1st Quarter September 30, 2008crescenttextile.com/wp-content/uploads/FN/1st Quarter 30 Sep 08.pdfAl...
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1st Quarter September 30, 2008 1st Quarter September 30, 2008
Transcript of 1st Quarter September 30, 2008crescenttextile.com/wp-content/uploads/FN/1st Quarter 30 Sep 08.pdfAl...
1st Quarter September 30, 20081st Quarter September 30, 2008
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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
Al Baraka 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. Firasat Ali (Nominee NIT)
Mr. Khalid Bashir
Mr. Muhammad Arshad
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
Registered Office & Share Department
40-A, Off: Zafar Ali Road,
Gulberg-V, Lahore, Pakistan
T + 92-42-111-245-245
F + 92-42-111-222-245
E-mail: [email protected]. Naseer Ahmad Chaudhary
Corporate Secretary
Mr. Muhammad Attiq ur Rehman
Head of Internal Audit
Riaz Ahmed & Company
Chartered Accountants
Auditors Sargodha Road,
Faisalabad, Pakistan
T + 92-41-111-105-105
F + 92-41-111-103-104
E-mail: [email protected]
Web Site: www.crescenttextile.com
Mills
Mr. Fazal Din Faiz
Hassan & Hassan
Advocate
Advocates
Legal Advisor
The Crescent Textile Mills Limited is a listed Company
and its shares are traded on all three Stock Exchanges
in Pakistan.
8th Floor, Sidco Avenue Centre,
Stratchen Road, Karachi, Pakistan
T + 92-21-111-105-105
F + 92-21-111-103-104
E-mail: [email protected]
Stock Exchange Listing Liaison Office
The Company's shares are quoted in leading dailies
under textile composite sector.
4
for and on behalf of the Board.
(Muhammad Anwar)
Chairman & Chief Executive
Directors' Report to the Shareholders
For the 1st Quarter ended September 30, 2008
Your directors are pleased to present the un-audited financial statements of the company for the 1st Quarter ended
on September 30, 2008.
Mostly, business environment during 1st quarter of 2009 remained under pressure as global economic slowdown, upsurge in
input costs on the back of high inflation and increase in financial charges due to liquidity crunch arising out of monetary
tightening had an adverse impact on performance of textile industry. The increase in cotton prices @31% (from Rs.3,200/ md
to Rs.4,200/ md), minimum wage rate @30% (from Rs.4,600/ pm to Rs.6,000/ pm), gas prices @37% (from Rs.7.79/ cm to
Rs.10.74/ cm) and HFO cost @112% (from Rs.25,000/ ton to Rs.53,000/ ton) over the same period of last year had a significant
impact on input costs. The changed macro backdrop in the country posed greater risks to corporate earning growth as Rupee
plunged by 14.70% during the quarter (from Rs.68/$ on Jun-30th, 2008 to Rs.78/$ on Sep-30th, 2008) and ignited inflation by
escalating input costs d espite in ternational m elt dow n in c om modity prices .
Sales revenue
Gross profit
Operating and other costs
Other operating income
Finance cost
Profit share from associate
Loss before tax
Taxation
2009(Millions Rs.)
2,673
417
272
63
268
37
23
18
The company exhibited strong performance in the quarter despite difficult environment and achieved targeted results
through smooth and stable operations.
In 1st quarter of 2009 although company was able to withstand all pressures and could achieve positivity except a higher
negative impact of provisioning and loss on CCS transaction but impact of global economic slow down is expected to further
creep into subsequent periods. This would greatly affect volumes and selling margins as uptrend in input costs due Rupee
devaluation and non a bsorption o f fix ed cos ts mig ht dilut e future profita bility of the com pany .
Nevertheless, your management is quite aware of its role as with focused and dedicated approach it is striving
towards betterment of company. With improved level of production efficiency, cost reduction though cost cutting
efforts and with b etter m arketing ap proach it f ore sees impr oved future prospe cts.
Business environment:
During this quarter the company made a growth in sales (up by 44%) due improvement in volumes and through changed strategy
by reducing use of outside converted fabric from supplied yarn to outright purchased products, semi and finished textiles. This
change helped in reducing costs (down from 93.43% to 84.41% of sales) and gave a major lift to gross margins (up by 241%) as
it jumped to 15.59% from 6.57% of sales over the same period of last year. Although raw materials prices, packing and fuel costs
were higher but better sales product mix and enhanced volumes had significantly improved the gross margins. The net margins,
however, declined and were negative as well as close to the same level of previous year's 1st quarter (from 1.49% in 1QFY2008
to 1.52% in 1QFY2009 of the sales). This was mainly due to provisioning of Rs.59.924 millions for doubtful debts and loss on
derivative financial instrument ( Cross C urrency Sw ap Tra nsaction-CCS) of R s.1 01.575 millio ns.
Operational and financial performance:
Summarized position of financial results, in comparison to same period of last year, is as below:
Financial results:
2008(Millions Rs.)
Change(%)
1,858
122
87
60
112
-
17
11
44
241
213
4
138
-
32
70
Loss after tax 41 28 46
Future prospects:
st1 Quarter
Interim Condensed Balance Sheetas at September 30, 2008
EQUITY AND LIABILITIES
Authorized share capital100 000 000 (June 30, 2008: 100 000 000) ordinaryshares of Rupees 10 each
Share capital and reserves
Issued, subscribed and paid up share capitalRevenue reservesUnrealized gain on revaluation of investments
Surplus on revaluation of operating fixed assets
Total Equity
Un-Audited
September 30, 2008
( Rupees in thousand )
1,000,000 1,000,000
492,099
1,527,044
136,064
Note
Audited
June 30, 2008
4
5
492,099
1,567,632
351,010
2,155,207 2,410,741
1,640,401 1,640,401
Long term financing
Term finance certificates
Non-current liabilities
975,097
199,970
1,087,403
199,970
1,175,067 1,287,373
Trade and other payables
Interest accrued on secured loans
Short term finances
Current portion of long term liabilities
Current liabilities 472,240
159,360
4,615,001
429,500
377,205
119,112
4,585,543
398,861
Contingencies and commitments
Total Liabilities
5,676,101 5,480,721
6,851,168
6,768,094
10,646,776 10,819,236
The annexed notes form an integral part of these financial statements.
TOTAL EQUITY AND LIABILITIES
7
Operating fixed assets - tangible
Capital work-in-progress
ASSETS
Non-current assets
8
9
4,136,715
61,372
4,216,100
10,057
Investment in an associate
Available-for-sale investments
Loans and advances
Deposits and prepayments
Deferred tax - asset
352,745
358,000
1,664,147
3,433
12,302
10
11
Stores, spares and loose tools
Stock-in-trade
Trade debts
Short term loans and advances
Trade deposits and prepayments
Balances with statutory authorities
Interest accrued
Other receivables
Available-for-sale investments - short term
Sales tax recoverable
Cash and bank balances
Current assets
241,305
1,013,497
2,342,203
86,503
1,431
62,479
4,653
35,706
228,824
27,042
14,419
215,230
1,240,654
2,106,306
71,653
1,555
61,565
10,156
57,862
231,012
55,465
8,572
4,058,062 4,060,030
TOTAL ASSETS 10,646,776 10,819,236
(Muhammad Anwar)
Chairman & Chief Executive
(Khalid Bashir)
Director
6
12
Property, plant and equipment
4,198,087 4,226,157
320,028
570,758
1,632,403
3,558
6,302
6,588,714 6,759,206
(Restated)
5
6
Interim Condensed Profit and Loss Account (Un-Audited)
for the 1st Quarter Ended September 30, 2008
Sales - net
Cost of sales
55,053
38,022
178,911
2,673,143
2,256,292
Note
13
47,319
35,152
4,296
1,857,782
1,735,671
271,986 86,767
Gross profit
Distribution cost
Administrative expenses
Other operating expenses
Other operating income
Finance cost
Share of profit of associate before tax
Net loss before taxation
Taxation
Net loss after taxation
The annexed notes form an integral part of these financial statements.
416,851
122,111
144,865 35,344
62,791 60,104
207,656 95,448
267,961 112,615
(22,699) (17,167)
17,889 10,500
(40,588) (27,667)
(0.82) (0.56)
(Muhammad Anwar)
Chairman & Chief Executive
(Khalid Bashir)
Director
September 30, 2008
September 30, 2007
( Rupees in thousand )
- 37,606
Loss per share - basic and diluted (in Rupees)
7
Interim Condensed Cash Flow Statement (Un-Audited)
for the 1st Quarter Ended September 30, 2008
Cash flows from operating activities
Loss before taxation
Depreciation on property, plant and equipment
Gain on disposal of operating fixed assets
Gain on sale of investments
Credit balances added back
Share in results of an associate before tax
Income from investments in loans and advances
Finance cost
September 30, 2008
(Rupees in thousand)
September 30, 2007
218,474 134,458
(22,699) (17,167)
Stores, spare parts and loose tools
Stock in trade
Trade debts
Short term loans and advances
Trade deposits, prepayments
Balances with statutory authorities
Interest accrued
Other receivables
Cash flows from working capital changes
Short term finances
Trade and other payable
(26,075)
227,157
(235,897)
(14,850)
124
28,423
5,503
22,156
(36,587)
(112,428)
(217,975)
30,913
(11,006)
(7,609)
6,064
(15,716)
29,458
115,596
415,116
63,361
Net cash flows from working capital changes 151,595 114,133
Cash flows from operating activities 370,069 248,591
Finance cost paid
Income tax paid
Dividend paid
(227,713)
(19,915)
(23)
(103,664)
(10,686)
-
122,418
Net cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from sale of investment
Long term loans and advances received
Decrease in long term deposits and prepayments
(59,418)
23,899
-
489
125
(14,358)
454
1,264
142
10
(34,905) (12,488)Net cash used in investing activities
Cash flows from financing activities Long term finances acquired
Long term finances repaid
Finance lease liabilities repaid
35,000
(116,666)
-
321,672
(429,842)
(3,355)
(81,666) (111,525) Net cash used in financing activities
Net increase in cash and cash equivalents 5,847
8,572
14,419
10,228
7,365
17,593
(Increase) / decrease in current assets:
Increase in current liabilities:
Adjustments to reconcile profit to net cash provided
by operating activities
(Muhammad Anwar)
Chairman & Chief Executive
(Khalid Bashir)
Director
64,861
(1,272)
-
(20,538)
(37,606)
(32,233)
267,961
73,859
(87)
(965)
-
-
(33,797)
112,615
134,241
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
8
Interim Condensed Statement of Changes in Equity (Un-Audited)
for the 1st Quarter ended September 30, 2008
Bonus shares issued
Net loss for the quarter ended September 30, 2007
Unrealized gain on revaluation of investments
Balance as on July 01, 2007
ShareCapital Sub total
Total
492,099 1,773,643 30,000 (200,040) 1,603,603 798,062 2,893,764
Revenue Reserves
Dividend equalization
(AccumulatedLoss)
Unrealized gainon revaluationof investments
General
( Rupees in thousand )
447,362
44,737
-
-
Balance as on September 30, 2007
Net loss for the period from
October 01, 2007 to June 30, 2008
Transfer from surplus on revaluation of operating
fixed assets on account of incremental depreciation
Effect of re-classification of available-for-sale investment
Unrealized loss on revaluation of investments - net
Balance as on June 30, 2008
Effect of accounting error regarding
investment in an associate
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar)
Chairman & Chief Executive
(Khalid Bashir)
Director
Note
1,818,380
(44,737)
-
-
30,000
-
-
-
(172,373)
-
(27,667)
-
1,676,007
(44,737)
(27,667)
-
865,863
-
-
(67,801)
2,989,232
-
(27,667)
(67,801)
-
-
-
-
-
-
-
-
-
-
-
-
(3,443)
8
-
-
(3,443)
8
-
-
-
-
(60,018)
(387,034)
(3,443)
8
(60,018)
(387,034)
492,099
-
1,773,643
-
30,000
-
(203,475)
(32,536)
1,600,168
(32,536)
351,010
-
2,443,277
(32,536)
Balance as on June 30, 2008 - restated
Net loss for the quarter ended September 30, 2008
Unrealized loss on revaluation of investments
492,099
-
-
1,773,643
-
-
30,000
-
-
(236,011)
(40,588)
-
1,567,632
(40,588)
-
351,010
-
(214,946)
2,410,741
(40,588)
(214,946)
10.1
492,099 1,773,643 30,000 (276,599) 1,527,044 136,064 2,155,207 Balance as on September 30, 2008
9
Revenue reserves
5.
Dividend equalization
General
Accumulated losses
30,000
1,773,643
(276,599)
30,000
1,773,643
(236,011)
1,527,044 1,567,632
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). The
Company also operates a cold storage and a power generation hous e.
Selected Notes to the Interim Condensed Financial Information ( Un - Audited )
for the 1st Quarter Ended September 30, 2008
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 3 0,20 08.
2.2
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
Securities and Exchange C ommission o f Pa kistan.
2.3
Un-Audited
September 30, 2008
September 30, 2008
(No of Shares)
Audited
June 30, 2008
June 30, 2008
Critical accounting estimates and judgments3.
Judgments and estimates made by the management in the preparation of the condensed quarterly financial stat ements 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, 2008.
Issued, subscribed and paid up share capital4.
19,781,136
19,781,136
Un-Audited
( Rupees in thousand )
Audited
Ordinary shares of Rupees 10
each fully paid in cash
Ordinary shares of Rupees 10
each issued as fully paid bonus shares
-Opening balance
-Issued during the period / year
197,811 197,811
29,428,787
-
24,955,158
4,473,629
29,428,787 29,428,787
49,209,923 49,209,923
294,288
-
249,551
44,737
294,288 294,288
492,099 492,099
Term finance certificates
6.
Opening balance
Add: Disbursement during the period / year
Less: Current portion
299,955
-
399,940
- 299,955 399,940
-
(99,985)
199,970 199,970
Less: Payments during the period / year
299,955
(99,985)
299,955
(99,985)
(Restated)
10
Contingencies and commitments
7.
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 10.171 million (June 30, 2008: Rupees 36.195 million).
Commitments in respect of outstanding letters of credit other than for capital expenditures are Rupees 94.542
million (June 30, 2008: Rupees 76.112 million).
Letter of guarantees outstanding as on September 30, 2008 amount to Rupees 124.048 million (June 30,
2008: 124.048 million).
-
-
-
September 30, 2008
June 30, 2008
Un-Audited
( Rupees in thousand )
Audited
(Restated) Operating fixed assets - tangible8.
Opening book value
Add: Additions during the period / year -cost
Less: Deletions during the period / year
Less: Depreciation during the period / year
Book value at the end of the period / year
4,216,100
8,103
4,404,416
124,363
4,136,715 4,216,100
(8.1)
4,224,203
22,627
4,528,779
15,113
4,201,576
64,861
4,513,666
297,566
(8.2)
-
499
48
958
6,006
14
578
8,008
94,559
3,067
974
13,177
710
3,868 8,103 124,363
Additions during the period / year
8.1
Building on freehold land
Plant and machinery
Factory tools and equipments
Gas and electric installations
Vehicles
Furniture and fixtures
Office equipments
Deletions during the period / year
8.2
Plant and machinery
Factory tools and equipments
Vehicles
20,944
-
1,683
11,569
3
3,541
22,627 15,113
Capital work in progress9.
Building
Plant and machinery
Advances to suppliers
331
47,722
13,319
-
1,275
8,782
61,372 10,057
Investment in an associate
10.
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
50,764
269,264
-
37,606
(4,889)
54,938
(4,174)
32,717
83,481
352,745
50,764
50,764
320,028
As at the end of the period / year
Note
11
The company has restated the post acquisition profits as at June 30, 2008 in respect of its investment in Crescent
Bahuman Limited by revising the share of profit from associated company. The error has been corrected retrospectively
in accordance with International Accounting Standards (IAS 8) “Accounting Policies, Changes in Accounting Estimates
and Errors”. Consequently the acumulated losses increased by the same amount .
10.1
Quoted - Related parties
Unquoted - Related parties
Quoted-Others
Unquoted-Others
Available-for-sale investments - short term
12.
Quoted-Others
Unrealized gain on revaluation of investments
Available-for-sale investments11.
Unrealized gain on revaluation of investments
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
Other overhead
Cost of sales
13.
Work-in-process:
Opening stock
Closing stock
Cost of goods manufactured Finished goods:
Opening stock
Closing stock
Cost of goods sold - purchased products
This represents provision for the quarter against current tax under the normal law.
Taxation
14.
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 parties
15.
358,000 570,758
179,747
49,077
179,747
51,265
228,824 231,012
207,377
43,159
19,798
500
207,377
43,159
19,798
500
270,834
87,166
270,834
299,924
( Rupees in thousand )
September 30, 2008
September 30, 2007
Quarter ended
732,093
156,258
124,167
67,891
54,414
127,958
266,540
8,380
3,815
61,883
2,036
501,085
297,299
116,633
50,813
71,456
109,503
178,113
11,252
3,060
71,212
3,836
1,605,435 1,414,262
75,605
(97,236)
755,309
(689,948)
73,119
(91,358)
765,623
(851,541)
(21,631)
1,583,804
(18,239)
1,396,023
2,256,292 1,735,671
65,361
607,127
(85,918)
425,566
September 30, 2008
June 30, 2008
Un-Audited
( Rupees in thousand )
Audited
(Restated)
12
Associated Companies
53,355
82,565
779
8,139
36,886
3,350
132,877
43,728
5,173
6,804
35,734
3,175
Quarter ended September 30,
2008
September 30, 2007
( Rupees in thousand )
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 28, 2008.
Date of authorization
16.
General
17.
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:
(2,616)
1,660,910
184,381
4,653
10
(5,895)
1,628,677
152,681
10,156
340
Associated Companies
Insurance payable
Long term loans and advances
Trade receivable
Interest accrued
Other receivables
Transactions entered into with the key management personnel as per their terms of employment are excluded
from related party transactions.
September 30, 2008
June 30, 2008
( Rupees in thousand )
Figures have been rounded off to nearest thousand rupees.
(Muhammad Anwar)
Chairman & Chief Executive
(Khalid Bashir)
Director
Registered Office & Share DepartmentRegistered Office & Share Department
40-A, Off: Zafar Ali Road, Gulberg-V,Lahore, Pakistan.40-A, Off: Zafar Ali Road, Gulberg-V,Lahore, Pakistan.
TFE
TFE
:::
:::
MillsMillsSargodha Road, Faisalabad, Pakistan.Sargodha Road, Faisalabad, Pakistan.TFE
TFE
:::
:::
Liaison OfficeLiaison Office8th Floor, Sidco Avenue Centre,Stratchen Road, Karachi, Pakistan.
8th Floor, Sidco Avenue Centre,Stratchen Road, Karachi, Pakistan.TFE
TFE
:::
:::
www.crescenttextile.comwww.crescenttextile.com
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