NURICON PETROSERVICES (PVT) LIMITED KARACHI Financial Statements For the year ended June 30, 2016c ' §.M.REHAN & CO HARTERED ACCOUNTANTS AUDITORS’ REPORT TO THE MEMBERS. We have audited the annexed balance sheet of NURICON PETROSERVICES (PVT) LIMITED (‘the Company”) as at June 30, 2016 and the related profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we hhave obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our aut. It is the responsibilty of the company’s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibilty is to express an opinion on these statements based on our audit. ‘We conducted our audit in accordance with the auditing standards as applicable in Pakistan, These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence ‘supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our pinion and, after due verification, we report that: @) in our opinion, proper books of accounts have been kept by the company as required by the Companies Ordinance, 1984; b) in our opinion: i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently appli li) the expenditure incurred during the year was for the purpose of the company’s business; and li) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the company; ©) nour opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the ‘manner so required and respectively give a true and fair view of the state of the company’s affairs as at June 30, 2016 and of the Loss, its cash flows and changes in equity for the year then ended; and ©) _imour opinion no Zakat was deductible at source under the Zakat and Ushr Ordinance, a ‘S. M. REHAN & CO Chartered Accountants S. M, RehanNuricon Petroservices (Pvt) Limited Balance Sheet As at June 30, 2016 ASSETS Tangible fixed assets Property plant and equipments, In-tangible assets Softwares Current assets Trade debts Advances Deposits and prepayments Other receivables Cash & bank balances Total assets EQUITY & LIABILITIES Share capital & reserves ‘Share Capital Unappropriated profit Long term loan LUabilties against assets subject to finance lease Current liabilities ‘Trade and other payables Current maturity of lease liabilities Provision for taxation Contingencies and commitments Total equity and liabilities Note 3 eaNan 10 at 412 413 a2 15 2016 2015 Rupees Rupees 41,373,609 41,228,093 433,282 618,975 113,207,878 | [164,808,194 175,030,897 | | 101,459,565 16,965,953 | | 22,440,928 2,807,798 6,559,225 48,651,698 | |__ 45,879,186 356,674,225 341,148,098 395,481,116 362,996 166_ 1,588,000 1,588,000 228,039,977 _267,243,197 229,627,877 268,831,197 18,000,000 18,000,000 755,258 123,283 5,937,233 8,980,801 489,712 1,053,712 143,670,936 | |_86,007,173 150,097,881 96,041,686 398,481,116 _ 382,996 166 4 ‘The annexed notes form an integral part of these financial statements ist ee Aprerenry DIRECTORos Nuricon Petroservices (Pvt) Limited Profit and Loss Account For the year ended June 30, 2016 2016 2015 Note Rupees Rupees Receipts 592,715,073 967,411,154 Less: Cost of receipts 505,387,350 _646,128,689, Gross Profit 87,327,723 321,282,465 Service revenue 14,633,911 __ 26,710,045 102,167,634 347,992,510 Operating expenses ‘Administrative expense 16 {86,065,401 | [ 75,783,407 Financial charges 17 |__2,609,707 | |_ 3,759,044 88,675,108 _ 79,542,451, 13,492,527 268,450,059 (Other income 18 4,968,016 351,673 Profit before taxation 18,460,543 268,801,732 Taxation 19 __ (57,663,763) _(86,007,173) Proft/(Loss) after taxation 39,203,221) 182,794,559 7. ae “The annexed notes form an integral part of these financial statements mong Biweerf CHIEF EXECUTIVE OFFICER DIRECTOR‘Nuricon Petroservices (Pvt) Limited Cash Flow Statement For the year ended June 30, 2016 2016 2015 Rupees Rupees CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation 18,460,543 268,801,732 Adjustments for: Depriciation 2,350,751 2,794,477 ‘Amortization 185,693 175275 75996.987 271,771,484 Changes in operating assets/liabilities (ncrease) / decrease in operating assets Trade debts S601 315 | [140,681 550) @ Advances (42/915,856) 611,191 Deposits and prepayments 5,474,975 | | (11,148,530) Other receivables 3,751,427 | | (5,108,049) Increase / (decrease) in operating liabilities Trade and other payables 3,043,568] |__3,418,810 44,868,293 (152,908,168) Income tax paid 60,655,476) __ (86,876,885) Net cash flows from operating activites 5,209,804 — 32,034,431 ‘CASH FLOW FROM INVESTING ACTIVITIES Capes ependure 395,267) (514,500) Net cash flows from investing activites (695267) (614500) ‘CASH FLOW FROM FINANCING ACTIVITIES Payments against assets subject to finance lease Cem] amon Net cash flows from financing activities —Gios7.025) (800,071) Net increase in cash and cash equivalents ae Sie Cash and bank balances at the beginning ofthe year 45,879,186 __ 16,159,326 e Cash and bank balances at the end of the year 46,661,698 45,879,196 ‘The annexed notes form an integral part of these financial statements —- Reveon] CHIEF EXECUTIVE OFFICER DIRECTORNuricon Petroservices (Pvt) Limited ‘Statement of Changes in Equity For the year ended June 30, 2016 Balance as at 30 June 2014 Profit for the year Balance as at 30 June 2015 Loss for the year Balance as at 30 June 2016 Issued, subscribed a U@PPropriated Total paidup capital pee 1,588,000 84,445,638 86,036,638 e| 182,794,559 182,794,559 "1,588,000 267,243,197 265,831,197 : (39,203,221) (39,203,221) 2588, 000_ —338,039,977- 339,627, 577- we ‘The annexed notes form an integral part of these financial statements (CHIEF EXECUTIVE OFFICER Borreeny DIRECTORNURICON PETROSERVICES (PVT) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2016 2a 2.2 23 STATUS AND NATURE OF BUSINESS ‘The company is a private limited company incorporated in Pakistan under Companies Ordinance, 1984. The principal activity of the company is to execute contracts and provide oil field and mud engineering services, biostratigraphic and corrosion engineering services. The registered office of the Company is situated at 4th Floor, Mubarak Manzi! 39 Garden road Saddar, Karachi. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‘Statement of compliance ‘These financial statements have been prepared in accordance with approved accounting standards, as applicable in Pakistan. Approved Accounting Standards comprise of Accounting and Financial Reporting Standard for Medium-Sized Entities (MSEs) issued by the Institute of Chartered Accountants of Pakistan and provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail Basis of Preparation ‘These financial statements have been prepared on the basis of ‘historical cost convention’. Use of estimates ‘The preparation of financial statements in conformity with approved accounting standards requires management to make judgment, estimates and assumptions that affect the application of policies and reported amourits of assets and liablities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of ‘making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates ‘and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised, if the revision affect ‘only that period, or in the period of the revision and future periods if the revision affects both ‘current and future periods. Property, plant and equipment ‘Owned Fixed assets are stated at cost less accumulated depreciation except freehold land and capital work-in-progress, which are stated at cost. Depreciation is charged to income using the reducing balance method at the rates reflected in the relevant note to fixed assets. Depreciation on additions is charged on the basis of whole year. Whereas no depreciation is. Charged on fixed assets disposed off curing the year. Residual values useful lives and methods OF deprecation are reviewed at each balance sheet date and adjusted, if expectations cfr ‘ignficanty from previous estimates. ay 7 Brsert CHIEF EXECUTIVE DIRECTOR25 26 f 27 2.8 Useful lives are determined by the management based on expected usage of asset, expected physical wear and tear, technical and commerdal obsolescence, legal and similar limits on the Use of the assets and other similar factors. Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalized. Gains or losses on disposal of assets are included in curent income. Expenditure incurred subsequert to the initial acquisition of assets is capitalized only when it increases the future economic lives embodied in the items of property, plant and equipment. Leased Leased assets in terms of which the Company assumes substantially all the risks and rewards Of ownership are dassified as finance lease. Assets held under finance lease are accounted for by recording the assets and the corresponding liability there against. The amount capitalized is determined on the basis of discounted value of total minimum lease payments. Financial ‘charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of change on the outstanding liability. Depreciation is charged on leased assets on a basis, similar to that of owned assets. Staff retirement benefits ‘The company operates provident fund scheme covering all permanent employees, Equal monthly contributions are made both by the company and employee to the fund. ‘Trade debts and other receivables Trade debts and other receivables are stated at original invoice amount as reduced by appropriate provision for debts / receivables considered to be doubtful. Bad debts are written off when identified. Provisions ‘A provision is recognized in the balance sheet when the company has legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits wil be required to settle the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Trade payables, accrued and other payables LLabilities for trade and other amounts payable are carried at cost, which is the fair value of the ‘consideration to be paid in the future for goods and services, whether or not billed to the ‘company. Taxation Current ‘The charge, for current taxation is based on taxable income at the current rates of taxation after taking into account applicable tax credits, rebates and exemptions available, if any. —e eed CHIEF EXECUTIVE DIRECTOR2.9 2.10 2an Deferred Deferred tax is accounted for using the balance sheet liability method on all temporary differences arising between the tax bases of assets and liablities and their carrying amounts in the financial statements. Deferred tax liabilities ate generally recognized for all taxable ‘temporary differences and deferred tax assets are recognized to the extent that itis probable that tarable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized. “The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that itis no longer probable that sufficient taxable prof will be available to allow all or part for the deferred tax asset to be utilized. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the profit and loss account. ‘The charge for current taxation is based on taxable income at the current rates of taxation after taking into account applicable tax credits, rebates and exemptions available, if any. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will low to the Company and the revenue can be measured reliably. Revenue is measured at the feir value Of the consideration received or receivable. Revenue is recorded on rendering of services. Income on investments, if any, is recorded on accruel basis, Profit from bank accounts, if any, is recognized on a time proportion basis. Financial instruments All financial assets and liabilities are recognized at the time when the company becomes a party to the contractual provisions of the instruments. All the finandal assets are derecognized at the time when the company loses control of contractual rights that comprise the financial assets. All financial liabilities are derecognized at the time when they are extinguished i. when the obligation specified in the contract is discharged, cancelled, or expired. Any gain or loss on recognition / de-recognition of the financial assets and liabilities is taken to profit and loss account currently. Financial assets and financial liabilities are intially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured at fair value, amortized cost or cost, as the case may be. Foreign currency translation Foregn creny trnsacions we vandeted into npees at the ries of exange copreinsn Use prevang cw the de of tonsacions Honey sets a lites foreign currencies are translated into rupees at the rates of exchange approximating those Prevailing at the balance sheet date. Exchange gains and losses are induded in the profit and Eee aie. Normnondary frapy carony anes an falls, wich re Card Feo cin eran cena re aed argues at teas of change oss on te ao warcaon oe fia wey CHIEF EXECUTIVE DIRECTOR242 243 214 245 Offsetting of financial assets and financial liabilities Financial assets and financial liabilities are offset and the net amount is reported in the financial statements only when the Company has legally enforceable right to offset the recognized ‘amounts and the Company intends elther to settle on a net basis, or to realize the assets or to settle the liabilities simultaneously. Impairment ‘The carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists the ‘asset's recoverable amount is estimated in order to determine the extent of the impairment loss if any. Impairment losses are recognized as expense in income and expenditure account Cash and cash equivalents ‘Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents include cash in hand, deposits held with banks, ‘other short term highly liquid investments that are readily convertible to known amount of cash ‘and which are subject to an insignificant risk of change in value. Related party transactions “ect rBolsd wesdrves ca hu revel cure 6 Wn eri Lae ean erento ar ok te ea owe al omnes a Ula eae area ven lua ee w adriobe S97 ee CHIEF EXECUTIVE DIRECTOR» 3. PROPERTY PLANT AND EQUIPMENTS WRITTEN COST DEPRECIATION DOWN VALUE ‘sat 01 Additionsy __Asat 30% | Asat Ol Fortheyear/ Asat 30 ‘As at 30 July 2015 (Transfer) __June 2016 July 2015 snsfer) June 2016 __June 2016 OWNED ASSETS Lease hold Land, 25,500,000 = 25,500,000 - : : - 25,500,000 Building on leasehold land 7,188,912 7,188,912 10% 2,472,267 471,665 2,943,932 4,244,980 Office infrastructure 813,545 2813,545 10% 762,471 «205,107 ‘967,578 1,845,967 Lab equipments 395,436 395,436 10% 374,604 2,083 376,687 18,749 Electric equipments 1,141,012 170,940 1,311,952 10% 676,349 50,740 727,089 584,862 Furniture and fixture 2,078,990 2,078,990 10% 1,500,175 57,882 1,558,057 520,933, Rectifier 12,000 12,000 10% 10,541 146 10,687 1,313 Generator 1,278,000 1,278,000 10% 752,121 52,588 804,709 473,291 Airconditioner 1,033,091, 1,033,091 10% 398,563, 63,453 462,016 571,075 Vehicles 9,929,446 - 8,793,446 20% 7,297,056 299,278 6,524,087 2,269,359 (1,136,000) (1,072,247) Computers 1,518,290 288,080 1,806,370 30% 777,002 —265,505 1,042,507 763,863 52,888,722 459,020 52,211,742 15,021,149 1,468,447 15,417,349 36,794,393 (1,136,000) (1,072,247) LEASED ASSETS Vehicles 5,701,500 2,100,000 7,801,500 20% 2,339,980 882,304 3,222,284 4,579,216 5,701,500 2,100,000 7,801,500 2,339,980 882,304 —_—3,222,284 4,579,216 2016 Rupees 58,590,222 2,559,020 _ 60,013,242 17,361,129 2,350,751 _ 18,639,633 _ 41,373,609 (4,136,000) (4,072,247) 2015 Rupees 58,435,722 154,500 58,590,222 14,566,652 2,794,477 17,361,129 _ 41,229,093 4, INTANGIBLE ASSETS (Owned Assets) cost Rate AMORTIZATION DOWN VALUE Tsat OF —Additions]__Asat 30 % —Asat 01 Fortheyeary _Asat 30 As at 30 July 2015 __(Transfer)_June 2016 July 2015 ransfer) June 2016 _June 2016 Softwares 900,000 900,000 30% 281,025 185,693 466,718 433,282 2016 ——Rupees 900,000 - 900,000 281,025 185,693 __466,718 433,282 2015 Rupees 540,000 360,000 —_900,000 105,750 175,275 281,025 618,975 Rerun (CHIEF EXECUTIVE OFFICER DIRECTOR oe10 a ma 2016 201s Rupees Rupees ‘TRADE DEBTS - Considered good 113207879 _ 164,209,194 [ADVANCES ‘Advances - Unsecured considered good To staf for expense 4439585 2619859 - Loan te employees 11ge4e14 1,665,500 + Advanee against Serdces 3,797,016 - “Tasation 157305,682_ __97,174206 173001897 TOL AS9.565 “his includes advance to decors Rs. tl (2015: NIL) DEPOSITS AND PREPAYMENTS Prepayments 542667 320.982 epost 16423285 22,119,986 iss eons OTHER RECEIVABLES. Sales toe 2AI9.73L 2,885,554 ‘Due from associated companies and related party Premier Tubular Inspection Servces (Pt) Limited 1,650 11,650 tro Services - GMBH 376417 661.951 Sipron Petotols (Pt Ls. ae ZBI ——6550.205. ‘CASH & BANK BALANCES Cash in hand 600,000 600,000, Cash at bank - Current accounts 48,061,598 _ 45,275,185 isaratiee ‘SHARE CAPITAL [Authorlsed capital 20,000 (2015: 20,000) Orenary shares of R.100/-e&ch 2,900,000. __ 2,000,900 {Issued subscribed & paid-up capital 15,880 (2015: 15,880) Orenary shares of Rs, 100/- each ful paid in cash 1,588,000, __1,586,00 {LONG TERM LOAN, From assoclated company-SipronPetrotools (Pvt) Ltd. (14.1) 13.900,000, __:8,00900 “This represents unsecured and interest fee Ioan and payment wil be due on or before June 30, 2018. However balloon payments atthe sole dacretion of associated company are permisle oy ee Brand (CHIEF EXECUTIVE OFFICER biREcTORaa 6 2016 2015 Rupees Rupees LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE ‘The amount of future rentals and periods during which they fall dve are as under: Due within cre year es232¢ 48.921 Due ater ene year bu within thre years 529269 ‘26,165, 620.593 1.315.086, Less: Francia charges 375.625) __ (138,051) Present value of mrimum lease payments 1.243970 1,176,995, Las: Curent potion shown under curent abies 999.712) __(053712 759.258 123,285 “These represent fiance leese entered into with easing company for lease of veri and Generator. The pera ease ‘payments Include bul in at of markup 18% to 28% (2015 18% to 28%) pr annum wich was used as éscountng factor. The lessee has the open to purchase the anes upon expr of Ue respective lease tems. Lease Fetal ayment are secured by way of demand promissory notes and persenal quarartees of directors, “TRADE AND OTHER PAYABLES ‘Trade Credtors 2,235,704 2,050,400 Accrued Labi 2543138 5,150,605 ‘Advance from catomers 234,000 Sales tax payable 12.260 Income tox payable 15088 38.985 ‘Due to associated company- ‘Sorin Petrotoos (Pt is, 44137303, __1354471 3.957.235, 950,801 LETTER OF GUARANTEE AND OVERDRAFT FACILITY [A commercal bank has sancioned leter of guarantee ard overdrafts to the company and its assdates Companies. Interchangeable group brit avait the Nurcon group compares in respect of ltr of guarantees Rs 300 mln (2015: 300 mien) which remaied unutled by te company. The mark-up rate applcale to overcaf fact is 3 North KIBOR pus 1.5% per annum payacle on quarterly bass. In respect eter of gurartee 0.10% commision ie payabi query to the bank The Group Im wtachangeabe of overra act s RS. 59 (2015 : 59 SMI) ailn which remained uted by te company. The pinch srepyaéle on demand. The fecity secured against Equtable Mortgage of associated compan propery and assignment agreement and equtable morgage on (rectors personal property and personal guarantees ofl rectors of the Group of Companies. ‘CONTINGENCIES AND COMMITMENTS Contingencies ‘The bank MAS Qven guarantee on behalf of the company amouning to Re, 163,663,290 (2015 + Re 152,184,886). Commitments conn — a (TER EXECUTIVE OFFICER DIRECTORADMINISTRATIVE EXPENSES Decors remuneration Sais, wages & benefits (note 16.1) Traveling ‘Transportation Vehicle up keep Communion Rent, Rates & Taxes Beatie 8 Gas charges Registration & Subscription Entertainment Tender fee Business promotions Acvertsement Printing & stationary Photastat Repats & mantenance ‘Auditors remuneration (note no. 16:2) Legal & Professional Exp General expenses Property & Professional tax Insirance Bod debts Weiten off Depreciation eorzaion 2016 2015 Rupees Rupees 5.664035 5,499,002 33,382,691 25,148,075 91107;324 5,063,933, 1587702 950919 6367204 6 307,196, 3.676393 2504,762 96201 26390095 2am 2.348.451 355658362870 B7a7713—4,39}081 ‘ 19850 4503373 1,668,157 - 12,000 2191677 2,093,058, : 16141 8205768 5430,655, 397500 397,500 516.710 1,326,133 1ainsas “sige 10/450 46,103, 936,575 811,680 57,659, - 2350751 2,794477 195.693 __'175275 Bess son Fares 907 6:1 The indudes amount Rs 1,529,854 (2015: RS. 1,222,982) in respect of staff rerement benefits 16.2 ” ‘Audtor'emunerations sud fee Tax fee FINANCIAL CHARGES ‘Bank charges Markup on shot term borrowings Lease financial charges 2 (CHIEF EXECUTIVE OFFICER 313000 © 318,00 79500 79,500 3975500. 397,500 2.375786 3224408 3597 6,904 465,646 309,707. 3759.04 Breerenp biREcTOR19 21 22 2016 2015 RUPEES RUPEES OTHER INCOME Exchange gain/(loss) 4,917,465 351,673 Gain on disposal of assets 50,550 - 7968,016 ESKIA ‘TAXATION Current year 57,663,763_ _ 86,007,173 ‘TRANSACTIONS WITH RELATED PARTIES ‘The related parties comprise of directors and key management personnel, Transactions with related Parties are made under normal commercial terms and conditions. ‘The related party status of outstanding balances at June 30, 2016 Is included in the respective notes to the financial statements. REMUNERATION OF CHIEF EXECUTIVE AND DIRECTORS ‘The aggregate amounts charged in the accounts for the year for remuneration and benefits to the directors of the Company were as follows: DIRECTORS 2016 2015 RUPEES RUPEES ‘Managerial remuneration 5,040,000 3,296,165, Ubilities 1,051,074 1,647,835, Medical Reimbursements - 504,042 SOOO 5,448,047 Number of persons 2 2 PROVIDENT FUND Disclosure with regards to provident fund Size of the fundytrust 6,300,826 5,259,561, Cost of investment made - 7 Percentage of investment made N/A A Fair value of investments : i ‘The funds available were not invested any where and these are kept in current accounts, According to the Trustees funds of provident fund/trust have been kept in accordance with the provisions of section 227 of the Ordinance (current account with scheduled bank) and were a invested. aoe Perry) (CHIEF EXECUTIVE OFFICER DIRECTOR23.4 @ () 23.2 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURE Interest / mark-up rate risk management Interest/ mark-up rate is the risk that the value of a financial Instrument will fluctuate due to changes in the market interest/ mark-up rates. Sensitivity to interest/ mark-up rate risk arises from mismatches of financial assets ‘and financial labilties 2016 Mark-up / interest beari |_|, fone One month One yearto up /interest Total month toone year _fiveyears bearing __ Rupees Financial Assets Trade debts - - = 113,207,879 113,207,879 Advances - - = 1,439,585 1,439,585 Deposits and prepayments : - = 16,423,286 16,423,286 Other receivables - - = 2,807,798 2,807,798 CCash & bank balances : = = 48,661,698 48,661,698, = = = 187,540,246 162,540,246 Financial Liabilities Lease lablity - 489,712 755,258 : 1,244,370 ‘Trade and other payables : = 5,937,233 5,937,233 z FO 712 755258 5,937,233 7,182,203, On balance sheet gap - 2016 (a) E (489,712) (755,258) 176,603,013 _175,358,04 On balance sheet gap - 2015 (a) = 1,053,712) (123,283) 06,649 231,829,654 On balance sheet gap represents the net amounts of on balance sheet items. Effective rates of return / mark-up on financial assets and liabilities are as follows: Off balance sheet items are not exposed to mark-up / interest rate risk. Interest/ mark-up rates per annum on financial assets and 2015 2014 Finan Ni rT Financial liabilities Lease liabilty 18%-22% 18 %-22% Credit risk exposure and concentration of credit risk (Credit risk isthe risk wich arises with the possibilty that one party to a financial instrument will ail to discharge its obligations and cause the other party to incur a financial loss. The company attempts to control credit risk by monitoring credit exposure, limiting transactions with specific counterparties and continually assessing the creditworthiness of counterparties. Concentrations of credit risk arise when a number of counterparties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations of credit risk indicate the relative sensitivity of the Company's performance to developments affecting a particular industry. Le Brey a CHIEF EXECUTIVE OFFICER DIRECTOR» 23.5 24 26 7 Liquidity risk Liquicity risk is the risk that the company will be unable to meet its funding requirements, To guard against the risk, the company has diversified funding sources and assets are managed with liquidity in mind, maintaining a healthy balance of cash and cash equivalents. The maturity profile is monitored to ensure adequate liquidity is maintained. Foreign exchange risk management Foreign currency risk arises mainly where receivables and payables exists due to transactions entered into foreign currencies. Payables exposed to foreign currency risks are usually covered through forward foreign exchange Contracts on the basis of management's assessment of fluctuation in exchange rates. Fair value of financial instruments Fair value Is amount for which an asset could be exchanged, or a liabilty settled, between knowledgeable willing parties in an arms length transaction. Carrying value of all the financial instruments reflected in the financial statements approximate their respective fair values. Consequently, the differences may arise between the carrying values and the fair value estimates. Underlying the definition of fair value Is the presumption that the company Is a going concern without any Intention or requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms. DEFERRED TAXATION “The major portion of income of the company are finalised under section 169 (Final Tax Regime). Accordingly the timing difference between accounting income and taxable income are not reversible in the foreseeable future. Therefore, no provision of deferred tax has been made. ‘CORRESPONDING FIGURES. s.143,835/- have been adjusted from Note No. 8 - Due from associated companies and related parties to Note No. 13 = Due to associated companies to faclitate comparisons. NUMBER OF EMPLOYEES “The number of employees as at balance sheet date were 33 (2015: 29). DATE OF AUTHORISATION ‘These financial statements were authorised for issue in the Board of Director's meeting held on GENERAL ‘he figures have been rounded off to the nearest. "Sy ee Bovey) (CHIEF EXECUTIVE OFFICER DIRECTOR