HUSEIN INDUSTRIES LIMITED HUSEIN INDUSTRIES LIMITED HUSEIN INDUSTRIES LIMITED HUSEIN INDUSTRIES LIMITED CONDENSED INTERIM CONDENSED INTERIM CONDENSED INTERIM CONDENSED INTERIM FINANCIAL INFORMATION FOR THE FINANCIAL INFORMATION FOR THE FINANCIAL INFORMATION FOR THE FINANCIAL INFORMATION FOR THE PERIOD ENDED DECEMBER 31,2011 PERIOD ENDED DECEMBER 31,2011 PERIOD ENDED DECEMBER 31,2011 PERIOD ENDED DECEMBER 31,2011
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In the name of Allah the Most Merciful and the Most Benevolent
Directors of your company are pleased to present the half yearly financial statements and the Auditors
review report thereon to the members for the half year ended December 31, 2011.
The sales of your company was Rs. 230 Million for the half year under review as compared to Rs. 333
Million in the previous year. After accounting for all charges your company incurred loss after taxation of
Rs. 88 Million as compared to Rs. 69 Million in previous year.
During the half year under review the prices of inputs have shown upward trend. Energy shortage and
security and law and order problems are the main reasons for adverse economic conditions. However your
management is taking all steps to control these problems by efficient and economical operations.
Auditors have raised observations in their report on review of condensed interim financial information to
the members in respect of valuation of inventories, impairment tests of stores and spares, in this regard it
is clarified that the standard practice followed by the companyis to value the inventories, stores and spares
at lower of cost and net realizable value. However necessary exercise will be carried out and the results
would be incorporated in next annual financial statements of the Company.
Karachi: the
Your Directors also like to express thanks the assistance, support and cooperation given by various
Government Departments Regulatory Authorities, Shareholders, Customers, Suppliers and FinancialInstitutions.
On behalf of the Board
Aziz L. Jamal
Chairman & Chief Executives
As regards overdue export receivables which has not been realized it is stated that due to global recession
our export proceeds realization have been delayed and we now expect that the remittances would
commence in the near future.
We have negotiated with the bank which has agreed to extend maturity periods in order to coincide with
the projected cash flows of the Company. The Company is a going concern andyour directors are
committed to continue the business of the company.It is reiterated that the uncertainly as indicated in thereport on review of condensed interim financial information to the members is unlikely to materialize. The
uncertainly would have continued had the company would not have negotiated for restructuring of the
finances. Accordingly preparation of this condensed interim financial information on going concern basis
is justified.
Acknowledgement
The Management would like to place on record its appreciation for the continued dedication, hard work
commitment and loyalty of the executives, staff and workers engaged with the company at various levels.
Scope of review Scope of review Scope of review Scope of review
INDEPENDENT AUDITORS’ REPORT ON REVIEW OFINDEPENDENT AUDITORS’ REPORT ON REVIEW OFINDEPENDENT AUDITORS’ REPORT ON REVIEW OFINDEPENDENT AUDITORS’ REPORT ON REVIEW OFCONDENSED INTERIM FINANCIAL INFORMATION TO THE MEMBERSCONDENSED INTERIM FINANCIAL INFORMATION TO THE MEMBERSCONDENSED INTERIM FINANCIAL INFORMATION TO THE MEMBERSCONDENSED INTERIM FINANCIAL INFORMATION TO THE MEMBERS
We have reviewed the accompanying condensed interim balance sheet of HUSEINHUSEINHUSEINHUSEIN INDUSTRIESINDUSTRIESINDUSTRIESINDUSTRIES
LIMITEDLIMITEDLIMITEDLIMITED (the Company) as at December 31, 2011, and the related condensed interim profit and loss
These conditions along with the matters reported in Paragraphs (i) to (iii) above indicate theexistence of a material uncertainty that may cast significant doubt on the Company’s ability tocontinue as a going concern and therefore the Company may be unable to realize its assets anddischarge its liabilities in the normal course of business. The annexed interim financial information
iv. During the period, the Company has incurred loss after taxation amounting to Rs. 87.845 (Dec
2010: Rs. 69.126) million and its accumulated losses stand at Rs. 657.806 (Dec 2010: Rs. 254.809)
million eroding the shareholders’ equity to negative Rs. 225.547 (Dec 2010: positive Rs. 177.450)
million. Further, the turnover of the company has fallen by 31% in the current period as compared to
corresponding period and the Company has incurred gross loss of Rs. 66.919 million for the current
period as against gross profit of Rs. 43.911 million for the corresponding period. Moreover, as per
restructured financing arrangement with the lending bank, the company has to sell its properties to
pay off long term finance amounting to Rs. 953 million.
iii. Company’s trade debts as disclosed in Note 8 to the annexed interim financial information
include overdue export receivables Rs. 407.705 (June 2011: Rs. 410.294) million which has not yet
been realized during the current financial period. Furthermore, no provision has been made against
these receivables in this interim financial information. Accordingly, our conclusion regarding
realizability of these receivables could not made.
Other matter Other matter Other matter Other matter
In their review report dated March 12, 2011, the auditors expressed an adverse conclusion for
reasons same as mentioned in paragraphs (i) and (ii) above and also included emphasis of matterparagraphs regarding going concern assumption and unrealized exports receivables amounting to Rs.
405.134 million.
.
Our review indicates that, owing to the significance of the matters stated in paragraphs i to iv above
and the possible adjustments that may require but are not determined, the interim financial
information does not give a true and fair view of the financial position of the HUSEIN INDUSTRIESHUSEIN INDUSTRIESHUSEIN INDUSTRIESHUSEIN INDUSTRIES
LIMITEDLIMITEDLIMITEDLIMITED as at December 31, 2011 and of its financial performance and its cash flows for the six-month period then ended in accordance with approved accounting standards as applicable in
Pakistan.
The interim financial information of the Company for the six months period ended December 31,
2010 and for the year ended June 30, 2011 were reviewed and audited by another chartered
1 11 1 NATURE AND STATUS OF BUSINESS NATURE AND STATUS OF BUSINESS NATURE AND STATUS OF BUSINESS NATURE AND STATUS OF BUSINESS
2 22 2 BASIS OF PREPARATION BASIS OF PREPARATION BASIS OF PREPARATION BASIS OF PREPARATION
2.1 2.1 2.1 2.1
2.2 2.2 2.2 2.2
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
FOR THE HALF YEAR ENDED DECEMBER 31, 2011 FOR THE HALF YEAR ENDED DECEMBER 31, 2011 FOR THE HALF YEAR ENDED DECEMBER 31, 2011 FOR THE HALF YEAR ENDED DECEMBER 31, 2011
The Company was incorporated in Pakistan on May 25, 1953 as a Public Limited Company underthe repealed Companies Act 1913( now Company Ordinance 1984) in the name of Husein TextileMills Limited, which was changed to Husein Industries Limited in 1964. Its shares are listed onKarachi Stock Exchange in Pakistan. The major activities of the Company are textilemanufacturing, producing cotton and polyester yarn, cloth and garments, which are marketedwithin, and outside Pakistan. The registered office of the Company is situated at HT-8,LandhiIndustrial Area, Karachi.
These interim financial information of the Company for the half year period ended December 31,
2011 are unaudited and have been prepared in accordance with the requirements of the
International Accounting Standard 34 - Interim Financial Reporting and provisions of and directives
issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of
or directives issued under the Companies Ordinance, 1984 have been followed.
The figures of condensed interim profit and loss account for the quarters ended December 31, 2010and 2011 have not been reviewed by the auditors of the Company as they have reviewed the
2.3 2.3 2.3 2.3
2.4 2.4 2.4 2.4
2.5 2.5 2.5 2.5
3 33 3 SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
3.1 3.1 3.1 3.1
3.2 3.2 3.2 3.2
, .information do not include all the information and disclosures required in annual financialstatements, and should be read in conjunction with Company's annual financial statements for theyear ended June 30, 2011.
These condensed interim financial information have been prepared under the historical cost
convention, except as otherwise disclosed in these notes.
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.
These interim financial information are presented in Pakistani Rupees which is also the Company'sfunctional currency and figures presented in these interim financial information have been rounded
off to the nearest thousand of Rupees.
The comparative balance sheet presented has been extracted from annual financial statements forthe year ended June 30, 2011, whereas comparative condensed profit and loss account, condensedcomprehensive statement of income, condensed cash flow statement and condensed statement of changes in equity have been extracted from the unaudited interim financial information for the sixmonths ended December 31, 2010.
The accounting policies, applied in the preparation of these interim financial information are the
same as those applied in the preparation of the annual audited financial statements of the Company
5 55 5 PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT PROPERTY, PLANT AND EQUIPMENT
The Company's financial risk management objectives and policies are consistent with thosedisclosed in the financial statements as at and for the year ended June 30, 2011.
The preparation of these interim financial information in conformity with approved accountingstandards as applicable in Pakistan 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 arebased on historical experience and other factors, including reasonable expectations of future events.Revision to accounting estimates are recognised prospectively commencing from the period of revision.
In preparing these interim financial information, the significant judgments made by management inapplying the Company’s accounting policies and the key sources of estimation and uncertainty werethe same as those that applied to the financial statements as at and for the year ended June 30,2011.
Opening written down value 666,793666,793666,793666,793 391,483 Additions during the period / year 5.1 2,4172,4172,4172,417 150Disposal during the period / year ---- (15,393)Revaluation of free and lease hold landduring the year ---- 333,715Depreciation charge for the period / year (20,210) (20,210) (20,210) (20,210) (43,162)Closing written down valueClosing written down valueClosing written down valueClosing written down value 649,000649,000649,000649,000 666,793
5.1 5.1 5.1 5.1 Additions during the period / year Additions during the period / year Additions during the period / year Additions during the period / year
Building on lease hold land 147147147147 -
Plant and machinery 2,2702,2702,2702,270 150 2,4172,4172,4172,417 150
Exports Exports Exports Exports Considered good 455,830455,830455,830455,830 407,02 Considered doubtful 3,2653,2653,2653,265 3,26
459,095459,095459,095459,095 410,29
Deferred tax asset as at December 31, 2011 to the extent of 74.308 million (June 2011: nhas not been recognized as the Company does not expect to generate the sufficient taxabprofits against which such benefits can be utilized.
- - - - (Rupees in '000) - - - - - - - (Rupees in '000) - - - - - - - (Rupees in '000) - - - - - - - (Rupees in '000) - - -
Considered good 220,932220,932220,932220,932 307,41 Considered doubtful 11,36211,36211,36211,362 11,36
Provision against debts considered doubtful (14,627)(14,627)(14,627)(14,627) (14,62
676,762676,762676,762676,762 714,39
9999 LOANS AND ADVANCES - CONSIDERED GOOD LOANS AND ADVANCES - CONSIDERED GOOD LOANS AND ADVANCES - CONSIDERED GOOD LOANS AND ADVANCES - CONSIDERED GOOD
LoansLoansLoansLoansto employees 1,6881,6881,6881,688 1,71 to contractors 241241241241 24
1,9291,9291,9291,929 1,96
Advances Advances Advances Advancesagainst expenses 962962962962 55 to employees 1,1281,1281,1281,128 1,19 to contractors 653653653653 - to suppliers 11,84611,84611,84611,846
11 11 11 11 LONG TERM FINANCE LONG TERM FINANCE LONG TERM FINANCE LONG TERM FINANCE
- Secured - Secured - Secured - Secured
From a banking companyFrom a banking companyFrom a banking companyFrom a banking company
Export Oriented Projects - 24,677
Term finance 11.1 1,468,8751,468,8751,468,8751,468,875 1,470,313
1,468,8751,468,8751,468,8751,468,875 1,494,990
Current and overdue portion shown under current liabilities (21,716)(21,716)(21,716)(21,716) (54,093) 1,447,1591,447,1591,447,1591,447,159 1,440,897
11.1 11.1 11.1 11.1
This represents share premium received in the preceding years and is held for utilization of purposesas stated in Section 83 of the Companies Ordinance, 1984.
As per restructuring agreement with the bank on May 11, 2011, this amount of Term Finance isrepayable in monthly instalments of different amounts over the period of ten years ranging from Rs.
200,000 to Rs. 5,081,750 including lump sum payments of Rs. 953 million on sale of properties of the
Company in years 2013 and 2014 . Further, no markup shall be charged till June 2012 and
thereafter, markup would be charged at rate applicable on 3 months Treasury Bills prevailing from
time to time. The other terms of Term Finance are same as disclosed in the financial statements of
December 31,December 31,December 31,December 31, June 30,
12 12 12 12 SHORT TERM BORROWING SHORT TERM BORROWING SHORT TERM BORROWING SHORT TERM BORROWING
- Secured - Secured - Secured - Secured
From Banking CompanyFrom Banking CompanyFrom Banking CompanyFrom Banking Company
Running finance under markup arrangements Running finance under markup arrangements Running finance under markup arrangements Running finance under markup arrangements
The facility has a sanctioned limit of Rs. 50 million and carries markup at the rate three monthsKIBOR. The facility is secured against hypothecation of raw material, semi finished, finished goods,receivables and machinery, equitable mortgage on properties of the Company and personal
guarantees of Chief Executive and directors of the Company.
Company's all matured and overdue financing has been restructured on May 11, 2011 and at thetime of restructure, this overdue balance was required to be paid by the Company which could not bepaid during the period.