s 02 directors’ report t n - din...

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Corporate Information

Directors’ Report

Condensed Interim Balance Sheet

Condensed Interim Profit & Loss Account

Condensed Interim Statement of Comprehensive Income

Condensed Interim Statement of Cash Flow

Condensed Interim Statement of Changes in Equity

Selected Notes to the Condensed Interim Financial Statement

02

03

10

11

12

13

14

Consolidated Condensed Interim Balance Sheet

Consolidated Condensed Interim Profit & Loss Account

Consolidated Condensed Interim Statement of Comprehensive Income

Consolidated Condensed Interim Statement of Cash Flow

Consolidated Condensed Interim Statement of Changes in Equity

Selected Notes to the Consolidated Condensed Interim Financial Statement

09

23

24

25

26

27

28

2

Board of Directors

CORPORATE INFORMATION

Company SecretaryMr. Islam Ahmed

Chief Financial OfficerMr. Shaukat Hussain Ch.

AuditorsMushtaq & Co.,Chartered Accountants

Registered OfficeDin House, 35-A/1, Lalazar Area,

Opp: Beach Luxury Hotel, M. T. Khan Road, Karachi.

MillsUnit-I and II: Kot Akbar Khan, 70 Km Multan Road, Tehsil Pattoki,

District Kasur, Punjab.Unit-III: Revenue Estate, Bhai Kot, Tablighi Chowk, Raiwind Road,

Tehsil and District Lahore - Punjab.Unit-IV: 48 Km Multan Road, Bhai Pheru, District Kasur, Punjab.

Websitewww.dingroup.com

Ba

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(ACA, FPFA, CFC )

ChairmanDirectorChief ExecutiveDirectorDirectorDirectorDirector

Audit Committee

Human Resource and Remuneration Committee

Shaikh Mohammad PervezShaikh Muhammad TanveerMr. Abdul Razzak Tarmuhammad

ChairmanMemberMember

ChairmanMemberMember

Shaikh Mohammad MuneerShaikh Mohammad PervezShaikh Muhammad TanveerShaikh Mohammad NaveedMr. Faisal JawedMr. Farhad Shaikh MohammadMr. Abdul Razzak Tarmuhammad

Allied Bank Ltd.

Barclays Bank PLC .

Dubai Islamic Bank Pakistan Ltd.

Faysal Bank Ltd.

Habib Bank Ltd.

Habib Metropolitan Bank Ltd.

MCB Bank Ltd.

Meezan Bank Ltd.

National Bank of Pakistan.

Pak Oman Investment Co. Ltd.

Standard Chartered Bank (Pakistan) Ltd.

The Bank of Punjab.

Mr. Abdul Razzak TarmuhammadShaikh Mohammad PervezMr. Farhad Shaikh Mohammad

31-Mar-14 Inc. / (Dec.) % age

Dear shareholders

Financial Results

a.

b.

DIRECTORS’ REPORT

Sales Gross Profit Pre-tax Profit After Tax Profit Gross Profit After Tax Profit Earning per share

General Market Conditions

Rupees in ‘000’Rupees in ‘000’Rupees in ‘000’Rupees in ‘000’PercentagePercentageRupees

3

operation cost.

Nine Months Ended

The Board of Directors take great privilege to present the un-audited Condensed Interim Financial Information of the Company along with observation on the performance of the company for the 3rd Quarter ended March 31,2014, are hereby presented to you in compliance with requirements of the section 245 of the Companies Ordinance ,1984.

During the 3rd quarter under review, the operational results of your company are as follows.

6,463,139 722,968 227,792 175,507 11.19

2.72 7.83

31-Mar-13

6,103,666 1,015,990 612,152 483,393

16.65 7.92 21.56

6 (29) (63) (64)

During the 3rd quarter under review the profitability of your company has shown a substantial improvements by managing to surmount the challenges faced by the whole industry in shape of high cost of fuel and power and intruppeted of power and gas supply.

Although the overall economy continue showing downward profitability trend the management of your company expects that they will remain successful in improving the situation in the remaining period of the financial year by strategic planning and reduce the per unit cost.

In addition to sales of the premium yarn , the rise in export sale of your company was also boosted by the start of sale of certain categories of specialized yarn for the international market. All these factors contributed towards improvements in the company's operations and reducing the

The economy of Pakistan is the 26th largest in the world in terms of purchasing power parity (PPP), and 44th largest in terms of nominal GDP. However as Pakistan has a population of over 183 million (the world's 6th-largest), thus GDP per capita is $4,141 ranking 140th in the world. Pakistan is a rapidly developing country and is one of the Next Eleven, the eleven countries that, along with the BRICs, have a high potential to become the world's largest economies in the 21st century. However, after decades of war and social instability, as of 2014,

serious deficiencies in basic services such as railway transportation and electric power generation had developed. The economy is semi-industrialized, with centers of growth along the Indus River. Major industries includes textiles (garments, bed linen, cotton cloth, yarn), chemicals, food processing (mainly sugar, salt, wheat, rice, fruit), agriculture, fertilizer, cement, dairy,polutary and rugs.

There is a direct need to fast-track the economy. A beginning has to be made involving at times painful and difficult decisions. Enabling conditions would have to be provided for increasing production, exports and employment opportunities. The primary prerequisite for all these is investment. Investment in industry is urgently required to impart inherent strength to the economy and confer on it the resilience to manage shocks and in the long term cure the economy of inflationary propensities and the like. There is an inverse relationship between industrial investment and interest rates. High interest rates while keeping inflation low have always disabled investment in industry. For achieving an economic turnaround a special line of credit for industry at internationally competitive interest rates is imperative.

China’s current progress in textiles and the continuing shift of its focus on downstream sectors gives an opportunity to Pakistan to fill up the area in spinning and weaving being vacated by China. This is an opportunity that should not be missed. We must take benefit of the rapid economic progress of China and enable synergies of operation to be achieved. Many Chinese companies have shown interest to explore Pakistan’s energy sector for making investment in hydro, solar and wind energy projects and help it in overcoming its energy problems.

4

Future OutlookIn future China would be focusing on hitech sectors, like Japan and Korea. The Federal Advisor was optimistic for the enhancement of textile exports due to EU allowing Pakistan duty free market access to the textile products bringing Pakistan at par with Bangladesh. Pakistan and China agreed to establish a joint Economic Corridor Energy Information platform, for which China would extend $6 million. After detailed formal deliberations during the first meeting of Energy Planning Working Group of China-Pakistan Economic Corridor (CPEC), Ministry of Water and Power, in an official announcement, stated that both parties discussed the organizational framework, basic concepts, main items, work programme and an enabling mechanism of the energy planning of CPEC. Ministry of Water and Power and China's National Energy Administration agreed for a fast-track implementation of the 21,690 MW power and related infrastructure projects under CPEC. It was agreed that both sides would jointly establish China-Pakistan Economic Corridor Energy Information Platform and provide timely, precise and complete data and information of the platform and also establish an Energy Planning Expert Group.

Growth poles of Pakistan's economy are situated along the Indus River the diversified economies of Karachi and major urban centers in the Punjab, coexisting with lesser developed areas in other parts of the country. The economy

has suffered in the past from internal political disputes, a fast growing population, mixed levels of foreign investment. Foreign exchange reserves are bolstered by steady worker remittances, but a growing current account deficit – driven by a widening trade gap as import growth outstrips export expansion – could draw down reserves and dampen GDP growth in the medium term. Pakistan is currently undergoing process economic liberalization with includes privatization of all government corporations, aimed to attract foreign investment and decrease budget deficit in 2014, foreign currency reserves cross $10b while it is expected to cross $15 billion by end-2014.

Under these very difficult challenges, your director would like to assure you that every effort will be made to achieve better results in the becoming years. Your company remain committed to business growth and opportunity for new investment and your company's management is well aware of the challenges that are ahead and focusing on value added products to deal with the ongoing crisis and will be making all efforts to ensure continued growth, operational efficiency and optimal results for the company and its valued stakeholders in the days to come.

Acknowledgment

The mission of Din Textile Mills Limited is to be the finest organization, and to conduct business responsibly and in a straight forward way. Our hall mark is honesty, innovation, teamwork of our people and our ability to respond effectively to change in all aspects of life including technology, culture and environment. Our basic aim to benefit the customers, employees and shareholders and fulfill our commitment to the society.

In the end we would like to thank Almighty for all his blessing in these challenges times and to convey our appreciation to all our customers, dealers, bankers and stakeholders for their continued support and confidence in the company. We also want to recognize the efforts of all our team members, who have worked diligently to achieve the results.

5

On behalf of the Board of Directors

Karachi:

Dated :April 26, 2014

SHAIKH MUHAMMAD TANVEER

Chief Executive

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DIN TEXTILE MILLS LTD.

ACCOUNTS Financial Statements (Un-Audited)

3rd Quarter Ended March 31, 2014

9

(Amounts in Thousand)

Note31-Mar-14

Rupees

30-Jun-13 30-Jun-12Rupees Rupees

The annexed notes form an integral part of these condensed interim financial statements.

5

7

6

NON CURRENT ASSETS

Property, plant and equipment

Long term deposits

Long term invesment

Deferred tax assets

CURRENT ASSETS

Stores, spare parts and loose toolsStock in tradeTrade debtsLoans and advancesTrade deposits and short term prepaymentsOther receivablesTax refunds due from the GovernmentCash and bank balances

CURRENT LIABILITIES

Trade and other payablesAccrued mark up / interestShort term borrowingsCurrent portion of Long term financing from banking companies - securedLiabilities against assets subject to finance lease

WORKING CAPITAL

TOTAL CAPITAL EMPLOYED

NON CURRENT LIABILITIES

Long term financing from banking companies - securedLiabilities against assets subject to finance leaseDeferred liabilitiesStaff retirement benefits - gratuity

CONTINGENCIES AND COMMITMENTS

Net Worth

Authorized capital

Net Worth Represented by:Issued, subscribed and paid up capital

Reserves

9

Condensed Interim Balance Sheet (Un-Audited)as at March 31, 2014

Karachi:Dated : April 26, 2014

SHAIKH MOHAMMAD MUNEER SHAIKH MUHAMMAD TANVEERChief Executive Chairman

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES

50,000,000 ordinary shares of Rs. 10/- each

22,421,688 (June 30, 2013 20,383,353) ordinary shares of Rs. 10/- each

8

1,635,532

15,099

44,681

141,632

1,836,944

267,028 1,636,247 1,579,248 755,278 5,982 42,365 166,888 54,000

4,507,036

2,627,435 81,063 182,332

185,826 33,090

3,109,746

1,397,290

3,234,234

820,967 19,910

99,689

940,566

2,293,668

500,000

203,833 2,089,835

2,293,668

1,695,685

15,500

-

141,632

1,852,817

122,048 1,128,025 1,005,597 71,044 5,594 3,525 100,899 74,424

2,511,156

1,576,585 63,469 501,526

222,563 34,739

2,398,882

112,274

1,965,091

274,215 46,815

92,090

413,120

1,551,971

500,000

203,833 1,348,138

1,551,971

----Restated----

10

1,738,838

12,188

44,681

141,632

1,937,339

357,350 1,711,274 1,278,644 1,457,723 10,161 17,356 256,535 163,777

5,252,820

2,631,849 113,079 1,007,733

261,621 24,382

4,038,664

1,214,156

3,151,495

729,758 7,251

103,281

840,290

2,311,205

500,000

224,216 2,086,989

2,311,205

Un-Audited Audited Audited


(Amounts in Thousand except earning per share)

Sales

Cost of sales

Gross Profit

Distribution cost

Administrative expenses

Other operating expenses

Finance cost

Other income

Profit / (Loss) before taxation

Provision for taxation

Profit / (Loss) for the period

Earning / (Loss) per share - basic and diluted

10

31-Mar-14 Rupees

Condensed Interim Profit and Loss Account (Un-audited)For the quarter and 3rd quarter ended March 31, 2014

Nine Months Ended Quarter Ended

Note

11

31-Mar-13 Rupees

31-Mar-13 Rupees

31-Mar-14 Rupees

6,463,139

(5,740,171)

722,968

(84,680)

(86,475)

(12,278)

(311,926)

(495,359)

227,609

183

227,792

(52,285)

175,507

7.83

6,103,666

(5,087,676)

1,015,990

(84,733)

(79,246)

(32,436)

(208,615)

(405,030)

610,960

1,192

612,152

(128,759)

483,393

21.56

2,056,699

(1,894,563)

162,136

(28,691)

(30,260)

413

(115,162)

(173,700)

(11,564)

43

(11,521)

(19,311)

(30,832)

(1.38)

2,212,391

(1,824,141)

388,250

(24,828)

(26,921)

(13,504)

(69,704)

(134,957)

253,293

816

254,109

(51,708)

202,401

9.03



11



Other comprehensive income for the period

Total comprehensive Income/ for the period

(Loss)


Condensed Interim Statement of Comprehensive Income (Un-Audited) For the quarter and 3rd quarter ended March 31, 2014

31-Mar-14 Rupees


31-Mar-13 Rupees

31-Mar-13 Rupees

31-Mar-14 Rupees

175,507 483,393 (30,832) 202,401

- - - -

175,507 483,393 (30,832) 202,401



31-Mar-14 Rupees


Rupees


Condensed Interim Cash Flow Statement (Un-Audited) for the 3rd quarter ended March 31, 2014

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation

Adjustments forDepreciationStaff retirement benefits - gratuity

Workers' profit participation fundFinance costLoss/(Gain) on disposal of property, plant and equipment

Profit before working capital changes

(Increase) / Decrease in current assetsStores, spare parts and loose toolsStock in tradeTrade debtsLoans and advancesTrade deposits and short term prepaymentsOther receivables

(Decrease) / Increase in current liabilitiesTrade and other payables

Cash generated from operations

Finance cost paidTaxes paidDividend paidWorkers' profit participation fund paidStaff retirement benefits - gratuity paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment

Fixed capital expenditure

Long term deposits

Long term Investment

Net cash used in investing activities


Long term financing

Liabilities against assets subject to finance lease

Net cash generated from / (used) in financing activities

Net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

CASH AND CASH EQUIVALENTS

Cash and bank balances

Short term borrowings

12

31-Mar-13

227,792

132,017 27,915 11,989 311,926 145

483,992

711,784

(90,322) (75,027) 300,604 (702,445) (759) 25,009

(542,940)

21,383

190,227

(279,453) (139,595) (100,790) (44,253) (24,322)

(398,186)

1,847

(237,313)

(510)

(44,681)

(280,657)

(15,414)

(21,367)

(36,781)

(715,624)

(128,332)

(843,956)

163,777

(1,007,733)

(843,956)

612,152

124,958 30,883 32,214 208,615 (399)

396,271

1,008,423

(62,153) (228,910) (100,686) (324,392) 757 (764,200)

(1,479,584)

784,495

313,334

(212,018) (104,383) (16)

- (17,402)

(20,485)

2,344

(68,609)

(640)

-

(66,905)

(182,497)

(26,976)

(209,473)

(296,863)

(427,101)

(723,964)

178,416

(902,380)

(723,964)




P a r t i c u l a r sUnappropriated

profit

Sub totalGeneral

Merger reserve

Total

Rupees


Revenue Share capital

Capital

Reserves

Condensed Interim Statement of Changes in Equity (Un-Audited)

for the 3rd quarter ended March 31, 2014

Balance as at July 01, 2012

as originally reported

Effect of retrospective application of

change in an accounting policy

referred in note 3.3

Balance as at

July 01, 2012 - as restated

Total comprehensive income for the

3rd Quarter ended March 31, 2013

Balance as at March 31, 2013


- as restated


203,833

- -

- -

203,833

203,833

20,383

10,377

10,377

- -

-

-

-

-

-

400,000

-

-

-

400,000

400,000

224,216 400,000

(20,383)

1,566,587

(14,616)

2,293,668

(101,916)

-

10,377

10,377

203,833 10,377 400,000 1,551,971

13

952,377

(14,616)

937,761

483,393

1,421,154

1,679,458

175,507

(101,916)

(56,054)

1,676,612

Total comprehensive income for the 3rd quarter ended March 31, 2014

Dividend for the year ended june 30, 2013 @ Rs 5/- per share

10% Bonus share issue for the yearended June 30,2013 @ Rs 1/- per share

Interim dividend for the half year ended December 31, 2013 @ Rs 2.50/- per share (56,054)

1,362,754

(14,616)

1,348,138

483,393

1,831,531

2,089,835

175,507

(101,916)

(20,383)

(56,054)

2,086,989 2,311,205

175,507

2,035,364

483,393



Selected Notes to the Condense Interim Financial Statements (Un-Audited) for the 3rd quarter ended March 31, 2014

LEGAL STATUS AND NATURE OF BUSINESS

The company is limited by shares, incorporated in Pakistan on June 13, 1988 and is quoted on stock exchanges at Karachi and Lahore. The registered office of the company is situated at 35-A/1, Lalazar area, opposite Beach Luxury Hotel, M. T. Khan road, Karachi in the province of Sind, Pakistan.

The principal business of the company is to manufacture and sale of yarn. The manufacturing units are located at Pattoki, Raiwind and Bhai Pheru in the province of Punjab.

The company had entered into an agreement during the year ended June 30, 2011 with Brother Textile Mills Limited having registered office at 135 Upper mall, Lahore (Manufacturing unit located at 48 Km Multan Road, Bhai Pheru) and obtained a license to use the site and spinning unit with installed capacity of 17,280 spindles. During the period, the license was renewed and extended for a period of twelve months expiring on November 12, 2014. Upon expiry of the license period, the agreement may be extended for future periods at the option of both parties. The license fee is agreed at rupees 2,843,375 per month payable quarterly in advance.

The company had entered into an agreement during the year ended June 30, 2013 with Din Farm Products (Pvt) Limited (an associated undertaking) to sell electric power at a reference price as and when required by the Din Farm Products (Pvt) Limited. The company will charge tariff against fuel cost component at cost of furnace oil 247 grams per KWH delivered by the company based on specific fuel consumption and at the reference fuel price adjusted from time to time for fuel price movement. Tariff against fixed cost component will be charged at Rs. 1.67 per KWH delivered by the company which includes but not limited to O & M cost, insurance cost etc.

BASIS OF PREPARATION

Statement of compliance

This condensed interim financial information is un-audited and has been prepared in accordance with the requirements of the International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial Reporting" as applicable in Pakistan. This condensed interim financial information does not include all of the information and disclosures required for annual financial statements, and should be read in conjunction with the financial statements of the company as at and for the year ended 30th June, 2013.

These condensed interim financial information are being submitted to the shareholders as required by the Listing regulations of Karachi and Lahore Stock Exchange and section 245 of the Companies Ordinance, 1984.

These condensed interim financial statements comprise of condensed interim

1

1.1

1.2

1.3

2

2.1

1.4

14

15

balance sheet, condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the selected notes for the 3rd quarter ended March 31, 2014 which have not been audited. These condensed interim financial statements also include condensed interim profit and loss statement for the 3rd quarter ended March 31,2014.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and methods of computation which have been used in the preparation of these condensed interim financial information are the same as those applied in preparation of the financial statements for the preceding year ended June 30, 2013.

Amendments to certain existing standards and new interpretations on approved accounting standards effective during the period either were not relevant to the company's operations or did not have any impact on the accounting policies of the company.

During the period, the company has adopted IAS 19, (Revised) 'Employee Benefits'. The amendments in the revised standard require the company to eliminate the corridor approach and recognize all actuarial gains and losses (now called 'remeasurements', that result from the remeasurement of defined benefits obligations and fair value of plan assets at the balance sheet date) in other comprehensive income as they occur, immediately recognize all past service costs and replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefits liability / asset.

This change in accounting policy has been accounted for retrospectively as required under International Accounting Standard - 8 'Accounting Policies, Changes in Accounting Estimates and Errors', and the comparative financial statements have been restated.

Effects of the change in the accounting policy on the interim financial statement are not quantifiable, hence the effects based on the relevant available actuarial valuation on the financial statements have been summarized below:

3.2

3

3.1

3.3

8,5762,007 6,569

16,623 2,007

14,616

Impact on Balance Sheet

Increase in the retirement benefits obligationIncrease in deferred tax assetDecrease in accumulated profits

30-Jun-13 30-Jun-12-------------Rupees in’000’------------

As at

Impact on profit and loss account Increase in profit and loss accountDecrease in deferred taxation - current yearIncrease in other comprehensive income

30-Jun-13 30-Jun-12-------------Rupees in’000’------------

Year Ended

1,012 - 7,035

2,131 2,007 5,682

5.1

16

4 ACCOUNTING ESTIMATES, JUDGMENTS AND FINANCIAL RISK MANAGEMENT

The preparation of these condensed interim financial information in conformity with approved accounting standards requires management to make estimates, assumptions and use judgements that affect the application of policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revisions to accounting estimates are recognized prospectively commencing from the period of revision.

Judgements and estimates made by management in the preparation of these condensed interim financial informations are the same as those that were applied to the financial statements as at and for the year ended June 30, 2013.

The Company's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30, 2013.

4.1

4.2

Note31-Mar-14 30-Jun-13

-------------Rupees in’000’------------

PROPERTY, PLANT AND EQUIPMENT5

1,722,825

16,013

1,738,838

1,620,275

15,257

1,635,532

Operating assets

Capital work in progress - at cost

(Un-audited) (Audited)

31-Mar-14 31-Mar-13Acquisition Disposal

Cost-----------Rupees in '000'-----------

Acquisition DisposalCost

-----------Rupees in '000'-----------

The cost of additions and deletions to property, plant and equipment during the 3rd quarter ended were as follows.

Owned Assets

Building

Plant and machinery

Electric installation

Tools and equipment

Furniture and fixture

Office equipment

Computers

Vehicles

Leased Assets

Vehicles

5.1

5.2

-

221,483

4,571

-

2,162

235

941

146

7,020

236,558

-

15,991

-

-

-

-

85

2,336

-

18,412

44

137,255

2,180

887

1,846

1,906

3,809

269

2,459

150,655

-

3,875

-

-

-

-

-

9,483

-

13,358

17

5.2

6

CAPITAL WORK IN PROGRESS (Un-audited) (Audited)

31-Mar-14

30-Jun-13-------------Rupees in’000’------------

Building

Electric Installation

Investment in Subidiray company

Ihsan Raiwind Mills (Pvt) Limited

27,017,996 (June 30, 2013: 27,017,996) ordinay shares of Rs. 10 each.Equity Interest Held 100%

LONG TERM INVESTMENT

44,681

44,681

44,681

44,681

15,257

-

15,257

9.1

DEFERRED TAX ASSETSIn view of applicability of presumptive tax regime, deferred tax assets has been worked out after taking effect of income covered under presumptive tax regime. During the period net deferred tax assets amounted to Rs. 176,743,098 has arised. The increase in the amount of deferred tax asset has not been recognized because proportion of export sales for the year exceeds the thresholds of 80 percent of total sales, therefore, the assessment of the company for the period will be finalized under final tax regime under section 169 of the income tax ordinance 2001.

STOCK IN TRADE

Finished goods amounting to Rs. Nil (June 30, 2013 : Rs. 5,177,560) stated at their net realizable value aggregating Rs. Nil (June 30, 2013 : Rs. 4,968,866). The amount charged to profit and loss in respect of stocks written down to their net realizable value is Rs. Nil (June 30, 2013 : Rs. 208,694).


There has been no significant change in the contingencies and commitments since the last audited financial statements except as disclosed in note 9.1, 9.2 and 9.3 respectively.

The Company has issued post dated cheques amounting to Rs. 79.878 million (June 30, 2013: Rs. 77.474 million) in favor of Collector of Customs in lieu of custom levies against various statutory notification. The indemnity bonds furnished by the company are likely to be released after the fulfillment of term of related SROs.

8

8.1

9

7

15,421

592

16,013

18

10 ISSUED, SUBSCRIBED AND PAID UP CAPITAL

9.2

9.3

Contingencies

Bills discounted with recourse

Bank guarantees issued in ordinary course of business

Commitments

Letters of credit for capital expenditure Letter of credit for raw material Letter of credit for stores and spares

53,302

159,060

140,495 506,926 40,858

-------------Rupees in’000’------------


31-Mar-14 30-Jun-13

-------------Rupees in’000’------------


31-Mar-14 30-Jun-13 Number of Shares

31-Mar-14 30-Jun-13

13,479,600

1,962,334

6,979,754

22,421,688

13,479,600

1,962,334

4,941,419

20,383,353

Ordinary shares of Rs. 10 each allotted for consideration paid in cash

Ordinary shares of Rs. 10 each allotted for consideration paid in cash

Ordinary shares of Rs. 10 each allotted as fully paid bonus shares

134,796

19,623

69,797

224,216

134,796

19,623

49,414

203,833

Associated company (Din Leather (Pvt.) Limited) held 7,260 (June 30, 2013 : 6,600) ordinary shares of the company.

The shareholders' are entitled to receive all distributions to them including dividend and other entitlements in the form of bonus and right shares as and when declared by the company. All shares carry "one vote" per share without restriction.

During the period the company issued 2,038,335 (June 30, 2013: Nil) as fully paid bonus shares at one share for every ten held.

10.1

10.2

10.3

220,128

169,060

156,662 178,892 50,337

11

11.2

11.1

12

19

31-Mar-14 Rupees

Nine Months ended Quarter ended

EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED

------------------------Rupees-----------------------

Profit/(Loss) for the period

Weighted average number of ordinary shares outstanding during the period

Earnings/(Loss) per share - basic (Rupee per share)

Weighted average number of shares in issue during comparative periods have been restated for the effect of bonus shares issued during current period.

There is no dilutive effect on the basic earnings per share of the company.

TRANSACTIONS WITH RELATED PARTIES

(Un-audited)

-------------Rupees in’000’------------

(Un-audited)

Transactions with related parties

MCB Bank Limited

Deposits

Withdrawals

Din Farm Product (Pvt) Limited

Relationship

Associated company

Associated company

31-Mar-14

Sale of electricity

Salaries and other

employees benefits

Staff retirement

benefits

Key management personnel

Ihsan Raiwind Mills (Pvt) Limited Subsidiary company

SalesPurchase Advance


31-Mar-13 Rupees

31-Mar-14 Rupees

31-Mar-13 Rupees

175,507

22,421,688

7.83

483,393

22,421,688

21.56

(30,832)

22,421,688

(1.38)

202,401

22,421,688

9.03

215,305 212,702

4,779

203,486 3,333 49,440

61,746

1,817

31-Mar-13

244,822 219,514

2,785

220,750 - 546,732

52,213

1,352

20


-------------Rupees in’000’------------

31-Mar-14 30-Jun-13

Balances outstanding at the period end

MCB Bank Limited

Din Farm Products (pvt) Ltd

Ihsan Raiwind Mills (Pvt) Ltd

-

18,421

1,047

1,004,822

13 NON ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

FromReclassification

To Nature Rupees

(In Thousands)

Sales - Electricity Sales

Cost of Sales - Electricity Sales

Other Income - Income from Power generation


Better Presentation

Better Presentation

14

21,024

1,254,415

The company had filed an application in the Honorable Sindh High Court under the Section 284 through 288 of the Companies Ordinance, 1984 for the approval of scheme of merger of Ihsan Raiwind Mills (Pvt) Limited (IRML) the wholly owned subsidiary with Din Textile Mills Limited (DTML). Pursuant to the order of the Honorable Sindh High Court separate meetings of members and creditors of DTML and IRML have been convened on January 17, 2014 for the approval of the scheme and the same has been conferred by them.

CORRESPONDING FIGURES

Comparative information has been rearranged and reclassified, wherever necessary, for the purpose of better presentation and comparison. Minor reclassifications were made in cash flow statement for better presentation and understanding. Significant reclassifications includes the following.

15 DATE OF AUTHORIZATION FOR ISSUE

These condensed interim financial statements have been authorized for issue on April 26, 2014 by the board of directors of the company.

GENERAL

Figures have been rounded off to the nearest thousand rupees.

16

2,785

(2,028)



CONSOLIDATED Financial Statements (Un-Audited)


DIN TEXTILE MILLS LTD.


Note 31-Mar-14 Rupees

30-Jun-13Rupees

5

7

6

NON CURRENT ASSETS

Property, plant and equipment

Long term deposits

Deferred tax assets

CURRENT ASSETS

CURRENT LIABILITIES

Trade and other payablesAccrued mark up / interestShort term borrowingsCurrent portion of Long term financing from banking companies - securedLiabilities against assets subject to finance lease

WORKING CAPITAL

TOTAL CAPITAL EMPLOYED

NON CURRENT LIABILITIES

Long term financing from banking companies - securedLiabilities against assets subject to finance leaseDeferred liabilitiesStaff retirement benefits - gratuity


Net Worth

Authorized capital

Net Worth Represented by:Issued, subscribed and paid up capital

Reserves

8

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES

50,000,000 ordinary shares of Rs. 10/- each

22,421,688 (June 30, 2013 20,383,353) ordinary shares of Rs. 10/- each

Intangibles

Stores, spare parts and loose toolsStock in tradeTrade debtsLoans and advancesTrade deposits and short term prepaymentsOther receivablesOther financial assetsTax refunds due from The GovernmentCash and bank balances

The annexed notes form an integral part of these consolidated condensed interim financial statements.

9

23

Consolidated Condensed Interim Balance Sheet (Un-audited)as at March 31, 2014

2,413,942

17,090

16,043

141,632

2,588,706

286,131 1,713,102 1,356,977 112,170 5,982 43,172 87 194,954 76,707

3,789,281

2,745,075 84,658 182,332

185,826 33,090

3,230,981

558,300

3,147,006

820,967 19,911

107,063

947,941

2,199,065

500,000

203,833

1,995,232

2,199,065

1,695,685

15,500

-

141,632

1,852,817

122,048 1,128,025 1,005,597 71,044 5,594 3,525 -

100,899 74,424

2,511,156

1,576,585 63,469 501,526

222,563 34,739

2,398,882

112,274

1,965,091

274,215 46,815

92,090

413,120

500,000

30-Jun-12Rupees

......... Restated..........

Un-Audited Audited Audited

1,551,971

203,833

1,348,138

1,551,971

2,502,541

15,626

-

141,632

2,659,799

384,075 1,782,748 1,489,067 215,575 12,015 17,713 90 293,502 221,824

4,416,609

2,727,733 113,079

1,007,733

261,621 24,382

4,134,548

282,061

2,941,860

729,758 7,251

113,580

850,589

2,091,271

500,000

224,216

1,867,055

2,091,271



24


(Amounts in Thousand except earning per share)

Sales

Cost of sales

Gross Profit

Distribution cost

Administrative expenses

Other operating expenses

Finance cost

Other operating income

Profit / (Loss) before taxation

Provision for taxation


Earning / (Loss) per share - basic and diluted

31-Mar-14 Rupees


Consolidated Condensed Interim Profit and Loss Account (Un-audited)for the quarter and 3rd quarter ended March 31, 2014

10

Note31-Mar-13 Rupees

31-Mar-14 Rupees

31-Mar-13 Rupees

7,728,671

(7,115,799)

612,872

(102,333)

(88,200)

(12,278)

(312,377)

(515,188)

97,684

6,185

103,869

(53,696)

50,173

2.24

5,914,452

(4,912,619)

1,001,833

(84,887)

(79,290)

(32,436)

(216,027)

(412,640)

589,193

1,369

590,562

(129,074)

461,488

20.58

3,322,231

(3,270,191)

52,040

(46,344)

(31,985)

413

(115,613)

(193,529)

(141,489)

6,045

(135,444)

(20,722)

(156,166)

(6.96)

2,023,177

(1,649,084)

374,093

(24,982)

(26,965)

(13,504)

(77,116)

(142,567)

231,526

993

232,519

(52,023)

180,496

8.05



25



31-Mar-14 Rupees


Profit / for the period(Loss)

Items that may be reclassified to profit and loss account

Un realized Gain on available for sale Investments

Total comprehensive Income / for the period(Loss)

Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited)for the quarter and 3rd quarter ended March 31, 2014

31-Mar-13 Rupees

31-Mar-13 Rupees

31-Mar-14 Rupees

50,173

3

50,176

461,488

-

461,488

(156,166)

-

(156,166)

180,496

-

180,496



31-Mar-14 Rupees


Rupees


Consolidated Condensed Interim Cash Flow Statement (Un-Audited) for the 3rd quarter ended March 31, 2014

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation

Adjustments forDepreciationStaff retirement benefits - gratuity

Workers' profit participation fundFinance costLoss / (Gain) on disposal of property, plant and equipment

Profit before working capital changes

(Increase) / Decrease in current assetsStores, spare parts and loose toolsStock in tradeTrade debtsLoans and advancesTrade deposits and short term prepaymentsOther receivables

(Decrease) / Increase in current liabilitiesTrade and other payables

Cash generated from operations

Finance cost paidTaxes paidDividend paidWorkers' profit participation fund paidStaff retirement benefits - gratuity paid

Net cash (used in) generated from operating activities


Proceeds from sale of property, plant and equipmentFixed capital expenditureLong term depositsLong Term Investments

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Long term financing

Liabilities against assets subject to finance lease

Net cash generated from / (used) in financing activities

Net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

CASH AND CASH EQUIVALENTS

Cash and bank balances

Short term borrowings

26

31-Mar-13

103,869

182,260

31,835

11,989

312,377

145

538,606

642,475

(97,944)

(69,646)

(132,090) (103,405)

(2,613)

25,459

(380,239)

14,918

277,154

(283,499) (149,858) (100,790)

(44,253) (24,712)

(325,958)

1,847

(272,754)

(1,957)

(44,681)

(317,545)

(15,414)

(21,367)

(36,781)

(680,284)

(105,625)

(785,909)

221,824

(1,007,733)

(785,909)

590,562

126,468

30,883

32,214

216,027

(399)

405,193

995,755

(64,510) (434,062) (156,391) (324,637) 757 (764,200)

(1,743,043)

1,310,055

562,767

(244,290) (104,391) (16)

-

(17,402)

196,668

2,344 (68,609)

(9,370)-

(75,635)

(378,766)

(26,976)

(405,742)

(284,709)

(427,101)

(711,810)

190,570

(902,380)

(711,810)





Consolidated Condensed Interim Statement of Changes in Equity (Un-Audited)for the 3rd quarter ended March 31, 2014

27

P a r t i c u l a r sUnappropriated

profit

Sub total

GeneralMerger reserve

Total

Rupees

Revenue

Share capital

Capital

Reserves


as originally reported

Effect of retrospective application of

change in an accounting policy

referred in note 3.3

Balance as at

July 01, 2012 - as restated





- as restated



Dividend for the year ended

june 30, 2013 @ Rs 5/- per share

10% Bonus share issue for the year

ended June 30,2013 @ Rs 1/- per share


203,833

- -

203,833

- -

203,833

203,833

20,383

10,377

10,377

10,377

- -

- -

-

-

-

400,000

-

- -

- -

400,000

400,000

400,000

224,216 400,000

Un realized gain / (loss) on remeasurement

of available for sale

investment

-

-

-

20

3

-

-

23

10,377

10,377

Interim dividend for the 3rd Quarter

ended March 31, 2014 @ Rs 2.50/-

per share

952,377

(14,616)

937,761

461,488

1,399,249

1,584,835

50,173

(101,916)

(20,383)

(56,054)

1,456,655

1,362,754

(14,616)

1,348,138

461,488

1,809,626

1,995,232

50,176

(101,916)

(20,383)

(56,054)

1,867,055

1,566,587

(14,616)

1,551,971

461,488

2,013,459

2,199,065

50,176

(101,916)

-

(56,054)

2,091,271



LEGAL STATUS AND NATURE OF BUSINESS

Selected Notes to the Consolidated Condensed InterimFinancial Statements (Un-Audited) for the 3rd quarter ended March 31, 2014

The company is limited by shares, incorporated in Pakistan on June 13, 1988 and is quoted on stock exchanges at Karachi and Lahore. The registered office of the company is situated at 35-A/1, Lalazar area, opposite Beach Luxury Hotel, M. T. Khan road, Karachi in the province of Sind, Pakistan.

The principal business of the company is to manufacture and sale of yarn. The manufacturing units are located at Pattoki, Raiwind and Bhai pheru in the

The company had entered into an agreement during the year ended June 30, 2011 with Brother Textile Mills Limited having registered office at 135 Upper mall, Lahore (Manufacturing unit located at 48 Km Multan Road, Bhai Pheru) and obtained a license to use the site and spinning unit with installed capacity of 17,280 spindles. During the period, the license was renewed and extended for a period of twelve months expiring on November 12, 2014. Upon expiry of the license period, the agreement may be extended for future periods at the option of both parties. The license fee is agreed at rupees 2,843,375 per month payable quarterly in advance.

The company had entered into an agreement during the year ended June 30, 2013 with Din Farm Products (Pvt) Limited (an associated undertaking) to sell electric power at a reference price as and when required by the Din Farm Products (Pvt) Limited. The company will charge tariff against fuel cost component at cost of furnace oil 247 grams per KWH delivered by the company based on specific fuel consumption and at the reference fuel price adjusted from time to time for fuel price movement. Tariff against fixed cost component will be charged at Rs. 1.67 per KWH delivered by the company which includes but not limited to O & M cost, insurance cost etc.

IHSAN RAIWIND MILLS (PVT) LIMITED (Subsidiary Company)

The subsidiary company was incorporated in Pakistan on February 28, 2001 as a private limited group under the Companies Ordinance, 1984. During the year the entire share capital was acquired by the holding company. The company became a subsidiary in the group with effect from March 15, 2013. The financial results of the subsidiary are incorporated in these consolidated financial statements since the date it became the part of the group. The company is engaged in the manufacturing, sale and trading of yarn and textile products. Registered Office of the group is situated at 35-A/1 Lalazar Area, Opposite Beach Luxury Hotel, Karachi in the province of Sindh, Pakistan with effect form March 15, 2013. Previously it was situated at F-207, Textile Avenue, of polytechnic site Karachi. The production facility is located at Dars Road, Off Raiwind Road, Bachuki Mujha District, Kasur in the province of Punjab.

28

The group consists of;

DIN TEXTILE MILLS LIMITED (The holding company)

1

1.1

1.2

1.3

1.4

1.5

BASIS OF PREPARATION

Statement of compliance

This condensed interim financial information is un-audited and has been prepared in accordance with the requirements of the International Financial Reporting Standard (IFRS) IAS 34 "Interim Financial Reporting" as applicable in Pakistan. This condensed interim financial information does not include all of the information and disclosures required for annual financial statements, and should be read in conjunction with the financial statements of the company as at and for the year ended 30th June, 2013.

These condensed interim financial information are being submitted to the shareholders as required by the Listing regulations of Karachi and Lahore Stock Exchange and section 245 of the Companies Ordinance, 1984.

These condensed interim financial statements comprise of condensed interim balance sheet, condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the selected notes for the 3rd Quarter ended March 31, 2014 which have not been audited. These condensed interim financial statements also include condensed interim profit and loss statement for the quarter ended March 31,2014.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and methods of computation which have been used in the preparation of these condensed interim financial information are the same as those applied in preparation of the financial statements for the preceding year ended June 30, 2013.

Amendments to certain existing standards and new interpretations on approved accounting standards effective during the period either were not relevant to the company's operations or did not have any impact on the accounting policies of the company.

During the period, the group has adopted IAS 19, (Revised) 'Employee Benefits'. The amendments in the revised standard require the company to eliminate the corridor approach and recognize all actuarial gains and losses (now called 'remeasurements', that result from the remeasurement of defined benefits obligations and fair value of plan assets at the balance sheet date) in other comprehensive income as they occur, immediately recognize all past service costs and replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefits liability / asset.

This change in accounting policy has been accounted for retrospectively as required under International Accounting Standard - 8 'Accounting Policies, Changes in Accounting Estimates and Errors' by the holding company, and the

2

2.1

3

3.3

29

3.1

3.2

comparative financial statements have been accordingly restated. For the comprehensive impacts on the financial statement of the holding company refer to the annexed separate condensed financial statements.

The subsidiary company has already 'accounted for the actuarial gain / loss and the liability was fully recorded hence there is no impact of the revision of the International Accounting Standard (IAS) 19, in its 'condensed interim financial information. Further there is no consequential effect in the condensed interim profit and loss 'account or condensed interim statement of other comprehensive income as the provision in this behalf was 'incorporated on the basis of management's estimate in the condensed interim half yearly financial information and 'impact of actuarial gain / loss was considered immaterial.

ACCOUNTING ESTIMATES, JUDGMENTS AND FINANCIAL RISK MANAGEMENT

The preparation of these condensed interim financial information in conformity with approved accounting standards requires management to make estimates, assumptions and use judgements that affect the application of policies and reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revisions to accounting estimates are recognized prospectively commencing from the period of revision.

Judgements and estimates made by management in the preparation of these condensed interim financial informations are the same as those that were applied to the financial statements as at and for the year ended June 30, 2013.

The group's financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended June 30, 2013.

4

30

5


31-Mar-14 30-Jun-13-------------Rupees in’000’------------

PROPERTY, PLANT AND EQUIPMENT

Note

Operating assets

Capital work in progress - at cost

5.1

5.2

4.1

4.2

2,377,244

36,698

2,413,942

2,486,300

16,241

2,502,541

31

31-Mar-14Acquisition Disposal

Cost-----------Rupees in '000'-----------

Acquisition DisposalCost

-----------Rupees in '000'-----------

5.1

31-Mar.13

The cost of additions and deletions to property, plant and equipment during the 3rd Quarter ended were as follows.

Owned Assets

Building

Plant and machinery

Electric installation

Tools and equipment

Furniture and fixture

Office equipment

Computers

Vehicles

Leased Assets

Vehicles

-

-

-

-

-

-

9,483

-

13,358

5.2

6

CAPITAL WORK IN PROGRESS (Un-audited) (Audited)

31-Mar-14 30-Jun-13-------------Rupees in’000’------------

Building

Plant and machinery

Electric Installation

17,405

19,293

36,698

INTANGIBLES

GoodwillOpening BalanceArised in the period / yearImpaired

16,043

16,043

This represents excess of the amount paid by the holding company over fair value of net assets of Ihsan Raiwind Mills (Pvt.) Limited on its acquisition. The recoverable amount of goodwill was tested for impairment by allocating the amount of goodwill to respective assets on which it arose, based on value in use in accordance with ‘IAS-36 Impairment of Assets’.Based on the calculations the entire amount of goodwill has been impaired and accordingly charged off.

DEFERRED TAX ASSETS

In view of applicability of presumptive tax regime, deferred tax assets has been worked out after taking effect of income covered under presumptive tax regime.

6.1

7

-

-

-

4,094

252,800

24,119

706

2,863

235

1,228

146

7,020

293,211

-

15,991

-

-

-

-

85

2,336

-

18,412

44

137,255

2,180

887

1,846

1,906

3,809

269

2,459

150,655

15,421

-

820

16,241

16,043 -

(16,043)

-

3,875

during the period net deferred tax assets amounted to Rs. 176,743,098 has arised. The increase in the amount of deferred tax asset has not been recognized because proportion of export sales for the year exceeds the thresholds of 80 percent of total sales, therefore, the assessment of taxation for the period will be finalized under final tax regime under section 169 of the income tax ordinance 2001.

STOCK IN TRADE

Finished goods amounting to Rs. Nil (June 30, 2013 : Rs. 30,880,756) stated at their net realizable value aggregating Rs. Nil (June 30, 2013 : Rs. 29,630,817). The amount charged to profit and loss in respect of stocks written down to their net realizable value is Rs. Nil (June 30, 2013 : Rs. 1,249,939).


There has been no significant change in the contingencies and commitments since the last audited financial statements except as disclosed in note 9.1, 9.2 and 9.3 respectively.

The holding company has issued post dated cheques amounting to Rs. 79.878 million (June 30, 2013: Rs. 77.474 million) in favor of Collector of Customs in lieu of custom levies against various statutory notification. The indemnity bonds furnished by the company are likely to be released after the fulfillment of term of related SROs.

8

9

9.1

8.1

9.2

9.3

Contingencies

Bills discounted with recourse

Bank guarantees issued in ordinary course of business

Commitments

Letters of credit for capital expenditure Letter of credit for raw material Letter of credit for stores and spares

53,302

159,060

140,495 506,926 40,858

-------------Rupees in’000’------------


31-Mar-14 30-Jun-13

220,128

169,060

156,662 178,892 50,337

32

(Un-audited)

-------------Rupees in’000’------------

EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED10

Quarter Ended

31-Mar-14


Weighted average number of ordinary shares outstanding during the period

Earnings / (Loss) per share - basic (Rupee per share)

-------------Rupees in’000’------------

Nine Months Ended

31-Mar-14 31-Mar-13

Transactions with related parties

MCB Bank Limited

Deposits

Withdrawals

Din Farm Product (Pvt) Ltd

Sale of Electricity

Salaries and other employees

benefits

Staff retirement benefits

Relationship

Associated company

Associated company


TRANSACTIONS WITH RELATED PARTIES 11

10.1

10.2

31-Mar-13


-------------Rupees in’000’------------

31-Mar-14 30-Jun-13

Balances outstanding at the period end

MCB Bank Limited

Din Farm Products (pvt) Ltd

21,024

-

18,421

1,047

33


(Un-audited)

31-Mar-1331-Mar-14

50,173

22,421,688

2.24

461,488

22,421,688

20.58

(156,166)

22,421,688

(6.96)

180,496

22,421,688

8.05

Weighted average number of shares in issue during comparative periods have been restated for the effect of bonus shares issued during current period.

There is no dilutive effect on the basic earnings per share of the group.

215,305

212,702

4,779

64,075

2,002

244,822

219,514

2,785

52,213

1,352

12 NON ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

The holding company had filed an application in the Honorable Sindh High Court under the Section 284 through 288 of the Companies Ordinance, 1984 for the approval of scheme of merger of Ihsan Raiwind Mills (Pvt) Limited (IRML) the wholly owned subsidiary with Din Textile Mills Limited (DTML). Pursuant to the order of the Honorable Sindh High Court separate meetings of members and creditors of DTML and IRML have been convened on January 17, 2014 for the approval of the scheme and the same has been conferred by them.

CORRESPONDING FIGURES

Comparative information has been rearranged and reclassified, wherever necessary, for the purpose of better presentation and comparison. Minor reclassifications were made in cash flow statement for better presentation and understanding. Significant reclassifications includes the following.

13

14

FromReclassification

To Nature Rupees

(In Thousands)

Sales - Electricity Sales

Cost of Sales - Electricity Sales



Better Presentation

Better Presentation

DATE OF AUTHORIZATION FOR ISSUE

These condensed interim financial statements have been authorized for issue on April 26, 2014 by the board of directors of the company.

GENERAL

Figures have been rounded off to the nearest thousand rupees.

15

2,785

(2,028)



34

s 02 directors’ report t n - din...

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