ifl half yearly 2012

8/2/2019 IFL Half Yearly 2012

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Company Information

Directors Review

Auditors Report on Review of Interim Financial Information to the Members

Condensed Interim Financial Report

Condensed Interim Balance SheetCondensed Interim Profit and Loss Account

Condensed Interim Statement of Comprehensive Income

Condensed Interim Cash Flow Statement

Condensed Interim Statement of Changes in Equity

Selected Explanatory Notes to the Condensed Interim Financial Report

Contents

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1Ibrahim Fibres Limited


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Board of Directors

Sheikh Mukhtar AhmedChairman

Mohammad Naeem Mukhtar

Chief Executive Officer

Muhammad Waseem Mukhtar

Shahid Amin

Anwarul Haque

Mohammad Pervaiz Aslam Rana

Mohammad Waqar

Secretary

Anwarul Haque - FCA

Audit Committee

Shahid Amin

Chairman

Mohammad Pervaiz Aslam Rana

Member

Mohammad Waqar

Member

Anwarul Haque - FCA

Secretary

Auditors

Avais Hyder Liaquat Nauman

Chartered Accountants

Faisalabad, Pakistan.

Bankers

Askari Bank LimitedBank Alfalah Limited

Bank Al Habib Limited

BankIslami Pakistan Limited

Barclays Bank PLC

Citibank, N.A.

Deutsche Bank AG

Faysal Bank Limited

Habib Bank Limited

Habib Metropolitan Bank LimitedHSBC Bank Middle East Limited

JS Bank Limited

MCB Bank Limited

Meezan Bank Limited

National Bank of Pakistan

Standard Chartered Bank (Pakistan) Limited

United Bank Limited

Registered OfficeIbrahim Centre,

1 - Ahmed Block,

New Garden Town,

Lahore - 54600, Pakistan.

Head Office

Ibrahim Centre,

15 - Club Road,

Faisalabad - 38000, Pakistan.

Registrars & Shares Registration Office

M/s Technology Trade (Pvt) Ltd.

Dagia House,

241 - C, Block - 2,

P.E.C.H.S., Off: Shahrah-e-Quaideen,

Karachi, Pakistan.

Projects Location

38 - 40 Kilometres,

Faisalabad - Sheikhupura Road,

Faisalabad, Pakistan.

Company Information2

Half Yearly Report December 31, 2011


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Directors Review

The Directors of your Company are pleased to present before you the un-audited financial results of the Companyfor the half year ended December 31, 2011.

Operating Performance

During the half year under review, the polyester plant of your Company produced 105,084 tons of Polyester StapleFibre (PSF) / Polyester chips as compared to production of 107,323 tons during the corresponding period of previousyear, thus achieving an average capacity utilization of 96% as against 98% achieved during the corresponding periodof previous year. Out of this production, 11,463 tons of PSF were consumed by the textile plants of your Companyfor the production of blended yarns as against 11,927 tons consumed during the corresponding period of previousyear.

The textile plants of your Company produced 16,187 tons of blended yarns of different counts during the half yearas compared to 16,959 tons produced during corresponding period of previous year.

Financial Performance

During second quarter of the half year under review, your Company achieved net sales of Rs. 8,675 million ascompared to Rs. 9,335 million during the corresponding quarter of previous year. Gross profit earned during the saidquarter was Rs. 709 million as compared to Rs. 943 million during the corresponding quarter.

During the half year under review, your Company achieved net sales of Rs. 18,410 million and gross profit ofRs. 1,273 million as compared to Rs. 17,690 million and Rs. 1,804 million respectively during correspondingperiod of previous year. Gross margins have squeezed due to high prices of heavy furnace oil and natural gas,devaluation of Pak Rupee against US Dollar and inventory losses caused by continuously falling prices of cottonand yarns.

After accounting for the Companys proportionate share in profits of Allied Bank Limited, an associated company,amounting to Rs. 1,439 million during the half year as compared to Rs. 1,524 million during the correspondingperiod, your Company earned profit before tax of Rs. 2,559 million as against Rs. 2,631 million earned during thecorresponding period. Profit after tax for the half year amounted to Rs. 2,398 million as compared to Rs. 2,147million for the corresponding period of previous year.

Balancing, Modernisation, Replacement and Expansion

Polyester Staple Fibre PlantThe plan to increase the overall production capacity of polyester staple fibre plant of your Company from 208,600tons of PSF per annum to 436,100 tons is being implemented as per schedule.

Major shipments against import of machinery have already arrived at site and are under installation. Themanagement of your Company expects that commercial production will be started as per schedule.

Power Generation PlantThe management of your Company has decided to increase the generation capacity of its power generation

plant, as reported in chairmans review of the latest Annual Report. In this regard, a letter of credit was openedin July 2011 for import of 5 power generating sets based on heavy fuel oil having a generation capacity of 5.3MW each from NIIGATA, Japan who is the supplier of existing power generating sets of the Company. Afterinstallation, these power generating sets will add 26.5 MW to the existing 46.8 MW generation capacity of thepower generation plant. Shipment of machinery is expected to start during calendar year 2012.

Future Outlook

Going forward, the demand of PSF in domestic market is expected to be suppressed due to excessive availabilityof cotton and lower capacity utilization by the downstream textile industry which is mainly because of lesseravailability of power and natural gas.

On the other hand, margins are expected to remain low as compared to last financial year due to rise in crude oilprice in international market and increase in the rate of natural gas in domestic market.

Earnings per share

Earnings per share for the half year ended December 31, 2011 come to Rs. 7.72 as compared to Rs. 6.91 during thecorresponding period of previous year.

On behalf of the Board

Lahore MOHAMMAD NAEEM MUKHTARFebruary 25, 2012 Chief Executive Officer



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Ibrahim Fibres Limited

Condensed Interim Financial Reportfor the half year ended December 31, 2011


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Un-audited AuditedDecember 31, June 30,

2011 2011Note Rupees Rupees

NON - CURRENT ASSETSProperty, plant and equipment 3 11,502,038,714 8,828,907,710

Intangible assets 10,504,073 11,092,969

Investment in associate 4 11,201,312,723 13,769,491,023

Long term loans 19,368,492 20,540,808

Long term deposits 3,681,763 3,573,063

22,736,905,765 22,633,605,573

CURRENT ASSETSStores, spare parts and loose tools 1,201,080,309 832,525,351

Stock in trade 4,367,537,652 2,676,081,437

Trade debts 231,951,855 162,236,487

Loans and advances 413,269,435 863,787,917

Prepayments 48,866,370 8,052,309

Other receivables 555,476,029 537,943,429

Cash and bank balances 206,239,039 155,387,775

Non - current assets held for sale 3,333,868,890 2,240,815,548

10,358,289,579 7,476,830,253

CURRENT LIABILITIESTrade and other payables 2,368,309,167 3,001,543,155

Markup / interest payable 132,907,894 154,623,130

Short term bank borrowings 2,090,801,738 703,649,354

Current portion of long term financing 1,760,416,668 1,783,333,334

Provision for taxation - income tax 256,065,766 644,189,393

6,608,501,233 6,287,338,366

Working capital 3,749,788,346 1,189,491,887

Total capital employed 26,486,694,111 23,823,097,460

NON - CURRENT LIABILITIESLong term financing 3,756,249,999 2,541,666,666

Deferred liabilities :Deferred taxation 1,881,999,150 1,980,013,457

Staff retirement gratuity 614,773,445 525,355,864

6,253,022,594 5,047,035,987

CONTINGENCIES AND COMMITMENTS 5

Net worth 20,233,671,517 18,776,061,473

Represented by :

SHARE CAPITAL AND RESERVESShare capital 3,105,069,950 3,105,069,950

Capital reserves 1,155,366,404 1,164,673,343Revenue reserves 15,973,235,163 14,506,318,180

20,233,671,517 18,776,061,473

The annexed notes form an integral part of this condensed interim financial report.

Chief Executive Officer Director

Condensed Interim Balance Sheetas at December 31, 2011

6Half Yearly Report December 31, 2011


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Quarter ended December 31, Half year ended December 31,2011 2010 2011 2010

Note Rupees Rupees Rupees Rupees

Sales - net 8,674,588,347 9,334,682,162 18,410,206,329 17,689,970,235

Cost of goods sold 6 7,965,426,207 8,392,161,959 17,137,530,263 15,885,593,667

Gross profit 709,162,140 942,520,203 1,272,676,066 1,804,376,568

Selling and distribution expenses 36,648,532 45,941,169 77,779,234 85,462,313

Administrative expenses 137,260,358 140,127,191 272,726,641 293,384,724

Other operating expenses 27,452,093 42,227,653 45,564,983 76,072,144

Finance cost 188,248,403 198,789,967 369,179,661 417,389,591

389,609,386 427,085,980 765,250,519 872,308,772

319,552,754 515,434,223 507,425,547 932,067,796

Other operating income 12,201,038 91,799,221 612,591,864 175,144,036

331,753,792 607,233,444 1,120,017,411 1,107,211,832

Share of profit of associate - net 644,713,000 830,252,000 1,438,612,000 1,523,881,000

Profit before taxation 976,466,792 1,437,485,444 2,558,629,411 2,631,092,832

Provision for taxation 109,692,397 279,691,578 160,191,442 484,366,910

Profit for the period 866,774,395 1,157,793,866 2,398,437,969 2,146,725,922

Earnings per share - Basic and Diluted 2.79 3.73 7.72 6.91



Condensed Interim Profit and Loss Account (Un-audited)for the half year ended December 31, 2011



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Condensed Interim Statement of Comprehensive Income (Un-audited)for the half year ended December 31, 2011



Rupees Rupees Rupees Rupees

Profit for the period 866,774,395 1,157,793,866 2,398,437,969 2,146,725,922

Other comprehensive income / (loss) for the period

Share of changes in equity of associate 1,747,000 2,863,000 4,045,000 5,756,000

Deferred tax relating to share of changes in

equity of associate (174,700) (286,300) (404,500) (575,600)

Share of changes in equity of associate reclassified

to profit and loss account on disposal (2,396,851) (14,386,043) (4,919,883)

Deferred tax relating to share of changes in equityof associate reclassified to profit and loss

account on disposal 239,685 1,438,604 491,988

Unrealised gain on remeasurement of

investment in associate - available for sale 3,194,218 3,194,218

Deferred tax relating to unrealised gain on

remeasurement of investment in

associate - available for sale (319,422) (319,422)

1,572,300 3,294,330 (9,306,939) 3,627,301

Total comprehensive income for the period 868,346,695 1,161,088,196 2,389,131,030 2,150,353,223




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Half year ended December 31,

2011 2010

Rupees Rupees

a) Cash flows from operating activities

Profit before taxation 2,558,629,411 2,631,092,832Adjustments for :

Depreciation / amortisation of property, plant and equipment 350,991,783 354,619,027Amortisation of intangible assets 1,202,374 885,036Provision for staff retirement gratuity 96,742,850 68,952,624Loss / (gain) on disposal of :

Property, plant and equipment 982,451 (1,822,375)Investment - available for sale (724,417)Non - current assets held for sale (585,248,802) (138,420,757)

Profit on deposits (9,878,837) (21,768,628)Share of profit of associate - net (1,438,612,000) (1,523,881,000)Finance cost 369,179,661 417,389,591

Operating cash flows before working capital changes 1,343,988,891 1,786,321,933Changes in working capital(Increase) / decrease in current assets

Stores, spare parts and loose tools (368,554,958) (92,305,993)Stock in trade (1,691,456,215) (325,638,149)Trade debts (69,715,368) (7,474,064)Loans and advances 199,398,819 4,463,977Prepayments (40,814,061) (15,254,655)Other receivables (99,495,359) 164,943,954

Increase in current liabilities

Trade and other payables 571,992,988 1,895,788,829(1,498,644,154) 1,624,523,899

Cash (used in) / generated from operations (154,655,263) 3,410,845,832Long term loans recovered - net 1,172,316 1,610,534Finance cost paid (390,894,897) (467,417,858)Income tax paid (344,487,999) (139,753,361)Staff retirement gratuity paid (7,325,269) (19,119,652)

Net cash (used in) / generated from operating activities (896,191,112) 2,786,165,495

b) Cash flows from investing activities

Additions in :Property, plant and equipment (3,007,442,538) (147,689,919)

Intangible assets (613,478) (2,825,100)Investment - available for sale (1,145,000,000)Proceeds from disposal of :

Property, plant and equipment 1,425,983 5,814,044Investment - available for sale 320,418,830Non - current assets held for sale - net 1,616,796,160 866,392,096

Dividend received 676,966,410 603,693,130Long term deposits (108,700) 4,860Profit on deposits 9,878,837 21,768,628

Net cash (used in) / generated from investing activities (703,097,326) 522,576,569

c) Cash flows from financing activities

Long term financing obtained 2,000,000,000

Repayment of :Long term financing (808,333,334) (794,541,666)Long term murabaha (150,000,000)

Increase / (decrease) in short term bank borrowings - net 1,387,152,384 (1,569,438,291)Dividend paid (928,679,348) (618,960,358)

Net cash generated from / (used in) financing activities 1,650,139,702 (3,132,940,315)

Net increase in cash and cash equivalents (a+b+c) 50,851,264 175,801,749

Cash and cash equivalents at the beginning of the period 155,387,775 72,753,720

Cash and cash equivalents at the end of the period 206,239,039 248,555,469



Condensed Interim Cash Flow Statement (Un-audited)for the half year ended December 31, 2011



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Quarterly Report March 31, 2011

1. STATUS AND ACTIVITIES

1.1 Ibrahim Fibres Limited (the Company) is incorporated in Pakistan as a public limited company underthe Companies Ordinance, 1984 (the Ordinance) and is listed on Karachi and Lahore Stock Exchanges in

Pakistan. The principal business of the Company is manufacture and sale of polyester staple fibre and

yarn. The registered office of the Company is located at 1 - Ahmad Block, New Garden Town, Lahore. The

manufacturing units are located at Faisalabad - Sheikhupura Road, in the Province of Punjab.

1.2 The Company is in the process of implementation of balancing, modernisation and expansion of Polyester

plant which will enhance the production capacity by 650 tons per day.

1.3 Pursuant to scheme of arrangement approved by the Honourable Lahore High Court, Lahore, assets,

liabilities and reserves of Ibrahim Textile Mills Limited, A.A. Textiles Limited, Zainab Textile Mills Limited

and Ibrahim Energy Limited were merged with the assets, liabilities and reserves of the Company with

effect from October 01, 2000.

1.4 This condensed interim financial report is presented in Pak Rupee, which is the Companys functional and

presentation currency.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 This condensed interim financial report 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 Ordinance. In case the requirements differ, the provisions of or directives issued under

the Ordinance have been followed.

2.2 This condensed interim financial report has been prepared under the historical cost convention except

staff retirement gratuity carried at present value, investment in associate accounted for using the equity

method and non - current assets held for sale stated at the lower of carrying amount and fair value less

costs to sell.

2.3 This condensed interim financial report does not include all the information required for full annual

financial report, and should be read in conjunction with the Companys published audited financial

statements for the year ended June 30, 2011.

2.4 This condensed interim financial report is unaudited but subject to limited scope review by auditors and

are being submitted to the shareholders as required under Section 245 of the Ordinance.

2.5 The accounting policies and methods of computation followed in the preparation of this condensed

interim financial report are the same as those applied in the preparation of the published audited financial

statements for the year ended June 30, 2011.

2.6 Standards, amendments to published approved accounuting standards and interpretations effective from

July 01, 2011 :

There are certain new standards, amendments and Interational Financial Reporting Interpretations

Committee (IFRIC) interpretations that became effective during the period and are mandatory foraccounting periods beginning on or after July 01, 2011 but are considered not to be relevant or have any

significant effect on the Companys operations and are, therefore, not disclosed in this condensed interim

financial report.

2.7 Standards, amendments to published approved accounting standards and interpretations as adopted in

Pakistan, which are not yet effective :

There are other amendents to the standards and new interpretations that are mandatory for accounting

periods beginning on or after July 01, 2012 but are considered not to be relevant or have any significant

effect on the Companys operations and are, therefore, not detailed in this condensed interim financial

report.

Selected Explanatory Notes to the Condensed Interim Financial Report(Un-audited)for the half year ended December 31, 2011



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Half year ended December 31, 2011 Half year ended December 31, 2010

Acquisitions Disposals Acquisitions Disposals


3.1 Acquisitions and disposals of

operating assets - at cost

Freehold land 956,800

Plant and machinery 46,378,840 350,000 13,575,832 3,224,856

Furniture and fixture 5,403,492 59,079 4,013,530 25,217

Office equipment 14,326,216 2,306,263 16,074,814 642,887

Vehicles 17,157,473 3,153,056 19,546,978 8,426,517

84,222,821 5,868,398 53,211,154 12,319,477


2011 2011

Rupees Rupees

4. INVESTMENT IN ASSOCIATE

Allied Bank Limited (ABL) - Quoted

270,786,565 (June 30, 2011 : 315,786,565) ordinary shares of Rs.10/ - each 7,383,839,647 8,610,904,890

Ownership interest 31.48% (June 30, 2011 : 36.71%)Share of post acquisition changes in equity 7,828,308,376 8,577,252,201

Less : Dividend received during the period / year (676,966,410) (1,177,850,520)

14,535,181,613 16,010,306,571

Less : 65,000,000 (June 30, 2011 : 45,000,000) ordinary shares

classified as held for sale (3,333,868,890) (2,240,815,548)

11,201,312,723 13,769,491,023

4.1 The fair value of investment in associate as at December 31, 2011 is Rs. 11,343 million (June 30, 2011 :

Rs.17,368 million).

4.2 The financial year end of ABL is 31st December. The latest available financial results of associate as of

September 30, 2011 have been used for the purpose of application of equity method.



2011 2011Rupees Rupees

3. PROPERTY, PLANT AND EQUIPMENT

Operating assets 6,839,990,779 7,109,168,175

Capital work in progress 4,662,047,935 1,719,739,535

11,502,038,714 8,828,907,710



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5. CONTINGENCIES AND COMMITMENTS

5.1 Contingencies

There are no changes in contingent liabilities since the date of published audited financial statements for the

year ended June 30, 2011 except for the following :

(i) The amount of bank guarantees given to Sui Northern Gas Pipelines Limited against supply of gas has

been reduced from Rs. 196.075 million to Rs. 195.474 million.

(ii) Bank guarantee amounting to Rs. 8.940 million is given to Faisalabad Electric Supply Company Limited

against supply of electricity.

(iii) Bank guarantees amounting to Rs. 66.257 million have been issued in favour of The Collector

of Customs, Karachi to avail exemption from Ievy of custom duty, sales tax and income tax on a

consignment imported to replace the existing equipment. The exemption is subject to reshipment of

rejected equipment and these guarantees will be released after the said reshipment.

(iv) Bank guarantee amounting to Rs. 45.000 million has been issued in favour of The Director, Excise and

Taxation, Karachi against imposition of infrastructure cess on the value of imported goods. As per

interim order of the Honorable Sindh High Court, Karachi, all importers are required to deposit 50% of

disputed cess in cash alongwith bank guarantee equal to balance amount of 50% till final order of the

court on the petitions filed by various petitioners challenging the imposition of infrastructure cess.



2011 2011 Rupees in million Rupees in million

5.2 Commitments

Under contracts for capital expenditure :

Civil work 957.531 1,189.152Plant and machinery 276.216 44.000

Under letters of credit for :

Plant and machinery 11,449.170 12,448.954

Raw materials and spare parts 402.729 1,230.606



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6. COST OF GOODS SOLD

Raw materials consumed 7,015,174,964 7,134,534,136 14,638,850,384 13,480,640,449

Packing materials 88,078,267 83,119,073 178,547,735 166,560,872

Salaries, wages and benefits 243,627,098 213,036,618 481,177,117 387,982,288

Staff retirement benefits 35,847,518 23,671,392 71,695,036 47,342,784

Stores and spare parts 232,091,393 285,854,721 420,622,276 393,546,078

Fuel and power 785,630,066 577,681,350 1,553,147,680 1,077,673,408

Insurance 7,383,321 6,086,118 14,766,867 12,064,608Depreciation of property, plant and equipment 166,405,875 166,863,223 331,436,000 333,338,098

Other 79,002,393 90,931,731 165,356,351 139,097,149

8,653,240,895 8,581,778,362 17,855,599,446 16,038,245,734

Work in process

Opening stock 373,221,331 252,965,522 296,007,743 273,470,969

Closing stock (286,828,614) (319,477,841) (286,828,614) (319,477,841)

86,392,717 (66,512,319) 9,179,129 (46,006,872)

Cost of goods manufactured 8,739,633,612 8,515,266,043 17,864,778,575 15,992,238,862

Finished goods

Opening stock 1,122,972,539 770,107,792 1,169,931,632 786,566,681

Closing stock (1,897,179,944) (893,211,876) (1,897,179,944) (893,211,876)

(774,207,405) (123,104,084) (727,248,312) (106,645,195)

7,965,426,207 8,392,161,959 17,137,530,263 15,885,593,667

7. AGGREGATE TRANSACTIONS WITH RELATED PARTIES

The Company in the normal course of business carries out transactions with various related parties which

comprise of associated undertakings and key management personnel. Significant transactions with related

parties are as under :

Half year ended December 31,

2011 2010

Relationship Nature of transaction Rupees Rupees

Associated undertakingsRent paid 46,200,000 11,550,000Dividend received 676,966,410 603,693,130Commission 391,583,560 386,327,820Investment - available for sale 1,145,000,000

Proceeds from disposal of investment- available for sale 320,418,830

Key management personnelRemuneration 13,500,000 13,500,000Reimbursable expenses 2,260,428 1,334,742Proceeds from disposal of

non - current assets held for sale 1,617,617,853 866,615,586Advance from directors against

non - current assets held for sale 621,442,181 Dividend paid 824,277,042 493,851,050




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8. The provision for taxation, workers profit participation fund and workers welfare fund made in this condensed

interim financial report is subject to adjustments in annual financial statements.

9. DATE OF AUTHORISATION FOR ISSUE

This condensed interim financial report was authorised for issue on February 25, 2012 by the Board of Directors

of the Company.

10. GENERAL

i) There is no unusual item included in this condensed interim financial report which is affecting assets,

liabilities, profit, cash flows or equity of the Company.

ii) Figures have been rounded off to the nearest Rupee.





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ifl half yearly 2012

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