Printed Matter. Half Yearly DECEMBER 31, 2016 (UN-AUDITED) RUBY. If un-delivered please return to:

Transcription

1 Printed Matter Half Yearly ccounts DECEMBER 31, 2016 (UN-AUDITED) RUBY If un-delivered please return to: Room # 203, Faiyaz Centre, 2nd Floor, 3-A, S.M.C.H.S., Shahrah-e-Faisal, Karachi Phone: (+92-21) , Fax: (+92-21) aslamd9@yahoo.com

2 BOARD OF DIRECTORS COMPANY S PROFILE Chairman and Chief Executive: MR. NOOR ELAHI s: MRS. PARVEEN ELAHI MRS. NAHEED JAVED MR. NABEEL JAVED MR. JAVED USMAN MR. FAIZAN JAVED MR. SHARIQ JAVED COMPANY SECRETARY MR. ASIF PERVAIZ KHAWAJA AUDIT COMMITTEE MR. JAVED USMAN -CHAIRMAN MR. NABEEL JAVED -MEMBER MR. FAIZAN JAVED -MEMBER HUMAN RESOURCE & REMUNERATION COMMITTEE MR. FAIZAN JAVED -CHAIRMAN MR. NOOR ELAHI -MEMBER MR. NABEEL JAVED -MEMBER BANKERS AUDITORS LEGAL ADVISOR HEAD OFFICE REGISTERED OFFICE MILLS SHARE REGISTRAR M/S.MEEZAN BANK LTD M/S.BANK AL-HABIB LTD M/S.HABIB METROPOLITAN BANK LTD M/S.NATIONAL BANK OF PAKISTAN M/S. SONERI BANK LTD M/S. SILK BANK LTD M/S. FAYSAL BANK LTD M/S. MUSLIM COMMERECIAL BANK LTD M/S. HABIB BANK LTD M/S. BANK ALFALAH LTD M/S AMIN MUDASSAR & CO., Chartered Accountants, 4th Floor IEP Building, 97-B/D-1, Main Boulevard Gulberg III, Lahore. Ph# (+92-42) amclhr@brain.net.pk M/S MOHSIN & WAHEED LAW ASSOCIATES Office#S-3, 2nd Floor, West End Plaza, 72-The Mall Road Lahore. 35-Industrial Area, Gulberg-III, Lahore-54660, Pakistan. Ph#(+92-42) , Fax:(+92-42) , info@rubytextile.com.pk Room#203, Faiyaz Centre, 2nd Floor,3-A, S.M.C.H.S., Shahrah-e-Faisal, Karachi Ph#(+92-21) , Fax#(+92-21) aslamd9@yahoo.com Raiwind -Manga Road, Raiwind, District Kasur-55050, Pakistan Phone:(+92-42) , Fax:(+92-42) wasim@rubytextile.com.pk M/S CORPLINK (PVT) LTD., 1-K, (Commercial) wings Arcade., Model Town, Lahore-54700, Pakistan. Phone:(+92-42) , Fax:(+92-42) corplink786@yahoo.com

3 DIRECTOR S REPORT TO THE MEMBERS The s of your company are pleased to present the un-audited six months financial statements for the period ended December 31, During the period under review the company suffered loss after tax of Rs million as against loss after tax of Rs million of the corresponding period. The company incurred loss due to non availability of sustained supply of electricity and unstable prices of Cotton and Yarn during the period under review. Consequently the company could not achieve its optimal level of production.resultantly per unit cost of output increased. We would like to thank all our worker, staff and officers, customers, agents, suppliers and shareholders for their dedicated efforts. We also thanks to our financial institutions for their financial support to run our operations. Auditors Review Report The auditors have qualified their review report as under: A). Finance cost has not been accounted for and outstanding bank liability written off. During the year ended June 30, 2012, the company had paid Rs.390 million to financial institution against outstanding principal amount of long term and short term loans. While making payment of Rs.390 million, it was notified that the paid amount of Rs.390 million should be adjusted against principal liability first. On the contrary, financial institution had not adjusted the payment of Rs.390 million to settle the principal liability of various loans and settled the amount against mark up payable and continued to charge the interest which included interest on interest amounted to Rs.65, 390,954. The Company has been perusing with the bank for rectifications, but failed to succeed. The Company therefore, filed a suit in the Court for adjudicating of the disputed amount. Therefore, the company has written back long term and short term borrowing and mark up payables aggregating and approximating to Rs million. This entry has been adjusted retrospectively in accordance with the requirements of international accounting standard (IAS) 8 Accounting policies, changes in Accounting Estimates and Errors and the resultantly adjustments have been made in relevant years. Company has not accounted for finance cost for the period aggregating and approximating to Rs million and Rs million on long term financing and short term borrowing. B). Interest free loans from directors and associates not amortized. Loans from directors and associates are interest free and repayment of these loans not confirm. Therefore, the company has not amortized these loans. With reference to emphasis of matter paragraph by auditors in their report, the management is making its best efforts to make operation as efficient as possible. For and on behalf of the Board of s LAHORE February 28, 2017 (NOOR ELAHI) CHAIRMAN/CHIEF EXECUTIVE

4 Auditor's Report to the Members on Review of Condensed Interim Financial Information Introduction We have reviewed the accompanying condensed interim balance sheet of Ruby Textile Mills Limited as at December 31, 2016 and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the notes forming part thereof (here-in-after referred to as condensed interim financial information ) for the half year then ended. Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this interim financial information based on our review. The figures of the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended December 31, 2015 and December 31, 2016 have not been reviewed and we do not express conclusion on them as we are required to review only the cumulative figures for the half year ended December 31, Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Basis for Qualified Conclusion (i) (ii) The company has not accounted for finance cost for the period aggregating and approximately to Rs million and Rs million on long term financing and short term borrowings respectively. As fully explained in note no. 8.4 to the financial statements for the year ended June 30, 2016, the company has adjusted the outstanding bank liability retrospectively in respect of commercial loan amounting Rs million, short term borrowings amounting Rs million and accrued mark up on long term and short term borrowings amounting Rs million. The above balances were confirmed by the bank as receivable from the company as at June 30, Had the company accounted for bank liability, loss for the period, accrued mark up, loan liability and accumulated loss would have been higher by Rs million, Rs million, Rs million and Rs million respectively. The company has classified the interest free loan from directors and associates under the head Long Term Liabilities instead the fact that underlying terms and conditions have not yet been finalized. Consequently, the aforesaid loan should be classified under the head Current Liabilities. Moreover, if the company decided to account for the loan as long term loan, the loan should be accounted for at amortized cost as required by the International Accounting Standards (IAS) 39 Financial Instruments-Recognition and measurement. However, the company has neither classified the loan under current liabilities nor accounted for the loan at amortized cost. Due to non availability of underlying repayment terms and conditions of interest free loan, we were not able to ascertain the effects on financial statements regarding amortized cost of interest free loan. Had the loan received from the directors and associates been classified under the current liabilities, the current liabilities would have been higher by Rs million. Qualified Conclusion Based on our review, with the exception of the matters described in preceding paragraphs, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as of and for the half year ended December 31, 2016 is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting. Emphasis of Matter Paragraph Without qualifying our opinion, we draw attention to note 1.2 in the condensed interim financial information which indicates that the company incurred a net loss of Rs million during the period ended December 31, This condition along with other matters as set forth in note 1.2 indicate the existence of a material uncertainty that may cast significant doubt about the company's ability to continue as going concern. Other matter paragraph The condensed interim financial information of the company for the half year ended December 31, 2015 and the annual financial statements for the year ended June 30, 2016 were reviewed and audited by another firm of Chartered Accountants, whose review report dated February 27, 2016 expressed qualified opinion with an emphasis of matter paragraph and their audit report dated October 07, 2016 expressed qualified opinion with an emphasis of matter paragraph in respect of the same matters as stated above. Chartered Accountants Engagement Partner: Muhammad Amin Lahore: February 28, 2017

5 ASSETS NON CURRENT ASSETS (Un-audited) 31-Dec-16 (Audited) 30-Jun-16 Property, plant and equipment 3 922,189, ,463,285 Long term deposits 7,952,894 6,990,105 CURRENT ASSETS CONDENSED INTERIM BALANCE SHEET (UN-AUDITED) AS AT DECEMBER 31, 2016 Note Rupees Stores, spare parts and loose tools 134,585, ,604,214 Stock in trade 360,667, ,255,281 Trade debts 20,865,845 19,815,092 Loans and advances 16,885,734 15,641,499 Tax refunds due from Government 28,603,384 27,628,974 Other receivables 1,072,062 1,182,562 Cash and bank balances 5,900,553 1,640, ,581, ,767,993 TOTAL ASSETS 1,498,723,898 1,511,221,383 EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized Capital 70,000,000 (June 30, 2016 : 70,000,000) Ordinary shares of Rs. 10 each 700,000, ,000,000 Issued, subscribed and paid up capital 52,214,400 (June 30, 2016 : 52,214,400) Ordinary shares of Rs. 10 each 522,144, ,144,000 Capital reserves 3,240,000 3,240,000 Accumulated loss (507,167,386) (443,060,548) 18,216,614 82,323,452 Surplus on revaluation of property, plant and equipment - net of tax 410,791, ,692,905 NON CURRENT LIABILITIES Long term financing from banking companies 43,801,542 45,468,209 Long term financing from others 90,062,500 97,174,687 Long term financing from directors and associates 510,317, ,601,817 Deferred liabilities 6,669,933 6,206,400 CURRENT LIABILITIES Trade and other payables 273,222, ,519,845 Accrued mark up / interest 22,542,963 22,415,144 Short term borrowings 28,852,638 28,469,287 Current portion of Long term financing from banking companies 4,166,665 4,246,140 Long term financing from others 77,612,261 70,340,079 Provision for taxation 12,466,684 10,763, ,863, ,753,913 CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES 1,498,723,898 1,511,221,383 The annexed notes 1 to 9 form an integral part of this condensed interim financial information. Chief Executive

6 CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) FOR THE QUARTER AND HALF YEAR ENDED DECEMBER 31, 2016 Half Year Ended Quarter Ended 31-Dec Dec Dec Dec Rupees Rupees Sales Cost of sales Gross loss 170,323, ,675,822 99,343,930 49,900,845 (228,518,743) (217,846,972) (137,831,690) (77,159,318) (58,195,066) (57,171,150) (38,487,760) (27,258,474) Distribution cost Administrative expenses - (2,784,857) - (635,359) (6,872,848) (10,856,416) (3,742,489) (5,852,701) Other operating income 1,096, , , ,351 Finance cost Loss before taxation (3,333,603) (7,487,544) (1,859,482) (2,479,016) (67,305,046) (77,868,937) (43,215,260) (36,017,199) Taxation -Current -Deferred Loss for the period Earning per share - basic and diluted (1,703,236) (455,940) (993,439) (122,268) (1,703,236) (455,940) (993,439) (122,268) (69,008,282) (78,324,877) (44,208,699) (36,139,467) (1.32) (1.50) (0.85) (0.69) The annexed notes 1 to 9 form an integral part of this condensed interim financial information. CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE QUARTER AND HALF YEAR ENDED DECEMBER 31, 2016 Half Year Ended Quarter Ended 31-Dec Dec Dec Dec Rupees Rupees Loss for the period (69,008,282) (78,324,877) (44,208,699) (36,139,467) Other comprehensive income for the period Total comprehensive loss for the period (69,008,282) (78,324,877) (44,208,699) (36,139,467) The annexed notes 1 to 9 form an integral part of this condensed interim financial information. Chief Executive

7 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR THE HALF YEAR ENDED DECEMBER 31, 2016 Share capital Capital reserves Accumulated loss Total Rupees Balance as at June 30, restated - (Audited) 522,144,000 3,240,000 (287,716,230) 237,667,770 Loss for the six months ended December 31, (78,324,877) (78,324,877) Other comprehensive income for the period Total comprehensive income - - (78,324,877) (78,324,877) Transferred from surplus on revaluation of property, plant and equipment on account of incremental depreciation - net of tax - - 8,632,674 8,632,674 Balance as at December 31, (Unaudited) 522,144,000 3,240,000 (357,408,433) 167,975,567 Balance as at June 30, (Audited) 522,144,000 3,240,000 (443,060,548) 82,323,452 Loss for the six months ended December 31, (69,008,282) (69,008,282) Other comprehensive income for the period Total comprehensive income - - (69,008,282) (69,008,282) Transferred from surplus on revaluation of property, plant and equipment on account of incremental depreciation - net of tax - - 4,901,444 4,901,444 Balance as at December 31, (Unaudited) 522,144,000 3,240,000 (507,167,386) 18,216,614 The annexed notes 1 to 9 form an integral part of this condensed interim financial information. Chief Executive

8 CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) FOR THE HALF YEAR ENDED DECEMBER 31, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation 31-Dec Dec Rupees (67,305,046) (77,868,937) Adjustments for : Depreciation Provision for staff retirement benefits - gratuity Finance cost Gain on disposal of property, plant and equipment (Loss) / profit before working capital changes Working capital changes: (Increase) / decrease in current assets Stores, spares and loose tools Stock in trade Trade debts Loans and advances Other receivables Increase in current liabilities Trade and other payables Cash used in operations Finance cost paid Income tax paid Staff retirement benefits - gratuity paid Net cash used in operating activities 20,172,085 22,978, ,262 1,335,356 3,333,603 7,487,544 (598,661) - 23,688,289 31,801,402 (43,616,757) (46,067,535) (1,981,513) (2,265,317) 2,587,443 8,773,439 (1,050,753) 3,654,721 (1,244,235) 7,299,775 (375,062) 5,951,100 (2,064,120) 23,413,718 22,702,926 (589,673) (22,977,951) (23,243,491) (3,205,784) (7,336,731) (488,818) (1,511,773) (317,729) (1,379,066) (26,990,281) (33,471,061) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment Long term deposits Net cash used in investing activities 700,000 - (962,789) - (262,789) - CASH FLOWS FROM FINANCING ACTIVITIES Long term financing from banking companies Long term financing from directors and associates Net cash generated from financing activities Net 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 Cash and cash equivalents Cash and bank balances Short term borrowings (1,586,147) 3,251,048 32,716,048 33,014,656 31,129,901 36,265,704 3,876,831 2,794,643 (26,828,916) (60,177,890) (22,952,085) (57,383,247) 5,900,553 2,309,291 (28,852,638) (59,692,538) (22,952,085) (57,383,247) The annexed notes 1 to 9 form an integral part of this condensed interim financial information. Chief Executive

9 SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED) FOR THE QUARTER AND HALF YEAR ENDED DECEMBER 31, THE COMPANY AND NATURE OF ITS BUSINESS 1.1 The company was incorporated in Pakistan on October 18, 1980 as a private limitedcompany and was subsequently converted into public limited company. The registered office of the company is located at 3-A, SMC Housing Society, Shara-e-Faisal, Karachi. The shares of the company are quoted on Pakistan Stock Exchange Limited. The principal business of the company is manufacturing and sale of yarn. The manufacturing units are located at Manga Road, Raiwind in the province of Punjab. 1.2 The company has been incurring gross losses for the last four years because of under utilization of production capacity. During the period ended December 31, 2016 the company has incurred a net loss for the year Rs. 69,008,282. During the period unit-1 was in operation and unit-2 remain close.production of yarn is considerably less than as compared with the installed capacity. Due to problem of availability of gas, company was unable to produce electricity from its self generation plant. Available load of electricity from LESCO is not enough to run the entire machinery of the mills. These conditions indicate the existence of material uncertainty which may cast significant doubt about the company's ability to continue as a going concern and therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. These financial statements, however, have been prepared under the going concern assumptions based on the following mitigating factors: (a) (b) (c) 2 BASIS OF PREPARATION The company has applied to the LESCO for enhancement of sanction load of electricity so that management could be able to run the mill upto maximum available capacity in the absence of Gas from SNGPL. Site visit has been undertaken by LESCO officials. The management is expediting the matter to materialized this. During the period directors have injected further funds amounting to Rs. 32,116,048. The management has deviced plan to undertak adequate steps towards the reduction of fixed cost and expenses which are in process of implementation. Such steps include, but not limited to, rightsizing of the man power, resource conservation, close monitoringof other fixed cost etc. The management is expected that such steps would be helpful to overcome the prevailing situation. STATEMENT OF COMPLIANCE This condensed interim financial information is un-audited but subject to limited scope review by the statutory auditors and is being submitted to shareholders as required by section 245 of the Companies Ordinance, This condensed interimfinancial information of the Company for the half year ended 31 December 2016 has been prepared in accordance with the requirements of 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 shall prevail. This condensed interim financial information should be read in conjunction with the preceding audited annual published financial statements of the Company for the year ended 30 June ACCOUNTING ESTIMATES, JUDGEMENTS AND FINANCIAL RISK MANAGEMENT The preparation of this condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Company s accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. During preparation of this condensed interim financial information, the significant judgments made by the management in applying the Company s accounting policies and the key sources of estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the Company for the year ended 30 June SIGNIFICANT ACCOUNTING POLICIES The accounting policies and methods of computation adopted in the preparation of these condensed interim financial statements are consistent with those applied in the preparation of the financial statements for the year ended June 30, There were certain other 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: - IAS 12 - Income Taxes 01 January, IAS 7 - Statement of Cash Flows 01 January, PROPERTY, PLANT AND EQUIPMENT Operating fixed assets Opening written down value Less: Disposal during the period Depreciation charged during the period / year Revaluation Deficit Closing written down value (Un audited) (Audited) 31-Dec Jun Rupees ,189, ,463, ,189, ,463, ,463,285 1,037,950, ,463,285 1,037,950,919 (101,339) - (20,172,085) (45,957,004) - (49,530,630) 922,189, ,463,285

10 4 CONTINGENCIES AND COMMITMENTS 4.1 Contingencies There is no change in status of contingencies as disclosed in note 16.1 of the audited annual financial statements of the Company for the year ended June 30, Commitments There is no change in status of commitments as disclosed in note of the audited annual financial statements of the Company for the year ended June 30, TRANSACTION WITH RELATED PARTIES The related parties and associated undertakings of the company comprise of associated companies, directors and key management personnel. The company's aggregate transactions with the associated companies are as follows:- Transactions with the related parties Mr. Noor Elahi Mrs. Perveen Elahi Relationship 31-Dec Dec Rupees / Chief Executive Reciepts Receipts Payments 72,000 32,044,048 (Un audited) - 3,950,000 23,935,000 5,960,000 Mrs. Naheed Javed Receipts - 10,250,000 Aroma Drinks Pvt Ltd. Associated company Receipts - 395,000 Pure Drinks FSD Associated company Receipts 600,000 1,000,000 Sunrise bottling private limited Associated company Receipts 110,500 4,407,000 6 FINANCIAL RISK MANAGEMENT The Company s financial risk management objectives and policies are consistent with those disclosed in the preceding audited annual published financial statements of the Company for the year ended 30 June CORRESPONDING FIGURES In order to comply with the requirements of International Accounting Standard (IAS) 34 Interim Financial Reporting, the unconsolidated condensed interim balance sheet and unconsolidated condensed interim statement of changes in equity have been compared with the balances of annual audited financial statements of preceding financial year, whereas, the unconsolidated condensed interim profit and loss account, unconsolidated condensed interim statement of comprehensive income and unconsolidated condensed interim cash flow statement have been compared with the balances of comparable period of immediately preceding financial year. Corresponding figures have been rearranged and reclassified, wherevernecessary, for the purpose of comparison. However, no significant rearrangements or reclassifications have been made in this condensed interim financial information. 8 DATE OF AUTHORIZATION FOR ISSUE The condensed interim financial information was authorised for issued on February 28, 2016 by the Board of s of the Company. 9 GENERAL Figures in this condensed interim financial information havebeen rounded off to the nearest Rupee. Chief Executive