1st Quarterly Report September 30, 2017

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2 1st Quarterly Report September 30,

3 1st Quarterly Report September 30,

4 CONTENTS 1st Quarterly Report September 30, 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

5 COMPANY S INFORMATION 1st Quarterly Report September 30, Board of Directors Mian Parvez Aslam Mr. Imran Aslam Mr. Irfan Aslam Syed Raza Ali Bokhari Mr. Humayun Bakht Mr. Ahsan Ahmad Khan Mr. Maqsood Shahid Najmi Chief Financial Officer Mr. Humayun Bakht Company Secretary Mr. HassanudDin Ansari Auditors Horwath Hussain Chaudhry & Co. Chartered Accountants Audit Committee Syed Raza Ali Bokhari Mr. Irfan Aslam Mr. Maqsood Shahid Najmi Chairman Chief Executive Chairman Member Member Bankers Habib Metropolitan Bank Ltd. J S Bank Ltd. National Bank of Pakistan. Meezan Bank Limited. United Bank Limited. Bank AlFalah (Islamic Banking) Share Registrar Hameed Majeed Associates (Pvt) Ltd. H.M. House, 7Bank Square, Lahore. Registered Office 19A Off. Zafar Ali Road, GulbergV, Lahore. Ph: +92 (42) Fax: +92 (42) mis@shaheencotton.com Web: Mills Units # 1,3 & 4 34th KM Lahore Sheikhupura Road, Sheikhupura Unit # 2 7th KM Sheikhupura Faisalabad Road, Sheikhupura. Human Resource & Remuneration Committee Syed Raza Ali Bokhari Mr. Imran Aslam Mr. Ahsan Ahmad Khan Chairman Member Member 01

6 1st Quarterly Report September 30, CONDENSED INTERIM FINANCIAL INFORMATION OF FOR THE 1ST QUARTER ENDED SEPTEMBER 30,

7 DIRECTORS REPORT 1st Quarterly Report September 30, On behalf of the directors of Shahzad Textile Mills Limited It is my great pleasure to present the unaudited financial statement for the first quarter ended September. The company s pretax profit is Rs million as compared to Profit of Rs million in corresponding quarter of previous year. Company s sales of yarn for the current quarter is also increased to Rs. 1, million from sales of Rs. 1, million in corresponding period of previous year. In the current quarter company, by the grace of Allah Almighty, have portrayed positive results by exhibiting profit as apparent from the above financial data. Favorable conducive local market conditions and Government s fiscal measures in country have helped us to achieve these impressive financial results. The prices of Raw material if averagely seen remained strengthened which are currently rotating around Cotton Rs. 6,425/ per maund. Polyester Rs. 134 per kg and viscose Rs. 238/ per kg accordingly. FUTURE PROSPECTUS As we have extensively discussed in the annual directors report that the Management has worked out a plan for smooth supply of fuel and power to Mills i.e. replacement of five (5) existing generator and execute major overhauling of balance two generator for which all major parts have already been imported. One portion of this plan i.e. replacement of Five (5) generators have been already successfully completed by replacement of new imported generators which are efficiently functioning at mills. The remaining two generators are under process of major overhauling which shall hopefully be completed by end of December and shall be the part of currently functioning generators. Earning per share Rs as compared to Profit per share Rs in corresponding period of previous year. We are thankful and appreciate the efforts of valued customers, bankers, share holders who have actively participated in smooth functioning of company s routine work and also mention staff members who have dedicatedly worked to run all business activities of the company and strived hard to maintain cordial relation by creating pleasant working environment. For and on behalf of the board Lahore. Dated : 2310 Imran Aslam Chief Executive Offic 02

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9 CONDENSED INTERIM BALANCE SHEET AS AT SEPTEMBER 30, 1st Quarterly Report September 30, September, June 30, 2016 CAPITAL AND LIABILITIES Note (Unaudited) (Audited) Share Capital and Reserves Rupees in thousand Authorized capital: 40,000,000 (June : 40,000,000) ordinary shares of Rs. 10 each Issued, subscribed and paid up capital 17,971,372 (June : 17,971,372) ordinary shares of Rs. 10 each Reserves 400, ,714 1,098, , ,714 1,088,787 Surplus on Revaluation of Property, Plant and Equipment Non Current Liabilities Long term financing Staff retirement benefits Deferred tax liability 1,278, , ,592 98, ,743 1,268, ,511 98,777 91, ,866 Current Liabilities Trade and other payables Accrued mark up Short term borrowings Current portion of long term financing 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 389, ,644 4, ,539 40,740 59, , ,721, ,650, ,947 13,970 2,040,932 70, ,127 84,021 96, ,438 49, ,775 2,721, , ,575 8, ,847 40,740 45, ,960 2,908,802 1,684, ,635 13,970 2,069,589 71, ,374 92,684 51, ,147 60, ,213 2,908,802 The annexed notes form an integral part of this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 04

10 1st Quarterly Report September 30, CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UNAUDITED) FOR THE 1ST QUARTER ENDED SEPTEMBER 30, September 31, Note Rupees in thousand September 31, 2016 Sales Cost of sales Gross Profit 1,227,556 7 (1,170,458) 57,098 1,062,199 (998,910) 63,289 Operating expenses: Selling and distribution Administrative expenses Operating Profit Finance cost Other operating expenses Other income Share of net profit of associate Profit before Taxation Taxation Net Profit for the Period Earnings per Share Basic (6,643) (29,518) (36,161) 20,937 (7,344) (2,351) 323 6,312 (3,060) 17,877 (12,839) 5, (14,175) (28,602) (42,777) 20,512 (7,690) (1,457) 213 5,516 (3,418) 17,094 (8,905) 8, The annexed notes form an integral part of this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 05

11 1st Quarterly Report September 30, CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE 1ST QUARTER ENDED SEPTEMBER 30, September 30, September 30, 2016 Rupees in thousand Net Profit for the Period 5,038 8,189 Other Comprehensive Income for the Period Items that may be reclassified subsequently to profit and (loss) Total Comprehensive Income for the Period 5,038 8,189 The annexed notes form an integral part of this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 06

12 1st Quarterly Report September 30, CONDENSED INTERIM CASH FLOW STATEMENT (UNAUDITED) FOR THE 1ST QUARTER ENDED SEPTEMBER 30, CASH FLOW FROM OPERATING ACTIVITIES September 30, September 30, 2016 Rupees in thousand Profit before taxation 17,877 Adjustments for: Depreciation 28,081 Share of net profit of associate (6,312) Loss on disposal of property, plant and equipment Net 1,013 Surplus on revaluation of short term investments at fair value through profit or loss (36) Provision for gratuity 12,250 Exchange (gain) / loss (3) Provision for workers' profit participation fund 961 Provision for workers' welfare fund 377 Finance cost 5,506 41,837 Operating Profit before Working Capital Changes 59,714 Decrease / (Increase) in current assets Stores and spares 1,068 Stock in trade 180,247 Trade debts 8,665 Advances, trade deposits, prepayments, and other receivables (41,149) Tax refunds due from the Government 2,709 Increase in current liabilities Trade and other payables 79, ,272 Net Cash generated from Operations 290,986 Income tax paid (4,057) Gratuity paid (5,361) Finance cost paid (9,942) Net Cash generated from Operating Activities 271,626 CASH FLOW FROM INVESTING ACTIVITIES Property, plant and equipment purchased Proceeds from disposal of property, plant and equipment 10,000 Capital work in progress (4,125) Net Cash generated from / (used) in Investing Activities 5,875 17,094 21,373 (5,516) 8, ,283 32,248 49,342 5, ,977 (24,902) (24,328) (6,724) 12,313 80, ,710 (4,801) (7,167) (6,450) 111,292 (6,689) (6,689) CASH FLOW FROM FINANCING ACTIVITIES LTF Loan repaid (10,185) Loan repaid to directors (40,000) Short term borrowings (238,308) Net Cash used in Financing Activities (288,493) Net Decrease in Cash and Cash Equivalents (10,992) Cash and cash equivalents at the beginning of the period 60,340 (181,756) (181,756) (77,153) 88,151 Cash and Cash Equivalents at the End of the three Months Ended 49,348 10,998 The annexed notes form an integral part of this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 07

13 1st Quarterly Report September 30, CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE 1ST QUARTER ENDED SEPTEMBER 30, Particulars Share Capital Share Premium Reserve Unappropriated Profit Total Equity Rupees in thousand Balance as at June 30, ,714 5,796 1,023,529 Total comprehensive Income for the first quarter 8,189 Transferred from surplus on revaluation of property, plant and equipment on incremental depreciation charged in current period (net of deferred tax) 3,925 1,209,039 8,189 3,925 Transaction with owners Dividend paid during the period Balance as at September 30, ,714 5,796 1,035,643 Balance as at June 30, ,714 5,796 1,082,991 Total comprehensive Income for the first quarter 5,038 Transferred from surplus on revaluation of property, plant and equipment on incremental depreciation charged in current period (net of deferred tax) 3,417 Surplus realized on disposal of revalued property, plant and equipment (net of deferred tax) transferred to retained 1,537 earnings 1,221,153 1,268,501 5,038 3,417 1,537 Transaction with owners Dividend paid during the period Balance as at September 30, 179,714 5,796 1,092,984 1,278,494 The annexed notes form an integral part of this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 08

14 Note 1 The Company and its Operations 1st Quarterly Report September 30, NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UNAUDITED) FOR THE 1ST QUARTER ENDED SEPTEMBER 30, 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 (PSX). The Company manufactures and deals in all types of yarn. The registered office of the Company is situated at 19A, Off. Zafar Ali Road, Gulberg V, Lahore. Note 2 Basis of Preparation This condensed interim financial statements have been prepared in accordance with the directives issued by the Securities & Exchange Commission of Pakistan (SECP) and is in compliance with the International Accounting Standard 34 (Interim Financial Reporting). 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,. 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,. Note 4 Long Term Financing September 31, (Unaudited) June 30, (Audited) Rupees in thousand LTF loan Secured 129,332 Current portion of LTF loan (40,740) 88, ,517 (40,740) 98, These represent LTF loans obtained from banking companies during the period against specific and exclusive charge on relevant fixed assets of the Company. The tenure of facility is from 3 to 5 years starting from February and ends in February Mark up on these facilities is charged at SBP rate payable quarterly. Note 5 Contingencies and Commitments Contingencies The Company has provided bank guarantees in favour of following parties: September 31, June 30, (Unaudited) (Audited) Rupees in Million Sui Northern Gas Pipeline Limited The Company is contingently liable for Rs million (June : Rs 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. 09

15 1st Quarterly Report September 30, Commitments The Company's outstanding commitments / contracts as at the balance sheet date are as under: September 31, June 30, (Unaudited) (Audited) Rupees in Million Foreign bills of exchange purchased Letters of credit Note 6 Property, Plant and Equipment September 31, (Unaudited) June 30, (Audited) Rupees in thousand Operating fixed assets 1,645,890 Capital work in progress 4,125 1,650,015 1,609,826 75,158 1,684, Operating fixed assets Opening written down value 1,609,826 Additions during the period / year (at cost) 75,158 1,684,984 Disposals during the period / year (at written down value) (11,013) 1,673,971 Depreciation charged for the period / year (28,081) 1,645,890 1,576, ,989 1,717,064 (19,099) 1,697,966 (88,140) 1,609,826 Note 7 Cost of Sales September 30, September 30, 2016 (Unaudited) Rupees in thousand Raw materials consumed 816,535 Stores and spares consumed 17,646 Packing materials consumed 26,339 Salaries, wages and other benefits 129,097 Fuel and power 148,131 Insurance 1,876 Repairs and maintenance 1,849 Other manufacturing expenses 2,470 Depreciation 25,538 1,169,481 Opening work in process 33,324 Closing work in process (37,170) (3,846) Cost of goods manufactured 1,165,635 Opening finished goods 55,108 Closing finished goods (50,285) 4,823 1,170, ,761 21,091 22, , ,408 2,052 7,699 2,989 18, ,898 29,336 (28,548) ,686 52,961 (46,737) 6, ,910 10

16 1st Quarterly Report September 30, Note 8 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 transactions with related parties are as follows: Transaction during the period September 30, September 30, 2016 Related party Relationship Nature of Transaction (Unaudited) Rupees in thousand Sargodha Jute Mills Associate Purchase of materials, Limited goods and services 88 Sale of materials, goods and services Rent received / receivable 120 Directors Sponsor loan repaid 40,000 Mark up on loan from directors 610 Note 9 Authorization of Interim Financial Information This condensed interim financial information (unaudited) is authorized for issue on October 23, by the Board of Directors of the Company. Note 10 General Corresponding figures have been rearranged / reclassified, wherever necessary, to facilitate comparison. No significant rearrangements have been made in this condensed interim financial information (unaudited). CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR 11

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