_______________________________________________________________________

1

Annual Report ___________________________________________________________

2

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 …………………………………………….

12-13

PROFIT AND LOSS ACCOUNT ……………………………..

14

STATEMENT OF COMPREHENSIVE INCOME …………..

15

CASH FLOW STATEMENT ………………………………….

16

STATEMENT OF CHANGES IN EQUITY ………………….

17

NOTES TO THE FINANCIAL STATEMENTS ………………

18-45

PATTERN OF SHAREHOLDING ………………………………….

46

FORM OF PROXY …………………………………………….

_______________________________________________________________________

3

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 EY Ford Rhodes 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.

Annual Report ___________________________________________________________

4

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.

_______________________________________________________________________

5

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 27th Annual General Meeting of the Shareholders of Resham Textile

Industries Limited will be held on Monday 31st October, 2016 at 10:00 a.m. at the Registered Office of the

Company i.e. 36-A Lawrence Road, Lahore to transact the following business.

A. Ordinary Business:

1. To confirm the minutes of the last Meeting.

2. To receive and adopt the audited accounts of the Company for the year ended 30 June 2016 and

reports of the Directors’ and Auditors’ thereon, as recommended by the Audit Committee.

3. To appoint auditors and fix their remuneration for the year ending June 30, 2017. The auditors M/s EY

Ford Rhodes, Chartered Accountants, Lahore retire and being eligible, offer themselves for reappointment.

Company is also inviting quotations from top ten chartered accountant firms on SBP panel for selection

of one firm on merit, expertise and cost.

B. Special Business:

Resolution for Amendments to Articles of Association

RESOLVED as Special resolution following amendments be and are hereby made, with or without

modification, to the Articles of Association of the Company:

a. First para of existing Article 47 of Articles of Association of the Company be substituted as following:

“A General Meeting, as its annual general Meeting, shall in accordance with the provisions of

Section 158 of the Ordinance be held once at least in every calendar year within a period of four

months following the close of its financial year and not more than fifteen months after the holding

of its last preceding annual general meeting.:”

b. First para of existing Article 110 of Articles of Association of the Company be substituted as

following:

“Once at least in every year the Directors shall lay before the Company in General Meeting a profit

and loss account for the period since the preceding account, made up to a date not more than four

months before such meeting.”

Annual Report ___________________________________________________________

6

STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984

Articles 47 & 110 of Articles of Association of the company are proposed to be amended by the above

said resolution so as to bring the same in conformity with the requirements of the Companies

Ordinance, 1984.

4. 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: 08 October, 2016 Company Secretary

NOTES:

1. The Share Transfer Books of the Company will remain closed from 25 October 2016 to 31 October

2016 (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. Account holders and sub-account holders, holding book entry securities of the Company in CDS of

Central Depository Co. of Pakistan Ltd., who wish to attend the Annual General Meeting are

requested to please bring original National Identity Card with copy thereof duly attested by their

Bankers for identification purpose.

4. In case of corporate entity, the Board of Directors resolution / power of attorney with specimen

signature shall be submitted (unless it has been provided earlier) along with proxy form of the

Company.

5. Members who have not submitted copy of valid CNIC are once again advised to submit the same

without further delay to ensure compliance with the Securities and Exchange Commission of

Pakistan (SECP) Notification S.R.O. 19(I)/2014 dated January 10, 2014 read with Notification

S.R.O. 831(I)/2012 dated July 5, 2012.

6. The financial statements for the year ended June 30, 2016 shall be uploaded on the Company's

website as soon as the same are approved by the Board of Directors i.e October 8, 2016.

7. Shareholders are requested to promptly notify the company of any change in their address, if any.

_______________________________________________________________________

7

DIRECTORS’ REPORT

It is my pleasure to present the Directors’ Report and the audited accounts for the year ended June 30, 2016. Performance Review

The year under review was a very difficult year. While sales at Rs.3,132,476,189 decreased by nominal 7.75% as compared with Rs.3,395,806,830 (s.p.l.y.) and cost of sales also declined by 4.10% to Rs.3,019,779,907 from Rs.3,148,835,353 (s.p.l.y.), the gross profit decreased significantly to Rs.112,696,282 as compared to Rs.246,971,477 (s.p.l.y.) by 54.37%. It was primarily on account of lower demand for yarn due to which the production of yarn decreased to 13,842,874 kgs as compared to 14,025,493 kgs of yarn produced previous year (1.3%) on account of dumping of Indian yarn and fabric through legal and illegal routes and production capacity of mill could not be used to the full. Administrative expenses increased to Rs.53,624,523 from Rs.48,708,987 (s.p.ly.) by 10.09% due to mandatory increase in salaries and company’s policy of honest implementation of laws. On account of better and micro management, other operating expenses reduced to Rs.2,405,871 from Rs.12,287,790 (s.p.l.y.) i.e. by 80.42%.

Moreover, due to a more efficient procurement of raw material and injection of interest free Directors’ loan, financial cost decreased by 36.7% to Rs.22,805,351 from Rs.36,029,698 (s.p.l.y.). However, the profit before taxation decreased by 87.42% to Rs.17,395,588 from Rs.138,316,060 (s.p.l.y.) and the end result profit after tax to Rs.3,354,205 from Rs.103,246,188 (s.p.l.y.) by 96.75%.

Arbitrary and unjust taxation laws and increase in RLNG prices, major failure of cotton crop, dumping of Indian yarn and other cotton and polyester products and unfriendly policies of the Government despite protests and advertisements by APTMA, the situation worsened. A number of good mills have been closed down and if the present policies are continued, the day is not far when country will become net importer of yarn and other cotton products as the entire cotton chain particularly the growers are under a lot of pressure due to step motherly attitude of Government and most of them are now switching over to other crops such as maize while India is subsidizing their growers and also facilitating exporters of yarn and other goods. With the trade balance heavily in favour of India, our Government is doing nothing for reasons not-understandable to counter the potential threat and disaster for country’s economy specially for the poor and once the industry is shut down there will be no need of load shedding because there will be no users of electricity and gas and the money spent on new power and other mega projects will become a liability for the nation, particularly in view of the external loans on which these are being built.

The effects of global warming, unpredicted rains and floods, effects of various kinds of pest attacks, change in temperatures and other factors also need to be looked at by Agriculture University, NIAB, Pakistan Agriculture Research Council and Ministry of Food and Agriculture, to whom copies of this report are being sent. It is also strange that our Agriculture, which has maximum input/output ratio everywhere in the world, is still in cave age while advanced countries such as Holland, Germany, Australia and New Zealand export Agriculture products such as milk and its products worldwide. It is a matter of shame for the nation and institutions working with Agriculture. If we can ensure turn around in Agriculture the destiny of the country and poor as also lower middle class would change but the vested interests would not want it. Agriculture must also be a mandatory subject in primary and secondary education. It is painful to see that Pakistan, which was exporting cotton to India in early 90’s, has become an importer of cotton and most of

Annual Report ___________________________________________________________

8

the industrialists who are successful to some extent are big groups and it is likely that cartels would emerge just like cement, power, sugar and other industries and the smaller entities will disappear or die their own death.

The good news for the shareholders is the start of new division namely Garment Division and its brand ANAYA by Kiran Chaudhry is making good progress and the demand cannot be met. Towards further cost cutting the company stands delisted w.e.f. 6 September 2016. It is not understandable that electricity units produced at the cost of Rs. 4 are being sold to the consumers upto Rs.18.71 and in some cases more than this and taxation laws are also arbitrary and unjust and mainly fleecing the honest tax payers who will be forced to shut down operations and the Indian dreams will be fulfilled particularly our Nation having become addicted to consumerism. Let’s hope and pray that day does not come, Ameen The financial results in tabulated form are given below and details may be perused in other sections of this report:-

2016 2015

Rupees('000)

Sales-net 3,132,476 3,395,806

Cost of sales 3,019,780 3,148,835

Gross profit 112,696 246,971

Distribution cost 21,847 19,255

Administrative expenses 53,625 48,709

Other operating expenses 2,406 12,288

77,878 80,252

Operating profit 34,818 166,721

Other income 5,382 7,626

40,200 174,345

Finance cost 22,805 36,029

Profit before taxation 17,395 138,316

Taxation 14,041 35,070

Profit after taxation 3,354 103,246

Earnings per share - basic and diluted (Rupees) 0.09 2.87

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 employees in performing their duties.

For and on behalf of the Board Lahore: 08 October, 2016 Muhammad Arshad Saeed (Chief Executive Officer)

_______________________________________________________________________

9

Financial Summary

2016 2015 2014 2013 2012 2011

BALANCE SHEET

(Rupees in thousand)

Paid up Share Capital 360,000 360,000 360,000 360,000 360,000 360,000

Un-appropriated Profit 535,330 539,159 446,894 376,336 203,967 154,507

Total Equity 895,330 899,159 806,894 736,336 563,967 514,507

Surplus on Revaluation of Fixed Assets 218,156 236,394 257,360 132,850 144,907 156,914

Long Term Liabilities - - - - 120,184 166,327

Liabilities against assets subject to finance lease

- - - - - 30,325

Deferred Liabilities 280,672 296,914 316,511 257,398 236,588 210,580

Long Term Advances 76 131 235 389 269 143

Current Liabilities 207,974 326,909 436,630 672,317 275,740 487,665

1,602,208 1,759,507 1,817,630 1,799,290 1,341,655 1,566,461

Represented by:

Fixed Assets 1,156,630 1,218,378 1,289,573 1,019,514 893,579 925,417

Capital work in progress 2,526 5,746 3,669 1,420 8,431 -

Other Assets 3,698 3,698 3,698 3,678 3,669 3,667

Current Assets 439,354 531,685 520,690 774,678 435,976 637,377

1,602,208 1,759,507 1,817,630 1,799,290 1,341,655 1,566,461

PROFIT AND LOSS

Sales 3,132,476 3,395,806 4,051,203 3,501,701 3,245,032 3,704,951

Cost of Sales 3,019,780 3,148,835 3,775,254 2,994,130 2,867,911 3,409,780

Gross Profit 112,696 246,971 275,948 507,571 377,121 295,171

Operating Profit 40,200 166,721 194,539 410,689 318,221 249,585

Profit Before Taxation 17,395 138,316 140,176 349,455 232,531 142,334

Profit After Taxation 3,354 103,246 90,901 251,079 147,927 65,792

EPS 0.09 2.87 2.53 6.97 4.11 1.83

Dividend % - 12 15 20 20 15

PERCENTAGE TO SALES

Gross Profit % age 3.60 7.27 6.81 14.49 11.62 7.97

Profit Before Taxation % age 0.56 4.07 3.46 9.98 7.17 3.84

Profit After Taxation % age 0.11 3.04 2.24 7.17 4.56 1.78

Admin & Selling Expenses % age 2.41 2.05 1.71 2.07 1.82 1.23

Annual Report ___________________________________________________________

10

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. Its purpose is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest. CONFLICTS OF INTEREST - Directors, officers and employees of the Company shall act at all times honestly and ethically, and shall avoid situations where their personal or outside business interests could conflict with the interests of the Company and its shareholders. DEALING WITH BUSINESS PARTNERS - All purchases of goods and services by the Company will be made exclusively on the basis of price, quality, service and suitability to the Company's needs and in the interest of the Company alone. Directors, officers and employees are prohibited from accepting gifts from sellers or buyers in any form whatsoever. DISCLOSURE - Each senior executive officer must provide full, fair, accurate and understandable information whenever communicating with the Company's stockholders or the general public. COMPLIANCE WITH LAWS, RULES AND REGULATIONS - All directors, officers and employees must conduct Company business in compliance with all applicable laws, rules and regulations. HEALTH, SAFETY, AND ENVIRONMENTAL PROTECTION - It is the Company's policy to ensure the safety of its employees, be extra careful in protecting Company property from fire and other hazards, and to maintain the state of environment. REPORTING OF VIOLATIONS - It is each employee's responsibility to notify promptly his or her supervisor regarding any actual or potential violation of this Code and any applicable laws, rules and regulations by anyone in the Company. FAIR DEALING - It is our policy that each director, officer and employee will endeavor to deal fairly with the Company's customers, suppliers, competitors and employees. CONFIDENTIALITY - All directors, officers and employees are prohibited from revealing confidential information of the Company acquired by virtue of their association with the Company or in any other manner, disclosure of which may hurt the interests of the Company. This does not apply to disclosures required by laws, rules and regulations. PROPER USE OF COMPANY ASSETS - All Directors, officers and employees should protect the Company's assets and ensure their efficient use. Employees must not participate in, or arrange, any activity that is not commensurate with Company interests.

_______________________________________________________________________

11

AUDITOR’S REPORT TO THE MEMBERS We have audited the annexed balance sheet of Resham Textile Industries Limited (“the Company”) as on 30 June 2016 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit. It is the responsibility of the Company’s management to establish and maintain a system of internal control and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by the management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: a) in our opinion, proper books of accounts have been kept by the Company as required by the

Companies Ordinance, 1984;

b) in our opinion;

i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the changes as stated in Note 2.2 of these financial statements, with which we concur;.

ii) the expenditure incurred during the year was for the purpose of the Company’s business; and

iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company;

c) in our opinion and to the best of our information and according to the explanations given to us, the

balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984 in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 30 June 2016 and of the profit, comprehensive income, its cash flows and changes in equity for the year then ended; and

d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. (EY FORD RHODES) CHARTERED ACCOUNTANTS Audit Engagement Partner: Naseem Akbar Lahore: 08 October, 2016

Annual Report _____________________________________________________________________________

BALANCE SHEET AS

2016 2015

EQUITY AND LIABILITIES Note Rupees Rupees

Share capital and reserves

Authorized share capital

36,000,000 (2015: 36,000,000) ordinary shares

of Rs. 10/- each360,000,000 360,000,000

Issued, subscribed and paid up share capital 5 360,000,000 360,000,000

Unappropriated profit 535,329,811 539,159,162

Total equity 895,329,811 899,159,162

Surplus on revaluation of fixed assets 6 218,156,350 236,393,980

Non-current liabilities

Long term deposits 7 75,548 130,748

Deferred liabilities 8 280,671,949 296,914,442

280,747,497 297,045,190

Current liabilities

Trade and other payables 9 106,476,149 178,718,547

Balances with statutory authorities 10 8,242,614 1,641,270

Mark-up accrued on short term borrowings 4,478,124 5,153,641

Short term borrowings 11 28,579,472 55,745,482

Provision for taxation 60,197,535 85,649,670

207,973,894 326,908,610

Total liabilities 488,721,391 623,953,800

TOTAL EQUITY AND LIABILITIES 1,602,207,552 1,759,506,942

CONTINGENCIES AND COMMITMENTS 12 - -

The annexed notes from 1 to 39 form an integral part of these financial statements.

(Chief Executive Officer)

12

__________________________________________________________________

AT 30 JUNE 2016

2016 2015

ASSETS Note Rupees Rupees

Non-current assets

Property, plant and equipment 13 1,159,156,289 1,224,124,423

Long term deposits 14 3,697,560 3,697,560

1,162,853,849 1,227,821,983

Current assets

Stores and spare parts 15 43,893,393 37,360,227

Stock in trade 16 259,590,878 270,966,529

Trade debts 17 76,128,783 115,572,506

Advances 18 4,261,254 2,532,386

Trade deposits and short

term prepayments 19 3,461,513 2,377,508

Advance income tax 27,377,815 63,455,130

Cash and bank balances 20 24,640,067 39,420,673

439,353,703 531,684,959

TOTAL ASSETS 1,602,207,552 1,759,506,942

(Director)

13

Annual Report _____________________________________________________________________________

2016 2015

Note Rupees Rupees

Sales 21 3,132,476,189 3,395,806,830

Cost of sales 22 3,019,779,907 3,148,835,353

Gross profit 112,696,282 246,971,477

Distribution cost 23 21,847,060 19,255,123

Administrative expenses 24 53,624,523 48,708,987

Other operating expenses 25 2,405,871 12,287,790

77,877,454 80,251,900

Other income 26 5,382,111 7,626,181

Operating profit 40,200,939 174,345,758

Finance costs 27 22,805,351 36,029,698

Profit before taxation 17,395,588 138,316,060

Taxation 28 14,041,383 35,069,872

Profit for the year 3,354,205 103,246,188

Earnings per share - basic and diluted (Rupees) 29 0.09 2.87

The annexed notes from 1 to 39 form an integral part of these financial statements.

(Chief Executive Officer) (Director)

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30 JUNE 2016

14

__________________________________________________________________

2016 2015

Rupees Rupees

Profit for the year 3,354,205 103,246,188

Other comprehensive income:

Items to be reclassified to profit or loss in subsequent periods - -

Items not to be reclassified to profit or loss in subsequent periods:

18,016,444 23,396,171

Actuarial gain on defined benefit plans - net of deferred tax - 1,623,024

Total other comprehensive income - net of deferred tax 18,016,444 25,019,195

Total comprehensive income for the year 21,370,649 128,265,383

The annexed notes from 1 to 39 form an integral part of these financial statements.

(Chief Executive Officer)

Transfer from surplus on revaluation of fixed assets on

account of incremental depreciation - net of deferred tax

(Director)

STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2016

15

______________________________________________________________________________________

2016 2015

CASH GENERATED FROM OPERATING ACTIVITIES Note Rupees Rupees

Profit before taxation 17,395,588 138,316,060

Adjustments for non-cash items:

Depreciation 73,498,054 80,864,363

(Gain) / Loss on disposal of property, plant and equipment (1,136,785) 756,123

Provision for gratuity 16,419,665 17,711,165

Finance costs 22,805,351 36,029,698

Profit on bank deposits (2,521,239) (640,912)

Creditors written back (27,000) (21,393)

Provision for Workers' Welfare fund 1,415,798 4,039,281

Provision for Workers' Profit Participation Fund 990,073 7,492,386

111,443,917 146,230,711

Cash flows from operating activities before working capital changes 128,839,505 284,546,771

Working capital changes

(Increase) / decrease in current assets:

Stores and spare parts (6,533,166) 282,499

Stock in trade 11,375,651 (2,512,079)

Trade debts 39,443,723 (13,764,601)

Advances (1,728,868) 3,719,786

Trade deposits and short term prepayments (1,084,005) 992,496

Increase / (decrease) in current liabilities:

Balances with statutory authorities 6,601,344 3,296,890

Trade and other payables (67,128,883) (19,660,036)

(19,054,204) (27,645,045)

Cash generated from operations 109,785,301 256,901,726

Finance cost paid (23,480,868) (44,469,178)

Workers' profit participation fund paid (7,492,386) (7,951,817)

Income tax paid (23,335,947) (59,470,141)

Gratuity paid (12,742,414) (10,751,928)

Net cash generated from operating activities 42,733,686 134,258,662

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure incurred (10,542,725) (16,171,620)

Profit on bank deposits 2,521,239 640,912

Proceeds from disposal of property, plant and equipment 2,928,404 3,669,127

Net cash used in investing activities (5,093,082) (11,861,581)

CASH FLOWS FROM FINANCING ACTIVITIES

Decrease in short term borrowings - net (27,166,010) (89,010,126)

Dividend paid (25,200,000) (36,267,275)

Decrease in long term deposits (55,200) (104,693)

Net cash used in financing activities (52,421,210) (125,382,094)

Net decrease in cash and cash equivalents (14,780,606) (2,985,013)

Cash and cash equivalents at the beginning of the year 39,420,673 42,405,686

Cash and cash equivalents at the end of the year (20) 24,640,067 39,420,673

The annexed notes from 1 to 39 form an integral part of these financial statements.

(Chief Executive Officer) (Director)

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2016

16

Annual Report _____________________________________________________________________________

---------------------------Rupees---------------------------

Balance as at 30 June 2014 - Restated 360,000,000 446,893,760 806,893,760

Profit for the year ended 30 June 2015 - 103,246,188 103,246,188

Other comprehensive income for the year - 25,019,195 25,019,195

Total comprehensive income for the year - 128,265,383 128,265,383

Final dividend paid for the year ended 30

June 2014 @ Rs.0.5/- per share- (18,000,000) (18,000,000)

Interim dividend paid for the year ended

30 June 2015 @ Rs. 0.5/- per share- (17,999,981) (17,999,981)

Balance as at 30 June 2015 360,000,000 539,159,162 899,159,162

Profit for the year ended 30 June 2016 - 3,354,205 3,354,205

Other comprehensive income for the year - 18,016,444 18,016,444

Total comprehensive income for the year - 21,370,649 21,370,649

Interim dividend paid for the year ended

30 June 2016 @ Rs. 0.7/- per share- (25,200,000) (25,200,000)

Balance as at 30 June 2016 360,000,000 535,329,811 895,329,811

The annexed notes from 1 to 39 form an integral part of these financial statements.

(Chief Executive Officer)

Share capital

Un-

appropriated

profit

Total equity

(Director)

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2016

17

Annual Report _____________________________________________________________________________

1. THE COMPANY AND ITS OPERATIONS

1.1

1.2

2. STATEMENT OF COMPLIANCE

2.1

2.2 New, amended standards and interpretations become effective

IFRS 12 – Disclosure of Interests in Other Entities

Improvements to Accounting Standards Issued by the IASB

18

The Company has adopted the following revised standard, amendments and interpretation

of IFRSs which became effective for the current year:

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2016

Resham Textile Industries Limited (the Company) is a public limited company incorporated

in Pakistan on 06 June 1990 under the Companies Ordinance, 1984. The registered office

of the Company is situated at 36 - A, Lawrence Road, Lahore. The Company is principally

engaged in the business of manufacturing and selling of yarn.

The Company was listed on Pakistan Stock Exchange Limited (PSX) (formerly Karachi

Stock Exchange, in which the Lahore and Islamabad Stock Exchanges have merged).

However, the Board of Directors of the Company in its meeting held on February 25, 2016

decided to voluntarily delist the Company from PSX. The purchase price of Rs. 51.02/- per

share was approved by the PSX, which was also agreed by the shareholders in the Extra-

Ordinary General Meeting, held on May 04, 2016. Resultantly, the Company was delisted

from PSX with effect from September 6, 2016. In accordance with letter NO.

EMD/233/177/02-308 dated September 21, 2016 from SECP, financial statements for the

year ended June 30, 2016 has been prepared as a public non listed Company.

These financial statements of the company have been prepared in accordance with

approved accounting standards as applicable in Pakistan. Approved accounting standards

comprise of such International Financial Reporting Standards (IFRS) issued by the

International Accounting Standards Board (IASB) and Islamic financial accounting

standards (IFAS) issued by Institute of Chartered Accountants of Pakistan (ICAP) as are

notified under the Companies Ordinance, 1984, provisions of and directives issued under

the Companies Ordinance, 1984. Whenever, the requirements of the Companies

Ordinance, 1984 or directives issued by the Securities and Exchange Commission of

Pakistan (SECP) differ with the requirement of these standards, the requirements of

Companies Ordinance, 1984 or the requirements of the said directives take precedence.

IFRS 10 – Consolidated Financial Statements

IFRS 11 – Joint Arrangements

IFRS 13 – Fair Value Measurement

IAS 27 – Separate Financial Statements – (Amended)

IAS 28 – Investment in Associates and Joint Ventures – (Amended)

The adoption of the above accounting standards did not have any effect on the financial

statements.

____________________________________________________________________

3. BASIS OF MEASUREMENT

3.1 Basis of preparation

3.2 Presentation currency

3.3 Critical accounting estimates and judgments

- Employee benefits (Note 4.4);

- Taxation (Note 4.7);

- Provisions (Note 4.5);

- Useful lives and residual value of property, plant and equipment (Note 4.10);

- Impairment (Note 4.16)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4.1 Surplus on revaluation of fixed assets

19

These financial statements have been prepared under the historical cost convention, except

for recognition of certain employee benefits at present value and certain items of property,

plant and equipment which are measured at revalued amounts.

The preparation of financial statements in conformity with the approved accounting

standards requires the use of certain critical accounting estimates. It also requires the

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, including expectation of future events that are believed to be reasonable under

the circumstances. The areas where various assumptions and estimates are significant to

the Company's financial statements or where judgments were exercised in application of

accounting policies are as follows:

The accounting policies adopted in the preparation of these financial statements are

consistent with those of the previous financial year.

This represents the surplus arising on the revaluation of operating property, plant and

equipment of the Company. Revaluation surplus is credited to the "surplus on revaluation of

fixed assets" presented below equity (in accordance with the requirements of the section

235 of companies ordinance, 1984) except to the extent that it reverses a revaluation

decrease of the same asset previously recognized in profit and loss account. An annual

transfer from the surplus on revaluation of property, plant and equipment (net of deferred

tax) through other comprehensive income is made for the difference between depreciation

based on the revalued carrying amount of the assets and depreciation based on the assets'

original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated

against the gross carrying amount of the asset and the net amount is restated to the

revalued amount of the asset.

These financial statements are presented in Pak Rupee, which is the Company's functional

currency.

Annual Report _____________________________________________________________________________

i) to the extent actually realized on disposal of the assets which are revalued;

ii) to the extent of incremental depreciation arising out of revaluation of property, plant and equipment; or

iii)

4.2 Interest bearing loans and borrowings

4.3 Ijarah assets

4.4 Employee benefits

4.5 Provisions

4.6 Dividend

4.7 Taxation

Current

20

setting-off or in diminution of any deficit arising from the revaluation of any other

property, plant and equipment of the Company.

This surplus is not free for setting-off or reducing any deficit of the Company. However, it

can only be utilized:

All loans and borrowings are initially recognized at the fair value of the amount received

less directly attributable transaction costs. After initial recognition, long term interest-bearing

loans and borrowings are measured at amortized cost using the effective interest method

while short term borrowings are measured at fair value. Gains and losses are recognized in

profit and loss account when the liabilities are derecognized as well as through the

amortization process.

The Company recognizes ijarah payments under an ijarah agreement as an expense in the

profit and loss account on a straight line basis over the ijarah term.

The Company operates an unfunded gratuity scheme for its permanent employees. The

latest valuation was carried out as at 30 June 2015 using the projected unit credit method.

The future contribution rates of this plan include allowances for deficit and surplus.

Provisions are recognized in the balance sheet when the Company has legal or

constructive obligation as a result of past events, it is probable that outflow of economic

benefits will be required to settle the obligation and a reliable estimate of the amount can be

made. However, provisions are reviewed at each balance sheet date and adjusted to reflect

current best estimate.

Dividend distribution to the Company's shareholders and appropriation to reserve are

recognized in the period in which these are approved.

Provision for current tax is based on taxable income for the year determined in accordance

with the prevailing law for taxation of income. The charge for current tax is calculated using

current rate of tax after taking into account rebates and tax credits, if any. The charge for

current tax also includes adjustments, where considered necessary, to provision for tax

made in previous years arising from assessments framed during the year for such years.

____________________________________________________________________

Deferred

4.8 Trade and other payables

4.9 Operating segments

4.10 Property, plant and equipment

4.10.1 Operating fixed assets and depreciation

a) Cost

21

Operating fixed assets except land, building and plant and machinery are stated at cost less

accumulated depreciation and accumulated impairment losses, if any. Such cost includes

the cost of replacing a part of such assets when that cost is incurred if the recognition

criteria are met. Building and plant and machinery are stated at revalued amount less

accumulated depreciation and accumulated impairment losses if any, while land is stated at

revalued amount. Capital work in progress is stated at cost less accumulated impairment

losses, if any.

Subsequent costs are included in the asset's carrying amount or recognized as a separate

asset, as appropriate, only when it is probable that future economic benefits associated with

the item will flow to the Company and the cost of the item can be measured reliably. All

other repair and maintenance costs are charged to profit and loss account during the year in

which they are incurred.

Operating segments are reported in a manner consistent with the internal reporting

provided to the chief operating decision maker. The chief operating decision maker, who is

responsible for allocating resources and assessing performance of the operating segments,

has been identified as the Board of Directors that makes strategic decisions. The Board of

Directors has determined that the Company has two reportable segments namely Yarn and

Garments Division.

Deferred tax is accounted for by using the liability method on all timing differences between

carrying amounts of assets and liabilities in the financial statements and their tax base.

Deferred tax liabilities are recognized for all taxable temporary differences. The Company

recognizes deferred tax assets on all deductible temporary differences to the extent it is

probable that future taxable profits will be available against which these deductible

temporary differences can be utilized.

Deferred tax asset is also recognized for the carry forward of unused tax losses and unused

tax credits to the extent it is probable that future taxable profits will be available against

which the unused tax losses and unused tax credits can be utilized. Deferred tax is charged

to / credited in the profit and loss account except in case of items credited or charged to

other comprehensive income.

The carrying amount of all deferred tax assets is reviewed at each balance sheet date and

adjusted to the appropriate extent, if it is no longer probable that sufficient taxable profits

will be available to allow all or part of the deferred tax assets to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply

to the year when the asset is realized or liability is settled, based on the tax rates that have

been enacted or substantively enacted at the balance sheet date.

Liabilities for trade and other amounts payable are initially recognized at fair value which is

normally the transaction cost.

Annual Report _____________________________________________________________________________

b) Depreciation

c) Derecognition

4.11 Stores and spare parts

4.12 Stock in trade

Raw material -

Raw material in transit - Invoice value plus other charges paid thereon

Packing material Moving average

Work in process - Average manufacturing cost

Finished goods - Average manufacturing cost

Waste - Net realizable value

22

The carrying values of plant and equipment are reviewed for impairment when events or

changes in circumstances indicate that the carrying value may not be recoverable.

Depreciation is charged to profit and loss account on reducing balance method to write off

the cost of operating fixed assets less their residual values over their expected useful lives

at the rates mentioned in Note 14.1 to these financial statements.

Depreciation on assets is charged from the month in which an asset is acquired while no

depreciation is charged for the month in which the asset is disposed off.

The assets’ residual values, useful lives and methods of depreciation are reviewed, and

adjusted if appropriate, at each financial year end.

An item of property, plant and equipment is derecognized upon disposal or when no future

economic benefits are expected from its use or disposal. Any gain or loss arising on

derecognition of the asset (calculated as the difference between the net disposal proceeds

and carrying amount of the asset) is included in profit and loss account in the year the asset

is derecognized.

These are valued at lower of moving average cost and net realizable value. Items in transit

are valued at cost comprising invoice value plus other charges paid thereon. Provision is

made for slow moving items based on management estimate.

First in first out (FIFO) i.e. the cost of raw material reported on the

balance sheet represents the cost of the raw material most

recently purchased.

Average manufacturing cost in relation to work in process and finished goods signifies cost

including a portion of related direct overheads.

Net realizable value signifies the estimated selling price in the ordinary course of business

less costs necessary to be incurred in order to make such sale.

These are valued at lower of cost and net realizable value. Basis of determining cost is as

follows:

____________________________________________________________________

4.13 Trade debts

4.14 Cash and cash equivalents

4.15 Financial assets and liabilities

4.16 Impairment

23

Financial assets are derecognized when the Company loses control of the contractual rights

that comprise the financial asset. The Company loses such control if it realizes the rights to

benefits specified in contract, the rights expire or the Company surrenders those rights.

Financial liabilities are derecognized when the obligation specified in the contract is

discharged, cancelled or expired.

Trade debts originated by the Company are recognized and carried at original invoice

amount less an allowance for any uncollectible amounts. Specific bad debts are written off

and provision is made against debts considered doubtful when collection of the full amount

is no longer probable.

Cash and cash equivalents comprise cash in hand, cash at banks in current and deposit

accounts and other short term highly liquid instruments that are readily convertible into

known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial assets and liabilities comprise long term deposits, trade debts, other receivables,

cash and bank balances, long term financing, short term borrowings and trade and other

payables.

Financial assets and liabilities are recognized at the time the Company becomes a party to

contractual provisions of the instruments.

The particular recognition methods adopted are disclosed in the individual policy statements

associated with each item.

Financial assets and liabilities are offset when the Company has a legally enforceable right

to offset and intends to settle either on a net basis or to realize the asset and settle the

liability simultaneously.

The carrying amounts of the Company's assets are reviewed at each balance sheet date to

determine whether there is any indication of impairment. If such indication exists, the

recoverable amount of such asset is estimated. An impairment loss is recognized wherever

the carrying amount of the asset exceeds its recoverable amount. Impairment losses are

recognized in profit and loss account. A previously recognized impairment loss is reversed

only if there has been a change in the estimates used to determine the asset's recoverable

amount since the last impairment loss was recognized. If that is the case, the carrying

amount of the asset is increased to its recoverable amount. That increased amount cannot

exceed the carrying amount that would have been determined, net of depreciation, had no

impairment loss been recognized for the asset in prior years. Such reversal is recognized in

profit and loss account.

Annual Report _____________________________________________________________________________

4.17 Revenue recognition

a) Sale of goods

b) Interest income

4.18 Borrowing costs

4.19 Foreign currencies

4.20 Related party transactions

4.21

Standard or Interpretation

24

beginning on or after)

Revenue is recognized when the significant risks and rewards of ownership of the goods

have passed to the buyer which generally coincides with the delivery of goods to

customers. Export goods are considered dispatched when shipped on board.

Profit on bank deposit is recognized when accrued.

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 or sale, are added to the cost of those assets, until such time as

the assets are substantially ready for their intended use or sale. All other borrowing costs

are charged to profit and loss account whenever incurred.

Transactions in foreign currency are initially recorded in the functional currency at the rate

prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign

currencies are retranslated at functional currency rate of exchange prevailing at the balance

sheet date. All differences are taken to the profit and loss account.

Transactions and contracts with related parties are carried out at arms length prices

determined in accordance with comparable uncontrolled price method. Parties are said to

be related if they are able to influence the operating and financial decisions of the Company

and vice versa.

Standards, interpretations and amendments to published 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

(accounting periods

01 January 2018IFRS 2 Share-based Payments – Classification and

Measurement of Share-based Payments Transactions

(Amendments)

____________________________________________________________________

Standard

25

IFRS 10 Consolidated Financial Statements, IFRS 12

Disclosure of Interests in Other Entities and IAS 28

Investment in Associates – Investment Entities:

Applying the Consolidation Exception (Amendment)

01 January 2016

IFRS 10 Consolidated Financial Statements, IFRS 12

Disclosure of Interests in Other Entities and IAS 28

Investment in Associates – Investment Entities:

Applying the Consolidation Exception (Amendment)

Not yet finalized

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)

IFRS 9 - Financial Instruments: Classification and

Measurement01 January 2018

IAS 16 Property, Plant and Equipment IAS 41

Agriculture - Agriculture: Bearer Plants (Amendment)

01 January 2016

IAS 27 Separate Financial Statements – Equity

Method in Separate Financial Statements

(Amendment)

01 January 2016

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.

IAS 12 Income Taxes – Recognition of Deferred Tax

Assets for Unrealized losses (Amendments)

01 January 2017

IAS 16 Property, Plant and Equipment and IAS 38

intangible assets - Clarification of Acceptable Method

of Depreciation and Amortization (Amendment)

IFRS 15 - Revenue from Contracts with Customers 01 January 2018

IFRS 16 – Leases 01 January 2019

IFRS 14 - Regulatory Deferral Accounts 01 January 2016

01 January 2016

IFRS 11 Joint Arrangements - Accounting for

Acquisition of Interest in Joint Operation (Amendment)

01 January 2016

IAS 1 Presentation of Financial Statements -

Disclosure Initiative (Amendment)

01 January 2016

IFRS 7 Financial Instruments: Disclosures -

Disclosure Initiative - (Amendment)

01 January 2017

Annual Report _____________________________________________________________________________

2016 2015

Note Rupees Rupees

5.ISSUED, SUBSCRIBED AND PAID UP SHARE

CAPITAL

36,000,000 (2015 : 36,000,000) Ordinary shares of

Rs. 10 each fully paid in cash 360,000,000 360,000,000

6. SURPLUS ON REVALUATION OF FIXED ASSETS

Surplus on revaluation of fixed assets as at 01 July 334,302,798 369,029,180

Surplus on revalued assets disposed off (289,354) (1,334,873)

Surplus relating to incremental depreciation charged on related

assets - transferred to other comprehensive income (29,871,617) (33,391,509)

Surplus on revaluation of fixed assets as at 30 June 304,141,827 334,302,798

Less: Related deferred tax liability on:

- Balance as at 01 July (97,908,818) (111,669,765)

- Fixed assets disposed off during the year 89,700 435,530

- Incremental depreciation charged during the year 9,260,201 10,894,681

- Increase due to change in proportionate local sales (200,285) (628,915)

- Decrease due to change in tax rate 2,773,725 3,059,651

(85,985,477) (97,908,818)

218,156,350 236,393,980

7. LONG TERM DEPOSITS

8. DEFERRED LIABILITIES

Deferred liabilities (8.1) 244,647,555 264,567,299 Gratuity - unfunded (8.2) 36,024,394 32,347,143

280,671,949 296,914,442

8.1 Deferred taxation

Taxable temporary differencesSurplus on revaluation of fixed assets 85,985,477 97,908,818 Accelerated tax depreciation 169,829,640 178,169,275

255,815,117 276,078,093 Deductible temporary differences

Unapproved gratuity (11,167,562) (11,510,794)

244,647,555 264,567,299

26

The Company had revalued its freehold land, factory building, office building and plant and

machinery on 31 December 2013. The revaluation exercise was carried out by M/s Harvest

(Private) Limited to replace the carrying amount of freehold land with current market value

and other assets with their depreciated market values. The surplus arisen on the revaluation

aggregating to Rs. 211,186,148 was credited to this account to comply with the requirements

of section 235 of the Companies Ordinance, 1984.

These represent deposits taken from employees against future transfer of company owned

vehicles to them and carry no mark-up.

____________________________________________________________________

2016 2015Note Rupees Rupees

8.2 Movement in net liability

Liability at the beginning of the year 32,347,143 28,883,564

Charge for the year (8.2.1) 16,419,665 17,711,165

48,766,808 46,594,729

Paid during the year (12,742,414) (10,751,928)

Actuarial gain - (3,495,658)

Liability at the end of the year 36,024,394 32,347,143

8.2.1 Charge for the year

Current service cost 14,148,532 14,596,408

Interest cost 2,271,133 3,114,757

16,419,665 17,711,165

8.2.2 The charge for the year has been allocated as follows:

Cost of sales (22) 13,464,125 14,523,155

Distribution cost (23) 985,180 1,062,670

Administrative expenses (24) 1,970,360 2,125,340

16,419,665 17,711,165

8.2.3 Sensitivity analysis

Discount rate +100 bps 31,812,865

Discount rate -100 bps 32,906,365

Salary increase +100 bps 33,042,469

Salary increase -100 bps 31,670,197

2015

Expected rate of increase in salary 8.75%

Discount rate 9.75%

Average expected remaining working life of employees 2 years

27

The sensitivity analyses below have been determined based on reasonably possible

changes of the respective assumptions, while holding all other assumptions constant.

Significant assumptions for the determination of the defined obligation are discount rate and

expected salary increase based on the last year actuary valuation. Following significant

assumptions were used for valuation of this scheme. Current year charge has been

calculated based on the projected figures in 2015 actuary report.

Annual Report _____________________________________________________________________________

2016 2015

Note Rupees Rupees9. TRADE AND OTHER PAYABLES

Creditors 11,961,148 14,172,583

Accrued liabilities 75,289,449 137,614,521

Advances from customers (9.1) 7,776,456 7,532,178

Advance from brokers against customers (9.2) 1,554,860 1,733,860

Unclaimed Workers' Profit Participation Fund 7,140,623 5,824,898

Workers' Profit Participation Fund (9.3) 990,073 7,492,386

Workers' Welfare Fund (9.4) 1,415,798 4,039,281

Unclaimed dividend 232,342 208,840

Others 115,400 100,000

106,476,149 178,718,547

9.1

9.2

9.3 Workers' Profit Participation Fund

Balance at the beginning of the year 7,492,386 7,951,817 Charge for the year (25) 990,073 7,492,386

8,482,459 15,444,203 Less: Payments made during the year 7,492,386 7,951,817

990,073 7,492,386

9.4 Workers' Welfare Fund

Balance at the beginning of the year 4,039,281 3,984,988 Charge for the year (25) 1,415,798 4,039,281

5,455,079 8,024,269 Less: Payments made during the year 4,039,281 3,984,988

1,415,798 4,039,281

10. BALANCES WITH STATUTORY AUTHORITIES

This represents sales tax payable to government.

11. SHORT TERM BORROWINGS

From banking companies - secured:

Cash finance (11.1) 26,564,037 7,962,967

Running finance (11.1) 369,312 19,430,920

Salam 800,000 3,000,000

27,733,349 30,393,887

Unsecured:

Book overdrawn (11.2) 846,123 1,327,747

Loan from directors (11.3) - 24,023,848

846,123 25,351,595

28,579,472 55,745,482

28

These represent advances against sale of yarn.

These represent advances from brokers against sale of yarn.

____________________________________________________________________

11.1

11.2

11.3

12. CONTINGENCIES AND COMMITMENTS

12.1 Contingencies:

12.1.1

12.1.2

12.2 Commitments:

29

The Company based on the opinion of its legal advisor has not recorded any provision for

the above in these financial statements as the Company is confident that outflow of

economic resources is not probable.

Bank guarantees aggregating to Rs. 47,742,200 (2015: Rs. 43,582,200) issued on behalf of

the Company were outstanding on balance sheet date.

This represents the book overdrawn balance due to unpresented cheques issued near the

balance sheet date. However, the bank statement shows a favourable balance of Rs.

681,127 (2015: Rs. 238,972).

Order under section 122(5A) of the Income Tax Ordinance, 2001 (ITO 2001) for the tax year

2005 (Oct - June) was issued by ACIR, who raised a demand amounting Rs. 6,801,138

against the Company. On appeal of the company, the CIR(A) set aside the order and

directed the assessing officer to recalculate the amount of demand raised according to the

rules ,vide order dated 31 March 2012. The department has now filed an appeal against the

order of CIR(A) before the ATIR which is pending adjudication.

This represents interest free loan from a director and have maturity of less than 12 months.

Order under section 122(5A) of the Income Tax Ordinance, 2001 (ITO 2001) for tax year

2005 (July - September) was issued by Additional Commissioner Inland Revenue (ACIR),

who raised a demand amounting to Rs. 74,047,800 against the Company. On application by

the Company for rectification to ACIR, he reduced the amount to Rs. 54,892,444. The

Company filed an appeal before Commissioner Inland Revenue Appeals (CIR(A)), who set

aside the order and directed the assessing officer to decide the case on merit in the light of

the submissions of the Company's lawyers, vide order dated 24 November 2011 and the

decision was taken in favour of the Company. The department has now filed an appeal

against the order of CIR(A) before the Appellate Tribunal Inland Revenue (ATIR) which is

pending adjudication. The appeal has been heard by the Tribunal, while decision regarding

thereto has not been issued as yet.

The aggregate facility of short term finances from commercial banks available at year end

was Rs. 1,065,000,000 (2015: Rs. 1,275,000,000). The rates of mark-up range from 3

months KIBOR plus 1% to 2% (2015: 3 months KIBOR plus 1% to 2.75%) per annum.

These facilities are secured against pledge of cotton bales with 10% margin for cotton, 25%

margin for yarn bags, first pari passu charge of Rs.159,000,000 on all current assets of the

Company, first pari passu charge of Rs. 337,000,000 on fixed assets of the Company, trust

receipts duly executed by the Company and personal guarantee of the directors of the

Company.

Annual Report ____________________________________________________________________________________________________

2016 2015

Note Rupees Rupees

13. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets - Owned (13.1) 1,156,629,818 1,218,378,299

Capital work in progress (13.2) 2,526,471 5,746,124

1,159,156,289 1,224,124,423

13.1 Operating fixed assets - Owned

Free hold land

Building on

freehold land -

Factory

Building on

freehold land -

Residential

Plant and

machinery

Electric

installations

Mills

equipment

Office

equipment

Furniture and

fixturesVehicles

Arms and

ammunition

Total

Assets

--------------------------------------------------------------------------------------------------------------------------- R u p e e s -------------------------------------------------------------------------------------------------------------------------------

At 01 July 2015

Cost 139,153,296 186,561,368 30,636,655 935,660,840 28,584,644 38,939,618 2,960,717 1,129,360 12,890,531 43,620 1,376,560,649

Accumulated Depreciation - 26,904,211 2,179,112 92,396,963 15,289,325 14,166,434 1,126,429 697,025 5,397,033 25,818 158,182,350

Net book value 139,153,296 159,657,157 28,457,543 843,263,877 13,295,319 24,773,184 1,834,288 432,335 7,493,498 17,802 1,218,378,299

Movement during the year

Opening net book value 139,153,296 159,657,157 28,457,543 843,263,877 13,295,319 24,773,184 1,834,288 432,335 7,493,498 17,802 1,218,378,299

Additions - cost - - - - - 128,000 767,918 224,640 5,741,555 - 6,862,113

Transferred from CWIP - - 6,900,265 - - - - - - - 6,900,265

Disposals

Cost - - - 405,498 - - - 2,878,098 - 3,283,596

Depreciation - - - 116,144 - - - 1,154,647 - 1,270,791

- - - 289,354 - - - - 1,723,451 - 2,012,805

Depreciation for the year - 15,965,716 1,652,887 52,033,015 168,133 2,083,226 191,246 29,270 1,372,781 1,780 73,498,054

Closing net book value 139,153,296 143,691,441 33,704,921 790,941,508 13,127,186 22,817,958 2,410,960 627,705 10,138,821 16,022 1,156,629,818

Depreciation rate (%) - 10 5 10 10 10 10 10 20 10

30

2016

________________________________________________________________________________________________________________________________________________

Free hold land

Building on

freehold land -

Factory

Building on

freehold land -

Residential

Plant and

machinery

Electric

installations

Mills

equipment

Office

equipment

Furniture and

fixturesVehicles

Arms and

ammunition

Total

Assets

--------------------------------------------------------------------------------------------------------------------------- R u p e e s -------------------------------------------------------------------------------------------------------------------------------

At 01 July 2014

Cost 128,395,241 186,561,368 29,547,210 937,410,840 28,584,644 38,816,908 2,675,917 1,129,360 14,748,913 43,620 1,367,914,021

Accumulated Depreciation - 9,164,527 738,680 34,897,093 13,707,665 13,265,732 936,263 670,073 4,935,957 24,689 78,340,679

Net book value 128,395,241 177,396,841 28,808,530 902,513,747 14,876,979 25,551,176 1,739,654 459,287 9,812,956 18,931 1,289,573,342

Movement during the year

Opening net book value 128,395,241 177,396,841 28,808,530 902,513,747 14,876,979 25,551,176 1,739,654 459,287 9,812,956 18,931 1,289,573,342

Additions - cost 10,758,055 - 1,089,445 - - 122,710 284,800 - 1,839,560 - 14,094,570

Disposals

Cost - - - 1,750,000 - - - 3,697,942 - 5,447,942

Depreciation - - - 353,030 - - - 669,662 - 1,022,692

- - - 1,396,970 - - - - 3,028,280 - 4,425,250

Depreciation for the year - 17,739,684 1,440,432 57,852,900 1,581,660 900,702 190,166 26,952 1,130,738 1,129 80,864,363

Closing net book value 139,153,296 159,657,157 28,457,543 843,263,877 13,295,319 24,773,184 1,834,288 432,335 7,493,498 17,802 1,218,378,299

Depreciation rate (%) - 10 5 10 10 10 10 10 20 10

31

2015

Annual Report ____________________________________________________________________________________________________

2016 2015

Note Rupees Rupees

13.1.1 Depreciation charge for the year has been allocated as follows:

Cost of sales (22) 71,902,977 79,515,378

Administrative expenses (24) 1,595,077 1,348,985

73,498,054 80,864,363

13.1.2

Owned Assets:

Freehold land 112,383,975 - 112,383,975 112,383,975 - 112,383,975

Building on freehold land:

Factory 171,940,415 137,515,127 34,425,288 171,940,415 133,690,095 38,250,320

Residential 27,993,594 11,087,384 16,906,210 21,093,329 10,318,641 10,774,688

Plant and machinery 1,222,340,872 615,049,129 607,291,743 1,222,861,119 548,041,027 674,820,092

1,534,658,856 763,651,640 771,007,216 1,528,278,838 692,049,763 836,229,075

32

Had there been no revaluation, the related figures of freehold land, building and plant and machinery at 30 June would have been as follows:

Particulars

Balance As at 30 June 2016 Balance As at 30 June 2015

CostAccumulated

depreciation Net book value Cost

Accumulated

depreciation Net book value

---------------------------------------------------------------------------------------Rupees --------------------------------------------------------------------------------------------

____________________________________________________________________

2016 2015

Note Rupees Rupees

13.2 Capital work in progress

Opening 5,746,124 3,669,074

Additions during the year 11,809,489 3,192,016

Less: transfer to operating fixed assets (6,900,265) -

Less: Transfer to stores (8,128,877) (1,114,966)

2,526,471 5,746,124

13.2.1

14. LONG TERM DEPOSITS

15. STORES AND SPARE PARTS

Stores in transit 50,975 37,915

Stores 4,910,946 5,874,942

Spare parts 38,931,472 31,447,370

43,893,393 37,360,227

16. STOCK IN TRADE

Raw material 213,242,376 211,598,536

Work in process 18,897,018 18,980,136

Finished goods (16.1) 19,228,567 31,302,878

Packing material 5,281,963 5,990,047

Waste 2,940,954 3,094,932

259,590,878 270,966,529

16.1 This includes garments stock of Rs. 3,872,581 (2015: Rs. Nil).

17. TRADE DEBTS

These are unsecured but considered good by the management of the Company.

18. ADVANCES- unsecured

Advances to suppliers:

Considered good 2,679,852 2,325,692

Considered doubtful - 743,604

2,679,852 3,069,296

Less: provision for doubtful advances (18.1) - 743,604

2,679,852 2,325,692

Advances to employees - considered good (18.2) 1,581,402 206,694

4,261,254 2,532,386

18.1 Provision for doubtful advances

Opening balance 743,604 743,604

Provision made during the year - -

Advances written off (743,604) -

Closing balance - 743,604

33

This represents expenses incurred and advances given in relation to office building.

These includes interest free deposits made for guarantees and security deposits to utility companies.

Annual Report _____________________________________________________________________________

18.2

18.3

2016 2015

Note Rupees Rupees

19. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Bank guarantee margin 2,511,565 1,511,565

Short term prepayments 949,948 865,943

3,461,513 2,377,508

20. CASH AND BANK BALANCES

Cash in hand 671,954 407,935

Cash at bank:

Current accounts 9,412,887 29,154,785

Deposit accounts (20.1) 14,555,226 9,857,953

23,968,113 39,012,738

24,640,067 39,420,673

20.1

21. SALES - net

Local 3,169,743,503 3,406,809,202

Waste 57,220,934 55,375,724

3,226,964,437 3,462,184,926

Less: Sales tax 94,488,248 66,378,096

3,132,476,189 3,395,806,830

22. COST OF SALES

Raw materials:

Opening 211,598,536 181,312,119

Purchases 2,344,538,708 2,393,384,505

Closing stock (16) (213,242,376) (211,598,536)

Raw material consumed 2,342,894,868 2,363,098,088

Salaries, wages and other benefits (22.1) 208,691,133 207,669,128

Fuel and power 282,162,328 358,004,322

Packing material consumed 43,040,947 45,089,769

Stores and spare parts consumed 46,030,642 55,991,392

Insurance 5,448,502 5,192,946

Repairs and maintenance 4,894,045 3,873,581

Depreciation (13.1.1) 71,902,977 79,515,378

Others 2,403,058 1,500,004

3,007,468,500 3,119,934,608

Work in process:

Opening stock 18,980,136 17,168,014

Closing stock (16) (18,897,018) (18,980,136)

83,118 (1,812,122)

Cost of goods manufactured 3,007,551,618 3,118,122,486

Finished goods and waste:

Opening stock 34,397,810 65,110,677

Closing stock (16) (22,169,521) (34,397,810)

12,228,289 30,712,867

3,019,779,907 3,148,835,353

34

These represent interest free advances to employees for the purpose of the expenses.

No advances were given to the Chief Executive Officer, Directors and Executives of the Company.

These carry interest at the rate ranging from 4% to 6% (2015: 4% to 6%) per annum.

____________________________________________________________________

22.1

2016 2015

Note Rupees Rupees

23. DISTRIBUTION COST

Salaries and other benefits (23.1) 6,412,124 6,283,562

Commission on sales 14,593,875 12,421,334

Freight and forwarding - 103,550

Other expenses 841,061 446,677

21,847,060 19,255,123

23.1

24. ADMINISTRATIVE EXPENSES

Directors' remuneration 5,927,903 5,750,416

Salaries and other benefits (24.1) 20,654,738 17,095,302

Charity and donations (24.2) 7,910,000 15,035,000

Depreciation (13.1.1) 1,595,077 1,348,985

Fee and subscription 1,092,657 951,041

Postage, telephone and telex 1,282,847 819,126

Auditors' remuneration (24.3) 655,000 680,000

Rent, rates and taxes 141,690 625,422

Electricity, gas and water 1,697,266 540,183

Legal and professional 760,375 599,620

Entertainment 1,033,548 720,826

Repairs and maintenance 2,344,701 455,312

Vehicle running and maintenance 1,174,407 1,015,272

Printing and stationery 397,759 318,386

Insurance 311,497 156,017

Traveling and conveyance 180,218 144,585

Advertisement 1,105,134 131,855

Advances written off 1,738,327 -

Others 3,621,379 2,321,639

53,624,523 48,708,987

24.1

24.2 None of the directors had any interest in any of the donees.

24.3 Auditors' remuneration

Statutory audit 550,000 550,000

Half yearly review 75,000 75,000

Other certifications - 25,000

Out of pocket expenses 30,000 30,000

655,000 680,000

35

This includes an amount of Rs. 985,180 (2015: Rs.1,062,670) representing gratuity expense for the

year.

This includes an amount of Rs. 1,970,360 (2015: Rs. 2,125,340) representing gratuity expense for

the year.

This includes an amount of Rs. 13,464,125 (2015: Rs.14,523,155) representing gratuity expense for

the year.

Annual Report _____________________________________________________________________________

2016 2015

Note Rupees Rupees

25. OTHER OPERATING EXPENSES

Workers' Profit Participation Fund (9.3) 990,073 7,492,386

Workers' Welfare Fund (9.4) 1,415,798 4,039,281

Loss on disposal of property, plant and equipment - 756,123

2,405,871 12,287,790

26. OTHER INCOME

Income from financial assets:

Interest on bank deposits 2,521,239 640,912

Subsidy on finance lease due to subsidized rate - 1,034,934

2,521,239 1,675,846

Income from assets other than financial assets:

Gain on disposal of property, plant and equipment 1,136,785 -

Scrap sales 1,697,087 5,928,942

Creditors written back 27,000 21,393

2,860,872 5,950,335

5,382,111 7,626,181

27. FINANCE COSTS

Interest / mark-up on:

Short term borrowings 20,493,229 33,451,384

Loans from directors - 278,425

Mark up on Workers' Profit Participation Fund 527,553 741,924

21,020,782 34,471,733

Bank charges and commission 1,784,569 1,557,965

22,805,351 36,029,698

28. TAXATION

Current :

For the year 32,740,560 61,030,747

Prior year 1,220,567 (3,458,523)

33,961,127 57,572,224

Deferred:

For the year (19,919,744) (22,502,352)

(28.1) 14,041,383 35,069,872

28.1 Relationship between tax expenses and accounting profit

Profit before taxation 17,395,588 138,316,060

Current Taxation:

Tax at applicable tax rate of 1% minimum tax (2015: 33%) 31,324,762 45,644,300

Tax effect of change in prior year 1,220,567 (3,458,523)

Tax effect of expenses that are not deductible in

determining taxable income charged to profit and loss account (18,503,946) 17,247,355

Tax effect of expenses that are deductible in

determining taxable income not charged to profit and loss account - (20,078,831)

Effect of tax credits - (4,284,429)

14,041,383 35,069,872

36

Annual Report _____________________________________________________________________________

2016 2015

Note Rupees Rupees

29. EARNINGS PER SHARE - BASIC AND DILUTED

Profit for the year Rupees 3,354,205 103,246,188

Weighted average number of shares Number 36,000,000 36,000,000

Basic earnings per share Rupees 0.09 2.87

YarnGarments

DivisionTotal

30. SEGMENT RESULTS Rupees Rupees Rupees

Sale 3,225,743,852 1,220,585 3,226,964,437

Less: Sales tax 94,427,216 61,032 94,488,248

3,131,316,636 1,159,553 3,132,476,189

Cost of sale

Raw material consumed 2,337,357,655 5,537,213 2,342,894,868

Salaries, wages and other benefits 208,263,557 427,576 208,691,133

Fuel and power 282,162,328 - 282,162,328

Packing material consumed 42,979,114 61,833 43,040,947

Stores and spare parts consumed 46,030,642 - 46,030,642

Insurance 5,448,502 - 5,448,502

Repairs and maintenance 4,706,613 187,432 4,894,045

Depreciation 71,902,977 - 71,902,977

Others 2,262,475 140,583 2,403,058

3,001,113,863 6,354,637 3,007,468,500

Work in process:

Opening stock 18,980,136 - 18,980,136

Closing stock (18,897,018) - (18,897,018)

83,118 - 83,118

Cost of goods manufactured 3,001,196,981 6,354,637 3,007,551,618

Finished goods and waste:

Opening stock 34,397,810 - 34,397,810

Closing stock (18,296,940) (3,872,581) (22,169,521)

16,100,870 (3,872,581) 12,228,289

3,017,297,851 2,482,056 3,019,779,907

Gross profit / (loss) 114,018,785 (1,322,503) 112,696,282

37

29.1 No figure for diluted earnings per share has been presented as the Company has not issued any

instrument carrying options which would have an impact on the basic earnings per share, when

exercised.

____________________________________________________________________

YarnGarments

DivisionTotal

Rupees Rupees Rupees

Distribution cost

Salaries and other benefits 5,942,436 469,688 6,412,124

Commission on sales 14,593,875 - 14,593,875

Other expenses 387,158 453,903 841,061

20,923,469 923,591 21,847,060

Administrative expenses

Directors' remuneration 5,927,903 - 5,927,903

Salaries and other benefits 19,223,773 1,430,965 20,654,738

Charity and donations 7,910,000 - 7,910,000

Depreciation 1,594,455 622 1,595,077

Fee and subscription 1,092,657 - 1,092,657

Postage, telephone and telex 1,272,430 10,417 1,282,847

Auditors' remuneration 655,000 - 655,000

Rent, rates and taxes 141,690 - 141,690

Electricity, gas and water 1,219,317 477,949 1,697,266

Legal and professional 760,375 - 760,375

Entertainment 1,033,548 - 1,033,548

Repairs and maintenance 1,480,173 864,528 2,344,701

Vehicle running and maintenance 1,159,407 15,000 1,174,407

Printing and stationery 397,759 - 397,759

Insurance 311,497 - 311,497

Traveling and conveyance 180,218 - 180,218

Advertisement 226,400 878,734 1,105,134

Advances written off 1,738,327 - 1,738,327

Others 3,557,750 63,629 3,621,379

49,882,679 3,741,844 53,624,523

Other operating expenses 2,405,871 - 2,405,871

52,288,550 3,741,844 56,030,394

Other income 5,382,111 - 5,382,111

Operating profit / (loss) 46,188,877 (5,987,938) 40,200,939

Finance costs 22,802,809 2,542 22,805,351

Profit / (loss) before taxation 23,386,068 (5,990,480) 17,395,588

38

Annual Report _____________________________________________________________________________

31. REMUNERATION OF CHIEF EXECUTIVE OFFICER, DIRECTORS AND EXECUTIVES

2,150,000 1,761,935 7,328,960 1,671,113 2,162,500 6,753,889

Utilities 215,000 176,194 732,896 167,111 216,249 675,389

House rent 860,000 704,774 2,931,585 668,444 864,999 2,701,555

3,225,000 2,642,903 10,993,441 2,506,668 3,243,748 10,130,833

1 1 4 1 3 4

31.1 In addition, the above persons have been provided with the Company maintained cars.

31.2 No fee is paid to the Chief Executive Officer or any director of the Company for attending the meetings.

32. TRANSACTIONS WITH RELATED PARTIES

2016 2015

Rupees Rupees

Directors Loan received during the year 24,500,000 91,212,848

48,523,848 67,189,000

- 278,425

- 635,915

33. FINANCIAL RISK MANAGEMENT

33.1 Financial risk factors

39

2015

Directors Executives

Chief

Executive

Officer

Directors Executives

2016

Chief

Executive

Officer

----------------------Rupees-------------------

Nature of transaction

Loan repaid during the year

Interest on loans

The related parties include directors of the Company and key management personnel. Amounts due

from and to related parties are shown under respective notes to the financial statements.

Remuneration of directors and key management personnel is disclosed in note 31. Other significant

transactions with related parties are as below:

-------------------------Rupees----------------------

Managerial

remuneration

Number of

persons

Relationship with the

Company

Rent paid during the year

The Company's financial liabilities mainly comprise short term borrowings and trade and other

payables. The main purpose of these financial liabilities is to raise finances for Company's operations.

The Company has trade debts, trade deposits, short term advances and short term bank deposits that

arrive directly from its operations. The Company's activities expose it to a variety of financial risks:

market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. 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.

Risk management is carried out by the Board of Directors (the Board). The Board provides principles

for overall risk management, as well as policies covering specific areas such as currency risk, price

risk, interest rate risk, credit risk and liquidity risk.

____________________________________________________________________

a)Market risk

i)Currency risk

ii)Other price risk

iii)Interest rate risk

2016 2015

Floating rate instruments Rupees Rupees

Financial assets

Bank balances - deposit accounts 14,555,226 9,857,953

Financial liabilities

Short term borrowings 28,579,472 55,745,482

Cash flow sensitivity analysis for variable rate instruments

40

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rates. Currency risk arises mainly from future commercial

transactions or receivables and payables that exist due to transactions in foreign currencies. The

Company has no significant transactions in foreign currency therefore, it is not exposed to currency

risk.

Other price risk represents the risk that the fair value or future cash flows of a financial instrument

will fluctuate because of changes in market prices (other than those arising from interest rate risk or

currency risk), whether those changes are caused by factors specific to the individual financial

instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

The Company is not exposed to commodity price risk since it has diverse portfolio of commodity

suppliers. The Company is also not exposed to equity price risk.

This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in market interest rates.

The Company has no significant interest-bearing assets other than bank balances in deposit

accounts. The Company's interest rate risk mainly arises from short term borrowings. Borrowings

obtained at variable rates expose the Company to cash flow interest rate risk. Borrowings obtained

at fixed rate expose the Company to fair value interest rate risk.

The following analysis demonstrates the sensitivity to a reasonably possible change in interest

rates, with all other variables held constant, of the Company's profit before tax. This analysis is

prepared assuming the amounts of floating rate instruments outstanding at balance sheet dates

were outstanding for the whole year.

At the balance sheet date the Company was not exposed to fair value interest rate risk, however

the interest rate profile of the Company’s floating interest bearing financial instruments was:

Annual Report _____________________________________________________________________________

Changes in

Interest

Rate

Effects on

Profit

Before Tax

Bank balances - deposit accounts +1.00 (145,552)

-1.00 145,552

+1.00 (98,580)

-1.00 98,580

Short term borrowings +1.50 (428,692)

-1.50 428,692

+1.50 (836,182)

-1.50 836,182

b)Credit risk

2016 2015

Rupees Rupees

Long term deposits 3,697,560 3,697,560

Trade debts 76,128,783 115,572,506

Trade deposits 2,511,565 1,511,565

Bank balances 23,968,113 39,012,738

106,306,021 159,794,369

Rupees Rupees

Banks

Habib Bank Limited A-1+ AAA JCR - VIS 945,414 495,079

Al-Baraka Bank A A1 PACRA 82,617 -

MCB Bank Limited A-1+ AAA PACRA 148,796 10,037,439

National Bank of Pakistan A-1+ AAA JCR - VIS 676,667 4,122,320

Faysal Bank Limited A1+ AA PACRA 11,039,427 5,858,854

Askari Bank Ltd AA+ A1+ PACRA 581,190 19,941

Bank Alfalah Limited A1+ AA PACRA 2,756,136 3,628,281

Bank of Punjab AA- A1+ PACRA 29,612 29,683

Habib Metropolitan Bank Ltd AA+ A1+ PACRA 7,668,136 14,780,473

NIB Bank Limited AA- A1+ PACRA 40,118 40,668

23,968,113 39,012,738

41

2015

Credit risk represents the risk that one party to a financial instrument will cause a financial loss to

the other party by failing to discharge an obligation. The carrying amount of financial assets

represents the maximum credit exposure. The maximum exposure to credit risk at the reporting

date was as follows:

The credit quality of financial assets that are neither past due nor impaired can be assessed by

reference to external credit ratings or to historical information about counterparty default rate. The

table below shows the bank balances held with counterparties at the balance sheet date:

Rating2016 2015

Short

Term

Long

termAgency

2015

2016

2016

____________________________________________________________________

Trade debts

2016 2015

The age of trade receivables at balance sheet date was: Rupees Rupees

Not past due 75,817,417 115,301,945

Past due 1- 6 months 618,406 13,391

Past due 7- 12 months 220,330 6,027

1 - 2 years 238,675 251,143

2 - 3 years 79,877 -

Above 3 years 91,223 -

77,065,928 115,572,506

-

-

c)Liquidity risk

Carrying

Amount

Contractual

cash flows

Less than

1 year

Between

1 and 5

years

Over 5 years

30 June 2016

12,308,890 12,308,890 12,308,890 - -

4,478,124 4,478,124 4,478,124 - -

36,024,394 36,024,394 - 36,024,394 -

Short term borrowings 28,579,472 28,579,472 28,579,472 - -

81,390,880 81,390,880 45,366,486 36,024,394 -

42

At 30 June 2016, Company had 9 customers (2015: 13 customers) that owed the Company more

than Rs. 1 million each and accounted for approximately 95% (2015: 98%) of all receivables owing.

Due to the Company's long standing business relationships with these counterparties and after

giving due consideration to their strong financial standing, management does not expect non-

performance by these counter parties on their obligations to the Company. Accordingly the credit

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with

financial liabilities.

Post employment benefits -

gratuity

The Company's approach to managing liquidity is to ensure, as far as possible, that it will always

have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,

without incurring unacceptable losses or risking damage to the Company's reputation. The

management believes the liquidity risk to be low.

Mark-up accrued on short

term-borrowings

---------------------------------------------------------------------------------Rupees----------------------------------------------------------------------------------

Trade and other payables

The table below analyses the Company's financial liabilities into relevant maturity groupings based

on the remaining period at the balance sheet to the contractual maturity date. The amounts

disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months

equate to their carrying balances as the impact of discounting is not significant:

Credit risk related to trade receivables is managed by established policies, procedures and controls

relating to customers credit risk management. Outstanding receivables are regularly monitored.

Annual Report _____________________________________________________________________________

Carrying

Amount

Contractual

cash flows

Less than

1 year

Between

1 and 5

years

Over 5 years

30 June 2015

14,481,423 14,481,423 14,481,423 - -

5,153,641 5,153,641 5,153,641 - -

32,347,143 32,347,143 - 32,347,143 -

Short term borrowings 55,745,482 55,745,482 55,745,482 - -

107,727,689 107,727,689 75,380,546 32,347,143 -

33.2 Fair values of financial assets and liabilities

33.3 Financial instruments by categories

Loans and

receivablesTotal

As at 30 June 2016

Financial assets as per balance sheet

Long term deposits - 3,697,560 3,697,560

Trade debts - 76,128,783 76,128,783

Trade deposits - 2,511,565 2,511,565

Cash and bank balances 24,640,067 - 24,640,067

24,640,067 82,337,908 106,977,975

Financial liabilities as per balance sheet Rupees

Trade and other payables 12,308,890

Mark-up accrued on short term borrowings 4,478,124

Post employment benefits- Gratuity 36,024,394

Short term borrowings 28,579,472

81,390,880

43

---------------------------------------------------------------------------------Rupees----------------------------------------------------------------------------------

The contractual cash flows relating to the above financial liabilities have been determined on the

basis of mark-up rates effective as at 30 June. The rates of mark up have been disclosed in

respective notes to the financial statements.

The carrying values of all financial assets and liabilities reflected in financial statements approximate

their fair values. Fair value is determined on the basis of objective evidence at each reporting date.

Cash and

cash

equivalents

Trade and other

payables

Mark-up accrued on

short term-borrowings

Post employment

benefits - gratuity

---------------------------------------------------Rupees------------------------------------------------

Financial

liabilities at

amortized cost

____________________________________________________________________

Loans and

advancesTotal

As at 30 June 2015

Financial assets as per balance sheet

Long term deposits - 3,697,560 3,697,560

Trade debts - 115,572,506 115,572,506

Trade deposits - 1,511,565 1,511,565

Cash and bank balances 39,420,673 - 39,420,673

39,420,673 120,781,631 160,202,304

Financial liabilities as per balance sheet Rupees

Liabilities against assets subject to finance lease -

Trade and other payables 14,481,423

Mark-up accrued on financing 5,153,641

Post employment benefits 32,347,143

Short term borrowings 55,745,482

107,727,689

33.4 Capital risk management

2016 2015

Note Rupees Rupees

The gearing ratio as at year end is as follows:

(12) 28,579,472 55,745,482

1,113,486,161 1,135,553,142

Total capital employed 1,142,065,633 1,191,298,624

3% 5%

44

No changes were made in the objectives, policies or processes from the previous year. The Company

monitors capital using gearing ratio, which is debt divided by equity plus net debt. Debt represents short

term borrowings obtained by the Company as referred to in note 12. Total capital employed includes

‘total equity’ as shown in the balance sheet plus debt. The Company’s strategy, which was unchanged

from last year, was to maintain optimal capital structure in order to minimize cost of capital.

Debt

Equity

Gearing ratio

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue

as a going concern in order to provide return for shareholders and benefits for other stakeholders and to

maintain healthier capital ratios in order to support its business and maximize shareholders' value. The

Company manages its capital structure and makes adjustments to it, in the light of changes in economic

conditions. To maintain or adjust the capital structure, the Company may adjust dividend payments to

the shareholders or issue new shares.

Cash and

cash

equivalents

---------------------------------------------------Rupees------------------------------------------------

Financial

liabilities at

amortized cost

Annual Report _____________________________________________________________________________

2016 2015

34. PLANT CAPACITY AND ACTUAL PRODUCTION

Spindles installed / worked No. 38,448 38,448

Production at normal capacity in 20/S count

based on 3 shifts per day Kgs 14,102,609 14,102,609

Actual production converted to 20/S count

based on 3 shifts per day Kgs 12,052,742 11,718,371

34.1 Reason for low production

35. NON ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE

2016 2015

36. NUMBER OF EMPLOYEES

Number of employees at the end of the year 878 899

Average number of employees during the year 917 942

37. DATE OF AUTHORIZATION FOR ISSUE

38. CORRESPONDING FIGURES

39. GENERAL

45

(Director)(Chief Executive Officer)

Under utilization of available capacity is due to change over in production mix and normal maintenance

down time.

Figures in these financial statements have been rounded off to the nearest rupee, unless otherwise

stated.

The Board of Directors of the Company in its meeting held on 08 October 2016 has proposed a cash

dividend of Rs. NIL per share (2015: Rs. 0.7 per share) in respect of the year ended 30 June 2016. The

appropriation will be approved by the members in the forthcoming Annual General Meeting. These

financial statements do not include the effect of these appropriations which will be accounted for

subsequent to the year end.

These financial statements were authorized for issue by the Board of Directors of the Company on 08

October 2016 .

Corresponding figures have been re-arranged or reclassified wherever necessary, for better and fair

presentation. However, no significant reclassifications / restatements have been made in these financial

statements.

_______________________________________________________________________

46

PATTERN OF SHAREHOLDING

1. Incorporation Number 0021882

2. Name of the Company RESHAM TEXTILE INDUSTRIES LIMITED

3. Pattern of holding of the shares held by the shareholders as at 30 June 2016

------Shareholding------

4. No. of Shareholders From To Total Shares Held

28 1 100 139

34 101 500 16,286

5 501 1,000 4,015

6 1,001 5,000 12,000

1 5,001 10,000 10,000

1 15,001 20,000 19,419

1 25,001 30,000 29,100

1 30,001 35,000 32,299

2 50,001 55,000 101,185

1 65,001 70,000 66,000

1 80,001 85,000 82,164

1 100,001 105,000 100,500

1 140,001 145,000 143,846

1 150,001 155,000 153,968

1 165,001 170,000 166,452

1 195,001 200,000 200,000

3 285,001 290,000 863,073

1 345,001 350,000 346,000

1 440,001 445,000 444,620

1 550,001 555,000 553,991

1 585,001 590,000 589,300

1 650,001 655,000 650,746

1 735,001 740,000 738,350

1 765,001 770,000 765,481

1 840,001 845,000 843,481

1 1,140,001 1,145,000 1,140,515

1 1,250,001 1,255,000 1,254,021

1 1,555,001 1,560,000 1,558,998

1 1,665,001 1,670,000 1,668,814

1 2,955,001 2,960,000 2,957,752

1 3,085,001 3,090,000 3,089,560

1 17,395,001 17,400,000 17,397,925

104 36,000,000

5. Categories of shareholders Shares held Percentage

5.1 Directors, Chief Executive Officers and their spouse and minor children

26,974,211 74.928%

5.2 Banks Development In Financial Institutions, Non-Banking Financial Institutions.

119 0.000%

5.3 Shareholders holding 10% or more 23,870,956 66.308%

5.4 General Public 9,005,565 25.015%

5.5 Others (to be specified)

1- Joint Stock Companies 5 0.000%

2- Pension Funds 19,419 0.054%

3- Others 681 0.002%

27 Monday 31st October 2016

2016

th

10.00 a.m.

R E S H A

Annual Report

36-A, Lawrence Road, Lahore.