nine month-2018-bwm-new 25-4-18

BIBOJEE GROUP

WOOLLEN MILLS LIMITED

Nine MonthAccounts

March, 2018

BANNU

CONTENTS

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 ............................8-12

CONTENTS

BANNU WOOLLEN MILLS LIMITED

1


COMPANY'S PROFILE

Board Of Directors Chairman

Chief Executive

Mr. Raza Kuli Khan KhattakMrs. Shahnaz Sajjad AhmadMr. Ahmad Kuli Khan KhattakMr. Mushtaq Ahmad Khan, FCAMr. Gohar Ayub KhanSyed Zubair Ahmed Shah (NIT)Mr. Ahmad Zeb Khan (Independent)Mr. Muhammad Kuli Khan KhattakMr. Abdul Rehman Qureshi

Audit Committee Mr. Ahmad Zeb Khan ChairmanMemberMr. Ahmad Kuli Khan Khattak

Mr. Abdul Rehman Qureshi Member

Human Resource &

Remuneration Committee Mrs. Shahnaz Sajjad AhmadMr. Ahmad Kuli Khan Khattak

Chairman

Member / CEOMember

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] Site "www.bwm.com.pk "

Mr. Ahmad Zeb Khan

2

DIRECTORS’ REPORT TO THE SHAREHOLDERS

It is our pleasure to present the Directors' review on behalf of the Board of Directors together with the un-audited condensed interim financial information of the Company for the quarter and nine months ended March 31, 2018.

FINANCIAL PERFORMANCEWe are pleased to report that your Company has earned net profit of Rs. 39.797 million (March 31, 2017: Rs. 76.328 million) after incorporation of share of (loss) / profit of Associated Companies and taxation. The net sales decreased by 3.34% during the period under review with respect to corresponding period of last year.

FINANCIAL RESULTSThese are summarized below:

During the period, the Company has earned profit before tax of Rs. 51.498 million (March 31, 2017: Rs. 106.101 million), which included share of loss of Associated Companies amounting Rs. 13.243 million (March 31, 2017: profit of Rs. 5.740 million).

The management has revised the sales policy of the Company after considering the market conditions and current position of un-lifted stock (woollen& lawn fabric) available at mills & other go-downs. The budget of current financial year was mainly dependent on the sales of lawn fabric; however, the sales did not reach the level anticipated by the management. The management is however, confident that sales revenue of summer products will increase in the last quarter of the current financial year and major dealers have also committed to lift the woollen fabric stock, which will resultantly, increase the profitability and sales revenue of the Company for the current year.

FUTURE OUTLOOKThe outlook of the business during the remaining last quarter of the financial year appears challenging owing to the uncertain political and the law and order situation as general elections are expected to be held during that time. The imported wool prices are also rising and a 20% increase was seen in last nine months. The increased fuel prices and the devaluation of the rupee resulting in increase in forex rates will also negatively affect the profits of the Company for the year ending June 30, 2018.

We are also endeavoring to develop new products of pre-winter season to increase the sales revenue of the Company.

THANKS AND APPRECIATIONThe management takes this opportunity to thank customers, shareholders, suppliers, bankers and other stakeholders. We also appreciate and acknowledge the continued support, commitment, loyalty and hard work of our employees.


For & on behalf of the Board of Directors,

Shahnaz Sajjad Ahmad

Chairman / Director Chief Executive / DirectorRaza Kuli Khan Khattak

Rawalpindi17 April, 2018

Quarter ended

Nine months period ended

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

2018

2017

2018

2017

-

-

-

-

-

-

-

-

-

-

Rupees in '000 -

-

-

-

-

-

-

-

-

-

Sales – net

24,795

47,505

674,439

697,747 Gross profit

8,842

15,312

219,857

225,390

(Loss) / profit before taxation

(23,783)

(7,729)

51,498

106,101

(Loss) / profit after taxation

(10,117)

(5,118)

39,797

76,328

-

-

-

-

-

-

-

-

-

-

-

Rupees -

-

-

-

-

-

-

-

-

-

-

(Loss) / earnings per share

-

basic and diluted

(1.06)

(0.54)

4.19

8.03

3


4

Condensed Interim Statement of Financial Position As At March 31, 2018

Mar. 31, June 30,

2018 2017

Un-audited AuditedASSETS NoteNon-current assets

Property, plant and equipment 6 1,099,597 1,119,852Intangible assets 411 112Investments in Associated Companies 7 360,570 369,131Advances 675 937

Security deposits 2,994 3,3441,464,247 1,493,376

Current assetsStores and spares 74,480 78,905Stock-in-trade 635,475 617,366Trade debts 295,397 184,080Current portion of advances 943 916Advances to employees - unsecured, considered good 3,999 14,363Advance payments 525 10,428Trade deposits and prepayments 8 6,502 1,682Sales tax refundable 5,045 5,975Income tax refundable, advance tax

and tax deducted at source 13,376 31,455Cash and bank balances 12,589 12,709

1,048,331 957,879

Total assets 2,512,578 2,451,255

EQUITY AND LIABILITIESShare capital and reserves

Authorized capital 200,000 200,000

Issued, subscribed and paid-up capital 95,063 95,063Capital reserves

Share premium 19,445 19,445Surplus on revaluation of

property, plant and equipment 814,024 819,833Revenue reserve 904,055 865,055Unappropriated profit 51,020 87,263

Shareholders' equity 1,883,607 1,886,659

LIABILITIESNon-current liabilities

Staff retirement benefits - gratuity 213,440 203,118Deferred taxation 69,153 75,492

282,593 278,610Current liabilities

Trade and other payables 113,122 105,866Unpaid dividend 4,569 3,219Unclaimed dividend 3,302 2,791Accrued mark-up 4,368 1,035Short term finances 201,198 140,330Taxation 19,819 32,745

346,378 285,986Total liabilities 628,971 564,596

Contingencies and commitments 9

Total equity and liabilities 2,512,578 2,451,255

Rupees in '000


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

Shahnaz Sajjad AhmadChief Executive

A. R. Tahir Chief Financial Officer

Ahmad Kuli Khan KhattakDirector

5

For the Quarter and Nine Months Period Ended March 31, 2018

Mar. 31, Mar. 31, Mar. 31, Mar. 31,Note 2018 2017 2018 2017

Sales - net 24,795 47,505 674,439 697,747

Cost of sales (15,953) (32,193) (454,582) (472,357)

Gross profit 8,842 15,312 219,857 225,390

Distribution cost (11,911) (4,706) (61,658) (37,771)

Administrative expenses (20,120) (19,440) (76,719) (77,003)

Other income 272 621 1,973 2,369

Other expenses 3,542 601 (5,413) (9,598)

(Loss) / profit from operations (19,375) (7,612) 78,040 103,387

Finance cost (4,408) (117) (13,299) (3,026)

(23,783) (7,729) 64,741 100,361

Share of (loss) / profit of

Associated Companies - net 7 0 0 (13,243) 5,740

(Loss) / profit before taxation (23,783) (7,729) 51,498 106,101

Taxation 10 13,666 2,611 (11,701) (29,773)

(Loss) / profit after taxation (10,117) (5,118) 39,797 76,328

Other comprehensive income 0 0 0 0

Total comprehensive (loss) / income

for the period (10,117) (5,118) 39,797 76,328

(Loss) / earnings per share - basic and diluted (1.06) (0.54) 4.19 8.03


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

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

Quarter ended Nine months period ended

Condensed Interim Statement of Profit and Loss Account (Un-Audited) and Other Comprehensive Income





6

Mar. 31, Mar. 31,

2018 2017

Cash flow from operating activities

Profit for the period - before taxation and net share

of (loss) / profit on investments in Associated Companies 64,741 100,361

Adjustments for non-cash charges and other items:

Depreciation 29,300 30,400

Amortization of intangible assets 25 29

Staff retirement benefits - gratuity (net) 10,322 13,320

Mark-up on bank deposits (494) (1,066)

Finance cost 13,299 3,026

Payable balances written-back (705) 0Gain on sale of vehicle (187) (491)

Profit before working capital changes 116,301 145,579

Effect on cash flow due to working capital changes

(Increase) / decrease in current assets

Stores and spares 4,425 7,082

Stock-in-trade (18,109) (16,280)

Trade debts (111,317) (119,031)

Advances 10,599 2,582

Advance payments 9,903 (42)

Trade deposits and prepayments (4,820) (2,592)

Sales tax refundable 930 5,061

Increase in trade and other payables 8,748 12,809

(99,641) (110,411)

Cash generated from / (used in) operations 16,660 35,168

Taxes paid (15,111) (26,540)

Net cash generated from / (used in) operating activities 1,549 8,628

Cash flow from investing activities

Fixed capital expenditure (9,067) (15,857)

Sale proceeds of vehicle 210 1,209

Intangible assets acquired (323)

0

Security deposits 350 50

Dividend received on investments 0 1,949

Mark-up received on bank deposits 494 1,066

Net cash used in investing activities (8,336) (11,583)

Cash flow from financing activities

Demand finances - repaid 0 (2,500)

Short term finances - net 60,868 0

Dividend paid (44,235) (44,748)

Finance cost paid (9,966) (2,968)

Net cash used in financing activities 6,667 (50,216)

Net decrease in cash and cash equivalents (120) (53,171)

Cash and cash equivalents - at beginning of the period 12,709 82,842

Cash and cash equivalents - at end of the period 12,589 29,671


Condensed Interim Statement of Cash flows (Un-Audited)

For the Nine Months Period Ended March 31, 2018

Nine months period ended

- - - Rupees in '000 - - -





7

Revenue

Balance as at June 30, 2016 (audited) 95,063 19,445 827,453 833,055 1,679,953 79,923 1,854,939

Transfer 0 0 0 32,000 32,000 (32,000) 0

Transaction with owners:

Cash dividend at the rate of Rs.5

per ordinary share for the year

ended June 30, 2016 0 0 0 0 0 (47,531) (47,531)

Total comprehensive income for

the period ended March 31, 2017 0 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 (6,381) 0 (6,381) 6,381 0

Effect of items directly credited in

equity by Associated Companies 0 0 0 0 0 3,946 3,946

Balance as at March 31, 2017(un-audited) 95,063 19,445 821,072 865,055 1,705,572 87,047 1,887,682

Balance as at June 30, 2017 (audited) 95,063 19,445 819,833 865,055 1,704,333 87,263 1,886,659

Transfer 0 0 0 39,000 39,000 (39,000) 0

Transaction with owners:

Cash dividend at the rate of Rs.5

per ordinary share for the year

ended June 30, 2017 0 0 0 0 0 (47,531) (47,531)

Total comprehensive income for the

period ended March 31, 2018 0 0 0 0 0 39,797 39,797

Transfer from surplus on revaluation

of property, plant and equipment on

account of incremental depreciation for

the period - net of deferred taxation 0 0 (5,809) 0 (5,809) 5,809 0

Effect of items directly credited in

equity by Associated Companies 0 0 0 0 0 4,682 4,682

Balance as at March 31, 2018

(un-audited) 95,063 19,445 814,024 904,055 1,737,524 51,020 1,883,607


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

Condensed Interim Statement of Changes in Equity (Un-Audited)For the Nine Months Period Ended March 31, 2018

Share

capitalTotal

Share

premiumGeneral

Sub-total

ReservesUnapprop-

riated

profit

Capital

Revaluation

surplus





8

1. Legal Status and Operations

2. Basis of Preparation

2.1

2.2

2.3

3. Accounting Policies

4. Changes in Accounting Standards and Interpretations

4.1

(a)

(b)

4.2

Standards, interpretations and amendments to published approved accounting

standards that are effective and relevant

Following amendments to existing standards and interpretations have been published and aremandatory for accounting periods beginning on or after January 01, 2017, and are consideredto be relevant to the Company’s operations.

Amendments to IAS 12, ‘Income taxes’ in relation to recognition of deferred tax asset forunrealized losses clarify how to account for deferred tax asset related to debt instrumentsmeasured at fair value. These amendments do not have any impact on the Company’sfinancial statements.

Notes to the Condensed Interim Financial Information (Un-Audited)

For the Nine Months Period Ended March 31, 2018

Bannu Woollen Mills Ltd. (the Company) was incorporated in Pakistan as a Public Company inthe year 1960 under the Companies Act, 1913 (now the Companies Act, 2017) and its sharesare quoted on Pakistan Stock Exchange Ltd. The Company is principally engaged inmanufacture and sale of woollen yarn, cloth and blankets. The Company's registered officeand Mills are located at D.I.Khan Road, Bannu.

The accounting policies and methods of computation adopted in preparation of thiscondensed interim financial information are the same as those applied in preparation offinancial statements of the Company for the year ended June 30, 2017.

This condensed interim financial information is being submitted to the shareholders asrequired by section 237 of the Companies Act, 2017.

Amendments to IAS 7, ‘Statement of cash flows’ require disclosures that enable users offinancial statements to evaluate changes in liabilities arising from financing activities, includingboth changes arising from cash flow and non-cash changes. The amendments only affectdisclosures in the Company’s financial statements.


standards that are effective but not relevant

There are certain new standards, amendments to approved accounting standards and newinterpretations that are mandatory for accounting periods beginning on or after January 01,2017, but are considered not to be relevant or have any significant effect on the Company'sreporting and are, therefore, not disclosed in this condensed interim financial information.

These condensed interim financial statements have been prepared in accordance with theaccounting and reporting standards as applicable in Pakistan for interim financial reporting.The accounting and reporting standards as applicable in Pakistan for interim financialreporting comprise of:

- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by theInternational Accounting Standards Board (IASB) as notified under the Companies Act, 2017;and

- Provisions of and directives issued under the Companies Act, 2017.

Where the provisions of and directives issued under the Companies Act, 2017 differ with therequirements of IAS 34, the provisions of and directives issued under the Companies Act,2017 have been followed.


9

4.3

(a)

(b)

5. Accounting Estimates, Judgments and Financial Risk Management

6. Property, Plant and Equipment Un-audited AuditedMar. 31, June 30,

2018 2017Note

Operating fixed assets - tangible 6.1 1,096,098 1,113,060

Capital work-in-progress 3,499 6,792

1,099,597 1,119,852

6.1 Operating fixed assets

Book value at beginning of the period / year 1,113,060 1,121,695

Additions during the period / year 6.2 12,360 33,090

Book value of disposals - cost Rs.1.001 million (June 30, 2017: Rs.3.137 million) (22) (787)

Depreciation charge for the period / year (29,300) (40,938)

Book value at end of the period / year 1,096,098 1,113,060

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 recognized prospectively commencing

from the period of revision.

IFRS 15 ‘Revenue from contracts with customers’ replaces the previous revenue standards:IAS 18 (Revenue), IAS 11 (Construction contracts) and the related interpretations on revenuerecognition. The new standard is based on the principle that revenue is recognized whencontrol of a good or service transfers to a customer – so the notion of control replaces theexisting notion of risks and rewards. The standard permits a modified retrospective approachfor the adoption. Under this approach, entities will recognize transitional adjustments inretained earnings on the date of initial application, i.e. without restating the comparativeperiod. They will only need to apply the new rules to contracts that are not completed as of thedate of initial application.

- - - Rupees in '000 - - -

Judgments and estimates made by the management in the preparation of this condensedinterim financial information are the same as those that were applied to financial statementsas at and for the year ended June 30, 2017.

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, 2017.


standards that are not yet effective but relevant

The following are the new standards, amendments to existing approved accounting standardsand new interpretations that will be effective for the periods beginning July 01, 2018 that mayhave an impact on the financial statements of the Company.

IFRS 9 ‘Financial instruments’, this standard replaces the guidance in IAS 39. It includesrequirements on the classification and measurement of financial assets and liabilities; it alsoincludes an expected credit losses model that replaces the current incurred loss impairmentmodel.

The management is in the process of assessing the impact of changes laid down by thesestandards on its financial statements.


10

6.2 Additions to operating fixed assets, including transfers Un-audited Auditedfrom capital work-in-progress, during the period / year: Mar. 31, June 30,

2018 2017

- factory buildings on freehold land 2,081 762

- plant and machinery 6,045 30,386

- weighment & material handling equipment 0 108

- tools & equipment 0 15

- furniture & fixtures 575 354

- electric fittings 485

187

- office equipment 101

172

- computers and accessories 1,168 1,106

- vehicles 1,905

0

12,360 33,090

7. Investments in Associated Companies - Quoted

Babri Cotton Mills Ltd. (BCM)

144,421 ordinary shares of Rs.10 each - cost 7.2 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 22,651 23,040

Loss for the period / year - net of taxation (3,024) (1,171)

Share of other comprehensive income - net of taxation 0 286

21,259 23,787

Janana De Malucho Textile Mills Ltd. (JDM)

1,559,230 ordinary shares of Rs.10 each - cost 7.2 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 321,768 322,239

Dividend received 0 (1,949)

Loss for the period / year - net of taxation (10,219) (2,751)

Share of other comprehensive income - net of taxation 0 43

339,311 345,344

360,570 369,131

7.1

7.2

7.3 The management intends to carry-out impairment testing of its investments in BCM and JDMas at June 30, 2018.

Although the Company has less than 20% voting rights in BCM as at March 31, 2018 andJune 30, 2017, it is presumed that the Company has significant influence over BCM due tomajority representation on the board of directors of BCM.

- - - Rupees in '000 - - -

Market values of the Company's investments in BCM and JDM as at March 31, 2018 wereRs.7.221 million (June 30, 2017: Rs.11.698 million) and Rs.154.504 million (June 30, 2017:Rs.155.923 million) respectively.


11

8. Trade Deposits and Prepayments

9. Contingencies and Commitments

9.1 Contingencies

Un-audited AuditedMar. 31, June 30,

2018 20179.2 Commitments in respect of:

- letters of credit for purchase of raw materials

and stores & spares 26,155

9,781

10. TAXATION

Mar. 31, Mar. 31, Mar. 31, Mar. 31,2018 2017 2018 2017

- current (9,821) (909) 19,090 32,476

- prior year 0 0 (1,050) 344

- deferred (3,845) (1,702) (6,339) (3,047)

(13,666) (2,611) 11,701 29,773

10.1

11. Transactions with Related Parties

11.1

2018 2017

(i) Associates - dividend received 0 1,949

- dividend paid 16,192 16,192

- office rent paid 17,085 1,050

- expenses shared 1,421 5,276

(ii) Key management - remuneration and personnel - restated other benefits 66,191 65,173

11.2 Period / year-end balances are as follows:

Payable to Gammon Pakistan Ltd. grouped under trade and other payables 0 113

Receivable from Gammon Pakistan Ltd. grouped under trade deposits and prepayments 4,062

0

- - - Rupees in '000 - - -

March 31,

Relationship Nature of transaction

period ended

Nine months

Executive means an employee, other than the chief executive and directors, whose basicsalary exceeds twelve hundred thousand rupees in a financial year.

Significant transactions with related parties during the period are as follows:

- - - Rupees in '000 - - -

Period-end balance includes advance building rent amounting Rs.4.062 million paid toGammon Pakistan Ltd. (an Associated Company).

Income tax assessments of the Company have been completed upto the tax year 2017 i.e.accounting year ended June 30, 2017.

There is no significant change in the status of contingencies during the current period asdisclosed in the audited financial statements of the Company for the year ended June 30,2017.

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

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

Nine months period endedQuarter ended


12. Corresponding Figures

12.1

12.2

Reclassification from component Reclassification from component AmountRs. in '000

Trade and other payables

- Unclaimed dividend

Unclaimed dividend

Unpaid dividend

2,791

Share capital and reservesSurplus on revaluation of property, plant and equipment - Capital reserves

- Surplus on revaluation of property, plant and equipment 819,833

13. Date of Authorization for Issue

This condensed interim financial information was approved and authorized for issue by theBoard of Directors of the Company on April 17, 2018.

In order to comply with the requirements of IAS 34 'Interim financial reporting', the condensedinterim balance sheet has been compared with the balances of annual audited financialstatements of the preceding financial year, whereas, the condensed interim profit and lossaccount, condensed interim cash flow statement and condensed interim statement of changesin equity have been compared with the balances of comparable period of immediatelypreceding financial year.

Corresponding figures have been re-arranged and re-classified, wherever necessary, for thepurposes of comparison; however, no material significant reclassification have been madeother than disclosed below:

12


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nine month-2018-bwm-new 25-4-18

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