NAZIR COTTON MILLS LTD.

COMPANY'S INFORMATION

Bankers: National Bank Of Pakistan Habib Bank Limited Muslim Commercial Bank Ltd.

Registered Office: 61-K, Gulberg III, Lahore. Ph: 042-35763736, 35773742 Fax: 042-35763768

Mill: 8-Km, Faisalabad Road, Khaareyanwala, Sheikhupura.

Ph: 056-3544053

Aslamabad,

Board of Director Mian Shahzad Aslam Mian Farrukh Naseem Mian Aamir Naseem Mr. Maqbool Hussain Bhutta

Mr. Muhammad Asghar

Mr. Muhammad Abbas

Chief Executive Officer

Chief Financial Officer: Mr. Maqbool Hussain Bhutta

Company Secretary: Mr. Ahsan Raza

Auditors: Ale Imran & Co.Chartered Accountants House No. 155, Street No. 4, Cavalry Ground Lahore.

Share Registrar Corplink (Pvt) Ltd.Wings Arcade, 1-K Commercial, Modal Town, Lahore.Tel: 042-3561714, 35839182, 35916719

Audit Committee:

Mr. Muhammad AsgharMr. Muhammad Abbas

Chairman Member

Mr. Muhammad Irfan

Mr. Muhammad Irfan

Member

HR Committee:

Mr. Muhammad Abbas

Chairman MemberMr. Muhammad IrfanMember

Mr. Muhammad Asghar

The results for the 3rd Quarter under review show a loss after tax amounting to Rs.2.439 Million after accounting for administrative expenses of Rs. 2.692 Million including depreciation of Rs. 0.042. Other operating expenses were Rs. Nil and financial cost was Rs. 0.005 million.

During the third quarter period ended March 31, 2017, the operation of mills remained Closed.

The management is doing its best efforts to settle all the cases with Banks and is doing negotiation with banks and making all efforts to review the operation of mills.

The management is hopeful that it will be able to pay off the other loans of the company also.

The Management is also trying to obtain electricity connection to restart the production process of the mill.

The Management of the Company is hopeful that the operation of the Mill will be re-started in near future.

Lahore. April 27, 2017

NAZIR COTTON MILLS LTD.DIRECTORS' REPORT TO THE SHAREHOLDERS

For and on behalf of the Board of Directors

Chief Executive

Chief Executive Director

NAZIR COTTON MILLS LTD. CONDENSED INTERIM BALANCE SHEET

AS AT 31 MARCH 2017

Book Estimated Book Estimated

Value realizable/ value realizable/

settlement value settlement/value

Notes Rupees Rupees Rupees Rupees

ASSETS

NON-CURRENT ASSETS

Assts held for Sales 210,288,795 210,288,795 210,288,795 210,288,795

Long term investments 3,838,000 2,310,476 3,838,000 4,987,900

Property, plant & equipment 3 385,152 385,152 427,385 427,385

214,511,947 212,984,423 214,554,180 215,704,080

CURRENT ASSETS

Store & spares 1,805,733 1,805,733 1,805,733 1,805,733

Stock in trade - - - -

Trade debts 2,827,973

2,827,973

2,827,973 2,827,973

Loans and advances -

-

- -

Deposits, prepayments and other

receivables 12,555,612

12,555,612

31,571,208 31,571,208

Cash & bank balances 10,747,828

10,747,828

4,429,326 4,429,326

27,937,146

27,937,146

40,634,240 40,634,240

242,449,093

240,921,569

255,188,420 256,338,320

EQUITY & LIABILITIES

SHARE CAPITAL & RESERVES

Authorized capital:

25,000,000 Ordinary shares of Rs.10/-

each 250,000,000

250,000,000

250,000,000 250,000,000

Issued, subscribed & paid-up capital 230,000,000

230,000,000

230,000,000 230,000,000

Capital reserve 434,000

434,000

434,000 434,000

Un-realized Profit/(deficit) on re-

measurement of available for sale

investment (479,125)

(2,006,649)

(479,125) 670,775

Reserves & deficit 4 (371,499,252)

(371,499,252)

(366,372,655) (366,372,655)

(141,544,377)

(143,071,901)

(136,417,780) (135,267,880)

LIABILITIES

Trade and other payables 839,315 839,315 365,589 365,589

Accrued mark-up on secured loans 986,643 986,643 986,643 986,643

Short term running finances 10,000,000 10,000,000 10,000,000 10,000,000

Loan Liabilities - Banking Companies 92,188,792 92,188,792 92,188,792 92,188,792

Provision for taxation 1,341,384 1,341,384 1,341,384 1,341,384

Accrued Mark-up on loan from

Associated Undertakings 9,248,965 9,248,965 9,248,965 9,248,965

Long Term Loan From Sponsors 5 104,070,157 104,070,157 112,156,613 112,156,613

218,675,256 218,675,256 226,287,986 226,287,986

Surplus on Revaluation of Assets held for sales 165,318,214 165,318,214 165,318,214 165,318,214

Contingencies & Commitments 6 - - - -

242,449,093 240,921,569 255,188,420 256,338,320

The annexed notes form an integral part of this condensed interim financial information.

31 March, 2017

AUDITED

30 June, 2016

UN-AUDITED

Chief Executive Director

NAZIR COTTON MILLS LTD.PROFIT AND LOSS ACCOUNT

FOR THE QUARTER ENDED MARCH 31, 2017

Jan - Mar Jan - Mar Jul - Mar Jul - Mar

2017 2016 2017 2016

Rupees Rupees Rupees Rupees

Sales - Net - - - -

Cost of Sales - - - -

Gross (Loss) / Profit -

-

-

-

Operating Expenses

Administrative 2,692,883

805,991

5,449,806

2,378,851

Selling and Distribution -

-

-

-

2,692,883

805,991

5,449,806

2,378,851

Operating Loss (2,692,883)

(805,991)

(5,449,806) (2,378,851)

Capital Gain 74,152,455

74,152,455

Other Income 254,606

2,221

327,296

2,651

Financial and other Charges (1,318)

(835)

(4,087)

(1,758)

(LOSS) / BEFORE TAXATION (2,439,595) 73,347,850 (5,126,597) 71,774,497

Taxation - - - -

(LOSS) / AFTER TAXATION (2,439,595) 73,347,850 (5,126,597) 71,774,497

Basic earning / (loss) per share (0.11) 3.19 (0.22) 3.12

Accumulated upto For the Quarter

STATEMENT OF CHANGES IN FINANCIAL POSITION

(CASH FLOW STATEMENT)

FOR THE PERIOD ENDED MARCH 31, 2017 (Un-Audited)

Chief Executive Director

NAZIR COTTON MILLS LTD.

Mar 31, 2017 Mar 31, 2016

Rupees Rupees

Cash Flow from Operating Activities

Profit / (Loss) before taxation (5,126,597) 71,774,497

Adjustment for:

Depreciation 42,233 48,996

Fixed Assets 1,847,545

Financial Charges 4,087

1,758

46,320

1,898,299

Operating Profit before working capital changes (5,080,277)

73,672,796

Adjustments for working capital changes:

(Increase) / Decrease in Current Assets

Stores and Spares -

-

Stock in trade -

-

Trade Debts -

-

Advances, deposits and other receivables 19,015,596

(19,010,241)

19,015,596

(19,010,241)

(Decrease) / Increase In Current Liabilities

Short term finances - (15,975,000) Creditors, Accruals and other Liabilities 473,726

(92,728)

473,726

(16,067,728)

Cash Generated from Operations 14,409,045

38,594,827

Income Tax paid -

-

Financial charges paid (4,087)

(1,758)

Net Cash in flow/(out flow) from operating activities 14,404,958

38,593,069

Cash Flow from Financing Activities

Long Term Laon From Banking Companies -

-

Deffered Sponsor's Loan 205,000

-

Loan From Associated Companies (8,291,456) (32,607,550)

Net Cash (out flow) from investing activities (8,086,456) (32,607,550)

Net (out flow) / in flow of cash 6,318,502 5,985,519

Cash and cash equivalents at beginning of the year 4,429,326 153,256

Cash and cash equivalents at end of the period 10,747,828 6,138,775

NAZIR COTTON MILLS LTD.

Chief Executive Director

STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED MARCH 31, 2017

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SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION

FOR THE PERIOD ENDED MARCH 31, 2017

(UN-AUDITED)

NAZIR COTTON MILLS LTD.

1. THE COMPANY AND ITS OPERATIONS

1.1 Nazir Cotton Mills Limited is a Public Limited Company incorporated in Pakistan under the Companies Act, 1913 (Now Companies Ordinance, 1984) and its shares are quoted on Karachi Stock Exchange of Pakistan. The Company is engaged in manufacturing and sale of Yarn of all types. The registered office of the Company is situated at 61-K, Gulberg III, Lahore. The manufacturing unit is located at 8-KM, Faisalabad, Aslamabad, Kharianwala, Sheikhupura.

1.2 Going concern assumption

The Company has incurred after tax loss of Rs.24.395 million resulting in accumulated losses of Rs.417.129 million as at March 31, 2017 and as of that date its current liabilities exceeded its current assets by Rs.190.738 million and its total liabilities exceeded its total assets by Rs. 141.544 million. Further during the period operational activities remained suspended due to unfavourbale business conditions and electricity crises. These factors raise doubts about the Company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in the normal course of business. However, any adjustments relating to the recoverability of recorded assets and settlement of recorded liabilities have not been incorporated in these accounts. The Board of Directors have unanimously approved to re-start the commercial operation of the Company in the foreseeable future when the textile market conditions turn favourable and is also under negotiation with lenders for financial support at favourable terms.

In veiw of the financial reporting requirements of Code of Corporate Governance, this condensed interim financial information has been prepared on the basis of estimated realizable/settlement values of assets and liabilites respectively in addition to historical cost convention. All assets and liabilities in this condensed interim financial information has been presented in the order of liquidity.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and methods of computation adopted for the preparation of this condensed interim financial information are the same as applied in the preparation of preceding audited annual published financial statements of the Company for the year ended June, 30 2016.

2.1 Basis of preparation

2.1.1 Statement of compliance

This condensed interim financial information is un-audited but subject to limited scope review by the statutory auditors of the company and is being submitted to shareholders as required by Section 245 of the Companies Ordinance, 1984. This condensed interim financial information of the company for the quarter ended on 31 March 2017 has been prepared in accordance with the requirements of international accounting standard 34 ''interim financial reporting'' and provision of directives issued under the companies ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the companies ordinance, 1984 have been followed.

This condensed interim financial information does not include all the information and disclosures required for full financial statements, and should be read in conjunction with the company's audited annual financial Statements for the year ended June 30, 2016.

2.1.2 Accounting convention

Keeping in view the fact that the company may not be able to continue as going concern, this condensed interim financial information is prepared on the bases of realisable/(sattlement) values of assets and liabilities respectively in addition to the historical cost convention. In realizable / (settlement) values basis, assets are carried at amount of cash and cash equivalents that could currently be obtained by selling the assets in an orderly disposal. Liabilities are carried at their settlement values, that is the undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business. Realizable / (settlement) values of assets and liabilities respectively as disclosed as in the condensed interim balance sheet are based on the management's best estimate.

2.1.3 Critical accounting estimates and judgments

The preparation of this condensed interim financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also require management to exercise its judgments in the process of applying the company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

During the preparation of this condensed interim financial information, the significant judgments made by the management in applying the company's policies and the key sources of the estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the company for the year ended 30 June 2016.

NAZIR COTTON MILLS LTD.Mar 31, 2017 June 30, 2016

(Un-audited) (Audited)

Rupees Rupees3. PROPERTY, PLANT & EQUIPMENT

Owned assets 3.1 385,152 427,385

Leased assets - -

385,152 427,385

3.1 Opening written down value 427,385 492,713

Additions during the period / year (at cost) - -

Depreciation charge for the period / year (42,233) (65,328)

Closing written down value 385,152 427,385

4. RESERVES & DEFICIT

Accumulated Losses (417,129,252) (412,002,655)

Revenue Reserve 45,630,000 45,630,000

(371,499,252) (366,372,655)

5. LONG TERM LOANS

Loans from banking institutions - Secured 5.1 - -

Deferred Sponsors' Loan - Unsecured 5.2 102,380,856 102,175,856

Loans from Related parties - Unsecured 5.3 1,689,301 9,980,757

104,070,157 112,156,613

5.1 Loans from banking institutions - Secured

Habib Bank Limited 5.1.1 13,258,000 13,258,000

Samba Bank Limited (Formerly Crescent Commercial Bank Ltd) 5.1.2 - 40,141,598

Islamic Investment Bank Limited 5.1.3 71,464,211 71,464,211

National Bank of Pakistan 7,466,581 7,466,581

92,188,792 132,330,390

Less: Current portion (92,188,792) (132,330,390)

- -

5.1.1 State Bank of Pakistan committee for resolution of cases vide their meeting held on 29 December, 2004 has settled the outstanding liability of the Company which had resulted in reduction in the liability of the Company. The liability of HBL was settled at Rs. 10.754 million without any further mark up. Down payment of 10% of the settled liability, Rs.1.076 million, was paid by the company in May 2005. Balance amount of Rs.9.678 million is payable in 12 quarterly installments of Rs.0.806 million each, commencing from the date of settlement agreement which is under process. This have been stated at their fair value at balance sheet date. In case of default in payment of settlement installment the above arrangement would be cancelled and the Bank would be entitled to recover entire outstanding liability.

The loan is secured against equitable mortgage charge on all the entire present and future fixed assets, hypothecation charge on all the present and future current assets and personal guarantees of all the directors of the company.

The Company has not been providing any markup on this loan. The Company is of the view as the matter is subjudice before the courts, no markup is leviable / payable.

5.1.2 This loan was created by payment of mark-up, exchange risk fee, letter of credit and letter of guarantee commissions on machinery suppliers' credit obtained (on a guarantee established by Doha Bank Limited) from Toyota Tsusho (Hong Kong) Co. Limited.

The Company has been entered with in an an out of court agreement with M/S Samba Bank Limited to settle the loan. The bank has sold the land situated at chunian wich was in the lien of Bank. The bank loan has been cleared out of the sasles proceeds of the loan as per agreement and the balnce will be paid to the Company.

5.1.3 The bank entered into a restructuring memorandum with the Company on December 31, 1998. The prime covenants of the restructuring agreement are as follows:

- The loan shall be repayable in sixteen quarterly installments w.e.f. April 1, 1999.- Mark-up @ 20% per annum shall be charged.- Accrued mark-up will be frozen and kept in a separate account.

The new mark-up on diminishing principal would also be kept in same account and repayment of this mark-up shall start from April 1, 2003 subject to the entire repayment of the loan account # 01.

This loan and mark-up account are secured by:

- Personal guarantee of directors except nominee director. - Mortgage of fixed assets to the tune of Rs.20 million. - Lien on shares of Sajjad Textile Mills Limited.

NAZIR COTTON MILLS LTD.

Chief Executive Director

The liquidator of Islamic Investment Bank limited has been appointed, the BOD is of the opinion that the bank is shareholder in the profits / losses of the Company and no markup is payable.

5.2 This represents unsecured and interest free loan obtained from sponsors of the Company to meet the Company's B.M.R. plans and liquidity problem. These are payable on ease of the company's liquidity problems. There is no fixed tenure for repayment of these liabilities. In the absence of the availability of a defined repayment schedule, the fair value of these loans is not determinable.

5.3 This represents unsecured and interest free loan obtained from Group Companies. These are payable on ease of the Company liquidity problems. There is no fixed tenure for repayment of these liabilities. In the absence of the availability of a defined repayment schedule, the fair value of these loans is not determinable.

6. CONTINGENCIES & COMMITMENTS

There is no change in the status of contingencies and commitments from the preceding annual published financial statements of the Company for the year ended June 30, 2016.

7. TRANSACTION WITH ASSOCIATED COMPANIES

There is no transaction with associated companies during the period.

8. CORRESPONDING FIGURES

In order to comply with the requirements of International Accounting Standard 34 -''Interim Financial Reporting'', the condensed interim balance sheet and condensed interim statement of changes in equity have been compared with the balances of annual audited financial statements of preceding financial year, where as, the condensed interim profit and loss account, condensed interim statement of profit or loss, and other comprehensive income, and condensed interim cash flow statement have been compared with the balances of comparable period of immediately preceding financial year.

Corresponding figures have been re-arranged, wherever necessary, for the purpose of comparison, however, no significant re-arrangements have been made.

9. FINANCIAL RISK MANAGEMENT

The companies financial risk management objectives and policies are consistent with those disclosed in the preceding audited annual published financial statements of the company as at and for the year ended June 30, 2016.

10. DATE OF AUTHORIZATION

This condensed interim financial information has been approved by the Board of Directors of the Company and authorized for issue on 27th April 2017

11. GENERAL

Figures have been rounded off to the nearest Rupee unless otherwise stated.

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