Riaz Ahmad & Company Chartered Accountants

AKD SECURITIES LIMITED

STATEMENT OF NET CAPITAL BALANCE AS AT 31 DECEMBER 2019

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Riaz Ahmad & Company Chartered Accountants

INDEPENDENT AUDITORS' REPORT ON STATEMENT OF NET CAPITAL BALANCE TO THE CHIEF EXECUTIVE OFFICER OF AKD SECURITIES LIMITED

Opinion

We have audited the Statement of Net Capital Balance of AKD Securities Limited (the Securities Broker) together with the notes to the Statement of Net Capital Balance as at 31 December 2019 ("the Statement").

In our opinion, the financial information in the Statement of the Securities Broker as at 31 December 2019 is prepared, in all material respects, in accordance with the requirements of the Second Schedule of the Securities Brokers (Licensing and Operations) Regulations, 2016 (the Regulations) read with Rule 2(d) of the Securities Exchange Commission (SEC) Rules, 1971 (SEC Rules, 1971) issued by the Securities & Exchange Commission of Pakistan (SECP).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Statement section of our report. We are independent of the Securities Broker in accordance with the ethical requirements that are relevant to our audit of the Statement in Pakistan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Basis of Accounting and Restriction on Distribution

We draw attention to 2.1 to the Statement, which describes the basis of accounting. The Statement is prepared to assist AKD Securities Limited to meet the requirements of the Securities and Exchange Commission of Pakistan (SECP), Pakistan Stock Exchange (PSX) and National Clearing Company of Pakistan Limited (NCCPL). As a result, the Statement may not be suitable for another purpose. Our report is intended solely for AKD Securities Limited, SECP, PSX and NCCPL and should not be distributed to parties other than AKD Securities Limited or the SECP, PSX or NCCPL. Our opinion is not modified in respect of this matter.

Responsibilities of Management and Those Charged with Governance for the Statement

Management is responsible for the preparation of the Statement in accordance with the Regulations and the SEC Rules, 1971, and for such internal control as management determines is necessary to enable the preparation of the Statement that is free from material misstatement, whether due to fraud or error.

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Riaz Ahmad & Company Chartered Accountants

Those charged with governance is responsible for overseeing the Securities Broker's financial reporting process.

Auditors' Responsibilities for the Audit of the Statement

Our objectives are to obtain reasonable assurance about whether the Statement is free from material misstatement whether due to fraud or error, and to issue an auditors' report includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Statement.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Securities Broker's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

RIAZ AHMAD & COMPANY Chartered Accountants

Engagement Partner: Muhammad Waqas

Dated: 14 March 2020

KARACHI

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The ann d notes from 1 to 7 form an integral part of this statement.

Chief Financial Officer

AKD SECURITIES LIMITED STATEMENT OF NET CAPITAL BALANCE

AS AT 31 DECEMBER 2019

A- DESCRIPTION OF CURRENT ASSETS Rupees

Cash and bank balances

Rupees Rupees

Cash in hand 383,926 Cash at bank:

-clients accounts 134,452,431 -proprietary accounts 4,921,435 139,373,866

Cash equivalents (Note 3) 1,160,804,880 1,300,562,672

Trade receivable Book value 245,391,263 Less : Overdue for more than fourteen days (217,948,145) 27,443,118

Investment in listed securities Securities on the exposure list mark to market (Note 4) 638,207,186 Less: 15% discount (95,731,078) 542,476,108

Securities purchased for clients 26,989,258

TOTAL CURRENT ASSETS A 1,897,471,156

B- DESCRIPTION OF CURRENT LIABILITIES

Trade payables Book value 1,274,056,810 Less: Overdue for more than thirty days (765,643,655) 508,413,155

Other liabilities (Note 5) 859,638,833

TOTAL CURRENT LIABILITIES B 1,368,051,988

NET CAPITAL BALANCE A-B 529,419,168

Chief Executive Officer

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AKD SECURITIES LIMITED NOTES TO THE STATEMENT OF NET CAPITAL BALANCE

AS AT 31 DECEMBER 2019

1. THE COMPANY AND ITS OPERATIONS

AKD Securities Limited ("the Company") was incorporated as a public limited company under the repealed Companies Ordinance, 1984 (Now Companies Act 2017) on 16 May 2007. The Company is a Trading Right Entitlement Certificate (TREC) holder of Pakistan Stock Exchange Limited. During the period, the Company has been transferred Universal Membership Certificate of Pakistan Mercantile Exchange Limited (PMEX) from its associated company AKD Commodities (Private) Limited. The registered office of the Company is located at 602, Continental Trade centre, Block-8, Clifton Karachi. The Company is principally engaged in the business of brokerage, financial consultancy, underwriting, and securities research.

The Company is wholly-owned subsidiary of Aqeel Karim Dhedhi Securities (Private) Limited which holds 100% shares of the Company through direct and beneficial ownership.

2. STATEMENT OF COMPLIANCE

2.1 This statement of net capital balance (here in after referred as "the statement") has been prepared and presented in accordance with the requirements of the Second Schedule of the Securities Brokers (Licensing and Operations) Regulations, 2016 (the Regulations) read with Rule 2(d) of the Securities Exchange Commission (SEC) Rules, 1971 (SEC Rules, 1971) issued by the Securities & Exchange Commission of Pakistan (SECP) and further in light of the clarifications / guidelines in respect of third schedule of SEC Rules, 1971 issued by SECP vide their File No. SMD-/SSED-C&IW-(633)/2016 dated 08 September 2016.

2.2 The statement is presented in Pak Rupees, which is the Company's functional and presentation currency.

3. CASH EQUIVALENTS

Cash equivalents represents the balances deposited with Pakistan Stock Exchange Limited (PSX) and National Clearing Company of Pakistan Limited (NCCPL) as margins in respect of the followings:

Rupees

Ready market exposure 807,400,000

Future market exposure and loss 295,815,475

Margin Trading System (MTS) exposure and margin with NCCPL 57,089,405

Stock Index Futures Contracts (SIFC) exposure 500,000 1,160,804,880

Cash equivalents comprises of:

Client balances 1,139,604,379

Proprietary funds 21,200,501 1,160,804,880

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4. SECURITIES ON THE EXPOSURE LIST MARK TO MARKET

Number of Security Name

Shares

Market Value

Rupees

57,290 AKD Capital Limited 8,854,742

7,100 Oil & Gas Development Company Limited 1,010,472

1,100 Treet Corporation Limited 23,199

16,500 Pakistan Synthetics Limited 297,000

11,984,066 Javedan Corporation Limited 363,117,200

7,336 Bankislami Pakistan Limited 81,356

403,500 The Universal Insurance Company Limited 2,421,000

1,602,953 Pakistan Stock Exchange Limited 20,004,853

12,063,237 Ansari Sugar Mills Limited 79,617,364

6,600,000 TRG Pakistan Limited - Class 'A' 162,030,000

60,000 Metropolitan Steel Corporation Limited 750,000

638,207,186

5. OTHER LIABILITIES Rupees

Current portion of liabilities against right to use assets subject to lease 4,991,781

Other creditors 31,413,814

Taxes payables 12,454,569

Accrued expenses 19,772,738

Payable to Staff Provident Fund 2,319,406

Unclaimed deposits 13,812,536

Commission payable 9,230,334

Trade payables overdue more than 30 days 765,643,655 859,638,833

6. AUTHORIZATION OF THE STATEMENT

This statement has been duly signed by chief executive officer and chief financial officer of the Company on 1 4 MAR 2020 •

7. GENERAL

Figures have been rounded off to the nearest of Rupee.

Chief Financial Officer Chief Executive Officer

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