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
SAFDAR HUSSAIN TARIQ
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
The annexed notes from 1 to 17 form an integral part of this interim financial information.
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
SAFDAR HUSSAIN TARIQ
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
The annexed notes from 1 to 17 form an integral part of this interim financial information.
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
SAFDAR HUSSAIN TARIQ
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
The annexed notes from 1 to 17 form an integral part of this interim financial information.
Condensed Interim Statement of Changes in Equity (Un-audited) for the half year ended December 31, 2014
JEHANZEB AMIN
Chief Executive
SAFDAR HUSSAIN TARIQ
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
The annexed notes from 1 to 17 form an integral part of this interim financial information.
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
Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2014
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
Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2014
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
Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2014
JEHANZEB AMIN
Chief Executive
SAFDAR HUSSAIN TARIQ
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.
Notes to the Condensed Interim Financial Information (Un-audited)for the half year ended December 31, 2014