This action might not be possible to undo. Are you sure you want to continue?
Company Information Notice of Annual General Meeting Mission, Vision and Values Directors’ Report to the Shareholders Key Operating / Financial Highlights Statement of Compliance with best practices of Code of Corporate Governance Review report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance Pattern of Shareholding Auditors’ Report to the Members Balance Sheet Profit & Loss Account Statement of Comprehensive Income Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements Proxy Form
3 4 6 7 16
19 20 23 24 26 27 28 29 30 83
Mr. Muhammad Anwar
Chairman & Chief Executive Director Director Director Director Director Director
Mr. Ahmad Shafi Mr. Khalid Bashir Mr. Muhammad Arshad Mr. Muhammad Asif (Nominee NIT) Mr. Nasir Shafi Mr. Tariq Shafi
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. Khalid Bashir Mr. Nasir Shafi Mr. Ahmad Shafi Chairman Member Member
Mills & Head Office
Sargodha Road, Faisalabad, Pakistan T: + 92-041-111-105-105 F: + 92-041-111-103-104 E: firstname.lastname@example.org
Chief Financial Officer
Mr. Sadiq Saleem
Registered Office Corporate Secretary
Mr. Naseer Ahmad Chaudhary 40-A, Off: Zafar Ali Road, Gulberg-V, Lahore, Pakistan T: + 92-042-111-245-245 F: + 92-042-111-222-245 E: email@example.com
Head of Internal Audit
Mr. Muhammad Attiq ur Rehman
Riaz Ahmad & Company Chartered Accountants
Crescent Group Services (Pvt) Ltd, 306, 3rd Flr, Siddiq Trade Centre, 72-Main Boulevard, Gulberg, Lahore, Pakistan T: + 92-042-35787592 F: + 92-042-35787594 E: firstname.lastname@example.org www.ctm.com.pk
Mujtaba Jamal Law Associates Raza Abbas Chaudhary Advocate
Stock Exchange Listing
The Crescent Textile Mills Limited is a listed Company and its shares are traded on all three Stock Exchanges in Pakistan. The Company's shares are quoted in leading dailies under textile personal goods sector.
Off: Zafar Ali Road.m. Rs.50 per share for the year ended June 30. 1. 4. Gulberg-V. To receive. 2010 together with the Directors' and Auditors' Reports thereon.Notice of Annual General Meeting Notice is hereby given that the 61st Annual General Meeting of the shareholders of the Company will be held on Saturday. 5. Present auditors M/s. Chartered Accountants. retire and being eligible to offer themselves for re-appointment. Lahore: T: +92-042-111-245-245 F: +92-042-111-222-245 Dated: October 04. consider and approve the audited accounts of the company for the year ended June 30. Riaz Ahmad and Company. To transact any other business with permission of the Chairman. Registered Office: 40-A. Lahore to transact the following business:1. Gulberg V. To approve. 2010. 2010 By Order of The Board (Naseer Ahmad Chaudhary) Corporate Secretary 4 . payment of cash dividend @ 15% i. as recommended by the Board of Directors. 2011. Off: Zafar Ali Road. 2.e. the October 30. To appoint auditors of the company and fix their remuneration for the year ending June 30. 3. 2010 at 9:30 a. at the registered office of the company at 40-A. To confirm the minutes of last Annual General Meeting of the shareholders held on October 29. 2009.
iv). the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. The proxy form shall be witnessed by two persons whose names. addresses and CNIC numbers shall be mentioned on the form. For Appointing Proxies: i). the Board of Directors' resolution/power of attorney with specimen signatures of the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting. 5 . ii). 4. 3.Notes 1. Physical / CDC transfers received at the Registered Office of the Company by the close of business on October 21. In case of corporate entity. CDC account holders will further have to follow the guidelines as laid down in circular No. shall submit the proxy form as per the above requirement. The proxy shall produce his original CNIC or original passport at the time of the Meeting. ii). The Members' Register will remain closed from October 22. shall authenticate his/her identity by showing his original Computerized National Identity Card (CNIC) or original passport at the time of attending the meeting. v). 2010 will be considered in time for the purpose of payment of cash dividend to the transferees. b. A member eligible to attend and vote in this meeting may appoint another member as proxy to attend and vote in the meeting. iii). the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. 2010 (both days inclusive). Proxies in order to be effective must be received by the company at the Registered Office not later than 48 hours before the time for holding the meeting. In case of corporate entity. the Board of Directors' resolution/power of attorney with specimen signatures shall be submitted (unless it has been provided earlier) along with proxy form to the company. Shareholders are requested to immediately notify the change in address. 2010 to October 30.1 dated January 26. if any. In case of individuals. 2. Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. In case of individuals. 2000 issued by the Securities and Exchange Commission of Pakistan: a. For attending the meeting: i).
Vision and Values To be the 1st Choice of Customers and achieve a leading role in the economy through enhancement of quality of life style for Stakeholders. 6 .Mission.
491 238. Other operating expenses and financial costs declined by 63.53 (63. Achieve greater consistency and safety of operational strength to inculcate more confidence into all stakeholders for reliance on achievements and commitments.10.386 10. 2010 together with the Auditors' Report thereon. which improved earnings per share to Rs 7. Therefore.63) (34.020 136. Operations remained smooth and stable despite serious energy crises and difficult security situation in the country.670 179. growth in value added sales through maximum use of own manufactured products is the way forward.63% and 34.863.512 463.270 815.05 94.872 376.750. 500 n o i l 400 l i m300 n i s e 200 e p 100 u R (100) 2005 2006 2007 2008 2009 2010 Profit before tax Profit after tax 7 .518 344.10.863 million against Rs. Net profit after tax was 3. Summary of highlights is as below: (Rupees in million) Particulars Sales revenue Net profit before tax Net profit after tax Other operating cost Finance cost 2010 2009 % Change 1.00 from Rs 3.Directors' Report to the Shareholders Directors of your company are pleased to present the 61st Annual Report and Audited Financial Statements of the company for the year ended June 30.948 Profi t before tax and after tax Rupees in million The strategy and focus: Company is fully integrated into composite textile chain and strategically poised to enhance revenues from its home textile products.64. Profit % of Sales Highlights for the year: Achieved stable sales revenue of Rs.751 million of last year. 20% 15% 10% 5% 0% -5% 2005 2006 2007 2008 2009 2010 Gross pr ofit to sales (%) Profit afte r tax to s ales (%) Operating profit to sales (%) Break up value (Rupe es/share ) 70 60 Rupees Yarn prices remained bullish on sharp increase in cotton prices and higher international demand but value added sector faced brunt of high input costs.28) 50 s e 40 e p u 30 R 20 10 0 2005 2006 2007 2008 2009 2010 10.17% of sales against 1.67% during last year.32 92.28% respectively from last year.284 536.
persistent power and gas shortages.000 n o i l l i 9. Increasing cotton prices. Loans & advances Equity & Liabilities Equity Non cu rrent lia bilities Surplus o n rev aluatio n Current liab ilities Sales: Export & Local 12. corporate. On IMF support and record increase in home remittances PKR remained stable (81. Trade deficit was down. Gas curtailment by utility company for supply to power plants not only halted operations but also reduced margins of industry due use of alternate fuel at high cost. and local as well as international laws and norms for satisfaction of all concerned parties. 2010) and declined only by 5. So.000 2005 2006 2007 2008 2009 2010 Rupees in million Local Sales Expo rt Sales 8 . 2009 to 85. Exports showed resilience despite global recession. severe competition and high input costs.30% during the year. which had serious effects in shape of financial loss by way of non utilization of exports proceeds remitted by customers due to shortened working week. Fixed assets Investments Current as sets Assets Over view of economy and business environment: In the backdrop of stagnant economy marred with bleak energy and security situation.1% GDP growth against 1.000 e e p u R 3.2% of last year mainly due to manufacturing and service sector growth.20% over last year also negatively impacted performance of textile industry.000 m n i s6. To be resilient in order to face challenges of difficult business environments in all times to come through attaining financial and operational stability. Contrary to proclamation in Textile Policy 2009 the Govt did not exempt export industry from gas and power load shedding.8 billion to $19.3 billion). circular debt and increased external debt servicing continue to impede recovery. Company also places emphasis on investing in human resource for improving organizational strength to cope with complex and strategic business ventures. largely through increase in exports by 8.Continuation of achieving legal. An average increase in gas rates @6. Textile exports also registered increase mainly driven by three segments including cotton. the country was able to achieve 4.10 on June 30. social. higher mark up rates and unstable security and political situation had affected industry's performance.40 on June 30. no concessional treatment for Pakistan's exports. To overcome energy deficiency Govt took various measures besides resorting to two weekly holidays. yarn and synthetic textiles. Country saw some consolidation in recovery but power shortages. in comparative terms exchange rate did not contribute towards increase in exports.43% (from $17.
52%) due depressed margins of value added segments but all time high margins on yarn sales offset the decline in manufacturing profit. severe power crises and exacerbating cotton prices. Operations also remained under stress due prolonged gas outages and could not pick momentum despite having ample export orders. During the year Textile Ministry also helped industry by arranging disbursement of all R&D pending claims of financial year 2008.95% and 12.74% respectively. 2009 the Govt provided some financial relief to industry through mark up rebates/ subsidy on long term loans and export finances.700/Md against previous high of Rs. Other operating income 2% Sources of Revenue Share of associate profit 1% Local 29% Export 68% Utilization of Revenue Tax 1% NAT profit 3% Finance co st 5% Admin & o ther cos ts 3% Distribution 4% Cost ofsales 84% 9 . polyester prices also toed line of cotton prices and showed consistently rising trend. Cash starved Govt hammered industry by blocking sales tax refunds and rebates thereby increasing finance cost and liquidity crunch.5 million bales. Local yarn prices also followed upward path and moved ahead of cotton rates on higher global demand. In order to protect valued sector Govt imposed 15% Regulatory Duty on yarn export ignoring outcry of spinning sector. Financial performance: During the year your company demonstrated improved financial results amidst rising cost pressures.4. which not only halted production but forced the company to use alternate expensive fuel for power generation.200/Md. But due to lack of budgetary allocation these benefits were not fully disbursed. Sales revenue showed relatively stable trend and growth in yarn and home textile sales helped to achieve this level.6. Gross profit of the company lagged behind previous year (down by 7.8 million bales was short to industry's requirement of 15. Similarly. On higher international oil prices POL and HFO prices also remained strong negatively affecting energy generation on HFO based capacity. The value added sector's margins came under severe pressure due to high yarn prices. Local shortfall in cotton crop coupled with global rising demand pushed prices to new apogee of Rs. The margins were also affected by substantial gas curtailment. Under Textile Policy.Cotton crop size of 12. which were up by 34.
740 307.305 15 2.404 2 1. company was able to combat these pressures and improved its bottom line by reducing 'Other operating expenses' by 63.Direct purchases Home textiles 2010 Million Rs.375.662 30 7.242 70 10.749 2.386 100 257. Our exports originated from all regions but majority were from EU and USA. The retirement of long term loans and use of low cost financing to cater borrowing needs of company for increased working capital requirements. depicting stable trend of company's sales of value added segment.892. % 1.144 22 5 3 30 2009 Million Rs. % 2.34%.70%.439. Sales: Overall sales of the company were slightly higher (1. Composition of sales during the year with combination of local and exports was as below: Sales revenue Local: Yarn Fabric Others Export: Yarn Fabric. Major thrust in such sales was coming from yarn which rose by 32.610.Own manufactured Fabric.279 506.032.243 27 8.26% as frequent gas curtailment severally disrupted power generation facilities and production processes of the company. Despite tough business conditions. higher yarn prices were also responsible for decline in exports of value added goods as foreign buyers had reacted conservatively to rising textile prices and booked lesser orders.507. In export category home textiles exports contributed 61% against 62% of last year. freight and distribution expenses also had an impact on profitability of the company.347.253.Rising fuel.260.05%) compared to previous year's sales as domestic sales surged by 19.253 559.28%.550 21 3. exports of value added segment of company has been showing growth over the years as below: 80% 60% 40% 20% 0% 2005 2006 2007 2008 2009 2010 Debt Equity 10 .750.863.512 100 Capital mix (Debt & Equity) 120% 100% Export sales were marginally lower by 5.640 14 3.608. However . recession in US and Europe and un-favourable international business environment for Pakistan's textiles. In overall sales revenue exports constituted 70% against 75% during last year.63% and 'Finance cost' by 34.704 75 10.417 32 2.843.725 4 1. helped in saving of finance cost.806 314. Partly.717.808 17 5 3 25 Product mix 2010 Other 3% Yarn 26% Home Text ile 51% Fabric 20% 393.125 3.
360 million due to extra fuel cost incurred during the year. Comparison of total sales revenue composition with previous year is given as below: Particulars Yarn Fabric Home Textile Trading Others Total sales revenue 2010 2009 Change Million Rs.200/ Md) and polyester 13.992 4.770 2.136.348 307 10. 11 .893 3.4.751 35 2 13 (30) (3) 1 Factors responsible for increase in these costs were: § § § § § Yarn prices were higher on increase in cotton prices and high export demand. Share of profit from associate also improved bottom line of the company.100 2. Rising raw materials prices increased input cost by 8.607 424.114/ kg).830 382.817 325.700/ Md to Rs.884 369.375 315 10. ( % ) 821.261 2.658 5.115 3. Fabric purchase prices were also higher by 37% but less dependence on out side purchases had slight saving in cost through procurement of lesser quantities. Million Rs. % 879 1.620 1.85% (avg rate was higher by Rs.833 2.779 976.128.51% (avg rate increased from Rs.891 376. Weaving and processing charges increased due requirement of outside weaved fabric and processing of some fabric from other sources for lack of availability of gas. Power cost rose considerably as frequent gas curtailment forced to shift to alternate expensive fuel to keep manufacturing processes operational although not fully. planning and cost effective measures. Packing material was higher due to growth in home textile exports.068 2. % 271 204 277 257 394 10 07 06 06 07 Fabric Million Rs.508 1.261 32 41 49 62 61 Total Million Rs. ( % ) 2.376.500/ Md from Rs. Finance cost decreased due stable PKR as lower interest rates on availing US $ loans proved very economical and also utilization of export refinance / SBP loans at concessional rate contributed favourably. Million Rs. The surge in raw materials prices was due to shortfall in cotton crop.942 286. and employed qualified and skilled work force. Company absorbed Rs.872 million in current year) had significant impact on improving bottom line of the company.892 3.863 2.082 4. Administrative and general expenses were slightly higher but major decrease in other operating costs (reduced from Rs. Other costs which had increased compared to previous year were as below: Distribution and shipment cost increased mainly due higher ocean freight charged by shipping lines on revival of export market and rising fuel costs. % 1.3. Although average use of banking facilities was slightly higher but saving through mark-up rates resulted substantial reduction in finance cost. Operations and other costs: The impinging cost trends had an adverse impact on input cost but over all cost of sales of company remained in check through close monitoring.608 58 52 45 32 32 Home Textiles Million Rs.Year 2006 2007 2008 2009 2010 Yarn Million Rs. use of imported cotton and higher PSF prices.825 1.980 2.546 94 (2) 31 14 14 To further boost exports of home textiles.565 1.348 391.223 1. Growth in home textiles exports reflects on company's intention to convert maximum processed fabric in house in order to strengthen its bottom line.284 million to Rs.263 100 100 100 100 100 Particulars Yarn purchases Fabric purchases Weaving and processing charges Packing materials Fuel and power 2010 2009 Change Million Rs. your company has added more machines.025 859. % 2.72% with cotton contributing 7.101/ Kg to Rs.
327 16.282 Internal use of semi and intermediate products was favourable to some extent as surge in prices of these products in local market would have considerable impact on profitability.53 75.974 (46) 13. subsidy and past pending R&D claims and part of Duty Draw Back claims under Textile Policy.575 937 251 816 165 238 59 179 1 (8) (16) (16) (34) (27) 95 102 93 a) Yarn (in '000' Kgs): Available for use Sold (%) Used in weaving (%) b) Grey fabric (in '000' Mtrs): Available for use Sold (%) Used in processing (%) 17.449 (64) 10. To ensure healthy and safe working environment all required arrangements were made in accordance with international standards. Data given below clearly depicts this philosophy: Year 2006 2007 2008 2009 2010 2010 2009 Change Million Rs. Operational performance of company during the year was normal in spinning.234 (33) 22.719 14. Internal capacity to feed up- 12 .824 (54) 24.006 (29) 17.125 7. Summarized financial results for the year 2010 were as below: Particulars Sales revenue Gross profit Operating costs Other operating income Finance cost Profit share from associate Profit before tax Taxation Profit after tax stream processes saved company from rising costs and was able to demonstrate considerably well under difficult business conditions.539 (42) 17.170 4. The gas load shedding increased from 36 days to 55 days in current year.004 14.790 (68) 27.281 2009 ( Qty ) 36.234 (33) 19.886 (73) 24.822 12.316 18.44) 34.704 13. Reduced gas availability affected power and fabric processing facilities besides increasing fixed costs for not operating fully during the year. Compliance to systems.414 (48) 25. processing.477 11.315 (49) 12.999 (48) 23.445 (36) 29. These machines were required to improve / enhance the efficiency of these processes.119 (71) 26.527 78. home textiles and power generation facilities to cope with the current and future requirements.294 16. 2010 ( Qty ) 36. procedures and work place according to local and international laws.010 (69) 16.179 (58) 34.484 (50) Operational performance: Frequent and continued gas load shedding badly disrupted operations of the company but use of alternate energy source helped to achieve satisfactory performance of operations.750 1.408 (52) 11. The operational efficiency of various processes was achieved 88% ~ 98% which helped in achieving yield from 85% in spinning and 97% in the other value added processes. These compliances were helpful in achieving various certifications which were obtained through repellence audits conducted during the year.135 11.900 (67) 35.798 11.706 (52) 12.234 11.41 5. Comparison of the same with last year's data is as below: Particulars Spinning: Yarn converted into 20's (000 kgs) Weaving: Fabric converted into 50 picks (000 Sq Meters) Processing: Fabric processed (000 in linear meters) c) Processed fabric (in '000' Mtrs): Available for use Sold (%) Used in home textile (%) 28.299 12.064 12.863 1. laws and social environment: The company maintained its systems.893 18.994 (58) 12.581 (50) 12.451 (69) Company continued to improve its assets base and added various machinery items in spinning.449 (64) 12.415 20.890 33. This performance of various operations of company would have improved had there not been severe gas load shedding during year under reference. Million Rs.220 (3.026 (31) 24.684 (51) 25.249 (69) 26.301 (42) 34.539 (42) 20. ( % ) 10. 2009.During the year company received mark-up support.994 (58) 11.51 Home Textiles: Fabric stitched (000 in linear meters) 21.457 789 212 536 120 464 119 345 10.091 Change ( % ) 0. lower in weaving and improved in value added segments.
company envisages various challenges as cotton prices have hit record high levels to an expected shortfall in supplies from flood affected in Pakistan and rain hit in China. Sever gas load shedding as witnessed in last year is likely to effect more in future due increasing gap between demand and supply. Operations of the company were carried out keeping in view the dignity.In an overall operating set up workers. These things helped for industrial harmony as company had always taken lead and made it a Future prospects and plans: Going forward. All employees were provided suitable working environment and climate to ensure accomplishment of their jobs. contractors and visitors were given required safety awareness and these were followed throughout plant operations. During the year company gave bonuses to workers and paid expenses of 05 workmen to perform Hajj. Company had installed OF (Oracle Financial) to cater its ERP needs. protection and international standards set to meet working environment. Company is also planning to convert its existing OF to Release 12 which is an enhanced version and will have added features to cope requirements of newest technological changes. 13 . Company is also striving to obtain accreditation of ISO 17025 for Competence of Testing and Laboratory Calibration respectively. Social and welfare responsibilities: Cognizant of its social responsibilities company responds to the need of local communities and civil society organizations which include contributions in kind and in cash to health care centers. New developments on Oracle based platform are in progress and with passage of time being annexed to main system. Company has its outreach to supports various other social and welfare organizations spread across the country. Information technology: Information technology provides requisite leverage to company to boost its performance. All workmen performed their duties and jobs at standard hours and if they were required to put extra workings to meet the exigencies and to fill man power shortage they were compensated and paid per legal criteria. New IT assets were added to fulfill business needs more efficiently and existing ones were upgraded. respect. They were paid their remunerations well in time and disbursement of pays / wages were made within the legally specified days. High cost is very disconcerting for textiles as it will affect margins due very limited scope to pass through the rising price impact to customers under intense global competition environment. Global Organic Textiles Product Standards for Fabric. Human resource and industrial relations: Harmonious working environment and cordial industrial relations prevailed during the year. support. For recreation of executive employees club facilities were provided for entertainment activities. It has been funding to charitable institution and also established two Campuses in the vicinity of Faisalabad run by The Citizen Foundation (TCF) besides providing annual support fund for running of these schools. social welfare organizations and educational institutions. These steps in recognizing value of human resource were essentials to create a team of trained and professional people. Human Ecology Product Standards for Home Textiles Certification for use SUPIMA Cotton Social accountability (In process) suitable workplace for its employees where all required necessary steps are taken to protect their legal rights and for their safety. Followings certifications given by accredited agencies were available with company: ISO 9001:2008 ISO 14001:2004 C-TPAT/ GSV OE 100 GOTS Oeko-Tex 100 Oeko-Tex 100 SUPIMA SA 8000 Quality Management Systems Environment Management Systems Security Management Systems Product Standards. Besides extending coverage to social security scheme the workmen were able to get benefit of ambulance service and also provided conveyance facility to outstation workforce. To avoid interruptions in processing operations the company has arranged LPG gas supply system which will not only ensure timely execution of export orders but and will also reduce fixed costs. smoothly. There were no complaints of work abuse or of not fulfilling their legal requirements. Organic Exchange Product Standards. Various executives and employees attended courses / seminars of professional training at different forums which were either arranged in house or at outstation places.
g. Nasir Shafi Meetings Attended 3 4 3 1 4 1 4 S# 01 02 03 04 05 06 07 b. h. Information about outstanding taxes and levies is given in Notes to the Accounts. Corporate governance and Financial frame work: Board of the company attaches utmost importance in adhering to local and international principles of good corporate governance and committed to inculcating this culture at all levels of organization.3. On-going review will continue in future for further improvement in controls. Financial statements prepared by the management represent fairly and accurately company's state of affairs. k. f. Appropriate accounting policies have been consistently applied in preparation of financial statements and any changes in accounting policies have been disclosed in the financial statements. System of internal control is sound in design. products. Proper books of accounts have been maintained.7. results of its operation. Before each board meeting closed period is declared during which directors and executives are not allowed to trade into shares of the company. increasing shareholders' wealth and promoting market confidence. Transactions undertaken with related parties during the financial year have been ratified by the Audit Committee and approved by the Board. During the year under review. The value of investment in respect of Employees Provident Fund was Rs.Nominee NIT Mr. cash flows and changes in equity. Muhammad Asif.373 million (as per audited accounts of 2009). The accounting estimates are based on reasonable and prudent judgment. The directors are pleased to state that: a.537. International Accounting Standards as applicable in Pakistan have been followed in preparation of financial statements and any departure there from has been adequately disclosed. e. c. Muhammad Anwar Mr. Ahmad Shafi Mr.64 in previous year. Appropriations: The company has earned profit Rs. Khalid Bashir Mr. four (04) meetings of the Board were held and following were in attendance: Director's Name Mr. Muhammad Arshad Mr. Muhammad Iqbal Hussain Nominee NIT Mr. Rs. The company has sound potentials to continue as going concern. enhancing profitability of the company. we shall focus on our processes. customers to improve from present level through efficiency and more dedicated efforts. i. Leave of absence was granted to directors who could not attend Board meetings. All directors and employees are required to sign the code of ethics in acknowledging of their understanding and acceptance of same.1. j.00 per share in the year 2010 as against earning per share of Rs. There has been no material departure from best practices of corporate governance.e. However.The recent upward revisions in discount rate by SBP in two MP announcements will also have a negative impact on borrowing costs in ensuing period. has been effectively implemented and being monitored continuously. Board of directors have recommended cash dividend for shareholders of the company @15% i. During the year Board was actively involved in performing their duties including those required to be performed under various laws and Memorandum and Articles of Association of the company with ultimate objective of safeguarding interests of the stakeholders. Directors of the company are fully aware of their duties and responsibilities and strive to discharge fiduciary responsibilities in best possible manner in compliance with all applicable corporate laws and regulations. d.50/ share (2009: Nil) to be paid after approval by the shareholders in Annual General Meeting. 14 .
For and on behalf of the Board of Directors Auditors: The auditors M/s. Events after the reporting period: There was no significant event after the reporting period which may warrant mentioning in Directors' Report. retire and offer themselves for reappointment for the year 2011.1 (d) (i) . two of them are non-executives independent directors including Chairman. Committee meets every quarter for review of audit reports. customers. 2. To the best of our knowledge. their spouses and minor children have not undertaken any trading of company's shares. 2010 is included in these financial statements. The terms of Preference Shares as approved by the shareholders are 5%. efforts. cumulative. adoption of IFRS8 'Operating Segments' and change in accounting estimate regarding useful life of building.7 (d). Pattern of shareholding: A statement showing the pattern of shareholding of the company as at June 30.CBL: Board of Directors and shareholders of the company had resolved conversion of all sums due from Crescent Bauman Limited. CFO and Company Secretary. on account of long term loans and interest receivables thereon till date of conversion into Preference Shares of investee company subject to regulatory approvals to be obtained by said company. The impact of above changes in accounting policies and estimate has properly been disclosed in the financial statements as per the requirement of 'International Accounting Standards' as mentioned in Note 2. Key operating financial highlights: Financial data of the last six (06) years is attached. an associate of the company. staff and workers.l. unlisted. bankers. interim and annual financial results prior to approval of the Board. vendors and all other stake holders for support. participatory and convertible preference shares of Rupees 10 each. management. Acknowledgements: I take this opportunity to thank the Board of Directors. IFRS7 'Financial Instruments Disclosures'. CEO.. Directors.20 and 2. Riaz Ahmad & Co. auditors. Changes in accounting policies and estimates: Company has changed policies in current year regarding IAS1 'Presentation of Financial Statements'. non-voting. Chartered Accountants. (Muhammad Anwar) Chief Executive Officer 15 . Audit Committee: The committee comprises of three members. Investment in 'Preference Shares' of Crescent Bahuman Ltd . commitment and ownership in what we have achieved as a team.
31 4.720) 1.419) 1.58 (14.00 10.061 Times Times Times 0.926 (500) 1.26 (1.60 2.50 1.36 0.80) 0.808) 665 4.55 62.03 10.00 8.67) 69.70) 14.02) 0.35 0.13 11.36 19.182 (1.53 10.24 10.54 6.31 54.57 1.29 5.63 (0.99 2.34) (1.57 5.117 541 477 302 254 4.730 529 582 117 88 8.73 7.27 2.00 92.26 55.71 0.20 45.108 2.50 0.51 0.65 8.82 0.48) (0.206 7.17 2005 2006 2007 2008 2009 2010 16 .451 1.686 (235) 1.462 1.79 2.713 2.00 3.15) 9.04 % % % % 13.80 22.83 (0.09 5.007 Rupees in million 1.02 10.66 0.989 4.10 4.441 (688) 1.75 (17.72) 54.44 0.15 2.(cash/stock) Price earning ratio Market price per share Market capitalization HISTORICAL TRENDS Trade results Sales .287 2.262 4.08 21.52 3.76 (46.17 (12. plant and equipment Working capital Non current liabilities 2.880 3.35 6.86 0.00 38.92 0.374 2.745 2.36 0.Key Operating / Financial Highlights KEY INDICATORS Operating Gross profit margin Operating profit margin Pre tax margin After tax margin Performance Return on total assets Total assets turnover Fixed assets turnover Inventory turnover Return on paid up share capital Leverage Debt equity ratio Current ratio Quick ratio Valuation Earning per share Earnings growth Break up value Dividend .973 524 340 (17) (57) 5.76 0.83 0.00 58.22) 66.04 3.457 880 463 345 Rs % Rs % Times Rs Rs(M) 6.25) 240.73 24.80 (120.96 6.751 1.50 % Times Times Times % 3.54) 1.18 10.14 0.60 7.net Gross profit Profit from operations Profit / (loss) before tax Profit / (loss) after tax Financial position Shareholders' equity Property.41 8.226 (1.55) 0.70 0.20 0.22 70.04 1.38 3.22 1.70 2.82 49.54 0.40 0.29) 60.70 0.64 391.95 5.575 889 239 179 10.57 (0.56 1.229 1.16 (170.412 4.33 0.78 (1.99 2.981 (1.863 1.52 0.27 3.672 3.087 2.67 13.31 15.27) 519.84 (0.88 36.845 968 515 (43) (62) 10.50 2.
Casual vacancy occurred in the Board during the year 2010 was filled within the stipulated period of 30 days. 4. All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company. 17 . 6. have been apprised and adequately briefed. The minutes of the meetings were appropriately recorded and circulated. 5. Written notices of the Board meetings. Statement of Ethics and Business Practices has been circulated to directors and employees. Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. 10. overall corporate strategy and significant policies. who have not participated in these. The Company has applied the principles contained in the Code in the following manner: 1. including appointment and determination of remuneration. The Company encourages representation of independent non-executive Directors and directors representing minority interests on its Board of Directors. has been declared as a defaulter by that stock exchange. Director(s). being a member of a stock exchange. The Board has developed a vision/mission statement. 9. four non-executive Directors and one independent non executive Director but no Directors representing minority interest. At present the Board includes two executive Directors. The Board has approved the appointment of company CFO and Head of Internal Audit including their remuneration and the terms of appointment as determined by the CEO. along with agenda and working papers. whereby a listed company is managed in compliance with the best Practices of Corporate Governance. 8.Statement of Compliance with Best Practices of Code of Corporate Governance This statement is being presented to comply with the Code of Corporate Governance contained in Listing Regulations of Karachi. 3. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. 7. All the powers of the Board have been duly exercised and decisions on material transactions. 2. were circulated at least seven days before the meetings. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. The Directors have confirmed that none of them is serving as a Director in more than ten listed companies. a DFI or an NBFI or. Directors of the company have participated in Orientation Course at group level to apprise them of their duties and responsibilities. terms and conditions of employment of the CEO have been taken by the Board.
15. The financial statements of the Company were duly endorsed by CEO and CFO before approval by the Board. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan. 20. 19. CEO and Executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. Lahore and Islamabad Stock Exchanges. The Directors' report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. 18. two of them are non-executive Directors including the Chairman of the Committee. The terms of reference of the Committee have been formed and advised to the Committee for compliance. It comprises 3 members. 17. On behalf of the Board (Muhammad Anwar) Chief Executive Officer 18 . The company has fully complied with the best practices on transfer pricing as contained in the Listing Regulations of the Karachi. The Directors. We confirm that all other material principles contained in the Code have been complied with. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. The related party transactions have been placed before the audit committee and approved by the Board of Directors. their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan. The Company has complied with all the corporate and financial reporting requirements of the Code. 16.11. The Board has set-up an effective internal audit function manned by suitably qualified and experienced personnel who are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time basis. 12. The Board has formed an Audit Committee. 21. 13. 22. 14. The meetings of the audit committee were held at least once in every quarter prior to approval of interim and final results of the Company and as required by the Code. that they or any of the partners of the firm.
to the extent where such compliance can be objectively verified. or to form an opinion on the effectiveness of such internal controls.Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance We have reviewed the Statement of Compliance with the best practices contained in the code of Corporat Governance prepared by the Board of Directors of THE CRESCENT TEXTILE MILLS LIMITED (”the Company”) for the year ended June 30. Our responsibility is to review. Listing Regulations of the Karachi. Lahore and Islamabad Stock Exchanges require the Company to place before the Board of Directors for their consideration and approval related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s length transactions and transactions which are not executed at arm’s length price recording proper justification for using such alternate pricing mechanism. whether the statement of compliance reflects the status of the Company’s compliance with the provisions of the Code of Corporate Governance and report if it does not. Faisalabad: October 05. 2010. to comply with the Listing Regulations of the respective Stock Exchanges. in all material respects. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code. Further. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. the Company’s corporate governance procedure and risks. As part of our audit of financial statements. which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance. 2010. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. nothing has come to our attention. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended June 30. Further. all such transactions are also required to be separately placed before the audit committee. 2010 Liaqat Ali Panwar (Riaz Ahmad & Company) Chartered Accountants 21 . where the Company is listed. Based on our review. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm’s length price or not. We are not required to consider whether the Board’s statement on internal control covers all risks and controls. we are required to obtain and understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach.
089 17. 2010 No.000 415.001 20.000 55.523 183.050 231.060.245 675.000 220.001 675.001 205.708 20.000 235.425 191.111 1.484 1.780 445.001 175.111 49.001 50.000 445.000 80.811 452.030.080.000 12.445.090 625.684 326.000 340.772 17.001 90.440.000 15.302 97.001 405.001 215.005 313.00 0.087 410.271.309 552.085.000 95.000 5.808 162.000 325.001 100 500 1.000 165.001 70.245.001 2.775 184.734 235.063 1.000 420.445.329 341.844 245.681.129 1.001 415.001 260.001 550.001 160.000 2.711 262.448 200.000 195.422 13 5.004 384.020 132.245.210.001 190.000 225.001 5.03 20 .000 1.001 2.265 218.001 240.080.79 15.001 320.001 95.679 4 39 8 1 2 3 13 1.000 515.319 295.000 2.335 Percentage 1. Total Others Abondand Property Association Non Resident Trust Total Number 8 1.000 170.000 115.001 85.250.000 380.000 265.525 12.000 210.000 45.000 60.207.001 450.335 49.001 440.442 293.452 815.001 1.000 120.000 10.000 1.001 55.001 40.001 120.379 460.98 0.001 210.955 169.001 410.000 175.333 440.680.001 1.001 335.607 223.000 30.001 310.000 410.773 425.001 230.757 3 1 5 4 13 Shares Held 801.001 1.131 607.001 300.207.000 215.000 Total Shares Held 17.748.000 140.536.000 70.633 1.209.000 185.001 1.446 32.001 1.300 755.128 10.000 315.068 2.820.545 No.031 1.757 Shareholding From To 200.300.663 335.000 90.306 487.962 353.001 375.531.973 308.904 1.000 1.001 35. of Shareholders 1 3 2 1 2 1 2 1 2 1 1 1 1 1 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1.000 25.81 2.171 224.981 2.001 1.000 1.060.077 1.922 Categories of Shareholders Financial Institutation Individual Insurance Companies Joint Stock Companies Associated Companies More than 10% Mutual Funds Modaraba & Modaraba Cos Others G.030.001 460.000 1.000 75.65 24.07 0.486 7.001 170.000 35.000 395.270.948 4.001 390.(Form “34”) as at June 30.000 555.01 0.001 105.000 200.001 180.867.459 137.446.000 245.63 41.001 485.242 292.209.000 310.000 490.714 307.492 235.001 205.000 20.596 179.001 195.001 65.001 220.815.000 465.000 110.000 602.73 3.212 414.312 214.000 455.000 Total Shares Held 202.001 80.000 125.001 150.467.489 789.601 210.275.122 324.000 85.001 75.311 988.00 0.380 169.205.000 40.295.875 12.001 305.001 25.000 155.001 30.450.819.02 0.000 1.685.001 135.001 155.001 165.001 15.001 1.075 376.675 419.951 510.966 151.001 110.000 50.922 1.000 180.124 488.636 122.000 680.000 1.000 305.001 510. of Shareholders 507 471 183 316 83 33 13 13 11 5 11 8 4 4 4 3 4 2 2 4 2 1 2 2 2 2 1 2 3 2 1 3 1 1 2 5 Shareholding From To 1 101 501 1.035.412 414.295.001 10.861 1.001 45.442.274 1.Pattern of Shareholding .892 473.001 1.001 115.001 12.065.31 9.000 160.000 100.484 517.03 100 0.000 1.
245. Their Spouse and Minor Children Chief Executive/Director Mr.000 5.122 323.Pattern of Shareholding .030.054 1. 2010 Categories of Shareholders a) Directors.320.122 262.155.525 c) NIT & ICP National Bank of Pakistan-Trustee Department Ni(U)T Fund National Bank of Pakistan Investment Corporation of Pakistan National Bank of Pakistan Investar Accounts NDFC IDBP (ICP Unit) 2.890 3. Chief Executive Officer.748.077 107.536 2.060.807 159. Trustees The Crescent Textile Mills Emp Provident Fund Trust Premier Insurance Limited Shakarganj Mills Limited Ahsan Associates (Pvt) Limited Jubilee Spinning & Weaving Mills Limited 2.194 92.379 313.891 2.068 1.011 239.904 10.875 1.802 8.157 5. Undertaking & Related Parties Crescent Sugar Mills & Distillery Ltd.080.898 1. Muhammad Anwar Directors Ahmad Shafi Tariq Shafi Muhammad Arshad Nasir Shafi Khalid Bashir Muhammad Asif (Nominee NIT) Directors' Spouse Salma Parveen Naryman Tariq Tanveer Khalid Bashir Shaheen Nasir Abida Anwar b) Associated Companies.563 827 4.861 452.474 1.199 58.681.309 Number of shares held 21 .432 212.(Form “34”) as at June 30.838 510.473 6. Crescent Foundation Crescent Steel And Allied Products Ltd.
708 (e) Insurance Companies 1.111 (n) General Public 18.772 (h) Mutual Funds 1.209.486 (f) Modarabas 188.8.131.522 49.141 (j) Non-Residents 5.446 (i) Other companies (Public Sector Companies. DFIs.867.128 (k) Abondand Property 1.422 (l) Association 13 (m) Shareholders More than 10% 12.(Form “34”) as at June 30. NBFIs 801.089 (g) Trusts 10.056.922 22 .Pattern of Shareholding . Corporations & Joint Stock Cos) 4.467. 2010 Number of shares held (d) Banks.
1984. profit and loss account. in our opinion: the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. 1984. its comprehensive income. were necessary for the purposes of our audit. evidence supporting the amounts and disclosures in the above said statements. 2010 and the related profit and loss account. we report that: (a) in our opinion. no Zakat was deductible at source under the Zakat and Ushr Ordinance. (b) i) ii) iii) c) d) Faisalabad: October 05. after due verification. evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and.1)(d)(i) and Note 2. 1984. 2010 Liaqat Ali Panwar (Riaz Ahmad & Company) Chartered Accountants 23 . proper books of account have been kept by the company as required by the Companies Ordinance. as well as. An audit also includes assessing the accounting policies and significant estimates made by management. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. the balance sheet. cash flow statement and statement of changes in equity together with the notes forming part thereof. and in our opinion. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. 1984. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan. the expenditure incurred during the year was for the purpose of the company’s business.20 with which we concur. It is the responsibility of the company’s management to establish and maintain a system of internal control. give the information required by the Companies Ordinance. An audit includes examining. for the year then ended and we state that we have obtained all the information and explanations which. investments made and the expenditure incurred during the year were in accordance with the objects of the company. statement of comprehensive income. in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at June 30. its cash flows and changes in equity for the year then ended. statement of comprehensive income. to the best of our knowledge and belief. 2010 and of the profit. 1980 (XVIII of 1980). on a test basis.Auditors’ Report to the Members We have audited the annexed balance sheet of THE CRESCENT TEXTILE MILLS LIMITED as at June 30. and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the change stated in Note (2. in our opinion and to the best of our information and according to the explanations given to us. and. and the business conducted. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. Our responsibility is to express an opinion on these statements based on our audit.
Balance Sheet as at June 30, 2010
EQUITY AND LIABILITIES Share capital and reserves Authorised share capital 100 000 000 (June 30, 2009: 100 000 000) ordinary shares of Rupees 10 each Issued, subscribed and paid up share capital Reserves Total equity Surplus on revaluation of operating fixed assets net of deferred tax Non-current liabilities Long term financing Deferred tax liability 6 7 3 4
(Rupees in thousand)
1,000,000 492,099 2,180,340 2,672,439
1,000,000 492,099 1,769,738 2,261,837
656,351 8,813 665,164
Current liabilities Trade and other payables Accrued mark-up Short term borrowings Current portion of long term financing Provision for taxation Total liabilities Contingencies and commitments TOTAL EQUITY AND LIABILITIES The annexed notes form an integral part of these financial statements. 11 8 9 10 6
521,393 106,719 4,840,018 451,668 90,890 6,010,688 6,675,852
315,065 177,207 4,883,207 356,845 73,361 5,805,685 6,913,704
(Muhammad Anwar) Chairman & Chief Executive
Balance Sheet as at June 30, 2010
2010 2009 (Rupees in thousand)
ASSETS Non-current assets
Property, plant and equipment Investment in an associate Long term investments Long term loans and advances Long term deposits and prepayments Deferred tax - asset
12 13 14 15 16 17
3,981,181 617,870 255,197 1,928,720 2,827 6,785,795
4,182,387 485,335 227,883 1,812,096 2,217 20,344 6,730,262
Current assets 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
18 19 20 21 22 23 24 25
169,769 1,047,150 2,579,901 224,556 5,956 109,446 49,706 16,419 4,202,903
174,116 940,421 2,562,348 239,191 1,422 22,081 61,909 65,253 18,931 4,085,672
(Khalid Bashir) Director
Profit and Loss Account for the Year Ended June 30, 2010
Note 2010 2009 (Rupees in thousand)
10,863,386 9,406,644 1,456,742 10,750,512 9,175,267 1,575,245
Sales Cost of sales Gross profit
Distribution cost Administrative expenses Other operating expenses
28 29 30
470,413 182,018 136,872 789,303 667,439
392,885 168,350 376,284 937,519 637,726 251,433 889,159 815,948 165,307 238,518
Other operating income Profit from operations Finance cost Share of profit of associate Profit before taxation
536,270 120,022 463,491
Provision for taxation Profit after taxation
Earnings per share - basic and diluted (Rupees)
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar) Chairman & Chief Executive
(Khalid Bashir) Director
Statement of Comprehensive Income for the Year Ended June 30, 2010
2010 2009 (Rupees in thousand)
Profit after taxation Other comprehensive income Surplus / (deficit) on remeasurement of available for sale investments
Total comprehensive income / (loss) for the year
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar) Chairman & Chief Executive
(Khalid Bashir) Director
247 (55.931 16.643 (757.841) (256.853) (90.421 2010 2009 (Rupees in thousand) The annexed notes form an integral part of these financial statements.Cash Flow Statement for the Year Ended June 30.009.452) 27.845) (43.294 10.909) (7) (4.931 (63.159. 2010 Note CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance cost paid Income tax paid Dividend paid Workers' profit participation fund paid Net (increase)/decrease in long term deposits and prepayments Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure on property.572 18.341 162.189) (400.693) (17) 1.138) (610) 453.356) 35 1.553) 297. (Muhammad Anwar) Chairman & Chief Executive (Khalid Bashir) Director 28 .149 947 (228.295 1.363 1.785 (606.359 8.512) 18.net Net cash (used in) / from financing activities Net (decrease) / Increase in Cash and Cash Equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 25 (356.664 76. plant and equipment Proceeds from sale of property. plant and equipment Net decrease in long term loans and advances Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long term financing Repayment of long term financing Short term borrowings .034) (2.419 90.758) (94.383) 6.183 (311.
551 2.607 1.185 492.180.020 8 8 8 179.672.104.769.670 11.376) 21.262 344.086 2. 2009 Transfer from surplus on revaluation of operating fixed assets on account of incremental depreciation .000 11.099 (329.643 (234.412. 2010 (Rupees in thousand) SHARE CAPITAL CAPITAL RESERVE General Fair value RESERVES REVENUE RESERVES Unappropriated Dividend profit / equalization (accumulated loss) 30.670 11.658 75.000 8 179.net of deferred tax Share of associate's realized surplus on revaluation of property.328 300.908 2.773.579 1.356) (150.Statement of Changes in Equity for the Year Ended June 30.099 350. plant and equipment Total comprehensive income for the year Balance as at June 30.356) (55.569.773. (Muhammad Anwar) Chairman & Chief Executive (Khalid Bashir) Director 29 .000 Sub total TOTAL TOTAL EQUITY Balance as at June 30.773.507 1.748.064) 1.643 30. 2010 492.262 344.439 The annexed notes form an integral part of these financial statements.036) 1.643 30.340 2.920.262 399.261.020 (150.262 399.131 1.099 54.328 11.837 - - - - 12 12 12 12 492.789 1.738 2.net of deferred tax Total comprehensive loss for the year Balance as at June 30. 2008 Transfer from surplus on revaluation of operating fixed assets on account of incremental depreciation .
Estimates and judgments are continually evaluated and are based on historical experience and other factors. selling and otherwise dealing in yarn.Notes to the Financial Statements for the Year Ended June 30. These policies have been consistently applied to all years presented. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in the preparation of these financial statements are set out below. buying. dyeing. Off: Zafar Ali Road. Gulberg-V. except freehold and leasehold land measured at revalued amounts and the financial instruments which are carried at fair value. bleaching. 1984. In case requirements differ. 1984. It also requires the management to exercise its judgment in the process of applying the Company's accounting policies. printing. weaving. 2010 1. combing. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance. 2. c) Critical accounting estimates and judgments The preparation of financial statements in conformity with the approved accounting standards requires the use of certain critical accounting estimates. accumulate. distribute. Lahore. 1984 shall prevail. the provisions or directives of the Companies Ordinance. supply and sale of electricity. The Company is engaged in business of textile manufacturing comprising of spinning. The registered office of the Company is located at 40-A.1 Basis of preparation a) Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. b) Accounting convention These financial statements have been prepared under the historical cost convention. stitching. 1984. THE COMPANY AND ITS ACTIVITIES The Crescent Textile Mills Limited (the Company) is a public limited company incorporated in Pakistan under the Companies Ordinance. including expectations of future events that are believed to be reasonable under the circumstances. provisions of and directives issued under the Companies Ordinance. cloth and other goods and fabrics made from raw cotton and synthetic fiber(s) and to generate. The areas where various assumptions and estimates are significant to the Company's financial statements or where judgments were exercised in application of accounting policies are as follows: 30 . The Company also operates a cold storage unit. Its shares are quoted on all the Stock Exchanges in Pakistan. unless otherwise stated: 2.
whereas all non-owner changes in equity are presented in the statement of comprehensive income. As the change in accounting policy only results in additional disclosures. As the change in accounting policy only impacts presentation aspects. d) Standard and amendments to published approved accounting standards that are effective in current year i) Changes in accounting policies and disclosures arising from standard and amendments to published approved accounting standards that are effective in the current year IAS 1 (Revised) 'Presentation of Financial Statements' (effective for annual periods beginning on or after January 01. plant and equipment. Any change in the estimates in the future might affect the carrying amount of respective item of property. disclosure of fair value measurements by level of a fair value measurement hierarchy. IFRS 7 (Amendment) ‘Financial instruments: Disclosures’ (effective for annual periods beginning on or after January 01. This amendment requires enhanced disclosures about fair value measurement and liquidity risk. Taxation In making the estimates for income tax currently payable by the Company. Comparative information has been re-presented so that it also is in conformity with the revised standard. Provision for doubtful debts The Company reviews its receivable balances against any provision required for any doubtful balances on an ongoing basis. 2010 Useful lives. patterns of economic benefits and impairments Estimates with respect to residual values and useful lives and pattern of flow of economic benefits are based on the analysis of the management of the Company.Notes to the Financial Statements for the Year Ended June 30. there is no impact on earnings per share. Further the . the management takes into account the current income tax law and the decisions of appellate authorities on certain issues in the past. 31 . Company reviews the value of assets for possible impairment on annual basis. requiring ‘non-owner changes in equity’ to be presented separately from owner changes in equity in a statement of comprehensive income. there is no impact on earnings per share. 2009). As a result the Company presents in the statement of changes in equity all owner changes in equity. 2009). The provision is made while taking into consideration expected recoveries. In particular the amendment requires . if any. The revised standard prohibits the presentation of items of income and expenses (that is ‘non-owner changes in equity’) in the statement of changes in equity. with a corresponding effect on the depreciation charge and impairment.
complies with the above mentioned requirements to capitalize borrowing cost and hence this change has not impacted the Company's accounting policy. As the change in accounting policy only results in additional disclosures of segment information. e) Standards. there is no impact on earnings per share. IFRS 8 requires presentation and disclosure of segment information based on the internal reports regularly reviewed by the Company's chief operating decision makers in order to assess each segment's performance and to allocate resources to them. interpretations and amendments to published approved accounting standards that are effective in current year but not relevant There are other new standards. Spinning. Weaving. 2010 or later periods: 32 . the Company has determined operating segments on the basis of business activities i. interpretations and amendments to the published approved accounting standards that are mandatory for accounting periods beginning on or after July 01. Under the management approach. as disclosed in note 2.14. Power Generation and Cold Storage. 2009). construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. It introduces the "management approach" to segment reporting. Processing and Home Textile. Previously. 2009 but are considered not to be relevant or do not have any significant impact on the Company's financial statements and are therefore not detailed in these financial statements. the Company did not present segment information as IAS 14 limited reportable segments to those that earn a majority of their revenue from sales to external customers and therefore did not require the different stages of vertically integrated operations to be identified as separate segments. Trading.Notes to the Financial Statements for the Year Ended June 30. ii) Other amendment to published approved accounting standard that is effective in the current year IAS 23 (Amendment) 'Borrowing Costs' (effective for annual periods beginning on or after January 01. The Company's accounting policy on borrowing cost.e. It requires an entity to capitalize borrowing costs directly attributable to the acquisition. f) Standards and amendments to published approved accounting standards that are not yet effective but relevant Following standards and amendments to existing standards have been published and are mandatory for the Company's accounting periods beginning on or after July 01. 2009). 2010 IFRS 8 'Operating Segments' (effective for annual periods beginning on or after January 01.
Notes to the Financial Statements for the Year Ended June 30. 2. There are other amendments resulting from annual improvements projects initiated by International Accounting Standards Board in April 2009 and May 2010. Employees are eligible under the scheme on completion of prescribed qualifying period of service. Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the balance outstanding. g) Standards. The management of the Company is in the process of evaluating impacts of the aforesaid standard on the Company's financial statements. The interest element of the rental is charged to profit over the lease term. 2010 but are considered not to be relevant or do not have any significant impact on the Company's financial statements and are therefore not detailed in these financial statements. IAS 7 'Statement of Cash Flows'. Moreover. IFRS 9 has superseded the IAS 39 'Financial Instruments: Recognition and Measurement'. 2. The amendments are unlikely to have a significant impact on the Company's financial statements and have therefore not been analyzed in detail. finance leases are recorded at the lower of present value of minimum lease payments under the lease agreement and the fair value of the assets.25 percent of the basic salary plus cost of living allowance. IFRS 8 'Operating Segments'. Equal monthly contributions are made to the fund both by the Company and the employees at the rate of 6. Certain categories of financial instruments available under IAS 39 will be eliminated. At inception. IAS 1 'Presentation of Financial Statements'. The related rental obligations. Obligation for contributions to defined contribution plan is recognized as an expense in the profit and loss account as and when incurred. amendments to published approved accounting standards and new interpretations that are mandatory for accounting periods beginning on or after July 01. It requires that all equity investments are to be measured at fair value while eliminating the cost model for unquoted equity investments.3 Liabilities against assets subject to finance lease Leases. 33 . where the Company has substantially all the risks and rewards of ownership of assets are classified as finance leases. specifically in IFRS 7 'Financial Instruments: Disclosures'. are included in liabilities against assets subject to finance lease. interpretations and amendments to published approved accounting standards that are not effective in current year and not considered relevant There are other accounting standards. 2010 IFRS 9 'Financial Instruments' (effective for annual periods beginning on or after January 01. net of finance cost. 2013).2 Employees retirement benefits The Company operates a recognized provident fund for all its permanent employees. IAS 24 'Related Party Disclosures' and IAS 36 'Impairment of Assets' that are considered relevant to the Company's financial statements. it also amends certain disclosure requirements relating to financial instruments under IFRS 7. The liabilities are classified as current and non-current depending upon the timing of the payment.
The charge for current tax also includes adjustments. to provision for tax made in previous years arising from assessments framed during the year for such years. except to the extent that it relates to items recognised in other comprehensive income or directly in equity. 2.6 34 . unused tax losses and tax credits can be utilized. where considered necessary. In this case the tax is also recognised in other comprehensive income or directly in equity. Deferred Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit. 2010 2. The charge for current tax is calculated using prevailing current tax rates or tax rates after taking into account rebates and tax credits. Deferred tax is charged or credited in the profit and loss account.5 2. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets to the extent that it is probable that taxable profits will be available against which the deductible temporary differences.4 Provisions Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event. Dividend Dividend is recognized as a liability in the period in which it is declared. Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on tax rates that have been enacted or substantively enacted by the balance sheet date. respectively. if any. Taxation Current Provision for current tax is based on taxable income for the year determined in accordance with the prevailing law for taxation of income.Notes to the Financial Statements for the Year Ended June 30.
7. revalued amount. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset. except to the extent that it offsets an existing surplus on the same asset recognized in surplus on revaluation of operating fixed assets.1 Operating fixed assets and depreciation a) Cost / revalued amount Fixed assets are stated at cost less accumulated depreciation and any identified impairment loss. All other repair and maintenance costs are charged to profit and loss account during the period in which they are incurred.7 Property.14 and directly attributable cost of bringing the assets to working condition. plant and equipment 2. Upon disposal. as appropriate. Capital work-in-progress is stated at cost less any identified impairment loss.Notes to the Financial Statements for the Year Ended June 30. All transfers from surplus on revaluation of operating fixed assets are net of applicable deferred taxation. 35 . borrowing cost pertaining to the construction / erection period referred to Note 2. A revaluation deficit is recognized in profit or loss. An annual transfer from surplus on revaluation of operating fixed assets to unappropriated profit is made for the difference between depreciation based on the revalued carrying amount of the assets and depreciation based on the assets original cost. 2010 2. in which case the increase is recognized in profit or loss. Any revaluation surplus is credited to surplus on revaluation of operating fixed assets except to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. except freehold land which is stated at revalued amount less any identified impairment loss and leasehold land which is stated at revalued amount less accumulated depreciation and any identified impairment loss. only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Cost of operating fixed assets consists of purchase cost. any revaluation reserve relating to the particular asset being sold is transferred to retained earnings. Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. b) Depreciation Depreciation on assets is charged from the month in which an asset is acquired while no depreciation is charged for the month in which the asset is disposed of.
Subsequently. Now the Company has changed its accounting estimate to charge depreciation at the rate of 5% as a result of annual review of useful lives of assets. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and carrying amount of the asset) is included in profit and loss account in the year the asset is derecognized. 2010 Depreciation is charged to income on reducing balance method. The change in accounting estimate has been applied prospectively in accordance with IAS 8 'Accounting policies.1. plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal.7.Notes to the Financial Statements for the Year Ended June 30. Assets so acquired are depreciated over their expected useful lives.2 Assets subject to finance lease These are initially recognised at lower of present value of minimum lease payments under the lease agreements and fair value of assets. d) Change in accounting estimate Previously depreciation on the office building on leasehold land at Hattar Unit was being charged at the rate of 10%. these assets are stated at cost less accumulated depreciation and any identified impairment loss. except leasehold land on which depreciation is charged on straight line method to write off the cost of operating fixed assets over their expected useful lives at the rates mentioned in Note 12. the figures recognized in these financial statements would have been different as follows: (Rupees in thousand) Net book value of building on leasehold land would have been lower by Profit after taxation would have been lower by 2. Changes in Accounting Estimates and Errors'. Depreciation of leased assets is charged to profit and loss account. Depreciation on additions to leased assets is charged from the month in which an asset is acquired while no depreciation is charged for the month in which the asset is disposed of. 35 32 36 . c) Derecognition An item of property. Had there been no change in this accounting estimate.
Management determines the appropriate classification of its investments at the time of purchase. except for “Investment at fair value through profit or loss” which is measured initially at fair value. 2. plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount.3 Assets subject to operating lease Leases. Other long-term investments that are intended to be held-to-maturity. 2. except investment in an associate.1 Investments at fair value through profit or loss Investments at fair value through profit or loss includes financial assets held for trading designated upon initial recognition as at fair value through profit or loss.8. For investments carried at amortised cost. these are stated at fair values with any resulting gains or losses recognized directly in the profit and loss account. gains and losses are recognised in profit and loss account when the investments are derecognised or impaired. 2010 2. If any such evidence exists. transaction costs and all other premiums and discounts. 2.2 Held-to-maturity investments Investments with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. are subsequently measured at amortised cost. After initial recognition. Investments are initially measured at fair value plus transaction costs directly attributable to acquisition. Investments which are acquired principally for the purpose of generating profit from short term fluctuations in price or dealer’s margin are classified as held for trading. as well as through the amortisation process. The Company assesses at the end of each reporting period whether there is any objective evidence that investments are impaired. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate. This cost is computed as the amount initially recognised minus principal repayments.Notes to the Financial Statements for the Year Ended June 30. Investments intended to be held for an undefined period are not included in this classification. Transaction costs are charged to profit and loss account when incurred.8. the Company applies the provisions of IAS 39 'Financial Instruments: Recognition and Measurement' to all investments. 37 .8 Investments Classification of an investment is made on the basis of intended purpose for holding such investment.7. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit and loss account on a straight line basis over the lease term. which is tested for impairment in accordance with the provisions of IAS 36 'Impairment of Assets'.
An associate is an entity in which the Company has significant influence and which is neither a subsidiary nor a joint venture. Under the equity method.8. except for stock in transit and waste materials. 2. 2. Fair value is determined by reference to stock exchange quoted market bids at the close of business on the balance sheet date. These are sub-categorized as under: Quoted After initial recognition. Where there has been a change recognized directly in the equity of the associate. at which time the cumulative gain or loss previously reported in statement of other comprehensive income is included in profit and loss account.4 Investment in an associate The Company’s investment in its associate is accounted for under the equity method of accounting.9 Inventories Inventories. The profit and loss account reflects the share of the results of operations of the associate. the investment in the associate is carried in the balance sheet at cost plus post-acquisition changes in the Company’s share of net assets of the associate.Notes to the Financial Statements for the Year Ended June 30. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortized. derecognized or is determined to be impaired. Unquoted The investments that do not have a quoted market price in an active market and whose fair value can not be reliably measured. 2010 2. or changes to interest rates or equity prices are classified as available for sale. subsequent to after initial recognition are carried at cost less any identified impairment loss. which may be sold in response to need for liquidity. the Company recognizes its share of any changes and discloses this.3 Available for sale investments Investments intended to be held for an indefinite period of time. are stated at lower of cost and net realizable value. Gains or losses on available-for-sale investments are recognized directly in statement of other comprehensive income until the investment is sold. when applicable.8. in the statement of changes in equity. Cost is determined as follows: 38 . investments which are classified as available-for-sale are measured at fair value. Net realizable value signifies the estimated selling price in the ordinary course of business less costs necessary to be incurred in order to make such sale. The reporting dates of the associate and the Company are identical and the associate’s accounting policies conform to those used by the Company for like transactions and events in similar circumstances.
spare parts and loose tools are valued at moving average cost.11 Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. 2. Cost of work-in-process and finished goods comprises of cost of direct materials. 2. except for stock-in-transit. The following specific recognition criteria must also be met before revenue is recognized: Sale of goods and electricity Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Items-in-transit are stated at invoice amount plus other charges paid thereon. Stock-in-trade Stock of raw materials. usually on the delivery of the goods. 39 . Revenue from sale of electricity is recognized at the time of transmission. Dividends Dividend income is recognized when right to receive the dividend is established.10 Cash and cash equivalents Cash and cash equivalents comprise cash in hand. cash at banks on current accounts and other short term highly liquid instruments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in values. Stock of waste materials is stated at net realizable value. is valued principally at the lower of weighted average cost and net realizable value. while items considered obsolete are carried at nil value. 2010 Stores. labour and appropriate manufacturing overheads. spare parts and loose tools Usable stores. Interest income Revenue is recognized as interest accrues (using the effective interest method that is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).Notes to the Financial Statements for the Year Ended June 30. Raw materials-in-transit are valued at cost comprising invoice value plus other charges paid thereon.
After initial recognition. except for "financial instruments at fair value through profit or loss” which is measured initially at fair value. Gains and losses are recognized in profit and loss account when the loans and receivables are derecognised or impaired. interest accrued. short term borrowings. which is normally the transaction cost. cash and bank balances. d) Trade and other payables Liabilities for trade and other amounts payable are initially recognized at fair value. deposits. loans and advances. trade debts. c) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. accrued mark-up and trade and other payables etc. long term financing. b) Trade debts Trade debts originated by the Company are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. Financial assets and liabilities are recognized at the time the Company becomes a party to contractual provisions of the instruments. 2010 2. Known bad debts are written off and provision is made against debts considered doubtful when collection of the full amount is no longer probable. The particular measurement methods adopted are disclosed in the following individual policy statements associated with each item and in the accounting policy of investments. Gains and losses are recognized in net profit or loss when the liabilities are derecognized as well as through the amortization process.12 Financial instruments Financial instruments carried on the balance sheet include investments. Initial recognition is made at fair value plus transaction costs directly attributable to acquisition. Such assets are carried at amortized cost using the effective interest method. 40 .Notes to the Financial Statements for the Year Ended June 30. as well as through the amortization process. long term interest-bearing loans and borrowings are measured at amortized cost using the effective interest method while short term borrowings are measured at fair value. a) Interest bearing loans and borrowings All loans and borrowings are initially recognized at the fair value of the consideration received less directly attributable transaction costs. other receivables.
The fair value of cross currency swap contracts is determined by reference to market values for similar instruments. Such reversal is recognised in profit or loss account. All other interest. 2. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. had no impairment loss been recognised for the asset in prior years. That increased amount cannot exceed the carrying amount that would have been determined. If the forecast transaction or firm commitment is no longer expected to occur. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. If the hedging instrument expires or is sold. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. the recoverable amount of such asset is estimated. If that is the case. amounts previously recognized in equity remain in equity until the forecast transaction or firm commitment occurs. the carrying amount of the asset is increased to its recoverable amount. Impairment losses are recognized in profit and loss account.14 Borrowing cost Interest. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. mark-up and other charges on long term finances are capitalized upto the date of commissioning of respective qualifying assets acquired out of the proceeds of such long term finances. Any gains or losses arising from changes in fair value on derivatives during the year that do not qualify for hedge accounting are taken directly to profit or loss. terminated or exercised without replacement or rollover. net of depreciation. amounts previously recognized in equity are transferred to profit or loss. or if its designation as a hedge is revoked. mark-up and other charges are charged to profit and loss account. If such indication exists.Notes to the Financial Statements for the Year Ended June 30. 41 . 2. 2010 2.15 Impairment a) Impairment of assets other than financial assets The carrying amounts of the assets other than financial assets are reviewed at each balance sheet date to determine whether there is any indication of impairment.13 Derivative financial instruments The Company uses derivative financial instruments such as forward currency contracts and forward currency swaps to hedge its risks associated with interest rate and foreign currency fluctuations. An impairment loss is recognized wherever the carrying amount of the asset exceeds its recoverable amount.
Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment. the effective interest rate computed at initial recognition). the previously recognized impairment loss is reversed. whether significant or not. or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument has been incurred. and individually or collectively for financial assets that are not individually significant. to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date.e. the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. The carrying amount of the asset shall be reduced either directly or through use of an allowance account. Assets carried at cost If there is objective evidence that an impairment loss on an unquoted equity instrument that is carried at cost.Notes to the Financial Statements for the Year Ended June 30. the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i. Assets carried at amortized cost If there is objective evidence that an impairment loss on loans and receivables carried at amortized cost has been incurred. the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant. 42 . Any subsequent reversal of an impairment loss is recognized in the income statement. 2010 b) Impairment of financial assets The Company assesses at each balance sheet date whether a financial asset or group of financial assets is impaired. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset. The amount of the loss shall be recognized in profit or loss. If. in a subsequent period.
2010 Available for sale financial assets If an available for sale asset is impaired. less any impairment loss previously recognized in profit or loss. - Where the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset.16 Derecognition of financial assets and liabilities Financial assets A financial asset (or. the Company retains the right to receive cash flows from the asset. the asset is recognised to the extent of the Company’s continuing involvement in the asset. where applicable a part of a financial asset or part of a group of similar financial assets) is derecognized where: the rights to receive cash flows from the asset have expired. if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognized in profit or loss. an amount comprising the difference between its cost (net of any principal payment and amortization) and its current fair value. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay. is transferred from equity to the income statement. but has transferred control of the asset. Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset. Reversals in respect of equity instruments classified as available for sale are not recognized in profit. 43 . or (b) has neither transferred nor retained substantially all the risks and rewards of the asset. except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value. or the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset.Notes to the Financial Statements for the Year Ended June 30. the extent of the Company’s continuing involvement is the amount of the transferred asset that the Company may repurchase. Reversals of impairment losses on debt instruments are reversed through profit or loss. the extent of the Company’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. 2. but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement.
Monetary assets and liabilities denominated in foreign currencies are retranslated at functional currency using the rate of exchange prevailing at the balance sheet date.Notes to the Financial Statements for the Year Ended June 30. All differences are taken to the profit and loss account. Transactions in foreign currency during the year are initially recorded in the functional currency at the rate prevailing at the date of transaction. An operating segment's operating results are reviewed regularly by the Chief Executive Officer to make decisions about resources to be allocated to the segment and assess its performance.20 Segment reporting Segment reporting is based on the operating (business) segments of the Company.18 Off setting Financial assets and financial liabilities are set off and the net amount is reported in the financial statements when there is legally enforceable right to set off and the Company intends either to settle on a net basis. 2. including revenues and expenses that relate to the transactions with any of the Company's other components. 2. Where an existing financial liability is replaced by another from the same lender on substantially different terms. liabilities and other balances which can not be allocated to a particular segment on a reasonable basis are reported as unallocated.19 Foreign currencies The financial statements are presented in Pak Rupees. Those income. 44 . which is the Company's functional currency. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses.17 Related party transactions and transfer pricing Transactions and contracts with related parties are carried out at arm's length price determined in accordance with comparable uncontrolled price method. or the terms of an existing liability are substantially modified. such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. and for which discrete financial information is available. 2010 Financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. or to realize the assets and to settle the liabilities simultaneously. and the difference in the respective carrying amounts is recognized in profit or loss. Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 2. 2. assets. expenses.
3. Trading (Buying and selling of garments and Home Textile articles). ISSUED.099 Ordinary shares of the Company held by related parties as at year end are as follows: 2010 2009 (Number of Shares) Crescent Sugar Mills and Distillery Limited Crescent Foundation Crescent Steel and Allied Products Limited The Crescent Textile Mills Limited-Employees Provident Fund-Trustee Premier Insurance Limited Shakarganj Mills Limited Ahsan Associates (Private) Limited Jubilee Spinning and Weaving Mills Limited 2 681 875 1 030 861 452 379 313 122 262 000 5 898 1 563 827 4 748 525 2 681 875 1 030 861 452 379 313 122 264 000 5 898 1 563 827 4 750 525 45 . Inter segment sales and purchases are eliminated from the total.1 29 428 787 49 209 923 294. Processing and Home Textile (Processing greige fabric for production of printed and dyed fabric and manufacturing of Home Textile articles). Transactions among the business segments are recorded at arm's length prices using admissible valuation methods.Notes to the Financial Statements for the Year Ended June 30. SUBSCRIBED AND PAID UP SHARE CAPITAL 2010 2009 (Number of Shares) Ordinary shares of Rupees 10 each fully paid in cash Ordinary shares of Rupees 10 each issued as fully paid bonus shares 2010 2009 (Rupees in thousand) 19 781 136 19 781 136 197.811 29 428 787 49 209 923 3. Power Generation (Generating and distributing power) and Cold Storage (Making of ice and warehousing of perishable goods). Weaving (Producing different quality of greige fabric using yarn). 2010 The Company has six reportable business segments.288 492.099 294.811 197.288 492. Spinning (Producing different quality of yarn using natural and artificial fibres).
643 300.640.340 30.180. 2010 4.908 2.131 5.036) 1.640.131 54. Less: Transferred to unappropriated profit Net of deferred tax Related deferred tax liability 1. RESERVES 2010 2009 (Rupees in thousand) Composition of reserves is as follows: Capital Fair value reserve (Note 4. 21. Add / (less): Fair value adjustment during the year Balance as at June 30.376) 21. 2007 by Messrs Hamid Mukhtar and Company (Private) Limited.640.738 4.552 8 5 13 1.643 (55.640.789 21.Notes to the Financial Statements for the Year Ended June 30.658 75.539 12 1 13 1.1 This represents the unrealized gain on remeasurement of investments at fair value and is not available for distribution. This will be transferred to profit and loss account on realization.640. 46 . Reconciliation of fair value reserve is as under: Balance as at July 01.000 1. SURPLUS ON REVALUATION OF OPERATING FIXED ASSETS .1 to the financial statements.1.640.507 (329.NET OF DEFERRED TAX Surplus on revaluation of operating fixed assets as at July 01.407 1.393 Less: Deferred tax liability as at July 01.104.1 This represents surplus resulting from revaluation of freehold land and leasehold land carried out on June 30.131 30.607 1.748.1) Revenue Dividend equalization General Unappropriated profit / (accumulated loss) 75. Adjustment of deferred tax liability due to re-assessment at year end Incremental depreciation charged during the year transferred to profit and loss account 5.773. an independent valuer enrolled on panel of the State Bank of Pakistan (SBP) as per the basis stated in Note 12.769.773.526 146 (26) (1) 119 1.551 2.539 151 (5) 146 1.000 1.789 350.
000 SBP refinance rate for LTF-EOP plus 3% Habib Bank Limited 1.029 377.000 6 months KIBOR plus 1.019 451.541 55. January 23.833 166. LONG TERM FINANCING . 12 equal half yearly installments January 03.183 SBP refinance rate for LTF-EOP plus 3% 12 equal half yearly installments 10 equal half yearly installments 12 equal half yearly installments 10 equal half yearly installments 12 equal half yearly installments 12 equal half yearly installments 12 equal half yearly installments June 08.108.1 Lender 2010 2009 Rate of interest per annum 6 months KIBOR Number of installments Date of repayment Of first installment Interest Payable Security (Rupees in thousand) 99.985 1.864 356.811 SBP refinance rate for LTF-EOP plus 2% Allied Bank Limited 50. 2007 Half yearly September 22. 2006 Half yearly First pari passu charge over fixed assets of the Company.034 99.955 National Bank of Pakistan 62.019 6.000 250.668 656.576 162. 2011 Quarterly Ranking charge over fixed assets of the Company. 2010 Quarterly December 29. Ranking charge over fixed assets of the Company.SECURED Financing from banking companies (Note 6.45% without any floor or cap 11 equal half yearly installments December 17.845 1.034 6.008.2) Less: Current portion shown under current liabilities 1.Notes to the Financial Statements for the Year Ended June 30.108. March 29.894 199.2 Lender 2010 2009 1. Rate of interest per annum Number of installments Date of repayment Of first installment Interest Payable Security (Rupees in thousand) United Bank Limited 99. 2010 Quarterly Ranking charge over fixed assets of the Company and lien over import documents.682 145.264.591 plus 2% without any floor or cap SBP refinance rate for LTF-EOP plus 2% SBP refinance rate for LTF-EOP plus 2% Allied Bank Limited 150.667 104. March 03.264.000 75. 2006 Quarterly First pari passu charge amounting to Rupees 335 million over fixed assets (plant and machinery) of the company.894 55. 2010 2010 2009 (Rupees in thousand) 6.250 SBP refinance rate for LTF-EOP plus 2% Habib Bank Limited 340. 2006 Half yearly First pari passu charge over fixed assets of the Company.091 241.90% without any floor or cap Allied Bank Limited 92.135 SBP refinance rate for LTF-EOP plus 2% Habib Bank Limited 32.083 35.183 55. Joint pari passu charge over fixed assets of the Company.970 1.1) Term finance certificates (Note 6.464. 2007 Quarterly Joint pari passu charge over fixed assets of the Company and lien over import documents.531 National Bank of Pakistan 125. Joint pari passu charge over fixed assets of the Company.985 199.008. 47 .970 6 months KIBOR plus 1. 2010 Quarterly February 23.351 1.
274) 8.087 (144.963 354 3.932 206 17.932 3.Notes to the Financial Statements for the Year Ended June 30.518 4.729 403 6.813 - 8.393 150.1) Accrued liabilities Advances from customers Retention money due to contractors Income tax deducted at source Unclaimed dividend Payable to Employees Provident Fund Trust Workers' profit participation fund (Note 8.293 26.597 20.065 8. Interest for the year (Note 32) Add: Provision for the year (Note 30) Less: Payments during the year 3.103 1.380 3.222 8.530 million) due to related parties. 2004 between the Company and United Bank Limited.972 169. United Bank Limited has been appointed to act as trustee for the issue. 2010 6.956 943 17. dated March 27.107 34.861 119 153. TRADE AND OTHER PAYABLES Creditors (Note 8. 2010 2009 (Rupees in thousand) 7.097 5.496 521. The deed requires that the trustees will ensure adherence to terms and conditions of the security documents.619 million (2009: Rupees 6.138 17.380 3. specifies the rights and obligations of the trustees.380 21. DEFERRED TAX LIABILITY Taxable temporary differences Tax depreciation allowance Tax on investment in associate Surplus on revaluation of operating fixed assets Deductible temporary differences Unused tax losses 118.393 123. Modernization and Replacement (BMR) of existing facilities of the Company was converted in financial year 2004 to privately placed term finance certificates having face value of Rupees 5.932 2.000 each.932 3.932 48 .2. Workers' profit participation fund Balance as on July 01.2 This includes amounts in aggregate of Rupees 5.494 315.2) Other payables Workers' welfare fund 286.204 455 2.1 Syndicated loan facility of Rupees 550 million (2009: Rupees 550 million) obtained from United Bank Limited for Balancing. The trust deed.472 5.1 8.
10.207 10. 2010 2009 (Rupees in thousand) 9.4 The aggregate short term finances are secured by way of hypothecation on all present and future current assets of the Company.2 Export refinances have been obtained from banking companies under SBP’s refinance scheme on which service charges at the rate of 7.207 10.847.4) 1.4) State Bank of Pakistan (SBP) refinance (Note 10. 10.938 83.840.2.00 percent) per annum. 2010 8.50 to 2.553 177.460 million). pledge on finished stocks and lien on export letters of credit or firm contracts.00 percent) per annum.616 4.409.719 64.462 million) are available at mark-up ranging from LIBOR plus 2.748.600 Short term foreign currency finances (Note 10. 49 .secured 1.772 1. ACCRUED MARK-UP Long term financing Short term borrowings 22.1 and Note 10.748 million (2009: Rupees 1.4) 1.50 percent) per annum are payable.438 million) are obtained from banking companies under mark-up agreements and carry mark-up ranging from KIBOR plus 1.883.243. These form part of aggregate borrowing limits of Rupees 1.835 4.600 1.3 Short term foreign currency finances amounting to Rupees 1.Notes to the Financial Statements for the Year Ended June 30.40 to 5.90 percent (2009: KIBOR plus 1.2 and Note 10.018 2.447.654 112.856 million (2009: Rupees 1.1 The finances aggregating to Rupees 2.00 percent (2009: LIBOR plus 2.00 to 4.1 The Company retains workers' profit participation fund for its business operations till the date of allocation to workers. Interest is paid at prescribed rate under the Companies Profit (Workers' Participation) Act. SHORT TERM BORROWINGS From banking companies . 1968 on funds utilized by the Company till the date of allocation to workers.802 Short term finances (Note 10. 10.3 and Note 10.00 percent (2009: 7.50 to 9.781 106.20 to 7.209 million (2009: Rupees 2.025.75 to 5.
240 million) as its share of contingent liabilities of its associate.872 million).260 4.385 million (2009: Rupees 117.985 million). If documents of exports are not provided on due dates.143 million (2009: Rupees 120.182.181 4.807 million (2009: Rupees 19.809 3.180.848 million) are given by the banks of the Company to Sui Northern Gas Pipeline Limited against gas connection and Collector of Customs against import of raw material and supplies.127 2.297 million (2009: Rupees 51. cheques issued as security shall be encashable. The Company is contingently liable to the extent of Rupees 84.176 million) are issued to Custom Authorities in respect of duties on imported material availed on the basis of consumption and export plans.1) Capital work in progress (Note 12. 2010 2009 (Rupees in thousand) 12.273 million (2009: Rupees 8. PLANT AND EQUIPMENT Operating fixed assets (Note 12. Commitments Contracts for capital expenditure amounting to Rupees 59.387 50 .981.2) 3.Notes to the Financial Statements for the Year Ended June 30.372 32.948. PROPERTY. Letters of credit other than for capital expenditure amounting to Rupees 190. 2010 11. CONTINGENCIES AND COMMITMENTS Contingencies Letters of guarantee of Rupees 115. Post dated cheques of Rupees 9.
368 4.364 (431) 390 (41) (672) 2.014 45.652.895 4.644) 7.406 5.705) 6.216. 2009 Cost / revalued amount Accumulated depreciation Net book value Year ended June 30.652. 2010 Cost / revalued amount Accumulated depreciation Net book value Annual rate of depreciation (%) 1.124) (35.979 (58.71.(24.355.242) 2.015 10.100 4.449 1.234 264.369 65. 2010 Opening net book value Additions Disposals: Cost Accumulated depreciation Depreciation charge Closing net book value At June 30.652.644) (2.911 13.394 4.948.934) (15.132 6.283) 5.369 6.652.(RUPEES IN THOUSAND) -------------------------------------------------------------------------------Land Freehold At July 01.340.527 32.542) 8.419) 17.680) 45.321 7.615) 2.483) (1.853 2.449 55.509.01 306.700 6.948.538) (25.576) 3.385 74.124.474 3.065 1.700 1. 2010 12.326 (574) 3.126 306.364 37.127 1.045 18.479 (1.612 2.003 2.539 6.578) (1.687 49.000 (813) 5.218) 123.676 (29.324 (10.126 (61) 5.014 35.329.173.700 - 6.050 (43.372 50 51 .895 4.180.000 (874) 5.263 5-10 10 67.905 (183.652.180.475 4.652.785 20 20 7.700 1.350) 6.756) .958) 123.435 (208) (1.364 3.700 6.095.431 4.372 (2.234) 113.566) 2. 2008 Cost / revalued amount Accumulated depreciation Net book value Year ended June 30.398 .015 20 53.253.216.007) 18.850) 17.045 5-10 49.Buildings on and electric Vehicles Total leasehold and machinery equipment Leasehold freehold land equipment Installations land fixtures ------------------------------------------------------------------------.310.340 (61.095) 18.785 1.305 6.187 299.014 712 45.526.577.180.355.042) 4.420 (23) (2.700 5.369 17.100 1.853 (1.449 7.325) 6.687 (626) 489 (137) (10.000 (935) 5.1 Operating fixed assets Factory tools Gas and Buildings on Furniture Plant and Office Land .003 2.274 50.279 (193.095.921 (45.700 5.127 1.437 (59.371 (3.705) 6.682 (32.651 20 35.263 5.406 23.246 (31.652.136) 8.371 44.333) 3. 2009 Opening net book value Additions Disposals: Cost Accumulated depreciation Depreciation charge Closing net book value At June 30.213 (1.853 2.651 4.495 79.948 2.943.274 458 (1.895 4.814) (275.371 44.906 61.029) 10.505) 113.988) 5.310.200) 2.670 7.687 20.475 4.948 (2.948) (246.410) (9.833) 10.670 11.918 (15) 13 (2) (1.464 3.581 (172.807) (2.925) (262.065 123.431 4.295 (3.147) (10.658) (2.127 1.353 (28.474 3.907) 1.074 (86.249 .761.652.126 127.321 49.757) 3.759) 1.260) 127.809 222.169 (32.700 1.864) 4.544) 20.310.187 (61) 5.431 4.830) (2.103 (20.834 (3.337) (2.809 64.252) 3.700 1.051) 65.Notes to the Financial Statements for the Year Ended June 30.376 (30.(95.268.699 (45.700 1.788 (119) (232.874) 3.117.697 (4.371) (29.266 (4.368 35.652.354 (9.670 1.612 33.652.358) (2.428) (2.602) (6.
288 12.403 4. Whereas the land situated at Faisalabad granted to the Company by the Government of Punjab in 1958 under Land Acquisition Act. Messrs Hamid Mukhtar and Company (Private) Limited. If the freehold and leasehold land were measured using the cost model.403 4.1 The land of the Company.719 18.122 834 834 13.403 3. 2007 using the present market value at Rupees 62 million.403 3.834 15.885 17. the carrying amount would be as follows: 12.836 17.030 275.1. 2010 12.Freehold Land .174 262.1.597 million taking into account conditions specified under various directives of the Government by an independent valuer.4 Depreciation charge for the year has been allocated as follows: 2010 2009 (Rupees in thousand) Cost of sales (Note 27) Administrative expenses (Note 29) 246.1.1. 1894 for the specific purpose of using it as an industrial undertaking had been revalued at Rupees 1.864 52 .2 Fixed assets of the Company with carrying amount Rupees 3.078 16.Leasehold 13.3 Cost 2010 Accumulated Net book depreciation value Cost 2009 Accumulated Net book depreciation value (Rupees in thousand) Land . except the land situated at Faisalabad.280 million) are subject to first pari passu charge to secured bank borrowings.904 million (2009: Rupees 3.Notes to the Financial Statements for the Year Ended June 30.239 13. The Company had revalued this land based on the advice from its legal counsel. had been revalued as on June 30.122 883 883 13. 12.719 18.252 260.
Faisalabad. Company Employee.794 500 Negotiation Aggregate of other items of property.336 53 60 113 206 220 366 298 335 242 65 65 1. House No. Sakhi Hussain Shah.809 2. New Town. 247 Negotiation Mr. 475 Insurance claim Premier Insurance Limited. Muhammad Rizwan. 215 Negotiation Mr. Samanabad. House No. 500 Negotiation Mr.757 8. Nazim Abad.. 3. House No.5 Detail of operating fixed assets.260 53 .2 Capital work in progress Building Plant and machinery Advances for vehicles 3. exceeding the book value of Rupees 50. Mansoorabad. Faisalabad.A.133 Mr.337 336 6.295 2010 2009 (Rupees in thousand) 12. Cost Accumulated Net book Sale depreciation value proceeds Mode of disposal Particulars of purchasers (Rupees in thousand) Plant and Machinery Cone winder Comber. Faisalabad. 800 Negotiation Mr.000 15. Azam Javaid. Karachi. Karachi. step cleaner Vehicles Honda Civic Suzuki Mehran Toyota Corolla Suzuki Cultus Toyota Corolla Honda City Suzuki Mehran Suzuki Mehran 1 5 178 206 384 125 146 271 989 238 823 311 778 609 294 294 4. 720 Negotiation Mr. Tariq Chowk. 205.000 disposed of during the year is as follows: Description Qty. Noor Pur Road. 5.Notes to the Financial Statements for the Year Ended June 30.165 H. Muhammad Raees-Ud-Din. P-1013/12-C.195 458 1.260 2. Canal Road. 2010 12.240 Rupees 50.762 27.420 427 2. 14/7-A-5. Faisalabad. Shahabad. Fatima Jinnah Road.232 1. 337 Insurance claim Premier Insurance Limited. Street No. Abid Iqbal. P-5857.535 Negotiation 630 Negotiation 2. plant and equipment with individual book values not exceeding 9.813 13.797 1. 332-A. House No. P-298. House No. Montgomery Bazar.113 851 359 359 6. 1 1 1 1 1 1 1 1 1. Haq Spinning Mills. Mr.815 32. Asmat Ali Javed.189 609 1.1. Faisalabad. Muhammad Idrees Ch.
813 6.591.087.1) Share of post acquisition profit: As at July 01.010 3.870 269. For the year Realised surplus on revaluation of property.Notes to the Financial Statements for the Year Ended June 30.826 3.127 7.264 216. The summarized financial information of CBL is as follows: Associate's balance sheet: Current assets Non-current assets Current liabilities Non-current liabilities Net assets Associate's revenue and profit: Revenue Profit before taxation for the year Profit after taxation for the year 4.516 3.764 165.080 54 .052.335 13.635.726) (2.022 12.610.587 560. 2010 2010 2009 (Rupees in thousand) 13. an unquoted public limited company involved in manufacturing of textile products.99%) interest in Crescent Bahuman Limited (CBL).768) (2.unquoted 26 926 433 (2009: 26 926 433) ordinary shares of Rupees 10 each (Note 13.99% (2009: 32.459) 1.088) 180.606 617.165.514 363.544.875 (4.172.1 The Company holds 32.941.071 485.513 348.071 120.238 501. 269. plant and equipment As at June 30.031.726 434. INVESTMENT IN AN ASSOCIATE Crescent Bahuman Limited .307 216.101.973 (3.264 50.
105 20. Equity held 9.81% (2009: 7.98% (2009: 11. Equity held 11. Equity held 0.40% (2009: 9. Equity held 11% (2009: 11%) Unquoted Renfro Crescent (Private) Limited 4 317 252 (2009: 4 317 252) fully paid ordinary shares of Rupees 10 each.56% (2009: 0.98%) Others Quoted Crescent Fibres Limited 351 657 (2009: 351 657) fully paid ordinary shares of Rupees 10 each.186 46.130 - 4. Equity held 7.854 4.625 91.1) Premier Insurance Limited 169 573 (2009: 147 455) fully paid ordinary shares of Rupees 5 each.124 5.40%) Shakarganj Mills Limited 5 427 488 (2009: 5 427 488) fully paid ordinary shares of Rupees 10 each. 2010 2010 2009 (Rupees in thousand) 14.94%) (Note 14.160 27.08% (2009: 3.83% (2009: 2.31%) Jubilee Spinning and Weaving Mills Limited 182 629 (2009: 182 629) fully paid ordinary shares of Rupees 10 each.159 2.94% (2009: 7.31% (2009: 0.52% (2009: 11.08%) Crescent Knitwear Limited 1 200 000 (2009: 1 200 000) fully paid ordinary shares of Rupees 10 each.159 43.625 43. LONG TERM INVESTMENTS Available for sale Related parties Quoted Crescent Jute Products Limited 2 738 637 (2009: 2 738 637) fully paid ordinary shares of Rupees 10 each. Equity held 2.Notes to the Financial Statements for the Year Ended June 30.629 15.56%) Crescent Steel and Allied Products Limited 6 209 676 (2009: 6 209 676) fully paid ordinary shares of Rupees 10 each. Equity held 3.668 - 12. Equity held 12.81%) 2 746 050 (2009: 2 746 050) fully paid preference shares of Rupees 10 each.52%) Crescent Sugar Mills and Distillery Limited 975 944 (2009: 975 944) fully paid ordinary shares of Rupees 10 each.83%) Crescent Spinning Mills Limited 466 800 (2009: 466 800) fully paid ordinary shares of Rupees 10 each. Equity held 0.56% (2009: 4. Equity held 4.162 3.50%) 4.680 27.56%) Shams Textile Mills Limited 812 160 (2009: 812 160) fully paid ordinary shares of Rupees 10 each.50% (2009: 12.181 27.359 5. Equity held 11.000 55 .461 35 35 546 702 91. Equity held 7.
The conversion is set in the ratio of 167 ordinary shares for every 1.800 266 2.812. Equity held 2.162 1.343) 75.928.082) 21.930 3. LONG TERM LOANS AND ADVANCES Considered good: Loan and advances to Crescent Bahuman Limited associate (Note 15. Investment Finance Corporation (IFC) and other senior lenders for revival of the project.197 500 270.317 2.927.980 1.650 1.1 The Company has the right to convert these shares into ordinary shares at end of every financial year in whole or in part through a tender offer by the Issuing Company.448 1.22%) 500 206.050 1.1) Secured: Executives (Note 15.131 227.168 1.Notes to the Financial Statements for the Year Ended June 30.845 1. Memorandum of Understanding (MOU) signed on January 25. 1.809.000 preference shares at a face value of Rupees 10 each.883 Less: Impairment loss charged to profit and loss account (Note 30. 2001 amongst The Crescent Textile Mills Limited (CTML).1 This represents balance transferred from current account of Crescent Bahuman Limited (CBL) as at September 30.22% (2009: 2.834 (64.188 1.931. 2000 and further long term loan contributed under the Restructuring of CBL.800 648 2.3) Other employees 15.000 each.096 Less: Current portion shown under current assets (Note 21) Executives Other employees 15.814.789 255. 2010 2010 2009 (Rupees in thousand) Unquoted Premier Financial Services (Private) Limited 500 (2009: 500) fully paid ordinary shares of Rupees 1.066 1.751 (27.720 3.2) Add: Fair value adjustment 14.195 4. CBL. The principal figures and carrying amount of such balances are: 56 .
000 342. cumulative.317 The loan including accrued mark-up are unsecured and subordinated to all loans owed by CBL or to be obtained by CBL under the Restructuring Plan for repayment.650 57 .30 percent per annum (2009: 15.600 2. 15.400 504.390 1.000 342.927.400 504.650 1.400 504. amounting to Rupees 770. 3.274. The terms of Preference Shares as approved by the shareholders are 5%.000 428. Less: Repayments Closing balance as at June 30.050 5. 2010 2010 2009 (Rupees in thousand) Principal amount a) Principal (short term converted advance) b) Accrued mark-up on short term converted advance upto September 30.000 652.000 342.2 Board of Directors and shareholders of the Company have resolved the conversion of all the sums due from Crescent Bahuman Limited on account of long term loan and interest receivable thereon till date of conversion into Preference Shares of the investee company subject to regulatory approvals to be obtained by the said company.000 1.30 percent). During the year.400 428.400 Carrying amount a) Principal (short term converted advance) b) Accrued mark-up on short term converted advance upto September 30.400 504.788 1.Notes to the Financial Statements for the Year Ended June 30.400 million). carries markup at the rate of 15.000 1. The principal portion of short term converted advance and long term convertible loan.809. 15.274. 2000 c) Long term convertible subordinated loan d) Effect of amortization and mark-up on principal portion of short term converted advance and long term convertible subordinated loan 428.740 3. 2000 c) Long term convertible subordinated loan 428.188 534. unlisted.000 342.400 million (2009: Rupees 770. maximum aggregate amount at the end of any month was Rupees 1.3 Reconciliation of carrying amount of loans to executives: Opening balance as at July 01. participatory and convertible preference shares of Rupees 10 each. non-voting.927 million (2009: Rupees 1.809 million).917 1.
138 1.390 173 2. LONG TERM DEPOSITS AND PREPAYMENTS Security deposits Prepayments Less: Current portion shown under current assets (Note 22) 2.1 Maximum aggregate balance due from executives at the end of any month during the year was Rupees 3.Notes to the Financial Statements for the Year Ended June 30.138 252 2.516 107 169. SPARE PARTS AND LOOSE TOOLS Stores (Note 18.3.702 20.1 This includes stores in transit amounting to Rupees 16.390 million).492 3. DEFERRED TAX ASSET Taxable temporary differences Tax depreciation allowance Tax on investment in associate Surplus on revaluation of operating fixed assets Deductible temporary differences Unused tax losses - (138.3.630 803 2.2 58 .650 million (2009: Rupees 5.344 18. These represent Qarz-e-Hasna given to executives and employees and are secured against balance to the credit of employee in the provident fund trust.827 2.605) (21.769 150. 18.3.358) 180. Stores and spare parts include items which may result in fixed capital expenditure but are not distinguishable at this stage. These are recoverable in equal monthly installments. 2010 2009 (Rupees in thousand) 15.376 41 174.217 17.116 18.1) Spare parts Loose tools 155.3 16.103 million (2009: Rupees 8.607) (146) (160. STORES.778 million).2 15. The fair value adjustment in accordance with the requirements of IAS 39 'Financial Instruments: Recognition and Measurement' arising in respect of staff loans is not considered material and hence not recognized.699 23. 2010 15.146 14.
747 33. trade debts of Rupees 1.346. amounting to Rupees 4.201 703.586 105.348 Considered doubtful: Others .145 2.901 215. The ageing analysis of these trade debts is as follows: Upto 1 month 1 to 6 months More than 6 months 570. STOCK IN TRADE Raw materials Work in process Finished goods Waste 20.610 million (2009: Rupees 128.150 179.747 33.783 2.747 33.186 2.747 33.Notes to the Financial Statements for the Year Ended June 30.1 As at June 30. Crescent Bahuman Limited. These relate to a number of independent customers from whom there is no recent history of default.647 15.672 84.579.258 million).601 1. TRADE DEBTS Considered good: Secured (against letters of credit) Unsecured (Note 20. 2010. Add: Provision for the year As at June 30.747 - 33.428 940.295.390.142 4.136 20.715 2.047. 59 .unsecured Less: Provision for doubtful debts As at July 01.136 million) were past due but not impaired.562.756 21.838 680. 33.013 76.565 2.747 - 20.732 781.295.647 million (2009: Rupees 105.690 1.421 189.2 It includes amount receivable from the associate. 2010 2010 2009 (Rupees in thousand) 19.263 287 89.2) 178.
232 109.747 million (2009: 33. 5.1) Letters of credit Income tax 67 2.001 152 803 5.952 109. trade debts of Rupees 33.3 As at June 30.909 12.448 38.Notes to the Financial Statements for the Year Ended June 30.865 1.239 89.050 2.767 million) SHORT TERM DEPOSITS AND PREPAYMENTS Margin deposit Short term prepayments Current portion of long term prepayments (Note 16) 22.824 million (2009: Rupees 23.645 4.665 224.191 21.744 12.446 25 22.747) were impaired and provided for.181 1.446 12.115 239.195 182. LOANS AND ADVANCES Considered good: Employees . 330 15.744 61. 2010.1 These include advances to related parties amounting to Rupees 4. The ageing of these trade debts was more than six months.909 60 .656 37.363 61.956 701 548 173 1. 2010 20.818 161.422 23.interest free Current portion of long term loans (Note 15) Advances to suppliers (Note 21.066 73.952 12. OTHER RECEIVABLES Considered good: Due from related parties Export rebate and claims Sales tax and special excise duty refundable Miscellaneous Considered doubtful: Export rebate and sales tax refundable Less: Provision for doubtful debts As at June 30.556 142 2. 2010 2009 (Rupees in thousand) 21.
419 17.2) 25.061 102.686.494) 65.738 20.quoted Samba Bank Limited 21 897 007 (2009: 21 897 007) fully paid ordinary shares of Rupees 10 each.217 11.158 10.017 16.241.046 3.789 2.50% (2009: 2.50%) Less: Impairment loss charged to profit and loss account (Note 30.Notes to the Financial Statements for the Year Ended June 30.402 1. CASH AND BANK BALANCES With banks: On current accounts Including US$ 70.928 51.986.863.638 1.019 166.214.750.217 2.555.975 (2009: US$ 164.036 3.293 18.200.547) 49.1 Local Sales Waste Energy Less: Sales tax Processing income 65.666.116 14.512 2.946.685 10. SALES Export Local (Note 26.037 4.175 3.353 41.149 2.706 179.890 147.074 3.253 (15.332 2.385 2.042 41.747 (114.253 15. Equity held 2.707.403. SHORT TERM INVESTMENTS Available for sale Others .123 46.1) Cold storage Export rebate Duty drawback 26.707.555 10.241.685 61 .059 135.931 7.445) Cash in hand 26.386 7. 2010 2010 2009 (Rupees in thousand) 24.
267 Cost of sales .233) 6.331 816.546 55.818 2.4) Other factory overheads Work-in-process Opening stock Closing stock Cost of goods manufactured Finished goods Opening stock Closing stock 2.834 7.607 50.895 2.848.406.981 17.255 1.277.732) (7.779 376.927 (178.885 623.405.619.285.2 Exchange gain due to currency rate fluctuations relating to export sales amounting to Rupees 115.026.013) 2.449 2.557 million) by the Company.798. spare parts and loose tools Packing materials consumed Processing and weaving charges Salaries.purchased for resale 27.514 976.176) 7.1) Cloth and yarn purchased Stores.025 286.721 564.337.Notes to the Financial Statements for the Year Ended June 30.814 9.848.619.178.344 (179. 2010 2009 (Rupees in thousand) 27.894) 7.453 2.947 75.204.996 million (2009: Rupees 11.716 246.525 million (2009: Rupees 194.078 9.605 (76.994 684.471 325. COST OF SALES Raw material consumed (Note 27.570) 70.746) (99.022 7.739 6.255 392.914 3. 62 .888 76.2) Fuel and power Repair and maintenance Insurance Depreciation (Note 12. wages and other benefits include provident fund contribution of Rupees 10.292 million) has been included in export sales.570 (783.408.672) 2.826 9.331 27.847.838 (84.983 369.328 15. 2010 26.096 6.1.838) (1.1 Raw material consumed Opening stock Add: Purchased during the year Less: Closing stock 179.309 (684.290 533.766.211 260.644 2.2 Salaries. wages and other benefits (Note 27.714 755.013 2.3184.108.40.2067 557.345 859.
119 168.162 201.367 105 11.892 3.425 48.568 16.2) Software maintenance Depreciation (Note 12.325 4.629 2.222 15. rates and taxes Repair and maintenance Insurance Printing and stationery Communication Subscription Legal and professional Auditors' remuneration (Note 29.920 15.530 217 392.219 1.413 18.350 29.1.1) Freight and shipment Distribution Commission to selling agents Advertisement 16.258 million (2009: Rupees 0.071 182.101 202 470.213 1.4) Other charges 29.591 1.1 Salaries.521 2.207 18.285 1. ADMINISTRATIVE EXPENSES Salaries.973 174. wages and other benefits (Note 28.643 4. 2010 2010 2009 (Rupees in thousand) 28.248 1.543 7.294 million) by the Company. conveyance and entertainment Rent.1) Meeting fee to non-executive directors Traveling. Auditors' remuneration: Riaz Ahmad and Company Audit fee Half yearly review Reimbursable expenses 29. DISTRIBUTION COST Salaries.797 6.740 150.2 1. wages and other benefits include provident fund contribution of Rupees 0.885 28.831 3.285 63 .1 Salaries. wages and other benefits include provident fund contribution of Rupees 3.766 115 9.145 2.285 4.359 million) by the Company.877 70.000 160 125 1.000 160 125 1.Notes to the Financial Statements for the Year Ended June 30.285 8.018 92.845 3. 97.763 182.684 million (2009: Rupees 3. wages and other benefits (Note 29.030 8.174 5.
494 178.890 64.2 27.284 30.547 42.458 15.491 247 3.2) Gain on fair value of derivative financial instrument Income from non-financial assets Sale of empties and scrap Rental income Gain on sale of property. OTHER OPERATING INCOME Income from financial assets Dividend Income (Note 31.2) Exchange loss Provision for doubtful debts Debit balances written off Workers' profit participation fund Workers' welfare fund 4.1) Mark-up on loans and advances (Note 31.791 29.300 134 202.721 202.855 16.212 227 3.115 35 17.082 114.358 27.Notes to the Financial Statements for the Year Ended June 30.578 251.690 178.533 171.433 64 .056 7.854 46.1) Impairment loss on investments (Note 30.494 376.343 15.418 48.380 7. plant and equipment Credit balances added back Research and development refund Sundry receipts 12.155 214 2.872 5.1 The directors and their spouses have no interest in donations made by Company during the year. Impairment loss on investments Long term investments (Note 14) Short term investments (Note 24) 30.458 790 40.958 197 20.002 136.890 58.576 31. 2010 2010 2009 (Rupees in thousand) 30.394 42.842 212.932 1.576 139. OTHER OPERATING EXPENSES Donations (Note 30.567 131.
292 million). Reconciliation of tax expenses and product of accounting profit multiplied by the applicable tax rate is not presented.234 815.890 27.721 32.931 118. 2010 are Rupees 412.Notes to the Financial Statements for the Year Ended June 30.111 404. minimum tax on local sales and tax on other operating income under the relevant provisions of the Income Tax Ordinance.567 134 134 31.1 Provision for current taxation represents the tax deducted against export sales.821 73.109 87.673 536.421 14.2) Loss on fair value of derivative financial instrument Bank charges and commission 125.931 22.948 33.419 12. FINANCE COST Mark-up on: Long term financing Short term borrowings Workers' profit participation fund (Note 8.081 202.2 Mark-up on loans and advances Associate Crescent Bahuman Limited Mark-up on principal portion of short term converted advance and long term convertible subordinated loan Amortization of accrued mark up on short term converted advance upto September 30.2) 90.709 56.498 33. 65 . PROVISION FOR TAXATION Charge for the year: Current (Note 33.487 131. 2001. Tax losses available as at June 30. being impracticable.280 206 6. 2010 2010 2009 (Rupees in thousand) 31.184 542.270 172. 2000 Amortization of long term convertible subordinated loan Mark-up on overdue receivables 117.212 million (2009: Rupees 516.1 Dividend Income From related parties: Premier Insurance Limited Crescent Steel and Allied Products Limited 148 12.358 117.361 (13.000 6.1) Deferred (Note 33.863) 59.871 13.
518 275.00 3.002 (120.670 179.513 1.491 262.890 (197) 17.861 119 8.270 72.863) 344.494 (165.Notes to the Financial Statements for the Year Ended June 30.958) 35 42.159.252 (3.BASIC AND DILUTED (RUPEES) Profit for the year (Rupees in thousand) 118.864 (2.009.2 Deferred tax effect due to : Tax depreciation allowance Unused tax losses Tax on investment in associate Surplus on revaluation of operating fixed assets Opening balance as at July 01 Related to surplus on revaluation of operating fixed assets 34.344) 6.642 (161) (13.022) (117.020 (NUMBER OF SHARES) Weighted average number of ordinary shares 49 209 923 49 209 923 (RUPEES) Earnings per share 7. plant and equipment Debit balances written off Impairment loss on investments Credit balances added back Provision for workers' profit participation fund Provision of workers' welfare fund Share in profit of associate Income from loans and advances Finance cost Working capital changes (Note 35.418) 3. EARNINGS PER SHARE . 2010 2010 2009 (Rupees in thousand) 33.64 No figure for diluted earnings per share has been presented as the Company has not issued any instrument carrying options which would have an impact on earnings per share when exercised. 35.107 (144. CASH GENERATED FROM OPERATIONS Profit before taxation Adjustments for non-cash charges and other items: Depreciation Gain on disposal of property.576 (29.813 20.948 (126.871) 536.274) 34.785 238.1) 463.607 146 (20.791) 247 178.380 7.932 1.605 (180.307) (180.640) 815.931 138.702) 21.344 (1.643 66 .780) 1.226) 27.
980 891 198 240 124 3.588) 36.980 891 198 240 124 3.185 (4.925) 53.860 444 3.534) 22.160 480 240 624 300 8.365 (79.604 1 4.347 (106.498 8.157 63. REMUNERATION OF CHIEF EXECUTIVE OFFICER.589 1 1.423) 133 (11.972 393 3.775) 186.537) (113.233 (456.343 62. DIRECTOR AND EXECUTIVES The aggregate amount charged in the financial statements for the year for remuneration including all benefits to Chief Executive Officer.598 38 40.505 628 165 2.1 Working capital changes Decrease / (increase) in current assets: Stores.160 480 240 609 300 8.433 1 39.988) (126.780) Increase / (decrease) in current liabilities: . 2010 2010 2009 (Rupees in thousand) 35.883 3.Notes to the Financial Statements for the Year Ended June 30.084 3.800 2.433 1 1.557 9.081 (47.378 3.114 300.792) (46.611 663 155 2.288 72.(RUPEES IN THOUSAND) --------------------------Managerial remuneration Allowances House rent Utilities Servant Medical Special allowance Reimbursable expenses Cost of living allowance Contribution to provident fund 4.Trade and other payables 36.289) (6. Director and Executives of the Company is as follows: Chief Executive Officer 2010 2009 Director 2010 2009 Executives 2010 2009 -----------------------.800 2.272 3.729) (17.970 36 Number of persons 67 . spare parts and loose tools Stock in trade Trade debts Loans and advances Short term deposits and prepayments Interest accrued Other receivables 4.513 41.
TRANSACTIONS WITH RELATED PARTIES The related parties comprise associated companies.184 38. 2010 2009 (Rupees in thousand) 36. other than those which have been specifically disclosed elsewhere in these financial statements are as follows: ASSOCIATED COMPANIES Purchase of goods and services Sale of goods and services Processing income Dividend income Insurance premium paid Interest income 189. EMPLOYEES’ RETIREMENT BENEFITS Contribution to Employees’ Provident Fund Trust Contribution to Employees’ Old Age Benefit Institution 14.000) has been paid to non-executive directors.827 12.477 134 20. 2010 36.358 403.721 (Number) Bonus shares received 22 118 577 921 68 .593 2.212 131. The Chief Executive Officer is provided with free use of the Company maintained vehicles and residential telephone. Meeting fee amounting to Rupees 105. The Company in the normal course of business carries out transactions with various related parties.578 15.640 33.538 1.Notes to the Financial Statements for the Year Ended June 30.567 23.210 17.974 33.604 248. Detail of transactions with related parties.2 37.938 18.000 (2009: Rupees 115.988 202. staff retirement fund and key management personnel.1 Certain Executives are provided with rent free furnished accommodation and free use of Company maintained vehicles.437 207.
2010 2010 2009 (Rupees in thousand) Company’s contribution to Employees' Provident Fund Trust 14.) Actual production converted to 20s count based on 3 shifts per day for 1 095 shifts (2009: 1 095 shifts) (Kgs. Power plant is operated according to the requirement of electricity. Finishing and Home Textile 75 527 78 220 The plant capacity of these divisions are indeterminable due to multi product plants involving varying processes of manufacturing.) Dyeing.) Weaving 100 % plant capacity at 50 picks based on 3 shifts per day for 1 095 shifts (2009: 1 095 shifts) 38 562 38 562 36 281 36 091 (Sq. (Figures) Power Plant Generation capacity Actual generation 39.210 (Figures in thousand) 39.1 Reason for low production Under utilization of available capacity of textile facilities is mainly due to normal maintenance.938 15. PLANT CAPACITY AND ACTUAL PRODUCTION Spinning 100 % plant capacity converted to 20s count based on 3 shifts per day for 1 095 shifts (2009: 1 095 shifts) (Kgs.Mt. (MWH) (MWH) 257 544 138 413 257 544 143 713 69 .Mt.Notes to the Financial Statements for the Year Ended June 30.) 97 078 97 078 Actual production converted to 50 picks based on 3 shifts per day for 1 089 shifts (2009: 1 095 shifts) (Sq.
254 136.724) 4.209 2.097.135.7 - 17.162 - payables.707 1.4 17.170 1.643 60.Notes to the Financial Statements for the Year Ended June 30.986 64.541 (183.(RUPEES IN THOUSAND) ----------------------------- Total assets for reportable segments Unallocated assets 1.081.737 114.4 107.830.229.924 811. 2010 40.376.593 7.442 1.761.696 107.895.717 6.833 855.688.900 7.539 39.435 263.633 1.989 (74.593 1.439.462 2.097 1.426.7 All segment assets are allocated to reportable segments other than those directly relating to corporate and Total liabilities for reportable segments Unallocated liabilities All segment liabilities are allocated to reportable segments other than trade and other 1.065 909.479 14.873 2.565.956 1.925 16.461 935.862 1.542 962. corpor 70 .3 40.043.033.577.975 60.566 3.296 72.264.4 Profit / (loss) before taxation and unallocated income and expenses Unallocated income and expenses Other operating expenses Other operating income Finance cost Share of profit of associate Provision for taxation 825.102.837 287.793 5.859 122.(RUPEES IN THOUSAND) ----------------------------Spinning Weaving Trading 2010 2009 ------------------------ Sales Cost of sales Gross profit Distribution cost Administrative expenses 5.2 2.913) 451.528 4.204.256 55.084 4.331 447.357 356.566.294.738 3.574 1.735 43.158 363.199 3.036.336.710 4.438.506 84.973 71.298.855.441 41.937.975 359.1 SEGMENT INFORMATION Processing & Home Textile 2010 2009 2010 2009 2010 2009 ---------------------------.482.487 71.594 183. 40.279 2.2 Profit after taxation Reconciliation of reportable segment assets and liabilities: Spinning 2010 2009 Weaving 2010 2009 Processing & Home Textile 2010 2009 Trading 2010 2009 ---------------------------.357 339.550 42.
010 (136.441 43. 033.162 - - 321.357 339.487 71.675.461 935.248 171.471 9.244 5.704 han trade and other payables.289.311 1.917 5.307 (118.284) 212.925 16.643 183.593 7.123 5.830.243 2.(RUPEES IN THOUSAND) ------------------------------------------------------------Trading Power Generation Cold Storage 761.333 5.386 10.495 6.658 397.300 251.574 1.964 - - 804.565.562 9.213 4.518 3.456.793 5.433 (536.568.562 10.696 107.108.541 (183.132 10.704 981.821) (59.717 6.750.094.698 10.572 11.059 884.771 3.885 168.975 359.566 3.863.512 9.762.439. corporate borrowings and current and deferred tax liabilities.158 363.454 5.235 122.186 6.1.913.956 1.065 8.506 84.937.928 6.406.833 855.924 811.707 1.566.688.670 179.376 605 605 10.161 179.934 n those directly relating to corporate and tax assets.921 11.350 561.988.436 941.129 11.229.342 1.852 6.331 447.757 3.175.413 182.431 392.601 10.568.562 598 598 9.495 6.644 9.561 4.952 1.756 17.183 888 3. 2010 g Processing & Home Textile 2009 2010 2009 USAND) ----------------------------- Elimination of InterTotal .386.735 502.Company 2010 2009 USAND) ----------------------------- 102.498) 344.226.900 7.442 1.436 17.837 287.107 56.014.575.503 802.022 165.320 45.487 107.805.267 .020 g 2009 Processing & Home Textile 2010 2009 Trading 2010 2009 Power Generation 2010 2009 Cold Storage 2010 2009 Total .376.815.742 1.435 263.064 7.245 470.357 356.Company segment transactions 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 ------------------------------------------------------.084 577.975 60.095 3.570 1.209 2.294.Notes to the Financial Statements for the Year Ended June 30.482.270) (815.018 652.565.462 2.565. 71 .913) 451.948) 120.872) (376.164 550.426.721.552 5.336.
3. other price risk and interest rate risk). The Board provides principles for overall risk management.750.2 All non-current assets of the Company as at reporting dates are located and operating in Pakistan.887 3.253. Revenue from major customers Revenue from major customers of Company's trading segment represent Rupees 2.3.937 2.808 10.863. The Company's finance department evaluates and hedges financial risks.717. 40.040 million). use of derivative financial instruments and non derivative financial instruments and investment of excess liquidity.386 3. Risk management is carried out by the Company's finance department under policies approved by the Board of Directors.003 2.574.Notes to the Financial Statements for the Year Ended June 30.1 Geographical Information The Company's revenue from external customers by geographical location is detailed below: 2010 2009 (Rupees in thousand) Europe America Asia.640. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance. credit risk and liquidity risk. The Company uses derivative financial instruments to hedge certain risk exposures. Australia Pakistan 2. credit risk.761.307. 2010 40. Africa.512 40.145 10. interest rate risk. 72 .4 41. liquidity risk.662.764 1.267 1.087 3.1 FINANCIAL RISK MANAGEMENT Financial risk factors The Company's activities expose it to a variety of financial risks: market risk (including currency risk.294 million (2009: Rupees 3.3 40.696. 41. Revenue from other segments of the Company does not include any major customer. other price risk. as well as policies covering specific areas such as currency risk.
10 73 .230) (7. Currency risk arises mainly from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies.104 million (2009: Rupees 75. 2010 (a) Market risk (i) Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.USD 2009 70. The Company's exposure to currency risk was as follows: 2010 Cash at banks . mainly as a result of exchange gains / losses on translation of foreign exchange denominated financial instruments.161) (9. Currency risk sensitivity to foreign exchange movements has been calculated on a symmetric basis. the impact on profit after taxation for the year would have been Rupees 71.196) 17. Currently.149 million) higher / lower.975 28.676 (350.451.01 81.932 The following significant exchange rates were applied during the year: Rupees per US Dollar Average rate Reporting date rate Sensitivity analysis If the functional currency.USD Trade debts . the amounts receivable / payable from / to the foreign entities.294 164. 83.886. primarily with respect to the United States Dollar (USD).929.445 27.Notes to the Financial Statements for the Year Ended June 30.84 85. The Company is exposed to currency risk arising from various currency exposures. at reporting date.USD Trade and other payable . had weakened / strengthened by 5% against the USD with all other variables held constant.770) 19.USD Derivative financial instruments -USD Net exposure . when considered appropriate.40 79.706. the Company's foreign exchange risk exposure is restricted to bank balances. The Company uses forward exchange contracts to hedge its foreign currency risk.094.487 (3.905.
594) 9.(Rupees in thousand) ------------------- KSE 100 (5% increase) KSE 100 (5% decrease) 3.659 (3. receipts and payments are prepared on monthly basis.738) 5. exposure to currency risk is measured and appropriate steps are taken to ensure that such exposure is minimized while optimizing return. 2010 Currency risk management The Company manages its exposure to currency risk through continuous monitoring of expected / forecast committed and non-committed foreign currency payments and receipts. The Company is not exposed to commodity price risk.640) Fair value reserve would increase / decrease as a result of gains / losses on equity investments classified as available for sale. 74 .353 (6. or factors affecting all similar financial instrument traded in the market. whether those changes are caused by factors specific to the individual financial instrument or its issuer. This includes matching of foreign currency liabilities / payments to assets / receipts. Index Impact on profit after Impact on other comprehensive income (fair value reserve) taxation 2010 2009 2010 2009 ----------------------.047) 6. Balances in foreign currency are also maintained in current accounts with banking companies.Notes to the Financial Statements for the Year Ended June 30.723 (5.132 (9. The Company maintains foreign currency working capital lines in order to finance production of exportable goods. using source inputs in foreign currency and arranging cross currency swaps. The analysis is based on the assumption that the equity index had increased / decreased by 5% with all other variables held constant and all the Company's equity instruments moved according to the historical correlation with the index. (ii) Other price risk Other price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk). Proceeds from exports are used to repay / settle / rollover the Company's obligations under these working capital lines which substantially reduces exposure to currency risk in respect of such liabilities. Reports on forecast foreign currency transactions. Sensitivity analysis The table below summarises the impact of increase / decrease in the Karachi Stock Exchange (KSE) Index on the Company's profit after taxation for the year and on other comprehensive income (fair value reserve).
940 2. long term financing and short term borrowings. 75 .561 3. Borrowings obtained at variable rates expose the Company to cash flow interest rate risk.607 Fair value sensitivity analysis for fixed rate instruments The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.400 758. At the balance sheet date the interest rate profile of the Company’s interest bearing financial instruments was: 2010 2009 (Rupees in thousand) Fixed rate instruments Financial assets Long term loans and advances Financial liabilities Long term financing Short term borrowings Floating rate instruments Financial liabilities Long term financing Short term borrowings 770. a change in interest rate at the balance sheet date would not affect profit or loss of the Company.400 770. 2010 (iii) Interest rate risk This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Therefore.409.600 848.847. Borrowings obtained at fixed rate expose the Company to fair value interest rate risk.303 1.Notes to the Financial Statements for the Year Ended June 30.418 616.600 349.079 1. The Company's interest rate risk arises from long term loans and advances.473.992.
This analysis is prepared assuming that amounts of liabilities outstanding at balance sheet dates were outstanding for whole year. (b) Credit risk Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. the Company calculates impact on profit after taxation and equity of defined interest rate shift.734 The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (If available) or to historical information about counterparty default rate: 76 .839 2.638 4. 2010 Cash flow sensitivity analysis for variable rate instruments If interest rates. Based on these scenarios.402 4.136 1. fluctuates by 1% higher / lower with all other variables held constant.562.903 1.388 17.117 million (2009: Rupees 38. as a result of higher / lower interest expense on floating rate borrowings. Interest rate risk management The Company manages interest rate risk by analyzing its interest rate exposure on dynamic basis.304 2. renewal of existing positions and alternative financing.139 2.081 1.348 22. mostly 100 basis points. The maximum exposure to credit risk at the reporting date was as follows: 2010 2009 (Rupees in thousand) Investments Loans and advances Deposits Trade debts Interest accrued Other receivables Bank balances 304.843. The carrying amount of financial assets represents the maximum credit exposure.713.079 million) lower / higher.562 15.901 4.931.142 293.Notes to the Financial Statements for the Year Ended June 30. Cross currency swaps are also arranged to transfer exposure to more stable markets. at the year end date.579. Cash flow interest rate risk is managed by simulating various scenarios taking into consideration refinancing.814. profit after taxation for the year would have been Rupees 31.235 7.
592 17. Due to the Company's long standing business relationships with these counterparties and after giving due consideration to their strong financial standing.755 646 11 104 240 794 36 146 15. with the exception of trade debts.298 14 527 297 11 2. Formal policies and procedures of credit management and administration of receivables are established and executed. the Company manages credit risk by limiting significant exposure to any single customer. 77 .601 7. 2010 Short term Rating Long term 2010 Agency 2009 (Rupees in thousand) Banks National Bank of Pakistan Allied Bank Limited Bank Alfalah Limited Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank Limited MCB Bank Limited NIB Bank Limited Samba Bank Limited Silkbank Limited Standard Chartered Bank (Pakistan) Limited United Bank Limited Al-Baraka Islamic Bank Meezan Bank Limited A-1+ A1+ A1+ A1+ A-1+ A1+ A1+ A1+ A-1 A-3 A1+ A-1+ A-1 A-1 AAA AA AA AA AA+ AA+ AA+ AA A AAAA AA+ A A+ JCR-VIS PACRA PACRA PACRA JCR-VIS PACRA PACRA PACRA JCR-VIS JCR-VIS PACRA JCR-VIS JCR-VIS JCR-VIS 884 2. which are exposed to losses arising from any nonperformance by counterparties. Accordingly the credit risk is minimal. In monitoring customer credit risk.797 15 100 273 1.295 3.003 11 99 330 64 2. management does not expect non-performance by these counterparties on their obligations to the Company. Credit risk management The Company's financial assets do not carry significant credit risk.664 1. along with collection activities are reviewed on a regular basis.Notes to the Financial Statements for the Year Ended June 30. In respect of trade debts. including suspending future shipments and administering dispatches on a prepayment basis or confirmed letters of credit. the ageing profile of total receivables and individually significant balances.638 The Company's exposure to credit risk and impairment losses related to trade debts is disclosed in Note 20.402 5.433 1. High risk customers are identified and restrictions are placed on future trading.
459 177.919.719 3.841 106.647 7.791 4.459 177.673.789 466. The rates of interest / mark up have been disclosed in Note 6 and Note 10 to these financial statements.719 4.894 466.226 672.226 The amounts disclosed in the table are undiscounted cash flows.910 428.419.277 212.692 6.571. The contractual cash flows relating to the above financial liabilities have been determined on the basis of interest rates / mark up rates effective as at June 30.840.650.151 1.737 1.841 106.245. 2010 (c) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. 2010: Carrying Amount Contractual 6 month or Cash Flows less 6-12 month 1-2 Year More than 2 Years --------------------------------.207 5.864 282.681 488.018 6. 2009: Long term financing Trade and other payables Accrued mark-up Short term borrowings 1.289.Notes to the Financial Statements for the Year Ended June 30.245 268.268.841 106. 2010. 78 .243.910 317.717 3. Management believes the liquidity risk to be low.041 274.918.989 million) available borrowing limits from financial institutions and Rupees 16.521.901 1.069 million (2009: Rupees 1.597 1.(Rupees in thousand) --------------------------------- Long term financing Trade and other payables Accrued mark-up Short term borrowings 1.699 239. At June 30.883. Contractual maturities of financial liabilities including interest payments as at June 30.612.807.681 672.934.019 466.996 488.459 177.964 282.834 The following are the contractual maturities of financial liabilities as at June 30.325 2.719 5.207 4.207 2.207 6.930 2.464. Liquidity risk Management The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. the Company had Rupees 2.931 million) cash and bank balances.318.108.070.052 317.834 428.316 282.419 million (2009: Rupees 18.741 5.
2010. 2010 Assets Available for sale financial assets 261. The Company has no such type of financial instruments as on June 30. those financial instruments are classified under level 2 in above referred table. If all significant inputs required to fair value a financial instrument are observable. The Company has no such type of financial instruments as on June 30. The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values.477 The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments.477 - - 249. 79 . The quoted market price used for financial instruments held by the Company is the current bid price. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. 2010 41.244 As at June 30. The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value. grouped in to levels 1 to 3 based on the degree to which fair value is observable: Level 1 Level 2 Level 3 Total --------------------------. 2009 Assets Available for sale financial assets 249. If one or more of the significant inputs is not based on observable market data. These financial instruments are classified under level 1 in above referred table. the financial instrument is classified under level 3.244 - - 261. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.Notes to the Financial Statements for the Year Ended June 30.(Rupees in thousand) --------------------------- As at June 30. 2010.2 Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in financial statements approximate their fair values.
081 1.715.108.901 4.136 293.159 Financial liabilities at amortized cost (Rupees in thousand) Liabilities as per balance sheet Long term financing Accrued mark-up Short term borrowings Trade and other payables 1.139 2.3 Financial instruments by categories Loans and receivables Available for sale Total (Rupees in thousand) As at June 30.081 1. 2009 Assets as per balance sheet Investments Loans and advances Deposits Trade debts Interest accrued Other receivables Cash and bank balances 1.840.521.891 293.018 466.348 22.814.388 18.931 4.931.136 1.235 7.844.903 304.597 Loans and receivables Available for sale Total (Rupees in thousand) As at June 30.903 1.304 2.562 16.814.419 4.579.304 2. 2010 Assets as per balance sheet Investments Loans and advances Deposits Trade debts Other receivables Cash and bank balances 1.931 4.839 2.136 293.903 304.Notes to the Financial Statements for the Year Ended June 30.562 16. 2010 41.027 80 .421.841 6.562.139 2.931.419 4.562.839 2.901 4.539.388 18.348 22.019 106.256 304.579.235 7.719 4.
207 282.73 The decrease in the gearing ratio resulted primarily from decrease in borrowings from the banks. Total capital employed includes 'total equity' as shown in the balance sheet plus 'borrowings'. was to maintain a gearing ratio of 60% debt and 40% equity.348.476 69.00 6.Notes to the Financial Statements for the Year Ended June 30.807. 2010 Financial liabilities at amortized cost (Rupees in thousand) Liabilities as per balance sheet Long term financing Accrued mark-up Short term borrowings Trade and other payables 1.207 4. 81 .464. 2010 2009 (Rupees in thousand) Borrowings Total equity Total capital employed Gearing ratio Percentage 5.837 8.439 8. the Company may adjust the amount of dividends paid to shareholders.908 73.261.071 2.459 6.620.4 Capital risk management The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Borrowings represent long term financing and short term borrowings obtained by the Company as referred to in note 6 and 10 respectively. This ratio is calculated as borrowings divided by total capital employed.737 41.037 2. In order to maintain or adjust the capital structure.864 177. which was unchanged from last year. the Company monitors the capital structure on the basis of gearing ratio. current year profits and increase in fair value reserves due to increase in market value of shares.672. issue new shares or sell assets to reduce debt.883. The Company's strategy. Consistent with others in the industry and the requirements of the lenders.948.609.
2010. 43. CORRESPONDING FIGURES Comparative figures of balance sheet. (Muhammad Anwar) Chairman & Chief Executive (Khalid Bashir) Director 82 . DATE OF AUTHORIZATION FOR ISSUE These financial statements were authorized for issue on October 04. GENERAL Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated. 2010 have proposed cash dividend of Rupees 1. NON ADJUSTING EVENT AFTER THE REPORTING PERIOD The Board of Directors in their meeting held on October 04. 2010 42. However. 44. profit and loss account. 2010 by the Board of Directors of the Company.Notes to the Financial Statements for the Year Ended June 30.50 per share for the year ended June 30. - 45. Figures of Cold Storage Unit in the notes of the profit and loss account have been aggregated instead of showing them separately because segment information is given in Note 40. cash flow statement and statement of changes in equity and related notes have been re-arranged. 2010 (2009: Nil) for approval of the members of the Company at the Annual General Meeting to be held on October 30. wherever necessary for the purpose of comparison. this event has been considered as non adjusting under IAS 10 and has not been recognized in these financial statement. However. no significant reclassifications have been made during the year except: Share of profit in associate has been shown net of taxation instead of showing share of profit of associate before taxation and related taxation separately.
Signature on Rs. at registered office. Gulberg-V . off: Zafar Ali Road. Proxies in order to be effective must be received by the Company at the Registered Office not less than 48 hours before the time for holding the meeting. The Crescent Textile Mills Limited.m. 40-A. As witness my hand this _______________ day of ________________2010. 40-A.61st Annual General Meeting The Corporate Secretary. 2010 at 09:30 a. Account Number and participant Account Number to be produced at the time of attending the meeting. speak and vote for me/ us and on my/ our behalf at the 61st Annual General Meeting of the Company to be held on Saturday the October 30. Lahore and at any adjournment thereof. Proxies of the member(s) through CDC shall be accompanied with attested copies of the CNIC(s). 5/Revenue Stamp 83 . Lahore. Off: Zafar Ali Road. PROXY FORM I/We______________________________________of______________________________________ a member/ members of The Crescent Textile Mills Limited and holder of _______________________ shares as per Registered Folio # / CDC Participant ID # / Sub A/C # / Investor A/C # ___________ __________________________________________________________________ do hereby appoint ___________________________________ of_________________________________ or failing him _____________________________________ of_________________________________ who is also member of the Company vide Registered Folio # / CDC Participant ID # / Sub A/C # / Investor A/C # _______________________ as my/ our Proxy to attend. Member's:____________________ Witness's:____________________ Date:________________________ Place:________________________ Note: A member eligible to attend and vote at this meeting may appoint another member as his/her proxy to attend and vote instead of him/her. Gulberg-V. The shareholders through CDC are requested to bring original CNIC.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.