Pel 2018

Innovating today
for a better tomorrow..

Through Research & Development, Technology and Innovation Leadership
PEL recognizes the importance of consumer-driven product

development, makes signicant investments in Research &
Development and Technologies, and remains a technology
forerunner and market leader in providing new products
and services to meet the challenges and technology
intensive needs of its customers.
This annual report can be accessed and downloaded from PEL’s website
http://pel.com.pk/index.php/nancial/
Annual Report 2018 i
Best Corporate and Sustainability

Report Awards 2017
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 (ICMAP) jointly hold the Best competition.
Corporate Report Award annually.
The objective of the Awards is to encourage
Companies are encouraged to adopt the application of timely, accurate, informative
international best practices to ensure and well-presented annual reports for
transparency by giving more disclosures and stakeholders.
following specic 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 third consecutive year and was able to successfully
secure awards in the Engineering and Auto sector for all three years, 2015, 2016 and 2017.
PEL’s annual report is a more 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 D 06 Foreign Directors
ii TABLE OF CONTENTS D 06 Implemented Governance Practices
iv 2018 IN NUMBERS vs Legal Requirements
vi STRIVING FOR EXCELLENCE IN CORPORATE REPORTING D 07 Related Parties
vii CALENDER OF EVENTS D 07 Preparation and Fair Presentation
of Financial Statements
A ORGANIZATIONAL OVERVIEW AND
D 07 COMMITEES OF THE BOARD
EXTERNAL ENVIRONMENT D 08 Audit Commitee
A 02 ABOUT PEL D 09 Human Resource and Remuneration
A 04 PRODUCT PROFILE Committee
A 18 GEOPRAPHICAL PRESENCE D 10 INFORMATION TECHNOLOGY
A 20 PEL'S JOURNEY THROUGH TIME GOVERNANCE
A 22 CORPORATE INFORMATION D 10 IT Governance Policy
A 24 VISION AND MISSION D 10 Business Continuity and Disaster
A 26 ETHICS AND BUSINESS PRACTICES Recovery Plan
A 26 CODE OF CONDUCT D 12 POLICY DISCLOSURES
A 26 ORGANIZATIONAL CULTURE D 12 Diversity Policy
A 27 CORE VALUES D 12 Corporate Social Responsibility and
A 28 GROUP STRUCTURE Sustainability Policy
A 30 HUMAN CAPITAL D 12 Conict of Interest Policy
A 32 ORGANIZATION CHART D 12 Investers' Grievance Policy
A 34 POSITION WITHIN THE VALUE CHAIN D 13 Policy For Safety Of Records
A 36 EXTERNAL ENVIRONMENT D 13 Whistle Blowing Policy
A 38 EFFECT OF SEASONALITY D 13 Human Resource Management Policy
A 38 COMPOSITION OF RAW MATERIAL; LOCAL VS IMPORTED
A 38 SIGNIFICANT CHANGES FROM PRIOR YEARS D 14 SHARIAH COMPLIANCE
D 14 Shariah Compliance Certicate
B STRATEGY AND RESOURCE ALLOCATION D 15 Shariah Advisor's Prole And Report
D 16 CODE OF CORPORATE GOVERNANCE
B 02 OBJECTIVES AND STRATEGIES
D 16 Statement of Compliance
B 04 RESOURCE ALLOCATION PLAN
D 18 Report of the Audit Committee
B 05 BUSINESS MODEL
D 20 Review Report by Auditors
B 06 LIQUIDITY MANAGEMENT
B 06 SIGNIFICANT PLANS AND DECISIONS
E PERFORMANCE AND POSITION
C RISK AND OPPORTUNITIES
E 02 CHAIRMAN'S REVIEW
C 02 RISKS AND MITIGATION STRATEGIES E 04 CEO'S REMARKS
C 06 OPPORTUNITIES AND MATERIALIZATION STRATEGIES E 06 DIRECTORS' REPORT
C 06 MATERIALITY APPROACH E 06 Macro-economic Overview
C 07 SWOT ANALYSIS E 08 Analysis of Financial and Non-Financial
C 08 CAPITAL STRUCTURE Performance
C 08 REPAYMENT DEBTS E 13 Product-Wise Operating Performance
E 16 Financial Ratios
D GOVERNANCE E 18 Graphical Anaylsis
E 20 Dupont Anaylsis
D 02 BOARD OF DIRECTORS
E 21 Free Cash Flow
D 02 Prole of Board Members
E 22 Economic Value Added
D 04 Composition of the Board
E 23 Summary of Cash Flows
D 04 Independent Director
E 24 Horizontal Analysis
D 04 Female Director
E 26 Vertical Analysis
D 04 Meetings of The Board
E 28 Quarterly Analysis
D 05 Board Operations
E 29 Direct Method Cash Flow Statement
D 05 Changes to the Board
E 30 Segmental Review of Business Performance
D 05 Annual Evaluation of Board's Performance
E 31 Market Share Information
D 05 Ofce of the Chairman and Chief Executive Ofcer
E 32 Market Overview
D 05 Roles and Responsibilities of the Chairman
E 34 Pattern of Shareholding
and Chief Executive Ofcer
E 40 Capital Expenditure
D 06 Formal Orientation at Induction
E 40 Dividend
D 06 Directors Training Program
E 40 Other Matters
D 06 Directors' Remuneration
E 46 Directors' Report In Urdu
Annual Report 2018 iii
We need
F
constant
OUT LOOK
F 02 FORWARD LOOKING STATEMENT
change,
F 02
F 03
COMPANY PERFORMANCE AGAINST
LAST YEAR PROJECTIONS
FINANCIAL PROJECTIONS
technological
F 03
F 03
STATUS OF PROJECTS
SOURCES OF INFORMATION AND
innovation
ASSUMPTIONS
capability,
G STAKEHOLDERS RELATIONSHIP
AND ENGAGEMENT and high
G 02
G 05
STAKEHOLDERS' ENGAGEMENT
STATEMENT OF VALUE ADDITION productivity
G 06 INVESTOR RELATIONS
G 08 GLOSSARY OF TERMS AND DEFINITIONS to survive in
H SUSTAINABILITY AND CORPORATE
SOCIAL RESPONSIBILITY
the erce
H 02
H 07
CSR INITIATIVES
SUSTAINABILITY HIGHLIGHTS
competitive
I CONSOLIDATED FINANCIAL STATEMENTS environment.
J SEPARATE FINANCIAL STATEMENTS -Joe Kaeser
K ANNUAL GENERAL MEETING
K 02 NOTICE OF ANNUAL GENERAL MEETING
K 07 FORM OF PROXY
iv Pak Elektron Limited
2018
the year in
numbers
REVENUE IN 2018
[RUPEES IN MILLIONS]
38,990
18,856
24,126
29,323
34,124
42,347
38,990
2013 2014 2015 2016 2017 2018

Annual Report 2018 v
Segmental Performance
APPLIANCES DIVISION 27,276
POWER DIVISION 11,715
Key Indicators
EARNINGS PER SHARE RETURN ON EQUITY
Rs. 2.67 4.53%
MARKET VALUE PER SHARE BREAK-UP VALUE PER SHARE

Rs. 24.90 Rs. 59.94
30,280
MARKET CAPITALIZATION CURRENT RATIO 27,001
25,511
Rs. 12,392 M 1.77 Times
19,996
15,595
Equity 11,158
Share capital and reserves

Advance against issue of ordinary shares 2013 2014 2015 2016 2017 2018
Surplus on revaluation of property, plant and equipment
Expenses In 2018
79.17% Cost of sales

8.15% Distribution cost 30,280
3.99% Administrative and general expenses
0.23% Other expenses
7.76% Finance cost
0.01% Share of loss of associate
0.69% Taxation
vi Pak Elektron Limited
Striving for Excellence in Corporate

Reporting
Organizational
A overview and external
environment
Corporate social
Strategy and
responsibility and
sustainability
H B resource allocation
Stakeholder's
INTEGRATED
relationship and
engagement
G REPORTING C Risks and opportunities
Outlook F D Governance
Performance
and position E
UNRESERVED COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING

STANDARDS ISSUED BY INTERNATIONAL ACCOUNTING STANDARDS BOARD
PEL prepares its nancial statements in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in
Pakistan comprise of:
a) International Financial Reporting Standards ['IFRS'] issued by the International Accounting
Standards Board ['IASB'] as notied under the Companies Act, 2017;
b) Islamic Financial Accounting Standards ['IFAS'] issued by Institute of Chartered Accountants
of Pakistan as notied under the Companies Act, 2017; and
c) Provisions of and directives issued under the Companies Act, 2017.
The Company has adopted all IFRSs notied under the Companies Act, 2017 and effective for the
year 2018. Those IFRSs which have been notied under the Companies Act, 2017 but are not
effective for the year 2018 will adopted on their due dates.
However, 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 in preparation of nancial statements.
Annual Report 2018 vii
ADOPTION AND STATEMENT OF ADHERENCE WITH THE INTERNATIONAL INTEGRATED

REPORTING FRAMEWORK
Since its inception in 1956, PEL has maintained a legacy of adhering to the best corporate
governance practices. The management has laid business foundation built on the principles of
ethics and corporate professionalism and, as always, it is committed to generating greater
value for both the organization and its stakeholders. The Company is not only focused on
achieving sustainable corporate value but also committed to achieving excellence in
transparent reporting.
In the current increasingly complex economic, technological, social, political and environmental
circumstances, integration of its nancial information with nonnancial information is one of the
most effective ways for an organization to demonstrate the importance of linking sustainability
issues to business strategies. Frequent changes to the corporate environment have led to a
need for additional information beyond the basic nancial statements so that stakeholders can
have a better understanding of the value-creation process.
The Company has adopted 'International Integrated Reporting (IR) Framework' to give an
overview of the Company's business affairs by presenting and explaining all the nancial and
non-nancial 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 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
Moving ahead with PEL's tradition of providing information to its stakeholders that goes beyond
the traditional requirements of nancial 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, governance and performance
which itself is a form of value creation for its stakeholders.
viii Pak Elektron Limited
Calendar Of Events 2018

May
Launched LED TVs after successful production trial run.
June
Shifting of Switchgear production line to PEL II 34-KM
Ferozepur Road, Lahore.
August
Start of setting up Washing Machine manufacturing facility at
PEL I 14-KM Ferozepur Road, Lahore.
September
Prequalication with DHA Karachi for supply of compact Substation
after successful testing from “XIAI High Voltage Laboratory China”.
November
Obtained STL short circuit certicate from VEIKI-VNL Lab, Hungry,
after successful testing of Power Transformer.
Organizational
A Overview and External
Environment
A 02 Pak Elektron Limited
About PEL
PEL is the pioneer manufacturer of electrical
goods in Pakistan. In 1956, the Company was
set up by Malik Brothers in technical
collaboration with M/s AEG of Germany (“AEG”)
to manufacture transformers, switchgear and
electric motors. AEG exited 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.
Until the acquisition by the Saigol Group, PEL
was solely catering the power equipment market.
The Company ventured into home appliances
market in 1981 after acquisition as a part of the
Group’s long term strategy of diversication.
The Company comprises of two divisions; each
offering a wide range of products as follows:
Power Division
• Distribution Transformers
• Power Transformers
• Energy Meters
• Switchgears
• Grid Stations
• EPC
Appliances Division
• Refrigerators
• Air Conditioners
• Deep Freezers
• Microwave Ovens
• Water Dispensers
• LED TVs
• Small Domestic Appliances (Electric Kettle,
Toaster, Sandwich Maker, Steam Iron)
Annual Report 2018 A 03
Since its inception, PEL 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.
Product Prole
APPLIANCES DIVISION
PEL is among the market leaders in home
appliances business with a very good presence
and market share since year 1987. The growing
demand is due to innovation and product
development through dedicated & continuous
research & development.
REFRIGERATOR
PEL started refrigerator manufacturing in 1987 with
the technical assistance of IAR- SILTAL Italy. Its
cooling performance is tested and approved by
Danfoss Germany while the manufacturing facility
is ISO 9002 Certied from SGS Switzerland.
Growing numbers of middle class, growth in
disposable Incomes, upward trajectory of country
macro- economic indicators, improved country
law & order situation and improved 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 Efcient” will create
an additional demand.
The Company is well positioned to take benet of market. PEL Glass Door Series “INTELLO” with
growing demand as a result of above factors and super freezer, bluetooth speaker, door alarm and
has introduced energy efcient “Invert on series” intelligent temperature control system is also
Compatible with UPS and solar solutions. launched last year, are receiving an excellent
Company also launched “Arctic Fresh" Series with response due to its additional and unique features.
turbo cooling and freshness LEDs for better food
The Company is focusing on continuous
preservation. Both of the series being based on a
improvement through R&D. Special attention is
masterpiece of “Japanese Inverter Technology”
being given through different marketing
with electricity saving up to 50% with improved
campaigns to further strengthen the PEL Brand.
aesthetics are well received in the local market. In
The turnover of refrigerators has increased
already existing series new models with enhanced
signicantly over the past few years.
space and cooling retention are introduced in the
Going forward,
the Company is
committed to
adding more
products in its
range. The
strategy
employed is to
use the same
distribution
channel to sell
more products.
This dilutes our
xed cost. The
growth potential
to add more
products and
leverage to the
PEL Brand is Vast.
DEEP FREEZER
PEL Deep Freezers were introduced in 1987 in Capitalizing on our technical expertise we have
technical collaboration with ARISTON Italy. The signed after sale service agreements with Coca
Company's manufacturing facility is ECO Friendly Cola Beverages Limited, PEPSI Bottlers, Unilever,
because PEL uses Green Gases and is the best Engro Foods, Pakistan Dairies for repair services
choice for MNCs. Customized products (Deep of Deep Freezers, Visi Coolers and Chest Coolers .
Freezers and ICE Cream Cabinets) with durability This will deepen our relationship with valued
and high level of performance is preference of customers and multinational companies.
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.
Entry of PEL Deep Freezers in retail market is

being well received; this is evident from sales
volume growth. A continuous R&D process is on
way to make the product energy efcient, durable
and with improved aesthetics. Growing macro-
economic indicators and 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 AC Company introduced new product series like "Invert-
manufacturing in the country and remained market Eco", "Invert-o-Sense" , "Invert-o-Sense" , "Invert-o-
leader for a long time until it hit due to technological Life" and "Invert-o-Pro" launched during the year, are
shift on Split AC. Since the Company's return in Split well received by Market. These “Heat & Cool"
A.C Business, PEL Split A.C has been well received Energy Efcient ACs with "4 Star Rating Inverter
in the market due to its innovations, durability, Technology" are real market "Eye Catch" due to
quality, brand equity and after sales service. product quality & aesthetics. An aggressive market
campaign also leveled fueled the growth trajectory.
Growing emerging middle class, rapid urbanization
Improved electricity supply also played a vital role in
and increase in disposable income are market
country market growth.
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 efcient after sales services net work is
also playing a vital role to win "Consumer
Condence”.
MICROWAVE OVEN
PEL Electrical Home Appliances have always been
customers' choice due to its quality, brand equity
and a country wide efcient after sales services
network. On consistent market demand, the
Company entered in to Microwave Oven business.
WATER DISPENSER
Following an innovative product development
culture, the Company has introduced DESIRE and On consistent market demand and to widen the
GLAMOUR series with built in recipes. 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.
LED TV
PEL celebrated the launch of their new 4K Coloron
LED Smart TV in Pakistan with an event on
October 20, 2018.
The Smart TV features 4K UHD, Smart LED
technology and Dolby Digital (5.1) surround sound
system which, combined with Netix and YouTube,
delivers a fully cinematic entertainment
experience.
The Coloron LED TV also comes with Android 6.0
Marshmallow, as well as Google Play and Wi-Fi
functions, allowing users to download and use all
their favourite apps on the TV itself. With its built-in
Screen Mirroring technology, users can use the
Coloron LED TV to view content being played on
their mobile devices.
The new LED TV uses IPS display to enhance
display and colour quality, and allows for high
quality viewing from any angle. It also has 1 GB
ram, 8 GB Internal Space, VGA, USB 2.0, HDMI
2.0 and has LAN capabilities making it an equally
good choice for both movie fans and gamers.
Coloron Prime 4K LED TVs are available in 55 and
49inch sizes, the smart Coloron model is available
in 40inches, with basic models available in 49, 40,
and 32 inch sizes.
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,
electrication 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 certied 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 Company's (11KV) and 250 & 630 KVA (33KV) at KEMA –
Premier Products. PEL is engaged in Netherlands for Jordan Electric Power
Distribution Transformer manufacturing since Company - JEPCO Jordan (First time by a
its inception in 1958. With its excellent Pakistani manufacturer in its history).
performance history, the Company is among
key players in local market with a substantial
market share. After Siemens's exit from
transformer business PEL is among
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 efcient 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
year under review was the successful short
circuit testing of PEL Green Transformers
(with bio degradable uid instead of
conventional mineral oil) of 1,500 & 630 KVA
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 specications
establishment of Power Transformer Division of Utility Companies licensed from ABB USA
in 2005. Since its birth this division has and its quality is certied by KEMA
produced transformers of rating 31/40 MVA, Laboratories.
20/26 MVA and 10/13 MVA for 132 KV level.
PEL Energy Meter Plant is ISO 9002 certied
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 efcient metering
technical partners for new development. system to control electricity pilferage.
Company has developed Single Phase, Three
After Siemens' exit from transformer business,
Phase GSM Energy Meters and DLMS
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 well
due to the Government's accelerated efforts
positioned to take care of rising demand of
for T&D Infrastructure Augmentation after
Energy Meters with advance functionalities.
meeting energy generation requirements.
SWITCHGEARS
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
condent 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.
• Electrication 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 Ofces :2 SKARDU
Service Center :2
ASCs : 91 KPK
PESHAWAR JAMMU & KASHMIR
(DISPUTED TERRITORY)
ISLAMABAD
BALOCHISTAN LAHORE
Population : 6%
Dealers : 2% PUNJAB
Sales Ofces :1
Service Center :0 PUNJAB
QUETTA
ASCs :6 Population : 61%
Dealers : 75%
Sales Ofces : 11
BALOCHISTAN
Service Center : 13
ASCs : 366
SINDH
GAWADAR SINDH
KARACHI
Population : 21%
Dealers : 12%
Sales Ofces :3
Service Center :7
ASCs : 61
SUMMARY
Total Appliances Dealers : 2,600 Sales Ofces
PEL Dealer : 1,500 Service Centers
PEL Sales Ofces : 17
PEL Service Centers : 22
Authorized Service Centers (ASCs) : 524
International Presence
PEL exports to customers and see potential in following countries and has
continued focus on expanding presence in international market:
• Qatar • Tanzania • Oman • Bulgaria • Tajikistan

• Afghanistan • Kazakhstan • UAE • Uganda
• Zimbabwe • Kenya • Kuwait • South Africa
• Yemen • Rwanda • Botswana • Guinea
• Saudi Arabia • Jorden • Congo • Mauritius
• Swaziland • Namibia • Nigeria • Ghana
If you can
dream it,
you can do it.
-Walt Disney
PEL’s Journey Through Time
Launching of New
Desire Series
Refrigerator
Prequalication with
Saudi Electrical
Company - SEC
4th CSR National

2011 Excellence Award 6th
Annual Environmental
Excellence Award
Export of Power
Transformer
Inauguration of New
Distribution Transformer
Factory by Prime Minister of
2010
Pakistan under Technical
Assistance from Pauwels,
Belgium.
2009
Started Production
Listing with all Stock of Energy Meters
Exchanges in under the License
Manufacturing of Pakistan Acquired from ABB USA
Refrigerators & Deep License to
Start of Commercial Freezers in Technical manufacture VCBs
Production of Collaboration with from Hitachi, Japan
Manufacturing of
Distribution IAR-SILTAL &
Air Conditioners
Transformers and ARISTON of Italy
with assistance of
Switch Gears in Fujitsu Japan
Incorporation Technical
of Pak Elektron Collaboration with
Limited AEG Germany
1992
1988
1987
1981
1958
1956
Launched of 4K Coloron LED

Smart TV Android 6.0
Marshmallow powered by the
massively successful Android
with high resolutionns.
2018
Commencement of
Water Dispenser
Production.
Launching of “ Invert
-o-Cool" Air
Conditioners, "
Arctic Premium Plus
" Deep Freezers and
" Convection Series"
Microwave Ovens.
Successful
Commissioning
Launch of new Arctic
Series Refrigerator
of 220 KV GIS
Shalimar Grid Station
Launching of New
Glass Door Launching of Glass
2017
with New Aesthetics Refrigerator with Door Mirror Series
worthRs. 1.3 Billion
New Aesthetics
2012 2013 2014 2015 2016
Launching of Inverter
Refrigerator & Air
Formal start of EPC
Conditioner Series
Business Segment
Successful Short
of the Company
Circuit Testing of
PEL Green
Transformer
2006
Launching of new
Crystal Series
Refrigerator under
Technical
Collaboration of
Danfoss, Germany
Acquired
Technology from Acquired
Carrier,USA to
manufacture
2004 Technology from
GANZ, Hungry to
Air Conditioners Produce Power
Transformers
2000
1997
1994
Quality
Management
System Certication
for Energy Meter
ISO 9001 by SGS
Corporate Information
BOARD OF DIRECTORS
Mr. M. Naseem Saigol Director/Chairman - Non Executive
Mr. M. Murad Saigol Director/Chief Executive Ofcer - Executive/Certied (DTP)
Mr. M. Zeid Yousuf Saigol Director - Executive/Certied (DTP)
Syed Manzar Hassan Director - Executive/Certied (DTP)
Sheikh Muhammad Shakeel Director - Non Executive/Certied (DTP)
Syed Haroon Rashid Director - Non Executive/Certied (DTP)
Mr. Asad Ullah Khawaja Director - NIT Nominee/Independent
Mr. Usman Shahid Director - NBP Nominee U/S 182 of the Ordinance/ Non Executive
Mr. Jamal Baquar Director - NBP Nominee U/S 182 of the Ordinance/ Non Executive
Ms. Azra Shoaib Director - NBP Nominee U/S 182 of the Ordinance/ Non Executive
AUDIT COMMITTEE BANKERS

Mr. Asad Ullah Khawaja Chairman/Member Albaraka Bank (Pakistan) Limited
Mr. Usman Shahid Member Askari Bank Limited
Sheikh Muhammad Shakeel Member Bank Alfalah Limited
Syed Haroon Rashid Member The Bank of Khyber
The Bank of Punjab
HR & REMUNERATION COMMITTEE Sindh Bank Limited
Mr. Asad Ullah Khawaja Chairman/Member Faysal Bank Limited
Mr. Usman Shahid Member Bank Islami (Pakistan) Limited
Syed Manzar Hassan Member MCB Bank Limited
Syed Haroon Rashid Member National Bank of Pakistan
Pak Brunei Investment Company Limited
Pak Libya Holding Company (Private) Limited
COMPANY SECRETARY Pak Oman Investment Company Limited
Muhammad Omer Farooq Samba Bank Limited
Silk Bank Limited
CHIEF FINANCIAL OFFICER Soneri Bank Limited
Syed Manzar Hassan, FCA Standard Chartered Bank (Pakistan) Limited
Summit Bank Limited
AUDITORS Saudi Pak Industrial and Agriculture
Investment Company Limited
Rahman Sarfaraz Rahim Iqbal Raq United Bank Limited
Chartered Accountants
A member of Russell Bedford International
REGISTERED OFFICE KARACHI
LEGAL ADVISOR
17- Aziz Avenue, Canal Bank, Kohinoor Building
M/s Hassan & Hassan Advocates Gulberg-V, Lahore 25-West Wharf Road,
Tel: 042-35718274-6, Karachi
COMPANY REG. NO. Fax: 042-35762707 Tel: 021-32200951-4
0000802 E-Mail: shares@saigols.com Fax: 021-32310303
NATIONAL TAX NO. (NTN) ISLAMABAD CHINA

2011386-2 Room # 301, 3rd Floor, 206, No. 1007, Zhong
Green Trust Tower, Shan Naun Er Road,
STATUS OF COMPANY Blue Area, Islamabad Shanghai, China
Public Interest Company (PIC) Tel: 051-2824543, 2828941 Tel: 86-21-64567713
Fax: 051-2273858 Fax: 86-21-54109971
SHARIAH ADVISOR
TRANSFORMER WORKS
Mufti Zeeshan Abdul Aziz
FACILITY
S.M. Suhail & Co. 14-K.M. Ferozepur
Chartered Accountants 34-K.M. Road, Lahore
Ferozepur Road, Tel: 042-35920151-9
SHARE REGISTRAR Keath Village, Lahore
Tel: 042-35935151-2
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. 25-1-C, Punjab Small Industries Estate, 1. 203-L, Block-2, PECHS society, Karachi
Bahawalpur Road, Bahawalpur
2. A- 120, Block 5, Sardar Ali Sabri Road,
2. Chungi No. 5, Burewala Gulshan-e-Iqbal, Karachi
3. 4 KM Bannu Road, Dera Ismail Khan 3. H # B-434, Sector 35/A, Area Gulshan-E-Hali
Korangi No. 4, Zaman Town, Karachi
4. Kohinoor Industries, College Road, Madina
Town, Faislabad 4. B-273, Block A, North Nazimabad, Karachi
5. Abdullah Marriage Hall, Near Pindi Bypass, 5. E-38 Site Area Shershah, Karachi
Gujranwala
6. 5/A, Block-6, Unit No.6, Latifabad, Hyderabad
6. Plot No. D/2-A, Hyderabad
7. A-115, Street no. 2 Sindh Corporative
7. Main Fath Jung Road, Tarnool, Islamabad Housing Society, Airport Road, Sukkur
8. D-132 Site, Metrovil, Karachi 8. 288, Opposite Ladies Park, Shams Abad
Colony, Multan
9. Plot# 220, Sher Shah By Pass Road, Multan
9. Kohinoor Industries Limited, Madina Town,
10. Adil International (Private) Limited, Amangrah Faisalabad
G.T. Road, Nowshera
10. 173, Tehsil Road, Sahiwal
11. Al Syed Godown, Airport Road, Quetta
11. 6-A, Small Industrial Area, Lahore Road,
12. Factory Area, Shahbaz Pur Road, Rahim Yar Sargodha
Khan
12. 81-X, New Sadiq Colony, Bahawalpur
13. PEL Godown, 02 Km Multan Road, Sahiwal
13. Factory Area, Shahbaz Pur Road, Rahim Yar
14. A-3 Small Industres Estate, Sargodha Khan
15. 6A, Main Small Industries State, Lahore 14. 16, Shah Jamal, Lahore
Road, Sargodha
15. 143/4 Begum Pura GT Road, Lahore
16. China Chowk, Pasrur Road, Sialkot
16. 2-C1, Street No. 1, Session Court Road, Civil
17. A-74, Block A Sindh Small Industrial Estate, Lines, Gujranwala
Golimar, Sukkur
17. Khayam Plaza, Police Lines Road, Gujrat
18. Mubarak Palace, Garden Town, Butter Road,
Daska Road, Sialkot
19. 85-C/2 ,Block C , Satellite Town, Rawalpindi
20. 44, Street No.6, Gulshan-e-Iqbal Town,
University Road, Peshawar
21. 5 Street no. 7, Phase no. 2 Wah Model town,
Wah Cantt.
22. 76, Baghdad Colony, North West Circular
Road, Dera Ismail Khan
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 AND BUSINESS PRACTICES CODE OF CONDUCT

• We are serving the nation through manufacturing and PEL’s Code of Conduct
sales of electrical goods and home appliances. We are claries its mission, values
committed to represent the ethical responsibilities of and principles, linking them
company operations. In recognition of this, our with standards of professional
commitment reects the value statements. conduct.
• As directors, and employees, we all are passionate to our • Honesty and integrity: We
contents and strive to be model of the principles. It is an shall demonstrate highest
organization of people who are united to achieve the standards of honesty and
common goal. We are accountable for all our actions both integrity while conducting
individually and as a company. We act with absolute our employment activities.
honesty, integrity and fairness in the way we conduct our
business and in the way we live and act. • Unlawful activities: We shall
not engage in any activity
• We realize the importance of the human life and that is believed to be in
company’s all other resources. We are committed, all the violation of any law.
time, to the safe and reliable operations of our power
complex, and to the incident-free workplace. We ensure • Unfair advantage: We shall
that this commitment shall remain one of our utmost not abuse our position in
priorities. any manner to inuence
any person, including
• We are persistent about delivering our promises to the subordinates, to provide us
customers as our success comes only with the success of any favour, whether
our customers. We carried out jobs keeping in view the nancial or otherwise.
satisfaction of our internal and external customers. We
believe in cost effective quality of work with the aim of • Conict of interest: We shall
excellence in everything. not allow ourselves to be
put in a position, while
• We value the safety, security and peace of mind of our representing the Company
employees. We recognize and afrm the unique and in dealings with third
intrinsic worth of each individual and treat all with parties, in which an actual
compassion and kindness. We value treating each or perceived conict of
individual with an attitude of mutual respect, caring interest exists.
attention and fairness. We observe strict compliance in the
organization discipline with respect to all the company • Other engagements: We
rules and regulations. shall not engage in any
business activity, whether
• We embrace progress and growth as the life blood of our directly or indirectly, with
organization that gives us the freedom to fulll our vision any customer, supplier or
and mission. This includes company’s growth as well as agent of the Company or
the career growth of the employees. which is inconsistent or
conicting with the
• We value and promote teamwork by providing a work business activities of the
environment that helps to recognize the benets of the Company.
individual and collective wisdom which is achieved
through empowering the employees to create and act • Condentiality: We shall not
based upon the highest level of ethical conduct. use or disclose the
Company’s proprietary or
• We strive to enhance the quality of life of our surrounding condential information to
community and set the precedent for the corporate sector make personal gains or
to recognize the responsibilities. We value the promotion benets.
of mutual trust between the community and corporate
sector.
ORGANIZATIONAL CULTURE
Organizational culture at PEL is based on strongly held and widely shared set of values and
beliefs that are supported by our strategy and structure. Our culture sets the context for
everything we do and is driven by our core values.
CORE VALUES
• Honesty and integrity in conducting
business.
• Continued focus on customer
satisfaction
• Being socially responsible by giving
back to society.
• Adhering to high standards of
morality.
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.
THE FOUR SEASONS / THE MEADOWS

(A PROJECT OF REAL ESTATE)
The Four Seasons is a real estate project by
Saigols which launched its rst 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.
KOHINOOR INDUSTRIES LIMITED

(TEXTILE MANUFACTURERS)
Kohinoor Industries Limited one of the largest
vertically integrated textile manufacturers, started
its successful journey back in 1949. 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.
RED COMMUNICATION ARTS (PRIVATE) LIMITED

(ADVERTISEMENT)
In 1996 RED COMMUNICATION was formed to fulll
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-edged
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 afliate 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

(YARN)
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 efcient
Japanese and European Machinery, its knitted
yarn is renowned in Far east and Europe for its
nest 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 signicant
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
SIZE OF PROVIDENT FUND &
In its quest of the Top Talent, PEL has VALUE OF INVESTMENTS
formulated a comprehensive succession plan 450,000
which includes performance evaluation and 400,000

appropriate training requirements for
350,000
development of potential and prospective
future leaders. The succession plan allows 300,000
Rupees in millons
PEL to ensure availability of competent 250,000
personnel in each department. 200,000
150,000
RETIREMENT BENEFITS 100,000
PEL has put in place a retirement benet plan 50,000
for its employees, in the form of an approved -

2017 2018
funded contributory provident fund “Pak Financial year
Elektron Limited Employees Provident Fund Size of fund Value of Investments
Trust”. All employees who have completed a

minimum qualifying period of service as
dened under the trust are eligible. Equal
monthly contributions are made by PEL and 33.65%
28.64%
41.69%
employees in accordance with the scheme,
2018 2017
to cover the obligation. 66.35%
Size of the fund as December 31, 2018 stood 29.66%
at Rs. 389.017 million. Investments of the Deposit accounts with commercial banks Government Securities
fund at the close of 2018 are valued at Listed equity collective investment schemes
351.027 million.
MIX OF INVESTMENTS
The best
preparation
for tomorrow
is doing your
best today.
-H Jackson brown Junior
Organization Chart
Shareholders
Board of Directors
Chief Executive
Audit Committee
Officer
Director Operations
Chief Financial
Head of Internal
Officer
Audit
Sr. GM Marketing
Private Business Sr. Manager Sr. Manager
& WAPDA (Imports & Logistics) Corporate Finance
GM Manufacturing
Switchgear Finance Manager
(AD)/(PD) Financial Controller
Functional Reporting
GM Manufacturing
Transformers Administrative Reporting
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. Manager
Sr. GM
Marketing
Manufacturing & R&D
(Appliances Division)
GM Manager
Manufacturing AC Manufacturing
& Deep Freezer Energy Meter
Position within the
APPLIANCES Value Chain
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
RAW Factory Overheads
MATERIAL
Compressors,
Condensers, Coolants,
Motors, Copper pipes,
Isocynate, Insulation
materials, Evaporators
POWER
DIVISION
CUSTOMERS
WAPDA DISCOs,
Private/Corporate
Customers
FINAL
PRODUCTS
Distribution Transformer,
Power Transformers,
Energy Meter,
Switchgears, 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
Signicant Factors Affecting the

External Environment
Businesses are inuenced 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:
Signicant change
Factors Description PEL's response
from prior year
These factors determine • General The Company keeps a close

the extent to which a elections 2018 eye on the political situation
government may inuence of the country including
POLITICAL
the economy or a certain • Political changes in regulations and

industry uncertainty 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 economic

determinants of an interest rates conditions has been the
economy's performance main cause of decrease in
that directly impacts a • Ination protability of the Company.
ECONOMIC
business and have • Rupee

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 modied
the organization operates disposable accordingly.
income
Signicant change
Factors Description PEL's response
from prior year
These factors pertain to • Energy efcient The Company recognizes

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

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

rules and regulations that 2017 professional in-house legal
organizations are required team, the members of which
to abide by. • Finance Act, are experts of their
2018
LEGAL
respective elds as well as

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

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

surrounding environment. average in demand for domestic
temperature. 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 signicant 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.
65% of the material procured during the year
was imported while 35% was sourced locally.
This exposes the Company to changes in
exchange rates which have an important
bearing on the nancial performance of the
Company. Keeping all other factors constant, a
1% depreciation or appreciation in Pak Rupee Imported 65%
during the year would have had an estimated Local 35%
impact of approximately Rs. 126 million on the

prot before taxation. COMPOSITION OF RAW MATERIAL
Signicant Changes from Prior Year

The nancial statements of the Company for the year 2018 have been prepared in accordance
with the requirements of Companies Act, 2017 ['the Act']. The Act was enacted on May 30,
2017. The Act has brought certain changes with regard to the preparation and presentation of
these consolidated nancial statements. These changes, amongst others, included change in
respect of presentation and measurement of surplus on revaluation of property, plant and
equipment and change in nomenclature of primary statements. Further, the disclosure
requirements contained in the fourth schedule of the Act have been revised, resulting in
elimination of duplicative disclosure with the IFRS disclosure requirements and incorporation of
additional/amended disclosures including, but not limited to, particulars of immovable assets of
the Group, management assessment of sufciency of tax provision in the consolidated nancial
statements, change in threshold for identication of executives, additional disclosure
requirements for related parties, disclosure of signicant events and transactions affecting the
nancial position and performance of the Group, disclosure relating to number of employees
etc.
In line with the Company's vision of product diversication, the Company has set up its LED TV
production line during the year and made a colorful entry in the market with a brand “COLOR
ON”. 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 existing
research and products.
development and
• No of new models for
efcient market
research existing products
launched.
Short Term Development of human Technical and non- • Training and

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 avoid and safety incidents.
risk of accident
Short Term Maintaining supplier Monitor cash ow • Payable days
relationships requirements and
produce cash ow
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
center and dealer • After sales services
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 sufcient liquidity Monitor cash ow • Liquidity ratios
Medium / to meet liabilities when requirements and
Long term due produce cash ow • Timely payments
projections for the short
and long term. Maintain
Annual Report 2018 B 03
Relevant term Objective Strategies KPI's monitored
balance sheet liquidity

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

avenues to diversify
within and outside the
Appliance and Power
Industry
Medium Term Enhance production Keep up-to-date with • Technology
facilities and processes the latest technology upgradation
to improve efciency advancements to activities.
achieve production
efciencies
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 integrated • Market share

leadership and market marketing campaigns
presence and increasing access • Sales, service center
to customers through a and dealer network.
nationwide sale/service
center and dealer
network
There were no signicant changes in objectives and strategies from prior years. The existing
objectives and strategies have been re-arranged for the purposes of better reporting.
Further, all of the above KPIs will continue to be relevant in future.
Resource Allocation Plan

STRATEGY
Rs.
MANUFACTURED RELATIONSHIP HUMAN INTELLECTUAL FINANCIAL

CAPITAL CAPITAL CAPITAL CAPITAL CAPITAL
PEL is committed to provide best value to all employees. Various technical and non-
its stakeholders for their engagement with technical training programs are carried out
the Company through efcient resource for employees at all levels both internally and
allocation. externally.
Manufactured Capital Financial Capital
The Company has continued focus on The Company currently has a long-term debt
product innovation and development and of Rs. 4,520 million and short-term
diversication. To achieve this the Company borrowings amounting to Rs. 12.844 million
does substantial spending on research and at the close of 2018. Long term debt is
development with the objective of improving obtained to nance capital expenditure and
features and aesthetics of exiting product long term working capital which indirectly
range and marker research to seek avenues backs manufactured capital of the Company.
for diversication within and outside the Short term borrowings are contracted to
appliance and electrical capital goods nance short term working capital
industry. The Company recognizes the requirements in accordance with the liquidity
importance of consumer driven product management framework of the Company,
development and allocates resources thereby supporting Human, Intellectual and
accordingly. Relationship Capital of the Company.
Resources are also allocated for planned and Intellectual Capital
integrated marketing campaigns and
increase access to customers through a The Company recognizes the importance of
nation-wide sales/service center and dealer being a technology forerunner in order to
network aimed at maintaining industry achieve efciencies and economies of scale.
leadership and market presence. Further, the The Company invests in development of
Company spares no expense in keeping intellectual capital including product design
itself up-to-date in terms of technology as the and development, market research,
Company recognizes that in order to achieve management information systems, research
efciencies and economies of scale, it has to and development, trademark protection and
remain a technology forerunner. licensing.
Human Capital Social and Relationship Capital
Human Capital is considered as one of the We believe that our sustainability depends on
most valuable resources at PEL. With our ability to maintain strong relationships
signicant contributions towards the growth with customers, vendors and with the
and success of the Company, Human Capital society/community for whom we also create
remains one the most important areas of value. A sizeable budget is allocated for
focus as the Company endeavors to ensure initiatives that align our activities with our
acquisition of top talent and provision of best stakeholder's expectations whether it's our
employee development programs, healthy customers, suppliers, the community, our
and safe work environment and market employees and society as a whole. We also
commensurate compensation packages. contribute to the society/community through
a broad range of community initiatives,
The Company also allocates adequate charitable giving, foundation grants and
resources for training and development of its volunteerism.
Annual Report 2018 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.
Human Capital,
KEY ASSETS 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 SUSTAINABLITY
of customers.
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
GROWTH DRIVERS operations. Adequate reserves and banking
facilities are maintained by continuously
Our growth is monitoring of forecasts and actual cash ows.
primarily driven by increase in sales
Continuous research and development has
revenue resulting from strong demand forour
allowed us to emerge as technology and
products and our presence nationwide and
innovation leader in the industry.
internationally.
We have continued focus on improving production
efciencies and economizing costs which, in turn
contributes towards improved protability.
Effective planning is the key to achieving our
management objectives. Continuous
monitoring enables us to identify gaps
and improve our planning
process.
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. 493.33
million at the close of 2018. Current ratio
Liquidity management 3.00
2.50
PEL continuously aims to maintain a strong 2.00
Times
liquidity position through an effective liquidity 1.50
management system to ensure availability of 1.00
sufficient working capital. The Board of Directors 0.50
has built an appropriate liquidity management -
framework for the management of short, medium 2013 2014 2015 2016 2017 2018
and long-term funding and liquidity Years
requirements.
The Company's approach to managing liquidity
risk is to ensure, as far as possible, that it will Quick Ratio
2.00
always have sufficient liquidity to meet its
liabilities when due, under both normal and 1.50
stressed conditions, without incurring
Times
1.00
unacceptable losses or risking damage to the
Company's reputation. The Company monitors 0.50
cash flow requirements and produces cash flow
-
projections for the short and long term. Typically, 2013 2014 2015 2016 2017 2018
the Company ensures that it has sufficient cash Years
on demand to meet expected operational cash
flows, including servicing of financial obligations.
This includes maintenance of balance sheet Liquid assets
liquidity ratios, debtors and creditors
800
Rupees in million
concentration both in terms of overall funding

600
mix and avoidance of undue reliance on large
individual customer and matching the maturity 400
profiles of financial assets and liabilities. 200
-
Cash flow projections for the future indicate 2013 2014 2015 2016 2017 2018
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
facilities were made for market competitiveness and brand equity. 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. In year under review Company launched. LED TVs after successful production trial run.
Installation of washing machine manufacturing facility started during the year and production is
likely to be started by 2nd half of year 2019.
C Risks and
Opportunities
C 02 Pak Elektron Limited
Risks and Opportunities

PEL's activities expose it to a variety of risks The Board of Directors has overall
which are subject to difference levels of responsibility for the establishment and
uncertainty against which PEL has oversight of PEL's risk management
implemented effective mitigating strategies. framework. The Board is responsible for
These risks can emanate from a number of developing and monitoring PEL's risk
factors including but not limited to management policies.
uncertainties in nancial markets, project
failures, legal liabilities, credit risk, accidents The Audit Committee oversees how
and disasters as well as deliberate management monitors compliance with
aggressive actions from an adversary, or PEL's risk management policies and
uncertain or unpredictable events. procedures and reviews the adequacy of the
risk management framework in relation to the
Risk Governance Structure risks faced by PEL. The Audit Committee is
assisted in its oversight role by Internal Audit
PEL's risk management policies are department. Internal Audit department
established to identify and analyze the risks undertakes both regular and ad hoc reviews
faced by PEL, to set appropriate risk limits of risk management controls and
and controls, and to monitor risks and procedures, the results of which are reported
adherence to limits. Risk management to the Audit Committee.
policies and systems are reviewed regularly
to reect changes in market conditions and The Human Resource & Remuneration
PEL's activities. PEL, through its training and Committee focuses on risks in its area of
management standards and procedures, oversight. This includes succession planning
aims to develop a disciplined and with a view to ensure availability of talented
constructive control environment in which all functionaries in each area of critical company
employees understand their roles and operations as well as assessment of
obligations. compensation programs to ensure that they
do not escalate corporate risk.
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 efciencies
and improved
products.
Strong market Low / External Manufactured / PEL holds a
competition lowering Moderate Intellectual Capital considerable market
demand for PEL's share and has
products continued focus on
sustaining and
maintaining its
market share
through offering new
and improved
products and
Annual Report 2018 C 03
Likelihood /
Magnitude
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 unauthorized
cause nancial and data access to
data loss condential
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
employee trainings,
operational discipline
and regular safety
audits

Likelihood /
Magnitude
Loss of customer Low / High External Manufactured Continued focus on
condence in PEL Capital new and improved
brand adversely products and state of
affecting sales the art after sales
services to
customers
Breach of law Low / High Internal Manufactured / Monitoring of latest

resulting in nes, Financial Capital updates in regulatory
penal action or framework is carried
suspension of out to prevent in
business operations 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
nancial 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 nancial 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.
Liquidity shortfall Low / Internal Financial Capital The responsibility for
resulting in inability Moderate 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
Likelihood /
Magnitude
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
ows and matching
the maturity proles
of nancial 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
ow interest rate risk
is managed by
simulating various
scenarios taking into
consideration
renancing, renewal
of existing positions
and alternative
nancing. Based on
these scenarios, the
management
calculates impact on
prot after taxation
and equity of dened
interest rate shift,
mostly 100 basis
points
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

Likelihood /
Magnitude
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 electrications 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.
Determination of materiality levels, other than those provided under the law, is judgemental and
varies between organizations. 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 diversication
• Sufcient production capacity to absorb the
increase in volumes
• Technical Collaboration with international
reputed organizations
• Latest Technologies
• Excellent labour skills to execute Power WEAKNESSES
Division orders • The Company has high nancial leverage
• Focused Research and Development
strategy
• Strong country wide dealers network
• Strong, efcient and broad after sales
network
OPPORTUNITIES THREATS
• Government has plans to up grade existing • Availability of timely working capital
electricity infra structure resulting into more • Law and order situation and political
orders for Power Division. disturbance in the country
• Appliances market is showing growth. • Dependence on WAPDA/ DISCOs Financial
• Local industry preferential protection in health
international tenders. • Devaluation of Pak Rupee
• Change in regulatory frame work
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
-
2013 2014 2015 2016 2017 2018
Years
Orindary share capital Preferred share capital
Reserves Long term debt
Repayment of Debts
The Group's external long term debt stood at Rs. 4,520 million at the close of 2018 recording a net
decrease of Rs. 1,558 million.
Short term borrowings showed an increase of Rs. 5,616 million due to increase in 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
MR. 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.
MR. 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.
MR. 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 2018 D 03
SHEIKH MUHAMMAD SHAKEEL

Non-Executive Director
Mr. S M Shakeel is a Non-Executive Director on the Board of PEL. He is a Fellow Member of the Institute
of Chartered Accountants of Pakistan. In 1990 he joined A. F. Ferguson & Co, Lahore, as Audit Trainee.
During the training, he gained extensive experience of operations of a number of listed companies
representing diverse segments of industry and finance. He passed his C.A. examination in 1994, and in
recognition to his outstanding performance the Institute awarded him with the Gold Medal. He is a
Corporate Governance Certified Director under Directors Training Program.
In 1994, he joined the Saigols Group as Manager Finance and was soon promoted to the position of
General Manager Finance. Mr. Shakeel carries a wide range of experience in the fields of project
development, business operations, financial management, and corporate and tax administration. He is a
member of the Company’s Audit Committee. He is a Corporate Governance Certified Director under
Directors Training Program.
He is also on the Board of Kohinoor Energy Limited.
SYED HAROON RASHID

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 Mr. Asad Ullah Khawaja is an Independent Non-Executive Director on
the Board of PEL nominated by NIT.
The following Directors are on the Board of directors of PEL through nomination under section 182 of the
Companies Ordinance, 1984.
1) Mr. Usman Shahid 2) Mr. Jamal Baquar 3) Ms. Azra Shoaib
Board of Directors
COMPOSITION OF THE BOARD OF
DIRECTORS 14%
43% 30%
In order to ensure transparency, good
governance and smooth functioning of the
Company's operations, the Company has 43%
70%
implemented the regulatory framework in

terms of qualification, experience and Independent Directors
Executive Directors
Nominee Directors
composition of the Board of Directors as well Other Non-Executive Directors
Non-Executive Directors
as awareness of the Board responsibilities. Composition of

Non-Executive Directors
Composition of the Board
The Board comprises 10 directors effectively

representing shareholders' interests. There All directors are highly qualified and
are 7 non-executive directors including 1 experienced and come from varied
independent director and 3 directors discipline, which enables the Board to carry
nominated by holders of special interest out effective and efficient decision making.
under now Section 164 of the Companies Detailed profile of each member of the Board
Act, 2017. is presented page D-02.
INDEPENDENT DIRECTOR
Mr. Asad Ullah Khawaja is an independent director on the Board of Directors of the Company. He meets
the definition of independence provided by Companies Act 2017 and he has submitted to the Company
his declaration 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
Mr. M. Naseem Saigol 4 10

No. of Directors present
Mr. M. Murad Saigol 2

08
Mr. M. Zeid Yousuf Saigol 4
06
Syed Manzar Hassan 4
Sheikh Muhammad Shakeel 1 04
Syed Haroon Rashid 3 02
Mr. Asad Ullah Khawaja 2

-
1st 2nd 3rd 4th
Mr. Usman Shahid 4
Meetings of the Board
Mr. Jamal Baquar 2
Attendance Quorum required
Ms. Azra Shoaib 2
BOARD OPERATIONS ANNUAL EVALUATION OF BOARD’S

PERFORMANCE
Each member of the Board is fully aware of
his responsibilities as an individual member PEL has put in place a comprehensive
as well as the responsibilities of all members mechanism for undertaking annual
together as a board. evaluation of the performance of the Board of
The Board actively participates in all major Directors in accordance with the requirement
decisions of the Company including of the Code of Corporate Governance.
appointment approval of capital expenditure The mechanism evaluates the performance
budgets, investments, issuance of equity and of the Board on the following parameters:
debt capital, related party transactions and • Board composition, organization and
appointment of key personnel. scope
The Board also monitors the Company's • Board functions and responsibilities
operations by approval of financial • Monitoring of Company's performance
statements, review of internal and external
Evaluation forms and checklists are
audit observations, if any and
circulated to all members of the Board and
recommendation of dividend.
each member is required to submit the same
The Board has devised formal policies for duly filled to the Company Secretary.
conducting business and ensures their The results are consolidated and discussed
monitoring through an independent Internal in the nest meeting to formulate a strategy for
Audit Department which continuously improvement in Board's performance.
monitors adherence to Company Policies.
OFFICE OF THE CHAIRMAN AND
The responsibility of implementing the CHIEF EXECUTIVE OFFICER
strategies as approved by the Board of
Directors is that of the management. The The office of Chairman and that of the Chief
management conducts the routine business Executive Officer of the Company are held
operations of the Company in an effective separately, as part of the Company's
and ethical manner in accordance with the governance structure, with clear division of
strategies and goals approved by the Board roles and responsibilities.
and identifies and administers the key risks
and opportunities which could impact the ROLES AND RESPONSIBILITIES OF
Company in the ordinary course of execution THE CHAIRMAN AND CHIEF
of its business. Management is also EXECUTIVE OFFICER
concerned in keeping the Board members
The Chairman acts as the head of the Board
updated regarding any changes in the
and is responsible for assessing and making
operating environment or risk profile. It is
recommendations regarding effectiveness of
also the responsibility of management, with
the Board and ensuring effective role of the
the oversight of the Board and its Audit Board in fulfilling all its responsibilities and
Committee, to prepare financial statements has the power to set agendas, give directions
that fairly present the financial position of the and sign the minutes of Board meetings.
Company in accordance with applicable
accounting standards and legal The Chief Executive Officer is an executive
requirements. director who also acts as the head of the
Company's management in the capacity of
CHANGES TO THE BOARD managing director and implements the
policies delegated by the Board within the
There were no changes to the Board of limits prescribed.
Directors during the year.
Board of Directors
The main responsibilities of the Chief 1. M. Murad Sagol
Executive Officer include:
2. M. Zeid Yousuf Saigol
• Safeguarding the Company's assets 3. Sheikh Muhammad Shakeel
• 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 Governance)
• Ensuring effective functioning of the Regulations, 2017.
internal control system
• Identifying risks and designing mitigation DIRECTORS' REMUNERATION
strategies There are formal and transparent procedures
• Development of human capital and good for fixing the remuneration of directors and
investors' relations no director is involved in deciding his own
remuneration. Remuneration levels are kept
• Compliance with regulations and best at a reasonable level in order to attract and
practices. retain directors, without compromising
FORMAL ORIENTATION AT INDUCTION independence.
New members of the Board are taken FOREIGN DIRECTORS

through a detailed orientation process at the The Company does not have any foreign
time of induction. The orientation process directors on its Board.
involves a familiarization program which
mainly features the following:
IMPLEMENTED GOVERNANCE
• Vision, mission, core values and strategies PRACTICES VS LEGAL
and stakeholders. REQUIREMENTS
• Significant policies PEL is committed to highest standards of
business ethics to promote transparency,
• Summary of financial position
fairness and accountability throughout its
• Risks exposure and management business processes which thereby protects
customer and shareholder interests. PEL as
• Critical performance indicators an organization encourages proactive and
• Roles and responsibilities of director accountable management system to ensure
under the statute transparency and compliance with laws. To
further strengthen implementation of the
• Expectations from the Board same, PEL has well composed and
• Facets of business including strategic structured policies and procedures based on
plans, forecasts, minutes of past meetings international standards that are ahead of our
and litigations. laws and regulations. For this we have
instituted a comprehensive legal and
compliance function in the company that
DIRECTORS' TRAINING PROGRAM
goes beyond legal requirements.
The following directors have obtained
certification under the Directors' Training
Program from SECP approved institutes in
accordance with requirements of the Code of
Corporate Governance:
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 nancial 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 nancial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the nancial 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 nancial 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
Directors 16th 25th 16th 30th Total control system prior to
March April August October Attended endorsement by the Board
of Directors and internal
Mr. Asad Ullah Khawaja 2
audit reports.
Mr. Usman Shahid 4
k) Instituting special projects,
Sheikh Muhammad Shakeel 1
value for money studies or
Syed Haroon Rashid 3 other investigations on any
matter specified by the
Salient Features & Terms of d) Facilitating the external Board of Directors, in
References audit and discussion with consultation with the CEO
external auditors of major and to consider remittance
The Board of Directors of the observations arising from of any matter to the external
Company have determined the interim and final audits and auditors or to any other
following term of reference of any matter that the auditors external body.
the Audit Committee: may wish to highlight (in the l) Determination of
a) Determination of absence of Management, compliance with relevant
appropriate measures to where necessary). statuary requirements.
safeguard the Company's e) Review of Management m) Monitoring compliance with
assets. Letter issued by external the best practices of
b) Review of preliminary auditors and Management's corporate governance and
announcements of results responsible thereto. identification of significant
prior to publication. f) Ensuring coordination violations thereof.
c) Review of quarterly, half between the internal and n) Review of arrangement for
yearly and annual financial external auditors of staff and management to
statements of the Company, Company. report to audit committee
prior to their approval by the g) Review of the scope and financial and other matters
Board of Directors, focusing extent of internal audit and and recommend instituting
on: ensuring that the internal remedial and mitigating
audit function has adequate measures;
• Major judgmental areas,
resources and is o) Recommend to the Board
• Significant adjustments appropriately placed within of Directors the
resulting from the the Company. appointment of external
audit,The going concern auditors, their removal,
assumption, h) consideration of major
findings of internal audit fees, the provision of
• Any change in investigations of activities any service permissible to
accounting policies and characterized by fraud, be financial statements. The
practices, corruption and abuse of board of directors shall give
power and management's due consideration to the
• Significant related party recommendations of the
response thereto.
transactions audit committee and where
i) ascertaining that the it acts otherwise it shall
• Compliance with
internal control systems record the reasons thereof.
applicable accounting
including financial and
standards, and p) Consideration of any other
operational controls,
• Compliance with listing accounting systems for issue or matter as maybe
regulations and other timely and appropriate assigned by the Board of
statutory and regulatory recording of purchases and Directors.
requirements.
Human Resource and

Remuneration Committee
Composition Designation
Mr. Asad Ullah Khawaja Chairman

Mr. Usman Shahid Member
Syed Manzar Hassan Member
Syed Haroon Rashid Member
Directors 16th Total

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

Information Technology has grown to Disaster Recovery Planning
permeate the business world, affecting how
companies make and market their products As part of BCP, a Disaster Recovery site (DR)
as well as how people communicate and has been established to further strengthen the
accomplish their jobs. The need for IT availability of IT/Oracle services in case of a
governance has also become pivotal towards disaster.
organization sustenance and growth. The site hosts backup servers for shifting of
At PEL, IT Governance provides a framework services during a disaster. A comprehensive
that is aimed at IT strategy about IT set of policies and procedures, including
infrastructure, risks management, deployment responsibilities and actions to recover
of new techniques and ideas as well as computer, communications and network
delivery of IT services in an efcient and environment in the event of an unexpected
economical way. PEL remains focused on interruption, have been implemented to
continuous exploration of best technologies ensure a hassle free movement of data from
and infrastructure, to enable efcient and primary site to DR site.
timely decision making, in addition to
economizing on the cost related to operating Safety and security of IT record
and decision making. Safety and security of IT records is ensured
through effective implementation of the
Review of Business Continuity and Company’s policy for Safety of Records,
Disaster Recovery Planning by the Board which has been elaborated on page D-13.
PEL has implemented an effective Disaster
Recovery System, for sustained business
operations in the event of a disruption or
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 condence
of customers as well as investors inbusiness
and helps protect PEL’s image, brand and
reputation.
Today’s
innovation is
tomorrow’s
tradition.
- lidia Bastianich
Policy Disclosures
DIVERSITY POLICY CONFLICT OF INTEREST POLICY
PEL is committed to promoting and In order to avoid known or perceived
maintaining a culture of diversity. Our human conflicts of interests, PEL has employed, in
capital is our most valuable resource, with the addition to compliance of regulatory
individuals coming from different age, color, requirements, a formal Code of Business
disability, ethnicity, family or marital status, Ethics, for formal disclosure of vested
gender identity or expression, language, interests if any. While all the directors
national origin, physical and mental ability, exercise their due rights of participation in
political afliation, race, religion, sexual Board proceedings, which are generally
orientation, socio-economic status, veteran undertaken through consensus, concerns of
status, and other characteristics that make the Board members on any agenda point are
each individual unique. duly noted in the minutes of the proceedings
for further evaluation of actual existence in
All major areas of human resource
addition to quantification of any conflict of
management are subject to our diversity
policy, be it, recruitment and selection, interest before finalization of any agenda
compensation and benets, professional point.
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 Company operations, in addition to details
RESPONSIBILITY AND relating to his/her specific investment,
SUSTAINABILITY POLICY 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
and Environmental practices have been by the Corporate Affairs Department, through
elaborated in the section relating to an effective grievance management
'Corporate Social Responsibility', with the mechanism for handling of investor queries
following distinct features: and complaints, through the following key
measures:
• Community investment & welfare schemes
• 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
manner
• Environmental protection measures
• Grievances are handled honestly and in
• Occupational health & safety good faith by PEL employees and without
• Business ethics & anti-corruption prejudice
measures • Any grievances requiring attention of the
management or the Board of Directors,
• Consumer protection measures
are escalated to the appropriate levels
• Energy conservation with full facts of the case, for judicious
• Industrial relations settlement of the grievance
• Investigations are also carried out to
• Employment of special persons
inquire whether the cause of the grievance
• National cause donations was a weakness in the system or
• Contribution to National Exchequer negligence/willful act on part of any
employee
• Appropriate remedial action is taken The employees are required to report

immediately to ensure avoidance in the concerns directly to immediate supervisors,
future except where, reporting to supervisors is
impracticable, in which case, the level may
POLICY FOR SAFETY OF RECORDS be raised to the senior management.
The Company has established a policy for The purpose of this policy is to encourage all
preservation of records in line with good stakeholders to raise questions and
governance practice. concerns, monitor the progress of resultant
These records include books of account, inquiries, provide feedback and where
documentation pertaining to secretarial, required, also voice concerns against any
legal, contractual, taxation and other matters, unsatisfactory inquiry or proceeding.
which have been archived where needed, in The Policy covers unethical conduct, offence,
a well preserved and secure manner. breach of law or failure to comply with legal
The main objectives this policy are: obligations and possible fraud / corruption.
• To ensure that the Company's records are Due emphasis has also been placed on
created, managed, retained and disposed health, safety and environmental risks.
off in an effective and efficient manner; Inappropriate or malicious reporting leading
to wrongful convictions have been
• To ensure preservation of the Company's
specifically forbidden, with clear definition of
records of permanent value to support
consequences for the persons making
both protection of privacy and freedom of
wrongful accusations.
information;
• To ensure that information is held as long No material incidence was reported to the
as required to meet legal, administrative, Audit Committee during the year regarding
operational and other requirements of the improprieties in financial, operating, legal or
Company. other matters. All minor events requiring
management's attention were duly
These objectives are achieved through addressed with dissemination of messages
implementation of access controls, on-site across the Company for avoidance of such
and off-site backups, determination of incidents in the future.
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
the management. PEL attracts the finest talent for induction in
all functions of the Company and ensures
WHISTLE BLOWING POLICY provision of a conducive environment to
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 whistle blowing mechanism for refining their abilities for prospective
sounding of alerts against deviations from leadership roles.
policies, controls, applicable regulations, or
violation of the code of professional ethics / The Company also ensures availability of
conduct. The Whistle Blowing Policy is competent personnel in each department
applicable to all employees, management through a comprehensive Succession Plan,
and the Board and extends to every carried out in terms of an individual's
individual associated with the Company potential, qualification, period of service and
including contractors, suppliers, business professional attitude amongst other criteria.
partners and shareholders etc., who can The succession policy is updated
participate effectively and in confidentiality, periodically in line with the Company's
without fear of reprisal or repercussions. requirements and career development
objectives.
Shariah Compliance
S.M. SUHAIL & CO.
CERTIFICATE ON SHARIAH COMPLIANCE REVIEW OF PAK ELEKTRON LIMITED
It is hereby certied that M/s Pak Elektron Limited (PEL) is a Shariah Compliant Company
as on December 31, 2018, including the business activities for the year then ended, as
per the relevant information provided to us and to the best of our knowledge and belief.
M/s.Pak Elektron Limited
Our Ref: SMS-A-1442019

Date: April 04, 2019
global
leading edge alliance

innovation quality excellence
April 04, 2019

Ref: SA-2019/027
SHARIAH COMPLIANCE CERTIFICATE OF PAK ELEKTRON LIMITED (PEL)
PAK ELEKTRON LIMITED
PAK ELEKTRON LIMITED (PEL)

Corporate Governance
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES (CODE OF
CORPORATE GOVERNANCE) REGULATIONS, 2017
The company has complied with the absence, by a director elected by the
requirements of the Regulations in the board for this purpose. The board has
following manner: complied with the requirements of Act
and the Regulations with respect to
1. The total number of directors are Ten as
frequency, recording and circulating
per the following:
minutes of meeting of board.
a) Male: Nine (9)
8. The board of directors have a formal
b) Female: One (1)
policy and transparent procedures for
2. The composition of board is as follows: remuneration of directors in accordance
with the Act and these Regulations.
Category Names
Independent Director Mr. Asad Ullah Khawaja

9. The Board has arranged Directors'
Training program for the following
Executive Directors Mr. M. Murad Saigol
Mr. M. Zeid Yousuf Saigol Directors:
Syed Manzar Hassan
a) Mr. Muhammad Murad Saigol
Non-Executive Directors Mr. M. Naseem Saigol b) Mr. Muhammad Zeid Yousuf Saigol
Sheikh Muhammad Shakeel
Syed Haroon Rashid c) Syed Manzar Hassan
Mr. Usman Shahid d) Syed Haroon Rashid
Syed Jamal Baquar e) Sheikh Muhammad Shakeel
Ms. Azra Shoaib
10. The board has approved appointment of
3. The directors have confirmed that none CFO, Company Secretary and Head of
of them is serving as a director on more Internal Audit, including their
than five listed companies, including this remuneration and terms and conditions
company. of employment and complied with
4. The company has prepared a Code of relevant requirements of the Regulations.
Conduct and has ensured that 11. CFO and CEO duly endorsed the
appropriate steps have been taken to financial statements before approval of
disseminate it throughout the company the board.
along with its supporting policies and
procedures. 12. The board has formed committees
comprising of members given below:
5. The board has developed a
vision/mission statement, overall a) Audit Committee:
corporate strategy and significant 1. Mr. Asad Ullah Khawaja
policies of the company. A complete
record of particulars of significant 2. Mr. Usman Shahid
policies along with the dates on which 3. Sheikh Muhammad Shakeel
they were approved or amended has
been maintained. 4. Syed Haroon Rashid
6. All the powers of the board have been b) Human Resource and
duly exercised and decisions on relevant Remuneration Committee:
matters have been taken by board/ 1. Mr. Asad Ullah Khawaja
shareholders as empowered by the
relevant provisions of the Act and these 2. Mr. Usman Shahid
Regulations. 3. Syed Manzar Hassan
7. The meetings of the board were presided 4. Syed Haroon Rashid
over by the Chairman and, in his
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 (quarterly/half
requirement and the auditors have
yearly/ yearly) of the committee were as
confirmed that they have observed IFAC
per following:
guidelines in this regard.
a) Audit Committee: Four (4)
18. We confirm that all other requirements of
b) Human Resource the Regulations have been complied
and Remuneration with.
Committee: One (1)
M. Naseem Saigol
15. The board has set up an effective
Chairman
internal audit function who is considered
suitably qualified and experienced for the Lahore:
purpose and are conversant with the April 04, 2019
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
ICAP and registered with Audit Oversight
Board of Pakistan, that they or any of the
partners of the firm, their spouses and
minor children do not hold shares of the
company and that the firm and all its
partners are in compliance with
International Federation of Accountants
(IFAC) guidelines on code of ethics as
adopted by the ICAP.
AUDIT COMMITTEE’S REPORT ON COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
The Committee comprises of members management processes and adequate for
possessing considerable financial insight. shareholder needs.
The Audit committee has concluded its
• All Directors have access to the Company
annual review of the conduct and operations
Secretary. All direct or indirect trading and
of the Company during 2018, and report that:
holdings of Company's shares by
• The Company has issued a "Statement of Directors and executives or their spouses
Compliance with the Listed Companies were notified in writing to the Company
(Code of Corporate Governance) Secretary along with the all the necessary
Regulations, 2017, which has also been require information, including price,
reviewed by the External Auditors of the number of shares, form ofshare
Company. certificates and nature of transaction,
which were notified by the Secretary to the
• Understanding and compliance with
Board within the stipulated time. All such
Company codes and policies has been
holdings have been disclosed in the
affirmed by the members of the Board, the
pattern of shareholding. The Annual
Management and employees of the
Secretarial Compliance Certificates are
Company individually. Equitable treatment
being filed regularly within stipulated time.
of shareholders has also been ensured.
• Closed periods were duly determined and
• Appropriate accounting policies have
announced by the Company, precluding
been consistently applied. All applicable
the Directors, the Chief Executive and
Approved Accounting and Financial
executives of the Company from dealing
Reporting Standards were followed in
in Company's shares, prior to each Board
preparation of financial statements of the
meeting involving announcement of
Company on a going concern basis, for
interim / final results, distribution to
the financial year ended December 31,
shareholders or any other business
2018, which present fairly the state of
decision, which could materially affect the
affairs, results of operations, profits, cash
share market price of Company, along
flows and changes in equity of the
with maintenance of confidentiality of all
Company.
business information.
• The Chief Executive and the Chief
Internal Audit
Financial Officer have endorsed the
financial statements of the Company. They • The internal control framework has been
acknowledge their responsibility for true effectively implemented through an
and fair presentation of the Company's Internal Audit function established by the
financial condition and results, Board which is independent of the
compliance with regulations and External Auditors of the Company.
applicable accounting standards and
• The Company's system of internal control
establishment and maintenance of internal
is sound in design and has been
controls and systems of the Company.
continually evaluated for effectiveness and
• Accounting estimates are based on adequacy.
reasonable and prudent judgment. Proper
• The Audit Committee has ensured the
and adequate accounting records have
achievement of operational, compliance,
been maintained by the Company in
risk management and financial reporting
accordance with the Companies Act,
objectives and safeguarding of the assets
2017. The financial statements comply
of the Company and the shareholders
with the requirements of the Fourth
wealth at all levels within the Company.
Schedule to the Companies Act, 2017 and
the external reporting is consistent with
• The Internal Audit function has carried out objectivity of the Auditors has thereby
its duties under the charter defined by the been ensured. The Auditors attended the
Committee. The Committee has reviewed General Meetings of the Company during
material Internal Audit findings, taking the year and have confirmed attendance
appropriate action or bringing the matters of the 63rd Annual General Meeting
to the Board's attention where required. scheduled for April 26, 2019 and have
indicated their willingness to continue as
• The Head of Internal Audit has direct
Auditors.
access to the Chairman of the Audit
Committee and the Committee has • Being eligible for reappointment as
ensured staffing of personnel with Auditors of the Company, the Audit
sufficient internal audit insight and that the Committee has recommended the
function has all necessary access to appointment of Rahman Sarfaraz Rahim
Management and the right to seek Iqbal Rafiq, Chartered Accountants as
information and explanations. External Auditors of the Company for the
year ending December 31, 2019.
• Coordination between the External and
Internal Auditors was facilitated to ensure • The Firm has no financial or other
efficiency and contribution to the relationship of any kind with the Company
Company's objectives, including a reliable except that of External Auditors.
financial reporting system and compliance
with laws and regulations.
External Auditors
• The statutory Auditors of the Company, Asad Ullah Khawaja
Rahman Sarfaraz Rahim Iqbal Rafiq, Chairman - Audit Committee
Chartered Accountants, have completed
Lahore:
their Audit of the Company's financial
April 04, 2019
statements and the their Review of the
Company's Compliance with the Code of
Corporate Governance for the financial
year ended December 31, 2018 and shall
retire on the conclusion of the 63rd 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.
• The Auditors have been allowed direct
access to the Committee and the
effectiveness, independence and
Rahman Sarfaraz Rahim Iqbal Rafiq
72-A, Faisal Town,

Lahore - 54770, Pakistan.
T: +92 42 35160430 - 32
F: +92 42 35160433
E: lahore@rsrir.com
W: www.rsrir.com
To the members of PAK ELEKTRON LIMITED

Review Report on the Statement of Compliance contained in Listed Companies
(Code of Corporate Governance) Regulations, 2017
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of
Corporate Governance) Regulations, 2017 ['the Regulations'] prepared by the Board of
Directors of PAK ELEKTRON LIMITED for the year ended December 31, 2018 in accordance
with the requirements of regulation 40 of the Regulation.
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 and also ensure compliance with the requirements
of section 208 of the Companies Act, 2017. 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. We have not carried out
procedures to assess and determine the Company's process for identification of related parties
and that whether the related party transactions were undertaken at arm's length price or not.
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, 2018.
RAHMAN SARFARAZ RAHIM IQBAL RAFIQ

Lahore: April 04, 2019
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 this After nalization of IMF program, Our organization has passed
challenging economic era your Revival of energy & housing through a dynamic phase where
company maintained its share sectors and CPEC Special skills, technologies and scales
holders trust and market share Economic Zones SEZs the are developed. With the
due to its quality products and demand of Power Division increased capacity and improved
business practices. products is expected to ourish. competitiveness our PEL brand
In future economic outlook CPEC is well positioned as standout
At the close of 2018, Company
Projects of around 15,852 MW market leader.
achieved a revenue level of
are in pipe line and privatization
Rs.38.990 Billion against Rs.
of DISCOs is underway, the
42.346 Billion of previous year.
Company foresees a promising M. Naseem Saigol
Despite of overall economic
way forward for this segment. Chairman
stress, Appliances Division
Our focus will remain on
business almost maintained its Lahore
continuous research and
revenue level at Rs. 27.275 April 04, 2019
development which will enable
Billion against Rs. 27.754 Billion
us to not only cater for the local
of preceding year. In such a
demands but also explore new
challenging environment, this all
markets outside Pakistan.
is due to our team resilience,
strong customer focus and Under the prevailing competitive
reception of PEL's brand image circumstances we remained
in the industry. committed to our strategy of
steady growth in quality avenues
Power Division business
with signicant emphasis on
remained slower, with a revenue
product development. The
of Rs. 11.714 Billion against
cornerstone of our business
14.591 Billion of previous year.
philosophy revolves around
Slow ordering from WAPDA and
customer satisfaction, capacity
Discos are the underlying
building and human resource.
reasons causing this decline.
Annual Report 2018 E 03
CEO’s Remarks
This year has been highly product features, introduce and dedication provide
challenging to meet inuences of aesthetics and increase product condence of sustained
tough economic macros range that led to strengthening protability for the shareholders
prevailed in the country during the customer's condence. of the Company.
the period under review.
The sales in Power Division
Company business
remained lower by 20% due to
fundamentals are intact and it will M. Murad Saigol
low ordering from Government
again attain its growth Chief Executive Ofcer
sector. We foresee a potential
momentum as economic
recovery and further growth
conditions revive. The company Lahore
momentum due to Electricity
is on way to launch latest market April 04, 2019
T&D infrastructure augmentation
competitive product models both
needs after managing electricity
in home appliances and power
generation shortfall.
division through ongoing R&D.
The company aims to achieve Gross prot achieved in 2018
sustainable growth by amounts to Rs. 6,997 million as
undertaking strategic and compared to Rs. 9,116 million in
forward looking investments that 2017, resulting a decline of @ 23
build on our robust earnings % as compared to previous year
based and meet the rising mainly due to increase in input
demand of PEL products. cost mainly affected by Pak
Rupee depreciation of 25.8%
In 2018 revenue achieved is Rs.
during the year under review.
38,990 million which is lower by
Prot after tax was recorded at
7.92% as compared to the
Rs. 1,372 million as compared to
corresponding period (2017: Rs.
Rs. 3,308 for the previous year.
42,347 million). Decline in sales
is due to prevailing country Earning per share is Rs. 2.67 as
economic outlook and reverse compared to that of Rs. 6.56 of
with the improvement in key previous year.
economic indicators.
To support the future growth in
Appliance Division maintained its revenue, production and prots,
business volumes of Rs. 27 Company has invested in
Billion despite overall decline in building, plant and machinery,
per capita disposable income. which will not only increase the
The company continued production capacities, but will
launching of “New Series” of all also improve efciencies. This
products to achieve market will support us to meet the
competitiveness. To cater the production and warehousing
consistent product range requirements during peak
widening LED TV launched in seasons and in timely deliveries
last quarter of the year which is against future high order intakes.
well received in the market.
The aggressive marketing by the
Production Facility of Washing
global brands, persistent pricing
Machine is under installation and
pressure and strong competition
its commercial production is
continue to pose challenges for
expected to commence in 2nd
Company protability and
half of the year 2019.
performance. However, we
Refrigerator new series “Llife”,
remain committed to drive the
Arctic Fresh” and InverterON are
business forward and explore the
well received in the market. “Full
new avenues despite these
DC Inverter series” of Air
numerous challenges. Resilient
Conditioners, “Inverter series” in
Company performance during
Deep Freezers and curve glass
2018, besides our planned
with multiple designs introduced
diversication & productivity
in Water Dispensers. The
initiatives, improved brand equity
Company kept on improving
Directors’ Report
The Board of Directors’ is pleased to present to you the annual report of the Company along with the
audited nancial statements for the year ended December 31, 2018
MACRO - ECONOMIC This is in line with a 2% YoY than expected performance of the
OVERVIEW increase in the level of exports to Pakistani market as foreign
USD 11.2 billion in H1 FY'19 vs. investment recorded a net
Global Economic Overview last year and a 2.3% YoY outow of USD 537.1 million in
reduction in the level of imports CY'18 (CY'17: USD 487.1 million).
Globally, Economic growth
to USD 28.0 billion during H1
remained subdued during Industry Overview
FY'19. Home remittances
2018.The growth rates are
remained strong with growth of After peaceful General Elections
estimated at 3.7% for 2019 and
10% (H1 FY'19 vs. H1 FY'18) and and a smooth transition process
2020 growth estimates have now
stood at USD 10.8 billion during is completed. The new
been revised downward at 3.5%
H1 FY'19. Government with its manifesto is
and 3.6% respectively which is
taking off. A nancial Planning
0.2 and 0.1 percentage point The huge current account decit
with complete understanding of
below the initial estimates. These continued to strain FX reserves
economic issues is intact. In next
developments occurred against a that reduced from USD 20.2
following months government is
backdrop of weakening nancial billion in Dec'17 to USD 13.8
moving towards IMF package
market sentiments and a lack billion at Dec'18, a decline of
and after its conclusion stability
luster performance observed by 31.8%. While the country's
with reference current economic
major economies. Concerns decision of formally entering into
issues will be seen. Pak Rupees
about inationary effects like oil another IMF Program remained
Deprecation increased home
price volatility and currency under review, external support
appliance cost, beyond the
depreciation have forced central during the last quarter of 2018
consumer absorption limits
banks in emerging market eased the burden on the balance
resulted in manufacturer's margin
economies to raise policy rates. of payments position. However,
cut. On the other hand growing
pressure remained on the
Domestic Economic Overview inationary trends curtailed
exchange rate resulting in 25.8%
disposable incomes and
Economic progress in 2018 has devaluation in the rupee over the
ultimately lower buying.
been undermined by challenges year with the closing level in
revolved around maintaining a Dec'18 at PKR 138.86 / USD. Electricity shortage is almost
stable foreign exchange reserves cooped after power generation
Inationary pressures have
position, containing the scal projects and augmentation of
started to build up as average H1
decit and the steady increase in T&D infrastructure is major task
FY'19 CPI stood at 6.0% year on
the level of ination. This has to transmit the additionally
year versus 3.8% in H1 FY'18.
resulted in an expected generated electricity to end
Rising ination, combined with
slowdown in the rate of GDP consumers. A temporary
the deteriorating external and
growth for FY'19 to 4.0% from the slowdown is seen on this and
scal imbalances, resulted in an
earlier targeted level of 6.2% due to the reason ordering of
increase in the benchmark policy
(FY'18: 5.8%). The low interest electrical equipment by WAPDA
rate by a cumulative 450 basis
rate regime during the previous distribution companies is slow.
points in the last one year, taking
years, along with high aggregate After conclusion of IMF package
the policy rate to 10.25% in
demand had resulted in huge hopefully the things will move on
January 2019.
credit expansion. However, its natural pace.
measures taken in the last one A more bearish sentiment
year in the form of monetary prevailed in the stock market
policy tightening and sharp throughout the year as the PSX-
devaluation are now impacting 100 Index closed at 37,067 points
the rate of growth. in Dec'18, a decline of 8.4% over
the Dec'17 level. 2018 proved to
The current account decit,
be a difcult year for the stock
although still at high levels, has
market in view of sharp
reduced from USD 8.4 billion in
devaluation, while investors
H1 FY'18 to USD 8.0 billion in H1
awaited more clarity on the
FY'19. The trade decit reduced
macro economic outlook under
from USD 17.7 billion in H1 FY'18
the new government. Sell-off by
to USD 16.8 billion in H1 FY'19.
global funds also led to the lower
The company aims to

achieve sustainable
growth by undertaking
strategic and forward
looking investments that
build on our robust
earnings based and meet
the rising demand of PEL
products.
M. Murad Saigol
Chief Executive Ofcer
Directors’ Report
ANALYSIS OF FINANCIAL AND NON-FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE
Summary of nancial 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
2018 2018 2017
(Actual) (Budget) (Actual)
Gross revenue 38,990 43,406 42,347

Gross prot 6,997 8,535 9,116
Operating prot 3,663 4,454 5,155
Finance cost 2,103 2,056 1,547
Prot before tax 1,557 2,398 3,603
Prot after tax 1,371 2,212 3,308
Earnings per share - Rupees 2.67 4.36 6.56
The nancial performance of the Company remained under par as compared to the budgetary
targets as well as its nancial performance in previous year. Revenue declined mainly due to
inationary pressures causing an overall decline in per capita disposable income resulting in
lower spending on appliances and an unforeseen temporary slowdown in power segment due
to prevailing uncertainty post General Elections 2018 whereby ordering of electric equipment
by electric power distribution companies remained sluggish in the last two quarters. Prot
margins dropped signicantly due to increase in input cost mainly affected by Pak Rupee
depreciation by over 25% during the year. This in turn also effected liquidity position causing
increased reliance on external borrowings which in turn, coupled with increase in interest rates,
resulted in higher nance cost.
Financial Indicators
Revenue Break-up value per share
38,990 7.93%
59.94 12.35%
(Rs. in million) (Rs. in million)
Gross prot Financial leverage
6,997 23.24%
0.57 16.37%
(Rs. in million) (Times)
Prot after taxation Total assets
1,371 58.54%
52,100 18.64%
(Rs. in million) (Rs. in million)
Earnings per share Total equity
2.67 59.31%
30,280 12.14%
(Rupees) (Rs. in million)
Return on equity Share price
4.53 63.03%
24.90 47.57%
(Rs. in million) (Rupees)
NON-FINANCIAL PERFORMANCE
As regards non-nancial 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.
Diversication 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 market sales/service center
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
efciency The Company has kept that in order to achieve
itself up-to-date with efciencies and
the latest technology economies of scale, it
advancements to has to remain a
achieve production technology forerunner.
efciencies
Directors’ Report
Personnel Training and Yes.

development education programs
for employees. Human Capital shall
continue to remain one of
Technical and non- the most important areas
technical training of focus for the Company.
HUMAN programs were
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 sufcient Timely payments Yes.

liquidity to meet
liabilities when due, The Company has Having sufcient liquidity
Rs.
under both normal maintained sufcient 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 market The Company's
share price decline shareholders shall
during the year as it is continue to be of the
directly impacted by prime focus.
SOCIAL AND the Company's
RELATIONSHIP performance
CAPITAL
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
efcient 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 meet
initiatives and activities societal needs.
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 recognizes
products. the importance of
meeting the innovation
New series for intensive needs of its
INTELLECTUAL refrigerator, air 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 nancial and non-nancial indicators on an
annual basis which are approved by the Board of Directors. Key Performance Indicators are
identied based on how effectively these reect 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 nancial performance and position are the most basic nancial indicators. The
Company analyses revenue, gross prot, prot 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 nancial position. Market share price is also a very important
nancial indicator as the Company's market perception is measured directly with reference to
its market share price.
Non-nancial 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 take the opportunity. Wide (CCBPL) and PEPSI (Riaz
OPERATING product penetration gap is yet Bottlers) for repair services of
to be bridged, especially in rural Deep Freezers, Visi Coolers and
PERFORMANCE areas. In the improved Chest Coolers in different parts
Refrigerator electricity load shedding of Pakistan.
scenario, PEL's “Inverter / Invert
Being Company's Prime PEL Deep Freezers with its
on Series Refrigerators” being
Product, refrigerator contributed improved aesthetics is well
“Energy Efcient” will have an
64% of the appliance division's received in retail market is well
additional demand. A number
revenue and 45% of in total received; this is evident from
of initiatives have been
Company's revenue in the year Sales Volume growth by 18% in
premeditated with respect to
2018. Refrigerator registered a the current year. Company is
product innovation which will be
YOY sales decrease @ 7% due also introducing a glass door
complemented with appropriate
to slow country market. Product series in year 2019 on market
marketing campaigns.
cost hike faced during the year demand. A Continuous R&D
due to massive Pak Rupee Deep Freezer Process is on way to make the
depreciation and same could product energy efcient,
Deep Freezer revenue
not be passed on completely to durable and with improved
registered a YoY growth @ 18%
customers as their buying esthetics.
as Company aggressively
power had also shrunk due to
entered into this market and Air conditioner (AC)
increasing ination.
captured additional volumes
During the year Split ACs
Our energy efcient refrigerator over & above Institutional Sales.
Business showed a declining
“InvertON series” with lowest Company Uses “O Zone
trend @ 10%. The Split AC
start-up with 100 Volts &“Arctic Friendly Refrigerants" as per UN
market is still highly potential for
Fresh" series with Turbo Cooling Montreal Protocol, so is the
growth. The models introduced
and Freshness LEDs are preferred choice for MNCs in
during the year are “AERO”,
designed for better food the corporate sector. PEL's
“ALLURE”, “ACE”, “APEX” and
preservation. These series are innovative customized product
“FIT”. All the product
based on a masterpiece of satises the demand of Ice
development is fueled by the
“Japanese Inverter Technology” cream and beverage
concept of energy efcient and
with electricity saving up to companies and has gained
4 star rating inverter technology
40%. These refrigerators with strong brand equity. PEL Deep
to meet the customer
improved aesthetics have been Freezers has become the
satisfaction and market
well received in the local preferred choice of corporate
competition.
market. Further R&D is on the Institutions like Unilever, Engro
way to introduce new wide Foods, Pepsi and Pakistan Growing Emerging Middle-
body models with increased Dairies (Igloo) who are the Class and Rapid Urbanization
capacity in all existing series. major customers of PEL's deep are potential market growth
The multi door and side-by-side freezers right now. drivers. Uninterrupted and lower
refrigerators are also introduced cost electricity supply will
During the year new advances
in the market which fetched a further increase the market
series of “Arctic Pro Freeze
very promising response from demand, due to low electricity
Extend” and “Slider Series” are
the customers. Parallel to consumption by Inverter
introduced with improved
product development initiatives, technology based equipments.
technological developments
continuous marketing Company's country wide
with primary focus on energy
campaigns and tireless sales efcient after sales services net
efciency. The Company has
activities lead to maintain the work is also play a vital role to
also changed its slogan “Sub
market share. win "Consumer Condence”.
Sy Thanda” to “Extreme
With the expected economic Freezing -33“. Microwave Oven
revival after IMF Package again
our company is capitalizing on During the period under review
improvement in disposable
stronger relations and technical Company registered slight
income of middle class will be
expertise and our After Sale decline of 3% in revenue from
seen and resultantly demand of
Department has signed service last year. Company launched
refrigerator will get back on its
agreements with Coca Cola new innovative MWO Series
growth trajectory and your
Beverages Pakistan Limited “Classic Plus” and “Silver Line”
company is well positioned to
Directors’ Report
during the year. These series competitors in market. For this commercial production and
with improved product features purpose state of the art now the target is to transmit the
and offer a unique cooking technology regarding Video generated electricity to end
experience. These include solo Processing and Latest Sound consumers. Augmentation of
as well as grill models inspired Standards are adopted to meet T&D infrastructure is much
by users' need for both the with the customer requirements. needed at the moment. As the
options. The PEL microwave Along with this now a days due current slowdown ends, a
ovens are equipped with to versatility of ANDROID OS in robust demand of Distribution
manual as well as digital mobiles, television Transformers is expected and
interface depending on manufacturers also focused to Your Company is well equipped
customers' needs. These embed this feature in the LED to take this opportunity. After
products are well-designed and TVs. We have incorporated the expected revival of local
recommended for space- ANDROID OS in LED TVs to industry demand of
saving, they also offer convert the television from transformers will increase in
customized cooking NORMAL to SMART and offer Private sector as well. We are
experience. the user to enjoy the SMART condent that we will gain our
television experience. due share of distribution
Water Dispenser
transformer supply share in
Washing Machine
On consistent Market Demand present government Five million
to widen the Product Range The persistent urge of houses of “Naya Pakistan
Company entered into Water enhancing our product portfolio Housing Authority Project”.
Dispenser trading and after and diversication has led us to
Your Company is also gaining
seeing business potential set of Washing Machine
ground in the export market in
decided to set up a Production manufacturing facility. There is
Middle East, Africa, and Central
Facility and started Commercial sizable market of Washing
Asia, Swaziland with special
Production in year 2017. Machine which exists in the
focus on Afghanistan.
During the Year 2018 Sales country and being essential in
volumes increase @112% home appliances. Company PEL transformer manufacturing
indicates its warm market foresees a reasonable market facility continues to be the
reception. The continuous share in near future. The agship of the Company by
research and development manufacturing facility is in the maintaining its image of being
activities are on the way to process of setting up washing the best state-of the - art
improve product quality & machine manufacturing facility manufacturing set up in the
esthetics. and production is expected in region. With the highest quality
2nd half of year 2019. human resource, manufacturing
LED Television
and design infrastructure, your
Distribution transformer
Keeping in view the rapidly Company is committed to not
(DTR)
growing market of LED only maintain, but enhance its
television and as a key unit of PEL, is amongst the Pioneers in brand image in local as well as
home appliances product Distribution Transformer global markets.
portfolio, PEL decided to enter Manufacturing in Pakistan, has
Power transformer (PTR)
into the manufacturing of LED set up a state of art Distribution
televisions. The Company has Transformer manufacturing and Company started Power
set up its production line during testing facility in year 2009 to Transformer Business in year
the year and made a colorful attain Global Quality 2004, in technical Collaboration
entry in the market with a brand Standards. Distribution with GANZ Hungry. Power
“COLOR ON”. We made a Transformer is also one of the Transformer is a high value
massive launch with Company's Premier Product. In asset in any electrical network.
advertisement campaigns all the year under review Product There are limited Power
across the country to stamp the revenues remained lower by Transformer suppliers in
product awareness. 16% due to lowering of pricing Pakistan. Company has the
and slow ordering from WAPDA plan to set up a state of art
The major focus in development
Distribution Companies. Power Transformer
of LED TV was to introduce the
Manufacturing Facility at 34 KM
features that make PEL's TV Most of Power Generation
Ferozepur Road Lahore.
more attractive & cost Projects under CPEC
competitive in comparison to its arrangements has started During the Year, Sales Revenue
of Power Transformer dropped there in the following year due EPC Contracting
by 58% as compared to last to demand increase as a result
year, largely due to slow of Distribution system up PEL- EPC Department takes up
ordering by WAPDA Distribution gradation and expected turnkey contracts involving
Companies. After eliminating Industrialization. Engineering, Procurement and
generation short fall, there must Construction (EPC) for building
During the year company power infrastructure projects
be a focus shift on rehabilitation
achieved a milestone for comprising electrical
of T&D Infrastructure and
qualifying with DHA Karachi for networks/electrication and grid
demand of Power Transformers
supply of compact substations stations up to 220 KV level.
is again expected to increase
after successful testing from
and PEL being key player will EPC Business reected a slow
“Xiai High Voltage Laboratory
gain its due business share trend @ 17 % mainly due to
China”.
from WAPDA Distribution execution timings and
Companies. With the revival of We have an optimistic Business registered revenue of Rupees
local industry it is expected outlook, aligned the visible 3.135 Billion in comparison to
additional demand of Power signs of economic stimulation 3.784 Billion of last year.
Transformer will arise. Housing of national industry in textile and Company capitalizing its
Sector Growth backed by rapid energy sectors. The overall performance history of
urbanization and Population private business of housing Installation of Grid Stations for
pressure will increase demand schemes and upcoming NTDC, WAPDA Distribution
of Power Transformers. We are projects of industrial estates Companies and Private
condent that we will gain our seem very promising next Customers. We received
due share of distribution following years. Contract of 132 KV GIS Grid
transformer supply share in Station at DHA Karachi and
Energy Meters
present government Five million external electrication project
houses of “Naya Pakistan Energy Meter Business during with Faisalabad Development
Housing Authority Project” the review registered 37% YOY Authority. EPC Business also
decline due slow ordering by achieved a contract of Design,
During the Year Company
WAPDA Distribution companies. Supply and supervision of
obtained “STL Short Circuit
Certication from VEIKI-VNL Construction of Five Million Installation & Commissioning of
Lab, Hungary” after successful Houses by “Naya Pakistan 33 KV grid station at Juba South
testing of Power Transformer, Housing Authority” an Sudan. This will further open an
becoming the rst local opportunity window for Energy avenue of off-shore business
manufacturer to have achieved Meter Business and Your and our EPC team of seasoned
this milestone. Company is well positioned to professionals with an excellent
take its due market share, as performance history is
Our focus will remain on determined to grasp this
has already developed Single
continuous research and opportunity.
Phase, Three Phase GSM
development which will enable
Energy Meters and DLMS EPC Business has a great
us to not only cater for the local
Compliant Single Phase Energy potential due to CPEC
demands but also explore new
Meter and got it approved from developments in the country
markets outside Pakistan.
NTDC. and also because of expected
Switch Gears (SG) local construction Industry
During the year your company
Company is among the prequalied with “Karachi boom. Your Company is well
Pioneers of Switch Gear Electric KE” for supply of prepared to grasp arising future
Industry in Pakistan and is electricity meters. opportunities in this sector.
engaged in switchgear
Development and approval of
business since its inception in
Three Phase GSM / GPRS
1958. PEL is one of the leading
based on MPECO Specication
manufacturers of Pakistan.
Customized Meter and
Switch Gear Business reected
development of Firmware,
decline trend @ 8% during the
Programming and Calibration
year under review due to timing
Software for smooth Production
of ordering by WAPDA
ow is already obtained.
distribution companies.
However positive signs are
Directors’ Report
FINANCIAL RATIOS
Unit 2018 2017 2016 2015 2014 2013
Protability Ratios
Gross Prot ratio % 24.60 29.41 30.87 29.59 30.75 24.62
Net Prot to Sales % 4.82 10.67 13.68 11.46 10.92 3.69
EBIT margin Rupees in millions 3,765 5,173 5,691 5,295 4,438 2,594
EBITDA margin Rupees in millions 4,616 6,055 6,541 6,041 5,195 3,315
% change in sales % (7.93) 24.10 16.37 21.54 27.94 (7.08)
% change EBIT margin % (27.23) (9.10) 7.47 19.32 71.07 17.34
EBITDA Margin to Sales % 16.23 19.53 24.38 24.05 25.32 20.13
Operating Leverage Times 3.44 (0.38) 0.46 0.90 2.54 (2.45)
Return on Equity
- without revaluation resevres % 5.79 14.56 17.61 18.96 20.33 9.28
- with revaluation resevres % 4.53 12.25 14.39 14.40 14.37 5.44
Return on Capital Employed % 3.12 7.68 9.28 8.13 7.45 2.38
Liquidity Ratios
Current ratio Times 1.77 2.40 2.84 2.52 2.44 1.52
Quick / Acid Test ratio Times 1.04 1.55 1.73 1.61 1.49 0.99
Cash to Current Liabilities Times 0.03 0.05 0.07 0.07 0.05 0.04
Cash Flow from Operations to Sales Times (0.00) 0.06 0.08 0.08 (0.17) 0.00
Activity/Turnover Ratios
Inventory turnover ratio Times 2.27 2.74 2.64 2.83 2.79 3.24
No. of Days in Inventory Days 161 133 138 129 131 113
Debtor turnover ratio Times 3.73 4.42 4.23 3.96 3.83 3.39
No. of Days in Receivables Days 98 83 86 92 95 108
Creditor turnover ratio Times 26.07 27.39 24.72 23.59 17.63 10.54
No. of Days in Payables Days 14 13 15 15 21 35
Total Assets turnover ratio Times 0.55 0.71 0.67 0.69 0.63 0.61
Fixed Assets turnover ratio Times 1.75 2.39 2.04 1.85 1.63 1.24
Operating Cycle Days 245 203 210 206 206 186
Investment/Market Ratios
Earning per Share - Basic Rupees 2.67 6.56 7.51 6.61 6.13 3.75
Earning per Share - Diluted Rupees 2.67 6.56 7.51 6.61 6.13 3.75
Price Earnings ratio Times 9.33 7.24 9.49 9.46 6.68 5.33
Dividend Yield ratio % - 5.69 4.21 2.00 - -
Dividend Payout ratio % - 41.15 39.95 18.91 - -
Dividend Cover ratio Times - 2.43 2.50 5.29 - -
Cash Dividend per Share Rupees - 2.70 3.00 1.25 - -
Stock Dividend per Share % - - - - - 10.00
Market Value per Share
- year end Rupees 24.90 47.49 71.28 62.54 40.93 19.99
- high during the year Rupees 61.85 123.73 74.64 94.97 40.93 27.97
- low during the year Rupees 21.96 43.10 53.57 42.33 18.87 8.14
Break-up Value per Share
- without revaluation resevres Rupees 46.72 44.76 40.97 33.07 26.57 22.74
- with revaluation resevres Rupees 59.94 53.35 50.36 45.14 38.04 39.94
Market capitalization Rupees in millions 12,392 23,635 35,475 24,900 16,296 5,360
Capital Structure Ratios

Financial Leverage ratio Times 0.57 0.49 0.45 0.69 0.84 1.00
Weighted Average Cost of Debt % 10.69 9.31 9.13 11.15 14.81 14.52
Debt to Equity ratio % 13:87 18:82 20:80 29:71 36:64 36:64
Interest Cover ratio Times 2.30 4.50 5.16 3.67 2.47 1.51
COMMENTS ON FINANCIAL RATIOS
Protability Ratios Investment / Market ratios

Gross prot has decreased by 23% as As a result of decrease in earning in current
compared to the previous year 2017 primarily year EPS has also decreased to 2.67 as
due to increase in input cost mainly affected compared to 6.56 in the previous year.
by Pak Rupee depreciation of 25.8% and Economic uncertainty on the political front
decrease in Sales due to prevailing resulted in an oscillate price trend exhibited
economic conditions in the country. Net prot by the company's share throughout the year.
also decreased by 59% as compared to 2017 However, investor condence is resuming in
mainly due to increased nance cost. As a the light of improved fundamentals like price
result return on equity and capital employed earnings ratio which is 9.33 in 2018 as
also decreased by 60% and 59% against the compare to 7.24 in year 2017.
previous year of 2017.
Capital Structure Ratios
Liquidity Ratios Financial leverage improved in the current
year to 0.57 which is reduced 43% as
Current ratio as at close of 2018 has
compared to the year 2013 when it was 1
decreased by 26% as compared to the year
times. As a result of increased nance cost
2017 mainly due to increase in short term
and low earnings recorded in year under
borrowings. This also caused a slight
review interest cover declined to 2.3 times as
decrease in cash to current liabilities and
compared to 4.5 times in year 2017.
cash ow from operations to sales ratio.
Activity/ Turnover Ratios
Inventory days increased in current year by
28 days as compared to previous year 2017.
mainly due to bulk buying and receivable
days increased by 15 days.
There is a slight improvement in payment
days to creditors.
Directors’ Report
GRAPHICAL ANALYSIS
Prot after Tax Gross Prot

4,500 10,000
4,000 9,000
Rupees in millions
Rupees in millions
3,500 8,000
3,000 7,000
6,000
2,500
5,000
2,000
4,000
1,500 3,000
1,000 2,000
500 1,000
- -
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Years Years
Financial Leverage Return on Equity

1.20 16.00
14.00
1.00
12.00
0.80 10.00
% age
Times
0.60 8.00
6.00
0.40
4.00
0.20 2.00
- -
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Years Years
Current Ratio Inventory Turnover

3.00 3.50
2.50 3.00
2.50
2.00
Times
Times
2.00
1.50
1.50
1.00
1.00
0.50 0.50
- -
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
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
- -
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Years Years
Earnings per Share Market Value per Share

8.00 80.00
7.00 70.00
6.00 60.00
Rupees
5.00
Rupees
50.00
4.00 40.00
3.00 30.00
2.00 20.00
1.00 10.00
- -
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Years Years
Statement of Financial Position Analysis (Assets)

30,000
25,000
Rupees in millions
20,000
15,000
10,000
5,000
-
2013 2014 2015 2016 2017 2018
Years
Non-current Assets Current Assets
Statement of Financial Position Analysis (Equity and Liabilities)
2018
2017
2016
2015
2014
2013
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Equity Long term debt Deferred liabilities/income Current liabilities
Statement of Prot 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
-
2013 2014 2015 2016 2017 2018
Years
Gross revenue Net revenue
Statement of Prot or Loss Analysis (Expenses)
2018
2017
2016
2015
2014
2013
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cost of sales Distribution cost Administrative and general expenses Other expenses Finance cost
Directors’ Report
DUPONT ANALYSIS
Unit 2018 2017
Tax burden % 88.07 91.81

Interest burden % 41.37 69.65
EBIT margin % 13.23 16.69
Asset turnover Times 0.55 0.71
Leverage % 172.06 162.65
Return on Equity % 4.53 12.25
Net profit Revenue Total assets Total liabilities Total equity

Rs. 1,371 M Rs. 28,445 M Rs. 52,100 M Rs. 21,820 M Rs. 30,280 M
Net profit margin Assets turnover Total equity Total assets

4.82 % 0.55 times Rs. 30,280 M Rs. 52,100 M
Return on assets Ownership Ratio

2.63 % 58.12%
RETURN ON EQUITY
4.53 %
GRAPHICAL PRESENTATION OF DUPONT ANALYSIS
16.00
14.37 14.40 14.39
Return on Equity (% age)
14.00
12.00 12.25
10.00
8.00
6.00
5.44
4.00 4.53
2.00
-
2013 2014 2015 2016 2017 2018
Years
COMMENTS ON DUPONT ANALYSIS

Operating margin has slided down over the outgoing year primarily due to increase in raw
material cost in the local and international markets. Finance cost as represented by leverage
has also increased to cater the working capital financing needs which is also visible in the
lowered interest burden. The company continued to benefit from tax efficiency in 2018 as well.
To sum up, these factors out weighted the positive factors causing return on equity to fall.
FREE CASH FLOW

Rs. In millions 2018 2017 2016 2015 2014 2013
Prot before taxation 1,558 3,603 4,119 3,514 2,545 775

Adjustments for non-cash and other items 2,609 2,197 2,125 2,391 2,649 2,502
Changes in working capital (2,032) (1,941) (2,247) (1,721) (5,761) (1,495)
Payments for income tax, interest etc. (2,224) (2,010) (1,864) (2,119) (2,918) (1,719)
Net cash generated from/(used in) operating activities (89) 1,849 2,133 2,065 (3,485) 63
Purchase of property, plant and equipment (2,369) (1,843) (1,731) (1,878) (387) (334)
Free Cash Flows (2,458) 6 402 187 (3,872) (271)
1,000
500 402
187
- 6
(271)
(500)
Free Cash Flows
(1,000)
(1,500)
(2,000)
(2,500) (2,458)
(3,000)
(3,500)
(4,000) (3,872)
(4,500)
2018 2017 2016 2015 2014 2013
Years
COMMENTS ON FREE CASH FLOW

Since the Company is in the process of expanding its product range, significant amount of
capital expenditure has been made in the current year which has resulted in negative free cash
flows.
Directors’ Report
ECONOMIC VALUE ADDED
Rs. In millions 2018 2017 2016 2015 2014 2013
Operating prot 3,663 5,155 5,616 5,193 4,449 2,615

Taxation (186) (295) (450) (634) (304) (168)
Operating prot after taxation 3,477 4,860 5,166 4,559 4,145 2,448
Total assets 52,100 43,916 40,327 36,149 32,527 27,143

Current liabilities (15,990) (1,941) (2,247) (1,721) (5,761) (1,495)
Invested Capital 36,110 41,975 38,080 34,428 26,766 25,648
WACC 14.92 11.86 11.61 11.84 14.39 14.09
Cost of capital 5,389 4,977 4,420 4,076 3,852 3,615
Economic Value Added (1,911) (117) 746 483 294 (1,167)
1,000
746
500 483
294
Economic Value Added
-
(117)
(500)
(1,000)
(1,167)
(1,500)
(1,911)
(2,000)
(2,500)
2018 2017 2016 2015 2014 2013
Years
COMMENTS ON ECONOMIC VALUE ADDED

Interest rates increased significantly during the year which caused the weighted average cost
of capital of the Company rise by 25.8 % 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
2017.
SUMMARY OF CASH FLOWS

Rs. In millions 2018 2017 2016 2015 2014 2013
Prot before taxation 1,558 3,603 4,119 3,514 2,545 775

Adjustments for non-cash and other items 2,609 2,197 2,125 2,391 2,649 2,502
Changes in working capital (2,032) (1,941) (2,247) (1,721) (5,761) (1,495)
Payments for income tax, interest etc. (2,224) (2,010) (1,864) (2,119) (2,918) (1,719)
Net cash generated from/(used in) operating activities (89) 1,849 2,133 2,065 (3,485) 63
Purchase of intangible assets (8) (4) - - - (42)
Proceeds from disposal of property, plant and equipment 36 30 38 126 16 34
Acquisition of short term investments - - - - (50) -
Proceeds from sale of investments - - 65 - - -
Long term deposits 6 (106) 23 (97) (73) (53)
Long term advances (1,040) (300) (861) (688) - -
Net cash used in investing activities (3,375) (2,223) (2,466) (2,537) (495) (393)
Long term debt obtained 226 3,810 58 2,063 1,850 -

Repayment of long term debt (1,910) (4,153) (1,854) (2,912) (319) (80)
Net increase/(deacrese) in short term borrowings 5,616 2,246 313 426 345 (1,355)
Proceeds from issue of ordinary shares - - 2,406 - 2,064 1,828
Advances against issue of ordinary shares - - - 1,575 - -
Proceeds from sale and leaseback activities 110 15 4 52 100 -
Dividend paid (591) (1,611) (619) (494) - -
Net cash generated from/(used in) nancing activities 3,451 307 308 710 4,041 393
Net increase/(decrease) in cash and cash equivalents (13) (67) (25) 238 62 62
Cash and cash equivalents as at beginning of the year 484 552 578 340 278 216
Cash and cash equivalents as at end of the year 471 484 552 578 340 278
5,000
4,000
3,000
Rupees in million
2,000
1,000
-
(1,000)
(2,000)
(3,000)
(4,000)
2018 2017 2016 2015 2014 2013
Years
Cash ows from operating activities Cash ows from investing activities Cash ows from nancing activities
COMMENTS ON CASH FLOWS

Net cash used in operating activities amounted to Rs. 89 million, after payment of interest/mark-
up of Rs. 1,414 million and income tax payments of Rs. 810 million.
Net cash used in investing activities amounted to Rs. 3,375 million comprising payments for
capital expenditure of Rs. 2,377 million, and long term advances of Rs. 1,040 million and long
term deposits of Rs. 21 million partially offset by proceeds from disposal of property, plant and
equipment amounting to Rs. 36 million and refund of long term advances of Rs. 27 million.
Net cash generated from financing activities amounted to Rs. 3,451 million comprising of long
term finance obtained Rs. 226 million, proceeds from short term borrowings Rs. 5,616 million
and proceeds from sales & lease back activities Rs. 110 million offset from redemption of
redeemable capital Rs. 275 million, payment of long term finances Rs. 1,543 million, repayment
of lease liabilities Rs. 92 million and a dividend payment of Rs. 591 million.
Directors’ Report
HORIZONTAL ANALYSIS
2018 2018 vs 2017 2017 2017 vs 2016 2016
Rs. in M %age Rs. in M %age Rs. in M
EQUITY AND LIABILITIES
Equity 30,280 12.14 27,001 5.84 25,511

Non-current liabilties 5,830 (10.33) 6,502 (6.73) 6,971
Current liabilties 15,990 53.55 10,413 32.75 7,845
TOTAL EQUITY AND LIABILITIES 52,100 18.64 43,916 8.90 40,327
ASSETS
Non-current assets 23,752 25.68 18,899 4.60 18,068

Current assets 28,348 13.31 25,017 12.39 22,259
TOTAL ASSETS 52,100 18.64 43,916 8.90 40,327
PROFIT OR LOSS
Revenue 38,990 (7.93) 42,347 24.10 34,124

Gross prot 6,997 (23.24) 9,116 10.05 8,284
Operating prot 3,663 (28.95) 5,155 (8.20) 5,616
Prot before taxation 1,557 (56.78) 3,603 (12.53) 4,119
Prot after taxation 1,371 (58.54) 3,308 (9.86) 3,670
COMMENTS ON HORIZONTAL ANALYSIS

Non-current assets have increased as compared to 2017 primarily on the back of acquisition of
property, plant and equipment to support the increasing range of products offered by the
Company. Similarly, a visible increase in current liabilities is to cater to the increasing working
requirements for smooth running of operations.
Decline in sales revenue is attributable to lower per capita disposable income and slow
ordering for the Company’s power products by WAPDA Discos. Profit margins decreased due
to increase in interest rates and depreciation of Rupee.
2016 vs 2015 2015 2015 vs 2014 2014 2014 vs 2013 2013 2013 vs 2012 2012
%age Rs. in M %age Rs. in M %age Rs. in M %age Rs. in M
27.58 19,996 28.22 15,595 39.77 11,158 43.38 7,782

(17.33) 8,432 (13.82) 9,783 19.27 8,203 7.91 7,601
1.59 7,722 8.02 7,148 (8.15) 7,782 (20.84) 9,832
11.56 36,149 11.14 32,527 19.84 27,143 7.65 25,215
8.07 16,719 10.96 15,068 (1.49) 15,295 7.72 14,198

14.56 19,431 11.29 17,459 47.36 11,848 7.55 11,016
11.56 36,149 11.14 32,527 19.84 27,143 7.65 25,215
16.37 29,323 21.54 24,126 27.94 18,856 (7.08) 20,294

11.43 7,434 17.83 6,309 55.59 4,055 11.29 3,644
8.14 5,193 16.72 4,449 70.11 2,615 17.61 2,224
17.22 3,514 38.07 2,545 228.46 775 381.55 161
27.43 2,880 28.49 2,241 269.07 607 429.65 115
Directors’ Report
VERTICAL ANALYSIS
2018 2017
Rs. in M %age Rs. in M %age
Equity 30,280 58.12 27,001 61.48

Non-current liabilties 5,830 11.19 6,502 14.81
Current liabilties 15,990 30.69 10,413 23.71
TOTAL EQUITY AND LIABILITIES 52,100 100.00 43,916 100.00
ASSETS
Non-current assets 23,752 45.59 18,899 43.03

Current assets 28,348 54.41 25,017 56.97
TOTAL ASSETS 52,100 100.00 43,916 100.00
PROFIT OR LOSS
Revenue 38,990 100.00 42,347 100.00

Gross prot 6,997 17.95 9,116 21.53
Operating prot 3,663 9.39 5,155 12.17
Prot before taxation 1,557 3.99 3,603 8.51
Prot after taxation 1,371 3.52 3,308 7.81
COMMENTS ON VERTICAL ANALYSIS

The ratio of equity decreased due increase in short term borrowings to fund the working capital
requirements of the expanding operations of the Company. Non-current assets have increased
to 45% in the present year as compared to 43% in the corresponding period due to the
Company's additional investment in property, plant and equipment.
Profit margins decreased due to increase in interest rates and depreciation of Rupee.
2016 2015 2014 2013

Rs. in M %age Rs. in M %age Rs. in M %age Rs. in M %age
25,511 63.26 19,996 55.31 15,595 47.94 11,158 41.11

6,971 17.29 8,432 23.33 9,783 30.08 8,203 30.22
7,845 19.45 7,722 21.36 7,148 21.98 7,782 28.67
40,327 100.00 36,149 100.00 32,527 100.00 27,143 100.00
18,068 44.80 16,719 46.25 15,068 46.32 15,295 56.35

22,259 55.20 19,431 53.75 17,459 53.68 11,848 43.65
40,327 100.00 36,149 100.00 32,527 100.00 27,143 100.00
34,124 100.00 29,323 100.00 24,126 100.00 18,856 100.00

8,284 24.28 7,434 25.35 6,309 26.15 4,055 21.51
5,616 16.46 5,193 17.71 4,449 18.44 2,615 13.87
4,119 12.07 3,514 11.98 2,545 10.55 775 4.11
3,670 10.75 2,880 9.82 2,241 9.29 607 3.22
Directors’ Report
QUARTERLY ANALYSIS
1st 2nd 3rd 4th

Rupees in millions Quarter Quarter Quarter Quarter
Revenue 8,377 14,126 8,407 8,080 100%

Sales tax and discount (2,065) (3,739) (1,386) (3,355)
90% 17% 18%
21% 24%
Revenue - net 6,312 10,387 7,021 4,725
Cost of sales (4,479) (7,974) (5,434) (3,561) 80%
Gross profit 1,833 2,413 1,587 1,164 70% 25%

22% 27%
Other income 7 2 4 5
27%
Distribution cost (472) (673) (595) (467) 60%
Administrative and general expenses (336) (292) (305) (148)

50%
Other expenses (38) (18) (9) 2
40% 36% 37% 29%
(846) (983) (909) (614)
29%
Operating profit 994 1,432 682 555 30%
Finance cost (416) (614) (578) (495)

20%
578 818 104 60 25%
10% 21% 21%
Share of loss of associate (1) (1) 1 (1) 20%
Profit before taxation 577 817 105 58 0%

Revenue Cost of Operating Finance
Taxation (41) (138) 12 (19) sales expenses cost
Profit after taxation 536 679 117 39 1st quarter 2nd Quarter 3rd Quarter 4th Quarter
Other comprehensive income - - - -
Total comprehensive income 536 679 117 39
COMMENTS ON QUARTERLY ANALYSIS
Sales revenue during the 2nd quarter

Sales revenue during the first quarter was reported at Rs. 14,126 million, an
was reported at Rs. 8,377 Million, a increase of 1% as compared to the
decrease of 29% as compared to the same period last year. Split ACs and
corresponding period last year. Revenue deep freezers showed major
2nd Quarter
1st Quarter
from appliances division went down by improvements in results after

32% mainly due to 39% decrease in introduction of new energy efficient
refrigerator sales and 46% decline in “Inverter” technology. Switchgear
split AC sales due to slow country business growth of 66% was prominent
market. Profit for the quarter also in this quarter; however, the remaining
showed a declining trend due to power products faced low order status.
product cost hike. Profit after tax was down by 58% mainly
due to the rising production cost after
Rupee depreciation.
Sales revenue was reported at Rs. 8,079

Million during the last quarter, a decline
In the third quarter, Sales revenue of 5% as compared to the same quarter
witnessed a quarter on quarter increase in 2017. Both divisions faced tough
of 5% with sale of Rs. 8,407 million. All business environments. However, water
3rd Quarter
4th Quarter
home appliances contributed to this dispenser performed better and LED

growth as the season reached its peak. TVs were well received by the market.
LED TV was introduced at the end of On the other hand, distribution
this quarter. Power division sales transformers registered 34% increase in
remained on the down side. Profit after sales which was partly offset by slow
tax reduced due to tight gross margins. ordering in other power products. Profit
after tax shrinked due to continuous
marketing campaigns and sales
activities to maintain the market share.
DIRECT METHOD CASH FLOW STATEMENT

Rs. in millions 2018 2017 2016 2015 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers - net 39,358 39,823 33,322 28,670 21,864 18,414
Payments to suppliers/service providers/employees etc. - net (37,062) (35,774) (29,145) (24,369) (22,394) (16,610)
Payment to Workers' Prot Participation Fund (87) (105) (107) (70) (27) (4)
Payment to Workers' Welfare Fund (74) (84) (72) (47) (9) (18)
Interest/mark-up on borrowings paid (1,414) (1,143) (1,203) (1,683) (2,748) (1,506)
Income taxes (paid)/refund (810) (867) (661) (437) (170) (214)
Net cash generated from/(used in) operating activties (89) 1,849 2,133 2,065 (3,485) 63
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets (8) (4) - - - (42)
Proceeds from disposal of property, plant and equipment 36 30 38 126 16 34
Acquisition of short term investments - - - - (50) -
Proceeds from sale of investments - - 65 - - -
Long term deposits 6 (106) 23 (97) (73) (53)
Long term advances (1,040) (300) (861) (688) - -
Net cash generated used in investing activties (3,375) (2,223) (2,466) (2,537) (495) (393)
CASH FLOWS FROM FINANCING ACTIVITIES
Long term debt obtained 226 3,810 58 2,063 1,850 -

Repayment of long term debt (1,910) (4,153) (1,854) (2,912) (319) (80)
Net increase/(deacrese) in short term borrowings 5,616 2,246 313 426 345 (1,355)
Proceeds from issue of ordinary shares - - 2,406 - 2,064 1,828
Advances against issue of ordinary shares - - - 1,575 - -
Proceeds from sale and leaseback activities 110 15 4 52 100 -
Dividend paid (591) (1,611) (619) (494) - -
Net cash generated used in investing activties 3,451 307 308 710 4,041 393
Net increase/(decrease) in cash and cash equivalents (13) (67) (25) 238 62 62
Cash and cash equivalents at the end of the year 484 552 578 340 278 216
Cash and cash equivalents at the end of the year 471 484 552 578 340 278
COMMENTS ON DIRECT METHOD CASH FLOW STATEMENT

Net cash used in operating activities amounted to Rs. 89 million, after payment of interest/mark-
up of Rs. 1,414 million and income tax payments of Rs. 810 million.
Net cash used in investing activities amounted to Rs. 3,375 million comprising payments for
capital expenditure of Rs. 2,377 million, and long term advances of Rs. 1,040 million and long
term deposits of Rs. 21 million partially offset by proceeds from disposal of property, plant and
equipment amounting to Rs. 36 million and refund of long term advances of Rs. 27 million.
Net cash generated from financing activities amounted to Rs. 3,451 million comprising of long
term finance obtained Rs. 226 million, proceeds from short term borrowings Rs. 5,616 million
and proceeds from sales & lease back activities Rs. 110 million offset from redemption of
redeemable capital Rs. 275 million, payment of long term finances Rs. 1,543 million, repayment
of lease liabilities Rs. 92 million and a dividend payment of Rs. 591 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 19.71% 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 profit before tax of Rs. 280 million for despite overall decline in per capita disposable
the year, down by 48.62% from 2017. The decline income. However, profit margins went down by
was mainly attributable to slow ordering of power 58.97% from the previous year due to increase in
products by WAPDA DISCOs and depreciation of interest rates and depreciation of Rupee. A
Rupee. A summary of operating results of power summary of operating results of appliances
division is presented below: division is presented below:
Power Division Appliances division
2018 2017 YoY 2018 2017 YoY

Rs. in M Rs. in M %age Rs. in M Rs. in M %age
Revenue 11,715 14,591 (19.71) Revenue 27,275 27,755 (1.73)

Finance cost 689 637 8.16 Finance cost 1,415 910 55.49
Prot before taxation 280 545 (48.62) Prot before taxation 1,322 3,222 (58.97)
12,684 15,773 30,012 31,887
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
2017 2018 2017 2018
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, 201,
the market capitalization of PEL's shares stood at Rs. 12,392 million, lower by 48% from
previous year. PEL's share traded at an average of Rs. 39.27 per share. Market price
experienced fluctuations, principally, caused by market psychology, speculative investors and
material events occurring during the year, between Rs. 61.85 and Rs. 21.96 per share. Total
trading volume during the year was 1,690 million shares.
Share Price vs Volume Traded 2018

35,000,000 70.00
30,000,000 60.00
25,000,000 50.00
20,000,000 40.00
15,000,000 30.00
10,000,000 20.00
5,000,000 10.00
- -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Volume Traded Share Price

Lowest Share Price Average Share Price Highest 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
The appliances industry in Pakistan has Jeeto PEL Say
continued to grow steadily for the past few
This year a new activity named “JEETO PEL
years. As domestic appliances become more
SAY” was arranged for customer retention.
energy efcient and affordable, penetration of
This activity has been taken place nation
these appliances is growing day by day.
wide and different prizes compromising
Business growth potential remains steady,
PEL's products have been distributed among
with more households willing to embrace our
customers.
reliable home appliances for better living.
Women in Business and Leadership
Continued focus of the Government on
Conference 2018
improvement of power generation and
distribution infrastructure, the market outlook PEL sponsored Women in Business and
for power division looks promising. Leadership Conference - WIBCON 2018
which was the biggest learning festival where
Government's initiatives in the energy sector
diverse, multicultural, cross functional and
in light of recent energy deals signed,
unorthodox business ideas were presented
policies for IPPs and above all, CPEC will
and shared. Through this event, the most
create a pool of opportunities for power
successful and highly accomplished women
products. EPC activity is also on agrowth
leaders from Pakistan and across the globe
track due to the increase in housing sector
were brought together to share stories of
schemes and upgrading of grid stations.
their hardships and failures.
PEL’s MARKETING ACTIVITES Floor Salesman Trainings 2018
PEL is providing premium quality products to
PEL initiated Floor Salesman Training which
consumers through its ever evolving dealer
network which is spread all over the country. has been taken place in the major cities of
Pakistan to share the complete functionality
PEL's market strategy encompasses market of all products. Representatives from different
research , brand positioning and marketing
departments such as Research and
communications as well as right decisions in
Development, Customer Services, Marketing
terms of incentives and dealers to ensure smooth
running of dealers network. The sales of power and Sales provided detail information and
division mainly originate from tendering and our gave demonstration as well.
power division marketing team is well versed and
equipped to win major orders. Mall Cinema Activations for ColorOn
Smart LED TV
Pakistan Fashion Week 2018
This year PEL launched ColorOn LED Smart
This year Red Carpet of Pakistan Fashion
TV. Launching ceremony took place in
Week was sponsored by PEL and a display
Emporium Mall Lahore and Dolmen Mall
of PEL's products attracted people.
Karachi while various cinemas (Cinepax,
Pel Limitless Summit 2018 Dealer Universal Cinema, Emporium Mall, Nuplex
Convention Cinema Karachi and Centaurs Mall
Islamabad) were branded with ColorOn
PEL celebrated the big gest ever Summit at
“RUNG JAMA KE DEKH” balloons & other
the Grand Ball Room – PEL LIMITLESS, at
promotional material.
Pearl Continental Hotel (PC), Lahore on 21st
January 2018. over 1500 participants Through the activations we shared complete
attended the e vent from all over the country. details to the customers, engaged them via
The event was full of fun lled activities Xbox gaming consoles, VR and Kinect
including musical performances by various Games, and lucky draws. Small Domestic
artists, followed by stand-up comedy by Appliances and LED's were the bumper
renowned comedians. prizes for the lucky winners.
PRODUCT QUALITY ASSURANCE

PEL is dedicated towards maintenance of excellent product quality which is
evident from evergrowing consumer condence in PEL's products.
Extensive quality assurance measures have been implemented by PEL to
provide best 'value for money' products through the following measures:
• Suppliers of raw material and other inputs are selected carefully and only
those suppliers are engaged, who can demonstrate the full commitment and
ability to comply with PEL's quality requirements/standards.
• Careful and meticulous inspections and testing is carried out at every stage
of production.
• Top quality packing material to eliminate the chance of physical damage to
the product during transportation and storage.
Directors’ Report
PATTERN OF SHAREHOLDING
FORM 34
THE COMPANIES ACT 2017

(Section 237(2)(f)
1. Incorporation Number 0000802
2. Name of the Company PAK ELEKTRON LIMITED
3. Pattern of holding of the shares held by the shareholders as at 31-12-2018
4. Number of Shareholding Total

shareholders From To shares held
1,014 1 100 36,557

2,198 101 500 917,681
2,163 501 1,000 2,046,202
4,033 1,001 5,000 11,348,605
1,152 5,001 10,000 9,046,939
442 10,001 15,000 5,731,501
277 15,001 20,000 5,041,438
181 20,001 25,000 4,262,602
136 25,001 30,000 3,889,575
67 30,001 35,000 2,212,459
62 35,001 40,000 2,389,324
41 40,001 45,000 1,763,868
85 45,001 50,000 4,200,238
28 50,001 55,000 1,487,329
24 55,001 60,000 1,409,270
18 60,001 65,000 1,139,984
23 65,001 70,000 1,571,418
26 70,001 75,000 1,914,553
9 75,001 80,000 701,422
17 80,001 85,000 1,415,836
14 85,001 90,000 1,238,462
8 90,001 95,000 745,215
46 95,001 100,000 4,590,565
11 100,001 105,000 1,130,583
10 105,001 110,000 1,086,307
2 110,001 115,000 222,875
9 115,001 120,000 1,071,700
7 120,001 125,000 865,500
7 125,001 130,000 894,200
2 130,001 135,000 265,125
4 140,001 145,000 569,269
14 145,001 150,000 2,090,500
4 150,001 155,000 617,000
3 155,001 160,000 472,400
2 160,001 165,000 326,000
3 165,001 170,000 507,500
5 170,001 175,000 870,500
1 180,001 185,000 185,000
2 185,001 190,000 379,000
5 190,001 195,000 966,800
12 195,001 200,000 2,393,400
2 205,001 210,000 418,000
3 215,001 220,000 649,490
5 220,001 225,000 1,120,500
1 230,001 235,000 232,000
1 240,001 245,000 244,000
4 245,001 250,000 996,000
2 260,001 265,000 522,300
2 265,001 270,000 536,750
4 270,001 275,000 1,093,500
1 275,001 280,000 279,500

1 280,001 285,000 281,250

2 285,001 290,000 577,000
7 295,001 300,000 2,096,000
1 300,001 305,000 300,500
1 320,001 325,000 325,000
4 325,001 330,000 1,314,500
2 335,001 340,000 674,620
1 340,001 345,000 341,000
3 345,001 350,000 1,050,000
2 360,001 365,000 722,000
1 385,001 390,000 390,000
7 395,001 400,000 2,797,500
1 410,001 415,000 410,250
1 420,001 425,000 422,926
1 430,001 435,000 434,000
2 435,001 440,000 879,000
1 455,001 460,000 456,500
1 465,001 470,000 467,000
1 470,001 475,000 470,500
1 485,001 490,000 487,270
1 490,001 495,000 492,000
7 495,001 500,000 3,497,500
1 500,001 505,000 502,000
1 510,001 515,000 511,000
2 525,001 530,000 1,059,900
1 535,001 540,000 538,303
3 545,001 550,000 1,650,000
1 555,001 560,000 560,000
2 595,001 600,000 1,200,000
1 605,001 610,000 610,000
1 615,001 620,000 617,645
1 630,001 635,000 633,000
1 645,001 650,000 650,000
1 705,001 710,000 710,000
1 725,001 730,000 726,760
1 740,001 745,000 740,947
1 745,001 750,000 750,000
1 750,001 755,000 752,000
1 770,001 775,000 771,000
1 790,001 795,000 791,500
1 795,001 800,000 800,000
1 815,001 820,000 819,000
1 825,001 830,000 827,200
1 830,001 835,000 834,000
1 865,001 870,000 870,000
1 870,001 875,000 873,523
2 890,001 895,000 1,787,000
1 895,001 900,000 900,000
1 925,001 930,000 929,000
1 955,001 960,000 960,000
5 995,001 1,000,000 5,000,000
1 1,025,001 1,030,000 1,030,000
1 1,085,001 1,090,000 1,088,200
1 1,190,001 1,195,000 1,194,200
1 1,295,001 1,300,000 1,299,500
1 1,360,001 1,365,000 1,361,500
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
1 1,495,001 1,500,000 1,500,000
1 1,505,001 1,510,000 1,510,000
1 1,690,001 1,695,000 1,690,500
1 1,700,001 1,705,000 1,702,000
1 1,835,001 1,840,000 1,839,000
Directors’ Report
2 1,995,001 2,000,000 4,000,000

1 2,045,001 2,050,000 2,049,070
1 2,105,001 2,110,000 2,107,500
1 2,190,001 2,195,000 2,192,000
1 2,260,001 2,265,000 2,262,000
1 2,745,001 2,750,000 2,747,052
1 2,805,001 2,810,000 2,808,500
1 2,995,001 3,000,000 3,000,000
1 3,215,001 3,220,000 3,217,945
1 3,275,001 3,280,000 3,276,500
1 3,370,001 3,375,000 3,372,500
1 3,400,001 3,405,000 3,400,195
1 3,585,001 3,590,000 3,589,534
1 3,695,001 3,700,000 3,700,000
1 4,070,001 4,075,000 4,073,000
1 4,215,001 4,220,000 4,215,500
1 4,240,001 4,245,000 4,242,500
1 4,500,001 4,505,000 4,503,000
1 4,695,001 4,700,000 4,700,000
1 4,710,001 4,715,000 4,710,893
1 4,750,001 4,755,000 4,753,000
1 5,300,001 5,305,000 5,300,500
1 5,995,001 6,000,000 6,000,000
1 7,240,001 7,245,000 7,240,500
1 8,415,001 8,420,000 8,419,625
1 14,735,001 14,740,000 14,737,537
1 102,225,001 102,230,000 102,229,533
1 124,905,001 124,910,000 124,905,715
12,321 497,681,485
CLASSIFICATION OF ORDINARY SHARES BY CATEGORIES AS AT DECEMBER 31, 2018

Categories of Shareholders No. of Shareholders Share held Percentage
Directors, Chief Executive Ofcer, and their spouse

and minor children 7 144,382,028 29.0109
Associated Companies, undertakings and related party - - -
NIT and ICP 6 4,992,238 1.0031
Banks Development Financial Institutions Non Banking
Financial Institution 17 24,851,279 4.9934
Insurance Companies 22 31,923,645 6.4145
Modarabas and Mutual Funds 31 6,564,243 1.3190
General Public 11,968 228,794,408 45.9721
Others (to be specied)
Pension Funds 4 3,111,947 0.6253
Other Companies 39 3,629,574 0.7293
Investment Companies 2 3,556,000 0.7145
Joint Stock Companies 180 25,373,079 5.0983
Foreign Companies 45 20,503,044 4.1197
12,321 497,681,485 100.0000
CATEGORIES OF SHAREHOLDING REQUIRED UNDER LISTED COMPANIES (CODE OF

CORPORATE GOVERNANCE) REGULATIONS, 2017 AS ON DECEMBER 31, 2018
Sr. Name No. of Shares Percentage

No. Held
Associated Companies, Undertakings and Related Parties:

Mutual Funds:
1 CDC - TRUSTEE ABL INCOME FUND - MT (CDC) 8,500 0.0017

2 CDC - TRUSTEE AKD INDEX TRACKER FUND (CDC) 53,775 0.0108
3 CDC - TRUSTEE AL AMEEN ISLAMIC DEDICATED EQUITY FUND (CDC) 900 0.0002
4 CDC - TRUSTEE AL-AMEEN ISLAMIC ASSET ALLOCATION FUND (CDC) 700 0.0001
5 CDC - TRUSTEE ALFALAH GHP INCOME FUND - MT (CDC) 1,500 0.0003
6 CDC - TRUSTEE ALFALAH GHP INCOME MULTIPLIER FUND - MT (CDC) 8,500 0.0017
7 CDC - TRUSTEE ALFALAH GHP ISLAMIC DEDICATED EQUITY FUND (CDC) 315 0.0001
8 CDC - TRUSTEE ALFALAH GHP SOVERGEIGN FUND - MT (CDC) 13,000 0.0026
9 CDC - TRUSTEE APIF - EQUITY SUB FUND (CDC) 122,500 0.0246
10 CDC - TRUSTEE ATLAS ISLAMIC STOCK FUND (CDC) 250,000 0.0502
11 CDC - TRUSTEE DAWOOD ISLAMIC FUND (CDC) 10,500 0.0021
12 CDC - TRUSTEE FAYSAL MTS FUND - MT (CDC) 115,500 0.0232
13 CDC - TRUSTEE FAYSAL SAVINGS GROWTH FUND - MT (CDC) 1,000 0.0002
14 CDC - TRUSTEE FIRST CAPITAL MUTUAL FUND (CDC) 10,000 0.0020
15 CDC - TRUSTEE FIRST DAWOOD MUTUAL FUND (CDC) 4,500 0.0009
16 CDC - TRUSTEE KSE MEEZAN INDEX FUND (CDC) 538,303 0.1082
17 CDC - TRUSTEE MCB DCF INCOME FUND (CDC) 834,000 0.1676
18 CDC - TRUSTEE MCB PAKISTAN ASSET ALLOCATION FUND (CDC) 895,000 0.1798
19 CDC - TRUSTEE MEZAN ISLAMIC FUND (CDC) 11,350 0.0023
20 CDC - TRUSTEE NAFA INCOME FUND - MT (CDC) 210,000 0.0422
21 CDC - TRUSTEE NAFA INCOME OPPORTUNITY FUND - MT (CDC) 960,000 0.1929
22 CDC - TRUSTEE NAFA ISLAMIC ACTIVE ALLOCATION EQUITY FUND (CDC) 296,000 0.0595
23 CDC - TRUSTEE NAFA ISLAMIC STOCK ALLOCATION FUND (CDC) 400,000 0.0804
24 CDC - TRUSTEE PAKISTAN INCOME FUND - MT (CDC) 4,000 0.0008
25 CDC-TRUSTEE NAFA SAVING PLUS FUND - MT (CDC) 32,500 0.0065
26 MC FSL - TRUSTEE JS - INCOME FUND (CDC) 1,690,500 0.3397
27 MC FSL - TRUSTEE JS - INCOME FUND - MT (CDC) 20,500 0.0041
28 MCBFSL - TRUSTEE PAK OMAN ISLAMIC ASSET ALLOCATION FUND (CDC) 100 0.0000
6,493,443 1.3047
Directors, CEO and their Spouse and Minor Children:
1 MR. M. NASEEM SAIGOL (CDC) 124,905,715 25.0975
2 MR. MUHAMMAD MURAD SAIGOL 12,421 0.0025
3 MR. MUHAMMAD ZEID YOUSAF SAIGOL 14,749,958 2.9637
4 SHEIKH MUHAMMAD SHAKEEL 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
144,382,028 29.0109
Executives: - -
Public Sector Companies & Corporations: - -
Banks, Development Finance Institutions, Non Banking Finance

Institution, Insurance Companies, Modarabas and Pension Funds: 59,957,671 12.0474
Directors’ Report
Sr. Name No. of Shares Percentage
No. Held
Shareholders holding ve percent or more voting intrest in the listed company
1 MR. M. NASEEM SAIGOL (CDC) 124,905,715 25.0975

2 MRS. AMBER HAROON SAIGOL W/O MR. M. AZAM SAIGOL (CDC) 102,229,533 20.5412
227,135,248 45.6387
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 RIGHT
1 SYED HAROON RASHID - 500 -

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 and • The financial statements, prepared by the
esthetically improved products for market management of the company, present its
competitiveness. Company is consistently
state of affairs fairly, the result of its
spending on development of different
operations, cash flows and changes in
models in its existing products to cater
equity.
market demand. On consistent market
demand, company during the year added • Proper books of accounts of the company
locally manufactured LED TVs in its product have been maintained.
range. Installation Washing Machine • Appropriate accounting policies have
production line is started in the year under been consistently applied in the
review and its production is expected by 2nd preparation of financial statements and
half of the year 2019. accounting estimates are based on
Demand of energy efficient products with reasonable and prudent judgment.
improved esthetics is latest market trend. • International accounting standards, as
Company for market competiveness spends applicable in Pakistan, have been followed
a lot on required modifications in in preparation of financial statements and
manufacturing line. Further, Company is any departure there from has been
widening its product range on continues adequately disclosed.
market demand. Both of the steps relate to • The system of internal control is sound in
improved profitability & long term business design and has been effectively
sustainability. In this way company implemented and monitored.
safeguards the stake holders interest i.e.
security of Investment & Payout. • There are no significant doubts upon the
Company's ability to continue as a going
concern.
DIVIDEND AND APPROPRIATIONS
• There has been no material departure
During the year, PEL distributed cash from the best practices of corporate
dividend on ordinary shares at Rs. 1.20 per governance, as detailed in the listing
ordinary share as final dividend for the year regulations.
2017. However, in view of the financial results
• Key operating and financial data for last
for 2018, the Board of Directors did not
six (6) years in summarized form is given
proposed any dividend for the year 2018.
on page E-16.
CORPORATE SOCIAL • The Company has been declaring regular
dividends to its shareholders for the past
RESPONSIBILITY
three years, however, in view of the
At PEL we pride ourselves in aligning our financial results for 2018, the Board of
business strategy to meet societal needs. We Directors do not propose any dividend for
believe in giving something back to the the year 2018.
society because we care. For us it’s about • There is nothing outstanding against the
more than just aligning our activities with our Company on account of taxes, duties,
stakeholder’s expectations whether it’s our levies and charges except for those which
clients, suppliers, the community, our
are being made in normal course of
employees and society as a whole. Through
business.
a broad range of community initiatives,
charitable giving, foundation grants and • The Company maintains Provident Fund
volunteerism, we seek to create more value accounts for its employees. The values of
for our society to continue to bring joy in the investments of the fund as on
people’s lives. December 31, 2018 are given on page A-
30.
BOARD OF DIRECTORS adjustment to or disclosure in the financial

statements.
The composition of the Board of Directors,
and their profile and attendance at meetings
is give on page D-04.
REVIEW OF BUSINESS CONTINUITY
AND DISASTER RECOVERY
PLANNING BY THE BOARD
REVIEW OF RELATED PARTY
TRANSACTIONS The Board of Directors has Reviewed the
Business Continuity and Disaster
Details of all related party transactions are
placed before the Audit Committee and upon Recovery Plan of the Company and
recommendations of the Audit Committee, satised that the Company is well
the same are placed before the Board for protected against risks of loss arising
review and approval in accordance with from any disaster. The details of the
requirements of the Code of Corporate Company’s Business Continuity and
Governance. Disaster Recovery Plan are given on
page D-10.
TRADING IN SHARES BY DIRECTORS
AND EXECUTIVES APPOINTMENT OF AUDITORS
Details of trading conducted by directors, Rahman Sarfaraz Rahim Iqbal Rafiq,
executives, their spouses and minor children Chartered Accountants, have completed the
in the shares of PEL during the year is given annual audit of PEL for the year ended
on page E-38. December 31, 2018 and have issued an
unqualified report. They will retire at the
INTERIM FINANCIAL REPORTING conclusion of the forthcoming AGM, and
being eligible, have offered themselves for
Periodic nancial statements of the Company reappointment for the year ending December
during the year 2018 were circulated to 31, 2019. The Board of Directors on the
directors, duly endorsed by the CEO and the suggestion of the Audit Committee has
Chief Financial Ofcer. Quarterly nancial recommended their re-appointment as
statements of the Company, were approved, auditors of the PEL for the year ending
published and circulated to shareholders December 31, 2019 at a fee to be mutually
within one month of closing date, while half agreed.
yearly nancial statements were reviewed by
external auditors of the Company, approved
by the Board, published and circulated to FUTURE OUTLOOK
shareholders within the permitted time of two A detail Forward Looking Statement is give
months after the period end. on page F-02.
RISK ASSESSMENT ACKNOWLEDGMENT

The Board of Directors have carried out a The management would like to express its
robust assessment of the principal riks facing gratitude to all customers, financial
the Company, including those that wood institutions, staff memebers, suppliers and
threaten the business model, future shareholders who hae been assoicated with
performance, solvency or liquidity. The the Company for their continued support and
detalis of risks faced by the Company and cooperation.
our mitigating strategies are given on page
C-02.
M. Murad Saigol
SUBSEQUENT EVENTS Chief Executive Ofcer
There were no major events subsequent to
Lahore
the reporting period that may require material April 04, 2019
2017 2018 žÜ» ò
42,347 38,990 ãæW¦ù

9,116 6,997
5,155 3,663 «o
1,547 2,103
3,603 1,557 «oLi ZI
3,308 1,371 «oLi Zˆ
6.56 2.67 9zgX ãæW¥°
F Outlook
F 02 Pak Elektron Limited
Forward Looking Statement

World Bank has foreseen in coming years urbanization. This will lead to an overall
growth rate of below 4.0% for Pakistan growth in Country Home Appliances Market
against 5.4% for the year 2018. The decline is and Company with its brand equity , state of
projected due to stressed situation of art manufacturing facility , Country wide
balance of payment, current accounts decit Sales and After Sales Services Net work is
and low Forex reserves level. After IMF quiet condent to clutch its due market
package the severity is expected to tone share.
down and the economy can derive the
After successful commissioning of electricity
benets from Infrastructure Development,
generation projects, now the focus has to
recovery of energy shortfall and improved
swing towards augmentation of T&D
Law & Order Situation. Legal & Economic
Infrastructure to ensure availability of
reforms are on way under Pakistan Vision
electricity at consumer end. PEL being key
2025. The improved governance level and
electrical equipment manufacturer is
ease of doing business are being focused to
condent of receiving its due market share.
attract local as well foreign Investors. The
Company's EPC Division engaged in Grid
targeted measures to raise investor's
Station Installations and underground & on
condence will certainly boost economic
ground electrications is on a growth track
growth.
due to the increase in housing sector
Viable energy solutions, Improvement in schemes and upgrading of grid stations.
Human Index Level, Channelizing youth
Company is aiming at to capitalize its Brand
potential and Improvement in governance
Equity and Commercial Relations with
level are the measures to meet the
WAPDA Distribution Companies in the
challenges of growing population which is
emerging CPEC Scenario. Per Capita
expected to be double by 2050. Cost
Income is likely grow in future years due to
competitiveness is right now major challenge
potential improvement in Macro Economic
to local Industry and this can be met through
Indicators and PEL Brand market penetration
technical collaborations. Regional low labour
at large will sustain its growth perspective in
cost and growing market of 200 Million
Home Appliances Division. Your Company
population can be an attraction for foreign
apart from widening product range is
investors.
launching aggressive marketing campaigns
China Pak Economic Corridor (CPEC) has to promote PEL Brand.
come into its execution phase and has
emerged with tangible existence on the COMPANY PERFORMANCE AGAINST
canvas. Most of the Energy Projects are LAST YEAR PROJECTION
functional, as a result Electricity Load For the Year 2018 company budgeted
Shedding is expected to eliminate in near revenue of Rs. 43,406 at 2.5% growth over
future. A Lot of developments in Roads and year 2017. Due to slow ordering by WAPDA
Railway under CPEC arrangements is on the distribution companies and shrink of
way and likely to complete within scheduled disposable income, company achieved
time line. These all developments will revenue of Rs. 38,990 million at 10.1% below
promote local industry and Foreign Direct the budgeted number. Product cost
Investment (FDI). Six Special Economic increased due Rupee depreciation by 25.8%,
Zones -SEZ have been notied out of 46 which could not be passed on to customers
SEZs proposed under CPEC arrangements in full due slow economic environment.
and infrastructure development is almost Lower volume and cost increase resulted in
complete. These Industrial Parks will lead an declined gross prot of Rs. 6,997 million
industrial revolution all over the country. against budgeted Rs.8,535 million. Net
Home Appliances Division Products prots also reduced to Rs. 1,557 million
Penetration is expected to grow as a result of against budgeted Rs. 2,397 million due
growth in consumable income and rapid increase in policy rate along with the factors
earlier explained.
Annual Report 2018 F 03
Everything is
possible
Your dreams,
Your ideas!
Your Inventions!
Your Vision!
Never let anyone
tell you, You Cant!
SOURCES OF
FINANCIAL PROJECTIONS INFORMATION AND
Company foresees a moderate revenue
ASSUMPTIONS
growth in future years keeping in view Revenue planning of existing
current economic indicators. Growing products is based on market
country population, rapid urbanization and feedback through countrywide
required T&D infrastructure augmentation are sales net work, independent
among major growth assumptions. market survey and latest
Rs. in millions 2019 2020 2021
consumer trends .
For new product launching
Revenue 39,964 41,364 43,431
market research, market
STATUS OF PROJECTS surveys and sales network
feedback is based. If required,
During the year company installed LED TVs consultants are engaged for
manufacturing facility and started its project feasibilities. Before
commercial production after successful trial formal submission of
run. Company has started installation of feasibilities underlying
washing machines production line during the assumptions are discussed at
year is likely to be completed in next year length. The feasibility is then
and commercial production is expected to presented to board for formal
start commercial production by 2nd half of approval. Board after thorough
year 2019. Company also plans to set up discussion of its nancial
Power Transformer Manufacturing Facility at viability by paying special
PEL –Unit II 34 KM Ferozepur Road, Lahore. attention realistic payback
Besides these developments a continuous period approves the feasibility
Plant BMR is made to ensure improved report.
quality production.
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Stakeholders
G 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 2018 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 signicant investments in depends upon the loyalty of
this regard over the years going beyond extending credit our customers with the PEL
facilities and trade discounts. We also acknowledge that brand and effective supply
engaging reputed and dependable suppliers as business chain management
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 nances are one of the Dealing with banks and other
lenders key stakeholders who are engaged by us on a regular providers of debt nances is
basis for the purpose of short term and long term key to our performance in
nancing. 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
developments, activities and products of the Company 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 Pakistan. other factors controlled by 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 human Our employees represent us
capital, is at the core of our HR strategy. PEL provides a in in the industry and
nurturing and employee friendly environment to its community, and are at the
employees. heart of our organization,
implementing every strategic
and operational decision of
the management.
Employees Local PEL regularly engages with general public at large The people of our country
community and through its CSR initiates. This engagement helps us to provide the grounds for us to
general public identify required interventions in the eld 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 25, 2018.
ANALYST BRIEFINGS
The Company did not hold any analyst briefings during the year 2018, however, the Company
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

2018 2017
Rs. '000 %age Rs. '000 %age
Wealth Generated
Contract Revenue 2,899,882 9.01% 2,841,124 8.10%
Sale of Goods 29,255,895 90.93% 32,221,709 91.86%
Other income 17,977 0.06% 12,439 0.04%
Total Wealth Generated 32,173,754 100.00% 35,075,272 100.00%
Wealth Distributed
Cost of sales 19,443,171 60.43% 19,871,468 56.65%
Employees remuneration and benetes 2,248,596 6.99% 2,134,990 6.09%
Operating expenses 2,201,117 6.84% 2,818,627 8.04%
Depreciation and Amortization 851,104 2.65% 881,926 2.51%
Finance cost 2,098,403 6.52% 1,540,949 4.39%
Government levies 3,959,894 12.31% 4,519,058 12.88%
Dividends to shareholders 597,218 1.86% 1,617,465 4.61%
Retained in business 774,251 2.41% 1,690,789 4.82%
Total Wealth Distributed 32,173,754 100.00% 35,075,272 100.00%
2.41%
1.86% Cost of sales
12.31%
Operating expenses
Finance cost
6.52%
Dividends to shareholders
2018
2.65%
Employees remuneration and benetes
6.84% Depreciation and Amortization

60.43%
Government levies
6.99%
Retained in business
4.82%
4.61% Cost of sales
Operating expenses
12.88%
Finance cost
2017
Dividends to shareholders
4.39%
Employees remuneration and benetes
2.51%
Depreciation and Amortization
8.04% 56.65%
Government levies
6.09% Retained in business

Investor Relations
REGISTERED OFFICE DIVIDEND REMITTANCE GENERAL MEETINGS &
VOTING RIGHTS
17-Aziz Avenue, Canal Bank, Ordinary dividend declared and
Gulberg-V, Lahore. approved at the Annual General Pursuant to section 132 of the
Tel: 042-35718274-6 Meeting will be paid within the Companies Act, 2017) PEL
Fax: 042-35762707 statutory time limit of 30 days. holds a General Meeting of
shareholders at least once a
(i) For shares held in physical
SHARE REGISTRAR year. Every shareholder has a
form: to shareholders
right to attend the General
Corplink (Pvt) Limited whose names appear in the
Meeting. The notice of such
Wings Arcade, 1-K Commercial Register of Members of the
meeting is sent to all the
Model Town, Lahore. Company after entertaining
shareholders at least 21 days
Tel: 042-35839182, 35887262 all requests for transfer of
before the meeting and also
Fax: 042-35869037 shares lodged with the
advertised in at least one
Company on or before the
English and one Urdu
LISTING ON STOCK book closure date.
newspaper having circulation in
EXCHANGES (ii) For shares held in electronic Karachi, Lahore and Islamabad.
from: to shareholders
Ordinary shares of Pak Elektron Shareholders having holding of
whose names appear in the
Limited are listed on Pakistan at least 10% of voting rights
statement of beneficial
Stock Exchange Limited. may also apply to the Board of
ownership furnished by
Directors to call for meeting of
STOCK CODE / SYMBOL CDC as at end of business
shareholders, and if the Board
on book closure date.
does not take action on such
The stock code / symbol for WITHHOLDING OF TAX & application within 21 days, the
trading in ordinary shares of ZAKAT ON ORDINARY shareholders may themselves
Pak Elektron Limited at Pakistan DIVIDEND call the meeting.
Stock Exchange Limited is
PAEL. As per the provisions of the All ordinary shares issued by
Income Tax Ordinance, 2001, the Company carry equal voting
STATUTORY COMPLIANCE income tax is deductible at rights, Generally, matters at the
source by the Company at the general meetings are decided
During the year, the Company rate of 15% (filer) and 20% by a show of hands in the first
has complied with all applicable (non-filer) wherever applicable. instance. Voting by show of
provisions, filed all hands operates on the principle
returns/forms and furnished all Zakat is also deductible at
source form the ordinary of “One Member-One Vote”. If
the relevant particulars as majority of shareholders raise
required under the repealed dividend at the rate of 2.5% of
the face value of the share, their hands in favor of a
Companies Ordinance, 1984 particular resolution, it is taken
(now Companies Act, 2017) and other than corporate holders or
individuals who have provided as passed, unless a poll is
allied rules, the Securities and demanded.
Exchange Commission of an undertaking for non-
Pakistan Regulations and the deduction. Since the fundamental voting
listing requirements. principle in the Company is
DIVIDEND WARRANTS “One Share-One Vote”, voting
DIVIDEND takes place by a poll, if
Cash dividends are paid
demanded. On a poll being
through dividend warrants
in view of the financial results taken, the decision arrived by
addressed to the ordinary
for 2018, the Board of Directors poll is final, overruling any
shareholders whose names
did not proposed any dividend decision taken on a show of
appear in the Register of
for the year 2018. hands.
Shareholders at the date of
book closure.
BOOK CLOSURE DATES INVESTOR’S GRIEVANCES
To date none of the investors or

Share Transfer Books of the
shareholders has filed any
Company will remain closed
significant complaint against any
from April 20, 2019 to April 26,
service provided by the Company
2019 (both days inclusive). to its shareholders.
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 Ofcer
CFO Chief Financial Ofcer
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' Prot Participation Fund
WWF Workers' Welfare Fund
DEFINITIONS
Term Definition
Activity/Turnover Ratios Activity / Turnover ratios are used to evaluate the

operational efciency 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 notied 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 prots.
Gearing The level of a company’s debt related to its equity capital.

It is a measure of a company’s nancial 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 prots.
Liquidity Ratios Liquidity ratios determine the Company’s ability to meet

its short-term nancial 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

inuence the economic decisions of users.
Protability Ratios Protability Ratios give and assessment of the

Company’s ability to generate prots in relation to its
sales, assets and equity.
Corporate Social
H Responsibility
and Sustainability
H 02 Pak Elektron Limited
Corporate Social Responsibility

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.
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.
CSR INITIATIVES
FATIMA MEMORIAL HOSPITAL
A donation was made to Fatima Memorial Hospital for their neonatal intensive care unit. The
donation will be spent towards the purchase of a high frequency ventilator that will provide care
for all sick or premature infants born in the hospital.
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 we conducted a charity drive
requesting employees to come
forward and donate for this cause. We
collected substantial amount of
money and during the last week of
Ramadan went to various children
wards in government hospitals to
distribute Eidi/monetary and give
away goodie bags.
Annual Report 2018 H 03

and Sustainability
FAISALABAD DEAF CRICKET ASSOCIATION
Deaf and hard of hearing people

face many injustices around the
world. Deaf sports are an important
part of the social lives for the deaf
and hard of hearing people. The
rules of the game are virtually the
same as in ordinary sports, but with
certain modications. This year
PEL sponsored a cricket match for
the Faisalabad Deaf Cricket
Association. The initiative breaks
down barriers the deaf community
faces when accessing sports, art
and leisure opportunities.
NATIONAL CAUSE DONATIONS

PEL makes generous donations for national cause on a regular basis.
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.
NUST NEED BLIND PROGRAM
“Giving is not just about

making a donation, but it is
about making a difference.”
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 of 10
undergraduate engineering students at
NUST. The total cost for this donation was
PKR 2 Million. 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 rst benet from our part
and later on they will start playing their role.

and Sustainability
“No one has ever
become poor by
Giving.”
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, PEL donated 15 Refrigerators amounting to PKR 675,000 to SOS Children's Village
Muzaffarabad. PEL aims to build a society where less-privileged people don't nd themselves
deprived of such necessities of life.
“Nothing that
you have not
given away will
ever be really
yours.”
SOS Children's Village Muzaffarabad
GOVT. TRAINING COLLEGE FOR THE TEACHERS FOR DEAF

Special Children are beautiful assets of Pakistan and PEL understands their signicance and
necessities. These children merely need love and affection from society. Bringing a smile on
these beautiful faces is the best thing one can do. PEL also loves them and to express it, PEL
donated TWO Water Dispensers to the Govt. Training College for the Teachers of Deaf. This
effort was made to encourage those teachers who are playing vital role to make these children
a better citizen.
SUSTAINABILITY HIGHLIGHTS
The highlights of the Company’s drinking water to the underprivileged

performance, policies, initiatives and plans in community of Lahore. These water
place relating to various aspects of dispensers were placed in parks where
sustainability are as follows: people rest under the cool shade of the
tree, at railway stations, near government
ECONOMIC hospitals and in marketplaces where most
The Company is cognizant of both private people travel back and forth by foot.
and social economic impact on its A noble and encouraging initiative, “Pel
stakeholders and includes: Se Zindagi” not only involved in
a.) Economic Performance spreading awareness about the
importance of clean water but also
PEL is committed to providing persistent instilled a desire among people to
growth and steady value for all its perform their own acts of kindness.
stakeholders. This growth and value can People were inspired to take a step
be quantied and evaluated accurately forward towards making a difference.
through the audited nancial statements They were encouraged to post their
of the Company and the statement of stories or accounts of their good deeds in
value addition and its distribution (which order build a united community based on
is reported on page G-05). charity.
b.) Market Presence a.) Energy Conservation
PEL not only provides employment but PEL recognizes the importance of
also various business opportunities in the efficient use of limited energy resources
market. The Company encourages hiring and responsible use of energy resources
staff members at all levels from local remains a priority at PEL.
community. The Company also ensures
that business opportunities are rst made PEL has also developed an Energy
available to local transporters, Information System to help identity
contractors and vendors. energy losses at PEL's production units
and those associated with PEL's
c.) Indirect Economic Impact products. The system helps addressing
Growth and development of the abnormalities in the system and enables
Company contributes towards the growth PEL to dened benchmarks for energy
of our beloved country Pakistan. consumption per product thereby
Wherever possible, the Company improving energy consumption at PEL's
contributes towards development of production units.
infrastructure and other facilities of the b.) Mitigating the Adverse Impact of
country in general and of our premises Industrial Efuents
vicinity in particular.
There are no industrial efuents at PEL's
ENVIRONMENTAL plants that might adversely impact the
environment.
The highlights of the Company’s
performance, policies, initiatives and plans in SOCIAL
place relating to certain aspects of this
dimension of sustainability are as follows: The Company has signicant impact on the
social systems in which its operates. The
a.) Clean Drinking Water highlights of the Company’s performance,
PEL launched “Pel Se Zindagi”, an on policies, initiatives and plans in place relating
ground activation that resulted in the to certain aspects of this dimension of
installation of refrigerator like water sustainability are as follows:
dispensers that provided cool and clean

and Sustainability
a.) Industrial Relations e.) Consumer Protection Measures
PEL recognizes importance of good and The requirement for protection of
positive relations with its employees and consumer rights and interests is greatly
has put in place an effective system to valued at PEL. For this, an effective
ensure that a mutual beneficial system has been put in place to ensure
relationship is maintained. Salient the consumer interests are safeguarded.
features of this system include providing
conducing working environment, Our extensive dealer network ensures
appropriate pay packages, rewards for that our products are available
performance with discrimination and throughout the country. Well trained
special incentives for maintenance of officers employed at established and
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 so
motivational packages, PEL has 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 their Quality and Safety policy, strict and
entire expenses in this regard are borne stringent safety policies have been put in
by PEL. place for workers to avoid the risk of an
accident and ensure maximum safety of
c.) Product Quality Assurance 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 and
incoming, in-process and final stages. non technical trainings were conducted
The Company has implemented an companywide for workers.
extensive and effective quality assurance Three water ltration plants are installed
system for its products, as detailed on in the company in compliance with World
page E-32. Health Organization (WHO) & National
Environmental Quality Standards to
d.) Employment of Special Persons provide clean drinking water to its
PEL considers it a social and moral employees.
responsibility to accommodate special
persons and ensure that there are ample g.) Rural Development Programs
opportunities for their hiring and PEL has undertaken establishing a girls'
retention. school near Luliani in coordination with a
Special efforts are made for training and charitable trust by the name of Care
development of special persons to Foundation. This will be followed by
enable them to compete with others and establishing more schools in other rural
to provide equal incentives for career areas of the country.
growth and development without
discrimination.
At PEL, we inspire
to take a step
forward towards
making a
difference.

and Sustainability
h.) Business Ethics and Anti-corruption l.) Grievance Mechanism
Measures
The Company is committed to provide
PEL’s Legal & Compliance Department every opportunity to every employee for
organized a Code of Conduct brieng re-dress of any valid grievances arising
session.An awareness drive was set up. from work related matters. The
The session was specially conducted for management does not discriminate
the Department Heads and the General against any employee who elects to use
Managers; primary goal was to increase the grievance procedure. The purpose
the participants’ understanding of the of this policy is to encourage healthy
company’s Code of Conduct and to gain relationship between employees in order
their valuable feedback. Emphasis was to ensure smooth running of the
on the importance of the Code and its business.
implementation as an imperative
measure for the legal and compliance
procedures to be commensurate with the
company’s growth. It is the policy of PEL
to comply with all applicable laws,
regulations and corporate ethical
standards in the conduct of its 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 efciently 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.
k.) Forced or Compulsory Labor

PEL does not engage in forced or
compulsory work practices and
maintains a free working environment.
I Consolidated
Financial Statements
I 02 Pak Elektron Limited

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 nancial statements of PAK ELEKTRON LIMITED and its
subsidiary ['the Group'], which comprise the consolidated statement of nancial position as at December 31,
2018, the consolidated statement of prot or loss, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity, the consolidated statement of cash ows for the year then
ended, and notes to the consolidated nancial statements, including a summary of signicant accounting
policies and other explanatory information.
In our opinion, consolidated nancial statements give a true and fair view of the consolidated nancial
position of the Group as at December 31, 2018, and of its consolidated nancial performance and its
consolidated cash ows for the year then ended in 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 fullled our other ethical responsibilities in accordance with the Code. We believe that the audit
evidence we have obtained is sufcient 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 signicance in our audit
of the consolidated nancial statements of the current period. These matters were addressed in the context
of our audit of the consolidated nancial 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 key audit matter
1. Preparation of consolidated nancial

statements under Companies Act,
2017
As disclosed in note 3 to the annexed We assessed the procedures applied by the management
consolidated nancial statements, the for identication of the changes required in the nancial
Companies Act, 2017 ['the Act'] became statements due to the application of the Act. We
applicable for the rst time for the considered the adequacy and appropriateness of the
preparation of the Group's annual additional disclosures and changes to the previous
nancial statements for the year ended disclosures based on the new requirements.
December 31, 2018.
We also evaluated the sources of information used by the
The Act forms an integral part of the management for the preparation of these disclosures and
statutory nancial reporting framework the internal consistency of such disclosures with other
as applicable to the Group and amongst elements of the consolidated nancial statements.
Annual Report 2018 I 03
others, prescribes the nature and In respect of the change in accounting policy for the
content of disclosures in relation to accounting and presentation of surplus on revaluation of
various elements of the consolidated property, plant and equipment, as referred to in note 5 to
nancial statements. the consolidated nancial statements, we assessed the
accounting implications in accordance with the
In the case of the Group, a summary of
accounting and reporting standards as applicable in
key additional disclosures and changes
Pakistan and evaluated its application in the context of the
to the existing disclosures have been
Group.
stated in note 3 to the annexed
consolidated nancial statements.
Further, the Group has also changed its
accounting policy relating to
presentation and measurement of
surplus on revaluation of property, plant
and equipment as a consequence of the
application of the Act with retrospective
effect. The impact of the said change in
accounting policy has been disclosed in
note 5 to the accompanying
consolidated nancial statements.
The above changes and enhancements
in the consolidated nancial statements
are considered important and a key
audit matter because of the volume and
signicance of the changes in the
consolidated nancial statements
resulting from transition to the new
reporting requirements under the Act.
2. Inventory valuation
Stock in trade amounts to Rs 10,786 To address the valuation of stock in trade, we assessed
million as at the reporting date. The historical costs recorded in the inventory valuation; testing
valuation of stock in trade at cost has on a sample basis with purchase invoices. We tested the
different components, which includes reasonability of assumptions applied by the management
judgment in relation to the allocation of in allocating direct labour and direct overhead costs to
labour and overheads which are inventories.
incurred in bringing the stock to its
We also assessed management's determination of the net
present location and condition.
realizable value of inventories by performing tests on the
Judgment has also been applied by
sales prices secured by the Group for similar or
management in determining the Net
comparable items of inventories.
Realizable Value ['NRV'] of stock in
trade.
The estimates and judgments applied
by management are inuenced by the
amount 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 signicance of the balance coupled
with the judgment involved has resulted
in the valuation of inventories being

identied as a key audit matter
The disclosures in relation to inventories
are included in note 27.
3. Tax contingencies
As disclosed in note 20 to the annexed Our key audit procedures in this area included, amongst
consolidated nancial statements, others, a review of the correspondence of the Group with
various tax matters are pending the relevant tax authorities and tax advisors including
adjudication at various levels with the judgments or orders passed by the competent authorities.
taxation authorities and other legal
We also obtained and reviewed conrmations from the
forums. Such contingencies require the
Group's external tax advisor for their views on the status of
management to make judgments and
each case and an overall opinion on the open tax position
estimates in relation to the interpretation
of the Group.
of tax laws and regulations and the
recognition and measurement of any We involved internal tax experts to assess and review the
provisions that may be required against management's conclusions on contingent tax matters and
such contingencies. Due to inherent evaluated whether adequate disclosures have been made
uncertainties and the time period such in note 20 to the annexed consolidated nancial
matters may take to resolve, the statements.
management's judgments and
estimates in relation to such
contingencies may be complex and can
signicantly impact the consolidated
nancial statements. For such reasons
we have considered tax contingencies
as a key audit matter.
4. Contract accounting and revenue

recognition
The Group's business involves entering We read the relevant clauses with in all key contracts and
into long term contracts with customers discussed each with management to obtain a full
to provide a construction services with a understanding of the specic terms and risks, which
signicant proportion of the Group's informed our consideration of whether revenue for these
revenues and prots derived such contracts was appropriately recognized.
contracts.
We evaluated and tested the operating effectiveness of
Due to the contracting nature of the internal controls over the accuracy and timing of revenue
business, revenue recognition involves recognized, including controls relating to estimating total
a signicant degree of judgment, as costs, stage of completion of contracts, prot margin and
referred to in note 2.4.8 to the evaluating contract protability.
consolidated nancial statements, with
• For the more signicant and judgemental contracts, in
estimates being made to:
performing the following additional testing, we:
• assess the total contract cost;
• obtained an understanding of the performance and
• assess the stage of completion of status of the contracts in progress;
the contract;
• discussed and understood management's estimates
• forecast the prot margin after for total contract costs and forecast costs to complete,
taking consideration of estimated including taking into account the historical accuracy of
future costs to complete the such estimates; and
projects in progress; and
• appropriately provide for loss • compared management's position on the recognition

making contracts. of any cost and revenue, to the actual costs incurred
and current progress of the contract.
There is a range of acceptable outcomes
resulting from these judgments that
could lead to different prot and revenue
reported in the consolidated nancial
statements.
5. Revenue recognition
As referred to in note 6.16, revenue is Our audit procedures included considering the
recognized when the risks and rewards appropriateness of the Group's revenue recognition
of the underlying products have been accounting policies.
transferred to the customer. The Group
In response to the risk of fraud, we tested the effectiveness
focuses on revenue as a key
of the Group's controls over the timing of revenue
performance measure which could
recognition.
create an incentive for fraudulently
overstated revenue by recognizing We assessed sales transactions taking place at either side
revenue before the risks and rewards of the year end as well as credit notes, if any, issued after
have been transferred. the year end date to assess whether that revenue was
recognised in the correct period.
We performed testing over journals posted to revenue,
near the end of the reporting period to identify unusual or
irregular items.
We also considered the adequacy of the Group's
disclosures in respect of revenue
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 nancial statements and our auditor's
report thereon.
Our opinion on the consolidated nancial 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 nancial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated nancial 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 nancial
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 nancial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated nancial 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 nancial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated nancial 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 inuence the economic decisions of user taken on the
basis of these consolidated nancial 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 nancial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufcient 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 signicant 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 nancial 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 nancial statements,
including the disclosures, and whether the consolidated nancial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufcient appropriate audit evidence regarding the nancial information of the entities or business
activities within the Group to express an opinion on the consolidated nancial 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 signicant audit ndings, including any signicant deciencies 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
signicance in the audit of the consolidated nancial 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 benets of such communication.
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, 2018
Note 2018 2017

Rupees '000 Rupees '000
SHARE CAPITAL AND RESERVES
Authorized capital 8 6,000,000 6,000,000
Issued, subscribed and paid-up capital 9 5,426,392 5,426,392

Capital reserve 10 4,279,947 4,279,947
Surplus on revaluation of property, plant and equipment 11 6,579,049 4,274,019
Accumulated prot 13,994,307 13,020,232
TOTAL EQUITY 30,279,695 27,000,590
LIABILITIES
NON-CURRENT LIABILITIES
Redeemable capital - secured 12 - 68,750
Long term nances - secured 13 2,646,032 3,958,767
Liabilities against assets subject to nance lease 14 59,778 22,406
Deferred taxation 15 3,087,822 2,413,351
Deferred income 16 36,781 38,717
5,830,413 6,501,991
CURRENT LIABILITIES
Trade and other payables 17 922,850 980,030
Unclaimed dividend 18,650 12,766
Accrued interest/markup/prot 390,172 165,579
Short term borrowings 18 12,843,848 7,227,368
Current portion of non-current liabilities 19 1,814,311 2,027,692
15,989,831 10,413,435
TOTAL LIABILITIES 21,820,244 16,915,426
CONTINGENCIES AND COMMITMENTS 20
TOTAL EQUITY AND LIABILITIES 52,099,939 43,916,016
The annexed notes from 1 to 59 form an integral part of these nancial statements.
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL

Chief Executive Officer Director
Note 2018 2017

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 21 21,957,015 17,405,713
Intangible assets 22 313,352 315,525
Long term investments 23 6,985 8,848
Long term deposits 24 365,957 371,936
Long term advances 25 1,109,094 796,843
23,752,403 18,898,865
CURRENT ASSETS
Stores, spares and loose tools 26 859,145 746,408
Stock in trade 27 10,786,157 8,149,848
Trade debts 28 10,181,739 10,727,632
Due against construction work in progress -unsecured, considered good 29 1,535,735 1,393,185
Short term advances 30 1,039,505 845,826
Short term deposits and prepayments 31 1,105,179 1,109,232
Other receivables - unsecured, considered good 360,962 311,090
Short term investments 32 22,071 21,824
Advance income tax/Income tax refundable 33 1,985,785 1,227,912
Cash and bank balances 34 471,258 484,194
28,347,536 25,017,151
TOTAL ASSETS 52,099,939 43,916,016
SYED MANZAR HASSAN

Chief Financial Officer
Consolidated Statement of Prot or Loss

For the year ended December 31, 2018
Note 2018 2017

Revenue 35 38,990,247 42,346,753
Sales tax, excise duty and discounts 35 (10,544,936) (11,346,711)

Net revenue 28,445,311 31,000,042
Cost of sales 36 (21,448,040) (21,883,842)

Gross prot 6,997,271 9,116,200
Other income 37 17,977 17,793
Distribution cost 38 (2,207,445) (2,683,532)

Administrative and general expenses 39 (1,081,326) (1,118,844)
Other expenses 40 (63,376) (176,194)
(3,352,147) (3,978,570)
Operating prot 3,663,101 5,155,423
Finance cost 41 (2,103,343) (1,546,604)

1,559,758 3,608,819
Share of loss of associate 23.1 (2,456) (5,354)

Prot before taxation 1,557,302 3,603,465
Taxation 42 (185,833) (295,211)

Prot after taxation 1,371,469 3,308,254
Earnings per share - basic and diluted 43 2.67 6.56
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL SYED MANZAR HASSAN

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

Note 2018 2017

Items that may be reclassied subsequently to prot or loss - -
Items that will not be reclassied to prot or loss

Surplus on revaluation of property, plant and
equipment recognised during the year 11 3,045,215 -
Deferred tax adjustment on surplus on revaluation of
property, plant and equipment recognised during the year 11 (672,091) -
property, plant and equipment attributable to changes in tax rates 11 52,268 -
property, plant and equipment attributable to change
in proportion of income taxable under nal tax regime 11 79,462 (201,431)
2,504,854 (201,431)
Other comprehensive income/(loss) 2,504,854 (201,431)
Prot for the year 1,371,469 3,308,254
Total comprehensive income 3,876,323 3,106,823

Consolidated Statement of Cash Flows

Note 2018 2017

CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 44 2,134,519 3,859,383
Payments for:
Interest/markup on borrowings - Interest based arrangements (1,217,343) (1,099,531)
Interest/markup/prot on borrowings - Shariah compliant (196,675) (43,601)
Income tax (809,596) (867,489)
Net cash (used in)/generated from operating activities (89,095) 1,848,762
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,369,292) (1,843,969)

Purchase of intangible assets (8,030) (3,919)
Proceeds from disposal of property, plant and equipment 36,288 30,010
Long term deposits made (21,394) (117,510)
Long term deposits refunded 27,373 11,927
Long term advances made (1,040,000) (300,000)
Net cash used in investing activities (3,375,055) (2,223,461)
CASH FLOW FROM FINANCING ACTIVITIES
Redemption of redeemable capital (275,000) (2,564,553)

Long term nances obtained 226,013 3,809,701
Repayment of long term nances (1,542,813) (1,516,669)
Proceeds from sale and lease back activities 109,944 15,100
Repayment of liabilities against assets subject to nance lease (92,076) (71,186)
Net increase in short term borrowings 5,616,480 2,245,706
Dividend paid (591,334) (1,611,416)
Net cash generated from nancing activities 3,451,214 306,683
NET DECREASE IN CASH AND CASH EQUIVALENTS (12,936) (68,016)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 484,194 552,210
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 45 471,258 484,194
Consolidated Statement of Changes In Equity

Capital reserves Revenue

Share capital
reserves
Surplus on
Issued revaluation of
subscribed and Capital property, plant Accumulated Total
Note paid-up capital reserve and equipment prot equity
Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000
Balance as at January 01, 2017 5,426,392 4,279,947 4,668,386 11,134,131 25,508,856

Comprehensive income
Prot after taxation - - - 3,308,254 3,308,254
Other comprehensive loss - - (201,431) - (201,431)
Total comprehensive income - - (201,431) 3,308,254 3,106,823
Incremental depreciation 11 - - (192,936) 195,312 2,376
Transaction with owners
Final dividend on ordinary shares

@ Rs. 1.75 per share - - - (870,943) (870,943)
Interim dividend on ordinary shares
@ Rs. 1.25 per share - - - (746,522) (746,522)
- - - (1,617,465) (1,617,465)
Balance as at December 31, 2017 5,426,392 4,279,947 4,274,019 13,020,232 27,000,590

Other comprehensive income - - 2,504,854 - 2,504,854
Total comprehensive income - - 2,504,854 1,371,469 3,876,323
Incremental depreciation 11 - - (199,824) 199,824 -

@ Rs. 1.20 per share - - - (597,218) (597,218)
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 ofce 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 and distribution of transformers, switchgears, energy meters, power transformers,
construction of grid stations and electrication works.
Appliances Division: Manufacturing, assembling and distribution of refrigerators, deep freezers, air conditioners, microwave
ovens, 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 Company under the repealed Companies Ordinance, 1984. Registered ofce 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 nancial statements
These nancial statements are the consolidated nancial 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, benecially owns or holds more that fty
percent of the voting securities or otherwise has the power to elect and/or appoint more than fty 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 Company.
Inter-company 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 nancial 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
notied under the Companies Act, 2017;
- Islamic Financial Accounting Standards ['IFAS'] issued by Institute of Chartered Accountants of Pakistan as notied 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 nancial 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 nancial instruments measured at fair
value/amortized cost. In these nancial statements, except for the amounts reected in the statement of cash ows, all
transactions have been accounted for on accrual basis.
2.4 Judgments, estimates and assumptions
The preparation of nancial statements requires management to make judgements, 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 judgements 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 judgements 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. Judgments made by management in the
application of approved accounting and reporting standards as applicable in Pakistan that have signicant effect on the
nancial statements and estimates with a risk of material adjustment in subsequent years are as follows:
2.4.1 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 benets that the Group expects to derive from that item.
2.4.2 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 benets that the Group expects to derive from that asset.
2.4.3 Recoverable amount and impairment (see note 6.25)

The management of the Group reviews carrying amounts of its assets for possible impairment and makes formal estimates of
recoverable amount if there is any such indication.
Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which
goodwill has been allocated. The calculation of value in use requires the entity to estimate the future cash ows expected to
arise from the cash-generating unit and a suitable discount rate in order to calculate present value.
Trade and other receivables

The Group assesses the recoverability of its trade debts and other receivables if there is objective evidence that the Group will
not be able to collect all the amount due according to the original terms. Signicant nancial difculties of the debtors,
probability that the debtor will enter bankruptcy and default or delinquency in payments are considered indicators that the trade
debt is impaired.
Investments
The Group reviews the carrying amounts of its investments in equity securities for possible indications of impairment. Indicators
considered include nancial position/credit rating of the investee entity and changes in values of investment by reference to
active market, if any.
2.4.4 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.
2.4.5 Taxation (see note 6.2)

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 prot trends and their taxability under the current tax law.
2.4.6 Provisions (see note 6.14)

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.
2.4.7 Net realizable values (see note 6.4)

The Group reviews the net realizable values of stock in trade to assess any diminution in the respective carrying amounts. Net
realizable value is determined with reference to estimated selling prices less estimated costs necessary to make the sale.
2.4.8 Estimated future costs to complete projects in progress (see note 6.18)
As part of the application of percentage of completion method on contract accounting, the project costs are estimated. These
estimates are based on the prices of materials and services applicable at that time, forecasted increases and expected
completion date at the time of such estimation. Such estimates are reviewed at regular intervals. Any subsequent changes in the
prices of materials and services compared to forecasted prices and changes in the time of completion affect the results of the
subsequent periods.
2.5 Functional currency
These consolidated nancial statements have been prepared in Pak Rupees which is the Group's functional currency.
2.6 Date of authorization for issue
These nancial statements were authorized for issue on April 04, 2019 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, unless
specied otherwise, are either not relevant to the Group or their application does not have any material impact on the nancial
statements of the Group other than presentation and disclosures.
Clarications to IFRS 15 - Revenue from Contracts with Customers
IFRS 15 - Revenue from Contracts with Customers have been amended to clarify three aspects of the standard (identifying
performance obligations, principal versus agent considerations, and licensing) and to provide some transition relief for
modied contracts and completed contracts.
IFRIC 22 - Foreign Currency Transactions and Advances Consideration
The interpretation addresses the determination of taxable prot (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 specically considers:
- Whether tax treatments should be considered collectively
- Assumptions for taxation authorities' examinations
- The determination of taxable prot (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
- The effect of changes in facts and circumstances
Classication and Measurement of Share-based Payment Transactions (Amendments to IFRS 2 - Share-based

Payment)
IFRS 2 - Share-based Payment have been amended to clarify the standard in relation to the accounting for cash-settled share-
based payment transactions that include a performance condition, the classication of share-based payment transactions with
net settlement features, and the accounting for modications of share-based payment transactions from cash-settled to equity-
settled.
Applying IFRS 9 - Financial Instruments with IFRS 4 - Insurance Contracts (Amendments to IFRS 4 - Insurance
Contracts)
IFRS 4 Insurance Contracts have been amended to provide two options for entities that issue insurance contracts within the
scope of IFRS 4:
- an option that permits entities to reclassify, from prot or loss to other comprehensive income, some of the income or
expenses arising from designated nancial assets; this is the so-called overlay approach;
- an optional temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within
the scope of IFRS 4; this is the so-called deferral approach
The application of both approaches is optional and an entity is permitted to stop applying them before the new insurance
contracts standard is applied.
Transfers of Investment Property (Amendments to IAS 40 - Investment Property)
IAS 40 - Investment Property have following amendments:
- Paragraph 57 have been amended to state that an entity shall transfer a property to, or from, investment property when, and
only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the denition
of investment property. A change in management’s intentions for the use of a property by itself does not constitute evidence
of a change in use.
- The list of examples of evidence in paragraph 57(a) – (d) is now presented as a non-exhaustive list of examples instead of
the previous exhaustive list.
Annual Improvements to IFRS Standards 2014–2016 Cycle (IFRS 1 - First-time Adoption of International Financial
Reporting Standards and IAS 28 - Investments in Associates and Joint Ventures)
Annual improvements makes amendments to the following standards:
- IFRS 1 - Deletes the short-term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended
purpose.
- IAS 28 - Claries that the election to measure at fair value through prot or loss an investment in an associate or a joint
venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each
investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition.
Companies Act, 201

The Companies Act 2017 ['the Act'] was enacted on May 30, 2017. The Act has brought certain changes with regard to the
preparation and presentation of these consolidated nancial statements. These changes, amongst others, included change in
respect of presentation and measurement of surplus on revaluation of property, plant and equipment as fully explained in note
of these consolidated nancial statements, change in nomenclature of primary statements. Further, the disclosure
requirements contained in the fourth schedule of the Act have been revised, resulting in elimination of duplicative disclosure
with the IFRS disclosure requirements and incorporation of additional/amended disclosures including, but not limited to,
particulars of immovable assets of the Group (see note 21.2 and 21.3), management assessment of sufciency of tax provision
in the consolidated nancial statements (see note 42.1), change in threshold for identication of executives (see note 52),
additional disclosure requirements for related parties (see note 46), disclosure of signicant events and transactions affecting
the nancial position and performance of the Group (see note 7), disclosure relating to number of employess (see note 56) etc.
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE
Effective date
(annual periods
beginning on
or after)
IFRS 9 - Financial Instruments (2014) July 01, 2018

IFRS 15 - Revenue from Contracts with Customers July 01, 2018
IFRS 16 - Leases (2016) January 01, 2019
IFRS 17 - Insurance contracts (2017) January 01, 2021
Sale or contribution of assets between an Investor and its Associate or Joint Venture Deferred Indefinitely
(Amendments to IFRS 10 - Consolidated Financial Statements and IAS 28 - Investmentsin
Associates and Joint Ventures).
IFRIC 23 - Uncertainty over Income Tax Treatments January 01, 2019
Prepayment Features with Negative Compensation (Amendments to IFRS 9 - Financial January 01, 2019
Instruments)
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - Investments January 01, 2019
in Associates and Joint Ventures)
Annual Improvements to IFRS Standards 2015 – 2017 Cycle January 01, 2019
Plan Amendment, Curtailment or Settlement (Amendments to IAS 19 - Employee Benefits) January 01, 2019
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 InternationalFinancial January 01, 2020
Reporting Standards and IAS 8 - Accounting Policies, Changes in Accounting Estimates and
Errors)
Other than afore mentioned standards, interpretations and amendments, IABS has also issued the following standards which
have not been notied by the Securities and Exchange Commission of Pakistan ['SECP']:
IFRS 1 - First Time Adoption of International Financial Reporting Standards
IFRS 14 - Regulatory Defferal 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, notication 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 nancial statements other than in
presentation/disclosures.
IFRS 9 - Financial Instruments
Finalised version of IFRS 9 - Financial Instruments: Recognition and Measurement which contains accounting requirement for
nancial instruments, replacing IAS 39 - Financial Instruments: Recognition and Measurement. The standard contains
requirements in the following areas:
- Classication and measurement: Financial assets are classied by reference to the business model within which they
are held and their contractual cash ow characteristics. The 2014 version of IFRS 9 introduces a 'fair value through other
comprehensive income' category for certain debt instruments. Financial liabilities are classied in a similar manner to
under IAS 39, however there are differences in the requirements applying to the measurement of an entity's own credit risk.
- Impairment: The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement of the impairment
of nancial assets, so it is no longer necessary for a credit event to have occurred before a credit loss is recognised.
- Hedge accounting: Introduces a new hedge accounting model that is designed to be more closely aligned with how
entities undertake risk management activities when hedging nancial and non-nancial risk exposures.
- Derecognition: The requirements for the derecognition of nancial assets and liabilities are carried forward from IAS 39.
IFRS 15 - Revenue from Contracts with Customers
IFRS 15 provides a single, principles based ve-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 performace obligations in the contracts.
- Recognized revenuew when (or as) the entity satises a performance obligation.
5 CHANGE IN ACCOUNTING POLICY
During the year, the Companies Act, 2017 has been enacted and has resulted in change in accounting policy for surplus on
revaluation of property, plant and equipment.
- The surplus on revaluation of property, plant and equipment, which was previously disclosed in the consolidated
statement of nancial position of the Group after share capital and reserves, has now been included as part of equity with
corresponding inclusion in consolidated statement of changes in equity;
- If an asset's carrying amount is increased as a result of revaluation, the increase will be recognised in statement of
comprehensive income. However, the increase shall be recognised in statement of prot or loss to the extent that it
reverses a revaluation decrease of the same asset previously recognised in statement of prot or loss;
- If an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be recognised in statement of
prot or loss. However, the decrease shall be recognised in statement of comprehensive income to the extent of any credit
balance existing in the revaluation surplus in respect of that asset. Previously, section 235 of repealed Companies
Ordinance, 1984 allowed that the surplus on revaluation of property, plant and equipment may be applied by the Group in
setting off or in diminution of any decit arising from the revaluation of any other property, plant and equipment of the
Company.
The change in accounting policy does not have any impact on the amounts reported in these nancial statements. Hence a third
consolidated statement of nancial position as at the beginning of the previous year has not been presented.
6 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated nancial
statements except of the change referred to in note 5.
6.1 Property, plant and equipment
6.1.1 Operating xed assets

Operating xed assets are measured at cost less accumulated depreciation and accumulated impairment losses with the
exception of freehold land, leasehold land, buildings and plant and machinery. Freehold land, buildings and plant and
machinery are measured at revalued amounts less accumulated depreciation and accumulated impairment losses, if any.
Leasehold land is measured at historical cost. 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 signicant and their useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.
When signicant parts of an item of operating xed assets have different useful lives, they are recognized as separate items.
Major renewals and improvements to operating xed assets are recognized in the carrying amount of the item if it is probable
that the embodied future economic benets will ow to the Group and the cost of renewal or improvement can be measured
reliably. The cost of the day-to-day servicing of operating xed assets are recognized in prot or loss as incurred.
The Group recognizes depreciation in prot 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 xed asset
using rates specied in note 21 to the consolidated nancial statements. Depreciation on additions to operating xed 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 classied as held for disposal.
An operating xed asset is de-recognized when permanently retired from use. Any gain or loss on disposal of operating xed
assets is recognized in prot 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 prot or loss, the increase is rst
recognised in prot or loss. Decreases that reverse previous increases of the same asset are rst recognised in other
comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to prot
or loss. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to prot or
loss and depreciation based on the asset’s original cost, net of tax, is reclassied from the surplus on revaluation of property,
plant and equipment to accumulated prot.
6.1.2 Capital work in progress

Capital work in progress is stated at cost less identied 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 xed assets. These
costs are transferred to operating xed 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
identiable 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 specic software.
Costs that are directly associated with the production of identiable and unique software products controlled by the Group, and
that will probably generate economic benets exceeding costs beyond one year, are recognized as intangible assets. These
costs are amortized over their estimated useful lives. Amortization of intangible commences when it becomes available for use.
6.3 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 classied as property,
plant and equipment through capital work in progress.
6.4 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 nished goods consists of direct material, labour and an
appropriate proportion of manufacturing overheads.
Net realizable value signies the estimated selling price in the ordinary course of business less estimated costs of completion
and estimated costs necessary to make the sale.
6.5 Employee benets
6.5.1 Short-term employee benets

The Group recognizes the undiscounted amount of short term employee benets to be paid in exchange for services rendered
by employees as a liability after deducting amount already paid and as an expense in prot 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 benets, 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.
6.5.2 Post-employment benets

The Group operates an approved funded contributory provident fund for all its permanent employees who have completed the
minimum qualifying period of service as dened 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 prot or loss.
6.6 Financial instruments
6.6.1 Recognition
A nancial instrument is recognized when the Group becomes a party to the contractual provisions of the instrument.
6.6.2 Classication
The Group classies its nancial instruments into following classes depending on the purpose for which the nancial assets and
liabilities are acquired or incurred. The Group determines the classication of its nancial assets and liabilities at initial
recognition.
(a) Loans and receivables

Non-derivative nancial assets with xed or determinable payments that are not quoted in an active market are classied as
loans and receivables. Assets in this category are presented as current assets except for maturities greater than twelve
months from the reporting date, where these are presented as non-current assets.
(b) Financial assets at fair value through prot or loss
Financial assets at fair value through prot or loss are nancial assets that are either designated as such on initial
recognition or are classied as held for trading. Financial assets are designated as nancial assets at fair value through
prot or loss if the Group manages such assets and evaluates their performance based on their fair value in accordance
with the Group’s risk management and investment strategy. Financial assets are classied as held for trading when these
are acquired principally for the purpose of selling and repurchasing in the near term, or when these are part of a portfolio of
identied nancial instruments that are managed together and for which there is a recent actual pattern of prot taking, or
where these are derivatives, excluding derivatives that are nancial guarantee contracts or that are designated and
effective hedging instruments. Financial assets in this category are presented as current assets.
(c) Held-to-maturity investments
Held-to-maturity investments are non-derivative nancial assets with xed or determinable payments and xed maturity
that an entity has the positive intention and ability to hold to maturity. Assets in this category are presented as non-current
assets except for maturities less than twelve months from the reporting date, where these are presented as current assets.
(d) Financial liabilities at amortized cost
Non-derivative nancial liabilities that are not nancial liabilities at fair value through prot or loss are classied as nancial
liabilities at amortized cost. Financial liabilities in this category are presented as current liabilities except for maturities
greater than twelve months from the reporting date where these are presented as non-current liabilities.
6.6.3 Measurement
The particular measurement methods adopted are disclosed in the individual policy statements associated with each
instrument.
6.6.4 De-recognition
Financial assets are de-recognized if the Group's contractual rights to the cash ows from the nancial assets expire or if the
Group transfers the nancial asset to another party without retaining control or substantially all risks and rewards of the asset.
Financial liabilities are de-recognized if the Group's obligations specied in the contract expire or are discharged or cancelled.
Any gain or loss on de-recognition of nancial assets and nancial liabilities is recognized in prot or loss.
6.6.5 Off-setting
A nancial asset and a nancial liability is offset and the net amount reported in the balance sheet 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 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.
6.8 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 classications of preference shares.
6.9 Loans and borrowings
Loans and borrowings are classied as 'nancial 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 prot or loss over the
period of the borrowings on an effective interest basis.
6.10 Investments in equity securities
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 nancial 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.
Investments in other quoted equity securities
These on initial recognition, are designated as 'investments at fair value through prot or loss' and are recognized at cost.
Subsequent to initial recognition, these are measured at fair value. Gains and losses arising from changes in fair value are
recognized in prot or loss.
6.11 Finance leases
Leases in terms of which the Group assumes substantially all risks and rewards of ownership are classied as nance leases.
Assets subject to nance lease are classied as 'operating xed assets'. On initial recognition, these are measured at cost, being
an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial
recognition, these are measured at cost less accumulated depreciation and accumulated impairment losses. Depreciation,
subsequent expenditure, de-recognition, and gains and losses on de-recognition are accounted for in accordance with the
respective policies for operating xed assets. Liabilities against assets subject to nance lease and deposits against nance
lease are classied as 'nancial liabilities at amortized cost' and 'loans and receivables' respectively, however, since they fall
outside the scope of measurement requirements of IAS 39 'Financial Instruments - Recognition and Measurement', these are
measured in accordance with the requirements of IAS 17 'Leases'. On initial recognition, these are measured at cost, being their
fair value at the date of commencement of lease, less attributable transaction costs. Subsequent to initial recognition, minimum
lease payments made under nance leases are apportioned between the nance charge and the reduction of outstanding
liability. The nance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Deposits against nance leases, subsequent to initial recognition are carried at cost.
6.12 Ijarah transactions
Ujrah payments under an Ijarah are recognized as an expense in the prot 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 benet, even if the payments are not on that
basis.
6.13 Trade and other payables

6.13.1 Financial liabilities
These are classied as 'nancial 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 prot or loss.
6.13.2 Non-nancial liabilities
These, both on initial recognition and subsequently, are measured at cost.
6.14 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 outow of resources embodying economic benets 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 outow of resources embodying economic benets 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
outow is remote.
6.15 Trade and other receivables
6.15.1 Financial assets
These are classied as 'loans and receivables'. On initial recognition, these are measured at cost, being their fair value at the
date of transaction, plus attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost
using the effective interest method, with interest recognized in prot or loss.
6.15.2 Non-nancial assets
6.16 Revenue
Revenue is measured at the fair value of the consideration received or receivable, net of returns allowances, trade discounts and
rebates, and represents amounts received or receivable for goods and services provided and other income earned in the
normal course of business. Revenue is recognized when it is probable that the economic benets associated with the
transaction will ow to the Group, and the amount of revenue and the associated costs incurred or to be incurred can be
measured reliably.
- Revenue from different sources is recognized as follows:

- Revenue from sale of goods is recognized when risks and rewards incidental to the ownership of goods are transferred to
the buyer.
- Interest income is recognized using effective interest method.
- Dividend income is recognized when right to received payment is established.
- Contract revenue relating to long term construction contracts are recognized as revenue by reference to stage of
completion of contract activity at the balance sheet date. Stage of completion of a contract is determined by applying 'cost-
to-date method'. Under cost-to-date method stage of completion of a contract is determined by reference to the proportion
that contract cost incurred to date bears to the total estimated contract cost.
6.17 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
prot or loss and other comprehensive income ['OCI']. OCI comprises items of income and expense, including reclassication
adjustments, that are not recognized in prot or loss as required or permitted by approved accounting and reporting standards
as applicable in Pakistan, and is presented in 'consolidated statement of comprehensive income'.
6.18 Contract costs
Contract costs relating to long term construction contracts are recognized as expenses by reference to stage of completion of
contract activity at the reporting date. Stage of completion of a contract is determined by applying 'cost-to-date method'. Under
cost-to-date method, stage of completion of a contract is determined by reference to the proportion that contract cost incurred
to date bears to the total estimated contract cost. Expected losses on contracts are recognized as an expense immediately.
6.19 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 specic borrowings pending their expenditure on qualifying asset is deducted from the borrowing costs eligible
for capitalization. All other borrowing costs are recognized in prot or loss as incurred.
6.20 Income tax
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in prot 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.
6.20.1 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.
6.20.2 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 nancial 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 nal 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 prots 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 benet will be realized.
6.21 Government grants
Government grants that compensate the Group for expenses or losses already incurred are recognized in prot 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 prot or loss.
6.22 Earnings per share ['EPS']
Basic EPS is calculated by dividing the prot or loss attributable to ordinary shareholders of the Parent 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 prot or loss attributable
to ordinary shareholders of the Parent Company that would result from conversion of all dilutive potential ordinary shares into
ordinary shares.
6.23 Cash and cash equivalents
Cash and cash equivalents for the purpose of consolidated statement of cashows comprise cash in hand and cash at banks.
These are carried at cost.
6.24 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 prot or loss.
6.25 Impairment
A nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
Individually signicant nancial assets are tested for impairment on an individual basis. The remaining nancial assets are
assessed collectively in groups that share similar credit risk characteristics. A nancial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative effect on the estimated future cash ows of the asset.
An impairment loss in respect of a nancial asset measured at amortized cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash ows discounted at the original effective interest rate.
Impairment loss in respect of a nancial asset measured at fair value is determined by reference to that fair value. All impairment
losses are recognized in prot 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 nancial 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 carrying amount of the Group’s non-nancial 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 ows are discounted to their present
values using a pre-tax discount rate that reects current market assessments of the time value of money and the risks specic 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 prot 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.
6.26 Dividend distribution to ordinary shareholders
Dividend to ordinary shareholders is recognized as a deduction from accumulated prot in consolidated statement of changes
in equity and as a liability, to the extent it is unclaimed/unpaid, in the Group’s nancial statements in the year in which the
dividends are approved by the Group’s shareholders.
6.27 Basis of allocation of common expenses
Distribution, administrative and nance cost are allocated to PEL Marketing (Private) Limited ('PMPL') on the basis of
percentage of operating xed assets used by PMPL, under the interservices agreement between PEL and PMPL.
6.28 Warranty costs
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 all possible outcomes against their associated possibilities.
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 Ofcer to make decisions about resources
to be allocated to the segment and assess its performance and for which discrete nancial information is available.
Segment results that are reported to the Chief Executive Ofcer 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 prot/(loss) of associates, nance 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 SIGNIFICANT EVENTS AND TRANSACTIONS
During the year, interest rates increased exorbitantly causing increase in interest on borrowings. Rupee depreciation increased
the Group’s costs of production. These factors affected the protably of the Group in a negative manner. Further, The Group
launched a new product; LED TVs during the year which contributed marginally to the revenue and protability of the Group, but
its real effects will be visible in the ensuing year.
8 AUTHORIZED CAPITAL
2018 2017 2018 2017

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
9 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2018 2017 2018 2017

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
9.1 'A' class preference shares
9.1.1 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-proling of preference shares to these remaining investors. See note
9.1.2.
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.
9.1.2 Re-proling of preference shares
PEL offered re-proling 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-proling
term sheet and commercial terms and conditions therein. Further, SECP had allowed PEL to proceed with the re-proling
subject to fulllment 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 reproling has lapsed. PEL is in the process of nalising another reproling exercise based on mutual agreement to be
made amongst the existing investors.
9.1.3 Accumulated preference dividend
As at reporting date an amount of approximately Rs. 384.39 million (2017: Rs. 341.68 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 prots 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 reproling 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 reproling from different quarters is not yet complete.
10 CAPITAL RESERVE
This represents premium on issue of right ordinary shares recognized under Section 83(1) of the repealed Companies
Ordinance, 1984.
2018 2017
11 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
As at beginning of the year 4,274,019 4,670,762
Surplus recognized during the year

Surplus for the year 3,045,215 -
Deferred taxation (672,091) -
2,373,124 -
Incremental depreciation transferred to accumulated prots
Incremental depreciation for the year (280,450) (274,117)
Deferred taxation 80,626 78,805
(199,824) (195,312)
Other adjustments
Deferred tax adjustment attributable to changes in proportion

of income taxable under nal tax regime 79,462 (201,431)
Deferred tax adjustment attributable to changes in tax rates 52,268 -
131,730 (201,431)
As at end of the year 6,579,049 4,274,019
12 REDEEMABLE CAPITAL - SECURED
These represent interest/markup/prot based debt securities issued to institutional and other investors. The details are as
follows:
Description 2018 2017 Pricing Security Arrangements and repayment

Shariah compliant
Sukuk Funds 101,875 376,875 Three months KIBOR plus 1% Charge on present and future These were issued for the purpose of renance of existing machinery with diminishing
per annum (2017: Three operating xed assets of PEL. musharaka facility.
months KIBOR plus 1% per Later, PEL entered into restructuring arrangement, whereby, the outstanding principal was
annum) subject to oor and cap deferred till June 2015 with the outstanding liability payable in sixteen equal quarterly
of 8% and 16% respectively. installments commencing from June 2015.
Total 101,875 376,875

Current portion presented
under current liabilities (101,875) (308,125)
- 68,750
13 LONG TERM FINANCES - SECURED
These represent long term nances utilized under interest/markup/prot arrangements from banking companies and nancial
institutions. The details are as follows:

Shariah compliant
Term Finance 750,000 523,987 Three months KIBOR plus 1% Charge over operating xed This represents diminishing musharika facility obtained from Faysal Bank Limited for the
per annum (2017: Three assets of the PEL and purpose of balancing modernization and replacement requirements. The nance is
months KIBOR plus 1% per personal guarantees of repayable in fteen equal quarterly installments commencing from May 2019, with a grace
annum). sponsoring directors of the period of one year.
PEL.
Interest based arrangement
Term Finance 375,000 500,000 Three months KIBOR plus 3.8% Charge over present and The nance has been obtained from Pak Oman Investment Company Limited for the purpose
per annum (2017: Three future current assets of PEL, of nancing capital expenditure. The nance is repayable in twelve equal quarterly
months KIBOR plus 3.8% per mortgage of the PEL's land installments commencing from March 2018.
annum). and building.
Term Finance 1,928,571 2,785,714 Three months KIBOR plus Charge over present and The nance has been obtained from Bank Alfalah Limited for the purpose of nancing the
1.25% per annum (2017: Three future current assets of PEL, repayment of existing long term loans of the PEL. The nance is repayable in fourteen equal
months KIBOR plus 1.25% per mortgage of PEL's land and quarterly installments commencing from December 2017.
annum). building.
Term Finance 14,517 50,810 Three months KIBOR plus Charge over operating xed The nance has been obtained from The Bank of Punjab for the purpose of nancing capital
2.10% per annum. (2017: Three assets of the PEL and expenditure. The nance is repayable in eight equal quarterly installments commencing from
months KIBOR plus 2.10% per personal guarantees of September 2017.
annum). sponsoring directors of the
PEL.
Demand Finance 568,384 820,999 Three months KIBOR plus 2% Charge over operating xed This represents demand nance facility sanctioned by National Bank of Pakistan against an
per annum (2017: Three assets of the PEL and upfront payment of 1,650 million against Private Placed Term Finance Certicates. See note
months KIBOR plus 2% per personal guarantees of 12. The nance is repayable in sixteen equal quarterly installments commencing from April
annum). sponsoring directors of the 2017.
PEL.

Demand Finance 679,406 951,168 Three months KIBOR plus Charge over present and The nance has been obtained from National Bank of Pakistan for settlement of long term
2.25% per annum (2017: Three future current assets of the nances obtained from NIB Bank Limited. The nance is repayable in twenty three equal
months KIBOR plus 2.25% per PEL and personal guarantees quarterly installments commencing from September 2015.
annum). of sponsoring directors of
PEL.
3,565,878 5,108,691
Total 4,315,878 5,632,678
Current portion presented
under current liabilities (1,669,846) (1,673,911)
2,646,032 3,958,767
Note 2018 2017

14 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Present value of minimum lease payments 14.1 & 14.2 102,368 68,062
Current portion presented under current liabilities 14.1 & 14.2 (42,590) (45,656)
59,778 22,406
14.1 These represent vehicles and machinery acquired under nance lease arrangements. The leases are priced at rates ranging
from six months KIBOR plus 1.5% to 4.5% per annum (2017: 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 nance 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.
14.2 The amount of future payments under the nance lease arrangements and the period in which these payments will become due
are as follows:
Note 2018 2017

Not later than one year 50,351 49,686

Later than one year but not later than ve years 64,573 23,703
Total future minimum lease payments 114,924 73,389
Finance charge allocated to future periods (12,556) (5,327)
Present value of future minimum lease payments 102,368 68,062
Not later than one year 19 (42,590) (45,656)
15 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 15.1 3,708,750 3,379,016

Deferred tax asset on deductible temporary differences 15.1 (620,928) (965,665)
3,087,822 2,413,351
15.1 Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2018
As at Recognized in Recognized on As at
January 01 prot or loss balance sheet December 31
Rupees '000 Rupees '000 Rupees '000 Rupees '000
Deferred tax liabilities
Operating xed assets - owned 3,351,793 (213,815) 540,361 3,678,339
Operating xed 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
2017
Operating xed assets - owned 2,942,669 207,693 201,431 3,351,793
Operating xed assets - leased 40,117 (12,894) - 27,223
2,982,786 194,799 201,431 3,379,016
Deferred tax assets
Provisions (148,260) (67,568) - (215,828)
Unused tax losses and credits (508,333) (234,626) - (742,959)
Long term investments - (6,878) - (6,878)
(656,593) (309,072) - (965,665)
2,326,193 (114,273) 201,431 2,413,351
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 % (2017: 30% and 15%) respectively of the
timing differences based on tax rates notied by the Government of Pakistan for future tax years for such income.
2018 2017
16 DEFERRED INCOME
As at beginning of the year 38,717 40,755

Recognized in prot or loss (1,936) (2,038)
As at end of the year 36,781 38,717
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 xed
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. 1.936 million (2017: Rs. 2.038 million) has been included in other income in proportion to depreciation
charged on related plant and machinery keeping in view the matching principle.
Note 2018 2017

17 TRADE AND OTHER PAYABLES
Trade creditors - unsecured 414,995 399,217

Foreign bills payable - s ecured 17.1 108,823 99,102
Accrued liabilities 182,301 138,364
Advances from customers - u nsecured 82,117 119,864
Employees' provident fund 11,247 13,423
Compensated absences 34,162 33,114
Advance against contracts 47 11,852 9,615
Workers' Prot Participation Fund 17.2 26,765 82,450
Workers' Welfare Fund 17.3 31,883 73,897
Other payables - unsecured 18,705 10,984
922,850 980,030
17.1 Foreign bills payable are secured against bills of exchange accepted by the Group in favour of suppliers.
Note 2018 2017

17.2 Workers' Prot Participation Fund

Interest on fund utilized by the Group 41 4,940 5,655
Charged to prot or loss for the year 40 26,772 81,504
Paid during the year (87,397) (104,648)
17.2.1 Interest on funds utilized by the Group has been recognized at 9 % (2017: 8.5%) per annum.
Note 2018 2017

17.3 Workers' Welfare Fund

Paid/adjusted during the year (73,897) (84,078)
18 SHORT TERM BORROWINGS
Secured
Short term nances utilized under interest/markup/prot arrangements from
- Banking companies - Interest based arrangement 18.1 10,202,314 4,673,422
- Banking companies - Shariah compliant 18.1 1,854,937 1,000,000
- Non Banking Finance Companies ('NBFCs') 18.2 200,000 350,000
12,257,251 6,023,422
Unsecured
Short term nances utilized under interest/markup arrangements from
Non Banking Finance Companies ('NBFCs') - Interest based arrangement 18.3 - 1,135,174
Book overdraft 18.5 586,597 68,772
12,843,848 7,227,368
18.1 These facilities have been obtained from various banking companies for working capital requirements and carry
interest/markup at rates ranging from 7.11% to 12.3% (2017: 7.16% to 9.16%) per annum. These facilities are secured by pledge
/ hypothecation of raw material and components, work-in-process, nished goods, machinery, spare parts, charge over book
debts, shares of public companies 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 purchase of raw material and carry interest/markup at rates ranging from
7.12% to 11.55% (2017: 7.11% to 7.89%) per annum. These facilities are secured by charge over operating xed assets of the
PEL and personal guarantees of the directors of PEL.
18.3 This represented nances obtained against issue of commercial paper to non-banking nance companies and carry
interest/markup at nil (2017: nine months KIBOR plus 1.25% per annum). These were issued at discounted value and are
redeemed at face value.
18.4 The aggregate un-availed short term borrowing facilities as at the reporting date amounts to Rs. 10,464 million (2017: Rs. 10,727
million).
18.5 This represents cheques issued by the Group in excess of balances at bank which have been presented for payments in the
subsequent period.
Note 2018 2017

19 CURRENT PORTION OF NON-CURRENT LIABILITIES
Redeemable capital 12 101,875 308,125

Long term nances 13 1,669,846 1,673,911
1,814,311 2,027,692
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:
2018 2017
Tender bonds 488,314 482,288

Performance bonds 2,863,884 2,685,710
Advance guarantees 647,033 662,609
Custom guarantees 72,064 92,645
Foreign guarantees 80,682 77,084
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 The Finance Act 2015 introduced Tax on Undistributed Reserves vide newly inserted section 5A to the Ordinance whereby, tax at
the rate of 10% of undistributed prots exceeding one hundred percent of paid-up capital, was imposed on public companies
that derive prots in a tax year but do not distribute a certain amount of prot as cash dividend within six months of the end of the
year.
No provision for income tax on undistributed reserves for subsequent tax years, has been made as the matter is subjudice
before Lahore High Court and the management of the Group expects a favourable 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 the rate of 3% of the income equal to or excedding Rs. 500 million. No provision for Super Tax has
been made for tax years 2015 to 2017 as the matter is subjudice before Lahore High Court and the management of the
Company expects a favourable outcome.
20.1.5 On 12 July 2014, the Punjab Employees Social Security Institution ['the Institution'] issued a demand notice to PEL demanding a
payment of Rs. 31,106,274 as social security contributions for the period from January 2013 to December 2013. In 2015, PEL
challenged the demand notice by ling a complaint under Section 57 of the Provincial Employees Social Security Ordinance,
1965 before the Institution. The complaint is pending adjudication before the Adjudicating Ofcer of the Institution.
20.1.6 In tax year 2014 Worker’s Welfare Fund was levied at Rs. 1.55 million contrary to the judgements of the Lahore High Court
[‘LHC’] and the apex court and it is expected that this liability will be deleted by the Appellate Authority.
20.1.7 The Group’s case was selected for audit by the Additional Commissioner Inland Revenue ['ACIR'] for tax years 2009, 2016 and
2017. The Group has led appeals for these tax years before the Commissioner Inland Revenue (Appeals) [‘CIR(A)’], and the
appellate orders are yet awaited. The issues raised in these appeals are mostly concerning disallowance of various expenses.
The management expect to get adequate relief from the Appellate Authority and no additional tax liability is expected to arise.
20.1.8 As per order under section 137(2) of the Income Tax Ordinance, 2001 [‘the Ordinance’] dated October 20, 2017 a refund of Rs.
441.28 million has been determined for the tax year 2016. The department has led an appeal before the Appellate Tribunal
Inland Revenue ['ATIR'] on the relief allowed by the Commissioner Inland Revenue (Appeals) [‘CIR(A)’] on the account of
adjustment of minimum tax under section 113(2)(c) and tax credit allowed under section 65E of the Ordinance. The appeal led
is not xed for hearing. The ATIR in different case has allowed relief respecting the claim of tax under section 113 (2)(c) of the
Ordinance. The management expect to get adequate relief from the Appellate Authority and no additional tax liability is
expected to arise.
2018 2017
20.2 Commitments
20.2.1 Commitments under irrevocable letters of credit for import of

stores, spare parts and raw material 2,012,639 1,926,602
20.2.2 Commitments under ijarah contracts
The aggregate amount of ujrah payments for ijarah nancing and the period in which these payments will become due are as
follows:
2018 2017
- payments not later than one year 13,295 44,389

- payments later than one year 16,139 11,333
29,434 55,722
I 32
21 PROPERTY, PLANT AND EQUIPMENT
2018
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

Leasehold land 13,256 - - - - 13,256 - - - - - - 13,256
Freehold land 539,232 - 482,768 - - 1,022,000 - - - - - - 1,022,000
Building on leasehold land 1,763,372 - 453,650 - - 2,217,022 5 751,904 50,574 206,448 - 1,008,926 1,208,096
Building on freehold land 2,756,951 - 709,259 - - 3,466,210 5 884,539 93,620 251,643 - 1,229,802 2,236,408
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
Ofce equipment and xtures 214,254 35,208 - (52,506) - 196,956 10 118,943 10,767 - (44,530) 85,180 111,776
Computer hardware and allied items 141,232 11,918 - (26,736) - 126,414 30 109,972 17,797 - (25,019) 102,750 23,664
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
Assets subject to nance lease

Plant and machinery 103,488 109,944 - - (52,068) 161,364 5 10,753 4,637 - (8,956) 6,434 154,930
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
Capital work in progress

Building on freehold land 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
2017
Assets owned by the Group

Leasehold land 13,256 - - - - 13,256 - - - - - - 13,256
Freehold land 539,232 - - - - 539,232 - - - - - - 539,232
Building on leasehold land 1,763,372 - - - - 1,763,372 5 698,669 53,235 - - 751,904 1,011,468
Building on freehold land 2,754,337 2,614 - - - 2,756,951 5 786,062 98,477 - - 884,539 1,872,412
Plant and machinery 17,918,980 521,540 - - 102,700 18,543,220 5 5,655,258 636,896 - 16,388 6,308,542 12,234,678
Vehicles 183,497 132,022 - (62,276) 56,070 309,313 20 97,002 31,219 - 2,177 130,398 178,915
23,496,012 708,144 - (82,096) 158,770 24,280,830 7,457,170 846,597 - 531 8,304,298 15,976,532

Plant and machinery 203,488 - - - (100,000) 103,488 5 17,860 9,281 - (16,388) 10,753 92,735
Vehicles 131,102 27,802 - - (56,070) 102,834 20 46,496 13,998 - (27,679) 32,815 70,019
334,590 27,802 - - (156,070) 206,322 64,356 23,279 - (44,067) 43,568 162,754
23,830,602 735,946 - (82,096) 2,700 24,487,152 7,521,526 869,876 - (43,536) 8,347,866 16,139,286

Building on freehold land 73,547 937,336 - - - 1,010,883 - - - - - 1,010,883
Plant and machinery 59,755 198,489 - - (2,700) 255,544 - - - - - 255,544
133,302 1,135,825 - - (2,700) 1,266,427 - - - - - 1,266,427
23,963,904 1,871,771 - (82,096) - 25,753,579 7,521,526 869,876 - (43,536) 8,347,866 17,405,713
21.1 Property, plant and equipment includes fully depreciated assets of Rs. 64.54 million (2017: Rs. 71.15 million) which are still in use of PEL.
21.2 Freehold land of PEL is located at Mouza Kot Islampura, 34 - K.M, Ferozepur Road, Lahore with a total area of 511 Kanals (2017: 511 Kanals).
21.3 Leasehold land of PEL is located 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 (2017: 322 Kanals 15
Marla).
Annual Report 2018
I 33
21.4 Disposal of operating xed assets
2018
Accumulated Net Disposal Gain/(loss) Mode of
Particulars Cost depreciation book value proceeds on disposal disposal Particulars of buyer
Ofce equipment and xtures
Assets having net book value less than Rs. 500,000 each
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 ofce 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 hardware and allied items
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)
78, Block C, DHA Phase-1, Lahore.
BMW X1 5,217 591 4,626 5,737 1,111 As Per Company Policy Mehdi Hassan (employee)
Honda City 1,494 971 523 747 224 As Per Company Policy Atif Imtiaz (employee)
23-A, New Staff Colony U.E.T, Lahore.
Honda Civic 2,439 1,505 934 642 (292) As Per Company Policy Waseem Ishaq (employee)
199-A, Block C, PCSIR, College Road, Lahore.
Honda Civic 2,489 1,460 1,029 539 (490) As Per Company Policy Iftikhar Ahmed (employee)
100, Block E, Askari 10, AOHC, Lahore.
Honda Civic 2,469 1,448 1,021 560 (461) As Per Company Policy Tariq Irani (employee)
5, Block G4, Wapda Town, Lahore.
Honda Civic 2,448 1,277 1,171 470 (701) As Per Company Policy Javed A Khan (employee)
777, Ammar Shaheed Road Chahklala Scheme 3, Rawalpindi.
Honda Civic 2,164 793 1,371 1,456 85 As Per Company Policy Atif Ali (employee)
180, Block C, Gulshan-e-Ravi, Lahore.
Honda Civic 2,521 892 1,629 328 (1,301) As Per Company Policy Sadiq Munir (employee)
173-A, New Muslim Town, Lahore.
Porsche 1,202 439 763 3,000 2,237 Negotiation Performance Automotive
24-D, Al Faisal Town, Lahore.
Suzuki Mehran 578 10 568 222 (346) As Per Company Policy Shees Butt (employee)
442, Millat Road, Taj Colony, Faisalabad.
Toyota Corolla 1,731 1,015 716 600 (116) As Per Company Policy Javed Iqbal (employee)
10-A, Block E, Muhaz Town, Multan Road, Lahore.
Toyota Corolla 1,771 924 847 831 (16) As Per Company Policy Rizwan Cheema (employee)
149-B, PCSIR Colony, Canal Road, Lahore.
Honda City 1,438 1,028 410 568 158 As Per Company Policy Imran Iqbal (employee)
Suzuki Cultus 1,020 740 280 203 (77) As Per Company Policy Shaq Ahmed (employee)
Suzuki Cultus 990 692 298 498 200 As Per Company Policy M Mukhtar Khan (employee)
Suzuki Cultus 1,049 615 434 544 110 As Per Company Policy Irshad Khan (employee)
Suzuki Cultus 1,039 586 453 572 119 As Per Company Policy Salman (employee)
Suzuki Cultus 106 12 94 401 307 As Per Company Policy Shahid Ahmed (employee)
Suzuki Cultus 106 12 94 307 213 As Per Company Policy Muhammad Asif (employee)
Suzuki Mehran 612 431 181 700 519 As Per Company Policy Muhammad Shaq (employee)
Suzuki Mehran 612 431 181 305 124 As Per Company Policy Masood ul Hassan (employee)
Suzuki Mehran 612 431 181 213 32 As Per Company Policy Tahir Ikram (employee)
Suzuki Mehran 612 431 181 - (181) As Per Company Policy Muhammad Asghar (employee)
Suzuki Mehran 640 420 220 345 125 As Per Company Policy Sami Ullah Qazi (employee)
Suzuki Mehran 657 427 230 167 (63) As Per Company Policy Amer Fayyaz (employee)
Suzuki Mehran 657 427 230 167 (63) As Per Company Policy Sharaf ud Din (employee)
Suzuki Mehran 657 427 230 320 90 As Per Company Policy Nasir Javed (employee)
Suzuki Mehran 688 404 284 472 188 As Per Company Policy Muhammad Zeeshan (employee)
Suzuki Mehran 69 14 55 474 419 As Per Company Policy Uzair (employee)
Suzuki Mehran 69 16 53 170 117 As Per Company Policy Shafqat (employee)
Suzuki Swift DX 1,131 797 334 383 49 As Per Company Policy Abdul Qavi Butt (employee)
Toyota Corolla 168 - 168 1,450 1,282 As Per Company Policy Azeem (employee)
Toyota XLI 1,554 1,095 459 306 (153) As Per Company Policy Manzar Hassan (employee)
Motor Bike 63 55 8 64 56 As Per Company Policy Waqas (employee)
Motor Bike 41 30 11 41 30 As Per Company Policy Abid (employee)
Motor Bike 57 39 18 69 51 As Per Company Policy Badar (employee)
Motor Bike 85 53 32 - (32) As Per Company Policy Faisal (employee)
Motor Bike 62 29 33 62 29 As Per Company Policy Abid Tabassum (employee)
Motor Bike 62 32 30 62 32 As Per Company Policy Nauman (employee)
Motor Bike 62 28 34 64 30 As Per Company Policy Syed Anwar Ali (employee)
Motor Bike 64 29 35 64 29 As Per Company Policy Muhammad Ali Shahbaz (employee)
Motor Bike 42 18 24 42 18 As Per Company Policy Nadeem Shahzad (employee)
Motor Bike 64 21 43 25 (18) As Per Company Policy Gulman Shah (employee)
Motor Bike 171 - 171 917 746 As Per Company Policy Jehanzeb Ahmed (employee)
45,906 21,578 24,328 29,921 5,593
125,148 91,127 34,021 36,288 2,267

2017
Table and chairs 1,021 775 246 249 3 Negotiation Various individuals
Air conditioners 1,746 1,233 513 43 (470) Negotiation Various individuals
Mobile sets 364 77 287 94 (193) Negotiation Various individuals
Mobile sets 63 4 59 76 17 Insurance Claim Adamjee insurance
Miscellaneous ofce items 870 596 274 50 (224) Negotiation Various individuals
4,064 2,685 1,379 512 (867)

Laptops 161 118 43 36 (7) Negotiation Various individuals
Mobile sets 1,854 1,491 363 429 66 Negotiation Various individuals
Allied items 693 692 1 110 109 Negotiation Various individuals
15,756 15,349 407 917 510
Vehicles
Honda City 167 - 167 1,375 1,208 As Per Company Policy Kashif Khan (employee)
Honda City 1,438 979 459 940 481 As Per Company Policy Adnan Shahid (employee)
Honda City 1,603 847 756 201 (555) As Per Company Policy Arfan Hashmi (employee)
Honda Civic 2,167 1,436 731 719 (12) As Per Company Policy Nasir Paul (employee)
Toyota Corolla 1,775 - 1,775 1,775 - As Per Company Policy Javed Iqbal (employee)
Honda Civic 2,383 1,567 816 616 (200) As Per Company Policy Mehdi Hassan (employee)
Suzuki Cultus 106 - 106 925 819 As Per Company Policy Kamran (employee)
Suzuki Cultus 1,029 528 501 315 (186) As Per Company Policy Muhammad Hanif (employee)
Suzuki Cultus 106 2 104 825 721 As Per Company Policy Adil Ashfaque (employee)
Suzuki Cultus 85 14 71 439 368 As Per Company Policy Arfan Hashmi (employee)
Suzuki Cultus 1,044 561 483 624 141 As Per Company Policy Khalid Sheikh (employee)
Suzuki Cultus 1,049 516 533 322 (211) As Per Company Policy Umer Shahzad (employee)
Suzuki Cultus 985 621 364 508 144 As Per Company Policy Muhammad Farooq (employee)
Suzuki Cultus 106 5 101 575 474 As Per Company Policy Muhammad Ali (employee)
Suzuki Cultus 1,029 524 505 570 65 As Per Company Policy Tanweer Malik (employee)
Suzuki Mehran 640 416 224 230 6 As Per Company Policy Irfan Ahmad (employee)
Suzuki Mehran 673 345 328 241 (87) As Per Company Policy Mian Nazir (employee)
Suzuki Mehran 683 348 335 506 171 As Per Company Policy Husnain Arif (employee)
Suzuki Mehran 693 361 332 504 172 As Per Company Policy Khawaja Mudassar (employee)
Suzuki Mehran 657 405 252 167 (85) As Per Company Policy Attique (employee)
Suzuki Mehran 657 354 303 194 (109) As Per Company Policy Mahmood (employee)
Suzuki Mehran 657 405 252 358 106 As Per Company Policy Amir Shahzad (employee)
Suzuki Mehran 612 386 226 319 93 As Per Company Policy Afzal (employee)
Suzuki Mehran 612 374 238 340 102 As Per Company Policy Abdul Raheem (employee)
Suzuki Mehran 69 2 67 504 437 As Per Company Policy Yamin Afridi (employee)
Suzuki Swift 1,486 732 754 909 155 As Per Company Policy Muhammad Shahid (employee)
Suzuki Swift 1,282 658 624 562 (62) As Per Company Policy Muhammad Nauman (employee)
Suzuki Swift 1,282 669 613 532 (81) As Per Company Policy Shahb Ali (employee)
Suzuki Swift 1,221 634 587 494 (93) As Per Company Policy Muhammad Shahzad (employee)
Suzuki Swift 1,297 192 1,105 1,107 2 As Per Company Policy Muhammad Farooq (employee)
Suzuki Swift 133 - 133 300 167 As Per Company Policy Nazir (employee)
Suzuki WagonR 92 3 89 443 354 As Per Company Policy Nadeem un Din (employee)
Toyota Corolla 1,824 730 1,094 208 (886) As Per Company Policy Tauqir Akhtar (employee)
Toyota Corolla 1,591 1,084 507 313 (194) As Per Company Policy Tariq Siraj (employee)
Toyota Corolla 1,625 1,047 578 365 (213) As Per Company Policy Muhammad Raq Ahmad (employee)
Toyota Corolla 1,694 926 768 471 (297) As Per Company Policy Jalil ur Rehman (employee)
Toyota Corolla 1,555 874 681 231 (450) As Per Company Policy Ashar Abbas (employee)
Toyota Corolla 1,690 1,098 592 1,070 478 As Per Company Policy Umar Saleemi (employee)
Toyota Corolla 1,690 1,120 570 453 (117) As Per Company Policy Tassawar Hanif (employee)
Toyota Corolla 1,690 1,153 537 441 (96) As Per Company Policy Syed Muhammad Amer (employee)
Toyota Corolla 1,555 1,040 515 761 246 As Per Company Policy Masood Ahmed (employee)
Honda City 1,538 101 1,437 1,799 362 Sale & Lease Back First Habib Modaraba
Suzuki Cultus 961 - 961 1,124 163 Sale & Lease Back First Habib Modaraba
Suzuki Mehran 605 - 605 708 103 Sale & Lease Back First Habib Modaraba
Suzuki WagonR 901 45 856 1,054 198 Sale & Lease Back First Habib Modaraba
Various Motor Cycles 421 155 266 436 170 As Per Company Policy Various individuals
47,763 23,257 24,506 28,581 4,075
67,583 41,291 26,292 30,010 3,718
Note 2018 2017

21.5 The depreciation charge for the year has been allocated as follows:
Cost of sales 36 772,241 805,694

Administrative and general expenses 39 68,660 64,182
840,901 869,876
21.6 Revaluation of property, plant and equipment
Most recent valuation of freehold land, buildings on freehold and lease hold land and plant and machinery was carried out by an
independent valuer, Asif Associates (Private) Limited, on December 31, 2018 and was incorporated in the nancial 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:
2018
Accumulated Net
Cost depreciation book value
Rupees '000 Rupees '000 Rupees '000
Freehold land 189,184 - 189,184

Buildings 3,302,326 1,321,029 1,981,297
Plant and machinery 10,898,107 3,426,343 7,471,764
2017
Accumulated
Cost depreciation Net book value
Freehold land 189,184 - 189,184

Buildings 3,302,326 1,216,750 2,085,576
21.6.1 As per most recent valuation, forced sale values of freehold land, buildings on freehold land and plant and machinery are as
follows:
Rupees
Rupees '000
Freehold land 919,800

Buildings on freehold land 2,927,828
Plant and machinery 11,998,078
15,845,706
22 INTANGIBLE ASSETS
Note 2018
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 38,984 3,904 42,888 74,166
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
Enterprise Resource Planning system 22.4 31,675 - 31,675 18,825 4,241 23,066 8,609
470,046 8,030 478,076 154,521 10,203 164,724 313,352
2017
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 5,057 3,919 8,976 4,701 152 4,853 4,123
466,127 3,919 470,046 142,471 12,050 154,521 315,525
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 identiable 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:
2018 2017
2,910,600 (2017: 2,910,600) ordinary shares of Rs. 10 each

Percentage of ownership interest 23.10% 23.10%
2018 2017
Cost of investment 54,701 54,701

Share of post acquisition loss - net of dividend received (8,857) (6,401)
45,844 48,300
Accumulated impairment (38,859) (39,452)
6,985 8,848
23.1 Extracts of nancial statements of associated company
The assets and liabilities of Kohinoor Power Company Limited as at the reporting date and related revenue and prot for the year
then ended based on the un-audited nancial statements for the year ended December 31, 2018 are as follows:
Note 2018 2017

Assets 159,384 170,860

Liabilities 3,411 3,192
Revenue 4,473 4,028
Loss for the year 10,630 23,177
Share of loss 2,456 5,354
Market value per share (Rupees) 2.40 3.04
24 LONG TERM DEPOSITS
Financial institutions 24.1 7,858 31,131

Utility companies and regulatory authorities 24.2 42,351 42,351
Customers 24.3 315,748 298,454
365,957 371,936
24.1 These represent security deposits against Ijarah nancing.
24.2 These have been deposited with various utility companies and regulatory authorities. These are classied as 'loans and
receivables' under IAS 39 'Financial Instruments - Recognition and Measurement' which are required to be carried at amortized
cost. However, these, being held for an indenite period with no xed maturity date, are carried at cost as their amortized cost is
impracticable to determine.
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. Due to uncertainties regarding dates of refund of these deposits, these have been
carried at cost.
25 LONG TERM ADVANCES
Note 2018 2017

Face value of deposits 923,211 1,081,926

Additions during the year 1,040,000 300,000
Transferred to current assets (623,715) (458,715)
Less: unamortized notional interest 25.2 (230,402) (126,368)
As at end of the year 1,109,094 796,843
25.1 These advances have been made to various customers against renovation of show rooms for long term. These are classied as
'loans and receivables' under IAS 39 'Financial Instruments - Recognition and Measurement' which are required to be carried at
amortized cost which has been determined using a discount rate of 10.72%.
Note 2018 2017

`
25.2 Unamortized notional interest

Recognized during the year 38.2 184,408 56,740
Amortization for the year (80,374) (80,162)
26 STORES, SPARES AND LOOSE TOOLS
Stores 290,865 136,561

Spares 452,987 505,812
Loose tools 134,117 122,859
877,969 765,232
Provision for slow moving and obsolete items (18,824) (18,824)
859,145 746,408
26.1 There are no spare parts held exclusively for capitalization as at the reporting date.
Note 2018 2017

`
27 STOCK IN TRADE
Raw material
- in stores 5,130,566 4,639,215
- in transit 2,110,833 582,589
Provision for slow moving and obsolete items 27.1 (37,037) (34,515)
7,204,362 5,187,289
Work in process 758,928 848,453
Finished goods 2,829,889 2,121,128
2,822,867 2,114,106
10,786,157 8,149,848
Note 2018 2017

27.1 Movement in provision for slow moving and obsolete items

Recognized during the year 2,522 8,868
27.2 Entire stock in trade is carried at cost being lower than net realizable value.
27.3 Stock in trade valued at Rs. 1,754 million (2017: Rs. 1,308 million) is pledged as security with providers of debt nances.
Note 2018 2017

28 TRADE DEBTS - UNSECURED
Considered good
- against sale of goods 7,127,034 8,841,149
- against execution of contracts 3,054,705 1,886,483
10,181,739 10,727,632
Considered doubtful 28.2 587,301 576,971
10,769,040 11,304,603
Impairment allowance for doubtful debts 39 (587,301) (576,971)
10,181,739 10,727,632
28.1 These include retention money for contracts in progress amounting to Rs. 617.648 million (2017: Rs. 855.5 million) held by the
customers in accordance with contract terms.
2018 2017
28.2 Movement in impairment allowance

29 DUE AGAINST CONSTRUCTION WORK IN PROGRESS - UNSECURED, CONSIDERED GOOD
This represents unbilled revenue from construction work in progress.
Note 2018 2017

30 SHORT TERM ADVANCES
Advances to suppliers and contractors - unsecured

- considered good 589,824 617,091
- considered doubtful 32,730 32,730
Impairment allowance for doubtful advances (32,730) (32,730)
589,824 617,091
Advances to employees - unsecured
- considered good 30.1 449,681 228,735
449,681 228,735
1,039,505 845,826
2018 2017
30.1 These include advances for
- purchases 230,008 147,989

- expenses 105,524 46,886
- traveling 114,149 33,860
449,681 228,735
31 SHORT TERM DEPOSITS AND PREPAYMENTS
Security deposits
Impairment allowance for doubtful deposits (5,379) (5,379)
308,133 383,133
Margin deposits 421,671 488,316
Prepayments 52,865 46,211
Letters of credit 322,510 191,572
1,105,179 1,109,232
32 SHORT TERM INVESTMENTS
These represent investments in listed equity securities classied as 'nancial assets at fair value through prot or loss'. The
details are as follows:
Note 2018 2017

Standard Chartered Bank (Pakistan) Limited

915,070 (2017: 915,070) ordinary shares of Rs. 10 each
Market value: Rs. 24.12 (2017: Rs. 23.85) per share
Changes in fair value 37 & 40 247 (1,282)
33 ADVANCE INCOME TAX/INCOME TAX REFUNDABLE
Advance income tax/income tax refundable 2,129,147 1,637,396

Provision for taxation 42 (143,362) (409,484)
1,985,785 1,227,912
34 CASH AND BANK BALANCES
Cash in hand 16,818 16,217

Cash at banks 454,440 467,977
471,258 484,194
35 NET REVENUE
Contract revenue 47 2,899,882 2,841,124

Sale of goods
- local 35,201,408 38,212,710
- exports 888,957 1,292,919
38,990,247 42,346,753
Sales tax and excise duty (3,710,466) (4,062,791)

Trade discounts (6,834,470) (7,283,920)
(10,544,936) (11,346,711)
28,445,311 31,000,042
Note 2018 2017

36 COST OF SALES
Finished goods at the beginning of the year 2,121,128 1,895,253

Cost of goods manufactured 36.1 19,723,220 19,699,023
Finished goods at the end of the year (2,829,889) (2,121,128)
Cost of goods sold 19,014,459 19,473,148
Contract cost 47 2,433,581 2,410,694
21,448,040 21,883,842
36.1 Cost of goods manufactured

Work-in-process at beginning of the year 848,453 1,033,340
Raw material and components consumed 16,936,321 16,792,254
Direct wages 799,473 712,515
Factory overheads:
- salaries, wages and benets 422,952 482,115
- traveling and conveyance 27,930 25,623
- electricity, gas and water 339,186 361,245
- repairs and maintenance 68,323 61,254
- vehicles running and maintenance 30,060 30,028
- insurance 35,855 29,225
- depreciation 21.5 772,241 805,694
- amortization of intangible assets 22 10,203 12,050
- provision for obsolete and slow moving stock 26 & 27 2,522 8,868
- carriage and freight 23,742 27,540
- erection and testing 151,605 153,582
- other factory overheads 13,282 12,143
1,897,901 2,009,367
20,482,148 20,547,476
Work-in-process at end of the year (758,928) (848,453)
19,723,220 19,699,023
36.2 These include charge in respect of employees retirement benets amounting to Rs. 39.401 million (2017: Rs. 32.37 million).
Note 2018 2017

37 OTHER INCOME
Gain on nancial instruments

Reversal of impairment loss on long term investments 23 593 -
Changes in fair value of short term investments 32 247 -
Gain on disposal of property, plant and equipment 2,267 3,718
Gain on sale and lease back activities - 2,832
3,107 6,550
Other income
Amortization of grant-in-aid 16 1,936 2,038
Others 12,934 9,205
14,870 11,243
17,977 17,793
Note 2018 2017

38 DISTRIBUTION COST
Salaries and benets 38.1 468,433 454,356
Traveling and conveyance 89,541 106,218
Rent, rates and taxes 111,552 128,721
Electricity, gas, fuel and water 23,116 24,761
Repairs and maintenance 8,555 9,262
Vehicles running and maintenance 59,421 65,505
Printing and stationery 11,680 10,331
Postage, telegrams and telephones 25,815 23,170
Entertainment and staff welfare 38,007 39,952
Advertisement and sales promotion 462,122 695,407
Insurance 17,940 17,124
Freight and forwarding 451,391 552,921
Contract and tendering 1,981 10,860
Warranty period services 317,342 358,229
Others 38.2 120,549 186,715
2,207,445 2,683,532
38.2 These include notional interest expense/(income) amounting to Rs. 104.034 million (2017: Rs. 23.422 million) on long term
advances. (See note 25.2)
Note 2018 2017

39 ADMINISTRATIVE AND GENERAL EXPENSES

Ujrah payments 46,788 62,149
Legal and professional 75,395 84,548
Electricity, gas and water 36,223 30,610
Auditor's remuneration 39.2 5,877 5,591
Printing, stationery and periodicals 5,016 4,559
Advertisement 12,693 12,205
Insurance 15,105 12,449
Provision for doubtful debts, advances and security deposits 10,330 132,382
Depreciation 21.5 68,660 64,182
Others 25,527 28,140
1,081,326 1,118,844
2018 2017
39.2 Auditor's remuneration

Annual statutory audit 4,300 4,299
Limited scope review 800 600
Review report under Code of Corporate Governance 500 430
Out of pocket expenses 277 262
5,877 5,591
Note 2018 2017

40 OTHER EXPENSES
Loss on nancial instruments

Loss due to changes in fair value of short term investments 32 - 1,282
Impairment of long term investments 23 - 12,139
Loss on sale and lease back activities 4,721 -
4,721 13,421
Others
Others - 7,372
58,655 162,773
63,376 176,194
41 FINANCE COST
Interest/markup/prot on borrowings:
redeemable capital 19,655 288,312
long term nances 443,864 296,851
liabilities against assets subject to nance lease 6,362 10,922
short term borrowings 1,168,730 553,204
1,638,611 1,149,289
Interest on Workers' Prot Participation Fund 17.2 4,940 5,655
Bank charges and commission 459,792 391,660
2,103,343 1,546,604
42 TAXATION
Provision for taxation 33 & 42.1

for current year 143,362 409,484
for prior year (91,639) -
51,723 409,484
Deferred taxation
adjustment attributable to origination and reversal of temporary differences 162,516 (114,273)
adjustment attributable to changes in tax rates 15.1 (28,406) -
134,110 (114,273)
185,833 295,211
42.1 Provision for current tax has been made in accordance with section 18 and 154 (2017: section 18 and 154) of the Income Tax
Ordinance, 2001 ['the Ordinance']. A comparison of last three years of provision for current taxation with tax assessed is
presented below:
2017 2016 2015

Rupees Rupees Rupees
Provision for current taxation as per nancial statements 409,484 323,783 321,851
Tax assessment under section 120 of the Ordinance 317,845 131,799 -
42.2 Reconciliation between average effective tax rate and applicable tax rate
Unit 2018 2017
Prot before taxation Rupees 1,557,302 3,603,465
Provision for taxation Rupees 185,833 295,211
Average effective tax rate % 11.93 8.19
Tax effects of:

Income taxable under nal tax regime % (3.74) 2.40
Admissible deductions, losses and tax credits % 25.39 18.14
Deferred taxation % (8.61) 3.17
Others % 4.03 (1.90)
Applicable tax rate % 29.00 30.00
42.3 Assessments upto tax year 2017 have been nalized under the relevant provisions of the Ordinance.
Unit 2018 2017
43 EARNINGS PER SHARE - BASIC AND DILUTED
Earnings
Prot after taxation Rupees '000' 1,371,469 3,308,254
Preference dividend for the year Rupees '000' (42,710) (42,710)
Prot attributable to ordinary shareholders Rupees '000' 1,328,759 3,265,544
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 2.67 6.56
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.
43.3 The effect of issue of ordinary and preference shares on conversion of redeemable capital, as referred to in note 12, has not
been considered for the purpose of calculation of earnings per share as the said issue is subject to various legal and regulatory
approvals which are pending as at the reporting date.
Note 2018 2017

44 CASH GENERATED FROM OPERATIONS

Adjustments for non-cash and other items
Interest/markup/prot on borrowings 1,638,611 1,149,289
Notional interest 104,034 (23,422)
Gain on disposal of property, plant and equipment (2,267) (3,718)
Amortization of grant-in-aid (1,936) (2,038)
Amortization of intangible assets 10,203 12,050
Share of loss of associate 2,456 5,354
Gain on sale and lease back activities - (2,832)
Reversal of impairment loss on long term investments (593) -
Impairment of long term investments - 12,139
Changes in fair value of nancial assets at fair value through prot or loss (247) 1,282
Impairment allowance for doubtful debts, advances and security deposits 10,330 132,382
Provision for obsolete and slow moving stock 2,522 8,868
Depreciation 840,901 869,876
2,608,735 2,159,230
4,166,037 5,762,695
Changes in working capital
Stores, spares and loose tools (112,737) 66,507
Stock in trade (2,638,831) (312,916)
Trade debts 1,159,278 (1,891,212)
Due against construction work in progress (142,550) (265,189)
Short term advances (193,679) 109,055
Trade deposits and short term prepayments 4,053 149,642
Other receivables (49,872) 169,154
Trade and other payables (57,180) 71,647
(2,031,518) (1,903,312)
Cash generated from operations 2,134,519 3,859,383
45 CASH AND CASH EQUIVALENTS

471,258 484,194
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 benet 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 N/A
Kohinoor Power Company Limited Associated company Investment N/A
Red Communication Arts
(Private) Limited Associated undertaking Common Directorship N/A
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 benets, advances
against issue of ordinary shares and dividend payments. Transactions with post employment benet 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 2018 2017

46.1 Transactions with related parties
Nature of relationship Nature of transactions

Provident Fund Trust Contribution for the year 78,053 74,972
Associated companies and undertakings Purchase of services 50,304 136,462
Key management personnel Short term employee benets 52 50,125 46,941

Post employment benets 52 1,600 1,600
Directors and sponsors Dividend paid 295,933 813,143
46.2 Balances with related parties
Nature of relationship Nature of balances

Provident Fund Trust Contribution payable 11,247 13,423
Key management personnel Short term employee benets payable 2,805 2,897
Note 2018 2017

47 LONG TERM CONSTRUCTION CONTRACTS
Contract revenue for the year 35 2,899,882 2,841,124
Cost incurred to date 7,402,753 4,969,171
Contract costs for the year 36 2,433,581 2,410,694
Gross prot realized to date 1,340,197 2,095,361
Advances against contracts 17 11,852 9,615
Retention money receivable 617,648 855,500
Gross amount due from customers 3,972,791 3,279,668
Gross amount due to customers 43,031 151,688
Estimated future costs to complete projects in progress 1,358,721 2,340,622
48 FINANCIAL INSTRUMENTS
The carrying amounts of the Group's nancial instruments by class and category are as follow:
2018 2017
48.1 Financial assets
Cash in hand 16,818 16,217
Loans and receivables

Long term deposits 358,099 340,805
Long term advances 1,109,094 796,843
Trade debts 10,181,739 10,727,632
Due against construction work in progress 1,535,735 1,393,185
Short term deposits 729,804 871,449
Other receivables 360,962 311,090
Bank balances 454,440 467,977
14,729,873 14,908,981
Financial assets at fair value through prot or loss
Short term investments 22,071 21,824
14,768,762 14,947,022
48.3 Financial liabilities
Financial liabilities at amortized cost

Redeemable capital 101,875 376,875
Long term nances 4,315,878 5,632,678
Liabilities against assets subject to nance lease 102,368 68,062
Foreign bills payable - secured 108,823 99,102
Short term borrowings 12,843,848 7,227,368
18,543,024 14,178,486
49 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Group’s activities expose it to a variety of nancial 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 Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reect changes in market conditions and the Group's activities. The Group, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. The Board is responsible for developing and monitoring the Group’s risk management policies. The Audit
Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is
assisted in its oversight role by Internal Audit department. Internal Audit department undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
The Group’s exposure to nancial risks, the way these risks affect the nancial 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 nancial loss to the Group, if the counterparty to a nancial instrument fails to meet its obligations.
49.1.1 Maximum exposure to credit risk
The gross carrying amount of nancial assets, other than cash in hand, represents maximum exposure to credit risk. The
maximum exposure to credit risk as at the reporting date is as follows:
Note 2018 2017

Loans and receivables
Long term advances 25 1,339,496 923,211
Trade debts 28 10,769,040 11,304,603
Due against construction work in progress 29 1,535,735 1,393,185
Short term deposits 31 735,183 876,828
Bank balances 34 454,440 467,977
15,191,993 15,306,609
15,214,064 15,328,433
49.1.2 Concentration of credit risk
There is no concentration of credit risk geographically. Maximum exposure to credit risk by type of counter-party is as follows:
2018 2017
Customers 13,960,019 13,919,453

Banking companies and nancial institutions 1,211,694 1,366,629
Others 42,351 42,351
15,214,064 15,328,433
49.1.3 Credit quality and impairment
The manner in which the Group assesses the credit quality of its nancial assets depends on the type of counter-party. The
Group conducts different types of transactions with the following counter-parties.
(a) Customers
Customers are counter-parties to trade debts, long term security deposits for contracts in progress, long term advances to
dealers, due against contract work in progress and retention money for contracts in progress.
These ,with the exception of trade debts and long term advances to dealers, do not carry any signicant credit risk. Long
term advances to dealers are neither past due nor impaired. The ageing analysis of trade debts as at reporting date is as
follows:
2018 2017
Gross Accumulated Gross Accumulated
carrying amount Impairment carrying amount Impairment
Not yet due and past due by 1 year 9,286,535 - 9,861,016 -

1 to 2 years 858,057 - 827,998 -
2 to 3 years 317,664 280,517 317,328 278,710
More than 3 years 306,784 306,784 298,261 298,261
10,769,040 587,301 11,304,603 576,971
There is no single signicant customer in the trade debts of the Group. The maximum exposure to credit risk for trade debts
as at the reporting date by type of customer is:
2018 2017
General customers 9,313,265 10,120,445

Corporate customers 1,455,775 1,184,158
10,769,040 11,304,603
In determining the recoverability of a trade debt, the Group considers any change in the credit quality of the trade debt from
the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer
base being large and unrelated. Accordingly, the management believes that there is no further provision required in excess
of the allowance for doubtful debts.
(b) Banking companies and nancial institutions
Banking companies and nancial institutions are counter-parties to security/margin deposits, bank balances and
investments in preference shares. The Group limits its exposure to credit risk by only investing in highly liquid securities
and only with counterparties that have reasonably high credit ratings. Given these high credit ratings, management does
not expect any counterparty to fail to meet its obligations.
(c) Others
These include employees of the Group who are counter parties to advances and utility companies and regulatory
authorities who are counter parties to long term security deposits. These do not carry any signicant credit risk.
49.1.4 Collateral held
The Group does not hold any collateral to secure its nancial assets.
49.1.5 Credit risk management
As mentioned in note 49.1.3 to the nancial statements, the Group's nancial assets do not carry signicant credit risk, with the
exception of trade debts, which are exposed to losses arising from any non-performance by customers. To manage credit risk
the Group maintains procedures covering the application for credit approvals, granting and renewal of counterparty limits and
monitoring of exposures against these limits. As part of these processes the nancial viability of all counterparties is regularly
monitored and assessed. The majority of sales to the Group’s customers are made on specic terms. Customer credit risk is
managed by each business unit subject to the Group’s established policy, procedures and controls relating to customer credit
risk management. Credit limits are established for all customers based on internal rating criteria. Credit quality of the customer is
assessed based on an extensive credit rating. 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.
49.2 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its nancial obligations as they fall due.
49.2.1 Exposure to liquidity risk
The followings is the analysis of contractual maturities of nancial liabilities, including estimated interest payments.
2018
Carrying Contractual One year One to More than

amount cash ows or less ve years ve years
Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000'
Redeemable capital 101,875 103,885 103,885 - -
Long term nances 4,315,878 4,962,564 2,059,357 2,903,207 -
Liabilities against assets -
subject to nance lease 102,368 114,924 50,351 64,573 -
Short term borrowings 12,843,848 13,126,746 13,126,746 - -
Accrued interest/markup/prot 390,172 390,172 390,172 - -
Trade and other payables 414,995 414,995 414,995 - -
18,169,136 19,113,286 16,145,506 2,967,780 -
2017
Redeemable capital 376,875 398,082 70,106 327,976 -

Long term nances 5,632,678 6,433,662 4,391,407 2,042,255 -
Liabilities against assets
13,869,779 14,773,411 12,379,477 2,393,934 -
49.2.2 Liquidity risk management
The responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash ows and matching the maturity proles of nancial assets and
liabilities. As referred to in note 18.4 the Group has additional undrawn facilities of Rs. 10,727 million (2017: Rs. 10,727 million) at
its disposal to further reduce liquidity risk.
49.3 Market risk
49.3.1 Currency risk
Currency risk is the risk that fair values or future cash ows of a nancial instrument will uctuate 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) Exposure to currency risk
The Group's exposure to currency risk as at the reporting date is as follows:
2018 2017
Financial assets - -
Financial liabilities
Foreign bills payable
USD (92,204) (80,601)
CNY (16,619) -
EUR - (18,501)
(108,823) (99,102)
Net balance sheet exposure (108,823) (99,102)
Foreign currency commitments
CHF (17,235) (12,895)
CNY (28,496) (70)
EUR (156,714) (305,925)
GBP (1,059) -
JPY (1,809,135) (1,607,712)
USD - -
(2,012,639) (1,926,602)
Net exposure (2,121,462) (2,025,704)
(b) Exchange rates applied as at the reporting date
The following spot exchange rates were applied as at the reporting date.
2018 2017
Assets Liabilities Assets Liabilities
GBP - 176.5100 - -
EUR - 159.1000 - 131.7900
USD - 139.1000 - 110.5000
CHF - 141.2700 - 112.9000
CNY - 20.2100 - 17.3300
(c) Sensitivity analysis
A ve percent appreciation in Pak Rupee against foreign currencies would have increased prot and equity for the year by
Rs. 5.441 million (2017: Rs. 4.955 million). A ve percent depreciation in Pak Rupee would have had an equal but opposite
effect on prot for the year. 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.
(d) 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.
49.3.2 Interest rate risk
Interest rate risk is the risk that fair values or future cash ows of a nancial instrument will uctuate because of changes in
interest rates.
(a) Interest/markup bearing nancial instruments
The effective interest/markup rates for interest/markup bearing nancial instruments are mentioned in relevant notes to the
nancial statements. The Group's interest/markup bearing nancial instruments as at the reporting date are as follows:
2018 2017
Fixed rate instruments - -
Variable rate instruments

Financial liabilities 16,777,372 13,236,211
(b) Fair value sensitivity analysis for xed rate instruments
The Group does not have any xed rate nancial instruments.
(c) Cash ow sensitivity analysis for variable rate instruments
An increase of 100 basis points in interest rates as at the reporting date would have decreased prot for the year by Rs.
167.774 million (2017: Rs. 132.362 million). A decrease of 100 basis points would have had an equal but opposite effect on
prot for the year. The analysis assumes that all other variables, in particular foreign exchange rates, remain constant and
(d) Interest rate risk management
The Group manages interest rate risk by analyzing its interest rate exposure on a dynamic basis. Cash ow interest rate risk
is managed by simulating various scenarios taking into consideration renancing, renewal of existing positions and
alternative nancing. Based on these scenarios, the Group calculates impact on prot after taxation and equity of dened
interest rate shift, mostly 100 basis points.
49.3.3 Price risk
Price risk represents the risk that the fair value or future cash ows of nancial instrument will uctuate because of changes in
market prices, other than those arising from interest rate risk or currency risk, whether those changes are caused by factors
specic to the individual nancial instrument or its issuer, or factors affecting all similar nancial 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 classied
using a fair value hierarchy that reects the signicance 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 nancial instruments measured at fair value and the information about how the fair values of these
nancial 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 2018 2017
Financial assets at fair value

through prot or loss
Investments in quoted
equity securities Level 1 Quoted bid prices in an active market 22,071 21,824
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 nancial 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 nancial 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 2018 2017

Freehold land - 1,022,000 - 1,022,000 539,232

Buildings - 3,444,504 - 3,444,504 2,883,880
Plant and machinery - 13,797,790 - 13,797,790 12,234,678
For fair value measurements categorised into Level 2 and Level 3 the following information is relevant:
Valuation technique Signicant inputs Sensitivity
Freehold land Market comparable Estimated purchase price, A 5% increase in estimated

approach that reects recent including non-refundable purchase price, including non-
transaction prices for similar purchase taxes and other refundable purchase taxes
properties costs directly attributable to and other costs directly
the acquisition. attributable to the acquisition
would result in a signicant
increase in fair value of
buildings by Rs. 51.1 million
(2017: Rs. 26.962 million).
Buildings Cost approach that reects 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 signicant increase
and age, adjusted for in fair value of buildings by
obsolescence and Rs. 172.225 million (2017: Rs.
depreciation. There was no 144.194 million).
change in valuation technique
during the year.
Plant and machinery Cost approach that reects Estimated purchase price, A 5% increase in estimated
the cost to the market including import duties and purchase price, including
participants to acquire assets non-refundable purchase import duties and non-
of comparable utility and age, taxes and other costs directly refundable purchase taxes
adjusted for obsolescence attributable to the acquisition and other directly attributable
and depreciation. There was or construction, erection and costs would result in a
no change in valuation installation. signicant increase in fair
technique during the year. value of plant and machinery
by Rs. 689.890 million(2017:
Rs. 611.734 million).
Reconciliation of fair value measurements categorized in Level 3 is presented in note 21.6.
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 benets 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 nances, redeemable capital and liabilities against
assets subject to nances lease, including current maturity. Total capital employed includes total equity plus debt. During the
period, the Group's strategy was to maintain the gearing ratio below 30% and 'A' credit rating. The gearing ratios as at the
reporting date are as follows:
Unit 2018 2017
Total debt Rupees '000' 4,520,121 6,077,615

Total equity Rupees '000' 30,279,695 27,000,590
Total capital employed Rupees '000' 34,799,816 33,078,205
Gearing ratio % age 12.99 18.37
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 nance.
52 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged to prot or loss in respect of chief executive, directors and executives on account of managerial
remuneration, allowances and perquisites, post employment benets and the number of such directors and executives is as
follows:
Chief Executive Directors Executives

2018 2017 2018 2017 2018 2017
Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000' Rupees '000'
Remuneration 12,046 12,046 28,042 28,042 156,009 180,547

House rent 1,205 1,205 1,844 1,844 33,930 37,458
Utilities 1,205 1,205 1,205 1,205 15,601 17,459
Bonus - - - - 7,481 20,325
Post employment benets - - 1,600 1,600 14,889 8,218
Meeting fee - - 345 225 - -
Reimbursable expenses
Motor vehicles expenses - - - - 15,501 16,898
Medical expenses - - 224 286 6,008 7,471
14,456 14,456 33,260 33,202 249,419 288,376
Number of persons 1 1 2 2 73 79
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 nancial information is available.
Information about the Group's reportable segments as at the reporting date is as follows:
Power Division Manufacturing and distribution of Transformers, Switch Gears, Energy Meters, Power Transformers and
Engineering, Procurement and Construction Contracting.
Appliances Division Manufacturing, assembling and distribution of Refrigerators, Air conditioners, Deep Freezers,
Microwave ovens, Washing Machines, Water Dispensers and other Home Appliances.
Power Division Appliances Division Total

2018 2017 2018 2017 2018 2017
Revenue 11,714,746 14,591,864 27,275,501 27,754,889 38,990,247 42,346,753
Finance cost 688,585 636,799 1,414,758 909,805 2,103,343 1,546,604
Depreciation and amortization 393,077 423,324 458,027 458,602 851,104 881,926
Segment prot before tax 279,840 545,397 1,321,832 3,221,823 1,601,672 3,767,220
Segment assets 19,668,173 18,731,142 27,368,295 23,926,290 47,036,468 42,657,432

2018 2017
Rupees '000' Rupees '000'
53.1 Reconciliation of segment prot

Total prot for reportable segments 1,601,672 3,767,220
Un-allocated other expenses (47,855) (163,755)
53.2 Reconciliation of segment assets

Total assets for reportable segments 47,036,468 42,657,432
Other corporate assets 2,014,841 1,258,584
Total assets 49,051,309 43,916,016
53.3 Information about major customers

Revenue derived from Multan Electric Power Company 2,650,670 -
54 EMPLOYEES PROVIDENT FUND TRUST
The following information is based on the un-audited nancial statements of the Pak Elektron Limited Employees Provident
Fund Trust for the year ended December 31, 2018.
2018 2017
Size of the fund - total assets Rupees '000' 389,017 401,413

Fair value of investments Rupees '000' 351,027 356,969
Percentage of investments made % age 90.23 88.93
The break-up of investments is as follows:
2018 2017
Rupees '000' % age Rupees '000' % age
Listed equity collective investment schemes - - 148,830 41.69

Government securities 118,131 33.65 105,890 29.66
Deposit accounts with commercial banks 232,896 66.35 102,249 28.64
351,027 100.00 356,969 100.00
55 PLANT CAPACITY AND ACTUAL PRODUCTION
2018 2017
Actual Actual
Annual production Annual production
production during the production during the
Unit capacity year capacity year
Transformers/Power Transformers MVA 7,000 2,397 7,000 3,239
Switch gears Nos. 12,000 4,805 12,000 3,318
Energy meters Nos. 1,700,000 826,007 1,700,000 1,045,231
Air conditioners Tonnes 200,000 103,220 200,000 139,396
Refrigerators/deep freezers Cfts. 6,950,000 5,075,992 6,950,000 5,608,735
Microwave ovens Litres 2,500,000 1,945,097 2,500,000 2,072,617
LED TVs Sets 200,000 24,190 - -
Washing machines Kgs 50,000 7,005 - -
55.1 Under utilization of capacity is mainly attributable to consumer demand.

56 NUMBER OF EMPLOYEES
Manufacturing facilities Area ofces

2018 2017 2018 2017
Total number of employees 5,116 5,138 701 917
Average number of employees 5,367 4,283 798 1,529
57 RECLASSIFICATIONS
The following have been reclassied for compliance with Fourth Schedule to the Companies Act, 2017.
Particulars From To 2018 2017
Unclaimed dividend Trade and other payables Statement of Financial Position 18,650 12,766
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 nancial statements.
59 GENERAL
59.1 Figures have been rounded off to the nearest thousands.
59.2 Comparative gures have been rearranged and reclassied, where necessary, for the purpose of comparison. However, there
were no signicant reclassications during the year other than those referred to in note 57.

J Separate
Financial Statements
J 02 Pak Elektron Limited

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 nancial statements of PAK ELEKTRON LIMITED ['the Company'], which
comprise the statement of nancial position as at December 31, 2018, the statement of prot or loss, the
statement of comprehensive income, the statement of changes in equity, the statement of cash ows for the
year then ended, and notes to the nancial statements, including a summary of signicant 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 nancial position, the statement of prot or loss, the statement of comprehensive income, the statement of
changes in equity and the statement of cash ows 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, 2018 and of the prot, other comprehensive income, the
changes in equity and its cash ows 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
fullled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we
have obtained is sufcient 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 signicance in our audit
of the nancial statements of the current period. These matters were addressed in the context of our audit of
the nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
1. Preparation of nancial statements

under Companies Act, 2017
As disclosed in note 3 to the annexed We assessed the procedures applied by the management
nancial statements, the Companies for identication of the changes required in the nancial
Act, 2017 ['the Act'] became applicable statements due to the application of the Act. We
for the rst time for the preparation of the considered the adequacy and appropriateness of the
Company's annual nancial statements additional disclosures and changes to the previous
for the year ended December 31, 2018. disclosures based on the new requirements.
The Act forms an integral part of the We also evaluated the sources of information used by the
statutory nancial reporting framework management for the preparation of these disclosures and
Annual Report 2018 J 03
as applicable to the Company and the internal consistency of such disclosures with other
amongst others, prescribes the nature elements of the nancial statements.
and content of disclosures in relation to
In respect of the change in accounting policy for the
various elements of the nancial
accounting and presentation of surplus on revaluation of
statements.
property, plant and equipment, as referred to in note 5 to
In the case of the Company, a summary the nancial statements, we assessed the accounting
of key additional disclosures and implications in accordance with the accounting and
changes to the existing disclosures reporting standards as applicable in Pakistan and
have been stated in note 3 to the evaluated its application in the context of the Company.
annexed nancial statements.
Further, the Company has also changed
its accounting policy relating to
presentation and measurement of
surplus on revaluation of property, plant
and equipment as a consequence of the
application of the Act with retrospective
effect. The impact of the said change in
accounting policy has been disclosed in
note 5 to the accompanying nancial
statements.
The above changes and enhancements
in the nancial statements are
considered important and a key audit
matter because of the volume and
signicance of the changes in the
nancial statements resulting from
transition to the new reporting
requirements under the Act.
2. Inventory valuation
Stock in trade amounts to Rs 8,374 To address the valuation of stock in trade, we assessed
million as at the reporting date. The historical costs recorded in the inventory valuation; testing
valuation of stock in trade at cost has on a sample basis with purchase invoices. We tested the
different components, which includes reasonability of assumptions applied by the management
judgment in relation to the allocation of in allocating direct labour and direct overhead costs to
labour and overheads which are inventories.
incurred in bringing the stock to its
We also assessed management's determination of the net
present location and condition.
realizable value of inventories by performing tests on the
Judgment has also been applied by
sales prices secured by the Company for similar or
management in determining the Net
comparable items of inventories.
Realizable Value ['NRV'] of stock in
trade.
The estimates and judgments applied
by management are inuenced by the
amount 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 signicance of the balance coupled

with the judgment involved has resulted
in the valuation of inventories being
identied as a key audit matter
The disclosures in relation to inventories
are included in note 26.
3. Tax contingencies
As disclosed in note 20 to the annexed Our key audit procedures in this area included, amongst
nancial statements, various tax matters others, a review of the correspondence of the Company
are pending adjudication at various with the relevant tax authorities and tax advisors including
levels with the taxation authorities and judgments or orders passed by the competent authorities.
other legal forums. Such contingencies
We also obtained and reviewed conrmations from the
require the management to make
Company's external tax advisor for their views on the
judgments and estimates in relation to
status of each case and an overall opinion on the open tax
the interpretation of tax laws and
position of the Company.
regulations and the recognition and
measurement of any provisions that We involved internal tax experts to assess and review the
may be required against such management's conclusions on contingent tax matters and
contingencies. Due to inherent evaluated whether adequate disclosures have been made
uncertainties and the time period such in note 20 to the annexed nancial statements.
matters may take to resolve, the
management's judgments and
estimates in relation to such
contingencies may be complex and can
signicantly impact the nancial
statements. For such reasons we have
considered tax contingencies as a key
audit matter.
4. Contract accounting and revenue

recognition
The Company's business involves We read the relevant clauses with in all key contracts and
entering into long term contracts with discussed each with management to obtain a full
customers to provide a construction understanding of the specic terms and risks, which
services with a signicant proportion of informed our consideration of whether revenue for these
the Company's revenues and prots contracts was appropriately recognized.
derived such contracts.
We evaluated and tested the operating effectiveness of
Due to the contracting nature of the internal controls over the accuracy and timing of revenue
business, revenue recognition involves recognized, including controls relating to estimating total
a signicant degree of judgment, as costs, stage of completion of contracts, prot margin and
referred to in note 2.4.8 to the evaluating contract protability.
consolidated nancial statements, with
For the more signicant and judgemental contracts, in
estimates being made to:
performing the following additional testing, we:
• assess the total contract cost;
• obtained an understanding of the performance and
• assess the stage of completion of status of the contracts in progress;
the contract;
• discussed and understood management's estimates
• forecast the prot margin after for total contract costs and forecast costs to complete,
taking consideration of estimated including taking into account the historical accuracy of
future costs to complete the such estimates; and
projects in progress; and
• appropriately provide for loss • compared management's position on the recognition

making contracts. of any cost and revenue, to the actual costs incurred
and current progress of the contract.
There is a range of acceptable outcomes
resulting from these judgments that
could lead to different prot and revenue
reported in the nancial statements.
5. Revenue recognition
As referred to in note 6.17, revenue is Our audit procedures included considering the
recognized when the risks and rewards appropriateness of the Company's revenue recognition
of the underlying products have been accounting policies.
transferred to the customer. The
In response to the risk of fraud, we tested the effectiveness
Company focuses on revenue as a key
of the Company's controls over the timing of revenue
performance measure which could
recognition.
create an incentive for fraudulently
overstated revenue by recognizing We assessed sales transactions taking place at either side
revenue before the risks and rewards of the year end as well as credit notes, if any, issued after
have been transferred the year end date to assess whether that revenue was
recognised in the correct period.
We performed testing over journals posted to revenue,
near the end of the reporting period to identify unusual or
irregular items.
We also considered the adequacy of the Company's
disclosures in respect of revenue.
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 nancial statements and our auditor's report thereon.
Our opinion on the nancial 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 nancial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the nancial
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 nancial 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 nancial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the nancial 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 nancial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the nancial 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 inuence the economic decisions of user taken on the
basis of these nancial 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 nancial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufcient 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 signicant 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 nancial 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 nancial statements, including the
disclosures, and whether the nancial 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 signicant audit ndings, including any signicant deciencies 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
signicance in the audit of the nancial 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 benets 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 nancial position, the statement of prot or loss, the statement of comprehensive
income, the statement of changes in equity and the statement of cash ows 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) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by
the Company and deposited in the Central Zakat Fund established under section 7 of that ordinance.
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, 2018
Note 2018 2017

SHARE CAPITAL AND RESERVES
Authorized capital 8 6,000,000 6,000,000
Issued, subscribed and paid-up capital 9 5,426,392 5,426,392

Capital reserve 10 4,279,947 4,279,947
Surplus on revaluation of property, plant and equipment 11 6,579,049 4,274,019
Accumulated prot 6,884,031 6,753,080
TOTAL EQUITY 23,169,419 20,733,438
LIABILITIES
NON-CURRENT LIABILITIES
Redeemable capital - secured 12 - 68,750

Long term nances - secured 13 2,646,032 3,958,767
Deferred taxation 15 2,423,945 1,918,383
Deferred income 16 36,781 38,717
5,166,536 6,007,023
CURRENT LIABILTIES
Trade and other payables 17 823,850 875,182

Short term borrowings 18 12,843,848 7,227,368
Current portion of non-current liabilities 19 1,814,311 2,027,692
15,890,831 10,308,587
TOTAL LIABILITIES 21,057,367 16,315,610
CONTINGENCIES AND COMMITMENTS 20
TOTAL EQUITY AND LIABILITIES 44,226,786 37,049,048
M. MURAD SAIGOL M. ZEID YOUSUF SAIGOL

Chief Executive Officer Director
Note 2018 2017

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 21 21,957,015 17,405,713

Intangible assets 22 313,352 315,525
Long term investments 23 7,085 8,948
22,643,409 18,102,122
CURRENT ASSETS
Stores, spares and loose tools 25 859,145 746,408

Stock in trade 26 8,374,111 6,388,779
Trade debts - unsecured 27 4,870,122 5,484,699
Due against construction work in progress - unsecured, considered good 28 1,535,735 1,393,185
Short term advances - unsecured 29 965,614 826,216
Short term deposits and prepayments 30 1,105,179 1,109,232
Other receivables - unsecured, considered good 360,962 311,090
Advance income tax/Income tax refundable 32 3,132,528 2,263,669
21,583,377 18,946,926
TOTAL ASSETS 44,226,786 37,049,048
SYED MANZAR HASSAN

Chief Financial Officer
Statement of Prot or Loss

Note 2018 2017

Revenue 34 27,182,898 30,229,103
Sales tax, excise duty and discounts 34 (3,710,466) (4,062,791)

Net revenue 23,472,432 26,166,312
Cost of sales 35 (20,719,396) (22,192,115)

Gross prot 2,753,036 3,974,197
Other income 36 17,384 17,793
Distribution cost 37 (732,340) (805,922)

Administrative and general expenses 38 (524,558) (614,442)
Other expenses 39 (43,529) (138,623)
(1,300,427) (1,558,987)
Operating prot 1,469,993 2,433,003
Finance cost 40 (976,447) (921,048)

Prot before taxation 493,546 1,511,955
Taxation 41 34,799 (118,792)

Prot after taxation 528,345 1,393,163
Earnings per share - basic and diluted 42 0.98 2.71

Statement of Comprehensive Income

Note 2018 2017

Items that may be reclassied subsequently to prot or loss - -
Items that will not be reclassied to prot or loss

Surplus on revaluation of property, plant and
equipment recognised during the year 11 3,045,215 -
property, plant and equipment recognised during the year 11 (672,091) -
property, plant and equipment attributable to changes in tax rates 11 52,268 -
property, plant and equipment attributable to change
in proportion of income taxable under nal tax regime 11 79,462 (201,431)
2,504,854 (201,431)
Other comprehensive income/(loss) 2,504,854 (201,431)
Prot for the year 528,345 1,393,163
Total comprehensive income 3,033,199 1,191,732

Statement of Cash Flows

Note 2018 2017

CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 43 163,131 3,016,858
Payments for:
Interest/markup on borrowings - Interest based arrangements (257,670) (566,533)
Interest/markup/prot on borrowings - Shariah compliant (196,675) (43,601)
Income tax (868,859) (843,872)
Net cash (used in)/generated from operating activities (1,160,073) 1,562,852
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,369,292) (1,843,969)

Purchase of intangible assets (8,030) (3,919)
Proceeds from disposal of property, plant and equipment 36,288 30,010
Long term deposits refunded 27,373 11,927
Long term deposits made (21,394) (117,510)
Net cash used in investing activities (2,335,055) (1,923,461)
CASH FLOW FROM FINANCING ACTIVITIES
Redemption of redeemable capital (275,000) (2,564,553)

Long term nances obtained 226,013 3,809,701
Repayment of long term nances (1,542,813) (1,516,669)
Proceeds from sale and lease back activities 109,944 15,100
Repayment of liabilities against assets subject to nance lease (92,076) (71,186)
Net increase in short term borrowings 5,616,480 2,245,706
Dividend paid (591,334) (1,611,416)
Net cash generated from nancing activities 3,451,214 306,683
NET DECREASE IN CASH AND CASH EQUIVALENTS (43,914) (53,926)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 401,824 455,750
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 44 357,910 401,824

Statement of Changes In Equity

Revenue
Share capital Capital reserves
reserves
Surplus on
Issued revaluation of
subscribed and Capital property, plant Accumulated Total
paid-up capital reserve and equipment prot equity
Note Rupees '000 Rupees '000 Rupees '000 Rupees '000 Rupees '000

Other comprehensive loss - - (201,431) - (201,431)
Total comprehensive income - - (201,431) 1,393,163 1,191,732
@ Rs. 1.75 per share - - - (870,943) (870,943)
Interim dividend on ordinary shares
@ Rs. 1.25 per share - - - (746,522) (746,522)
- - - (1,617,465) (1,617,465)

Prot after taxation - - - 528,345 528,345
Other comprehensive income - - 2,504,854 - 2,504,854
Total comprehensive income - - 2,504,854 528,345 3,033,199
@ Rs. 1.20 per share - - - (597,218) (597,218)

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 ofce 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 and distribution of transformers, switchgears, energy meters, power transformers,
construction of grid stations and electrication works.
Appliances Division: Manufacturing, assembling and distribution of refrigerators, deep freezers, air conditioners, microwave
ovens, washing machines, water dispensers and other home appliances.
2 BASIS OF PREPARATION
2.1 Separate nancial statements
These nancial statements are the separate nancial 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 nancial
statements are prepared and presented separately.
2.2 Statement of compliance
These nancial 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
notied under the Companies Act, 2017;
- Islamic Financial Accounting Standards ['IFAS'] issued by Institute of Chartered Accountants of Pakistan as notied 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 nancial 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 nancial instruments measured at fair value/amortized cost. In
these nancial statements, except for the amounts reected in the statement of cash ows, all transactions have been
accounted for on accrual basis.
2.4 Judgments, estimates and assumptions
The preparation of nancial 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. Judgments made by management in the
application of approved accounting and reporting standards as applicable in Pakistan that have signicant effect on the
nancial statements and estimates with a risk of material adjustment in subsequent years are as follows:
2.4.1 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 benets that the Company expects to derive from that item.
2.4.2 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 benets that the Company expects to derive from that asset.
2.4.3 Recoverable amount and impairment (see note 6.26)
The management of the Company reviews carrying amounts of its assets for possible impairment and makes formal estimates
of recoverable amount if there is any such indication.
Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which
goodwill has been allocated. The calculation of value in use requires the entity to estimate the future cash ows expected to
arise from the cash-generating unit and a suitable discount rate in order to calculate present value.
Trade and other receivables

The Company assesses the recoverability of its trade debts and other receivables if there is objective evidence that the
Company will not be able to collect all the amount due according to the original terms. Signicant nancial difculties of the
debtors, probability that the debtor will enter bankruptcy and default or delinquency in payments are considered indicators that
the trade debt is impaired.
Investments
The Company reviews the carrying amounts of its investments in equity securities for possible indications of impairment.
Indicators considered include nancial position and credit rating of the investee entity and changes in values of investment by
reference to active market, if any.
2.4.4 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
2.4.5 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 prot trends and their taxability under the current tax law.
2.4.6 Provisions (see note 6.15)

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.
2.4.7 Net realizable values (see note 6.4)

The Company reviews the net realizable values of stock in trade to assess any diminution in the respective carrying amounts.
Net realizable value is determined with reference to estimated selling prices less estimated costs necessary to make the sale.
2.4.8 Estimated future costs to complete projects in progress (see note 6.19)
As part of the application of percentage of completion method on contract accounting, the project costs are estimated. These
estimates are based on the prices of materials and services applicable at that time, forecasted increases and expected
completion date at the time of such estimation. Such estimates are reviewed at regular intervals. Any subsequent changes in the
prices of materials and services compared to forecasted prices and changes in the time of completion affect the results of the
subsequent periods.
2.5`Functional currency
These nancial statements have been prepared in Pak Rupees which is the Company's functional currency.
2.6 Date of authorization for issue
These nancial statements were authorized for issue on April 04, 2019 by the Board of Directors of the 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 year but, unless specied
otherwise, are either not relevant to the Company or their application does not have any material impact on the nancial
statements of the Company other than presentation and disclosures.
Clarications to IFRS 15 - Revenue from Contracts with Customers

IFRS 15 - Revenue from Contracts with Customers have been amended to clarify three aspects of the standard (identifying
performance obligations, principal versus agent considerations, and licensing) and to provide some transition relief for
modied contracts and completed contracts.
IFRIC 22 - Foreign Currency Transactions and Advances Consideration
The interpretation addresses the determination of taxable prot (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 specically considers:
- Whether tax treatments should be considered collectively
- Assumptions for taxation authorities' examinations
- The determination of taxable prot (tax loss), tax bases, unused tax losses, unused tax credits and tax rate.
- The effect of changes in facts and circumstances
Classication and Measurement of Share-based Payment Transactions (Amendments to IFRS 2 - Share-based

Payment)
IFRS 2 - Share-based Payment have been amended to clarify the standard in relation to the accounting for cash-settled share-
based payment transactions that include a performance condition, the classication of share-based payment transactions with
net settlement features, and the accounting for modications of share-based payment transactions from cash-settled to equity-
settled.
Applying IFRS 9 - Financial Instruments with IFRS 4 - Insurance Contracts (Amendments to IFRS 4 - Insurance
Contracts)
IFRS 4 Insurance Contracts have been amended to provide two options for entities that issue insurance contracts within the
scope of IFRS 4:
- an option that permits entities to reclassify, from prot or loss to other comprehensive income, some of the income or
expenses arising from designated nancial assets; this is the so-called overlay approach;
- an optional temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within
the scope of IFRS 4; this is the so-called deferral approach
The application of both approaches is optional and an entity is permitted to stop applying them before the new insurance
contracts standard is applied.
Transfers of Investment Property (Amendments to IAS 40 - Investment Property)

IAS 40 - Investment Property have following amendments:
- Paragraph 57 have been amended to state that an entity shall transfer a property to, or from, investment property when, and
only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the denition
of investment property. A change in management’s intentions for the use of a property by itself does not constitute
evidence of a change in use.
- The list of examples of evidence in paragraph 57(a) – (d) is now presented as a non-exhaustive list of examples instead of
the previous exhaustive list.
Annual Improvements to IFRS Standards 2014–2016 Cycle (IFRS 1 - First-time Adoption of International Financial
Reporting Standards and IAS 28 - Investments in Associates and Joint Ventures)
Annual improvements makes amendments to the following standards:
- IFRS 1 - Deletes the short-term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended
purpose.
- IAS 28 - Claries that the election to measure at fair value through prot or loss an investment in an associate or a joint
venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each
investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition.
Companies Act, 2017
The Companies Act 2017 ['the Act'] was enacted on May 30, 2017. The Act has brought certain changes with regard to the
preparation and presentation of these nancial statements. These changes, amongst others, included change in respect of
presentation and measurement of surplus on revaluation of property, plant and equipment as fully explained in note 5 of these
nancial statements, change in nomenclature of primary statements. Further, the disclosure requirements contained in the
fourth schedule of the Act have been revised, resulting in elimination of duplicative disclosure with the IFRS disclosure
requirements and incorporation of additional/amended disclosures including, but not limited to, particulars of immovable
assets of the Company (see note 21.3), change in threshold for identication of executives (see note 51), additional disclosure
requirements for related parties (see note 45), disclosure of signicant events and transactions affecting the nancial position
and performance of the Company (see note 7), disclosure relating to number of employess (see note 55) etc.
4 NEW AND REVISED STANDARDS, INTERPRETATIONS AND AMENDMENTS NOT YET EFFECTIVE
Effective date
(annual periods beginning
on or after)
IFRS 9 - Financial Instruments (2014) July 01, 2018

IFRS 15 - Revenue from Contracts with Customers July 01, 2018
IFRS 16 - Leases (2016) January 01, 2019
IFRS 17 - Insurance contracts (2017) January 01, 2021
Sale or contribution of assets between an Investor and its Associate or Joint Deferred Indenitely
Venture (Amendments to IFRS 10 - Consolidated Financial Statements and IAS
28 - Investments in Associates and Joint Ventures).
IFRIC 23 - Uncertainty over Income Tax Treatments January 01, 2019
Prepayment Features with Negative Compensation (Amendments to IFRS 9 - January 01, 2019
Financial Instruments)
Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28 - January 01, 2019
Investments in Associates and Joint Ventures)
Annual Improvements to IFRS Standards 2015 – 2017 Cycle January 01, 2019
Plan Amendment, Curtailment or Settlement (Amendments to IAS 19 - Employee January 01, 2019
Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
Denition of a Business (Amendments to IFRS 3 - Business Combinations) January 01, 2020
Denition 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)
Other than afore mentioned standards, interpretations and amendments, IABS has also issued the following standards which
have not been notied by the Securities and Exchange Commission of Pakistan ['SECP']:
IFRS 1 - First Time Adoption of International Financial Reporting Standards
IFRS 14 - Regulatory Defferal 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, notication 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 nancial statements other
than in presentation/disclosures.
IFRS 9 - Financial Instruments
Finalised version of IFRS 9 - Financial Instruments: Recognition and Measurement which contains accounting requirement for
nancial instruments, replacing IAS 39 - Financial Instruments: Recognition and Measurement. The standard contains
requirements in the following areas:
- Classication and measurement: Financial assets are classied by reference to the business model within which they are
held and their contractual cash ow characteristics. The 2014 version of IFRS 9 introduces a 'fair value through other
comprehensive income' category for certain debt instruments. Financial liabilities are classied in a similar manner to
under IAS 39, however there are differences in the requirements applying to the measurement of an entity's own credit risk.
- Impairment: The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement of the impairment
of nancial assets, so it is no longer necessary for a credit event to have occurred before a credit loss is recognised.
- Hedge accounting: Introduces a new hedge accounting model that is designed to be more closely aligned with how
entities undertake risk management activities when hedging nancial and non-nancial risk exposures.
- Derecognition: The requirements for the derecognition of nancial assets and liabilities are carried forward from IAS 39.
IFRS 15 - Revenue from Contracts with Customers

IFRS 15 provides a single, principles based ve-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 performace obligations in the contracts.
- Recognized revenuew when (or as) the entity satises a performance obligation.
5 CHANGE IN ACCOUNTING POLICY
During the year, the Companies Act, 2017 has been enacted and has resulted in change in accounting policy for surplus on
revaluation of property, plant and equipment.
- The surplus on revaluation of property, plant and equipment, which was previously disclosed in the statement of nancial
position of the Company after share capital and reserves, has now been included as part of equity with corresponding
inclusion in statement of changes in equity;
- If an asset's carrying amount is increased as a result of revaluation, the increase will be recognised in statement of
comprehensive income. However, the increase shall be recognised in statement of prot or loss to the extent that it
reverses a revaluation decrease of the same asset previously recognised in statement of prot or loss;
- If an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be recognised in statement of
prot or loss. However, the decrease shall be recognised in statement of comprehensive income to the extent of any credit
balance existing in the revaluation surplus in respect of that asset. Previously, section 235 of repealed Companies
Ordinance, 1984 allowed that the surplus on revaluation of property, plant and equipment may be applied by the Company
in setting off or in diminution of any decit arising from the revaluation of any other property, plant and equipment of the
Company.
The change in accounting policy does not have any impact on the amounts reported in these nancial statements. Hence a third
statement of nancial position as at the beginning of the previous year has not been presented.
6 SIGNIFICANT ACCOUNTING POLICIES
6.1 Property, plant and equipment
6.1.1 Operating xed assets
Operating xed assets are measured at cost less accumulated depreciation and accumulated impairment losses with the
exception of freehold land, leasehold land, buildings and plant and machinery. Freehold land, buildings and plant and
machinery are measured at revalued amounts less accumulated depreciation and accumulated impairment losses, if any.
Leasehold land is measured at historical cost. 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 signicant and their useful lives are reviewed and adjusted, if appropriate, at each statement of
nancial position date.
When signicant parts of an item of operating xed assets have different useful lives, they are recognized as separate items.
Major renewals and improvements to operating xed assets are recognized in the carrying amount of the item if it is probable
that the embodied future economic benets will ow to the Company and the cost of renewal or improvement can be measured
reliably. The cost of the day-to-day servicing of operating xed assets are recognized in prot or loss as incurred.
The Company recognizes depreciation in prot 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 xed asset
using rates specied in note 21 to the nancial statements. Depreciation on additions to operating xed 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
classied as held for disposal.
An operating xed asset is de-recognized when permanently retired from use. Any gain or loss on disposal of operating xed
assets is recognized in prot 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 prot or loss, the increase is rst
recognised in prot or loss. Decreases that reverse previous increases of the same asset are rst recognised in other
comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to prot
or loss. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to prot or
loss and depreciation based on the asset’s original cost, net of tax, is reclassied from the surplus on revaluation of property,
plant and equipment to accumulated prot.
6.1.2 Capital work in progress
Capital work in progress is stated at cost less identied 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 xed assets. These
costs are transferred to operating xed 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
identiable 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 specic software.
Costs that are directly associated with the production of identiable and unique software products controlled by the Company,
and that will probably generate economic benets exceeding costs beyond one year, are recognized as intangible assets.
These costs are amortized over their estimated useful lives. Amortization of intangible commences when it becomes available
for use.
6.3 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 classied as property,
plant and equipment through capital work in progress.
6.4 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 nished goods consists of direct material, labour and an
appropriate proportion of manufacturing overheads.
Net realizable value signies the estimated selling price in the ordinary course of business less estimated costs of completion
and estimated costs necessary to make the sale.
6.5 Employee benets
6.5.1 Short-term employee benets

The Company recognizes the undiscounted amount of short term employee benets to be paid in exchange for services
rendered by employees as a liability after deducting amount already paid and as an expense in prot 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 benets, 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.
6.5.2 Post-employment benets

The Company operates an approved funded contributory provident fund for all its permanent employees who have completed
the minimum qualifying period of service as dened 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 prot or loss.
6.6 Financial instruments
6.6.1 Recognition
A nancial instrument is recognized when the Company becomes a party to the contractual provisions of the instrument.
6.6.2 Classication
The Company classies its nancial instruments into following classes depending on the purpose for which the nancial assets
and liabilities are acquired or incurred. The Company determines the classication of its nancial assets and liabilities at initial
recognition.
(a) Loans and receivables

Non-derivative nancial assets with xed or determinable payments that are not quoted in an active market are classied
as loans and receivables. Assets in this category are presented as current assets except for maturities greater than twelve
months from the reporting date, where these are presented as non-current assets.
(b) Financial assets at fair value through prot or loss

Financial assets at fair value through prot or loss are nancial assets that are either designated as such on initial
recognition or are classied as held for trading. Financial assets are designated as nancial assets at fair value through
prot or loss if the Company manages such assets and evaluates their performance based on their fair value in
accordance with the Company’s risk management and investment strategy. Financial assets are classied as held for
trading when these are acquired principally for the purpose of selling and repurchasing in the near term, or when these are
part of a portfolio of identied nancial instruments that are managed together and for which there is a recent actual
pattern of prot taking, or where these are derivatives, excluding derivatives that are nancial guarantee contracts or that
are designated and effective hedging instruments. Financial assets in this category are presented as current assets.
(c) Held-to-maturity investments

Held-to-maturity investments are non-derivative nancial assets with xed or determinable payments and xed maturity
that an entity has the positive intention and ability to hold to maturity. Assets in this category are presented as non-current
assets except for maturities less than twelve months from the reporting date, where these are presented as current assets.
(d) Financial liabilities at amortized cost
Non-derivative nancial liabilities that are not nancial liabilities at fair value through prot or loss are classied as nancial
liabilities at amortized cost. Financial liabilities in this category are presented as current liabilities except for maturities
greater than twelve months from the reporting date where these are presented as non-current liabilities.
6.6.3 Measurement
The particular measurement methods adopted are disclosed in the individual policy statements associated with each
instrument.
6.6.4 De-recognition
Financial assets are de-recognized if the Company's contractual rights to the cash ows from the nancial assets expire or if the
Company transfers the nancial asset to another party without retaining control or substantially all risks and rewards of the
asset. Financial liabilities are de-recognized if the Company's obligations specied in the contract expire or are discharged or
cancelled. Any gain or loss on de-recognition of nancial assets and nancial liabilities is recognized in prot or loss.
6.6.5 Off-setting
A nancial asset and a nancial liability is offset and the net amount reported in the balance sheet 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 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.
6.8 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 classications of preference shares.
6.9 Loans and borrowings
Loans and borrowings are classied as 'nancial 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 prot or loss over the
period of the borrowings on an effective interest basis.
6.10 Investments in equity securities
6.10.1 Investments in subsidiaries, associates and other un-quoted equity securities

Investments in subsidiaries, associates and other un-quoted equity securities are initially recognized at cost. Subsequent to
initial recognition these are measured at cost less accumulated impairment losses, if any.
6.10.2 Investments in other quoted equity securities

These on initial recognition, are designated as 'investments at fair value through prot or loss' and are recognized at cost.
Subsequent to initial recognition, these are measured at fair value. Gains and losses arising from changes in fair value are
recognized in prot or loss.
6.11 Investments in debt securities
Investments in debt securities with xed or determinable payments and xed maturity that the Company has positive intention
and ability to hold are classied as 'held-to-maturity investments'. These are recognized initially at fair value plus transaction
costs. Subsequent to initial recognition, these are measured at amortized cost with any difference between cost and value at
maturity recognized in the prot or loss over the period of investment on an effective interest basis.
6.12 Finance leases
Leases in terms of which the Company assumes substantially all risks and rewards of ownership are classied as nance
leases. Assets subject to nance lease are classied as 'operating xed assets'. On initial recognition, these are measured at
cost, being an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial
recognition, these are measured at cost less accumulated depreciation and accumulated impairment losses. Depreciation,
subsequent expenditure, de-recognition, and gains and losses on de-recognition are accounted for in accordance with the
respective policies for operating xed assets. Liabilities against assets subject to nance lease and deposits against nance
lease are classied as 'nancial liabilities at amortized cost' and 'loans and receivables' respectively, however, since they fall
outside the scope of measurement requirements of IAS 39 'Financial Instruments - Recognition and Measurement', these are
measured in accordance with the requirements of IAS 17 'Leases'. On initial recognition, these are measured at cost, being their
fair value at the date of commencement of lease, less attributable transaction costs. Subsequent to initial recognition, minimum
lease payments made under nance leases are apportioned between the nance charge and the reduction of outstanding
liability. The nance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Deposits against nance leases, subsequent to initial recognition are carried at cost.
6.13 Ijarah transactions
Ujrah payments under an Ijarah are recognized as an expense in the prot 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 benet, even if the payments are not on that
basis.
6.14 Trade and other payables
6.14.1 Financial liabilities

These are classied as 'nancial 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 prot or loss.
6.14.2 Non-nancial liabilities

6.15 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 outow of resources embodying economic benets 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 outow of resources embodying economic benets 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 outow is remote.
6.16 Trade and other receivables

These are classied as 'loans and receivables'. On initial recognition, these are measured at cost, being their fair value at the
date of transaction, plus attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost
using the effective interest method, with interest recognized in prot or loss.

6.17 Revenue
Revenue is measured at the fair value of the consideration received or receivable, net of returns allowances, trade discounts and
rebates, and represents amounts received or receivable for goods and services provided and other income earned in the
normal course of business. Revenue is recognized when it is probable that the economic benets associated with the
transaction will ow to the Company, and the amount of revenue and the associated costs incurred or to be incurred can be
measured reliably.
- Revenue from different sources is recognized as follows:

- Revenue from sale of goods is recognized when risks and rewards incidental to the ownership of goods are transferred to
the buyer.
- Interest income is recognized using effective interest method.
- Dividend income is recognized when right to receive payment is established.
- Contract revenue relating to long term construction contracts are recognized as revenue by reference to stage of
completion of contract activity at the balance sheet date. Stage of completion of a contract is determined by applying 'cost-
to-date method'. Under cost-to-date method stage of completion of a contract is determined by reference to the proportion
that contract cost incurred to date bears to the total estimated contract cost.
6.18 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
prot or loss and other comprehensive income ['OCI']. OCI comprises items of income and expense, including reclassication
adjustments, that are not recognized in prot 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'.
6.19 Contract costs
Contract costs relating to long term construction contracts are recognized as expenses by reference to stage of completion of
contract activity at the reporting date. Stage of completion of a contract is determined by applying 'cost-to-date method'. Under
cost-to-date method, stage of completion of a contract is determined by reference to the proportion that contract cost incurred
to date bears to the total estimated contract cost. Expected losses on contracts are recognized as an expense immediately.
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 specic borrowings pending their expenditure on qualifying asset is deducted from the borrowing costs eligible
for capitalization. All other borrowing costs are recognized in prot or loss as incurred.
6.21 Income tax
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in prot 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 nancial 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 nal 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 prots 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 benet will be realized.
6.22 Government grants
Government grants that compensate the Company for expenses or losses already incurred are recognized in prot 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 prot or loss.
6.23 Earnings per share ['EPS']
Basic EPS is calculated by dividing the prot 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 prot 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 statement of cash ows comprise cash in hand and cash at banks. These are
carried at cost.
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 prot or loss.
6.26 Impairment

A nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
Individually signicant nancial assets are tested for impairment on an individual basis. The remaining nancial assets are
assessed collectively in groups that share similar credit risk characteristics. A nancial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative effect on the estimated future cash ows of the asset.
An impairment loss in respect of a nancial asset measured at amortized cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash ows discounted at the original effective interest rate.
Impairment loss in respect of a nancial asset measured at fair value is determined by reference to that fair value. All impairment
losses are recognized in prot 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 nancial 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 carrying amount of the Company’s non-nancial 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 ows are discounted to their present
values using a pre-tax discount rate that reects current market assessments of the time value of money and the risks specic 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 prot 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 prot in statement of changes in equity and
as a liability, to the extent it is unclaimed/unpaid, in the Company’s nancial 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 nance cost are allocated to PEL Marketing (Private) Limited ['PMPL'] on the basis of
percentage of operating xed assets used by PMPL, under the interservices agreement between the Company and PMPL.
6.29 Warranty costs
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 all possible outcomes against their associated possibilities.
6.30 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 Ofcer to make decisions
about resources to be allocated to the segment and assess its performance and for which discrete nancial information is
available.
Segment results that are reported to the Chief Executive Ofcer 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
prot/(loss) of associates, nance 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 SIGNIFICANT EVENTS AND TRANSACTIONS
During the year, interest rates increased exorbitantly causing increase in interest on borrowings. Rupee depreciation increased
the Company’s costs of production. These factors affected the protably of the Company in a negative manner. Further, The
Company launched a new product; LED TVs during the year which contributed marginally to the revenue and protability of the
Company, but its real effects will be visible in the ensuing year.
8 AUTHORIZED CAPITAL
2018 2017 2018 2017

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
9 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2018 2017 2018 2017

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
9.1 'A' class preference shares
9.1.1 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-proling of preference shares to
these remaining investors. See note 9.1.2.
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.
9.1.2 Re-proling of preference shares

The Company offered re-proling 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-proling term sheet and commercial terms and conditions therein. Further, SECP had allowed the Company to
proceed with the re-proling subject to fulllment 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 reproling has lapsed. The Company is in the process of nalising another reproling exercise
based on mutual agreement to be made amongst the existing investors.
9.1.3 Accumulated preference dividend

As at reporting date, an amount of approximately Rs. 384.39 million (2017: Rs. 341.68 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
prots 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 reproling 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 reproling from different quarters is not yet complete.
10 CAPITAL RESERVE
This represents premium on issue of right ordinary shares recognized under Section 83(1) of the repealed Companies
Ordinance, 1984.
2018 2017
11 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
As at beginning of the year 4,274,019 4,668,386
Surplus recognized during the year

Surplus for the year 3,045,215 -
Deferred taxation (672,091) -
2,373,124 -
Incremental depreciation transferred to accumulated prots
Incremental depreciation for the year (280,450) (271,741)
Deferred taxation 80,626 78,805
(199,824) (192,936)
Other adjustments
Deferred tax adjustment attributable to changes in proportion
of income taxable under nal tax regime 79,462 (201,431)
Deferred tax adjustment attributable to changes in tax rates 52,268 -
131,730 (201,431)
As at end of the year 6,579,049 4,274,019
12 REDEEMABLE CAPITAL - SECURED
These represent interest/markup/prot based debt securities issued to institutional and other investors. The details are as
follows:

Shariah compliant
Sukuk Funds 101,875 376,875 Three months KIBOR plus 1% Charge on present and These were issued for the purpose of renance of existing machinery with
per annum (2017: Three future operating xed diminishing musharaka facility.
months KIBOR plus 1% per assets of the Company. Later, the Company entered into restructuring arrangement, whereby, the
annum) subject to oor 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.
respectively.
Total 101,875 376,875

Current portion presented under
current liabilities (101,875) (308,125)
- 68,750
13 LONG TERM FINANCES - SECURED
These represent long term nances utilized under interest/markup/prot arrangements from banking companies and nancial
institutions. The details are as follows:

Shariah compliant
Term Finance 750,000 523,987 Three months KIBOR plus 1% Charge over operating This represents diminishingmusharika facility obtained from Faysal Bank Limited for
per annum (2017: Three xed assets of the the purpose of balancing modernization and replacement requirements. The
months KIBOR plus 1% per Company and personal nance is repayable in fteen equal quarterly installmentscommencing from May
annum). guarantees of 2019, with a grace period of one year.
sponsoring directors of
the Company.
Interest based arrangements
Term Finance 375,000 500,000 Three months KIBOR plus Charge over present The nance has been obtained from Pak Oman Investment Company Limited for
3.8% per annum (2017: Three and future current assets the purpose of nancing capital expenditure. The nance is repayable in twelve
months KIBOR plus 3.8% per of the Company, equal quarterly installments commencing from March 2018.
annum). mortgage of the
Company's land and
building.
Term Finance 1,928,571 2,785,714 Three months KIBOR plus Charge over present The nance has been obtained from Bank Alfalah Limited for the purpose of
1.25% per annum (2017: and future current and nancing the repayment of existing long term loans of the company. The nance is
Three months KIBOR plus xed assets of the repayable in fourteen equal quarterly installments commencing from December
1.25% per annum). Company, mortgage of 2017.
the Company's land and
building.
Term Finance 14,517 50,810 Three months KIBOR plus Charge over operating The nance has been obtained from The Bank of Punjab for the purpose of
2.10% per annum. (2017: xed assets of the nancing capital expenditure. The nance is repayable in eight equal quarterly
Three months KIBOR plus Company and personal installments commencing from September 2017.
2.10% per annum). guarantees of
the Company.
Demand Finance 568,384 820,999 Three months KIBOR plus 2% Charge over operating This represents demand nance facility sanctioned by National Bank of Pakistan
per annum (2017: Three xed assets of the against an upfront payment of 1,650 millionagainst Private Placed Term Finance
months KIBOR plus 2% per Company and personal Certicates. The nance is repayable in sixteen equal quarterly installments
annum). guarantees of commencing from April 2017.
the Company.
Demand Finance 679,406 951,168 Three months KIBOR plus Charge over present The nance has obtained from National Bank of Pakistan for settlementof long term
2.25% per annum (2017: and future current assets nances obtained from NIB Bank Limited. The nance is repayable in twenty three
Three months KIBOR plus of the Company and equal quarterly installments commencing from September 2015.
2.25% per annum). personal guarantees of
the Company.
3,565,878 5,108,691
Total 4,315,878 5,632,678
Current portion presented under
current liabilities (1,669,846) (1,673,911)
2,646,032 3,958,767
Note 2018 2017

14 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Present value of minimum lease payments 14.1 & 14.2 102,368 68,062
Current portion presented under current liabilities 14.1 & 14.2 (42,590) (45,656)
59,778 22,406
14.1 These represent vehicles and machinery acquired under nance lease arrangements. The leases are priced at rates ranging
from six months KIBOR plus 1.5% to 4.5% per annum (2017: 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 nance 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.
14.2 The amount of future payments under the nance lease arrangements and the period in which these payments will become due
are as follows:
Note 2018 2017

Not later than one year 50,351 49,686

Total future minimum lease payments 114,924 73,389
Finance charge allocated to future periods (12,556) (5,327)
Present value of future minimum lease payments 102,368 68,062
Not later than one year 19 (42,590) (45,656)
15 DEFERRED TAXATION
Deferred tax liability on taxable temporary differences 15.1 3,708,750 3,379,016

Deferred tax asset on deductible temporary differences 15.1 (1,284,805) (1,460,633)
2,423,945 1,918,383
15.1 Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2018
Operating xed assets - owned 3,351,793 (213,815) 540,361 3,678,339
Operating xed assets - leased 27,223 3,188 - 30,411
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
2017
Operating xed assets - owned 2,942,669 207,693 201,431 3,351,793
Operating xed assets - leased 40,117 (12,894) - 27,223
2,982,786 194,799 201,431 3,379,016
Deferred tax assets
Provisions (148,524) (69,144) - (217,668)
Unused tax losses and credits (1,236,102) - - (1,236,102)
Long term investments - (6,863) - (6,863)
(1,384,626) (76,007) - (1,460,633)
1,598,160 118,792 201,431 1,918,383
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 % (2017: 30% and 15%) respectively of the
timing differences based on tax rates notied by the Government of Pakistan for future tax years for such income.
2018 2017
16 DEFERRED INCOME

Recognized in prot or loss (1,936) (2,038)
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 xed 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. 1.936 million (2017: Rs. 2.038 million) has been included in other income in proportion to depreciation
charged on related plant and machinery keeping in view the matching principle.
Note 2018 2017

17 TRADE AND OTHER PAYABLES

Foreign bills payable - secured 17.1 108,823 99,102
Advances from customers -unsecured 65,302 88,205
Advance against contracts 46 11,852 9,615
823,850 875,182
17.1 Foreign bills payable are secured against bills of exchange accepted by the Company in favour of suppliers.
Note 2018 2017

17.2 Workers' Prot Participation Fund

Interest on funds utilized by the Company 40 4,940 5,655
Paid during the year (87,397) (104,648)
17.2.1 Interest on funds utilized by the Company has been recognized at 9% (2017: 8.5%) per annum.
Note 2018 2017

17.3 Workers' Welfare Fund

Paid/adjusted during the year (30,972) (37,977)
18 SHORT TERM BORROWINGS
Secured
Short term nances utilized under interest/markup/prot arrangements from
- Banking companies - Interest based arrangements 18.1 10,202,314 4,673,422
- Banking companies - Shariah compliant 18.1 1,854,937 1,000,000
- Non Banking Finance Companies ['NBFC's'] 18.2 200,000 350,000
12,257,251 6,023,422
Unsecured
Short term nances utilized under interest/markup arrangements from
Non Banking Finance Companies ['NBFC's'] -Interest based arrangements 18.3 - 1,135,174
Book overdraft 18.5 586,597 68,772
12,843,848 7,227,368
18.1 These facilities have been obtained from various banking companies for working capital requirements and carry
interest/markup/prot at rates ranging from 7.11% to 12.3% (2017: 7.16% to 9.16%) per annum. These facilities are secured by
pledge / hypothecation of raw material and components, work-in-process, nished goods, machinery, spare parts, charge over
book debts, shares of public companies 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 purchase of raw material and carry interest/markup at rates ranging from
7.12% to 11.55% (2017: 7.11% to 7.89%) per annum. These facilities are secured by charge over operating xed assets of the
Company and personal guarantees of the directors of the Company.
18.3 This represented nances obtained against issue of commercial paper to non-banking nance companies and carry
interest/markup at nil (2017: nine months KIBOR plus 1.25% per annum). These were issued at discounted value and are
redeemed at face value.
18.4 The aggregate un-availed short term borrowing facilities as at the reporting date amounts to Rs. 10,464 million (2017: Rs. 10,727
million).
18.5 This represents cheques issued by the Company in excess of balances at bank which have been presented for payments in the
subsequent period.
Note 2018 2017

19 CURRENT PORTION OF NON-CURRENT LIABILITIES
Redeemable capital 12 101,875 308,125

Long term nances 13 1,669,846 1,673,911
1,814,311 2,027,692
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:
2018 2017
Tender bonds 488,314 482,288

Performance bonds 2,863,884 2,685,710
Advance guarantees 647,033 662,609
Custom guarantees 72,064 92,645
Foreign guarantees 80,682 77,084
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 The Finance Act 2015 introduced Tax on Undistributed Reserves vide newly inserted section 5A to the Ordinance whereby, tax at
the rate of 10% of undistributed prots exceeding one hundred percent of paid-up capital, was imposed on public companies
that derive prots in a tax year but do not distribute a certain amount of prot as cash dividend within six months of the end of the
year.
No provision for income tax on undistributed reserves for subsequent tax years, has been made as the matter is subjudice
before Lahore High Court and the management of the Company expects a favourable 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 the rate of 3% of the income equal to or excedding Rs. 500 million. No provision for Super Tax has
been made for tax years 2015 to 2017 as the matter is subjudice before Lahore High Court and the management of the
Company expects a favourable outcome.
20.1.5 On 12 July 2014, the Punjab Employees Social Security Institution ('the Institution') issued a demand notice to Company
demanding a payment of Rs. 31,106,274 as social security contributions for the period from January 2013 to December 2013. In
2015, PEL challenged the demand notice by ling a complaint under Section 57 of the Provincial Employees Social Security
Ordinance, 1965 before the Institution. The complaint is pending adjudication before the Adjudicating Ofcer of the Institution.
20.1.6 In tax year 2014 Worker’s Welfare Fund was levied at Rs. 1.55 million contrary to the judgements of the Lahore High Court
[‘LHC’] and the apex court and it is expected that this liability will be deleted by the Appellate Authority.
20.1.7 The Company’s case was selected for audit by the Additional Commissioner Inland Revenue ['ACIR'] for tax years 2009, 2016
and 2017. The Company has led appeals for these tax years before the Commissioner Inland Revenue (Appeals) [‘CIR(A)’],
and the appellate orders are yet awaited. The issues raised in these appeals are mostly concerning disallowance of various
expenses. The management expect to get adequate relief from the Appellate Authority and no additional tax liability is expected
to arise.
20.1.8 As per order under section 137(2) of the Income Tax Ordinance, 2001 [‘the Ordinance’] dated October 20, 2017 a refund of Rs.
441.28 million has been determined for the tax year 2016. The department has led an appeal before the Appellate Tribunal
Inland Revenue ['ATIR'] on the relief allowed by the Commissioner Inland Revenue (Appeals) [‘CIR(A)’] on the account of
adjustment of minimum tax under section 113(2)(c) and tax credit allowed under section 65E of the Ordinance. The appeal led
is not xed for hearing. The ATIR in different case has allowed relief respecting the claim of tax under section 113 (2)(c) of the
Ordinance. The management expect to get adequate relief from the Appellate Authority and no additional tax liability is
expected to arise.
2018 2017
20.2 Commitments
20.2.1 Commitments under irrevocable letters of credit for import of

stores, spare parts and raw material 2,012,639 1,926,602
20.2.2 Commitments under ijarah contracts
The aggregate amount of ujrah payments for ijarah nancing and the period in which these payments will become due are as
follows:
2018 2017
- payments not later than one year 13,295 44,389

- payments later than one year 16,139 11,333
29,434 55,722
J 32
21 PROPERTY, PLANT AND EQUIPMENT
2018
Assets owned by the Company

Leasehold land 13,256 - - - - 13,256 - - - - - - 13,256
Freehold land 539,232 - 482,768 - - 1,022,000 - - - - - - 1,022,000
Building on leasehold land 1,763,372 - 453,650 - - 2,217,022 5 751,904 50,574 206,448 - 1,008,926 1,208,096
Building on freehold land 2,756,951 - 709,259 - - 3,466,210 5 884,539 93,620 251,643 - 1,229,802 2,236,408
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

Plant and machinery 103,488 109,944 - - (52,068) 161,364 5 10,753 4,637 - (8,956) 6,434 154,930
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 on freehold land 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
2017
Assets owned by the Company

Leasehold land 13,256 - - - - 13,256 - - - - - - 13,256
Freehold land 539,232 - - - - 539,232 - - - - - - 539,232
Building on leasehold land 1,763,372 - - - - 1,763,372 5 698,669 53,235 - - 751,904 1,011,468
Building on freehold land 2,754,337 2,614 - - - 2,756,951 5 786,062 98,477 - - 884,539 1,872,412
Plant and machinery 17,918,980 521,540 - - 102,700 18,543,220 5 5,655,258 636,896 - 16,388 6,308,542 12,234,678
-
Vehicles 183,497 132,022 - (62,276) 56,070 309,313 20 97,002 31,219 - 2,177 130,398 178,915
23,496,012 708,144 - (82,096) 158,770 24,280,830 7,457,170 846,597 - 531 8,304,298 15,976,532

Plant and machinery 203,488 - - - (100,000) 103,488 5 17,860 9,281 - (16,388) 10,753 92,735
Vehicles 131,102 27,802 - - (56,070) 102,834 20 46,496 13,998 - (27,679) 32,815 70,019
334,590 27,802 - - (156,070) 206,322 64,356 23,279 - (44,067) 43,568 162,754
23,830,602 735,946 - (82,096) 2,700 24,487,152 7,521,526 869,876 - (43,536) 8,347,866 16,139,286

Building on freehold land 73,547 937,336 - - - 1,010,883 - - - - - 1,010,883
Plant and machinery 59,755 198,489 - - (2,700) 255,544 - - - - - 255,544
133,302 1,135,825 - - (2,700) 1,266,427 - - - - - 1,266,427
23,963,904 1,871,771 - (82,096) - 25,753,579 7,521,526 869,876 - (43,536) 8,347,866 17,405,713
21.1 Property, plant and equipment includes fully depreciated assets of Rs. 64.54 million (2017: Rs. 71.15 million) which are still in use of the Company.
21.2 Freehold land of the Company is located at Mouza Kot Islampura, 34 - K.M, Ferozepur Road, Lahore with a total area of 511 Kanals (2017: 511 Kanals).
Annual Report 2018
21.3 Leasehold land of the Company is located 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 (2017: 322
Kanals 15 Marla).
J 33
21.4 Disposal of operating xed assets
2018
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 ofce items 39,975 34,968 5,007 1,949 (3,058) Negotiation Various individuals
52,506 44,530 7,976 2,533 (5,443)
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)
BMW X1 5,217 591 4,626 5,737 1,111 As Per Company Policy Mehdi Hassan (employee)
Honda City 1,494 971 523 747 224 As Per Company Policy Atif Imtiaz (employee)
23-A, New Staff Colony U.E.T, Lahore.
Honda Civic 2,439 1,505 934 642 (292) As Per Company Policy Waseem Ishaq (employee)
199-A, Block C, PCSIR, College Road, Lahore.
Honda Civic 2,489 1,460 1,029 539 (490) As Per Company Policy Iftikhar Ahmed (employee)
100, Block E, Askari 10, AOHC, Lahore.
Honda Civic 2,469 1,448 1,021 560 (461) As Per Company Policy Tariq Irani (employee)
5, Block G4, Wapda Town, Lahore.
Honda Civic 2,448 1,277 1,171 470 (701) As Per Company Policy Javed A Khan (employee)
777, Ammar Shaheed Road Chahklala Scheme 3, Rawalpindi.
Honda Civic 2,164 793 1,371 1,456 85 As Per Company Policy Atif Ali (employee)
180, Block C, Gulshan-e-Ravi, Lahore.
Honda Civic 2,521 892 1,629 328 (1,301) As Per Company Policy Sadiq Munir (employee)
173-A, New Muslim Town, Lahore.
Porsche 1,202 439 763 3,000 2,237 Negotiation Performance Automotive
24-D, Al Faisal Town, Lahore.
Suzuki Mehran 578 10 568 222 (346) As Per Company Policy Shees Butt (employee)
442, Millat Road, Taj Colony, Faisalabad.
Toyota Corolla 1,731 1,015 716 600 (116) As Per Company Policy Javed Iqbal (employee)
10-A, Block E, Muhaz Town, Multan Road, Lahore.
Toyota Corolla 1,771 924 847 831 (16) As Per Company Policy Rizwan Cheema (employee)
149-B, PCSIR Colony, Canal Road, Lahore.
Honda City 1,438 1,028 410 568 158 As Per Company Policy Imran Iqbal (employee)
Suzuki Cultus 1,020 740 280 203 (77) As Per Company Policy Shaq Ahmed (employee)
Suzuki Cultus 990 692 298 498 200 As Per Company Policy M Mukhtar Khan (employee)
Suzuki Cultus 1,049 615 434 544 110 As Per Company Policy Irshad Khan (employee)
Suzuki Cultus 1,039 586 453 572 119 As Per Company Policy Salman (employee)
Suzuki Cultus 106 12 94 401 307 As Per Company Policy Shahid Ahmed (employee)
Suzuki Cultus 106 12 94 307 213 As Per Company Policy Muhammad Asif (employee)
Suzuki Mehran 612 431 181 700 519 As Per Company Policy Muhammad Shaq (employee)
Suzuki Mehran 612 431 181 305 124 As Per Company Policy Masood ul Hassan (employee)
Suzuki Mehran 612 431 181 213 32 As Per Company Policy Tahir Ikram (employee)
Suzuki Mehran 612 431 181 - (181) As Per Company Policy Muhammad Asghar (employee)
Suzuki Mehran 640 420 220 345 125 As Per Company Policy Sami Ullah Qazi (employee)
Suzuki Mehran 657 427 230 167 (63) As Per Company Policy Amer Fayyaz (employee)
Suzuki Mehran 657 427 230 167 (63) As Per Company Policy Sharaf ud Din (employee)
Suzuki Mehran 657 427 230 320 90 As Per Company Policy Nasir Javed (employee)
Suzuki Mehran 688 404 284 472 188 As Per Company Policy Muhammad Zeeshan (employee)
Suzuki Mehran 69 14 55 474 419 As Per Company Policy Uzair (employee)
Suzuki Mehran 69 16 53 170 117 As Per Company Policy Shafqat (employee)
Suzuki Swift DX 1,131 797 334 383 49 As Per Company Policy Abdul Qavi Butt (employee)
Toyota Corolla 168 - 168 1,450 1,282 As Per Company Policy Azeem (employee)
Toyota XLI 1,554 1,095 459 306 (153) As Per Company Policy Manzar Hassan (employee)
Motor Bike 63 55 8 64 56 As Per Company Policy Waqas (employee)
Motor Bike 41 30 11 41 30 As Per Company Policy Abid (employee)
Motor Bike 57 39 18 69 51 As Per Company Policy Badar (employee)
Motor Bike 85 53 32 - (32) As Per Company Policy Faisal (employee)
Motor Bike 62 32 30 62 32 As Per Company Policy Nauman (employee)
Motor Bike 62 28 34 64 30 As Per Company Policy Syed Anwar Ali (employee)
Motor Bike 64 29 35 64 29 As Per Company Policy Muhammad Ali Shahbaz (employee)
Motor Bike 42 18 24 42 18 As Per Company Policy Nadeem Shahzad (employee)
Motor Bike 64 21 43 25 (18) As Per Company Policy Gulman Shah (employee)
Motor Bike 171 - 171 917 746 As Per Company Policy Jehanzeb Ahmed (employee)
45,906 21,578 24,328 29,921 5,593
125,148 91,127 34,021 36,288 2,267
2017
Table and chairs 1,021 775 246 249 3 Negotiation Various individuals
Air conditioners 1,746 1,233 513 43 (470) Negotiation Various individuals
Mobile sets 364 77 287 94 (193) Negotiation Various individuals
Mobile sets 63 4 59 76 17 Insurance Claim Adamjee insurance
Miscellaneous ofce items 870 596 274 50 (224) Negotiation Various individuals
4,064 2,685 1,379 512 (867)
Laptops 161 118 43 36 (7) Negotiation Various individuals
Mobile sets 1,854 1,491 363 429 66 Negotiation Various individuals
Allied items 693 692 1 110 109 Negotiation Various individuals
15,756 15,349 407 917 510
Vehicles
Honda City 167 - 167 1,375 1,208 As Per Company Policy Kashif Khan (employee)
Honda City 1,438 979 459 940 481 As Per Company Policy Adnan Shahid (employee)
Honda City 1,603 847 756 201 (555) As Per Company Policy Arfan Hashmi (employee)
Honda Civic 2,167 1,436 731 719 (12) As Per Company Policy Nasir Paul (employee)
Toyota Corolla 1,775 - 1,775 1,775 - As Per Company Policy Javed Iqbal (employee)
Honda Civic 2,383 1,567 816 616 (200) As Per Company Policy Mehdi Hassan (employee)
Suzuki Cultus 106 - 106 925 819 As Per Company Policy Kamran (employee)
Suzuki Cultus 1,029 528 501 315 (186) As Per Company Policy Muhammad Hanif (employee)
Suzuki Cultus 106 2 104 825 721 As Per Company Policy Adil Ashfaque (employee)
Suzuki Cultus 85 14 71 439 368 As Per Company Policy Arfan Hashmi (employee)
Suzuki Cultus 1,044 561 483 624 141 As Per Company Policy Khalid Sheikh (employee)
Suzuki Cultus 1,049 516 533 322 (211) As Per Company Policy Umer Shahzad (employee)
Suzuki Cultus 985 621 364 508 144 As Per Company Policy Muhammad Farooq (employee)
Suzuki Cultus 106 5 101 575 474 As Per Company Policy Muhammad Ali (employee)
Suzuki Cultus 1,029 524 505 570 65 As Per Company Policy Tanweer Malik (employee)
Suzuki Mehran 640 416 224 230 6 As Per Company Policy Irfan Ahmad (employee)
Suzuki Mehran 673 345 328 241 (87) As Per Company Policy Mian Nazir (employee)
Suzuki Mehran 683 348 335 506 171 As Per Company Policy Husnain Arif (employee)
Suzuki Mehran 693 361 332 504 172 As Per Company Policy Khawaja Mudassar (employee)
Suzuki Mehran 657 405 252 167 (85) As Per Company Policy Attique (employee)
Suzuki Mehran 657 354 303 194 (109) As Per Company Policy Mahmood (employee)
Suzuki Mehran 657 405 252 358 106 As Per Company Policy Amir Shahzad (employee)
Suzuki Mehran 612 386 226 319 93 As Per Company Policy Afzal (employee)
Suzuki Mehran 612 374 238 340 102 As Per Company Policy Abdul Raheem (employee)
Suzuki Mehran 69 2 67 504 437 As Per Company Policy Yamin Afridi (employee)
Suzuki Swift 1,486 732 754 909 155 As Per Company Policy Muhammad Shahid (employee)
Suzuki Swift 1,282 658 624 562 (62) As Per Company Policy Muhammad Nauman (employee)
Suzuki Swift 1,282 669 613 532 (81) As Per Company Policy Shahb Ali (employee)
Suzuki Swift 1,221 634 587 494 (93) As Per Company Policy Muhammad Shahzad (employee)
Suzuki Swift 1,297 192 1,105 1,107 2 As Per Company Policy Muhammad Farooq (employee)
Suzuki Swift 133 - 133 300 167 As Per Company Policy Nazir (employee)
Suzuki WagonR 92 3 89 443 354 As Per Company Policy Nadeem un Din (employee)
Toyota Corolla 1,824 730 1,094 208 (886) As Per Company Policy Tauqir Akhtar (employee)
Toyota Corolla 1,591 1,084 507 313 (194) As Per Company Policy Tariq Siraj (employee)
Toyota Corolla 1,625 1,047 578 365 (213) As Per Company Policy Muhammad Raq Ahmad (employee)
Toyota Corolla 1,694 926 768 471 (297) As Per Company Policy Jalil ur Rehman (employee)
Toyota Corolla 1,555 874 681 231 (450) As Per Company Policy Ashar Abbas (employee)
Toyota Corolla 1,690 1,098 592 1,070 478 As Per Company Policy Umar Saleemi (employee)
Toyota Corolla 1,690 1,120 570 453 (117) As Per Company Policy Tassawar Hanif (employee)
Toyota Corolla 1,690 1,153 537 441 (96) As Per Company Policy Syed Muhammad Amer (employee)
Toyota Corolla 1,555 1,040 515 761 246 As Per Company Policy Masood Ahmed (employee)
Honda City 1,538 101 1,437 1,799 362 Sale & Lease Back First Habib Modaraba
Suzuki Cultus 961 - 961 1,124 163 Sale & Lease Back First Habib Modaraba
Suzuki WagonR 901 45 856 1,054 198 Sale & Lease Back First Habib Modaraba
Various Motor Cycles 421 155 266 436 170 As Per Company Policy Various individuals
47,763 23,257 24,506 28,581 4,075
67,583 41,291 26,292 30,010 3,718
Note 2018 2017

21.5 The depreciation charge for the year has been allocated as follows:
Cost of sales 35 772,241 805,694

Administrative and general expenses 38 68,660 64,182
840,901 869,876
21.6 Revaluation of property, plant and equipment
Most recent valuation of freehold land, buildings on freehold and lease hold land and plant and machinery was carried out by an
independent valuer, Maricon Consultants (Private) Limited, on December 31, 2018 and was incorporated in the nancial
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:
2018
Accumulated Net
Cost depreciation book value
Freehold land 189,184 - 189,184

Buildings 3,302,326 1,321,029 1,981,297
2017
Accumulated
Cost depreciation Net book value
Freehold land 189,184 - 189,184

Buildings 3,302,326 1,216,750 2,085,576
21.6.1 As per most recent valuation, forced sale values of freehold land, buildings on freehold land and plant and machinery are as
follows:
Rupees
Rupees '000
Freehold land 919,800

Buildings on freehold land 2,927,828
Plant and machinery 11,998,078
15,845,706
22 INTANGIBLE ASSETS
Note 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
2017
Goodwill 22.2 312,341 - 312,341 91,859 - 91,859 220,482
Software 22.3 5,057 3,919 8,976 4,701 152 4,853 4,123
466,127 3,919 470,046 142,471 12,050 154,521 315,525
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 identiable assets acquired at the time of acquisition of PEL Appliances Limited and PEL Daewoo Electronics Limited by the
Company. 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 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 2018 2017

PEL Marketing (Private) Limited -Unquoted

10,000 (2017: 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 (2017: 2,910,600) ordinary shares of Rs. 10 each 23.1 6,985 8,848
Relationship:associate
Ownership Interest: 23.1%
7,085 8,948
23.1 Details of investment are as follows:

Cost of investment 54,701 54,701
Accumulated impairment (47,716) (45,853)
6,985 8,848
24 LONG TERM DEPOSITS
Financial institutions 24.1 7,858 31,131

Utility companies and regulatory authorities 24.2 42,351 42,351
Customers 24.3 315,748 298,454
365,957 371,936
24.1 These represent security deposits against Ijarah nancing.
24.2 These have been deposited with various utility companies and regulatory authorities. These are classied as 'loan and
receivables' under IAS 39 'Financial Instruments - Recognition and Measurement' which are required to be carried at amortized
cost. However, these, being held for an indenite period with no xed maturity date, are carried at cost as their amortized cost is
impracticable to determine.
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. Due to uncertainties regarding dates of refund of these deposits, these have been
carried at cost.
Note 2018 2017

25 STORES, SPARES AND LOOSE TOOLS
Stores 290,865 136,561

Spares 452,987 505,812
Loose tools 134,117 122,859
877,969 765,232
859,145 746,408
25.1 There are no spare parts held exclusively for capitalization as at the reporting date.
Note 2018 2017

26 STOCK IN TRADE
Raw material
- in stores 5,130,566 4,639,215
- in transit 2,110,833 582,589
Provision for slow moving and obsolete items 26.1 (37,037) (34,515)
7,204,362 5,187,289
Work in process 758,928 848,453
Finished goods 417,843 360,059
410,821 353,037
8,374,111 6,388,779
26.1 Movement in provision for slow moving and obsolete items - raw material
26.2 Entire stock in trade is carried at cost being lower than net realizable value.
26.3 Stock in trade valued at Rs. 1,754 million (2017: Rs. 1,308 million) is pledged as security with providers of debt nances.
Note 2018 2017

27 TRADE DEBTS - UNSECURED
Considered good
- against sale of goods 1,815,417 3,598,216
- against execution of contracts 27.1 3,054,705 1,886,483
4,870,122 5,484,699
Considered doubtful 27.2 587,301 576,971
5,457,423 6,061,670
Impairment allowance for doubtful debts 38 (587,301) (576,971)
4,870,122 5,484,699
27.1 These include retention money for contracts in progress amounting to Rs. 617.648 million (2017: Rs. 855.5 million) held by the
customers in accordance with contract terms.
2018 2017
27.2 Movement in impairment allowance

28 DUE AGAINST CONSTRUCTION WORK IN PROGRESS - UNSECURED, CONSIDERED GOOD
This represents unbilled revenue from construction work in progress.
Note 2018 2017

29 SHORT TERM ADVANCES - UNSECURED
Advances to suppliers and contractors - unsecured

589,824 617,091
Advances to employees - unsecured
- considered good 29.1 375,790 209,125
375,790 209,125
965,614 826,216
29.1 These include advances for

- purchases 189,350 136,903
- expenses 105,524 46,886
- traveling 80,916 25,336
375,790 209,125
30 SHORT TERM DEPOSITS AND PREPAYMENTS
Security deposits
Impairment allowance for doubtful deposits (5,379) (5,379)
308,133 383,133
Margin deposits 421,671 488,316
Prepayments 52,865 46,211
Letters of credit 322,510 191,572
1,105,179 1,109,232
31 SHORT TERM INVESTMENTS
These represent investments in listed equity securities classied as 'nancial assets at fair value through prot or loss'. The
Note 2018 2017

Standard Chartered Bank (Pakistan) Limited

915,070 (2017: 915,070) ordinary shares of Rs. 10 each
Changes in fair value 36 & 39 247 (1,282)
32 ADVANCE INCOME TAX/INCOME TAX REFUNDABLE
Advance income tax/income tax refundable 3,132,528 2,263,669

Provision for taxation 41 - -
3,132,528 2,263,669
33 CASH AND BANK BALANCES
Cash in hand 8,102 12,012

Cash at banks 349,808 389,812
357,910 401,824
34 NET REVENUE
Contract revenue 46 2,899,882 2,841,124

Sale of goods
- local 23,394,059 26,095,060
- exports 888,957 1,292,919
27,182,898 30,229,103
Sales tax and excise duty (3,710,466) (4,062,791)
23,472,432 26,166,312
35 COST OF SALES
Finished goods at the beginning of the year 360,059 1,742,903

Cost of goods manufactured 35.1 18,343,599 18,398,577
Finished goods at the end of the year (417,843) (360,059)
Cost of goods sold 18,285,815 19,781,421
Contract cost 46 2,433,581 2,410,694
20,719,396 22,192,115
Note 2018 2017

35.1 Cost of goods manufactured
Work-in-process at beginning of the year 848,453 1,033,340
Raw material and components consumed 15,556,700 15,491,808
Direct wages 799,473 712,515
Factory overheads:
- salaries, wages and benets 422,952 482,115
- traveling and conveyance 27,930 25,623
- electricity, gas and water 339,186 361,245
- repairs and maintenance 68,323 61,254
- vehicles running and maintenance 30,060 30,028
- insurance 35,855 29,225
- depreciation 21.5 772,241 805,694
- amortization of intangible assets 22 10,203 12,050
- provision for obsolete and slow moving stock 26 & 27 2,522 8,868
- carriage and freight 23,742 27,540
- erection and testing 151,605 153,582
- other factory overheads 13,282 12,143
1,897,901 2,009,367
19,102,527 19,247,030
Work-in-process at end of the year (758,928) (848,453)
18,343,599 18,398,577
Note 2018 2017

36 OTHER INCOME
Gain on nancial instruments
Changes in fair value of short term investments 31 247 -
Gain on disposal of property, plant and equipment 2,267 3,718
Gain on sale and lease back activities - 2,832
2,514 6,550
Other income
Amortization of grant-in-aid 16 1,936 2,038
Others 12,934 9,205
14,870 11,243
17,384 17,793
37 DISTRIBUTION COST

Electricity, gas, fuel and water 3,162 3,236
Printing and stationery 3,368 3,256
Advertisement and sales promotion 191,524 258,034
Insurance 7,524 7,003
Freight and forwarding 121,588 132,209
Contract and tendering 1,355 6,610
Warranty period services 111,565 106,228
Others 35,463 46,278
732,340 805,922
Note 2018 2017

38 ADMINISTRATIVE AND GENERAL EXPENSES

Ujrah payments 21,620 31,591
Legal and professional 56,932 60,952
Electricity, gas and water 27,215 23,587
Auditor's remuneration 38.2 4,827 4,557
Printing, stationery and periodicals 3,150 2,803
Advertisement 8,168 12,152
Insurance 8,882 6,786
Provision for doubtful debts, advances and security deposits 10,330 132,382
Depreciation 21.5 68,660 64,182
Others 24,351 21,831
524,558 614,442
Note 2018 2017

38.2 Auditor's remuneration

Annual statutory audit 3,300 3,300
Limited scope review 800 600
Review report under Code of Corporate Governance 500 430
Out of pocket expenses 227 227
4,827 4,557
39 OTHER EXPENSES
Loss on nancial instruments

Loss due to changes in fair value of short term investments 31 - 1,282
Impairment of long term investments 1,863 17,493
6,584 18,775
Others
Others - 7,372
36,945 119,848
43,529 138,623
Note 2018 2017

40 FINANCE COST
Interest/markup/prot on borrowings:
redeemable capital 19,655 288,312
long term nances 443,864 296,851
liabilities against assets subject to nance lease 6,362 10,922
short term borrowings 209,057 20,206
678,938 616,291
Interest on Workers' Prot Participation Fund 17.2 4,940 5,655
Bank charges and commission 292,569 299,102
976,447 921,048
41 TAXATION
Provision for taxation

for current year 32 & 41.1 - -
for prior years - -
- -
Deferred taxation
adjustment attributable to origination and reversal of temporary differences (22,893) 118,792
adjustment attributable to changes in tax rates 15.1 (11,906) -
(34,799) 118,792
(34,799) 118,792
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. No provision for taxation is charged due to
available tax credits. There is no relationship between aggregate tax expense and accounting prot. Accordingly no numerical
reconciliation has been presented.
41.2 Assessments upto tax year 2017 have been nalized under the relevant provisions of the Ordinance.
Unit 2018 2017
42 EARNINGS PER SHARE - BASIC AND DILUTED
Earnings
Prot after taxation Rupees '000 528,345 1,393,163
Preference dividend for the year Rupees '000 (42,710) (42,710)
Prot attributable to ordinary shareholders Rupees '000 485,635 1,350,453
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 0.98 2.71
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.
42.3 The effect of issue of ordinary and preference shares on conversion of redeemable capital, as referred to in note 12, has not
been considered for the purpose of calculation of earnings per share as the said issue is subject to various legal and regulatory
approvals which are pending as at the reporting date.
Note 2018 2017

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

Interest/markup on borrowings 678,938 616,291
Gain on disposal of property, plant and equipment (2,267) (3,718)
Amortization of grant-in-aid (1,936) (2,038)
Amortization of intangible assets 10,203 12,050
Gain on sale and lease back activities - (2,832)
Impairment of long term investments 1,863 17,493
Changes in fair value of nancial assets at fair value through prot or loss (247) 1,282
Impairment allowance for doubtful debts, advances and security deposits 10,330 132,382
Provision for obsolete and slow moving stock 2,522 8,868
Depreciation 840,901 869,876
1,545,028 1,649,654
2,038,574 3,161,609
Changes in working capital
Stores, spares and loose tools (112,737) 66,507
Stock in trade (1,987,854) 1,295,803
Trade debts 604,247 (1,774,707)
Due against construction work in progress (142,550) (265,189)
Advances (139,398) 128,665
Trade deposits and short term prepayments 4,053 149,642
Other receivables (49,872) 169,154
Trade and other payables (51,332) 85,374
(1,875,443) (144,751)
Cash generated from operations 163,131 3,016,858
44 CASH AND CASH EQUIVALENTS

357,910 401,824
45 TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Related parties from the Company's perspective comprise subsidiary, associated companies, key management personnel and
post employment benet 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 N/A
PEL Marketing (Private) Limited Subsidiary Investment N/A
Kohinoor Power Company Limited Associated company Investment N/A
Red Communication Arts Associated undertaking Common directorship N/A
(Private) Limited
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 benets, advances
against issue of ordinary shares and dividend payments. Transactions with post employment benets 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 2018 2017

45.1 Transactions with related parties
Nature of relationship Nature of transactions

Provident Fund Trust Contribution for the year 59,394 62,720
Subsidiary Sale of goods 14,159,484 14,008,319

Allocation of common expenses 1,379,621 1,300,446
Associated companies and undertakings Purchase of services 50,304 136,462
Key management personnel Short term employee benets 51 50,125 46,941

Post employment benets 51 1,600 1,600
Directors and sponsors Dividend paid 295,933 813,143
45.2 Balances with related parties
Nature of relationship Nature of balances

Provident Fund Trust Contribution payable 11,247 13,423
Key management personnel Short term employee benets payable 2,805 2,897
46 LONG TERM CONSTRUCTION CONTRACTS
Contract revenue for the year 34 2,899,882 2,841,124

Cost incurred to date 7,402,753 4,969,171
Contract costs for the year 35 2,433,581 2,410,694
Gross prot realized to date 1,340,197 2,095,361
Advances against contracts 17 11,852 9,615
Retention money receivable 27.1 617,648 855,500
Gross amount due from customers 3,972,791 3,279,668
Gross amount due to customers 43,031 151,688
Estimated future costs to complete projects in progress 1,358,721 2,340,622
47 FINANCIAL INSTRUMENTS
The carrying amounts of the Company's nancial instruments by class and category are as follows:
2018 2017
47.1 Financial assets

Cash in hand 8,102 12,012
Loan and receivables
Long term deposits 358,099 340,805
Trade debts 4,870,122 5,484,699
Due against construction work in progress 1,535,735 1,393,185
Short term deposits 724,425 866,070
Bank balances 349,808 389,812
7,838,189 8,474,571

Short term investments 22,071 21,824
7,868,362 8,508,407
47.2 Financial liabilities

Financial liabilities at amortized cost
Redeemable capital 101,875 376,875
Long term nances 4,315,878 5,632,678
Liabilities against assets subject to nance lease 102,368 68,062
Foreign bills payable - secured 108,823 99,102
Short term borrowings 12,843,848 7,227,368
18,482,549 14,147,268
48 FINANCIAL RISK EXPOSURE AND MANAGEMENT
The Company’s activities expose it to a variety of nancial 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 Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reect changes in market conditions and the Company's activities. The Company, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management
framework. The Board is responsible for developing and monitoring the Company’s risk management policies. The Company's
Audit Committee oversees how management monitors compliance with the Company’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The
Audit Committee is assisted in its oversight role by Internal Audit department. Internal Audit department undertakes both regular
and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
The Company’s exposure to nancial risks, the way these risks affect the nancial 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 nancial loss to the Company, if the counterparty to a nancial instrument fails to meet its obligations.
48.1.1 Maximum exposure to credit risk
The gross carrying amount of nancial assets, other than cash in hand, represents maximum exposure to credit risk. The
maximum exposure to credit risk as at the reporting date is as follows:
Note 2018 2017

Loan and receivables

Trade debts 27 5,457,423 6,061,670
Due against construction work in progress 28 1,535,735 1,393,185
Short term deposits 30 735,183 876,828
Cash at banks 33 349,808 389,812
8,436,248 9,062,300
8,458,319 9,084,124
48.1.2 Concentration of credit risk
There is no concentration of credit risk geographically. Maximum exposure to credit risk by type of counterparty is as follows:
2018 2017
Customers 7,308,906 7,753,309

Banking companies and nancial institutions 1,107,062 1,288,464
Others 42,351 42,351
8,458,319 9,084,124
48.1.3 Credit quality and impairment
The manner in which the company assesses the credit quality of its nancial assets depends on the type of counter-party. The
Company conducts different types of transactions with the following counter-parties.
(a) Customers
Customers are counter parties to trade debts, long term security deposits for contracts in progress, due against contract
work in progress and retention money for contracts in progress.
These, with the exception of trade debts, do not carry any signicant credit risk. The ageing analysis of trade debts as at
the reporting date is as follows:
2018 2017
Gross Accumulated Gross Accumulated
carrying amount Impairment carrying amount Impairment
Not yet due and past due by 1 year 4,401,729 - 5,014,835 -

1 to 2 years 431,246 - 431,246 -
2 to 3 years 317,664 280,517 317,328 278,710
More than 3 years 306,784 306,784 298,261 298,261
5,457,423 587,301 6,061,670 576,971
The Company's three (2017: two) signicant customers accounts for Rs. 930.603 million (2017: Rs. 647.89 million ) of
trade debts as at the reporting date, apart from this, exposure to any single customer does not exceed 5% (2017: 5%) of
trade debts. These signicant 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.
2018 2017
General customers 4,001,648 4,877,512

Corporate customers 1,455,775 1,184,158
5,457,423 6,061,670
In determining the recoverability of a trade debt, the Company considers any change in the credit quality of the trade debt
from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the
customer base being large and unrelated. Accordingly, the management believes that there is no further provision
required in excess of the allowance for doubtful debts.
(b) Banking companies and nancial institutions
Banking companies and nancial institutions are counter-parties to security/margin deposits, investments in debt and
equity shares and bank balances. The Company limits its exposure to credit risk by only investing in highly liquid
securities and only with counterparties that have reasonably high credit ratings. Given these high credit ratings,
management does not expect any counterparty to fail to meet its obligations.
(c) Others
These include employees of the Company who are counter-parties to advances and utility companies and regulatory
authorities who are counter-parties to long term security deposits. These do not carry any signicant credit risk.
48.1.4 Collateral held
The Company does not hold any collateral to secure its nancial assets.
48.1.5 Credit risk management
As mentioned in note 48.1.3 to the nancial statements, the Company's nancial assets do not carry signicant credit risk, with
the exception of trade debts, which are exposed to losses arising from any non-performance by customers. To manage credit
risk the Company maintains procedures covering the application for credit approvals, granting and renewal of counterparty
limits and monitoring of exposures against these limits. As part of these processes the nancial viability of all counterparties is
regularly monitored and assessed. The majority of sales to the Company’s customers are made on specic terms. Customer
credit risk is managed by each business unit subject to the Company’s established policy, procedures and controls relating to
customer credit risk management. Credit limits are established for all customers based on internal rating criteria. Credit quality
of the customer is assessed based on an extensive credit rating. 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.
48.2 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its nancial obligations as they fall due.
48.2.1 Exposure to liquidity risk
The followings is the analysis of contractual maturities of nancial liabilities, including estimated interest payments.
2018
Redeemable capital 101,875 103,885 103,885 - -

Long term nances 4,315,878 4,962,564 2,059,357 2,903,207 -
18,169,136 19,113,286 16,145,506 2,967,780 -
2017
Redeemable capital 376,875 398,082 70,106 327,976 -

Long term nances 5,632,678 6,433,662 4,391,407 2,042,255 -
13,869,779 14,773,411 12,379,477 2,393,934 -
48.2.2 Liquidity risk management
The responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate liquidity risk
management framework for the management of the Company’s short, medium and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities
and reserve borrowing facilities, by continuously monitoring forecast and actual cash ows and matching the maturity
proles of nancial assets and liabilities. As referred to in note 18.4 the Company has additional undrawn facilities of Rs.
12,014 million (2017: Rs. 10,727 million) at its disposal to further reduce liquidity risk.
48.3 Market risk
48.3.1 Currency risk
Currency risk is the risk that fair values or future cash ows of a nancial instrument will uctuate 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) Exposure to currency risk
The Company's exposure to currency risk as at the reporting date is as follows:
2018 2017
Financial assets - -
Financial liabilities
Foreign bills payable
USD (92,204) (80,601)
CNY (16,619) -
EUR - (18,501)
(108,823) (99,102)
Net balance sheet exposure (108,823) (99,102)
Foreign currency commitments
CHF (17,235) (12,895)
CNY (28,496) (70)
EUR (156,714) (305,925)
GBP (1,059) -
USD (1,809,135) (1,607,712)
(2,012,639) (1,926,602)
Net exposure (2,121,462) (2,025,704)
(b) Exchange rates applied as at the reporting date

The following spot exchange rates were applied as at the reporting date.
2018 2017
Assets Liabilities Assets Liabilities
GBP - 176.5100 - -
EUR - 159.1000 - 131.7900
USD - 139.1000 - 110.5000
CHF - 141.2700 - 112.9000
CNY - 20.2100 - 17.3300
(c) Sensitivity analysis
A ve percent appreciation in Pak Rupee against foreign currencies would have increased prot and equity for the year by
Rs. 5.44 million (2017: Rs. 4.96 million). A ve percent depreciation in Pak Rupee would have had an equal but opposite
effect on prot for the year. The analysis assumes that all other variables, in particular interest rates, remain constant and
(d) 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.
48.3.2 Interest rate risk
Interest rate risk is the risk that fair values or future cash ows of a nancial instrument will uctuate because of changes in
interest rates.
(a) Interest/markup/prot bearing nancial instruments
The effective interest/markup rates for interest/markup/prot bearing nancial instruments are mentioned in relevant
notes to the nancial statements. The Company's interest/markup/prot bearing nancial instruments as at the reporting
date are as follows:
2018 2017
Fixed rate instruments - -
Variable rate instruments

Financial liabilities 16,777,372 13,236,211
(b) Fair value sensitivity analysis for xed rate instruments
The Company does not have any xed rate nancial instruments.
(c) Cash ow sensitivity analysis for variable rate instruments
An increase of 100 basis points in interest rates as at the reporting date would have decreased prot for the year by Rs.
167.774 million (2017: Rs. 132.362 million). A decrease of 100 basis points would have had an equal but opposite effect
on prot for the year. 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.
(d) Interest rate risk management
The Company manages interest rate risk by analyzing its interest rate exposure on a dynamic basis. Cash ow interest
rate risk is managed by simulating various scenarios taking into consideration renancing, renewal of existing positions
and alternative nancing. Based on these scenarios, the Company calculates impact on prot after taxation and equity of
dened interest rate shift, mostly 100 basis points.
48.3.3 Price risk
Price risk represents the risk that the fair value or future cash ows of nancial instrument will uctuate because of changes in
market prices, other than those arising from interest rate risk or currency risk, whether those changes are caused by factors
specic to the individual nancial instrument or its issuer, or factors affecting all similar nancial 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
classied using a fair value hierarchy that reects the signicance 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 nancial instruments measured at fair value and the information about how the fair values of these
nancial instruments are determined are as follows:
49.1 Financial instruments measured at fair value

Financial instruments Hierarchy Valuation techniques and key inputs 2018 2017
Financial assets at fair value

through prot or loss
Investments in quoted
equity securities Level 1 Quoted bid prices in an active market 22,071 21,824
49.2 Financial instruments not measured at fair value
The management considers the carrying amount of all nancial 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 nancial 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 2018 2017

Freehold land - 1,022,000 - 1,022,000 539,232

Buildings - 3,444,504 - 3,444,504 2,883,880
Plant and machinery - 13,797,790 - 13,797,790 12,234,678
For fair value measurements categorised into Level 2 and Level 3 the following information is relevant:
Freehold land Market comparable Estimated purchase price, A 5% increase in estimated

approach that reects recent including non-refundable purchase price, including non-
transaction prices for similar purchase taxes and other refundable purchase taxes and
properties costs directly attributable to other costs directly attributable
the acquisition. to the acquisition would result in
a signicant increase in fair
value of buildings by Rs. 51.1
million (2017: Rs. 26.962
million).
Buildings Cost approach that reects Estimated construction costs A 5% increase in estimated
the cost to the market and other ancillary construction and other ancillary
participants to construct expenditure. expenditure would result in a
assets of comparable utility signicant increase in fair value
and age, adjusted for of buildings by Rs. 172.225
obsolescence and million (2017: Rs. 144.194
depreciation. There was no million).
change in valuation
technique during the year.
Plant and machinery Cost approach that reects Estimated purchase price, A 5% increase in estimated
the cost to the market including import duties and purchase price, including
participants to acquire assets non-refundable purchase import duties and non-
of comparable utility and taxes and other costs directly refundable purchase taxes and
age, adjusted for attributable to the acquisition other directly attributable costs
obsolescence and or construction, erection and would result in a signicant
depreciation. There was no installation. increase in fair value of plant
change in valuation and machinery by Rs. 689.890
technique during the year. million (2017: Rs. 611.734
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 benets 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 nances, redeemable capital and liabilities
against assets subject to nances lease, including current maturity. Total capital employed includes total equity plus debt.
During the period, the Company's strategy was to maintain the gearing ratio below 30% and 'A' credit rating. The gearing ratios
as at the reporting date are as follows:
Unit 2018 2017
Total debt Rupees '000' 4,520,121 6,077,615

Total equity Rupees '000' 23,169,419 20,733,438
Total capital employed Rupees '000' 27,689,540 26,811,053
Gearing ratio % age 16.32 22.67
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 nance.
51 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged to prot or loss in respect of chief executive, directors and executives on account of managerial
remuneration, allowances and perquisites, post employment benets and the number of such directors and executives is as
follows:
Chief Executive Directors Executives

2018 2017 2018 2017 2018 2017
Remuneration 12,046 12,046 28,042 28,042 156,009 180,547

House rent 1,205 1,205 1,844 1,844 33,930 37,458
Utilities 1,205 1,205 1,205 1,205 15,601 17,459
Bonus - - - - 7,481 20,325
Post employment benets - - 1,600 1,600 14,889 8,218
Meeting fee - - 345 225 - -
Reimbursable expenses
Motor vehicles expenses - - - - 15,501 16,898
Medical expenses - - 224 286 6,008 7,471
14,456 14,456 33,260 33,202 249,419 288,376
Number of persons 1 1 2 2 73 79
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 nancial 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 and Engineering, Procurement and Construction Contracting.
Appliances Division Manufacturing, assembling and distribution of Refrigerators, Air conditioners, Deep Freezes,
Microwave ovens, Washing Machines, Water Dispensers and other Home Appliances
Power Division Appliances Division Total

2018 2017 2018 2017 2018 2017
Revenue 11,714,746 14,591,864 15,468,152 15,637,239 27,182,898 30,229,103

Finance cost 688,585 636,799 287,862 284,249 976,447 921,048
Depreciation and amortization 393,077 423,324 458,027 458,602 851,104 881,926

Segment prot before tax 279,840 545,397 239,851 1,087,388 519,691 1,632,785
Segment assets 19,668,173 18,731,142 21,396,929 16,023,465 41,065,102 34,754,607

2018 2017
Rupees '000' Rupees '000'
52.1 Reconciliation of segment prot

Total prot for reportable segments 519,691 1,632,785
Un-allocated other expenses (26,145) (120,830)
52.2 Reconciliation of segment assets

Total assets for reportable segments 41,065,102 34,754,607
Other corporate assets 3,161,684 2,294,441
Total assets 44,226,786 37,049,048
52.3 Information about major customers

Revenue derived from PEL Marketing (Private) Limited 14,159,484 14,008,319
Revenue derived from Multan Electric Power Company 2,650,670 -
53 EMPLOYEES PROVIDENT FUND TRUST
The following information is based on the un-audited nancial statements of the Pak Elektron Limited Employees Provident
Fund Trust for the year ended December 31, 2018.
2018 2017
Size of the fund - total assets Rupees '000' 389,017 401,413

Fair value of investments Rupees '000' 351,027 356,969
Percentage of investments made % age 90.23 88.93
The break-up of investments is as follows:
2018 2017
Rupees '000' % age Rupees '000' % age
Listed equity collective investment schemes - - 148,830 41.69

Government securities 118,131 33.65 105,890 29.66
Deposit accounts with commercial banks 232,896 66.35 102,249 28.64
351,027 100.00 356,969 100.00
54 PLANT CAPACITY AND ACTUAL PRODUCTION
2018 2017
Actual Actual
Annual production Annual production
production during the production during the
Unit capacity year capacity year
Transformers/Power Transformers MVA 7,000 2,397 7,000 3,239

Switch gears Nos. 12,000 4,805 12,000 3,318
Energy meters Nos. 1,700,000 826,007 1,700,000 1,045,231
Air conditioners Tonnes 200,000 103,220 200,000 139,396
Refrigerators/deep freezers Cfts. 6,950,000 5,075,992 6,950,000 5,608,735
Microwave ovens Litres 2,500,000 1,945,097 2,500,000 2,072,617
LED TVs Sets 200,000 24,190 - -
Washing machines Kgs 50,000 7,005 - -
54.1 Under utilization of capacity is mainly attributable to consumer demand.

55 NUMBER OF EMPLOYEES
Manufacturing facilities Area ofces

2018 2017 2018 2017
Total number of employees 4,792 4,889 46 107
Average number of employees 4,994 4,029 113 767
56 RECLASSIFICATIONS
The following have been reclassied for compliance with Fourth Schedule to the Companies Act, 2017.
Particulars From To 2018 2017
Unclaimed dividend Trade and other payables Statement of Financial Position 18,650 12,766
57 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 nancial statements.
58 GENERAL
58.1 Figures have been rounded off to the nearest thousands.
58.2 Comparative gures have been rearranged and reclassied, where necessary, for the purpose of comparison. However, there
were no signicant reclassications during the year other than those referred to in note 56.

K Annual General
Meeting
K 02 Pak Elektron Limited
Notice of Annual General Meeting

Notice is hereby given that the 63rd Annual General Meeting of Shareholders of Pak Elektron Limited
will be held on Friday, April 26 , 2019 at 11:30 A.M. at Factory Premises, 14-KM. Ferozepur Road,
Lahore to transact the following business:-
1. To confirm the minutes of Last Annual General Meeting held on April 25, 2018.
2. To receive and adopt the Annual Audited Accounts of the Company for the year
ended December 31, 2018 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

April 04, 2019 Company Secretary
Notes:
1. Share Transfer Books of the Company will remain closed from April 20, 2019 to April
26, 2019 (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 April 19, 2019 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,
2018 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 2018 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.
11. ATTENDANCE OF MINORITY SHAREHOLDERS

All minority shareholders of the Company are encouraged to attend the Annual General Meeting.
12. PRESENCE OF CHAIRMAN OF AUDIT COMMITTEE

The chairman of the Audit Committee will be present at the annual general meeting to respond
to questions on audit committee’s activities and matter within the scope of audit committee’s
responsibilities.
Form of Proxy
63RD 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 63rd Annual General Meeting of the Company to be held on April 26, 2019 at factory premises, 14-Km,
Ferozepur Road, Lahore at 11:30 A.M. and at every adjournment thereof, if any.
A witness my / our hand (s) this day of 2019.
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

17 - Aziz Avenue, Canal Bank,
Gulberg-V, Lahore.
2019
AFFIX
CORRECT
POSTAGE
The Company Secretary

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

Pel 2018

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Innovating today

for a better tomorrow..

PEL recognizes the importance of consumer-driven product

Best Corporate and Sustainability

2013 2014 2015 2016 2017 2018

APPLIANCES DIVISION 27,276

POWER DIVISION 11,715

MARKET VALUE PER SHARE BREAK-UP VALUE PER SHARE

Share capital and reserves

79.17% Cost of sales

Striving for Excellence in Corporate

UNRESERVED COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING

ADOPTION AND STATEMENT OF ADHERENCE WITH THE INTERNATIONAL INTEGRATED

Calendar Of Events 2018

Since its inception, PEL has always been contributing

Entry of PEL Deep Freezers in retail market is

POWER TRANSFORMERS ENERGY METER

• Qatar • Tanzania • Oman • Bulgaria • Tajikistan

PEL’s Journey Through Time

4th CSR National

Launched of 4K Coloron LED

2012 2013 2014 2015 2016

AUDIT COMMITTEE BANKERS

NATIONAL TAX NO. (NTN) ISLAMABAD CHINA

SALES OFFICES SERVICE CENTERS

To focus on personal development of

To promote good governance,

STATEMENT OF ETHICS AND BUSINESS PRACTICES CODE OF CONDUCT

THE FOUR SEASONS / THE MEADOWS

KOHINOOR INDUSTRIES LIMITED

RED COMMUNICATION ARTS (PRIVATE) LIMITED

SARITOW SPINNING MILLS LIMITED

KOHINOOR ENERGY LIMITED

which includes performance evaluation and 400,000

personnel in each department. 200,000

RETIREMENT BENEFITS 100,000

PEL has put in place a retirement benet plan 50,000

for its employees, in the form of an approved -

Trust”. All employees who have completed a

Size of the fund as December 31, 2018 stood 29.66%

Sr. GM Sales Manager

Signicant Factors Affecting the

These factors determine • General The Company keeps a close

the economy or a certain • Political changes in regulations and

These factors are • Increase in Decline in general economic

business and have • Rupee

These factors scrutinize • Customers have The Company continuously

demographic intensive changes there in and

These factors pertain to • Energy efcient The Company recognizes

operations of the industry popularity makes signicant

These factors include laws, • Companies Act, The Company has a

respective elds as well as

These factors include all • Climate change Increase in average

determined by the expected to cause increase

Effect of Seasonality on Business

Local vs Imported Raw Material and

during the year would have had an estimated Local 35%

impact of approximately Rs. 126 million on the

Signicant Changes from Prior Year

Objectives and Strategies

Relevant term Objective Strategies KPI's monitored

Short Term Product innovation and Improve existing • Improved product