PDF mail Final - crescenttextile.com Quarter 30 Sep 09.pdfChartered Accountants Auditors Sargodha Road, Faisalabad, Pakistan T: + 92-041-111-105-105 F: + 92-041-111-103-104 E: [email protected]

1

2

Contents

Company Information

Directors’ Report to the Shareholders

Balance Sheet

Profit & Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statements

3

4

5

6

7

8

9

3

Company information

AlBaraka Islamic Bank B.S.C (E.C)

Allied Bank Limited

Faysal Bank Limited

Habib Bank Limited

Meezan Bank Limited

MCB Bank Limited

National Bank of Pakistan

NIB Bank Limited

Standard Chartered Bank (Pakistan) Limited

United Bank Limited

Mr. Muhammad Anwar

Mr. Ahmad Shafi

Mr. Khalid Bashir

Mr. Muhammad Arshad

Mr. Muhammad Iqbal Hussain

(Nominee NIT)

Mr. Nasir Shafi

Mr. Tariq Shafi

Chairman &

Chief Executive

Director

Director

Director

Director

Director

Director

Audit Committee

Mr. Khalid Bashir

Mr. Nasir Shafi

Mr. Ahmad Shafi

Chairman

Member

Member

Chief Financial Officer

Mr. Sadiq Saleem

Mr. Naseer Ahmad Chaudhary

Corporate Secretary

Mr. Muhammad Attiq ur Rehman

Head of Internal Audit

Riaz Ahmad & Company

Chartered Accountants

Auditors

Sargodha Road,

Faisalabad, Pakistan

T: + 92-041-111-105-105

F: + 92-041-111-103-104

E: [email protected]

Mills & Head Office

Hassan & Hassan

Mr. Raza Abbas Chaudhary

Advocates

Advocate

Legal Advisor

The Crescent Textile Mills Limited is a listed Company

and its shares are traded on all three Stock Exchanges

in Pakistan.

Crescent Group Services (Pvt) Limited

306, 3rd Flr, Siddiq Trade Centre,

72-Main Boulevard, Gulberg,

Lahore, Pakistan

T: +92-042-5787592

F: + 92-042-5787594


Stock Exchange Listing

Share Registrar

The Company's shares are quoted in leading dailies

under textile composite sector.

Registered Office

40-A, Off: Zafar Ali Road, Gulberg-V,

Lahore, Pakistan

T: + 92-042-111-245-245

F: + 92-042-111-222-245


www.ctm.com.pk

4

Directors' Report to the Shareholders

For the 1st Quarter ended September 30, 2009

Your directors are pleased to present the un-audited financial statements of the company for the 1st Quarter ended

on September 30, 2009.

Financial and Operational performance:

Economic indicators of the country were giving mixed signals during this Qtr as current account deficit had

squeezed on the back of record home remittances, IMF borrowings and major decline in non-oil imports. This

implies positive in future for PKR/US$ stability but negative for GDP growth and also for exports as investment on

import of machinery was stagnant. Due internal security situation domestic and foreign investment had dried-up

and increased fragility of the economy. High mark up rates prolonged power and gas load shedding had also been

In 1st Qtr of FY2010 sales of the company were down by 22% from Rs.2,115 million as against Rs.2,712 million in

corresponding period. This was partly due to lower selling prices, slightly less volume sold, reduced sales of outside

purchased goods and to some extent stable PKR/US$ parity in comparison to same period of last year. Same trend was

visible in cost of sales; which was down by 20% but higher decline in sales had negative impact on gross margins. The

company achieved lower gross margins (down by Rs.141.684 million, current Qtr) in comparison of same period last

year (reduced from 16.79% to 14.83% of sales). But reduction in 'Other Operating and Finance Costs' (down by

Rs.142.415 million and Rs.129.527 million respectively) negated the impact on bottom line results of the company.

The reduction in these costs had contributed positively on bottom line growth; which depicted Rs.43.452 million 'Profit

Before Tax' as against Rs.60.305 million 'Loss Before Tax' in same period of corresponding year. In previous

corresponding period these costs included 'Provisioning for doubtful debts, Exchange loss on FCY loans and loss on

CCS Transaction' to the tune of Rs.161.499 million and had a cumulative negative impact on net margins of the

company. So, under very competitive environment and with limited options in hand we remained focused on

diversified product mix having better margins resulting in better than expected performance .

The company achieved better operational efficiency in all the processes which remained operative throughout 92 days

during 1st Qtr of FY2010. Operational performance of these processes was satisfactory and machine

utilization of the same was at optimum level.

Summarized position of financial results of the company, in comparison to same period of last year, is as below:

Sales revenue

Gross profit

Operating and other costs

Other operating income

Finance cost

Profit share from associate

Profit / (loss) before tax

Taxation

Profit / (loss) after tax

2009(Millions Rs.)

2,115

314

169

37

138

42

86

19

67

2008(Millions Rs.)

Change(%)

2,712

455

311

63

268

38

( 2 3 )

18

( 4 1 )

( 22 )

( 31 )

( 45 )

( 41 )

( 48 )

14

32

6

263

st1 Quarter

The improvement in demand for cotton on better international economic outlook is likely to keep its prices firm. This will lead to reduced margins for domestic industry which is already facing high interest rates, power/ gas shortage and rising input costs. However, an early reduction in mark up rates, implementation of positive steps in Textile Policy, 2009 and last but not the least any relaxation from EU on market access will greatly help improvingperformance of the industry.

We, however, are focused to improve performance of the company through sustained growth in sale of value added

products having good margin and will strive to pursue this strategy through dedicated efforts by reducing

costs with efficient and better resource utilization. for and on behalf of the Board.

(Muhammad Anwar)

Chairman & Chief Executive

the other reasons for negative industrial growth.

On improvement of global economic fundamentals and expectation of healthy demand the cotton prices were firm

during this Qtr despite healthy crop (44% up from previous season, PCGA data up till October 15, 2009). Similarly,

other input costs of semi- finished goods, polyester, HFO and wages also registered rise and continued to track the

rise of oil and other commodity prices in the international market. However, foreign buyers were reluctant toaccommodate this impact and left little room for growth in margins.

Future prospects:

Interim Condensed Balance Sheetas at September 30, 2009

EQUITY AND LIABILITIES

Authorized share capital100 000 000 (June 30, 2009: 100 000 000) ordinary shares of Rupees 10 each

Share capital and reserves

Issued, subscribed and paid up share capital

Surplus on revaluation of operating fixed assets

Total Equity

Un-Audited

September 30, 2009

( Rupees in thousand )

1,000,000 1,000,000

492,099

1,932,485

Note Audited

June 30, 2009

4

5

492,099

1,769,738

2,424,584 2,261,837

1,640,393 1,640,393

Long term financing

Non-current liabilities

957,796 1,108,019

Trade and other payables

Accrued mark-up

Short term borrowings

Current portion of long term financing

Provision for taxation

Current liabilities 493,997

149,086

4,622,755

473,750

86,661

315,065

177,207

4,883,207

356,845

73,361

Contingencies and commitments

Total Liabilities

5,826,249 5,805,685

6,784,045 6,913,704

The annexed notes form an integral part of these financial statements.

TOTAL EQUITY AND LIABILITIES

7

Property, plant and equipment

Investment in an associate

Long term investments

Long term loans and advances

Long term deposits and prepayments

Deferred tax - asset

ASSETS

Non-current assets

8

9

10

4,137,095

522,090

95,043

1,841,120

2,299

20,344

4,182,387

485,335

227,883

1,812,096

2,217

20,344

Stores, spare parts and loose tools

Stock-in-trade

Trade debts

Loans and advances

Short term deposits and prepayments

Interest accrued

Other receivables

Short term investments

Cash and bank balances

Current assets

195,941

923,197

2,499,421

223,525

1,340

4,281

64,567

293,932

24,827

174,116

940,421

2,562,348

239,191

1,422

22,081

61,909

65,253

18,931

4,231,031 4,085,672

TOTAL ASSETS 10,849,022 10,815,934

(Muhammad Anwar)


(Khalid Bashir)

Director

6

11

6,617,991 6,730,262

5

Reserves

10,849,022 10,815,934

6

Interim Condensed Profit and Loss Account (Un-Audited)

for the 1st Quarter Ended September 30, 2009

Sales

Cost of sales

89,724

42,629

36,496

2,115,091

1,801,371

Note

12

93,606

38,022

178,911

2,711,696

2,256,292

168,849 310,539

Gross profit

Distribution cost

Administrative expenses

Other operating expenses

Other operating income

Profit from operations

Finance cost

Share of profit of associate before taxation

Profit / (loss) before taxation

Provision for taxation

Profit / (loss) after taxation


313,720 455,404

144,871 144,865

37,016

181,887

138,434

42,945

86,398

19,490

66,908

1.36 (0.82)

(Muhammad Anwar)


(Khalid Bashir)

Director

September 30, 2009

September 30, 2008


Earnings / (loss) per share - basic and diluted (in Rupees)

62,791

207,656

267,961

37,606

(22,699)

17,889

(40,588)

7

Interim Condensed Cash Flow Statement (Un-Audited)


Cash flows from operating activities

Profit / (loss) before taxation

Depreciation

Gain on disposal of operating fixed assets

Credit balances written back

Share in profit of associate before tax

Income from loans and advances

Finance cost

September 30, 2009

(Rupees in thousand)

September 30, 2008

216,920 218,474

86,398 (22,699)

Stores, spare parts and loose tools

Stock-in-trade

Trade debts

Loans and advances

Short term deposits and prepayments

Interest accrued

Other receivables

Increase in current liabilities:

Trade and other payable

Cash flows from working capital changes

(21,825)

17,224

62,927

31,308

82

17,800

(2,658)

(26,075)

227,157

(235,897)

(14,850)

124

5,503

50,579

178,932

115,596

Net cash flows from working capital changes 283,790

500,710

122,137

340,611 Cash flows from operating activities

Finance cost paid

Income tax paid

Dividend paid

(Increase) / decrease in long term deposits and prepayments

(166,555)

(15,642)

-

(82)

(227,713)

(19,915)

(23)

125

Net cash flows from operating activities

Cash flows from investing activities

Capital expenditure on property, plant and equipment

Proceeds from sale of property, plant and equipment

Decrease in long term loans and advances

(20,021)

570

686

(59,418)

23,899

489

(18,765) (35,030)Net cash used in investing activities

Cash flows from financing activities Proceeds from long term financing

Repayment of long term financing

Short term borrowings - net

-

(33,318)

(260,452)

35,000

(116,666)

29,458

(293,770)

5,896

18,931

24,827

Net cash used in financing activities

Net increase in cash and cash equivalents

(Increase) / decrease in current assets:

Adjustments for non-cash charges and other items:

(Muhammad Anwar)


(Khalid Bashir)

Director

65,103

(360)

-

(42,945)

(29,710)

138,434

64,861

(1,272)

(20,538)

(37,606)

(32,233)

267,961 Cash flows from operating activities

before working capital changes

Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

(182,279)

318,431

(247,526)

93,085

(52,208)

5,847

8,572

14,419


8

Interim Condensed Statement of Changes in Equity ( Un - Audited )

for the 1st Quarter ended September 30, 2009

Balance as on July 01, 2008

Net loss for the quarter ended September 30, 2008

Fair value adjustment on investments

Balance as on September 30, 2008

ShareCapital Total


492,099

-

-

492,099

(Muhammad Anwar)


(Khalid Bashir)

Director

350,507

-

(214,946)

135,561

1,773,643

-

-

1,773,643

30,000

-

-

30,000

(234,064)

(40,588)

-

(274,652)

1,569,579

(40,588)

-

1,528,991

2,412,185

(40,588)

(214,946)

2,156,651

-

-

-

-

-

(114,430)

-

-

-

Balance as on June 30, 2009

Net profit for the quarter ended September 30, 2009


Balance as on September 30, 2009

492,099

-

-

492,099

Revenue Reserves

Reserves

CapitalReserve

Fair value General

Dividendequalization

(AccumulatedLoss)

Sub Total

Total Equity

1,920,086

(40,588)

(214,946)

1,664,552

Net profit for the period from

October 01, 2008 to June 30, 2009

Transfer from surplus on revaluation of operating

fixed assets on account of incremental

depreciation - net of deferred tax


-

-

-

219,608

8

-

219,608

8

-

219,608

8

(114,430)

219,608

8

(114,430)

21,131

-

95,839

116,970

1,773,643

-

-

1,773,643

30,000

-

-

30,000

(55,036)

66,908

-

11,872

1,748,607

66,908

-

1,815,515

1,769,738

66,908

95,839

1,932,485

2,261,837

66,908

95,839

2,424,584


9

Reserves5.

Composition of reserves is as follows:

Capital

Fair value reserve

Revenue

Dividend equalization

General

Accumulated losses

30,000

1,773,643

11,872

1,815,515

1,932,485

30,000

1,773,643

(55,036)

1,748,607

1,769,738

The Crescent Textile Mills Limited (the Company) is a public limited company incorporated in Pakistan under the

Companies Ordinance, 1984. The registered office of the Company is located at 40-A, Off: Zafar Ali Road, Gulberg-V,

Lahore. Its shares are quoted on all the Stock Exchanges in Pakistan. The Company is engaged in business of textile

manufacturing comprising of spinning, combing, weaving, dyeing, bleaching, printing, stitching, buying, selling and

otherwise dealing in yarn, cloth and other goods and fabrics made from raw cotton and synthetic fiber(s) and to

generate, accumulate, distribute, supply and sale of electricity. The Company also operates a cold storage unit .

Selected Notes to the Interim Condensed Financial Information ( Un - Audited )


The company and its activities1.

Basis of preparation of financial statements

These financial statements are un-audited and are being submitted to shareholders, as required by section 245

of the Companies Ordinance, 1984.

2.

2.1

The accounting policies adopted for the preparation of these condensed quarterly financial statements are the same as

those applied in the preparation of the preceding annual published financial statements of the Company for the year

ended June 30, 20 09.

2.2

2.3

Un-Audited

September 30, 2009

(No of Shares)

Audited

June 30, 2009

Critical accounting estimates and judgments3.

Issued, subscribed and paid up share capital4.

19,781,136

19,781,136 Ordinary Shares of Rupees 10 each

fully paid in cash

Ordinary Shares of Rupees 10 each

issued as fully paid bonus shares

197,811 197,811

29,428,787

49,209,923

29,428,787

49,209,923

294,288

492,099

294,288

492,099

Long term financing - secured6.

Financing from banking companies (Note 6.1)

Term finance certificates (Note 6.2)

857,811

99,985

957,796

1,008,034

99,985

1,108,019

September 30, 2009

June 30, 2009

Un-Audited


Audited

These financial statements have been prepared in accordance with the requirements of the International

Accounting Standard (IAS) 34, "Interim Financial Reporting" as applicable in Pakistan as notified by the Securitiesand Exchange Commission of Pakistan.

Judgments and estimates made by the management in the preparation of the condensed quarterly financial statements

are the same as those applied in the preparation of the preceding annual published financial statements of the Companyfor the year ended June 30, 2009.

116,970

21,131

10

1,264,894

-

1,264,894

(33,318)

1,231,576

(373,765)

857,811

1,386,279

90,183

1,476,462

(211,568)

1,264,894

(256,860)

1,008,034

Financing from banking companies6.1

Opening balance

Add: Disbursement during the period / year

Less: Payments during the period / year

Less: Current portion

Term finance certificates6.2

Opening balance

Less: Payments during the period / year

Less: Current portion

199,970

-

199,970

(99,985)

99,985

299,955

(99,985)

199,970

(99,985)

99,985

Contingencies and commitments7.

Contingencies

There has been no significant change in contingencies since the date of preceding annual published financial

statements.

-

Commitments

Commitments in respect of capital expenditures are Rupees 5.082 million (June 30, 2009: Rupees 8.985 million).

Commitments in respect of outstanding letters of credit other than for capital expenditures are Rupees 32.178

million (June 30, 2009: Rupees 51.872 million).

-

-

Property, plant and equipment8.

Operating fixed assets - tangible (Note 8.1)

Capital work in progress (Note 8.2)

4,135,713

1,382

4,137,095

4,180,127

2,260

4,182,387

Operating fixed assets - tangible8.1

Opening book value

Add: Additions during the period / year (Note 8.1.1)

Less: Deletions during the period / year (Note 8.1.2)

Less: Depreciation during the period / year

Book value at the end of the period / year

4,180,127

20,899

4,201,026

210

4,200,816

65,103

4,135,713

4,216,100

264,249

4,480,349

24,358

4,455,991

275,864

4,180,127

Additions during the period / year8.1.1

Building on freehold land

Plant and machinery

Factory tools and equipments

Gas and electric installations

Vehicles

Furniture and fixtures

Office equipments

-

11,525

170

417

8,147

-

640

20,899

7,324

222,074

458

4,479

23,354

2,326

4,234

264,249

Deletions during the period / year8.1.2

Plant and machinery

Vehicles

4

206

210

20,948

3,410

24,358

September 30, 2009

June 30, 2009

Un-Audited


Audited

Capital work in progress8.2

Plant and machinery

Advances to suppliers -

1,382

1,382

2,167

93

2,260

11

September 30, 2009

June 30, 2009

Un-Audited


Audited

Investment in an associate9.

Unquoted

Cost

Share of post acquisition profit

as at the beginning of the period / year

Share of post acquisition profit before taxation

Share in charge for profit

269,264

216,071

42,945

(6,190)

36,755

252,826

522,090

269,264

50,764

184,823

(19,516)

165,307

216,071

485,335

As at the end of the period / year

Long term investments10.

Quoted - Related parties

Unquoted - Related parties

Quoted - Others

Unquoted - Others

Impairment loss charged to profit and loss account

Fair value adjustment

41,625

43,159

2,163

500

87,447

-

7,596

95,043

207,377

43,159

19,798

500

270,834

(64,082)

21,131

227,883

Short term investments11.

Quoted - Related parties

Quoted - Others

Impairment loss charged to profit and loss account

Fair value adjustment

119,305

65,253

184,558

-

109,374

293,932

-

179,747

179,747

(114,494)

-

65,253

11.1

Certain long term investments of the Company have been classified as short term investments as the

management intends to dispose off such investments in the coming next twelve months.

Cost of sales12.

Raw material consumed

Cloth and yarn purchased

Store, spare parts and loose tools

Packing materials

Processing and weaving charges

Salaries, wages and other benefits

Fuel and power

Repairs and maintenance

Insurance

Depreciation on operating fixed assets

Other factory overhead

641,978

233,954

122,746

70,356

65,269

142,916

219,564

9,753

4,110

61,353

1,627

1,573,626

732,093

156,258

124,167

67,891

54,414

127,958

266,540

8,380

3,815

61,883

2,036

1,605,435 Work-in-process

Opening stock

Closing stock

Cost of goods manufactured

Finished goods:

Opening stock

Closing stock

Cost of sales - purchased for resale

76,838

(94,191)

(17,353)

1,556,273

684,570

(710,627)

(26,057)

271,155

1,801,371

75,605

(97,236)

(21,631)

1,583,804

755,309

(689,948)

65,361

607,127

2,256,292

Quarter ended September 30,

2009

September 30, 2008


12 (Muhammad Anwar)


(Khalid Bashir)

Director

This represents provision for the quarter against current tax under the normal law.

Taxation

13.

The related parties and associated undertakings comprise associated companies, associates, companies in which

directors are interested, staff retirement funds, directors and key management personnel. Significant transactions

with related parties and associated undertakings are as under:

Transactions with related parties14.

Associated Companies

62,515

42,154

-

7,844

33,991

4,772

53,355

82,565

779

8,139

36,886

3,350

Quarter ended September 30,

2009

September 30, 2008


Company type

Nature of transaction

Employees Provident Fund Trust

Purchases

Sales

Processing income

Insurance charges

Interest income

Amount contributed

These financial statements have been authorized for issue by the Board of Directors of the Company on October 27, 2009.

Date of authorization

15.

General

16.

Corresponding figures have been rearranged, wherever necessary for the purpose of comparison. However, no significant

reclassifications have been made.

The outstanding balances of such parties are as under:

(7,554)

1,839,026

121,987

4,281

20

(4,632)

1,809,317

128,258

22,081

25

Associated Companies

Insurance payable

Long term loans and advances

Trade receivable

Interest accrued

Other receivables

Figures have been rounded off to nearest thousand rupees.

Transactions entered into with the key management personnel as per their terms of employment are excluded from related

party transactions.

September 30, 2009

June 30, 2009

Un-Audited


Audited

Documents

PDF mail Final - crescenttextile.com Quarter 30 Sep 09.pdfChartered Accountants Auditors Sargodha Road, Faisalabad, Pakistan T: + 92-041-111-105-105 F: + 92-041-111-103-104 E: [email protected]