SHAHZAD TEXTILE MILLS LIMITEDshahzadtex.com/wp-content/uploads/2017/10/QTRY2017.pdfMian Parvez Aslam Chairman Mr. Imran Aslam Chief Executive Mr. Irfan Aslam Syed Raza Ali Bokhari

SHAHZAD TEXTILE MILLS LIMITED

1st Quarterly Report September 30, 2017




CONTENTS


Company’s Information

Directors’ Report - English

Directors’ Report - Urdu

Balance Sheet

Profit and Loss Account

Statement of Comprehensive Income

Cash Flow Statement

Statement of Changes in Equity

Notes to the Accounts

1

2

3

4

5

6

7

8

9-11

SHAHZAD TEXTILE MILLS LIMITED01

COMPANY’S INFORMATION


Board of Directors

Mian Parvez Aslam Chairman

Mr. Imran Aslam Chief Executive

Mr. Irfan Aslam

Syed Raza Ali Bokhari

Mr. Humayun Bakht

Mr. Ahsan Ahmad Khan

Mr. Maqsood Shahid Najmi

Chief Financial Officer

Mr. Humayun Bakht

Company Secretary

Mr. Hassan-ud-Din Ansari

Auditors Horwath Hussain Chaudhry & Co. Chartered Accountants

Audit Committee

Syed Raza Ali Bokhari Chairman

Mr. Irfan Aslam Member

Mr. Maqsood Shahid Najmi Member

Human Resource &

Remuneration Committee

Syed Raza Ali Bokhari Chairman

Mr. Imran Aslam Member

Mr. Ahsan Ahmad Khan Member

Bankers

Habib Metropolitan Bank Ltd.J S Bank Ltd.National Bank of Pakistan.Meezan Bank Limited.United Bank Limited.Bank Al-Falah (Islamic Banking)

Share Registrar Hameed Majeed Associates (Pvt) Ltd.H.M. House, 7-Bank Square, Lahore.

Registered Office19-A Off. Zafar Ali Road,Gulberg-V, Lahore.Ph: +92 (42) 35754024-27Fax: +92 (42) 35712313E-mail: [email protected]: www.shahzadtex.com

MillsUnits # 1,3 & 434th KM Lahore Sheikhupura Road,Sheikhupura

Unit # 27th KM Sheikhupura FaisalabadRoad, Sheikhupura.


CONDENSED INTERIM FINANCIAL INFORMATION

OF


FOR THE 1ST QUARTER ENDED

SEPTEMBER 30, 2017


DIRECTORS’ REPORT


On behalf of the directors of Shahzad Textile Mills Limited It is my great pleasure to present the un-audited financial statement for the first quarter ended September 2017. The company’s pretax profit is Rs. 17.877 million as compared to Profit of Rs.17.094 million in corresponding quarter of previous year. Company’s sales of yarn for the current quarter is also increased to Rs. 1,227.556 million from sales of Rs. 1,062.199 million in corresponding period of previous year. In the current quarter company, by the grace of Allah Almighty, have portrayed positive results by exhibiting profit as apparent from the above financial data. Favorable conducive local market conditions and Government’s fiscal measures in country have helped us to achieve these impressive financial results. The prices of Raw material if averagely seen remained strengthened which are currently rotating around Cotton Rs. 6,425/- per maund. Polyester Rs. 134 per kg and viscose Rs. 238/- per kg accordingly. FUTURE PROSPECTUS As we have extensively discussed in the annual directors’ report 2017 that the Management has worked out a plan for smooth supply of fuel and power to Mills i.e. replacement of five (5) existing generator and execute major overhauling of balance two generator for which all major parts have already been imported. One portion of this plan i.e. replacement of Five (5) generators have been already successfully completed by replacement of new imported generators which are efficiently functioning at mills. The remaining two generators are under process of major overhauling which shall hopefully be completed by end of December 2017 and shall be the part of currently functioning generators. Earning per share Rs. 0.28 as compared to Profit per share Rs. 0.46 in corresponding period of previous year. We are thankful and appreciate the efforts of valued customers, bankers, share holders who have actively participated in smooth functioning of company’s routine work and also mention staff members who have dedicatedly worked to run all business activities of the company and strived hard to maintain cordial relation by creating pleasant working environment.

For and on behalf of the board

Lahore. Dated : 23-10- 2017 Imran Aslam Chief Executive Offic

SHAHZAD TEXTILE MILLS LIMITED 03


:


CONDENSED INTERIM BALANCE SHEET

AS AT SEPTEMBER 30, 2017


2017Note

September,

(Un-audited)

June 30,2016

(Audited)

------------- Rupees in thousand -------------CAPITAL AND LIABILITIES

Share Capital and ReservesAuthorized capital:

40,000,000 (June 2017: 40,000,000) ordinary shares of Rs. 10 each

Issued, subscribed and paid up capital17,971,372 (June 2017: 17,971,372) ordinary shares of Rs. 10 each

Reserves

Surplus on Revaluation of Property, Plant and EquipmentNon Current LiabilitiesLong term financingStaff retirement benefitsDeferred tax liability

Current Liabilities

Trade and other payables Accrued mark upShort term borrowingsCurrent portion of long term financingProvision for taxation

Contingencies and Commitments

ASSETS

Non Current AssetsProperty, plant and equipmentLong term investment in associateLong term deposits

Current AssetsStores and sparesStock in tradeTrade debtsAdvances, trade deposits, prepayments and other receivablesShort term investmentsTax refunds due from the GovernmentCash and bank balances

The annexed notes form an integral part of this condensed interim financial information (un-audited).

400,000

179,714

1,098,780

1,278,494 475,909

4 88,592 98,076

202,743

389,411

344,644 4,195

128,539 40,740 59,775

577,893

5 -

2,721,707

6 1,650,015 376,947 13,970

2,040,932

70,723 298,127 84,021 96,261

857 81,438 49,348

680,775

2,721,707

400,000

179,714

1,088,787

1,268,501 483,511

98,777 91,187

201,866

391,830

263,575 8,631

406,847 40,740 45,167

764,960

-

2,908,802

1,684,984 370,635 13,970

2,069,589

71,792 478,374 92,684 51,055

821 84,147 60,340

839,213

2,908,802

CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER DIRECTOR


CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)

FOR THE 1ST QUARTER ENDED SEPTEMBER 30, 2017


SalesCost of sales

Gross Profit

Operating expenses:Selling and distribution -

- Administrative expenses

Operating Profit

Finance costOther operating expensesOther income Share of net profit of associate

Profit before Taxation

Taxation

Net Profit for the Period

Earnings per Share - Basic


Note ---- Rupees in thousand ----

1,227,556 7 (1,170,458)

57,098

(6,643) (29,518)

(36,161)

20,937

(7,344) (2,351)

323 6,312

(3,060)

17,877

(12,839)

5,038

0.28

September 31, 2017

1,062,199 (998,910)

63,289

(14,175) (28,602)

(42,777)

20,512

(7,690) (1,457)

213 5,516

(3,418)

17,094

(8,905)

8,189

0.46

September 31, 2016



CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)



Net Profit for the Period 5,038

Other Comprehensive Income for the Period

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

Total Comprehensive Income for the Period 5,038


September 30, 2017

September 30, 2016

---- Rupees in thousand ----

8,189

8,189



CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)



CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 17,877

Adjustments for:Depreciation 28,081 Share of net profit of associate (6,312) Loss on disposal of property, plant and equipment - Net 1,013 Surplus on revaluation of short term investments at fair value through profit or loss (36) Provision for gratuity 12,250 Exchange (gain) / loss (3) Provision for workers' profit participation fund 961 Provision for workers' welfare fund 377 Finance cost 5,506

41,837 Operating Profit before Working Capital Changes 59,714

Decrease / (Increase) in current assets- Stores and spares 1,068 - Stock in trade 180,247 - Trade debts 8,665 - Advances, trade deposits, prepayments, and other receivables (41,149) - Tax refunds due from the Government 2,709

Increase in current liabilities- Trade and other payables 79,732

231,272 Net Cash generated from Operations 290,986

Income tax paid (4,057) Gratuity paid (5,361) Finance cost paid (9,942) Net Cash generated from Operating Activities 271,626

CASH FLOW FROM INVESTING ACTIVITIES

Property, plant and equipment purchased -Proceeds from disposal of property, plant and equipment 10,000 Capital work in progress (4,125) Net Cash generated from / (used) in Investing Activities 5,875

CASH FLOW FROM FINANCING ACTIVITIES

LTF - Loan repaid (10,185) Loan repaid to directors (40,000) Short term borrowings (238,308) Net Cash used in Financing Activities (288,493)

Net Decrease in Cash and Cash Equivalents (10,992)

Cash and cash equivalents at the beginning of the period 60,340

Cash and Cash Equivalents at the End of the three Months Ended 49,348 10,998


--- Rupees in thousand ---

September 30, 2017

17,094

21,373(5,516)

- -

8,650171 919 368

6,28332,24849,342

5,032118,977(24,902)(24,328)(6,724)

12,31380,368

129,710

(4,801)(7,167)(6,450)

111,292

(6,689)- -

(6,689)

-

(181,756)(181,756)

(77,153)

88,151

--- Rupees in thousand ---

September 30, 2016



CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)




Balance as at June 30, 2016 179,714 5,796 1,023,529

Total comprehensive Income for the first quarter - - 8,189

Transferred from surplus on revaluation ofproperty, plant and equipment on incrementaldepreciation charged in current period (net ofdeferred tax) - - 3,925

Transaction with owners

Dividend paid during the period - - -

Balance as at September 30, 2016 179,714 5,796 1,035,643

Balance as at June 30, 2016 179,714 5,796 1,082,991

Total comprehensive Income for the first quarter - - 5,038

Transferred from surplus on revaluation ofproperty, plant and equipment on incrementaldepreciation charged in current period (net ofdeferred tax) - - 3,417

Surplus realized on disposal of revaluedproperty, plant and equipment (net of deferred tax) transferred to retained - - 1,537

earnings

Transaction with owners

Dividend paid during the period - - -

Balance as at September 30, 2017 179,714 5,796 1,092,984


ParticularsShare

Capital

Share Premium Reserve

Unappropriated Profit

1,209,039

8,189

3,925

-

1,221,153

1,268,501

5,038

3,417

1,537

-

1,278,494

-------------------------- Rupees in thousand ---------------------

Total Equity



NOTES TO AND FORMING PART OF THE CONDENSED

INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE 1ST QUARTER ENDED SEPTEMBER 30, 2017

Note 1The Company and its Operations

Note 2Basis of Preparation

2.1

2.2

Note 3Accounting Policies

Note 4Long Term Financing September 31,

2017(Un-audited)

LTF loan - Secured 129,332 Current portion of LTF loan (40,740)

88,592

4.1

This condensed interim financial statements have been prepared in accordance with the directives issued bythe Securities & Exchange Commission of Pakistan (SECP) and is in compliance with the InternationalAccounting Standard - 34 (Interim Financial Reporting).

This condensed interim financial information is presented in Pak rupees, which is the Company's functional andpresentational currency. Figures have been rounded off to nearest thousand rupees, unless stated otherwise.This condensed financial information does not include all the information required for annual financialstatements and therefore, should be read in conjunction with the annual financial statements for the yearended June 30, 2017.

The accounting policies and methods of computation of this condensed interim financial information is the same as thosefollowed in the preparation of annual financial statements for the preceding financial year ended on June 30, 2017.

These represent LTF loans obtained from banking companies during the period against specific and exclusivecharge on relevant fixed assets of the Company. The tenure of facility is from 3 to 5 years starting fromFebruary 2017 and ends in February 2022. Mark up on these facilities is charged at SBP rate payable quarterly.

Rupees in thousand

Shahzad Textile Mills Limited is a Public Limited Company incorporated in Pakistan under the Companies Act, 1913 (now the Companies Ordinance, 1984) Its Shares are quoted on Pakistan Stock Exchange (PSX). The Company manufactures and deals in all types of yarn. The registered office of the Company is situated at 19-A, Off. Zafar Ali Road, Gulberg - V, Lahore.

June 30,2017

(Audited)

139,517(40,740)98,777

Note 5Contingencies and Commitments

Contingencies

-

September 31,2017

(Un-audited)

- Sui Northern Gas Pipeline Limited 69.32 69.32

-

The Company has provided bank guarantees in favour of following parties:

Rupees in Million

The Company is contingently liable for Rs. 17.438 million (June 2017: Rs. 16.367 million) on account ofelectricity duty on self generation. However the company has not admitted the said duty and case is pendingbefore the Supreme Court of Pakistan.

June 30,2017

(Audited)

69.32 69.32



Commitments

-

September 31,2017

(Un-audited)

Foreign bills of exchange purchased 77.92 Letters of credit 25.04

102.96

Note 6Property, Plant and Equipment September 31,

2017(Un-audited)

Operating fixed assets 1,645,890 Capital work in progress 4,125

1,650,015

6.1 Operating fixed assets

Opening written down value 1,609,826 Additions during the period / year (at cost) 75,158

1,684,984

Disposals during the period / year (at written down value) (11,013)

The Company's outstanding commitments / contracts as at the balance sheet date are as under:

Rupees in Million

---- Rupees in thousand ----

June 30,2017

(Audited)

89.08 6.10 95.18

June 30,2017

(Audited)

1,609,826 75,158

1,684,984

1,576,075 140,989

1,717,064

(19,099)

1,673,971 Depreciation charged for the period / year (28,081)

1,645,890

1,697,966(88,140)

1,609,826

Note 7Cost of Sales

September 30, 2017

Raw materials consumed 816,535 Stores and spares consumed 17,646 Packing materials consumed 26,339 Salaries, wages and other benefits 129,097 Fuel and power 148,131 Insurance 1,876 Repairs and maintenance 1,849 Other manufacturing expenses 2,470 Depreciation 25,538

1,169,481 Opening work in process 33,324 Closing work in process (37,170)

(3,846) Cost of goods manufactured 1,165,635

Opening finished goods 55,108 Closing finished goods (50,285)

4,823 1,170,458

September 30, 2016

664,761 21,091 22,980

119,566 132,408

2,052 7,699 2,989

18,352 991,898 29,336

(28,548) 788

992,686

52,961 (46,737)

6,224 998,910

---- (Un-audited) -------- Rupees in thousand ----




Note 8Transactions with Related Parties

Transaction during the period September 30,2017

Related party Relationship Nature of Transaction

Sargodha Jute Mills Associate Purchase of materials,Limited goods and services 88

Sale of materials, goods andservices 73

The related parties comprise associated companies, staff retirement funds, directors and key management personnel.The Company in the normal course of business carries out transactions with various related parties. The Company entersinto transactions with related parties on the basis of mutually agreed terms. Significant transactions with related partiesare as follows:


September 30,2016

79

612


Rent received / receivable 120

Directors Sponsor loan repaid 40,000

Mark up on loan from directors -

Note 9Authorization of Interim Financial Information

Note 10General

This condensed interim financial information (un-audited) is authorized for issue on October 23, 2017 by the Board ofDirectors of the Company.

Corresponding figures have been re-arranged / reclassified, wherever necessary, to facilitate comparison. No significantre-arrangements have been made in this condensed interim financial information (un-audited).

-

610

Documents

SHAHZAD TEXTILE MILLS LIMITEDshahzadtex.com/wp-content/uploads/2017/10/QTRY2017.pdfMian Parvez Aslam Chairman Mr. Imran Aslam Chief Executive Mr. Irfan Aslam Syed Raza Ali Bokhari