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LIMITED
Company Performance
Financial year 2016 was a turbulent year. Lower demand,
particularly of basic textiles from China and Europe has adversely
affected financial results of the company. Lower cotton production
by around 28% has further aggravated the situation. Yarn prices
remain depressed due to low demand in international markets.
Reduced exports have been the major drag for the Company.
Depressed yarn selling price and lower margins resulted in after
tax loss of Rs.92,944,967 compared to profit of Rs.133,688,757
during the corresponding previous year. Earning per share (EPS)
for the year is negative at Rs.4.97 compared to earnings of
Rs.7.15 during the correspondence previous year.
Sales revenue slightly increased by 1.42% over the previous year
and stood at Rs.4,267,868,825. Cost of sales significantly surged
from 90.75% of sales to 96.45% of sales thus causing reduction in
GP by 61.08% over the corresponding last year. GP for the year
under review is 3.55% compared to 9.25% of the corresponding
last year.
Distribution cost decreased from 2.48% of sales to 2.17% of sales.
Administrative expenses also decreased from 2.35% of sales to
2.24% of sales. Other operating expenses decreased by 78.75%
over the previous year mainly due to no provision for Workers
Profit Participation Fund and reduction in provision of Workers
Welfare Fund because of losses of the Company. Due to efficient
utilization of financial resources, repayment of long term loans
and hard negotiations with banks for pricing of loans, the finance
cost decreased by 5.09% over the last year.
Capital Assets Investment
During the year your Company invested Rs.254,531,809 in
Balancing, Modernization, Replacement (BMR)/ expansion in
building, plant and machinery and other assets. This was done in
line with Company's strategic plans to continue to diversify its
product range, addition of new qualities and blends of yarn and
improvement in the production capacity of the plant to cater both
domestic and International markets.
Dividend
In spite of loss during the year, the Board of Directors recommend
cash dividend @10% i.e. Rs.1 per ordinary share for the year
ended June 30, 2016. The dividend will amount to Rs.18,700,000.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED
JUNE 30, 2016
2016
2015
Rupees Rupees
Sales 4,267,868,825
4,208,113,516 Cost of goods sold
(4,116,388,155) (3,818,880,520)
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Gross profit 151,480,670
389,232,996
Distribution cost (92,553,673)
(104,495,620) Administrative expenses
(95,807,183) (99,073,058) Other expenses
(2,357,653) (11,092,746)
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(190,718,509)
(214,661,424)
Other income 29 41,213,315 43,419,046
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Operating profit 1,975,476
217,990,618 Finance cost
(66,397,256) (69,959,094)
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(Loss) / Profit before taxation (64,421,780)
148,031,524 Provision for taxation
(28,523,187) (14,342,767)
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(Loss) / Profit after taxation (92,944,967)
133,688,757
Other comprehensive (Loss) / income
Items that will not be reclassified to profit and loss account
Chennab LIMITED
Sales 28,729,331
22,264,703
Cost of sales
Opening stock of finished goods 11,285,914
8,970,687
Cost of goods manufactured 24,084,476
18,583,075
Closing stock of finished goods (11,900,897)
(10,646,345)
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23,469,493 16,907,417
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Gross profit 5,259,838
5,357,286
Distribution cost 2,551,167
2,323,705 Administrative expenses 1,715,943
1,322,526 Other operating expenses
36,596 106,613
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4,303,706 3,752,844
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956,132
1,604,442
Other income 172,739 84,113
Operating profit 1,128,871 1,688,555
Finance cost 635,089 695,795
Profit before taxation 493,782
992,760 Taxation
-Current 192,193 140,055
-Deferred 6,708 (65,499)
198,901 74,556
Profit after taxation 294,881 918,204
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Earning per share - basic and diluted (Rs.) 0.99
3.09
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