BANNU - bwm.com.pk

BIBOJEE GROUP

WOOLLEN MILLS LIMITED

Nine MonthAccounts

March, 2017

BANNU

Pages

COMPANY’S PROFILE .........................................................1

DIRECTORS’ REPORT(English & ) .............................2-3

BALANCE SHEET..................................................................4

PROFIT & LOSS ACCOUNT..................................................5

CASH FLOW STATEMENT....................................................6

STATEMENT OF CHANGES IN EQUITY ..............................7

SELECTED NOTES TO THE ACCOUNTS ............................8-11

CONTENTS

BANNU WOOLLEN MILLS LIMITED

1


Board of Directors Lt. Gen. (Retd) Ali Kuli Khan Khattak ChairmanMr. Raza Kuli Khan KhattakMrs. Shahnaz Sajjad Ahmad Chief ExecutiveMr. Ahmad Kuli Khan KhattakMr. Mushtaq Ahmad Khan, FCAMr. Gohar Ayub KhanSyed Zubair Ahmed Shah (NIT)Mr. Ahmad Zeb Khan (Independent)Mr. Muhammad Kuli Khan Khattak

Audit Committee Mr. Ahmad Zeb Khan ChairmanLt. Gen. (Retd) Ali Kuli Khan Khattak MemberMr. Ahmad Kuli Khan Khattak Member

Human Resource & Lt. Gen. (Retd) Ali Kuli Khan Khattak ChairmanRemuneration Committee Mrs. Shahnaz Sajjad Ahmad Member

Mr. Ahmad Kuli Khan Khattak Member

Chief Financial Officer Mr. A.R. TahirChief Operating Officer (COO)

Company Secretary Mr. Azher IqbalAPFA

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]

Web Site: www.bwm.com.pk

COMPANY'S PROFILE

2


Date : 14 April, 2017Rawalpindi

For & on behalf of the Board of Directors,

FINANCIAL PERFORMANCE

Financials Results

2017 2016

Sales - net 697,747 717,364

Gross profit 225,390 231,215

Profit from Operations 103,387 114,429

Profit before taxation 106,101 108,883

Profit after taxation 76,328 76,000

Basic & diluted earnings per share 8.03

7.99

Future outlook

THANKS AND APPRECIATION

The Company is optimistic in using its marketing function to further grow and hopesto strengthen operating results by volume benefits in next season by establishing newproducts, new designs and new markets niches of existing products.

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

During the period, the Company has earned profit before tax of Rs. 106.101 million(March 31, 2016: Rs. 108.883 million), which included share of profit of AssociatedCompanies amounting Rs. 5.740 million (March 31, 2016: Rs. 0.189 million).

Keeping in view of the market opportunities, the management of the Company isfocused to replace the old machinery with new to enhance production capacity andquality. The Marketing function is also striving for development of new products &markets and will launch its Summer product before June 2017, which will impact thesales revenue of the Company in current & next financial year. They have alsodeveloped the new designs of existing Winter products which are appreciated by the mills’ dealers.

The management takes this opportunity to thank customers, shareholders, suppliers,bankers and other stakeholders. We also appreciate and acknowledge the continuedsupport, commitment, loyalty and hard work of our employees.

The sales during the third quarter ended March 31, 2017 has decreased by Rs.39.773 million over the corresponding period of last year mainly due to decreasedsales of Shirting Cloth. The sales of Shirting Cloth has decreased from 86,628 metersto 16,467 meters during the third quarter of current year over the same period of lastyear because of lower market demand for the warm cloth owing to non-setting ofwinter season and the dealers complain huge inventory of the Company's unsoldcloth with them. The continuing trend and lower market demand will affect the annual sales of the current financial year.

Chairman's Review

We are pleased to present the un-audited condensed financial information of theCompany for the 3rd quarter ended March 31, 2017.

We are pleased to report that your Company has earned after tax net profit of Rs.76.328 million after incorporation of share of profit of Associated Companies andtaxation. The net sales decreased by 2.73% during the period under review and thegross profit has been slightly increased from 32.23% to 32.30% over the correspondingperiod.

Financial results are summarized as under:-Nine months period

ended March 31,

(Rupees in thousand)

Lt. Gen (Retd) Ali Kuli Khan Khattak Chairman

3


4


Condensed Interim Balance Sheet As At March 31, 2017Mar. 31, June 30,

2017 2016

Un-audited AuditedASSETS NoteNon-current assets

Property, plant and equipment 5 1,127,406 1,142,667Intangible assets 121 150Investments in Associated Companies 6 374,095 366,358

Security deposits 3,344 3,3941,504,966 1,512,569

Current assets

Stores and spares 59,632 66,714Stock-in-trade 503,242 486,962Trade debts 183,992 64,961Advances to employees - unsecured, considered good 5,419 8,001Advance payments 815 773Trade deposits and prepayments 2,857 265Sales tax refundable 5,263 10,324Income tax refundable, advance tax

and tax deducted at source 23,076 27,810Cash and bank balances 29,671 82,842

813,967 748,652

Total assets 2,318,933 2,261,221

EQUITY AND LIABILITIESShare capital and reserves

Authorised capital 200,000 200,000

Issued, subscribed and paid-up capital 95,063 95,063Reserves 884,500 852,500Unappropriated profit 87,047 79,923

Shareholders' Equity 1,066,610 1,027,486

Surplus on Revaluation of Property, Plant and Equipment 821,072 827,453

LiabilitiesNon-current liabilities

Staff retirement benefits - gratuity 198,382 185,062Deferred Taxation 78,906 81,953

277,288 267,015Current liabilities

Trade and other payables 120,681 105,089Accrued mark-up 77 19Current portion of demand finances 0 2,500Taxation 33,205 31,659

153,963 139,267Total liabilities 431,251 406,282

Contingencies and commitments 7

Total equity and liabilities 2,318,933 2,261,221

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

Rupees in '000

5


Mar. 31, Mar. 31, Mar. 31, Mar. 31,Note 2017 2016 2017 2016

Sales - net 47,505 86,628 697,747 717,364

Cost of sales (32,193) (55,302) (472,357) (486,149)

Gross profit 15,312 31,326 225,390 231,215

Distribution cost (4,706) (5,936) (37,771) (32,243)

Administrative expenses (19,440) (24,487) (77,003) (77,402)

Other income 621 2,011 2,369 3,306

Other expenses 601 (471) (9,598) (10,447)

(Loss) / profit from operations (7,612) 2,443 103,387 114,429

Finance cost (117) (344) (3,026) (5,735)

(7,729) 2,099 100,361 108,694

Share of profit of Associated Companies - net 6 0 0 5,740 189

(Loss) / profit before taxation (7,729) 2,099 106,101 108,883

Taxation 8 2,611 (1,597) (29,773) (32,883)

(Loss) / profit after taxation (5,118) 502 76,328 76,000

Other comprehensive income 0 0 0 0

Total comprehensive (loss) / income

for the period (5,118) 502 76,328 76,000

(Loss) / earnings per share - basic and diluted (0.54) 0.05 8.03 7.99


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

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

Condensed Interim Profit And Loss Account (Un-Audited)For The Quarter And Nine Months Period Ended March 31, 2017

Quarter ended Nine months period ended

Mushtaq Ahmad Khan, FCA Director

Shahnaz Sajjad AhmadChief Executive

6


Mar. 31, Mar. 31,

2017 2016

Cash flow from operating activities

Profit for the period - before taxation and net share

of profit on investments in Associated Companies 100,361 108,694

Adjustments for non-cash charges and other items:

Depreciation 30,400 27,994

Amortisation of intangible assets 29 29

Staff retirement benefits - gratuity (net) 13,320 15,747

Mark-up on bank deposits (1,066) (777)

Finance cost 3,026 5,735

Gain on sale of fixed assets (491) 0

Profit before working capital changes 145,579 157,422

Effect on cash flow due to working capital changes

(Increase) / decrease in current assets

Stores and spares 7,082 (9,541)

Stock-in-trade (16,280) 48,156

Trade debts (119,031) 84,150

Advances to employees 2,582 (510)

Advance payments (42) (1,992)

Trade deposits and prepayments (2,592) (1,185)

Sales tax refundable 5,061 (1,591)

Decrease in trade and other payables 12,809 (37,772)

(110,411) 79,715

Cash (used in) / generated from operations 35,168 237,137

Taxes paid (26,540) (37,858)

Net cash (used in) / generated from operating activities 8,628 199,279

Cash flow from investing activities

Fixed capital expenditure (15,857) (7,116)

Sale proceeds of assets disposed 1,209 0

Intangible assets acquired 0 (188)

Security deposits 50 (110)

Dividend received on investments 1,949 2,339

Mark-up received on bank deposits 1,066 777

Net cash used in investing activities (11,583) (4,298)

Cash flow from financing activities

Demand finances - repaid (2,500) (7,500)

Short term finances - net 0 (49,778)

Dividend paid (44,748) (27,519)

Finance cost paid (2,968) (6,062)

Net cash used in financing activities (50,216) (90,859)

Net (decrease) / increase in cash and cash equivalents (53,171) 104,122

Cash and cash equivalents - at beginning of the period 82,842 3,506

Cash and cash equivalents - at end of the period 29,671 107,628


Condensed Interim Cash Flow Statement (Un-Audited)For The Nine Months Period Ended March 31, 2017

Nine months period ended

- - - Rupees in '000 - - -



7


Capital Revenue

Balance as at July 01, 2015 (audited) 95,063 19,445 786,055 805,500 75,940 976,503

Transfer of reserves 0 0 47,000 47,000 (47,000) 0

Transaction with owners:

Final dividend for the year ended June 30, 2015 at the rate of Rs.3 per share 0 0 0 0 (28,519) (28,519)

Total comprehensive income forthe period ended March 31, 2016 0 0 0 0 76,000 76,000

Transfer from surplus on revaluation of property, plant and equipment on account of incremental depreciation for the period - net of deferred taxation 0 0 0 0 4,659 4,659

Effect of items directly credited inequity by Associated Companies 0 0 0 0 2,657 2,657

Balance as at March 31, 2016(un-audited) 95,063 19,445 833,055 852,500 83,737 1,031,300

Balance as at July 01, 2016 (audited) 95,063 19,445 833,055 852,500 79,923 1,027,486

Transfer of reserves 0 0 32,000 32,000 (32,000) 0

Transaction with owners:

Final dividend for the year ended June 30, 2016 at the rate of Rs.5 per share 0 0 0 0 (47,531) (47,531)

Total comprehensive income for the

period ended March 31, 2017 0 0 0 0 76,328 76,328

Transfer from surplus on revaluation

of property, plant and equipment on account of incremental depreciation for the period - net of deferred taxation 0 0 0 0 6,381 6,381

Effect of items directly credited inequity by Associated Companies 0 0 0 0 3,946 3,946

Balance as at March 31, 2017

(un-audited) 95,063 19,445 865,055 884,500 87,047 1,066,610


GeneralSub-total

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

Unapprop-

riated

profit

Reserves

Condensed Interim Statement of Changes In Equity (Un-Audited)For The Nine Months Period Ended March 31, 2017

Share

capitalTotal

Share

premium



8


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 AuditedMar. 31, June 30,

2017 2016Note

Operating fixed assets - tangible 5.1 1,115,816 1,121,695

Capital work-in-progress 11,590 20,972

1,127,406 1,142,667

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.

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.

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.

Notes To The Condensed Interim Financial Information (Un-Audited)

For The Nine Months Period Ended March 31, 2017

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 themembers in accordance with section 245 of the Companies Ordinance, 1984 (theOrdinance). It has been prepared in accordance with the requirements of InternationalAccounting Standard (IAS) 34 - ‘Interim financial reporting’ and provisions of anddirectives issued under the Ordinance. In case where requirements differ, the provisionsof or directives issued under the Ordinance have been followed. This condensed interimfinancial information does not include all the information required for annual financialstatements and, therefore, should be read in conjunction with the annual audited financialstatements of the Company for the year ended June 30, 2016.

9

BANNU WOOLLEN MILLS LIMITED Un-audited Audited

Mar. 31, June 30,

2017 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 25,239 42,168

Revaluation adjustments 0 288,961

Disposals costing Rs.2.761 million (June 30, 2016: Rs. Nil) - at net book value (718) 0

Depreciation charge for the period / year (30,400) (37,844)

Net book value at end of the period / year 1,115,816 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 24,074 39,148

- weightment & material handling equipment 108 0

- tools & equipment 15 0

- furniture & fixtures 218 435

- electric fittings 0 312

- office equipment 0 193

- computer and accessories 824 504

- vehicles 0 1,576

25,239 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 0 (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 0 (6,077)

349,786 342,360

374,095 366,358

- - - Rupees in '000 - - -

10


6.1

6.1.1

7. CONTINGENCIES AND COMMITMENTS

7.1 Contingencies

Un-audited Audited

Mar. 31, June 30,

2017 2016

7.2 Commitments in respect of:

- letters of credit for purchase of raw materials

and stores & spare parts 12,517 35,126

- capital expenditure other than letters of credit 800 0

8. TAXATION

Mar. 31, Mar. 31, Mar. 31, Mar. 31,

2017 2016 2017 2016

- current (909) 755 32,476 31,796

- prior year 0 0 344 46

- deferred (1,702) 842 (3,047) 1,041

(2,611) 1,597 29,773 32,883

8.1

8.2

9. TRANSACTIONS WITH RELATED PARTIES

9.1

2017 2016

(i) Associates Dividend received 1,949 2,339

Dividend paid 16,192 9,715

Office rent paid 1,050 300

Purchase of raw-material 0 2,143

Expenses shared 5,276 0

(ii) Key management

personnel Remuneration and other benefits 71,130 57,701

Un-audited Audited

Mar. 31, June 30,

9.2 Period / year end balances are as follows: 2017 2016

Payable to related parties

Trade and other payables 113

100

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.

- - - - - - - - - - - - - - Un-audited - - - - - - - - - - - - -

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

Nine months period endedQuarter ended

Market values of the Company's investments in BCM and JDM as at March 31, 2017were Rs.8.817 million (June 30, 2016: Rs.14.754 million) and Rs.159.057 million (June30, 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.

Significant transactions with related parties are as follows:

Nine months

- - - Rupees in '000 - - -

Income tax assessments of the Company have been completed upto the tax year 2016i.e. accounting year ended June 30, 2016.

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 - - -

March 31,

- - - Rupees in '000 - - -

Relationship with

the Company

Nature of

transactions

period ended

11


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 April 14, 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 annualaudited financial statements of the preceding financial year, whereas, the condensedinterim profit and loss account, condensed interim cash flow statement and condensedinterim statement of changes in equity have been compared with the balances ofcomparable period of immediately preceding financial year.



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BANNU - bwm.com.pk

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