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Heritage of Pakistan
The architectural heritage of any country or city encompasses many different types of structures, from ruins and fortifications, mosques, churches and temples, and other types of medieval buildings, to various, more recent buildings and complex installations. The preservation of one’s architectural heritage is important because it provides a unique source of knowledge about the past. The aesthetic and artistic qualities of buildings may hold a symbolic value within local communities, adding to the sense of history and identity of the inhabitants. We are rich in our architectural heritage and must preserve these timeless monuments for future generations to utilize, enjoy and learn from.

and take constructive interest in supporting education and environmental causes.Mission. as an equal opportunity employer. To gain and maintain cost and quality leadership in the international competitive environment. as world class manufacturers. Vision. To conduct business as a responsible corporate citizen. To promote best use and development of human talent in a safe enviroment. . Values To add value to shareholders and the economy by giving the best returns and reinvest sensibly in products and markets we compete in.

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Contents Company Information Management Committees Shareholders’ Information Company Profile Our Governing Principles Y in Brief ear Key Figures Statement of Value Added Vertical Analysis Horizontal Analysis Directors’ Report Chief Executive’s Review Management Structure Financial Highlights Attendance at Board and Audit Committee Meetings Statement of Compliance with the Code of Corporate Governance Review Report to the Members on Statement of Compliance with Best Practices of Code of Corporate Governance Auditors’ Report to the Members Balance Sheet Profit and Loss Account Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements Pattern of Holding of Shares Notice of Annual General Meeting Form of Proxy 2 4 5 6 9 15 15 17 19 21 23 31 52 53 55 56 58 59 60 62 63 64 65 122 126 .

Saleem. S.M. Saleem Javed A. Saad Thaniana. Ahsan M. Sidat. Ehtishamullah Zahid Bashir M.Company Information 02 ANNUAL REPORT 2008 From left to right: M. Javed Iqbal. Saad Thaniana Javed A. Callea Javed Iqbal Mohammad Anwar Nasir Shafi S. (Sharjeel Jamil AhmedEngagement Partner) Ahsan M. Ehtishamullah. Rhodes. Zahid Bashir. BOARD OF DIRECTORS Non-Executive Chairman Chief Executive & MD Non-Executive Director (Independent) Non-Executive Director (Independent) Non-Executive Director Non-Executive Director Finance Director & CFO Non-Executive Director COMPANY SECRETARY AUDIT COMMITTEE Chairman Mazhar Karim Ahsan M.M. Saleem Javed Iqbal Nasir Shafi Head of Internal Audit HUMAN RESOURCE COMMITTEE Chairman Crescent Steel & Allied Products Ltd. Callea Javed Iqbal Nasir Shafi Ford. . Hyder & Co.

A. Mohammad Anwar and Javed A. Ehtishamullah.N. Mir. 55 1983* Advisor to CEO (Technical) Mohammad Sharif. Saleem. 48 2000* Chief Information Officer Shahid H. THE MANAGEMENT Chief Executive & Managing Director Ahsan M.M. 54 2006* Senior Vice President (Finance & Control) M. Nasir Shafi. 76 1984* Finance Director & CFO S. Callea. 66 1986* BU Head – Steel Division Iqbal Zafar Siddiqui. 58 2008* BU Head – Cotton Division Abdul Rouf. Kazmi. 46 1985* * Year joined Company . 69 1996* Commercial Director / Head of Buying S. 41 2007* Head of Risk & Compliance Shah Muhammad Chaudhry 2008* Human Resource Advisor Ehsan Durrani 2008* Head of Marketing Steel Division Arif Raza. Saad Thaniana.03 ANNUAL REPORT 2008 Mazhar Karim.

Saleem S.M. Saad Thaniana This Committee helps to maintain a balanced portfolio of investments and maximize returns while keeping risk at a desirable low level. establishing and ensuring adequacy of internal controls and monitoring compliance of key policies. Ehtishamullah S. Business Strategy Committee Chairman Ahsan M. Saleem M. Investment Committee Chairman Ahsan M.M. Further. Saad Thaniana This Committee is responsible for formulation of business strategy.A. Kazmi Abdul Rouf Iqbal Zafar Siddiqui 04 ANNUAL REPORT 2008 M. the Committee is also responsible for staying abreast of developments and trends in the Industry to assist the Board in planning for future capital intensive investments and growth of the Company. Saleem S.Management Committees Crescent Steel & Allied Products Ltd. Executive Committee Chairman Ahsan M. Saleem S.N.N. Ehtishamullah S. System and Technology Committee Chairman Ahsan M. The Committee is also responsible for review of Company’s operation on ongoing basis. Mir This Committee is responsible for devising the I. Saad Thaniana Shahid H.T strategy within the Organization to keep all information systems of the Company updated in a fast changing environment.M. Kazmi This Committee devises long term policies and visions for the Company with the sole objective for providing the best returns to shareholders by optimum allocation of existing resources. .A. review of risks and their mitigation plan. Ehtishamullah M.

Cotton Division Crescent Cotton Products (Spinning Unit) 1st Mile.E.mail: iqbal.mail: arif. 4311741 Fax: 041-4315475 E. District Faisalabad.com. 10-B. Nooriabad.Shareholders’ Information Crescent Steel & Allied Products Ltd. 9 E-2. Lahore Bankers Standard Chartered Bank (Pakistan) Limited MCB Bank Limited Allied Bank Limited Meezan Bank Limited HSBC Bank Middle East Limited Public Information Financial analysts.I.T. Lahore. Advocates.crescent.mail: ejaz@shakarganj. District Jamshoro. Lines. Gulberg-III. at Qasr-eNoor. Gulberg-III. Karachi. 4312899. Lahore.com. .rouf@jrn.mail: mohammad. Telephone: 042-5783828-32 Fax: 042-5875916 Shareholders’ Information Enquiries concerning lost share certificates.. verification of transfer deeds and share transfers should be directed to the Shareholder Services Department at the Registered Office at Lahore. change of address. The Company’s share is quoted in leading dailies under the Engineering Sector.m. dividend payments. Gulberg-III.pk Products Steel Division Manufacturer of DSAW steel line pipes in diameters ranging from 8” to 90” and applicator of multi-layer polyolefin coating conforming to international standards. 10-B.pk URL: www. 264 R. Telephone: 021-5674881-5 E. Legal Advisor Hassan & Hassan. Stock Exchange Listing Crescent Steel and Allied Products Limited is a listed Company and its shares are traded on all the three stock exchanges of Pakistan.pk Registered Office 6th Floor. Jaranwala. Lahore Road.yamin@crescent. Sidco Avenue Centre.pk 05 Principal Office 9th Floor. Telephone: 021-5674881-5 Fax: 021-5680476 E. Auditors KPMG Taseer Hadi & Co. S. Telephone: 042-5783801-4 Fax: 042-5870357 E.crescent. Block E-2.com.raza@crescent. Telephone: 025-4670020-2 E.pk Cotton Division Manufacturer of quality cotton yarn of various counts of 10s to 80s. stock brokers. Main Boulevard. Crescent Standard Tower.com. Telephone: 041-4313799. interested investors and financial media desiring information about ‘Crescent Steel’ should contact Mohammad Yamin at the Company’s Principal Office. Factory .mail: abdul. Karachi-74200.pk Annual Meeting The 24th Annual General Meeting of Crescent Steel and Allied Products Limited will be held on Saturday.siddiqui@crescent. Crescent Standard Tower. Punjab.com.com. Main Boulevard. Lahore. Telephone: 042-5783828-32 Fax: 042-5875916 Liaison Office Lahore ANNUAL REPORT 2008 10th Floor. Block E-2. 30 August 2008 at 11:30 a. Sindh. Main Boulevard. Mills .A.Steel Division A/25.

The Company has authorization to use API monogram of the American Petroleum Institute – the highest international standard accredited for quality of steel line pipe. The manufacturing facilities consist of a Spiral Pipe Production line and a multi-layer Polyolefin and stand-alone Epoxy Coating line. extendable upto maximum 200. which is the hub of textile industry and carries out this activity under the name and title of “Crescent Cotton Products” (CCP) a division of Crescent Steel .000 tons Cotton Division In the year 2000.680 spindles CCP-I and 25. Co-Polymer Adhesive and High Density Polyethylene / Polypropylene and Polyethylene Tape Coating on steel pipes ranging from 4” – 56” (114 mm – 1. quality control and quality assurance. Crescent Steel and Allied Products Limited is an equal opportunity employer with a sense of social responsibility and strongly supports education. It also has the ISO 9001 : 2000 certification. In addition.000 tons per annum. Crescent Steel and Allied Products Limited is a Public Limited Company listed on all the Stock Exchanges of Pakistan. healthcare and environmental causes. Faisalabad.344 spindles CCP-II at Jaranwala. 06 ANNUAL REPORT 2008 Steel Division The Spiral Pipe Plant has a capability of manufacturing high quality steel pipes in the diameter range of 8” – 90” (219 mm – 2.Company Profile Crescent Steel & Allied Products Ltd. It started commercial production in March 1987.000 tons initially to the present notional capacity of 90. The Company has been gradually enhancing and upgrading the pipe production capacity which has increased from 80. Crescent Steel maintains high quality norms in all its products and has consistently exceeded the requirements of international standards both in steel line pipe and multi-layer coatings and will continue to remain at the cutting edge in terms of technology. we have become the first Pakistani company to have acquired oil and gas industry specifics ISO/TS 29001. both located side by side at the Sindh Industrial Trading Estate. Nooriabad in Jamshoro district of Sindh and a Cotton Spinning Unit of 19. Quality Management System Certification from API. the Company acquired a running cotton spinning mill located at Jaranwala near Faisalabad.422 mm). The Polyolefin Coating Plant was added adjacent to the pipe mills which is capable of applying single and multi-layer Coatings comprising of Fusion Bonded Epoxy. Company’s Investment and Infrastructure Development Division manages an investment portfolio and real estate.286 mm) in wall thickness from 4 mm – 20 mm and material grades up to API 5L X-80.

07 ANNUAL REPORT 2008 . Investment and Infrastructure Development Division During the year Investment and Infrastructure Development Division (IID) was carved separately from Steel Division under the new business Architecture.5 and 9. CCP produces good quality cotton yarn of various counts from 10s to 80s having a notional capacity based on 20s of 6. CCP is a division of the Company but its operating results are shown separately.3 million kgs per annum in CCP-I and CCP-II respectively and its products are consistently in demand and generally sold at a premium. Our strategy has been to focus on those sectors and projects which have potential for growth and where real investments are being made. CCP as a division holds ISO 9001 : 2000 Quality Management Credential.Company Profile Crescent Steel & Allied Products Ltd. The division manages an investment portfolio in shares and other securities. across diversified sectors and real estate. and Allied Products Limited.

vegetables. was built in 1888 by James Stratchan. situated in the center of Karachi. meat. Empress Market .The Empress Market. It is a huge symmetrically built Gothic structure crowned by a clock tower 50 meters high. The Market houses hundreds of stalls selling fruit. fish and other groceries. and is the biggest bus terminal of the city.

Integrity CSAPL does not use bribe as an instrument for any business or financial gain. We also insist that all transactions be open. . We also have the same expectations from all those with whom we have relationships. procedures. The system is based upon written Board Committees The Board has constituted an Audit Committee and a Human Resource Committee to review and improve the current human resource architecture. Employees are also required to avoid engaging in any personal activity or financial interests which would conflict with their responsibility to the Company. transparent and with in the legal framework culminating in responsible financial reporting.Our Governing Principles Crescent Steel & Allied Products Ltd. an organogram that provides an appropriate division of responsibility. This responsibility includes such areas of stewardship as the identification and control of the Company’s business risks. We insist on doing what is right which sets the tone of our actions and underpins the functioning of our employees. the integrity of management information systems and clear. manning of all key functions by qualified personnel and constant training. it recognizes that the internal control system has to be cost effective and that no cost effective system will preclude all errors or irregularities. However. a programme of internal audit. The Board accepts its primary responsibility for the overall control architecture of the Company. customers and regulators Confidentiality of information Trading in Company’s shares Environmental responsibilities Role of the Board of Directors The Board has a fiduciary responsibility for the proper direction and control of the activities of the Company. transparent reporting to shareholders. 09 ANNUAL REPORT 2008 Code of Conduct The Board has adopted a code of conduct for its members. Employees are not authorized to give or receive any gift or payment which may be construed as such. specifying the business standards and ethical considerations in conducting its business. and integrity. The code includes: • • • • • Corporate governance Relationship with employees. CSAPL conducts its business in a responsible manner and with honesty. policies. executives and staff. guidelines.

Nooriabad is the newest industrial site situated about 100 km to the north of Karachi. Also it is closer to the ginneries that bring cotton from the interior of Sindh or the Punjab. Another factor for its economic viability is the provision of natural gas to run the mills and factories in place of electricity. Nooriabad . The textile sector has become the major buyer of land because it is a cost effective option as real estate has gone up considerably in the Karachi industrial areas.

a Cotton Division and an Investment and Infrastructure Development Division. Limits of authority at all levels are clearly defined in our control manual. Profitability is essential to discharge this responsibility and the corporate resources are primarily deployed in the achievement of this end. The Committee has framed a terms of reference and its aim is to guide the management in formulating an overall strategic plan for HR.Our Governing Principles Crescent Steel & Allied Products Ltd. In short to ensure the attainment of the maximum effectiveness from the overall HR service delivery system. These controls include safe-guarding of assets. The governing charter of the Audit Committee addresses the requirement of the code of corporate governance issued by the SECP and includes the requirements of best practices. Three business unit heads and three corporate functional heads as defined in the management structure with clear responsibility and authority matrix have direct reporting lines to the Chief Executive Officer. the Committee provides the Board with additional assurance. maintaining of proper accounting records complying with legislation and ensuring the reliability of financial information. . The Internal Audit function is responsible to monitor compliance with the manual. The Committee also ensures that the Company has an effective internal control framework. directing and monitoring the audit function and reviewing the adequacy and quality of the audit process. Management Structure The Company has three distinct business units. 11 ANNUAL REPORT 2008 HR Committee The HR Committee has been constituted to address and improve the crucial area of human resource development. a Steel Division. The accounting for these units is done separately in an arms length manner to arrive at the true profit before tax for each unit. in developing new program initiatives and formulation of policies. Responsibility to Stakeholders Our primary purpose is to run our business efficiently and profitably to enhance shareholders’ value but we do it with responsibility to all stakeholders. Audit Committee The Audit Committee operates under a charter approved by the Board. CEO and the CFO are responsible for the accuracy of financial information for inclusion in the annual report. The Committee is accountable to the Board for the recommendation of appointment of external auditors.

Lahore Fort . A symbol of Mughal heritage. Ranjit Singh added several pavilions on the upper ramparts in the Sikh era. the Fort was extensively refurbished by later Mughal Emperors with beautiful murals and monuments.Emperor Akbar built the Lahore Fort (Shahi Qila) in the 16th century on the site of a mud-fort built in Mahmud Ghazni’s times in the 11th century.

Safety. environmental health etc. Major portion of our budget for philanthropy and sponsorship is allocated to primary and secondary schooling for less privileged children. We also ensure that our products are shipped in a safe manner complying with the safety standards and legal requirements. Information is communicated to the shareholders in the annual report and the interim quarterly reports. public safety. visitors. health and environment. We are committed to actively managing health and safety risks associated with our business . The Company’s financial statements are available on the Company’s website and an officer is designated to answer all shareholder enquiries. This is also arising from our basic belief that individual entities when they work together can create powerful synergies and help to improve the conditions of the societies in which they are operating.Our Governing Principles Crescent Steel & Allied Products Ltd. The Board encourages the shareholders’ participation at the Annual General Meetings to ensure a high level of accountability. Health and Environment Maintenance of health and safety standards at our plants and offices is a serious issue at CSAPL. We believe in “giving something back” by helping address issues such as education. 13 ANNUAL REPORT 2008 Role of Shareholders The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. These principles are not just put forth on paper but we have over the years actively strived to promote issues of education. remove or control the risk of fire. However the Company does not operate in isolation with its environment and accordingly feels responsible to all stakeholders which are: • Our Shareholders • Our Customers • Our People • Our Business Partners • Our Society and are actively working towards improving our procedures to reduce. accidents or injuries to employees and Service to Society We are increasingly conscious of the role we have to play as responsible corporate citizens in fulfilling a wide variety of community needs. healthcare.

Jaranwala . a city about 400 years old. It is situated on the north bank of the River Ravi between two canals. Jaranwala hosts the largest jute mill in Pakistan and is home to a Government college.Jaranwala. is named after a well which had the roots (jaraan in Punjabi) of an old willow tree hanging inside. the Gogira and the Rakh and is the second largest tehsil of Faisalabad in the Punjab.

15 ANNUAL REPORT 2008 KEY FIGURES Sales Revenue Gross Profit Net income No. in million Rs. • Company during the year initiated implementation of Oracle application suite.cash .847 153 7. 4.0 10 18. • Total investments increased to Rs./share (%) (%) 2008 4. in million No.4 million to help community initiatives. 970 million respectively which is highest ever in Company’s history. in million Rs. • Bare pipe production during the year was 41.Year in Brief Crescent Steel & Allied Products Ltd. in million Rs. in million Rs.4 2.3 8. of Shares Outstanding Earnings per Share .0 10 22. • Company during the year has contributed Rs.102 metric tons an increase of 77%. 4. • We have during the year explored new markets and diversified our product offering for construction and infrastructure projects.200 896 416 51. • Sales revenue and gross contribution margin is Rs.3 billion last year. 2.0 1.7 13.0 68. • During the year Company has donated Rs.994 4.5 5 : 95 2. • The balance sheet footing has increased to Rs.7 billion from Rs.0 10 : 90 3.64 2007 2. Rs. • During the year we have contributed to start with Paint a School Project for The Citizen Foundation.3 3.696 127 5. 24.8 billion whereas the gearing is 5 : 95.139 * Rs. in million Rs.3 1.1 3.166 10.Basic and Diluted Dividend . (%) * Not available . 2. • Our Annual Report 2007 received 1st position in Engineering Sector of “Best corporate Report Award-2007” from ICAP & ICMAP.3 million towards the national exchequer.bonus Return on Average Capital Employed Current Ratio Debt : Equity Ratio Shareholders’ Equity Total Assets Capital Expenditure Price Earning Ratio Break-up Value per Share Employees Weighted average cost of debt Rs. 712.950 511 663 46.6 58.2 billion and Rs. in million Rs.200 4.6 1.

The University of Peshawar is one of its landmarks along with the Khyber Pass and the Qissa Khawani Bazar. University of Peshawar .000 acres (4 km). The University was established in October 1950 and is a unique institution where educational facilities exist up to PhD. it operates as a residential campus spread over approximately 1.Peshawar was the heart of the ancient kingdom of Gandhara and is rich in archaeological remains.

WWF and WPPF To Society Donation towards education.310) 1.303 (2.614 21% 24. custom duty.420 1.802. amortization & retained profit 196.832 23% 100% 649.142 (3.644 128.975 1.861 45% 100% ANNUAL REPORT 2008 .018 12% 9% 186. 2008 Rupees in '000 % 2007 Rupees in '000 % WEALTH GENERATED Total revenue net of discount and allowances Bought-in-material and services 4.150 11% 17 712.456.861 100% 62% 38% WEALTH DISTRIBUTED To Employees Salaries.281 43% 303.379 12% 168.345.442) 1. benefits and other costs To Government Income tax.456.Statement of Value Added As at 30 June 2008 Crescent Steel & Allied Products Ltd.426 1% 19.782.676. health and environment To Providers of Capital Dividend to shareholders Mark-up/interest expenses on borrowed funds Retained for reinvestment & future growth Depreciation.105. sales tax.676.832 100% 65% 35% 3.308 153.988 1% 205.490 13% 9% 385.

It was featured on the old Rupee 5 notes. The Khojak Tunnel is the fourth longest tunnel in the world and a marvel of civil and mechanical engineering. It is a 3. Khojak Tunnel .Built in the historic Khojak Pass.945 meters above sea level. the Khojak Tunnel was built 117 years ago in 1891.91 kilometres long railway tunnel located in Killa Abdullah district of Balochistan in Pakistan approximately 1.

5 17.847 25.0 66.7) 15.0 4.2 22.014 3.715 2.0 91.0 100.9 5.4 13.2 14.0 9.3 1.2 15.313 7 1.7 17.6 100.7 2.4 24.4 3.0) 630 486 (392) 86 180 350.0 (217.0) .0 270.8 8.3 27.200 3.304 896 74 151 110 20 729 153 51 627 211 416 % 100.5 0.net Distribution.1 23.0 1.net Operating profit before finance costs Finance costs Share of profit / (loss) in associates Profit before taxation Income tax Net income Balance Sheet (Rupees in million) Property.950 2.2 7.1 5.2 (104.3 (47.567 140 333 119 22 25 357 83 (12) 262 3 260 % 100.8 3.4 56.8 3.737 5 871 4.5 6.200 354 65 626 451 4.2 27.7 100.4 0.3 3.3 0.0 82. plant and equipment Investments including investment property Other non current asstes Current assets (excluding investments) Total assets Shareholders' equity Long term debt (excluding current maturity) Deferred liabilities Short term debt (including current maturity of long term debt) Other Current liability Total equity and libilities Cash Flows ( Rupees in million) Cash generated from operations Cash flows from / (used in) operating activities Cash flows used in investing activities Cash flows (used in) / from financing activities Net (decrease) / increase in cash and cash equivalents 4.6 6. selling and administrative expenses Other operating expenses Other operating income .038 548 2 877 250 3.847 2.307 2.1 100.8) 370.0 30 (88) (778) 682 (184) 16.3 9.5 2.5 1.4 20.0 54.0 78.2 19 ANNUAL REPORT 2008 1.4 100.7 21.1 18.0 1.440 510 411 147 126 107 757 128 99 727 64 663 % 100.3 13.4 3.8 49.994 168 112 1.6 4.Vertical Analysis Crescent Steel & Allied Products Ltd.300 5 1.9 5.6 1.233 2. 2008 Operating Results ( Rupees in million) Net sales Cost of sales Gross profit Investment income .0 68.9 4.8) 47.5 2006 1.9 1.306 267 4.0 0.5) (61.9 (0.6 2.6 25.0 906 566 (893) (528) (855) 106.707 1.2 19.3 1.696 3.7 (100.2 35.3 100.715 37.9 14.084 4.381 1.9 2007 2.8) (100.0 61.8 100.6 0.8 ––– 23.8) (422.696 27.

a town named after Sir James Lyall. Clock T ower . It stands in the centre of Faisalabad. Lieutenant Governor of the Punjab.The famous Clock Tower of Faisalabad (former Lyallpur) has 8 streets leading from it and was designed in a pattern so as to form the ‘Union Jack’. and now the textile hub of Pakistan.

Horizontal Analysis
Crescent Steel & Allied Products Ltd.

2008

Variance vs Last Year Increase / (Decrease) % 42.4 35.4 75.6 (82.1) 2.9 (12.6) (81.7) (3.7) 19.1 (48.8) (13.8) 228.9 (37.3)

2007

Variance vs Last Year Increase / (Decrease) % 72.8 55.7 263.8 23.6 23.6 474.1 335.7 111.8 54.9 (931.5) 177.2 2,199.1 155.4

2006

Variance vs Last Year Increase / (Decrease) % (36.5) (32.3) (62.3) 88.7 9.5 (68.8) (72.0) (21.9) 88.7 (38.9) (33.4) (96.6) (16.9)

Balance Sheet (Rupees in million) Property, plant and equipment Investments including investment property Other non current asstes Current assets (excluding investments) Total assets Shareholders' equity Long term debt (excluding current maturity) Deferred liabilities Short term debt (including current maturity of long term debt) Other Current liability Total equity and libilities Cash Flows ( Rupees in million) Cash generated from operations Cash flows from / (used in) operating activities Cash flows (used in) / from investing activities Cash flows (used in) / from financing activities Net (decrease) / increase in cash and cash equivalents

1,233 2,737 5 871 4,847 2,994 168 112 1,306 267 4,847

(5.6) 19.0 (4.1) (19.6) 3.2 (6.4) (52.5) 72.7 108.7 (40.9) 3.2

1,307 2,300 5 1,084 4,696 3,200 354 65 626 451 4,696

(5.4) 75.3 (26.0) 6.9 26.4 57.1 (35.4) 3,850.1 (28.6) 80.4 26.4

1,381 1,313 7 1,014 3,715 2,038 548 2 877 250 3,715

212.6 (12.6) (26.3) 64.6 44.6 9.5 132.2 (57.9) 275.6 6.3 (44.6)

906 566 (893) (528) (855)

43.8 16.5 127.9 (714.0) (575.0)

630 486 (392) 86 180

2,000.0 (646.1) (49.6) (87.4) (197.8)

30 (89)

(88.8) (147.6)

(778) 1,241.4 682 (184) (795.9) (693.5)

ANNUAL REPORT 2008

Operating Results ( Rupees in million) Net sales Cost of sales Gross profit Investment income - net Distribution, selling and administrative expenses Other operating expenses Other operating income - net Operating profit before finance costs Finance costs Share of profit / (loss) in associates Profit before taxation Income tax Net income

4,200 3,304 896 74 151 110 20 729 153 51 627 211 416

2,950 2,440 510 411 147 126 107 757 128 99 727 64 663

1,707 1,567 140 333 119 22 25 357 83 (12) 262 3 260

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ANNUAL REPORT 2008

Directors’ Report
Crescent Steel & Allied Products Ltd.

The directors of the company have the pleasure in submitting their report together with audited financial statements of the company for the year ended 30 June 2008.

Operating Results
The financial results of the Company are summarised below: 2008 2007 Rupees in '000 Profit for the year Taxation Profit after taxation Unappropriated profit brought forward Profit available for appropriation 626,622 210,941 415,681 599,273 1,014,954 2008 - @10% 2008 - @10% 2008 - @10% 2007 - @10% 2007 - @10% 2007 (51,327) (51,327) (51,327) (46,661) (46,661) (500,000) (747,303) Unappropriated profit carried forward Basic and diluted earning per share 267,651 Rs. 8.10 727,323 64,145 663,178 450,417 1,113,595 (46,661) (46,661) ––– ––– ––– (421,000) (514,322) 599,273 Rs. 13.30
23 ANNUAL REPORT 2008

Appropriations:
- First interim dividend - Second interim dividend - Third interim dividend - Final dividend - Bonus shares issued - Transfer to General Reserve

The Board of Directors recommends bonus shares in proportion of every one share for ten shares held i.e. 10% in addition to three interim dividends of Re. 1.00 each (Rs. 3.00) per share (30%) already paid.

Board of Directors and its Committees Board of Directors
The Board has formulated formal policies including risk management, procurement of fixed assets, goods and services, investments, borrowings, donations, charities and contributions, delegation of financial authority, transactions with related parties and transfer pricing, provision for slow moving store and spares

16 ANNUAL REPORT 2008 .

policies. a reporting mechanism and a quality control plan. Statement on Corporate and financial reporting framework These financial statements. policies. the Audit and Human Resources Committees. the result of its operations. • To provide the Board with an oversight of the internal audit department in the Company to assure that an effective internal audit function is in place system-wide. objective evaluation of their operations. and 25 Human Resources Committee The Committee comprises three members including the Chief Executive as Chairman and other two are Non-Executive Directors of the Board. • To review and evaluate procedures established to comply with laws and regulations and to monitor compliance thereof. procedures and controls. ■ ANNUAL REPORT 2008 . The purpose of the committee includes inter alia: • To provide the Board of Directors (“the Board”) with an independent and objective evaluation of the operations. present fairly its state of affairs. cash flows and changes in equity. procedures and controls implemented within the Company.e. • To provide assistance to BOD in fulfilling their oversight responsibility relating to integrity of the financial statements and financial reporting.Directors’ Report Crescent Steel & Allied Products Ltd. The main aim of the committee is to guide the management in formulating an overall strategic plan for HR and to provide the best working environment. which are implemented and monitored through delegation of duties to two standing committees of the Board i. Audit Committee The Committee comprises three members including the Chairman all of whom are NonExecutive Directors out of which two are Independent Directors of the Company. and impairment of assets etc. The terms of reference of the Audit Committee was revised during the year to bring it in line with Global Best Practices. prepared by the management of the company. The HR Committee has been constituted to address and improve the area of Human Resource Development. which includes a risk based annual and long-range audit plan. • To provide supplemental assistance and resources to the internal audit department of the Company in order for them to provide the management and the Board of the Company with an independent.

26 ANNUAL REPORT 2008 .

■ ANNUAL REPORT 2008 The system of internal control is sound in design. Key operating and financial data for last six years in summarized form is annexed. CFO and Company Secretary and their spouses and minor children except those that have been duly reported as per the law. 82.Gratuity fund . as applicable in Pakistan. have been followed in preparation of financial statements. No trade in the shares of the company were carried out by CEO.Provident fund . ■ International Accounting Standards. Proper books of account of the company have been maintained. The process of monitoring internal controls will continue as an ongoing process with the objective to further strengthen the controls and bring improvements in the system. Details of significant improvements in the company's operations during the current year and significant plans and decisions for the future are stated in the Chief Executive Review. The system is being continuously monitored by Internal Audit and through other such monitoring procedures. ■ Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.139). ■ The following is the value of investments of the following funds based on the audited accounts for the year ended 31 December 2006: ■ 27 . ■ . 27.Pension fund ■ Rs. ■ Information about taxes and levies is given in the notes to the financial statements. ■ held and the attendance by each director is attached separately. 87.35 million Rs.Directors’ Report Crescent Steel & Allied Products Ltd. ■ The number of employees at the end of year was 1. ■ There are no significant doubts upon the company's ability to continue as a going concern.44 million During the year six board meetings were There has been no material departure from the best practices of corporate governance.166 (2007:1. ■ Pattern of Shareholding The pattern of shareholding and additional information regarding pattern of shareholding is attached separately.02 million Rs. as detailed in the listing regulations.

28 ANNUAL REPORT 2008 .

The Audit Firm has been given a satisfactory rating under the Quality Control Review Programme of the Institute of Chartered Accountants of Pakistan (ICAP) and the firm is fully compliant with the International Federation of Accountants’ (IFAC) Guidelines on Code of Ethics. Saleem shareholders consideration at the forthcoming annual general meeting.. 29 ANNUAL REPORT 2008 By order of the Board Auditors The auditors. KPMG Taseer Hadi & Co. Chartered Accountants and their report is attached with the financial statements. the seven retiring Directors were elected unopposed whose term of office will expire on 29 January 2009. Directors Election of Directors was held on 28 January 2006 and out of eight Directors. retire and offer themselves for re-appointment. No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year to which this Balance Sheet relates and the date of the Directors' Report. KPMG Taseer Hadi & Co.Directors’ Report Crescent Steel & Allied Products Ltd. as adopted by the ICAP. Ahsan M. Committee and the Board of Directors of the Company have endorsed their appointment for Financial statements The financial statements of the Company have been duly audited and approved without qualification by the auditors of the Company. The Board Audit Chief Executive 31 July 2008 . The Board Audit Committee and the Board of Directors of the Company have endorsed their appointment for shareholders consideration at the forthcoming annual general meeting.

30 ANNUAL REPORT 2008 .

Similarly. The performance of the Company during the Economy Pakistan’s economy which had been growing rapidly in the last few years saw one of the most challenging periods in the year under review. 31 ANNUAL REPORT 2008 . At the home front. Tightening of the monetary policy.2 billion.387 points (22%) from its peak by the end of June 2008. a huge trade gap due to high consumer import and rising oil bill. Soaring oil and commodity prices internationally have added to the economic woes and will precipitate an economic slowdown. In addition to the above mentioned reasons. Profits of IID Division were consequently. has not improved the situation but added significantly to the cost of doing business for the industry. the textile sector remained under pressure throughout the year to which power and gas outages and higher borrowing costs affected the bottom line in the cotton division. year under review in terms of revenue as well as profits was satisfactory. This can be attributed to combination of domestic and international issues. Despite this down turn the division bottom line stayed in positive. Dear Shareholders. The greater challenge now is the high inflation and while the central bank continues to take steps to contain inflation. political uncertainty combined with lower contribution of agriculture and industry has contributed to this under achievement. With food and energy prices rising to unprecedented level. the coming year will pose a severe test of economic and political management. increase in discount rate and devaluation of rupee contributed to this steep downturn.2 percent for the year. A growth of only 5. so far. badly hit particularly during the last quarter. The Steel Division contributed significantly to the top line growth in revenue and improved margins. The capital market which continued to perform well for the first nine months despite political uncertainty finally succumbed to fall by 3. There continues to be looming fear about worsening political prospects. Financial and Operational Performance I am pleased to present the Annual Report and the audited financial statements including review of the performance of the Company for the year ended 30 June 2008 together with Auditors' report thereon. foreign exchange reserves have started depleting putting a pressure on rupee dollar parity. rising prices and slowing economic growth.Chief Executive’s Review Crescent Steel & Allied Products Ltd.8 percent could be achieved against a target of 7. And the Company was able to post highest ever revenues of rupees 4.

32 ANNUAL REPORT 2008 .

3 million) gross profit was contributed by Steel Division which constitutes almost 84. This includes own products as well as conversion items.3 million i. we have explored new markets and diversified our product offering for construction and infrastructure projects.6% (2007: 25%) played a vital role in bringing the entire gross contribution to 23. Steel Division profit before taxation amounted to Rs. The gross profit of Rs. The gross margin of steel division is 29.102 metric tons as compared to 23.9 million was well above the prior year of Rs.9 million) in which Rs. 390. In the ensuing paragraphs operating performance of divisions is set out separately.1% of sales as against 31. 896.8 billion. In Steel Division.5% of the gross contribution margin. Highlights of 2008 results are given below: Sales Revenue increased by 42% over last year and amounted to Rs.9 million (2007: Rs. 650.641.180 metric tons to 41.4 million. Earning per share of Rs. Gross profit increased by 76 percent as compared to the corresponding period and amounted to Rs.e.102 metric tons.Chief Executive’s Review Crescent Steel & Allied Products Ltd.3 million as against Rs. improved plant utilization and diversification of product offering for construction / infrastructure projects. Steel Division Performance of steel division both in terms of revenue and profits for the year ended 30 June 2008 was exceptional as compared to the last year. During the year.7 million last year. 2. 33 ANNUAL REPORT 2008 .8 billion in Steel Division increased by 77%. Gross contribution during the year is Rs.217. Sales for year amounted to Rs.3% as compared to last year.2% in corresponding period last year. increase of Rs. 429.7 million.1%. Production of bare pipes mix dia increased by 77% from 23. 819. 390. Gross contribution margin as a whole during the year was 23. 4.2 billion including a record turnover of Rs. performance both in terms of revenue and profits for the year ended 30 June 2008 was exceptional as compared to the last year due to healthier order book for pipe production.1 per share.180 metric tons during last year. 819.6 million over last year resulting in record profit from operations amounting to Rs. Bare pipe production during the year was 41. 8. increased by 77. 921. 2. 970 million (2007: Rs.

34 ANNUAL REPORT 2008 .

it made the all time high of 15.7% to 5.426 million during the current year due to increase in prices of cotton yarn.Chief Executive’s Review Crescent Steel & Allied Products Ltd.7 million during the year. The spinning unit–I operated for 365 days whereas unit-II of cotton division operated only for 341 days.5 million as compared to Rs. However. As a result division make loss of Rs. the steel division maintained its market share of 40 percent in spiral pipe segment. 1. Top line had increased by 3% mainly due to increase in sales price by 9. .4% in current year mainly due to high prices of raw cotton. 6. energy and labour. decrease of Rs.2 million in last year– decreased by Cotton Division This year was again a challenging year for the Textile industry particularly for Spinning sector. 120. 35 ANNUAL REPORT 2008 Investment and Infrastructure Development Division During the last few years.6 million.6 million Kgs as compared to 16. 1. 99. During the year under review. The financial charges for the year increase by Rs. Gross profit for the year under review amounted to Rs. 76. due to stoppage for 25 days which was caused by non-availability of gas for generation of power.4 million in the corresponding period last year. However. Global cotton prices also showed upward trend while prices of cotton yarn did not show proportionate increase. The cost of production was also affected due to increase in oil prices and overall inflation in the country.3 million as compared to Rs. during the current year. 59. affecting cost of manufacturing of yarn. the market kept on swinging in both directions. 40. 32 million because of turmoil in Karachi Stock Exchange. 46. Spinning unit production in 20’s counts converted for the year was 15. Cotton production for 2007-08 was 11. During the year under review.1 million. Non-availability of gas resulted in a loss of over Rs. This resulted in shortage of cotton for local consumption and consequently significant increase in cotton prices.4% whereas gross profit margin decreased from 8.3 percent. contribution of Investment and Infrastructure Development Division (IID) to the bottom line was only Rs.7 million bales decreased by 9. sales revenue increased from Rs.4 percent. portfolio investment has contributed a major portion of profits. The operating profit was Rs. 14 million.8 million to Rs.7 million Kgs produced in last year. fought with the 36.385.676 and witnessed intra-day deepest plunge of 636 points.

36 ANNUAL REPORT 2008 .

The balance sheet gearing (Company’s long term debt to equity ratio) as at 30 June 2008 is 5: 95 (2007 .at cost amounted to Rs. 122.483 points or 10.3.846. Net long term borrowing at the year end reduced to Rs. apartment and warehouse.1 million). 99. And despite continuing Capital Gain Tax exemption. political disturbance in last week of December and tight monetary policy. 2.7 billion on 30 June 2008 as compared to Rs.800 points or 18. The total value of our chip scrips across diversified sectors to mitigate the inherent risks in equity investment and infrastructure development projects. 2. KSE-100 index during last quarter plunged by over 2. However despite this turmoil.7 million this year.772 to 12.1 million (2007: Rs.3 billion last year. 50. This represents industrial and non-industrial lands. our strategy has been to focus on those sectors and project which have potential for growth and where real investments are being made. investment in infrastructure development property including capital work in progress. We continued our policy of investing in blue 37 ANNUAL REPORT 2008 Profit before tax amounted to Rs.75% to end the quarter at 12. office premises.289 on average daily turnover of 198. 354.30% to 14. during the year under review.0 million). company generated 5.10: 90). 4. negatives superseded the positives and shifted the balance in negative zone as KSE-100 Index shed 1.7 million shares whilst the KSE-30 Index dropped by over 4.289 with an average daily turnover of 241 million shares.Chief Executive’s Review Crescent Steel & Allied Products Ltd.000 points or 22.2 billion were sold on account of trading and switching positions. For the benefit of our shareholders. The liquidity position .326. Total investments appearing in short term and long term classification aggregated to a market value of Rs. Net share of profit in associates (entities which are accounted on equity accounting method) for the year amounted to Rs. Balance Sheet The Company’s balance sheet continues to remain robust supported by strong reserves.2 million Shakarganj Mills Limited) were purchased while shares amounting to Rs. 509. During the period under review shares amounting to Rs.6 million including one-off profit on disposal of office premises last year. 32 million compared to Rs.8 million (2007: Profit of Rs. by grace of Allah.8% from 13. Balance sheet footing has increased to Rs.1 million as at 30 June 2008. 168. after effects of Emergency. 260.0 billion (including Rs. 2.2% return on average portfolio investment (excluding equity accounted undertakings).

38 ANNUAL REPORT 2008 .

855. 3.3% for last year respectively.4% versus 22. Provisions have also been made for payments on account of capital commitments stated in financial statements for 2008. The decrease is mainly due to reduction in capital reserves related to unrealized gain on available for sale investment and other reserve for investment in associates by Rs. Break up value of shares has decreased to Rs. Shareholders’ funds at the year end totaled Rs. and doing right the first time – making objectives for continual improvement and monitoring them .4% and 25.5 million respectfully. mainly due to increase in number of shares by bonus issue during the year. 212. With the increase in interest rates the financial cost will also increase. Contribution to National Exchequer The company has contributed Rs. Going forward working capital requirements of the Company is likely to increase substantially due to significant increase in price of raw material mainly steel and cotton. 208. maintaining cost and quality leadership. 39 ANNUAL REPORT 2008 Cash Flow Management The Company has an effective Cash Flow Management System in place whereby cash inflows and cash outflows are projected on regular basis.4 times. 629. 179.3 from Rs.6 million last year.9 million and Rs. ensuring customer satisfaction. of the Company is comfortable with a current ratio of 1.2 billion).9 million during last year due to net cash outflow of Rs. During the year cash generated from operation amounted to Rs.6 in last year.Chief Executive’s Review Crescent Steel & Allied Products Ltd.5 (2007 – 2). Quality CSAPL is committed to provide products and services conforming to international standards and customer requirements – based on application of modern technology. 893. 906. Working capital requirements of the Company for 2008 have been planned to be financed through internal cash generations and short term financings from external sources. 58. 303. Net decrease in cash and cash equivalents amounted to Rs.4 million which is higher than Rs.2 million as against increase of Rs. 68.4 million for investing activity.3 million towards the national exchequer on account of government levies and taxes as compared to Rs. Return on average capital employed (ROCE) and return on average equity (ROE) for the year is 18% and 13. 3 billion (2007: Rs. The management is taking steps to counter the negativity and to effectively manage the cash flows and to contain the interest / mark-up cost.6 million during last year. This is an increase of 2. 712.

40 ANNUAL REPORT 2008 .

We have also a long term commitment to tertiary education and have been contributing to Lahore University of Management Sciences and Commecs Institute of Business and Emerging Sciences. In 2008 donations and payments helping community initiatives amounted to Rs. computing systems and facilities. These integrated efforts of the entire organization have brought fruitful results with no major accidents occurring at the factory. property.5% of its Pre-tax profits in the form of donations and community support initiatives. computer labs and books. guidance and to assess the performance and requirement of schools. protecting the environment by conserving resources and preventing pollution in a cost effective way.Chief Executive’s Review Crescent Steel & Allied Products Ltd. A written report is submitted by visitors to Chief Executive for review. In addition we contributed to support running of schools. As a Healthcare initiative. In line with our long term commitment to education and to develop a sense of owning we contributed to start with Paint Safety. To have a better coordination. to ensure effectiveness of Quality Management System through an independent quality function. Secondary and Tertiary education support and Healthcare. Further Hepatitis “B” vaccination and anti flue shots and awareness program for employees were carried out during the year. campuses in the past years. 41 ANNUAL REPORT 2008 Social responsibility Social responsibility has long been a part of CSAPL’s values and how we operate. In partnership with The Citizens Foundation. we have contributed to Indus Hospital . protecting human health within our boundaries. we have started with School Visit Program carried out by our Executives and Managers. We are now preparing ourselves for the certification of ISO 14001 and OHSAS 18001 Systems. our focus in social development initiatives continues to be in Primary. Health and Environment by adopting safe working practices to protect people. we have contributed fourteen school . painted a school. 24. In line with our vision.managed by Rufaydh Foundation. Company has a policy to allocate 2% . giving more assistance. a School Project in which all staff headed by Chief Executive.4 million or 4 percent of pre-tax profits. purchase of vehicles. Health and Environment and complying with current legislation and maintain standards of Safety. Health and Environment The Company is committed to continually improve its environment by providing training to all its employees with regards to Safety.

42 ANNUAL REPORT 2008 .

“Standard of Conduct for Employees”. Values and ethics encompass a trustworthy relationship between organizations and their business partners which paves the way towards a mutually beneficial relationship. job evaluation and advance training strategies beneficial for all employees throughout the company. These are. implemented KPI (key performance indicators). therefore. “Standard of Conduct for Directors”. processes and frameworks including “Core Values”. prepared recruitment plan.Chief Executive’s Review Crescent Steel & Allied Products Ltd. This has also interconnected with our major exercise carried out termed as ORTEOrganization Review and Transformation Exercise. 43 ANNUAL REPORT 2008 Good Governance The Board places paramount importance on Good Governance and has. identification and solution for risks and challenges. sustained business prosperity and safeguarding the rights of shareholders. It endorses the Best Practices of the Code of Corporate Governance as an effective tool in discharging these duties in addition to enhancing the timeliness. changing commercial. to cater for the evolving and ever . HR Initiatives With a stated objective and keeping with global best management practices. These standards are regularly reviewed and updated to ensure effectiveness and relevance for achievement of long term objectives of the Company and are applicable to everybody in the Company. accuracy. HR department under the guidance of an HR consultant has successfully introduced new performance management system. social and environmental requirements. management. in addition to international best practices. in conformity with the Code of Corporate Governance of Pakistan. change management concept. Priority has been accorded to values and ethical conduct. During the year the Company has also invested on Human Resource Management System which is in implementation phase and will be operational within couple of months. and. therefore. ingrained in CSAPL’s culture. The Board acknowledges its responsibility for the overall strategy. formulated goals and objectives both for departments as well as individuals at management level for all departments. HR initiatives will drive CSAPL towards betterment and growth. comprehensiveness and transparency of financial and non-financial information through accountability and integrity. developed effective Governance structures. “Policy Statement of Ethics and Business Practices”.

44 ANNUAL REPORT 2008 .

projects and human resource management system to replace our legacy applications. Business Process Reengineering and Management Information System To enhance efficiencies and as a part of business process reengineering for continuous improvement. . Primarily Risk Management is the responsibility of the business managers whereas. and by taking measured risks we strive to be a sustainable Company. This is in the implementation phase and so far all the milestones have been achieved as per plan. manufacturing.“Double A Minus” respectively. In order to support this ERP. This reflects our focus on excellence in corporate governance. Business locations are also now connected over a High Credit Rating JCR-VIS Credit Rating Company Limited in its recent annual review of the Company’s creditworthiness has maintained Company’s entity and debt security ratings as A+/A-1 “A plus / A one” and AA. Speed Wide Area Network which has a high art technology. employees. shareholders. and society can be met. Head of Risk and Compliance has a responsibility for the oversight of the key risks and compliance of legal requirements. Risk management is one of the essential elements of the Company’s corporate governance. ethics and values. This competition was held jointly by Institute of Chartered Accountants of Pakistan and Institute of Cost and Management Accountants of Pakistan. transparency and dedication to best practice. an Enterprise Resource Planning system for its financial. This calls for creating a proper balance between entrepreneurial attitude and risk levels associated with business opportunities. ANNUAL REPORT 2008 45 level of security through firewalls of state of the Business Risks and Challenges Doing business inherently involves taking risks.Chief Executive’s Review Crescent Steel & Allied Products Ltd. state of the art Blade servers were selected and installed. Through our risk management framework we want to provide reasonable assurance that our business objectives can be achieved and our obligations to customers. These ratings reflect the Company’s financial and management strength and denote a low expectation of credit risk and the capacity for timely payment of financial commitments. the Company during the year initiated implementation of Oracle application suite. Best Corporate Report Our Annual Report 2007 received 1st position in Engineering Sector of “Best corporate Report Award-2007”. supply chain.

46 ANNUAL REPORT 2008 .

and educating staff. Recently State Bank of Pakistan has withdrawn forward cover facility and the falling value of Pakistan Rupee. retaining.Chief Executive’s Review Crescent Steel & Allied Products Ltd. The Company aims to use its purchasing power and long term relationships with suppliers to acquire raw materials and safeguard their constant delivery at the best conditions. Investment Risk Company has made significant investment in marketable securities. motivating. The Company’s financial condition and results of operations could be adversely affected if the Company does not successfully mitigate risks associated with interest rate changes. mitigation of adverse currency fluctuation has become more challenging. As a part of our policy to produce forward looking statements we are outlining the risks which may affect our business. Internal Controls Without effective internal controls the Company may be exposed to financial irregularities and 47 ANNUAL REPORT 2008 . exchange rate fluctuations can have an impact on the Company’s financial results. growth in cost and expenses for raw materials and natural gas. significant portion of this is arranged through short term borrowings. Interest Rate Risk With increase in price of steel. Currency Risk Since the significant parts of the Company’s operations are based on imported raw material. This exercise also helps the management focus on a strategy to mitigate risk factors. may adversely influence the future results of the Company. our major risk factors are listed below: Raw Material Sourcing Inability to access raw materials. Employee Retention and Recruitment The Company’s ambitious growth plans may not be achieved when we fail to attract and retain the right people. The Company follows diversified investment policy and actively manages its investment portfolio to match the required risk profiles. The Company puts emphasis on attracting. Company is sensitive to price movements that may lead to erosion of margins and liquidated damages due to non-availability of raw material. Adverse stock market developments may affect the profitability and assets of the Company. Under the explicit understanding that this is not an exhaustive enumeration. cotton and other inputs the working capital requirements of the Company will also enhance. using Human Resources instruments.

48 ANNUAL REPORT 2008 .

This may lead to Pakistan losing its share to India. But on the other hand the consumption is estimated as 16 million bales. Due to early sowing in some area of Punjab and supportive weather (till now) and the growth of BT cotton in massive area. Iran-Pakistan-India gas pipeline arrangement is in finalization stage and Gas Sales Agreement is expected to be signed very soon and the construction of pipeline in Pakistan is likely to commence in the later part of 2009. ANNUAL REPORT 2008 Future Prospects and Outlook 49 The infrastructure development like water . half million ton of steel pipes). be internally generated by the gas companies for the development of their infrastructure to take gas from the point of delivery to the point of consumption. affecting cost of manufacturing of yarn. Nevertheless exceptionally high prices of crude oil and acute power shortage would favour emphasis on maximizing gas utilization which should expedite approval of new projects.035 Km of 56” and 42” dia pipes (approx. improve their production efficiencies and lower costs. This covers the areas ranging from safeguarding the assets. new IPPs and thus generate business for steel pipes. In the cotton division. Similarly we have to ensure that we match or exceed the quality and service performance of our competitors. energy and labour. sea ports up gradation. Exorbitant steel prices and resultant high product cost are forcing the major clients to slow down their development due to increased capital requirement and limited availability of funds in the form of approved budget. China & Bangladesh due to their government supportive export policies. Market is under pressure due to high prices of raw cotton. it is expected that the production will be close to this target. This involves supply of 1.1 million bales. Similar demand of approximately half million ton will supply projects. Technological Advantages Our competitors may be able to identify and implement a major technological step change resulting in product substitution. power projects is expected to generate substantial demand during next few years. losses.Chief Executive’s Review Crescent Steel & Allied Products Ltd. the situation is again not looking very favorable. compliance with laws and regulations and accuracy and reliability of its records and financial reporting. Our inability to implement similar steps may make us uncompetitive. Government has set the cotton target for the year 2008-09 as 14.

50 ANNUAL REPORT 2008 .

enthusiasm and sense of motivation in taking the company’s performance to new heights. In case the cotton yarn prices do not move in proportion to the production cost. However. I am pleased to record our appreciation. Capital Market substantially fell over the last couple of months. Another development in our neighboring country India is that they have lifted the 14% duty on cotton imports and removed 1% rebate on cotton export. 51 ANNUAL REPORT 2008 General The management would like to record its . Ahsan M. International cotton market is also at high tune and the world production is expected to be lower by 3. This may further increase the cotton prices in Pakistan. The management is aware of the challenges and will do everything possible to mitigate the adverse impact of such an event. However. in results. Our employees have demonstrated great dedication. increase in gas price and increase in minimum wages will significantly push the production cost.5% over last year. it is expected that due to the fiscal and monetary measures taken by the Government and State Bank of Pakistan the market may stabilize at these levels. We would like to express warm gratitude to our customers for their support and believe that all our efforts and success are possible because of vital role played by them and their confidence for potential growth in our products and services. This along with the high inflation. Saleem Chief Executive 31 July 2008 deep appreciation to the active role of the Board of Directors and the Audit Committee in supporting and guiding the Management on matters leading to success in achieving the targets of the Company. This will also enhance the working capital requirement and with the rise in SBP discount rates and KIBOR rates. the financing cost may also go up drastically. capital markets are always subject to market risk and we have to be vigilant in terms of current economic and political instability. this will affect the bottom line.Chief Executive’s Review Crescent Steel & Allied Products Ltd. On behalf of the directors and myself. We are taking all the measures to mitigate the market risks through diversification in the portfolio. the India is importing cotton from Pakistan in early start of cotton season in Pakistan. It means Pakistan is facing 2 million bales shortfall of cotton even if the target is achieved.

.

4 69.7 128.9 8.2 16.7 168.5 467.2 18.2 52.8 1.2 81.1 1.4 10.6 151.233.0 1.5 3.3 1.9 63.9 1.2 26.8 2.7 11 : 89 27.687.5 99.0 3.3 3.6 22.3 1.3 221.9 (11.9 15.5 181.5 20.0 2005 2.1 2002 1.2 82.8 2.1 1.2 21.2 4.0 260.8 2.5 1.7 21.1 1.including final proposed Dividend pay out (%) .0 72-32 5.291.5 23.4 25.4 2.686.8 1.055.0 1.6 210.6 961.6 357.6 125.1 53 ANNUAL REPORT 2008 .8 896.3 20 77.6 3.1 10 78.2 5.9 431.6 20.519.228.733.0 8.0 68.1 5.4 146.0 22.8 22.5 35.1 1.3 4.860.0 11.5 107.7 60.306.7 2006 1.2 21.0 10 61.1 20.9 4.0 1.5) 394.5 4.2 222.including final proposed Market value per share (Rupees) Market value per share high .3 205.5 66.8 140.4 1.5 75.9 32.439.8 312.1 229.3 132.2 20.4 0.6 156.2 90.0 20.298.8 ––– 381.8 626.1 2.4 1.9 24.200.5 91.1 1.162.2 0.0 4.7 58.5 13.4 32.3 8.9 221.7 18.994.1 354.9 1.1 398.7 432.5 411.9 441.3 70.0 21.7 954.2 588.7 18.2 286.4 49.1 3.9 1.9 233.303.1 43.5 26.9 1.0 756.8 1.9 16.200.0 4.9) 262.2 1.5 6.7 11.8 1.4 996.2 1.8 18.3 72.4 31.1 60.9 16.9 3.2 ––– ––– ––– 20 43.6 2.3 2007 2.3 19.4 2.9 56.6 5 : 95 35.1 76.7 457.573. plant and equipment turnover (times) Total assets turnover (times) Other Data (Rupees in million) Depreciation / amortization Capital expenditure (including leased assets) Common shares (no.8 236.1 1.5 90-37 5.1 80.5 7 : 93 44.6 468.9 37.480.6 0.9 3.4 73.8 259.3 22.0 340.1 10 71.173.3 44.7 43.1 663.617.9 25.Financial Highlights 2008 Operating Results ( Rupees in million) Net sales Cost of sales Gross profit Investment income .7 10.3 82.0 153.566.7 584.6 2.5 7.5 5.6 21.9 82.9 93-50 5.7 154. taxes and depreciation and amortization (EBITDA) Dividend Per Share Results and Return Earnings per share (Rupees) Break-up value per share (Rupees) Dividend per share .381.1 4.0 2.net Distribution.8 2.9 415.6 728. selling and administrative expenses Other operating expenses Other operating income .6 173.0 6.low (Rupees) Price earning ratio (Rupees) Financial Position (Rupees in million) Current assets Stock-in-trade Trade debt Current liability Trade and other payables Property.950.0 13.9 46.4 468.3 44.4 77.4 442.0 13.1 3.3 13.2 10.7 83.3 140.2 1.8 295.4 15.0 370.1 3.1 118.5 36.9 153.707.6 68.1 100.4 10 83.2 1.9 13.1 10 : 90 30.714.4 108.5 194.9 10.3 2004 1.0 90-30 5.4 2.9 46.7 42.3 1.6 21.5 37.124.047.0 3.5 706.5 138.5 15.7 8.2 326.2 284.0 26.3 100.3 64.0 9.4 9.2 1.6 19.including final proposed (Rupees) Dividend yield (%) .3 17.7 48.2 410.5 51.7 29.696.2 347.306.0 100-64 6.2 163.2 481.6 46.4 3.3 3 : 97 20.348.7 22.738.2 3.9 (19.9 175.6 3.4 17.2 355.6 625.6 4.9 79.3 14.5 1.9 174.9 789.7 30.5 23.3 3.5 1.8 3. of shares in million) 4.7 1.9 176.0 110.569.0 3.4 34.0 109.including final proposed Bonus shares (%) .5 1.0 84.4 8.4 522.5 99.1 58.3 1.841.0 50.5 10.5 18 : 82 31.9 1.6 13.7 510.6 12.9 174.3 332.846.0 32-14 4.0 5.1 240.9 113.6 876.3 17.3 0.5 4.3 16.1 727.7 712.5 5.3 57.0 4.029.4 ––– 33.6 84.4 12.127.1 59.5 1.2 61.2 3.8 3.1 240.3 7.3 1.9 21 : 79 45.7 72.7 548.9 973.460.077.3 31.4 ––– 326.170.1 61.4 97.314.4 126.3 114.2 8.1 2003 1.7 43.279.8 17.4 26.034. plant and equipment Total assets Long term debt (excluding current maturity) Deferred liabilities Short term debt (including current maturity of long term debt) Reserves Shareholders' equity Financial Ratios Gross profit to sales (%) Operating profit to sales (%) Net income to sales (%) Return on average assets (%) Return on average capital employed (%) Return on average equity (%) Quick / acid ratio Current ratio Net current assets (working capital) Long term debt to equity (%) Long term debt : equity ratio Total debt to total assets (%) Interest coverage (times) Debtors turnover (times) Inventory turnover (times) Average collection period (days) Inventory turnover (days) Creditors turnovers (days) Operating cycle (days) Property.2 22.4 8.9 23.3 17.6 714.8 633.2 77.8 450.4 3.6 35.6 39.779.7 2.1 3.9 8.9 130.9 38.1 111.2 235.0 20.1 19.9 23.0 87.3 7.0 ––– 100.2 1.6 444.8 ––– 6.6 2.8 5.3 24.7 19.1 1.310.0 64.7 9.541.net Operating profit before finance costs Finance costs Share of profit / (loss) in associates Profit before taxation Income tax Net income Earning before interest.0 4.0 35.1 606.037.8 28.9 0.1 435.7 ––– 198.7 2.0 43.3 68.9 118.6 22.7 108-58 7.7 371.439.398.6 11.5 4.7 36.6 101.3 25.3 11.4 23.

54 ANNUAL REPORT 2008 .Financial Highlights Crescent Steel & Allied Products Ltd.

Ehtishamullah Zahid Bashir No. Callea Javed Iqbal Muhammad Anwar Nasir Shafi Syed M. of meetings attended 3 4 3 55 ANNUAL REPORT 2008 . Callea Javed Iqbal Nasir Shafi No. of meetings attended 1 6 4 6 3 5 6 3 During the year four meetings of the audit committee were held.Board and Audit Committee Meetings Attendance by the Directors / Members During the year six meetings of the board of directors were held. Attendance by each of Audit Committe member was as follows: Name of Member Javed A. Saleem Javed A. Attendance by each director was as follows: Name of Director Mazhar Karim Ahsan M.

including their remuneration and terms and conditions of employment. including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer (CEO) and an Executive Director have been taken by the Board. . and significant policies of the Company. 56 ANNUAL REPORT 2008 7. 11. The Board met six times during the year ended 30 June 2008 including once in every quarter to approve the financial statements of the Company. The Directors have confirmed that none of them is serving as a Director in more than ten listed companies. whereby a listed company is managed in compliance with the best practices of corporate governance. by a Director elected by the Board for this purpose. In-house orientations for the Directors were made to apprise them of their duties and responsibilities and to brief them regarding amendments in the Companies Ordinance / Corporate Laws. All the meetings of the Board were presided over by the Chairman and. The Board comprises eight directors including the CEO. None of them is a member of a Stock Exchange. The company has prepared a 'Statement of Ethics and Business Practices'. 4. The corporate strategy of the Company is reviewed and approved by the Board alongwith the annual plan.Statement of Compliance with the Code of Corporate Governance Crescent Steel & Allied Products Ltd. the Board met to discuss with the key members of the management team with out the Chief Executive to assess the adequacy of controls. were circulated at least seven days prior to the meetings. The Board has approved appointment of CFO / Company Secretary and the Head of Internal Audit. A complete record of particulars of significant policies alongwith the dates on which they were approved or amended has been maintained. The Directors' Report for the year ended 30 June 2008 has been prepared in compliance with the requirements of the Code and it fully describes the salient matters required to be disclosed. a DFI or an NBFI. The company has applied the principles contained in the Code in the following manner: 1. 10. including this Company. The minutes of the meetings were appropriately recorded and circulated in time. 9. At present the Board has six non-executive Directors out of which two are independent non-executive Directors. The company encourages representation of independent non-executive Directors. A separate meeting of the Board was held to approve the Annual plan/Budget. in his absence. 2. The Board has developed a vision / mission statement. alignment of key managers with overall objectives of the Company and to make an independent assessment of adequacy of succession. Written notices of the Board meetings. 5. which has been signed by all the Directors and employees of the Company. as recommended by the CEO. 6. No casual vacancy occurred during the year ended 30 June 2008. 8. 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. This statement is being presented to comply with the Code of Corporate Governance as contained in the Listing Regulations of the Stock Exchanges of Pakistan for the purpose of establishing a framework of good governance. 3. Following the Best Practices of Corporate Governance. All the powers of the Board have been duly exercised and decisions on material transactions. alongwith agenda and working papers.

This function has been outsourced to Ford Rhodes Sidat Hyder & Co. 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 Board has formed an Audit Committee. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final results of the Company and as required by the Code. It comprises of three members. It requires that at least two members of the Audit Committee must be financially literate. 14. Chartered Accountants. Saleem Chief Executive 31 July 2008 . CEO and Executives do not hold any interest in the shares of the Company. and appropriate steps are taken to comply with the best practices. 17. 21. The Audit Charter of the Company was reviewed during the year to bring it in line with International Best Practice. The terms of reference of the Committee have been framed and advised to the Committee for compliance. The Directors. who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company. 15. We confirm that all other material principles contained in the Code have been complied with. 13. 18. The Company has complied with all the corporate and financial reporting requirements of the Code. The financial statements of the company were duly endorsed by the CEO and CFO before approval by the Board. The Board has set-up an effective internal audit function. all of whom are non-executive Directors including the Chairman of the Committee..Statement of Compliance with the Code of Corporate Governance 12. other than that disclosed in the pattern of shareholding. 19. 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 statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan. 16. that they or any of the partners of the firm. The Management of the Company is committed to good corporate governance. 57 ANNUAL REPORT 2008 By order of the Board Ahsan M. 20.

Chapter XIII of the Listing Regulations of the Lahore Stock Exchange and Section 36 (Chapter XI) of the Listing Regulations of the Islamabad Stock Exchange where the Company is listed.com.. Our responsibility is to review. 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 30 June 2008. 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. 58 ANNUAL REPORT 2008 As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. KPMG Taseer Hadi & Co. 2 Beaumont Road Karachi 75530 Pakistan Telephone +92 (21) 568 5847 Fax +92 (21) 568 5095 Internet www. 31 July 2008 Karachi KPMG Taseer Hadi & Co. Based on our review. 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.kpmg. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. in all material respects. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board’s statement on internal control covers all controls and the effectiveness of such internal controls. 37 of the Karachi Stock Exchange. which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance. a Swiss cooperative . Chartered Accountants First Floor Sheikh Sultan Trust Building No. to the extent where such compliance can be objectively verified.pk 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 Corporate Governance prepared by the Board of Directors of Crescent Steel and Allied Products Limited (“the Company”) to comply with the Listing Regulation No.KPMG Taseer Hadi & Co. Chartered Accountants. a partnership firm registered in Pakistan and a member firm of the KPMG network of independent member firms affiliated with KPMG International.

Zakat deductible at source under the Zakat and Ushr Ordinance. a Swiss cooperative .KPMG Taseer Hadi & Co. and. as well as. give the information required by the Companies Ordinance. the balance sheet.. on a test basis. It is the responsibility of the company's management to establish and maintain a system of internal control. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. We believe that our audit provides a reasonable basis for our opinion and. proper books of account have been kept by the company as required by the Companies Ordinance. investments made and the expenditure incurred during the year were in accordance with the objects of the company. for the year then ended and we state that we have obtained all the information and explanations which. were necessary for the purposes of our audit.com. An audit also includes assessing the accounting policies and significant estimates made by management.kpmg. Chartered Accountants. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance.pk Auditors’ Report to the Members We have audited the annexed balance sheet of Crescent Steel and Allied Products Limited (“the Company”) as at 30 June 2008 and the related profit and loss account. profit and loss account. 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. and in our opinion. d) 31 July 2008 Karachi KPMG Taseer Hadi & Co. KPMG Taseer Hadi & Co. in our opinion: i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. evidence supporting the amounts and disclosures in the above said statements. 1984. a partnership firm registered in Pakistan and a member firm of the KPMG network of independent member firms affiliated with KPMG International. 1984. 1984 and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. Chartered Accountants First Floor Sheikh Sultan Trust Building No. 2 Beaumont Road Karachi 75530 Pakistan Telephone +92 (21) 568 5847 Fax +92 (21) 568 5095 Internet www. Our responsibility is to express an opinion on these statements based on our audit. 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. in the manner so required and respectively give a true and fair view of the state of the company's affairs as at 30 June 2008 and of the profit. its cash flows and changes in equity for the year then ended. An audit includes examining. 1984. cash flow statement and statement of changes in equity together with the notes forming part thereof. evaluating the overall presentation of the above said statements. to the best of our knowledge and belief. 1980 (XVIII of 1980). 59 ANNUAL REPORT 2008 b) ii) iii) c) in our opinion and to the best of our information and according to the explanations given to us. we report that: a) in our opinion. was deducted by the company and deposited in the Central Zakat Fund established under Section 7 of that Ordinance. after due verification.

077.000.500 75.098 ––– 1.000.505 279.590 Redeemable capital Deferred taxation Current liabilities Trade and other payables Interest and mark-up accrued Short term borrowings Current portion of long term loan Current portion of redeemable capital Taxation .765 1.551 6.331 112.000 ––– 5.799 112.573.696.403 Non-current liabilities Long term loan 60 ANNUAL REPORT 2008 7 8 9 168.119.612 792. subscribed and paid-up capital Capital reserves Revenue reserves 6 1.000 ordinary shares of Rs.500 74.Balance Sheet As at 30 June 2008 Crescent Steel & Allied Products Ltd.080 2.080 16.109.652 64.994. Note 2008 2007 (Rupees in '000) EQUITY AND LIABILITIES Share capital and reserves Authorized capital 100.000 466.819 19.518 1.354 73.584 418.200.941.273 3.622 280.117 ––– 111.273 371.004 1.150 432.064 4.066 Total equity and liabilities Contingencies and commitments . 10 each Issued.000 513.000.net Current portion of liabilities against assets subject to finance leases 10 11 12 7 8 13 240.544 1.690 14 435.651 2.846.073 4.

Balance Sheet
As at 30 June 2008

Note

2008 2007 (Rupees in '000)

ASSETS Non-current assets Property, plant and equipment Intangible assets Investment property Long term investments Long term loan and deposits 15 16 17 18 19 1,233,231 620 50,003 1,279,480 4,241 2,567,575 Current assets Stores, spares and loose tools Stock-in-trade Trade debts Advances Trade deposits and short term prepayments Current portion of long term investments Investments Mark-up accrued Other receivables Taxation - net Cash and bank balances 25 26 27 13 28 20 21 22 23 24 77,385 606,059 118,696 24,599 2,413 10 1,407,638 2,387 31,729 ––– 8,199 2,279,115 48,849 633,452 181,408 83,119 4,750 10 1,040,919 2,476 72,635 20,192 36,999 2,124,809
61 ANNUAL REPORT 2008

1,306,641 503 ––– 1,259,546 4,567 2,571,257

Total assets The annexed notes 1 to 49 form an integral part of these financial statements.

4,846,690

4,696,066

Chief Executive

Director

Profit and Loss Account
For the year ended 30 June 2008
Crescent Steel & Allied Products Ltd.

Note

2008 2007 (Rupees in '000) 4,200,205 3,303,807 896,398 73,607 970,005 2,950,120 2,439,656 510,464 411,402 921,866 13,286 133,362 125,543 272,191 649,675 107,002 756,677 128,490 99,136 727,323 64,145 663,178

Sales Cost of sales Gross profit Investment income

29 30

31

Distribution and selling expenses Administrative expenses Other operating expenses

32 33 34

15,262 135,705 109,744 260,711 709,294

Other operating income
62 ANNUAL REPORT 2008

35

19,573 728,867

Operating profit before finance costs Finance costs Share of profit in associated undertakings Profit before taxation Taxation Profit for the year 37 36

153,018 50,773 626,622 210,941 415,681

(Rupees)

Earning per share basic and diluted

38

8.10

13.28

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Executive

Director

Cash Flow Statement
For the year ended 30 June 2008

Note Cash flows from operating activities Cash generated from operations Taxes paid Financial charges paid Contribution to pension and gratuity fund Contribution to workers' profit participation fund Payment for 10-C bonus Liquidated damages paid Increase / (decrease) in long term deposits and prepayments Net cash from operating activities Cash flows from investing activities Capital expenditure Purchase of intangible assets Proceeds from sale of property, plant and equipment Investments - net Dividends received Interest received Net cash used in investing activities Cash flows from financing activities Repayments against short term loans Proceeds from issue of shares Repayments against long term loan Repayment of redeemable capital Repayment of liabilities against assets subject to finance leases Dividends paid Net cash (used in) / from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 39

2008 2007 (Rupees in '000)

906,443 (137,730) (148,690) (9,771) (44,067) (587) ––– 326 565,924

629,572 (4,650) (131,399) (6,571) ––– (483) (427) (17) 486,025

(139,869)
–––

(112,500) (75,000) (5,931) (194,465) (527,765) (855,201) 26,275 (828,926)

(147,925) 466,612 (56,250) (75,000) (9,934) (91,922) 85,581 179,891 (153,616) 26,275

40

The annexed notes 1 to 49 form an integral part of these financial statements.

Chief Executive

Director

ANNUAL REPORT 2008

(153,461) (456) 2,631 (820,361) 76,166 2,121 (893,360)

(126,907) (194) 127,419 (435,910) 37,862 6,015 (391,715)

63

273 193.581) (19.661) (46. inadvertently classified in previous years Reversal of proportionate share of reserve on disposal of shares Profit for the year Total recognized income and expenses for the year Issuance of right shares Transfer to general reserve Dividend .967 415.403 64 ANNUAL REPORT 2008 Unrealized gain on available for sale investment securities ––– Realized gain on sale of investments securities ––– Proportionate share of various reserves of associated undertakings ––– Reversal of proportionate share of reserve on disposal of shares ––– ––– Profit for the year Total recognized income and expenses for the year ––– ––– Transfer to general reserve Dividend .681 (5.612 ––– ––– ––– ––– ––– ––– ––– 349.520 ––– (62. Chief Executive Director .000 450.327) (51.158) ––– ––– ––– ––– ––– ––– 500.757) ––– (46.681 415.000) (46.Third interim 2008 (10%) ––– Balance as at 30 June 2008 513.327) (51.681 (500.001) ––– ––– ––– ––– 148.661) (51.466) 36.651 854 (209.037.653 ––– ––– ––– 466. Issued.828) (49.959 854 (209.004 *This represents various reserves maintained by the associated undertakings The annexed notes 1 to 49 form an integral part of these financial statements.218 ––– ––– (19.698 ––– ––– ––– ––– ––– ––– ––– 116.279 ––– ––– (249.178 ––– (421.959 2.273 ––– ––– ––– ––– ––– ––– ––– ––– ––– ––– ––– ––– 349.200.661) ––– (51.126 (54.693 ––– ––– 188.520 663.661 Dividend .342.661) (46.000 ––– ––– ––– ––– ––– 663.828) ––– 7.959 193.793) ––– ––– ––– (208.First interim 2007 (10%) Dividend .581) ––– 49.Final 2007 (10%) ––– Issuance of bonus shares final 2007 (10%) 46.327) (51.693) 7.000 ––– ––– ––– ––– 415.126 (54.939) ––– ––– ––– ––– ––– ––– 85. subscribed and paid-up capital Capital reserve Revenue reserves Share Unrealised gain on Others* General Unappropriated Premium remeasurement reserve profit of available for sale investment securities (Rupees in '000) ––– 105.959 ––– ––– ––– 349.Second interim 2008 (10%) ––– Dividend .327) 2.238 ––– ––– ––– ––– 294.341 ––– ––– ––– ––– ––– ––– ––– ––– 421.417 Total Balance as at 1 July 2006 Changes in equity for the year ended 30 June 2007 Unrealized gain on available for sale investment securities Realized gain on sale of investments securities Proportionate share of various reserves of associated undertakings Reclassification for better presentation.842.178 789.327) (51.000 ––– ––– 1.994.Statement of Changes in Equity For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.466) 36.793) (249.000 ––– ––– ––– ––– ––– 1.415 466.499) ––– ––– ––– ––– ––– ––– (64.612 ––– (46.Second interim 2007 (10%) Balance as at 30 June 2007 Changes in equity for the year ended 30 June 2008 349.980 210.000) (46.661) 599.661) 3.967 (212.342 921.661) (46.178 663.327) 267.First interim 2008 (10%) ––– Dividend .

1) • derivative financial instruments are stated at fair value (refer para 5. All financial information presented in Pakistan Rupees has been rounded to the nearest thousand. 1984 provision of and directives issued under the Companies Ordinance. The coating plant commenced commercial production from 16 November 1992. 1984. 1984) and is quoted on all stock exchanges of Pakistan.400 spindles (now 19. 65 1. The Company's steel segment is one of the down stream industries of Pakistan Steel Mills.1) • investments classified as available-for-sale are stated at fair value (refer para 5. 2.10. The cotton spinning activity is carried out by the Company under the name and title of "Crescent Cotton Products a division of Crescent Steel and Allied Products Limited". 1. Block E-2. Another spinning unit CCP-II was added with 25. 10-B.3 2. In case requirement differ.1 THE COMPANY AND ITS OPERATIONS Crescent Steel and Allied Products Limited ("the Company") was incorporated on 1 August 1983 as a public limited company in Pakistan under Companies Act. ANNUAL REPORT 2008 . The Company acquired a running spinning unit of 14.2 1. The Company has a coating facility capable of applying three layer high density polyethylene coating on steel line pipes.Notes to the Financial Statements For the year ended 30 June 2008 1.1 BASIS OF PREPARATION Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Crescent Standard Tower. 2. Main Boulevard. The registered office of the Company is located a 6th floor.10.344 spindles in 2006. Lahore.3 Functional and presentation currency These financial statements are presented in Pakistan Rupees which is also the Company's functional currency.680 spindles) at Jaranwala (District Faisalabad) on 30 June 2000 from Crescent Jute Products Limited.10. 1913 (now Companies Ordinance. manufacturing large diameter spiral arc welded steel line pipes at Nooriabad (District Dadu). the provisions of and directives of the Companies Ordinance.4) 2. 1984 shall prevail.2 Basis of measurement These financial statements have been prepared on the historical cost basis except for the following: • investments classified as held for trading are stated at fair value (refer para 5. 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. Gulberg-III.

IAS 29 . that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 47 to these financial statements.IAS 19-The Limit on Defined Benefit Asset.Business Combinations and consequential amendments to IAS 27 . USE OF ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with approved accounting standards. IFRIC 12 .Operating Segments. IFRS 7 .Financial Instruments: Disclosures. IFRS 3 (amendment) .Share-based payments.Presentation of Financial Statements.Interest in Joint Ventures.Financial instruments: presentation and consequential amendments to IAS 1 . IAS 32 (amendment) . liabilities.Consolidated and separate financial statements.Investment in associates and IAS 31 .Agreement for the Construction of Real Estate. • • • • • • • .Hedge of Net Investment in a Foreign Operation. estimates and assumptions that affect the application of policies and the reported amounts of assets. IFRIC 15 . IFRIC 13 . NEW ACCOUNTING STANDARDS AND IFRIC INTERPRETATIONS THAT ARE NOT YET EFFECTIVE The following standards.Presentation of Financial Statments. the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.Financial Reporting in Hyperinflationary Economies. amendments and interpretations of approved accounting standards are only effective for accounting periods beginning on or after 1 July 2008 and are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements other than certain increased disclosures in the certain cases: • • • • • • Revised IAS 1 . IFRS 8 . The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Revised IAS 23 . 66 ANNUAL REPORT 2008 4. as applicable in Pakistan.Service Concession Arrangements.Customer Loyalty Programmes. as applicable in Pakistan. or in the period of the revision and future periods if the revision affects both current and future periods. income and expenses. IFRIC 16 .Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. Minimum Funding Requirements and their interaction. IFRS 2 (amendment) . IFRIC 14 . requires management to make judgements.Borrowing costs. Judgements made by the management in the application of approved accounting standards. 3. IAS 28 . Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period. The estimates and underlying assumptions are reviewed on an ongoing basis.

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mark-up bearing borrowings Mark-up bearing borrowings are recognized initially at cost. mark-up bearing borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in the income statement over the period of the borrowings on an effective interest basis. Obligation for contributions to the fund are recognised as an expense in profit or loss when they are due. A trust has been established and its approval has been obtained from Commissioner of Income Tax.2. contributions are made at the rate of 10 percent. 67 ANNUAL REPORT 2008 . Equal monthly contributions are made by the Company and its employees. less attributable transaction cost.2 Defined benefit plans Pension and gratuity fund The Company operates pension and gratuity fund schemes for its permanent management employees as per the terms of employment.1 Defined contribution plan Provident fund The Company operates a provident fund scheme for its permanent employees.2 Post retirement benefits 5.2. All Employees except cotton segment Contributions to the fund are made at the rate of 8.2. 5. Subsequent to initial recognition. Cotton segment Provision and collection from employees are made at the rate of 6.1 Compensated absences The Company accounts for all accumulated compensated absences when employees render services that increase their entitlement to future compensated absences.25 percent of the basic pay plus Cost Of Living Allowance (COLA) of cotton division employees.2 Employee benefits 5.2.Notes to the Financial Statements For the year ended 30 June 2008 5. 5.2. 5.2. The pension scheme provides life time pension to retired employees or to their spouses.33 percent of basic pay plus Cost Of Living Allowance (COLA) for those employees who have served the Company for a period less than five years and after completion of five years. 5.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities. Past service cost is recognized immediately to the extent that the benefits are already vested. 5.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. if any. For non-vested benefits past service cost is amortized on a straight line basis over the average period until the amended benefits become vested. Contributions are paid to the pension and gratuity funds on the basis of actuarial recommendations. Actuarial gains and losses which exceed 10 percent of the greater of the present value of the Company’s obligations and the fair value of plan assets are amortized over the expected average remaining working lives of the eligible employees. 5. .4 Provisions A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of past events. Deferred Deferred tax is provided using the balance sheet liability method. providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.3 68 ANNUAL REPORT 2008 Taxation Current Provision for current taxation is based on taxable income at the current rates of taxation after taking into account tax credits and tax rebates available. whether or not billed to the Company. which is the fair value of the consideration to be paid in the future for goods and services received. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. The cost of providing benefits is determined using the projected unit credit method.5 Trade and other payables Liabilities for trade and other amounts payable are recognized and carried at cost. with actuarial valuations being carried out at each balance sheet date. 5. using the current rates of taxation. and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Amounts recognized in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost and as reduced by the fair value of plan assets. Any assets resulting from this calculation is limited to the unrecognized actuarial losses and unrecognized past service cost plus the present value of available refunds and reductions in future contributions to the plan.

69 ANNUAL REPORT 2008 5. at cost less any accumulated depreciation and any identified impairments loss. plant and equipment are recognized in profit or loss as incurred. Depreciation Depreciation is charged to income on straight line basis at the rates specified in note 15 to these financial statements. The assets’ residual values and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is significant. Depreciation on additions to property. Impairment Where the carrying amount of asset exceeds its estimated recoverable amount it is written down immediately to its recoverable amount. The costs of the day-to-day servicing of property. plant and equipment. if any. Depreciation is charged on the same basis as used for owned assets. Subsequent cost The cost of replacing part of an item of property.8 Investment property Property not held for own use or for sale in the ordinary course of business is classified as investment property. if any. Leased assets Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classified as finance lease.7 Property. plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. Asset acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of minimum lease payments at the inception of the lease less accumulated depreciation and impairment losses.e. The investment properties of the Company comprise land and buildings and is valued using the cost method i.6 Dividend Dividend is recognized as a liability in the period in which it is declared. 5. . plant and equipment is charged from the month in which an item is acquired or capitalized while no depreciation is charged for the month in which the item is disposed off. Financial charges are allocated to accounting period in a manner so as to provide a constant rate of charge on outstanding liability. The gain or loss on disposal or requirment of an asset represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense.Notes to the Financial Statements For the year ended 30 June 2008 5. plant and equipment and depreciation Owned assets Property. except freehold land and capital work-in-progress are stated at cost less accumulated depreciation and impairment losses. Freehold land and capital work-in-progress are stated at cost.

assets are written down to their recoverable amounts and the resulting impairment loss is recognized in income currently. Subsequent expenditures Subsequent expenditures on capitalized intangible assets is capitalized only when it increases the future economic benefits embodied in the specific assets to which it relates. The Company assesses at each balance sheet date whether there is any indication that investment property may be impaired.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. 5. Where carrying values exceed the respective recoverable amount. If such indication exists. The gain or loss on disposal of investment property represented by the difference between the sale proceeds and the carrying amount of the asset is recognized as an income or expense. 70 ANNUAL REPORT 2008 . The residual values and useful lives of investment property are reviewed at each financial year end and adjusted if impact on depreciation is significant. if any. Where an impairment loss is recognized.9 Intangible assets Intangible assets acquired by the Company are stated at cost less accumulated amortization and impairment losses. the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Depreciation is charged to profit on the straight line method so as to write off the depreciable amount over its estimated useful life. Amortization on additions to intangible assets is charged from the month in which an item is acquired or capitalized while no amortization is charged for the month in which the item is disposed off. Amortization Amortization is charged to the income statement on a straight line basis over the estimated useful lives of intangible assets unless such lives are indefinite. All other expenditures is expensed as incurred. the depreciation charge is adjusted in the future period to allocate the asset's revised carrying amount over its estimated useful life. Depreciation on additions to investment property is charged from the month in which a property is acquired or capitalized while no depreciation is charged for the month in which the property is disposed off. Impairment Where the carrying amount of assets exceeds its estimated recoverable amount it is written down immediately to its recoverable amount. All intangible assets with an indefinite useful life are systematically tested for impairment at each balance sheet date. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.

plus attributable transaction cost. or until the investments are determined to be impaired. 71 ANNUAL REPORT 2008 . Subsequent to initial recognition. Investments are designated at fair value through profit or loss if the Company manages such investments and makes purchase and sale decisions based on their fair value. thereafter the carrying amount is increased or decreased to recognize the Company's share of profit or loss of associates.10 Investments 5. plus attributable transaction cost. Investments at fair value through profit or loss are measured at fair value. Distribution received from investee. these are stated at amortized cost with any difference between cost and redemption value being recognized in the profit and loss account over the period of the investments on an effective yield method. with any resultant gain or loss being recognized directly in equity. are recognized directly in the equity of the Company. reduces the carrying amount of investment. Investments classified as held to maturity are recognized initially at cost. These investments are initially recognized at cost.Equity Method Entities in which the Company has significant influence but not control and which are neither its subsidiaries nor joint ventures are associates and are accounted for by using the equity method of accounting.10.1 Investments are being categorized as follows: Investment at fair value through profit or loss A non-derivative financial asset is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Held to maturity Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity.Notes to the Financial Statements For the year ended 30 June 2008 5. attributable transaction cost are recognized in profit or loss when incurred. and changes therein are recognized in profit or loss. The changes in the associate's equity which are not been recognized in the associates' profit and loss account. loans and advances originated by enterprise are stated at amortized cost with any difference between cost and redemption value being recognized in the profit and loss account over the period of the investments on an effective yield method. Share of post acquisition profit and loss of associates is accounted for in the Company's profit and loss account. Gains or losses on available-for-sale investments are recognized directly in equity until the investments are sold or disposed off. Subsequent to initial recognition. at that time cumulative gain or loss previously reported in the equity is included in current year's profit and loss account. Investments in associate . Loans and advances originated by enterprise Loans and advances originated by enterprise are recognized initially at cost. Available-for-sale Other investments not covered in any of the above categories including investments in associates in which the Company has no significant influence are classified as being available-for-sale and are stated at fair value. Upon initial recognition.

5. The fair value of a derivative is the equivalent of the unrealized gain or loss from marking to market the derivative using prevailing market rates. 5. Spare parts of capital nature which can be used only in connection with an item of property. Net realizable value is the estimated selling price in the ordinary course of business less costs of completion and selling expenses.2 Fair value of listed securities are the quoted prices on stock exchange at balance sheet date. Debts considered irrecoverable are written off. Fair value of unquoted investments is estimated based on appropriate valuation method if it is practicable to determine it.12 Stock-in-trade Stock-in-trade is stated at the lower of cost and net realizable value. which include future contracts in stock market.4 Derivative financial instruments The Company enters into derivative financial instruments.10. Derivatives with positive market values (unrealized gains) are included in other receivables and derivatives with negative market values (unrealized losses) are included in other liabilities in the balance sheet. except for sale and purchase of securities in future market. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon. 72 ANNUAL REPORT 2008 . Scrap stocks are valued at their estimated net realizable value. Derivatives are initially recorded at cost and are remeasured to fair value on subsequent reporting dates. Cost is arrived at on a weighted average basis. An estimate is made for doubtful receivables when collection of the amount is no longer probable.11 Stores and spares Stores and spares are valued on a weighted average cost basis. 5.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.10. 5. plant and equipment are classified as tangible fixed assets under the ‘plant and machinery’ category and are depreciated over a time period not exceeding the useful life of the related assets.13 Trade debts and other receivables These are originated by the Company and are stated at cost less provisions for any uncollectible amount.10. All investments classified as available-for-sale are initially recognized at cost inclusive of transaction costs and subsequently quoted investments are marked to market using the last quoted rate at the close of the financial year. 5. No derivative is designated as hedging instrument by the Company. which are accounted for at settlement date. The cost of finished goods of steel segment is measured on the specific identification method. The resultant gains and losses from derivatives held for trading purposes are included in income currently. Cost of work-in-process and finished goods include cost of materials and appropriate portion of production overheads. 5.3 The Company follows trade date accounting for regular way of purchase and sales of securities.

Gains and losses on sale of investments are accounted for when the commitment (trade date) for sale of security is made. Interest income is recognised on the basis of constant periodic rate of return. 5. is recognised when the right to receive is established i. if any. 5. if practicable to determine.16 Borrowing costs Borrowing costs incurred on long term finances directly attributable for the construction / acquisition of qualifying assets are capitalized up to the date.17 Impairment All Company’s assets are reviewed at each balance sheet date to determine whether there is objective evidence of impairment.18 Foreign currency translation Foreign currency transactions are translated into Pak Rupees at exchange rates prevailing on the date of transaction. Dividend income relating to post acquisition profit. interest and other related charges are taken to the profit and loss account currently. Monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of exchange prevailing at the balance sheet date. are taken to profit and loss account. All other mark-up. the respective assets are available for the intended use. the assets' recoverable amount is estimated. Impairment losses are recognized in the profit and loss account currently. the book closure date of the investee company declaring the dividend.Notes to the Financial Statements For the year ended 30 June 2008 5. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. ANNUAL REPORT 2008 . If any such indication exists. 73 Unrelized gains / (losses) arising on revaluation of securities classified as 'held for trading' are included in profit and loss account in the period in which they arise. Rental income (net of any incentives given to lessees) from investment profit is recognized on a straight line basis over the lease term. Gains / (losses) arising on the revaluation of the derivatives to the fair value are taken to profit and loss account.15 Revenue recognition Revenue from sales is recognised when significant risks and rewards of ownership are transferred to the buyer. 5.e. Exchange differences. 5.14 Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits.

or to realize the asset and settle the liability simultaneously. SUBSCRIBED AND PAID-UP-CAPITAL 2008 2007 (Number of shares) 2008 2007 (Rupees in '000) Ordinary shares of Rs.693 965.302 74 ANNUAL REPORT 2008 22.273 244.188 29.097.153 290. which is subject to risks and rewards that are different from those of other segments.062 562 5.327. ISSUED.666.392 2. 10 each were issued as 10% bonus shares.188 22. 10 each fully paid in cash Ordinary shares of Rs. 5.630 1.127.079 51.19 Offsetting of financial assets and financial liabilities Financial assets and financial liabilities are set off and only the net amount is reported in the balance sheet when there is a legally enforceable right to set off the recognized amount and the Company intends to either settle on a net basis.230.971 513.400 139.645.310 466.661.965 46.612 6.964 ––– .330.230.267 24.563.20 Segment reporting A segment is a distinguishable component of the Company that is engaged either in providing products (business segment).2 During the current period. 5.1 222.160 27.302 222. The Company's primary format for segment reporting is based on business segments. 10 each fully issued as bonus shares 6. 4.193 511 5.114 shares of Rs.131.430. Ordinary shares of the Company held by associated undertakings as at year end are as follows: 2008 2007 (Number of shares) Crescent Jute Products Limited Shakarganj Mills Limited Crescent Sugar Mills & Distillery Limited Muhammad Amin Muhammad Bashir Limited The Crescent Textile Mills Limited Premier Insurance Limited ––– 2.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. or in providing products within a particular economic environment (geographical segment). 6.1 6.

652 (75.000) 73. The tenor of the loan is five years. 8.500) 280.854 (112.854 263 (112.652 ANNUAL REPORT 2008 .652 899 (75. 75 This facility has been secured against first equitable mortgage pari passu charge on all present and future fixed assets including land and building with 25% margin.000) 74.500) 168. Principal is repayable on quarterly basis with one year grace period.617 (112.551 (74.117 448.secured (non-participatory) 2008 2007 (Rupees in '000) Term Finance Certificates (TFCs) Balance as at 1 July Transaction cost amortized Redemption Current portion Balance as at 30 June 148.250) 392.1 The mark-up rate is 6 months KIBOR prevailing on the base rate setting date plus 1.354 7.841 263 (56. The loan was disbursed on 17 December 2005.9 percent per annum. REDEEMABLE CAPITAL . Mark-up is payable on quarterly basis.5%).04% (2007: 11.000) 148.86% to 15.Notes to the Financial Statements For the year ended 30 June 2008 7. Call option is exercisable after 18 months by the bank.500) 280.6% to 12.551) ––– 222. The effective mark-up charged during the year ranges from 11.753 899 (75. LONG TERM LOAN 2008 2007 (Rupees in '000) Allied Bank Limited Amortization of initial transaction cost Repayment Current portion 392.

5 Trustee In order to secure the interest of the TFC holders. in multiples of Rs. 300 million in 2004.500 42.000 8. These TFCs are not listed. .4 Security The TFCs have been secured by pari passu charge by way of hypothecation on all present and future assets of the Company to the tenure of outstanding TFCs amount with a 25% margin.3.000 75. The base rate for the first coupon payment will be set on the last working day prior to disbursement and subsequently on the last working day at the beginning of each semi-annual period for the profit due at the end of that semi-annual period. 8.1 8.1 The base rate is defined as the cut off yield on the last successful SBP auction of the six months T-Bills. 50 million or whole with 60 days advance notice. 8.000 107. 8.2 Principal purpose for the use of subscription money The TFCs were issued to carry on the business authorized by the Company's Memorandum and Articles of Association. specifies the rights and obligations of the trustees. 8.3. excluding amortization of transaction cost are as follows: 2008 2007 (Rupees in '000) Commercial Banks Financial Institutions 55. Orix Investment Bank Pakistan Limited has been appointed to act as trustee for the issue. The trust deed dated 22 December 2003 between the Company and Orix Investment Bank Pakistan Limited. The Company has a call option exercisable at par. TFCs outstanding as at year end. The deed requires that the trustee will ensure the safeguard of interest of TFC holders and adherence to terms and conditions of the security documents.500 150.3 76 ANNUAL REPORT 2008 Redemption of TFCs The terms of redemption are as under : Tenor Expected profit rate Floor Cap Principal redemption 5 years Base rate plus 250 bps None 9% Principal redemption has started from 7 July 2006 in 8 equal semi-annual installments. 8.1 The Company issued TFCs for Rs.000 20.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.

242 20.572 .1 10.1 Accrued liabilities Salaries.973 803 8.587 435. DEFERRED TAXATION 2008 2007 (Rupees in '000) Deferred tax credits / (debits) arising in respect of temporary taxable differences due to : Accelerated tax depreciation / amortization Finance lease arrangements Provisions for stock-in-trade and stores and spares Provisions for doubtful debts.964 2.808 12.800 2.457 9.080 77 ANNUAL REPORT 2008 10.050 9.460 3.457 52.365) (47.584 10.920) (32.631 15.395 27 14.4 10.180 23.819 268.434 39.058) ––– 886 111.149 39.047 2.505 199.849 11.680 180 27.556 7.963 2.450 (23. wages and other benefits Accrual for 10-C bonus Compensated absences Accruals 11. TRADE AND OTHER PAYABLES Trade creditors Commission payable Accrued liabilities Provisions Advance from customers Retention money Due to associated undertakings Payable to provident fund Unclaimed dividend Sales tax payable Special Excise Duty payable Workers Welfare Fund Workers Profit Participation Fund Withholding tax payable Customer's security deposit Others 24.Notes to the Financial Statements For the year ended 30 June 2008 9.560 (25.590 39.875 750 6.129 138 ––– 14.187) 13.403 115 2.564 240.121) (9.804 39.058) (82.589 2.581 662 6.194 64.741 352 4.2 10. advances and other receivables Provisions for impairment in unquoted available for sale investments Current year tax loss Share of profit from investments in equity accounted undertakings 187.306 2.572 44.421 55.208) (9.116 1.3 10.901 3.

10.242 9. 36 million) in favour of Excise and Taxation Department.2.2.2.631 8. 10.089 1. Current year charge has been calculated on the value of imports during the year.300 7. However. 50 million (2007: Rs.500 3.3) Opening balance 1 July 2007 Provision for the year Provision written back Closing balance 30 June 2008 32.741 Amount paid to the trustees of the fund Balance at end of the year .741 ––– 11.4 Workers' Profit Participation Fund 2008 2007 (Rupees in '000) Balance at beginning of the year Mark-up on funds utilized in the Company's business Allocation for the year 11. on a prudent basis full provision has been made.067) 2.2 These have been made against sales tax claims long outstanding with the sales tax department. 78 ANNUAL REPORT 2008 10.501 (911) 9.679 44.1) (Note 10.2.2.741 11.242 ––– ––– 3.701 (911) 52.3 This represents expenses incurred by associated undertakings on behalf of the Company and insurance premium payable to associated undertakings.1 This has been made against infrastructure fee levied by Government of Sindh through Sindh Finance (Amendment) Ordinance. The Company is in process of negotiating this matter and expects that this may be resolved.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. 10.403 46. 10.741 326 34.2 Movement of provisions Infrastructure fee Sales Liquidated Tax damages (Rupees in '000) Total (Note 10. The Company has provided bank guarantees amounting to Rs.2.200 ––– 39.403 ––– ––– 11. the Company is contesting this issue in High Court.421 10. 2001.2) (Note 10.470 (44.3 The provision has been made on account of liquidated damages claimed by a customer on delayed supply of goods. However.

206 1. 1.738 3.3 . 409 million). The facilities for opening letters of credit and guarantees as at 30 June 2008 aggregate Rs. These facilities are secured by way of hypothecation of plant and machinery.490 6.724 422.700 million and Rs.1 12.2 837. trade debts and other current assets. 811 million (30 June 2007: Rs. and lien over import / export document. 625 million (30 June 2007: Rs.587 million and Rs.38% (30 June 2007: 10. Mark-up rates is normally negotiated at the time of the transaction.62%) per annum. 12.Notes to the Financial Statements For the year ended 30 June 2008 11.350 million (30 June 2007: Rs. During the year.2 12.331 10. This facility is interchangeable with Term Finance / Demand Finance as given Note No.799 79 ANNUAL REPORT 2008 12.on Long term loan .850 million and Rs. 725 million). 2.12% to 12. INTEREST AND MARK-UP ACCRUED 2008 2007 (Rupees in '000) .on Leases 1.12.22% to 13.075 432.184 40 16. 1.on Running finance and short term loans .1 Short term running finance available from various commercial banks under mark-up arrangement amount to Rs.218 14.37%) per annum.765 2. 2. pledge of shares and cotton/cotton yarn. 880 million respectively) of which the amounts unutilized as at 30 June 2008 were Rs. 1.3% to 14. stock-in-trade. SHORT TERM BORROWINGS Secured from banking companies Running finances under mark-up arrangements Short term loans / Murabaha 12.119.31% (30 June 2007: 9.2 below. the mark-up on such arrangement ranges between 10.300 million respectively (30 June 2007: Rs.on Term Finance Certificates . 570 million). The Company has also borrowed short term loan / murabaha financing from various commercial banks under mark-up arrangements amount to Rs.150 12. The rate of mark-up ranges between 10. 2.125 282.436 7.37% to 11.809 ––– 19.457 million and Rs.

47 million may arise. Further. 2008 2007 (Rupees in '000) Advance tax Provision for taxation 488. the order is still awaited. the department has also filed appeals against orders of Commissioner of Income Tax (Appeals) in respect of assessment years 1997-1998. 80 ANNUAL REPORT 2008 except for assessment year 2000-2001 against which full provision has been made. 20.301) (6. additional tax liability of Rs.192 The Tax Officer (TO) and Income Tax Appellete Tribunal (ITAT) has issued the orders in respect of the assessment years 2001-2002. 2000-2001 Tax year 2004. Tax year 2003 and 2007.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.203 (494. 14.280) 20. The Company has filed appeals against above mention orders passed by TO and ITAT. .472 (330. In case of adverse decisions. TAXATION . The Company has provided bank guarantee of Rs.098) 350. no provision has been made in these financial statements as the management is confident for favourable outcome of these appeals.03 million may arise against the above mentioned assessments in case decisions are made against the Company. 2001-2002. Additional tax liability of Rs.42 million as directed by the Honourable Court. The Company contested that as per SRO 1317 (1)/94 dated 22 December 1990. 22. for levy of import licence fee at 6% against import of coating plant in 1992. The petition was dismissed by High Court as having been incompetently filed. 2002-2003 and Tax year 2003 are pending adjudication. However. 13. The appeals in respect of assessment years 2000-2001. being located in rural area. is only liable to pay 2% of import licence fee. The Company has filed the appeal with Honourable Supreme Court.1 CONTINGENCIES AND COMMITMENTS The Company has filed a suit in the Sindh High Court against Federation of Pakistan and others. No provision. 14. 2002-2003. which has been admitted for hearing.NET The income tax assessments of the Company have been finalized up to tax year 2007. No provision has been made in the financial statements as management considers that the case would be decided in Company's favour. 3. however appeal in respect of Tax year 2007 has been heard by the Commissioner Income Tax (Appeals). has been made in these financial statements as the management is confident for favourable outcome of these appeals.

126.790 69. PROPERTY.231 1.07 million (30 June 2007: Rs.1 15.7 15. 81 ANNUAL REPORT 2008 14. which has been provisionally allotted to the Company in the downstream Industrial Estate of Pakistan Steel.3 Aggregate amount of guarantees issued by the banks on behalf of the Company against various contracts aggregated Rs.448 106.85 million) payable over the period of six years in 20 quarterly installments representing office premises in Islamabad.621 million respectively. This includes commitment in respect of capital expenditure to be incurred on leasehold land. however.27 million (30 June 2007: Rs.5 Commitments in respect of capital expenditure contracted for as at 30 June 2008 amounted to Rs. The High Court has restrained the SITE from taking any adverse action against the Company.6 Commitments under letters of credit as at 30 June 2008 amounted to Rs.233. 58. 12. 470. 24. The High Court has decided the case in the Company's favour.16 million). the Company has not filed any execution petition for the recovery of said amount.4 The Company filed a suit in the High Court of Sindh for recovery of retention money amounting to Rs. Bin Qasim amounting to Rs. The Company has challenged the cancellation and filed a suit in Sindh High Court. 14. 3. Therefore. 0.3 1. 488. 25.27 million) from Indus Steel Pipes Limited against supply of pipes. 0. 5.Notes to the Financial Statements For the year ended 30 June 2008 14. 242. PLANT AND EQUIPMENT 2008 2007 (Rupees in '000) Operating fixed assets Capital work-in-progress 15. 263. management considers that the case would be decided in Company's favour and no provision is required. 58.641 . 14.87 million).2 Sindh Industrial Trade Estate (SITE) has cancelled allotment of plot A-26 and A-27 and charged nonutilization fees of Rs. It also includes an amount of Rs.56 million (30 June 2007: Rs.68 million). 30.236.66 million ( 30 June 2007: Rs.306.33 million). 14. 14. 3.851 1.2 million).60 million (30 June 2007: Rs.285 million and Rs. Commitments in respect of future purchase of shares amounted to Nil (30 June 2007: Rs.783 1.1 million (30 June 2007: Rs.

113 15.000) 210.804 1 243.886 ––– ––– (82) 6.007 (56.410) 4. 15.472 ––– ––– (25.790 15.281 ––– (17.804 25.682) 13. 1.583) 210.735 10 * Transfer to investment property.634 5 40. .433 (24.236 210.242 6.027 (58.790 24.242 ––– 8.790 ––– 69.646 (1.020 ––– ––– (1.242 6.634 1.681) 15.242 ––– ––– ––– ––– 69.020 40.845 (58.89 million ( 2007: Rs.509 202.416 ––– ––– (2.541) 12.493 (27.373) 12.380) 13.514)* ––– (54) 4.242 ––– 69.242 5. 2.175 ––– ––– (2.020 15.906 8.698) 15.007) 12.233) 209.735 69.634) 12.612 70.1 Operating fixed assets Description Freehold Land Leasehold including improvement Buildings On On freehold Leasehold Land Land (Rupees in '000) Office premises Net carrying value as at 1 July 2007 Opening net book value (NBV) Additions Transfer (at NBV) Disposals / writeoff (at NBV) Depreciation charge Balance as at 30 June 2008 (NBV) Gross carrying value as at 30 June 2008 15.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.650) 209.373 (32.612 12.113 60.735 60 ––– ––– (2.336 ––– ––– 69.160 (1.236 267.356) 6.634 18.4 82 ANNUAL REPORT 2008 Cost Accumulated depreciation Net book value Net carrying value as at 1 July 2006 Opening net book value (NBV) Additions / transfers Disposals / transfers (at NBV) Depreciation charge Balance as at 30 June 2007 (NBV) Gross carrying value as at 30 June 2007 Cost Accumulated depreciation Net book value Depreciation rate % per annum 69.804 ––– (2.1 69.242 ––– 69.1. ** Net book value of plant and machinery includes book value of Rs.08 million ) of capitalized spares.

000 ––– ––– (2.908) 13.759 ––– ––– (9.826 8.000 9.901 5 & 20 14.892 16.000 (830) (118.785 10 40.343 (691.128.210 (958) (6.428) 16.320 (30.644) 1.000 10 29.990) 17.651 55.33 47.881 ––– (1.967) 16.028 ––– (128.413) ––– (482) ––– 1.125 5 .847 2.015 ––– (9.285 (12.960) 16.329) 24.631 (32.236.500) 1.581 ––– ––– (502) 2.049 ––– (2.000) ––– (2.785 1.530) 13.790 66.448 762.150) (172.600 10.882 14.847 1.054) 1.000 ––– (8.514) (2.864 16.790 ANNUAL REPORT 2008 1.124 ––– 1.882 8.864 17.809 (15.021) 15.063.126.319) 17.236.002) 49.716 ––– 11.674 16.957) 58.868 (19.125 12.000) 10.892 2.000 (10.137 (818.20 20.790 1.785 26.378 282.018 (962) (172.336) 1.882 33.000) 10.33 2.658 (2.844 (898.448 934.872 (22.866 (13.716 10.134.421) ––– ––– 30.189.320) (8.126.382 7.218) 861.741 (34.552.Notes to the Financial Statements For the year ended 30 June 2008 Plant and Machinery Owned Lease ** Electrical / Office equipment and Installation Furniture and fittings Computers Motor vehicles Owned Leases TOTAL (Rupees in '000) 861.674 24.617) ––– ––– 2.581.113) 11.236.124 ––– ––– ––– ––– ––– ––– 1.125 12.405) 762.554) 861.186 1.895 (2.901 1.892 20 ––– ––– ––– 20 & 33.496 (1.000) ––– 13.901 1.059 ––– ––– (3.772 512 (4) (495) 1.048) 83 .

3.600 66. Final sale deed execution in Company's name is subject to certain conditions which include installation of industrial unit and obtaining completion certificate from FIEDMC.059 15.336 156. 15.3.2 The depreciation charge for the year has been allocated as follows: 2008 2007 (Rupees in '000) Cost of sales Distribution and selling costs Administrative expenses 30.150 square feet) provisionally allotted to the Company in Woven Garment Zone Value Addition City by Faisalabad Industrial Estate Development Management Company (FIEDMC).1 32 33 154.3. which is owned by the Government of Punjab.2 It includes expenditure incurred on acquiring licence and implementing Enterprise Resource Planning (ERP) software (Oracle).402 382 15.2 15.251 ––– ––– 69.1 This includes advance against purchase of land amounting to Rs.1 This includes freehold land represents land measuring 1.644 15.976 acres (71.1 15. 15.3 84 ANNUAL REPORT 2008 CAPITAL WORK-IN-PROGRESS Plant and machinery Civil work Software Advances to supplier ––– 90.157 1.546 172. 15. .424 366 17.1.783 3.851 15.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.860 172.567 106.3. 40 million.

Fahim Karim (ex-employee) Various –––––– ––– ––– ––– Various 85 .942) (10) 620 11.4 The following assets were disposed off / written off during the year: Description Cost Accumulated Book depreciation value (Rupees in '000) 386 80 97 412 103 3.106 194 (797) ––– 503 11. INTANGIBLE ASSETS 2008 2007 (Rupees in '000) Net carrying value as at 1 July Net book value at 1 July Additions (at cost) Amortization Impairment charge Net book value at 30 June Gross carrying value at 30 June Cost Accumulated amortization Impairment charge Net book value 16.419 Company Scheme Company Scheme Company Scheme Insurance Claim Company Scheme Company Scheme Write off Write off––– Write off Write off Write off Plant & machinery 2008 2007 38.488 754 279 271 7.879 952 352 332 9.732 Sale proceeds Mode of disposal Particular of buyers Motor vehicles 579 464 390 447 395 3.159 16.427 193 384 293 35 292 123 107 391 198 73 61 2.492 289 371 302 231 303 1.Notes to the Financial Statements For the year ended 30 June 2008 15.135 ––– ––– ––– ––– ––– 2. Iftikhar Arif (ex-employee) Mr.342 9.116 (10.631 127.1 16.613) ––– 503 ANNUAL REPORT 2008 Miss Mona Adeel (ex-employee) Mr. Arshad Ali (ex-employee) EFU Mr.062 410 1.150 28.1 503 456 (329) (10) 620 1.185 517 1.572 (10.

1 17.546 .1 The amortization charge and impairment loss for the year has been allocated as follows: 2008 2007 (Rupees in '000) Cost of sales Administrative expenses Other operating expenses 30.994 ––– 1.514 (29) 2.4 18. 16.857 10 ––– 1.786 (238) 1.435 26.791 1. Fair value of the investment property.695 29.222.3 1.1 18. plant and equipment Depreciation charge Balance as at 30 June 2008 (NBV) Depreciation rate % per annum 17. 59.385 (2.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.382) 50.561 (1. LONG TERM INVESTMENTS 2008 2007 (Rupees in '000) Related parties Investment in equity accounted undertakings Held to maturity Available for sale Others Available for sale Held to maturity 18.2 18.256 5 ––– 25.259.801 1.2 ––– 2.5 ––– 26.5 million (2007: Nil) 18.480 175.1 33 34 262 67 10 339 343 454 ––– 797 17.485 1 ––– 21.003 Depreciation charged for the year has been allocated to administrative expenses.548 5 & 20 ––– 916 (59) 857 10 ––– 52.316 29.704) 23. INVESTMENT PROPERTY Description Land Buildings Office Electrical / Furniture On On premises Office and Leasehold Leasehold equipment fittings Land Installation (Rupees in '000) TOTAL 86 ANNUAL REPORT 2008 Balance as at 1 July 2007 Additions / transfer from property. based on cost of purchase is Rs.279.027.994 ––– 18.608 (352) 21.

475.665 6. Anjum M.222.475.027.150 528.089.937 352.117 ––– 2. Tehmeena Khan) 995.000 ––– 50. 2008 2007 (Number of shares) Quoted Altern Energy Limited (Chief Executive Officer Sheikh Muhammad Iqbal) Shakarganj Mills Limited (Chief Executive Officer Mr.031.250 ––– 42.168 ––– 1.1 The above figures are based on unaudited condensed interim financial statements of these companies as at 31 March 2008.1 Investments in equity accounted undertakings The following associates.1.000 ––– 39.Saleem) Safeway Fund Limited (Chief Executive Officer Mr.250. Ahsan M.144 87 ANNUAL REPORT 2008 1. are accounted for using equity method of accounting as defined in IAS-28 "Investments in Associates".239 701.687 Unquoted Central Depository Company of Pakistan Limited (Chief Executive Officer Mr.006 15.648 ––– 1. Mohammad Hanif Jakhura) Shakarganj Food Products Limited (Chief Executive Officer Mr.416 647.052. .625 38. over which the Company has significant influence either due to representation on investee Company's board or percentage of holding of voting power or both.193. Asif Haider Mirza) Asian Capital Management Limited (Chief Executive Officer Ms. Saleem) 2008 2007 (Rupees in '000) 60.082 405.416 60.695 1.Notes to the Financial Statements For the year ended 30 June 2008 Investments in related parties 18.166 6.075 32.448 294.000.316 18.

1.975 24.374.027 22.2 Market value / break-up of investments in associates are as follows: 2008 2007 (Rupees in '000) Quoted Altern Energy Limited Shakarganj Mills Limited Unquoted** Central Depository Company of Pakistan Limited Shakarganj Food Products Limited Safeway Fund Limited Asian Capital Management Limited 1.929 1.904 1.00 25.00 1.75 9.947 18.65 10.75 ––– ––– ––– .301 88 ANNUAL REPORT 2008 ** Break-up value of shares is based on latest available unaudited condensed interim financial statements as at 31 March 2008.058.1.70 17.514 1.491.721 21.134 1.234 86.847 1. 18.65 21.203.167 18.461 288.392. 18.69 2007 1.44 25.578.320 315.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.3 Percentage holding of equity investments in associates are as follows: 2008 % Quoted Altern Energy Limited Shakarganj Mills Limited Unquoted Central Depository Company of Pakistan Limited Shakarganj Food Products Limited Safeway Fund Limited Asian Capital Management Limited 17.134 ––– ––– ––– 18.

1.4 Summarized financial information of associated companies as at 31 March 2008 where there is significant influence is as follow: Total Total Revenuse Profit / Assets Liabilities (loss) (Rupees in '000) Name of investee company 2008 Altern Energy Limited Shakarganj Mills Limited Central Depository Company of Pakistan Limited Shakarganj Food Products Limited Safeway Fund Limited Asian Capital Management Limited 2007 Altern Energy Limited Shakarganj Mills Limited Central Depository Company of Pakistan Limited 18.471 99.3 27. 10 each. The preference shares will be redeemed after five years from the date of issue.1.137. The preference shares are convertible into ordinary shares of Rs.749 13.228 1.413.633 12.3 18. 18.013 8.4.960 37.4. The conversion option is exercisable at the end of every financial year of the investee company.226.1.982 15.437 (31.3 18.319 5.347 3.4.1 These figures are based on the latest available summarized consolidated condensed interim financial statements as at 31 March 2008 including its subsidiary company (Rousch (Pakistan) Power Limited).751 984.4.307 14.801.385.1. 10 each of Shakarganj Mills Limited.509. issued in October 2004.547 239. These shares carry dividend rate of 8.Notes to the Financial Statements For the year ended 30 June 2008 18.057) 14. 18.3 18.272 227.052 9.587 15.413) 344.718 1.1.1.509 21.1 18.312 561.2 18.403 21.659.3 These figures are based on the latest available summarized condensed interim financial statements as at 31 March 2008.2 These figures are based on the latest available summarized consolidated condensed interim financial statements as at 31 March 2008 including its wholly owned subsidiary company (Shakarganj Food Products Limited).228.2 Held to maturity This represents 2. an associated undertaking.5% per annum payable annually.783.761 761.628.035 (577.231 551. 18.564.949 255.139 1.275.028 112.501 12.1.284) 183.400 preference shares of Rs.175.756.4.4.1. .1.4.1.185.668.4.186 10.825 18.208 (162.054 89 ANNUAL REPORT 2008 27.524 1.999.4.902 3.

507) ––– ––– ––– 90 ANNUAL REPORT 2008 18. The subsidiary company has not commenced operation and accordingly no financial statements have been prepared.403.047.3.2 Provision for impairment loss 2 2 Crescent Continental Gas Pipelines Limited (US $ 1 each) 18.725 1.3.435 175.000 24. Tariq Shafi. 18.4 Available-for-sale 2008 2007 (Number of shares) Quoted Crescent Commercial Bank Limited 2008 2007 (Rupees in '000) ––– 7. 18.037 10. Nasir Shafi.470 34. The company's break up value of shares could not be ascertained as the financial statements of the company are not available.3.1 Crescent Industrial Chemicals Limited 18. 18.3 The investment in a subsidiary is Rs.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.507 (34.403.1.507 (34.725 1.3.456 18.814. The company's break up value of shares could not be ascertained as the financial statements of the company are not available.2 The chief executive of Crescent Industrial Chemicals Limited is Mr.3.037 10. Other 18.2 ––– ––– 175. 90 only.047.3 Available-for-sale 2008 2007 (Number of shares) Unquoted Crescent Bahuman Limited 18.507) ––– ––– ––– 24.3 2008 2007 (Rupees in '000) 2.435 .3.470 34.000 2.1 The chief executive of Crescent Bahuman Limited is Mr.

955 24.724 21.Term Finance Certificates (TFCs) United Bank Limited (5.5. These preference shares will mature after five years from the date of issuance i. STORES.161) 48.e.1 18.332 94.000 TFCs of Rs.241 2.965 1.cotton segment 9.1 20.3 ANNUAL REPORT 2008 .010 (12.5.086 634 30.1 20. 10 each and carry dividend rate of 9.Notes to the Financial Statements For the year ended 30 June 2008 18.244) 77. LONG TERM DEPOSITS AND PREPAYMENTS 2008 2007 (Rupees in '000) Security deposits Long term loans 3.1 19.000 each) Current maturity shown under current assets 18.Term Finance Certificates (TFCs) Maple Leaf Cement Limited (Preference Shares) 18.566 61.2 24.629 (17.5. SPARES AND LOOSE TOOLS Stores .579 4.567 19.2 Preference shares have a face value of Rs.849 20. 14 December 2004.steel segment Stores and spares .2 Provision for slow moving items 20.5 Held to maturity 2008 2007 (Rupees in '000) Redeemable Capital .965 18.steel segment Spare parts .801 18.975 (10) 24.836 26.5.75% per annum.1 Redeemable capital .3 24.955 1.102 4.640 38.5.5. 5.45 percent per annum. This represents interest free house loans provided to employees for a period of 5 years.965 (10) 24. 19.139 1.385 8.696 961 45. 91 18.3 This represents investments in TFCs issued on 10 February 2004 by United Bank Limited.988 1.836 26. The rate of profit is 8. The tenor of the TFCs are eight years with semi-annual installments comprising of principal and profit.steel segment Loose tools .791 24.

Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.919 15.208 27. 1.161 21.547 78.177 (26.084) 443.522 million).748 15.527) 110.1 This includes raw cotton amounting to Rs. STOCK-IN-TRADE Raw materials Hot rolled steel coils (HR Coil) Coating materials Others .315 Work-in-process Finished goods Scrap / cotton waste Provision for slow-moving and obsolescence finished goods 30.58 million (2007: Rs. 299.064 4.1 21.56 million). 20.2 16.731 421 452.3 (8.311 606.083 17.161 5.452 92 ANNUAL REPORT 2008 21. 3.348) 162.09 million (2007: Rs. This includes raw cotton amounting to Rs.332 138.010) (84) (191) (11.269 892 12.1 21.290 3.2.137 million (2007: Rs. 20.244 11. 44.98 million).2 This includes items in-transit as at 30 June 2008 of Rs.4 21.832 199.1 This includes items in-transit as at 30 June 2008 of Rs.3 Movement of provision for slow moving items 2008 2007 (Rupees in '000) Opening balance Provision made during the year Closing balance 12.030 43.482 90.813) (84) (187) (9.1 30.422 633.521 (16.285) 523. 62 million) pledged as security with a financial institution.645 534.pipe plant Raw cotton Stock-in-transit Provision for slow-moving and obsolescence Hot rolled steel coils Coating materials Others 21.544 358.2 .1.059 (11.074 159. 0.7 million (2007: Rs.3 21. 20. 21.928 49.872 101.3 21.

Coil Total H.197) 8.285 21.1 118.543 38.11 million (2007: Rs. Coil (Rupees in '000) 11.30 million) .269 26.179) 16.865 181.696 142.1 This includes amount due from associated undertakings of Rs. 0.3 Movements of provision for slow-moving and obsolescence of raw material 2008 Coating / Others 2007 Coating / Others H. 0.348 258 26.R.084 ––– 11.612 148 (148) 118. TRADE DEBTS Secured Considered good Unsecured Considered good Considered doubtful Provision for doubtful trade debts 84 22.408 22.527 (10.4 Movements of provision for slow-moving and obsolescence of finished goods 2008 2007 (Rupees in '000) Opening balance Provision / (reversal) made during the year Closing balance 26.612 118.R.813 275 (4) 271 275 ––– 275 275 11.010 Total Opening balance Provision / (reversal) during the year Closing balance 11.865 155 (155) 38.285 (2.010 11.010 11.527 93 ANNUAL REPORT 2008 22.010 (2.201) 9.Notes to the Financial Statements For the year ended 30 June 2008 21.

750 .000 3.1 This represents advance given to Safeway Fund Limited.1 23.2 23.3 24.626 2. During the current period 6 million shares amounting to Rs. Movement of provision for doubtful advances 2008 2007 (Rupees in '000) Opening balance Provision reversed during the year Closing balance 290 ––– 290 321 (31) 290 23.000 (3. ADVANCES 2008 2007 (Rupees in '000) Considered good Advances to staff Suppliers for goods and services Related parties Advances against shares Safeway Fund Limited Shakarganj Food Products Limited Considered doubtful Advances to others Provision for doubtful advances to others 844 8.599 15.000 (3.413 1.000 75. now an associated company against which shares will be issued.000) ––– 290 (290) ––– 83.2 15.069 4.3 23.000 60. 60 million were issued by Shakarganj Food Products Limited against such advance.000 2.491 23.119 94 ANNUAL REPORT 2008 Suppliers for goods and services Provision for doubtful advances 23.681 1. 23.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.755 628 7.000) ––– 290 (290) ––– 24. subject to regulatory approval.000 3.000 ––– 15. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Lease deposit Security deposits Prepayments ––– 787 1.

3 25.163 1.000) ––– ––– 85.407.377 248.379 91.977 970.1 25.300 411.377 .000 This represents investment under Musharika arrangement with Crescent Standard Modaraba on profit and loss sharing basis.048 1.638 42.Crescent Standard Modaraba Opening balance as at 1 July Realized during the year Impairment made during the year Write off during the year Closing balance as at 30 June 42.475 28.2 ––– 26.381.254 91.150.313 ––– (40.475 26.475 231.2 Available for sale .565 721.1 Held to maturity 95 ANNUAL REPORT 2008 Musharika arrangements .1 26.4 Investment in related parties 25.377 ––– 28.475 ––– 26. INVESTMENTS 2008 2007 (Rupees in '000) Related parties Held to maturity Available-for-sale Others Available-for-sale Held for trading 25.000 ––– (42.040.542 1.919 25.000 28.313) 42.000) (3.Notes to the Financial Statements For the year ended 30 June 2008 25.300 Quoted The Crescent Textile Mills Limited Crescent Jute Products Limited 25.Related Parties The company holds investments in ordinary shares of Rs.377 70.2. 10 each. 25.115 1. in the following listed investee companies: 2008 2007 (Number of shares) Name of investee company 2008 2007 (Rupees in '000) 452.

3. The break-up value has been calculated on the basis of the financial statements for the period ended 31 December 2004.996 26.275 Siemens (Pakistan) Engineering Company Limited 6.311 175.290 Inovative Investment Bank Limited (Formerly CSIBL) ––– Jubilee Spinning and Weaving Mills Limited 25. 50 per unit.900 5.790 ––– ––– 2.292 2.391 185.892 ––– 1. as this company is on the defaulters counter of Karachi Stock Exchange.944. 25.459 National Investment Trust * ––– Nestle Pakistan Limited 2. in the following listed investee companies: 2008 2007 (Number of shares) Name of investee company 2008 2007 (Rupees in '000) 96 ANNUAL REPORT 2008 9.1 Investments in Jubilee Spinning and Weaving Mills Limited is carried at break-up value of Nil per share.301.771 Quoted Asian Stocks Fund Limited 56.048 30.500 192.407 PICIC Growth Fund 2.936 1.385 6. ** It has face value of Rs.689 30.806 Cherat Cement Company Limited 257 Fauji Fertilizer Company Limited 7. unless stated otherwise.225 26.090 3.000 1.1 Investments in Crescent Jute Products Limited is carried at their break-up value.000 399.000 9.327 6.263 4.3 Available for sale .3.060.140 231.346.329 The Hub Power Company Limited 4.669 75.949 23.490 8.400 ––– ––– 3.356 2.500 55.326 Sui Northern Gas Pipelines Limited ––– Pakistan Stock Market Fund * / ** 14.500 100.565 * These are open ended funds.000 34.600 8 156.133 8.000 6.000 7.299.500 ––– 173. 25.435. 25.000 245.311 175.245 1.144 35.079 Safeway Mutual Fund Limited 103. .993 38.Others The Company holds investments in ordinary shares of Rs.784 4.490 9. which is Nil per share.981 1 17.384 PICIC Investment Fund 2.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.1 ––– National Bank of Pakistan 1.295 95.000 1.2. 10 each.597 7.113 248.391 150.296 Packages Limited ––– Pakistan Oilfields Limited ––– Pakistan Strategic Allocation Fund 30. The Break-up value has been calculated on the basis of the audited financial statements for the year ended 30 September 2006.343 2.

931 3.000 387 243.005 ––– 16.830 3.800 7.000 80.350 25.061 5.020 45.250 55.604 3.000 ––– ––– ––– 1.795 ––– 420 66.000 72.478 280 43.125 250.325 3.563 10 14.050 6.267.500 ––– 9.700 55.300 24.500 24.990 25.000 10.136 ––– 1.4 Held for trading 2008 2007 (Number of shares/units) Name of investee company Quoted ––– 65.506 20.000 ––– ––– 20.500 173.000 ––– 341.450 21.000 ––– 196.008 6.400 ––– 288.457 25.425 20.000 ––– ––– ––– 4.428 9.703 ––– 16.053 198 11.383 10.682 17.800 ––– 15.625 20.245 ––– 22.792 ––– 100.000 ––– 600.000 60.000 ––– 220.670 5.298 26.677 ––– 31.200 ––– 15.659 31 2008 2007 (Rupees in '000) 97 ANNUAL REPORT 2008 .753 876 ––– 2.024 21.250 Al Meezan Mutual Fund Limited Al Ghazi Tractors Limited ** Adamjee Insurance Company Limited Agriautos Industries Limited ** AKD Income Fund */*** Allied Bank Limited Arif Habib Bank Limited Arif Habib Securities Limited Askari Bank Limited Attock Cement Pakistan Limited Attock Petroleum Limited Attock Refinery Limited Bank Al Habib Limited Bank Alfalah Limited Century Paper and Board Mills Limited Cherat Cement Company Limited Crescent Commercial Bank Limited Dawood Hercules Chemicals Limited D.084 ––– 22.000 ––– 235.300 45.690 95.472 ––– ––– ––– ––– 344 38. Khan Cement Company Limited Engro Chemicals Pakistan Limited Fauji Cement Company Limited Fauji Fertilizer Company Limited First Habib Bank Modaraba Fauji Fertilizer Bin Qasim Limited Ghandhara Nissan Limited Golden Arrow Selected Stocks Fund Limited ** Hinopak Motors Limited The Hub Power Company Limited Indus Motor Company Limited ICI Pakistan Limited IGI Insurance Limited Inovative Investment Bank Limited (Formerly CSIBL) JS Bank Limited Jahangir Siddiqui and Company Limited Javed Omer Vohra & Company Limited Kohat Cement Company Limited Kohinoor Energy Limited Kohinoor Textile Mills Limited Kot Addu Power Company Limited Maple Leaf Cement Factory Limited ––– 17.755 3.000 40.591 ––– 3.281 10.257 274 8.000 5.350 38.G.000 500 1.895 1.000 10.000 100.504 11.065 67.000 30.500 150.281 1.500 214.315 ––– 5.417 466 2.616 10.663 19.800 194.000 270.000 153.804 ––– 2.000 148.617 145.151 157 29.127 ––– 26.000 305.520.702 4.191 2.500 6.000 15.000 ––– 200.000 810.700 1.956 ––– 391.Notes to the Financial Statements For the year ended 30 June 2008 25.000 ––– 106 3.665 35.014 9.240 2.000 700.046 ––– 4.000 575.

547 44.115 2.428 ––– 23.751 14. 50 per share.000 530.300 27.521 15.725 ––– 5.000 ––– 334.450 331.000 ––– 149.372 18.233 ––– 10.000 165.374 ––– 98 ANNUAL REPORT 2008 1.550 11.391 ––– ––– 11.000 390.032.000 375 ––– ––– ––– ––– Meezan Balanced Fund Meezan Bank Limited National Bank of Pakistan National Investment Trust * National Refinery Limited Netsol Tecnologies Limited New Jubilee Life Insurance Company Limited NIB Bank Limited (R) NIB Bank Limited Nishat Mills Limited Oil & Gas Development Company Limited Packages Limited NIB Bank Limited (Formerly Pakistan Industrial Credit and Investment Corporation Limited) Pakistan Oilfields Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited Pakistan Capital Market Fund Pakistan National Shipping Corporation Pakistan Petroleum Limited Pakistan Premier Fund Limited Pakistan Reinsurance Company Limited Pakistan State Oil Company Limited Pak Suzuki Motor Company Limited NIB Bank Limited (Formerly PICIC Commercial Bank Limited) PICIC Energy Fund PICIC Insurance Limited Samin Textiles Limited Soneri Bank Limited Sui Northern Gas Pipelines Limited Thal Limited ** The Bank of Khyber The Bank of Punjab TRG Pakistan Limited Standard Chartered Bank (Pakistan) Limited United Bank Limited Worldcall Telecom Limited 4.977 * This is open ended funds.010 1.158 45.575 50.200 ––– 230.704 2.000 1.208 ––– 55.434 4.219 40.577 ––– 100.000 25000 101.800 43.895 17.200 9.437 973 861 ––– 1. 2008 2007 (Number of shares/units) Name of investee company 2008 2007 (Rupees in '000) Quoted 500.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.376 6.000 100.219 235.500 161.656 2.004 ––– 2.320 61.000 299.402 ––– 16.000 25.000 780. 5 per share.000 35.000 4.150.000 15.875 ––– ––– 651.500 161.000 10.000 92.500 ––– 40.849 ––– ––– 40. ** It has face value of Rs.685.489 ––– 74.000 340.053 11.134 211.200 ––– 221. *** It has face value of Rs.235 7.000 188.268 5.250 140.027 ––– 6.000 ––– ––– 204.800 ––– 190.157 19.892 6.200 3.007 275.075.900 25.150.615 2. .297 5.033 1.500 288.021 100.200 1.400 1.550 95.095 966 8.700 8.975 19.400 ––– 269.600 50.775 ––– 49.000 200.000 ––– 40.200 30.221 ––– 109.184 128.271 3.731 9.085 825 44 ––– ––– ––– ––– 721.000 28.000 150.000 37.587 ––– 5.719 588 8.457 283.

849 ––– 28.662 11.997 2.850 34.581 271.011 16.528 5. Khan Cement Limited Engro Chemical Pakistan Limited Fauji Cement Company Limited Fauji Fertilizer Bin Qasim Limited Fauji Fertilizer Company Limited The Hub Power Company Limited ICI Pakistan Limited Indus Motor Company Limited Kohinoor Energy Limited Kot Addu Power Company Limited Kohat Cement Company Limited Meezan Balanced Fund Nestle Pakistan Limited National Bank of Pakistan National Refinery Limited Nishat Mills Limited Oil and Gas Development Company Limited Pak Suzuki Motor Company Limited Pakistan Capital Market Fund Pakistan National Shipping Corporation Pakistan Oilfields Limited Pakistan Petroleum Limited Pakistan Premier Fund Limited Pakistan State Oil Company Limited Pakistan Strategic Allocation Fund Pakistan Telecommunication Company Limited PICIC Growth Fund PICIC Investment Fund Soneri Bank Limited Siemens (Pakistan) Engineering Company Limited The Bank of Punjab Thal Limited 99 ANNUAL REPORT 2008 .690 29.318 ––– ––– ––– 17.307 122.079 ––– 6.945 1.640 35.250 6.310 93.964 Altern Energy Limited Agriauto Industries Limited Al Ghazi Tractors Limited Arif Habib Securities Limited Attock Petroleum Limited Attock Refinery Limited Al Meezan Mutual Fund Limited Adamjee Insurance Company Limited Bank Alfalah Limited Crescent Commercial Bank Limited D.429 3.015 5.296 2.775 ––– 48.189 16.5 The following investments are deposited as security with commercial banks.130 2.388 45.913 2.663 4.995 ––– ––– 7.250 ––– 34.005 14.241 4.940 5.939 2.329 8.432 15.186 ––– 21.830 8.450 16.800 29.159 4.468 6.058.949 7.937 6.195 2.394 7.808 583 34.320 24.203.645 7.260 ––– 114.684 25.600 1.231 ––– 3.429 10.745 ––– 8.Notes to the Financial Statements For the year ended 30 June 2008 25.461 16.135.520 8.180 ––– 14.748 18.236 36.326 ––– 39.669 5.560 3.641.302 13.646 9.671 72.337 ––– ––– 19.073 807 8. Name of investee company 2008 2007 (Rupees in '000) 1.556 1.G.453 2.

936) ––– 2.1 Receivable from staff retirement funds Others 27.346) 10.Musharika arrangement / deposits .385 1.489 926 67.091 4.383 42.635 27.346) 62.678 4.385 1.387 4.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.988 2.024 (4. 100 ANNUAL REPORT 2008 OTHER RECEIVABLES Dividend receivable Claim receivable Due from associated undertakings Sales tax refundable Provision thereagainst 15.936 (4.1 Due from associated undertakings Crescent Textile Mills Limited Shakarganj Mills Limited Shakarganj Food Products Limited Crescent Jute Products Limited Premier Insurance Limited 10 479 67 37 ––– 593 38 789 ––– ––– 99 926 .253 301 72.476 27. MARK-UP ACCRUED 2008 2007 (Rupees in '000) Considered good .602 345 31.729 1.580 2.2 2.Others Considered doubtful Related party Profit accrued on: .002 1. 26.936) ––– 2.226 593 14.Related party .936 (4.Provision thereagainst 1.729 (4.

757 2.in deposit accounts .643) 2.038 719 4.foreign currency .303.950.638.184.954. SALES Bare Pipes (own product excluding coating revenue) Revenue from conversion Coating of pipes Cotton yarn Scrap / waste .in current accounts Cash in hand 2007 (Rupees in '000) 4.477) 4.984) 4.807 1.local currency .538 2.439.341.235 521 36.Sales tax and special excise duty 30.265.Sales returns 2.254 466.613 1. COST OF SALES Steel Cotton 30.440 117.174.691.843 (19.860 285.700 742 8.120 101 ANNUAL REPORT 2008 .763 (234.038 1.205 1.189 (437.309. CASH AND BANK BALANCES 2008 With banks .1 1.243 8.170 1.656 .760 197.376 1.705 28.763 1.349.364.431 3.723 86.778 (20.618 2.200.199 25.1 30.Notes to the Financial Statements For the year ended 30 June 2008 28.999 29.775) 3.

436.856 20.922 78.560) (87.559 819 ––– 75.096.920) 766 1.198.681 42.424 262 19.254 2.817 2.686 ––– (25.526) (1.2 16.504) 18.482) (33.105 154.163 117.151 3.817 75.516) 1.370) (24.192) 2.2 Detail of salaries.439.482 75.800.852 26.965) 2.933 4.920 356 (113.552 8.465 2.431 111.284) 1.2 1.786 122.511 16.462 47.731) 1.064) (68.548) 29.671 18.762.479 58.243 (1.264.007 ––– ––– 3.303.482 (15.038.947 156.341 29.1 30.837 Opening stock of work-in-process Closing stock of work-in-process Cost of goods manufactured Opening stock of finished goods Finished goods purchased Closing stock of finished goods 33.754 65.769 39.402 343 18.496.268.3 30. wages and other benefits Insurance Repairs and maintenance Depreciation Amortization of intangible assets Other expenses Expenses allocated to cotton segment Expenses allocated from steel segment 15.639 ––– (64.401 136.866 1.290 356 (159.349 3.545 (33.813 3.156) 1. wages and other benefits Salaries.266 262 6.261) (3.263 8.745 (10.225 90.380 3.861 6.108 (1.606 127.372.445 3. 30.002 18.673 1.325 ––– (90.156 2.408 3.980 10.463.1 Cost of sales Steel Segment 2008 2007 Cotton Segment 2008 2007 2008 (Rupees in '000) Raw materials consumed Packing materials consumed Store and spares consumed Fuel.510 64.867 5.462 21.666 1.754 35.813 10.158 21.935.174.669 ––– 25.672 14.074) 28.817 43.636 1.847 520 136.257 5.290 (43.228.619 3.135 ––– 1.036 21.594 138.715 25.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.287 132.221) (29.861 .487 38.291 ––– ––– 1.686 849 ––– 78.122 ––– 29.905.290) (23.618 2.487 1. wages and other benefits Provident fund contributions Pension fund Gratuity 30.845 1.621 66.504 1.418) 3.006 3.370 ––– (45.038 1.368 6.302 2. power and electricity Salaries.158 ––– 12.265.339 407 117.716 ––– ––– 1.380 72.458 137.346 343 5.343.3 53.431 889.676) 1.044 129.056 ––– 13.376 1.520 407 42.998 520 58.221 (3.437.156 1.261 (11.265) 1.985.867 111.954.656 Total 2007 102 ANNUAL REPORT 2008 30.044 4.156) ––– 1.807 1.349.

339 709 589 (954) 63 407 31.549 million) dividend received on preference shares from Shakarganj Mills Limited an associated company. Further Rs.911 (212.3 million (30 June 2007: Nil).Notes to the Financial Statements For the year ended 30 June 2008 30.140 36.1 103 .026 89.746 2.845 (4.8 million were incurred against the non rented out area. 2.847 854 973 (1.531 132.Held for trading Unrealized gain on held for trading investments Rent from investment properties Income from related parties Provision written back on investment 2. 0. 31.1 This includes Rs.028 66.241) 288 3.2 ––– 73.758 125.852 134.402 31.373) 66 520 3.346) 282 3.3 Staff retirement benefits 2008 2007 Pension Gratuity Pension Gratuity (Rupees in '000) Current service cost Interest cost Expected return on plan assets Past service cost 4.Available-for-sale .607 45 411.479 ––– 31.066 3.982) 2.866 2.549 million (2007: Rs. 2. ANNUAL REPORT 2008 31. INVESTMENT INCOME 2008 2007 (Rupees in '000) Return on Term Finance Certificates/ IROP bond Dividend income Gain on sale of investments .2 Direct operating expenses incurred against rent income from investment property amounted to Rs. 1.355 105.546 (3.

1 Commission Travelling. conveyance and entertainment Depreciation Insurance Postage. wages and other benefits Salaries. wages and other benefits 32.849 152 482 78 4.050 13.561 1. DISTRIBUTION AND SELLING EXPENSES Steel Segment 2008 2007 Cotton Segment 2008 2007 2008 (Rupees in '000) Salaries.547 6.2 537 366 51 81 794 461 ––– 693 422 8.677 280 382 90 151 674 361 29 565 520 7.286 5.272 32.673 578 366 51 128 794 461 567 693 728 15.585 18 ––– ––– 64 ––– ––– 424 ––– 530 5.939 152 482 78 5. 32.651 3.090 5.278 1.550 4.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.090 3.550 4.613 41 ––– ––– 47 ––– ––– 567 ––– 306 6.392 182 601 97 5.547 Total 2007 104 ANNUAL REPORT 2008 32.346 5. wages and other benefits Provident fund contributions Pension fund Gratuity 32.262 298 382 90 215 674 361 453 565 1. telephone and telegram Advertisement Bid bond expenses Transportation Legal and professional charges Others 15.278 4.561 ––– 1.272 ––– 4.670 182 601 97 6.2 4.346 1.1 Detail of salaries.278 ––– ––– ––– 1.2 32.2 Staff retirement benefits 2008 Pension Gratuity Pension (Rupees in '000) Current service cost Interest cost Expected return on plan assets Past service cost 635 600 (678) 44 601 160 182 (257) 12 97 541 368 (468) 41 482 136 113 (183) 12 78 2007 Gratuity 3.651 .090 ––– ––– ––– 1.

903 163 434 105.408 738 814 134 66 59 104 159 853 129 104 100 119 152 672 366 148 85 482 143 548 362 322 132 392 99 7.074 28.3 6.442 2.708 19 48 11.586 21.988 15.192) 402 5.874 3.393 1.776 17 2. subscriptions and periodicals Others 157 113 114.148 669 33.481 876 46.474) 398 4.020 40.469 4.961 1. conveyance and entertainment Fuel and power Postage.315 3.375 3.477 (6.962 34.792 1. wages and other benefits Salaries.515 (4.644 5.222 1.548 911 4.382 2.547 181 128 135.480 4.746) 115 743 2007 Gratuity 27.258 667 3.928 3.362 1.705 193 623 133.925 1.151 1.258 3.426 19.318 15 3.543 ––– 7.315) 112 876 5.481 1.263 6 2 8.933 788 39.390 24 1.2 32.928 34.440 1.083 3.1 60 330 ––– 79 7 45 67 454 33.284 4. wages and other benefits Provident fund contributions Pension fund Gratuity 33.032 114 182 128 135 1.794 5.552 18 13 12.639 (2.538 3.339 1.903 743 105 ANNUAL REPORT 2008 .986 151 21.052 3.128 164 548 88 3.119 1.928 101 4.637 11 141 16.172 239 19.555 ––– ––– ––– 3.1 39.2 33.090 74 46.292 1.322 4.349 16.082 1.2 15.2 Staff retirement benefits 2008 Pension Gratuity Pension (Rupees in '000) Current service cost Interest cost Expected return on plan assets Past service cost 5.919 989 33.555 3.4 15. rates and taxes Travelling.281 1.132 168 24.408 147 461 74 4.609 743 40.239 215 11.515 1.716 33.170 3.370 ––– 4 472 3.980 17.609 1. wages and other benefits Rents.318 3.Notes to the Financial Statements For the year ended 30 June 2008 33.555 2 3.182 400 1.318 ––– ––– ––– 3.525 13.126 2.617 3.962 1.1 Salaries.860 33.796 1.090 38.586 5.716 904 33. stationery and office supplies Newspapers.078 (1.334 767 4. ADMINISTRATIVE EXPENSES Steel Segment 2008 2007 Cotton Segment 2008 2007 IID Segment 2008 2007 2008 Total 2007 (Rupees in '000) Salaries.776 3.360 33.296 1. telephone and telegram Insurance Repairs and maintenance Auditors' remuneration Legal and professional and corporate service charges Advertisement Donations Depreciation Amortization of intangible assets Printing.

278 15. NIC Building. 20. review report on Statement of Compliance with best Practices Code of Corporate Governance and audit of reconciliation statement of Nominee Shareholding of Central Depository Company of Pakistan Limited (CDC).021 33.151 717 19.304 Director 873 ––– Member of Managing Committee ––– 3. Faisalabad. Commecs Education Trust 301. Karachi.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. F-8/3. Pakistan Centre for Philanthrophy 1-A.000 Member ––– 21.4. Ahsan M.586 750 219 20 989 *Audit fee includes services for audit of annual financial statements.3 Auditors' remuneration 2008 2007 (Rupees in '000) Audit fee* Fee for audit of funds' financial statements and other reports Out of pocket expenses 850 459 277 1. Islamabad. Lyallpur Golf Club Race Course Club. . 33.4 Donations Donations include the following in which a director is interested: 106 ANNUAL REPORT 2008 Name of the director Interest in donee Name and address of the donee Amount donated 2008 2007 (Rupees in '000) Mr. 33. Karachi.1 Donations other than those mentioned above were not made to any donee in which a director or his spouse had any interest at any time during the year. Fortune Centre. Street 14. Saleem Director The Citizens Foundation 9th Floor. Main Sharah-e-Faisal. limited review of condensed interim financial statements for the six months period.

114 34.983 ––– 3.002 107 ANNUAL REPORT 2008 36.573 2.694 36.543 35.000 ––– 830 590 6.141 11.744 892 37.412 107.090 4. prepayments and others Fixed assets written off Provision for liquidated damages Exchange loss 5.741 5. OTHER OPERATING EXPENSES 2008 2007 (Rupees in '000) Provision for slow moving stores.116 15.312 ––– ––– 5.514 109.095 98.490 . spares and tools Provision for stock-in-trade Provision for workers welfare fund Provision for workers profit participation fund (Steel Division) Provision for infrastructure fee Impairment of intangible asset Provision for impairment of investments Provision for other receivables.309 19.161 ––– 1.037 8.217 153.403 7.564 37.516 ––– 125.Notes to the Financial Statements For the year ended 30 June 2008 34.018 19.381 ––– 1.277 24 3. FINANCE COSTS Mark-up on: Running finances Short term loans Long term loans Redeemable capital Assets subject to finance leases Workers Profit Participation Fund Bank charges 39.665 128.816 65.200 10 42.900 ––– 46.653 53.331 1.280 15. OTHER OPERATING INCOME Return on deposits Liabilities written back Provision written back for stock-in-trade Provision written back against margin on letters of credit and guarantee Gain on disposal of fixed assets Insurance commission Exchange gain Others 6 565 12.687 1.083 ––– 13.507 ––– ––– 1.581 347 326 2.

178 (Number of shares) Average number of ordinary shares in issue during the year 38.941 1.318 ––– 24.10 13.964 (769) 1.563 5.920 210.28 Weighted average number of shares for the year ended 30 June 2007 have been adjusted for the effect of bonus shares issued during the year.268) (21.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.1 8. . TAXATION 2008 2007 (Rupees in '000) Current .for the year .953.199) 75 (11.195 62.145 37.622 219.267 49.021 46.327.860) (17.681 663.875 61 (22.246 (162.503) (769) 64. BASIC AND DILUTED EARNINGS PER SHARE Profit for the year 415.950 64.323 254.109) 6. 37.145 108 ANNUAL REPORT 2008 38.244 (Rupees) Earning per share basic and diluted 38.941 727.1 Relationship between tax expense and accounting profit Profit before taxation Tax at the applicable rate of 35% Effect of non-deductible expenses Tax effect of exempt income and export sales under presumptive tax regime Tax effect of change in tax WDV of fixed assets Tax effect of income taxed at different rate Tax effect on share of profit in associates taxed at different rate Prior years' tax effect 626.656 210.for prior years' Deferred 164.021 ––– 164.1 51.

095) 37.403 13.Notes to the Financial Statements For the year ended 30 June 2008 39.083 ––– (12.443 172.982 5.758) (2.018 (1.516 (24) (238.200 ––– 675 590 ––– (191.479) 892 (1.687) (36.516) 906.741 15.644 797 198 ––– (134. advances and investments Provision written back on investments Share of profit in associated undertaking Amortization of initial transaction cost Working capital changes 626.090 5.657 128.718 329 561 10 212.141 4.531) (4.773) 1.162 76.900 47 ––– 3.207) 9.162 (29.000 7.032) ––– (50.572 109 ANNUAL REPORT 2008 39.280 ––– 11.1 .647) (45) (99. CASH GENERATED FROM OPERATIONS 2008 2007 (Rupees in '000) Profit before taxation Adjustments for non cash charges and other items: Depreciation Amortization Amortization of advance to staff Provision for impairment on intangibles Adjustment arising from measurement to fair value Provision against stock-in-trade and stores and spares Provision written back against margin on letters of credit and guarantees Provision / (Reversal) against stock-in-trade Liabilities written back Provision for workers profit participation fund Provision for workers welfare fund Provision against accrued mark-up Fixed assets written off Provision for diminution in the value of investments Provision for infrastructure fee Provision against advances Provision for 10-C bonus Provision against liquidated damages Exchange loss / (gain) Gain on sale of investments Pension and gratuity expense Finance costs Gain on disposal of fixed assets Dividend income Return on deposits.114 ––– 830 42.622 727.609 629.136) 1.422 153.939) 11.312) (89.936 ––– 46.323 174.381) (565) 34.490 (98.

093) (29. 39.125) 8.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.261) 138.796) 168. financial charges between steel and cotton segments are allocated at average mark-up rate (2007: KIBOR plus 2% on the basis of funds utilized.719 58.773 62.577 (212.337 52.It comprises manufacturing of yarn (Note1.1 Working capital changes 2008 2007 (Rupees in '000) (Increase) / decrease in current assets Stores.999 26.To effectively manage the investment portfolio in shares and other securities (strategic as well as short term) and property investments (held for rentals as well as long term appreciation).724) 36.3) • Investment and Infrastructure Development (IID) segment .405 76.926) (10. plant and equipment.847 182.609 40. Segment liabilities comprise operating liabilities and exclude items such as taxation and corporate. . business segment. Segment results.2 The steel segment allocates certain percentage of the common administrative expenditure to the cotton segment and IID. CASH AND CASH EQUIVALENTS Running finances under mark-up arrangements Cash and bank balances 12 (837. store and spares. intangibles. 41.199 (828.213) (106. Business Segments The Company comprises the following main business segments: • Steel segment .520 2. In addition. assets and liabilities include items directly attributable to segment as well as those that can be allocated on a reasonable basis. stock in trade and trade and other debts.2) • Cotton segment .864 (91.516) (13. Segment assets consist primarily of property.275 110 ANNUAL REPORT 2008 41. is based on the Company's management and internal reporting structure.159 (946) 92. Financial charges between steel and IID segments are apportioned on the basis of their net assets.399) (202. plant and equipment and intangible assets.It comprises manufacturing and coating of steel pipes (Note 1.619) 39. Segment capital expenditure is the total cost incurred during the year to acquire property. 41. spares and loose tools Stock-in-trade Trade debts Short term advances Short term deposits and prepayments Other receivables (net) Increase in current liabilities Trade and other payables (33.1 SEGMENT REPORTING The reporting format.

464 411.145 663.552 550 22.677 114.675 107.867 153.673 16.910 99.656 510.890 5.490 99.178 ––– 217.607 970.376 819.683) ––– ––– ––– 73.705 109.775 97.402 921.613 105.819 635.402 ––– 11.005 15.402 411.415 72.431 76.440 95.773 31.038 390.205 3.227 1.962 21.950 99.962 338.286 133.Notes to the Financial Statements For the year ended 30 June 2008 41.454 213.899 37.607 ––– 12.265.362 ––– (12) ––– ––– ––– 411.360 61.362 125.249 7.363 3.782 184.547 61.622 210.708 42.425.773 626.174.677 128.712 1.120 2.547 ––– 76.899 ––– 18.262 135.851 ––– 819.744 260.136 727.978 1.547 6.585 8.385.3 Steel Segment Cotton Segment (Rupees in '000) IID Segment Total Segment results for the year ended 30 June 2008 Sales Cost of sales Gross Profit Investment Income Distribution and selling expenses Administrative expenses Other operating expenses 2.989 ––– (46.095 222.215 ––– 120.249 ––– 390.774.618 120.623 2.018 50.294 19.191 649.323 64.439.851 8.200.607 73.662 9.795 Other operating income Operating profit before finance costs Finance costs Share of profit in associated undertaking Profit / (loss) before taxation Taxation Profit for the year 9.675 50.681 111 ANNUAL REPORT 2008 .178 15.032 Other operating income Operating profit before finance costs Finance costs Share of profit in associated undertaking Profit / (loss) before taxation Taxation Profit for the year Segment results for the year ended 30 June 2007 Sales Cost of sales Gross Profit Investment Income Distribution and selling expenses Administrative expenses Other operating expenses 1.398 73.564.437 23.350 99.002 756.263 63.941 415.711 709.997 4.306 105.000 54.997 434.349.943 59.866 13.184 55.287 1.543 272.578 176.573 728.630 650.303.308 1.215 5.954.354 ––– 641.440 1.637 5.833 1.136 509.950.807 896.708 18.

000 53.695 69.093 128.846.694 1.663 23.047 Segment liabilities Unallocated corporate liabilities Consolidated total liabilities For the year ended 30 June 2007 Capital expenditure Depreciation and amortization 343.004 1.441 .Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.917 982.027.878 1.987 1.054 1.530 1.423.485 4.027.642 66.066 66.256.942 2.389 153.593.316 72.696.554.684 33.356 1.079 33.461 175.435 43.193 407.316 3.686 112 ANNUAL REPORT 2008 For the year ended 30 June 2008 Capital expenditure Depreciation and amortization As at 30 June 2007 Segment assets Investment in equity accounted undertakings Unallocated corporate assets Consolidated total assets 765.222.CONTINUED Steel Segment Cotton IID Segment Segment (Rupees in '000) Total Other segment information As at 30 June 2008 Segment assets Investment in equity accounted undertakings Unallocated corporate assets Total assets 356. SEGMENT REPORTING .800 1.407.696 4.695 3.495.699 1.794 ––– 595.532 604.852.690 Segment liabilities Unallocated corporate liabilities Total liabilities 188.510 1.658 33.907 173.603.222.631 126.832 1.596.168 37.379 1.440 139.133 513.

351 15.30 June 93.623 32.354 121.451 126.877) 2.169 12.597 8.For next year (2007 : next year) 15 .285 153.949 12.872 19.915) (6.305) 127.247) (6.673 ––– 4.183 4. using the following significant assumptions.217 7.599) (6.263) 5.169 99.954 28.162 9.457 6.208 (1.883 1.Expected rate of increase in salaries 12 .249 91.877 92.356) (4.955) 18.214) 71.Notes to the Financial Statements For the year ended 30 June 2008 42.495 9.713) (4.358 99. The projected unit credit method.153 93.1 July Expected return on plan assets Contribution to fund Benefits paid Actuarial gains / (losses) Fair value of plan assets .440) 27.437) (2.340 (1.169 (126.After two year (2007 : after three year) 12 .121 Fair value of plan assets .016) (3.955) 18.684 126.924) (4.224 27.955) 14.922 (2.155 28.945 (32.945 1.945 127.351) 285 (5.914) 2.474 11.474 24. 42.1 STAFF RETIREMENT BENEFITS The actuarial valuation of both pension and gratuity schemes has been conducted in accordance with IAS 19 "Employee benefits" as at 30 June 2008.684) 46 (1.198 11.140 1.023 2.945 2.954 (98.Expected rate of return on plan assets 12 .2 113 ANNUAL REPORT 2008 (Rupees in '000) Present value of defined benefit obligation Fair value of plan assets Unrecognised actuarial gains / (losses) Unrecognised past service cost Liability / (Asset) in balances 110.970) (2.358 (130.780 ––– 4. has been used for the actuarial valuation: 2008 2007 (Percentage per annum) .069) 31.454 2.404 139.404 (31.774) 127.066 6.571 (1.795 (1.717 (3.298 32.825 (2.055) (3.307 68.422 9.757) 139.224 10.947 (1.253) Present value of defined benefit obligation .For next year (2007 : next two year) 15 .877 3.955) 13.772 (3.Average working life of employee 10 years The amounts recognised in balance sheet are as follows: 2008 Pension Gratuity Total Pension 2007 Gratuity Total 10 20 15 10 12 11 years 42.195 8.428 (1.523) (4.898 (1.247) 11.224 (93.Discount rate .602) 99.30 June 110.776 2.474) (2.218 11.1 July Current service cost Interest cost Benefits paid Actuarial (gains) / losses Present value of defined benefit obligation .643) 52 27.016) (6.351 .263) (10.

428 (8.514 2.457 6.183) ––– 728 8.181 29.039) 99.493 12.991) 51.883) ––– 190 1.037 Experience adjustments (Gain) / loss on obligation Gain / (loss) on plan asset (3.355) 8.780 (2.113 17 2.878 4.140 1.298 1.217) ––– 729 9.050 .280 27.954 98. The following amounts have been charged in the profit and loss account in respect of these benefits: 2008 Pension Gratuity Total Pension 2007 Gratuity Total (Rupees in '000) Current service cost Interest cost Expected return on plan assets Actuarial (gains) / losses Past service cost Expense recognised in profit or loss 10.232) Experience adjustments (Gain) / loss on obligation Gain / (loss) on plan asset (6.024 3.980 Gratuity As at June 30 Present value of defined benefit obligation Fair value of plan assets Surplus 28.123) (2.949 12.922 (11.139 4.794 (3.774) (6.750) 71.945) ––– 190 1.422 68.261) 22.383 14.915 (12.422 9.945 32.744 (4.404 31.929 2.687 2.430 2.987 18.933 19.208 (11.716 (15.735 60.247 18.091) 708 4.256 46.502) (1.657 Actual return on plan assets (138) (2.157 (2.308 14.474 (5.454 2.337 7.194 (3.228) 65.224 93.776 24.023 4.684 3.597 8.512) 7.162) ––– 919 11.024 (5.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.518 Comparison for five years 2008 2007 2006 (Rupees in '000) 2005 2004 114 ANNUAL REPORT 2008 Pension As at June 30 Present value of defined benefit obligation Fair value of plan assets Deficit 110.962 3.440) (11.379 20.495 9.066) ––– 918 9.791 7.227 11.501 448 2.

687.476 9.243 127.128 4.785 ––– ––– ––– ––– ––– ––– ––– 56.613.857.757 4.486.387 21.475 4.408 2.279.756 1.202.567 181.957 75.795 ––– ––– ––– ––– ––– ––– 4.696 787 2.318 2.407.197 1.681 2.000 3.936 2.796.387 21.296 1.232 2.000 8.442 2.201.919 ––– 181.Notes to the Financial Statements For the year ended 30 June 2008 43.241 118.751 4.756 2.387 21.805 ––– ––– ––– ––– ––– ––– 28.757 61.241 118.638 ––– 118.226.048 998.000 8.630. FINANCIAL ASSETS AND LIABILITIES Interest / mark-up rate risk arises from the possibility that changes in interest/mark-up rates will affect the value of financial instruments.222.476 9.45 to 9.45 to 9.563 .552 1.243 70.785 56.569.346 15.767 56.000 36.000 3.408 2.408 2.253 56.567 ––– ––– ––– ––– ––– ––– 1.346 15.75 10 ––– ––– ––– ––– ––– ––– 4.442 1.515 2.300.207.795 ––– ––– ––– ––– ––– ––– ––– 56.696 787 2.000 8.476 9. The Company is exposed to interest/mark-up rate risk in respect of the following: 2008 Effective rate of interest / mark-up % Interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Non-interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Total (Rupees in '000) Financial assets Investments Long term loans and deposits Trade debts Short term deposits Mark-up accrued Other receivables Advances Cash and bank balances 8.957 75.199 2.999 2.696 787 2.681 2.795 98.346 15.784 115 ANNUAL REPORT 2008 2007 Effective rate of interest / mark-up % Interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Non-interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Total (Rupees in '000) Financial assets Investments Long term loans and deposits Trade debts Short term deposits Mark-up accrued Other receivables Advances Cash and bank balances 8.241 ––– ––– ––– ––– ––– ––– 1.681 2.957 75.695 4.010 ––– ––– ––– ––– ––– ––– 28.75 42.333 4.567 181.670 4.

615) (555.551 168.593.732 751.807 627.117 ––– 1.150 1.630 713.652 392.119.652 ––– ––– ––– ––– ––– ––– 392.590) (111.5 to 13.38 1.908 11.550 (1.232 ––– 1.331 99.006 5.765 119.467 19.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd.544 432.544 432.467 19.467 19.117 ––– 280.909 16.799 ––– ––– 979.205.550 751.551 ––– ––– ––– ––– ––– ––– 280.382 ––– ––– ––– ––– 168.331 ––– ––– 1.331 ––– ––– 1.150 364.474.12 to 12.909 16.076 ––– ––– ––– ––– 354.617 74.652 .000 2.268.343.936 1.823 85.04 9 112.617 74.877 1.211) (852.412. 2008 Effective rate of interest / mark-up % Interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Non-interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Total (Rupees in '000) Financial liabilities Long term loans Redeemable capital Liabilities against assets subject to finance leases Short term borrowings Trade and other payables Interest and mark-up accrued ––– 10.801) 1.843 On-balance sheet gap : 2008 2007 Off.306.053 1.354 73.551 116 ANNUAL REPORT 2008 Effective rate of interest / mark-up % Interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years 2007 Non-interest/mark-up bearing Maturity Maturity Sub-total upto one after one year year and upto five years Total (Rupees in '000) Financial liabilities Long term loans Redeemable capital Liabilities against assets subject to finance leases Short term borrowings Trade and other payables Interest and mark-up accrued 7.544 432.232 ––– ––– ––– ––– ––– ––– ––– 99.000 280.120.818 29.119.Outstanding LCs / LGs 2008 2007 ––– ––– ––– ––– ––– ––– 721.58 to 12.909 16.731 11.799 347.947) (297.765 119.450.86 to 15.765 1.52 9 112.balance sheet items : financial commitments .739 2.119.059 ––– ––– ––– ––– ––– ––– ––– 347.799 ––– ––– 625.059 5.264.500 74.22 to 14.226.499 ––– ––– 99.064 915.677.630 713.854 148.849 ––– ––– 347.43 9.500 75.17 5.332) (1.138 1.854 148.150 364.301.

In addition. The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. are exposed to credit risk. 43.5 Market risk Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices. In order to maintain or adjust the capital structure. 43.Notes to the Financial Statements For the year ended 30 June 2008 43. To manage exposure to credit risk. The Company believes that it is not exposed to major concentration of credit risk. 43. The Company incurs foreign currency risk on sales and purchases that are entered in a currency other than Pak Rupees. or its issuer. The Company is exposed to market risk with respect to its investments. 117 ANNUAL REPORT 2008 43. the Company may adjust the amount of dividend paid to the shareholders or issue new shares. when considered appropriate.3 Capital risk management The objective of the Company when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders. . All financial assets of the Company.2 Foreign exchange risk management Foreign currency risk arises mainly where receivables and payables exist due to transactions entered in foreign currencies. or factors affecting all securities traded in the market. As at the year end the Company had liabilities in foreign currencies aggregating Nil (2007: Nil) against which no forward exchange contracts were obtained. The Company uses forward foreign exchange contracts to hedge its foreign currency risk. whether those changes are caused by factors specific to the individual security. except cash in hand. the Company actively monitors the key factors that affect stocks and TFCs market movements.1 Concentration of credit risk Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. and to maintain a strong capital base to support the sustained development of its businesses. the Company applies credit limits to its certain customers.4 Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in the financial statements approximate to their fair values. The Company limits market risk by maintaining a diversified portfolio and by continuous monitoring of developments in equity and Term Finance Certificates (TFCs) markets.

967 1.610 1.616 786 548 677 118 ANNUAL REPORT 2008 573 401 1.160 million).574 8.801 9 44.157 7.859 3.Gratuity fund .503 998 3.189 533 999 16. The chief executive.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. according to their entitlements.335 297 296 ––– 105 2. 44.730 2.3 .135 1 261 183 483 7 36 ––– 12 5.009 ––– ––– 538 7.057 1.105 337 ––– ––– ––– 13.481 15 126 604 30 21.155 million (2007: Rs.2 44.038 7 1.559 569 525 548 105 20. The chief executive.245 11 1.175 261 261 ––– 123 11. a director. DIRECTOR AND EXECUTIVES Chief Executive 2008 2007 Director Executives 2008 2007 2008 2007 (Rupees in '000) 2.323 786 ––– ––– 449 Total 2008 2007 Managerial remuneration House rent Utilities Travelling expenses Others Medical Contribution to: . 0. 0.688 2.1 The aggregate amount charged in the account in respect of directors' fees paid to six (2007: six) directors was Rs. a director and five executives are provided with free use of Company maintained cars.242 1.877 4.879 1. 44.328 1.351 1 297 208 573 9 36 ––– 12 6.435 349 162 ––– 42 31.412 1 633 389 1.030 9 370 191 900 4 126 ––– 30 14.579 573 893 533 356 5.Pension fund Club subscription and expenses Entertainment Conveyance Telephone Number of persons 5.Provident fund .159 361 162 604 42 40.080 1 569 398 1.052 338 ––– ––– ––– 12. executives and their families are also covered under group life and hospitalization insurance.200 772 2. REMUNERATION TO THE CHIEF EXECUTIVE.

2 21.026 ––– ––– 3.132 1. directors and key management personnel.906 ––– 2.995 3.930 ––– ––– ––– ––– 260.898 1. TRANSACTIONS WITH RELATED PARTIES All transactions involving related parties arising in the normal course of business are conducted at commercial terms and conditions.396 152.947 20. other than those disclosed elsewhere in theses financial statements. i.825 1.573 917 438.151 9. are follows: 2008 2007 (Rupees in '000) Associated companies Sale of finished goods including waste Purchase of yarn Rendering of services Receiving of services Rental income Advance against rental income Dividends received Return on deposits Right shares subscribed Right shares subscribed under underwriting arrangement Advance against shares Purchase of shares Other related parties Donations Contribution to provident fund Contribution to pension fund Contribution to gratuity fund Dividends received 33. staff retirement funds.2 42.e.437 4.Notes to the Financial Statements For the year ended 30 June 2008 45.673 –– 22.978 385 1.202 70.4 42.418 19. The related parties and associated undertakings comprise local associated companies.065 355 9. and at prices agreed based on inter company prices using admissible valuation modes.238 5. Transactions with related parties and associated undertakings.966 7. comparable uncontrolled price method except service charges received / paid on cost plus method.822 60.021 4.000 ––– 119 ANNUAL REPORT 2008 .

The annual capacity of the plant works out to 600. which is equivalent to 50. Coating plant The coating plant has a capacity of externally shot blasting and coating of line pipes with 3 layer high/ medium density polyethylene coating at a rate of 250 square meters of surface area per hour on pipe sizes ranging from 219 to 1067 mm outside dia and thickness ranging from 3 to 16 mm.697 kilograms). the management looks at the current income tax law and the decisions of appellate authorities on certain issues in the past. judgement is involved in evaluating the intention and ability to hold these investments till their respective maturities. The actual production achieved during the year was 41. ACCOUNTING ESTIMATES AND JUDGEMENTS Income taxes In making the estimates for income taxes currently payable by the Company.102 tons (2007: 23.452. 46. .958 tons (2007: 67. The capacities of the plant were utilized to the extent of orders received.180 tons) line pipes of varied sizes and thickness.080 shifts is 9.487 square meters surface area) was achieved during the year (2007: 422.265 kilograms (2007: 10.3 47.609. Actual production converted into 20s count was 4. Actual production converted into 20s count was 11. 46. 46. Coating of 313. Spinning unit 2 The plant capacity converted to 20s count based on three shifts per day for 1.104 tons) if actual production is translated to the notional pipe size of 30" diameter.109.181.849 kilograms ( 2007: 6.000 tons (2007:30.490 kilograms).2 Cotton segment Spinning unit 1 The plant capacity converted to 20s count based on three shifts per day for 1.825 kilograms.284.000 tons) annually on the basis of notional pipe size of 30" dia x 1/2" thickness.272 square meters surface area).874 kilograms.000 square meters outside surface of pipes based on notional size of 30" dia on single shift working.080 shifts is 6.Notes to the Financial Statements For the year ended 30 June 2008 Crescent Steel & Allied Products Ltd. In this regard.199 meters of different dia pipes (208. Held to maturity investment The Company has classified certain investments as held to maturity.424.1 PLANT CAPACITY AND PRODUCTION Steel segment Pipe plant The plant’s installed / rated capacity for production based on single shift is 30. 120 ANNUAL REPORT 2008 46.

Property.) and therefore.2 Chief Executive Director . These financial statements were authorized for issue in the board of directors meeting held on 31 July 2008.1 GENERAL Previous year figures have been rearranged and reclassified where necessary for the purposes of comparison. Net realizable value is determined with respect to estimated selling price less estimated expenditures to make the sales. plant and equipments with a corresponding affect on the depreciation charge and impairment. etc. These estimates are subjective in nature and involve some uncertainties and matters of judgment (e. Stock-in-trade and stores and spares The Company reviews the net realizable value of stock-in-trade and stores and spares to assess any diminution in the respective carrying values. residual value and value of assets for possible impairment on an annual basis. plant and equipment The Company reviews the rate of depreciation. 121 ANNUAL REPORT 2008 49. 49. 49.7 million). interest rate. Any change in the estimates in future years might affect the carrying amounts of intangible assets with a corresponding affect on the amortization charge and impairment. 48. These changes were made for better presentation of transactions in the financial statements of the Company.Notes to the Financial Statements For the year ended 30 June 2008 Investment stated at fair value Management has determined fair value of certain investments by using quotations from active market conditions and information about the financial instruments. useful life. Any change in the estimates in future years might affect the carrying amounts of stock-in-trade and stores and spares with a corresponding affect on the amortization charge and impairment. valuation. The appropriations of proposed bonus issue will be reflected in the financial statements for the year ending 30 June 2009. 51. Intangible assets The Company reviews the rate of amortization and value of intangible assets for possible impairment on an annual basis.3 million (2007: Rs. NON ADJUSTING EVENTS AFTER BALANCE SHEET DATE The Board of Directors in their meeting held on 31 July 2008 has proposed 10% bonus issue (2007:10% bonus) of Rs.g. cannot be determined with precision. Any change in the estimates in future years might affect the carrying amounts of the respective items of property. 46.

000 30.000 155.000 150.000 85.000 115.907 150.001 80.000 120.001 15.000 15.729 411.001 45.932 273.791 365.000 165.001 70.400 404.001 145.356 415.000 205.000 75.000 20.000 40.000 110.000 TOTAL SHARES HELD 1 101 501 1.350 392.597.943 691.001 20.001 205.000 185.000 457.151.000 25.001 105.819 210.000 10.096 510.001 60.000 45.000 65.300 8 5 5 5 3 4 3 2 4 3 4 5 1 1 2 3 2 1 3 3 2 2 2 2 .098 312.953 759. Held by Shareholders as at 30 June 2008 NO.320 981.000 210.000 60.001 10.693 245.605 492.087 1.001 180.000 100.001 135. OF SHAREHOLDERS FROM 494 869 507 638 157 78 42 22 25 14 122 ANNUAL REPORT 2008 SHAREHOLDING TO 100 500 1.800 233.241 346.001 5.360 198.000 140.001 65.693 287.001 160.864 113.001 200.161 142.001 75.001 110.001 25.001 120.001 95.000 55.000 70.800 263.001 40.611 521.000 5.001 150.001 100.001 170.000 50.001 50.000 175.000 105.218 109.001 55.001 115.285 1.424 454.000 250.Form “34” Pattern of Holding of Shares Crescent Steel & Allied Products Ltd.600 368.892 304.000 125.000 80.517 239.658 173.001 24.000 35.001 35.001 30.

Pattern of Holding of Shares

NO. OF SHAREHOLDERS FROM 1
3 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2,958

SHAREHOLDING TO 220,000
225,000 235,000 275,000 295,000 300,000 325,000 360,000 365,000 370,000 390,000 410,000 415,000 475,000 485,000 500,000 550,000 555,000 590,000 630,000 725,000 770,000 845,000 970,000 990,000 1,000,000 1,125,000 1,565,000 1,740,000 2,580,000 3,140,000 5,650,000 7,170,000

TOTAL SHARES HELD

215,001
220,001 230,001 270,001 290,001 295,001 320,001 355,001 360,001 365,001 385,001 405,001 410,001 470,001 480,001 495,001 545,001 550,001 585,001 625,001 720,001 765,001 840,001 965,001 985,001 995,001 1,120,001 1,560,001 1,735,001 2,575,001 3,135,001 5,645,001 7,165,001

215,424
670,120 232,019 274,685 294,017 593,209 322,329 360,000 362,742 370,000 388,000 410,000 412,942 472,800 484,284 500,000 545,924 1,100,448 590,000 629,712 725,000 765,500 843,400 965,062 989,966 1,000,000 1,121,863 1,563,693 1,739,303 2,577,773 3,136,500 5,645,160 7,168,889 51,327,267
123 ANNUAL REPORT 2008

Pattern of Holding of Shares
Crescent Steel & Allied Products Ltd.

Held by Shareholders as at 30 June 2008 CATEGORIES OF SHAREHOLDERS a) Directors, Chief Executive Officer, Their Spouse and Children Chief Executive Mr. Ahsan M. Saleem Directors Mr. Javed Aslam Callea Mr. Mazhar Karim Mr. Nasir Shafi Mr. Zahid Bashir Syed Mahmood Ehtishamullah Directors Spouse and Their Childern Mrs. Abida Mazhar Mrs. Shahnaz A. Saleem Executives Kh. Muhammad Sharif Syed Ali Nazir Kazmi Mr. Arif Raza Mr. Hameed Alam SHARES HELD PERCENTAGE

152,908

0.30

1,277 137,307 31,303 71,148 1,816

0.00 0.27 0.06 0.14 0.00

124 ANNUAL REPORT 2008

18,147 223,324

0.04 0.43

38,860 3,885 10,277 1,000 691,252

0.08 0.01 0.02 0.00 1.35

b)

Associated Companies, Undertakings & Related Parties Asian Stock Fund Limited Crescent Sugar Mills & Distillery Limited Muhammad Amin Muhammad Bashir Limited Safeway Mutual Fund Limited Shakarganj Mills Limited The Crescent Textile Mills Limited Premier Insurance Limited

989,966 965,062 562 1,121,863 2,563,693 5,645,160 27,400 11,313,706

1.93 1.88 0.00 2.19 4.99 11.00 0.05 22.04

c)

NIT & ICP (Name Wise Detail) National Bank of Pakistan, Trustee Deptt.

7,168,889 7,168,889

13.97 13.97

d)

Banks, DFI's, NBFI's Banks, DFI's, NBFI's Banks, DFI's, NBFI's (CDC)

2,224 6,637,119 6,639,343

0.00 12.93 12.93

Pattern of Holding of Shares

CATEGORIES OF SHAREHOLDERS e) Insurance Companies Insurance Companies (CDC)

SHARES HELD

PERCENTAGE

2,005,903 2,005,903

3.91 3.91

f)

Modaraba and Mutual Funds Modaraba and Mutual Funds Modaraba and Mutual Funds (CDC)

158 1,427,632 1,427,790

0.00 2.78 2.78

g)

Other Companies Other Companies Other Companies (CDC)

19,173 2,748,726 2,767,899

0.04 5.36 5.40

125 ANNUAL REPORT 2008

h)

Non Resident Bankers Trust Company Baring Brothers (Guernsey) Limited Exchange Trading Limited H. S. B. C. International Trustee Limited Habib Bank AG Zurich, Deira Dubai (CDC) Hong Kong Bank International Trustee Limited Islamic Development Bank Midland Bank Trust Corporation (Jersey) Limited Royal Trust Corporation Of Canada The Northern Trust Company

184 44 14,569 30 6,200 273 3,136,500 986 20 594 3,159,400

0.00 0.00 0.03 0.00 0.01 0.00 6.11 0.00 0.00 0.00 6.15

i)

General Public A. Local A. Local (CDC)

845,060 15,308,025 16,153,085 51,327,267

1.65 29.82 31.47 100.00

Shareholders Holding More Than 10.00% The Crescent Textile Mills Limited National Bank of Pakistan, Trustee Deptt.

5,645,160 7,168,889

11.00 13.97

For Appointing Proxies 126 ANNUAL REPORT 2008 3. In case of corporate entity.00 each per share (aggregating Rs. 9 E-2 Main Boulevard. addresses and CNIC numbers shall be mentioned on the form.00 per share) already paid. B. In case of individuals. . A member entitled to attend and vote at this meeting may appoint any other member as his/her proxy to attend and vote instead of him/her. 2.Notice of Annual General Meeting Crescent Steel & Allied Products Ltd. In case of individuals. original passport at the time of attending the Meeting.e. a.m. c. the account holder and /or sub-account holder and their registration details are uploaded as per the CDC Regulations. Members who have deposited their shares into Central Depository Company of Pakistan Limited (“CDC”) will further have to follow the under mentioned guidelines as laid down by the Securities and Exchange Commission of Pakistan. 3. b. Attested copies of the CNIC or the passport of beneficial owners and the proxy shall be furnished with the proxy form. Lahore to transact the following business: ORDINARY BUSINESS 1. 30 August 2008 at 11:30 a. To consider and approve issue of fully paid bonus shares in proportion of one share for every ten shares held i. 4. shall submit the proxy form as per above requirements. 2. The instrument appointing a proxy and the power of attorney or other authority under which it is signed or a notarially attested copy of the power of attorney must be deposited at the Registered Office of the Company at least 48 hours before the time of the meeting. NOTICE is hereby given that the 24th Annual General Meeting of shareholders of Crescent Steel and Allied Products Limited (the “Company”) will be held on Saturday. the Board's resolution / power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting. To receive. BY ORDER OF THE BOARD Muhammad Saad Thaniana Company Secretary Lahore: 31 July 2008 Notes 1. shall authenticate his/her identity by showing his/her original CNIC or. Transfers received in order at the Registered Office of the Company upto the close of business on 22 August 2008. b. will be considered in time to be eligible of bonus shares to the transferees. Gulberg-III. To appoint Company's auditors and fix their remuneration. The Share Transfer Books of the Company will remain closed from 23 August 2008 to 30 August 2008 (both days inclusive). whose names. the account holder and/or sub-account holder and their registration details are uploaded as per the CDC Regulations. The proxy form shall be witnessed by two persons. at Qasr-eNoor. A. 1. 3. 10% as recommended by the Directors of the Company. For Attending the Meeting a. consider and adopt the Directors' and Auditors' reports and Audited Financial Statements for the year ended 30 June 2008. This is in addition to three interim cash dividends @ Re.

to date no investment has been made against the approval. Reasons for not having investment made 127 Due to recession in the textile industry in Pakistan.Notice of Annual General Meeting d.1 million in Crescent Textile Mills Limited. i. Major change in financial position of investee company since the date of last resolution There has been no major change in financial position of the Crescent Textile Mills Limited. ANNUAL REPORT 2008 . 15. In EOGM dated 27 December 2006. e. Statement under paragraph 3 of SRO 865(I)/2000 dated 6 December 2000. The proxy shall produce his original CNIC or original passport at the time of the Meeting. ii. shareholders approved an additional investment of Rs. In case of corporate entity. the Board's resolution / power of attorney with specimen signature shall be furnished (unless it has been provided earlier) along with proxy form to the Company. However.

.

No. No person shall act as proxy unless he / she is a member of the company except a corporation being a member may appoint as its proxy any officer of such corporation whether a member of the company or not. 2.Form of Proxy Crescent Steel & Allied Products Ltd. Gulberg-III. Dated: Place: Notes: 1. The Proxy Form should be deposited at our Registered Office. speak and vote for me / us and on my / our behalf at the 24th Annual General Meeting of the Company to be held on Saturday. 30 August 2008 at 11:30 a. ______________ CDC Participant’s Identity Card No ________________ A/C. vide Registered Folio No. 9 E-2 Main Boulvard. 10-B. _________________ I / We ________________________________________________ of _____________________________ a member / members of Crescent Steel & Allied Products Limited. Gulberg-III. Signature on Five-Rupees Revenue Stamp The signature should agree with the specimen registered with the Company. Main Boulevard. Folio No. Lahore. As witness my / our hand this___________________________ day of ___________________________2008. Lahore and at any adjournment thereof. the Proxy Form will not be treated as valid. . at Qasr-e-Noor. and holder of _______________________________________ shares do hereby appoint ______________________________________ of ___________________________________ or failing him / her ___________________________________________ of ________________________________ who is also a member of the Company. Crescent Standard Tower. as soon as possible but not less than 48 hours before the time of holding the meeting and in default. Block E-2.________________________________________ as my / our proxy to attend.m.