fr2018 PDF

Shabbir Tiles and Ceramics Limited
2018
Shabbir Tiles and Ceramics Limited Page - 41
ANNUAL REPORT 2018
Statement of Financial Position

As at June 30, 2018
(Amounts in PKR ’000)
June 30, June 30,
Note 2018 2017
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 8 3,375,273 2,840,968

Investment property 9 10,761 12,003
Long-term loans 10 10 39
Long-term security deposits 11 14,232 7,347
3,400,276 2,860,357
CURRENT ASSETS
Stores and spare parts 12 364,876 253,196

Stock-in-trade 13 1,107,933 976,358
Trade debts 14 243,365 948,703
Loans and advances 15 13,383 17,575
Deposits, prepayments and other receivables 16 8,115 9,105
Taxation - net 234,622 150,923
Cash and bank balances 17 104,474 63,315
2,076,768 2,419,175
5,477,044 5,279,532
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES

Authorised capital
240,000,000 (2017: 240,000,000) Ordinary shares of Rs.5/- each 1,200,000 1,200,000
Issued, subscribed and paid-up capital 18 1,196,601 1,196,601

Reserves 793,371 598,965
1,989,972 1,795,566
NON-CURRENT LIABILITIES
Long-term loan 19 905,219 375,000

Deferred tax liability - net 20 138,287 85,510
1,043,506 460,510
CURRENT LIABILITIES
Trade and other payables 21 2,163,702 1,621,267

Unclaimed dividends 3,324 3,328
Accrued mark-up 28,476 14,035
Current maturity of long-term loan 19 - 250,000
Short-term borrowings - 990,265
Sales tax payable 248,064 144,561
2,443,566 3,023,456
CONTINGENCIES AND COMMITMENTS 22
5,477,044 5,279,532
The annexed notes from 1 to 41 form an integral part of these financial statements.
WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

Chief Financial Officer Chief Executive Officer Director
ANNUAL REPORT 2018
Statement of Profit or Loss

For the year ended June 30, 2018
June 30, June 30,
Note 2018 2017
Turnover - net 23 5,767,082 5,020,008

Cost of sales 24 (4,509,865) (4,485,107)
Gross profit 1,257,217 534,901
Selling and distribution costs 25 (748,488) (514,307)

Administrative expenses 26 (178,128) (155,493)
(926,616) (669,800)
Other income 27 35,603 38,555
Operating profit / (loss) 366,204 (96,344)
Finance costs 28 (98,121) (93,426)

Other expenses 29 (20,900) -
(119,021) (93,426)
Profit / (loss) before taxation 247,183 (189,770)
Taxation 30 (52,777) 38,286
Profit / (loss) for the year 194,406 (151,484)
------------Rupee------------
Earnings / (loss) per share - basic and diluted 31 0.81 (0.63)

ANNUAL REPORT 2018
Statement of Comprehensive Income

June 30, June 30,
2018 2017
Profit / (loss) for the year 194,406 (151,484)
Other comprehensive income - -
Total comprehensive income / (loss) for the year 194,406 (151,484)

ANNUAL REPORT 2018
Statement of Cash Flows

June 30, June 30,
Note 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (loss) before taxation 247,183 (189,770)
Adjustments for non-cash and other items

Depreciation on
operating fixed assets 8.3 393,768 304,732
investment property 9 1,242 747
Finance costs 28 98,121 93,426
Provision for doubtful debts 14.2 20,364 44,625
Provision / (reversal) for slow moving stores and spare parts 12.1 6,030 (1,118)
Provision for slow moving stock-in-trade 13.2 13,243 4,148
Gain on disposal of property, plant and equipment 27 (1,697) (4,509)
531,071 442,051
Operating profit before working capital changes 778,254 252,281
(Increase) / decrease in current assets

Stores and spare parts (117,710) (90,051)
Stock-in-trade (144,818) (340,636)
Trade debts 684,974 (80,154)
Loans and advances 4,192 (6,524)
Deposits, prepayments and other receivables 990 45
427,628 (517,320)
Increase in current liabilities
Trade and other payables 542,432 396,698
Sales tax payable 103,503 82,938
645,935 479,636
Cash generated from operations 1,851,817 214,597
Income tax paid (83,699) (109,901)

Finance costs paid (83,680) (82,563)
Long-term loans - net 29 180
Long-term security deposits - net (6,885) 25
Net cash generated from operating activities 1,677,582 22,338
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure (933,317) (399,602)
Proceeds from disposal of property, plant and equipment 6,940 6,526
Net cash used in investing activities (926,377) (393,076)
CASH FLOWS FROM FINANCING ACTIVITIES

Receipts / (repayment) of long-term loans - net 280,219 (250,000)
Net cash generated from / (used in) financing activities 280,219 (250,000)
Net increase / (decrease) in cash and cash equivalents 1,031,424 (620,738)
Cash and cash equivalents at the beginning of the year (926,950) (306,212)
Cash and cash equivalents at the end of the year 32 104,474 (926,950)

ANNUAL REPORT 2018
Statement of Changes in Equity

R e s e rv e s
Issued, Capital
Revenue reserves
subscribed reserve
and paid- Share General Accumulated Total Total
up capital premium reserve losses reserves equity
-----------------------------------(Amounts in PKR ’000)----------------------------------
Balance as at June 30, 2016 1,196,601 449,215 478,000 (176,766) 750,449 1,947,050
Loss for the year - - - (151,484) (151,484) (151,484)
Other comprehensive income - - - - - -
Total comprehensive loss for the year - - - (151,484) (151,484) (151,484)
Profit for the year - - - 194,406 194,406 194,406
Other comprehensive income - - - - - -
Total comprehensive income for the year - - - 194,406 194,406 194,406

ANNUAL REPORT 2018
Notes to the Financial Statements

1. THE COMPANY AND ITS OPERATIONS
1.1 Shabbir Tiles and Ceramics Limited (the Company) was incorporated in Pakistan as a public limited company,
under the repealed Companies Act 1913 on November 7, 1978 and listed on the Pakistan Stock Exchange
Limited. The Company is primarily engaged in the manufacture and sale of tiles and trading of allied building
products.
1.2 Geographical location and addresses of all the business units are as under:
Business Unit Address Production Facility
Registered Office & Production 15th Milestone, National Highway, Tiles & Building material products
Plant (Unit 1): Landhi, Karachi.
Production Plant (Unit 2): Deh Khanto, Tappo Landhi, District Tiles
Malir, Bin Qasim Town Karachi.
Production Plant (Islamabad): Plot# 324, Kahuta Triangle, Building material products
Industrial Area Islamabad.
Production Plant (Lahore): Godown 21- KM Ferozpur Road, Building material products
Opp Ahmed CNG Pump Lahore.
2. SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING THE COMPANY’S FINANCIAL POSITION AND
PERFORMANCE
2.1 During the year, the Company has capitalized Rs. 910 million on account of balancing, modernization and
replacement of plant and machinery to increase efficiency and quality of products.
2.2 The Company has obtained long-term financing facility from a financial institution under islamic banking
terms amounting to Rs. 1,000 million to finance the balancing, modernization and replacement of plant and
machinery.
2.3 For a detailed discussion about the Company’s performance, please refer to the Directors’ report and
Chairman’s review report.
3. STATEMENT OF COMPLIANCE
3.1 These financial statements have been prepared in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of International
Financial Reporting Standards (lFRSs), issued by International Accounting Standard Board (IASB) as notified
under Companies Act, 2017 (the “Act”); and provisions of and directives issued under the Act. Where the
provisions of and directives issued under the Act differ from the IFRSs, the provisions of and directives issued
under the Act have been followed.
3.2 The Act has also brought certain changes with regard to the preparation and presentation of these financial
statements. These changes, amongst others, included change in respect of nomenclature of these financial
statements. Further, the disclosure requirements contained in the fourth schedule of the Act have been revised,
resulting in elimination of duplicative disclosure with the IFRS disclosure requirements and incorporation of
additional amended disclosures including, but not limited to, particulars of immovable assets of the Company
(note 8.2 and 9.4), management assessment of sufficiency of tax provision in the financial statements (note
30.2), additional disclosure requirements for related parties (note 34), change in threshold for identification of
executives (note 35) etc.
4. BASIS OF MEASUREMENT
4.1 These financial statements have been prepared under the historical cost convention, unless otherwise
specifically stated.
4.2 These financial statements have been presented in Pakistani rupee, which is the Company’s functional and
presentation currency.
ANNUAL REPORT 2018
5. STANDARDS, INTERPRETATIONS AND AMENDMENTS APPLICABLE TO FINANCIAL STATEMENTS
5.1 New Standards, Interpretations and Amendments
The Company has adopted the following amendments to the accounting standards which became effective for
the current year:
lAS 7 — Statement of Cash Flows - Disclosure Initiative - (Amendment)

lAS 12 Income Taxes — Recognition of Deferred Tax Assets for Unrealized losses (Amendments)
The adoption of the above amendments to accounting standards did not have any material effect on these
financial statements.
5.2 Standards, interpretations and amendments to approved accounting standards that are not yet effective
The following standards, amendments and interpretations with respect to the approved accounting standards
as applicable in Pakistan would be effective from the dates mentioned below against the respective standard
or interpretation:
Effective date
(annual periods
beginning on or
after)
Standard or Interpretation
IFRS 2 — Share Based Payments - Classification and Measurement of 01 January 2018
Share Based Payment Transactions (Amendments)
IFRS 4 — Insurance Contracts: Applying IFRS 9 Financial Instruments with
IFRS 4 Insurance Contracts — (Amendments) 01 January 2018
IFRS 9 — Financial Instruments 01 July 2018
IFRS 9 — Prepayment Features with Negative Compensation —
(Amendments) 01 January 2018
IFRS 15 — Revenue from Contracts with Customers 01 July 2018
IFRS 16 – Leases 01 January 2019
lAS 19 — Plan Amendment, Curtailment or Settlement (Amendments) 01 January 2019
IAS 28 - Long-term Interests in Associates and Joint Ventures –
IAS 40 Investment Property: Transfers of Investment Property
IFRIC 22 — Foreign Currency Transactions and Advance Consideration 01 January 2018
IFRIC 23 — Uncertainty over Income Tax Treatments 01 January 2019
The above standards and amendments are not expected to have any material impact on the Company’s
financial statements in the period of initial application.
In addition to the above standards and amendments, improvements to various accounting standards have also
been issued by the IASB in December 2016 and December 2017. Such improvements are generally effective
for accounting periods beginning on or after 01 January 2018 and 01 January 2019 respectively. The Company
expects that such improvements to the standards will not have any material impact on the Company’s financial
statements in the period of initial application.
ANNUAL REPORT 2018
The IASB has also issued the revised Conceptual Framework for Financial Reporting (the Conceptual
Framework) in March 2018 which is effective for annual periods beginning on or after 1 January 2020 for
preparers of financial statements who develop accounting policies based on the Conceptual Framework. The
revised Conceptual Framework is not a standard, and none of the concepts override those in any standard
or any requirements in a standard. The purpose of the Conceptual Framework is to assist IASB in developing
standards, to help preparers develop consistent accounting policies if there is no applicable standard in place
and to assist all parties to understand and interpret the standards.
Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the
purpose of applicability in Pakistan.
IASB Effective date
(annual periods
beginning on or
after)
Standards
IFRS 14— Regulatory Deferral Accounts 01 January 2016
IFRS 17— Insurance Contracts 01 January 2021
6. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of financial statements in conformity with approved accounting standards requires the use
of certain critical accounting estimates. It also requires management to exercise its judgment in the process
of applying the Company’s accounting policies. Estimates and judgments are continually evaluated and are
based on historical experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected. In the process of applying the Company’s
accounting policies, management has made the following estimates and judgments which are significant to the
financial statements:
Notes
a) determining the method of depreciation, residual values and useful lives of
operating fixed assets and investment property 7.1.1, 7.2, 8 & 9
b) determining the provision for slow moving stores and spare parts and
stock-in-trade and adjustment of stock-in-trade to their net realizable value (NRV) 7.6, 7.7, 12 & 13
c) determining the provision for trade debts 7.8 & 14
d) recognition of current and deferred taxation 7.16, 20 & 30
e) determining the provision for staff retirement benefit 7.17 & 21.4
f) expected outcome of contingencies involving the Company 22
7. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
7.1 Property, plant and equipment
7.1.1 Operating fixed assets
These are stated at cost less accumulated depreciation and accumulated impairment losses, if any except for
freehold land, which is stated at cost less any impairment in value.
Cost in relation to certain fixed assets, including capital work-in-progress, signifies historical cost and financial
charges on borrowings for financing the projects until such time as the projects are substantially ready for their
intended use.
Depreciation is charged on straight line basis, other than freehold land which is determined to have an indefinite
life, at the rates specified in note 8.1 to the financial statements. Depreciation on additions is charged from
the month in which the asset is available for use and on disposals upto the month immediately preceding the
month of deletion. No depreciation is charged if asset’s residual value exceeds its carrying amount.
ANNUAL REPORT 2018
Residual values and useful lives are reviewed at each reporting date, and adjusted if expectations differ
significantly from previous estimates.
Repairs and maintenance are charged to the statement of profit or loss as and when incurred. Major renewals
and improvements, if any, are capitalized when it is probable that respective future economic benefits will flow
to the Company and the assets so replaced, if any, are retired.
An item of operating fixed assets is derecognised upon disposal or when no future economic benefits are
expected from its use. Gains and losses on disposals of operating fixed assets are recognized in the statement
of profit or loss in the period in which they arise.
7.1.2 Capital work-in-progress
These are stated at cost less any impairment in value. All expenditure connected with specific assets incurred
during installation and construction period including advances to suppliers and contractors are carried under
this head. These are transferred to operating fixed assets as and when these assets are available for use.
7.2 Investment property
These are stated at cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is charged to the statement of profit or loss applying the straight line method at the rate specified
in note 9 to the financial statements. Depreciation on additions is charged from the month in which an asset is
put to use and on deletions up to the month immediately preceding the deletion.
Repairs and maintenance are charged to the statement of profit or loss as and when incurred. Major renewals
and improvements are capitalized and the assets so replaced, if any, are retired. Gain or loss on disposals is
taken to the statement of profit or loss for the year.
7.3 Impairment
7.3.1 Financial assets
A financial asset is assessed at each reporting date for impairments to determine whether there is any objective
evidence which indicates that one or more events have had a negative effect on the estimated future cash flows
of that asset.
All impairment losses are recognised in the statement of profit or loss. An impairment loss is reversed if the
reversal can be related objectively to an event accruing after the impairment loss was recognised. For financial
asset carried at cost, the impairment loss is measured as the difference between the assets carrying amount
and the present value of estimated future cash flows discounted at current market rate of return for similar
financial assets. For financial asset carried at amortised cost, the amount of impairment loss recognised is the
difference between carrying amount and present value of estimated cash flows, discounted at effective interest
rate.
7.3.2 Non-financial assets
The carrying amounts of non-financial assets other than inventories and deferred tax assets are assessed at
each reporting date to ascertain whether there is any indication of impairment. If such an indication exists,
the asset’s recoverable amount is estimated to determine the extent of impairment loss, if any. An impairment
loss is recognised, as an expense in the statement of profit or loss. The recoverable amount is the higher of an
asset’s fair value less cost to disposal and value in use. Value in use is ascertained through discounting of the
estimated future cash flows using a discount rate that reflects current market assessments of the time value of
money and the risk specific to the assets.
An impairment loss is reversed if there is a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised previously. Reversal of an impairment loss is recognised immediately in the statement of profit or
loss in the period of occurrence.
ANNUAL REPORT 2018
7.4 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use. All other
borrowing costs are recognized as an expense in the statement of profit or loss in the period in which they are
incurred.
7.5 Research and development costs
Research and development costs are charged to the statement of profit or loss in the period in which they are
incurred, except for development costs that relate to design of new or improved products which are recognised
as an asset to the extent that it is expected that such asset will meet the recognition criteria mentioned in
International Accounting Standard (IAS) - 38 “Intangible Assets”.
7.6 Stores and spare parts
These are valued at the lower of weighted average cost and net realizable value (NRV). Provision is made for
slow moving items, if any.
Items in transit and bonded warehouse are valued at cost comprising invoice value plus other charges incurred
thereon accumulated to the reporting date.
7.7 Stock-in-trade
These are valued at the lower of cost and NRV determined as follows:
Raw and packing material weighted average cost.
Work-in-process and finished goods cost of direct materials and labour plus attributable overheads.
Stock in transit invoice price plus other charges paid thereon.
Provision is made for slow moving items, if any.
7.8 Trade debts
Trade debts originated by the Company are recognized and carried at original invoice amount less provision
for doubtful debts, if any. Provision for doubtful debts is based on the management’s assessment of customers’
outstanding and creditworthiness. Bad debts are written-off when identified.
7.9 Ijarah rentals
Ijarah payments for assets under Ijarah arrangements are recognised as an expense in the statement of profit
or loss on a straight line basis over the Ijarah term.
7.10 Cash and cash equivalents
These are stated at cost. For the purpose of Statement of Cashflows, cash and cash equivalents comprise of
cash and bank balances net of short-term borrowings.
7.11 Financial instruments
All financial assets and liabilities are recognised at the time when the Company becomes party to the
contractual provisions of the instrument. Financial assets are derecognised when the contractual rights under
the instruments are realised, expired or surrendered. Financial liabilities are derecognised when the obligation
is extinguished, discharged, cancelled or expired. Any gain or loss on recognition or derecognition of the
financial assets and financial liabilities is taken to the statement of profit or loss.
ANNUAL REPORT 2018
7.12 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial
position if the Company has a legally enforceable right to set-off the transaction and intends to settle either on
a net basis or to realize the asset and settle the liability simultaneously. Income and expense arising from such
assets and liabilities are also offset accordingly.
7.13 Long-term loan and short-term borrowings
These are recorded at the proceeds received. Installments due within one year are shown as a current liability
and mark-up on loan and borrowings is charged as an expense to the statement of profit or loss on an accrual
basis.
7.14 Trade and other payables
Liabilities for trade and other payables are carried at cost which is the fair value of the consideration to be
paid in future for goods and services received, whether or not billed to the Company.
7.15 Provisions
Provisions are recognized in the statement of financial position when the Company has a present legal or
constructive obligation as a result of past event and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation
can be made. Provisions are reviewed at each reporting date and adjusted to reflect current best estimate.
7.16 Taxation
7.16.1 Current
Provision for current taxation is based on the taxable income for the year determined in accordance with
Income Tax Ordinance, 2001. The charge for current tax is calculated using prevailing tax rates. The charge
for current tax also includes adjustments for prior years or otherwise considered necessary for such years.
Current tax is charged to the statement of profit or loss except to the extent it relates to items recognised
directly in other comprehensive income in which case it is recognised in other comprehensive income.
7.16.2 Deferred
Deferred taxation is provided, proportionate to local sales, on all temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized
for all deductible temporary differences to the extent it is probable that taxable profits will be available against
which the deductible temporary differences can be utilized. Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled,
based on the tax rates that have been enacted or substantively enacted at the reporting date.
7.17 Staff retirement benefit - Defined contribution plan
The Company operates a recognised provident fund for all eligible employees. Equal monthly contributions are
made to the fund both by the Company and the employees in accordance with the rules of the scheme. The
contributions from the Company are charged to the statement of profit or loss for the year.
7.18 Employees’ compensated absences
The Company provides for its estimated liability towards unavailed earned leaves accumulated by employees
on an accrual basis using current salary levels.
ANNUAL REPORT 2018
7.19 Foreign currency translation
Transactions in foreign currencies are recorded at the rates ruling at the date of transaction. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting
date. Exchange differences on foreign currency translations are taken to the statement of profit or loss in the
period in which they occur.
7.20 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured
at fair value of the consideration received or receivable, excluding discounts, rebates, and sales tax or duty.
The following are the specific recognition criteria that must be met before revenue is recognised:
t Sales are recognised when goods are dispatched to the customers;

t Return on bank deposits / saving accounts is recognised on accrual basis;
t Rental income on investment property is accounted for on a straight-line basis over the lease term; and
t Other income, if any, is recognized on accrual basis.
7.21 Dividend and appropriation to reserves
Dividend and appropriation to reserves are recognized in the financial statements in the period in which these
are approved.
7.22 Earnings per share
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential ordinary shares.
8. PROPERTY, PLANT AND EQUIPMENT

June 30, June 30,
Note 2018 2017
Operating fixed assets 8.1 3,277,313 2,707,126

Capital work-in-progress 8.4 97,960 133,842
3,375,273 2,840,968
8.1 Operating fixed assets
NET
COST ACCUMULATED DEPRECIATION BOOK
VALUE
As at As at As at Charge for As at As at Depre-
On
July 01, Additions / June 30, July 01, the year June 30, June 30, ciation
disposals
2017 transfers Disposals 2018 2017 (note 8.3) 2018 2018 rate %
---------------------------------------------------------------------------(Amounts in PKR ’000)------------------------------------------------------------------------------
2018
---
Freehold land (note 8.2) 266,135 - - 266,135 - - - - 266,135 -
Building on freehold land
(note 8.2) 830,750 41,119 - 871,869 366,215 38,529 - 404,744 467,125 5-20
Plant and machinery 4,362,583 910,391 (2,883) 5,270,091 2,404,878 349,766 (2,854) 2,751,790 2,518,301 5-20
Furniture and fixture 24,310 - - 24,310 24,061 - - 24,061 249 20
Office equipment 24,296 5,260 (1,130) 28,426 20,998 1,927 (1,119) 21,806 6,620 20-33
Computers and accessories 14,089 4,151 (269) 17,971 11,961 1,336 (169) 13,128 4,843 33 - 50
Vehicles 34,587 4,466 (5,168) 33,885 21,511 2,210 (3,876) 19,845 14,040 20
5,556,750 965,387* (9,450) 6,512,687 2,849,624 393,768 (8,018) 3,235,374 3,277,313

ANNUAL REPORT 2018
NET
COST BOOK
ACCUMULATED DEPRECIATION
VALUE
As at As at As at Charge for As at As at Depre-
On
July 01, Additions / June 30, July 01, the year June 30, June 30, ciation
disposals
2016 transfers Disposals 2017 2016 (note 8.3) 2017 2017 rate %
2017 --------------------------------------------------------------------------- (Amounts in PKR ’000) ---------------------------------------------------------------------
Freehold land (note 8.2) 266,135 - - 266,135 - - - - 266,135 -

Building on freehold land
(note 8.2) 809,450 21,300 - 830,750 328,929 37,286 - 366,215 464,535 5-20
Plant and machinery 3,990,063 393,521 (21,001) 4,362,583 2,162,397 262,888 (20,407) 2,404,878 1,957,705 5-20
Furniture and fixture 24,310 - - 24,310 24,061 - - 24,061 249 20
Office equipment 22,192 2,104 - 24,296 19,651 1,347 20,998 3,298 20-33
Computers and accessories 13,278 2,001 (1,190) 14,089 12,491 648 (1,178) 11,961 2,128 33 - 50
Vehicles 38,883 4,409 (8,705) 34,587 26,242 2,563 (7,294) 21,511 13,076 20
5,164,311 423,335* (30,896) 5,556,750 2,573,771 304,732 (28,879) 2,849,624 2,707,126
*Includes transfers from capital work-in-progress during the year amounting to Rs. 882.732 million (2017: Rs. 181.508 million).
8.2 Particulars of immovable fixed assets:

Freehold land Building on freehold land
Cost as at Cost as at
30 June 30 June
Total area 2018 Total area 2018
Location (Amounts in PKR ’000) (Amounts in PKR ’000)
15th Milestone, National Highway, Landhi, Karachi. 12 Acre 19 Ghunta 553 201,339 sq. ft. 214,199
Deh Khanto, Tappo Landhi, District Malir, Bin Qasim Town Karachi. 28 Acre 14 Ghunta 265,582 403,617 sq. ft. 657,670
Total 266,135 871,869
8.3 Depreciation charge for the year has been allocated as follows:
June 30, June 30,
Note 2018 2017
Cost of sales - manufacturing 24.1 391,009 302,187
Distribution costs 25 1,591 1,524
Administrative expenses 26 1,168 1,021
393,768 304,732
8.4 Capital work-in-progress:
Plant and machinery 84,442 132,359

Civil works 13,518 1,483
8.4.1 97,960 133,842
8.4.1 Movement in capital work-in-progress is as follows:
Opening balance 133,842 157,575

Additions during the year 850,662 157,775
Transferred to operating fixed assets (882,732) (181,508)
Disposal during the year (3,812) -
Closing balance 97,960 133,842
ANNUAL REPORT 2018
9. INVESTMENT PROPERTY
NET
BOOK
COST ACCUMULATED DEPRECIATION VALUE
As at As at As at Charge As at As at Deppre-
for the
July 01, Additions June 30, July 01, June 30, June 30, ciation
year
2017 2018 2017 2018 2018 rate %
(note 25)
----------------------------------------------------------------------- (Amounts in PKR ’000) -------------------------------------------------------
Freehold land 3 - 3 - - - 3 -
Building on freehold land 1,083 - 1,083 1,083 - 1,083 - 10
Showroom 7,800 - 7,800 1,755 702 2,457 5,343 10
Apartments 6,000 - 6,000 45 540 585 5,415 10
2018 14,886 - 14,886 2,883 1,242 4,125 10,761
2017 8,886 6,000 14,886 2,136 747 2,883 12,003
9.1 The fair values of investment properties as at the reporting date are as under:
June 30, June 30,
2018 2017
Freehold land 5,478 4,980
Building on freehold land 2,242 2,242
Showroom 7,800 7,800
Apartments 6,000 6,000
21,520 21,022
9.2 The forced sale values of investment properties as at the reporting date are as under:
Freehold land 4,382 3,984

Building on freehold land 1,794 1,793
Showroom 6,240 6,240
Apartments 4,800 4,800
17,216 16,817
9.3 The latest valuation was carried out by an independant valuer on 23 July 2018.
9.4 Particulars of immovable investment property:
Particulars Location Total area / Covered area

Freehold land 15th Milestone, National Highway, Landhi, Karachi. 332 sq. yd.
Building on freehold land 15th Milestone, National Highway, Landhi, Karachi. 2,989 sq. ft.
Showroom Shop No. 11, Mezzanine Floor, Pace N Pace Mall,
Bosan Road, Multan. 260 sq. ft.
Apartments Flat No. 17 & 20, Fifth Floor, Bismillah Heights, Tando 770 sq. ft. &
Wali Muhammad, Ward A, Hyderabad. 860 sq. ft
10. LONG-TERM LOANS

June 30, June 30,
Note 2018 2017
Unsecured, considered good
Employees 10.1 3,238 4,541
Executives 10.1 & 10.2 175 -
3,413 4,541
Current maturity of long-term loans 15 (3,403) (4,502)
10 39
ANNUAL REPORT 2018
10.1 Represent loans given for the purchase of household equipment which are repayable within two years of
disbursement. These loans carry markup at the rate of KIBOR +3% per annum (2017: KIBOR +3% per
annum).
10.2 Reconciliation of the carrying amount of long-term loans to Executives:

June 30, June 30,
2018 2017
Opening balance - 308
Disbursements 500 -
Repayments (325) (308)
Closing balance 175 -
11. LONG-TERM SECURITY DEPOSITS
Utilities 2,956 2,893

Rent 10,921 4,099
Ijarah 285 285
Central Depository Company 25 25
Lockers deposit with a commercial bank 45 45
14,232 7,347
12. STORES AND SPARE PARTS
Stores 129,834 95,358

Spare parts
in hand 278,653 181,837
in transit 7,339 20,921
285,992 202,758
415,826 298,116
Provision for slow moving stores and spare parts 12.1 (50,950) (44,920)
364,876 253,196
12.1 Movement of provision for slow moving stores and spare parts:

Charge for the year 24.1 6,030 -
Reversal during the year 24.1 - (1,118)
13. STOCK-IN-TRADE
Raw and packing material

in hand 534,209 458,350
in transit 48,031 25,879
582,240 484,229
Work-in-process
Finished goods 24,562 27,578
Manufacturing 526,057 475,217
Trading 13,681 14,698
13.1 539,738 489,915
1,146,540 1,001,722
Provision for slow moving stock-in-trade 13.2 (38,607) (25,364)
1,107,933 976,358
13.1 Includes stock-in-trade costing Rs. 100.457 million (2017: Rs. 79.210 million) which has been written down to
its net realizable value (NRV) amounting to Rs. 55.856 million (2017: Rs. 61.137 million).
ANNUAL REPORT 2018
13.2 Movement of provision for slow moving stock-in-trade:

June 30, June 30,
Note 2018 2017
Charge for the year 24.1 13,243 4,148
14. TRADE DEBTS

June 30, June 30,
Note 2018 2017
Unsecured
Considered good 14.1 243,365 948,703
Considered doubtful 142,086 121,722
385,451 1,070,425
Provision for doubtful debts 14.2 (142,086) (121,722)
243,365 948,703
14.1 Includes receivables from the following related parties that are neither past due nor impaired and are aged
within 90 days:
June 30, June 30,
2018 2017
Indus Motor Company Limited 5,464 4,294

Agriauto Industries Limited 332 45
Thal Limited 5,815 4
11,611 4,343
14.1.1 The maximum aggregate amount due from the related parties at the end of any month during the year was
Rs.12.129 million (2017: Rs. 7.727 million).
June 30, June 30,
Note 2018 2017
14.2 Movement of provision for doubtful debts:

Charge for the year 26 20,364 44,625
15. LOANS AND ADVANCES
Unsecured, considered good

Loans
Current maturity of long-term loans 10 3,403 4,502
Advances
Employees 225 79
Suppliers and contractors 9,755 12,994
9,980 13,073
13,383 17,575
ANNUAL REPORT 2018
16. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

June 30, June 30,
2018 2017
Deposits - interest free 100 200
Prepayments
Rent 3,608 6,943
Insurance 2,538 1,062
Others 1,869 652
8,015 8,657
Other receivables - 248

8,115 9,105
17. CASH AND BANK BALANCES
Cash in hand 7,186 723
Cash at banks:
Current accounts
Conventional banking 74,393 45,321
Islamic banking 10,023 9,395
84,416 54,716
Saving accounts 12,872 7,876
104,474 63,315
17.1 Includes balance of Rs. 22.335 million (2017: Rs. 24.548 million) maintained with Habib Metropolitan Bank
Limited, a related party.
17.2 These carry profit rates ranging from 4% to 5% per annum (2017: 3.75% to 4% per annum). These balances
are held in accounts maintained under conventional banking. These include balance of Rs. 4.572 million (2017:
Rs. 3.843 million) maintained with Habib Metro Bank Limited, a related party.
18. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
(Number of shares in‘000) (Amounts in PKR ’000)

June 30, June 30, June 30, June 30,
2018 2017 Note 2018 2017
Ordinary shares of Rs. 5/- each
199,627 199,627 Fully paid-up in cash 998,140 998,140
1,150 1,150 Issued for consideration other than cash 5,750 5,750
38,543 38,543 Issued as fully paid bonus shares 192,711 192,711
239,320 239,320 1,196,601 1,196,601
19. LONG-TERM LOAN
Secured
From a banking company
Faysal Bank Limited 19.1 905,219 -
Habib Bank Limited - 625,000
Current maturity of long-term loan - (250,000)
905,219 375,000
ANNUAL REPORT 2018
19.1 Represents diminishing musharaka facility amounting to Rs. 1,000 million (2017: Nil) under islamic banking
terms which carries markup at rate of three months KIBOR + 0.70% per annum, payable quarterly with two
years grace period. The loan is repayable within five years in ten equal semi annual installments commencing
from September 2019. The facility is secured against first pari passu mortgage and hypothecation over all
present and future fixed assets (Land, building, plant and machinery).
20. DEFERRED TAX LIABILITY - net

June 30, June 30,
Note 2018 2017
Deferred tax liabilities on taxable temporary differences:

Accelerated tax depreciation 452,107 445,133
Deferred tax asset on deductible temporary differences:

Provisions (82,315) (69,995)
Carried forward tax credit 20.1 (17,808) -
Unused tax losses 20.2 (213,697) (289,628)
(313,820) (359,623)
138,287 85,510
20.1 Represents deferred tax asset against carried forward tax credit u/s 65B(5) of Income Tax Ordinance, 2001
amounting to Rs. 17.808 million (2017: Nil) which is adjustable against tax liability of subsequent 2 years.
20.2 As of the reporting date, accumulated carry forward tax losses amounted to Rs. 736.887 million (2017: Rs.
965.426 million).
21. TRADE AND OTHER PAYABLES

June 30, June 30,
Note 2018 2017
Creditors 21.1 227,008 208,213
Accrued liabilities 21.1 & 21.2 1,848,107 1,371,495
Advance from customers 63,057 31,932
Payable to provident fund 21.3 3,380 2,744
Security deposits 21.4 2,125 1,993
Withholding tax payable 1,519 4,666
Workers’ Profit Participation Fund 29 13,275 -
Workers’ Welfare Fund 29 5,045 -
Others 186 224
2,163,702 1,621,267
21.1 Includes payable to the following related parties:
Thal Limited 8,514 19,067

Habib Insurance Company Limited 40 -
Habib Metro Pakistan (Private) Limited 205 205
Habib University Foundation - 417
8,759 19,689
21.2 Include accrual for leave encashment of Rs. 54.061 million (2017: Rs. 43.913 million) and bonus of Rs. 64.499
million (2017: Rs. 32.680 million).
ANNUAL REPORT 2018
21.3 Payable to provident fund:

June 30, June 30,
2018 2017
Note (Unaudited) (Audited)
General disclosures
Size of the Fund 184,678 160,132

Investments - at cost 146,000 140,250
Investment - at fair value 21.3.1 173,897 156,514
Percentage of investments made 21.3.1 94.16% 97.74%
21.3.1 Categories of investments as a percentage of total assets of provident fund:
June 30, June 30,

2018 2017
------------------- (Unaudited) ------------- ---------------- (Audited) --------------------
Amount in PKR ‘000 Percentage Amount in PKR ‘000 Percentage
Fixed deposits 164,097 88.86% 148,218 92.56%
Mutual funds 9,800 5.31% 8,296 5.18%
173,897 94.16% 156,514 97.74%
21.3.2 Investments out of provident fund have been made in accordance with the provisions of the section 218 of the
Companies Act, 2017 and the rules formulated for this purpose.
21.4 These represent interest free deposits received from employees against company provided vehicles.
22. CONTINGENCIES AND COMMITMENTS
22.1 Contingencies
There are no material contingencies to report as at the reporting date.
22.2 Commitments
(i) Commitments in respect of outstanding letters of credit against raw materials and spares amounted to Rs.
83.228 million (2017: Rs. 96.118 million), issued by Habib Metropolitan Bank Limited, a related party.
(ii) Commitments in respect of capital expenditure amounted to Rs. 59.051 million (2017: Rs. 424.905 million)
for the import of machinery, including Rs. 2.045 million (2017: Rs. 200.692 million) issued by Habib
Metropolitan Bank Limited, a related party.
(iii) Bank guarantees issued by Habib Metropolitan Bank Limited, a related party, to Sui Southern Gas
Company Limited and Excise & Taxation Department amounted to Rs. 456.980 (2017: Rs. 270.528) million
and Rs. 60.381 (2017: Rs. 49.381) million respectively.
(iv) Commitments for rentals under Ijarah finance agreements:

June 30, June 30,
2018 2017
Within one year 631 631

Later than one year but not later than five years 974 1,605
1,605 2,236
Represent Ijarah agreements entered into with First Habib Modaraba in respect of vehicles. Total Ijarah
payments due under the agreements are Rs. 1.605 million and are payable in monthly installments latest by
January 2021. These commitments are secured by on-demand promissory notes of Rs. 3.156 million.
ANNUAL REPORT 2018
23. TURNOVER - net

June 30, June 30,
Note 2018 2017
Local
Manufacturing 6,901,777 6,004,836
Trading 41,868 43,409
6,943,645 6,048,245
Sales tax
Manufacturing (1,172,195) (1,025,621)
Trading (6,083) (6,307)
(1,178,278) (1,031,928)
5,765,367 5,016,317
Exports 1,715 3,691
23.1 5,767,082 5,020,008
23.1 Revenue earned from the normal operations of the Company is Shariah Compliant.
24. COST OF SALES

June 30, June 30,
Note 2018 2017
Manufacturing 24.1 4,484,989 4,457,884

Trading 24.2 24,876 27,223
4,509,865 4,485,107
24.1 Cost of sales - manufacturing
Raw and packing materials consumed

Opening stock 484,229 328,735
Purchases 1,726,630 1,772,115
Closing stock (582,240) (484,229)
1,628,619 1,616,621
Manufacturing expenses
Salaries, wages and other benefits 24.1.1 768,217 851,461
Fuel and power 1,045,347 1,186,116
Stores and spare parts consumed 424,682 476,841
Provision / (reversal) for slow moving stores and spare parts 12.1 6,030 (1,118)
Provision for slow moving stock-in-trade 13.2 13,243 4,148
Depreciation 8.3 391,009 302,187
Repairs and maintenance 144,078 128,532
Insurance 13,870 14,951
Vehicle running expenses 31,174 29,262
Travelling and conveyance 34,568 8,826
Printing and stationery 8,085 7,237
Communication 4,313 3,343
Rent, rates and taxes 5,065 5,148
Research costs 11,590 2,857
Legal and professional charges 1,196 1,531
Ijarah rentals 627 642
Others 1,100 879
2,904,194 3,022,843
Work-in-process
Closing stock (24,562) (27,578)
Cost of goods manufactured 4,535,829 4,649,278
Finished goods
Closing stock (526,057) (475,217)
4,484,989 4,457,884
24.1.1 Includes Rs. 12.301 million (2017: Rs. 11.621 million) in respect of staff retirement benefits.
ANNUAL REPORT 2018
24.2 Cost of sales - trading

June 30, June 30,
Note 2018 2017
Purchases 23,860 30,785
Closing stock (13,681) (14,698)
24,876 27,223
25. SELLING AND DISTRIBUTION COSTS
Salaries, wages and other benefits 25.1 124,731 88,300

Freight 463,074 281,822
Advertisement and sales promotion 40,284 43,431
Rent, rates and taxes 47,140 37,129
Insurance 4,470 4,994
Depreciation
on operating fixed assets 8.3 1,591 1,524
on investment property 9 1,242 747
Repairs and maintenance 17,939 8,628
Utilities 7,873 7,032
Entertainment 2,199 4,062
Others 184 361
748,488 514,307
25.1 Includes Rs. 3.269 million (2017: Rs. 2.532 million) in respect of staff retirement benefits.
26. ADMINISTRATIVE EXPENSES

June 30, June 30,
Note 2018 2017
Salaries, wages and other benefits 26.1 124,658 82,609

Depreciation 8.3 1,168 1,021
Auditors’ remuneration 26.2 1,813 1,692
Subscriptions 258 58
Insurance 720 478
Provision for doubtful debts 14.2 20,364 44,625
Others 2,172 1,962
178,128 155,493
26.1 Includes Rs. 3.585 million (2017: Rs. 2.662 million) in respect of staff retirement benefits.
ANNUAL REPORT 2018
26.2 Auditors’ remuneration

June 30, June 30,
Note 2018 2017
Audit fee 961 961

Half-yearly review fee 243 243
Tax services 65 65
Other certifications 366 346
Out of pocket expenses 178 77
1,813 1,692
27. OTHER INCOME

June 30, June 30,
Note 2018 2017
Income from financial assets

Profit on bank deposits / saving accounts 27.1 222 222
Income from non-financial assets

Rental income from investment property 732 720
Gain on disposal of operating fixed assets 1,697 4,509
Income from sale of scrap 31,790 27,961
Exchange gain - net 133 2,917
Others 1,029 2,226
35,381 38,333
35,603 38,555
27.1 Represents markup on bank accounts under conventional banking relationship.
28. FINANCE COSTS

June 30, June 30,
Note 2018 2017
Mark-up / interest on:

Long-term loan 28.1 67,051 53,039
Short-term borrowings 28.2 24,998 36,063
92,049 89,102
Bank charges and commission 6,072 4,324
98,121 93,426
28.1 Includes markup amounting to Rs. 38.771 million (2017: Nil) on facilities under Islamic mode.
28.2 Includes markup amounting to Rs. 6.054 million (2017: Rs. 8.794 million) on facilities under Islamic mode.
29. OTHER EXPENSES

June 30, June 30,
Note 2018 2017
Workers’ Profit Participation Fund 21 13,275 -

Workers’ Welfare Fund 21 5,045 -
Donations 2,580 -
20,900 -
ANNUAL REPORT 2018
30. TAXATION
June 30, June 30,
Note 2018 2017
Current - 11,985
Deferred 52,777 (50,271)
52,777 (38,286)
30.1 Provision for current taxation has been made on the basis of minimum tax under Section 113 and Final
Tax Regime under Section 169 of Income Tax Ordinance, 2001 (the Ordinance). Accordingly, tax expense
reconciliation with the accounting profit is not presented. During the year, due to balancing. modernization
and replacement (BMR) of plant and machinery, the Company has availed tax credit u/s 65B of the Ordinance.
However, the tax credit worked out was higher than the minimum tax u/s 113 of the Ordinance. Hence, tax
charge for the current year is Nil and remaining tax credit is carried forward u/s 65B(5).
30.2 Adequate provision for tax has been provided in these financial statements for the current year in accordance
with requirements laid under the Ordinance. The charge for current tax amounted to Nil due to tax credit u/s
65B. The returns of income have been filed on due date and are treated as deemed assessment orders under
section 120 of the Ordinance. A comparison of last three years of income tax provision with tax assessed is
presented below:
June 30, June 30, June 30,
2017 2016 2015
Income tax provision for the year 11,985 36,558 30,105

Income tax as per tax assessment 11,979 36,549 29,996
31. EARNINGS PER SHARE - basic and diluted

June 30, June 30,
2018 2017
Profit / loss for the year (Rupees in ‘000) 194,406 (151,484)
Weighted average number of ordinary shares

outstanding during the year (in ‘000) 239,320 239,320
Earnings / (loss) per share (Rupee) 0.81 (0.63)
32. CASH AND CASH EQUIVALENTS

June 30, June 30,
Note 2018 2017
Cash and bank balances 17 104,474 63,315

Short-term borrowings - (990,265)
104,474 (926,950)
33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company finances its operations through equity, borrowings and management of working capital with a
view to maintaining an appropriate mix between various sources of finance to minimize risk. Taken as a whole,
the Company is exposed to market risk (including interest rate risk, currency risk and equity price risk), credit
risk and liquidity risk.
The Board of Directors has overall responsibility for the establishment and oversight of Company’s risk
management framework. The Board is also responsible for developing and monitoring the Company’s risk
management policies. The Company’s overall risk management program focuses on the unpredictability of
financial markets and seeks to minimize potential adverse effects on the financial performance. No changes
were made in the objectives, policies or processes and assumptions during the year ended 30 June 2018
which are summarized below:
ANNUAL REPORT 2018
33.1 Market risk
Market risk is the risk that fair value of future cash flows will fluctuate because of changes in market prices.
Market risk comprises three types of risk: currency risk, interest rate risk and equity price risk.
(i) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rate
relates primarily to the Company’s certain bank balances, long-term and short-term borrowings. The company
manages it’s interest rate risk by placing it’s excess funds in PLS accounts in banks. Management of the
Company estimates that 1% increase in the market interest rate, with all other factors remaining constant,
would decrease the Company’s profit before tax by Rs. 9.052 million and a 1% decrease would result in the
increase in the Company’s profit before tax by the same amount. However, in practice, the actual result may
differ from the sensitivity analysis.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of the changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company’s operating activities. It mainly arises when receivables and
payables exist due to transactions in foreign currency.
The following is the foreign currency exposure as at the reporting date:

June 30, June 30,
2018 2017
Trade payables - US Dollar 6,844 363,579
Trade payables - Euro 74,825 53,860
The following significant exchange rates have been applied at reporting dates
Exchange rate – US Dollar 121.50 104.84

Exchange rate – Euro 141.58 115.72
The following table demonstrates the sensitivity to a reasonably possible change in the US dollar and Euro
exchange rates, with all other variables held constant, of the Company’s profit before tax and the Company’s
equity.
Change in USD Effect on profit Effect on
/ Euro rates (%) before tax Equity
2018 ±10 1,143 1,143
2017 ±10 4,435 4,435
(iii) Equity price risk
Equity price risk is the risk of loss arising from movements in prices of equity instruments. The Company is
not exposed to any equity price risk, as the Company does not have any investment in equity shares as at the
Reporting Date
33.2 Credit risk and concentration of credit risk
Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to discharge
its obligation and cause the other party to incur a financial loss. The Company attempts to control credit risk
by monitoring credit exposures, limiting transactions with specific counterparties and continually assessing
the creditworthiness of counterparties. Concentration of credit risk arises when a number of counterparties
are engaged in similar business activities or have similar economic features that would cause their ability to
meet contractual obligations to be similarly affected by changes in economic, political or other conditions.
The Company is mainly exposed to credit risk on long-term loans, long-term deposits, trade debts, loans and
advances and bank balances. The Company seeks to minimize the credit risk exposure by dealing mostly with
regular and permanent parties who pay on due dates.
ANNUAL REPORT 2018

June 30, June 30,
Note 2018 2017
The maximum exposure to credit risk at reporting date is as follows:
Long-term loans 10 10 39
Long-term security deposits 11 14,232 7,347
Trade debts - net 14 243,365 948,703
Current portion of long-term loans 15 3,403 4,502
Bank balances 17 97,288 62,592
358,298 1,023,183
The table below provides the analysis of the credit quality of financial assets on the basis of external credit
rating or the historical information about counter party default rates.
Trade debts
June 30, June 30,
2018 2017
The analysis of trade debts is as follows:
Neither past due nor impaired 63,429 348,514

Past due but not impaired
31 to 90 days 113,810 386,230
91 to 180 days 47,287 188,975
over 180 days 18,839 24,984
179,936 600,189
243,365 948,703
Bank balances
Ratings
A1+ 47,920 36,607
A-1+ 48,327 25,985
A-1 1,041 -
97,288 62,592
33.3 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company applies the prudent risk management policies by maintaining sufficient cash and bank balances and
by keeping committed credit lines. The table below summarises the maturity profile of the Company’s financial
liabilities at the following reporting dates:

Less
3 to 12 1 to 5 Over 5
On demand than 3 Total
months years years
2018 months
Long-term loan - - - 905,219 905,219
Trade and other payables 364,328 - - - - 364,328
Unclaimed dividends 3,324 - - - - 3,324
Accrued mark-up - 28,476 - - - 28,476
Short-term borrowings - - - - - -
367,652 28,476 - - 905,219 1,301,347
2017
Long-term loan - 62,500 187,500 375,000 - 625,000

Trade and other payables 334,530 - - - - 334,530
Unclaimed dividends 3,328 - - - - 3,328
Accrued mark-up - 14,035 - - - 14,035
Short-term borrowings 990,265 - - - - 990,265
1,328,123 76,535 187,500 375,000 - 1,967,158
ANNUAL REPORT 2018
33.4 Capital Risk Management
The Company’s objective when managing capital is to safeguard the Company’s ability to remain as a going
concern and continue to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital. The Company is currently financing majority of its
operations through long-term and short-term financing in addition to its equity.

June 30, June 30,
Note 2018 2017
The gearing ratios as at June 30 were as follows:
Long-term loan 19 905,219 375,000

Current maturity of long term loan 19 - 250,000
Short-term borrowings - 990,265
Total interest bearing debt 905,219 1,615,265
Total equity 1,989,972 1,795,566
Total capital 2,895,191 3,410,831
Gearing ratio 31.27% 47.36%
33.5 Unavailed Credit Facilities
33.5.1 The facility for short-term borrowings, opening letters of credit and letters of guarantees amounted to Rs. 1,325
million (2017: Rs. 1,075 million), Rs. 250 million (2017: Rs. 950 million) and Rs. 560 million (2017: Rs. 360 million)
respectively, of which Rs. 1,325 million (2017: Rs. 84.735 million), Rs. 165 million (2017: Rs. 428.977 million)
and Rs. 43 million (2017: Rs. 40.081 million) respectively, remained unutilized as at the reporting date.
33.5.2 Markup rates on running finance facilities range from three months KIBOR+0.5% to six months KIBOR+1.25%
(2017: three months KIBOR+0.5% to six months KIBOR+1.25%) per annum.
34. TRANSACTIONS WITH RELATED PARTIES
34.1 Related parties of the Company comprise of associated companies, staff retirement benefits, directors and
key management personnel. Balances outstanding with related parties have been disclosed in the respective
notes to these financial statements. Details of transactions with related parties during the year, other than those
which have been disclosed elsewhere in these financial statements, are as follows:
June 30, June 30,
2018 2017
Associated companies / other related parties
Sales 32,374 22,117

Purchases of goods, material and services 56,389 104,427
Insurance premium 21,907 22,548
Insurance claims received 663 5,200
Rent and service charges paid 8,223 7,659
Rent income 732 720
Markup earned 154 187
Markup expense 11,340 16,649
Commission on letter of guarantee 2,967 1,257
Staff retirement benefits
Contribution to provident fund 19,156 16,815
ANNUAL REPORT 2018
34.2 Following are the related parties with whom the Company had entered into transactions or has arrangement/
agreement in place.
Company Name Basis of relationship Aggregae % of shareholding in
the Company
Habib Insurance Company Limited Common Directorship 0.35
Indus Motors Company Limited Common Directorship N/A
Habib University Foundation Common Directorship N/A
Thal Limited Common Directorship 1.3
Habib Metro Pakistan (Pvt) Limited Common Directorship N/A
Habib Metropolitan Bank Limited Common Directorship N/A
Agriauto Industires Limited Common Directorship N/A
Auvitronics Limited Common Directorship N/A
Provident Fund Staff retirement benefits N/A
35. REMUNERATION OF CHIEF EXECUTIVE OFFICER, DIRECTOR AND EXECUTIVES
35.1 The aggregate amounts charged in the financial statements for the year are as follows:
June 30, June 30,
2018 2017
Chief Chief
Executive Executives Executive Executives
Officer Officer
------------------- (Amounts in PKR ‘000) ------------------
Managerial remuneration 13,749 25,342 7,707 22,909

Housing and utilities 9,441 22,538 6,036 15,865
Leave fare assistance, leave encashment and bonus 13,500 10,926 3,938 4,108
Reimbursement of medical expenses 1,375 2,534 771 2,022
Retirement benefits 841 2,786 691 1,764
38,906 64,126 19,143 46,668
Number of persons 1 12 1 8
35.2 In addition, the Chief Executive Officer and certain executives are provided with free use of the Company
maintained cars.
35.3 Fee amounting to Rs. 0.150 million (2017: Rs. 0.100 million) was paid to one (2017: one) director for attending
Board meetings during the year.
36. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of the financial assets and financial liabilities approximate their fair values. Fair value is the
amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties
in an arm’s length transaction.
Fair value hierarchy
The different levels to analyse financial assets carried at fair value have been defined as follows:
Level 1: Quoted market price

Level 2: Valuation techniques (market observable); and
Level 3: Valuation techniques (non-market observables)
As of the reporting date, the Company does not have any financial assets carried at fair value that required
categorization in Level 1, Level 2 and Level 3.
ANNUAL REPORT 2018
37. PRODUCTION CAPACITY
During the year, the tile production capacity attained was 8.315 million sq. meters (2017: 8.811 million sq.
meters) against annual manufacturing capacity of 12.76 million sq. meters (2017: 12.76 million sq. meters). The
shortfall is due to balancing, modernization and replacement of plant and machinery conducted at one of the
units of the Company.
38. NON-ADJUSTING EVENT AFTER THE REPORTING DATE
The Board of Directors in its meeting held on Sept, 11, 2018 proposed final cash dividend of Rs. 0.5 /- per share
for the year ended 30 June 2018 amounting to Rs. 119,660 million for approval of the members at the Annual
General Meeting to be held on October 22, 2018.
39. NUMBER OF EMPLOYEES

June 30, June 30,
2018 2017
As at year end
Permanent 888 939
Contractual 208 98
*1,096 *1,037
* This includes 914 (2017: 852) number of factory employees
Average during the year

Permanent 906 956
Contractual 148 96
*1,054 *1,052
* This includes 869 (2017: 873) number of factory employees
40. GENERAL
40.1 Figures have been rounded off to the nearest thousands unless otherwise stated.
40.2 Certain prior year figures have been reclassified for better presentation. However, there are no material
reclassifications to report.
41. DATE OF AUTHORISATION FOR ISSUE
These financial statements were authorized for issue on Sept 11, 2018 by the Board of Directors of the Company.

15th Milestone,
National Highway,
Landhi, Karachi-75120
+92-213 - 818 3610 -13
Website: www.stile.com.pk
Email: info@stile.com.pk

fr2018 PDF

Uploaded by

Copyright:

Available Formats

fr2018 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

fr2018 PDF

Uploaded by

Copyright:

Available Formats

Shabbir Tiles and Ceramics Limited

ANNUAL REPORT 2018

Statement of Financial Position

Property, plant and equipment 8 3,375,273 2,840,968

Stores and spare parts 12 364,876 253,196

SHARE CAPITAL AND RESERVES

Issued, subscribed and paid-up capital 18 1,196,601 1,196,601

Long-term loan 19 905,219 375,000

Trade and other payables 21 2,163,702 1,621,267

WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

ANNUAL REPORT 2018

Statement of Profit or Loss

Turnover - net 23 5,767,082 5,020,008

Gross profit 1,257,217 534,901

Selling and distribution costs 25 (748,488) (514,307)

Other income 27 35,603 38,555

Operating profit / (loss) 366,204 (96,344)

Finance costs 28 (98,121) (93,426)

Profit / (loss) before taxation 247,183 (189,770)

Taxation 30 (52,777) 38,286

Profit / (loss) for the year 194,406 (151,484)

Earnings / (loss) per share - basic and diluted 31 0.81 (0.63)

WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

ANNUAL REPORT 2018

Statement of Comprehensive Income

Profit / (loss) for the year 194,406 (151,484)

Other comprehensive income - -

Total comprehensive income / (loss) for the year 194,406 (151,484)

WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

ANNUAL REPORT 2018

Statement of Cash Flows

Adjustments for non-cash and other items

(Increase) / decrease in current assets

Cash generated from operations 1,851,817 214,597

Income tax paid (83,699) (109,901)

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase / (decrease) in cash and cash equivalents 1,031,424 (620,738)

WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

ANNUAL REPORT 2018

Statement of Changes in Equity

Loss for the year - - - (151,484) (151,484) (151,484)

Other comprehensive income - - - - - -

Total comprehensive loss for the year - - - (151,484) (151,484) (151,484)

Profit for the year - - - 194,406 194,406 194,406

Other comprehensive income - - - - - -

Total comprehensive income for the year - - - 194,406 194,406 194,406

WAQUAS AHMED SYED MASOOD ABBAS JAFFERY FEROZE JEHANGIR CAWASJI

ANNUAL REPORT 2018

Notes to the Financial Statements

1. THE COMPANY AND ITS OPERATIONS

Business Unit Address Production Facility

ANNUAL REPORT 2018

5. STANDARDS, INTERPRETATIONS AND AMENDMENTS APPLICABLE TO FINANCIAL STATEMENTS

5.1 New Standards, Interpretations and Amendments

lAS 7 — Statement of Cash Flows - Disclosure Initiative - (Amendment)

ANNUAL REPORT 2018

6. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

7. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES