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THE CRESCENT TEXTILE MILLS LIMITED.
Annual Reports 2003
CONTENTS
Company Information
Notice of Annual General Meeting
Mission, Vision and Values
Directors' Report to the Shareholders
Chairman's Review
Summarized Financial Data of Last Six Years
Statement of Compliance with best practices of Code of
Corporate Governance and Auditors' Review Report
Pattern of Shareholding
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY INFORMATION
Board of Directors Bankers
Mr. Muhammad Anwar Chairman & Al Baraka Investment Bank B.S.C (E.C)
Chief Executive Allied Bank of Pakistan Limited
Mr. Anjum M. Saleem Director Bank AI-Falah Limited
Mr. Asif Jameel (Nominee: NIT) Director Faysal Bank Limited
Mr. Humayun Mazhar Director Habib Bank Limited
Mr. Javed Omer Vohra Director Industrial Development Bank of Pakistan
Mr. Khalid Bashir Director Meezan Bank Limited
Mr. Muhammad Arshad Director National Bank of Pakistan
Mr. Nasir Shafi Director Pakistan Industrial Credit & Investment
Corporation Limited
Audit Committee Saudi Pak Industrial & Agricultural Investment
Mr. Khalid Bashir Chairman Company (Private) Limited
Mr. Anjum M. Saleem Mr. Nasir Shafi Member Member Saudi Pak Commercial Bank Limited Union Bank Limited
United Bank Limited
Chief Financial Officer
Mr. Saeed Ahmad Jabal Registered Office & Share Department
40-A, Off: Zafar Ali Road, Gulberg-V,
Head of Internal Audit Lahore. Pakistan
Mr. Sadiq Saleem T+ 92-42-111-245-245
F + 92-42-111-222-245
Corporate Secretary E-mail: mailho@crescentbahuman.com
Mr. Ghulam Muhammad
Mills
Auditors Sargodha Road,
Riaz Ahmad & Company Faisalabad. Pakistan
Chartered Accountants T + 92-41-111-105-105
F + 92-41-111-103-104
Legal Advisor E-mail: crestex@ctm.com.pk
Mr. Fazal Din Faiz Advocate Web Site: www.ctm.com.pk
Hassan & Hassan Advocates Liaison Office
8th Floor, Sidco Avenue Centre,
Stratchen Road,
Karachi. Pakistan
Stock Exchange Listing T + 92-21-111-105-105 F + 92-21-111-103-104
The Crescent Textile Mills Limited is a listed Company E-mail: ctmkhi@fascom.com
and its shares are traded on all three stock Exchanges
in Pakistan.
The Company's shares are quoted in leading dailies
under textile composite sector.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 54th Annual General Meeting of the shareholders of The Crescent
Textile Mills Limited will be held on Saturday the January 31, 2004 at 11:00 a.m. at the Registered
Office of the Company, 40-A, Off: Zafar Ali Road, Gulberg-V, Lahore to transact the following business:-
1. To receive, consider and adopt the Audited Accounts and Consolidated Accounts of the
Company for the year ended September 30, 2003 together with the Directors' and Auditors'
Reports thereon.
2. To approve, as recommended by the Directors, the payment of cash dividend @ 10% i.e.
Rs. 1.00 per share for the year ended September 30, 2003.
3. To appoint Auditors for the year ending September 2004 and fix their remuneration.
The present Auditors M/S Riaz Ahmad and Company, Chartered Accountants retire. The
Board of Directors on recommendation of audit Committee have recommended their
reappointment after rotating the partner incharge of the Riaz .Ahmad & Company Chartered
Accountants subject to the approval by Securities and Exchange Commission of Pakistan.
By order of the Board
Ghulam Muhammad
Corporate Secretary
Registered Office:
40-A, Off: Zafar Ali Road, Gulberg-V,
Lahore. Pakistan
T + 92-42-111-245-245
F + 92-42-111-222-245
E-mail: mailho@crescentbahuman.com
Dated: 30 December 2003
Note: l. The Member's Register will remain closed from January 16, 2004 to January 31, 2004
(both days inclusive). Transfers received at the Registered Office of the Company by the
close of business on January 15, 2004 will be treated in time for the purpose of payment
of cash dividend to the transferees.
2. A member eligible to attend and vote at this meeting may appoint another member as
proxy to attend and vote in the meeting. Proxies in order to be effective must be received
by the company at the Registered Office not later than 48 hours before the time for holding
the meeting.
3. Shareholders are requested to immediately notify the change in address, if any.
4. CDC account holders will further have to follow the guidelines as laid down in circular Mo. 1
dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan:
a. For Attending the Meeting
i) In case of individuals, the account holder or sub-account holder and/or the
person whose securities are in group account and their registration details are
uploaded as per the Regulations, shall authenticate his/her identity by showing
his original National Identity Card (NIC) or original passport at the time of
attending the meeting.
ii) In case of corporate entity, the Board of Directors' resolution/power of attorney
with specimen signatures of the nominee shall be produced (unless it has been
provided earlier) at the time of the meeting.
b. For Appointing Proxies
i) In case of individuals, the account holder or sub-account holder and/or the
person whose securities are in group account and their registration details are
uploaded as per the Regulations, shall submit the proxy form as per the above
requirement.
ii) The proxy form shall be witnessed by two persons whose name, address and NIC
numbers shall be mentioned on the form.
iii) Attested copies of NIC or the passport of the beneficial owners and the proxy
shall be furnished with the proxy form.
iv) The proxy shall produce his original NIC or original passport at the time of the
meeting.
v) In case of corporate entity, the Board of Directors' resolution/power of attorney
with specimen signatures shall be submitted (unless it has been provided earlier)
along with proxy form to the company.
MISSION, VISION AND VALUES
Vision Statement
We, at Crescent Textile, will continue forever to excel in producing quality textile products while
maintaining our position as industry leaders in setting standards for Professional, Human and
Structural Capital.
Mission Statements
Our Mission as team of The Crescent Textile Mills Limited is to accomplish our vision through:
Investment in new technologies for increase in production resources and consequently the
profitability of the company for the benefit of the shareholders
Creating new and exciting textile based products
Training and retaining of Professionals to uphold a strong and healthy organizational set up
Retaining of traditional customer base while exploring and expanding into new markets
Helping the community to keep the environment clean and healthy, and
Improving the quality of life of the community.
Directors' Report to the Shareholders
The Directors of your Company feel pleasure in presenting the annual report and audited financia
statements along with auditors' report thereon for the year ended 30 September 2003.
1. Financial Results
Your Company's operations for the year resulted in post tax profit of Rupees 81.596 million
after charging Rupees. 43.030 million for current year's taxation. Earning per share after
tax is Rupees 2.01 (Rs. 4.56 last year).
The Directors recommend appropriation of profits as follows:
(Rupees in Thousand)
Profit available for appropriation 86,279
Appropriations:
Transfer to general reserve 40,000
Proposed dividend 40,669
80,669
Unappropriated profit 5,610
Your Directors recommended cash dividend at the rate of 10% which is Rs. 1.00 per share.
2. Auditors
The present auditors M/s. Riaz Ahmad and Company, Chartered Accountants retire. The
Audit Committee has recommended their reappointment after rotating the partner incharge
of the Riaz Ahmad & Company Chartered Accountants subject to the approval by Securities
and Exchange Commission of Pakistan.
3. Review of Financial Affairs and Future Prospects
The Chairman's Review provides details of the financial affairs and the future prospects of
the Company.
4. Pattern of Shareholding
The pattern of shareholding as required by Section 236 of the Companies Ordinance, 1984
is attached to this report.
5. Statement pursuant to clause XIX of Corporate Governance
a) The financial statements of the Company present fairly its state of affairs, the results
of its operations, cash flows and changes in equity.
b) proper books of account of the Company have been maintained.
c) Appropriate accounting policies have been consistently applied in preparation of
financial statements and accounting estimates are based on reasonable and prudent
judgment.
d) International accounting standards as applicable in Pakistan have been followed in the
preparation of financial statements and any departure there from has been adequately
disclosed.
e) The system of internal control is sound in design and is being consistently reviewed by
the internal audit and other procedures and will continue to be reviewed and any
weakness in the system will be eliminated.
Directors' Report to the Shareholders
f) There are no significant doubts upon the Company ability to continue as going concern.
g) There has been no material departure form the best practices of Corporate Governance
as detailed in listing regulations.
h) Details of reduction in operating results of the Company compared to last year have
been explained in Chairman's review.
I) The key operating and financial data for the last six year is annexed.
j) Value of investments of provident fund was Rupees 103.706 million as on September
30, 2001 per its audited accounts,
k) Attendance at 5 meetings of the Board of Directors held during the year under review
were as under:
Name of Director Meetings attended
Mr. Muhammad Anwar 5
Mr. Anjum M. Saleem 4
Mr. Asif Jameel 3
Mr. Humayun Mazhar 2
Mr. Khalid Bashir 4
Mr. Muhammad Arshad 5
Mr. Nasir Shafi 5
Mr. Javed Omer Vohra 2
I) No trading in the shares of the Company was carried out by the Directors, CEO, CFO and
Company Secretary, their spouses and minor children.
m) A sum of Rupees 8.343 million in respect of excise duty on loan is provided for and
is outstanding. A case in respect of this issue is pending before the Supreme Court.
For and on behalf
the Board of Directors
' I &. t*^~ (J?H<~
Faisalabad (Muhammad Anwar)
30 December 2003 Chairman & Chief Executive
Chairman's Review
It is my pleasure to welcome you in the 54* Annual General Meeting
of the Company. We are passing through an era of rapidly changing
international economic environment. Our Textile industry needs to
respond quickly to the current global changes in business, production
and its management strategies to supporting its pace to face the
challenges of technology based production competition and efficiency,
quality of human resources and environmental protections. The ensuing
few years will ascertain Pakistan's textile industry's capabilities of
grabbing the opportunities that will coming across. The management
of your company is focusing on these issues and is setting its
benchmarks for the coming years.
Review of the affairs of your company for the year ended 30th
September, 2003 is given hereunder:
Financial
The financial year 2003 led by squeezed sale margin has proven a
difficult year for textile industry. Demand for yarn and fabric remain
sluggish during the year for one reason or the other. Strengthening of
Pak Rupee further eroded the profit margins. Substantial cut down in
mark up rates could not counter-act squarely the reduced sales margins.
As a result of aforesaid factors, your company has been able to
achieve post tax profit of Rs. 81.596 million compared to post tax
profit of Rs. 185.383 million during the corresponding year.
Turnover at Rs. 4,660.592 million posted a growth of 3.65%
against Rs. 4,496.610 million in the same period last year. Export
sales at Rs. 3,148.019 million showed an increase of 6.59% against
Rs. 2,953.482 million performed in financial year 2002. Local sale
stood at Rs. 1,494.573 million compared to Rs. 1,479.844 million
during the year 2002 (increase of 1.0%). Raw material cost
increased by Rs. 208.609 million (15.43%) to Rs. 1,560.846 million
in financial year 2003 from Rs. 1,352.237 million last year due
mainly to increase in raw material and other input costs which
could not be passed on to the customers due to suppressed market
conditions. Consequently gross profit decreased by Rs. 178.112
million (24.38%) to Rs. 552.344 million in current year from
Rs. 730.456 million in year 2002. Operating expenses reduced
to Rs. 308.700 million in financial year 2003 from Rs. 322.858
million in financial year 2002. Financial expenses decreased by
Rs. 72.462 million (28.53%) to Rs. 181.534 million in 2003 from
Rs. 253.996 million in financial year 2002 due to substantial
decrease in mark up rates.
Spinning Division.
During the year under review, 23.642 million kgs of yam of 29.16 average
count were produced as compared to 22.40 million kgs of 30.14 average
count last year.
In terms of 20/1 counts, an output of 34.467 million kgs was
obtained during the current year compared to 33.749 million kgs during the
past year.
Balancing Modernization and Replacement (BMR) plan continued as
usual to upgrade the production facilities of this division, ring frames,
cone- winders and uster tester were installed during the year to replace
the older versions.
Weaving Division.
Actual production of this division in converted average 50 picks
stood at 53.699 million square meters including production of wholly
owned subsidiary compared to 47.604 million square meters in the
corresponding year. Another 36 sulzer looms of this division were
replaced with better version and models and a sizing machine of
latest technology was also added to increase the sizing capacity. .
Processing Division.
A quantity of 37.029 million linear meters of white, dyed and printed fabric
was finished in processing division against 39.730 million linear meters
during the last year. Manual color kitchen system of processing division
was replaced with latest digital system.
A wider width shrinking range of latest model was also added in this division
to meet the customer's requirements. Letter of credit has been established
for import of stentering machine to enhance the finishing capacity of this division.
Home Textile
Production of this division was 9.436 million linear meters compared to 9.902
million linear meters during the previous financial year. Marketing efforts
continued to enhance the volume of this division. More sewing machines were
added during the year to increase the capacity of this division.
Safety, Health and Environment
The issues of safety, health and environment are assuming
increasing importance in companies the world over. Your company
continued to maintain its commitment towards safety, health and
environmental performance in all its operations. Installation of an
effluent water treatment plant is one of the commitment to recognize
the environmental risks. Dedicated efforts have commenced to identify
and prevent health and hazards and establish safety standards. Free of
cost Hepatitis B &. C test of all employees were carried out. Your
company also achieved certification of ISO 9001, 14001 of Quality
and Environmental Management Systems and OEKO Tex Standard 100. .
Future Outlook
Anticipated Chinese poor cotton crop output during the season 2003-04 forced
them to actively buy cotton from international market to cover the domestic
shortfall. Aggressive Chinese buying during October 2003 thus had a profound
impact on international cotton value, pushing up New York cotton outlook to a five
year high. Reports of our domestic cotton crop damages due to acute pest attacks
and consequential to rising international prices also soared domestic cotton prices at
all times record of touching Rs. 3600 per maund and PSF prices also showed
upward trend. Yam and fabric prices also registered significant increases to
equilibrate the sharp increase in raw material cost but failing to compensate
the increase in material costs. The demand for textile products is likely to
remain suppressed in the first quarter of next financial year.
CAPEX Plan for Balancing Modernization and Replacement (BMR) has
been earmarked in financial budget for ensuing year for investment in all of the
sectors of the company for up-gradation and balancing of the existing facilities. .
Acknowledgment.
I would like to take the opportunity to extend my sincere!
thanks to the other Directors for their continued support and
guidance. I am grateful to our customers, the bankers and
all agencies who have directly and/or indirectly helped us in our
growth and achievements. I would also like to express my
appreciation for the continued interest and support of all the
shareholders. I also express my appreciations for team work,
discipline of the employees of the company who have made it fine
place to work.
Muhammad Anwar
Chairman and Chief Executive Officer
Summarized Financial Data of Last Six Years
Rs. in Mln 1998 1999 2000 2001 2002 2003
Paid up Capital -do- 387.33 406.69 406.69 406.69 406.69 406.69
Reserves and Surplus -do- 865.49 885.01 1,019.22 1,185.57 1,489.58 1,899.94
Shareholders' Equity -do- 1,252.82 1,291.70 1,425.91 1,592.26 1,896.27 2,306.63
Long Term Liabilities -do- 691.94 547.42 400.79 382.03 667.27 1,059.61
Investments -do- 478.25 478.05 478.55 478.55 478.55 478.05
Market Value of Investments -do- 435.12 259.53 244.34 161.92 338.45 716.71
Current Assets -do- 2,052.87 2,690.75 2,333.25 2,393.88 2,395.24 2,754.97
Total Assets -do- 3,730.94 4,090.02 4,481.17 4,867.52 5,343.59 5,989.20
Turnover -do- 3,611.39 3,897.04 4,632.52 5,470.48 4,496.61 4,660.59
Cost of Sales -do- 3,096.04 3,185.71 3,788.29 4,437.53 3,766.15 4,108.25
Gross Profit -do- 515.35 711.32 844.23 1,032.95 730.46 552.34
Profit Before Taxation -do- 213.29 186.75 329.35 355.38 247.38 124.63
Profit After Taxation -do- 183.29 145.23 246.04 280.23 185.38 81.6
Break up Value of Rupees 10 Share Rupees 32.35 31.76 35.06 39.15 46.63 56.72
Earning Per Share (Pretax) -do- 5.51 4.59 8.1 8.74 6.08 3.06
Earning Per Share (After Tax) -do- 4.73 3.57 6.05 6.89 4.56 2.01
Gross Profit to Sales Percent 14.27 18.25 18.22 18.88 16.24 11.85
Profit Before Tax to Sales -do- 5.91 4.79 7.11 6.5 5.5 2.67
Dividend Per Share Rupees 1.9 2 2.75 2.8 2 1
Bonus Shares Percent 5 - - - - -
Debt Equity Ratio Times 0.36 0.3 0.22 0.19 0.26 0.31
Current Ratio -do- 1.15 1.2 0.89 0.84 0.87 1.05
Financial Charges Coverage -do- 1.89 1.78 2.41 2.24 1.97 1.69
Stock Turnover -do- 6 5.36 7.79 7.24 6.25 6.55
Short Term Borrowing to Sales -do- 0.34 0.38 0.36 0.35 0.4 0.42
Statements of Compliance with the
Code of Corporate Governance
This statement is being presented to comply with the Code of Corporate Governance contained in
regulation No.37 of listing regulation of Karachi Stock Exchange for the purpose of establishing a
framework of good governance, whereby a company is managed in compliance with the best practices
of Corporate Governance.
The company has applied the principles contained in the Code in the following manner:
1. The company encourages representation of independent non-executive directors and directors
representing minority interests on its Board of Directors. At present the Board includes 6
independent non-executive directors and no directors representing minority shareholders as the
election of Directors was held before implementation of Code of Corporate Governance.
2. The directors have confirmed that none of them is serving as a director in more that ten listed
companies, including this company.
3. 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, a DPI or an NBFI or, being member of a
stock exchange, has been declared as defaulter by that stock exchange.
4. No casual vacancy occurred in the Board during the year.
5. The company has prepared a statement of Ethics and Business practices' which has been signed
by all the directors and employees of the Company.
6. The board has developed a Vision/Mission statement, overall corporate strategy and significant
policies of the company. A complete record of particulars of significant policies along with the dates
on which they were approved or amended has been maintained.
7. All the powers of the Board have been duly exercised and decision on material transactions, including
appointment and determinating of remuneration and terms and condition of employment of the
CEO and other executive directors, have been taken by the Board.
8. The meetings of the Board were presided over by the chairman and the Board met at least once in
every quarter. Written notices of the Board meetings, along with agenda and working papers, were
circulated at least seven days before the meetings. The minutes of the meeting were appropriately
recorded and circulated.
9. The Board arranged an orientation course of its directors during the year to apprise them of their
duties and responsibilities.
10. The board has approved appointment of CFO, Company Secretary and Head of Internal Audit,
including their remuneration and terms and conditions of employment, as determined by the CEO.
11. The director's report for this year has been prepared in compliance with the requirements of the
Code and fully describes the salient matters required to be disclosed.
12. The financial statements of the company were duly endorsed by CEO and CFO before approval of
the Board.
13. The directors, CEO and executives do not hold any interest in the shares of the company other than
that disclosed in the pattern of shareholding.
14. The company has complied with all the corporate and financial reporting requirements of the Code.
15. The Board has formed an audit committee. It comprises 3 members, of whom 2 are non- executive
directors including the chairman of the committee.
16. 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. The terms of reference of the
committee have been formed and advised to the committee for compliance.
17. The Board has set-up an effective internal audit function who are considered suitably qualified and
experienced for the purpose and are conversant with the policies and procedures of the company
and they are involved in the internal audit function on full time basis.
18. 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,
that they or any of the partners of the firm, 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 Institute of Chartered Accountants of
Pakistan.
19. 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 auditors have confirmed that
they have observed IFAC guidelines in this regard.
20. We confirm that all other material principles contained in the Code have been complied with.
Sd/-
(Ghulam Muhammad)
NIC 33100-0760252-7
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 THE CRESCENT TEXTILE MILLS LIMITED to comply
with the Listing Regulation No. 37 (Chapter XI) of the Karachi Stock Exchange, Listing Regulation No. 43
(Chapter XIII) of the Lahore Stock exchange and Islamabad Stock Exchange
where the company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of
the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the statement of compliance reflects the status of the Company's compliance with provisions of the
Code of Corporate Governance and report if it does not. 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.
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. 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.
Based on our review, nothing has come to our attention which causes us to believe that the statement of compliance does
not appropriately reflect the company's compliance, in all material respects, with the best practices contained in the Code
of Corporate Governance.
(Riaz Ahmad and Company)
Faisalabad: 30 December 2003 Chartered Accountants
Pattern of Shareholding - (Form "34")
as at 30 September 2003
No. of Shareholding Total No. of Shareholding Total
Shareholders From To Shares held Shareholders From To Shares held
440 l 100 16,749 4 180001 185000 728,907
568 101 500 157,564 1 185001 190000 186,388
258 501 1000 194,642 1 190001 195000 190,998
468 1001 5000 1,123,762 2 200001 205000 403,008
133 5001 10000 954,333 1 205001 210000 210,000
39 10001 15000 456,572 1 210001 215000 213,277
23 15001 20000 415,400 1 215001 220000 216,825
18 20001 25000 399,665 1 235001 240000 237,992
10 25001 30000 279,037 1 240001 245000 244,704
20 30001 35000 642,362 2 245001 250000 494,663
13 35001 40000 473,176 2 270001 275000 546,862
10 40001 45000 416,140 1 275001 280000 278,783
12 45001 50000 577,956 1 285001 290000 285,709
5 50001 55000 262,877 2 315001 320000 634,346
1 55001 60000 58,482 1 325001 330000 326,140
5 60001 65000 311,937 3 335001 340000 1,011,425
2 65001 70000 136,028 1 360001 365000 362,587
5 70001 75000 362,275 1 365001 370000 366,555
3 75001 80000 231009 1 370001 375000 373,868
3 80001 85000 250,541 1 375001 380000 378,883
1 85001 90000 89,642 1 380001 385000 383,221
3 90001 95000 277,693 1 385001 390000 385,200
5 95001 100000 487,958 1 415001 420000 419,896
3 100001 105000 306,871 1 430001 435000 434,606
4 105001 110000 433,710 2 440001 445000 883,713
1 110001 115000 110,077 1 455001 460000 456,401
3 115001 120000 347,348 1 550001 555000 550,929
4 130001 135000 529,427 1 585001 590000 585,618
2 135001 140000 274,671 1 850001 855000 851,952
4 140001 145000 566,378 2 915001 920000 1,837,500
2 145001 150000 296,160 1 975001 980000 978,602
1 150001 155000 152,044 1 1050001 1055000 1,050,937
1 155001 160000 158,850 1 1490001 1495000 1,494,500
4 165001 170000 672,774 1 1685001 1690000 1,685,957
2 170001 175000 344,509 1 1860001 1865000 1,860,400
3 175001 180000 528,707 1 2215001 2220000 2,216,427
1 3600001 3605000 3,604,253
2,127 40,669,358
Categories of Shareholders Number Shares Held Percentage
Financial Institutions 55 6,165,824 15.16
Individuals 2,010 25,793,770 63.42
Insurance Companies 5 2,002,964 4.93
Investment Companies 5 4,653,997 11.44
Joint Stock Companies 21 121,113 0.3
Modarabas and Mutual funds 7 658,285 1.62
Others 24 1,273,405 3.13
2,127 40,669,358 100
Others
Abandoned Property 2 576 0
Association 1 11 0
Non Resident 17 1,248,609 3.07
Trust 4 24,209 0.06
24 1,273,405 3.13
Pattern of Shareholding
as at 30 September 2003
Held by Shareholders as at September 30, 2003
Categories of Shareholder Number of
shares held
a) Directors, Chief Executive Officer, Their Spouse and Minor Children
Chief Executive/ Director
Mr. Muhammad Anwar 168,161
Directors
Mr. Anjum M. Saleem 326,140
Mr. Humayun Mazhar 88,216
Mr. Javed Omer Vohra 2,525
Mr. Khalid Bashir 4,998
Mr. Muhammad Arshad 175,217
Mr. Nasir Shafi 180,361
, 945,618
Director's Spouse and Their Minor Children
Mrs. Abida Anwar 64,234
Mrs. Shaheen Nasir 6,742
Mrs. Salma Parveen 131,567
Mrs. Tanveer Khalid Bashir 48,598
Mrs. Fauzia Parveen Vohra 500
251,641
B) Associated Companies, Undertaking & Related Parties
Crescent Sugar Mills & Distillery Limited 2,216,427
Crescent Foundation 851,952
The Premier Insurance Company of Pakistan Limited 567,352
Crescent Powertec Limited 373,868
Shakarganj Mills Limited 216,825
Crescent Steel and Allied Products Limited 17,750
Ahsan Associates (Pvt) Limited 1,292
Crescent Group Services (Pvt) Limited 57
4,245,523
c) NIT&ICP
National Bank of Pakistan, Trustee Department 3,604,253
Investment Corporation of Pakistan (Semf) 1,049,744
4,653,997
Pattern of Shareholding
as at 30 September 2003
Number of
shares held
d) Banks, DFIs, NBFIs 6,165,824
e) Insurance Companies 2,002,964
f) Modarabas and Mutual Funds 658,285
g) Trusts 24,209
h) Other Companies (public Sector Company & Corporations) 1,494,216
I) Non Residents 1,248,609
j) General Public 18,971,297
k) Executives, Their Spouse and Minor Children 7,175
40,669,358
18 Shareholders More Than 10% Nil
Auditors' Report to the Members
We have audited the annexed balance sheet of THE CRESCENT TEXTILE MILLS LIMITED
as at 30 September 2003 and the related profit and loss account, cash flow statement anc
statement of changes in equity, together with the notes forming part thereof, for the year then
ended and we state that we have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of our audit.
It is the responsibility of the company's management to establish and maintain a system of
internal control, and prepare and present the above said statements in conformity with the
approved accounting standards and the requirements of the Companies Ordinance, 1984. Our
responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan.
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. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
above said statements. An audit also includes assessing the accounting policies and significant
estimates made by management, as well as, evaluating the overall presentation of the above
said statements. We believe that our audit provides a reasonable basis for our opinion and, after
due verification, we report that:
a) in our opinion, proper books of account have been kept by the company as required by
the Companies Ordinance, 1984;
b) 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, 1984, and are in
agreement with the books of account and are further in accordance with accounting
policies consistently applied;
ii) the expenditure incurred during the year was for the purpose of the company's
business; and
iii) the business conducted, investments made and the expenditure incurred during the
year were in accordance with the objects of the company.
c) in our opinion and to the best of our information and according to the explanations giver
to us, the balance sheet, profit and loss account, cash flow statement and statement ol
changes in equity, together with the notes forming part thereof, confirm with approvec
accounting standards as applicable in Pakistan, and, give the information required by the
Companies Ordinance, 1984, in the manner so required and respectively give a true anc
fair view of the state of the company's affairs as at 30 September 2003 and of the profit
its cash flows and changes in equity for the year then ended; and
d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980), was deducted by the company and deposited in the Central Zakat Fund
established under section 7 of that Ordinance.
FAISALABAD: 30 December 2003 (Riaz Ahmad and Company)
Chartered Accountants
Balance Sheet as at 30 September 2003
(Rupees in thousand)
Note 2003 2002
EQUITY AND LIABILITIES
Share capital and reserves
Authorized share capital
100 000 000 ordinary shares of Rupees 10 each 1,000,000 1,000,000
Issued, subscribed and paid up share capital 3 406,693 406,693
Reserves 1,853,659 1,484,893
Unappropriated profit 5,610 4,683
2,265,962 1,896,269
Deferred income on sale and lease
back of operating fixed assets 2,186 -
Non-current liabilities
Redeemable capital 4 550,000 134,949
Long term loan 5 150,000 -
Liabilities against assets subject to
finance lease 6 268,305 358,050
Deferred taxation 38,588 32,733
1,006,893 525,732
Current liabilities
Current portion of long term liabilities 7 91,306 174,266
Short term finances 8 1,980,485 1,812,479
Creditors, accrued and other liabilities 9 501,732 647,411
Workers' participation fund 10 11,201 17,727
Provision for taxation 82,979 182,950
Proposed dividend 40,669 81,339
Unclaimed dividend 5,788 5,416
2,714,160 2,921,588
Contingencies and commitments 11
5,989,201 5,343,589
The annexed notes form an integral part of these financial statements
(Muhammad Anwar)
Chairman & Chief Executive
(Rupees in thousand)
Note 2003 2002
ASSETS
Non-current assets
Tangible fixed assets
Operating fixed assets 12 777,591 641,061
Assets subject to finance lease 13 370,218 397,356
Capital work-in-progress 14 1,537 117,484
1,149,346 1,155,901
Equity investments 15 636,841 338,445
Long term loans and advances 16 1,411,731 1,412,143
Long term security deposits 36,310 41,864
3,234,228 2,948,353
Current assets
Stores, spare parts and loose tools 17 110,048 114,971
Stock in trade 18 711,196 719,876
Trade debts 19 1,134,350 832,517
Advances, deposits and prepayments 20 410,105 402,076
Other receivables 21 288,675 251,129
Short term Investments 22 79,870 -
Cash and bank balances 23 20,729 74,667
2,754,973 2,395,236
5,989,201 5,343,589
(Khalid Bashir)
Director
Profit and Loss Account for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
Sales 24 4,660,592 4,496,610
Cost of goods sold 25 4,108,248 3,766,153
Gross profit 552,344 730,457
Operating expenses
Administrative and general 26 130,052 102,889
Selling and distribution 27 178,648 219,970
308,700 322,859
Operating profit 28 243,644 407,598
Other income 29 78,026 109,144
321,670 516,742
Financial and other charges
Financial charges 30 181,534 253,996
Other charges 31 15,510 15,363
197,044 269,359
Profit before taxation 124,626 247,383
Provision for taxation 32 43,030 62,000
Profit after taxation 81,596 185,383
Unappropriated profit brought
forward 4,683 350,639
Profit available for appropriation 86,279 536,022
Appropriations
General reserve 40,000 450,000
Proposed dividend 40,669 81,339
80,669 531,339
Unappropriated profit 5,610 4,683
(Rupees)
Earning per share 35 2.01 4.56
Dividend per share 1 2
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar) (Khalid Bashir)
Chairman & Chief Executive Director
Cash Flow Statement for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
Cash flows from operating activities
Profit before taxation 124,626 247,383
Adjustments to reconcile profit to net cash
provided by operating activities
Depreciation 95,442 71,550
Amortization 41,387 45,135
Credit balances added back -12 -320
Gain on disposal of operating fixed assets -11,789 -2,720
Amortization of deferred income on sale and
lease back of operating fixed assets -547 -
Financial charges 181,534 253,996
Cash flows from operating activities
before working capital changes 430,641 615,024
Cash flows from working capital changes
(Increase)/decrease in current assets
Stores, spare parts and loose tools 4,956 -15,692
Stock in trade 8,680 36,043
Trade debts -301,833 104,722
Advances, deposits and prepayments -30,493 -55,207
Other receivables -37,546 52,085
Increase/ (decrease) in current liabilities
Short term finances 168,006 -84,315
Creditors, accrued and other liabilities 12,564 -26,111
Workers' participation fund -6,526 -5,242
Net cash flows from working capital changes -182,192 6,283
Cash flows from operating activities 248,449 621,307
Financial charges paid -189,765 -278,614
Income tax paid -114,682 -98,443
Dividend paid -80,967 -115,906
Net cash (used in)/flows from operating activities -136,965 128,344
Cash Flow Statement for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
Cash flows from investing activities
Fixed assets acquired -152,680 -53,021
Sale proceeds of operating fixed assets 38,557 31,604
Investments sold 500 -
Investments made -50,000 -
Long term loans and advances 412 -26,583
Long term security deposits 5,554 -19,610
Net cash used in investing activities -157,657 -67,610
Cash flows from financing activities
Redemption of redeemable capital -175,804 -58,356
Redeemable capital acquired 550,000 100,000
Repayment of long term loan -25,603 -22,156
Repayment of finance lease liabilities -107,909 -55,361
Net cash flows from/(used in) financing activities 240,684 -35,873
Net increase/(decrease) in cash and cash equivalents -53,938 24,861
Cash and cash equivalents at the beginning
of the year 74,667 49,806
Cash and cash equivalents at the end
of the year 20,729 74,667
The annexed notes form an integral part of these financial statements.
Statement of Changes in Equity for the Year Ended 30 September 2003
(Rupees in thousand)
Share Reserves Un-appropriated Total
capital Capital Revei nue Total profit
Fair Dividend General
value equalization
Balance as at 30
September 2001 406,693 - 30,000 1,145,000 1,175,000 10,571 1,592,264
Effect of adoption of IAS 39 - -208,355 - - -208,355 340,068 131,713
Adjusted balance as at
01 October 2001 406,693 -208,355 30,000 1,145,000 966,645 350,639 1,723,977
Fair Value gain - 68,248 68,248 68,248
Net profit for the year - - - - - 185,383 185,383
Transfer to general
reserve - - 450,000 450,000 -450,000 -
Proposed dividend - - - -81,339 -81,339
Balance as at 01 October 2002 406,693 -140,107 30,000 1,595,000 1,484,893 4,683 1,896,269
Fair value gain 328,766 328,766 - 328,766
Net profit for the year 81,596 81,596
Transfer to general
reserve 40,000 40,000 -40,000 -
Proposed dividend -40,669 -40,669
Balance as on 30 September 2003 406,693 188,659 30,000 1,635,000 1,853,659 5,610 2,265,962
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar) (Khalid Bashir)
Chairman & Chief Executive Director
Notes to the Financial Statements for the Year Ended 30 September 2003
1. The Company and its activities
The Crescent Textile Mills Limited is a public limited company incorporated in Pakistan
under the Companies Act, 1913 (Now Companies Ordinance, 1984). Its shares are quoted
on the Stock Exchanges in Pakistan. The company is engaged in business of textile
manufacturing comprising spinning, combing, weaving, dyeing, bleaching, printing,
buying, selling and otherwise dealing in yarn, cloth and other goods and fabrics made
from raw cotton and synthetic fiber(s). The Company also operates a cold storage.
2. Summary of significant accounting polices
2.1 Basis of preparation of financial statements
These financial statements have been prepared in accordance with approved
accounting standards as applicable in Pakistan and the requirements of the
Companies Ordinance, 1984. Approved accounting standards comprise of such
International Accounting Standards as notified under the provisions of the Companies
Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or
directives issued by the Securities and Exchange Commission of Pakistan differ with
the requirements of these standards, the requirements of Companies Ordinance,
1984 or the requirements of the said directives take precedence.
2.2 Accounting convention
These accounts have been prepared under the historical cost convention as
adjusted to the extent of exchange differences and fair valuation of investments as
referred to in Note 2.4 and 2.9.
2.3 Staff retirement benefits
The company operates a funded Provident Fund Scheme for its permanent
employees. Equal monthly contributions are made both by the company and
employees at the rate of 6.25 percent of basic pay.
2.4 Foreign currency
Assets and liabilities in foreign currency are translated into Pak Rupees at the rates
of exchange ruling at the balance sheet date or at exchange rates booked with
commercial bank(s). Exchange gain or loss on translation of foreign currency loans
is adjusted against the cost of tangible fixed assets acquired from respective loans.
Exchange risk fee and exchange gain or loss on translation of foreign bills under
collection at the year end are charged to current year's income.
2.5 Taxation
Current
Charge for current taxation is based on taxable income at current tax rates after
taking into account applicable tax rebates and credits, if any, or minimum tax at
the rate of 0.5 percent of the turnover, whichever is higher.
Notes to the Financial Statements for the Year Ended 30 September 2003
Deferred
Deferred tax is accounted for by using the liability method on all timing differences
between the carrying amounts of assets and liabilities in the financial statements
and their tax base. Deferred tax liabilities are recognized for all taxable temporary
differences. The Company recognizes deferred tax assets on all deductible temporary
differences to the extent that it is probable that future taxable profits will be available
against which these deductible temporary differences can be utilized. Deferred tax is
calculated at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
2.6 Tangible fixed assets and depreciation
Operating fixed assets are stated at cost less accumulated depreciation. Freehold
land and capital work-in-progress are stated at cost. Cost of tangible fixed assets
consists of historical cost, applicable exchange differences, borrowing cost pertaining
to the construction/erection period and directly attributable cost of bringing the assets
to working condition.
Depreciation on operating fixed assets is charged to income on reducing balance
method to write-off the cost including related exchange differences over their
expected useful life at the rates mentioned in Note 12. Full year's depreciation is
charged on assets added while no depreciation is charged on assets deleted during
the year.
Maintenance and normal repairs are charged to current year's income. Major
renewals and improvements are capitalized and the assets so replaced, if any, are
retired. Gain or loss on disposal of operating fixed assets is included in current year's
income.
2.7 Assets subject to finance lease
These are stated at lower of present value of minimum lease payments under the
lease agreements and fair value of assets. Aggregate amount of obligations relating
to assets subject to finance lease are accounted for at net present value of the
liabilities. Assets so acquired are amortized over their expected useful life at the
rates mentioned in Note No. 13. Amortization of leased assets is charged to current
year's income.
2.8 Assets subject to operating lease
Land of cold storage has been acquired under lease agreement termed as operating
lease for a period of 51 years commencing from August 1981. Lease rentals of Rupees
3,000 per annum are subject to 10 percent increase after every three years and are
charged to current year's income.
2.9 Equity Investments
Investments are initially recognized on trade-date at cost, comprising of consideration
paid and cost of transaction. For listed securities, closing quotations of stock
exchanges on last working day of the accounting year are considered for determining
fair value, while for unquoted securities, fair value is determined considering break up
value of the securities. Its classification is made on the basis of intended purpose for
holding such investments. These are measured at the balance sheet date on the
following basis:
Notes to the Financial Statements for the Year Ended 30 September 2003
Held-to-maturity
These are stated at amortized cost less impairment loss, if any, recognized to reflect
irrecoverable amounts. Impairment losses are charged to profit and loss account.
Held for trading
These are recognized at fair value and changes in carrying values are included in profit and
loss account.
Available for sale
These are stated at fair value and changes in carrying values are recognized in equity until
investment is sold or determined to be impaired at which time the cumulative gain or loss
previously recognized in equity is included in profit and loss account for the year.
2.10 Store, spare parts and loose tools
These are valued at moving average cost except for items-in-transit which are
valued at cost comprising invoice values plus other charges paid thereon.
2.11 Stock-in-trade
Stock-in-trade is valued at lower of average cost and net realizable value except
waste which is valued at net realizable value determined on the basis of contract
prices. Average cost and net realizable value are defined as under:
Average cost
For raw materials - Weighted average cost.
For work-in-process and - Production cost including a proportion of
finish good overheads.
Net realizable value - Selling prices in ordinary course of business
less incidental selling expenses.
2.12 Borrowing cost
Interest, mark-up and other charges on long term liabilities are capitalized up to the
date of commissioning of respective fixed assets acquired out of the proceeds of
such long term liabilities. All other interest, mark-up and other charges are charged
to income.
2.13 Provisions
Provisions are recognized in the balance sheet when the company has a legal or
constructive obligation as a result of past events, and it is probable that outflow of
economic benefits will be required to settle the obligation. However, provisions are
reviewed at each balance sheet date and adjusted to reflect current best estimate.
2.14 Impairment
The carrying amounts of the company's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such indication
exists, the assets recoverable amount is estimated and impairment losses are
recognized in the profit and loss account.
Notes to the Financial Statements for the Year Ended 30 September 2003
2.15 Trade debts
Trade debts originated by the company are recognized and carried at original
invoice amount less an allowance for any uncollectible amounts. Known bad debts
are written off and provision is made against debts considered doubtful when
collection of the full amount is no longer probable.
2.16 Related party transactions
Transactions and contracts with related parties are carried out at arms length prices
determined in accordance with comparable uncontrolled price method.
2.17 Revenue recognition
Revenue from sales is recognized on delivery of goods to customers. Dividend
income is recognized when right to receive the dividend is established.
2.18 Financial instruments
Financial assets and liabilities are recognised at cost that is the fair value of the
consideration given or received at the time when the Company becomes a party to
the contractual provisions of the instrument by following trade date accounting.
A financial asset or part thereof is de-recognised when the Company loses control
of the contractual right that comprises the financial asset or part thereof. Such
control is deemed to be lost if the Company realizes the rights to the benefits
specified in the contracts, the rights expire or the Company surrenders those rights.
A financial liability or part thereof is removed from the balance sheet when it is
extinguished i.e. when the obligation specified in the contract is discharged,
cancelled or expired.
Any gain or loss on subsequent measurement and de-recognition is charged to income.
2.19 Offsetting
Financial assets and financial liabilities are set off and the net amount is reported in
the financial statements when there is a legally enforceable right to set off and the
company intends either to settle on a net basis, or to realize the assets and to settle
the liabilities simultaneously.
2.20 Cash and cash equivalents
Cash and cash equivalents of the Company consist of cash in hand and balances with
banks (Note 23).
(Rupees in thousand)
Note 2003 2002
3. Issued, subscribed and paid up share capital
19 781 136(2002: 19 781 136) ordinary shares of 197,811 197,811
Rupees 10 each fully paid up in cash
20 888 222 (2002: 20 888 222) ordinary shares of
Rupees 10 each issued as fully paid bonus shares 208,882 208,882
406,693 406,693
3.1 4 245 523 (2002: 3 967 170) ordinary shares of Rupees 10 each are held by
associated undertakings.
Notes to the Financial Statements for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
4. Redeemable capital
United Bank Limited (Note 4.1) 550,000 -
Habib Bank Limited - 58,083
Allied Bank of Pakistan Limited - 17,721
Saudi Pak Industrial and Agricultural Investment
Company (Pvt) Limited - 100,000
550,000 175,804
Less: Current portion (Note 7) - 40,855
550,000 134,949
4.1 Syndicate loan facility of Rupees 550 million has been obtained from United Bank
Limited (UBL) for Balancing, Modernization and Replacement (BMR) of existing
facilities of the company and is convertible into privately placed term finance
certificates having face value of Rupees 5,000 each. It carries mark-up at the rate of
6 months treasury bills determined at last working day at the beginning of each
semi-annual period plus 1.85 percent per annum and is secured by first pari passu
charge over fixed assets of the company. The principal amount will be redeemed in
11 equal semi-annual installments after grace period of 18 months.
5. Long term loan
Pakistan Industrial Credit and Investment
Corporation Limited IBRD-3019 - 25,603
Loan from subsidiary company (Note 5.1) 150,000 -
150,000 25,603
Less: Current portion (Note 7) - 25,603
150,000 -
5.1 The amount payable on account of electricity supply by Crescent Energy
Limited - wholly owned subsidiary company has been reclassified as interest free long
term loan. It is unsecured and is repayable in six half yearly equal installments with
grace period of one year.
6. Liabilities against assets subject
to finance lease
The amounts of future payments and periods during which they fall due are as under:
30 September 2003 - 164,101
30 September 2004 119,214 129,085
30 September 2005 113,420 122,520
30 September 2006 101,973 107,113
30 September 2007 73,429 89,380
30 September 2008 9,924 -
Balance rentals as at 30 September 417,960 612,199
Less: Financial charges 58,349 146,341
Present value of minimum lease payments 359,611 465,858
Less: Current portion (Note 7) 91,306 107,808
268,305 358,050
Notes to the Financial Statements for the Year Ended 30 September 2003
6.1 The value of the minimum lease payments has been discounted at an implicit interest
rate ranging from 7.50 to 20 percent. The balance rentals are payable in
monthly/quarterly installments and in case of default of any payment an additional
charge at the rate of 1 to 2 percent per annum shall be paid. Taxes, repairs and
insurance costs are to be borne by the company. In case of termination of the
agreement, the company shall pay entire amount of rentals for un-expired period of
lease agreement.
The lease agreements are renewable at the option of the lessor on such terms as
may be agreed upon. Liabilities are secured against deposit of Rupees 35.842 million
and Rupees 0.210 million (2002: Rupees 34.530 million and Rupees 6.666 million)
included in long term security deposits and advances, deposits and prepayments
respectively.
6.2 Minimum lease payments and their present values are regrouped as under:
2003 2002
Within More than one Within More than one
one year but less one year but less
year then five year year then five year
Total of minimum lease payments 119,214 298,746 164,101 448,098
Less: Financial charges 27,908 30,441 562,913 90,048
Present Value of minimum lease
payments 91,306 268,305 107,803 358,050
(Rupees in thousand)
Note 2003 2002
7. Current portion of long term liabilities
Redeemable capital _ 40,855
Long tem loan - 25,603
Liabilities against assets subject to finance
lease (Note 6) 91,306 107,808
91,306 174,266
8. Short term finances
Secured:
Banking companies and financial institutions:
Cash finance (Note 8.1 and 8.2) 225,943 407,523
Export refinance scheme (Note 8.1 and 8.3) 285,000 595,639
Foreign Currency Finance (Note 8.1 and 8.4) 1,469,542 743,125
Usance export bills (Note 8.1 and 8.5) - 66,192
1,980,485 1,812,479
Notes to the Financial Statements for the Year Ended 30 September 2003
8.1 The aggregate short term finances are secured by way of joint pari passu hypothecation
agreement dated 15 February 1999 signed by the company and the consortium banks
against charge and hypothecating of all present and future current assets of the company,
wherever situated, lien on export letters of credit or firm contracts including but not
limited to stores, spare parts and loose tools, stock-in-trade, trade debts, advances,
deposits and prepayments, other receivables, cash and bank balances and personal
guarantee of the directors.
8.2 Finances aggregating total facility of Rupees 1,240 million (2002: Rupees 950 million) are
available under mark-up agreements and carry mark-up ranging from paisas 6.16 to 36.99
per Rupees 1000 per day.
8.3 Export refinances have been obtained from banking companies under State Bank of
Pakistan's refinance scheme on which a service charges at the rate of 3 percent to 8
percent per annum are payable. These form part of aggregate borrowing limits of Rupees
730.325 million (2002: Rupees 905.270 million).
8.4 Limits of Rupees 1,640.195 million (2002: Rupees 743.125 million) were availed during the
year at mark up at LIBOR plus 1.25 to 2.25 percent per annum on maturity of finance or
at the time of adjustment of finance.
8.5 Limits of Rupees 459 million (2002: Rupees 775 million) were available against usance
export bills at mark-up ranges between 6 to 17.50 percent per annum.
(Rupees in thousand)
9. Creditors, accrued and other liabilities Note 2003 2002
Creditors 299,890 313,962
Advances from customers 9,195 3,269
Retention money due to contractors 2,050 694
Accrued expenses 125,091 141,436
Mark-up/interest accrued on finances-secured
Redeemable capital 53 6,404
Long term loan - 961
Short term finances 17,587 18,204
Charges on finance lease liabilities 3,017 3,319
Excise duty on loans 8,343 8,343
Due to associated undertakings 21,930 136,885
Workers' welfare fund 8,858 8,858
Income tax deducted at source 865 2,454
Due to Employees' provident fund trust 4,853 2,622
501,732 647,411
Notes to the Financial Statements for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
10. Workers' participation fund
Balance as at 01 October 17,727 22,969
Allocation for the year 6,588 13,185
Interest accrued 545 1,618
24,860 37,772
Less: payments made to fund during the year 13,659 20,045
11,201 17,727
10.1 Interest is paid at the prescribed rate under the Act on the funds utilized by the
company till the date of allocation to workers.
11. Contingencies and commitments
Contingencies
K\ The Company is contingently liable to the sum of US$ 3.500 million to
International Finance Corporation (IFC) and Euro 3.784 million
(DM 7.400 million) to Deutsche Investitions UND Entwicklungs Gesellschaft
MBH (DEC) in case of loan installment payment default by Crescent Bahuman
Limited (formerly Crescent Greenwood Limited), CBL, under revised Project
Finance Agreement (PFA) for restructuring of CBL (2002: US$ 3.500 million
to IFC and Euro 3.784 million (DM 7.400 million) to Deutsche Investitions UND
Entwicklungs Gesellschaft MBH (DEG)).
(ii) The Company is also contingently liable for the sum of Rupees 5.270 million
(2002: Rupees 135.350 million) in respect of tax under section 12(9) of the
Income Tax Ordinance, 1979 levied by the Income Tax Department. An Appeal
has been filed with the Commissioner of Income Tax (Appeals) there against,
which is still pending. No provision has been made against the demand raised
by department. According to management of the Company there are
meritorious grounds that the ultimate decision would be in the Company's
favour.
Commitments
Contracts for capital expenditures are Rupees 81.027 million (2002: Rupees 45.585
million). Letters of credit other than for capital expenditure are Rupees 27.636 million
(2002: Rupees 33.040 million).
Notes to the Financial Statements for the Year Ended 30 September 2003
12. Operating fixed assets (Rupees in thousand)
Description Cost Depreciation Book value Depreciation
As at Additions/ As at As at Adjustments Charge As at as at rate
01 October (Deletions) 30 September 01 October for the 30 September 30 September %
2002 2003 2002 year 2003 2003
Land - Freehold 6,503 1,977 8,480 8,480
Buildings on freehold land 195,707 11,141 206,848 131,751 6,398 138,149 68,699 5-10
Buildings on leasehold land 4,156 - 4,156 3,697 - 46 3,743 413 10
Plant and Machinery 1,175,503 215,807 1,371,018 650,877 -3,765 72,391 719,503 651,515 10
-20,292
Factory tools and equipments 15,570 953 16,523 9,349 - 1,435 10,784 5,739 20
Gas and electric installations 43,579 2,134 45,703 30,053 -8 3,132 33,177 12,526 20
-10
Vehicles 21,849 19,674 35,760 8,897 -1,203 5,613 13,307 22,453 20
-5,763
Furniture and fixtures 10,626 179 3,721 6,110 -4,620 446 1,936 1,785 20
-7,084
Office equipments 18,334 3,660 21,994 10,032 5,981 16,013 5,981 50
2003 1,491,827 255,525 1,714,203 850,766 -9,596 95,442 936,612 777,591
-33,149
2002 1,508,097 25,810 1,491,827 792,412 -13,196 71,550 850,766 641,061
-42,080
12.1 Depreciation charge for the year has been allocated as follows:
(Rupees in thousand)
Note 2003 2002
Cost of goods sold
Textile (Note 25.1) 82,201 65,075
Cold Storage (Note 25.2) 91 101
Administrative and general
expenses - Textile (Note 26.1) 13,150 6,374
95,442 71,550
12.2 During the year, the Company has revised depreciation rates considering the useful life of some
of the operating fixed assets. Had the rates not been revised, the profit for the year would have
been higher by Rupees 6.694 million. Categories of the assets with previous and revised rates
are given below:
Description Depreciation rates
2003 2002
% %
Factory tools and equipments 20 10
Gas and electric installations 20 10
Furniture and fixtures 20 10
Office equipments 50 15
Motes to the Financial Statements for the Year Ended 30 September 2003
12.3 Disposal of operating fixed assets
>escription Qty. Cost Ace. Book Sate Mode of Particular of purchaser
top. value proceeds disposal
Mant Machinery
Colour Despencing system 1 10,200 1,020 9,180 11,912 Sale and lease back Item Bank Limited, Serena Hotel Complex, Fsd.
:olding Machine 1 60 34 26 42 Negotiation Crescent Hate limited, 49 Phase III, Hate.
iulzer Looms 110" 11 3,091 587 2,504 3,300 Negotiation Amir Weaving, Chak 7, Small Industrial toad, Fsd.
iulzer Looms 110" 1 283 54 229 300 Negotiation Amir Weaving, Chak #17, Small Industrial Road, Fsd.
Julzer Looms 110" 15 4,243 806 3,437 4,500 Negotiation Muhammad Nasir, Chak 1 119 IB, Samana M, Sargodha Road, Fsd,
let Dying Machine 1 406 373 33 75 Negotiation Abad AS, P-334, Samundri Road, Fsd.
lone Winder 1 300 184 116 500 Negotiation Imrarn Brother, Street # 2, Samundri Road, Fsd.
Zone Winder 1 659 227 432 600 Negotiation Khawar Manzoor, P-13, Kabar Market, Jhang Road, Fsd,
Mr Compressor 1 93 57 36 200 Negotiation Crescent Hattar United, 49 Phase III, Hattar.
\\r Compressor 1 78 48 30 200 Negotiation Crescent Hatare Limited, 49 Phase III, Hattar.
2one Winder 2 61 35 26 2,400 Negotiation Al-ahmad Textile Mills, 6/10, Sharja Trade Center, New Chali, Khi
lone Winder 1 659 227 432 508 Negotiation Shaheen Perviz, 26-D, Dar-ul-IhsanTown, Samundri Road, Fsd.
lone Winder 1 31 17 14 1,200 Negotiation Chirag Textile Mills, Suite 1 10, 2nd Floor, Shan Arcade, Barkat Market, Lhr,
5ulzer Looms 6 1,200 Negotiation Unity Textile Mills, F-20, Main Boulevard, Gulberg III, Lhr.
Sulzer Looms 10 - 3,000 Negotiation Khuram Gul Weaving, lamia Ashrafia Street, Sargodha Road, Fsd.
Gas & Electric Installations
Air Conditioner 1 10 8 2 3 Negotiation Arfat Trading Corporation, 958/9, Dastgir Society, Khi.
Vehicles
Honda Civic AB 3839 284 168 116 325 Negotiation Rashid Jalil, Company's employee.
Kia Pride LXA7595 246 145 101 165 Negotiation Rana Faiz Siddique, Sidhupura, Fsd.
Suzuki Pick up FDD 5184 110 100 10 60 Negotiation Muhammad Ibrahim, 425, Block D, Ghulam Muhammad Abad, Fsd.
Suzuki 800 C.C. FDV 5417 126 46 80 170 Negotiation Mohsin Fiaz, 36-C, Muslim Town, Fsd.
Suzuki 800 C.C. FDV 5419 127 45 82 176 Negotiation KhalaKhan,49-G-7,lsd.
Suzuki 1000 C.C. FDV 6605 168 60 108 208 Negotiation Tariq Mehmood, 55-A, Ali Housing, Jhang Road, Fsd.
Suzuki 800 C.C. FDV 4452 129 47 82 173 Negotiation Habib Ahmad, 474-A, Peoples Colony, Fsd.
Suzuki 800 C.C. FDV 2092 126 46 80 170 Negotiation Tanveer Ahmad, 142-B, Jinnah Colony, Fsd.
Suzuki 800 C.C. FDV 5328 130 46 84 170 Negotiation Qudrat Ullah, House # 220, Street # 7, Nisar Colony, Fsd.
Suzuki 800 C.C. FDV 5329 129 47 82 180 Negotiation Shahzad Haider, Company's employee.
Suzuki 1000 C.C. FDV 5318 183 66 117 220 Negotiation Muhammad Akram, Chak No. 102 G, District Sargodha.
Suzuki 800 C.C. FDW 8160 118 118 205 Negotiation Khyzer Islam, Company's employee.
Motor Cycle KVA 4891 69 14 55 69 Insurance claim The Premier Insurance Co, of Pak, Ltd., 1st Floor, Regency Plaza, Fsd.
Suzuki 800 C.C. FDV 6418 127 45 82 131 Negotiation Faiz All, House # 16, Street # 5, Taj Colony, Fsd.
Suzuki 800 C.C. FDV 4594 129 47 82 133 Negotiation Yasar lqbal,19-Block, Sargodha.
Suzuki 800 C.C. FDV 2096 145 52 93 159 Negotiation Imran Hafeez, Street * 14, Jaranwala Road, Fsd.
Toyota Corolla. FDV 9787 479 173 306 500 Negotiation M. Adeel, P-240, Street * 9, Tariq Abad, Fsd.
Mercedes Benz ACM 774 2,560 2,560 3,800 Insurance claim The Premier Insurance Co, of Pak. Ltd, 1st Floor, Regency Plaza, Fsd.
Suzuki Van FDS 3095 96 56 40 50 Negotiation Crescent Hattar Limited, 49 Phase III, Hattar.
Toyota Corolla FDW 4825 282 282 450 Negotiation Mian Amjid Saeed, 460-B, Peoples Colony, Fsd.
Furniture & Fixture
Furniture & Fixture 7,084 4,620 2,464 Old furniture and fixture written off
33,021 9,500 23,521 37,554
13. Assets subject to finance lease
Description Cost Amortization Book value Amortization
As at Additions/ As at As at Adjustments Charge As at as at rate
01 October (Deletions) 30 September 01 October for the 30 September 30 September
2002 2003 2002 year 2003 2003
Plant and machinery 473,650 85,909 458,888 83,384 -33,835 40,934 90,483 368,405 10
-100,671
Vehicles 14,118 - 3,759 7,028 -5,535 453 1,946 1,813 20
-10,359
2003 487,768 85,909 462,647 90,412 -39,370 41,387 92,429 370,218
-111,030
2002 251,908 236,860 487,768 45,637 -360 45,135 90,412 397,356
-1,000
13.1 Amortization of leasehold assets for the year has been allocated as follows:
(Rupees in thousand)
Note 2003 2002
Cost of goods sold - Textile (Note 25.1) 40,934 43,363
Administrative and general expenses - Textile (Note 26.1) 453 1,772
41,387 45,135
13.2 Disposal of assets subject to finance lease
Description Cost Amortization Book Sale Mode of Particulars of
value proceeds disposal purchaser
Suzuki 800 C.C. LXL9138 288 170 118 300 Insurance claim The Premier Insurance Co. of Pak. Ltd,
1st Floor Regency Plaza, Fsd.
Toyota Motor Car FDW 7655 969 572 397 703 Negotiation Saudi Pak Leasing Co. Ltd, 6th Floor,
Lakson Square Building 1,
1,257 742 515 1,003 SaiwarShaheedRoad, Khi.
13.3 Deletion of remaining assets represent assets purchased at the expiry of lease term an transferred to fixed assets
(Rupees in thousand)
Note 2003 2002
14. Capital work-in-progress
Land 119 1,498
Building - 8,655
Plant and machinery 1,418 103,230
Advances to suppliers - 4,101
1,537 117,484
(Rupees in thousand)
Note 2003 2002
15. Equity investments - available for sale
Quoted
Associated undertakings
Crescent Jute Products Limited
2 736 847 (2002: 2 736 847) fully paid ordinary
shares of Rupees 10 each. 20,359 20,359
Equity held 18.17% (2002: 18.17%)
. Crescent Sugar Mills and Distillery Limited
867 506 (2002: 867 506) fully paid ordinary shares
of Rupees 10 each. 5,854 5,854
Shams Textile Mills Limited
406 080 (2002: 406 080) fully paid ordinary shares
of Rupees 10 each. 5,029 5,029
Shakarganj Mills Limited
3 230 648 (2002: 3 230 648) fully paid ordinary
shares of Rupees 10 each. 25,969 25,969
Equity held 11.03% (2002: 11.03%)
Elite Textile Mills Limited
8 400 (2002: 8 400) fully paid ordinary shares of
Rupees 10 each. 40 40
The Premier Insurance Company of Pakistan
Limited
64 647 (2002: 64 647) fully paid ordinary shares of
Rupees 5 each. 35 35
Crescent Steel and Allied Products Limited
1 368 787 (2002: 1 368 787) fully paid ordinary shares of
Rupees 10 each. 7,200 7,200
Trust Investment Bank Limited
1 272 450 (2002: 1 272 450) fully paid ordinary shares of
Rupees 10 each (Note 15.2). 24,950 24,950
Crescent Knitwear Limited
1 200 000 (2002: 1 200 000) fully paid ordinary shares of
Rupees 10 each. 12,000 12,000
Equity held 12.50% (2002: 12.50%)
Others
MashreqBank Pakistan Limited.
12 632 485 (2002: 5 352 748 share of Crescent
Investment Bank Limited) fully paid ordinary shares
of Rupees 10 each 68,210 68,210
Equity held 11.68% (Note 15,2)
(Rupees in thousand)
Note 2003 2002
Crescent Boards Limited
334 912 (2002: 334 912) fully paid ordinary shares
of Rupees 10 each. 3,130 3,130
Jubilee Spinning and Weaving Mills Limited
182 629 (2002: 182 629) fully paid ordinary shares
of Rupees 10 each. 702 702
Pakistan Industrial Credit and investment
Corporation Limited
1 009 143 (2002: 851 598) fully paid ordinary shares
of Rupees 10 each. 4,542 4,542
Crescent Spinning Mills Limited
556 800 (2002: 556 800) fully paid ordinary shares
of Rupees 10 each. 5,568 5,568
183,588 183,588
Unquoted
Associated undertakings
Crescent Ventures International Limited
150 000 (2002: 150 000) fully paid ordinary shares
of Rupees 10 each. 1,500 1,500
Equity held 30.03% (2002: 30.03%)
Break-up value as per audited accounts for the year
ended 30 June 2002 was Rupees zero per share.
Crescent Group Services (Private) Limited
220 000 (2002: 220 000) fully paid ordinary shares
of Rupees 10 each. 2,200 2,200
Equity held 8.21% (2002: 8.21%)
Break-up value as per audited accounts for the year
ended 30 June 2002 was Rupees zero per share.
Crescent Bahuman Limited
26 826 433 (2002: 26 826 433) fully paid ordinary
shares of rupees 10 each. 268,264 268,264
Equity held 19.57% (2002: 19.57%)
Break-up value as per audited accounts for the year
ended 30 September 2002 was Rupees zero per share.
Subsidiary companies
Crescent Energy Limited
2 000 000 (2002: 2 000 000) fully paid ordinary shares
of rupees 10 each. 20,000 20,000
Equity held 100%
Break-up value as per audited accounts for the year
ended 30 June 2003 was Rupees 94.01 per share.
(Rupees in thousand)
Crescent (Hattar) Limited Note 2003 2002
(formerly SAC Group of Industries Limited)
5 700 000 ( 2002: 5 700 000) fully paid ordinary
shares of Rupees 10 each. 2,000 2,000
Equity held 100%
Break-up value as per audited accounts for the year
ended 30 September 2002 was Rupees 1.10 per share.
Others
Taxmac Services (Private) Limited
Nil (2002: 50 000) fully paid ordinary shares of
Rupees 10 each. - 500
Chief Executive Mr. Muhammad Rafi
Premier Financial Services (Private) Limited
500 (2002: 500) fully paid ordinary shares of
Rupees 1,000 each. 500 500
Chief Executive Mr. Adil A. Ghaffar
478,052 478,552
Revaluation gain/(defidt) 158,789 -140,107
636,841 338,445
15.1 Aggregate market value of investments of quoted companies was Rupees 441.593 million (2002:
Rupees 168.424 million).
15.2 12 632 485 fully paid ordinary shares of MashreqBank Pakistan Limited have been received against
5 352 748 shares of Crescent Investment Bank Limited after the merger. The shares were received at a
swap ratio of 2.36 shares of MashreqBank Pakistan Limited against 1 share of Crescent Investment
Bank Limited. Company will deposit these shares of MashreqBank Pakistan Limited in the form of jumbo
certificate with State Bank of Pakistan (SBP) as per the terms and conditions mentioned in SBP's license
No. BL-01 dated 10 March 2003 in the capacity of its sponsor.
16. Long term loans and advances
Loans - Considered good:
Subsidiary company (Note 16.1) 29,042 58,083
Associated company (Note 16.2) 1,410,416 1,381,500
Employees (Note 16.3) 2,338 3,256
Commission on bank guarantees 237 300
Long term prepayments 672 -
1,442,705 1,443,139
Less: Current portion
Loan to subsidiary company 29,042 29,042
Loans to employees 1,578 1,740
Commission on bank guarantees 179 214
Long term prepayments 175 -
30,974 30,966
1,411,731 1,412,143
16.1 It is due by Crescent (Hattar) Limited (formerly SAC Group of Industries Limited),
a wholly owned subsidiary company. It was utilized to repay its loan obligation
due to Muslim Commercial Bank Limited and AI-Faysal Investment Bank Limited
under SBP scheme. It carries mark up @ 8.50 to 16.75 percent per annum and is
repayable in 11 equal half yearly installments commenced from 01 July 1999.
16.2 This represents balance transferred from current account of CBL as at 30
September 2000 and further Long term convertible loan contributed under the
Restructuring of CBL, Memorandum of Understanding (MOU) that had been singed
on 25 January 2001 amongst the Crescent Textile Mills Limited (CTM), CBL,
International Finance Corporation (IFC) and other Senior Lenders for revival of the
project. Under the restructuring arrangements the Company has provided the
followina advances to CBL: __ ...
(Rupees in thousand)
Note 2003 2002
a) Principal (short term converted advance) 428,400 428,400
b) Accrued mark up 504,000 504,000
c) Long term convertible subordinated loan 342,000 342,000
d) Mark up accrued on principal portion of
Short term converted advance 136,016 107,100
1,410,416 1,381,500
The loans including accrued mark up are unsecured and subordinated to all loans
owed by CBL or to be obtained by CBL under the Restructuring plan for repayment.
The principal portion of Rupees 428.400 million short term converted advance
carries mark up at the rate of 6.75% (Commercial banks lending rate) while all
other advances are mark up free. The advances are outstanding for period
exceeding 3 years.
16.3 These are interest free loans to company's employees against cycles, fans, sewing
machines and computers, which are secured against provident fund contribution
and considered good. Loans are recoverable in fortnightly/monthly installments.
No amount is out standing for period exceeding 3 years.
(Rupees in thousand)
17. Stores, spare parts and loose tools Note 2003 2002
Stores 85,655 78,224
Store-in-transit 1,286 7,927
Spare parts 22,851 28,686
Loose tools 223 134
Scraped machinery 33 -
110,048 114,971
18. Stock-in-trade
Raw materials 106,486 118,501
Work-in-process 45,073 35,048
Finished goods 558,265 563,623
Waste 1,372 2,704
711,196 719,876
(Rupees in thousand)
Note 2003 2002
19. Trade debts
Considered good:
Secured - against letters of credit 276,626 114,941
Unsecured (Note 19.1) 857,724 717,576
1,134,350 832,517
Considered doubtful (Note 19.2) 29,677 29,677
Less: Provision for doubtful 29,677 29,677
1,134,350 832,517
19.1 It includes Rupees 77.960 million receivable from Crescent Bahuman Limited
(2002: Rupees 65.894 million).
19.2 It is receivable from Crescent Knitwear Limited - associated undertaking (2002:
Rupees 29.677 million).
20. Advances, deposits and prepayments
Loans and advances: (Rupees in thousand)
Considered good Note 2003 2002
Employees (Note 20.1) 2,253 2,580
Suppliers 17,585 15,283
Crescent Bahuman Limited (Note 20.2) 60,000 60,000
Current portion of long term loan 29,042 29,042
108,880 106,905
Considered doubtful 2,596 2,596
Less: Provision for doubtful 2,596 2,596
108,880 106,905
Income Tax 239,868 262,332
Letters of credit 50,025 13,455
398,773 382,692
Deposits
Securities-Trade and others 9,416 3,397
Excise duty 45 45
Margin deposit 47 13,651
9,508 17,093
Short term prepayments 1,824 2,291
410,105 402,076
20.1 The maximum aggregate amount due from employees at the end of any month
during the year was Rupees 8.293 million (2002: Rupees 5.227 million) and
aggregate balances due at the end of financial year was Rupees 1.590 million
(2002: Rupees 2.265 million).
20.2 It represents standby working capital loan facility to Crescent Bahuman Limited
under Memorandum of Understanding of restructuring of CBL
(Rupees in thousand)
21. Other receivables Note 2003 2002
\
Considered good:
Due from associated undertakings (Note 21.1) 129,866 78,970
Export rebates 31,903 38,323
Sales tax refundable 119,598 117,038
Dividend receivable 4,543 5,384
Miscellaneous 2,765 11,414
288,675 251,129
21.1 Due from associated undertakings
Crescent Jute Products Limited 119 997
Shams Textile Mills Limited - 14
Crescent (Hattar) Limited 87,343 36,733
Elite Textile Mills Limited 41,727 40,494
Crescent Industrial Chemicals Limited 400 448
Crescent Ujala Limited - 6
Crescent Group Services (Pvt) Limited 277 278
129,866 78,970
22. Short term investments - available for sale
Quoted
Associated undertakings
Crescent Steel and Allied Products Limited
840 222 fully paid ordinary shares of Rs. 10 each 33,105 -
Trust Investment Bank Limited
2 521 680 fully paid ordinary shares of Rs. 10 each 16,895 -
50,000 -
Fair value adjustment 29,870 -
79,870 -
22>1 Aggregate market value of quoted investments as at 30 September 2003 was
Rupees 79.870 million (2002: Rupees Nil).
(Rupees in thousand)
Note 2003 2002
23. Cash and bank balances
Cash with banks on:
Current accounts 20,141 23,474
Deposit accounts - 50,000
20,141 73,474
Cash in hand 588 1,193
20,729 74,667
24. Sales
Textile:
Local 1,494,573 1,479,844
Export 3,148,019 2,953,482
Waste- 28,386 17,679
Processing Income 60,427 113,859
4,731,405 4,564,864
Less: Commission paid to selling agents -76,999 -74,467
4,654,406 4,490,397
Cold Storage:
Ice 1,127 1,369
Warehousing income 5,059 4,844
6,186 6,213
4,660,592 4,496,610
25. Cost of goods sold
Textile (Note 25.1) 4,104,107 3,761,990
Cold storage (Note 25.2) 4,141 4,163
4,108,248 3,766,153
(Rupees in thousand)
Note 2003 2002
25.1 Cost of good sold - textile
Raw materials
Opening stock 118,501 163,775
Purchases 1,548,831 1,306,963
1,667,332 1,470,738
Closing stock -106,486 -118,501
Raw material consumed 1,560,846 1,352,237
Cloth and yarn purchased 778,612 754,039
Store, spare parts and loose tools 277,658 320,883
Packing materials 94,356 88, 545
Processing and weaving charges 453,425 425,313
Salaries, wages and other benefits 285,223 268,675
Fuel and power 477,329 407,615
Repairs and maintenance 40,298 36,519
Insurance 10,386 4,920
Depreciation (Note 12.1) 82,201 65,075
Amortization (Note 13.1) 40,934 43,363
Other factory overheads 6,174 4,037
4,107,442 3,771,221
Work-in-process
Opening stock 35,048 38,452
Closing stock -45,073 -35,048
-10,025 3,404
Cost of goods manufactured 4,097,417 3,774,625
Finished goods
Opening stock 566,327 553,692
Closing stock -559,637 -566,327
6,690 -12,635
4,104,107 3,761,990
(Rupees in thousand)
Note 2003 2002
25.2 Cost of goods sold - cold storage
Ammonia gas consumed 35 65
Stores 55 71
Salaries, wages and other benefits 216 211
Fuel and Power 3,454 3,419
Repairs and maintenance 252 268
Insurance 20 20
License fee and professional tax 13 3
Depreciation (Note 12.1) 91 101
Lease money 5 5
4,141 4,163
26. Administrative and general expenses
Textile (Note 26.1) 129,624 102,456
Cold storage (Note 26.3) 428 433
130,052 102,889
26.1 Administrative and general expenses - textile
Salaries, Wages and other benefits 67,544 53,778
Directors' meeting fee 165 93
Traveling, conveyance and entertainment 9,217 9,266
Rent, rates and taxes 1,770 1,658
Repairs and maintenance 6,429 6,913
Insurance 988 1,294
Printing and stationery ' 7,710 6,470
Communication I 6,782 6,622
Subscription 1,365 952
Software development expenses 7,248 -
Legal and professional charges (Note 26.2) 4,681 5,103
Depreciation (Note 12.1) 13,150 6,374
Amortization (Note 13.1) 453 1,772
Other charges 2,122 2,161
129,624 102,456
26.2 Legal and professional charges include the following in respect of auditors'
services for: .
Statutory audit 325 325
Corporate governance compliance review and
other certifications 25 -
Out of pocket expenses 34 12
384 337
(Rupees in thousand)
Note 2003 2002
26.3 Administrative expenses - cold storage
Salaries, wages and other benefits 387 395
Traveling and conveyance 2 4
Communication 22 17
Others 17 17
428 433
27. Selling and distribution expenses
Textile:
Freight and shipment 156,778 177,097
Distribution 21,639 42,683
Advertisement 231 190
178,648 219,970
28. Operating profit
Textile (Note 28.1) 242,027 405,981
Cold storage (Note 28.2) 1,617 1,617
243,644 407,598
28.1 Operating profit - textile
Sales (Note 24) 4,654,406 4,490,397
Cost of goods sold (Note 25.1) 4,104,107 3,761,990
Gross profit 550,299 728,407
Operating expenses
Administrative and general (Note 26.1) 129,624 102,456
Selling and distribution (Note 27) 178,648 219,970
308,272 322,426
242,027 405,981
28.2 Operating profit - cold storage
Sales (Note 24) 6,186 6,213
Cost of goods sold (Note 25.2) 4,141 4,163
Gross profit 2,045 2,050
Administrative and general expenses (Note 26.3) 428 433
1,617 1,617
(Rupees in thousand)
Note 2003 2002
29. Other Income
Mark- up on advances to associated undertakings 39,329 80,798
Dividend income (Note 29.1) 17,706 11,788
Sale of empties and scrap 6,360 5,262
Rental income 254 268
Gain on disposal of operating fixed assets 11,789 2,720
Amortization of deferred income on sale and lease
back of operating fixed assets 547 -
Service charges 1,560 1,560
Lease rent 469 469
Interest on deposit account - 3,949
Exchange gain - 2,010
Credit balances added back 12 320
78,026 109,144
29.1 Dividend income
Associated undertakings:
The Premier Insurance Company of Pakistan Limited 54 48
Pakistan Industrial Leasing Corporation Limited - 749
Crescent Steel and Allied Products Limited 9,984 6,160
Shams Textile Mills Limited 386 1,015
Shakarganj Mills Limited 4,604 2,423
Crescent Sugar Mills and Distillery Limited 1,236 -
Premier Financial Services (Private) Limited 244 -
Other:
Pakistan Industrial Credit and Investment
Corporation Limited 1,198 1,393
17,706 11,788
30. Financial charges
Interest on:
Long term loan 1,955 5,532
Provident Fund Trust 2,183 7,860
Workers' Participation Fund 545 1,618
Mark up on:
Redeemable capital 11,959 20,036
Short term finances 112,609 176,248
Charges on finance lease liabilities 47,021 36,356
Lease agreement fee 736 2,028
Bank charges and commission 4,526 4,318
181,534 253,996
(Rupees in thousand)
Note 2003 2002
31. Other Charges
Workers' welfare fund - 1,500
Donations (Note 31.1) 3,142 678
Exchange Loss 5,780 -
Workers' participation fund 6,588 13,185
15,510 15,363
31.1 The directors and their spouse have no interest in donees' funds.
32. Taxation
Charge for the year:
Current (Note 32.1) 37,175 59,336
Prior years - 2,664
37,175 62,000
Deferred (Note 32.2) 5,855 -
43,030 62,000
32.1 This represents tax liability of the company on export sales u/s 169, minimum
tax on turnover u/s 113 and tax on dividend income u/s 5 of Income Tax
Ordinance, 2001. No other provision for current tax is required keeping in view
the presumptive and minimum tax. Reconciliation of tax expense and product
of accounting profit multiplied by the applicable tax rate is not required in view
of minimum and presumptive taxation.
32.2 Deferred tax effect due to timing differences of:
Tax depreciation allowance 37,194 28,964
Finance lease arrangements 1,394 3,769
38,588 32,733
Less: Opening balance 32,733 32,733
5,855 -
Deferred tax expense relating to origination and reversal of temporary
differences is calculated at Rupees 3.650 million while due to change in tax
rate Rupees 2.205 million.
33. Directors and Executives' Remuneration
The aggregate amount charged in the accounts for remuneration, allowances including
all benefits to the Chief Executive and other Executives of the company are as follows:
Description 2003 2002
Chief Executives Chief Executives
Executive Executive
Managerial remuneration 4,536 58,440 2,891 39,224
Contribution to employees' 169 2,485 133 1,809
provident fund trust
Housing 1,215 9,183 959 6,429
Reimbursable expenses 650 670 599 6,294
6,570 70,778 4,582 53,756
No. of persons 1 206 1 142
33.1 70 Executives are provided with free accommodation and 38 executives are provided
free use of company's vehicles. The Chief Executive is provided free use of the
company's maintained vehicles and residential telephone.
33.2 The aggregate amount charged in these accounts for the year for fees to six
directors for four Board meetings and five Audit Committee meetings was Rupees
165,000 (2002: Rupees 92,500).
34. Transactions with Associated undertakings/related parties
The Company purchased from and sold to associated undertakings materials, goods and
services in the aggregate sum of Rupees 423.185 million (2002: Rupees 509.762 million)
and Rupees 181.447 million (2002: Rupees 155.504 million) respectively. Purchases/sales
of goods and services are made at arms length prices determined in accordance with
comparable uncontrolled price method. Mark-up is received/paid on advances at rate of
6.75 to 16.75 percent (Note 29).
The maximum aggregate amount due from associated undertakings/subsidiary company
at the end of any month during the year was Rupees 1,745.405 million (2002: Rupees
1,640.018 million).
35. Earning Per Share
There is no dilutive effect on the basic earnings per share, which is based on:
(Rupees in thousand)
Profit attributable to ordinary Note 2003 2002
Shareholders (Rupees in thousand) 81,596 185,383
Weighted average number of ordinary
shares outstanding during the year 40,669,358 40,669,358
Earning per share - Basic (Rupees) 2.01 4.56
36. Financial instruments and related disclosures
36.1 Financial assets and liabilities
2003
Interest/mark-up bearing Non interest bearing Total
Interest Maturity Maturity more than Sub-total Maturity Maturity more than Sub-total
rates within one year but less within one year but less
range % one year than five year one year than five year
Financial Assets
Long term investments - - - 189,242 189,242 189,242
Long term loans and advances 6.75 to 16.75 29,042 428,400 457,442 1,578 982,776 984,354 1,441,796
Long term security deposits . - - - 36,310 36,310 36,310
Trade debts - - 1,134,350 - 1,134,350 1,134,350
Advances and deposits - - - 70,956 - 70,956 70,956
Other receivables 6.75 41,727 - 41,727 95,447 95,447 137,174
Short term investments - - 79,870 - 79,870 79,870
Cash and bank balances - - 20,729 - 20,729 20,729
70,769 428,400 499,169 1,402,930 1,208,328 2,611,258 3,110,427
Financial Liabilities
Redeemable capital 3.25 . 550,000 550,000 - - 550,000
Long term loan - - 150,000 150,000 150,000
Liabilities against assets subject
to finance lease 7.50 to 20 91,306 268,305 359,611 - - 359,611
Short term finances 3 to 17.5 1,980,485 1,980,485 1,980,485
Creditors, accrued and other liabilities . . 469,619 469,619 469,619
Contingencies - - _ - 458,519 458,519 458,519
Commitments against letters of credit - 108,663 108,663 108,663
2,071,791 818,305 2,890,096 578,282 608,519 1,186,801 4,076,897
2002
Interest/mark-up bearing Non interest bearing Total
Interest Maturity Maturity more than Sub-total Maturity Maturity more than Sub-total
rates within one year but less within one year but less
range % one year than five year one year than five year
Financial Assets
Long term investments - - 23,904 23,904 23,904
Long term loans and advances 12.50 to 16.75 29,042 457,441 486,483 1,740 953,100 954,840 1,441,323
Long term security deposits - - - - 41,864 41,864 41,864
Trade debts - 832,517 - 832,517 832,517
Advances and deposits - - - 66,022 - 66,022 66,022
Other receivables 16.5 40,494 - 40,494 55,274 55,274 95,768
Cash and bank balances 10 50,000 50,000 24,667 - 24,667 74,667
119,536 457,441 576,977 980,220 1,018,868 1,999,088 2,576,065
Financial Liabilities
Redeemable capital 15.50 to 16.25 40,855 134,949 175,804 - - 175,804
Long term loan 15 25,603 - 25,603 - 25,603
Liabilities against assets subject
to finance lease 13 to 21 107,808 358,050 465,858 - - 465,858
Short term finances 8 to 17.50 1,812,479 1,812,479 - - - 1,812,479
Creditors, accrued and other liabilities - - 626,941 - 626,941 626,941
Contingencies - - - 422,675 422,675 422,675
Commitments against letters of credit 78,625 78,625 . 78,625
1,986,745 492,999 2,479,744 705,566 422,675 1,128,241 3,607,985
36.2 Financial instruments and risk management policies
The company issues financial instruments mainly to finance its operations. In
addition financial instruments such as trade receivables and trade payables arise
directly from the company's operation.
The company finances its operations primarily by a mixture of issued share capital,
retained profits, long term and short term loans and liabilities. The company borrows
funds in local currency usually at fixed rate of interest/mark-up.
Overall risks arising from the company's financial instruments are limited.
(a) Interest rate risk
Since the company borrows funds usually at fixed interest rates, therefore,
the risk occurrence is minimal.
(b) Foreign exchange risk management
Foreign currency risk on financial instruments, receivables or payables in foreign
currency is also not material as trend of devaluation of Pak Rupees on export
based industry is stable. In case of appreciation of Pak Rupee the company
recognizes the foreign receivables/payables at their fair values.
(c) Credit risk
The company deals mostly with regular and permanent customers who pay
the instrument on due dates, company considers the credit risk as minimal.
(d) Fair value of financial assets and liabilities
The carrying values of all financial assets and liabilities reflected in the financial
statements approximate their fair values including for equity investments which is
stated at fair value/break-up value. Market value is also disclosed in Note 15.1.
(Rupees in thousand)
Note 2003 2002
37. Employees' retirement benefits
Contribution to Employees's Provident Fund 9,486 8,703
Contribution to Employees's Old age Benefit
Institution 7,490 7,186
16,976 15,889
Number of Employees 4565 4835
(Figures in Thousand)
38. Plant capacity and actual production 2003 2002
Spinning:
Spindle installed (Numbers) 117,472 113,872
Murata Jet Spinning (MJS) Spindles 288 288
Rotar installed 1000 1000
Production at normal capacity in 20s count based on
3 shifts per day (kgs.) 34121 33009
Actual production converted to 20s count based on 3
shifts per day (kgs.) 34467 33 749
Weaving:
Sulzer looms installed (Numbers) 187 199
Production at normal capacity in 50 picks based on 3
shifts per day (Sqr. Mtrs.) 38899 37326
Actual production at normal capacity converted to 50 picks based on 3
shifts per day (Sqr. Mtrs.) 32923 31580
Towel:
Towel air jet looms (Numbers) 12 12
Production at normal capacity based on 3 shifts per
day (Kgs.) 654 654
Actual production at normal capacity based on 3
shifts per day (Kgs.) 489 361
38.1 Reason for low production
Under utilization of available capacity of weaving section is due to normal maintenance down time
and narrower width fabric orders. Production of towel is low due to short orders.
(Rupees in thousand)
Note 2003 2002
39. Segment assets
The composition of assets of textile and cold storage units is as follows:
Textile 5,982,845 5,337,112
Cold storage 6,356 6,477
5,989,201 5,343,589
40. Date of authorization
These accounts have been authorised for issue by the Board of Directors of the company on 30 December 2003.
41. Figures
Corresponding figures have been re-arranged and regrouped wherever necessary
for the purpose of comparison. No significant reclassification has been made.
Figures have been rounded off to the nearest thousand Rupees.
(Muhammad Anwar) (Khalid Bashir)
Chairman & Chief Executive Director
THE CRESCENT TEXTILE MILLS LIMITED AND ITS SUBSIDIARIES
Financial Statements with Accompanying Information
For the Year ended 30 September 2003.
THE CRESCENT TEXTILE MILLS LIMITED AND ITS SUBSIDIARIES
CONTENTS
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
AUDITORS' REPORT TO THE MEMBERS
We have audited the annexed consolidated financial statements comprising consolidated Balance
Sheet of The Crescent Textile Mills Limited and its Subsidiary Companies as at 30
September 2003 and the related consolidated profit and loss account, consolidated cash flow
statement and consolidated statement of changes in equity, together with the notes forming
part thereof, for the year then ended. We have also expressed separate opinions on the financial
statements of The Crescent Textile Mills Limited and its Subsidiary Companies. These financial
statements are the responsibility of the Holding Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and
accordingly included such tests of accounting records and such other auditing procedures as we
considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of The
Crescent Textile Mills Limited and its Subsidiary Companies as at 30 September 2003 and the
results of their operations for the year then ended.
Faisalabad: 30 December 2003 (Riaz Ahmad and Company)
Chartered Accountants
THE CRESCENT TEXTILE MILLS LIMITED AND ITS SUBSIDIARIES
Consolidated Balance Sheet as at 30 September 2003
(Rupees in thousand)
Note 2003 2002
EQUITY AND LIABILITIES
Share capital and reserves
Authorized share capital
100 000 000 ordinary shares of Rupees 10 each 1,000,000 1,000,000
Issued, subscribed and paid up share capital 3 406,693 406,693
Reserves 1,905,405 1,747,777
Accumulated loss -151,643 -189,197
2,160,455 1,965,273
Deferred income on sale and lease
back of operating fixed assets 2,186 -
Non-current liabilities
Redeemable capital 4 550,000 134,949
Liabilities against assets subject
to finance lease 5 325,298 358,050
Deferred taxation 38,588 32,733
Provision for gratuity - 1,966
913,886 527,698
Current liabilities
Current portion of long term liabilities 6 105,872 174,266
Short term finances 7 1,980,485 1,812,479
Creditors, accrued and other liabilities 8 507,959 528,929
Workers' participation fund 9 12,789 19,397
Provision for taxation 84,556 183,946
Proposed dividend 40,669 81,339
Unclaimed dividend 5,788 5,416
2,738,118 2,805,772
Contingencies and commitments 10
5,814,645 5,298,743
The annexed notes form an integral part of these financial statements.
(Muhammad Anwar)
Chairman & Chief Executive
(Rupees in thousand)
Note 2003 2002
Assets
Non-current assets
Tangible fixed assets
Operating fixed assets 11 898,933 761,802
Assets subject to finance lease 12 446,039 397,356
Capital work-in-progress 13 1,537 126,930
1,346,509 1,286,088
Equity investments 14 337,184 233,745
Long term loans and advances 15 1,411,731 1,383,102
Long term security deposits 41,831 42,920
3,137,255 2,945,855
Current assets
Stores, spare parts and loose tools 16 133,840 131,942
Stock-in-trade 17 713,720 721,589
Trade debts 18 1,135,932 832,916
Advances, deposits and prepayments 19 385,908 375,382
Other receivables 20 201,526 215,549
Short term investments 21 84,034 -
Cash and bank balances 22 22,430 75,510
2,677,390 2,352,888
5,814,645 5,298,743
THE CRESCENT TEXTILE MILLS LIMITED AND ITS SUBSIDIARIES
Consolidated Profit and Loss Account
for the Year Ended 30 September 2003
(Rupees in thousand)
Note 2003 2002
Sales 23 4,665,732 4,499,623
Cost of goods sold 24 4,073,603 3,721,370
Gross profit 592,129 778,253
Operating expenses
Administrative and general 25 136,610 109,946
Selling and distribution 26 178,648 219,970
315,258 329,916
Operating profit 276,871 448,337
Other income 27 61,839 84,891
338,710 533,228