Annual Audited Report 2017
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__________________________________________________________________________ 1 Annual Report ____________________________________________________________ C O N T E N T S COMPANY INFORMATION ………………………………….. 3 MISSION ……………………………………………………….. 4 NOTICE OF ANNUAL GENERAL MEETING ………………. 5-6 DIRECTORS’ REPORT ………………………………………. 7-8 FINANCIAL SUMMARY ………………………………………. 9 STATEMENT OF ETHICS AND BUSINESS PRACTICES.. 10 AUDITORS’ REPORT TO THE MEMBERS ………………… 11 BALANCE SHEET ……………………………………………. 12 PROFIT AND LOSS ACCOUNT …………………………….. 13 STATEMENT OF COMPREHENSIVE INCOME ………….. 14 CASH FLOW STATEMENT …………………………………. 15 STATEMENT OF CHANGES IN EQUITY …………………. 16 NOTES TO THE FINANCIAL STATEMENTS ……………… 17-31 PATTERN OF SHAREHOLDING …………………………………. 32 FORM OF PROXY ……………………………………………. 2 __________________________________________________________________________ COMPANY INFORMATION CHIEF EXECUTIVE OFFICER : Mr. Muhammad Arshad Saeed BOARD OF DIRECTORS : Ch. Rahman Bakhsh Mrs. Salma Aziz Mr. Muhammad Musharaf Khan Ms. Kiran A. Chaudhry Mr. Kamran Ilyas Mr. Muhammad Ali Chaudhry CHIEF FINANCIAL OFFICER : Mr. Muhammad Ali Chaudhry COMPANY SECRETARY : Mr. Muhammad Javed AUDITORS : M/s RSM Avais Hyder Liaquat Nauman Chartered Accountants Lahore AUDIT COMMITTEE : Mr. Kamran Ilyas Chairman Mrs. Salma Aziz Member Mr. Muhammad Musharaf Khan Member HR - COMMITTEE : Mr. Kamran Ilyas Chairman Mr. Muhammad Ali Chaudhry Secretary Ms. Kiran A. Chaudhry Member BANKERS : National Bank of Pakistan Bank Alfalah Limited Askari Bank LImited Al Baraka Bank (Pakistan) Ltd. Faysal Bank Limited SHARE REGISTRAR : Corplink (Pvt.) Ltd. LEGAL ADVISORS : Mr. Shaukat Haroon (Advocate) Barrister Salman Rahim (Advocate High Court) Yousaf Islam Associates REGISTERED OFFICE : 36-A, Lawrence Road, Lahore UAN : (042) 111-767-676 WEBSITE : www.reshamtextile.com MILLS : 1.5 Kilometer Habibabad, Chunian Road, Tehsil Chunian, District Kasur. 3 Annual Report ____________________________________________________________ MISSION The management is committed to excellence in operations with the aim of achieving highest standards in product quality, customer satisfaction, Company growth, employees welfare and social responsibilities and is constantly striving to meet these objectives. 4 __________________________________________________________________________ NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 28th Annual General Meeting of the Shareholders of Resham Textile Industries Limited will be held on 28th October, 2017 at 11:00 a.m. at the Registered Office of the Company i.e. 36-A, Lawrence Road, Lahore to transact the following business. 1. To confirm the minutes of the last Meeting. 2. To receive, consider and adopt the audited accounts of the Company for the year ended 30 June 2017 together with the Directors’ and Auditors’ report thereon. 3. To elect 7 Directors as fixed by the Board of Directors for a term of 3 years commencing from October 28, 2017 in pursuance with the provisions of the Section 159(1) of the Companies Act 2017. The following are eligible and offer themselves for re-election/election:- 1. Ch. Rahman Bakhsh 5. Ms. Kiran. A. Chaudhry 2. Mrs. Salma Aziz 6. Mr. Muhammad Ali Chaudhry 3. Mr. Muhammad Arshad Saeed 7. Mr. Muhammad Musharaf Khan (Independent) 4. Mr. Kamran Ilyas 4. To approve the appointment of the auditors for the year ending June 30, 2018 and fix their remuneration. The retiring Auditors Messrs RSM Avais Hyder Liaquat Nauman, Chartered Accountants, Lahore being eligible, have offered themselves for re-appointment at present remuneration, however any shareholder is welcome to suggest any other option. 5. To transact such other business as may be placed before the meeting with the permission of the Chair. By Order of the Board (Muhammad Javed) Lahore: 06 October 2017. Company Secretary NOTES: 1. The Share Transfer Books of the Company will remain closed from 22 October 2017 to 28 October 2017 (both days inclusive). 2. A member entitled to attend and vote at the meeting may appoint another member of the Company as a proxy to attend and vote instead of him. A proxy form duly signed and stamped must be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for holding the meeting. 3. The account holders of CDC are requested to bring their original CNIC/ Passport for the purpose of identification at the meeting. 5 Annual Report ____________________________________________________________ 4. As directed by the SECP through its Circular No. EMD/D-II/Misc/./2009-1342 of April 4, 2013, dividend warrants cannot be issued without valid CNICs. In the absence of a shareholder’s valid CNIC, the company will be constrained to withhold dispatch of dividend to such shareholders. Those shareholders who have not yet submitted their valid CNICs are once again advised to provide attested copies of their valid CNICs with their folio numbers to the Company’s share Registrar if they hold physical shares, to ensure timely disbursement of dividend. 5. Members are requested to promptly notify the Company of any changes in their registered address. 6 __________________________________________________________________________ DIRECTORS’ REPORT It is my pleasure to present the Directors’ Report and the audited accounts for the year ended June 30, 2017. Performance Review Alhamdulillah, the year under review, though a very difficult year due to increasing cost of doing business and slump in the market, the company performed better due to concerted efforts of the entire team of executives, top management and entire Resham family including labour and the synergy so created led to increase in Net Sale by 11.12% at Rs.3,464,594,340 from Rs. 3,117,882,314 (s.p.l.y.) while gross profit increased by 60.24%. Selling and distribution expenses also increased by 145.41% at Rs.20,512,115 from Rs.8,358,319 (s.p.l.y.) due to aggressive sales and distribution policy and addition of new buyers. However, the administrative expenses were kept at the minimum and increased only by 1.99% at Rs.53,562,964 from Rs.52,519,389 (s.p.l.y.). Other operating expenses increased by 119.25% at Rs.5,274,874 from Rs.2,405,871 (s.p.l.y). Financial cost increased by 20.64% at Rs.27,512,296 from Rs.22,805,351 (s.p.l.y) mainly on account of higher cotton price and short crop due to which larger inventory of cotton had to be maintained. As a result of the above the profit for the year before taxation increased by 200.30% at Rs.52,239,743 from Rs.17,395,588 (s.p.l.y) and finally the Management is very happy to announce that the profit for year was recorded at Rs.95,328,822 from Rs.3,354,205 (s.p.l.y) which is excellent in view of the very adverse conditions in the market and increasing cost of doing business. The financial results in tabulated form are given below and details may be perused in other sections of this report: - 2017 2016 Rupees Rupees Sales - net 3,464,594 3,117,882 Cost of sales 3,307,392 3,019,780 Gross profit 157,202 98,102 Selling and distribution expenses 20,512 8,358 Administrative expenses 53,563 52,519 Other operating expenses 5,275 2,406 Finance Cost 27,512 22,805 106,862 86,089 50,340 12,013 Other income 1,900 5,382 Profit for the year before taxation 52,240 17,396 Provision for taxation 43,089 14,041 Profit for the year 95,329 3,354 7 Annual Report ____________________________________________________________ Acknowledgements The Directors take this opportunity to thank the Company’s Bankers, particularly National Bank of Pakistan, Bank Alfalah Limited, NIB bank Limited, Faysal Bank Limited, Al Baraka Bank (Pakistan) Limited and other financial Institutions for their confidence in the Company and strong financial support. The Directors would also like to particularly mention the dedication and devotion displayed by the executives and employees in performing their duties. For and on behalf of the Board Lahore: 06 October 2017 Muhammad Arshad Saeed (Chief Executive Officer) 8 __________________________________________________________________________ Financial Summary 2017 2016 2015 2014 2013 2012 BALANCE SHEET (Rupees in thousand) Paid up Share Capital 360,000 360,000 360,000 360,000 360,000 360,000 Unappropriated Profit 613,596 535,330 539,159 446,894 376,336 203,967 Total Equity 973,596 895,330 899,159 806,894 736,336 563,967 Surplus on Revaluation of Fixed Assets 202,102 218,156 236,394 257,360 132,850 144,907 Long Term Liabilities - - - - - 120,184 Deferred Liabilities 249,590 280,672 296,914 316,511 257,398 236,588 Long Term Advances - - 131 235 389 269 Current Liabilities 233,363 208,050 326,909 436,630 672,317 275,740 1,658,651 1,602,208 1,759,507 1,817,630 1,799,290 1,341,655 Represented by: Fixed Assets 1,097,230 1,156,630 1,218,378 1,289,573 1,019,514 893,579 Capital work in progress - 2,526 5,746 3,669 1,420 8,431 Other Assets 3,703 3,698 3,698 3,698 3,678 3,669 Current Assets 557,719 439,354 531,685 520,690 774,678 435,976 1,658,651 1,602,208 1,759,507 1,817,630 1,799,290 1,341,655 PROFIT AND LOSS Sales 3,464,594 3,132,476 3,395,806 4,051,203 3,501,701 3,245,032 Cost of Sales 3,307,392 3,019,780 3,148,835 3,775,254 2,994,130 2,867,911 Gross Profit 157,202 112,696 246,971 275,948 507,571 377,121 Operating Profit 50,340 40,200 166,721 194,539 410,689 318,221 Profit Before Taxation 52,240 17,395 138,316 140,176 349,455 232,531 Profit After Taxation 95,329 3,354 103,246 90,901 251,079 147,927 EPS 2.65 0.09 2.87 2.53 6.97 4.11 Dividend % 10 - 12 15 20 20 PERCENTAGE TO SALES Gross Profit % age 4.54 3.60 7.27 6.81 14.49 11.62 Profit Before Taxation % age 1.51 0.56 4.07 3.46 9.98 7.17 Profit After Taxation % age 2.75 0.11 3.04 2.24 7.17 4.56 Admin & Selling Expenses % age 2.14 2.41 2.00 1.71 2.07 1.82 9 Annual Report ____________________________________________________________ STATEMENT OF ETHICS AND BUSINESS PRACTICES This Statement of Ethics and Business Practices is intended to document the principles of conduct and ethics to be followed by Resham Textile Industries Limited (the "Company") and its employees, officers and directors.