NAZIR COTTON MILLS LTD.
COMPANY'S INFORMATION
Bankers: National Bank Of Pakistan Habib Bank Limited Muslim Commercial Bank Ltd.
Registered Office: 61-K, Gulberg III, Lahore. Ph: 042-35763736, 35773742 Fax: 042-35763768
Mill: 8-Km, Faisalabad Road, Khaareyanwala, Sheikhupura.
Ph: 056-3544053
Aslamabad,
Board of Director Mian Shahzad Aslam Mian Farrukh Naseem Mian Aamir Naseem Mr. Maqbool Hussain Bhutta
Mr. Muhammad Asghar
Mr. Muhammad Abbas
Chief Executive Officer
Chief Financial Officer: Mr. Maqbool Hussain Bhutta
Company Secretary: Mr. Ahsan Raza
Auditors: Ale Imran & Co.Chartered Accountants House No. 155, Street No. 4, Cavalry Ground Lahore.
Share Registrar Corplink (Pvt) Ltd.Wings Arcade, 1-K Commercial, Modal Town, Lahore.Tel: 042-3561714, 35839182, 35916719
Audit Committee:
Mr. Muhammad AsgharMr. Muhammad Abbas
Chairman Member
Mr. Muhammad Irfan
Mr. Muhammad Irfan
Member
HR Committee:
Mr. Muhammad Abbas
Chairman MemberMr. Muhammad IrfanMember
Mr. Muhammad Asghar
The results for the 3rd Quarter under review show a loss after tax amounting to Rs.2.439 Million after accounting for administrative expenses of Rs. 2.692 Million including depreciation of Rs. 0.042. Other operating expenses were Rs. Nil and financial cost was Rs. 0.005 million.
During the third quarter period ended March 31, 2017, the operation of mills remained Closed.
The management is doing its best efforts to settle all the cases with Banks and is doing negotiation with banks and making all efforts to review the operation of mills.
The management is hopeful that it will be able to pay off the other loans of the company also.
The Management is also trying to obtain electricity connection to restart the production process of the mill.
The Management of the Company is hopeful that the operation of the Mill will be re-started in near future.
Lahore. April 27, 2017
NAZIR COTTON MILLS LTD.DIRECTORS' REPORT TO THE SHAREHOLDERS
For and on behalf of the Board of Directors
Chief Executive
Chief Executive Director
NAZIR COTTON MILLS LTD. CONDENSED INTERIM BALANCE SHEET
AS AT 31 MARCH 2017
Book Estimated Book Estimated
Value realizable/ value realizable/
settlement value settlement/value
Notes Rupees Rupees Rupees Rupees
ASSETS
NON-CURRENT ASSETS
Assts held for Sales 210,288,795 210,288,795 210,288,795 210,288,795
Long term investments 3,838,000 2,310,476 3,838,000 4,987,900
Property, plant & equipment 3 385,152 385,152 427,385 427,385
214,511,947 212,984,423 214,554,180 215,704,080
CURRENT ASSETS
Store & spares 1,805,733 1,805,733 1,805,733 1,805,733
Stock in trade - - - -
Trade debts 2,827,973
2,827,973
2,827,973 2,827,973
Loans and advances -
-
- -
Deposits, prepayments and other
receivables 12,555,612
12,555,612
31,571,208 31,571,208
Cash & bank balances 10,747,828
10,747,828
4,429,326 4,429,326
27,937,146
27,937,146
40,634,240 40,634,240
242,449,093
240,921,569
255,188,420 256,338,320
EQUITY & LIABILITIES
SHARE CAPITAL & RESERVES
Authorized capital:
25,000,000 Ordinary shares of Rs.10/-
each 250,000,000
250,000,000
250,000,000 250,000,000
Issued, subscribed & paid-up capital 230,000,000
230,000,000
230,000,000 230,000,000
Capital reserve 434,000
434,000
434,000 434,000
Un-realized Profit/(deficit) on re-
measurement of available for sale
investment (479,125)
(2,006,649)
(479,125) 670,775
Reserves & deficit 4 (371,499,252)
(371,499,252)
(366,372,655) (366,372,655)
(141,544,377)
(143,071,901)
(136,417,780) (135,267,880)
LIABILITIES
Trade and other payables 839,315 839,315 365,589 365,589
Accrued mark-up on secured loans 986,643 986,643 986,643 986,643
Short term running finances 10,000,000 10,000,000 10,000,000 10,000,000
Loan Liabilities - Banking Companies 92,188,792 92,188,792 92,188,792 92,188,792
Provision for taxation 1,341,384 1,341,384 1,341,384 1,341,384
Accrued Mark-up on loan from
Associated Undertakings 9,248,965 9,248,965 9,248,965 9,248,965
Long Term Loan From Sponsors 5 104,070,157 104,070,157 112,156,613 112,156,613
218,675,256 218,675,256 226,287,986 226,287,986
Surplus on Revaluation of Assets held for sales 165,318,214 165,318,214 165,318,214 165,318,214
Contingencies & Commitments 6 - - - -
242,449,093 240,921,569 255,188,420 256,338,320
The annexed notes form an integral part of this condensed interim financial information.
31 March, 2017
AUDITED
30 June, 2016
UN-AUDITED
Chief Executive Director
NAZIR COTTON MILLS LTD.PROFIT AND LOSS ACCOUNT
FOR THE QUARTER ENDED MARCH 31, 2017
Jan - Mar Jan - Mar Jul - Mar Jul - Mar
2017 2016 2017 2016
Rupees Rupees Rupees Rupees
Sales - Net - - - -
Cost of Sales - - - -
Gross (Loss) / Profit -
-
-
-
Operating Expenses
Administrative 2,692,883
805,991
5,449,806
2,378,851
Selling and Distribution -
-
-
-
2,692,883
805,991
5,449,806
2,378,851
Operating Loss (2,692,883)
(805,991)
(5,449,806) (2,378,851)
Capital Gain 74,152,455
74,152,455
Other Income 254,606
2,221
327,296
2,651
Financial and other Charges (1,318)
(835)
(4,087)
(1,758)
(LOSS) / BEFORE TAXATION (2,439,595) 73,347,850 (5,126,597) 71,774,497
Taxation - - - -
(LOSS) / AFTER TAXATION (2,439,595) 73,347,850 (5,126,597) 71,774,497
Basic earning / (loss) per share (0.11) 3.19 (0.22) 3.12
Accumulated upto For the Quarter
STATEMENT OF CHANGES IN FINANCIAL POSITION
(CASH FLOW STATEMENT)
FOR THE PERIOD ENDED MARCH 31, 2017 (Un-Audited)
Chief Executive Director
NAZIR COTTON MILLS LTD.
Mar 31, 2017 Mar 31, 2016
Rupees Rupees
Cash Flow from Operating Activities
Profit / (Loss) before taxation (5,126,597) 71,774,497
Adjustment for:
Depreciation 42,233 48,996
Fixed Assets 1,847,545
Financial Charges 4,087
1,758
46,320
1,898,299
Operating Profit before working capital changes (5,080,277)
73,672,796
Adjustments for working capital changes:
(Increase) / Decrease in Current Assets
Stores and Spares -
-
Stock in trade -
-
Trade Debts -
-
Advances, deposits and other receivables 19,015,596
(19,010,241)
19,015,596
(19,010,241)
(Decrease) / Increase In Current Liabilities
Short term finances - (15,975,000) Creditors, Accruals and other Liabilities 473,726
(92,728)
473,726
(16,067,728)
Cash Generated from Operations 14,409,045
38,594,827
Income Tax paid -
-
Financial charges paid (4,087)
(1,758)
Net Cash in flow/(out flow) from operating activities 14,404,958
38,593,069
Cash Flow from Financing Activities
Long Term Laon From Banking Companies -
-
Deffered Sponsor's Loan 205,000
-
Loan From Associated Companies (8,291,456) (32,607,550)
Net Cash (out flow) from investing activities (8,086,456) (32,607,550)
Net (out flow) / in flow of cash 6,318,502 5,985,519
Cash and cash equivalents at beginning of the year 4,429,326 153,256
Cash and cash equivalents at end of the period 10,747,828 6,138,775
NAZIR COTTON MILLS LTD.
Chief Executive Director
STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED MARCH 31, 2017
BA
LA
NC
E A
S A
T J
UN
E 3
0, 2
015
230,
000,
000
434,
000
1,24
5,72
545
,630
,000
(526
,115
,930
)
(248
,806
,205
)
Tota
l co
mp
reh
ensi
ve lo
ss
(Los
s) fo
r si
x m
onth
s en
ded
Dec
embe
r 31
, 201
5-
-
-
(1,5
73,3
53)
(1,5
73,3
53)
Oth
er c
ompr
ehen
sive
loss
-
-
(306
,640
)
-
-
(306
,640
.00)
-
(3
06,6
40)
(1
,573
,353
)(1
,879
,993
)
BA
LA
NC
E A
S A
T D
EC
EM
BE
R 3
1, 2
015
230,
000,
000
434,
000
939,
085
45,6
30,0
00(5
27,6
89,2
83)
(250
,686
,198
)
Pro
fit/(
Loss
) fo
r th
e ha
lf ye
ar e
nded
Jun
e 30
, 201
6-
-
(26
8,31
0)
115,
686,
628
115,
418,
318
BA
LA
NC
E A
S A
T J
UN
E 3
0, 2
016
230,
000,
000
434,
000
670,
775
45,6
30,0
00(4
12,0
02,6
55)
(135
,267
,880
)
(Los
s) fo
r 9
mon
ths
ende
d M
arch
31,
201
7-
-
(2,4
19,7
90)
-
(5,1
26,5
97)
(7,5
46,3
87)
Loss
as
on 3
1 M
arch
201
7 on
rem
easu
rem
ent o
f inv
estm
ent
BA
LA
NC
E A
S A
T M
arch
31,
201
723
0,00
0,00
043
4,00
0(1
,749
,015
)45
,630
,000
(417
,129
,252
)(1
42,8
14,2
67)
The
ann
exed
not
es fo
rm a
n in
tegr
al p
art o
f thi
s co
nden
sed
inte
rim fi
nanc
ial i
nfor
mat
ion.
Tota
l
----
----
----
----
----
----
----
----
----
---
Ru
pee
s --
----
----
----
----
----
----
----
----
----
-
Cap
ital
res
erve
R
even
ue
rese
rve
Issu
ed,
sub
scri
bed
&
pai
d u
p c
apit
al
Un
-rea
lized
(def
icit
) o
n r
e-
mea
sure
men
t o
f av
aila
ble
Acc
um
ula
ted
(lo
ss)
SELECTED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
FOR THE PERIOD ENDED MARCH 31, 2017
(UN-AUDITED)
NAZIR COTTON MILLS LTD.
1. THE COMPANY AND ITS OPERATIONS
1.1 Nazir Cotton Mills Limited is a Public Limited Company incorporated in Pakistan under the Companies Act, 1913 (Now Companies Ordinance, 1984) and its shares are quoted on Karachi Stock Exchange of Pakistan. The Company is engaged in manufacturing and sale of Yarn of all types. The registered office of the Company is situated at 61-K, Gulberg III, Lahore. The manufacturing unit is located at 8-KM, Faisalabad, Aslamabad, Kharianwala, Sheikhupura.
1.2 Going concern assumption
The Company has incurred after tax loss of Rs.24.395 million resulting in accumulated losses of Rs.417.129 million as at March 31, 2017 and as of that date its current liabilities exceeded its current assets by Rs.190.738 million and its total liabilities exceeded its total assets by Rs. 141.544 million. Further during the period operational activities remained suspended due to unfavourbale business conditions and electricity crises. These factors raise doubts about the Company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in the normal course of business. However, any adjustments relating to the recoverability of recorded assets and settlement of recorded liabilities have not been incorporated in these accounts. The Board of Directors have unanimously approved to re-start the commercial operation of the Company in the foreseeable future when the textile market conditions turn favourable and is also under negotiation with lenders for financial support at favourable terms.
In veiw of the financial reporting requirements of Code of Corporate Governance, this condensed interim financial information has been prepared on the basis of estimated realizable/settlement values of assets and liabilites respectively in addition to historical cost convention. All assets and liabilities in this condensed interim financial information has been presented in the order of liquidity.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies and methods of computation adopted for the preparation of this condensed interim financial information are the same as applied in the preparation of preceding audited annual published financial statements of the Company for the year ended June, 30 2016.
2.1 Basis of preparation
2.1.1 Statement of compliance
This condensed interim financial information is un-audited but subject to limited scope review by the statutory auditors of the company and is being submitted to shareholders as required by Section 245 of the Companies Ordinance, 1984. This condensed interim financial information of the company for the quarter ended on 31 March 2017 has been prepared in accordance with the requirements of international accounting standard 34 ''interim financial reporting'' and provision of directives issued under the companies ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the companies ordinance, 1984 have been followed.
This condensed interim financial information does not include all the information and disclosures required for full financial statements, and should be read in conjunction with the company's audited annual financial Statements for the year ended June 30, 2016.
2.1.2 Accounting convention
Keeping in view the fact that the company may not be able to continue as going concern, this condensed interim financial information is prepared on the bases of realisable/(sattlement) values of assets and liabilities respectively in addition to the historical cost convention. In realizable / (settlement) values basis, assets are carried at amount of cash and cash equivalents that could currently be obtained by selling the assets in an orderly disposal. Liabilities are carried at their settlement values, that is the undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business. Realizable / (settlement) values of assets and liabilities respectively as disclosed as in the condensed interim balance sheet are based on the management's best estimate.
2.1.3 Critical accounting estimates and judgments
The preparation of this condensed interim financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also require management to exercise its judgments in the process of applying the company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
During the preparation of this condensed interim financial information, the significant judgments made by the management in applying the company's policies and the key sources of the estimation and uncertainty were the same as those that applied in the preceding audited annual published financial statements of the company for the year ended 30 June 2016.
NAZIR COTTON MILLS LTD.Mar 31, 2017 June 30, 2016
(Un-audited) (Audited)
Rupees Rupees3. PROPERTY, PLANT & EQUIPMENT
Owned assets 3.1 385,152 427,385
Leased assets - -
385,152 427,385
3.1 Opening written down value 427,385 492,713
Additions during the period / year (at cost) - -
Depreciation charge for the period / year (42,233) (65,328)
Closing written down value 385,152 427,385
4. RESERVES & DEFICIT
Accumulated Losses (417,129,252) (412,002,655)
Revenue Reserve 45,630,000 45,630,000
(371,499,252) (366,372,655)
5. LONG TERM LOANS
Loans from banking institutions - Secured 5.1 - -
Deferred Sponsors' Loan - Unsecured 5.2 102,380,856 102,175,856
Loans from Related parties - Unsecured 5.3 1,689,301 9,980,757
104,070,157 112,156,613
5.1 Loans from banking institutions - Secured
Habib Bank Limited 5.1.1 13,258,000 13,258,000
Samba Bank Limited (Formerly Crescent Commercial Bank Ltd) 5.1.2 - 40,141,598
Islamic Investment Bank Limited 5.1.3 71,464,211 71,464,211
National Bank of Pakistan 7,466,581 7,466,581
92,188,792 132,330,390
Less: Current portion (92,188,792) (132,330,390)
- -
5.1.1 State Bank of Pakistan committee for resolution of cases vide their meeting held on 29 December, 2004 has settled the outstanding liability of the Company which had resulted in reduction in the liability of the Company. The liability of HBL was settled at Rs. 10.754 million without any further mark up. Down payment of 10% of the settled liability, Rs.1.076 million, was paid by the company in May 2005. Balance amount of Rs.9.678 million is payable in 12 quarterly installments of Rs.0.806 million each, commencing from the date of settlement agreement which is under process. This have been stated at their fair value at balance sheet date. In case of default in payment of settlement installment the above arrangement would be cancelled and the Bank would be entitled to recover entire outstanding liability.
The loan is secured against equitable mortgage charge on all the entire present and future fixed assets, hypothecation charge on all the present and future current assets and personal guarantees of all the directors of the company.
The Company has not been providing any markup on this loan. The Company is of the view as the matter is subjudice before the courts, no markup is leviable / payable.
5.1.2 This loan was created by payment of mark-up, exchange risk fee, letter of credit and letter of guarantee commissions on machinery suppliers' credit obtained (on a guarantee established by Doha Bank Limited) from Toyota Tsusho (Hong Kong) Co. Limited.
The Company has been entered with in an an out of court agreement with M/S Samba Bank Limited to settle the loan. The bank has sold the land situated at chunian wich was in the lien of Bank. The bank loan has been cleared out of the sasles proceeds of the loan as per agreement and the balnce will be paid to the Company.
5.1.3 The bank entered into a restructuring memorandum with the Company on December 31, 1998. The prime covenants of the restructuring agreement are as follows:
- The loan shall be repayable in sixteen quarterly installments w.e.f. April 1, 1999.- Mark-up @ 20% per annum shall be charged.- Accrued mark-up will be frozen and kept in a separate account.
The new mark-up on diminishing principal would also be kept in same account and repayment of this mark-up shall start from April 1, 2003 subject to the entire repayment of the loan account # 01.
This loan and mark-up account are secured by:
- Personal guarantee of directors except nominee director. - Mortgage of fixed assets to the tune of Rs.20 million. - Lien on shares of Sajjad Textile Mills Limited.
NAZIR COTTON MILLS LTD.
Chief Executive Director
The liquidator of Islamic Investment Bank limited has been appointed, the BOD is of the opinion that the bank is shareholder in the profits / losses of the Company and no markup is payable.
5.2 This represents unsecured and interest free loan obtained from sponsors of the Company to meet the Company's B.M.R. plans and liquidity problem. These are payable on ease of the company's liquidity problems. There is no fixed tenure for repayment of these liabilities. In the absence of the availability of a defined repayment schedule, the fair value of these loans is not determinable.
5.3 This represents unsecured and interest free loan obtained from Group Companies. These are payable on ease of the Company liquidity problems. There is no fixed tenure for repayment of these liabilities. In the absence of the availability of a defined repayment schedule, the fair value of these loans is not determinable.
6. CONTINGENCIES & COMMITMENTS
There is no change in the status of contingencies and commitments from the preceding annual published financial statements of the Company for the year ended June 30, 2016.
7. TRANSACTION WITH ASSOCIATED COMPANIES
There is no transaction with associated companies during the period.
8. CORRESPONDING FIGURES
In order to comply with the requirements of International Accounting Standard 34 -''Interim Financial Reporting'', the condensed interim balance sheet and condensed interim statement of changes in equity have been compared with the balances of annual audited financial statements of preceding financial year, where as, the condensed interim profit and loss account, condensed interim statement of profit or loss, and other comprehensive income, and condensed interim cash flow statement have been compared with the balances of comparable period of immediately preceding financial year.
Corresponding figures have been re-arranged, wherever necessary, for the purpose of comparison, however, no significant re-arrangements have been made.
9. FINANCIAL RISK MANAGEMENT
The companies financial risk management objectives and policies are consistent with those disclosed in the preceding audited annual published financial statements of the company as at and for the year ended June 30, 2016.
10. DATE OF AUTHORIZATION
This condensed interim financial information has been approved by the Board of Directors of the Company and authorized for issue on 27th April 2017
11. GENERAL
Figures have been rounded off to the nearest Rupee unless otherwise stated.
61
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