Saif Textile Mills Limited 29th Annual Report 2018 Saif Group 0335-5557717 0335-5557717 DESIGN MEDIA INC. DESIGN MEDIA INC. Saif Textile Mills Limited 3rd Floor, City Centre, Plot#40, Main Bank Road, Certified ISO 9001:2008 Saddar Cantt., Pawalpindi by: and Produced Designed by: and Produced Designed Certified ISO 14001:2004 Saif Group Tel: +92-51-5700824-8, Cell: +92-300-5000395 Entity rating of saif textile mills limited Long Term A- Short Term A2 Credit rating agency The Pakistan Credit Rating Agency Limited Contents PATTERN OF 03 CORPORATE INFORMATION 28 SHAREHOLDINGS Statement OF COMPLIANCE 04 VISION AND MISSION STATEMENT 32 WITH THE (CODE OF Corporate Governance) REGULationS, 2017 06 KEY PERFORMANCE INDICATORS INDepenDENT AUDitor’S 34 Report TO THE MEMBERS INDEPENDENT AUDITOR’S REVIEW 07 GeoGrapHicaL SpreaD REPORT ON THE STATEMENT 40 OF COMPLIANCE CONTAINED IN QUALITY Statement, OUR THE LISTED COMPANIES ( CODE 08 proDUctS AND CUStomerS OF CORPORATE GOVERNANCE ) REGULATIONS, 2017 09 ORGANIZation CHart 42 Statement OF FINANCIAL POSITION NOTICE OF 29TH ANNUAL 10 GENERAL MEETING 44 Statement OF Profit OR LoSS 13 CHAIRMAN’S REVIEW REPORT Statement OF OTHER 45 CompreHENSIVE Income DIRECTOR’S REPORT TO THE 14 SHAREHOLDERS 46 Statement OF CASH FLowS Corporate SociaL 23 RESponSIBILITY 47 Statement OF CHANGES IN EQUITY HORIZontaL & VERTICAL 24 ANALYSIS 48 NoteS to THE FINANCIAL StatementS 26 GrapHicaL ANALYSIS 96 PROXY FORM corporate INFORMATION BOARD OF DIRECTORS BANKERS Osman Saifullah Khan Chairman/ Director Allied Bank Limited Hoor Yousafzai Director Askari Bank Limited Assad Saifullah Khan Director Bank Alfalah Limited Jehannaz Saifullah Khan Director Dubai Islamic Bank Pakistan Limited Faisal Saifullah Khan Director Faysal Bank Limited Rana Muhammad Shafi Director Habib Bank Limited Muhammad Danish Director Industrial and Commercial Bank of China Limited Zaheen-ud-Din-Qureshi Chief Executive JS Bank Limited MCB Bank Limited AUDIT COMMITTEE Meezan Bank Limited Muhammad Danish Chairman National Bank of Pakistan Hoor Yousafzai Member Soneri Bank Limited Assad Saifullah Khan Member Summit Bank Limited HR & REMUNERATION COMMITTEE The Bank of Punjab Muhammad Danish Chairman The Bank of Khyber Hoor Yousafzai Member United Bank Limited Assad Saifullah Khan Member HEAD OFFICE City Centre Plaza CHIEF FINANCIAL OFFICER 3rd Floor Plot # 40 Main Bank Road Saddar Nouman Ahmad Rawalpindi COMPANY SECRETARY Telephone: +92-51-5700824-5700825-26 Sabir Khan Fax: +92-51-5700829 Email: [email protected] HEAD OF INTERNAL AUDIT REGISTERED OFFICE Fahad Talal APTMA House, Tehkal Payan, Jamrud Road, LEGAL ADVISOR Peshawar Dr. Pervez Hassan Telephone: +92-91-5843870, 5702941 Hassan & Hassan, Advocates Fax: +92-91-5840273 Salahuddin Saif & Aslam Email: [email protected] (Attorney’s at Law) SHARES REGISTRAR M/s Hameed Majeed Associates (Pvt.) Ltd. AUDITORS HM House, 7-Bank Square, Lahore M/s Shinewing Hameed Chaudhri & Co. Telephone: +92-42-37235081-37235082 Chartered Accountants Fax: +92-42-37358817 HM House, 7-Bank Square, Lahore Email: [email protected] MILLS Industrial Estate, Gadoon Amazai, District Swabi Telephone: +92-0938-270313, 270429 Fax: +92-0938-270514 Email: [email protected] CYBER www.saiftextile.com Annual Report 2018 3 Vision To attain market leadership through unmatched quality, a diverse and unique product mix, empowered employees, world class systems, and the highest ethical and professional standards. 4 Saif Textile Mills Limited Mission • Give our shareholders a competitive return on their investment through market leadership, sustainable business growth and sound financial management. • Earn and sustain the trust of our stakeholders through efficient resource management. • Provide the highest quality products and services consistent with customer needs and continue to earn the respect, confidence and goodwill of our customers and suppliers. • Foster a culture of trust and openness in order to make professional life at the Saif Textile Mills Limited a stimulating and challenging experience for all our people. • Strive for the continuous development of Pakistan while adding value to the textile sector. Annual Report 2018 5 Net Sales Revenue Rs. 7,852 Million Gross Profit Operating Profit Rs. 855 Rs. 512 Million Million Key performance Profit before tax indicators ebitda Rs. 50 Rs. 756 Million Million Rs. 1.74 Earning per Share 6 Saif Textile Mills Limited Geographical Spread Swabi Net Sales Revenue Faisalabad Rs. 7,852 Manufacturing Plant Million Major Local Market Gross Profit Operating Profit Karachi International Market Rs. 855 Rs. 512 Million Million Profit before tax ebitda Rs. 50 Rs. 756 Million Million Rs. 1.74 Earning per Share Annual Report 2018 7 quality statement, our products and customerS Quality Statement We strive to manufacture quality yarn as per our customer’s requirement. This is achieved by: Our commitment to quality Extensive process monitoring and Training of personnel Our Products Our products dyed yarns, melange yarns, special yarns for knitting and weaving and surgical cotton. Accru Yarn Saif Textile is one of few largest fancy yarns manufacturing company in Pakistan. Our passion for fancy yarn has made us a trendsetter in this industry. We are constantly searching throughout the world to find ideas for new yarns, with various cottons & fibers to lead the industry with our innovative and top quality products. Saif Textile Mills can deliver yarns fully palletized, as well as Soft wound yarn on Dye/Perforated plastic cones with the option of 4° 20’ and 0° cylindrical cone angles. All yarns are Automatically Palletized (Sangrato, Italy), Sequentially contamination controlled – Joss Vision Shield and Loptex, Loepfe Zenit Yarn cleared. Dyed Yarn Saif Textile also offers wide range of dyed yarns, produced and dyed with state of the art machinery from Thiese Germany with highly automated operations, automatic dyestuff machine from Date Color, Yarn dyeing shades are electronically measured by using state of the art spectrophotometers. Melange Yarn Saif Textile focus on the supply of top dyed melange yarn keeping in view latest trends and fashion, care for environment and technology. Surgical Cotton Surgical Cotton is being supplied to various local and international customers dealing with healthcare products. Our Customers Local (Karachi, Lahore, Multan and Faisalabad) Export (Turkey, Poland, Germany, Geneva, Tajikistan and Rassia) 8 Saif Textile Mills Limited organization chart Shareholders Board of Directors HR & Chief Audit Remuneration Executive Committee Committee Officer Chief Company Internal COO / CFO Secretary Auditor Operations Sales After Sales Accounts Finance Production, Supply Information HR & Production Planning & Chain Technology Administration Control Commercial Engineering & Planning & Projects Annual Report 2018 9 NOTICE OF 29th ANNUAL GENERAL MEETING NOTICE is hereby given that the 29th Annual may include but not limited to office General Meeting of Saif Textile Mills Limited will rents, administrative salaries, utilities In shaa Allah be held on Friday October 26, 2018 expenses, repair and maintenance at 11:00 a.m. at its registered office, APTMA and other miscellaneous expenses House Tehkal payan, Jamrud Road, Peshawar, etc. (collectively the “Administrative to transact the following business: Expenses”), in respect of its joint offices. • ORDINARY BUSINESS:- Further Resolved that Chief Executive & Secretary of company be and are 1. To confirm minutes of the last Extra hereby authorized to take all legal and Ordinary General Meeting of the other corporate formalities with regard Company held on March 31, 2018. to these matters on behalf of the 2. To receive, consider and adopt the company and to do all such acts, deeds annual audited financial statements and things as may be deemed necessary of the Company together with the and beneficial for the Company. Directors’ and Auditors’ Reports thereon Resolved Further that the Related Party for the year ended June 30, 2018. Transactions of sale and purchase of 3. To approve cash dividend @ 7.50% i.e. goods to / from associated companies Rs.0.75/- per share for the year ended as disclosed in notes to the audited June 30, 2018 as recommended by the financial statements be and are hereby Board of Directors. ratified, approved and confirmed. 4. To appoint auditors and to fix their Further Resolved that the Chief remuneration for the financial year Executive of the company be and ending June 30, 2019, who will hold is hereby authorized to approve the office till conclusion of the next Annual Related Party Transactions regarding General Meeting. The Board on the sale and purchase of goods to / from recommendation of the Audit Committee associated companies as disclosed in has proposed the appointment of M/s notes to the financial statements. Shinewing Hameed Chaudhri Chartered 6. To transact any other business with the Accountants as external auditors. The permission of the Chair. retiring auditors being eligible, have offered themselves for re-appointment. Attached to this Notice is a Statement of Material Facts covering the above- • SPECIAL BUSINESS:- mentioned special business, as required 5. To consider and approve the under Section 134(3) of the Companies following resolution(s), with or without Act, 2017. modification, as special resolution for sharing of common expenses, sale and purchase of goods with associated BY ORDER OF THE BOARD companies including M/s. Kohat Textile Mills Limited & Mediterranean Textile Company. Resolved