Bestway

Group
Annual
Report
2018
 Welcome to the Contents
Bestway Group Annual Report
2018

08 14-15 18-19
Group Chief Bestway Bestway Cement
Executive’s Retail Limited
Review

02-07 12-13 16-17 20-21

Chairman’s Bestway Well United Bank
Statement Wholesale Pharmacy Limited

Bestway Group was founded in 1963 by Sir Anwar Pervez. It is the 24 Directors’ Report
UK’s 18th largest privately-owned company and 7th largest family- 28 Bestway in Numbers
owned business. The Group consists of: Bestway Wholesale, the 30 Consolidated Financial Statements:
largest independent wholesaler in the UK; Bestway Cement, the
31 Consolidated Income Statement
largest cement manufacturer in Pakistan; United Bank Limited, the
2nd largest private bank in Pakistan; and Well Pharmacy, the third 33 Consolidated Statement of Comprehensive Income
largest pharmacy business in the UK. Recently, the business acquired 34 Consolidated Balance Sheet
Conviviality Retail, now named Bestway Retail, which services 36 Consolidated Statement of Changes in Equity
approximately 760 retail stores across the UK. We continue to grow 38 Consolidated Cashflow Statement
from strength to strength in all these areas.
 Bestway Group
02 Annual Report & Accounts 2018

Chairman’s statement
On behalf of the Board of Directors, I am pleased
to place before you the consolidated financial
statements of Bestway Group Limited (the
“Company”) and its subsidiaries (the “Group”) for
the period ended 30 June 2018.

Business overview

T
he Group continues to boast a portfolio consisting This latest investment in the national retail sector has
of the 2nd largest independent wholesaler and 3rd helped to secure more than 2,300 jobs. It is expected that
largest retail pharmacy in the UK, in addition to the c.800 strong retail store portfolio will add close to
the largest cement manufacturer and 2nd largest private £0.5 billion to the Group’s annual revenue in the future.
bank in Pakistan.
In June 2018, Bestway Cement Limited opened its second
Group revenue for the year ended 30 June 2018 totalled new brownfield plant at its Farooqia site. The second plant
£3.2 billion compared to £3.3 billion in the previous has a clinker production capacity of 6,000 tonnes per day.
year, a decrease of 3.0%. Profit before tax decreased by This latest capacity expansion takes Bestway Cement’s
46% to £295.8 million compared to £551.1 million in the annual production capacity to 10.8 million tonnes and has
previous year. However, underlying profit before taxation further enhanced its position as the market leader.
before adjusting items decreased by 26% to £331.9
million compared to £448.4 million in the previous year. In July 2018, the ‘UBL Digital’ banking app was launched
to much fanfare. It is currently the one of the largest
The decline in profitability was due to difficult trading banking app in the country. In September 2018, UBL
conditions in Pakistan resulting in softer trading results, won the ‘Best Corporate Finance House of the Year
a material level of Pakistani Rupee devaluation, as well (Fixed Income) 2017’ Award at the 15th CFA Pakistan
as the higher credit provisioning in the Middle East loan Annual Excellence Awards.
book within United Bank Limited.
In September 2018, Well Pharmacy launched its own
Despite the challenges, it has been an exciting year at pharmacy app. The app is designed to work with a
Bestway Group and we have been able to capitalise on customer’s GP to organise the prescription and refills. The
market opportunities and have continued investment in app was created by Well Digital, a division which was
our technology assets across the business. established last year. It’s staffed by an in-house team of 30
software engineers, pharmacists and designers.
In April 2018, Bestway Wholesale acquired the trade and
assets of Conviviality Retail for £7.5 million.

KEY HIGHLIGHTS

Group revenue for the year ended 30 June 2018 It is expected that the c.800 strong retail
totalled £3.2 billion compared to £3.3 billion store portfolio (of Conviviality Retail) will
in 2017, a decrease of 3%.
add close to £0.5 billion to the Group’s
Underlying profit before taxation before annual revenue in the future.
adjusting items decreased by 26% to £331.9
million from £448.4 million in 2017.
Bestway Group Chairman, Sir MA Pervez OBE HPK
 Bestway Group Bestway Group
04 Annual Report & Accounts 2018 Annual Report & Accounts 2018 05

Chairman’s statement
(continued)

SOCIAL RESPONSIBILITY conservation strategy at all it sites to ensure sustainable

Bestway Group is committed to giving back to the water for all of the communities it operates in.
communities it operates in through its charitable arm
Bestway Foundation as well as through its various During the period under review United Bank Limited
subsidiaries. I am happy to report that both of our provided scholarships to over 260 University students, in
Pakistani subsidiaries, Bestway Cement Limited and various programs across the country. UBL also donated
United Bank Limited, have been included in the Top 10 £750,000 (2017: £224,000) to education and healthcare
list of publicly listed companies in Pakistan with regards causes in Pakistan during the period.
to charitable giving.
AWARDS AND RECOGNITION
In December 2017 Bestway Foundation renewed its In November 2017, Well Pharmacy was awarded the
scholarship agreement with University of Bradford. A new Corporate Supporter of the year award by the Stroke
5 year agreement was put in place and the endowment Association. The award recognises the courage shown by
fund was increased to £800,000. stroke survivors and carers as well as the great work and
commitment shown by health professionals, groups and
During the period under review, Bestway Foundation supporter organisations.
provided in excess of £200,000 (2017: £174,000) in grants
to students of South Asian origin to attend a number of I am pleased to share with you that our Group Chief
universities in the United Kingdom. In addition, Bestway Executive Zameer Choudrey CBE SI was appointed the
Foundation donated over £185,000 (2017: £240,000) to Chairman of UK Advisory Council of the British Asian
nine charities in the UK, including amongst others, The Trust in January 2018.
Duke of Edinburgh Award, Crimestoppers and Grocery
Aid. In January 2018, at the 10th Annual Pakistan Corporate
Philanthropy Awards Bestway Cement received five
In March 2018, Well Pharmacy donated over 35,000 awards. Bestway won the coveted awards in the categories
Foster Grant sunglasses and reading glasses, with a total of green energy initiatives, community development and
estimated retail value of £946,000 to In Kind Direct, service, education and scholarship, vocational training
which distributes consumer goods donated by companies and sustainability initiatives.
to UK charities.
In March 2018, at the Annual Asian Business Awards
In June 2018 Bestway Wholesale organised its 24th 2018, Bestway Foundation was honoured with the
annual charity race day at the Royal Ascot. This year’s ‘Philanthropy Award’ in recognition of demonstrating
beneficiary charity was the Great Ormond Street excellent standards of philanthropy.
Hospital Charity.
On 23rd March 2018, our Group Chief Executive Zameer
In Pakistan in June 2018, Bestway Cement Limited, Choudrey CBE was awarded ‘Sitara-e-Imtiaz’ (Star
celebrated World Environment Day across all its sites, of Excellence) by the President of the Islamic Republic
reiterating the Company’s commitment towards the cause of Pakistan. The award was in recognition of his
of conservation and protection of environment. Bestway contributions to advancing Pakistan through his services
Cement has also put in place a comprehensive water and his wide array of philanthropic work.

This latest capacity expansion takes Bestway

Cement’s annual production capacity to 10.8
The new Bestway Foundation School, Pakistan
million tonnes and has further enhanced its
position as the market leader.
 Bestway Group
06 Annual Report & Accounts 2018

Chairman’s statement
(continued)

BOARD APPOINTMENT Limited, the previous holding company, by way of a share

With one eye to the future we have made a number of for share exchange. As a result, the Company became the
appointments during the year to strengthen the Group’s ultimate parent company of Bestway (Holdings) Limited
board of directors as well as our subsidiary management and its subsidiaries. The Company was formed as part
teams. We are delighted to see that the future generations of the group restructuring of the Group companies with
are moving into senior leadership positions within the ultimate control of the Group remaining materially the
business. same as the prior year.

In May 2018, we welcomed Haider Choudrey onto the OUTLOOK

Bestway Group Board and he will now assume the role of We anticipate more challenging operating conditions
Group Finance Director. This appointment is in addition in the year ahead both in the UK and Pakistan. The
to his current responsibilities as a Director of United uncertainty regarding Brexit will likely result in further
Bank Limited and Bestway Cement Limited in Pakistan. austerity and continue to dampen economic growth.
Haider is the first member of the third generation of the In Pakistan, economic growth is likely to slow down as
family to join the board. the government is focused on addressing the balance
of payments issue. This coupled with further rupee
In May 2018, Rabiah Sheikh was appointed Company devaluation, rising interest rates and input costs will
Secretary of Bestway Group and its holding companies create difficult trading conditions.
and this was in addition to her role as Legal Counsel for
Bestway Wholesale. However, we believe that our fundamental strengths and
the benefits of our business model make us resilient and
In September 2018, we announced that Dawood Pervez able to perform well even in testing market conditions.
would be replacing Martin Race as Managing Director of Looking to the future, we aim to grow our businesses
Bestway Wholesale from 1 December 2018. Dawood will and reach more customers through investments in new
work alongside Martin during the transition phase and technologies and processes. I am confident that the
maintain his role as Trading Director. combination of our strong Board, and long-term growth
horizons, puts Bestway on course for a successful future.
Group reorganisation
On 21 March 2018 the Company became the new holding Sir MA Pervez OBE HPK
company by acquiring shares in Bestway (Holdings) Chairman

Bestway GROUP TURNOVER —BY SECTOR Bestway GROUP Bestway GROUP KEY FIGURES
PROFIT (£ M) TURNOVER (£ bn)
before tax £3.2bn
600
£ million 5 £ billion Bestway Group turnover

£169.9m
£551.1m

500
24.1% 11.1% 64.8% 4
Trading group
400 cash in hand
£413.3m

3
£3.3bn

£3.3bn

£3.2bn

300
£295.8m
£295.8m

2
200 Profit before tax
1
Well Pharmacy (£775.4m) UBL figure not
included as banking
100
£7.5m
Bestway Cement (£355.5m) group has no turnover 0 0 Acquisition of
Bestway Wholesale (£2.08bn) 2016 2017 2018 2016 2017 2018 Conviviality Retail

Main Atrium of the new UBL office building in Lahore, Pakistan

 Bestway Group Annual Report 2018
08 Group Chief Executive Review

Group Chief Executive’s review

On behalf of the Board of Directors, I am pleased to
present the audited financial statements for Bestway
Group Limited for the period ended 30 June 2018.

REVIEW OF BUSINESS Bestway Cement was able to maintain its market share

2
018 has been a challenging year for Bestway Group. in spite of these challenges, however, margins have been
Despite difficult business conditions in both the UK compressed due to higher inputs costs and pressure on
and Pakistan, all our businesses remain profitable. prices.

In the UK, the Wholesale business has been able to United Bank Limited has also managed to maintain its
capitalise on the turmoil in the Wholesale sector by market share but has been challenged by deteriorating
winning customers following the collapse of Palmer & credit quality in the International book, as well as one-off
Harvey and Blakemore Wholesale. pension expense.

Following the collapse of Conviviality Plc, Bestway Group There has been a strong emphasis on cash generation
purchased the trade (Bargain Booze, Wine Rack, Select across all business units and during the year.
Convenience and Central Convenience) and assets of
Conviviality Retail for £7.5 million out of administration. Group financial performance
During the year ended 30 June 2018 Group revenue was
Well Pharmacy has had a mixed year, although market £3.2 billion compared to £3.3 billion in the previous
share was broadly maintained and there were benefits year, a decrease of 3.0%. Despite difficult trading
from strategic buying of medicines, this was counteracted conditions all of our businesses remained profitable,
by additional catch up of Category M clawback however, overall Group’s profit before tax decreased
adjustments from the Department of Health relating to by 46% to £295.8 million compared to £551.1 million
prior years. in the previous year, whilst Group’s underlying profit
before taxation before adjusting items decreased by 26%
Business conditions in Pakistan have been difficult with to £331.9 million compared to £448.4 million in the
the political uncertainty of the change in government previous year.
and the economy’s increasing balance of payments issue
resulting in significant foreign currency devaluation.

KEY HIGHLIGHTS

2018 has been a challenging year for Group revenue was £3.2 billion compared to £3.3
Bestway Group. Despite difficult business billion in the previous year, a decrease of 3%.

conditions in both the UK and Pakistan, all Group’s underlying profit before taxation before
our businesses remain profitable. adjusting items decreased by 26% to £331.9 million
(£448.4 million, 2017)

The Trading Group has improved cash in hand to

£169.9 million in 2018 as compared to £109.0 million
in 2017.
Bestway Group Chief Executive, Z M Choudrey CBE, SI, BA (Hons), FCA
 Bestway Group
10 Annual Report & Accounts 2018

Group Chief Executive’s review

(continued)

REVIEW OF BUSINESS (CONTINUED)

The decline in profitability was due to difficult trading During the year, the UK Group made external
conditions in Pakistan resulting in softer trading results, repayments of £93 million as part of its ongoing
a material level of Pakistani Rupee devaluation, as well de-leveraging strategy.
as the higher credit provisioning in the Middle East loan
book within United Bank Limited. The Group refinanced its £290 million outstanding UK
debt in September 2017 at materially lower interest rates
Tangible fixed assets after depreciation as at 30 June 2018 and this new facility provides the Group with the funding
stood at £1,007.8 million, compared to £948.4 million in security to develop its businesses and execute its growth
the previous year. strategy.

The Trading Group has improved cash in hand to £169.9

million in 2018 as compared to £109.0 million in 2017.

There has been a strong emphasis on cash

generation across all business units and
during the year.

New Well Pharmacy Northenden store The new UBL building in Lahore, Pakistan
 Bestway Group
12 Annual Report & Accounts 2018

Bestway Wholesale
‘ Bestway Wholesale successfully acquired Palmer &
Harvey’s Vans business as well as two strategically located
depots from Blakemore Wholesale.
’
M
arket conditions in the wholesale sector Our catering sales grew 7.6% during the year to £158.1
remain challenging with the continuing million while our online business now has 62,000
pressure of the grocery multiples taking a registered users compared to 37,000 in the prior year.
keener interest in the sector. Following the Tesco/Booker Weekly sales grew 12.0% with total app and website The business has continued to maintain
merger, there have been some significant developments sales averaging £26 million a month. The mobile app
with Co-Op acquiring Nisa and Morrison’s setting up accounts for nearly 25% of all online transactions, its focus on the growing volume through its
its own wholesale supply arm. The market environment compared to 15% in the prior year. customer channels.
is increasingly competitive and the strain has been too
much for certain providers with Palmer & Harvey and Revenue in the wholesale business amounted to
Conviviality Plc entering administration and Blakemore £2.08 billion, a decrease of 2.3% compared to
closing down its wholesale arm. the corresponding period last year. The decrease
was ahead of the market as although tobacco sales
Despite these challenges, Bestway Wholesale has declined, Bestway Wholesale was able to increase its
remained committed to its strategic plans and has been customer base and benefit from the turmoil in the
able to grow its market share and profitability on the sector following the collapse of Palmer & Harvey and
back of the increased customer turmoil. During the Costcutter’s supply issues.
year, Bestway Wholesale successfully acquired Palmer &
Harvey’s Vans business as well as two strategically located Bestway Wholesale (excluding Bestway Retail Limited)
depots from Blakemore Wholesale. Management are profit before tax decreased to £28.3 million in 2018
confident that these two acquisitions will complement our from £44.0 million in 2017. However, it should be
customer offering and drive growth going forward. noted that the prior year figures included a significant
profit on the disposal of certain non-strategic
During the year, the business has continued to maintain investment properties of £13.5 million, which for this
its focus on the growing volume through its customer year amounted to £0.7 million. Taking these into
channels. The Best-one and Xtra Local retail club account profit before tax decreased from £30.5 million
membership continues to grow as we ensure greater to £27.6 million.
discipline and compliance among our affiliated stores.
During the year, we continued the Great Rebate and Trading stock as at 30 June 2018 amounted to £174.5
Bestway Wholesale in numbers Bestway wholesale DEPOTS CATERING sales
MyRewards schemes to help our customers increase their million, compared to £171.1 million in the previous
turnover (£ billion)
margins and profitability. year.

£158.1m 2.5 = 63
-2.3% Catering sales
Decrease in
KEY HIGHLIGHTS revenue
(+7.6 %)
2 +7.6%
£2.08bn

£2.17bn

£2.13bn
34 Bestway

£2.08bn
Revenue in our wholesale business amounted to Turnover
1.5
DIGITAL SALES (£ m)
£2.08 billion (2.3% decrease compared to 2017). 25 Batleys
1 62,000 +12%
Our catering sales grew 7.6% during the year to £174.5m £28.3m app
users
Weekly Sales
Total app & website
£158.1 million. Trading stock Profit before tax
0.5
3 Best Pets (+67.5%)
(£171.1m, 2017)
1 Central
Bestway Wholesale acquired Palmer & Harvey’s 0 Distribution £26m/month
Vans business as well as two strategically located Opposite page: a newly designed BB Foodservice truck, rebranded and 2016 2017 2018 Total app & website sales

depots from Blakemore Wholesale. refurbished Best-one stores

 Bestway Group Bestway Group
14 Annual Report & Accounts 2018 Annual Report & Accounts 2018 15

Bestway Retail
‘activity)
Turnover for the period (under 3 months of trading
was £80.4 million and profit before tax for
the period was £11.5 million.
’

O
n 7 April 2018, Bestway Retail Limited, which As part of the deal the Bestway Group acquired a
forms part of the wholesale business, purchased number of brands (Bargain Booze, Wine Rack, Select
the trade and assets of Conviviality Retail for Convenience and Central Convenience), over 600
£7.5 million out of administration and the numbers in the franchisee stores, over 207 corporate owned stores as
accounts reflect a little under 3 months of trading activity. well as a business with annual run rate turnover of
c.£0.5 billion.
Turnover for the period was £80.4 million and profit
before tax for the period was £11.5 million, bolstered Although a significant amount of work remains in
by the recognition of £20.3 million of gain on bargain stabilising the business and reassuring franchisees,
purchase. Management are confident that the deal will complement
the wider Bestway offering and be value accretive in the
long-term.

KEY HIGHLIGHTS

Management are confident that the deal Turnover for the period (under 3 months of
will complement the wider Bestway trading activity) was £80.4 million

offering and be value accretive in the Profit before tax for the period (under 3 months of
long-term. trading activity) was £11.5 million A Select Convenience store and retailer (top row), a Bargain Booze store and retailer (middle row) and a Wine Rack and wine tasting session (bottom row)

Acquisition of 600 franchisee stores and over 207 Bestway RETAIL in numbers turnover* PROFIT BEFORE TAX* ACQUIRED STORES
corporate owned stores (£ Million) (£ Million)

100 25

600 207
80 20
Franchise Corporate-
= 807
Stores
£80.4m owned

£80.4m
acquisition stores
Turnover acquisition 60 15

40 10 600

£11.5m
Franchises
£20.3m £11.5m 20 5
gain on bargain Profit before tax
purchase
0 0
2018 2018 207
*(under 3 months of trading activity) *(under 3 months of trading activity) Corporate-owned

A Central Convenience fascia Bargain Booze store interior.

 Bestway Group
16 Annual Report & Accounts 2018

Well Pharmacy
‘ Well Pharmacy remains well placed to
adapt to market conditions and deliver on its
strategic plans.
’

T
rading conditions remain difficult within the During the year Well has also been working on a digital
pharmacy sector with practitioners facing product offering and its app was formally launched with
a reduction in overall government funding, a limited release in August 2018. To date, the app has
increased Category M clawback as well as an increase in c.10,000 customers with a more public launch planner for
costs to serve via the National Living Wage policy. early 2019. We are confident that this offering will provide
customers with increased convenience in managing their
Despite this backdrop, Well Pharmacy has been able medication requirements.
to retain its market share of national prescriptions and
remains well placed to adapt to market conditions and Revenue of the pharmacy business for the year ended
deliver on its strategic plans. Well Pharmacy has retained 30 June 2018 was £775.4 million compared to £779.2
its focus on leveraging technology to improve operational million in the prior year. The sales contraction was driven
efficiency and grow market share as well as diversifying its by a reduction in funding and drug reimbursement
product offering away from solely medication dispensing. price as the margin mechanism recovers margin
overpayment from prior periods. Well’s market share of
Well has made good progress on the rollout of its new the prescriptions nationally remained broadly at 6.0%.
Patient Medical Records system as well as the Central
Fulfilment project during the year. Well has also managed Profit before tax increased from £3.6 million in 2017
to sustain growth in its diversified offering and its B2B leg, to £8.6 million in 2018. This was driven by improved
Bestway Medhub, has had a strong year of revenue and margin on buying as well as cost efficiencies partially
profit growth and is gaining increasing recognition in the counteracted by a Category M clawback relating to prior
marketplace. periods.

KEY HIGHLIGHTS
Well Pharmacy — in Numbers turnover (£ Million) PROFIT (BEFORE TAX) KEY FIGURES
Turnover of the pharmacy business for the year (£ Million)

ended 30 June 2018 was £775.4 million. Profit Turnover

1000 40 £775.4m
before tax was £8.6 million. 2018 Turnover

£27.5m
£775.4m 773 800
30
Well’s market share of the prescriptions £8.6m

£802.7m
Branches

£779.2m

£775.4m
(2017: £779.2m)
nationally remained broadly at 6.0%. 600
20 Profit before tax
256k
Launched in August 2018, Well’s mobile app has 7161 Medications
400
6%

£8.6m
Employees usage
currently c.10,000 customers. 10 Market Share of

£3.6m
200 Prescriptions
74.7m
Prescriptions
0 0
138%
volume 2016 2017 2018 2016 2017 2018 Increase in profit
The new Well Pharmacy prescription ordering app Opposite page: the interior of a Well Pharmacy store
 Bestway Group
18 Annual Report & Accounts 2018

Bestway Cement Limited

During the year, Bestway Cement Limited (‘BCL’)
has maintained its position as the largest cement
manufacture and market leader in Pakistan as well as
the lowest cost producer of cement in the country.

I
n May 2018, BCL went operational with its the market leader in the domestic market and the largest
brownfield capacity expansion at its Farooqia site. exporter to Afghanistan and India.
The new plant has a capacity of 6,000 tonnes of
clinker per day and a 9MW Waste Heat Recovery Revenue for the financial year 2018 decreased by 8.5%
Power Plant was also installed at the site to improve cost to £355.5 million compared to £388.7 million for 2017.
efficiency. BCL’s profit before tax recognised in the Group’s accounts
during the period under review decreased 26.8% to
BCL’s capacity expansion was in line with the rest of £91.5 million compared to £125.0 million in 2017.
the market which has seen several competitors go live The decrease in profitability has been driven by lower
with their own enhanced capacity. In addition, due to retention prices in the market as well as higher input costs
the change in government and the related political and due to the rupee devaluation. It should also be noted that
economic uncertainty demand growth has dampened a portion of the negative variance can be explained by the
slightly. These factors have resulted in an excess supply weakening of the rupee during the period, hence resulting
situation in the market which has resulted in material in a foreign exchange loss on conversion.
negative price pressure. The reduction in market prices,
along with increased input costs due to the devaluing In response to the growing issue of water scarcity in
rupee, has resulted in margins being compressed the Kahoon Valley region, BCL has proactively started
significantly. work on a water conservation project at its Chakwal and
Kallar Kahar sites. The project cost is c£8.5 million
It is likely that the price pressure will continue, however, and involves the Water Cooled Condenser system used
BCL is well placed to withstand this pressure to a greater by the WHRPP’s being replaced with a new Air Cooled
extent than its competition by continuing to be the lowest Condenser. This will result in BCL’s Chakwal and Kallar
cost producer of cement. Kahar sites materially reducing their water consumption
by 88% and 80% respectively and will also ensure BCL
During the period under review, BCL’s despatches is playing its part towards water conservation in the
increased by 8.3% to 9.0 million tonnes in 2018 from 8.3 area. The project was completed and commissioned in
million tonnes in 2017. November 2018. In addition, the Shree Katas Raj case
closed with no adverse finding against the Company.
Domestic despatches increased by 16.9% during the Bestway Cement Farooqia plant
period to 7.6 million tonnes from 6.5 million tonnes. For the year ended 30 June 2018, BCL declared a
Exports grew by 2.2% to 1.0 million tonnes. BCL combined dividend of 12 PKR per share (£0.08 per share)
DOMESTIC DISPATCHES TURNOVER (£ Million) PROFIT BEFORE TAX KEY FIGURES
maintained its position as the largest cement producer and or 120% (of par value) (2017: 12 PKR per share (£0.09
(Million tonnes) (£ Million)
per share) or 120%). £91.5m
8 Mt
7.6 Mt 600 150 Profit before tax

6 Mt 5.9 Mt
6.5 Mt 500 125
£355.5m

£125m
KEY HIGHLIGHTS
400 100 Revenue
BCL’s capacity expansion was in line BCL’s revenue for the year ended 30 June 2018

£388.7m

£96.7m

£91.5m
4Mt 4.1 Mt

£355.5m
300 75
with the rest of the market which has seen was £355.5 million. BCL’s profit before tax was 9.0 Mt

£295.7m
£91.5 million. 200 50 Global despatches
several competitors go live with their own 2 Mt

+8.3%
100 25
enhanced capacity. Domestic despatches increased by 16.9% during
the period to 7.6 million tonnes (6.5m, 2017). 0 Mt 0 0 Increase in
2015 2016 2017 2018 2016 2017 2018 2016 2017 2018 global despatches
Exports grew by 2.2% to 1.0 million tonnes
 Bestway Group
20 Annual Report & Accounts 2018

United Bank Limited

United Bank Limited (‘UBL’) is the 2nd largest private
bank in Pakistan by asset base and has a branch
network of 1,381 branches globally, with presence in
four continents and serving over 4 million customers.

T
he bank’s long term strategy is to evolve its its non-fund income. The volatile foreign exchange
leading corporate and consumer lending markets have also assisted UBL in growing its non-fund
segments whilst creating opportunities through income. UBL continues to invest in its Digital Strategy
new digital platforms and product development. and its mobile app has grown to become the 3rd largest
banking app with 528,000 downloads and 238,000
Pakistan is going through an increasing interest rate cycle registered users to date. UBL is committed to investing
and rates have risen 75bps over the period from 5.75% to technology to improve its customer proposition as well
6.50%. There is a high likelihood that Pakistan will need as bring efficiency to its operations and several strategic
to reach an agreement with the IMF regarding a bailout work streams are planned for 2019.
and this is likely to result in the devaluation of the rupee
as well as a further increase to interest rates. Although in Whilst the domestic bank has performed strongly, it
the short-term this will have a negative impact on UBL has been a difficult year for UBL on the international
due to the pace of repricing, in the medium to long term it front, which has seen growing compliance costs in its
will offer UBL more attractive investment returns. international branch network as well as a significant
uptick in provisions for non-performing loans emanating
UBL’s net interest income decreased by 9.2% during from the economic slowdown in the Gulf, particularly the
the year from £432.3 million in 2017 to £392.7 million United Arab Emirates and Qatar. UBL is in the process
in 2018. UBL’s profit before tax decreased by 42.9% of rationalising its portfolio and reviewing its risk profile
during the year from £318.4 million in 2017 to £181.7 in its various geographies.
million in 2018. This was due to a one-off pension
provision of £56.5 million and increase in provision for The bank declared a total dividend of 13PKR (£0.09)
non-performing loans in Middle East (increase of £55.4 per share or 130% (of par value) during the year ended On the domestic front, UBL has
million for the year compared to £37.4 million in the 30 June 2018 (13PKR (£0.10) per share or 130% (of par
successfully continued its focus expanding
prior year). value) during the year ended 30 June 2017).
its low-cost deposit base and improving
UBL’s underlying profit before tax decreased 25.2% from UBL’s total assets at 30 June 2018 were £12.2 billion its non-fund income.
£318.4 million in 2017 to £238.2 million in 2018, as a compared to £14.6 billion in the corresponding period
result of the weakening of the rupee during the period and last year, a decrease of 16.4%. UBL’s deposit base
foreign exchange loss on conversion. decreased by 10.3% to £8.7 billion for the year to 30 June A brand new UBL branch interior
2018 as UBL actively decided to shed expensive deposits
On the domestic front, UBL has successfully continued its and improve its cost to income ratio.
NUMBER OF UBL BRANCHES PROFIT BEFORE TAX NET INTEREST INCOME KEY FIGURES
focus expanding its low-cost deposit base and improving
(£ Million) (£ Million)

1,381 4 Million+ 350 450 £392.7m

Net interest

£432.3m
Branches Customers 400
KEY HIGHLIGHTS 300

£318.4m
worldwide worldwide income

£307.8 m

£395.6m

£392.7m
350
250
UBL’s net interest income decreased by 9.2%
during the year from £432.3 million in 2017 to 200
300
£181.7m
250
Profit before tax
£392.7 million in 2018.

£181.7m
150 200
150 £8.7bn
UBL’s mobile app has grown to become the 3rd 100
Deposits
100
largest banking app with 528,000 downloads 50
£12.2bn
50
and 238,000 registered users to date.
= 100 branches = 1,363 = 18 0 0
in Pakistan rest of world 2016 2017 2018 2016 2017 2018 Total assets
Left: The UBL consumer banking App
 Bestway Group Bestway Group
22 Annual Report & Accounts 2018 Annual Report & Accounts 2018 23

Group Chief Executive’s review (continued) The financial performance indicators for the retail business
include, Like for like (‘LfL’) sales, sales per department, gross
Within the UK the wholesale business will focus on growing
share in a turbulent market and developing its infrastructure
margin, stock availability, operating expenses and wage cost capabilities; whilst the retail business will focus on stabilising
Principal risks & uncertainties The Group’s cement subsidiary’s performance is directly per store. itself and rebuilding trust and relationships with customers
The Group regularly monitors its banking facilities, cash correlated to the state of the economy, a key risk is the following a tumultuous period.
flow and net debt as it relies on retained profits and bank performance of the Pakistani economy. Additionally, the The financial performance indicators within the pharmacy
borrowings in order to meet its working capital and capital increase in energy and input costs in Pakistan continues business include, the key performance indicators are pre- Well Pharmacy will continue to focus on outperforming the
expenditure requirements. to pose a threat to the cement sector. There is a risk of scription growth, over the counter sales growth, profitability market in both prescription volumes and margin delivery
increased environmental standards for cement plants, per branch, stock levels and cost per prescription. by investing in technology initiatives that will enable us to
Duty fraud on alcohol and non-duty paid tobacco stock in which the Group has mitigated by ensuring that it monitors reduce our cost to serve as well as grow our market share.
the market are key commercial risks faced by the Group. its environmental impact and benchmarks itself against Financial performance indicators in the cement business are
The Group mitigates these risks through frequently international standards rather than local standards. net retention, margin, daily despatches and cost of Bestway Cement will retain its focus on being the lowest cost
reviewing its product offerings in an attempt to diversify this production. operator in the sector to better enable it to withstand sustain
range, thus reducing the overall risk faced by the Group. The Group’s banking subsidiary faces economic risk as the margin pressure.
performance of the banking sector is directly correlated with Among the financial performance indicators within the
Market conditions in the wholesale sector remain the state of the economy and the interest rate environment banking business, the key performance indicators are deposit As Pakistan moves into a higher interest rate environment,
challenging with the continuing pressure of the grocery of countries in where it operates. As with any other financial levels, assets under management, return on assets, return on United Bank Limited will continue its focus on leveraging
multiples taking a keener interest in the sector. Following institution the Bank also faces regulatory compliance risk. equity, net interest margin and non-financial income. technology to grow market share and reduce cost to serve, as
the Tesco/Booker merger, there have been some significant well as improving its consumer banking assets and growing
developments with Co-Op acquiring Nisa and Morrison’s The impact of the UK’s exit from the EU continues to be General non-financial performance indicators are staff non-fund income. UBL will continue its focus on managing
setting up its own wholesale supply arm. The market an important area of discussion. There are some continuing turnover, staff, supplier and customer satisfaction and health growing international compliance requirements and
environment is increasingly competitive and the strain has uncertainties around the impact of the Brexit negotiations, and safety reports, amongst others. managing the risk profile of its international network.
been too much for certain providers with Palmer & Harvey particularly in relation to the impact on imported food prices,
and Conviviality Plc entering administration and Blakemore labour availability and costs, consumer confidence and The Board is of the belief that the monitoring of the It has been a challenging twelve months and there have
closing down its wholesale arm. The increasing competition potential changes to access to EU labour. These uncertain- aforementioned indicators is an effective aspect of business been a number of headwinds we have had to face into.
and influence of multiple convenience businesses in the ties impact several of the established Group risks and have performance review. Notwithstanding these pressures, we have been able to show
wholesale sector is a threat as it imposes pressure on margins. therefore been factored into the assessment of the relevant risk the resilience of our business model and all of our businesses
The Group ensures that it frequently reviews its costs so as to where appropriate and the required mitigation plans. GROUP REORGANISATION have been able to maintain market share and are well
be able to remain price competitive whilst also maintaining On 21 March 2018 the Company became the new holding positioned to grow going forward and create value for all
margins. The Group has taken the necessary measures to reduce the company by acquiring shares in Bestway (Holdings) Limited, stakeholders.
key risks in the business. the previous holding company, by way of a share for share
The Group’s pharmacy business is exposed to Government exchange. As a result, the Company became the ultimate I would like to thank all our suppliers and employees for
policy on the funding of the pharmacy sector which remains Key performance indicators parent company of Bestway (Holdings) Limited and its their commitment to the business. I would also like to thank
an uncertainty in the business. The Group continues to The Board of Directors uses many performance indicators, subsidiaries. The Company was formed as part of the group my fellow Directors for their contribution to our strategic
mitigate this risk through looking for alternative revenue both financial and non-financial, to monitor the Group’s restructuring of the Group companies with ultimate control deliberations.
streams to diversify revenue away from the government. position. of the Group remaining materially the same as the prior year.

Due to the Group’s presence in Pakistan, it is exposed to Among the financial performance indicators within the FUTURE OUTLOOK
foreign exchange risk and interest rate movements. wholesale business, the key performance indicators are gross We see challenges ahead of us both in the UK and in Z M Choudrey CBE, SI, BA (Hons), FCA
profit margin, sales per depot, sales per department, wage Pakistan as the respective economies go through an Group Chief Executive
cost per depot, stock availability and stock levels. economic stabilisation phase. 5 December 2018
 Bestway Group
24 Annual Report & Accounts 2018

Directors’ Report
The Directors submit their report and the
financial statements of Bestway Group Limited
for the period ended 30 June 2018.

Incorporation and Directors

common control transaction The Directors who held office during the year were as
The Company was incorporated on 9 October 2017, in follows:
the United Kingdom. Accordingly, the current period
Company information represents the 9 month period • Sir MA Pervez OBE HPk (Group Chairman)
ended 30 June 2018 and no comparative information is (appointed 9 October 2017)
presented. • Z M Choudrey CBE, SI, BA (Hons), FCA
(Group Chief Executive) (appointed 9 October 2017)
On 21 March 2018 the Company became the new holding • M Y Sheikh (appointed 9 October 2017)
company by acquiring shares in Bestway (Holdings) • R Pervez, ACA (appointed 9 October 2017)
Limited, the previous holding company, by way of a share • D Pervez, BA (Hons), MA Oxon, Solicitor
for share exchange. As a result, the Company became the (appointed 9 October 2017)
ultimate parent company of Bestway (Holdings) Limited • H Z Choudrey, BA (Hons), MA Cantab, ACA
and its subsidiaries (the Group). The Company was (appointed 21 May 2018)
formed as part of the group restructuring of the Group
companies with ultimate control of the Group remaining Indemnity provisions
materially the same as the prior year. By way of a common No qualifying third party provision is in force for the
control transaction, the Group has elected to present the benefit of any Director of the Company.
comparative Group figures in its consolidated financial
statements as if the Company had historically always Employee involvement
been the holding company of the Group. Accordingly, AND equal opportunities
the current period and prior period Group information The Group systematically provides employees with
represent the full financial years of the Group. information on matters of concern to them and consults
with employees on a regular basis to ensure that their
The comparative information has been taken from the views can be taken into account in making decisions
audited consolidated financial statements of Bestway which are likely to affect their interests. The Group
(Holdings) Limited, on which an unqualified audit report encourages the involvement of employees in the Group’s
was expressed. performance and ensures that it provides employees
with the information required such that they are able
Principal activities to achieve a common awareness of the financial and
The principal activities of the Group during the year were economic factors affecting its performance.
in the wholesale, pharmacy, cement and financial services
sectors. (continues overleaf )

Opposite page, top row (left to right):

Sir MA Pervez, OBE HPk (Group Chairman)
ZM Choudrey CBE, SI, BA (Hons), FCA
(Group Chief Executive)
Middle row (right to left):
MY Sheikh (Chairman of Bestway Wholesale)
R Pervez, ACA
Bottom row (left to right)):
D Pervez, BA (Hons), MA Oxon, Solicitor
H Z Choudrey, BA (Hons), MA Cantab, ACA
 Bestway Group
26 Annual Report & Accounts 2018

Directors’ Report
(continued)

The Group is an equal opportunities employer and its

policies for the recruitment, training, career development
and promotion of employees are based on the relevant
merits and abilities of the individuals concerned. It
recognises its responsibilities towards the disabled and gives
full and fair consideration to applications for employment
from them, having regard to their particular aptitudes and
abilities. So far as particular disabilities permit, the Group
will give continued employment and arrange appropriate
training for any existing employee who becomes disabled.
It is the policy of the Group that the training, career
development and promotion of disabled persons should as
far as possible be identical to that of other employees.

Financial instruments
The Group’s policy is to finance its operations on a medium
term basis from retained profits, related party borrowings
and bank facilities. Additional uncommitted borrowing
and overdraft facilities are utilised for short term financing
requirements.

The financial instruments utilised by the Group are

borrowings, short-term cash deposits and items such as
trade creditors which arise directly from its operations.
Borrowing and deposit facilities are on a floating rate
basis. The Group’s policy is not to trade in other financial
instruments.

Political donations
Political donations made in the year totalled £101,155
(2017: £159,500).

Z M Choudrey CBE, SI, BA (Hons), FCA

Director

2 Abbey Road, Park Royal, London NW10 7BW

A collection of Best-one own-label products, and Best-one’s premium range, Best-one Inspired - sold through Bestway Wholesale
 Bestway Group Bestway Group
28 Annual Report & Accounts 2018
Bestway Annual Report & Accounts 2018 29

in Numbers
Bestway Group—Total No. Employees Bestway Group Turnover United Bank Limited Bestway Cement Limited Bestway Wholesale: depots Well Pharmacy
2017 2018 4 Million +
customers 10.8Mt
25,122 27,919 £ billion
4 238k
1,381 Annual production
capacity expansion App
Branches enhances BCL £8.6m £775.4m Users
worldwide position as market Profit Turnover
before tax
3 leader.

£3.3bn

£3.3bn

£3.2bn
Global despatches (Million tonnes) 74.7m 6%
Market
Prescription share
volume

2018 9.0 Mt
2 2017 8.3 Mt

2016 6.9 Mt
EMPLOYEES 7161
1
2016 4.9 Mt MEDICATION
USAGE
256k
0 = 18 Rest of
world
= 1,363 in
Pakistan
Bestway
Wholesale BestPets

2016 2017 2018 Batleys Central

BRANCHES
773
= 100 branches
= 1000 employees = new employees Distribution

Well Pharmacy HQ
Bestway Wholesale HQ

Bestway Cement HQ

UBL HQ

Bestway Wholesale HQ
Well Pharmacy HQ
Bestway Cement HQ
United Bank Limited HQ
UBL International branches/offices

Bestway Wholesale trade

Well Pharmacy trade
Bestway Cement trade
UBL presence
 Bestway Group
Annual Report & Accounts 2018 31

Consolidated
income statement
for the year ended 30 June 2018

Trading Banking Total Trading Banking Total

Group Group Combined Group Group Combined
2018 2018 2018 2017 2017 2017

£000 £000 £000 £000 £000 £000

Revenue 3,224,375 - 3,224,375 3,292,968 - 3,292,968
Cost of sales (2,717,961) - (2,717,961) (2,777,316) - (2,777,316)

506,414 - 506,414 515,652 - 515,652

Interest income - 776,133 776,133 - 766,535 766,535
Interest expense - (383,394) (383,394) - (334,235) (334,235)

Net interest income - 392,739 392,739 - 432,300 432,300

Gross written premium - 20,804 20,804 - 17,941 17,941
Premium ceded to reinsurer - (11,376) (11,376) - (10,545) (10,545)

Net written premiums - 9,428 9,428 - 7,396 7,396

Gross benefits and claims paid - (11,613) (11,613) - (10,970) (10,970)

Claims ceded to reinsurer - 8,367 8,367 - 7,307 7,307
Movement in technical provisions - (716) (716) - 46 46

Net benefits and claims - (3,962) (3,962) - (3,617) (3,617)

Net fee, commission and brokerage income - 104,084 104,084 - 105,495 105,495

Gross profit 506,414 502,289 1,008,703 515,652 541,574 1,057,226

Dividend income on investments - 11,867 11,867 - - -

Gains and losses on investments - 59,799 59,799 18,451 69,865 88,316
Other operating income 3,986 1,996 5,982 1,744 2,097 3,841
Other gains and losses 4,358 541 4,899 602 - 602
Distribution expenses (10,933) - (10,933) (12,201) - (12,201)
Administrative expenses (386,616) (340,936) (727,552) (363,293) (303,349) (666,642)
Share of profits of equity
accounted investees net of tax - 2,600 2,600 - 8,209 8,209
Other operating expenses (1,524) - (1,524) (2,962) - (2,962)

Total operating profit 115,685 238,156 353,841 157,993 318,396 476,389

Finance income 34 - 34 - - -
Finance expense (21,948) - (21,948) (27,987) - (27,987)

Net finance expense (21,914) - (21,914) (27,987) - (27,987)

Underlying profit before taxation 93,771 238,156 331,927 130,006 318,396 448,402

(Continued overleaf )

Main Atrium of the new UBL office building in Lahore, Pakistan

 Bestway Group Bestway Group
32 Annual Report & Accounts 2018 Annual Report & Accounts 2018 33

Consolidated Consolidated statement of

income statement (continued) comprehensive income
for the year ended 30 June 2018 for the year ended 30 June 2018

Trading Banking Total Trading Banking Total Trading Banking Total Trading Banking Total
Group Group Combined Group Group Combined Group Group Combined Group Group Combined
2018 2018 2018 2017 2017 2017 2018 2018 2018 2017 2017 2017

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000


Profit after taxation 85,531 128,001 213,532 180,844 184,963 365,807
Underlying profit before taxation 93,771 238,156 331,927 130,006 318,396 448,402
before adjusting items: Items that will not be reclassified
subsequently to profit or loss:
Adjusting items: Profit attributable to investors of UBL funds - (222) (222) - (1,489) (1,489)
UBL pension provision - (56,470) (56,470) - - - Remeasurement of net defined benefit
Gain on group reorganisation - - - 102,702 - 102,702 liability 2,229 (2,588) (359) (12,433) (297) (12,730)
Gain on acquisition 20,360 - 20,360 - - - Tax on remeasurement of net defined (420) 1,055 635 - - -
benefit liability
114,131 181,686 295,817 232,708 318,396 551,104
1,809 (1,755) 54 (12,433) (1,786) (14,219)

Taxation for the year

(28,600) (53,685) (82,285) (51,864) (133,433) (185,297)
Items that are or may be reclassified
Profit for the year 85,531 128,001 213,532 180,844 184,963 365,807 subsequently to profit or loss when
specific conditions have been met:
Surplus / (loss) arising on revaluation of
Attributable to: non-banking fixed assets - 44,177 44,177 - - -
Equity holders of the parent 50,882 72,468 123,350 142,284 102,509 244,793 Surplus / (loss) arising on available for
Non-controlling interests 34,649 55,311 89,960 38,560 80,964 119,524 sale securities 551 (98,666) (98,115) 11,745 (64,164) (52,419)
Investors of UBL funds - 222 222 - 1,490 1,490 Related tax 3,384 - 3,384 - - -
Other losses 1 - 1 (3) - (3)
Profit for the year 85,531 128,001 213,532 180,844 184,963 365,807 Exchange (loss) / gain on translation of
foreign operations (58,020) (145,203) (203,223) 6,298 17,032 23,330

The results shown above are derived entirely from continuing operations.
(54,084) (199,692) (253,776) 18,040 (47,132) (29,092)

Other comprehensive (loss) / income

for the year (52,275) (201,447) (253,722) 5,607 (48,918) (43,311)

Total comprehensive income / (loss) for

the year 33,256 (73,446) (40,190) 186,457 136,045 322,496

Total comprehensive income

attributable to:

Equity holders of the parent 24,479 (40,178) (15,699) 145,639 76,212 221,851
Non-controlling interests 8,777 (33,268) (24,491) 40,812 59,833 100,645

Total comprehensive income for the year 33,256 (73,446) (40,190) 186,457 136,045 322,496

 Bestway Group Bestway Group
34 Annual Report & Accounts 2018 Annual Report & Accounts 2018 35

Consolidated Consolidated
balance sheet balance sheet (continued)
for the year ended 30 June 2018 for the year ended 30 June 2018

At 30 June
At 30 June
At 30 June
At 30 June
2018 2017 2018 2017

£000 £000 £000 £000

Non-current assets Non-current liabilities
Goodwill 173,487 263,736 Trading Group
Trading Group Other interest bearing loans and borrowings 275,141 408,416
Other intangible assets 436,835 464,443 Employee benefits 9,611 12,053
Property, plant and equipment 689,445 636,611 Deferred tax liabilities 131,121 151,466
Investment property 114,612 114,987 Preference shares 58,178 58,178
Banking Group Banking Group
Other intangible assets 9,175 7,494 Other interest bearing loans and borrowings 165,605 131,491
Property, plant and equipment 318,390 311,760 Deposits and other accounts 535,828 577,074
Investment property 19,454 19,634 Employee benefits 62,043 6,555
Reinsurance assets 11,396 12,877 Deferred tax liabilities - 58,024
Investments in associates 23,693 50,200 Provisions 16,977 17,091
Investments in financial assets 2,894,350 4,392,263 Other financial liabilities 26,201 191,511
Lending to financial institutions and advances 2,222,911 1,991,887
Deferred tax asset 5,866 - 1,280,705 1,611,859

6,919,614 8,265,892 TOTAL LIABILITIES 12,459,337
14,625,187

Current assets TOTAL NET ASSETS 1,940,533

2,118,301
Trading Group
Inventories 330,330 298,020
Other financial assets held for sale - 19,262 Equity
Tax receivable 17,030 10,152 Share capital 10 171
Trade and other receivables 258,259 214,201 Share premium - 3,055
Cash and cash equivalents 169,887 108,973 Revaluation reserve 265,196 285,052
Banking Group Capital redemption reserve - 39
Investments in financial assets 2,390,652 3,315,760 Merger difference reserve 3,165 -
Lending to financial institutions and advances 2,647,665 2,752,614 Statutory reserve 217,273 205,124
Tax receivable 136,590 96,501 Reserve pertaining to UBL funds 4,751 1,178
Trade and other receivables Translation reserves 134,002 225,775
(£26.4 million (2017: £12.8 million) due after more than one year) 299,973 307,773 Retained earnings 674,119 669,306
Cash and cash equivalents 1,229,870 1,354,340
Equity attributable to equity holders of the parent 1,298,516 1,389,700
7,480,256 8,477,596
Non-controlling interests 642,017 728,601
TOTAL ASSETS 14,399,870 16,743,488
TOTAL EQUITY 1,940,533
2,118,301

Current liabilities
Trading Group These financial statements were approved by the Board of Directors
Trade and other payables 582,582 526,220 on 5 December 2018 and were signed on its behalf by:
Tax payable 3,555 2,104
Bank overdraft 140,649 38,320 Z M Choudrey, CBE, SI, BA (Hons), FCA M Y Sheikh
Other interest bearing loans and borrowings 91,658 50,965 (Chief Executive) Director
Provisions 22,715 20,694
Banking Group Company registered number: 11003305
Trade and other payables 384,954 263,407
Deposits and other accounts 8,148,034 9,162,686
Payable to investors of UBL funds 7,487 13,016
Bills payable 96,844 129,188
Bank overdraft 6,201 3,950
Other interest bearing loans and borrowings 1,693,953 2,802,778

11,178,632 13,013,328

 Bestway Group Bestway Group
36 Annual Report & Accounts 2018 Annual Report & Accounts 2018 37

Consolidated statement Consolidated statement

of changes in equity of changes in equity
for the year ended 30 June 2018 for the year ended 30 June 2018

Share Share Revaluation Capital Merger Statutory Reserve Translation Retained Total parent Non- Total
capital premium reserve redemption difference reserve pertaining to reserve earnings equity controlling
reserve reserve UBL funds interests
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000


At 1 July 2016 196 3,055 316,212 14 - 185,270 At 1 July 2016 8,133 222,774 625,508 1,361,162 699,677 2,060,839

Profit for the period - - - - - - Profit for the period - - 142,090 142,090 119,524 261,614
Other comprehensive income for the period - - (30,788) - - - Other comprehensive income for the period - 3,001 4,848 (22,939) (18,879) (41,818)

Total comprehensive income for the period - - (30,788) - - - Total comprehensive income for the period - 3,001 146,938 119,151 100,645 219,796
Dividends paid - - - - - - Dividends paid - - - - (67,087) (67,087)
Repurchase of own shares - - - - - - Repurchase of own shares - - (92,933) (92,933) (92,933)
Issuance and repurchase of units - - - - - - Issuance and repurchase of units (6,955) - 7,941 986 (3,005) (2,019)
Transfers (25) - (372) 25 - 19,854 Transfers - - (19,482) - - -
Other movements - - - - - - Other movements - - 1,334 1,334 (1,629) (295)

At 30 June 2017 171 3,055 285,052 39 - 205,124 At 30 June 2017 1,178 225,775 669,306 1,389,700 728,601 2,118,301

Profit for the period - - - - - - Profit for the period - - 123,572 123,572 89,960 213,532
Other comprehensive (loss) / income for the period - - (5,715) - - - Other comprehensive (loss) / income for the period - (91,773) (41,783) (139,271) (114,451) (253,722)

Total comprehensive (loss) / income for the period - - (5,715) - - - Total comprehensive (loss) / income for the period - (91,773) 81,789 (15,699) (24,491) (40,190)
Issue of ordinary shares 10 - - - - - Issue of ordinary shares - - - 10 - 10
Dividends paid - - - - - - Dividends paid - - (6,000) (6,000) (53,595) (59,595)
Issuance and repurchase of units - - - - - - Issuance and repurchase of units 3,573 - (2,471) 1,102 (10) 1,092
Acquisition of subsidiaries under common control (171) (3,055) - (39) 3,165 - Acquisition of subsidiaries under common control - - 90 (10) - (10)
Transfers - - (332) - - 12,149 Transfers - - (11,817) - - -
Movements due to business combinations - - (13,809) - - - Movements due to business combinations - - (56,778) (70,587) (8,488) (79,075)

At 30 June 2018 10 - 265,196 - 3,165 217,273 At 30 June 2018 4,751 134,002 674,119 1,298,516 642,017 1,940,533
 Bestway Group Bestway Group
38 Annual Report & Accounts 2018 Annual Report & Accounts 2018 39

Consolidated Consolidated
cash flow statement cash flow statement (continued)
for the year ended 30 June 2018 for the year ended 30 June 2018

Trading Banking Total Trading Banking Total Trading Banking Total Trading Banking Total
Group Group Combined Group Group Combined Group Group Combined Group Group Combined
2018 2018 2018 2017 2017 2017 2018 2018 2018 2017 2017 2017

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Cash flows from operating activities
Profit for the year 85,531 128,001 213,532 78,141 184,963 263,104 Cash flows from financing activities
Adjustments for: Net borrowings (from) / to third parties (102,785) (1,582,321) (1,685,106) (130,289) 1,415,886 1,285,597
Share of profit of equity accounted investees - (2,600) (2,600) - (8,209) (8,209) Net borrowings (from) / to related party 46 - 46 (116,509) - (116,509)
Finance income (34) - (34) - - - Repurchase of own shares - 1,093 1,093 (92,931) (2,019) (94,950)
Other gains and losses (4,358) (541) (4,899) (602) - (602)
Other operating income - - - (1,744) (269) (2,013) Net cash (used in) / from financing (102,739) (1,581,228) (1,683,967) (339,729) 1,413,867 1,074,138
Finance costs 21,948 - 21,948 27,987 - 27,987 activities
One off gain (20,360) - (20,360)
Taxation 28,600 53,685 82,285 51,865 133,433 185,298
Depreciation of property, plant and equipment 43,056 17,117 60,173 40,579 15,902 56,481 Net (decrease) / increase in cash (66,367) 133,966 67,599 (14,340) 395,553 381,213
Amortisation of intangible assets 39,141 3,805 42,946 37,923 2,941 40,864 and cash equivalents
Profit on disposal of property, plant and
equipment (1,325) - (1,325) (13,548) - (13,548)
Profit on disposal of investment property (892) - (892) (206) - (206) Cash and cash equivalents at beginning of year 70,653 1,350,390 1,421,043 84,952 938,405 1,023,357
(Decrease) / increase in provisions (9,576) (42,128) (51,704) 5,625 2,428 8,053
Increase / (decrease) in pension provision (2,442) 55,488 53,046 902 (1,161) (259) Effect of foreign exchange rate changes 24,952 (260,687) (235,735) 41 16,432 16,473
Impairment of goodwill 10,055 - 10,055 12,793 - 12,793
Impairment of intangible assets 1,123 - 1,123 - - - Cash and cash equivalents at end of year 29,238 1,223,669 1,252,907 70,653 1,350,390 1,421,043


Operating cash flows before movements
in working capital 190,467 212,827 403,294 239,715 330,028 569,743
(Increase) / decrease in inventories (3,092) - (3,092) (25,909) - (25,909)
(Increase) / decrease in receivables (36,006) 2,070,819 2,034,813 130,190 (1,019,026) (888,836)
Increase / (decrease) in payables 32,724 (2,821,678) (2,788,954) 44,455 1,314,470 1,358,925
(Increase) / decrease in investments - 2,423,021 2,423,021 449 (1,307,050) (1,306,601)

184,093 1,884,989 2,069,082 388,900 (681,578) (292,678)

Tax paid (34,027) (38,874) (72,901) (54,273) (176,478) (230,751)
Interest paid (21,948) - (21,948) (27,987) - (27,987)

Net cash from / (used in) operating
activities 128,118 1,846,115 1,974,233 306,640 (858,056) (551,416)

Cash flows from investing activities

Interest received 34 - 34 718 - 718
Proceeds on disposal of property, plant
and equipment 4,608 10,622 15,230 4,922 22,737 27,659
Proceeds on disposal of investment property 5,412 2,182 7,594 30,778 6,602 37,380
Purchases of property, plant and equipment (125,098) (41,801) (166,899) (56,800) (72,365) (129,165)
Purchases of investment property (38) (3,479) (3,517) - - -
Proceeds on disposal of intangible assets - 88 88 2,050 - 2,050
Purchase of intangible assets (1,830) (6,886) (8,716) (2,385) (3,089) (5,474)
Acquisition of subsidiary net of cash (6,886) - (6,886) 2,526 - 2,526
Issue of ordinary shares - - - - - -
Dividends received / (paid) (55,709 (55,709) - 69,205 (69,205) -
Dividends paid to Owners of the Company (6,000) - (6,000) - - -
Dividends paid to non-controlling interest (17,657) (35,938) (53,595) (32,265) (44,938) (77,203)

Net cash (used in) / from investing

activities (91,746) (130,921) (222,667) 18,749 (160,258) (141,509)

 It has been a challenging twelve months and
there have been a number of headwinds we
have had to face into. Notwithstanding these
pressures, we have been able to show the
resilience of our business model and all of our
businesses have been able to maintain market
share and are well positioned to grow going
forward and create value for all stakeholders.

Z M Choudrey CBE, SI, BA (Hons), FCA

Group Chief Executive

Bestway Cement plant in Kalar Kahar, Pakistan