growth through energy - hub power

growth through energy

THE HUB POWER COMPANY LIMITED

UNAUDITED QUARTERLY FINANCIAL STATEMENTS

FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011

CONTENTS THE HUB POWER COMPANY LIMITED Company Information 1 Report of the Directors 3

Condensed Interim Unconsolidated Profit & Loss Account 5 Condensed Interim Unconsolidated Statement of 6 Comprehensive Income

Condensed Interim Unconsolidated Balance Sheet 7

Condensed Interim Unconsolidated Cash Flow Statement 8

Condensed Interim Unconsolidated Statement of Changes 9 in Equity.

Notes to the Condensed Interim Unconsolidated Financial 10 Statements

THE HUB POWER COMPANY LIMITED and its Subsidiary Company

Report of the Directors on the Consolidated Financial Statements 13

Condensed Interim Consolidated Profit & Loss Account 14

Condensed Interim Consolidated Statement of 15 Comprehensive Income

Condensed Interim Consolidated Balance Sheet 16

Condensed Interim Consolidated Cash Flow Statement 17

Condensed Interim Consolidated Statement of 18 Changes in Equity

Notes to the Condensed Interim Consolidated 19 Financial Statements

COMPANY INFORMATION

BOARD OF DIRECTORS: Mr. Mohamed A. Alireza H.I. Chairman Dr. Fereydoon Abtahi Mr. Yousuf A. Alireza Mr. Robin A. Bramley Dr. Asif A. Brohi NBP Nominee Mr. Malcolm P. Clampin

Mr. Taufique Habib Mr. Arshad A. Hashmi Mr. Qaiser Javed Mr. Ahmad Raza Khan GOB Nominee Mr. Ali Munir Mr. Philippe F. A. L. Salmon

Mr. S. Nizam A. Shah Mr. Zafar Iqbal Sobani Mr. M. Ashraf Tumbi

MANAGEMENT: Zafar Iqbal Sobani Chief Executive Abdul Nasir Chief Financial Officer

Huma Pasha Chief Internal Auditor Abdul Vakil Chief Technical Officer Shamsul Islam Company Secretary

Wasif Mustafa Khan Head of Projects Lesley A. Middlecoat Sr. Manager HR, PR & Admin

Accounts Banks: Allied Bank of Pakistan

Askari Bank Limited Bank Al-Falah Limited Bank Al-Habib Limited

Bank of Punjab Bank Islami Pakistan Limited Barclays Bank PLC Pakistan Burj Bank Limited

Citibank N.A. Karachi. Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank Limited Meezan Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited

Pak Brunei investment Company Limited Pak China Investment Company Limited Pak Kuwait Investment Company (Pvt) Ltd.,

Samba Bank Limited Standard Chartered Bank (Pakistan) Ltd.,

Sumitomo Mitsui Banking Corp. Europe Ltd., London United Bank Limited INTER-CREDITOR AGENTS: National Bank of Pakistan, Habib Bank Limited Allied Bank Limited NIB Bank Limited

1

COMPANY INFORMATION

REGISTERED OFFICE: C/o. Famco Associates (Pvt) Ltd., 12, Capital Shopping Centre, Second Floor, G-11 Markaz, Islamabad HEAD OFFICE: 3rd Floor, Islamic Chamber of Commerce Bldg; ST-2/A, Block 9, Clifton, P. O. Box No. 13841, Karachi-75600 Email : [email protected] Website: http://www.hubpower.com LEGAL ADVISORS: Rizvi, Isa, Afridi & Angell AUDITORS: M. Yousuf Adil Saleem & Co. REGISTRAR: Famco Associates (Pvt) Limited

2


THE HUB POWER COMPANY LIMITED Islamic Chamber Building

Block-9, Clifton P. O. Box 13841 , Karachi-75600

Tel: (21) 587 4677-86, Fax (21) 587 0397 Website: http://www.hubpower.com

REPORT OF THE DIRECTORS FOR THE QUARTER ENDED SEPTEMBER 30, 2011

The Board of Directors has pleasure in presenting the financial statements (unaudited) for the first quarter ended September 30, 2011.

The Hub Power Company Limited (the "Company") was incorporated in Pakistan on August 1, 1991 as a public limited company under the Companies Ordinance, 1984 (the "Ordinance"). The shares of the Company are listed on the Karachi, Lahore and Islamabad Stock Exchanges and its Global Depository Receipts are listed on the Luxembourg Stock Exchange. The principal activities of the Company are to develop, own, operate and maintain power stations. The Company owns an oil-fired power station with an installed net capacity of 1,200 MW at Mouza Kund, Hub, in Balochistan and an oil-fired power station with an installed net capacity of 214 MW oil-fired power station at Mouza Poong, Narowal in Punjab. The Company also has a 75% controlling interest in Laraib Energy Limited, a subsidiary company that is developing a 84 MW hydel power plant near the New Bong Escape, 8 km downstream of Mangla Dam in Azad Kashmir.

The Water and Power Development Authority (WAPDA), our customer for the Hub plant, continues to face financial difficulty and remains unable to meet its obligations under the Power Purchase Agreement (PPA). On the date of this Report an amount of Rs. 97.425 billion is outstanding against WAPDA, of this Rs. 89.733 billion is classified overdue (payable immediately). The Company is in constant follow-up with WAPDA and the Federa l Government for early release of the entire outstanding amounts.

WAPDA has not been able to provide its obligatory Letter of Credit to Hubco under the PPA for 2011-12 for an amount of Rs. 19.31 billion. WAPDA also did not provide the Letter of Credit for the year 2010-11 for the amount of Rs. 12.92 billion. In view of the foregoing, the obligations of WAPDA under our Power Purchase Agreement are secured through the Sovereign Guarantee from the Federal Government of Pakistan under the Implementation Agreement for the Hub plant.

As a result of WAPDA's outstanding receipts, the Company presently owes Rs. 81.231 billion to Pakistan State Oil (PSO) for RFO supplied to the Hub Power Plant of which Rs. 76.114 billion is classified as overdue. The Company's obligation to PSO remains covered by the Stand-by Letter of Credit of Rs. 8 billion provided to PSO under the Fuel Supply Agreement.

The National Transmission and Despatch Company Limited (NTDC), the power purchaser under the 2002 Power Pol icy, owes Hubco Rs. 8.428 billion on account of our Narowal Plant of which Rs. 6.025 billion is classified as overdue. NTDC's obligations are fully guaranteed by GOP through a Sovereign Guarantee under the Implementation Agreement for Narowa l.

Registered Office: Clo. Famco Associates (Pvt) Limited. 12, 2nd Floor, Cap~al Shopping Centre, Markaz G-11 , Islamabad Telephone No. 051-2220816 Fax No : 051-2220817

3

Due to WAPDA and NTDC delayed payments, the Company has to continue with its Running Finance Facilities. Despite t he challenges faced by the Company due to delayed payments, the Company continues to meet its obligations under all its financing documents.

During the review period the Hub Plant operated at an average load factor of 74% and an average complex availability (ACA) of 87%. Electricity sold to WAPDA was 2,012 GWh. Our Narowal Plant operated at an average load factor of 77% and an ACA of 77.5% Electricity sold to Wapda was 365.1 GWh.

The current quarter figures include t he results of Narowal plant after achieving commercial operations on April 21 , 2011. The revenue from Narowal plant is recognized on the basis of reference tari ff and any differential amount of revenue due to an agreed tariff adjustment wil l be recognized in the subsequent period.

The Company earned a net profit of Rs . 1,241 million during the quarter resulting in earnings per share of Rs. 1.07 compared to a net profit of Rs. 1,269 million and earnings per share of Rs. 1.10 in the corresponding quarter last year. The decrease is mainly due to higher financing costs and recognition of Narowal revenue on reference tariff.

The Directors in compliance with the requirements of the "Commission De Surveillance Du Secteur Financier, Societe de Bourse de Luxembourg SA", are pleased to confirm that to the best of their knowledge, the condensed interim financial statements for the quarter ended September 30, 2011 give a true and fair view of the assets, liabilities, financial position and financial results of the Company and are in conformity with approved accounting standards as applicable in Pakistan. Further, the aforementioned business overview includes a fair review of the development and performance of the Company together with the potential risks and uncertainties faced, if any.

Construction of Laraib Energy Limited 's trailblazing 84 MW hydropower generating complex downstream of the Mangla Dam in Azad Jammu & Kashmir continued during the year. The Project is targeted to achieve Commercial Operations by June 2013 which is the required commercia l operations date under the Power Pu rchase Agreement.

The Company continues to remain proactive in maintaining and expanding its Corporate Social Responsibility programme. Our focus is to support health and education programme particularly in t he areas where our plants are located in the provinces of Balochistan and Punjab.

The Directors' Report on Consolidated financial statements (un-audited) of The Hub Power Company Limited (the Company) and its Subsidiary Laraib Energy Limited (the Subsidiary) for the first quarter ended September 30, 2011 has been separately presented in this Report.

By Order of the Board

Registered Office: C/o. Famco Associates (Pvt) Limited, 12, 2nd Floor, Capijal Shopping Centre, Markaz G-11 , Islamabad Telephone No. 051-2220816 Fax No : 051-2220817

4


THE HUB POWER COMPANY LIMITED CONDENSED INTERIM UNCONSOLIDATED

PROFIT AND LOSS ACCOUNT (UNAUDITED) FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011

3 months ended

Sep 2011

Note (Rs. 'OOOs)

Turnover 40,718,344

Operating costs 4 (37,626,450)

GROSS PROFIT 3,09 1,894

Other income 14,825

General and administration expenses (87,317)

Finance costs 5 (I,778,743)

Workers' profit participation fund 6

PROFIT FOR THE PERIOD 1,240,659

Basic and diluted earnings per share (Rupees) 1.07

3 months ended

Sep 2010

(Rs. 'OOOs)

25,200,135

(23 ,274,031 )

1,926,104

9,824

{I 07,990)

(558,733)

1,269,205

1.10

The annexed notes fro m I to 15 form an integral part of these unconsolidated financial statements.

Taufique Habib

Director

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Profit for the period


STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011

3 months ended

Sep 2011 (Rs. 'OOOs)

1,240,659

Other comprehensive income for the period

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,240,659

The annexed notes from 1 to 15 form an integral part of these unconsolidated financial statements.

3 months ended


1,269,205

1.269,205

Taufique Habib

Director

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CONDENSED INTERIM UNCONSOLIDATED

BALANCE SHEET (UNAUDITED) AS AT SEPTEM BER 30, 2011

ASSETS

NON-CU RRENT ASSETS Fixed Assets

Property. plant and equipment Intangibles

Stores and spares Investment in subsidiary

Long term advance, deposits and prepayments

CURRENT ASSETS

Stores and spares Stock- in-trade Trade debts Advances, prepayments and other receivables Cash and bank balances

TOTAL ASSETS

EOUITY AND LIABILITIES

SHARE CAPITAL AND RESERVE

Share Capital Authorised

Issued, subscribed and paid-up

Revenue Reserve

Unappropriated profi t

NON-CU RRENT LIABILITIES

Long term loans Deferred liab ili ty - Gratuity

CU RRENT LIABILITI ES Trade and other payabJes Interest / mark-up accrued

Short term borrowings Current maturity of long term loans

COMMITMENTS AND CONTINGENCIES

TOTAL EQ UITY AND LIABILITIES

Note

7

8

9

10

Scp 2011

(Rs. 'OOOs)

48,312,09 1

5,688 637,023

4,034,36 1

47,393

386,9 19 1,179,92 1

108,65 7,238 1,092,547

1,004,874

11 2,3 21 ,499

165,358,055

12,000,000

11 ,57 1,544

19, 189,452

30,760,996

26,472,908

24,897

87,333 ,885 1,566,964

17, 157,37 1 2,041 ,034

-108,099,2)4

165,358,055

The annexed notes from 1 to 15 form an integral part of these unconsolidated fi nancial statements.

Jun 2011

(Rs. 'OOOs)

48 ,890,480

6,698

637,023 4,034,36 1

50,652

358,797

3,773,699 85,806,069

1,066,697 1,615,203

92,620,465

146,239,679

12,000,000

11 ,57 1,544

17,948,793

29,520,337

27,231 ,358

19,320

74, 177,088 1,596,824

11 ,682,276

2,0 12,476 89,468,664

146,239,679

Taufique Habib Director

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CASH FLOW STATEMENT (UNAUDITED) FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES


Adjustments for: Depreciation

Amortisation Gain on disposal of fixed assets

Staff gratuity Interest income Interest / mark·up Amortisation of transaction cost

Operating profit before working capital changes

Working capital changes

Cash (used in) /generated from operations

Interest received

Interest / mark·up paid

Net cash (used in) / generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Fixed capital expenditure

Proceeds from disposal of fixed assets Investment in subsidiary Long term advance, deposits and prepayments

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid Repayment of long term loans· Hub plant

Repayment of long term loans· Narowal plant

Net cash used in financing activities

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Note

12

3 months ended


1,240,659

671 ,443 1,010

5,577 (2,947)

1,721,752 12,432

3,649,926

(7,150,980)

(3,501,054)

1,680 (1,751,612)

(5,250,986)

(93 ,054)

3,259

(89,795)

(2,320)

(489,531) (252,792)

(744,643)

(6,085,424)

(10,067,073 )

(16,152,497)

The annexed notes from I to 15 form an integral part of these unconsolidated financial statements.

3 months ended Sep 2010

(Rs. 'OOOs)

1,269,205

428,492 826

(702)

3,529 (1 ,897)

508,979

2,208 ,432

1,236,334

3,444,766

1,251 (743,885)

2,702,132

(1 ,395,339)

805 (50 I ,720)

(55 ,043)

(1 ,951 ,297)

(3,078)

(489,531)

(492,609)

258,226

(5,934,285)

(5,676,059)


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CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)


Issued capital

Balance at the beginning of the period

Balance at the end of the period

Unappropriated profit


Total comprehensive income for the period

Transactions with owners in their capacity as owners

Note

3 months ended


11,571 ,544

11 ,571,544

17,948,793

1,240,659

3 months ended


11 ,571,544

11,571 ,544

18,309,733

1,269,205

Final dividend for the fi scal year 20 I 0-20 II proposed

@ Rs. 3 (2009-20 10: @ Rs. 2.50) per share 13 '--____ ----'1 LI __ ""(2-,-,8,,,9-:-,2,-,-8 8,...,6",,) 1 (2,892,886)

Balance at the end of the period 19,189,452

Total equity 30,760,996

The annexed notes from I to 15 form an integral part of these unconsolidated financial statements.

5

Tau fi que Habib

Director

16,686,052

28,257,596

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THE HUB POWER COMPANY LIMITED NOTES TO THE CONDENSED INTERIM

UNCONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011

I. THE COMPANY AND ITS OPERATIONS

The Hub Power Company Limited (the "Company") was incorporated in Pakistan on August I , 1991 as a public limited company under the Companies Ordinance, 1984 (the "Ordinance"). The shares of the Company are listed on the Karachi, Lahore and Islamabad Slack Exchanges and its Global Depository Receipts are listed on the Luxembourg Stock Exchange. The principal activities of the Company are to develop. own, operate and maintain power stations. The Company owns an oil-fired power station of 1,200 MW (net) in Balochistan (Hub plant) and a 214 MW (net) oil-fired power station in Punjab (Narowal plant). The Company also has a 75% controlling inlerest in Laraib Energy Limited, a subsidiary company which owns an under construction hydel power project of84 MW.

The current quarter results include the results of Narowal operations on the basis of reference tariff approved by National Electric Power Regulatory Authority (NEPRA). After achieving Commercial Operations on April 21, 2011 , the Company has filed an application with NEPRA for adjustment in tarifYand the differential amount of revenue due to tariff adjustment will be recognised in the subsequent period.

2. SIGNIFICANT ACCOUNTING POLIC IES

The accounting policies and methods of computation followed for the preparation of these condensed interim unconsolidated financial statements are same as those applied in preparing the unconsolidated financial statements for the year ended June 30, 201 1.

3. BASIS OF PREPARATION

4.

These unaudited condensed interim unconsolidated financial statements have been prepared in accordance with the requ irements of lAS 34 "Interim Financial Reporting" as applicable in Pakistan and are being submitted to the shareholders as required under Section 245 of the Ordinance.

J months ended J months ended

SCI120ll Sep 2010 Note (IU. '000.) (Rs. 'OOOs)

OPERATING COSTS

Fuel cost 35,819,339 21,904,312

Stores and spares 9,325

Operation & Maintenance 4.1 818,915 696,365

Insurance 175,203 122,099

Depreciation 665 ,320 423 ,307

Amortisat ion 41

Miscellaneous 138,307 127,948

37,626,450 23 ,274,031

4.1 This includes Rs. 756.910 million (Sep 20 10: Rs. 696.365 million) related to services rendered by an associated undertaking under the Operation & Main tenance Agreement for Hub plant.

3 months ended

Sep 2011

<IU. '000.)

J months ended

Sep 2010

(IU. '000.)

5. FINANCE COSTS

Hub plant Interest I mark-up on long tcnn loans

Mark-up on short tenn borrowings

Miscel1aneous finance costs

Narowal plant

Mark-up on long term loans Mark-up on short term borrowings

Amortisation of transaction cost Other finance costs

Laraib'.s investment

Mark-up on long term loans

Unwinding of discount on share premium payable Olher finance costs

Less: amount capitalised in the cost of qualifying assets - Narowal plant

6

200,712

326,460

29,376

556,548

838,896 217,611

12,432

6,817 1,075,756

138,073 451

7,915 146,439

1,778,743

1,778,743

245 ,921

263,058 25 ,460

534,439

717,235

--

15, 157

732,392

-15,048 9,243

24 ,291

1,29 1,122

(732,389)

558,733

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J months ended


3 monlhs ended

Sell 2010

(lb. 'OOOs)

6. WORKERS' PROFIT PARTICIPATION FUND

Provis ion for Workers' profit participation fund

Payment of Workers' profit participation fund recoverable from WAPDA

62,0))

(62,0)))

63 ,460

(63,460)

The Company is req uired to pay 5% of its profit to the Workers' profit participation fund (the "Fund"). However, such payment does not affect the

Company's overall profitability because after payment to the Fund, the Company bills this to WAPDA as a pass through item under the Power Purchase

Agreement (PPA).

Sep 2011 Jun 2011 Note (Rs. 'OOOs) (IU. '000.)

7. PROPERTY, PLANT AND EQUIPMENT

Operating property, plant and equipment

Capital work-in-progress

Plant bettermenlS (H ub plant)

Narowal plant

47,657.631

41,265

613,195 654,460

48,312 ,09 1

48,))7,053

II 37,751 I 515,676, 553,427

48,890,480

8. TRADE DEBTS - Secured

Considered good 8.1 108 ,657,238 85,806,069

8.1 This includes an amount of Rs. 90,362 million (J un 20 11 : Rs. 70,444 million) rece ivable from WAPDA and Rs . 4,851 million (Jun 2011 : Rs. 668 million) receivable from NTDC which are overdue but notnnpaired because the trade debts are secured by a guarantee from the Government of Pakistan under Implementat ion AgreemenlS. The overdue from W APDA carries mark-up at SBP discount rate plus 2% per annum

compounded semi-annually and the overdue from NTDC carries mark-up at a rate of 3 month KIBOR plus 4.5% per annum compounded semiannually.

9. TRADE AND OTHER PAYABLES

10.

Th is includes Rs . 82,556 million (Jun 201): 69,687 million) payable to Pakistan State Oil, out of which overdue amount is Rs. 76,050 million (Jun 20 II : Rs. 55,337 mill ion). The overdue amount carries interest / mark-up at SBP discount rate plus 2% per annum compounded semi-ann ually.

Sep 2011 Jun 2011

Note (IU. '000.) (IU. '000.)

SHORT TERM BORROW INGS - Secured

Finances under mark-up arrangements (Hub plant) 10.1.10.2 & 10.3 14,804,821 11 ,682,276 Finances under mark-up arrangements (Narowal plant) 10.4 & 10.5 2,352,550

17,157,371 11 ,682,276

10.1 The facilities for running finance available from various banks / financial institution amounted to Rs.16,700 million (Jun 20 11: Rs. 12,900 million) al mark-up ranging between 0 .75% to 3.00% per annum above one month KIBOR. The mark-up on the facilities is payable on monthly I quarterly basis in arrears. The facilities will expire during the period from December 31 , 20 II to September 30, 2012. These fac ilities are secured by way of charge over the trade debts and stocks of the Company pari passu with the ex isting charge. Any late payment by the Company is subject to an additional payment of 2% per annum above the normal mark-up rate.

10.2 This includes a sum of Rs. Nit (Jun 20 11 : Rs. 898.991 million) payable to an assoc iated undertaking. The available facility amounts to Rs. 2,000 million (J un 20 II : Rs. 2,000 million).

10.3 During the pcriod, the Company also entered into Musharaka agreement amounting to Rs. 2,400 million (J un 2011: Rs. Nil) at a mark-up of 1.10% per annum above six month KIBOR. The mark-up and principal is payable on the expiry of six months from the date of drawdown. The Company has drawn full amount on August 4, 2011 . These faci li ties are secured by way of charge over the trade debts and stocks of the Company pari passu with the existing charge. Any late payment by the Company is subject to an additional payment of 2% per annum above the nomlal mark-up rate.

10.4 The facilit ies for running finance available from various banks amounted to Rs. 2,650 million (J un 2011 : Rs. 2,250 million) at a mark-up of 2.00% per annum above three month KlBOR. The mark-up on the facilities is payable on quarterly basis in arrears. The facilities will expire during the period from July 28 , 20 12 to September 30, 2012. Any late payment by the Company is subject to an additional payment of2% per annum above the normal mark-up rate. These facilities arc secured by way of:

(a) a first ranking charge on all present and future ( i) amounlS standing to the credit of the Energy Payment Collection Account and the Master Facility Account opened for the purpose of this agreement, (ii) Fuel, lube, fuel stocks at the Narowal plant and Spares pans: and (iii) the Energy Payment Receivables of Narowal plant.

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(b) a subordinated charge on all present and future plant, machinery and equipment and other moveable assets of the Narowal plant excluding: (i) the immoveable properties, (ii) Hypothecated Assets under fi rst ranking charge (iii) the Energy Payment Collection Account, Working Capital Facility Accounts and the Master Faciliry Account; (iv) the Energy Payment Receivables; (v) all of the Project Company's right, title and interest in the Project Documents (including any receivables thereunder): and (vi) all current assets.

10.5 The Company also has Murabahah fac ility agreements with banks for an amount of Rs. 625 million (Jun 2011: Rs. 625 million) at a mark-up of 2.00% per annum above three month KIBOR. The mark-up on the fac ilities is payable on quarterly basis in arrears. These facilities will expire on July 28, 2012. Any late payment by the Company is subject to an additional payment of 2% per annum above the normal mark-up rate . These facilities are secured by way of securities mentioned in note 10.4.

II. TRANSACTIONS WlTH RELATED PARTIES I ASSOCIATED UNDERTAKINGS

Amounts paid for services rendered

Reimbursement of expenses and others

Mark-up on short term borrowings

Olher finance costs

Remuneration to key management personnel

Salaries, benefits and other allowances

Retirement benefits

Fees

Contribution to staff retirement benefit plans

Note

11.1

11.2

1L3

11 .1 These include transactions with principal shareholders of the Company under various service agreements.

J months ended

Sep 2011

(R~. '0005)

1,146, 176

102

21,005

6

9,979

1 1 1,738

11 ,717

1,000

1,911

J months ended

Sell 2010

(IU, '000.)

876,975

507

9,243

17,256 1 1,696

18,952

2,000

2,369

11 .2 Transactions with key management personnel arc carried out under the terms of their employment Key management personnel arc also provided

with the use of Company maintained automobi les.

11 .3 This represents fee to four directors.

11.4 The transactions with associated undertakings are made under normal commercial terms and conditions.

12. CASH AND CASH EQUIVALENTS

Cash and bank balances Finances under mark-up arrangements

13, PROPOSED FINAL DIVIDEND

J months cndcd Sell 2011 (R~. 'ooos)

1,004,874 (17, 157,37 1)

(16, 152,497)

J months ended Sep 2010

(IU,'ooo.)

829,697 (6,505,756)

(5,676,059)

The Board of Directors proposed a final dividend for the year ended June 30, 2011 of Rs. 3 per share, amounting to Rs. 3,471.463 million, at their meeting held on September 08, 2011, for approval of the members at the Annual General Meeting to be held on October 31 , 20 II . These condensed interim unconsolidated financial statements do not reflect this dividend payable which will be accounted for in the period in which it is approved .

14. DATE OF AUTHORISATION

These condensed interim unconsolidated financial statements were authorised for issue on October 26, 20 II in accordance with the resolution of the Board of Directors.

15. GENERAL

Figures have been rounded offlo the nearest thousand rupees.

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Taufique Habib

Director

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THE HUB POWER COMPANY LIMITED Islamic Chamber Building

Block-9, Clifton P. O. Box 13841, Karachi-75600

Tel : (21) 5874677-86, Fax (21) 587 0397 Website: http://www.hubpower.com

REPORT OF THE DIRECTORS ON THE CONSOUDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED SEPTEMBER 30, 2011

The Board of Directors has pleasure in presenting the financial statements (un-audited) of The Hub Power Company Limited (the Company) and its Subsidiary Laraib Energy Limited (the Subsidiary) for the first quarter ended September 30, 2011.

The Company holds 75~o shares in the Subsidiary. The Subsidiary is developing the 84MW hydropower generating complex near the New Bong Escape 8km downstream of the Mangla Dam in Azad Jammu and Kashmir. Having achieved its Financial Close the Project plans to reach Commercial Operation by mid 2013.

The Directors' Report on the financial statements (un-audited) of The Hub Power Company Limited for the first quarter ended September 30, 2011 has been separately presented in this Report.

By Order of the Board

Karachi: October 26, 2011

Registered Office: C/o. Famco Associates (Pvt) Limited, 12, 2nd Floor, Caprtal Shopping Centre, Markaz G-11 , Islamabad Telephone No. 051 -2220816 Fax No : 051-2220817

13

growth through ene'l)'

THE HUB POWER COM PANY LIMITED CONDENSED INTERIM CONSOLIDATED

PROFIT AND LOSS ACCOUNT (UNAU DITED) FOR THE FIRST QUARTER EN DED SEPTEMBER 30, 2011

Turnover

Operating costs

GROSS PROFIT

Other income

General and adm inistration expenses

Finance costs

Workers' profit participation fund

Profit before taxation

Taxation

- current

- prior years

PROFIT FOR THE PERIOD

Attributable to:

- Owners of the holding company

- Non-controlling interest

Basic and di luted earnings per share attributable to owners of the holding company (Rupees)

Note

4

5

6

3 months ended

Sep 2011

(Rs. 'OOOs)

40,718,344

(37,626,450)

3,091,894

23 ,559

(102,588)

(1,675,845)

1,337,020

(1 ,850)

1,335,170

1,337,421

(2,25 1 )

1,335, 170

1.16

3 months ended

Sep 2010

(Rs. 'OOOs)

25,200, 135

(23,274,031 )

1,926 , I 04

11 ,289

(126,3 72)

(558,92 1 )

1,252, I 00

(2,680)

(10,231)

1,239,189

1,246,638

(7,449)

1,239, 189

1.08

The annexed notes from I to 16 form an integral part of these consolidated financial statements.

Taufique Habib

Director

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THE HUB POWER COMPANY LIMITED CONDENSED INTERIM CONSOLIDATED

STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 2011


Other comprehensive income for the period

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

Attributable to:

- Owners of the hold ing company

- Non-controlling interest

3 months ended

Sep 2011

(Rs. 'OOOs)

1,335,170

1,335,170

1,337,421

(2,251 )

1,335,170

The annexed notes from I to 16 fonn an integral part of these consolidated financial statements.

3 months ended

Sep 2010

(Rs. 'OOOs)

1,239,189

1,239,189

1,246,638

(7,449)

1,239,189

Taufique Habib

Director

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CONDENSED INTERIM C ONSOLIDATED

BALANCE SHEET (UNA UDITED) AS AT SEPTEMBER 30, 2011

ASSETS

:-ION-CURRENT ASSETS

Fixed Assets Property, plant and equipment Intangibles

Stores and spares Long term advance, deposits and prepayments

CURRENT ASSETS

Stores and spares Stock-in-trade Trade debts Advances. deposits, prepayments and other receivables Cash and bank balances

TOTAL ASSETS

EOUITY AND LIABILITIES

SHARE CA PITAL AND RES ERV E

Share Capital Authorised

Issued, subscribed and paid-up

Revenue Reserve


Atlribulable to owners of the holding company

Advance against issue of shares to minority shareholders

NON-CONTROLLING INTEREST

NON-CURRENT LIABILITIES

Long term loans Deferred liabil it ies

CURRENT LIABILITIES

Trade and other payables Interest I mark-up accrued Short tenn borrowings Current maturity of long term loans Taxation - provisions less payments

COMMITM ENTS AND CONTINGENCIES

TOTAL EQ UITY AND LIABILITIES

Note

7

8

9

10

Sep 2011

(R" '000,)

59,220,08 1

1,420,925

637,023

62,960

386,919 1,179,921

108,657,238

Ll16,179

2,532,272

113,872,529

175,2 13,5 18

12,000,000

11 ,57 1,544

19,3 19,076

30,890,620

805.2 16

31 ,695,836

34,675,655

26,222

87,895,679

1,7 12,202

17, 157,371

2,041,034

9,5 19

108,8 15,805

175 ,2 13,518

Jun2011

(R" '000,)

58,330,782

1,422,162

637,023

67, 11 1

358,797 3,773,699

85,806,069

1,080,307

2,562,524 ,

93,58 1,,96

154,038,474

12,000,000

11.571,544

17,981 ,332

29,552,876

202,100

605,690

30,360,666

33,069,836

20,380

75,042,966

1,841 ,627

11 ,682,276

2,0 12,476

8,247 -90,,87,592

154,038,474

The annexed notes frorn I to 16 form an integral part of these conso lidated financial statements.

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,rowth through enerrr

T HE HUB POWER COMPANY LI M ITE D CON DENSED INTERIM CO NSOLIDATE D

CASH FLOW STATEMENT (UNAU DITED) FOR T H E FIRST Q UARTER EN DED SEPTEMBER 30, 2011

CAS H FLOWS FROM OP ERAT ING ACTIVITI ES


Adjustments for:

Depreciation

Amortisation

Gain on disposal affixed assets Deferred income realised

Staff gratuity

Interest income

Interest I mark-up

Amortisation of transaction cost

Operati ng profit before working capital changes

Working capital changes

Cash (used in) I generated from operations

Interest received Interest I mark-up paid Taxes paid

Net cash (used in) I generated from operating activities

CASH FLOWS FROM INVESTI NG ACTIVITI ES

Fixed capital expenditure - net

Proceeds from disposal of fixed assets Share premium paid Long term advance, deposits and prepayments

Net cash used in investing activities

CASH FLOWS FROM FINANC ING ACTIVITI ES

Proceeds from issue of shares to minority shareholders Advance against issue of shares to minority shareholders Dividends paid to owners of the holding company

Proceeds from long term loans - Subsidiary Repayment of long te rm loans - Hub plant

Repayment of long term loans - Narowal plant Repayment of liabilities against assets subject to finance lease

Net cash from financing act ivities

Net (decrease) I increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Note

13

3 montbs ended


1,337,020

673,171 1, 184 ( 186)

5,710 (6,348)

1,618,197

12,432

3,641,180

(7,564,197)

(3,923,0 17)

4,626 {I ,648,057)

(578)

(5,567,026)

(1,563 ,373)

1,275

4, 151

{I ,557,947)

(2,320) 2,364,269

(489,531)

(252,792)

1,6 19,626

(5,505,347)

(9,119,752)

(14,625,099)

The annexed notes from I to 16 form an integral part of these consol idated fi nancial statements.

3 months ended Sep2010

(Rs. 'OOOs)

1,252,100

430,290 1,020

(793) (249)

3,661 (6,864)

509,029

2,188 ,194

670,392

2,858 ,586

8, 183

(743,935) (1 ,092)

2,121 ,742

(2,917,629) 1,446

{I 03,027) (53 ,508)

(3,072,718)

27,885 105,044

(3 ,078) 2,210, 121 (489,531)

(1,606)

1,848,835

897,859

(5,815 ,656)

(4,917,797)

Taufique Habib

Director

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THE HUB POW ER COMPANY LIMJTED

CONDENSED INTERIM CONSOLIDATED

STATEMENT OF CHANGES IN EQUITY (UNAUDITED)


Allributable to owners of the holding company

Issued capital






Transactions with owners in their capacity as owners

Final dividend for the fiscal year 20 10-20 11 proposed @ Rs. 3 (2009-2010 : @ Rs. 2.50) per share

Reduction in controll ing interest of the holding company


Attributable to owners of the holding company

Advance against issue of shares to minority shareholders


Advance received during the period

Shares issued during the period


Non-controlling interest


Shares issued during the period


Reduction in control ling interest of the holding company


Total equity

3 months ended

Sep 2011 No.e (Rs. 'OOOs)

11 ,571 ,544

11 ,57 1,544

17,981 ,332

1,337,42 1

14 D 323

19,3 19,076

30,890,620

202.100

(202,100)

605,690

202,100

(2,251 )

(323)

805.216

3 1,695,836

The annexed notes from I to 16 form an integral part of these consolidated financial statements .

3 months ended


11.571.544

11,571 ,544

18,196.909

1.246.638

(2,892,886)

836 (2,892,050)

16,551.497

28,123,04 1

132,929

(27,885)

105.044

357.415

27.885

(7 ,449)

(836)

377,015

28,605, 100

--I-d-) t.......- • -5

Taufique Habib Director 18

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THE HUB POWER CO~II'ANY LIMITED NOTES TO THE CONDENSED INTERIM

CONSOUDA TED FINANCIAL STATEMENTS (UNAU DITED) FOR THE FIRST QUARTER EN DED SEPTEMBER 30. 2011

I. STATUS AND NATURE OF BUSINESS

The Hub Power Company Limited (the "holding company") was incorporated in Pakistan on August I, 1991 as a public limited company under the Companies Ordinance, 1984 (the "Ordinance"). The shares of the holding company arc listed on the Karachi , Lahore and Islamabad Stock Exchanges and its Global Depos itory Receipts arc listed on the Luxembourg Stock Exchange. The principal activi ties of the holdlllg company arc 10 develop, own, operate and mamtain power stations. The holding company owns an oil-fired power slation of 1,200 MW (nct) in Balochistan (Hub plant) and a 214 MW (net) oil-fired power station in Punjab (Narowal plant).

The current quarter resu lts include the results of Narowal operations on the basis of reference tariff approved by National Electric Power Regulatory Authority (NEPRA). After achieving Commercial Operations on April 21 . 2011, the Company has filed an application with NEPRA for adjustment in tariff and the differential amount of revenue due to tariff adjustment wi ll be recognised in the subsequent period.

The Group consists of:

The Hub Power Company Limited (the holding company); and

Laraib Energy Limited (the subsidiary) - Holding of 75.10%.

The subs idiary was incorporated in Pakistan on August 9, 1995 as a public limited company under the Companies Ordinance, 1984. The subsidiary is constructing a 84 MW hydropower generating complex ncar the New Bong Escape, which is 8 km downstream of the Mangla Dam in Azad Jammu & Kashmir. The project achieved Financial Close in December 2009 and is required to achieve Commercial Operations Date within 42 months of Financial Close which will be June 20 13 as per PPA entered between the subsidiary and the Power Purchaser.

2. SIGNIFICANT ACCO NTING POLIC IES

The accounting policies and methods of computation followed for the preparation of these condensed interim consolidated financial statements are same as those applied in preparing the consolidated financial statements for the year ended June 30, 20 II .

3. BASIS OF PREPARA TlON

4.

These unaudited condensed interim consolidated financial statements have been prepared in accordance with the requirements of lAS 34 "Intenm Financial Reporting" as applicable in Pakistan and are being submitted to the shareholders as required under Section 245 of the Ordinance.

3 monlhs ended J mon lhs cl1ded

Sep 2011 Sep 2010 Note (Rs. '000,) (Rs. '000,)

OPERATING COSTS

Fuel cost 35,8 19,339 21.904,312 Stores and spares 9,325 Operation & Maintenance 4.1 818,915 696,365 Insurance 175,203 122,099 DepreciatIon 665,320 423,307

Amortisation 41 Miscellaneous 138,307 127,948

37,626,450 23,274,031

4.1 This mcludes Rs. 756.910 million (Sep 2010; Rs. 696.365 million) related to services rendered by an associated undertaking under the Operation & Maintenance Agreement for Hub plant.

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3 months rnded

Sep 2011

(Rs. '000.)

1 mon ths rndrd

Sep 2010

(Rs. 'OOOs)

5. FINANCE COSTS

6.

Holdillg compl",Y

Hub plant

Interest I mark-up on long tenn loans Mark-up on short tenn borrowings Miscellaneous finance costs

J\"arowal plant

Mark-up on long tenn loans Mark-up on short tenn borrowings Amortisation of transaction cost Other finance costs

Laraib's investment

Mark-up on 10llg term loans Unwinding of discount on share premium payable Other finance costs

Less: amount capitalised in the cost of qualifying assets - Narowal plant Less: amount capitalised in the cost of qualifying assets - Subsidiary

Finance cost of the holding company

SlIbsitlitlry

Interest I mark-up on long tenn loans Mark-up on leased assets Other finance costs

Less: amount capitalised in the cost of qualifying assets - Subsidiary

Finance cost of the subsidiary

WORKERS' PROFIT PARTICI PATION FUND

Provision for Workers' profit participation fund

Payment of Workers' profit participation fund recoverable from WAPDA

200,712

326,460

29,376

556,548

838,896

217,611

12,432

6,8 17

1,075 ,756

138,073

451

7,915 ,

146,4,9

1,778,743

(103,555)

1,675 , 188

145,808

20,881

166,689

( 166,032)

657

1,675,845

62,033

(62,033)

245 ,921

263 ,058

25,460

534,439

717,235

--

15, 157 ,

-15,048

9,243

24,29 1

1,291 , 122

(732,389)

558,733

57,03 1

50

23 ,566

80,647

(80,459)

188

558,921

63,460

(63,460)

The holding company is required to pay 5% of its profit to the Workers' profit participation fund (the "Fund"). However, such payment does not affect the holding company's overall profitability because after payment to the Fund, the holding company bills this to WAPDA as a pass through item under the Power Purchase Agreement (PPA).

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(limBu ,rowd> UItOUp Me'IY

7. PROPERTY, PLANT AND EQUIPMENT

Operating property, plant and equipment

Capilal work-in-progress Plant bettennents (Hub plant)

Narowal plant

Subsidiary

8. TRADE DEBTS· Secured

Considered good

Note

8.1

Sep 2011

(IU. '000,)

47,692,378

41 ,265

613,195

10,873,243

11 ,527,703

59,220,081

108,657,238

Jun 2011

(IU. '000,)

48,374,377

37,751

515,676

9,402,978

9,956,405

58,330,782

85,806,069

8.1 This includes an amount of Rs. 90,362 million (Jun 2011 : Rs. 70,444 million) receivable from WAPDA and Rs. 4.851 million (Jun 20 11:

Rs. 668 million) receivable from NTDC which are overdue but not impaired because the trade debts are secured by a guarantee from the Government of Pakistan under Implementation Agreements . The overdue from WAPDA carries mark-up at SSP discount rate plus 2% per

annum compounded semi-annually and the overdue from NTDC carries mark-up at a rate of 3 month KIBOR plus 4.5% per annum

compounded semi·annually.

9. TRADE AND OHlER PA YABLES

This includes Rs. 82,556 million (Jun 20 II : 69,687 million) payable to Pakistan State Oil, out of which overdue amount is Rs. 76,050 million (Jun 20 II : Rs. 55,337 million) . The overdue amount carries interest I mark· up at SSP discount rate plus 2% per annum compounded semi-annually.

10. SHORT TERM BORROWINGS· Secured

Finances under mark·up arrangements (Hub plant)

Finances under mark-up arrangements (NarowaJ plant)

Note

10.1, 10.2 & 10.3

10.4 & 10.5

Sep 2011

(IU. '000,)

14,804 ,821

2,352,550 17,157,37 1

Jun 2011

(IU. '000,)

11 ,682,276

11 ,682,276

10. 1 The faci lities for running finance available from various banks I financial institution amounted to Rs . 16,700 million (Jun 20 11 : Rs. 12,900 million) at mark·up ranging between 0.75% to 3.00% per annum above one month KISOR. The mark·up on the facilities is payable on monthly I quanerly basis in arrears. The facil ities will expire during the period from December 3 1, 20 11 to September 30, 2012. These facilities are secured by way of charge over the trade debts and stocks of the holding company pari passu with the existing charge. Any lale payment by the holding company is subject to an additional payment of 2% per annum above the nonnal mark-up rate.

10.2 This includes a sum of Rs. Nil (Jun 20 II : Rs. 898.991 mill ion) payable to an associated undertaking. The available facility amounts to Rs. 2,000 mill ion (lUll 20 11 : R,. 2,000 million).

10.3 During the period, the holding company also entered into Musharaka agreement amounting to Rs. 2,400 million (Jun 2011: Rs. Nil) at a mark·up of 1. 10% per annum above six month KIBOR. The mark-up and principal is payable on the expiry of six months from the date of drawdown. The holding company has drawn full amount on August 4, 20 II . These facilities arc secured by way of charge over the trade debts and stocks of the holding company pari passu with the ex isting charge. Any late payment by the holding company is subject to an additional payment of2% per annum above the nonnal mark-up rate.

10.4 The facilities for running finance available from various banks amounted to Rs. 2,650 million (J un 20 11 : Rs. 2,250 million) at a mark-up of 2.00% per annum above three month KIBOR. The mark-up on the facilities is payable on quanerly basis in arrears. The facilities wi ll expire during the period from Jul y 28, 20 12 to September 30,2012. Any late payment by the holding company is subject to an additional paymenl of 2% per annum above the normal mark-up rate . These facilities arc secured by way of:

(a) a first ranking charge on all present and future (i) amounts standing to the credit of the Energy Payment Collection Account and the Master Facil ity Account opened for the purpose of this agreement, (ii) Fuel, lube, fucl stocks at the Narowal plant and Spares parts : and (iii) the Energy Payment Receivables ofNarowal plant.

(b) a subordinated charge on all present and future plant, machinery and equipment and other moveable assets of the Narowal plant excluding: (i) the immoveable properties, (ii) Hypothecated Assets under first ranking charge (iii) the Energy Payment Collection Account, Working Capital Facility Accounts and the Master Facility Account; (iv) the Energy Paymcnt Receivables; (v) all of the Project Company's right, title and interest in the Project Documents (including any rcceivables mereunder); and (vi) all current assets.

10.5 The holding company also has Murabahah facility agreements with banks for an amount of Rs. 625 million (Jun 20 II : Rs. 625 million) at a mark-up of 2.00% per annum above three month KrBOR. The mark-up on the facilities is payable on quanerly basis in arrears. These faCilities will expire on July 28, 20 12. Any laIc payment by the holding company is subject to an additional payment of 2% per annum above the nonna! mark-up rate. These facilities are secured by way of seeunties mentIOned in note 10.4.

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II. SEG MENT ANALYS IS

11.I SEGMENT RESULTS

Turnover

Operating costs

GROSS PROFIT

Other Income

General and admInistration expenses

Finance costs

Workers' profit participation fund


Taxation

- current

- prior years

PROFIT FOR THE PERIOD

Turnover

Operating costs

GROSS PROFIT

Other income

General and administration expenses

Finance costs

Workers' profit partIcIpation fund


Taxation • current

- prior years

I)ROFIT FOR THE I'ERIOD

................................. .. 3 month s elid ed Sep 2011 .. ....... ... ...... ... ... ... . .... .

Hub plan t Na rowa l pla nt Laraib plant Unallocated Tota l

. . ............. ......... . . . ................. (R,. '000.) ... •••....... ..... . ......... . .•...........

34 ,589,429

(32 ,424 ,303)

2, 165, 126

18,736

(71 ,888)

(556,548)

1,555,426

1,555,426

6, 128,915

(5 ,202, 147)

926,768

(3 ,911)

( 15,250)

(1,075 ,756)

(168 , 149)

8,734

( 15,271)

(657)

(7, 194)

(1 ,850)

(179)

(42,884)

(43,063)

40,718 ,344

(37,626,450)

3,091 ,894

23 ,559

(1 02,588 )

( 1.675,845)

1,]]7,020

( 1,850)

(168 , 149) ___ (",9",,0.;.44;.,) __ ",(4;,;;3""0",63,,,) _ ...;., ,,,,3,,,3 5.;;.' 1",7;..0

. ... ............. , ...... ....... .... 3 months ended Sep 2010 . . ...... . ... ...... ... ... ... . . .. .. .

Hu b plant Narowa l pl ant Lan~ ib plant Unallocated Total

... ...... .... .... .. ... ... ... .. . ...... ...... (R •. '000.) ............•••...•.....••...........•.•...

25,200, 135

(23,274,03 I)

1,926, 104

II ,069 220

(95,981 ) (11 ,605)

(53 4,439) (3)

1,306,753 (11 ,388)

1,306,753 ( 11 ,388)

1,465

( 18,382)

( 188)

(I7, 105)

(2,680)

(I0,231)

(30,0 16)

(1 ,465)

(404)

(24,291 )

(26,160)

(26, 160)

25,200, 135

(23,274 ,031 )

1,926 , 104

11 ,289

(126,372)

(558,921 )

1,252 ,100

(2,680)

(10,231)

1,239,189

The unallocated items relate to costs incurred by the holding company for investment in the subsidiary.

11.2 SEGMENT ASSETS

... . ,' .... , .... , .............. . . .. ........ "'" Sc p 2011 "'" .. ,' "." ...... , ... ". '" .. ,'" .,., .. .. ,

Hu b plant Nllrowa l plant Laraib plant Unallocated Total

•. •••. ....••• . ....••••......•••..... . . . . ... .. (R •. '000.) . .... . .. . ... .... . . . .... . ..... ... .. .. .... .. .

TOTAL ASSETS 127, 163,525 34, 155,653 13,889,824 4,516 175,213 ,518

.... . .. .. , . . ... , ............... .. .............. Jun 2011 ........ , "'" ...... , "'"'''' '" , ....... ... .

Hu b pla nt Narowa l plant Laraib plant Unallocated Total

............... ...• ... .. ••.... ............... (R,. '000,) . . .. . ....... . . . ....... . .. .. ... .. ... . ........ .

TOTAL ASSETS 111,9 10,567 30,289,094 11 ,8]], 156 5,657 154,038 ,474

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growth through MerrY J months ended J months ended

Sep2011 Sep 2010

Note (Rs. 'OOOs) (Rs. 'OOOs) 12. TRANSACTIONS WITH RELATED PARTIES I

ASSOCIATED UNDERTAKI NGS

Amounts paid for services rendered 12.1 1, 146,176 876,975

Reimbursement of expenses and others 102 507

Mark-up on short term borrowings 21,005

Other finance costs 6 9,243

Remuneration to key management personnel

Salaries, benefits and other allowances 13,491 II 21.8621

Retirement benefits 2,162 2, 120

12.2 15,653 23.982

Fees 12.3 1,000 2,000

Contribution to staff ret irement benefit plans 2,465 2,369

12.1 These include transactions with principal shareholders of the holding company under various service agreements.

12.2 Transactions with key management personnel are carried out under the terms of their employment. Key management personnel are

also providcd with the use of Company maintained automobiles.

12.3 This represen ts fee to four directors of the holding company.

12.4 The transactions with associated undertakings are made under normal commercial terms and conditions.

13. CASH AND CASH EQUIVALENTS

Cash and bank balances

Finances under mark-up arrangements

14. PROPOSED FINAL DIVIDEND

J months ended


2,532,272

(17,157,37 1)

( 14,625,099)

J months ended


1,587,959

(6,505.756)

(4 ,917,797)

The Board of Directors of the holding company proposed a final dividend for the year ended June 30, 2011 ofRs. 3 per share, amounting to Rs. 3,471.463 million, at their meeting held on September 08, 201 t, for approval orthe members of the holding company at the Annual General Meeting to be held on October 3 J, 201 1. These condensed interim consolidated financial statement'i do not reflect this dividend payable which wi ll be accounted for in the period in which it is approved.

15. DATE OF AUTHORISATION

These condensed interim consol idated financial statements were authorised for issue on October 26, 201 1 in accordance with the resolution of the Board of Directors of the holding company.

16. GENERAL

Figures have been rounded off to the nearest thousand rupees.

10

Taufique Habib

Director

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