BIBOJEE GROUP
WOOLLEN MILLS LIMITED
Half YearlyHalf YearlyAccountsAccountsDecember, December, 20162016
Half YearlyAccountsDecember, 2016
BANNU
Pages
COMPANY’S PROFILE .........................................................1
DIRECTORS’ REPORT(English & ) .............................2-3
AUDITORS’ REVIEW REPORT.............................................4
BALANCE SHEET..................................................................5
PROFIT & LOSS ACCOUNT..................................................6
CASH FLOW STATEMENT....................................................7
STATEMENT OF CHANGES IN EQUITY ..............................8
SELECTED NOTES TO THE ACCOUNTS ............................9-12
CONTENTS
BANNU WOOLLEN MILLS LIMITED
1
BANNU WOOLLEN MILLS LIMITED
Board Of Directors Mr. Raza Kuli Khan Khattak ChairmanLt. Gen. (Retd) Ali Kuli Khan KhattakMrs. Shahnaz Sajjad Ahmad Chief ExecutiveMr. Ahmad Kuli Khan KhattakMr. Mushtaq Ahmad Khan, FCAMr. Gohar Ayub KhanDr. Shaheen Kuli Khan Syed Zubair Ahmed Shah (NIT)Mr. Ahmad Zeb Khan (Independent)
Audit Committee ChairmanMemberLt. Gen. (Retd) Ali Kuli Khan Khattak
Mr. Ahmad Kuli Khan KhattakMr. Mushtaq Ahmad Khan, FCA
Member
Mr. Ahmad Zeb Khan
Member
Human Resource & Lt. Gen. (Retd) Ali Kuli Khan Khattak ChairmanRemuneration Committee Mrs. Shahnaz Sajjad Ahmad Member / CEO
Mr. Ahmad Kuli Khan Khattak Member
Company Secretary Mr. Azher IqbalAPFA
Chief Financial Officer Mr. A.R. TahirChief Operating Officer (COO)
Head Of Internal Audit Mr. Salman Khan - ACA
Auditors M/S. ShineWing Hameed Chaudhri & CoChartered Accountants
Bankers National Bank Of PakistanBank Alfalah Ltd
Legal Adviser M/S Hassan & Hassan, AdvocatesPaaf Building, 1-D, Kashmir/ Egerton Road, Lahore
Tax Consultant M. Nawaz Khan & Co1-Ground Floor, Farrah Centre, 2 Mozang Road, Lahore
Registrars & Shares Management & Registration Services (Pvt) Limited.Registration Office Business Executive Centre, F/17/3, Block 8,
Clifton, KarachiPhone 021-35369174, 35375127-29Fax. 021-35820325E-Mail: [email protected]
Registered Office Bannu Woollen Mills LtdD.I.Khan Road, BannuTel. (0928) 615131, 611350Fax. (0928) 611450E-Mail: [email protected] Site "www.bwm.com.pk "
Mills D.I.Khan Road, BannuTel. (0928) 613151, 611350Fax (0928) 611450E-Mail: [email protected] Site: "www.bwm.com.pk "
COMPANY'S PROFILE
2RAZA KULI KHAN KHATTAK
Chairman
Date : 28th February, 2017
For & on behalf of the Board of Directors,
BANNU WOOLLEN MILLS LIMITED
FINANCIAL PERFORMANCE
FINANCIAL RESULTSThese are summarised below:
31 Dec.,
2016
31 Dec., 2015
Sales - net 650,242 630,736
Gross profit 210,078 199,889
Profit before taxation 113,830 106,784
Profit after taxation 81,446 75,498
Earnings per share Rupees 8.57 7.94
FUTURE OUTLOOK
THANKS AND APPRECIATION
Continuous improvement in macro-economic indicators has set a foundation of sustained economicgrowth. As law and order situation and availability of energy supplies has improved, which has promotedthe business environment and have a positive impact on domestic industry growth.
DIRECTORS' REPORT TO THE SHAREHOLDERS
It is my pleasure to present on behalf of the Directors, the un-audited condensed interim financialinformation of the Company for the half year ended December 31, 2016 duly reviewed by the statutoryauditors of the Company.
We are pleased to report that your Company has earned net profit of Rs. 81.446 million (December 31,2015: Rs. 75.498 million) after incorporation of share of profit of Associated Companies and taxation.The net sales increased by 3.09% during the period under review and the gross profit has been slightlyincreased from 31.69% to 32.31%.
Half-Year Ended
(Rupees in thousand)
This was one of the most difficult period for the Company due to non setting of winter owning toconsistent and long spell of drought. Our pre-winter five months sales from July, 2016 to November,2016 yielded Rs. 91 million i.e.17% surplus over the corresponding period of the last year but same waseroded by drastic sales decline in December, 2016 because of no market demand for warm cloth and thedealers complain huge inventory of the Company's unsold cloth with them. However, the pre Decembersurplus helped us to almost achieve the results which are in line with the set objectives of the Company.The net sales for the period recorded at Rs. 650.242 million, which is 3.09% higher as compared to thesame period of last year. The positive performance primarily represents a better sales mix. Finance cost,net of profit on bank deposits was registered at Rs. 2.222 million which is encouraging 52% lower overthe corresponding period on account of efficient treasury operations. The Company achieved earningsper share (EPS) of Rs. 8.57 per share against Rs. 7.94 per share for the corresponding period.
The Company is focused on growth opportunities and is determined to significantly improve its operatingresults by adding value to the stakeholders' wealth. In order to improve the quality of yarn for in-houseconsumption, an imported Italian Autoconer has been successfully installed by in-house technical teamand in operation from November, 2016.
The Company is optimistic in using its marketing function to grow and hopes to strengthen operatingresults further through volume benefits in next season by establishing new products, new designs andnew markets niches of existing products. Considering the decline in sales volume of coarse products andshrinkage of winter season, the Marketing function will add products related to summer season in nearfuture to fully utilize the production capacity of the mills.
The management takes this opportunity to thank customers, shareholders, suppliers, bankers and otherstakeholders. We also appreciate and acknowledge the continued support, commitment, loyalty and hardwork of our employees.
3
BANNU WOOLLEN MILLS LIMITED
4
SHINEWING HAMEED CHAUDHRI & CO.,LAHORE: 28 February, 2017 CHARTERED ACCOUNTANTS Engagement Partner: Abdul Hameed Chaudhari
AUDITORS' REPORT TO THE MEMBERS ON REVIEW OF CONDENSED INTERIM FINANCIAL INFORMATION
BANNU WOOLLEN MILLS LIMITED
Introduction
Scope of Review
Conclusion
We have reviewed the accompanying condensed interim balance sheet of BANNU WOOLLEN
MILLS LIMITED as at December 31, 2016 and the related condensed interim profit and loss
account, condensed interim cash flow statement and condensed interim statement of changes in
equity together with the notes forming part thereof for the six months 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 the 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 for the quarters ended December 31,2016 and 2015 have not been reviewed, as we are required to review only the cumulative figuresfor the six months period ended December 31, 2016.
We conducted our review in accordance with International Standard on Review Engagements2410, “Review of Interim Financial Information Performed by the Independent Auditor of theEntity”. A review of interim financial information consists of making inquiries, primarily of personsresponsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing and consequently does not enable us to obtain assurance thatwe would become aware of all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying interim financial information as of and for the six months period ended
December 31, 2016 is not prepared, in all material respects, in accordance with the approved
accounting standards as applicable in Pakistan for interim financial reporting.
5
BANNU WOOLLEN MILLS LIMITED
Dec. 31, June 30, 2016 2016
Un-audited AuditedASSETS Note
Non-current assets
Property, plant and equipment 5 1,132,273 1,142,667
Intangible assets 131 150
Investments in Associated Companies 6 374,095 366,358
Security deposits 3,344 3,3941,509,843 1,512,569
Current assets
Stores and spares 60,824 66,714
Stock-in-trade 406,482 486,962
Trade debts 327,455 64,961
Advances to employees - unsecured, considered good 4,860 8,001
Advance payments 3,665 773
Trade deposits and prepayments 2,478 265
Sales tax refundable 2,555 10,324
Income tax refundable, advance tax
and tax deducted at source 14,354 27,810
Cash and bank balances 7,778 82,842
830,451 748,652
Total assets 2,340,294 2,261,221
EQUITY AND LIABILITIES
Share capital and reservesAuthorised capital 200,000 200,000
Issued, subscribed and paid-up capital 95,063 95,063
Reserves 884,500 852,500
Unappropriated profit 90,039 79,923
Shareholders' Equity 1,069,602 1,027,486
Surplus on Revaluation of Property, Plant and Equipment 823,200 827,453
Liabilities
Non-current liabilities
Staff retirement benefits - gratuity 195,143 185,062
Deferred taxation 80,608 81,953
275,751 267,015Current liabilities
Trade and other payables 128,454 105,089
Accrued mark-up 1,732 19
Short term finances 7,441 -
Current portion of demand finances - 2,500
Taxation 34,114 31,659
171,741 139,267Total liabilities 447,492 406,282
Contingencies and commitments 7
Total equity and liabilities 2,340,294 2,261,221
The annexed notes form an integral part of this condensed interim financial information.
Rupees in '000
Shahnaz Sajjad AhmadChief Executive
Lt. Gen (Retd) Ali Kuli Khan Khattak Director
Condensed Interim Balance Sheet As At December 31, 2016
6
BANNU WOOLLEN MILLS LIMITED
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Note 2016 2015 2016 2015
Sales - net 355,519 373,441 650,242 630,736
Cost of sales (248,392) (262,418) (440,164) (430,847)
Gross profit 107,127 111,023 210,078 199,889
Distribution cost (18,313) (15,697) (33,065) (26,307)
Administrative expenses (29,089) (29,283) (57,563) (52,915)
Other income 767 428 1,748 1,295
Other expenses (4,936) (5,932) (10,199) (9,976)
Profit from operations 55,556 60,539 110,999 111,986
Finance cost (1,133) (2,119) (2,909) (5,391)
54,423 58,420 108,090 106,595
Share of profit of
Associated Companies - net 6 5,740 189 5,740 189
Profit before taxation 60,163 58,609 113,830 106,784
Taxation 8 (19,048) (21,579) (32,384) (31,286)
Profit after taxation 41,115 37,030 81,446 75,498
Other comprehensive income -
-
-
-
Total comprehensive income for
the period 41,115 37,030 81,446 75,498
Earnings per share - basic and diluted 4.33 3.90 8.57 7.94
The annexed notes form an integral part of this condensed interim financial information.
- - - - - - - - - - - Rupees - - - - - - - - - - -
- - - - - - - - - - Rupees in '000 - - - - - - - - - -
Condensed Interim Profit And Loss Account (Un-Audited)
For The Quarter And Six Months Period Ended December 31, 2016
Quarter ended Six months period ended
Shahnaz Sajjad AhmadChief Executive
Lt. Gen (Retd) Ali Kuli Khan Khattak Director
7
BANNU WOOLLEN MILLS LIMITED
Dec. 31, Dec. 31,
2016 2015
Cash flow from operating activities
Profit for the period - before taxation and net share
of profit on investments in Associated Companies 108,090 106,595
Adjustments for non-cash charges and other items:
Depreciation 19,973 18,328
Amortisation of intangible assets 19 19
Staff retirement benefits - gratuity (net) 10,081 12,778
Mark-up on bank deposits (833) (777)
Finance cost 2,909 5,391
Gain on sale of a vehicle (209) -
Profit before working capital changes 140,030 142,334
Effect on cash flow due to working capital changes
(Increase) / decrease in current assets
Stores and spares 5,890 (2,432)
Stock-in-trade 80,480 203,432
Trade debts (262,494) (121,169)
Advances to employees 3,141 (2,149)
Advance payments (2,892) (82)
Trade deposits and prepayments (2,213) (2,343)
Sales tax refundable 7,769 3,402
Increase / (decrease) in trade and other payables 19,900 (26,557)
(150,419) 52,102
Cash (used in) / generated from operations (10,389) 194,436
Taxes paid (17,816) (28,200)
Net cash (used in) / generated from operating activities (28,205) 166,236
Cash flow from investing activities
Fixed capital expenditure (9,970) (4,394)
Sale proceeds of a vehicle 600 -
Intangible assets acquired -
(188)
Security deposits 50 -
Dividend received on investments 1,949 2,339
Mark-up received on bank deposits 833 777
Net cash used in investing activities (6,538) (1,466)
Cash flow from financing activities
Demand finances - repaid (2,500) (5,000)
Short term finances - net 7,441 (49,778)
Dividend paid (44,066) (27,029)
Finance cost paid (1,196) (4,099)
Net cash used in financing activities (40,321) (85,906)
Net (decrease) / increase in cash and cash equivalents (75,064) 78,864
Cash and cash equivalents - at beginning of the period 82,842 3,506
Cash and cash equivalents - at end of the period 7,778 82,370
The annexed notes form an integral part of this condensed interim financial information.
Condensed Interim Cash Flow Statement (Un-Audited)
For The Quarter And Six Months Period Ended December 31, 2016
Six months period ended
- - - Rupees in '000 - - -
Shahnaz Sajjad AhmadChief Executive
Lt. Gen (Retd) Ali Kuli Khan Khattak Director
8
BANNU WOOLLEN MILLS LIMITED
Capital Revenue
Balance as at July 01, 2015 (audited) 95,063 19,445 786,055 805,500 75,940 976,503
Transfer of reserves -
-
47,000 47,000 (47,000) -
Transaction with owners:
Final dividend for the year
ended June 30, 2015 at
the rate of Rs.3 per share -
-
-
-
(28,519) (28,519)
Total comprehensive income for
the period ended December 31, 2015 -
-
-
-
75,498 75,498
Transfer from surplus on revaluation
of property, plant and equipment on
account of incremental depreciation for
the period - net of deferred taxation -
-
-
-
3,105 3,105
Effect of items directly credited in
equity by Associated Companies - - - - 2,657 2,657Balance as at December 31, 2015
(un-audited) 95,063 19,445 833,055 852,500 81,681 1,029,244
Balance as at July 01, 2016 (audited) 95,063 19,445 833,055 852,500 79,923 1,027,486
Transfer of reserves -
-
32,000 32,000 (32,000) -
Transaction with owners:
Final dividend for the year
ended June 30, 2016 at
the rate of Rs.5 per share -
-
-
-
(47,531) (47,531)
Total comprehensive income for the
period ended December 31, 2016 -
-
-
-
81,446 81,446
Transfer from surplus on revaluation
of property, plant and equipment on
account of incremental depreciation for
the period - net of deferred taxation -
-
-
-
4,255 4,255
Effect of items directly credited in
equity by Associated Companies -
-
-
-
3,946 3,946
Balance as at December 31, 2016
(un-audited) 95,063 19,445 865,055 884,500 90,039 1,069,602
The annexed notes form an integral part of this condensed interim financial information.
Condensed Interim Statement of Changes In Equity (Un-Audited)For The Quarter And Six Months Period Ended December 31, 2016
Share
capitalTotal
Share
premiumGeneral
Sub-total
- - - - - - - - - - - - Rupees in '000 - - - - - - - - - - - -
Unapprop-
riated
profit
Reserves
Shahnaz Sajjad AhmadChief Executive
Lt. Gen (Retd) Ali Kuli Khan Khattak Director
9
BANNU WOOLLEN MILLS LIMITED
1. LEGAL STATUS AND NATURE OF BUSINESS
2. BASIS OF PREPARATION
3. ACCOUNTING POLICIES
4. ACCOUNTING ESTIMATES AND JUDGEMENTS
5. PROPERTY, PLANT AND EQUIPMENT Un-audited AuditedDec. 31, June 30,
2016 2016Note
Operating fixed assets - tangible 5.1 1,125,053 1,121,695
Capital work-in-progress 7,220 20,972
1,132,273 1,142,667
Notes To The Condensed Interim Financial Information (Un-Audited)
For The Quarter And Six Months Period Ended December 31, 2016
Bannu Woollen Mills Ltd. (the Company) was incorporated in Pakistan as a PublicCompany in the year 1960 and its shares are quoted on Pakistan Stock Exchange Ltd.The Company is principally engaged in manufacture and sale of woollen yarn, cloth andblankets and its registered office and Mills are located at D.I.Khan Road, Bannu.
- - - Rupees in '000 - - -
This condensed interim financial information is un-audited and is being submitted to the
members in accordance with section 245 of the Companies Ordinance, 1984 (the
Ordinance). It 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 Ordinance. In case where requirements differ, the provisions
of or directives issued under the Ordinance have been followed. The figures for the six
months period ended December 31, 2016 have, however, been subjected to limited scope
review by the external Auditors as required by the Code of Corporate Governance. This
condensed interim financial information does not include all the information required for
annual financial statements and, therefore, should be read in conjunction with the annual
audited financial statements of the Company for the year ended June 30, 2016.
The accounting policies and methods of computation adopted for the preparation of thiscondensed interim financial information are the same as those applied in the preparationof preceding annual financial statements of the Company for the year ended June 30,2016.
The preparation of condensed interim financial information in conformity with approved
accounting standards requires management to make estimates, assumptions and use
judgments that affect the application of policies and reported amounts of assets and
liabilities and income and expenses. Estimates, assumptions and judgments are
continually evaluated and are based on historical experience and other factors, including
reasonable expectations of future events. Revisions to accounting estimates are
recognised prospectively commencing from the period of revision.
Judgments and estimates made by the management in the preparation of this condensedinterim financial information are the same as those that were applied to the financialstatements as at and for the year ended June 30, 2016.
The Company's financial risk management objectives and policies are consistent withthose disclosed in the financial statements as at and for the year ended June 30, 2016.
10
BANNU WOOLLEN MILLS LIMITED
Un-audited AuditedDec. 31, June 30,
2016 2016
5.1 Operating Fixed Assets Note
Net book value at beginning of the period / year 1,121,695 828,410
Additions during the period / year 5.1.1 23,722 42,168
Revaluation adjustments -
288,961
Disposals costing Rs.1.517 million (June 30, 2016: Rs.Nil) - at net book value (391) -
Depreciation charge for the period / year (19,973) (37,844)
Net book value at end of the period / year 1,125,053 1,121,695
5.1.1 Additions to operating fixed assets, including transfer from capital work-in-progress, during the period / year:
- plant and machinery 23,048 39,148
- weightment & material handling equipment 108 -
- tools & equipment 15 -
- furniture & fixtures 218 435
- electric fittings -
312
- office equipment -
193
- computer and accessories 333 504
- vehicles -
1,576
23,722 42,168
6. INVESTMENTS IN ASSOCIATED COMPANIES - Quoted
Babri Cotton Mills Ltd. (BCM)
144,421 ordinary shares of Rs.10 each - cost 6.1 1,632 1,632Equity held: 3.95%
Post acquisition profit and other comprehensive income brought forward including effect of items directly credited in equity by BCM 22,716 22,897
Loss for the period / year - net of taxation (39) (493)
Share of other comprehensive loss - net of taxation -
(38)
24,309 23,998
Janana De Malucho Textile Mills Ltd. (JDM)
1,559,230 ordinary shares of Rs.10 each - cost 6.1 27,762 27,762Equity held 32.59%
Post acquisition profit and other comprehensive income brought forward including effect of items directly credited in equity by JDM 318,194 318,812
Dividend received (1,949) (2,339)
Profit for the period / year - net of taxation 5,779 4,202
Share of other comprehensive loss - net of taxation -
(6,077)
349,786 342,360
374,095 366,358
- - - Rupees in '000 - - -
11
BANNU WOOLLEN MILLS LIMITED 6.1
6.1.1
7. CONTINGENCIES AND COMMITMENTS7.1 Contingencies
Un-audited AuditedDec. 31, June 30,
2016 20167.2 Commitments in respect of:
- letters of credit for purchase of raw materials
and stores & spare parts 5,515
35,126
- capital expenditure other than letters of credit 3,200
-
8.
8.1
8.2
9. TRANSACTIONS WITH RELATED PARTIES9.1
2016 2015
(i) Associates Dividend received 1,949 2,339
Dividend paid 16,192 9,715
Office rent paid 750 -
Expenses shared 3,751 -
(ii) Key management
personnel Remuneration and other benefits 49,053 39,995
Un-audited Audited
Dec. 31, June 30,
9.2 Period / year end balances are as follows: 2016 2016
Payable to related parties
Trade and other payables 75 100
Income tax assessments of the Company have been completed upto the tax year 2016i.e. accounting year ended June 30, 2016.
There is no change in the status of contingencies as disclosed in note 24.3 of the annualaudited financial statements of the Company for the year ended June 30, 2016.
Relationship with
the Company
Nature of
transactions
period ended
Market values of the Company's investments in BCM and JDM as at December 31,2016 were Rs.17.908 million (June 30, 2016: Rs.14.754 million) and Rs.168.662 million(June 30, 2016: Rs.209.132 million) respectively.
The management intends to carry-out impairment testing of its investments in BCM andJDM as at June 30, 2017.
There is no significant change in the status of pending tax cases as detailed in note 23 ofthe annual audited financial statements of the Company for the year ended June 30,2016.
- - - Rupees in '000 - - -
December 31,
- - - Rupees in '000 - - -
Significant transactions with related parties are as follows:
Six months
- - - Rupees in '000 - - -
TAXATION
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2016 2015 2016 2015
- current 18,294
18,052
33,385
31,041
- prior year 344
46
344
46
- deferred 410
3,481
(1,345)
199
19,048 21,579 32,384 31,286
- - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - -
- - - - - - - - - - - - - - Un-audited - - - - - - - - - - - - -Quarter ended Six months period ended
12
BANNU WOOLLEN MILLS LIMITED
10. CORRESPONDING FIGURES
11. DATE OF AUTHORISATION
This condensed interim financial information was approved and authorised for issue bythe Board of Directors of the Company on 28th February, 2017.
In order to comply with the requirements of IAS 34 'Interim financial reporting', thecondensed interim balance sheet has been compared with the balances of annual auditedfinancial statements of the preceding financial year, whereas, the condensed interim profitand loss account, condensed interim cash flow statement and condensed interimstatement of changes in equity have been compared with the balances of comparableperiod of immediately preceding financial year.
Shahnaz Sajjad AhmadChief Executive
Lt. Gen (Retd) Ali Kuli Khan Khattak Director
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