Contents. Condensed Interim Unconsolidated Financial Information

Transcription

1 Nine Months Ended Contents Corporate 02 Company Information 03 Directors' Review 04 Condensed Interim Unconsolidated Financial Information 06 Condensed Interim Unconsolidated Statement of Financial Position 08 Condensed Interim Unconsolidated Statement of Profit and Loss 09 Condensed Interim Unconsolidated Statement of other Comprehensive Income 10 Condensed Interim Unconsolidated Statement of Cash Flows 11 Condensed Interim Unconsolidated Statement of Changes in Equity 12 Notes to the Condensed Interim Unconsolidated Financial Information Condensed Interim Consolidated Financial Information 22 Condensed Interim Consolidated Statement of Financial Position 24 Condensed Interim Consolidated Statement of Profit and Loss 25 Condensed Interim Consolidated Statement of other Comprehensive Income 26 Condensed Interim Consolidated Statement of Cash Flows 27 Condensed Interim Consolidated Statement of Changes in Equity 28 Notes to the Condensed Interim Consolidated Financial Information 1

2 Nine Months Ended Company Information Board of Directors Sh. Naseem Ahmad Chief Executive Officer Mr. Rehman Naseem Chairman Mr. Aamir Naseem Sheikh Mr. Fazal Ahmed Sheikh Mr. Faisal Ahmed Mr. Fahd Mukhtar Mr. Babar Ali Independent Director Audit Committee Mr. Babar Ali Mr. Rehman Naseem Mr. Fahd Mukhtar Chairman Member Member Human Resource and Remuneration Committee Company Secretary Chief Financial Officer Auditors Mr. Rehman Naseem Chairman Mrs. Aamir Naseem Sheikh Member Mr. Faisal Ahmad Member Mr. Asad Mustafa Mr. Muhammad Azam KPMG Taseer Hadi & Co., Chartered Accountants Bankers Allied Bank Limited National Bank of Pakistan MCB Bank Limited Meezan Bank Limited United Bank Limited Standard Chartered Bank Pakistan Limited Habib Bank Limited Soneri Bank Limited NIB Bank Limited Bank Al-Falah Limited Bank Al-Habib Limited Faysal Bank Limited Askari Bank Limited The Bank of Punjab The Bank of Khyber Pak Kuwait Investment Company (Pvt.) Limited Pak Brunei Investment Company Limited Pak Oman Investment Company Limited Summit Bank Limited Samba Bank Limited Dubai Islamic Bank (Pakistan) Limited JS Bank Limited Head Office & Shares Department: Shares Registrar: Registered Office: 59/3, Abdali Road, Multan. Phone: (92) , Fax: (92) Website: Vision Consulting Ltd. 3-C, LDA Flats, Lawrence Road, Phone: (92) , Fax: (92) /7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. Phone: (92) Mills: i) Fazal Nagar, Jhang Road, Muzaffargarh Pakistan Ph. (92) ,18 Fax: (92) ii) Qadirpur Rawan Bypass, Khanewal Road, Multan Pakistan Ph. (92) , Fax : (92)

3 Nine Months Ended DIRECTORS' REVIEW Dear Shareholders! Assalam-o-Alaikum Your Directors are pleased to present before you un-audited financial information of Fazal Cloth Mills Limited for the nine months ended March 31,. Your Company earned after tax profit of Rs million as compared to Rs million for the corresponding period last year after charging depreciation of Rs million (March 31, : Rs million). EBITDA of Rs. 2, million (March 31, : Rs. 1, million) was generated. Sales were recorded at Rs. 23, million during the nine months of the current financial year compared to Rs. 19, million during the corresponding period of last year, registering an increase of 20.03%. Earnings per share of the Company for the nine months ended March 31, is Rs as compared to Rs for corresponding period in previous year. Subsidiary Companies and Consolidated Financial Statements The consolidated condensed interim un-audited financial information comprising Fazal Cloth Mills Limited and Fazal Weaving Mills Limited is annexed with separate interim condensed un-audited financial information of your Company in accordance with the requirements of International Accounting Standard 27 (Consolidated and Separate Financial Statements), 34 (Interim Financial Reporting) and applicable provisions of Companies Act,. During the nine months, the Group earned after tax profit of Rs million as compared to Rs million earned in the same period of last year after charging depreciation of Rs million as compare to Rs million in the same period last year. EBITDA of Rs. 2, million (March 31, : Rs. 2, million) was generated. Earnings per share of the Group for the nine months ended March 31, is Rs as compared to Rs for corresponding period in previous year. Financial Highlights Nine Month Ended Increase/. (Decrease) % Net Sales (Rs. '000') 24,787,046 22,468, Gross Profit (Rs. '000') 2,682,860 1,922, Profit before tax (Rs. '000') 1,011, , Profit after tax (Rs. '000') 671, , Gross Profit (%) Profit after tax (%) Earning per share Rs Future Outlook Rupee depreciated against US$ by another 5% in March, taking the exchange rate to Rs per $. The long overdue correction is occurring gradually and is expected to continue. This is positive for the export oriented textile sector of the country which has suffered a lot in the last few years due to overvaluation of the exchange rate. Your Company stands to benefit from this adjustment. Although the operating environment remains tough due to high energy costs and huge overdue receivables from the government (duty drawback, sales and income tax refunds, dues under TUFS scheme), your Company expects financial performance for the next quarter to be reasonable. Good demand for yarn and fabric has resulted in higher exports and satisfactory sales position. As a result, profit margins are expected to remain reasonable. Management and Labor Relations The relations between the workers and management remained cordial throughout the period. Your Directors wish to thank all workers and staff members for their hard work. For & on behalf of the Board Place: Multan Dated: 26 April (Rehman Naseem) Chairman/Director 3

4 Nine Months Ended ,468,892 1,922, , , ,787,046 2,682,860 1,011, , Dated: 26 April 4

5 Nine Months Ended Fazal Cloth Mills Limited (The Company) Condensed Interim Un-Consolidated Financial Information (Un-Audited) For the period ended 5

6 Nine Months Ended Condensed Interim Un-Consolidated Statement of Financial Position (Un-Audited) Note (Audited) Rupees ASSETS Non-current assets Property, plant and equipment 5 22,448,881,048 17,964,030,369 Long term advances and investments 6 4,876,677,819 4,165,944,439 Long term loan to subsidiary 7 530,000, ,000,000 Long term deposits 24,071,493 24,446,493 27,879,630,360 22,684,421,301 Current assets Stores, spares and loose tools 535,915, ,091,281 Stock-in-trade 8,930,278,309 6,420,465,744 Trade debts 8 3,918,837,806 4,243,040,569 Loans and advances 513,107, ,169,337 Trade deposits and short term prepayments 18,664,944 6,682,417 Mark-up accrued 108,091,064 46,240,903 Other receivables 415,866, ,066,647 Short term investment 214,116, ,658,800 Tax refunds due from the Government 903,278, ,370,161 Cash and bank balances 91,971, ,327,278 15,650,128,770 13,516,113,137 43,529,759,130 36,200,534,438 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR 6

7 Nine Months Ended As at Note (Audited) Rupees EQUITY AND LIABILITIES Share capital and reserves Authorized share capital Issued, subscribed and paid-up capital Capital reserves Unappropriated profits Surplus on revaluation of fixed assets - net of tax 700,000, ,000, ,000, ,000,000 1,553,158,321 1,606,703,247 7,936,202,950 7,296,152,237 9,623,565,933 6,306,367,002 19,412,927,204 15,509,222,486 Non-current liabilities Long term financing - secured Long term musharika - secured Deferred liabilities: - Staff gratuity - Deferred taxation Current liabilities Trade and other payables Un-claimed dividend Accrued mark-up Short term borrowings - secured Current portion of non-current liabilities Contingencies and commitments 9 7,256,833,695 6,068,698, ,111,250, ,750, ,469, ,404,551 2,663,671,692 2,175,617,785 11,247,224,608 9,327,471,222 2,210,788,815 1,841,097,881 8,537,242 7,879, ,595, ,256,533 8,506,570,695 7,516,146,659 1,873,115,566 1,749,460,234 12,869,607,318 11,363,840,730 43,529,759,130 36,200,534,438 (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 7

8 Nine Months Ended Condensed Interim Un-Consolidated Statement of Profit and Loss (Un-Audited) For the Nine months ended Nine months ended Quarter ended Note Rupees Rupees Rupees Rupees Sales - net 11 23,345,421,043 19,449,187,283 8,245,732,302 6,535,143,749 Cost of sales 12 (21,032,506,055) (17,917,496,204) (7,274,971,896) (6,058,804,337) Gross profit 2,312,914,988 1,531,691, ,760, ,339,412 Selling and distribution expenses (380,515,539) (297,306,687) (129,989,780) (102,188,451) Administrative expenses (237,669,867) (194,926,561) (83,022,466) (66,557,658) Other expenses (62,806,682) (38,616,697) (12,859,041) (11,040,646) (680,992,088) (530,849,945) (225,871,287) (179,786,755) Other income 79,210, ,633,886 35,422,452 28,086,434 Profit from operations 1,711,133,380 1,159,475, ,311, ,639,091 Finance cost (822,151,716) (623,020,828) (288,923,123) (217,872,890) Profit before taxation 888,981, ,454, ,388, ,766,201 Taxation 13 (303,091,124) (78,897,266) (155,601,336) (57,229,463) Profit after taxation 585,890, ,556, ,787,112 49,536,738 Earnings per share The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 8

9 Nine Months Ended Condensed Interim Un-Consolidated Statement of Other Comprehensive Income (Un-Audited) For the Nine months ended Nine months ended Quarter ended Rupees Rupees Rupees Rupees Profit after taxation 585,890, ,556, ,787,112 49,536,738 Other comprehensive income - net of tax Items that are or may be reclassified subsequently to profit and loss: Net change in fair value of available for sale financial assets (53,544,926) 318,119, ,468, ,287,465 Total comprehensive income for the period 532,345, ,676, ,255, ,824,203 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 9

10 Nine Months Ended Condensed Interim Un-Consolidated Statement of Cash Flows (Un-Audited) For the Nine months ended Cash flows from operating activities Nine months ended Nine months ended Rupees Rupees Profit before taxation 888,981, ,454,192 Adjustments for: Depreciation of property, plant and equipment 618,797, ,244,949 Unrealized loss / (gain) on re-measurement of investments 5,542,000 (32,926,000) Provision for gratuity 71,631,900 65,403,678 Provision for infrastructure cess 34,048,785 26,780,780 Gain on disposal of property, plant and equipment (8,507,329) (126,095) Dividend income - (86,892,539) Finance cost 822,151, ,020,828 Cash generated from operations before working capital changes 2,432,646,176 1,690,959,793 Effect on cash flows due to working capital changes (Increase) / decrease in current assets: Stores, spares and loose tools 49,175,562 (178,750,352) Stock-in-trade (2,509,812,565) (2,667,609,915) Trade debts 324,202,763 (1,427,439,413) Loans and advances 237,062, ,293,970 Trade deposits and short term prepayments (11,982,527) (16,466,802) Other receivables (165,800,342) (5,881,052) (2,077,155,081) (3,896,853,564) Increase in current liabilities Trade and other payables 336,299, ,094,432 Cash generated from / (used) in operations 691,791,063 (2,015,799,339) Gratuity paid to employees (60,567,229) (75,524,117) Long term deposits 375,000 - Taxes paid (211,484,919) (300,373,955) Finance cost paid - net (862,663,410) (600,052,752) (1,134,340,558) (975,950,824) Net cash used in operating activities (442,549,495) (2,991,750,163) Cash flows from investing activities Capital expenditure incurred (1,226,487,046) (1,460,357,527) Proceeds from sale of property, plant and equipment 31,744, ,025 Investment in associates - net (764,278,306) (236,595,487) Dividend received - 86,892,539 Net cash used in investing activities (1,959,020,667) (1,609,249,450) Cash flows from financing activities Long term financing obtained 2,306,362,118 2,853,419,549 Long term financing repaid (969,572,072) (1,348,834,317) Long term musharika obtained 500,000,000 - Long term musharika repaid (292,500,000) (148,750,000) Short term borrowings - net 990,424,036 3,333,811,980 Cash dividend paid (157,500,000) (74,691,065) Net cash generated from financing activities 2,377,214,082 4,614,956,146 Net increase / (decrease) in cash and cash equivalents (24,356,081) 13,956,533 Cash and cash equivalents at the beginning of the period 116,327,278 85,453,947 Cash and cash equivalents at the end of the period 91,971,197 99,410,480 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 10

11 Nine Months Ended Condensed Interim Un-Consolidated Statement of Changes in Equity (Un-Audited) For the Nine months ended Share capital Capital reserves Revenue reserve Capital Fair value reserveavailable for sale Un-appropriated Total Ordinary shares Share premium redemption profits reserve financial assets Rupees Balance as at 01 July ,000,000 77,616, ,000,000 1,369,835,755 6,782,748,947 8,705,200,702 Total comprehensive income Profit for nine months ended ,556, ,556,926 Other comprehensive income / (loss) ,119, ,119, ,119, ,556, ,676,783 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,798, ,798,727 Transactions with the owners of the Company: Cash Rs. 2.5 per share (75,000,000) (75,000,000) Balance as at 300,000,000 77,616, ,000,000 1,687,955,612 7,336,104,600 9,576,676,212 Total comprehensive income Profit for three months ended (69,270,410) (69,270,410) Other comprehensive income / (loss) (333,868,365) (4,983,281) (338,851,646) (333,868,365) (74,253,691) (408,122,056) Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,690,820 33,690,820 Transfer from surplus on revaluation of fixed assets on disposal - net of tax , ,508 Balance as at 300,000,000 77,616, ,000,000 1,354,087,247 7,296,152,237 9,202,855,484 Total comprehensive income Profit for nine months ended ,890, ,890,540 Other comprehensive income / (loss) (53,544,926) - (53,544,926) (53,544,926) 585,890, ,345,614 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,658, ,658,003 Surplus transferred on disposal of a revalued asset ,002,170 3,002,170 Transactions with the owners of the Company: Cash Rs per share (157,500,000) (157,500,000) Balance as at 300,000,000 77,616, ,000,000 1,300,542,321 7,936,202,950 9,789,361,272 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 11

12 Nine Months Ended Notes to the Condensed Interim Un-consolidated Financial Information For the period ended 1 Reporting entity Fazal Cloth Mills Limited ("the Company") was incorporated in Pakistan in 1966 as a Public Limited Company under the Companies Act, 1913 (now the Companies Act, ) Previously, the shares of the Company were quoted on Karachi and Lahore Stock Exchanges of Pakistan. However, due to integration of Karachi, Lahore and Islamabad Stock Exchanges into Pakistan Stock Exchange ("PSX") with effect from 11 January 2016 the shares of the Company are now quoted on PSX. The registered office of the Company is situated at 69/7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. The Company is principally engaged in manufacture and sale of yarn and fabric. The manufacturing facilities are located at Fazal Nagar, Jhang Road, Muzaffargarh and Qadirpur Rawan Bypass, Khanewal Road, Multan in the province of Punjab. 2 Basis of preparation 2.1 Basis of Accounting This condensed interim financial information comprises the condensed interim unconsolidated statement of financial position of the Company as at and the related condensed interim unconsolidated statement of profit and loss, condensed interim unconsolidated statement of other comprehensive income, condensed interim unconsolidated statement of cash flows and condensed interim unconsolidated statement of changes in equity together with the notes forming part thereof. This condensed interim financial information of the Company for the nine months period ended 31 March has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - Interim Financial Reporting, Islamic Financial Reporting Standards (IFAS) and provisions of and directives issued under the Companies Act,. In case where requirements differ, the provisions of or directives issued under the Companies Act, have been followed This condensed interim financial information does not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statements for the year ended. Corresponding statement of financial position numbers are extracted from the annual audited financial statements of the Company for the year ended, whereas corresponding statement of profit and loss, statement of other comprehensive income, statement of cash flows statement and statement of changes in equity are stated from unaudited condensed interim financial information of the Company for the nine months period ended. This condensed interim financial information is unaudited and being submitted to the shareholders as required under Section 237 of the Company Act, and Code of Corporate Governance These condensed interim financial information are the separate financial statements of the Company in which investments in subsidiaries are accounted for on the basis of direct equity interest rather than on the basis of reported results and net assets of the investee. Condensed interim consolidated financial information of the Group is prepared and presented separately. 12

13 Nine Months Ended The Company has following major investments: Name of the company Shareholding Nature Subsidiary - Fazal Weaving Mills Limited ("The Subsidiary") 100% Spinning Name of the company Shareholding Nature Associates - Fatima Energy Limited (''FEL'') 24.11% Energy Generation - Fatima Transmission Company Limited (''FTCL'') 24.00% Transmission of Energy - Fatima Electric Company Limited 20.00% Energy Generation 3 Estimates and judgments The preparation of condensed interim unconsolidated financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. Estimates and judgments made by the management in the preparation of this condensed interim unconsolidated financial information are the same as those that were applied to the unconsolidated annual financial statements of the Company as at and for the year ended. 4 Statement of consistency in accounting policies 4.1 The accounting policies and the methods of computation adopted in the preparation of this condensed interim unconsolidated financial information are same as those applied in the preparation of the unconsolidated annual financial statements for the year ended There were certain new standards and amendments to the approved accounting standards which became effective during the period but are considered not to be relevant or have any significant effect on the Company's operations and are, therefore, not disclosed. The following amendments and interpretations of approved accounting standards will be effective for accounting periods as detailed below: IFRS 15 - Revenue from contracts with customers 01 July IFRS 9 - Financial Instrument 01 July (Audited) 5 Property, plant and equipment Note Rupees Rupees Operating property, plant and equipment ,851,429,326 17,553,135,722 Capital work-in-progress ,451, ,894,647 22,448,881,048 17,964,030,368 13

14 Nine Months Ended 5.1 Opening net book value (Audited) Rupees Rupees 17,553,135,722 16,563,486,879 Additions during the period / year: Freehold land - 353,212 Factory building 81,509, ,330 Non-factory building 80,646,607 14,679,680 Plant and machinery 828,770,533 1,708,601,975 Furniture and fixtures 537,317 3,162,920 Office equipment 2,856,038 2,835,748 Vehicles 2,191,715 12,391,695 Electric fittings and installations 581,934 11,884,818 Tools, laboratory equipment and arms 42,811,903 2,600 Fire extinguishing equipments and scales - 36,000 1,039,905,274 1,754,682,978 Addition on revaluation surplus 3,900,398,332 - Carrying value of assets disposed off during the period / year (23,237,356) (7,941,528) Depreciation charge for the period / year (618,772,645) (757,092,607) Closing net book value 21,851,429,326 17,553,135, The detail of capital work-in-progress is as follows: Factory building Material and expenses 220,942, ,371,459 Advance payments 22,472, ,967, ,414, ,338,710 Non-factory building Material and expenses 94,551, ,675,777 Advance payments ,551, ,675,777 Plant and machinery Cost and expenses 23,703, ,295 Advance payments 26,931,793 9,172,340 Letters of credit 188,220,922 23,158, ,856,234 32,945,580 Electrical fittings and installation Material and expenses 4,787,007 - Advance payments - - 4,787,007 - Office equipment Material and expenses 359,576 - Advance payments 1,861,000 8,000 2,220,576 8,000 Furniture and fixtures Material and expenses 482,940 1,752,419 Advance payments - 797, ,940 2,549,580 Vehicles Material and expenses 2,137,602 - Advance payments 11,001,380 1,377,000 13,138,982 1,377, ,451, ,894,647 14

15 Nine Months Ended (Audited) 6 Long term advances and investments Note Rupees Rupees Long term advances to associate Pakarab Energy Limited 25,904,160 25,904,160 Fatima Transmission Company Limited 23,320,790 11,761,200 Fatima Energy Limited 1,057,601, ,882, ,106,826, ,548,045 Investments Investment in related parties: Available for sale - at fair value 6.2 2,068,723,978 2,122,268,904 Associated companies - at cost 6.3 1,429,483,490 1,429,483,490 Subsidiary company - at cost ,000, ,000,000 3,748,207,468 3,801,752,394 Others Others - at cost ,644,000 21,644,000 4,876,677,819 4,165,944, It represents advances against future issue of ordinary shares as per terms of special resolution passed in EOGM accordingly. 6.2 Associated Company - at fair value Shares Market value Market value per share Percentage of holding Number Rupees Rupees Fatima Fertilizer Company Limited - quoted 62,994,031 62,994,031 2,068,723,978 2,122,268, % 3.00% 6.3 Associated companies - at cost Shares Carrying value Percentage of holding Number Rupees Fatima Energy Limited - unquoted 137,421, ,421,349 1,374,213,490 1,374,213, % 24.24% Fatima Transmission Company Limited - unquoted 5,520,000 5,520,000 55,200,000 55,200, % 24.0% Fatima Electric Company Limited - unquoted 7,000 7,000 70,000 70, % 20.0% 1,429,483,490 1,429,483, This represent investment in Fazal Weaving Mills Limited ("FWML") set up to carry business of textile spinning. The Company being sponsor of FWML holds 100% of equity share of FWML. FWML commenced its commercial operations from 01 April This represents 0.21 million ( : 0.21 million) ordinary shares of Multan Real Estate (Private) Limited which are valued at cost owing to non-availability of market value of its shares. 15

16 Nine Months Ended 7 Loan to Subsidiary Company It represents loan disbursed to FWML to finance its capital expenditure as well as the working capital needs thereof. It carries mark-up at weighted average borrowing cost of the Company. During the period mark up was charged at the rates ranging from 7.26% to 7.50% per annum ( : 7.22% to 7.29% per annum). 8 Trade debts includes amounts due from following related parties: (Audited) Rupees Rupees Fazal Rehman Fabrics Limited 1,298, ,695,560 Ahmad Fine Textile Mills Limited - 4,036,691 Reliance Weaving Mills Limited 8,706,297 3,406,079 10,004, ,138,330 9 Long term financing - secured Note (Audited) Rupees Rupees Opening balance 7,475,659,120 6,004,221,550 Loan obtained during the period / year 9.1 2,306,362,118 3,429,363,417 Repayments made during the period / year (969,572,072) (1,957,925,847) Closing balance 8,812,449,166 7,475,659,120 Less: current portion grouped under current liabilities (1,555,615,566) (1,406,960,234) 7,256,833,599 6,068,698, Markup bearing finances from conventional banks: The Bank of Punjab - Term finance ("TF") ,000, ,995,866 Allied Bank Limited - Term loan ("TL") under LTFF Scheme ,039, ,627,983 Habib Bank Limited - Demand finance under LTFF Scheme ,569, ,857,410 The Bank of Punjab -Term finance III under LTFF Scheme ,172,504 - The Bank of Punjab - Term finance VI 5,004, ,176,638 United Bank Limited- Demand Finance II - 796,927,367 Demand Finance I1 under LTFF Scheme ,576,000 - Demand Finance III - 300,000, ,576,000 1,096,927,367 Pak Oman Investment Company Limited - Term finance ("TF") ,000, ,000,000 JS Bank - Term Finance ("TF") ,000,000 - National Bank of Pakistan- Demand Finance - VII - 140,954,791 Pak Brunei Investment Company Limited - Term finance ("TF") - 250,000,000 Standard Chartered Bank (Pakistan) Limited - Term finance ("TF") - 450,000,000 2,306,362,118 3,429,363,417 16

17 Nine Months Ended The Bank of Punjab Term Finance During the period, a term finance of Rs million has been obtained to refinance / finance local capital expenditure ("Capex") on Balancing Modernization and Replacement ("BMR") already incurred and to be incurred by the Company. The principal amount of loan is repayable within period of eight years including grace period of two years, in twelve equal half yearly installments. It carries mark up at the rate of six months KIBOR % per annum in arrears and payable in arrears on quarterly basis. This loan is secured against joint pari passu ("JPP") charge / mortgage of Rs. 1, million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors Allied Bank Limited - Term Loan - VII under State Bank of Pakistan ("SBP") Long term financing facility ("LTFF") Scheme During the period, a term loan of Rs million has been obtained to finance the retirement of letters of credit opened for import of textile machinery for expansion / BMR purpose. Out of total term loan, Rs million has been refinanced from SBP under its LTFF Scheme. The principal loan amount is repayable within a period of ten years, including a grace period of two years, in sixteen equal half yearly installments. It carries mark up at the rate of six months KIBOR % per annum on its own source loan and SBP's applicable rate for loan under LTFF scheme % per annum on loan under SBP's LTFF scheme. This loan is secured against JPP charge / mortgage of Rs. 2, million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors Habib Bank Limited Demand Finance under SBP s LTFF Scheme During the period, demand finance of Rs million has been obtained to finance the retirement of letters of credit for import of textile machinery for BMR purpose. Total limit of demand finance is Rs million which is partially disbursed during last year. Aggregate amount of demand finance has been refinanced from SBP under LTFF Scheme and it is repayable within the period of ten years including two years grace period, in sixteen half yearly equal installments of principal amount. It carries mark up at the rate of SBP rate +0.50% per annum. This finance is secured against JPP charge / mortgage of Rs million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors The Bank of Punjab Term Finance under SBP s LTFF Scheme During the period an amount of Rs million has been obtained for retirement of lettersof credit for import of textile machinery / generators / components for BMR / expansion and for import & local purchase of machinery / components / equipment for renewable Energy Captive Combined Cycle Power Plant of 1.6MW. Out of term loan, Rs million has been refinanced from SBP under its LTFF Scheme. Total limit of this finance is for Rs. 500 million. This finance is repayable within the period of ten years including grace period of two years in sixteen equal half yearly installments of principal amount. It carries mark up at the rate of SBP rate % per annum on SBP's LTFF and six months KIBOR % per annum on own source term finance United Bank Limited Demand Finance-II under SBP s LTFF Scheme During the period, an amount of Rs million has been obtained for retirement of lettersof credit for imported machinery under CAPEX / BMR in existing units. This finance is repayable within the period of ten years including grace period of two years in sixteen equal half yearly installments of principal amount. It carries mark up at the rate of SBP rate % per annum on SBP's LTFF and six months KIBOR % per annum on own source demand finance, payable in arrears on quarterly basis. This finance is secured against JPP / mortgage of Rs. 1, million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors Pak Oman Investment Company Ltd Term Finance During the period a term finance of Rs million has been obtained to refinance the capex incurred by the Company. It is repayable within the period of seven years inclusive of grace period of two years in twenty equal quarterly installments of principal amount. It carries mark up at the rate of six months KIBOR % per annum. This finance is secured against joint pari passu charge / mortgage of Rs million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors JS Bank Ltd Term Finance During the period a term finance of Rs million has been obtained for repayments of current maturities of outstanding term loan / re-profiling of balance sheet. It is repayable within the period of five years inclusive of grace period of one year in eight equal half yearly installments of principal amount. It carries mark up at the rate of six months KIBOR % per annum. This finance is secured against joint pari passu charge / mortgage of Rs million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors. 17

18 Nine Months Ended 10 Long term musharika - secured (Audited) Rupees Rupees Opening balance 1,221,250,000 1,445,000,000 Loan obtained during the period / year ,000,000 - Repayments made during the period / year (292,500,000) (223,750,000) Closing balance 1,428,750,000 1,221,250,000 Less: current portion grouped under current liabilities (317,500,000) (342,500,000) 1,111,250, ,750, Faysal Bank Limited Diminishing Musharaka During the period a Diminishing Musharaka facility of Rs million has been obtained for adjustment, swap or repayment of existing term finances with financial objective of balance sheet re-profiling. It is repayable within the period of five years inclusive of grace period of two years in six equal half yearly installments of principal amount. It carries profit at the rate of three months KIBOR % per annum. This finance is secured against joint pari passu charge / mortgage of Rs.1, million on all present and future fixed assets of the Company and personal guarantees of the sponsoring directors. Note 11 Sales - net Note Nine months ended Quarter ended Rupees Rupees Rupees Rupees Export 8,994,642,481 5,990,976,465 3,273,217,039 2,089,228,610 Local 13,435,741,378 13,015,881,340 4,646,544,874 4,295,857,317 Waste 593,761, ,329, ,911, ,057,822 23,024,145,257 19,449,187,283 8,134,673,904 6,535,143,749 Duty drawback on exports ,275, ,058,398-23,345,421,043 19,449,187,283 8,245,732,302 6,535,143, This represents an amount of Duty Drawback on exports under Duty Drawback of Taxes Order allowed by the Ministry of Textile under the Prime Minister's package of incentives for exporters. 12 Cost of sales Nine months ended Quarter ended Rupees Rupees Rupees Rupees Raw and packing materials consumed 12,859,312,199 11,532,553,807 4,307,820,209 3,974,602,026 Manufacturing costs 4,844,121,042 4,274,578,059 1,686,741,695 1,452,184,256 17,703,433,241 15,807,131,866 5,994,561,904 5,426,786,282 Opening stock of workin-process 276,835, ,793, ,536, ,982,206 Closing stock of workin-process (310,843,983) (265,736,979) (310,843,983) (265,736,979) Cost of goods manufactured 17,669,425,081 15,789,187,906 5,973,254,377 5,439,031,508 Opening stock of finished goods 1,809,881,306 2,270,180,548 1,926,834,207 1,712,918,454 Finished goods purchased 3,284,939,507 1,536,299,882 1,122,601, ,093,110 22,764,245,894 19,595,668,336 9,022,689,633 7,766,043,073 Closing stock of finished goods (1,752,997,340) (1,710,006,966) (1,752,997,340) (1,710,006,966) Cost of raw material sold 21,257,501 31,834,833 5,279,602 2,768,230 21,032,506,055 17,917,496,204 7,274,971,896 6,058,804,337 18

19 Nine Months Ended 13 The Finance Act, 2015 introduced a new tax under Section 5A of the Income Tax Ordinance, 2001 on every public Company other than a scheduled bank or modaraba, that derives profits for the tax year and does not distribute cash dividend within six months of the end of said tax year or distribute dividends to such extent that its reserves, after such distribution, are in excess of 100% of its paid up capital. However, with effect from tax year this tax on undistributed reserves is not applicable to a public Company which distributes at least 40% of its after tax profits within six months of the end of the tax year through cash dividend or bonus shares. The Board of Directors of the Company intends to distribute sufficient cash dividend for the year ended, to comply with the above stated requirements. Accordingly, no provision for tax on undistributed reserves has been recognized in this condensed interim financial information for the period ended. 14 Date of authorization for issue This condensed interim unconsolidated financial information was authorized for issue by the Board of Directors on 26 April. 15 General Figures in the financial Information have been rounded-off to the nearest rupee. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 19

20 Nine Months Ended 20

21 Nine Months Ended Fazal Cloth Mills Limited (The Group) Condensed Interim Consolidated Financial Information (Un-Audited) For the period ended 21

22 Nine Months Ended Condensed Interim Consolidated Statement of Financial Position (Un-Audited) Note (Audited) Rupees ASSETS Non-current assets Property, plant and equipment 5 25,840,631,844 20,982,732,578 Intangible assets 551, ,225 Long term advances and investments 6 4,563,909,970 3,872,437,148 Long term deposits 24,071,493 24,446,493 30,429,164,557 24,880,258,444 Current assets Stores, spares and loose tools 585,079, ,485,047 Stock-in-trade 10,564,172,694 7,579,999,590 Trade debts 7 4,236,367,116 4,619,059,328 Loans and advances 215,953, ,595,026 Trade deposits and short term prepayments 21,485,110 6,682,417 Mark-up accrued 59,869,776 27,137,816 Other receivables and deposits 449,894, ,284,068 Short term investment 214,116, ,658,800 Tax refundable from the Government 1,129,007,482 1,062,978,019 Cash and bank balances 105,073, ,354,044 17,581,020,548 14,792,234,155 48,010,185,105 39,672,492,599 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR 22

23 Nine Months Ended As at Note (Audited) Rupees EQUITY AND LIABILITIES Share capital and reserves Authorized share capital Issued, subscribed and paid-up capital Capital reserves Unappropriated profits Surplus on revaluation of fixed assets - net of tax 700,000, ,000, ,000, ,000,000 1,553,158,321 1,606,703,247 8,156,635,503 7,420,558,491 10,178,074,259 6,507,472,663 20,187,868,083 15,834,734,401 Non-current liabilities Long term financing - secured Long term musharika - secured Deferred liabilities: - Staff gratuity - Deferred taxation Current liabilities 8 8,438,711,679 7,439,660, ,119,568, ,679, ,447, ,614,337 2,634,045,520 2,056,716,653 12,413,773,162 10,600,671,013 Trade and other payables Un-claimed dividend Accrued profit / interest / mark-up Short term borrowings - secured Current portion of non-current liabilities Contingencies and commitments 2,520,596,502 2,014,497,883 8,537,242 7,879, ,214, ,002,402 10,364,415,692 8,940,727,933 2,199,779,905 1,993,979,544 15,408,543,860 13,237,087,185 48,010,185,105 39,672,492,599 (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 23

24 Nine Months Ended Condensed Interim Consolidated Statement of Profit and Loss (Un-Audited) For the Nine months ended Nine months ended Quarter ended Note Rupees Rupees Rupees Rupees Sales - net 10 24,787,045,725 22,468,891,879 8,587,244,887 7,396,378,468 Cost of sales 11 (22,104,185,332) (20,546,830,753) (7,514,783,185) (6,806,398,056) Gross profit 2,682,860,393 1,922,061,126 1,072,461, ,980,412 Selling and distribution expenses (407,259,318) (355,662,519) (135,808,066) (125,858,215) Administrative expenses (246,452,020) (202,280,169) (86,479,579) (68,669,839) Other expenses (70,427,108) (47,206,011) (14,041,650) (12,725,061) (724,138,446) (605,148,699) (236,329,295) (207,253,115) Other income 50,613, ,188,573 25,986,674 18,646,759 Profit from operations 2,009,335,880 1,447,101, ,119, ,374,056 Share of loss of associate (19,260,558) (9,204,451) (2,543,746) (5,411,328) Finance cost (978,208,465) (747,449,840) (349,967,642) (262,603,972) Profit before taxation 1,011,866, ,446, ,607, ,358,756 Taxation 12 (339,882,434) (146,548,718) (144,833,003) (78,297,936) Profit after taxation 671,984, ,897, ,774,690 55,060,820 Attributable to: Equity holders of the Holding Company 671,984, ,897, ,774,690 55,060,820 Earnings per share - basic and diluted The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 24

25 Nine Months Ended Condensed Interim Consolidated Statement of Other Comprehensive Income (Un-Audited) For the Nine months ended Nine months ended Quarter ended Rupees Rupees Rupees Rupees Profit after taxation 671,984, ,897, ,774,690 55,060,820 Other comprehensive income - net of tax Items that will never be reclassified to profit and loss: Net change in fair value of available for sale financial assets (53,544,926) 318,119, ,468, ,287,465 Total comprehensive income for the period ended 618,439, ,017, ,242, ,348,285 Attributable to: Equity holders of the Holding Company 618,439, ,017, ,242, ,348, ,439, ,017, ,242, ,348,285 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 25

26 Nine Months Ended Condensed Interim Consolidated Statement of Cash Flows (Un-Audited) For the Nine months ended Nine months ended Rupees Nine months ended Rupees Cash flows from operating activities Profit before taxation Adjustments for: Depreciation of property, plant and equipment Amortization of intangible assets Unrealized loss / (gain) on re-measurement of investments Provision for gratuity Provision for infrastructure cess Gain on disposal of property, plant and equipment Share of loss of associate Dividend income Finance cost Cash generated from operations before working capital changes 1,011,866, ,446, ,606, ,437,147 90, ,462 5,542,000 (32,926,000) 77,181,768 70,275,972 37,504,043 26,780,780 (8,507,329) (126,095) 19,260,558 9,204,451 - (86,892,539) 978,208, ,449,840 2,854,753,876 2,099,786,727 Effect on cash flows due to working capital changes (Increase) / decrease in current assets: Stores, spares and loose tools Stock-in-trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Increase in current liabilities Trade and other payables Cash generated from / (used in) operations Gratuity paid to employees Long term deposits Taxes paid Finance cost paid - net Net cash used in operating activities Cash flows from investing activities Capital expenditure incurred Proceeds from sale of property, plant and equipment Investment in associates Dividend received Net cash used in investing activities 41,406,043 (209,253,781) (2,984,173,104) (3,220,973,246) 382,692,213 (1,573,319,927) (18,358,882) (50,690,785) (14,802,693) (19,443,826) (140,610,621) 16,097,123 (2,733,847,044) (5,057,584,441) 469,252, ,606, ,159,227 (2,643,190,857) (70,348,873) (82,814,989) 375,000 - (274,806,677) (364,390,809) (975,728,308) (698,547,743) (1,320,508,858) (1,145,753,541) (730,349,631) (3,788,944,398) (1,276,325,229) (1,502,976,858) 31,744, ,025 (764,278,313) (236,595,487) - 86,892,539 (2,008,858,857) (1,651,868,781) Cash flows from financing activities Long term financing obtained Long term financing repaid Long term musharika obtained Long term musharika repaid Short term borrowings - net Cash dividend paid Net cash generated from 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 period 2,335,010,738 2,853,419,549 (1,105,159,547) (1,468,938,496) 500,000,000 - (295,110,538) (151,360,538) 1,423,687,759 4,187,771,746 (157,500,000) (74,691,065) 2,700,928,412 5,346,201,195 (38,280,077) (94,629,984) 143,354, ,689, ,073, ,059,229 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 26

27 Nine Months Ended Condensed Interim Consolidated Statement of Changes in Equity (Un-Audited) For the Nine months ended Share capital Capital reserves Revenue reserve Capital Fair value reserveavailable for sale Un-appropriated Total Ordinary shares Share premium redemption profits reserve financial assets Rupees Balance as at 01 July ,000,000 77,616, ,000,000 1,369,835,755 6,833,013,573 8,755,465,328 Total comprehensive income Profit for nine months ended ,897, ,897,991 Other comprehensive income ,119, ,119, ,119, ,897, ,017,848 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,457, ,457,043 Transactions with the owners of the Holding Company: Cash Rs. 2.5 per share (75,000,000) (75,000,000) Balance as at 300,000,000 77,616, ,000,000 1,687,955,612 7,482,368,607 9,722,940,219 Total comprehensive income Profit (loss) for three months ended (88,928,905) (88,928,905) Other comprehensive income / (loss) (333,868,365) (6,144,162) (340,012,527) (333,868,365) (95,073,067) (428,941,432) Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,652,442 32,652,442 Transfer from surplus on revaluation of fixed assets on disposal - net of tax , ,507 Balance as at 300,000,000 77,616, ,000,000 1,354,087,247 7,420,558,489 9,327,261,736 Total comprehensive income Profit for nine months ended ,984, ,984,423 Other comprehensive income / (loss) (53,544,926) - (53,544,926) (53,544,926) 671,984, ,439,497 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period - net of tax ,590, ,590,421 Surplus transferred on disposal of a revalued asset ,002,170 3,002,170 Transactions with the owners of the Holding Company: Cash Rs per share (157,500,000) (157,500,000) Balance as at 300,000,000 77,616, ,000,000 1,300,542,321 8,156,635,503 10,009,793,824 The annexed notes of this condensed interim financial information form an integral part of these financial information. (SHEIKH NASEEM AHMAD) CHIEF EXECUTIVE OFFICER (REHMAN NASEEM) DIRECTOR (MUHAMMAD AZAM) CHIEF FINANCIAL OFFICER 27

28 Nine Months Ended Notes to the Condensed Interim Consolidated Financial Information For the period ended 1 Reporting entity The Group comprises of - Fazal Cloth Mills Limited ("the Holding Company"); and - Fazal Weaving Mills Limited ("the Subsidiary Company"). Associates - Fatima Energy Limited - Fatima Transmission Company Limited - Fatima Electric Company Limited 1.1 Fazal Cloth Mills Limited ("the Company") was incorporated in Pakistan in 1966 as a Public Limited Company under the Companies Act, 1913 (now the Companies Act, ) Previously, the shares of the Holding Company were quoted on Karachi and Lahore Stock Exchanges of Pakistan. However, due to integration of Karachi, Lahore and Islamabad Stock Exchanges into Pakistan Stock Exchange ("PSX") with effect from 11 January 2016 the shares of the Company are now quoted on PSX. The registered office of the Holding Company is situated at 69/7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. The Company is principally engaged in manufacture and sale of yarn and fabric. The manufacturing facilities are located at Fazal Nagar, Jhang Road, Muzaffargarh and Qadirpur Rawan Bypass, Khanewal Road, Multan in the province of Punjab. 1.2 The Subsidiary Company was incorporated in Pakistan in 1989 as a public limited company under the Repealed Companies Ordinance, The registered office of the Subsidiary Company is situated at 69/7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. The Subsidiary Company is engaged in the manufacture and sale of yarn. The manufacturing facility of the Subsidiary Company is located at Mauza Khairabad Qadir Pur Rawan By Pass, Khanewal Road, Multan in the province of Punjab. The Subsidiary Company commenced its commercial production on April 01, Basis of preparation 2.1 Basis of Accounting This condensed interim financial information comprises the condensed interim consolidated Statement of financial position of the Group as at and the related condensed interim consolidated statement of profit and loss, condensed interim consolidated statement of other comprehensive income, condensed interim consolidated statement of cash flows and condensed interim consolidated statement of changes in equity together with the notes forming part thereof. This condensed interim financial information of the Group for the nine months period ended has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - Interim Financial Reporting, Islamic Financial Reporting Standards (IFASs) and provisions of and directives issued under the Companies Act,. In case where requirements differ, the provisions of or directives issued under the Companies Act, have been followed This condensed interim financial information does not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statements for the year ended. Corresponding consolidated statement of financial position numbers are extracted from the annual audited financial statements of the Group for the year ended, whereas corresponding consolidated statement of profit and loss, consolidated statement of other comprehensive income, consolidated statement of cash flows and consolidated statement of changes in equity are stated from unaudited condensed interim financial information of the Group for the nine months period ended. 28