DANDOT CEMENT COMPANY LIMITED
NOTES TO THE ACCOUNTS
FOR THE PERIOD ENDED DECEMBER 31, 2006 (UN-AUDITED)
1.	STATUS AND NATURE OF BUSINESS
	The Company is a public limited Company incorporated in Pakistan and is listed on Karachi and Lahore Stock Exchanges. The Company started its production on March 01, 1983 and has been engaged in production and marketing of cement.
2.	BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
	These financial statements have been prepared in accordance with the requirements of International Accounting Standard (IAS) 34 "Interim Financial Reporting" and are being submitted to the shareholders as required under Section 245 of the Companies Ordinance, 1984 and the listing regulations of the Karachi and Lahore Stock Exchanges.
	The accounting policies adopted in these financial statements are the same as those applied in the preparation of the preceding annual published accounts.
3.	SPONSORS AND ASSOCIATES LOANS
	During the period,sponsors of the company have injected a fresh local currency loan amounting Rs.250.00 million, carries markup 3 months KIBOR + 4%. Repayment of the said loans alongwith markup has been deferred and would be paid after December 31, 2007.
4.	CONTINGENCIES AND COMMITMENTS
4.1	Contingencies
	There has been no significant change in contigencies since the date of preceeding annual published financial statements except the matter stated as under:
4.1.1	Sui Northern Gas Pipelines Ltd.,(SNGPL) has charged the excess gas bill amounting Rs.37.90 million(June 30, 2006:Rs.37.90 million). On complaint lodged with the Oil & Gas Regulatory Authority (OGRA) against excessive billing by SNGPL,the matter was decided in favour of the company.SNGPL has filed an appeal against the said decision of OGRA.The appeal has also been adjudicated by OGRA in favour of the company.
4.1.2	Additional Collector of Sales Tax and Fedral Excise,Rawalpindi has issued a letter in July 2006 in which the issue of capacity production tax of Rs.114.77 million (June 30, 2006:Rs.114.77 million) pertaining to the period August 1991 to June 1993,has been raised.Additional Collector (Legal) Sales Tax and Fedral Excise,LTU,Lahore has decided the case and levied penalty of Rs.145.09 million  and Rs.2.11 million under  Rule 210 of Central Excise Rules 1994 and Section 33 (2)(CC) of the Sales Tax Act 1990 respectivly, in addtion to the above amount.However ,the company has filed appeal before Collector  Customs,Sales Tax and Fedral Excise (Appeals),Lahore .The matter is pending for adjudication.
4.2	Commitments
	Commitments in respect of irrevocable letter of credit as on December 31, 2006 are Rs. Nil (June 30, 2006: Rs. 21.7 million).
									December		June
									2006		2006
5.	OPERATING FIXED ASSETS								(Rupees in thousand)
	Opening fixed assts at WDV								1,796,726		1,812,714
	Additions								39,640		126,772
	(Deletions)								-		(41,808)
									1,836,366		1,897,678
	Less:
		Depreciation							49,419		101,297
		Depreciation on disposal							-		(345)
									49,419		100,952
									1,786,947		1,796,726
6.	COST OF SALES
					Second quarter ended				Half year ended
			Note		Dec. 2006		Dec. 2005		Dec. 2006		Dec. 2005
					(Rupees in thousand)				(Rupees in thousand)
	Raw materials consumed		6.1		32,600		23,283		82,827		51,578
	Salaries, wages and benefits				46,721		35,620		84,592		71,300
	Fuel, gas and electricity				161,833		137,314		293,486		280,125
	Stores and spares				11,330		10,108		35,344		16,140
	Rent, rates and taxes				43		503		1,309		546
	Vehicle running and maintenance				3,283		2,776		6,447		5,164
	Packing material				21,376		15,113		35,988		29,615
	Clinker consumption				-		-		21,247
	Depreciation				23,928		26,055		47,721		50,330
	Others				4,257		4,099		13,080		11,928
					305,371		254,871		622,041		516,726
	Adjustment of work in process				9,250		5,404		(7,349)		6,758
	Cost of goods manufactured				314,621		260,275		614,692		523,484
	Adjustment of finished goods				9,567		(1,366)		(2,579)		(1,296)
					324,188		258,909		612,113		522,188
6.1	It includes Golden Handshake expense of Rs.28.859 million (2005: Rs. Nil).
7.	Administration and General expenses includes deferred cost amortized amounting to Rs. 20.164 million (2005:Rs. 20.164 million).
8.	Finance cost includes exchange fluctuation loss amounting to  Rs.30.323 million ( 2005: Exchange Fluctuation gain Rs. 17.083 million).
9.	TAXATION
	In view of available tax losses, the current tax expense represents the minimum tax on turnover for the period due under Section 113 of the Income Tax Ordinance, 2001.
									Half year ended
									Dec. 2006		Dec. 2005
									(Rupees in thousand)
10.	TRANSACTIONS WITH ASSOCIATED COMPANY
	Expenses paid by associated company								3,854		261
	Expenses paid on behalf of associated company								186		-
	Mark up								595		-
	Inventory transferred								229		-
	Inventory received								95,403		1,742
	Sales								2,271		-
11.	CORRESPONDING FIGURES
	Previous figures have been rearranged and reclassified wherever necessary for the purpose of comparison and for better presentation. Consequently, following siginificant corresponding figures have been rearranged.
	-	Exchange fluctuation has been classified as finance cost. Previously, it was classifed as other (expenses) / income.
12.	GENERAL
		Figures in these financial statements have been rounded off to the nearest thousand.
13.	DATE OF AUTHORISATION
	These financial statements were authorised for issue on March 2, 2007 by the Board of Directors of the company.
	ABDUR RAFIQUE KHAN								A. SHOEB PIRACHA
	Chief Executive								Director