Samin Textiles Limited Interim Financial Report for the quarter ended September 30, 2017
Contents Company Information Directors Review Condensed Interim Balance Sheet Condensed Interim Profit and Loss Account Condensed Interim Statement of Comprehensive Income Condensed Interim Statement of Cash Flows Condensed Interim Statement of Changes in Equity Notes to the Condensed Interim Financial Information 01 02 03 04 05 06 07 08
Company Information Interim Financial Report Board of Directors NonExecutive Directors Mrs. Mehvash Amin Mr. Shehryar Amin Mr. Tariq Jilani Mr. Jamil Masud Executive Directors Mr. Jehanzeb Amin Mr. Safder Hussain Tariq Independent Director Mr. Qamber Hamid Audit Committee Mr. Qamber Hamid Mr. Jamil Masud Mr. Tariq Jilani Human Resource & Remuneration Committee Mr. Jamil Masud Mr. Tariq Jilani Mr. Shehryar Amin Chief Financial Officer Mr. Safder Hussain Tariq Company Secretary Mr. Muhammad Tayyab Chief Internal Auditor Ms. Nayab Ayaz Auditors Chairman Cheif Executive Chairman Member Member Chairman Member Member Legal Advisor Imtiaz Saddiqui & Associates Leading Banks National Bank of Pakistan Askari Bank Limited Bank Alfalah Limited Summit bank Limited NIB Bank Limited Allied Bank Limited Pak Libya Holding Company (Private) Limited Pak Oman Investment Company Limited Soneri Bank Limited Shares Registrar Corplink (Pvt) Limited Wings Arcade, 1K, Commercial Model Town, Lahore, Pakistan. Tel: 92 42 35839182 Fax: 92 42 35869037 Registered/Head Office 50C, Main Gulberg, Lahore, Pakistan. Tel: 92 42 35753761 Fax: 92 42 35753688 Mills th 8 Kilometer, Manga Raiwaind Road, District Kasur, Pakistan. Grant Thornton Anjum Rahman Chartered Accountants 01
Samin Textiles Limited Directors Review The board of directors of your company is pleased to present before you the unaudited financial statements for the 1st quarter ended September 2017. These financial statements have been prepared in compliance with IAS 34 Interim Financial Reporting and are submitted under section 245 of the companies ordinance 1984. Financial Highlights Sales Net Gross (Loss) / Profit Other Operating Income Loss/Profit After Tax Depreciation Cash Loss / Profit Quarter ended September 30, 2017 117.475 (47.678) 0.013 (83.190) 18.295 (64.895) in million Quarter ended September 30, 2016 319.524 (7.791) 0.168 (50.396) 18.032 (32.364) The figures tabulated above reveal that during the period under review the company posted net sales amounting to Rs. 117.475 million and a net loss of Rs. 83.190 million as compared to net sales of Rs. 319.524 million and a net loss of Rs. 50.396 million for the corresponding period of last financial year. Sluggish textile demand in the international market continued during the period under review as well. Consequently, the selling price remained under and couldn't generate gross margins and the total plant capacity couldn't be achieved resulting in lower sales volume, high fixed cost and increased red bottom line. Future Outlook / Strategy The sponsors and the management have the faith and belief in the textile business. The present lean period on textile industry hasn't shaken their determination to stay in the business. They are committed to cater for the financial needs of the company for its survival and revival. As soon as the prevailing political and investment climate turns congenial, they will be playing their role for turnaround of the project. Company is holding back its further investment in the proposed BMR plan till clarity of overall situation of the textile industry. However, cost cutting measures under all heads of account and financial support from the sponsors is helping the company to survive till crossing the rough patch. Acknowledgement: We are grateful to all our stakeholders exclusively the bankers for their ongoing support and the employees of the company for their commitment and hard work. For and on behalf of the Board Lahore : Dated : October 28, 2017 Jehanzeb Amin Chief Executive 02
Interim Financial Report 319.524 (7.791) 0.168 (50.396) 18.032 (32.364) 117.475 (47.678) 0.013 (83.190) 18.295 (64.895) 03
Samin Textiles Limited Condensed Interim Balance Sheet (Unaudited) as at September 30, 2017 Notes Unaudited Sep 30, 2017 Audited Jun 30, 2017 Equity and liabilities Share capital and reserves Share capital Loan from sponsor Reserves Total share capital and reserves Surplus on revaluation of property, plant and equipment 6 267,280,000 7 96,500,000 (298,935,932) 64,844,068 339,791,266 267,280,000 41,000,000 (215,745,357) 92,534,643 339,791,266 Liabilities Noncurrent Subordinated loanrelated party Long term financingsecured Deferred tax and other liabilities Total noncurrent liabilities 8 10,411,566 9 114,268,313 10 1,287,100 125,966,979 10,411,566 110,579,602 1,287,100 122,278,268 Current Trade and other payables Interest /markup accrued on borrowings Short term borrowings Current portion of long term borrowings Total current liabilities Total liabilities Total equity and liabilities 236,561,338 32,594,784 526,834,381 44,529,932 840,520,435 966,487,414 1,371,122,748 218,071,698 36,436,697 525,607,481 51,362,932 831,478,808 953,757,076 1,386,082,985 Contingencies and commitments 11 Assets Noncurrent Property, plant and equipment Intangible assets Long term investments Long term deposits Total Noncurrent assets 12 863,777,475 14,420,790 878,198,265 882,072,369 14,420,790 896,493,159 Current Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Trade deposits and prepayments Tax refunds due from government Interest accrued Cash and bank balances Current assets Total assets 51,269,525 256,322,910 44,295,370 8,396,636 2,793,663 126,573,420 3,272,959 492,924,483 1,371,122,748 52,077,111 272,970,158 19,414,419 7,370,758 2,859,050 129,840,173 5,058,157 489,589,826 1,386,082,985 The annexed notes from 1 to 18 form an integral part of this interim financial information. JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 04
Interim Financial Report Condensed Interim Profit and Loss Account (Unaudited) Note For the quarter ended Sep 30, 2017 For the quarter ended Sep 30, 2016 Sales Cost of sales Gross profit / (loss) Other income Distribution cost Administrative expenses Other operating expenses Operating (loss) / profit Finance cost (Loss) / profit before taxation Provision for taxation (Loss) / profit after taxation 117,475,436 13 (165,153,875) (47,678,439) 12,969 (3,222,004) (13,606,882) (64,494,356) (17,518,930) (82,013,286) (1,177,289) (83,190,575) 319,524,536 (327,316,308) (7,791,772) 168,442 (4,397,805) (15,668,224) (71,476) (27,760,835) (20,666,118) (48,426,953) (1,969,300) (50,396,253) (Loss) / earning per share basic and diluted 16 (3.11) (1.89) The annexed notes 1 to 18 form an integral part of these financial statements. JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 05
Samin Textiles Limited Condensed Interim Statement of Comprehensive Income (Unaudited) For the quarter ended Sep 30, 2017 For the quarter ended Sep 30, 2016 (Loss) / profit after taxation Other comprehensive income / (loss) for the year (83,190,575) (50,396,253) Total comprehensive (loss) for the year The annexed notes 1 to 18 form an integral part of these financial statements. (83,190,575) (50,396,253) JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 06
Interim Financial Report Condensed Interim Statement of Cash Flows (Unaudited) Cash flows from operating activities Cash (used in) operations Taxes paid Net cash (used in) operating activities Note For the quarter ended Sep 30, 2017 14 (32,790,664) (34,006,966) For the quarter ended Sep 30, 2016 51,602,140 (12,879,876) 38,722,264 Cash flows from investing activities Additions in property, plant and equipment Dividend received Net cash from investing activities (678,464) (678,464) Cash flows from financing activities (Decrease) in short term borrowings (Decrease) in long term financing net Increase / (Decrease) in Sponsor's loan Finance cost paid Net cash (used in) financing activities 1,226,900.00 (3,144,289) 55,500,000 (21,360,843) 32,221,768 (16,302,023) (13,143,168) (16,200,661) (45,645,852) Net change in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year (1,785,198) 5,058,157 3,272,959 (7,602,052) 26,116,244 18,514,192 The annexed notes 1 to 18 form an integral part of these financial statements. JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 07
Samin Textiles Limited Condensed Interim Statement of Changes in Equity (Unaudited) Particulars Issued, subscribed and paid up share capital Revenue reserve Accumulated Profits/(Loss) Reserves Subtotal Total Equity Balance as at July 01, 2016 267,280,000 51,256,016 51,256,016 318,536,016 Loss for the period (50,396,253) (50,396,253) (50,396,253) Other comprehensive income for the period Total comprehensive loss for the period (50,396,253) (50,396,253) (50,396,253) Transfer from surplus on revaluation of property, plant and equipmentnet of tax 2,777,905 2,777,905 2,777,905 Balance as at September 30, 2016 267,280,000 3,637,668 3,637,668 270,917,668 Profit for the period (232,708,920) (232,708,920) (232,708,920) Other comprehensive income for the period Total comprehensive loss for the period (232,708,920) (232,708,920) (232,708,920) Transfer from surplus on revaluation of property, plant and equipment net of tax 13,325,895 13,325,895 13,325,895 Balance as at June 30, 2017 267,280,000 (215,745,357) (215,745,357) 51,534,643 Loss for the period (83,190,575) (83,190,575) (83,190,575) Other comprehensive income for the period Total comprehensive loss for the period (83,190,575) (83,190,575) (83,190,575) Transfer from surplus on revaluation of property, plant and equipment net of tax Balance as at September 30, 2017 267,280,000 (298,935,932) (298,935,932) (31,655,932) The annexed notes from 1 to 18 form an integral part of this interim financial information. JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 08
Interim Financial Report Notes to the Condensed Interim Financial Information (Unaudited) 1 General information and nature of operations Samin Textiles Limited (the "Company") is a public limited company incorporated in Pakistan on November 27, 1989 under the Companies Ordinance, 1984. The shares of the Company are listed on Pakistan Stock Exchange. The principal business of the Company is manufacturing and sale of cloth. The address of its registered/head office is 50C, Main Gulberg, Lahore. The mill is situated at Manga Raiwind Road, District Kasur in the Province of Punjab. 2 Basis of preparation This condensed interim financial information is unaudited and is being submitted to shareholders, as required by section 245 of Companies Ordinance, 1984. This condensed interim financial information of the Company for the three month ended 30 September 2017 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, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This condensed interim financial report does not include all the information required for full annual financial statements and should be read in conjunction with the annual financial statements of the Company for the year ended June 30, 2017. 3 Accounting policies The accounting policies and methods of computation adopted for the preparation of this condensed interim financial information are consistent with those applied in the preparation of the annual published financial statements of the Company for the year ended June 30, 2017. The new standards, amendments to the approved accounting standards and interpretations that are mandatory for accounting periods beginning on or after July 1, 2017, were either considered not to be relevant to the Company's operations or did not have significant effect on the accounting policies of the Company. 4 Critical accounting estimates and judgments Judgments and estimates made by the management in the preparation of this condensed interim financial report are the same as those applied to the preceding annual published financial statements of the Company for the year ended June 30, 2017. 5 Financial risk management The financial risk management objectives and policies adopted by the Company are consistent with those disclosed in the financial statements of the Company for the year ended June 30, 2017. 6 Share capital Authorized share capital 30,000,000 (June 30, 2017: 30,000,000) ordinary shares of Rs. 10/ each Total Unaudited Audited Sep 30, 2017 Jun 30, 2017 300,000,000 300,000,000 300,000,000 300,000,000 7 Issued, subscribed and paidup capital 26,728,000 (June 30, 2017: 26,728,000) ordinary shares of Rs. 10/ each Total LOAN FROM SPONSOR RELATED PARTY 267,280,000 267,280,000 267,280,000 267,280,000 Loan from sponsor 96,500,000 96,500,000 Total 96,500,000 96,500,000 09
Samin Textiles Limited Notes to the Condensed Interim Financial Information (Unaudited) This represents an interest free loan from a member of the Company. This loan is designated interest free and is repayable at the discretion of the Company. 'Further, in accordance with Technical Release 32 Accounting Directors Loan issued by the Institute of Chartered Accountants of Pakistan effective for the financial statements for the period beginning on or after January 01, 2016 with earlier application permitted, such loan have been classified as part of equity instead of long term borrowing in current year financial statements. 8 Subordinated loan unsecured This interest bearing loan from a member of the Company is subordinated to the main lenders. The loan was designated as an interest bearing loan with effect from 1st July 2010 and carries interest @ 6 Month KIBOR + 3% per annum. Repayment terms of the loan have not yet been finalized. However, the loan is not repayable within next twelve months. 9 Long term financing secured Unaudited Audited Sep 30, 2017 Jun 30, 2017 From financial institutions 157,416,880 160,561,169 157,416,880 160,561,169 Less: Payable within in next twelve months (43,148,567) (49,981,567) Total 114,268,313 110,579,602 10 Defered Liabilities Defered tax Staff gratuity 1,287,100 1,287,100 Total 1,287,100 1,287,100 11 Contingencies and commitments Contingencies There is no material change in contingencies as disclosed in the notes to the financial statements for the year ended June 30, 2017. Unaudited Audited Sep 30, 2017 Jun 30, 2017 Note 12 Property, plant and equipment Operating fixed assets 12.1 Total 12.1 Operating fixed assets Written down value opening Add: Cost of additions during the period / year 12.1.1 Disposals during the period / year (W.D.V) Add: Transferred from capital work in progress Less: Depreciation Written down value closing 863,777,475 863,777,475 882,072,369 882,072,369 (18,294,895) 863,777,475 882,072,369 882,072,369 948,921,557 5,519,518 954,441,075 (9,890) (72,358,816) 882,072,369 10
Interim Financial Report Notes to the Condensed Interim Financial Information (Unaudited) 12.1.1 Cost of additions during the period Unaudited Audited Sep 30, 2017 Jun 30, 2017 Building on freehold land Plant and machinery 4,430,516 Office equipment 1,089,002 Total 5,519,518 13 Cost of Sales Raw material consumed Salaries, wages and other benefits Factory Overhead (Increase)/decrease in Work In process Opening work in process Closing work in process Adjustment of work in process Cost of goods manufactured (Increase) / decrease in finished goods Opening Stock Closing Stock Adjustment of finished goods Unaudited Unaudited Sep 30, 2017 Sep 30, 2016 49,547,873 171,165,631 30,962,069 38,697,016 69,817,253 88,348,845 150,327,195 298,211,492 1,329,570 2,850,745 (1,143,169) (3,417,538) 186,401 (566,793) 150,513,596 297,644,699 249,908,464 364,733,755 (235,268,185) (335,062,146) 14,640,279 29,671,609 165,153,875 327,316,308 11
Samin Textiles Limited Notes to the Condensed Interim Financial Information (Unaudited) 14 Cash (used in) generated from operations Unaudited Unaudited Sep 30, 2017 Sep 30, 2016 (Loss) / Profit before taxation Adjustments for: Depreciation on property, plant and equipment Amortization Interest Income Finance cost Operating profit before changes in working capital Changes in working capital (Increase) /decrease in current assets Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Trade deposits, prepayments and balances with statutory authorities (Decrease) /increase in current liabilities Trade and other payables Total (82,013,286) 18,294,894 17,518,930 (46,199,462) 807,586 16,647,248 (24,880,951) (1,025,878) 3,371,153 18,489,640 (32,790,664) (48,426,953) 18,032,355 117,320 (109,538) 20,666,118 (9,720,698) (2,322,710) 37,327,112 15,182,462 (4,112,769) 1,850,671 13,398,072 51,602,140 15 Transactions with related parties Significant transactions with related parties during three months are as follows: Unaudited Unaudited Sep 30, 2017 Sep 30, 2016 Relationship Mrs. Mehvish Amin Member of the Company Office rent 300,000 300,000 Markup on subordinated loan 227,000 229,061 MCB Bank Limited Associated company Profit received on PLS account 12,969 58,904 Onetel Pakistan (Pvt) Limited Associated company Interest On Loan 109,538 Directors and other key management personnel Directors and executives Remuneration and benefits 8,628,720 9,613,740 12
Significant balances with related parties as on balance sheet date are as follows: Interim Financial Report Notes to the Condensed Interim Financial Information (Unaudited) Unaudited Sep 30, 2017 Audited Jun 30, 2017 Security General Insurance Company Limited Associated undertaking Insurance premium payable 2,984,271 2,984,271 Payable to Sponsors Director 119,321,476 63,594,476 Payable to Provident Fund Provident fund 20,184,215 15,733,793 16 Earnings (loss) per share basic and diluted Unaudited Unaudited Sep 30, 2017 Sep 30, 2016 Loss for the period (83,190,575) (50,396,253) Weighted average number of ordinary shares 26,728,000 26,728,000 Loss per share () (3.11) (1.89) 17 General 17.1 Corresponding figures have been rearranged wherever necessary, for the purpose of comparison. However, there were no material reclassification or rearrangement to report. In order to comply with the requirements of International Accounting Standard 34 Interim Financial Reporting, the condensed interim balance sheet has been compared with the balances of annual audited financial statements of preceding financial year, whereas, the condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows have been compared with the balances of condensed interim half yearly financial information of comparable period. 17.2 Figures have been rounded off to the nearest rupees unless otherwise stated. 18 Date of authorization for issue This financial information was authorized for issue on 28 October 2017 by the Board of Directors of the Company. JEHANZEB AMIN Chief Executive SAFDAR HUSSAIN TARIQ Director 13
Samin Textiles Limited 50C, Main Gulberg, Lahore, Pakistan. Tel: +92 42 3575 3761 Fax: +92 42 3575 3688 www.samintextile.com