Page 48 - Interloop Annual Report 2018-2019

DIRECTORS’ REPORT

The Directors of Interloop Limited are pleased to present the annual report of During the year under review, the Board of Directors Payless Shoe Source Inc. While financial loss was prevented
the Company together with the audited financial statements of the Company approved 300% Interim Bonus Shares in the proportion of 3 as receivables from this company were insured through a
share(s) for every 1 share(s) held, followed by 12.5% Interim
factoring company, sales revenue suffered a slight set back.
for the year ended June 30, 2019. Cash Dividend and allotted/paid to the shareholders within Company’s sales and marketing teams have worked hard
stipulated time period, in accordance with the applicable and secured two other customers to fill the gap during next
laws & regulations. year.
Textile & Apparel Sector and The Board of Directors of the Company in their meeting Operational results show that the company achieved
Economic Overview held on 23 September, 2019 have proposed a final cash revenue growth of +20.36% for the year ended June 30,
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dividend of Rs. 1.75 per share (i.e. 17.5%). This is in addition 2019 compared to preceding year. Sales revenue stood at
Financial Year 2019 was a tough year for Pakistan due to billion was from Textiles & Apparel. According to Textile to Rs. 1.25 per share (i.e. 12.5%) first interim cash dividend Rs. 37.478 billion (FY18: Rs. 31.139 billion).
challenges to the macro-economy. Consolidation measures Policy 2014-2019, Textile exports were to double i.e. from already distributed; which make a total cash distribution of
to tackle the challenges brought a lot of pressure on the $13.0 billion to $ 26.0 billion, which could have created some Rs. 3 (i.e.30%) for the year ended June 30, 2019. Gross profit for the year stood at Rs. 11.954 billion (FY18:
performance of business and industry. After entering the 3.0 million additional jobs. Due to unfavorable economic Rs. 9.144 billion) whereas profit before taxation stood at Rs.
IMF Program, Pakistan is now on the path of consolidation conditions, inconsistent government policies, shortage of The proposed final cash dividend is subject to the approval 5.421 billion (FY18: Rs. 4.006 billion). The profit after tax for
to tackle sizeable fiscal and current account deficits but the energy and lack of investment to modernize and enhance of members at the Annual General Meeting to be held on the year under review was Rs. 5.195 billion (FY18: Rs. 3.886
imbalances are expected to diminish slowly. The World Bank capacity, Textile and Apparel exports have stagnated. October 14, 2019. These financial statements do not include billion) whereas earning per share (EPS) stood at Rs. 6.67
estimates the country’s GDP growth rate to deteriorate to the effect of above proposal which will be accounted for in per share (FY18: Rs. 5.10) per share.
2.7% in 2019-20. However, the consolidation measures, Despite all these challenges, your company, by the grace the period it is approved by the members.
coupled with other macro-economic improvements, are of God Almighty, has been able to achieve a record Sales Despite the factors stated earlier, the company performed
likely to lead to an increase in the economic growth to 4% in Turnover of Rs. 37.478 billion (FY18: PKR 31.139 billion). Financial and Operational with great resilience and maintained its position in the
the beginning in fiscal year 2020-21. At the same time, Net Profit for the year has increased by foreign markets. In the opinion of the directors, the results
33.69% over the corresponding year. Performance of the operations of the company during the said financial
Textile & Apparel industry contributes 57% percent of total By the grace of God Almighty, the year has ended on a year were not substantially affected by any item, transaction
export volumes and 8.50% of the GDP of Pakistan. Annual or event of a material and unusual nature other than what
Export during FY18 stood at $25.0 billion out of which $13.53 positive note for the company with better performances has been mentioned in this report. Directors believe that the
both operationally as well as financially. Machinery has company will be able to achieve even better results in the
been added with the prime objective of reducing imbalance next financial year.
Operating Results and inefficiencies, reducing utilities and maintenance
requirements and produce additional value-added material
The summary of operating results for the year and appropriation of divisible profits is given below: and finished products. Business Segments

2019 2018 The management of the company has determined the
operating segments based on the information that is
(Rs. In Millions) Vertical Analysis presented to the Board of Directors of the company, for
allocation of resources and assessment of performance.
Sales – net 37,478.32 31,138.74
2019 2018 Segment performance is generally evaluated based on
Gross profit 11,954.71 9,144.50 certain key performance indicators including business
EBITDA 7,960.92 5,903.89 Percentage volume and gross profit.
Profit before Tax 5,420.98 4,005.77 Gross profit 31.90 29.37
Based on internal management reporting structure and
Less : Tax Expense 226.22 119.95 Operating profit 17.10 14.42
products produced and sold, the company is organized into
Profit after Tax 5,194.77 3,885.81 Profit before tax 14.46 12.86 the following operating segments:
Unappropriated profit brought forward 7,142.57 12,522.99 Profit after tax 13.86 12.48
a - Hosiery - This segment relates to the sale of socks &
Profit available for Appropriations 5,001.94 3,794.50 EBITDA 21.24 18.96 tights
b - Spinning - This segment relates to the sale of yarn
Appropriations
c - Other Operating Segments - This represents various
- Interim dividend 2017 950.55 Performance of the company during the year remained good segments of the company which currently do not
- Payment under swap arrangement 8,224.37 in spite of all the challenges like pressure on export selling meet the minimum reporting threshold mentioned in
prices, shortage of gas, increase in minimum wages, lack of international financial reporting standards. These mainly
- Bonus Shares 2018 5,688.06 include domestic sales, energy, yarn dyeing, denim and
timely sales tax refunds by Government, etc.
- Interim dividend 2018 1,090.25 active-wear.
Unappropriated profit carried forward 5,366.21 7,142.57 At the same time, adjustment of exchange rate had a 2018 - 19
favorable impact on company’s profits. During the year
Interloop Limited Earnings per share – Diluted (Rs.) 6.67 5.10 under review, company sales suffered a slight set back due Annual Report
6.67
5.10
Earnings per share – Basic (Rs.)
to filling of Bankruptcy by one of the customers, namely

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