HALF YEARLY REPORT December 31, 2024
Financial Report for the six months' period ended December 31, 2024
TABLE OF CONTENTS
Contents
Company Information
Directors' Review Report
Condensed Interim Statement of Financial Position
Condensed Interim Statement of profit or Loss and Other Comprehensive Income
Condensed Interim statement of Cash Flows
Condensed Interim statement of Changes in Equity
Notes to the Condensed Interim Financial Statements
Financial Report for the six months' period ended December 31, 2024
CORPORATE INFORMATION | |
BOARD OF DIRECTORS | |
Mrs. Shazia Agha | Chairperson, Non-Executive Director |
Mr. Hussain Iqbal Agha | Chief Executive Officer |
Mr. Raza Agha | Executive Director |
Mr. Asif Ahmad | Non-Executive Director |
Mr. Muhammad Shahid | Non-Executive Director |
Mr. Muhammad Asif | Independent Director |
Mr. Saeed Mirza | Independent Director |
AUDIT COMMITTEE | |
Mr. Saeed Mirza | Chairman |
Mr. Asif Ahmad | Member |
Mr. Muhammad Asif | Member |
HUMAN RESOURCE & RUMENERATION COMMITTEE | |
Mrs. Shazia Agha | Chairperson |
Mr. Muhammad Shahid | Member |
Mr. Raza Agha | Member |
CHIEF FINANCIAL OFFICER
Mr. Kamran Ahmed
COMPANY SECRETARY
Mr. Muhammad Muneeb Khan
HEAD OF INTERNAL AUDIT
Mr. Khawaja Muhammad Akbar
EXTERNAL AUDITORS
Reanda Haroon Zakaria Rizwan Salman & Company Chartered Accountants Progressive Plaza, Beaumont Road, Karachi, Pakistan
Financial Report for the six months' period ended December 31, 2024
SHARE REGISTRAR
CDC Share Registrar Services Limited
CDC House, Main Shahrah-e-Faisal, Karachi, Pakistan
LEGAL ADVISOR
Asad Mehmood
Uni Shopping Center, Abdullah Haroon Road, Karachi, Pakistan
BANKERS | |||
Bank Al Habib Limited | | Faysal Bank Limited | |
| Askari Bank Limited | | Habib Metro Bank Limited |
| Habib Bank Limited | | MCB Islamic Bank Limited |
Bank Al Falah Limited | | MCB Bank Limited | |
| Meezan Bank Limited | | Dubai Islamic Bank Limited |
Bank Islami Pakistan Limited | | The Bank of Khyber | |
| United Bank Limited | | National Bank of Pakistan |
| JS Bank Limited | | Allied Islamic Bank Limited |
| Samba Bank Limited | | Bank of Punjab |
- Soneri Bank Limited
REGSITERED OFFICE
Plot No. N.W.I.Z/1/P-133, (SP-6), D-2, Port Qasim Authority, Karachi, Pakistan PTCL# 021-34156219-21
CORPORATE OFFICE
Office 801 & 804, 8th Floor, Emerald Tower, G-19
- Talwar, Block 5, Clifton, Karachi, Pakistan UAN # 021-111-111-2442 Corporate@aghasteel.com
SYMBOL AT PAKISTAN STOCK EXCHANGE
AGHA
WEBSITE INFORMATION
www.aghasteel.com
Financial Report for the six months' period ended December 31, 2024
DIRECTORS' REVIEW REPORT
The Board of Directors is pleased to present the financial statements for the quarter ended December 31, 2024.
Economic Environment
The economy continued to maintain stability under the USD 7 billion Extended Fund Facility (EFF) program by the International Monetary Fund (IMF). A decline in petroleum prices contributed to a reduction in inflation, which stood at 4.1% in December 2024. The exchange rate remained stable at approximately Rs.278 per USD, supported by strong remittances and export receipts. Encouragingly, the current account recorded a surplus of USD 1.2 billion, accompanied by an increase in foreign exchange reserves.
However, these positive economic indicators have yet to translate into increased economic activity, as evidenced by a contraction of 1.25% in the large-scale manufacturing sector during July-November 2024. The steel industry faced challenges due to volatility in steel prices, sluggish international growth, and heightened trade barriers in major economies, all contributing to a significant decline in steel prices. Additionally, the local industry remained under pressure due to rising costs and the continued misuse of sales tax exemptions granted to the FATA/PATA regions.
Management's Response
The management is actively reviewing operations to identify areas for improvement and implement strategic adjustments aimed at mitigating the factors contributing to the current financial losses. Our focus remains on stabilizing operations, optimizing costs, and exploring opportunities for recovery.
Financial Performance
During the six months of the financial year 2025, the Company recorded net sales of Rs. 5,363 million compared to Rs. 9,345 million during the corresponding period last year. The Company registered an operating loss of Rs. (3,620) million during the six-month period under review, as against an operating loss of Rs. (550) million in the same period last year. The loss before and after tax stood at Rs. (4,557) million and Rs. (1,403) million, respectively, compared to a loss of Rs. (520) million and Rs. (219) million in the corresponding period last year.
Financial Report for the six months' period ended December 31, 2024
Six Months Ended | December 31, 2024 December 31, 2023 | |
Rupees in Millions | ||
Sales | 5,363 | 9,345 |
Gross Profit | (632) | 1,809 |
Operating Profit/(Loss) | (3,620) | (550) |
Profit/(Loss) before tax | (4,557) | (520) |
Profit/(Loss) after tax | (1,403) | (219) |
Earnings per share - Basic (in Rupees) | (2.32) | (0.36) |
Qualified Opinion by Auditors
Extract from the Auditor's Report:
During the course of our review, we sent confirmations to trade debtors for outstanding balances receivable amounting to Rs. 3,735.463 million as of December 31, 2024. As of the date of this report, we have neither received direct confirmations from the respective debtors nor been able to substantiate these balances through alternative procedures. Consequently, we were unable to obtain sufficient and appropriate audit evidence regarding the existence and completeness of trade debts.
Further, with reference to Note 9.1 of the accompanying condensed interim financial statements, the Company has written off trade debts amounting to Rs. 1,034.567 million that were deemed uncollectible. We were not provided with specific criteria, documentation, or records regarding management's efforts to recover these balances. This limitation has affected our ability to assess the appropriateness and justification for these write-offs.
Based on our review, except for the possible effects of the matter described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the accompanying interim financial statements do not present a true and fair view of the financial position of the entity as of December 31, 2024, and its financial performance and cash flows for the six-month period then ended, in accordance with the applicable accounting and reporting standards in Pakistan.
Management's Response to Audit Observations
We acknowledge the observations highlighted in the auditors' report. While the write-off of certain trade debts may seem concerning at first glance, this step is necessary to ensure a more accurate and transparent balance sheet. The rationalization of actual receivables aligns with the
Financial Report for the six months' period ended December 31, 2024
principle of 'True and Fair' accounting, providing a clearer reflection of the Company's financial position.
This decision underscores our commitment to financial integrity and transparency. Despite prevailing macroeconomic challenges, including market volatility and operational difficulties, the management remains dedicated to upholding the highest standards of corporate governance and risk management. The write-offs reflect a prudent approach to financial reporting, allowing us to mitigate risks associated with uncollectible receivables while reinforcing stakeholder confidence in our financial disclosures.
Future Prospects
The Company is actively pursuing strategic initiatives to enhance operational efficiency and long- term sustainability. These initiatives include a comprehensive review of our product portfolio, exploration of potential partnerships and collaborations, and the adoption of innovative technologies to drive productivity. Furthermore, we are continuously evaluating market trends and customer preferences to align our offerings with evolving industry demands.
Acknowledgment
The Board of Directors extends its gratitude to all stakeholders, including the Securities and Exchange Commission of Pakistan, the Pakistan Stock Exchange, the State Bank of Pakistan, financial institutions, our valued customers, vendors, and suppliers, for their unwavering support and trust in the Company. We also acknowledge the dedication and commitment of our employees, whose contributions remain integral to our progress and resilience.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
________________ | __________________ |
Hussain Iqbal Agha | Raza Iqbal Agha |
Chief Executive Officer | Director |
Karachi: February 28, 2025 |
Financial Report for the six months' period ended December 31, 2024
AGHA STEEL INDUSTRIES LIMITED
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2024
(Unaudited) | (Audited) | ||
December 31 | June 30 | ||
2024 | 2024 | ||
ASSETS | Note | - - - - Rupees in '000'- - - - | |
Non-Current Assets | |||
Property, plant and equipment | 6 | 45,481,719 | 45,575,831 |
Intangible asset | 32,970 | 36,110 | |
Long term deposits and receivable | 7 | 28,571 | 387,360 |
45,543,260 | 45,999,301 | ||
Current Assets | |||
Stores, spare parts and loose tools | 2,692,623 | 2,869,749 | |
Stock-in-trade | 8 | 3,421,751 | 3,545,206 |
Trade and other receivables | 9 | 3,367,756 | 4,024,456 |
Loans and advances | 2,431,951 | 2,752,355 | |
Deposits | 23,920 | 33,063 | |
Tax refunds due from Government | 706,385 | 524,053 | |
Cash and bank balances | 63,291 | 239,134 | |
12,707,677 | 13,988,016 | ||
Total Assets | 58,250,937 | 59,987,317 | |
EQUITY AND LIABILITIES | |||
Share Capital and Reserves | |||
Authorized capital | 10,250,000 | 10,250,000 | |
Share Capital | |||
Issued, subscribed and paid up capital | 6,048,791 | 6,048,791 | |
Capital reserve | |||
Share premium | 2,126,687 | 2,126,687 | |
Surplus on revaluation of fixed assets - net | 16,342,962 | 16,656,355 | |
18,469,649 | 18,783,042 | ||
Revenue Reserve | |||
Accumulated (loss) / profit | (221,926) | 3,306,407 | |
Total Shareholders' Equity | 24,296,514 | 28,138,240 | |
Non-Current Liabilities | |||
Long term borrowings | 10 | - | - |
Advance against preference shares | 11 | 750,000 | 750,000 |
Loan from directors | 12 | 415,020 | - |
Lease liabilities | 49,962 | 72,668 | |
Deferred tax liability | 3,277,063 | 4,010,148 | |
4,492,045 | 4,832,816 | ||
Current Liabilities | |||
Trade and other payables | 13 | 971,582 | 645,548 |
Long term borrowings - on demand | 14 | 7,880,559 | 7,922,670 |
Short term borrowings - on demand | 15 | 15,126,507 | 15,226,851 |
Accrued markup | 16 | 5,467,537 | 3,193,826 |
Current portion of lease liabilities | 16,193 | 27,366 | |
29,462,378 | 27,016,261 | ||
Contingencies and Commitments | 17 | ||
Total Equity and Liabilities | 58,250,937 | 59,987,317 |
The annexed notes from 1 to 28 form an integral part of these condensed interim financial statements.
___________________ | ___________________ | |
Chief Executive | Chief Financial Officer | Director |
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