(Un-Audited) For the Nine Months Ended March 31, 2016

Transcription

1 (Un-Audited) For the Nine Months March 31, 2016

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4 DIRECTORS REVIEW Dear Shareholders, Assalam-o-Alaikum, Your s are pleased to present before you un -audited financial information of Fazal Cloth Mills Limited for the nine months ended March 31, Sales were recorded at Rs. 15,624 million during the nine months of the current financial year compared to Rs. 19,279 million during the corresponding period last year, registering a decrease of 18.96%. Your Company earned a pre -tax profit of Rs million (after tax profit of Rs million) as compared to Rs million (after tax profit of Rs million) for the corresponding period last year after charging depreciation of Rs million (2015: Rs million). Earnings per share of the Company for the nine months ended March 31, 2016 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 Ordinance, During the nine months reported the Group earned a pre-tax profit of Rs million (after tax profit of Rs million) as compared to Rs million (after tax profit of Rs million) earned in the same period last year after charging depreciation of Rs million as compare to Rs million in the same period last year. Future Outlook Since March this year, RLNG has become available on a twenty-four-hour basis for the textile industry in Punjab. This has enabled your Company to operate its gas fired power plants at full capacity. Not only the electricity supplied by these power plants is more reliable, cost of electricity produced is 25% cheaper than the power that your Company was purchasing from MEPCO. Due to this, cost of production has reduced sharply improving margins. With this major game changing step, your management expects better days ahead. Yarn/Fabric prices increased slightly during the quarter. However, raw cotton prices in Pakistan remain higher than those prevailing in competitor countries due to failure of the Cotton Crop. It is imperative that GOP takes initiatives to make good quality BT Seed available to farmers so that a better Crop can be harvested in the future. Pakistani Rupee remains approximately 15% overvalued against its realistic value as indicated by the REER. As a result, the country s exports are suffering and imports are increasing. The situation is not sustainable. It is high time our Finance Ministry stops interfering in the exchange rate market and allows the Rupee to find its correct market value. Management and Labor Relations The relations between the workers and management remained cordial throughout the period. Your s wish to thank all workers and staff members for their hard work. For & on behalf of the Board Place: Multan Dated: April 26, (Rehman Naseem) Chairman/

5 Fazal Cloth Mills Limited (The Company) Condensed Interim UnConsolidated Financial Statements (Un-Audited) for the period ended March 31,

6 Condensed Interim UnConsolidated Balance Sheet ASSETS Non-current assets (Un-audited) (Audited) March 31, June 30, Rupees Rupees Property, plant and equipment 16,974,188,745 17,465,989,537 Long term investments 3,742,430,092 3,657,165,531 Long term loan 530,000, ,000,000 Long term deposits 24,446,493 22,807,493 21,271,065,330 21,675,962,561 Current assets Stores, spares and loose tools 442,399, ,331,937 Stock-in-trade 5,662,907,690 4,446,033,548 Trade debts 3,084,621,610 3,805,423,237 Loans and advances 1,036,428, ,883,769 Trade deposits and short term prepayments 23,201,033 7,385,469 Mark-up accrued 45,105,717 98,148,500 Other receivables and deposits 85,058, ,025,479 Short term investments 251,480, ,590,770 Tax refundable 360,392, ,593,136 Cash and bank balances 201,466, ,824,779 11,193,062,440 11,029,240,624 32,464,127,770 32,705,203,185 The annexed notes from 1 to 4 form an integral part of these financial statements. 5

7 As at March 31, 2016 (Un-audited) March 31, 2016 Rupees (Audited) June 30, 2015 Rupees EQUITY AND LIABILITIES Share capital and reserves Authorized share capital 700,000,000 Issued, subscribed and paid-up capital 300,000,000 Capital reserves 1,580,875,695 Unappropriated profits 6,749,324,355 8,630,200,050 Surplus on revaluation of fixed assets - net of tax 6,683,365, ,000, ,000,000 1,945,611,134 6,406,846,268 8,652,457,402 6,865,760,927 Non-current liabilities Long term financing - secured 4,855,221,212 Long term musharika - secured 1,296,250,000 Deferred liabilities: - Staff gratuity 223,454,324 - Deferred taxation 1,957,096,646 8,332,022,182 Current liabilities Trade and other payables 2,049,095,430 Accrued profit / interest / mark-up 292,397,178 Short term borrowings - secured 4,683,838,451 Current portion of non-current liabilities 1,793,208,609 8,818,539,668 Contingencies and commitments 5,549,364, ,000, ,473,755 1,950,326,682 7,907,165,362 1,815,673, ,152,121 5,741,657,906 1,426,336,191 9,279,819,494 32,464,127,770 32,705,203,185 6

8 Condensed Interim Un-Consolidated Profit and Loss Account (Un-Audited) For the nine month ended March 31, 2016 Nine Months Nine Months Three Months Three Months March 31, March 31, March 31, March 31, Rupees Rupees Rupees Rupees Sales - net 15,624,234,580 19,278,839,860 5,511,773,256 5,936,014,375 Cost of sales (14,301,350,645) (17,441,936,303) (5,002,821,812) (5,421,219,742) Gross profit 1,322,883,935 1,836,903, ,951, ,794,633 Distribution cost (162,639,291) (228,169,027) (46,015,390) (72,819,237) Administrative expenses (183,256,293) (179,012,539) (57,884,318) (57,521,598) Other expenses (87,069,589) (61,876,185) (50,785,339) (14,212,386) (432,965,173) (469,057,751) (154,685,047) (144,553,221) Other income 308,824, ,198,621 (21,329,406) 80,861,484 Profit from operations 1,198,743,000 1,536,044, ,936, ,102,896 Finance cost (709,148,026) (957,936,869) (238,179,812) (327,166,765) Profit before taxation 489,594, ,107,558 94,757, ,936,131 Taxation (179,511,947) (187,319,185) (31,055,987) (44,651,462) Profit after taxation 310,083, ,788,373 63,701,192 79,284,669 Earnings per share The annexed notes from 1 to 4 form an integral part of these financial statements. 7

9 Condensed Interim Un-Consolidated Statement of Comprehensive Income (Un-Audited) For the nine month ended March 31, 2016 Nine Months Nine Months Three Months Three Months March 31, March 31, March 31, March 31, Rupees Rupees Rupees Rupees Profit after taxation 310,083, ,788,373 63,701,192 79,284,669 Other comprehensive income - net of tax Net change in fair value of available for sale financial assets (364,735,439) 602,222,936 (721,281,655) 175,753,346 Total comprehensive income for the nine months ended (54,652,412) 993,011,309 (657,580,463) 255,038,015 The annexed notes from 1 to 4 form an integral part of these financial statements. 8

10 Condensed Interim Un-Consolidated Cash Flow Statement (Un-Audited) For the nine month ended March 31, 2016 Cash flows from operating activities Nine Months Nine Months March 31, March 31, Note Rupees Rupees Profit before taxation Adjustments for: Depreciation of property, plant and equipment Unrealized loss / (gain) on re-measurement of investments Provision for gratuity Provision for infrastructure cess Loss / (Gain) on disposal of property, plant and equipment Gain on disposal of investment Dividend income Finance cost Cash generated from operations before working capital changes 489,594, ,107, ,827, ,278,077 41,143,886 (109,604,254) 73,235,346 65,053,401 21,690,323 20,894,778 (6,473) (8,781,647) (82,311,224) - (191,556,417) (392,832) 709,148, ,936,869 1,646,765,511 1,968,491,950 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 operations Gratuity paid to employees Long term deposits Taxes paid Finance cost paid - net Net cash generated / (used) in operating activities Cash flows from investing activities Capital expenditure incurred Proceeds from sale of property, plant and equipment Investment in associates Proceeds from sale of investment Long term loans to subsidiary Dividend received Net cash used in investing activities (51,067,906) 27,198,316 (1,216,874,142) (862,253,349) 720,801,627 (507,015,979) (594,544,433) (132,795,740) (15,815,564) (41,235,501) 48,966, ,567,390 (1,108,533,551) (1,342,534,863) 210,486, ,378, ,718, ,335,646 (62,254,776) (35,539,154) (1,639,000) - 6,458,187 (93,521,826) (659,860,186) (912,342,127) (717,295,775) (1,041,403,107) 31,422,245 (222,067,461) (94,203,731) (274,914,298) 183,926 14,674,920 - (945,857,490) 335,277, (30,060,000) 191,556, , ,814,543 (1,235,764,036) 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 (used) in / generated from financing activities Net (decrease) / increase 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 500,089, ,618,264 (921,110,383) (637,950,658) 1,250,000,000 - (55,000,000) (25,000,000) (1,057,819,455) 1,180,920,158 (148,754,229) (75,000,000) (432,594,964) 1,339,587,764 31,641,824 (118,243,733) 169,824, ,251, ,466, ,007,419 The annexed notes from 1 to 4 form an integral part of these financial statements. 9

11 Condensed Interim Un-Consolidated Statement of Changes in Equity (Un-Audited) For the nine month ended March 31, 2016 Share capital Capital Reserves Revenue reserve Ordinary shares Share premium Capital redemption reserve Fair value reserveavailable for sale financial assets Un-appropriated profits Balance as at June 30, ,000,000 77,616, ,000,000 1,058,645,242 5,822,543,822 7,433,805,064 Total Rupees Total comprehensive income Profit for nine months ,788, ,788,373 Other comprehensive income / (loss) ,222, ,222, ,222, ,788, ,011,309 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period -net of tax ,722,678 92,722,678 Transactions with the owners of the Company: Cash Rs. 2.5 per share (75,000,000) (75,000,000) Balance as at March 31, ,000,000 77,616, ,000,000 1,660,868,178 6,231,054,873 8,444,539,051 Total comprehensive income Profit for three months ,724, ,724,478 Other comprehensive income / (loss) ,126,956 (13,134,987) 18,991, ,126, ,589, ,716,447 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the `period-net of tax ,604,207 66,604,207 Transfer from surplus on revaluation of fixed assets on disposal - net of tax 2,597,697 2,597,697 Balance as at June 30, ,000,000 77,616, ,000,000 1,692,995,134 6,406,846,268 8,652,457,402 Total comprehensive income Profit for nine months ,083, ,083,027 Other comprehensive income / (loss) (364,735,439) - (364,735,439) (364,735,439) 310,083,027 (54,652,412) Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period- net oftax ,395, ,395,060 Cash Rs. 5 per share (150,000,000) (150,000,000) Balance as at March 31, ,000,000 77,616, ,000,000 1,328,259,695 6,749,324,355 8,630,200,050 10

12 Notes to the Condensed Interim Unconsolidated Financial Information (Un-audited) For the nine month ended March 31, 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 Ordinance, 1984) and its shares are quoted on Pakistan Stock Exchange Limited (formerly Karachi and Lahore stock exchanges). The registered office of the Company is situated at 69/7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. The Company is 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 balance sheet of the Company as at March 31, 2016 and the related condensed interim unconsolidated profit and loss account, condensed interim unconsolidated statement of comprehensive income, condensed interim unconsolidated cash flow statement 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 March 31, 2016 has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 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 June 30, Comparative balance sheet numbers are extracted from the annual audited financial statements of the Company for the year ended June 30, 2015, whereas comparative profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity are stated from unaudited condensed interim financial information of the Company for the nine months period ended March 31, This condensed interim financial information is unaudited and being submitted to the shareholders as required under Section 245 of the Companies Ordinance, 1984 and the Listing Regulations of Pakistan Stock Exchange Limited. 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 separately. 11

13 The Company has following major investment: Name of the company Subsidiary - Fazal Weaving Mills Limited ("Subsidiary") Name of the company Associates - Fatima Energy Limited - Fatima Transmission Company Limited Shareholding 100% Shareholding 26.30% 37.50% Nature Spinning Nature Energy Generation Transmission of Energy 3 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 tax year and does not distribute cash dividend within six months of the end of said tax year or distribute dividends to such an extent that its reserves, after such distribution, are in excess of 100% of its paid up capital. However, this tax on undistributed reserves is not applicable to a public company which distributes profit equal to either 40 percent of its after tax profits or 50% of its paid up capital, whichever is less, within six months of the end of the tax year. The Board of s of the Company intends to distribute sufficient cash dividend for the year ended 30 June 2016 (refer to note 23) 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 nine months ended March 31, Date of authorization for issue This condensed interim unconsolidated financial information was authorized for issue by the Board of s on April 26,

14 Fazal Cloth Mills Limited (The Group) Condensed Interim Consolidated Financial Statements (Un-Audited) For the period ended March 31,

15 ASSETS Condensed Interim Consolidated Balance Sheet (Un-Audited) (Un-audited) (Audited) March 31, June 30, Rupees Rupees Non-current assets Property, plant and equipment 20,110,801,624 19,891,189,835 Intangible assets 869,663 1,006, Long term investments 3,490,147,579 3,402,513,890 Long term deposits 24,446,493 34,418,530 23,626,265,359 23,329,128,380 Current assets Stores, spares and loose tools 491,768, ,686,925 Stock-in-trade 6,574,393,629 5,433,567,576 Trade debts 3,296,420,056 4,048,617,303 Loans and advances 255,278, ,136,342 Trade deposits and short term prepayments 24,966,447 7,385,469 Mark-up accrued 14,488,272 12,219,779 Other receivables and deposits 85,062, ,025,479 Short term investments 251,480, ,590,770 Tax refundable 489,062, ,060,909 Cash and bank balances 244,456, ,228,341 11,727,377,058 11,950,518,893 35,353,642,417 35,279,647,273 The annexed notes from 1 to 5 form an integral part of these financial statements. 15

16 EQUITY AND LIABILITIES As at March 31, 2016 (Un-audited) (Audited) March 31, June 30, Rupees Rupees Share Capital and Reserves Authorized share capital 700,000, ,000,000 Issued, subscribed and paid-up capital 300,000, ,000,000 Capital reserves 1,580,875,695 1,945,611,134 Unappropriated profits 6,740,682,826 6,459,764,305 8,621,558,521 8,705,375,439 Surplus on revaluation of fixed assets - net of tax 6,899,655,465 7,090,382,591 Non-current liabilities Long term financing - secured 6,574,067,223 6,701,070,813 Long term musharika - secured 1,310,814, ,174,569 Deferred liabilities: - Staff gratuity 234,527, ,481,472 - Deferred taxation 1,864,079,180 1,862,752,475 Current liabilities 9,983,488,045 8,996,479,329 Trade and other payables 2,159,274,151 1,899,625,930 Accrued profit / interest / mark-up 326,785, ,444,923 Short term borrowings - secured 5,342,109,488 6,715,274,961 Current portion of non-current liabilities 2,020,771,713 1,532,064,100 9,848,940,386 10,487,409,914 Contingencies and commitments 35,353,642,417 35,279,647,273 16

17 Condensed Interim Consolidated Profit and Loss Account (Un-Audited) For the nine month ended March 31, 2016 Nine Months Nine Months Three Months Three Months March 31, March 31, March 31, March 31, Rupees Rupees Rupees Rupees Sales - net Cost of sales Gross profit Distribution cost Administrative expenses Other expenses Other income Profit from operations Share of loss of associate Finance cost Profit before taxation Taxation Profit after taxation Attributable to: Equity holders of the Holding Company Earnings per share 17,621,140,194 20,673,641,471 6,242,792,085 6,503,926,256 (16,163,885,106) (18,538,249,032) (5,677,625,472) (5,893,428,595) 1,457,255,088 2,135,392, ,166, ,497,661 (191,417,812) (262,559,942) (54,665,981) (91,023,559) (189,676,000) (185,753,143) - (60,002,547) (59,946,792) - (87,069,589) (61,876,185) (50,785,339) (14,212,386) (468,163,401) (510,189,270) (165,453,867) (165,182,737) 278,206, ,555,828 (31,236,049) 68,456,398 1,267,298,480 1,752,758, ,476, ,771,322 (2,282,513) (835,098,998) (1,133,002,724) (285,427,917) (384,940,124) 429,916, ,756,273 83,048, ,831,198 (189,718,123) (187,723,824) (33,248,427) (37,685,964) 240,198, ,032,449 49,800,353 91,145, ,198, ,032,449 49,800,353 91,145, The annexed notes from 1 to 5 form an integral part of these financial statements. ` 17

18 Condensed Interim Consolidated Statement of Comprehensive Income (Un-Audited) For the nine month ended March 31, 2016 Nine Months Nine Months Three Months Three Months March 31, March 31, March 31, March31, Rupees Rupees Rupees Rupees Profit after taxation 240,198, ,032,449 49,800,353 91,145,234 Other comprehensive income - net of tax Net change in fair value of available for sale financial assets (364,735,439) 602,222,936 (818,932,403) 175,753,346 Total comprehensive income for the nine months ended (124,536,593) 1,034,255,385 (769,132,050) 266,898,580 Attributable to: Equity holders of the Holding Company (124,536,593) 1,034,255,385 (769,132,050) 266,898,580 (124,536,593) 1,034,255,385 (769,132,050) 266,898,580 The annexed notes from 1 to 5 form an integral part of these financial statements. 18

19 Condensed Interim Consolidated Cash Flow Statement (Un-Audited) For the nine month ended March 31, 2016 Nine Months Nine Months March 31, March 31, Cash flows from operating activities Note Rupees Rupees Profit before taxation 429,916, ,756,273 Adjustments for: Depreciation of property, plant and equipment 677,627, ,001,932 Amortization of intangible assets 136, ,463 Unrealized loss / (gain) on re-measurement of investments 41,143,886 (109,604,254) Provision for gratuity 73,235,346 70,113,701 Provision for infrastructure cess 21,690,323 30,573,985 Loss / (Gain) on disposal of property, plant and equipment (6,473) (8,781,647) Share of loss of associate 2,282,513 - Gain on disposal of investment (82,311,224) - Dividend income (191,556,417) (392,832) Finance cost 835,098,998 1,133,002,724 Cash generated from operations before working capital changes 1,807,258,094 2,273,806,345 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 operations Gratuity paid to employees Long term deposits Taxes paid Finance cost paid - net Net cash generated / (used) in operating activities Cash flows from investing activities Capital expenditure incurred Proceeds from sale of property, plant and equipment Investment in associates Proceeds from sale of investment Long term deposits Dividend received Net cash used in investing activities Cash flows from financing activities (63,081,082) 6,259,022 (1,140,826,053) (1,169,168,211) 752,197,247 (615,784,877) (174,141,839) 185,038,805 (17,580,978) (43,161,595) 48,962, ,567,389 (594,470,128) (1,463,249,467) 236,712, ,847,383 1,449,500,093 1,034,404,261 (59,189,206) (35,709,484) 9,972,037 - (50,052,024) (151,952,934) (851,027,380) (1,050,522,523) (950,296,573) (1,238,184,941) 499,203,520 (203,780,680) (897,416,951) (442,583,416) 183,926 14,674,920 - (945,857,490) 335,277, (326,720) 191,556, ,832 (370,398,677) (1,373,699,874) 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 (used) in / generated from financing activities Net (decrease) / increase 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 The annexed notes from 1 to 5 form an integral part of these financial statements. 1,000,089, ,618,264 (922,159,596) (637,950,658) 1,437,413,993 - (55,000,000) (25,000,000) (1,373,165,473) 1,304,479,371 (148,754,229) (75,000,000) (61,576,202) 1,463,146,977 67,228,640 (114,333,577) 177,228, ,063, ,456, ,729,494 19

20 Condensed Interim Consolidated Statement of Changes in Equity (Un-Audited) For the nine month ended March 31, 2016 Share Capital Capital Reserves Revenue Reserve Ordinary shares Share premium Capital redemption reserve Fair value reserveavailable for sale financial assets Un-appropriated profits Rupees Total Balance as at June 30, ,000,000 77,616, ,000,000 1,058,645,242 5,878,347,896 7,489,609,138 Total comprehensive income Profit for nine months Other comprehensive income / (loss) ,032, ,032, ,222, ,222, ,222, ,032,449 1,034,255,385 Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period -net of tax ,722,678 92,722,678 Transactions with the owners of the Group: Cash Rs. 2.5 per share (75,000,000) (75,000,000) Balance as at March 31, ,000,000 77,616, ,000,000 1,660,868,178 6,328,103,023 8,541,587,201 Total comprehensive income Profit for three months Other comprehensive income / (loss) Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period -net of tax ,972,755 65,972, ,126,956 (12,690,521) 19,436, ,126,956 53,282,234 85,409, ,781,351 75,781,351 Transfer from surplus on revaluation of fixed assets on disposal - net of tax 2,597,697 2,597,697 Balance as at June 30, ,000,000 77,616, ,000,000 1,692,995,134 6,459,764,305 8,705,375,439 Total comprehensive income Profit for nine months Other comprehensive income / (loss) ,198, ,198, (364,735,439) - (364,735,439) Surplus transferred to un-appropriated profit on account of incremental depreciation charged during the period -net of tax (364,735,439) 240,198,846 (124,536,593) ,719, ,719,675 Transactions with the owners of the Group: Cash Rs. 5 per share (150,000,000) (150,000,000) Balance as at March 31, ,000,000 77,616, ,000,000 1,328,259,695 6,740,682,826 8,621,558,521 20

21 Notes to the Condensed Interim Consolidated Financial Information (Un-audited) For the nine month ended March 31, 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 1.1 The Holding Company was incorporated in Pakistan in 1966 as a Public Limited Company under the Companies Act, 1913 (now the Companies Ordinance, 1984) and its shares are quoted on Pakistan Stock Exchange (formerly Karachi and Lahore stock exchanges). The registered office of the Holding Company is situated at 69/7, Abid Majeed Road, Survey No. 248/7, Lahore Cantt, Lahore. The Holding Company is 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 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 balance sheet of the Group as at March 31, 2016 and the related condensed interim consolidated profit and loss account, condensed interim consolidated statement of comprehensive income, condensed interim consolidated cash flow statement 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 March 31, 2016 has been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 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 June 30, Comparative balance sheet numbers are extracted from the annual audited financial statements of the Group for the year ended June 30, 2015, whereas comparative profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity are stated from unaudited condensed interim financial information of the Group for the nine months period ended March 31,

22 This condensed Interim financial information is unaudited and being submitted to the share holders as required under Section 245 of the Companies Ordinance, 1984 and the Listing Regulations of Pakistan Stock Exchange Limited. These condensed interim financial information are the separate financial statements of the Group 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 separately. the Group has following major investment: Name of the company Nature Associates - Fatima Energy Limited Energy Generation - Fatima Transmission Company Limited Transmission of Energy 3 Long term financing - secured 3.1 Askari Bank Limited-SBP s LTFF 3.2 During the period an amount of Rs million out of the term finance of Askari Bank Limited was refinanced by the State Bank of Pakistan under LTFF Scheme as imported machinery was qualified under LTFF Scheme. Mark up on SBP s LTFF scheme is chargeable at the rate of SBP rate +1.00% pa. During the period mark up was charged at the rate of 3.00% per annum on SBP s LTFF. This finance is secured against 1st joint pari passu charge/mortgage on all present and future fixed assets of the Subsidiary Company and personal guarantees of the sponsoring directors. Allied Bank Limited- SBP s LTFF During the period an amount of Rs million out of the term finance of Allied Bank Limited was refinanced by the State Bank of Pakistan under LTFF Scheme as imported machinery was qualified under LTFF Scheme. Mark up on SBP s LTFF is chargeable at the rate of SBP rate +1.25% pa. During the period mark up was charged at the rate of 3.25% per annum. This finance is secured against 1st joint pari passu charge/mortgage on all present and future fixed assets of the Subsidiary Company and personal guarantees of the sponsoring directors. 3.3 United Bank Limited- SBP s LTFF During the period an amount of Rs million out of the term finance of United Bank Limited was refinanced by the State Bank of Pakistan under LTFF Scheme as imported machinery was qualified under LTFF Scheme. Mark up on SBP s LTFF is chargeable at the rate of SBP rate +1.00% pa. During the period mark up was charged at the rate of 3.00% per annum. This finance is secured against 1st joint pari passu charge/mortgage on all present and future fixed assets of the Subsidiary Company and personal guarantees of the sponsoring directors. 4 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 tax year and does not distribute cash dividend within six months of the end of said tax year or distribute dividends to such an extent that its reserves, after such distribution, are in excess of 100% of its paid up capital. However, this tax on undistributed reserves is not applicable to a public company which distributes profit equal to either 40 % of its after tax profits or 50% of its paid up capital, whichever is less, within six months of the end of the tax year. The Board of s of the Group intends to distribute sufficient cash dividend for the year ended June30, 2016 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 nine months ended March 31, Date of authorization for issue This condensed interim consolidated financial information was authorized for issue by the Board of s on April 26,

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