CRESCENT COTTON MILLS LIMITED CRESCENT COTTON · PDF fileCRESCENT COTTON MILLS LIMITED Quarterly Accounts 30 Sep 2017 5 MUHAMMAD ARSHAD CHIEF EXECUTIVE OFFICER For and on behalf of

CONDENSED INTERIM FINANCIAL STATEMENTS

WITH ACCOMPANYING INFORMATION

FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2017

(UN-AUDITED)

CRESCENT COTTON MILLS

LIMITEDCOMPANY PROFILE

URL

BOARD OF DIRECTORS Mr. Zahid Bashir

(Chairman)

DIRECTORS (In alphabetical order) Mr. Abid Mehmood

Mr. Adnan Amjad

Mr. Humayun Mazhar

Mr. Naveed Gulzar

Mr. Salman Rafi

Mr. Taimur Amjad

AUDIT COMMITTEE Mr. Salman Rafi (Chairman)

Mr. Adnan Amjad (Member)

Mr. Taimur Amjad (Member)

COMPANY SECRETARY Mr. Sami Ullah Chaudhry

BANKERS National Bank of Pakistan

AUDITORS Riaz Ahmad & Compnay

Chartered Accountants

COMPANY REGISTRAR Vision Consulting Limited.

3-C, LDA Flats, 1st Floor,

Lawrance Road, Lahore.

Ph: 042-36283096-97

HUMAN RESOURCE

AND REMUNERATION COMMITTEE

Mr. Abid Mehmood (Chairman)

Mr. Adnan Amjad (Member)

Mr. Salman Rafi (Member)

Mr. Muhammad Arshad

(Chief Executive Officer)

Quarterly Accounts 30 Sep 2017CRESCENT COTTON MILLS LIMITED

3


5

MUHAMMAD ARSHADCHIEF EXECUTIVE OFFICER

For and on behalf of

the Board of Directors

FAISALABAD

October 31, 2017

Dear Members,

Future Prospectus

Acknowledgement

The directors of your company present to you the condensed interim financial information for the firstquarter ended September 30, 2017 During the period under review, your company has earned a pre-taxprofit of Rs. 22.654 Million as compared to pre-tax loss of Rs. 23.962 Million in the comparative period oflast year.

Total sales revenue of the company for the first quarter stood at Rs. 1,204.986 Million, whereas, theturnover figures during the same period in year 2016 was Rs. 1,095.598 Million hence depicting anincrease of almost ten percent. With the grace of Almighty Allah company has taken possession ofspinning unit located at 46 Km, Lahore Multan Road as well as operational activity has initiated during thisquarter. Increase in the figure of sales revenue is due to the additional revenue generated by the newlyacquired spinning unit. The cost of sales in the period under review stood at 97.18% whereas, up toSeptember 30, 2016 it was around 97.96%.

In spite of the hardships being faced by the textile industry during the period under review, themanagement of the company is continuously striving hard for better results.

Pakistan textile exports have declined in the last four years due to high business costs. Thoughgovernment is supplying RLNG to the textile industry around the clock in Punjab but the cost beingcharged to industry based in Punjab is higher than that being charged in Sindh and Khyber Pakhtunkhwaprovince. The spinning and weaving sectors are backbone of the textile value chain and are facing thebrunt of high cost of doing business and this has made them unviable. The country's cotton crop 2017-18is likely to improve mainly due to favourable weather conditions. The Prime Minister's package ofincentives for exporters has been announced vide which “Duty Drawback of Taxes Order 2017-18” hasbeen issued. It is expected that exporters shall benefit from this incentive, our company will also reapbenefit from this incentive scheme..

Management of your company is carefully watching the cotton market to procure the cotton at minimalprices. Currently yarn demand in local and foreign market is gradually moving towards improvement. Thecompany is focusing on improving efficiencies and minimizing costs to achieve the better financial resultsduring the remaining period of financial year ending June 30, 2018.

The management does not expect drastic improvement in the overall business scenario in the nearfuture, however, margins are expected to improve in the coming months. The textile industry of Pakistanis passing through a critical phase and it will be presented with many challenges in the coming period.There are issues of demand erosion for yarn and fabrics as well as questions about the size of crops in thecotton growing countries of the world.

The company will however take all efforts towards improvement where ever possible.

The Directors wish to express their gratitude to our valued clients, bankers and shareholders for thecooperation extended by them during the course of business activities. The Directors also wish to placeon record their appreciation for the hard work and devoted services of the staff members and workers ofthe company.

DIRECTORS' REVIEW TO THE SHAREHOLDERS


4

CRESCENT COTTONUNCONSOLIDATED CONDENSED INTERIM


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

5

MILLS LIMITEDBALANCE SHEET AS AT 30 SEPTEMBER 2017

6

7

8

NOTE

UN-AUDITED AUDITED

(RUPEES IN THOUSAND)

30 September

2017

30 June

2017


7


6

NOTE

UN-AUDITED AUDITED


30 September

2017

30 June

2017

ABID MEHMOODDIRECTOR

SAMI ULLAH CH.CHIEF FINANCIAL OFFICER

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized share capital

Issued, subscribed and paid up share capital

Reserves

Total equity

Surplus on revaluation of land and investment properties

LIABILITIES

NON-CURRENT LIABILITIES

CURRENT LIABILITIES

TOTAL LIABILITIES

CONTINGENCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES

30 000 000 (30 June 2017: 30 000 000)

ordinary shares of Rupees 10 each

Long term financing

Employees' retirement benefits

Trade and other payables

Accrued markup

Short term borrowings

Current portion of long term financing

Provision for taxation

300,000

213,775

603,455

817,230

3,079,990

225,787

68,090

293,877

549,332

9,764

520,963

11,883

48,457

1,140,399

1,434,276

5,331,496

300,000

213,775

647,405

861,180

3,079,990

225,787

74,797

300,584

391,872

12,186

439,919

11,883

32,713

888,573

1,189,157

5,130,327

ASSETS

NON-CURRENT ASSETS

CURRENT ASSETS

TOTAL ASSETS

Property, plant and equipment

Investment properties

Long term investments

Long term deposits

Deferred income tax asset

Stores, spare parts and loose tools

Stock in trade

Trade debts

Loans and advances

Short term deposits, prepayments and

balances with statutory authorities

Other receivables

Short term investments

Cash and bank balances

3,832,403

248,008

12,685

3,092

27,327

4,123,515

43,735

369,853

147,727

54,983

152,119

59,422

364,168

15,974

1,207,981

5,331,496

3,776,111

248,008

13,133

3,092

27,327

4,067,671

45,026

269,885

63,873

51,911

127,564

45,405

417,515

41,477

1,062,656

5,130,327

UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT

FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2017 (UN-AUDITED)

NOTE


9

10

CRESCENT COTTON MILLS LIMITEDUNCONSOLIDATED CONDENSED INTERIM STATEMENT OF

PROFIT OR LOSS AND COMPREHENSIVE INCOMEFOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2017 (UN-AUDITED)

CRESCENT COTTON MILLS LIMITED



30 September

2017

30 September

2016


9


8

1,095,598

(1,073,291)

22,307

(14,204)

(35,956)

(10)

(50,170)

(27,863)

8,844

(19,019)

(4,943)

(23,962)

(11,519)

(35,481)

(1.66)


30 September

2017

30 September

2016

PROFIT/(LOSS) AFTER TAXATION

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified to profit or loss

Items that may be reclassified subsequently

to profit or loss:

Surplus on remeasurement of available for sale investments

Other comprehensive income for the period

TOTAL COMPREHENSIVE INCOME/(LOSS)

FOR THE PERIOD

(35,481)

-

38,579

38,579

3,098

SALES

COST OF SALES

GROSS PROFIT

DISTRIBUTION COST

ADMINISTRATIVE EXPENSES

OTHER OPERATING EXPENSES

OTHER OPERATING INCOME

PROFIT/(LOSS) FROM OPERATIONS

FINANCE COST

PROFIT/(LOSS) BEFORE TAXATION

TAXATION


EARNINGS / (LOSS) PER SHARE - BASIC

AND DILUTED (RUPEES):

1,204,986

(1,171,021)

33,965

(8,044)

(40,211)

-

(48,255)

(14,290)

45,576

31,286

(8,632)

22,654

(15,744)

6,910

0.32





6,910

-

(50,860)

(43,950)

(50,860)



UNCONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT


The annexed noted form an integral part of this condensed interim financial information.

11


NOTE


10


30 September

2017

30 September

2016

61,490

(7,613)

(108)

(4,587)

-

47

49,229

(3,725)

44

4,094

413

-

(61,249)

(61,249)

(11,607)

32,334

20,727



CASH FLOWS FROM OPERATING ACTIVITIES

Cash (utilized in) / generated from operations

Net cash (utilized in) / generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash (used in) / from financing activities

NET (DECREASE) / INCREASE IN CASH

AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE PERIOD


END OF THE PERIOD

Finance cost paid

Staff retirement gratuity paid

Income tax paid

Dividend paid

Long term deposits

Capital expenditure on property, plant and equipment

Proceeds from sale of property, plant and equipment

Proceeds from sale of investments

Repayment of long term financing

Short term borrowings - net

(44,479)

(11,054)

(12,803)

(9,312)

-

-

(77,648)

(73,658)

1,194

43,565

(28,899)

-

81,044

81,044

(25,503)

41,477

15,974



UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY




CAPITAL RESERVES REVENUE RESERVES

SHARE

CAPITAL

Premium on

issue of

shares

Plant

Moderni-

sation

Fair

value

Sub

Total

General Dividend

equalization

(Accumulatedloss) /

unappropriatedprofit

TOTAL

EQUITY

Sub

Total

213,775

-

-

-

213,775

-

-

-

213,775

-

-

-

213,775

5,496

-

-

-

5,496

-

-

-

5,496

-

-

-

5,496

12,000

-

-

-

12,000

-

-

-

12,000

-

-

-

12,000

96,988

-

-

-

96,988

-

-

-

96,988

-

-

-

96,988

4,000

-

-

-

4,000

-

-

-

4,000

-

-

-

4,000

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11



Balance as at 30 June 2016 - Audited

Loss for the first quarter ended 30 September 2016

Other comprehensive income for the first quarter

ended 30 September 2016

Total comprehensive income for the

first quarter ended 30 September 2015

Balance as at 30 September 2015 - Un-audited

Profit for the next three quarters ended 30 June 2017

Other comprehensive income for the next three quarters

ended 30 June 2017

Total comprehensive income for the next three quarters

ended 30 June 2017





Total comprehensive income for the first quarter



100,008

-

38,579

38,579

138,587

-

219,695

219,695

358,282

-

(50,860)

(50,860)

307,422

117,504

-

38,579

38,579

156,083

-

219,695

219,695

375,778

-

(50,860)

(50,860)

324,918

145,519

(35,481)

-

(35,481)

110,038

60,601

-

60,601

170,639

6,910

-

6,910

177,549

246,507

(35,481)

-

(35,481)

211,026

60,601

-

60,601

271,627

6,910

-

6,910

278,537

577,786

(35,481)

38,579

3,098

580,884

60,601

219,695

280,296

861,180

6,910

(50,860)

(43,950)

817,230


SELECTED NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION


1. THE COMPANY AND ITS OPERATIONS

2. BASIS OF PREPARATION

3. ACCOUNTING POLICIES AND COMPUTATION METHODS

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Crescent Cotton Mills Limited 'the Company' is a public limited company incorporated in March

1959 in Pakistan under the provisions of Companies Act, 1913 (Now Companies Ordinance,

1984). Shares of the Company are quoted on all the stock exchanges of Pakistan. The Company

is engaged in manufacturing and sale of yarn and hosiery items along with buying, selling and

otherwise dealing in cloth. The Company also operates an embroidery unit. The registered

office of the Company is situated at New Lahore Road, Nishatabad, Faisalabad.

This condensed interim financial information is un-audited and is being submitted to

shareholders as required by section 245 of the Companies Ordinance, 1984. This condensed

interim financial information of the Company for the first quarter ended 30 September 2017

has been prepared in accordance with the requirements of the International Accounting

Standard (IAS) 34 "Interim Financial Reporting" and provisions of and directives issued under

the Companies Ordinance, 1984. In case where requirements differ, the provisions of or

directives issued under the Companies Ordinance, 1984 have been followed. This condensed

interim financial information should be read in conjunction with the audited annual published

financial statements of the Company for the year ended 30 June 2017.

The accounting policies and methods of computations adopted for the preparation of this

condensed interim financial information are the same as applied in the preparation of the

preceding audited annual published financial statements of the Company for the year ended

30 June 2017.

The preparation of this condensed interim financial information in conformity with the

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

requires the management to exercise its judgment in the process of applying the Company's

accounting policies. Estimates and judgments are continually evaluated and are based on

historical experience and other factors, including expectations of future events that are

believed to be reasonable under the circumstances.

During preparation of this condensed interim financial information, the significant judgments

made by the management in applying the Company’s accounting policies and the key sources

of estimation and uncertainty were the same as those that applied in the preceding audited

annual published financial statements of the Company for the year ended 30 June 2017.

5. CONTINGENCIES AND COMMITMENTS

Contingencies:

- Certain additions have been made by the assessing officer in different assessment years onvarious grounds and has created demand of Rupees 7.013 million (30 June 2017: Rupees 7.013million). The Company, being aggrieved, has filed appeals with the Honourable High Court whichare still pending. No provision has been made in the books of account against the aforesaid demandas the management is hopeful for positive outcome of the appeals filed by the Company.


6.

6.1

- The Company filed a suit against Crescent Fibres Limited for the recovery of Rupees 23.000 million

(30 June 2017: Rupees 23.000 million) along with mark-up in Civil Court, Lahore. No provision against

doubtful receivables has been made in this condensed interim financial information as the

management is hopeful that the case will be decided in favour of the Company and all the

outstanding dues will be recovered.

- Guarantees of Rupees 47.480 million (30 June 2017: Rupees 47.480 million) are given by the banks

of the Company to Sui Northern Gas Pipeline Limited against gas connections.

- Letters of credit for capital expenditure are of Rs. 0.337 million (30 June 2017: Rupees 20.318

million).

- Letters of credit for other than capital expenditure are of Rupees 0.023 million (30 June 2017:

Rupees 1.323 million).

Commitments:


13


12

UN-AUDITED AUDITED


30 September

2017

30 June

2017

6.1.1

6.1.2

PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets

Cost of additions during the period / year

Book value of deletions during the period / year

Operating fixed assets (Note 6.1)

Capital work-in-progress

Opening book value

Add : Cost of additions during the period / year (Note 6.1.1)

Less:

Book value of deletions during the period / year (Note 6.1.2)

Transferred to investment properties

Depreciation charged during the period / year

Book value at the end of the period / year

Land - Freehold

Buildings on free hold land

Plant and machinery

Electric installations

Tools and equipment

Furniture and fixtures

Vehicles

Office equipment

Plant and machinery

Vehicles

3,832,403

-

3,832,403

3,298,983

550,786

3,849,769

1,156

-

16,210

17,366

3,832,403

97,468

135,592

293,294

15,859

3,963

621

3,200

789

550,786

-

1,156

1,156

3,298,983

477,128

3,776,111

3,297,888

55,802

3,353,690

2,735

18,576

33,396

54,707

3,298,983

-

-

44,570

2,989

41

1,247

6,744

211

55,802

2,700

35

2,735

7.

8.


15


14

UN-AUDITED AUDITED


30 September

2017

30 June

2017

(UN-AUDITED)


30 September

2017

30 September

2016

10.

2,613

2,344

31

3,574

256

26

8,844

(UN-AUDITED)


30 September

2017

30 September

2016

COST OF SALES

Raw material consumed

Salaries, wages and other benefits

Stores, spare parts and loose tools consumed

Fuel and power

Outside weaving charges

Other manufacturing overheads

Insurance

Repair and maintenance

Depreciation

Work-in-process:

Opening stock

Closing stock

Cost of goods manufactured

Finished goods:

Opening stock

Closing stock

Cost of goods - purchased for resale

9.

690,643

84,757

22,865

114,231

7,908

2,226

1,478

411

7,141

931,660

16,154

(19,281)

(3,127)

928,533

238,084

(180,654)

57,430

985,963

87,328

1,073,291

11.

11.1

CASH UTILIZED IN OPERATIONS

Profit before taxation

Adjustments for non-cash charges and other items:

Working capital changes

(Increase) / decrease in current assets

Depreciation

Provision for staff retirement gratuity

Gain on sale of property, plant and equipment

Gain on sale of investments

Finance cost

Working capital changes (Note 11.1)


Stock in trade

Trade debts

Loans and advances

Prepayments and balances with statutory authorities

Other receivables

(Decrease) / increase in trade and other payables

(23,962)

8,400

-

(26)

(2,344)

4,943

74,479

61,490

6,526

47,021

(34,280)

(2,799)

968

(2,844)

14,592

59,887

74,479

LONG TERM INVESTMENTS - Available for sale

SHORT TERM INVESTMENTS – Available for sale

Unquoted - Subsidiary company

Quoted - Associated companies

Unquoted - Associated companies

Quoted - Others

Unquoted - Others

Less: Impairment loss charged to profit and loss account

Add: Fair value adjustment

Quoted - Associated companies

Quoted - Others


1,893

602

2,500

616

650

6,261

(2,087)

8,959

13,133

14,885

53,307

68,192

349,323

417,515

-

602

2,500

616

456

4,174

-

8,511

12,685

11,950

53,307

65,257

298,911

364,168

862,282

106,744

31,935

152,301

-

2,419

1,803

1,660

14,932

1,174,076

27,068

(25,417)

1,651

1,175,727

167,744

(172,450)

(4,706)

1,171,021

-

1,171,021


Exchange gain

Gain on sale of investments

Dividend income

Rental income

Scrape sales


93

40,630

4

4,509

302

38

45,576

22,654

16,210

6,097

(38)

(40,630)

8,632

(57,404)

(44,479)

1,291

(99,968)

(83,854)

(3,072)

(15,244)

(14,017)

(214,864)

157,460

(57,404)

Qu

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12. SEGMENT INFORMATION - UNCONSOLIDATED

Sales

Cost of sales

Gross profit

Distribution cost

Administrative expenses

Other operating expenses

Other operating income

Profit/(loss) from operations

Finance cost

Profit/(loss) before taxation

Taxation

Profit/(loss) after taxation

(12,023)

12,023

-

-

-

-

-

-

-

-

-

-

1,095,598

(1,073,291)

22,307

(14,204)

(35,956)

(10)

(50,170)

(27,863)

8,844

(19,019)

(4,943)

(23,962)

(11,519)

(35,481)

TextilesElimination of Inter-

segment transactions

First Quarter Ended

30 September

2017

TOTAL

(UN-AUDITED)

Trading


First Quarter Ended First Quarter Ended First Quarter Ended

30 September

2016

922,841

(909,754)

13,087

(8,076)

(34,590)

(10)

(42,676)

(29,589)

8,844

(20,745)

(4,747)

(25,492)

184,780

(175,560)

9,220

(6,128)

(1,366)

-

(7,494)

1,726

-

1,726

(196)

1,530

30 September

2017

30 September

2016

30 September

2017

30 September

2016

30 September

2017

30 September

2016

(8,866)

8,866

-

-

-

-

-

-

-

-

-

-

1,204,986

(1,171,021)

33,965

(8,044)

(40,211)

-

(48,255)

(14,290)

45,576

31,286

(8,632)

22,654

(15,744)

6,910

8,537

(8,225)

312

(172)

(2)

-

(174)

138

-

138

-

138

1,205,315

(1,171,662)

33,653

(7,872)

(40,209)

-

(48,081)

(14,428)

45,576

31,148

(8,632)

22,516

The related parties comprise subsidiary company, associated companies, other related parties and

key management personnel. The Company in the normal course of business carries out

transactions with various related parties. Detail of transactions and balances with related parties

are as follows:

DESCRIPTION

13. TRANSACTIONS WITH RELATED PARTIES

The Company's financial risk management objectives and policies are consistent with those

disclosed in the preceding audited annual published financial statements of the Company for the

year ended 30 June 2017.

This condensed interim financial information was approved and authorized for issue on October

31, 2017 by the Board of Directors of the Company.

In order to comply with the requirements of International Accounting Standard (IAS) 34 "Interim

Financial Reporting", the condensed interim balance sheet and condensed interim statement of

changes in equity have been compared with the balances of annual audited financial statements

of preceding financial year, whereas, the condensed interim profit and loss account, condensed

interim statement of profit or loss and other comprehensive income and condensed interim cash

flow statement have been compared with the balances of comparable period of immediately

preceding financial year.

Corresponding figures have been re-arranged, wherever necessary, for the purpose of

comparison, however, no significant re-arrangements have been made.

Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.

14. FINANCIAL RISK MANAGEMENT

15. DATE OF AUTHORIZATION

16. CORRESPONDING FIGURES

17. GENERAL

i) Transactions

Subsidiary company

Associated companies

Rental expense

Service charges

1,125

9,852-


17

QUARTER ENDED

(UN-AUDITED)


30 September

2017

30 September

2016

1,125

-




CRESCENT COTTON MILLS

CONSOLIDATED CONDENSED INTERIM


5

LIMITED AND ITS SUBSIDIARY

BALANCE SHEET AS AT 30 SEPTEMBER 2017

NOTE

UN-AUDITED AUDITED


30 September

2017

30 June

2017NOTE

UN-AUDITED AUDITED


30 September

2017

30 June

2017

Quarterly Accounts 30 Sep 2017CRESCENT COTTON MILLS LIMITED & ITS SUBSIDIARY

19


18


6

7

8


EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized share capital

Issued, subscribed and paid up share capital

Reserves

Total equity

Surplus on revaluation of land and investment properties

LIABILITIES

NON-CURRENT LIABILITIES

CURRENT LIABILITIES

TOTAL LIABILITIES

CONTINGENCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES

30 000 000 (30 June 2017: 30 000 000)

ordinary shares of Rupees 10 each

Long term financing

Employees' retirement benefits

Trade and other payables

Accrued markup

Short term borrowings

Current portion of long term financing

Provision for taxation

300,000

213,775

521,601

735,376

3,079,990

225,787

68,090

293,877

554,018

22,916

525,963

11,833

49,487

1,164,217

1,458,094

5,273,460

300,000

213,775

469,328

683,103

3,079,990

225,787

74,797

300,584

397,683

25,188

444,919

11,883

33,744

913,417

1,214,001

4,977,094

ASSETS

NON-CURRENT ASSETS

CURRENT ASSETS

TOTAL ASSETS

Property, plant and equipment

Investment properties

Long term investments

Long term deposits

Deferred income tax - asset


Stock in trade

Trade debts

Loans and advances

Short term deposits, prepayments and

balances with statutory authorities

Other receivables

Short term investments

Cash and bank balances

3,833,430

267,476

55,787

3,133

31,105

4,190,931

47,074

369,853

147,727

54,983

152,738

62,361

228,389

19,404

1,082,529

5,273,460

3,777,165

267,476

58,937

3,614

31,105

4,138,297

48,365

269,885

63,873

51,911

128,183

48,344

183,329

44,907

838,797

4,977,094


CONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT



9

10

CRESCENT COTTON MILLS LIMITED AND ITS SUBSIDIARYCONSOLIDATED CONDENSED INTERIM STATEMENT OF

PROFIT OR LOSS AND COMPREHENSIVE INCOMEFOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2017 (UN-AUDITED)

CRESCENT COTTON MILLS LIMITED AND ITS SUBSIDIARY



21


20

SALES

COST OF SALES

GROSS PROFIT

DISTRIBUTION COST

ADMINISTRATIVE EXPENSES

OTHER OPERATING EXPENSES


(LOSS)/PROFIT FROM OPERATIONS

FINANCE COST

SHARE OF PROFIT / (LOSS) FROM

ASSOCIATED COMPANIES

PROFIT/(LOSS) BEFORE TAXATION

TAXATION

PROFIT / (LOSS) AFTER TAXATION FROM

EARNINGS / (LOSS) PER SHARE - BASIC

AND DILUTED (RUPEES):

NOTE


30 September

2017

30 September

2016


30 September

2017

30 September

2016

1,095,598

(1,073,291)

22,307

(14,204)

(36,654)

(10)

(50,868)

(28,561)

6,500

(22,061)

(5,093)

(27,154)

-

(27,154)

(11,688)

(38,842)

(1.82)


OTHER COMPREHENSIVE INCOME / (LOSS)

Items that will not be reclassified to profit or loss

Items that may be reclassified subsequently

to profit or loss:

Share of other comprehensive income of associates

Surplus / (deficit) on remeasurement of available for sale investments

Other comprehensive income / (loss) for the period

TOTAL COMPREHENSIVE INCOME/(LOSS)

FOR THE PERIOD

(38,842)

-

21,411

(5,863)

15,548

(44,705)





1,204,986

(1,171,021)

33,965

(8,044)

(39,113)

-

(47,157)

(13,192)

4,946

(8,246)

(8,782)

(17,028)

(2,835)

(19,863)

(15,744)

(35,607)

(1.67)

(35,607)

-

63,205

24,675

87,880

(10,932)



CONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT



11



22

NOTE


30 September

2017

30 September

2016

CASH FLOWS FROM OPERATING ACTIVITIES

Cash (utilized in) / generated from operations

Net cash (utilized in) / generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash (used in) / from financing activities

NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS


BEGINNING OF THE PERIOD

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

Finance cost paid

Staff retirement gratuity paid

Income tax paid

Dividend paid

Capital expenditure on property, plant and equipment

Proceeds from sale of property, plant and equipment

Proceeds from sale of investments

Repayment of long term financing

Short term borrowings - net

61,530

(7,613)

(108)

(4,580)

-

(12,301)

49,229

(3,725)

44

4,094

413

-

(61,249)

(61,249)

(11,607)

35,669

24,062



(44,478)

(11,054)

(12,803)

(9,313)

-

(33,170)

(77,648)

(73,658)

1,194

43,565

(28,899)

-

81,044

81,044

(25,503)

44,907

19,404



CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY




CAPITAL RESERVES REVENUE RESERVES

SHARE

CAPITAL

Premium on

issue of

shares

Plant

Moderni-

sation

Fair

value

Sub

Total

General Dividend

equalization

(Accumulatedloss) /

unappropriatedprofit

TOTAL

EQUITY

Sub

Total

213,775

-

-

-

213,775

-

-

-

-

213,775

-

-

-

213,775

5,496

-

-

-

5,496

-

-

-

-

5,496

-

-

-

5,496

12,000

-

-

-

12,000

-

-

-

-

12,000

-

-

-

12,000

44,975

-

-

-

44,975

-

-

-

-

44,975

-

-

-

44,975

4,000

-

-

-

4,000

-

-

-

-

4,000

-

-

-

4,000

Qu

art

erl

y A

cco

un

ts 3

0 S

ep

20

17

CR

ES

CE

NT

CO

TTO

N M

ILLS

LIM

ITE

D &

IT

S S

UB

SID

IAR

Y

23







Total comprehensive income for the

first quarter ended 30 September 2016

Balance as at 30 September 2016 - Unaudited

Transfer from surplus on revaluation of property, plant

and equipment on account of incremental depreciation -

net of deferred income tax

Loss for the next three quarters ended 30 June 2017

Other comprehensive income for the next three quarters

ended 30 June 2017

Total comprehensive income for the next two quarters

ended 30 June 2017





Total comprehensive income for the first quarter



38,327

-

(5,863)

(5,863)

32,464

-

-

82,680

82,680

115,144

-

87,880

87,880

203,024

55,823

-

(5,863)

(5,863)

49,960

-

-

82,680

82,680

132,640

-

87,880

87,880

220,520

276,745

(38,842)

-

(38,842)

237,903

8,798

41,012

-

41,012

287,713

(35,607)

-

(35,607)

252,106

325,720

(38,842)

-

(38,842)

286,878

8,798

41,012

-

41,012

336,688

(35,607)

-

(35,607)

301,081

595,318

(38,842)

(5,863)

(44,705)

550,613

8,798

41,012

82,680

123,692

683,103

(35,607)

87,880

52,273

735,376


SELECTED NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION

1. THE GROUP AND ITS OPERATIONS

Holding Company

Subsidiary Company

Crescent Cotton Mills Limited

Crescot Mills Limited

2. BASIS OF PREPARATION

The Group consists of:

Crescent Cotton Mills Limited

Crescot Mills Limited

Crescent Cotton Mills Limited (formerly Crescent Sugar Mills and Distillery Limited) 'the

Company' is a public limited company incorporated in March 1959 in Pakistan under the

provisions of Companies Act, 1913 (Now Companies Ordinance, 1984). Shares of the Company

are quoted on all the stock exchanges in Pakistan. The Company is engaged in manufacturing and

sale of yarn and hosiery items along with buying, selling and otherwise dealing in cloth. The

Company also operates an embroidery unit. The registered office of the Company is located at

New Lahore Road, Nishatabad, Faisalabad.

Crescot Mills Limited (CML) is a public limited Company incorporated in Pakistan under the

Companies Act, 1913 (Now Companies Ordinance, 1984). CCML holds 66.15% equity of the CML.

Principal business of CML was manufacturing and sale of yarn. The mills is located at Sindh

Industrial and Trading Estate, Kotri in the Province of Sindh. A special resolution was passed in the

general meeting of the members on 28 September 1998 authorizing the Board of Directors to

dispose of the plant and machinery of CML.

CML has ceased all production activities since August 1998 and has disposed of major part of the

plant and machinery. The Company has leased out its buildings and other facilities to the Holding

Company.

This consolidated condensed interim financial information is un-audited and is being submitted

to shareholders as required by section 245 of the Companies Ordinance, 1984 and the listing

regulations of the Islamabad, Karachi and Lahore stock exchanges. This consolidated condensed

interim financial information has been prepared in accordance with the requirements of

International Accounting Standard-34 “Interim Financial Reporting” and International

Accounting Standard-27 “Consolidated and Separate Financial Statements” and provisions of

and directives issued under the Companies Ordinance, 1984. In case where requirements differ,

the provisions of and directives issued under the Companies Ordinance, 1984 have been

followed. This consolidated condensed interim financial information should be read in

conjunction with the preceding audited annual published consolidated financial statements of

the Group for the year ended 30 June 2017.

3. ACCOUNTING POLICIES AND COMPUTATION METHODS

3.1 The accounting policies and methods of computations adopted for the preparation of thisconsolidated condensed interim financial information are the same as applied in thepreparation of preceding audited annual published consolidated financial statements of theGroup for the year ended 30 June 2017.

CRESCENT COTTON MILLS LIMITED AND ITS SUBSIDIARY 3.2 Basis of consolidation

a) Subsidiary

b) Associates

Subsidiary Company is that entity in which Holding Company directly or indirectly controls,

beneficially owns or holds more than 50% of the voting securities or otherwise has power to

elect and appoint more than 50% of its directors. The condensed interim financial information

of the Subsidiary Company is included in the consolidated consolidated condensed interim

financial information from the date control commences until the date that control ceases.

The assets and liabilities of Subsidiary Company have been consolidated on a line by line basis

and carrying value of investments held by the Holding Company is eliminated against Holding

Company’s share in paid up capital of the Subsidiary Company.

Intragroup balances and transactions have been eliminated.

Proportionate share of accumulated losses relating to the non-controlling interest is more than

their respective share capital. Therefore, losses in excess of share capital of non-controlling

interest are absorbed by the Group.

Associates are the entities over which the Group has significant influence but not control,

generally accompanying a shareholding of between 20% and 50% of the voting rights or by way

of common directorship. Investments in these associates are accounted for using the equity

method of accounting and are initially recognized at cost. The Group’s investment in associate

includes goodwill identified on acquisition, net of accumulated impairment loss, if any.

The Group’s share of its associate’s post-acquisition profits or losses, movement in other

comprehensive income, and its share of post-acquisition movements in reserves is recognized in

the consolidated profit and loss account, consolidated statement of comprehensive income and

reserves respectively. The cumulative post-acquisition movements are adjusted against the

carrying amount of the investment. Distributions received from an associate reduce the carrying

amount of the investment.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of this consolidated condensed interim financial information in conformity

with the approved accounting standards requires the use of certain critical accounting

estimates. It also requires the management to exercise its judgment in the process of applying

the Group’s accounting policies. Estimates and judgments are continually evaluated and are

based on historical experience and other factors, including expectations of future events that

are believed to be reasonable under the circumstances.

During preparation of this consolidated condensed interim financial information, the significant

judgments made by the management in applying the Group’s accounting policies and the key

sources of estimation and uncertainty were the same as those that applied in the preceding

audited annual published consolidated financial statements of the Group for the year ended 30

June 2017.



25


24

5. CONTINGENCIES AND COMMITMENTS

Contingencies:

Subsidiary Company:

- Certain additions have been made by the assessing officer in different assessment years on variousgrounds and has created demand of Rupees 7.013 million (30 June 2017: Rupees 7.013 million). TheCompany, being aggrieved, has filed appeals with the Honourable High Court which are still pending. Noprovision has been made in the books of account against the aforesaid demand as the management ishopeful for positive outcome of the appeals filed by the Company.

- The Holding Company filed a suit against Crescent Fibres Limited for the recovery of Rupees 23.000million (30 June 2017: Rupees 23.000 million) along with mark-up in Civil Court, Lahore. No provisionagainst doubtful receivables has been made in this condensed interim financial information as themanagement is hopeful that the case will be decided in favour of the Company and all the outstandingdues will be recovered.

- Letters of guarantee of Rupees 47.480 million (30 June 2017: Rupees 47.480 million) are given by thebanks of the Company to Sui Northern Gas Pipeline Limited against gas connections.

- The Subsidiary Company is contingently liable for claim of Rs. 0.215 million (30 June 2017: Rupees0.215 million) not acknowledged by the Subsidiary Company in respect of card clothing machinedemanded by Custom Authorities in 1987 against which a letter of guarantee has been issued by bankin favour of Collector.

- Letters of credit for capital expenditure are of Rs. 0.337 million (30 June 2017: Rupees 20.318million).

- Letters of credit for other than capital expenditure are of Rupees 0.023 million (30 June 2017:Rupees 1.323 million).

Commitments:

7.1

8.

The investments in associates were not acquired for disposal purposes, therefore equity method

of accounting has been applied and as per the requirement of IAS 28 the same have been shown

under long term investments. In addition paragraph 2 (B)(d) of Part II of the Fourth Schedule to the

Companies Ordinance, 1984 requires that the investments accounted for under equity method

should be classified as long term investments.

SHORT TERM INVESTMENTS – Available for sale

Quoted - Others



27


26

UN-AUDITED AUDITED


30 September

2017

30 June

2017

6.

6.1

6.1.1

6.1.2

7.

PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets

Operating fixed assets (Note 6.1)

Capital work-in-progress

Opening book value

Add : Cost of additions during the period / year (Note 6.1.1)

Less:

Book value of deletions during the period / year (Note 6.1.2)

Transferred to investment properties

Depreciation charged during the period / year

Book value at the end of the period / year

3,833,430

-

3,833,430

3,300,037

550,786

3,850,823

1,156

-

16,237

17,393

3,833,430

3,300,037

477,128

3,777,165

3,299,062

55,802

3,354,864

2,735

18,576

33,516

54,827

3,300,037

Cost of additions during the period / year

Book value of deletions during the period / year

LONG TERM INVESTMENTS

Land - Freehold

Buildings on free hold land

Plant and machinery

Electric installations

Tools and equipments

Furniture and fixtures

Vehicles

Office equipment

Service equipment

Plant and machinery

Vehicles

In associates:

Cost

Share of post acquisition profit:

At the beginning of the period / year

Share of profit/(loss) during the period / year

Available for sale:

Quoted - Others

Unquoted - Others

Less: Impairment loss charged to profit and loss account


UN-AUDITED AUDITED


30 September

2017

30 June

2017

97,468

135,592

293,294

15,859

3,963

621

3,200

789

-

550,786

-

1,156

1,156

25,944

30,226

(2,836)

27,390

53,334

616

470

1,086

-

1,367

2,453

55,787

-

-

44,570

2,989

41

1,247

6,744

211

-

55,802

2,700

35

2,735

25,944

39,607

(9,381)

30,226

56,170

616

664

1,280

(194)

1,681

2,767

58,937

89,937

138,452

228,389

89,937

93,392

183,329

CASH UTILIZED IN OPERATIONS

Profit before taxation

Adjustments for non-cash charges and other items:

Working capital changes

(Increase) / decrease in current assets

Depreciation

Provision for staff retirement gratuity


Credit balances written back

Share of (profit) / loss from associated companies

Finance cost

Working capital changes (Note 11.1)


Stock in trade

Trade debts

Loans and advances

Prepayments and balances with statutory authorities

Other receivables

(Decrease) / increase in trade and other payables


29


28

9.

10.

(UN-AUDITED)


30 September

2017

30 September

2016

(UN-AUDITED)


30 September

2017

30 September

2016

690,643

84,757

22,865

114,231

7,908

2,226

1,478

411

7,141

931,660

16,154

(19,281)

(3,127)

928,533

238,084

(180,654)

57,430

985,963

87,328

1,073,291

2,613

31

3,574

256

26

6,500

11.

11.1

(27,154)

8,804

-

(26)

-

-

5,093

74,813

61,530

6,527

47,021

(34,280)

(2,799)

967

(3,132)

14,304

60,509

74,813

COST OF SALES


Raw material consumed

Salaries, wages and other benefits

Stores, spare parts and loose tools consumed

Fuel and power

Outside weaving charges

Other manufacturing overheads

Insurance

Repair and maintenance

Depreciation

Work-in-process:

Opening stock

Closing stock

Cost of goods manufactured

Finished goods:

Opening stock

Closing stock

Cost of goods purchased

Exchange gain

Dividend income

Rental income

Scrape sale


862,282

106,744

31,935

152,301

-

2,419

1,803

1,660

14,932

1,174,076

27,068

(25,417)

1,651

1,175,727

167,744

(172,450)

(4,706)

1,171,021

-

1,171,021

93

4

4,509

302

38

4,946

(19,863)

16,237

6,097

(38)

-

2,836

8,782

(58,529)

(44,478)

1,291

(99,968)

(83,854)

(3,072)

(15,244)

(14,017)

(214,864)

156,335

(58,529)

12. SEGMENT INFORMATION - CONSOLIDATED

TextilesElimination of Inter-

segment transactions

First Quarter Ended

30 September

2017

TOTAL

(UN-AUDITED)

Trading


First Quarter Ended First Quarter Ended First Quarter Ended

30 September

2016

30 September

2016

30 September

2016

30 September

2016

Qu

art

erl

y A

cco

un

ts 3

0 S

ep

20

17

CR

ES

CE

NT

CO

TTO

N M

ILLS

LIM

ITE

D &

IT

S S

UB

SID

IAR

Y

30

Sales

Cost of sales

Gross profit

Distribution cost

Administrative expenses

Other operating expenses

Other operating income

Profit from operations

Finance cost

Profit/(loss) before taxation and unallocated

income and expenses

Share of profit / (loss) from associated companies

Taxation

Profit/(loss) after taxation

Unallocated income and expenses:

922,841

(909,754)

13,087

(8,076)

(35,288)

(10)

(43,374)

(30,287)

6,500

(23,787)

(4,897)

(28,684)

184,780

(175,560)

9,220

(6,128)

(1,366)

-

(7,494)

1,726

-

1,726

(196)

1,530

(12,023)

12,023

-

-

-

-

-

-

-

-

-

-

1,095,598

(1,073,291)

22,307

(14,204)

(36,654)

(10)

(50,868)

(28,561)

6,500

(22,061)

(5,093)

(27,154)

-

(11,688)

(38,842)

30 September

2017

30 September

2017

30 September

2017

(12,023)

12,023

-

-

-

-

-

-

-

-

-

-

1,032,229

(1,007,484)

24,745

(1,916)

(37,747)

-

(39,663)

(14,918)

4,946

(9,972)

(8,586)

(18,558)

184,780

(175,560)

9,220

(6,128)

(1,366)

-

(7,494)

1,726

-

1,726

(196)

1,530

1,204,986

(1,171,021)

33,965

(8,044)

(39,113)

-

(47,157)

(13,192)

4,946

(8,246)

(8,782)

(17,028)

(2,835)

(15,744)

(35,607)

The related parties comprise associated companies, other related parties and key management

personnel. The Company in the normal course of business carries out transactions with various

related parties. Detail of transactions and balances with related parties are as follows:

DESCRIPTION

13. TRANSACTIONS WITH RELATED PARTIES

The Group’s financial risk management objectives and policies are consistent with those disclosed

in the preceding audited annual published consolidated financial statements of the Group for the

year ended 30 June 2017.

This consolidated condensed interim financial information was approved and authorized for issue

on October 31, 2017 by the Board of Directors of the Group.

In order to comply with the requirements of International Accounting Standard (IAS) 34 “Interim

Financial Reporting”, the consolidated condensed interim balance sheet and consolidated

condensed interim statement of changes in equity have been compared with the balances of

annual audited consolidated financial statements of preceding financial year, whereas, the

consolidated condensed interim profit and loss account, consolidated condensed interim

statement of profit or loss and other comprehensive income and consolidated condensed interim

cash flow statement have been compared with the balances of comparable period of immediately

preceding financial year.

Corresponding figures have been re-arranged, wherever necessary, for the purpose of

comparison, however, no significant re-arrangements have been made.

Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.

14. FINANCIAL RISK MANAGEMENT

15. DATE OF AUTHORIZATION

16. CORRESPONDING FIGURES

17. GENERAL

QUARTER ENDED


30 September

2017

UN-AUDITED

i) Transactions

Associated companies

Service charges 9,852 -

30 September

2016


31




D-MEDIA 0300-7909229

If undelivered please return to:

CRESCENT COTTON MILLS LIMITEDNEW LAHORE ROAD, NISHATABAD

FAISALABAD - PAKISTAN

PHONE: (041) 8752111-4

FAX: (041) 8750366

E-MAIL: [email protected]

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