quarterly report half yearly report december 31, 2005...
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COMPANY INFORMATION
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Board of Directors
(Chief Executive)
(Chairperson)
Khawar Maqbool
Imran Maqbool
Humayun Maqbool
Nadeem Maqbool
Riaz Masood
Shahid Riaz
Chief Financial Officer
Kamran Rasheed
Company Secretary
Javaid Hussain
Audit Committee
Nadeem Maqbool
Humayun Maqbool
Naila Humayun Maqbool
Ali Hussain
(Chairman)
(Member)
(Member)
(Secretary)
Auditors
BDO Ebrahim & Company
Chartered Accountants
Legal Advisor
Mohsin Tayebally & Sons
Registered Office
104 Shadman 1,
Lahore-54000
Tel : (042) 3757-9641, 3757-6482
Fax : (042) 3756-0963
E-mail: lo@crescentfibres.com
Website: www.crescentfibres.com
Naila Humayun Maqbool
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MANAGEMENT REVIEW
The Company reported a profit of Rs. 102.6 million for the six months ended December 31, 2010 as compared to a profit of Rs. 34.3 million for the six months ended December 31, 2009. The earnings per share for the period under review was Rs.8.26.
The period under review was a profitable one for the company as strong end product demand more than offset the higher raw material and input costs. Sales increased by 57.2% owing to higher unit prices as compared to the six months ended December 31, 2009. The gross margin increased to 13.7% as compared to 10.7% for the corresponding period. Inspite of inflationary pressures, selling and administrative costs were kept under tight control and were lower as a percentage of sales. The operating margin for the period under review increased to 11% as compared to 7.7% for the period ended December 31, 2009. Financial charges decreased from Rs. 20.6 million to Rs. 17.4 million primarily as a result of repayment of long- term debt. Overall, the net margin increased to 8.4% as compared to 4.4% for the previous period.
In spite of the manifold challenges being faced by industry in Pakistan the Management expects the current year to be a profitable one for the textile spinning industry in Pakistan. However, in order for profits to be sustained, it is imperative that a strategy is developed to enhance raw cotton production and quality within the country and to allow the free market mechanism to function. Further, steps must be taken to tackle the problems of increasing input costs, reduced productivity owing to load shedding of both gas and electricity, and the economic and law and order situation in Pakistan.
The Management wishes to place on record its appreciation for the hard work and devotion of its workers and the invaluable advice and support of the Company's Directors, shareholders and bankers.
IMRAN MAQBOOLChief Executive Officer
February 25, 2011
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INDEPENDENT AUDITORS' REPORT ON REVIEW OF CONDENSED INTERIM
FINANCIAL INFORMATION TO THE MEMBERS
Introduction
We have reviewed the accompanying condensed interim balance sheet of
CRESCENT FIBRES LIMITED ("the Company") as at December 31, 2010 and the related
condensed interim profit and loss account, condensed interim statement of
comprehensive income, condensed interim cash flow statement, condensed interim
statement of changes in equity and notes to the accounts for the six-month period then
ended (here-in-after referred as the "interim financial information"). Management is
responsible for the preparation and presentation of this interim financial information in
accordance with approved accounting standards as applicable in Pakistan. Our
responsibility is to express a conclusion on this interim financial information based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements 2410, "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity." A review of interim financial information consists of
making inquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Basis for qualified conclusion
The balance under short term borrowings includes an amount of Rs. 12.000 million and
mark up accrued thereon amounting to Rs. 19.905 million for which supporting information
has not been furnished to us. These balances have been presented in the interim financial
information as per the books of accounts. In the absence of any supporting information, we
are unable to confirm the existence and completeness of these balances and the related
mark up expenses.
Qualified conclusion
Based on our review, with the exception of the matter described in the preceding
paragraph, nothing has come to our attention that causes us to believe that the
accompanying interim financial information as at and for the six months period ended
December 31, 2010 is not prepared, in all material respects, in accordance with approved
accounting standards as applicable in Pakistan.
The figures for the quarter ended December 31, 2010 and December 31, 2009 in the
condensed interim profit and loss account and condensed interim statement of
comprehensive income have not been reviewed and we do not express a conclusion on
them.
CHARTERED ACCOUNTANTSEngagement Partner: Zulfikar Ali CauserDATED: 25th February, 2011
KARACHI
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CONDENSED INTERIM BALANCE SHEET AS AT DECEMBER 31, 2010 (UN-AUDITED)
NADEEM MAQBOOLDirector
IMRAN MAQBOOLChief Executive
December 31, June 30,2010 2010
(Un-audited) (Audited)Note Rupees Rupees
ASSETSNON CURRENT ASSETS
Property, plant and equipmentOperating fixed assets 5 273,862,406 274,157,928Capital work in progress 6 105,443,771 9,874,689
379,306,177 284,032,617Intangible assets 965,550 1,158,660Long term investments 2,560,684 2,482,630Long term deposits 8,551,410 7,050,710
391,383,821 294,724,617CURRENT ASSETS
Stores, spares and loose tools 32,158,881
26,833,284Stock in trade 402,562,198
158,475,463Trade debts 197,984,321
150,483,990Loans and advances 24,244,100
11,323,958Trade deposits and short term prepayments 6,187,610
3,065,036Other receivables 2,676,213
2,978,334Short term investments 39,880,325
35,384,809Tax refunds due from the Government 12,832,114
7,428,807Cash and bank balances 41,583,456
50,128,821760,109,218
446,102,502TOTAL ASSETS 1,151,493,039
740,827,119
EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES
Authorized share capital15,000,000 ordinary shares of Rs. 10 each 150,000,000
150,000,000
Issued, subscribed and paid-up capital12,417,876 ordinary shares of Rs. 10 each 124,178,760
124,178,760Reserves
Capital 375,541
(4,119,975)Revenue 256,819,995
166,619,357257,195,536
162,499,382381,374,296
286,678,142NON CURRENT LIABILITIES
Long term financing 7 65,680,164 19,549,227Liabilities against assets subject to finance leases 12,250,191 10,652,456Deferred taxation 52,820,878 51,780,367
130,751,233 81,982,050CURRENT LIABILITIES
Trade and other payables 261,990,085 165,337,285Financial charges payable 30,501,646 27,222,219Short term borrowings 327,559,461 147,539,193Taxation - net 7,581,328 8,800,475Current portion of long term liabilities 11,734,990 23,267,755
639,367,510 372,166,927CONTINGENCIES AND COMMITMENTS 8TOTAL EQUITY AND LIABILITIES 1,151,493,039 740,827,119
The annexed notes from 1 to 14 form an integral part of these condensed interim financial statements.
December 31, December 31, December 31, December 31,
2010 2009 2010 2009Note Rupees Rupees Rupees Rupees
Sales - net 1,215,555,429
773,103,633
648,538,765
416,167,308
Cost of sales 9 (1,049,036,618)
(690,325,107)
(577,265,807)
(361,429,396)
Gross profit 166,518,811
82,778,526
71,272,958
54,737,912
Selling and distribution expenses (4,500,380)
(3,566,191)
(2,552,891)
(2,125,228)
Administrative and general expenses (28,161,556)
(22,434,802)
(14,202,280)
(11,782,081)
Other operating expenses (8,737,452)
(2,433,766)
(3,404,116)
(1,976,827)
Other operating income 7,996,340
5,034,542
4,521,272
2,546,801
Operating profit 133,115,763
59,378,309
55,634,943
41,400,577
Finance cost (17,379,238)
(20,635,913)
(11,590,727)
(11,340,019)
Share of profit from associate 78,054
138,103
39,027
214,987
Profit before tax 115,814,579 38,880,499 44,083,243 30,275,545
Taxation 10 (13,196,065) (4,531,638) (5,737,334) (2,733,352)
Profit for the period 102,618,514 34,348,861 38,345,909 27,542,193
Earnings per share - basic and diluted (Rupees) 11 8.26 2.77 3.09 2.22
The annexed notes from 1 to 14 form an integral part of these condensed interim financial statements.
Half year ended Quarter ended
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CONDENSED INTERIM PROFIT AND LOSS ACCOUNT
FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
NADEEM MAQBOOLDirector
IMRAN MAQBOOLChief Executive
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NADEEM MAQBOOLDirector
IMRAN MAQBOOLChief Executive
CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)
FOR THE HALF YEAR ENDED DECEMBER 31, 2010
December 31, December 31,
2010 2009
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 115,814,579 38,880,499
Adjustment for non cash charges and other items:
Depreciation 13,864,278 13,720,916
Amortization 193,110 193,110
(Gain) / loss on disposal of operating fixed assets (751,652) 37,307
Share of profit from associate (78,054) (138,103)
Finance cost 17,379,238 20,635,913
30,606,920 34,449,143
(Increase) / decrease in current assets
Stores, spares and loose tools (5,325,597) (6,677,722)
Stock in trade (244,086,735) (145,607,067)
Trade debts (47,500,331) 6,067,424
Loans and advances (12,920,142) 72,079
Trade deposits and short term prepayments (3,122,574) (1,273,109)
Other receivables 302,121 (229,092)
Tax refund due from Government (5,403,307) (471,633)
(318,056,565) (148,119,120)
Increase in current liabilities
Trade and other payables 96,652,800 50,720,394
Cash used in operations (74,982,266) (24,069,084)
Income tax paid (13,374,700) (4,266,811)
Finance cost paid (14,099,811) (20,708,781)
Net cash generated used in operating activities (102,456,777) (49,044,676)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (105,245,186) (1,756,177)
Proceeds from disposal of operating fixed assets 1,200,000 79,900
Long term deposits (1,500,700) 197,613
Net cash used in investing activities (105,545,886) (1,478,664)
CASH FLOWS FROM FINANCING ACTIVITIES
Long term financing - net 33,861,607 (17,730,119)
Repayment of liabilities against asset subject to finance leases (2,006,701) (1,414,501)
Dividend Paid (12,417,876) -
Short term borrowings 180,020,268 64,108,312
Net cash generated from financing activities 199,457,298 44,963,692
Net increase in cash and cash equivalents (8,545,365) (5,559,648)
Cash and cash equivalents at the beginning of the period 50,128,821 29,897,977Cash and cash equivalents at the end of the period 41,583,456 24,338,329
The annexed notes from 1 to 14 form an integral part of these condensed interim financial statements.
NADEEM MAQBOOLDirector
IMRAN MAQBOOLChief Executive
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
FOR THE HALF YEAR ENDED DECEMBER 31, 2010
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
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December 31, December 31, December 31, December 31,2010 2009 2010 2009
Rupees Rupees Rupees Rupees
Profit for the period 102,618,514 34,348,861 38,345,909 27,542,193
4,495,516
16,765,462 5,910,890 6,784,983
Total comprehensive income for the period 107,114,030
51,114,323 44,256,799 34,327,176
The annexed notes from 1 to 14 form an integral part of these condensed interim financial statements.
Surplus on remeasurment of available fro sale financial assets
Half year ended Quarter ended
Balance as at July 1, 2009 124,178,760
171,982
55,874,613 56,046,595 180,225,355
Total comprehensive income for the period -
16,765,462
34,348,861 51,114,323 51,114,323
Balance as at December 31, 2009 124,178,760
16,937,444
90,223,474 107,160,918 231,339,678
Balance as at July 1, 2010 124,178,760
(4,119,975)
166,619,357 162,499,382 286,678,142
- - (12,417,876) (12,417,876) (12,417,876)
Total comprehensive income for the period - 4,495,516 102,618,514 107,114,030 107,114,030
Balance as at December 31, 2010 124,178,760 375,541 256,819,995 257,195,536 381,374,296
The annexed notes from 1 to 14 form an integral part of these condensed interim financial statements.
Total
Unrealized gain /
(loss) on
available for sale
investment
Unappropriated
profit
Issued,
subscribed and
paid-up capital
Reserves
Sub total
Profit distribution for the year ended
June 30, 2010 @ Re. per share
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NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
1. THE COMPANY AND ITS OPERATIONS
2. BASIS OF PREPARATION
2.1 Statement of compliance
2.2 Basis of measurement
2.3 Functional and presentation currency
3. SIGNIFICANT ACCOUNTING POLICIES
4. ESTIMATES
IAS 1 - Presentation of Financial Statements
IAS 7 - Statement of Cash Flows
IAS 17 - Leases
The preparation of condensed interim financial statements requires management to makejudgments, estimates and assumptions that affect the application of accounting policies and thereported amounts of assets and liabilities, income and expenses. Actual results may differ fromthese estimates. The significant judgments made by management in applying the Company'saccounting policies and key sources of estimation of uncertainty are the same as those that wereapplied to the financial statements for the year ended June 30, 2010.
IFRS 2 - Share-based Payment
IFRS 5 - Non-current Assets Held for Sales and Discontinued Operations
IFRS 8 - Operating Segments
The accounting policies adopted and methods of computation followed in the preparation of thesecondensed interim financial statements are same as those for the preceding annual financialstatements for the year ended June 30, 2010. The following standards, amendments andinterpretations of approved accounting standards became effective during the period, however,these do not have a significant impact on the Company's condensed interim financial statements:
The disclosures made in these condensed interim financial statements have been limited inaccordance with the requirements of the International Accounting Standard 34 "Interim FinancialReporting". They do not include all the information and disclosures made in the annual publishedfinancial statements and should be read in conjunction with the financial statements of theCompany for the year ended June 30, 2010.
These condensed interim financial statements have been prepared under the historical costconvention, except for available for sale investments which are carried at fair value.
These financial statements have been prepared following accrual basis of accounting except forcash flow information.
These condensed interim financial statements have been presented in Pak Rupees, which is thefunctional and presentation currency of the Company.
Crescent Fibres Limited ("the Company") was incorporated in Pakistan on August 06, 1977 as apublic limited company under the Companies Act, 1913 (now Companies Ordinance, 1984) and islisted on all the stock exchanges in Pakistan. The Company is engaged in the manufacturing, saleand trading of yarn. The Registered Office of the Company is situated at 104- Shadman 1, Lahore.
These condensed interim financial statements are unaudited but subject to the limited scopereview by auditors and are being submitted to the shareholders as required under section 245 ofthe Companies Ordinance, 1984.
This condensed interim financial report of the Company for the six months period ended December31, 2010 has been prepared in accordance with the requirements of the International AccountingStandard 34 - Interim Financial Reporting and provisions of and directives issued under theCompanies Ordinance, 1984. In case where requirements differ, the provisions of or directivesissued under the Companies Ordinance, 1984 have been followed.
IAS 32 - Financial Instruments: Presentation
IAS 36 - Impairment of Assets
IAS 39 - Financial Instruments: Recognition and Measurement
IFRS 1 - First-time Adoption of International Financial Reporting Standards
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NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
December 31, June 30,
2010 2010
(Un-audited) (Audited)
Note Rupees Rupees
5. OPERATING FIXED ASSETS
Opening net book value (NBV) 274,157,928 282,340,414
Additions (at cost) during the period / year 5.1 14,017,104 21,581,306
288,175,032 303,921,720
Disposals (at NBV) during the period / year 5.2 448,348 1,612,439
Depreciation charged during the period / year 13,864,278 28,151,353
14,312,626 29,763,792
Closing net book value (NBV) 273,862,406 274,157,928
5.1 Details of additions (at cost) during the period / year are as follows:
Owned
Building -
948,809
Plant and machinery 7,120,055
11,391,604
Office equipment 72,049
700,910
Furniture and fixtures -
149,790
Electric installation - 341,969
Vehicles 2,484,000 1,438,224
Leased
Vehicles 4,341,000
6,610,000
14,017,104
21,581,306
5.2 Details of disposals (at NBV) during the period / year are as follows:
Owned
Office equipment -
164,245
Vehicles 448,348
944,694
Leased
Vehicles -
503,500
448,348
1,612,439
6. CAPITAL WORK IN PROGRESS
This consists of:
Civil work 27,227,898 4,931,311
Mobilization advance 28,584,744 3,743,017
Plant and machinery 46,756,281 1,200,361
105,443,771 9,874,689
7. LONG TERM FINANCING
From banking companies - secured
Balance as at July 01 24,941,047 59,895,174
Obtained during the period / year 47,872,000 4,133,450
72,813,047 64,028,624
Repayments made during the period / year (14,010,393) (39,087,577)
58,802,654 24,941,047
Less: Current portion shown under current liabilities (6,797,204) (19,066,534)
52,005,450 5,874,513From related party - unsecured
Directors 13,674,714 13,674,714
65,680,164 19,549,227
Borrowing cost 2,874,846 -
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NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
8. CONTINGENCIES AND COMMITMENTS
8.1 Contingencies
a
b
8.2
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
9. COST OF SALES
Materials consumed 846,471,617
534,352,416
482,652,177
275,531,492
Stores, spares and loose tools
consumed 25,632,398
17,372,418
14,848,017
10,000,119
Packing material consumed 10,949,628
9,495,535
5,727,751
4,851,866
Salaries, wages and other
benefits 62,931,553 56,314,752 32,693,546 30,190,097
Fuel and power 85,367,201
64,774,592
43,488,271
32,764,920
Insurance 2,310,084
2,752,111
1,129,427
1,552,166
Repairs and maintenance 2,994,300
4,248,530
1,751,376
2,298,460
Depreciation 11,557,564
12,005,170
5,718,737
6,147,627
Other manufacturing overheads 4,545,782 3,952,506 2,214,429 1,331,659
1,052,760,127 705,268,030 590,223,731 364,668,406
Opening work in process 34,949,665 23,655,615 39,659,449 25,080,697
Closing work in process (54,857,810) (28,479,868) (54,857,810) (28,479,868)
(19,908,145) (4,824,253) (15,198,361) (3,399,171)
Cost of goods manufactured 1,032,851,982 700,443,777 575,025,370 361,269,235
Opening stock of finished goods 33,372,714 11,124,426 19,428,515 21,403,257
Closing stock of finished goods (17,188,078) (21,243,096) (17,188,078) (21,243,096)
16,184,636 (10,118,670) 2,240,437 160,161
1,049,036,618 690,325,107 577,265,807 361,429,396
10. TAXATION
(Un-audited)
The provision for taxation for the half year and quarter ended December 31, 2010 has been madeusing the estimated effective tax rate applicable to expected total annual earnings.
There is a contingent liability in respect of bank guarantees issued by the Company's bankers in theordinary course of business aggregating to Rs. 26.000 million (June 30, 2010 : Rs. 26.000 million).
There is a contingent liability aggregating to Rs. 3.975 million in respect of demand raised by taxdepartment for assessment years 2001-2002 and 2002-2003 which the Company is contesting inAppeal before Commissioner of Income Tax. No provision has been made against this demand.
Commitments
Commitment in respect of letters of credit as at the balance sheet date amounted to Rs. 245.598million (June 30, 2010 : Rs. 264.313 million).
Rupees
Half year ended Quarter ended
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NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED DECEMBER 31, 2010 (UN-AUDITED)
NADEEM MAQBOOLDirector
IMRAN MAQBOOLChief Executive
December December
31,31,
December
31,
December
31,
2010 2009 2010 2009
Rupees Rupees Rupees Rupees
11. EARNINGS PER SHARE -
BASIC AND DILUTED
There is no dilutive effect on the basic earnings per share of the Company, which is based on:
Profit for the period (Rupees) 102,618,514 34,348,861 38,345,909 27,542,193
Weighted average number of
ordinary shares 12,417,876
12,417,876
12,417,876 12,417,876
Earnings per share - basic
and diluted (Rupees) 8.26
2.77
3.09 2.22
12. TRANSACTIONS WITH RELATED PARTIES
Associated Sales of goods and services 3,355,000
8,393,000
- -
companies Insurance premium 6,045,011
5,209,574 335,643 66,960
Rent received 73,848
60,000
36,924 60,000
Retirement benefit Contribution to staff
plans retirement benefit plans 2,569,166 1,619,187 1,403,389 638,883
Key Management Remuneration and other
Personnel benefits 8,672,218
6,802,928 4,881,124 3,790,014
12.1
12.2
13. DATE OF AUTHORIZATION FOR ISSUE
14. GENERAL
Amounts have been rounded off to the nearest of rupee.
The related parties and associated undertakings comprise of group companies, other associated companies,staff retirement funds, directors and key management personnel. Transactions with related parties andassociated undertakings are as under:
These condensed interim financial statements were authorized for issue on February 25, 2011 by the
Board of Directors of the Company.
There are no transactions with key management personnel other than under their terms of employment.
The above transactions with related parties are based at arm's length at normal commercial rates.
Half year ended Quarter ended
Nature of transactionRelation with the
Company
(Un-audited)
top related