quarterly report half yearly report december 31, 2005...

Quarterly ReportDecember 31, 2005

Half Yearly ReportDecember 31, 2010

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: [email protected]

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


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)



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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




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


Surplus on remeasurment of available fro sale financial assets


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


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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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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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


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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.


Nature of transactionRelation with the

Company

(Un-audited)

CRESCENT FIBRES LIMITED

104-Shadman 1, Lahore - 54000

Tel: +92 (42) 3757-9641, 3757-6482

Fax: +92 (42) 3756-0963

Email: [email protected]

Website: www.crescentfibres.com

quarterly report half yearly report december 31, 2005...

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