Chenab LimitedChenab Limited. DIRECTORS’ REPORT TO THE SHAREHOLDERS ... textile made-ups, ... Faisalabad,JhumraRoad,Gatti,DistrictFaisalabad,SheikhupuraRoad,Kharrianwala ...chenabgroup.com/Finance/pdf_files/FSPE31032012.pdf ·

Financial Statements of

For the 3rd Quarter EndedMarch 31, 2012

Chenab Limited

L I M I T E D

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Contents

Company Information

Directors’ Report to the Members

Balance Sheet

Profit & Loss Account

Statement of Comprehansive Incom

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statement

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Company Information

Chief Executive Officer Mian Muhammad Latif

Directors Mian Muhammad Javaid IqbalMr. Muhammad NaeemMr. Muhammad Faisal LatifMr. Muhammad Farhan LatifMr. Muhammad Zeeshan LatifMst. Shahnaz Latif

Bankers/Financial Institutions(In Alphabetic Order)

Company Secretary/

Allied Bank Limited.Askari Bank Limited.AlBaraka Bank (Pakistan) Limited. (ABBL)Bank Alfalah Limited.Citibank, N.A.Faysal Bank Limited.First Credit & Investment Bank LimitedFirst Punjab Modaraba.Habib Bank Limited.Habib Metropolitan Bank Limited.KASB Bank Limited.National Bank of Pakistan.NIB Bank LimitedOrix Leasing (Pakistan) Limited.Pak Oman Investment Company Ltd.Pak Kuwait Investment Company (Pvt.) Ltd.Pak Libya Holding Company (Pvt.) Ltd.Saudi Pak Industrial & Agricultural Investment Company (Pvt.) Ltd.SILK Bank Limited.

Summit Bank Limited.The Bank of PunjabUnited Bank Limited.

Standard Chartered Bank (Pakistan) Limited

Chief Financial Officer

Audit Committee Mr. Muhammad Farhan Latif - Chairman- Member

Mst. Shahnaz LatifMr. Muhammad Zeeshan Latif

- Member

Auditors Avais Hyder Liaquat NaumanChartered Accountants

Legal Advisor Ch. Shahid Mehmood (Advocate)

Registered Office Nishatabad, Faisalabad.Tel:041-8754472-8Fax:041-8752400, 8752700

E-mail Address [email protected]

Website Address www.chenabgroup.com

Works - Spinning Unit - Toba Tek Singh.- Weaving Unit - Kharianwala, Distt., Sheikhupura.- Weaving Unit - Shahkot, Distt., Nankana Sahib.- Processing & Stitching Units - Nishatabad, Faisalabad.

Mr. Muhammad Arshad

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DIRECTORS’ REPORT TO THE SHAREHOLDERS

For and on behalf ofBoard of Directors

Date: 30-04-2012 Place: Faisalabad

Mian Muhammad Latif(Chief Executive Officer)

The directors’ place before you the un-audited financial statements of the company together with its notes for nine months period ended on March 31, 2012.

SALES AND SERVICES REVENUE

Sales revenue of Rs.1,693.969 million and revenue from services of Rs.254.859 million aggregating to Rs.1,948.828 million was earned during the period under report as compared with the sales and services revenue of Rs. 3,761.222 million achieved during the same period of the preceding year.

FINANCIAL RESULTS AND REASONS FOR LOSS

The company has suffered a financial loss of Rs916.614 million during the period under report for the circumstances being beyond control and for non availability of electric/sui gas on account of load management by the authorities concerned, thereby causing adverse effect on production and quality of the products.

There had been acute paucity of funds due to successive financial losses and the banks of the company did not extend their cooperation in providing any financial assistance to the company for its smooth running.

FUTURE PROSPECTS

The company can come out of the current financial crisis if interruption free gas is supplied to it by remaining within the parameters of gas load management by the authority concerned apart from providing additional working capital on economical rate of mark up and granting rescheduling of existing financial facilities on soft terms by its banks/financial institutions.

ACKNOWLEDGEMENT

The directors are thankful to the shareholders, financial institutions and customers of the company who have extended their support in one way or the other to the cause of the company. The directors also place on record their appreciation for dedicated services rendered by the employees of the company during this period.

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CONDENSED INTERIM BALANCE SHEETAs At March 31, 2012

Muhammad Naeem(Director)


(Un-audited) (Audited)March 31, June, 30

2012 2011Notes Rupees Rupees

SHARE CAPITAL AND RESERVESAuthorised capital

120,000,000 ordinary shares of Rs.10/- each 1,200,000,000 1,200,000,000

80,000,000 cumulative preference shares of Rs.10/- each 800,000,000 800,000,000

Issued, subscribed and paid up capital 1,150,000,000 1,150,000,000Cumulative preference shares 3 800,000,000 800,000,000Capital reserves 526,409,752 526,409,752Revenue reserves (5,665,349,842) (4,772,317,801)

(3,188,940,090) (2,295,908,049)

SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT 4 5,150,656,524 5,156,590,479

NON-CURRENT LIABILITIESLong term financing 5 3,271,313,049 1,866,733,990Liabilities against assets

subject to finance lease 27,017,001 33,546,581

Deferred liability 6 520,104,700 166,998,1883,818,434,750 2,067,278,759

CURRENT LIABILITIES

Trade and other payables 2,056,172,991 2,007,795,137Interest / markup payable 1,343,876,356 1,583,696,780Short term borrowings 5,569,654,125 7,266,477,945Current portion of :

Long term financing 1,525,957,415 1,265,396,400Liabilities against assets

subject to finance lease 126,299,859 123,250,292Provision for taxation - income tax 12,327,936 29,515,650

10,634,288,682 12,276,132,204CONTINGENCIES AND COMMITMENTS 7 - -

16,414,439,866 17,204,093,393

NON-CURRENT ASSETS

Property, plant and equipment 8 11,518,224,823 11,659,236,7228,851,468 8,851,468

11,527,076,291 11,668,088,190CURRENT ASSETS

Stores, spares and loose tools 863,917,353 1,108,469,107Stock in trade 1,278,982,012 1,246,629,813Trade debts 9 2,383,720,482 2,802,036,404Loans and advances 105,438,193 103,027,030Deposits and prepayments 37,136,805 25,931,317Other receivables 94,789,239 107,310,668Tax refunds due from

Government 90,014,836 122,847,043Cash and bank balances 33,364,655 19,753,821

4,887,363,575 5,536,005,203

16,414,439,866 17,204,093,393

The annexed notes form an integral part of this condensed interim financial report

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CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)For The 3rd Quarter Ended March 31, 2012

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) For The 3rd Quarter Ended March 31, 2012





2012 2011 2012 2011Note Rupees Rupees Rupees Rupees

Sales 520,024,339 1,245,755,281 1,948,828,388 3,761,221,607Cost of sales 10 737,083,393 1,524,379,850 2,568,974,326 4,793,761,001Gross (loss) (217,059,054 (278,624,569) (620,145,938) (1,032,539,394)

Other operating income 933,556 981,440 2,707,160 3,582,343(216,125,498) (277,643,129) (617,438,778) (1,028,957,051)

Selling and distribution expenses 7,056,598 21,322,746 26,003,495 149,899,298Administrative expenses 32,915,957 48,366,195 114,051,044 145,776,023Other operating expenses - - - -Finance cost 11 36,297,437 346,242,309 145,472,888 1,026,879,067

76,269,992 415,931,250 285,527,427 1,322,554,388(Loss) for the period before taxation (292,395,490) (693,574,379) (902,966,205) (2,351,511,439)

Provision for taxation 882,188 8,688,227 13,648,138 38,694,274

(Loss) for the period after taxation (293,277,678) (702,262,606) (916,614,343) (2,390,205,713)

Earnings per share - Basic 12 (2.55) (6.11) (7.97) (20.78)


Quarter Ended March 31, Nine Months Ended March 31,

2012 2011 2012 2011Rupees Rupees Rupees Rupees

(Loss) for the period (293,277,678)

7,854,394

(702,262,606) (916,614,343) (2,390,205,713)

Other comprehensive income for thePeriod incremental depreciation on

revalued assets for the period 36,674,025 23,582,302 32,599,670

(293,277,678) (665,588,581) (893,032,041) (2,357,606,043)



muhammad.sajjad

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CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)For The 3rd Quarter Ended March 31, 2012



March 31, March 31, 2012 2011

a) CASH FLOWS FROM OPERATING ACTIVITIES Rupees Rupees

(Loss) / profit before taxation (902,966,205) (2,351,511,439)Adjustments for: Depreciation / impairment loss

on property, plant and equipment 139,606,201 167,161,632 Provision for staff retirement gratuity 31,442,771 35,534,272 Loss on disposal of property, plant and equipment 3,538,837 - Finance cost 145,472,888 1,026,879,067

Operating cash flows before working capital changes (582,905,508) (1,121,936,468)

Changes in working capital (Increase) / decrease in current assets

Stores, spares and loose tools 244,551,754 72,221,880Stock in trade (32,352,199) 1,117,886,336Trade debts 418,315,922 475,906,198Loans and advances (2,411,163) (36,947,286)Deposits and prepayments (11,205,488) (2,129,934)Other receivables (13,900,513) (18,700,842)Tax refunds due from Government 47,310,920 22,420,040

650,309,233 1,630,656,392 Increase/ (Decrease) in current liabilities

Trade and other payables 51,888,808 80,377,515702,198,041 1,711,033,907

Cash generated from operating activities 119,292,533 589,097,439

Income tax paid (18,892,623) (26,465,126)Finance cost paid (19,568,138) (341,302,160)Staff retirement gratuity paid (13,807,689) (7,293,525)

Net cash generated from operating activities 67,024,083 214,036,628

b) CASH FLOWS FROM INVESTING ACTIVITIES

Additions in property, plant and equipment (1,189,883) (47,817,962)Proceeds from disposal of property, plant and equipment 2,867,222 10,429,607Net cash genrated / (used) in investing activities 1,677,339 (37,008,302)

c) CASH FLOWS FROM FINANCING ACTIVITIESLong term financing obtained - 99,443,670Repayment of:

Long term financing (30,858,973) (84,586,322)Liabilities against assets subject to finance lease (6,990,967) (1,168,818)

Increase in short term bank borrowings - net (14,907,199) (189,795,710)

Net cash (used) from financing activities (52,757,139) (176,107,180)

Net increase / (decrease) in cash and cash equivalents (a+b+c) 15,944,283 921,146

Cash and cash equivalents at the beginning of the period 17,420,372 17,420,372

Cash and cash equivalents at the end of the period 33,364,655 18,341,518


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CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)For The 3rd Quarter Ended March 31, 2012



The annexed notes form an integral part of this condensed interim

financial report

Total

Balance as at July 01, 20111,150,000,000

800,000,000120,000,000

63,552,610342,857,142

76,432,834(1,995,964,954)

556,877,632

Total comprehensive (loss)

for the period

(Loss) for the period-

--

--

-(2,364,263,927)

(2,364,263,927)

Incremental depreciation on

revalued assets for the period-

--

--

-51,883,571

51,883,571(2,312,380,356)

(2,312,380,356)

Balance as at March 31, 2011

1,150,000,000800,000,000

120,000,00063,552,610

342,857,14276,432,834

(4,308,345,310)(1,755,502,724)


for the period


--

--

-(523,487,230)

(523,487,230)

Surplus realised on disposal of assetduring the period

--

--

--

2,054,6142,054,614


revalued assets for the period-

--

--

-(18,972,709)

(18,972,709)-

--

--

-(540,405,325)

(540,405,325)Balance as at June 30, 2011

1,150,000,000800,000,000

120,000,00063,552,610

342,857,14276,432,834

(4,848,750,635)(2,295,908,049)


for the period


--

--

-(916,614,343)

(916,614,343)


revalu ed assets for the period-

--

--

-23,582,302

23,582,302-

--

--

-(893,032,041)

(893,032,041)Balance as at M

arch 31, 20121,150,000,000

800,000,000120,000,000

63,552,610342,857,142

76,432,834(5,741,782,676)

(3,188,940,090)

Premium

on issue of ordinary shares

Unappropriated

profit

Book

difference of capital under

scheme of

arrangement

Issued, subscribed and paid up capital

Preference shares

redemption

reserve

General

reserve

Share Capital

Revenue R

eservesC

apital Reserves

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

Cum

ulative preference

shares

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SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)For The 3rd Quarter Ended March 31, 2012

1. STATUS AND ACTIVITIES

1.1

1.2

1.3

1.4

2.

2.1

2.2

2.3

2.4

2.5

2.6

2.7

This condensed interim financial report has been prepared under the "historical cost convention" except staffretirement gratuity carried at present value and certain property, plant and equipment carried at valuation.

This condensed interim financial report is presented in Pak Rupee, which is the Company's functional andpresentation currency.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and methods of computation adopted in the preparation of this condensed interim financialreport are the same as those applied in the preparation of the financial statements for the year ended June 30,2011.

Pursuant to schemes of arrangement approved by the Honourable Lahore High Court, Lahore, assets, liabilitiesand reserves of Faisal Weaving (Private) Limited, Latif Weaving (Private) Limited and Chenab Finishing (Private)Limited were merged with the Company with effect from December 31, 1998 and assets, liabilities and reserves ofChenab Fibres Limited were merged with the Company with effect from April 01, 2003.

This condensed interim financial report has been prepared in accordance with the requirements of the InternationalAccounting Standard (IAS) 34 ''Interim Financial Reporting'' and provisions of and directives issued under theCompanies Ordinance, 1984. in case the requirements differ, the provisions of or directives issued under theCompanies Ordinance, 1984 have been followed.

This condensed interim financial report does not include all the information required for full annual financialstatements, and should be read in conjunction with the Company's published audited financial statements for theyear ended June 30, 2011.

This condensed interim financial report is unaudited and being submitted to the shareholders as required underSection 245 of the Companies Ordinance, 1984.

Chenab Limited (the Company) is incorporated as a public limited company under the Companies Ordinance,1984 (the Ordinance) and is listed on Karachi Stock Exchange. The registered office of the Company is situated atNishatabad, Faisalabad. The principal business of the Company is export of all kinds of value added fabrics,textile made-ups, casual and fashion garments duly processed. The cloth processing unit is located atNishatabad, District Faisalabad and stitching units are located at Nishatabad, District Faisalabad and ShorkotRoad, District Toba Tek Singh. Weaving units are located at Sheikhupura Road, Khurrianwala, DistrictFaisalabad, Jhumra Road, Gatti, District Faisalabad, Sheikhupura Road, Kharrianwala, District Sheikhupura andShahkot, District Nankana Sahib. Spinning unit is located at Shorkot Road, District Toba Tek Singh, in the province of Punjab..

Standards, amendments to published approved accounting standards and interpretations effective as adopted inPakistan, those are not yet effective:There are other amendments to the standards and new interpretations that are mandatory for accounting periodsbeginning on or after July 01, 2012 but are considered not to be relevant or do not have any significant effect onCompany's operations and are, therefore, not detailed in this condensed interim financial report.

restructured their long term and short term borrowings into long term loans (Refer Note 5). The Company hasapplied to its bankers and financial instituations for rescheduling of existing principal and mark up thereon toconvert the entire outstanding liabilities into non serviceable loans to improve the liquidity position of the Company.Negotiations with the banks and financial institutions are under process. The management is in the process ofmaking arrangements with renowned foreign buyers to obtain export business agianst advance payments beforeshipments and hopeful that this arrangement will improve the tight liquidity position of the Company. Themanagement is hopeful of restoring its previous status and prestige in the export market, subject to successfulnegotiations with the foreign buyers for improvement of liquidity. The management's efforts to improve theoperations and cut down the losses were adversely affected due to electricity and gas loadshedding. Themanagement is making all out efforts to achieve the desired level of production and sales. The management isconfident that with the improvement in the supply position of electricity and gas, the operations of the Company willimprove and it will be successful in its efforts and the Company will be able to continue as a going concern.

The Company has incurred operating losses of Rs. 916.867 million during the period and the accumulated losses ofthe Company as at the balance sheet date are Rs. 5,665.603 million. The current liabilities exceed its currentassets by Rs. 5,971.836 million. The Company has not redeemed preference shares on exercise of put options fortwo consecutive years by holders of preference shares due to tight cash flow situation. The Companyhas not been able to comply with terms of certain loan agreements. Certain banks and financial institutionshave filed cases for recovery and winding up of the Company and / or served legal notices against the Companywhich the management is defending. A couple of bankers of the Company have

Standards, amendments to published approved accounting standards and interpretations effective from July 01,2011:

There are certain new standards, amendments and International Financial Reporting Interpretations Committee(IFRIC) interpretations that became effective during the period and are mandatory for accounting periodsbeginning on or after July 01, 2011 but are considered not to be relevant or have any significant effect on theCompany's operations and are, therefore, not disclosed in this condensed interim financial report.

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Un-audited AuditedMarch 31, June 30,

2012 2011Rupees Rupees3. Cumulative preference shares

80,000,000 cumulative preference shares of Rs. 10/- each fully paid in cash. 800,000,000 800,000,000

3.1


2012 2011Note Rupees Rupees

4. SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT

Opening balance 5,156,590,479 5,209,204,302Surplus realised on disposal of assets during the period / year - (2,054,614)Incremental depreciation on revalued assets for the period / year (23,582,302) (32,910,862)(Reversal) / provision of deferred tax on surplus 17,648,347 (17,648,347)

5,150,656,524 5,156,590,4795. Long term financing

SecuredUnder mark up arrangements

From banking companies Fixed assets finance 239,227,233 239,227,233

Demand finances 5.1 1,723,000,000 417,640,000 Term finances 5.2 1,682,598,197 1,236,724,170 Long term finances 157,245,795 243,139,748

From financial institutions Term finances 561,760,533 561,960,533 Long term finances 78,434,529 78,434,529 Not subject to mark up

From financial institution Term finance 58,351,091 58,351,091

4,500,617,378 2,835,477,304 Less : Current portion

Installments due 998,409,940 716,187,546 Payable within one year 527,547,475 549,208,854

1,525,957,415 1,265,396,400 2,974,659,963 1,570,080,904

Unsecured From Directors 264,813,086 264,813,086 From others 31,840,000 31,840,000

296,653,086 296,653,086 3,271,313,049 1,866,733,990

5.1

5.2

Demand finance I of Rs. 91.660 million, demand finance V of Rs. 80 million, demand finance VI of Rs. 34.980million, long term finance of IX Rs. 85.90 million and short term export finances of Rs. 1,243.67 million have beenrestructured and converted into a long term finance during the period. The principal amount will be repaid in 36unequal quarterly installments in nine years commencing from September 30, 2011 and ending on June, 30, 2020.The loan will be subject to fixed mark up rate of 6% per annum for first 3 years, 7% per annum for next two years,8% per annum for next two years and at KIBOR rate for the last two years. Markup of Rs. 145.074 millionoutstanding as at June 30, 2011 and markup for the period from July 01, 2011 to June 30, 2020 will be deferredand will be repaid after payment of principal amount in nine years. The rescheduling of Rs 1,537 million wassubject to arrangement of fresh working capital facilities by the sponsors till September 30, 2011. The Companyhas requested to extend the period for arrangement of working capital.

Term finance I of Rs. 48.048 million, export finances of Rs. 219.105 million, finance against trust receipts of Rs.7.428 million and running finance of Rs. 225 million have been restructured into a long term finance during theperiod. Rs. 6 million will be repaid in 12 equal monthly instalments commencing from July 01, 2011 and ending onJune, 01, 2012, Rs. 243.581 million will be repaid in 54 equal monthly instalments commencing from July 01, 2012and ending on December, 01, 2016 and the balance principal of Rs 250 million will be declassified as a regular limitfrom January 1, 2017. Terms of repayment of balance amount of Rs. 250 million are not decided. The loan will besubject to fixed mark up rate of 9% per annum. Markup of Rs. 97.370 million outstanding as at June 30, 2011 andmarkup for the period from July 2011 to December 2016 will be deffered and will be repaid in 34 monthlyinstallments commencing from January 2017 and ending on October 2019.

The holders of 55,080,498 cumulative preference shares called upon to convert preference shares into ordinaryshares due to non-redemption of their holding on exercise of put option for two consecutive years. The Companyproposed to issue new ordinary shares to preference shareholders holding 49,984,998 cumulative preferenceshares who have called upon to convert their shares, as per conversion formula laid down in the Prospectus andArticles of Association of the Company. In view of the reservations by the investors regarding conversion formula,the matter is deferred till amicable resolution with the consensus of the investors. The matter of conversion ofbalance of 5,095,500 cumulative preference shares is also pending till the resolution of matter with the investorswho have first exercised the put option.

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2012 2011Rupees Rupees

6. Deferred liabilities

Deferred taxation 6.1 - 17,648,347 Staff retirement gratuity 166,984,923 149,349,841 Deferred mark up 5. 353,119,777 -

520,104,700 166,998,188

6.1

March 31, June 30,2012 2011

Rupees Rupees

7. CONTINGENCIES AND COMMITMENTS

Contingencies

Post dated cheques issued in favour of Collector of Customs for release of goods imported for re-export 22,388,382 32,496,022

Liability of markup not acknowledged in view ofloan rescheduling applications filed to

allow non serviceable grace period on the outstanding liabilities 677,777,312 -

Commitments

8. Property, plant and equipment

8.1 ACQUISITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT - AT COST

Acquisitions Disposals Acquisitions DisposalRupees Rupees Rupees Rupees

OwnedPlant and machinery 239,000 - 45,994,422 -Electric installations - - 465,201 -Furniture and fixture 150,000 - - -Office equipment 141,000 - 1,333,325 -Vehicles 659,883 10,515,694 - 392,550

1,189,883 10,515,694 47,792,948 392,550


2012 2011Rupees Rupees

9. Trade debts

Considered goodSecured

Foreign 15,383,490 47,697,586Unsecured

Foreign 1,811,590,352 2,383,154,461Local 556,746,640 371,184,357

2,383,720,482 2,802,036,404

9.1 The aging of trade debts is as under:

Not past due 568,605,575 1,002,888,683Past due 1,815,114,907 1,799,147,721

2,383,720,482 2,802,036,404

Nine Months Ended March 31, 2012 Nine Months Ended March 31, 2011

Out of past due trade debts outstanding at June 30, 2011, Rs. 859.568 million have been recovered during theperiod. The management is confident that its efforts will result in the recovery of above old outstanding balances,and hence, based on the past experience and taking into consideration, the financial position, previous record ofrecoveries and pending negotiations and resolutions, the management believes that trade debts past due do notrequire any impairment.

Deferred tax asset of Rs. 341.821 million has not been recognised in this condensed interim financial report inview of uncertain future results.

There is no commitment outstanding as at March 31, 2012.

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10. Cost of sales

Cost of goods manufactured (Note 10.1) 705,587,815 1,423,475,677 2,577,693,244 4,451,274,309

Finished goodsOpening stock 379,668,221 595,365,029 339,453,725 836,947,548Closing stock (348,172,643) (494,460,856) (348,172,643) (494,460,856)

31,495,578 100,904,173 (8,718,918) 342,486,692

737,083,393 1,524,379,850 2,568,974,326 4,793,761,001

Cost of goods manufactured

Raw material consumed (Note 10.1.1) 257,517,204 556,267,077 1,135,740,683 1,765,913,039

Salaries, wages and benefits 66,945,496 99,616,647 241,188,461 399,036,741Staff retirement benefits 9,402,763 7,211,912 24,867,333 25,026,345Stores and spares 24,784,546 90,867,243 183,478,951 230,373,457Dyes and chemicals 89,529,174 106,854,448 338,023,807 456,152,171Packing material 64,039,840 135,463,770 201,336,624 395,047,334Repairs and maintenance 2,065,941 6,602,645 9,715,863 11,278,963Fuel and power 79,571,699 80,457,707 259,837,897 259,943,233Insurance 146,001 5,819,024 3,432,753 17,644,945Research and development

expenditure - 256,042 - 344,258Depreciation 40,198,672 38,788,732 134,011,160 159,961,912Other 13,814,416 45,999,681 63,222,553 84,749,706

648,015,752 1,174,204,928 2,594,856,085 3,805,472,104Work in process

Opening stock 736,306,345 977,227,009 661,571,441 1,373,758,465Closing stock (678,734,282) (727,956,260) (678,734,282) (727,956,260)

57,572,063 249,270,749 (17,162,841) 645,802,205705,587,815 1,423,475,677 2,577,693,244 4,451,274,309

Raw material consumed

Opening stock 273,007,445 199,664,441 245,604,647 280,682,701Purchases including purchase expenses 236,584,846 507,687,898 1,142,211,123 1,636,315,600

509,592,291 707,352,339 1,387,815,770 1,916,998,301Closing stock (252,075,087) (151,085,262) (252,075,087) (151,085,262)

257,517,204 556,267,077 1,135,740,683 1,765,913,039

11. Finance cost


12. Earnings per share - Basic

(Loss) attributable to ordinary share holders (293,277,678) (702,262,606) (916,614,343) (2,390,205,713)

Weighted average number of ordinary shares outstanding

during the period 115,000,000 115,000,000 115,000,000 115,000,000Earnings per share - Basic and diluted (2.55) (6.11) (7.97) (20.78)

There is no dilutive effect on the basic earnings per share of the Company.

Quarter Ended March 31,

10.1

10.1.1

12.1

Nine Months Ended March 31,


The Company is facing financial and operational problems. As part of its long terms plan to overcome these problems,the management has filed applications to its bankers to reschedule the existing principal and markup thereon to convertthe entire outstanding liabilities into non serviceable loans for a reasonable period of time. The Company is hopeful thatits bankers will consider the proposals favourably, therefore provision of markup on financial facilities underconsideration for rescheduling has not been made in this condensed interim financial report.

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13. TRANSACTIONS WITH RELATED PARTIES

2012 2011Relationship Rupees Rupees

Associated undertakings Sale of goods - 865,343,337Organisational expenses recovered - 370,009Services received 3,267,679 4,435,901Rental income - 1,492,000

Key management personnel Remuneration 6,300,000 4,500,000

14. Overdue loans

15. DATE OF AUTHORISATION FOR ISSUE

16. GENERAL

(i)

(ii)

(iii) Figures have been rounded off to the nearest Rupee.

Nine Months Ended March 31,

Nature of transaction

On the reporting date, the installments of long term financing amounting to Rs. 998.410 million (June 30, 2011: Rs.716.187 million) alongwith mark up of Rs. 610.421 million (June 30, 2011: Rs. 488.985 million), lease financesamounting to Rs. 98.854 million (June 30, 2011: Rs. 81.167 million) alongwith mark up of Rs. 31.170 million (June 30,2011: Rs. 21.182 million) and short term borrowings amounting to Rs. 914.846 million (June 30, 2011: Rs. 991.326million) alongwith mark up of Rs. 770.972 million (June 30, 2011: Rs. 697.275 million) were over due. The Companyhas filed applications for rescheduling of outstanding liabilities, which are under consideration.

This condensed interim financial report was authorised for issue on 30-04-2012 by the Board of Directors of theCompany.

There is no unusual item included in this condensed interim financial report which is affecting liabilities, assets,loss, comprehensive loss, cash flows or equity of the Company.

The provision for taxation made in this condensed interim financial report is subject to adjustment in annualfinancial statements.

The Company in the normal course of business carries out transactions with various related parties which comprise ofassociated undertakings and key management personnel. Significant transactions with related parties are as follows:-

Nishatabad, Faisalabad - Pakistan.Tel: +92-41-8754472-76

Fax: +92-41-8752400,8752700Email: [email protected] www.chenabgroup.com

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Chenab LimitedChenab Limited. DIRECTORS’ REPORT TO THE SHAREHOLDERS ... textile made-ups, ... Faisalabad,JhumraRoad,Gatti,DistrictFaisalabad,SheikhupuraRoad,Kharrianwala ...chenabgroup.com/Finance/pdf_files/FSPE31032012.pdf ·