1st Quarterly Report September 30, 2016 - Shehzad Textileshahzadtex.com/wp-content/uploads/2016/10/QUATER-SEP16.pdf · Meezan Bank Limited. ... established letter of credit with bank

1st Quarterly Report September 30, 2016

SHAHZAD TEXTILE MILLS LIMITED



Contents

Company’s Information

Directors' Report - English

Directors’ Report - Urdu

Balance Sheet

Profit and Loss Account

Statement of Comprehensive Income

Cash Flow Statement

Statement of Changes in Equity

Notes to the Accounts

1

2

3

4

5

6

7

8

9-11



Company’s Information

Units # 1,3 & 4

Unit # 2

7th KM Sheikhupura Faisalabad Road, Sheikhupura.

Mills

Share Registrar

Hameed Majeed Associates (Pvt) Ltd. H.M. House, 7-Bank Square, Lahore.

Chief Financial Officer

Mr. Humayun Bakht

Company Secretary

Mr. Hassan-ud-Din Ansari

Auditors

Mian Parvez Aslam Chairman

Mr. Imran Aslam Chief Executive

Mr. Irfan Aslam

Syed Raza Ali Bokhari

Mr. Humayun Bakht

Mr. Ahsan Ahmad Khan

Mr. Maqsood Shahid Najmi

Audit Committee

Syed Raza Ali Bokhari Chairman

Mr. Irfan Aslam Member

Mr. Maqsood Shahid Najmi Member

Human Resource &Remuneration Committee

Syed Raza Ali Bokhari Chairman

Mr. Imran Aslam Member

Mr. Ahsan Ahmad Khan Member

19-A Off. Zafar Ali Road,

Gulberg-V, Lahore.

Ph: +92 (42) 35754024-27

Fax: +92 (42) 35712313

E-mail: [email protected]

Web: www.shahzadtex.com

Board of Directors Bankers

Registered Office

Habib Metropolitan Bank Ltd.

J S Bank ltd.

National Bank of Pakistan.

Meezan Bank Limited.

United Bank Limited.

Bank Al-Falah (Islamic Banking)

SHAHZAD TEXTILE MILLS LIMITED1


CONDENSED INTERIM FINANCIAL INFORMATION

OF

SHAHZAD TEXTILE MILLS LIMITEDFOR THE 1ST QUARTER ENDED

SEPTEMBER 30, 2016

Directors' Report

Dated: October 25, 2016

Lahore. Mr. Imran AslamChief Executive

For and on behalf of the Board

On behalf of the directors, I am pleased to present the un-audited financial statement for the first quarter ended September 30, 2016.

The company’s pretax profit for the quarter ended September 30, 2016 is Rs. 17.094 million as compared to loss of Rs.34.207 million in corresponding quarter of previous year depicting Earning per share of Rs.0.46 as compared to loss per share Rs.2.45 in the corresponding period of previous year.

The company’s sales of yarn for the current quarter increased to Rs. 1062.199 million from sales of Rs. 967.345 million in the corresponding period of previous year.

In the current quarter, the company’s overall performance is better as is apparent from the above financial information. The local yarn market exhibited favorable environment which resulted in increase in local sales and also returned profitability.

The prices of raw materials are currently rotating around Rs.6500/- per maund for Cotton, Rs. 117 per kg for Polyester and Rs.215/- per kg Viscose. The raw material prices exhibited volatile trend throughout the period under discussion. The year 2016-17 also confronts short fall of cotton crop. The crop produced is also not of good quality. This may effect the prices and quality of the yarn in the coming period. In-spite of all these adversities management still determined to give better financial results from local and international market in the time to come.

As we have already discussed in the annual report that the management has worked out a plan to replace old gas generators which are in operation since 2004 with new ones in order to provide the mill un-interrupted supply of power both through direct supply of electricity and generating electricity from gas for constant functioning of mills. Initially management has established letter of credit with bank for import of 2 generators from Austria which are expected to reach in mill on February 2017 and this process shall continue till completion of generator replacement plan.

We are thankful and appreciate the efforts of valued customers, bankers, share holders, staff members and management who have sincerely participated in all business activities of the company and strived to maintain cordial relation by creating pleasant working environment.




3SHAHZAD TEXTILE MILLS LIMITED


CONDENSED INTERIM BALANCE SHEET AS AT SEPTEMBER 30, 2016

(Rupees 000) (Rupees 000)

September 30,2016

(Un-audited)

Note

June 30, 2016

(Audited)

4

5

CAPITAL AND LIABILITIES Share Capital and Reserves Authorized capital: 40,000,000 (June 2016: 40,000,000) ordinary shares of Rs. 10 each Issued, subscribed and paid up capital 17,971,372 (June 2016: 17,971,372) ordinary shares of Rs. 10 each Reserves Surplus on Revaluation of Property, Plant and Equipment Non Current Liabilities Staff retirement benefits Deferred tax liability Current Liabilities Trade and other payables Accrued mark up Short term borrowings Provision for taxation Contingencies and Commitments ASSETS Non Current Assets Property, plant and equipment Long term investment in associate Long term deposits

Current Assets Stores and spares Stock in trade Trade debts Advances, trade deposits, prepayments and other receivables Short term investments Tax refunds due from the Government Cash and bank balances

400,000

179,714 1,041,439

1,221,153

501,395

94,815 229,047

323,862

242,740 4,640

138,834 47,989

434,203

-

2,480,613

1,561,391 349,531

13,970

1,924,892

44,376 244,414

70,719

106,510 1,184

77,520 10,998

555,721

2,480,613

400,000

179,714 1,029,325

1,209,039

505,320

93,332 230,791

324,123

229,138 4,807

320,591 37,341

591,877

-

2,630,359

1,576,075 344,015

13,970

1,934,060

49,408 363,391

45,988

77,381 1,184

70,796 88,151

696,299

2,630,359

The annexed notes form an integral part of this condensed interim financial information (un-audited).


Condensed Interim Profit And Loss Account (Un-Audited) FOR THE 1st QUARTER ENDED SEPTEMBER 30, 2016

Sales Cost of sales Gross Profit Operating expenses: - Selling and distribution - Administrative expenses Operating Profit / (Loss) Finance cost Other operating expenses Other income Share of net profit of associate Profit / (Loss) before Taxation Taxation Net Profit / (Loss) for the Period Earnings per Share - Basic

1,062,199 (998,910)

63,289

(14,175) (28,602)

(42,777)

20,512

(7,690) (1,457)

213 5,516

(3,418)

17,094

(8,905)

8,189

0.46

967,345 (957,548)

9,797

(11,629) (29,836)

(41,465)

(31,668)

(6,021) -

2,077 1,405

(2,539)

(34,207)

(9,819)

(44,026)

(2.45)

6

Note (Rupees 000) (Rupees 000)



The annexed notes form an integral part of this condensed interim financial information(un-audited).

September 30,2016

September 30,2015


6 SHAHZAD TEXTILE MILLS LIMITED

Condensed Interim Statement Of Comprehensive Income (Un-Audited) FOR THE 1st QUARTER ENDED SEPTEMBER 30, 2016

Net Profit / (Loss) for the Period Other Comprehensive Income for the Period Items that may be reclassified subsequently to profit and loss Share of associate's other comprehensive income - net of deferred tax Total Comprehensive Income / (Loss) for the Period

The annexed notes form an integral part of this condensed interim financial information(un-audited).

8,189

-

8,189

(44,026)

-

(44,026)


September 30,2016

September 30,2015


Condensed Interim Cash Flow Statement (Un-Audited) FOR THE 1st QUARTER ENDED SEPTEMBER 30, 2016


September 30,2016

September 30,2015


CASH FLOW FROM OPERATING ACTIVITIES Profit / (Loss) before taxation Adjustments for: - Depreciation - Share of net profit of associate - Provision for gratuity - Exchange gain - Provision for workers' (profit) participation fund - Provision for workers' welfare fund - Finance cost Operating Profit / (Loss) before Working Capital Changes Decrease / (Increase) in current assets - Stores and spares - Stock in trade - Trade debts - Advances, trade deposits, prepayments, and other receivables - Tax refunds due from the Government Increase in current liabilities - Trade and other payables Net Cash generated from Operations Income tax paid Gratuity paid Finance cost paid Net Cash generated from Operating Activities CASH FLOW FROM INVESTING ACTIVITIES Property, plant and equipment purchased Capital work in progress Net Cash used in Investing Activities CASH FLOW FROM FINANCING ACTIVITIES Liabilities against assets subject to finance lease Short term borrowings Net Cash used in Financing Activities Net Decrease in Cash and Cash Equivalents Cash and cash equivalents at the beginning of the period Cash and Cash Equivalents at the End of the three Months Ended


17,094

21,373 (5,516)

8,650 171 919 368

6,283 32,248

49,342

5,032 118,977 (24,902) (24,328) (6,724)

12,313 80,368

129,710

(4,801) (7,167) (6,450)

111,292

(6,689) -

(6,689)

- (181,756) (181,756)

(77,153)

88,151

10,998

(34,207)

22,666 (1,405)

6,000 - - -

4,783 32,044

(2,163)

3,034 101,019 (68,936) (26,857)

4,721

25,583 38,564

36,401

(15,368) (3,960) (7,856)

9,217

(1,221) (210)

(1,431)

(9,087) (28,766) (37,853)

(30,067)

82,556

52,489

Rupees (000)

Balance as at June 30, 2015 Total comprehensive loss for the first quarter Transferred from surplus on revaluation of property, plant and equipment on incremental depreciation charged in current period (net of deferred tax) Share in realized surplus on revaluation of property, plant and equipment of associate (net of deferred tax)

Transaction with owners Dividend paid during the period Balance as at September 30, 2015 Balance as at June 30, 2016 Total comprehensive Income for the first quarter Transferred from surplus on revaluation of property, plant and equipment on incremental depreciation charged in current period (net of deferred tax) Transaction with owners Dividend paid during the period Balance as at September 30, 2016


179,714

-

-

-

-

179,714

179,714

-

-

-

179,714

Condensed Interim Statement Of Changes In Equity (Un-Audited) FOR THE 1st QUARTER ENDED SEPTEMBER 30, 2016

ShareCapital

Share Premium Reserve

UnappropriatedProfit Total Equity

Particulars

5,796

-

-

-

-

5,796

5,796

-

-

-

5,796

1,033,080

(44,026)

3,657

660

-

993,371

1,023,529

8,189

3,925

-

1,035,643

1,218,590

(44,026)

3,657

660

-

1,178,881

1,209,039

8,189

3,925

-

1,221,153

8



SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE 1st QUARTER ENDED SEPTEMBER 30, 2016

Note 1 General Information Shahzad Textile Mills Limited is a Public Limited Company incorporated in Pakistan under the Companies Act, 1913 (now the Companies Ordinance, 1984). Its shares are quoted on Pakistan Stock Exchange Limited. The Company manufactures and deals in all types of yarn. The registered office of the Company is situated at 19-A, Off Zafar Ali Road, Gulberg - V , Lahore. Note 2 Basis of Preparation 2.1 This condensed interim financial statements have been prepared in accordance with

the directives issued by the Pakistan Stock Exchange and is in compliance with the International Accounting Standard - 34 (Interim Financial Reporting).

2.2 This condensed interim financial information is presented in Pak rupees, which is the Company's functional and presentational currency. Figures have been rounded off to nearest thousand rupees, unless stated otherwise. This condensed financial information does not include all the information required for annual financial statements and therefore, should be read in conjunction with the annual financial statements for the year ended June 30, 2016.

Note 3 Accounting Policies The accounting policies and methods of computation of this condensed interim financial information is the same as those followed in the preparation of annual financial statements for the preceding financial year ended on June 30, 2016.

Note 4 Contingencies and Commitments Contingencies

- The Company has provided bank guarantees / post dated cheques in the favour of following parties:

- Sui Northern Gas Pipeline Limited - Custom Authorities

- The Company is contingently liable for Rs. 13.090 million (June 2016: Rs. 11.886 million) on account of electricity duty on self generation. However, the company has not admitted the said duty and case is pending before the Supreme Court of Pakistan.

9


47.84 7.10

54.94

47.84 7.10

54.94

Rupees in Million

September 30,2016

(Un-audited)

June 30,2016

(Audited)


Commitments

- The Company's outstanding commitments / contracts as at the balance sheet date are as under:

Foreign bills of exchange purchased Letters of credit

Note 5 Property, Plant and Equipment 5.1 Operating fixed assets Opening written down value Additions during the period / year (at cost) Revaluation adjustment Disposals during the period / year (at written down value) Depreciation charge for the period / year Revaluation adjustment 5.2 Capital work in progress Capital work in progress

Note 6 Cost of Sales Raw materials consumed Stores and spares consumed Packing materials consumed Salaries, wages and other benefits Fuel and power Insurance Repairs and maintenance Other manufacturing expenses Depreciation Opening work in process Closing work in process Cost of goods manufactured Opening finished goods Closing finished goods

1st Quarterly Report September 30, 2016 Note 4, Contingencies and Commitments - Contd…

10 SHAHZAD TEXTILE MILLS LIMITED

Rupees (000) Rupees (000)

664,761 21,091 22,980

119,566 132,408

2,052 7,699 2,989

18,352 991,898

29,336 (28,548)

788 992,686

52,961 (46,737)

6,224 998,910

629,840 18,047 23,398

105,450 146,854

2,999 2,914 1,890

19,648 951,040

32,367 (30,207)

2,160 953,201

45,278 (40,931)

4,347 957,548

1,576,075 6,689

- 1,582,764

- 1,582,764

(21,373) -

1,561,391

- 1,561,391

1,630,097 -

(201,203) 1,428,894

- 1,428,894

(90,644) 237,825

1,576,075

- 1,576,075


September 30,2016

(Un-audited)

June 30,2016

(Audited)

51.17 116.32 167.48

85.48 33.89 119.37

Rupees in Million

September 30,2016

(Un-audited)

June 30,2016

(Audited)

September 30,2016

(Un-audited)

September 30,2015

(Un-audited)

11



Note 7 Transactions with Related Parties The related parties comprise associated companies, staff retirement funds, directors and key management personnel. The Company in the normal course of business carries out transactions with various related parties. The Company enters into transactions with related parties on the basis of mutually agreed terms. Significant balances and transactions with related parties are as follows: Transaction during the period Sargodha Jute Mills Limited

Directors

79

612

108

610

September 30,2016

(Un-audited)

September 30,2015

(Un-audited)


Relationship

Associate

Related party Nature of Transaction

Purchase of materials, goods and services Sale of materials, goods and services Rent receivable / received Mark up on loan from directors

67

52

108

707

Note 8 Authorization of Interim Financial Information This condensed interim financial information (un-audited) is authorized for issue on October 25, 2016 by the Board of Directors of the Company. Note 9 General Corresponding figures have been re-arranged / reclassified, wherever necessary, to facilitate comparison. No significant re-arrangements have been made in this condensed interim financial information (un-audited).

Documents

1st Quarterly Report September 30, 2016 - Shehzad Textileshahzadtex.com/wp-content/uploads/2016/10/QUATER-SEP16.pdf · Meezan Bank Limited. ... established letter of credit with bank