Transmission of Quarterly Report for the Period Ended 31 March 2025

COMPANY INFORMATION

Mr. Abbas Akberali

Mr. Shayan Akberali Syed Asghar Jamil Rizvi Mr. Sohail Feroz Shamsi Mr. Zoeb Salemwala

Mr. Hadi Abbas Akberali

Ms. Mariam Akberali

Syed Asghar Jamil Rizvi Mr. Sohail Feroz Shamsi Mr. Zoeb Salemwala

Mr. Sohail Feroz Shamsi Syed Asghar Jamil Rizvi Mr. Shayan Akberali

Mr. Hadi Abbas Akberali

Mr. FazalAhmed

Mr. Taha Umer

Mr. Adnan Abdul Ghaffar

Chairman, Non-Executive Director Chief Executive Officer Independent Director

Independent Director Non-Executive Director Executive Director

Non-Executive Director

Chairman Member Member

Chairman Member Member

BDO Ebrahim & Co. Chartered Accountants

Lakson Square Building No. 1,

Sarwar Shaheed Road, Karachi, Pakistan.

THK Associates (Pvt) Limited

Plot No. 32-C, Jami Commercial Street - 2, D.H.A.,

Phase -VII, Karachi-75500.

UAN: (021) 111-000-322

Email: sfc@thk.com.pk

02 Quartarly Report - March 2025 I Amreli Steels Limited

Moore Shekha Mufti

C-253, P.E.C.H.S, Block-6,

OP Shahrah-e-Faisal, Karachi, Pakistan

Tel: 021-34374811-5

Lex Firma

Advocates, Barristors & Legal Consultants

418, Continental Trade Centre, Clifton, Karachi.

A-18, S.I.T.E, Karachi, Pakistan UAN: (+92-21) 111-AMRELI (267354)

Fax: 92-21-32587240, 38798328

Email: investor-relations@amreIisteeIs.com

D-89, Shershah Road, Karachi, Pakistan

Industrial Land, Deh Gharo, Tapo Gharo,

Taluka Mirpur Sakro

(Distt: Thatta), Sindh, Pakistan

ASTL

https://www.amreIisteeIs.com

Amreli Steels Limited 03

The Board of Directors present the Directors' Report for the third quarter ended 31 March 2025. This report provides an overview of the Company's operational performance during the period, while also contextu aliz in g th e broader eco no mic hea dwind s afflicting the local steel industry.

Despite a year marked by significant economic headwinds, recent macroeconomic developments provide grounds for cautious optimism. The government's concerted efforts to stabilize the economy have started to yield encouraging results. The rupee has shown resilience, interest rates are on a downward trajectory, and electricity tariffs have been recently reduced, offering much-needed relief to the industrial sector. On the global front, the stability in scrap prices and a decline in oil prices have further alleviated cost pressures, creating a more favorable environment for businesses.

Looking ahead, GDP growth projections for 2026, estimated between 3.0% and 3.6%, signal a gradual but steady recovery in economic activity. These positive trends, coupled with structural reforms and improved external conditions, are expected to foster a more conducive business environment. While challenges remain, the Company is optimistic about its ongoing financial restructuring efforts under the Master Restructuring Agreement which hold the promise of enhanced financial flexibility. This, in turn, will enable the Company to address operational hurdles, sustain its commitments, and position itself for a stronger recovery.

The industry also anticipates government support through targeted relief measures, including the introduction of equitable tax regimes, discontinuation of preferential tax treatment in the FATA and PATA regions to ease the burden on documented businesses, and stricter enforcement to curb smuggling from neighboring countries that disrupts market dynamics. Additionally, implementing structural reforms to ensure a level playing field for all stakeholders is essential. These steps would significantly strengthen the industry's ability to recover and compete effectively, ultimately contributing to higher revenues for the exchequer and the creation of more employment opportunities.

Company Performance

An analysis of the key financial indicators of the Company for the nine months' period and quarter ended

31 March 2025, compared with the corresponding period last year, is tabulated below:

During the nine-month period, net sales declined sharply to Rs. 12,910 million, a significant 61°/ drop compared to Rs. 33,433 million in the same period last year. Gross profit also saw a considerable reduction, decreasing to Rs. 339 million from Rs. 3,376 million in the corresponding period of the previous year. This downturn was primarily driven by rising production costs, largely stemming from unabsorbed fixed expenses due to low capacity utilization. The latter was a direct consequence of ongoing financial restructuring and the resulting unavailability of working capital lines. These financial constraints disrupted operations and delayed critical imports, further deteriorating the Company's financial standing.

The operating loss for the period amounted to Rs. 791 million, in contrast to an operating profit of Rs. 1,695 million reported during the same period last year. Finance costs continued to weigh heavily, standing at Rs. 3,140 million, slightly lower than the Rs. 3,554 million incurred in the same period last year. Loss before and after taxation amounted to Rs. 3,932 million and Rs. 2,858 million, respectively,

04

compared to Rs. 1,859 million and Rs. 1,298 million in the corresponding period last year. Consequently, loss per share widened to Rs. 9.62, up from Rs. 4.37 reported in the same nine-month period last year.

The quarterly results for the period ended 31 March 2025 were similarly challenging. Net sales for the quarter were Rs. 4,109 million, representing a 63% decline from Rs. 11,182 million in the corresponding quarter of the previous year. Gross profit for the quarter plummeted by 89% to Rs. 94 million, compared to Rs. 888 million last year. The Company recorded an operating loss of Rs. 440 million for the quarter, as compared to operating profit of Rs. 351 million achieved in the same period last year. Finance costs for the quarter recorded at Rs. 900 million, though slightly lower than Rs. 1,288 million in the previous year's quarter. The loss per share for the quarter expanded to Rs. 3.32, compared to Rs. 2.24 in the corresponding period of the previous year.

Future Outlook:

The outlook for the remainder of the current fiscal year remains challenging. The broader economic climate continues to place significant pressure on the steel industry, while inconsistent policy measures further strain an already fragile industrial landscape. Despite these persistent headwinds, the Company remains fully committed to restoring financial health. Stakeholders can be assured that targeted strategic actions are underway to navigate this difficult period, with management firmly focused on long-term sustainability and a return to stable operations.

The Board remains confident in the successful restructuring of financial facilities with lending partners and the restoration of critical financial support previously extended to the Company. Securing this support will allow the Company to utilize available credit lines to open LCs for essential imports, vital toward stabilizing operations. The Board extends its sincere appreciation to all valued stakeholders - including shareholders, lenders, customers, and suppliers - for their continued trust and unwavering support during these challenging times.

Chief Executive Officer

29 April 2025 Karachi

Director

AS AT 31 MARCH 2025

ASSETS

Note

March 31, June 30,

2025 2024

(Un-audited) (Audited)

---- (Rupees iii '000) ----

The annexed notes from 1 to 25 form an integral part of these condensed interim financial statements.

Chief Ex6cutive Officer Chief Financial Officer Director

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2025

Nine months period ended March 31, March 31,

2025 2024

(Restated)

Quarter ended

March 31, March 31,

2025 2024

(Restated)

Note -------- ------- (Rupees in '000) --------- ------

(Rupees)

Loss per share - basic and diluted

(9.62) (4.37)

(3.32) (2.24)

The annexed notes troin 1 to 25 form an integral part of these condensed interim financial statements.

Chief Executive Officer Chief Financial Officer

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2025

Nine months period ended Quai ter Ended

Loss for the period

Other comprehensive income for the period

(2,858,604)

(l,298,987)

(985,543)

(666,650)

Total comprehensive loss for the period

(2,858.604) (1,258.587) (985.543)

(666,660)

The annexed notes from 1 to 25 form an integral part of these condensed interim financial statements.

Chief Executive Officer Chief Financial Officer

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2025

Chief Executive Ofñcer

Chief Financial Officer

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2025

i¥Iai'ch 31,

2025

Msrch 31,

2024

(Restste4)

Note ------(-Rupees in '000) -----

CASH FLOWS FROM OPERATING ACTIVITIES

Fixe‹l capital expen‹liture

Proceeds from disposal ot'operstinp fixed assets Short-terns iiuestrnent

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Divideiicls paid

Short-term borrowin;is - net Long-term financing - net Loan ti oin directors

Lease rentals paid

(22,522)

(265,9691

Net cash from financing activities 520,169 3,908,600

Net increase / (decrease) in cash and casti equivalents

3,114.006

fl,32D,330)

Cash and cash equivalents at beginning of the period (3,052,525) I,700,8841

Cash atid cash equivalents at end of the period T9

The annexed notes from 1 to 25 form an integral part of these condensed interim tinancial statements.

Chief Executive Officer Chief Fiziancial Officer

61,45 l

(3,02 7,2 l4)

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2025

1. THE COMPANY AND ITS OPERATIONS

   Amreli Steels Limited (the Company) was incorporated under repealed Companies Ordinance 1984, as a private limited company and converted into a public unquoted company in 2009. The Company enlisted on Pakistan Stock Exchange in 2015. The Company is engaged in manufacture and sale of steel bars and billets. The registered office of the Company is at Plot No. A-18, S.I.T.E., Karachi.

2. MATERIAL UNCERTATNITY RELATED TO GOING CONCERN

   During the year ended June 30, 2024 and the current period, the Coiiipany faced various challenges included, but were not limited to, a tight monetary policy, constrained fiscal space, high inflation, exorbitant energy costs, mounting external and domestic debt burdens, and stringent conditions associated with International Monetary Fund (IMF) support. These unprecedented external factors placed considerable pressure on the construction sector, leading to reduced demand and capacity utilization. Further, the Company has shutdown its plant located at Shershah and due to unfavourable financial position of the Company, the Company breached the covenant of all long term loan (refer note 11.2). As a result the Company has incurred a substantial net loss for the period amounting to Rs. 2,858.604 million (March 31, 2024: Rs. 1,298.987 million) and, as of that date, the Company's accumulated losses stood at Rs. 3,427.951 million (June 30, 2024: Rs. 751.018 million) and the current liabilities exceeded its current assets by Rs. 13,780.583 million (June 30, 2024: Rs. 10,742.584 million).

   These events or conditions, along with other matters as stated above, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.

   However, management has devised strategies to navigate these challenges, including debt restructuring and reducing operational costs, and sales of under-utilized assets including warehouses and building (refer note 10.1). The restructuring process is currently at advanced stage and 80% finn approvals have already been secured by the Company. Furthermore, the management also plans to improve liquidity up to Rs. 4 billion in combination of sale of non core asset and equity. Further, among these assets, the sale of one asset is subject to issuance of NOC from banks. Despite challenges, the management believes the Company's fiiture outlook is positive, citing the GDP growth forecast, a decrease in inflation, and an expected further decline in interest rates to a single digit, which will further boost the construction industry. Accordingly, the management believes that going concern basis oT" accounting is appropriate, therefore, these condensed interim financial statements have been prepared on a going concern basis.

3. BASIS OF PREPARATION
   1. Statement of Compliance

      These condensed interim financial statements of the Company have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

      • Provisions of and directives issued under the Companies Act, 2017 (the Act);

      • International Accounting Standard (IAS 34), Interim Financial Reporting, issued by International Accounting Standard Board (IASB) as notified under the Act; and

      • Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Act;

      Where the provisions of and directives issued under the Act or IFAS differ with the requirements of IAS 34, the provisions of and directives issued under the Act or IFAS have been followed.

      These condensed interim financial statements do not include all the information and disclosures required in annual financial statements and should be read in conjunction with the Company's annual financial statements as at and for the year ended June 30, 2024. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and performance since the last annual financial statements.

      The condensed interim financial statements are unaudited and being submitted to members as required under section 237 of the Coiiipanies Act 2017 and Listing Regrilations of Pakistan Stock Exchange.

   2. Functional and presentation currency

      These condensed interim financial statements are presented in Pakistan rupee ('Rupees' or Rs.') which is the functional currency of the Company.

   3. MATERIAL ACCOUNTING POLICY INFORMATION

      The accounting policies and the methods of computations adopted in the preparation of these condensed interim financial statements are consistent with those followed in the preparation of the Company's annual financial statements as at and for the year ended June 30, 2024.

   4. Restatement of comparative and reclassification

      As stated in note 5.33 to the annual financial statements as at and for the year ended June 30, 2024, the Company has changed its accounting policy to recognise minimum and final taxes as 'Levy'. The Company has also made certain restatement in respect of measurement of deferred tax on revaluaiton surplus on property, plant and equipment, classificaiton of resmeasureinent of defined benefit obligation as seperate line item in the statement of changes in equity, and account for unwinding effect of GIDC provison in accordance with the orignal installment plan.

      
      
      

      The above changes were made in accordance with the requirements of IAS 8, 'Accounting Policies, Change in Accounting Estimates and Errors' in the annual financial statements as at and for the year ended June 30, 2024 with retrospective effect. The effect of these on comparatives are as follows:

      Effect on condensed interim statement of profit or loss: Change in accounting policy:

      Increase in levy Minimum tax Final tax

      Decrease in income tax Corrections:

      Decrease in cost of sales Increase in finance cost

      Net effect on condensed interim statement of profit or loss Net effect to equity

      Decrease in loss per share

      As previousyl reported

      March 31. 2024 (Un-audited)

      Rs in 000

      (420,191)

      (963)

      (421,154)

      421,154

      4,954

      (3,797)

      1,157

      1,157

      (Rupees)

      0.01

      June 30, 2023

      A. stated Restatement

      ----------(Rupees in '000) ---------

      Effect on statement of changes in equity

      Revenue reserves - unappropriated profit*	5,250,225	5,055,368	(l 54,857)
      Siupltis on revaliintion of property, plant and equipment	3,642,789	3,521,961	(120,828)
      Rewasurement loss on defined benefit obligation	(85.629)	-	85.629

      * Restatement represents reclassification of remeasurement loss on defined benefit obligation amounting to Rs. 89.629 million and effect of correction of unwinding of GIDC liability as explained in above, amounting to Rs. 65.228 million.

   5. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS IN THE ACCOUNTING AND REPORTING STANDARDS AS APPLICABLE IN PAKISTAN

      1. New accounting standards, amendments and IFRS interpretations that are effective for the nine months period ended March 31, 2025

         The following standards, amendments and interpretations are effective for the nine months period ended March 31, 2025. These standards, amendments and interpretations are either not relevant to the Company's operations or did not have any material impact on the financial statements other than certain additional disclosures.

         Effective date (annual periods beginning on or after)

         Amendments to IFRS 7 'Financial Instruments: Disclosures' - Supplier

         finance arrangements January 01, 2024

         AmenAnents to IFRS 16 'Leases' - Amendments to clarify how a seller-lessee subsequently measures sale and leaseback transactions

         Amendmends to IAS 1 'Presentation of Financial Statements' - Classification of liabilities as current or non-current

         AmenAnends to IAS 1 'Presentation of Financial Statements' - Non-current liabilities with covenants

         Amendments to IAS 7 'Statement of Cash Flows' - Supplier finance arrangements

         January 01, 2024

         January 01, 2024

         January 01, 2024

         January 01, 2024

      2. New accounting standards, amendments and interpretations that are not yet effective

         The following standards, amendments and interpretations are only effective for accounting periods, beginning on or after the date mentioned against each of them. These standards, amendments and interpretations are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements other than certain additional disclosures.

         Amendments to IFRS 9 'Financial Instruments' - Amendments regarding the classification and measurement of financial instruments

         Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates' -Lack of Exchangeability

         AmenAnents to IFRS 7 'Financial Instruments: Disclosures' - Amendments regarding nature-dependent electricity contracts that are often structured as power purchase agreements (PPAs)

         Amendments to IFRS 9 'Financial Instruments' - Amendments regarding nature-dependent electricity contracts that are often structured as power purchase agreements (PPAs)

         IFRS 17 Insurance Contracts

         Effective date (annual periods beginning on or after)

         January 01, 2026

         January 01, 2025

         January 01. 2026

         January 01. 2026

         January 01. 2026

         Certain annual improvements have also been made to a number of IFRSs and IASs.

         IFRS 1 'First-time Adoption of International Financial Reporting Standards' has been issued by IASB effective from July 01, 2009. However, it has not been adopted yet locally by Securities and Exchange Commission of Pakistan (SECP).

         IFRS 17 - 'Insurance contracts' has been notified by the IASB to be effective for annual periods beginning on or after January 1, 2023. However SECP has notified the timeframe for the adoption of IFRS - 17 which will be adopted by January 01, 2026.

         IFRS 18 'Presentation and Disclosures in Financial Statements' has been issued by IASB effective from January 01, 2027. However, it has not been adopted yet locally by Securities and Exchange Commission of Pakistan (SECP).

         IFRS 19 'Subsidiaries without Public Accountability: Disclosures' has been issued by IASB effective from January 01, 2027. However, it has not been adopted yet locally by Securities and Exchange Commission of Pakistan (SECP)

4. ACCOUNTING ESTIMATES ASSUMPTION AND JUDGEMENTS

   The preparation of condensed interim financial statements is in conformity with the accounting and reporting standards as applicable in Pakistan.It is the responsibility of the management to make estimates, assumptions and use judgements that affect the application of policies and the reported amount of assets and liabilities and income and expenses.

   Judgements and estimates made by the management in the preparation of these condensed interim financial statements are same as those applied in the Company's annual financial statements as at and for the year ended June 30, 2024.

   March 31. June 30. 2025 2024 (Un-audited) (Audited)

   Note ---------- (Rupees in '000) ----------

5. PROPERTY, PLANT AND EQUIPMENT

   Operating fixed assets	5.1	25,818,428	28,196,929
   Capital work-in-progress	5.2	1,716,881	1,758,441
   		27,535,309	29,955,370

   1. Operating fixed assets

      Balance at beginning of the period / year	28,196,929	20,632,188
      Additions during the period / year 5.1.2	4,045	38,892
      Disposals during the period / year 5.1.2	(291,928)	(390,954)
      Assets held for sale 10	(1,156,899)	(423,170)
      Transfer from capital work-in-progress 5.2 & 5.1.2	76,095	347,483
      Surplus on revaluation of property,
      plant and equipment		9,030,439
      Depreciation charged during the period / year	(1,009,814)	(1,037,949)
      Balance at end of the period / year 5.1.1	25,818,428	28,196,929

      1. This includes plant and machinery having book value of Rs. 1,381.600 million located at Shershah, Karachi which was temporary shutdown due to financial constraints and market and operational challenges and was notified to Pakistan Stock Exchange on March 20, 2025.

         Additions		Deletions ( NBV)
         March 31, 2025	March 31, 2024	March 31, 2025	March 31, 2024
         	Un-Au	dited
         			250,000
         1,750	39,580	(12,832)
         74,100	224,584	(275,784)
         2,748	10,337	(618)
         760	10,778	(1,531)
         596	7,932	(1,011)	1,211
         186	18,304	(152)	430

      2. Details of additions and disposal for the nine months period ended are as follows:

         Leasehold land Buildings

         Plant and machinery Fufniture and fixtures Office equipments Vehicles

         Computers

         80,140

         311,515

         (291,928)

         251,641

   2. Captial work-in-progress

3,772,768 7,162,017

7.1 The movement in expected credit loss during the period / year is as follows:

Write-off during the period / year Balance at end of the period / year

(3,997) 594,745 672,922

1. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS

   1. This includes margin held by the bank against letter of credit amounting Rs. 262.250 million (June 30, 2024: Nil).

Cash-In-Hand

Bank balances

-Current accounts

-Saving accounts

1. NON CURRENT ASSETS HELD FOR SALE

   Karachi - Sky Tower Lahore - warehouse Islamabad - warehouse Karachi - Plots

   12,299 60,607

   101,384	134,195
   2,645,977	642

   2,747,361 134,837

   2,759,660 195,444

   882,338 -

   274,561

   423,170 423,170

   60,000 -

   10.1 1,640,069 423,170

   1. In order to meet the working capital requirements and to settle the liabilities, the Company has decided to sell its office space at Sky Tower and Lahore and Islamabad warehouse which comprise of leasehold land, building and machinery, furniture and office equipment installed therein. The Company acquired two plots from one of its customers in exchange for settlement of outstanding trade receivables. The Company has classified these assets, in accordance with the requirement of IFRS-5 " Non-current assets held for sale and discontinued operations".

      As per valuation carried out by M/S KG Traders, the market value of the Sky Tower building, Lahore and Islamabad warehouse was Rs. 912.435 million, Rs. 278.773 million and Rs. 423.170 million , and Karachi-Plots Rs. 60 million respectively.

2. LONG TERM FINANCING

   i i.i There is no change in the term and conditions as disclosed in the annual financial statements as at and for the year ended June 30, 2024.

   11.2 As at June 30, 2024, the current ratio of the Company falls below 1:1 which is required to be maintained as per existing loan agreements. As result of breach of condition of these long-term loans become payable on demand. Consequently, these loans along with related deferred grant pertaining to subsidized loan have been classified as current in accordance with the requirements of IAS-1 "Presentation of Financial Statements". As at March 31, 2025, the Company is still in breach of this covenant. The Company is currently engaged in restructuring of its long-term loan with the respective lenders and as disclosed in note 2 to the condensed interim financial statements it is at advanced stage and around 80% firms approvals have already been secured and the Company expects the restructuring would be finalized in near future. Consequently, the classification of long-term loan and deferred grant made in the annual financial statement as at and for the year ended June 30, 2024 have been maintained in these condensed interns financial statements.

3. LOAN FROM RELATED PARTY

   1. This represents loan obtained from a related party at a rate of 3 month KIBOR, repayable on December 31, 2027. The loan was obtained to meet the financial needs of the Company.

      March 31. June 30. 2025 2024 (Un-audited) (Audited)

      ------- (Rupees in '000) -------

4. DEFERRED TAXATION Deductible temporary differences arising in respect of:

   Deferred liability- Gratuity	(155,310)	(199,660)
   GIDC provisions	(110,073)	(110,054)
   Unused tax credits	(2,813,026)	(1,796,118)
   Trade debts	(231,950)	(262,440)
   Right of use asset - lease	(42,703)	(54,650)
   Others	(537) (391)

   (3,353,599) (2,423,312)

   March 31, June 30, 2025 2024 (Un-audited) (Audited)

   Note ------- (Rupees in '000) -------

   Taxable temporary diirerences arising in respect of:

   Accelerated tax depreciation / amortization Right-of-use-assets

   Surplus on revaluation of property, plant and equipment

5. SHORT-TERNI BORROWINGS

   Secured

   7,063,810 7,369,577

   3,107,838	3,284,485
   26,122	39,092
   3,929,850	4,046,000

   3,710,211 4,946,265

   Conventional mode Cash finance		776,435	891,487
   Running finance		2,298,727	2,435,960
   Short term loan			151,632
   Fhiance against trust receipts		9,208,247	7,903,905
   		12,283,409	11,382,984
   Islamic		5,569,983	6,478,973
   	14.1	17,853,392	17,861,957

   1. There is no change in the term and conditions as disclosed in the annual financial statements as at and for the ended year ended June 30, 2024.

6. CONTINGENCIES AND COMMITMENTS
   1. Contingencies

      There were no material changes in the status of contingencies as reported in the annual fniancial statements as at and for the year ended June 30, 2024.

      15.2 Commitments
      15.2.1 Outstanding letters of credit	173,094	2,883,937
      15.2.2 Outstanding letters of guarantee	484,855	487,856
      15.2.3 Capital expenditure		34;860

   2. .4 Commitments for rentals payable under Ijarah contracts m respect of vehicles and plant and machinery with Islamic banks are as follows: