Interim Financial Report |for the half year ended December ...50-C, Main Gulberg, Lahore, Pakistan....

Samin Textiles Limited

Interim Financial Report |for the half year ended December 31, 2013

Contents Company Information 01

Directors’ Report 02

Condensed Interim Balance Sheet 04

Condensed Interim Profit and loss account 05

Condensed Interim Statement of comprehensive Income 06

Condensed Interim statement of Cash flows 07

Condensed Interim Statement of Changes in Equity 08

Notes to the Condensed Interim Financial Statements 09

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. Safder Hussain Tariq

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. Tariq AliMr. Tariq JillaniMr. Salman ChaudhryMr. Jamil Masud

ChairmanChief Executive

Mr. Jamil MasudMr. Tariq JilaniMr. Salman Chaudhry

ChairmanMember Member

Mr. Jamil MasudMr. Tariq JilaniMr. Salman ChaudhryMr. Wasim Abbas

ChairmanMember MemberSecretary

02

Directors’ Review

December 31, 2013 December 31, 2012Half year ended Half year ended

Rupees in million Rupees in million

Net Sales

Gross Profit

(Loss) / Profit after tax

1,539.875

21.304

(90.075)

1,357.168

21.265

(60.856)

For and on behalf of the Board

Jehanzeb Amin

Chief Executive

Lahore :

Dated : February 22, 2014

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, 2013. 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:-

The above noted comparative figures reveal that during the period under review the company posted net sales amounting to Rs.1,539.875 million and a net loss after tax of Rs.90.075 million as compared to net sales of Rs.1,357.168 million and net loss of Rs.60.856 million for the corresponding period of last financial year.

The gross margin and bottom line remained under pressure because the paucity of working capital refrained the Company to run the project at its optimum plant capacity and to procure the raw material at good price.

To overcome this situation and to provide sufficient funds to the project the management has decided to raise the funds by selling its holding in Security General Insurance Company Limited. This step of generating capital through using company's internal sources will not only effectively resolve the reasons of losses as mentioned above but also keep the borrowing cost in check. As such the said source of raising funds will bring two fold advantage for the company. The management is taking immediate steps for divestment of its said holding.

Future outlook:

The future outlook of Pakistan's textile industry seems bright after getting GSP plus status from European Union. Those companies who have the potential of gearing themselves to meet the desired quality standards of European Union, will take the lead and pick up the cherries. However this scenario will create a vacuum for lower end mills also and they will be in a position to get some fruits.

The management is gearing up to meet the upcoming challenges and to turn around the project.

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

Introduction

We have reviewed the accompanying condensed interim balance sheet of Samin Textiles Limited as at December 31, 2013 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, 2013 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, 2013.

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.

ANJUM ASIM SHAHID RAHMAN CHARTERED ACCOUNTANTSEngagement Partner: Imran AfzalLahoreFebruary 22, 2014

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

Condensed Interim Balance Sheet (Un-audited)as at December 31, 2013

JEHANZEB AMIN

Chief Executive

SAFDAR HUSSAIN TARIQ

Director

December 31, 2013 June 30, 2013Note

Rupees Rupees

(Un-Audited) (Audited)

04

Equity and liabilities

Share capital and reserves

Share capital 6 267,280,000

267,280,000

Reserves 1,331,159,409

1,146,834,465

Total share capital and reserves 1,598,439,409

1,414,114,465

Surplus on revaluation of property, plant and equipment 278,502,494

283,956,964

Liabilities

Non-current

Subordinated loan 7 10,411,566

10,411,566

Long term financing 8 184,603,053

180,370,201

Liabilities against assets subject to finance lease -

982,385

Deferred tax and other liabilities 9 658,908,992

566,119,499

Total non-current liabilities 853,923,610

757,883,651

Current

Trade and other payables 294,008,217 317,466,054

Interest /markup accrued on borrowings 36,242,232

35,143,861

Short term borrowings 765,211,828

788,512,850

Current portion of long term borrowings 77,647,393

63,073,011

Total current liabilities 1,173,109,670

1,204,195,776

Total liabilities 2,027,033,280

1,962,079,427

Total equity and liabilities 3,903,975,183

3,660,150,856

Contingencies and commitments 10

Assets

Non-current

Property, plant and equipment 11

939,735,421

965,959,871

Intangible assets 2,401,956 2,803,823

Long term investment 721,748,080

806,843,880

Long term deposits 12,823,739

12,823,739

Non-current assets 1,676,709,196 1,788,431,313

Current

Stores, spare parts and loose tools 85,108,842 82,369,105

Stock in trade 281,555,193 372,704,545

Trade debts 99,785,515 78,151,679

Loans and advances 12,497,559 19,323,133

Trade deposits, prepayments and balances with statutory authorities 97,279,252 99,837,543

Investment 12 1,646,993,196 1,197,224,966

Cash and bank balances 4,046,430 22,108,572

Current assets 2,227,265,987 1,871,719,543

Total assets 3,903,975,183 3,660,150,856

The annexed notes from 1 to 18 form an integral part of this interim financial information.

05

Condensed Interim Profit and loss account (Un-audited)for the half year ended December 31, 2013

JEHANZEB AMIN

Chief Executive


Director

Sales - net

Cost of sales 13

Gross profit

Other operating income

Distribution cost

Administrative expenses Other operating expenses

Operating (loss)

Finance cost

Loss before taxation

Taxation

Loss for the period

Loss per share - basic & diluted


1,539,874,621

(1,518,569,870)

21,304,751

23,882,901

(21,677,658)

(28,762,069) -

(5,252,075)

(70,310,268)

(75,562,343)

(14,513,100)

(90,075,443)

(3.37)

1,357,168,902

(1,335,903,305)

21,265,597

20,540,583

(21,152,286)

(24,442,050) (278,921)

(4,067,077)

(64,593,332)

(68,660,409)

7,803,580

(60,856,829)

(2.28)

681,040,354

(672,617,825)

8,422,529

357,718

(8,487,480)

(18,963,675) -

(18,670,908)

(35,197,142)

(53,868,050)

(5,101,764)

(58,969,814)

(2.21)

724,387,281

(707,538,675)

16,848,606

59,318

(10,953,024)

(13,113,940)

-

(7,159,040)

(31,423,365)

(38,582,405)

13,712,544

(24,869,861)

(0.93)

NoteFor the half year ended

December 31, 2013

Rupees

For the half year endedDecember 31, 2012

Rupees

For the quarter endedDecember 31, 2013

Rupees


Rupees

JEHANZEB AMIN

Chief Executive


Director

Condensed Interim Statement of Comprehensive Income (Un-audited) for the half year ended December 31, 2013

06

Loss after taxation

Other comprehensive income

Items that will not be reclassified to profit or (loss)

Items that may be reclassified subsequently to profit or (loss)

Other comprehensive income for the year

Total comprehensive income / (loss) for the period


Gain on remeasurement of available-for-sale investment to fair

value-net of tax


Rupees

(24,869,861)

-

-

254,227,765

254,227,765

229,357,904


Rupees

(58,969,814)

-

-

268,945,917

268,945,917

209,976,103


Rupees

(60,856,829)

-

-

254,227,765

254,227,765

193,370,936


Rupees

(90,075,443)

-

-

268,945,917

268,945,917

178,870,474

07

Condensed Interim statement of Cash flows (Un-audited)for the half year ended December 31, 2013

JEHANZEB AMIN

Chief Executive


Director


Rupees


Rupees)

Cash generated from operations

Finance cost paid

Income taxes paid / refund received

Net cash (used in) operating activities

Cash flows from investing activities

Proceeds from disposal of property, plant and equipment

Additions to property, plant and equipment

Dividend received

Net cash from investing activities

Cash flows from financing activities

Net proceeds from short term borrowings

Net proceeds from long term financing

Repayment of lease liability

Net cash (used in) / from financing activities

Net change 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

Note

14 64,481,626

(5,597,966)

(68,930,334)

(72,990,669)

(14,553,362)

7,895,723

(19,002,070)

(70,692,912)

588,000

-

(14,320,165)

(18,051,564)

20,429,828

20,429,828

6,697,663

2,378,264

(23,301,022)

58,195,067

18,039,255

19,238,095

(495,969)

(2,307,848)

(5,757,736)

75,125,314

(18,062,143)

6,810,666

22,108,572

4,793,518

4,046,430

11,604,184


Condensed Interim Statement of Changes in Equity (Un-audited) for the half year ended December 31, 2013

JEHANZEB AMIN

Chief Executive


Director

08

Balance as at July 01, 2012

Loss for the period

Other comprehensive income for the period

Balance as at December 31, 2012

Balance as at July 01, 2013

Loss for the period

Other comprehensive income for the period

Total comprehensive income for the period

Balance as at December 31, 2013

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

Particulars

Total comprehensive income for the period

Rupees

971,684,651

(60,856,829)

254,227,765

193,370,936

6,733,914

1,171,789,501

1,414,114,465

(90,075,443)

268,945,917

178,870,474

5,454,470

1,598,439,409

Total Equity

Rupees

704,404,651

(60,856,829)

254,227,765

193,370,936

6,733,914

904,509,501

1,146,834,465

(90,075,443)

268,945,917

178,870,474

5,454,470

1,331,159,409

Sub-total

Rupees

(126,393,892)

(60,856,829)-

-

(60,856,829)

-

(187,250,721)

(253,895,906)

(90,075,443)

-

(90,075,443)

5,454,470

(338,516,879)

Revenue reserve-

Accumulated losses

Rupees

830,798,543

-

254,227,765

254,227,765

6,733,914

1,091,760,222

1,400,730,371

-

268,945,917

268,945,917

-

1,669,676,288

Surplus on

revaluation of

investment to fair value

Rupees

267,280,000

-

-

-

-

267,280,000

267,280,000

-

-

-

-

267,280,000

Issued, subscribed

and paid up share

capital


Reserves

09

Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 20131 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 2013 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, 2013.

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, 2013.

The new standards, amendments to the approved accounting standards and interpretations that are mandatory for accounting periods beginning on or after July 1, 2013, 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, 2013.

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, 2013.

6 Share capital

Authorized share capital

30,000,000 (June 30, 2013: 30,000,000) ordinary shares of Rs. 10/- each 300,000,000 300,000,000

Total 300,000,000 300,000,000

December 31, 2013

Rupees

(Un-Audited)

June 30, 2013

Rupees

(Audited)

7 Subordinated loan - unsecured

This interest bearing loan from director 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 @ 15% per annum.

8 Long term financing - secured

Opening balance 242,722,232

Receipts during the period / year 50,000,000

Repayments during the period / year (31,960,745)

Closing balance 260,761,487

Less:

Payable within in next twelve months (74,750,622)

186,010,865

Transaction cost (1,689,375)

Amortization of transaction cost 281,563 (1,407,813)

Non-current portion 184,603,053

9 Defered Liabilities

Defered tax 10.1

657,346,892

Staff gratuity 1,562,100

Total 658,908,992

10

December 31, 2013

Rupees

(Un-Audited)

June 30, 2013

Rupees

(Audited)

Note

119,485,577

123,239,319

(2,664)

242,722,232

(60,662,656)

182,059,576

(2,252,500)

563,125

(1,689,375)

180,370,201

564,557,399

1,562,100

566,119,499

9.1 This represents defered tax liability on surplus on revaluation of property, plant and equipment and remeasurement of available for sale investments to fair value. Defered tax asset of Rs. 99.029 million (2012: Rs 155.839 million) arising on account of temporary differences mainly for property, plant and equipment (other than valuation surplus), trade debts, and finance lease liabilities and un-used tax losses and tax credits have not been accounted for due to uncertainity regarding its recoveribility in the foreseeable future.

10 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, 2013 except for relief effects amounting to Rs. 3,637,893 in respect of tax year 2007 and 2008 on account of minimum tax.

December 31, 2013

Rupees

(Un-Audited)

June 30, 2013

Rupees

(Audited)

Note

Commitments

Commitments against foreign bills

11 Property, plant and equipment

Operating fixed assets 11.1

Capital work in process

Total

43,611,281

933,843,802

5,891,619

939,735,421

91,299,000

961,201,348

4,758,523

965,959,871

Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2013

11

11.1.1 Cost of additions during the period / year

Building on freehold land

Plant and machinery

Office equipment

Vehicles

Electric installations

Tube well

Total

4,480,094

7,856,829

560,147

290,000

-

-

13,187,069

389,044

13,962,853

1,232,900

1,339,595

1,743,818

1,816,000

20,484,210

December 31, 2013

Rupees

(Un-Audited)

June 30, 2013

Rupees

(Audited)

Note

11.1.1

11.1 Operating fixed assets

Written down value - opening

Add: Cost of additions during the period / year

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

Add: Transferred from capital work in progress

Less: Depreciation

Written down value - closing

961,201,348

13,187,069

974,388,417

(147,845)

-

(40,396,770)

933,843,802

855,312,418

20,484,210

875,796,628

(1,147,139)

172,686,060

(86,134,201)

961,201,348

12 Investment - Available for sale

Security General Insurance Company LimitedThis represents 7,108,914 fully paid ordinary shares (June 30, 2013: 6,108,914). Fair value of this investment at the end of reporting period was Rs. 231.68 (June 30, 2013: Rs. 195.98) per share. The company intends to dispose off such investment at the best option in the foreseeable future.

13 Cost of sales

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

477,536,069

34,390,354

97,868,489

609,794,912

5,478,814

(15,904,307)

(10,425,493)

599,369,419

285,712,267

(177,543,011)

108,169,256

707,538,675

Quarter endedDecember 31, 2012

Rupees

(Un-audited)

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

Quarter endedDecember 31, 2013

Rupees

(Un-audited)

1,006,746,631

63,104,909

198,837,922

1,268,689,462

8,514,215

(15,904,307)

(7,390,092)

1,261,299,370

252,146,946

(177,543,011)

74,603,935

1,335,903,305

Half year endedDecember 31, 2012

Rupees

(Un-audited)

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

Half year endedDecember 31, 2013

Rupees

(Un-audited)


14 Cash (used in) generated from operations

Loss before taxation

Adjustments for:

Depreciation on property, plant and equipment

Gain on disposal of property, plant and equipment

Amortization

Dividend 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

(75,562,343)

40,396,770

(440,155)

401,867

(20,429,828)

70,310,268

14,676,579

(2,739,737)

91,149,352

(21,633,836)

6,825,574

2,558,291

(26,354,597)

64,481,626

(68,660,409)

42,249,008

-

485,667

(20,429,828)

64,593,332

18,237,770

(13,846,216)

725,119

35,471,473

(40,862,373)

(14,424,882)

9,101,143

(5,597,966)

12

December 31, 2013

Rupees

(Un-Audited)

December 31, 2012

Rupees

(Un-Audited)

20,429,828

Office rent 450,000

421,248

1,061

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

Markup on subordinated loan

MCB Bank Limited

Profit received on PLS account

Directors and other key management personnel

Remuneration and benefits 8,238,582

15

20,429,828

450,000

421,248

448

7,332,315


JEHANZEB AMIN

Chief Executive


Director

16 Earnings (loss) per share - basic and diluted

Loss for the period (Rupees)

Weighted average number of ordinary shares

Loss per share (Rupees)

(90,075,443)

26,728,000

(3.37)

(60,856,829)

26,728,000

(2.28)

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

Ontel Pakistan (Private) Limited

Investment 2,150,000

Security General Insurance Company Limited

Investment 2,366,591,276

Insurance premium payable 4,389,600

2,150,000

2,001,918,846

3,471,852

December 31, 2013

Rupees

(Un-Audited)

June 30, 2013

Rupees

(Audited)

December 31, 2013

Rupees

(Un-Audited)

December 31, 2012

Rupees

(Un-Audited)

17 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.

18 Date of authorization for issue

This financial information was authorized for issue on February 22, 2014 by the Board of Directors of the Company.

13


Interim Financial Report |for the half year ended December ...50-C, Main Gulberg, Lahore, Pakistan....

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Transcript of Interim Financial Report |for the half year ended December ...50-C, Main Gulberg, Lahore, Pakistan....