Interim December 2014 - Samin Textiles Limited · Distribution cost Administrative expenses Other...

Samin Textiles Limited

Interim Financial Reportfor the half year ended

December 31, 2014

Company Information

Directors’ Review

Condensed Interim Balance Sheet

Condensed Interim Profit and loss account

Condensed Interim Statement of comprehensive Income

Condensed Interim Cash flow statement

Condensed Interim Statement of Changes in Equity

Notes to the Condensed Interim Information

01

02

04

05

06

07

08

09

Contents

Auditors’ Report to the Members 03

01

Shares Registrar

Corplink (Pvt) Limited Wings Arcade, 1-K, Commercial Model Town,Lahore, Pakistan.Tel: 92 - 42 - 35839182Fax: 92 - 42 - 35869037

Registered/Head Office

50-C, Main Gulberg,Lahore, Pakistan.Tel: 92 - 42 - 35753761Fax: 92 - 42 - 35753688

Mills th8 Kilometer,

Manga - Raiwaind Road,District Kasur, Pakistan.

Website

www.samintextile.com

Legal Advisor

Imtiaz Siddiqui & Associates

Auditors

Anjum Asim Shahid RahmanChartered Accountants

Chief Internal Auditor

Mr. Wasim Abbas

Chief Financial Officer

Mr. Safder Hussain Tariq

Company Secretary

Mr. Sohail Omer

Leading Banks

National Bank of PakistanAskari Bank LimitedBank Alfalah LimitedSummit Bank LimitedNIB Bank LimitedAllied Bank LimitedPak Libya Holding Company (Private) LimitedPak Oman Investment Company Limited Soneri Bank LimitedOrix Leasing Pakistan LimitedPak China Investment Company Limited

Human Resource & Remuneration Committee

Audit Committee

Board of Directors

Company Information

Mr. Sarmad Amin Mr. Jehanzeb AminMr. Safder Hussain Tariq Mr. Shehryar AminMr. Tariq JilaniMr. Qamber Hamid Mr. Jamil Masud

ChairmanChief Executive

Independent Director

Mr. Jamil MasudMr. Tariq JilaniMr. Shehryar Amin

ChairmanMember Member

Mr. Jamil MasudMr. Tariq JilaniMr. Qamber HamidMr. Wasim Abbas

ChairmanMember MemberSecretary

02

Directors’ Review

December 31, 2014Half year ended

Rupees in million

Net Sales

Gross Profit / (Loss)

(Loss) / Profit after tax

1,038.282

(66.156)

121.933

For and on behalf of the Board

Jehanzeb Amin

Chief Executive

Lahore :

Dated : February 25, 2015

The board of directors of your company is pleased to present before you the un-audited financial statements for duly reviewed by the auditors of the Company for the half yearly ended December 31, 2014. 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:

Comparison of significant financial figures for the period under review with the corresponding period is exhibited below:-

December 31, 2013Half year ended

Rupees in million

1,539.875

21.304

(90.075)

The above noted comparative figures reveal that during the period under review the company posted net sales amounting to Rs.1,038.282 million and a net profit after tax of Rs.121.933 million as compared to net sales of Rs.1,539.874 million and net loss of Rs.90.075 million for the corresponding period of last financial year.

It is a known fact that textile industry is overall suffering due to several factors including fall in international cotton prices and demand of grey fabric. Under the present situation, survival is possible only by cutting back costs and maximizing synergy between processes. Numerous steps have been taken to reduce selling and administrative costs and results will start approaching coming period.

Future outlook:

Management of the Company is re-strategizing and considering a plan of BMRE of Unit-I which has 100 old Tsudakoma looms of 1992 model. Based on proposed plan old and obsolete machinery will be replaced by latest technology looms resulting in enhanced productivity and efficiency. To arrange funds for BMRE plan and additional working capital, remaining holding in SGICL will also be sold. Once implemented, BMRE plan will ensure turnaround of the Company during the worst business conditions. Subsequently any positive trend on demand side will yield upward surge in the bottom line.

Management is fully devoted and not leaving any stone unturned to turn the existing situation around.

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.

03

Auditors' Report to the Members on Review of Interim Financial Information

Chartered Accountants Member of Grant Thornton International Ltd

Offices in Karachi and Islamabad

Anjum Asim Shahid Rahman 1-Inter Floor, Eden Centre,

43-Jail Road, Lahore 54000,

Pakistan.

T +92 42 37590 214-16, 37565 430-31

F +92 42 37599 023

www.gtpak.com

An instinct for growthTM

Introduction

We have reviewed the accompanying condensed interim balance sheet of Samin Textiles Limited as at December 31, 2014 and the related 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 and notes to the accounts for the six-month period then ended (here-in-after referred to as the "interim financial information"). Management is responsible for the preparation and presentation of this 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 for three-month periods ended December 31, 2014 in the interim financial information have not been reviewed and we do not express a conclusion thereon as we are required to review only the cumulative figures for the six-month period ended December 31, 2014.

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.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting.

CHARTERED ACCOUNTANTSEngagement Partner: Imran AfzalLahoreDated: February 25, 2015

Condensed Interim Balance Sheet (Un-audited)as at December 31, 2014

JEHANZEB AMIN

Chief Executive

SAFDAR HUSSAIN TARIQ

Director

04

Note

Equity and liabilities

Share capital and reserves

Share capital

Reserves

Total share capital and reserves

Surplus on revaluation of property, plant and equipment

Liabilities

Non-current

Subordinated loan

Long term financing 6

Deferred liabilities 7

Total non-current liabilities

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

Contingencies and commitments 8

Assets

Non-current

Property, plant and equipment 9

Intangible assets

Long term investments 10

Long term deposits

Non-current assets

Current

Stores, spare parts and loose tools

Stock in trade

Trade debts

Loans and advances

Trade deposits, prepayments and balances with statutory authorities

Tax refunds due from government

Investment 10

Interest accrued

Cash and bank balances

Current assets

Non-current assets classified as held for sale 10

Total assets

The annexed notes from 1 to 17 form an integral part of this interim financial information.

Un-audited Audited

Dec 31, 2014 June 30, 2014

Rupees Rupees

267,280,000 267,280,000

128,885,657 701,451,810

396,165,657 968,731,810

268,180,958 272,880,194

10,411,566 10,411,566

102,085,970 115,772,617

201,523,700 307,974,194

314,021,236 434,158,377

263,416,581 247,892,382

43,801,250 35,687,172

733,843,418 896,175,554

60,221,684 110,301,440

1,101,282,933 1,290,056,548

1,415,304,169 1,724,214,925

2,079,650,784 2,965,826,929

875,129,340 903,518,334

1,930,752 2,145,280

1,000,000 405,770,000

12,823,739 12,823,739

890,883,831 1,324,257,353

73,212,336 76,754,664

302,273,616 320,747,469

85,190,558 57,619,607

23,522,251 20,245,940

1,228,640 1,228,640

71,015,698 91,398,423

- 705,330,000

437,719 365,269

11,536,135 17,812,734

568,416,953 1,291,502,746

620,350,000 350,066,830

2,079,650,784 2,965,826,929

05

Condensed Interim Profit and loss account (Un-audited)for the half year ended December 31, 2014

JEHANZEB AMIN

Chief Executive


Director

Sales - net

Cost of sales 11

Gross profit / (loss)

Other operating income 12

Distribution cost

Administrative expenses

Other operating expenses

Operating profit / (loss)

Finance cost

Profit / (loss) before taxation

Taxation

Profit / (loss) for the period

Profit / (loss) per share - basic & diluted


Note

For the half For the half For the quarter For the quarter

year ended year ended ended ended

Dec 31, 2014 Dec 31, 2013 Dec 31, 2014 Dec 31, 2013

( Rupees ) ( Rupees ) ( Rupees ) ( Rupees )

1,038,282,572

(1,104,438,767)

(66,156,195)

330,137,599

(17,800,225)

(27,429,241)

(333,877)

218,418,061

(69,445,923)

148,972,138

(27,038,317)

121,933,821

4.56

1,539,874,621

(1,518,569,870)

21,304,751

24,000,315

(21,677,658)

(28,762,069)

(117,414)

(5,252,075)

(70,310,268)

(75,562,343)

(14,513,100)

(90,075,443)

(3.37)

535,150,668

(582,878,980)

(47,728,312)

131,316

(7,849,816)

(13,986,721)

(333,877)

(69,767,410)

(31,157,384)

(100,924,794)

(21,808,072)

(122,732,866)

(4.59)

681,040,354

(672,617,825)

8,422,529

475,132

(8,487,480)

(18,963,675)

(117,414)

(18,670,908)

(35,197,142)

(53,868,050)

(5,101,764)

(58,969,814)

(2.21)

JEHANZEB AMIN

Chief Executive


Director

Condensed Interim Statement of Comprehensive Income (Un-audited) for the half year ended December 31, 2014

06

Profit/(loss) after taxation

Other comprehensive income

Other comprehensive income for the year

Total comprehensive income / (loss) for the period


Gain/(loss) on remeasurement of available-

for-sale investment to fair value-net of tax

Items that may be reclassified subsequently

to profit or (loss)

Items that will not be reclassified to profit or

(loss)

For the half

year ended

Dec 31, 2014

Rupees

121,933,821

-

(368,536,875)

(368,536,875)

(246,603,054)

For the half

year ended

Dec 31, 2013

Rupees

(90,075,443)

-

268,945,917

268,945,917

178,870,474

For the quarter

ended

Dec 31, 2014

Rupees

(122,732,866)

-

(368,536,875)

(368,536,875)

(491,269,741)

For the quarter

ended

Dec 31, 2013

Rupees

(59,087,228)

-

268,945,917

268,945,917

209,858,689

07

Condensed Interim Statement of Cash flows (Un-audited)for the half year ended December 31, 2014

JEHANZEB AMIN

Chief Executive


Director

For the half For the half

year ended year ended

Dec 31, 2014 Dec 31, 2013

Note Rupees Rupees

Cash generated from operations 13 (65,657,570)

64,481,626

Finance cost paid (61,050,282)

(68,930,334)

Income taxes paid (10,910,883)

(14,553,362)

Net cash (used in) operating activities (137,618,735)

(19,002,070)

Cash flows from investing activities

Proceeds from disposal of property, plant and equipment -

588,000

Proceeds from disposal of Investments 350,066,830

-

Additions to property, plant and equipment (8,669,592) (14,320,165) Dividend received 16,325,000 20,429,828 Net cash from investing activities 357,722,238

6,697,663

Cash flows from financing activities

Net proceeds from short term borrowings (162,332,136)

(23,301,022)

Net proceeds from long term financing (63,608,376)

18,039,255

Repayment of lease liability (439,590)

(495,969)

Net cash (used in) financing activities (226,380,102)

(5,757,736)

Net change in cash and cash equivalents (6,276,598)

(18,062,143)

Cash and cash equivalents at the beginning of the period 17,812,734

22,108,572

Cash and cash equivalents at the end of the period 11,536,135

4,046,429


Condensed Interim Statement of Changes in Equity (Un-audited) for the half year ended December 31, 2014

JEHANZEB AMIN

Chief Executive


Director

08

Balance as at July 01, 2013

Loss for the period

Balance as at December 31, 2013

Balance as at July 01, 2014

Profit/(loss) for the period

Balance as at December 31, 2014


Particulars

Transfer from surplus on revaluation

of property, plant and equipment

on account of incremental

depreciation-net of income tax

Transfer from surplus on revaluation

of property, plant and equipment

on account of incremental

depreciation-net of income tax

Total comprehensive income/(loss)

for the period

Other comprehensive income for

the period

Total comprehensive income/(loss)

for the period

Transfer to profit and loss account

on disposal of available for sale

investment

Other comprehensive income for

the period

Reserves

267,280,000 1,400,730,371 (253,895,906) 1,146,834,465 1,414,114,465

- - (90,075,443) (90,075,443) (90,075,443)

- 268,945,917 -

268,945,917 268,945,917

- 268,945,917 (90,075,443) 178,870,474 178,870,474

-

- 5,454,470 5,454,470 5,454,470

267,280,000 1,669,676,288 (338,516,879) 1,331,159,409 1,598,439,409

267,280,000 997,125,119 (390,559,476) 606,565,643 873,845,643

- - 121,933,821 121,933,821 121,933,821

- (368,536,875) - (368,536,875) (368,536,875)

- (235,776,168) - (235,776,168) (235,776,168)

- (604,313,043) 121,933,821 (482,379,222) (482,379,222)

- - 4,699,236 4,699,236 4,699,236

267,280,000 392,812,076 (263,926,419) 128,885,657 396,165,657

Rupees

Total Equity

Capital reserve-

Surplus on

revaluation of

investment to fair

value

Revenue reserve-

Accumulated

losses Sub-total

Issued,

subscribed

and paid up

share capital

RupeesRupeesRupeesRupees

09

Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2014

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 the Lahore and Karachi Stock Exchanges. The principal business of the Company is manufacturing and sale of cloth. The address of its registered/head office is 50-C, 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 six month period ended 31 December 2014 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, 2014.

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, 2014.

The new standards, amendments to the approved accounting standards and interpretations that are mandatory for accounting periods beginning on or after July 1, 2014, 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, 2014.

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, 2014.

6 Long term financing - secured

Opening balance

Receipts during the period / year

Repayments during the period / year

Closing balance

Less:

Payable within next twelve months

Transaction cost

Amortization of transaction cost

Non-current portion

224,852,747

-

(63,608,376)

161,244,371

(58,313,714)

102,930,657

(1,126,250)

281,563

(844,688)

102,085,970

242,722,232

-

(17,869,485)

224,852,747

(107,953,880)

116,898,867

(1,689,375)

563,125

(1,126,250)

115,772,617

Un-audited Audited

Dec 31, 2014 June 30, 2014

Rupees Rupees

10

7.1 This represents deferred tax liability on surplus on revaluation of property, plant and equipment and remeasurement of available for sale investments to fair value. Deferred tax asset of Rs. 81.730 million (June 30, 2014: Rs. 129.576 million) arising on account of temporary differences mainly for property, plant and equipment (other than valuation surplus) and finance lease liabilities and un-used tax losses and tax credits have not been accounted for due to uncertainty regarding its recoverability in the foreseeable future.

8 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, 2014.

Commitments

Commitments against foreign bills

9 Property, plant and equipment

Operating fixed assets 9.1

Capital work in progress

Total

Un-audited

Dec 31, 2014

Rupees

43,092,590

870,858,435

4,270,905

875,129,340

Audited

June 30, 2014

Rupees

43,611,281

899,247,429

4,270,905

903,518,334

Note

7 Defered Liabilities

Defered tax 7.1

Staff gratuity

Total

199,961,600

1,562,100

201,523,700

306,412,094

1,562,100

307,974,194

Un-audited Audited

Dec 31, 2014 June 30, 2014

Note Rupees Rupees

9.1 Operating fixed assets

Written down value - opening

Add: Transferred from capital work in progress

Add: Cost of additions during the period / year 9.1.1

Disposals during the period / year (W.D.V)

Less: Depreciation

Written down value - closing

9.1.1 Cost of additions during the period / year

Building on freehold land

Plant and machinery

Furniture & Fittings

Office equipment

Vehicles

Electric installations

Total

899,247,429

-

8,669,592

907,917,021

-

(37,058,586)

870,858,435

-

7,418,742

135,000

1,115,850

-

-

8,669,592

961,201,348

1,620,714

17,790,649

980,612,711

(1,704,630)

(79,660,652)

899,247,429

5,903,569

9,260,726

-

1,078,747

377,607

1,170,000

17,790,649


11

10 Non-current assets classified as held for sale

10.1 During the year ended June 30, 2014, the company entered into a MOU with Adamjee Insurance Company Limited for disposing off 3,684,914 shares of Security General Insurance Company Limited at Rs. 95 per share. During the half year ended, such shares have been disposed off.

10.2 The company also intends to dispose off remaining 6,530,000 shares of Security General Insurance Company Limited within one year.

Cost of sales11

Other operating income12


Raw materials consumed

Salaries, wages and other benefits

Factory overheads

(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

Total

Un-audited

Quarter ended

Dec 31, 2013

( Rupees )

482,296,639

36,380,247

139,036,501

657,713,387

11,397,288

(3,315,412)

8,081,876

665,795,263

257,487,384

(234,764,949)

22,722,435

688,517,698

Un-audited

Quarter ended

Dec 31, 2014

( Rupees )

446,648,993

37,932,468

136,682,287

621,263,748

2,735,148

(2,923,786)

(188,638)

621,075,110

205,562,511

(243,758,641)

(38,196,130)

582,878,980

Un-audited

Half year ended

Dec 31, 2013

( Rupees )

1,145,127,756

70,822,870

256,910,495

1,472,861,121

15,904,307

(11,397,288)

4,507,019

1,477,368,140

257,487,384

(216,285,654)

41,201,730

1,518,569,870

Un-audited

Half year ended

Dec 31, 2014

( Rupees )

824,398,983

74,655,979

242,523,992

1,141,578,954

6,779,303

(2,923,786)

3,855,517

1,145,434,471

202,762,937

(243,758,641)

(40,995,704)

1,104,438,767

Note

Other operating income

Income from financial assets

Profit on deposit accounts

Dividend income

Interest income

Gain on disposal of Investment 10.1

Gain on disposal of property, plant and

equipment

Foreign currency translation differences

Total

Income from assets other than financial

assets

Un-audited Un-audited Un-audited Un-audited

Half year ended Half year ended Quarter ended Quarter ended

Dec 31, 2014 Dec 31, 2013 Dec 31, 2014 Dec 31, 2013

( Rupees ) ( Rupees ) ( Rupees ) ( Rupees )

44,342

-

-

-

430,790

-

191,359

16,325,000

263,809

313,046,597

-

310,834

330,137,599

110,959

20,429,828

-

-

440,155

3,019,373

24,000,315

75,092

-

56,224

-

-

-

131,316 475,132

12

14

20,429,828

450,000

421,248

1,061

72,450

Transactions with related parties

Significant transactions with related parties during six months are as follows:

Security General Insurance Company Limited

Dividend received

Mrs. Mehvish Amin

Office rent

Markup on subordinated loan

MCB Bank Limited

Profit received on PLS account

Onetel Pakistan (Pvt) Limited

Interest on loan

Directors and other key management personnel

Remuneration and benefits

16,325,000

450,000

421,248

1,526

72,450

12,586,992 8,238,582

13 Cash (used in) generated from operations

Profit/(loss) before taxation

Adjustments for:

Depreciation on property, plant and equipment

Gain on disposal of property, plant and equipment

Amortization

Dividend income

Gain on disposal of Investment

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

Cash (used in) / generated from operations

148,972,138 (75,562,343)

37,058,586 40,396,770

- (440,155)

214,528 401,867

(16,325,000) (20,429,828)

(313,046,597) -

(72,450)

Un-audited Un-audited

Dec 31, 2014 Dec 31, 2013

(Rupees) ( Rupees )

-

69,445,923

70,310,268

(73,752,872)

14,676,579

3,542,328

(2,739,737)

18,473,853

91,149,352

(27,570,951)

(21,633,836)

(3,276,311)

6,825,574

1,402,184

2,558,291

15,524,199

(26,354,597)

(65,657,570)

64,481,626


JEHANZEB AMIN

Chief Executive


Director

13

Un-audited

Dec 31, 2014

Rupees

Significant balances with related parties as on balance sheet date are as follows:

Ontel Pakistan (Private) Limited

Ordinary share capital

Loan

Interest accrued on loan

Security General Insurance Company Limited

Investment

Insurance premium payable

1,000,000

1,150,000

437,719

620,350,000

1,239,174

1,000,000

1,150,000

365,269

1,459,016,830 3,471,852

Un-audited Un-audited

Dec 31, 2014 Dec 31, 2013

15 Earnings (loss) per share - basic and diluted

Profit/(loss) for the period (Rupees) 121,933,821

(90,075,443)

Weighted average number of ordinary shares 26,728,000 26,728,000

Earning/(loss) per share (Rupees) 4.56 (3.37)

Audited

June 30, 2014

Rupees

Rupees Rupees

16 General

This financial information is presented in Pak Rupees, which is the Company's functional and presentation currency. Figures have been rounded off to the nearest rupee, unless stated otherwise.

17 Date of authorization for issue

This financial information was authorized for issue on February 25, 2014 by the Board of Directors of the Company.


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