bannu · 2019. 10. 5. · bannu woollen mills limited financial performance financial results these...

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


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,


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


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


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


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


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


- - - - - - - - - - - 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



7


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


Condensed Interim Cash Flow Statement (Un-Audited)


Six months period ended

- - - Rupees in '000 - - -



8


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


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



9


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)


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


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


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.



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bannu · 2019. 10. 5. · bannu woollen mills limited financial performance financial results these...

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