Kohinoor Mills Limited


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CONTENTS
Kohinoor Mills Limited Company Information ..........................................................................................................................02 Directors’ Report......................................................................................................................................04 Unconsolidated Condensed Interim Balance Sheet..................................................................06 Unconsolidated Condensed Interim Profit and Loss Account...............................................08 Unconsolidated Condensed Interim Statement of Comprehensive Income...................09 Unconsolidated Condensed Interim Cash Flow Statement....................................................10 Unconsolidated Condensed Interim Statement of Changes in Equity...............................11 Selected Notes to the Unconsolidated Condensed Interim Financial Information .......12
Kohinoor Mills Limited and its subsidiary Consolidated Condensed Interim Balance Sheet........................................................................20 Consolidated Condensed Interim Profit and Loss Account.....................................................22 Consolidated Condensed Interim Statement of Comprehensive Income........................23 Consolidated Condensed Interim Cash Flow Statement.........................................................24 Consolidated Condensed Interim Statement of Changes in Equity....................................25 Selected Notes to the Consolidated Condensed Interim Financial Information ............26
Kohinoor Mills Limited 1

Company information

Board of Directors Mr. Rashid Ahmed Mr. Aamir Fayyaz Sheikh Mr. Asad Fayyaz Sheikh Mr. Ali Fayyaz Sheikh Mr. Riaz Ahmed Mr. Aamir Amin Mr. Shahbaz Munir

Chairman Chief Executive Director Director Director Director (NIT Nominee) Director

Audit Committee Mr. Riaz Ahmed Mr. Rashid Ahmed Mr. Shahbaz Munir Mr. Ali Fayyaz Sheikh

Chairman Member Member Member

Human Resource &

Remuneration Committee

Mr. Rashid Ahmed

Chairman

Mr. Asad Fayyaz Sheikh

Member

Mr. Shahbaz Munir

Member

Registered Office & Mills 8th K.M. Manga Raiwind Road, District Kasur. UAN: (92-42 ) 111-941-941 CELL LINES: (92-333) 4998801-10 LAND LINES: (92-42) 3639340 FAX: (92-42) 35395064 & 35395065 EMAIL: [email protected] WEBSITE: www.kohinoormills.com
Shares Registrar M/s. Hameed Majeed Associates (Pvt.) Ltd, HM House, 7 Bank Square, Lahore. LAND LINES: (92-42) 37235081 & 82 FAX: (92-42) 37358817
Stock Exchange Kohinoor Mills Limited is a public limited Company and its shares are traded under personal goods sector at all three Stock Exchanges of Pakistan.

Chief Financial Officer Mr. Kamran Shahid
Head of Internal Audit Mr. Faisal Sharif
Legal Advisors • Raja Mohammad Akram & Co.,
Advocate & Legal Consultants, Lahore. • Malik Muhammad Ashraf Kumma Advocate
Company Secretary Mr. Muhammad Rizwan Khan
Auditors M/s. Riaz Ahmad & Co., Chartered Accountants

Bankers • Allied Bank Limited • Al Baraka Islamic Bank B.S.C. (E.C) • Askari Bank Limited • Bank Alfalah Limited • Faysal Bank Limited • Habib Bank Limited • Habib Metropolitan Bank Limited • National Bank of Pakistan • NIB Bank Limited • Silk Bank Limited • Standard Chartered Bank (Pakistan) Ltd • The Bank of Punjab • United Bank Limited

2 3rd Quarterly Report

Kohinoor Mills Limited 3

Directors’ Report
The Directors of the Company are pleased to present the un-audited interim financial statements for the nine months ended March 31, 2014. These interim financial statements are presented in accordance with the requirements of the Companies Ordinance, 1984.
Operating & Financial Results
During the nine months ended March 31, 2014, your company earned a gross profit of Rs. 851 million on sales of Rs. 5,794 million compared to gross profit of Rs. 1,041 million on sales of Rs. 6,199 million for the corresponding period of previous financial year. Gross margin was at 14.7% compared to 16.8% in the corresponding period last year. During the period under review, your company recorded a net profit of Rs. 125 million, compared to net profit of Rs. 1,057 million, which included Rs. 823 million as one-time gain on recognition of financial liabilities at fair value under IAS 39 in the corresponding period. The Earning per share was Rs. 2.46 compared to Rs. 20.75 for corresponding period in previous financial year.
Slow-down in high-street retail sector sales in the US and European markets, strengthening Rupee and increasing competition from India and China during the period under review resulted in decline in turnover and reduction in margins.
Weaving Division
Optimal capacity utilization and increase in export volume resulted in improvement in profits in this division. Keeping in view the good order position, the management is confident that the performance in this division will be maintained, going forward.
Dyeing Division
Pak Rupee appreciation, competition from China and other emerging markets continued to pressure the sales and margins in this division during the nine months under review. Being the flagship division of the Company, management is intensifying its marketing push in this division and is hopeful that its performance will be improved.
Genertek Division
Consistent scheduled supply of electricity and gas from LESCO and SNGPL, respectively, helped the company avoid reliance on more expensive HFO-based power generation. However, the tariff-increase for both electricity and gas during the nine months under review resulted in dilution of any potential savings.
In view of the worsening gas and electricity supply situation in the country in the long run, the management is earnestly considering various alternate-fuel based energy options. The installation of bio-fuel based boiler was completed during the period under review. The management is further exploring different options for alternate-fuel fired power generation.
Q Mart Corporation (Pvt) Ltd (a wholly owned subsidiary of your company)
The company, in line with its decision to focus on its core fabric business, pulled out of retail business and shut-down all its Q-Mart retails stores during previous financial year. The management is in the process of disposing of the remaining fixed assets of this company.
4 3rd Quarterly Report

Future Prospects
Keeping in view a difficult macro-economic scenario with appreciating Pak Rupee, increasing competition in textiles from China, India and other emerging markets and further to reap advantages accruing from grant of GSP-plus status to Pakistan by the EU, your management has devised a detailed marketingoriented strategy. For increased revenues and better margins, the management is intensifying its marketing efforts, focusing on market development and penetration, product development, especially niche products for famous brands and technical textiles. For cost-savings, the management is ensuring better supply-chain management of raw materials and increased reliance on alternate fuels for powergeneration. Therefore, the management is confident that the company shall be able to improve its performance, going forward.
Acknowledgment
The board places on record its profound gratitude for its valued shareholders, banks, financial institutions and customers, whose cooperation, continued support and patronage have enabled the company to strive for constant improvement. During the period under review, relations between the management and employees remained cordial and we wish to place on record our appreciation for the dedication, perseverance and diligence of the staff and workers of the company.
For and on behalf of the Board

Kasur: 28 April 2014

Aamir Fayyaz Sheikh Chief Executive

Kohinoor Mills Limited 5

UNCONSOLIDATED CONDENSED INTERIM BALANCE SHEET
As at 31 March 2014

EQUITY AND LIABILITIES

Note

Un-audited 31 March
2014 Rupees

Audited 30 June
2013 Rupees

SHARE CAPITAL AND RESERVES

Authorized share capital 80,000,000 (30 June 2013: 80,000,000) ordinary shares of Rupees 10 each 30,000,000 (30 June 2013: 30,000,000) preference shares of Rupees 10 each

800,000,000 300,000,000

800,000,000 300,000,000

1,100,000,000 1,100,000,000

Issued, subscribed and paid-up share capital 50,911,011 (30 June 2013: 50,911,011) ordinary shares of Rupees 10 each Reserves
Total equity
Surplus on revaluation of operating fixed assets - net of deferred income tax
LIABILITIES
Non-current liabilities
Long term financing - secured Sponsor’s loan Deferred liabilities
Current liabilities
Trade and other payables Accrued markup Short term borrowings - secured Current portion of long term financing Provision for taxation
Total Liabilities
Contingencies and commitments
TOTAL EQUITY AND LIABILITIES

509,110,110 160,576,331
669,686,441
770,460,299

509,110,110 12,324,332
521,434,442
785,458,501

5 1,884,069,093 272,000,000 538,819,577
2,694,888,670

1,994,125,496 272,000,000 483,022,877
2,749,148,373

848,680,449 120,414,996 746,271,873 5 120,566,652
4,700,465
1,840,634,435
4,535,523,105
6
5,975,669,845

814,538,309 110,743,721 671,405,785 127,360,657
79,975,000 1,804,023,472 4,553,171,845
5,860,064,788

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

AAmir FAYYAZ SHEIKH Chief Executive
6 3rd Quarterly Report

ASSETS
Non-current assets
Fixed Assets Long term investments Long term security deposits
Current assets
Stores, spares and loose tools Stock-in-trade Trade debts Advances Trade deposits and short term prepayments Other receivables Sales tax recoverable Short term investments Cash and bank balances

Note

Un-audited 31 March
2014 Rupees

Audited 30 June
2013 Rupees

7 3,474,729,093 78,304,191 20,587,740
3,573,621,024

3,354,568,091 82,235,864 20,587,740
3,457,391,695

379,992,065 821,895,470 411,814,151
64,346,097 26,965,499 229,676,142 209,290,535 145,344,925 112,723,937
2,402,045,821

315,856,083 614,534,124 679,533,395
90,306,682 7,595,341
237,728,166 195,540,934 132,357,244 129,221,124
2,402,673,093

TOTAL ASSETS

5,975,669,845 5,860,064,788

rashid ahmed Chairman
Kohinoor Mills Limited 7

UNCOSOLIDATED CONDENSED INTERIM PROFIT AND LOSS
ACCOUNT (Un-audited)
FOR THE Nine months ENDED 31 March 2014

Note

Nine months ended

31 March

31 March

2014

2013

Rupees

Rupees

Quarter ended

31 March

31 March

2014

2013

Rupees

Rupees

SALES COST OF SALES

5,794,028,990 6,199,446,551 1,782,355,768 2,060,924,466 8 (4,942,744,708) (5,158,728,402) (1,589,738,376) (1,767,553,615)

GROSS PROFIT

851,284,282 1,040,718,149 192,617,392

293,370,851

DISTRIBUTION COST ADMINISTRATIVE EXPENSES OTHER OPERATING EXPENSES 9

(324,977,865) (157,259,296)
(19,644,274)

(474,109,317) (135,772,911)
(195,013,321)

(92,285,328) (58,986,232)
(2,744,011)

(180,147,239) (46,113,964) 5,254,721

(501,881,435)

(804,895,549) (154,015,571)

(221,006,482)

OTHER OPERATING INCOME 10

349,402,847 58,729,473

235,822,600 1,186,980,867

38,601,821 11,193,000

72,364,369 188,308,233

PROFIT FROM OPERATIONS FINANCE COST

408,132,320 (278,898,941)

1,422,803,467 (309,951,425)

49,794,821 (77,958,284)

260,672,602 (83,852,113)

PROFIT / (LOSS) BEFORE TAXATION

129,233,379 1,112,852,042

(28,163,463)

176,820,489

TAXATION

(3,745,523)

(56,205,842)

30,765,873

(18,155,032)

PROFIT AFTER TAXATION
EARNINGS PER SHARE - BASIC AND DILUTED

125,487,856 2.46

1,056,646,200 20.75

2,602,410 0.05

158,665,457 3.12

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

AAmir FAYYAZ SHEIKH rashid ahmed

Chief Executive

Chairman

8 3rd Quarterly Report

UNCOSOLIDATED CONDENSED INTERIM STATEMENT OF
COMPREHENSIVE INCOME (Un-audited)
FOR THE Nine months ENDED 31 March 2014

Nine months ended

31 March

31 March

2014

2013

Rupees

Rupees

Quarter ended

31 March

31 March

2014

2013

Rupees

Rupees

PROFIT AFTER TAXATION
OTHER COMPREHENSIVE INCOME / (LOSS)
Items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss:
Surplus arising on remeasurment of available for sale investments to fair value
Reclassification adjustment relating to disposal of available for sale investment
Deferred income tax relating to surplus on remeasurement of available for sale investment to fair value
Other comprehensive income / (loss) for the period - net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

125,487,856 1,056,646,200

-

-

12,987,680 46,033,450 - (23,775,070)
(3,311,858) (5,190,531) 9,675,822 17,067,849 135,163,678 1,073,714,049

2,602,410

158,665,457

-

-

-

6,380,000

-

(73,196,010)

2,602,410

(66,816,010) 91,849,447

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

AAmir FAYYAZ SHEIKH rashid ahmed

Chief Executive

Chairman

Kohinoor Mills Limited 9

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Kohinoor Mills Limited