IDREES TEXTILE MILLS LIMITED CONDENSED INTERIM FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED MARCH 31, 2016 (UN-AUDITED) ADMIRAL BRAND SPLICED

Transcription

1 IDREES TEXTILE MILLS LIMITED CONDENSED INTERIM FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED MARCH 31, ADMIRAL BRAND SPLICED USTERIZED IDREES TEXTILE MILLS LIMITED

2 S REPORT The directors are pleased to present the un-audited condensed interim financial information of your Company for the quarter and nine months ended. The Company's sales during the period under review amounted to Rs.1, million as compared to Rs. 1, million during the corresponding period which shows a decrease of %. Finance cost amounted to Rs million as compared to Rs million in the comparable period of last year. The Company incurred a loss of Rs million during the period as compared to a profit of Rs million in the corresponding period. Loss per share amounted to Rs as compared to earnings per share of Re in the comparable period of last year. The overall textile industry and particularly spinning sector continued to face difficult times. Shrinkage of cotton crop in Pakistan set raw material prices on a higher side. This, coupled with high energy cost, has eroded the profitability of the Company. On the international front, due to continued slowdown in the Chinese economy, demand of yarn is not picking up resulting in a negative impact on its price. In the present scenario, the industry needs government support against competition with regional & international players in the shape of incentives for technology upgradation, expeditious tax refunds, decrease in electricity tariff, removal of surcharges & GIDC. In order to overcome these persistent challenges, the management of your Company is continuously trying to generate profit through process efficiency, controlling overheads, production of fine counts of yarn and value addition. The Board is thankful to the bankers, customers and shareholders for their support and highly appreciates the performance of employees. Karachi. April 29, for and on behalf of the Board S.M. Idrees Allawala Chairman

3 CONDENSED INTERIM BALANCE SHEET As at SHARE CAPITAL AND RESERVES (Unaudited) (Audited) March June 31, 30, Note Rupees Rupees Authorized capital 22,000,000 Ordinary shares of Rs.10/- each 220,000, ,000,000 Issued, subscribed and paid up capital 180,480, ,480,000 Unappropriated profit 442,996, ,620, ,476, ,100,076 Surplus on Revaluation of Property, Plant & Equipment 517,619, ,894,888 NON-CURRENT LIABILITIES Long-term finance From related parties 71,712,359 68,045,303 Liabilities against assets subject to finance lease 71,908,896 72,213,511 Deferred liabilities 265,438, ,428,229 CURRENT LIABILITIES Trade and other payables 380,597, ,158,421 Interest / markup accrued 20,684,245 12,446,560 Short term borrowings 739,684, ,091,973 Current portion of liabilities against assets subject to finance lease 46,085,647 58,246,798 Provision for taxation 34,310,246 18,795,754 1,221,361,723 1,133,739,506 CONTINGENCIES AND COMMITMENTS 4 2,771,517,422 2,748,421,513 NON-CURRENT ASSETS Property, plant and equipment 5 1,411,676,177 1,455,823,917 Long-term deposits CURRENT ASSETS Stores, spares and loose tools Stock-in-trade 6 Trade debts Loans and advances Deposits and short term prepayments Other receivables Other financial assets 7 Cash and bank balances 27,550,294 42,587, ,430, ,252,630 83,566,849 8,650,700 21,146,727 36,050,710 28,605,536 1,332,290,952 2,771,517,422 26,606,009 39,362, ,568, ,974,424 66,372,792 8,965,747 9,555,205 33,550,710 9,642,394 1,265,991,587 2,748,421,513 The annexed notes form an integral part of this condensed interim financial information.

4 CONDENSED INTERIM PROFIT & LOSS ACCOUNT For The Nine Months Ended Nine Months Ended Quarter Ended (July - March) (January to March) Note Rupees... Sales 1,288,461,452 1,641,812, ,246, ,572,841 Cost of goods sold 8 (1,210,093,271) (1,514,804,226) (322,921,028) (454,340,652) Gross profit 78,368, ,008,669 52,325,224 30,232,189 Other operating income 16,316,341 4,408,467 96, ,244 94,684, ,417,137 52,421,494 30,802,433 Distribution cost 11,583,992 15,669,127 2,075,246 5,096,098 Administrative expense 42,336,395 47,568,039 13,353,152 15,613,941 Other operating expenses 19,428,170 2,254,558 2,208, ,249 Finance cost 69,235,095 68,028,714 23,501,161 26,096,938 (142,583,652) (133,520,438) (41,138,004) (47,145,226) Profit /(Loss) before taxation Taxation (47,899,130) (2,103,301) 11,283,489 (16,342,793) 10,914,829 5,361,903 (4,156,948) (4,634,775) Profit/(Loss) after taxation (36,984,301) 3,258,602 7,126,541 (20,977,568) Other comprehensive income for the period Total comprehensive income for the period (36,984,301) 3,258,602 7,126,541 (20,977,568) Earnings/ (Loss) per share - basic and diluted (2.05) (1.16) The annexed notes form an integral part of this condensed interim financial information.

5 CONDENSED INTERIM CASH FLOW STATEMENT For The Nine Months Ended A. CASH FLOWS FROM OPERATING ACTIVITIES (Loss) before taxation Adjustments for : Depreciation on property, plant and equipment Provision for staff retirement gratuity Loss on sale of property, plant and equipment Finance cost Operating cash flow before movement of working capital Changes in working capital (Increase) / decrease in current assets Stores, spares and loose tools Stock-in-trade Trade debts Loans and advances Deposits and short term prepayments Other receivables Increase / (decrease) in current liabilities Trade and other payable Cash generated from operations Finance cost paid Gratuity paid Income tax paid Net cash used in operating activities Un-audited) Rupees (47,899,130) (2,103,301) 68,528,383 66,544,102 7,875,612 11,063,215 16,233,770-69,235,095 66,056, ,973, ,560,055 (3,225,537) (31,348,441) 82,138,053 (220,570,145) (95,278,206) 48,660,313 (4,941,537) 48,571,755 5,060,427 11,613,851 (11,591,522) (12,621,399) 125,086,192 29,135, ,221,599 15,001,918 (60,997,410) (64,790,239) (15,698,290) (6,074,850) (12,359,974) (17,604,105) 122,165,925 (73,467,276) B. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Proceed from disposal of property, plant and equipment Addition to capital work in progress Long term deposits (increased) / decreased Net cash used in investing activities (33,901,660) (61,725,544) 2,425,000 - (9,137,753) - (5,689,665) (12,098,830) (46,304,078) (73,824,373) C. CASH FLOWS FROM FINANCING ACTIVITIES Obtained / (paid) long term finance Finance lease obtained Repayment of finance lease liability Dividend paid Net cash from financing activities 3,667,056 (9,428,523) 27,204,500 21,729,068 (39,670,266) (24,535,616) (3,192,405) (3,545,202) (11,991,115) (15,780,273) Net decrease in cash and cash equivalents (A+B+C) Cash and cash equivalents at beginning of the period 63,870,732 (163,071,923) (738,898,870) (493,041,686) Cash and cash equivalents at end of the period (675,028,138) (656,113,608) Cash and cash equivalents Cash and bank balances Running finance Finance against Import (FIM) Cash finance 64,656,246 43,719,978 (321,095,372) (269,906,858) (174,686,029) (6,390,478) (243,902,983) (423,536,250) (675,028,138) (656,113,608) The annexed notes form an integral part of this condensed interim financial information.

6 NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION For The Nine Months Ended 1. GENERAL INFORMATION Idrees Textile Mills Limited (the company) was incorporated in Pakistan as an unquoted public limited company on June 05, 1990 under the Companies Ordinance, 1984 and is listed on Karachi and Lahore Stock Exchanges. The registered office of the Company is situated at 6-C, Ismail Centre, first floor, Central Commercial Area Bahadurabad, Karachi in the province of Sindh. The principal activity of the Company is manufacturing and sale of yarn. The Company's manufacturing facility is located at Kot Shah Muhammad, District Nankana, Punjab. The condensed interim financial information is presented in Pak Rupees, which is the company's functional and presentation currency. The condensed interim financial information has been prepared under the historical cost convention modified by: - revaluation of certain property, plant and equipment; - certain financial instruments at fair value; and - recognition of certain employees retirement benefits at present value This condensed interim financial information is unaudited and are being submitted to the shareholders as required under Section 245 of the Companies Ordinance, 1984 and also presented in accordance with the listing Regulations of Karachi Stock Exchange and Lahore Stock Exchange. This condensed interim financial information has been prepared in accordance with the requirements of the International Accounting Standard 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. The accounting policies and methods of computation followed in the preparation of this condensed interim financial information is same as those of the published annual audited financial statements for the year ended June 30,. This condensed interim financial information does not include all of the information required for annual financial statement and therefore should be read in conjunction with the annual audited financial statements of the Company for the year ended June 3 0,. The comparative balance sheet presented has been extracted from annual audited financial statements for the year ended June 30,, whereas comparative condensed interim profit and loss account, condensed interim cash flow statement and condensed interim statement of changes in equity are stated from the unaudited condensed interim financial information for the nine months ended. 2. ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of the condensed interim financial information is in conformity with approved accounting standards as applicable in Pakistan for interim financial reporting requires management to make estimates, assumptions and use judgments that affect the application of policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revision to accounting estimates are recognized prospectively commencing from the period of revision. In preparing this condensed interim financial information, the significant judgments made by the management in applying the Company's accounting policies and the key source of estimation and uncertainty were the same as those that applied to the annual audited financial statements as at and for the year ended June 30,. 3. FINANCIAL RISK MANAGEMENT The Company's financial risk management objectives and policies are consistent with those disclosed in the annual audited financial statements as at and for the year ended June 30,. 4. CONTINGENCIES AND COMMITMENTS (Unaudited) (Audited) March June 31, 30, Rupees Rupees 4.1 Contingencies Letters of guarantee issued by banks on behalf of the Company 57,383,168 49,547, Commitments Letters of credits opened and outstanding for import of: - Raw material 41,273,705 44,641,500 - Stores & spare 2,508,535 14,423,390 - Plant and machinery 16,280,680 13,363, ADDITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT During the period following additions and disposals were made: - (Unaudited) (Audited) Nine months ended Year ended June 30, Additions Disposals / Disposals / Additions transfers transfers Rupees Operating fixed assets Labour colony on freehold land - - 2,038,684 - Plant and machinery (owned) 6,554,489 (38,132,950) 39,394,198-43,840, ,437,774 Electric installations Mill equipment ,999 - Office equipment 142, ,376 - Furniture & Fixture ,041 - Vehicles (owned) - (1,790,956) 341,999 - Plant and machinery (leased) 27,204,500 74,607,908 - (43,840,426) (100,437,774) Vehicles (leased) - - 9,952,500-33,901,660 (39,923,906) 127,063, STOCK-IN-TRADE (Unaudited) (Audited) March June 31, 31, Rupees Rupees Raw material - in hand 404,427, ,798,539 - in transit 67,447, ,925,681 Work in process 14,510,137 20,104,990 Finished goods 98,201, ,958,198 Waste 1,842,746 5,780, ,430, ,568, OTHER FINANCIAL ASSETS This includes term deposit receipts amounting to Rs.36,050,710 /- (June 30, : Rs. 33,550,710/-) for a period of six months to one year carrying mark-up rate of 5.5% to 9.7% (June 30, : 7.00% to 9.7%) per annum. The banks have a lien on these term deposit receipts on account of guarantees provided by such banks.

7 NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION For The Nine Months Ended (Unaudited) (Unaudited) Nine Months ended Quarter Ended (July - March) (January - March)... Rupees 8. COST OF GOODS SOLD Raw material consumed 700,556,749 1,149,136, ,177, ,494,188 Salaries, wages and benefits 103,556, ,432,941 25,577,618 46,660,247 Fuel and power 180,333, ,819,996 53,279,881 64,315,053 Stores and spares 46,286,005 63,296,516 13,800,695 21,202,112 Depreciation 61,764,527 60,972,829 20,355,578 20,612,010 Insurance 5,085,370 4,787,968 1,800,000 1,689,000 Repairs and maintenance 3,644,833 2,555,015 1,256,770 1,078,482 Fabric processing cost 0 5,250, Other manufacturing overheads 4,576,591 6,313,246 1,318,567 1,941,784 1,105,804,108 1,609,565, ,566, ,992,876 Work-in-process Opening stock 20,104,990 26,464,751 12,866,438 22,093,737 Closing stock (14,510,137) (18,757,913) (14,510,137) (18,757,913) 5,594,853 7,706,838 (1,643,699) 3,335,824 Cost of goods manufactured 1,111,398,961 1,617,272, ,923, ,328,700 Finished goods Opening stock 198,738, ,243, ,042, ,722,782 Closing stock (100,044,613) (309,710,830) (100,044,613) (309,710,830) 98,694,310 (102,467,823) 30,997,873 (91,988,048) 1,210,093,271 1,514,804, ,921, ,340, TRANSACTIONS WITH RELATED PARTIES The related parties comprises of associated undertakings, directors and key management personnel. The significant transactions with related parties during the period are as follows: (Unaudited) Nine months ended Relationship with the Company Nature of Transactions (July - March)... Rupees Provident Fund of the Company Contribution paid 766, ,428 Key management personnel CEO & directors 5,920,000 5,690,000 The Chief Executive Officer, directors and some executives are provided with free use of company maintained car. 10. DATE OF AUTHORIZATION FOR ISSUE These condensed interim financial information was authorized for issue on 29April, by the Board of Directors of the Company. 11. GENERAL Figures have been rounded off to the nearest rupee. CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY For The Nine Months Ended Cash dividend for the year ended June 30, Re 1/- per share to minority shareholders Issued, subscribed and paid up Unappropriated Total capital profit Rupees Balance at July 01, ,480, ,660, ,140,728 Transaction with owners Transfer from surplus on revaluation of property, plant and - (5,830,226) (5,830,226) equipment on account of incremental depreciation - net of deferred tax - 24,834,115 24,834,115 Comprehensive Income Profit for the period ended - 3,258,602 3,258,602 Other comprehensive income - net of tax ,258,602 3,258,602 Balance at 180,480, ,923, ,403,219 Transaction with owners Transfer from surplus on revaluation of property, plant and equipment on account of incremental depreciation - net of deferred tax - 7,017,112 7,017,112 Transaction with owners recognized directly in equity Present value adjustment on interest free loan from related parties 32,284,698 32,284,698 Comprehensive Income Profit/(Loss) for the period ended June 30, - 2,395,047 2,395,047 Other comprehensive income - net of tax ,395,047 2,395,047 Balance at June 30, 180,480, ,620, ,100,076 Transaction with owners Cash dividend for the year ended June Re 0.50/- per share to minority shareholders (2,915,113) (2,915,113) Transfer from surplus on revaluation of property, plant and equipment on account of incremental depreciation - net of deferred tax - 27,275,487 27,275,487 Comprehensive Income Profit for the period ended - (36,984,301) (36,984,301) Other comprehensive income - net of tax (36,984,301) (36,984,301) Balance at 180,480, ,996, ,476,150 The annexed notes form an integral part of this condensed interim financial information.

8 BOOK POST P r i n t e d M a t e r i a l If undelivered please return to: IDREES TEXTILE MILLS LIMITED Ismail Centre, 1st Floor, 6-C, Central Commercial Area, Bahadurabad Karachi (Pakistan) A MEMBER OF THE A L L A W A L A G R O U P