n r u a l repo a n t t h 0 5 1 bilalbilalfibres.com/annual30062011.pdfmanufacturers & exporters...

Manufacturers & Exporters of“CHAMPION” and “CAPTAIN” Brand Yarn

BILALFIBRES LIMITED

MOODY

INTERNATIONALCERTIFICATIONISO 9001: 2000

APPROVED

PNAC

CERTIFICATE NO. 9910765

U K A S Q UA L I T Y

M A N A G EM EN T

R eg i s t r a t i on N um be er014

R EL PA OU RN TN 2h At 0 15 12

ANNUAL REPORT 2011BILAL FIBRES LIMITED BILAL FIBRES LIMITED

ANNUAL REPORT 2 0 1 1

12

DIRECTORS' REPORT 5

VISION AND MISSION STATEMENT 4

NOTICE OF MEETING 3

COMPANY INFORMATION 2

CONTENTS

13

14

15

17

18

43

STATEMENT OF COMPLIANCE 8

10REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCEWITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE

11AUDITORS' REPORT TO THE MEMBERS

KEY OPERATING AND FINANCIAL DATA FOR LAST SIX YEARS

STATEMENT OF FINANCIAL POSITION

INCOME STATEMENT

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

PATTERN OF SHAREHOLDING

16

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF CASH FLOW


2

COMPANY INFORMATION

Mr. Naeem Omer

Directors

Mr. Abdul Sattar

Mr. Anwar Abbas

Mr. Muhammad Sarwar

Mr. Muhammad Zubair

Mr. Muhammad Asghar

Mr. Amjad Ali

Audit committee

Chairman:

Member: Mr. Anwar Abbas

Member: Mr. Muhammad Zubair

Secretary Mr. Rizwan Aslam

Auditors M/s Mushtaq and Company

Chartered Accountants

406-407 Commerce Centre,

Hasrat Mohani Road, Karachi.

Bankers The Bank of Punjab

NIB Bank Limited

Silk Bank Limited

Meezan Bank Limited

Head office/ 112-C, Block E/1, Ghalib Road,

Registered office Gulberg III, Lahore.

Telephone: 0423-5717701-6

Fax No. 0423-5717707

Email: [email protected]

Mills 38th KM, Shiekhupura Road,

Tehsil Jaranwala, District Faisalabad.

Telephone: 041-4689075, 4689076

Fax No. 042-4689279



Share Registrar M/s Corplink (Pvt.) Ltd.

Wings Arcade, 1-K, Commercial,

Model Town, Lahore.

Phone: 0423-591-6714, 35916719

Fax: 0423-5869037

Legal Advisor Syed Waqar Hussain Naqvi

2nd Floor, Nawa-e-Waqt Building,

4 Shahrah-e-Fatima Jinnah Road,

Lahore. Tel: 042-36360624-5

Mr. Naeem Omer

Mr. Amjad Ali

Web site: www.bilalfibres.com

Chairman / Chief Executive Mr. Naeem Omer

-


3

NOTICE OF ANNUAL GENERAL MEETINNG

Notice is hereby given to all members of BILAL FIBRES LIMITED that the 25th ANNUAL th

GENERAL MEETING of the Company will be held on Thursday 27 of October 2011 at 9:30

A.M at the Company's registered office, situated at 112-C, Block E/1 Ghalib Road, Gulberg III,

Lahore to transact the following business:

th1) To confirm the Minutes of last Annual General Meeting of the Company held on 28 of

October 2010.

2) To receive, consider and adopt the Annual Audited Accounts of the Company for the thyear ended 30 June 2011 together with the Directors' and Auditors' reports thereon.

3) To appoint auditors and fix their remuneration for the next year ending on June 30,

2012.

4) To transact any other business with the permission of the chair.

By order of the Board

Lahore. (Rizwan Aslam)thDated: 6 October 2011 Company Secretary

NOTES:

th1) The share transfer books of the company will remain closed from 20 October 2011 to

th27 October 2011 (both days inclusive).

2)

a. A member entitled to attend and vote at the Annual General Meeting is entitled

to appoint a proxy. Proxies in order to be effective must be received at the

registered office of the company not less than 48 hours before the time for

holding the meeting. A proxy must be a member of the company.

b. For identification, CDC Account holders who wish to attend the Annual General

Meeting are requested to please bring with them original/attested copy of their

National Identity Card along with the participants I.D number and their account

number in Central Depository Company of Pakistan to facilitate identification at

Annual General Meeting. In case of proxy an attested copy proxy's Identity card,

Accounts & participants I.D numbers be enclosed. In case of corporate entity,

the BOD, resolution/ Power of attorney with specimen signature of the nominee

shall be produced at the time of the meeting (unless it has been provided earlier).

c. Shareholders are requested to notify any change in their addresses, if any,

immediately.


4

CORPORATE VISION / MISSION STATEMENT

VISION

MISSION

To be a distinctive yarn seller with international presence delivering best qualityyarn through innovative techniques and effective resource management bymaintaining high ethical and professional standards.

To be a customer oriented company having wide & diversified customer basewith a team of professionals working together to add value to all the stakeholdersand contributing to society to help build a strong and progressive Pakistan.

To accomplish excellent financial results which can benefit all the stakeholders

To fulfill obligations toward the society, being a good corporate citizen.

and employees of the company.including members


5

DIRECTORS' REPORT

Dear Shareholders

thOn behalf of the Board of Directors the under signed takes pleasure to present before you the 25 Annual Report for the financial year ended June 30, 2011 along with Auditors' Report there on.

Financial and Operating PerformanceDuring the financial year under review, the Company's sales have reached the milestone of Rs.1,930.499 million as compared to Rs.1,309.870 million of the corresponding year. The Company has earned profit before taxation for Rs.23.625 million in the current period as compared to loss before tax of Rs.14.445 Million in the previous period. The Net Sales registered an increase of 47.38% over the previous year but gross profit margin decreased from 8.68% to 7.30% as compared to last year due to application NRV method which reduced the Gross Profit by Rs.50.257 million. The loss for the current year is Rs.17.960 million as compared to last year loss for Rs.9.393 million, there are two reasons for increase in loss i.e. current raw material stock valuation on NRV effect adversely and cost Rs.50.257 million and deferred tax of Rs.21.501 million.

The financial results are summarized hereunder: -

Sales 1930.499 - 1309.870 -Gross Profit 140.924 7.30 113.695 8.68

Finance Cost 73.295 3.80 62.358 4.76Net pre-tax profit/ (loss) 23.625 1.22 (14.445) (1.10)Net (Loss) / profit (17.960) (0.93) (9.393) (0.72)Earning per share (Rs.) (1.27) - (0.67) -

Operating PerformanceThe factory remained operational throughout the year and worked on 3 shifts basis, except closed during the gas/electricity shutdown due to non availability of gas and electricity simultaneously. The total yarn produced 6.726 Million Kgs (2010 - 6.701 million kgs). The 20's converted production worked out to 12.050 Million Kgs (2010 - 12.536 million kgs).

The textile industry is facing un-controllable challenges such as availability of energy and its rising cost, scarce availability of borrowing and high cost, volatile yarn prices and its availability due to this many spinning mills has closed their businesses. The Company can not make profit in the current year due to non-cooperative behavior of financial institutions which have created hurdles and made difficult for the company to come out from its struggling position.

Presentation of Financial Statements The financial statements, prepared by the management of the company, fairly present its state of affairs, the result of its operations, cash flows and changes in equity.

Books of AccountsThe company has maintained proper books of accounts.

YEAR 2011 2010

Rs. in %age Rs. in %age Million to sales Million to sales


6

Accounting PoliciesAppropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgments.

International Accounting Standards (IAS)International accounting standards, as applicable in Pakistan, have been followed in preparation of financial statements.

Accounting Yearst th

The accounting year of the company is from 1 July to 30 June.

Audit CommitteeThe board of directors in compliance to the code of corporate governance has established an audit committee and the following non-executives directors are its member.

Mr. Amjad Ali ChairmanMr. Anwar Abbas MemberMr. Muhammad Zubair Member

Dividendth

Due to losses incurred by the company, directors do not recommend any dividend for the year ended 30 June 2011.

Related PartiesThe Board of Directors has approved the policy for transaction/contract between Company and its related parties on an arms' length basis and relevant rates are to be determiner as per the “comparable Un Controlled price method”.

AuditorsThe present Auditors M/s Mushtaq & Co., Chartered Accountants, being due for retirement has offered themselves for reappointment for the next year ending June 30, 2012.

AcknowledgmentThe Directors would like to express their profound appreciation for continued /devoted services and hard work rendered by the company's executives, staff and workers. The Directors are also thankful and wish to place on record their deep gratitude to the bankers of our company.

Corporate & Financial Reporting Frame WorkIn compliance to new listing regulations of stock exchanges & as required under the Companies Ordinance 1984, your directors are pleased to state as under: -

a) The system of internal control is sound in design and has been effectively implemented and monitored.

b) Board is satisfied with the Company's ability to continue as a going concern.c) There has been no material departure from the best practices of corporate governance, as detailed

in the listing regulations of the Stock Exchanges.d) Significant deviations from last year operating results of the Company and reasons thereof have

been explained.e) There are no statutory payments on account of taxes, duties, levies and charges those are

outstanding as on June 30, 2011 except for those disclosed in the financial statements.

For and on behalf of the Board of Directors

(Naeem Omer)Chief Executive


7

f) There are no significant plans for corporate restructuring, business expansions and discontinuation of operations except for improvement in the normal business activities to increase the business.

g) Key operating and financial data for the last six years in summarized form is included in this annual report.

h) Statement showing “Pattern of shareholding” as on 30-06-2011 is also enclosed herewith.

Directors' MeetingsDuring the year 13 meetings of the Board of Directors were held. Attendance by each director is as follows:

Name of Director Number of Meetings attendedMr. Naeem Omer 13Mr. Anwar Abbas 06Mr. Abdul Sattar 13Mr. Muhammad Zubair 13Mr. Muhammad Asghar 13Mr. Amjad Ali 13Mr. Hafeez Ullah 13

LahoreDated: 06-10-2011


8

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE FOR THE YEAR ENDED JUNE 30, 2011.

This statement is being presented to comply with the Code of Corporate Governance contained in listing regulations of Karachi, Lahore and Islamabad Stock Exchanges for the purpose of establishing a framework of good governance, whereby a listed 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. However, at present the Board includes no independent non-executive directors and no directors representing minority shareholder.

2) The directors have confirmed that none of them is serving as a director in more than 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, or a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by the stock exchange.

4) Casual vacancy was filled by Mr. Anwar Abbas and Mr. Muhammad Sarwar in place of Mian Habib Ullah and Mr. Hafeez Ullah respectively in the Board during the period under report.

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.

7) All the powers of the Board have been duly exercised and the Board has taken decisions on material

transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors.

8) The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose and the board met at least once in every quarter. Written notices of Board meetings, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes were appropriately recorded and circulated.

9) The board arranged an orientation course for its directors during the year to apprise them of their duties and responsibilities. More courses will follow in future.

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, when new appointments are made.

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.


9(NAEEM OMER)

Chief Executive

N.I.C No.33100-0571105-5

For and on behalf of the Board of Directors

14) The Company has complied with all the corporate & financial reporting requirements of the code.

15) The Board has formed an audit committee. It comprises three members; none of them are executive directors including the Chairman of the committee.

16) The meetings of audit committee were held at least once every quarter prior to approval of interim and financial 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.

18) The statutory auditors of the Company have confirmed that that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan and they or any of the partners of the firm, their spouse 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 the Institute of Chartered Accountants of Pakistan.

19) The statutory Auditors or the persons associated with them have not been appointed to provide other services expect in accordance with the listing regulations and the 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.

Dated: 06-10-2011

Lahore


10Karachi:

Dated: 06-10-2011

MUSHTAQ & COMPANYChartered AccountantsEngagement Partner:Shahabuddin A. Siddiqui F.C.A

REVIEW REPORT TO THE MEMBERSOn the Statement of Compliance with Best Practices of the 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 Bilal Fibres Limited to comply with the Listing Regulation No. 35 (previously Regulation No. 37)

of the Karachi Stock Exchange (Guarantee) Limited and Listing Regulations No. 35 of Lahore Stock Exchange (Guarantee)

Limited, 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 the 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

system 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.

Further, Sub- Regulation (xiii a) of Listing Regulation No. 35 (previously Regulation No. 37) notified by The Karachi Stock

Exchange (Guarantee) Limited vide circular KSE/N-269 dated 19 January 2009 requires the Company to place before the

Board of Directors for their consideration and approval related party transactions distinguishing between transactions carried

out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length

price recording proper justification for using such alternate pricing mechanism. Further, all such transactions are also required

to be separately placed before the audit committee. We are only required and have ensured compliance of requirement to the

extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit

committee. We have not carried out any procedures to determine whether the related party transactions were under taken at

arm's length price.

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 respect, with the best practices contained in the Code of

Corporate Governance as applicable to the company for the year ended June 30, 2011.

MUSHTAQ & CO.CHARTERED ACCOUNTANTS407, Commerce Centre, Hasrat Mohani Road, Karachi. Tel: 32638521-4 Fax: 32639843

Branch Office: 20-B, Block-G, Gulberg-III, Lahore. Tel: 35884926 Fax: 35843360

Email Address: [email protected]


11

MUSHTAQ & COMPANYChartered AccountantsEngagement Partner:Shahabuddin A. Siddiqui F.C.A

AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed Balance Sheet of Bilal Fibres Limited as at June 30, 2011 and the related profit and loss account,

statement of comprehensive income, cash flow statement, and 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 purpose 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 the 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 verifications, we report that;

(a) in our opinion, proper books of accounts 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 accounts 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 given to us, the Balance Sheet,

profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity

together with the notes forming part thereof conform with approved 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 and fair view of the state of the company's affairs as at June 30, 2011 and of the loss, comprehensive loss, its

cash flows and changes in equity for the year then ended; and

(d) in our opinion no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980).

Karachi:

Dated: 06-10-2011

MUSHTAQ & CO.CHARTERED ACCOUNTANTS407, Commerce Centre, Hasrat Mohani Road, Karachi. Tel: 32638521-4 Fax: 32639843

Branch Office: 20-B, Block-G, Gulberg-III, Lahore. Tel: 35884926 Fax: 35843360

Email Address: [email protected]


12

KEY OPERATING AND FINANCIAL DATA FOR LAST SIX YEARS

PARTICULARS

ASSETS EMPLOYED

Property, plant and equipment 879.203

740.645

721.687

727.389

546.134

554.381

Long term deposits 3.594

3.374

3.513

2.890

4.244

1.288

Current assets 287.997

263.264

234.693

287.931

226.072

183.450

Total assets employed 1,170.794

1,007.283

959.893

1,018.210

776.450

739.119

FINANCED BY

Shareholders' equity (101.669)

(92.725)

(88.930)

0.928

9.835

38.959

Surplus on revaluation of fixed assets 237.230

158.464

164.062

194.156

93.705

98.846

Loan from directors/sponsors 52.500

38.500

38.500

38.500

38.500

38.500

188.061

104.239

113.632

233.584

142.040

176.305

Deferred Income 29.139

33.996

-

-

-

-

Long term liabilities 490.866

525.717

450.782

347.401

234.751

63.486

Deferred tax liability 76.259

15.799

27.400

-

46.445

60.811

Other deferred liabilities 8.996

10.140

7.652

7.335

7.198

6.430

85.255

25.939

35.052

7.335

53.643

67.241

Current Liabilities 377.473

317.392

360.427

429.890

346.016

432.087

Toal funds invested 1,170.794

1,007.283

959.893

1,018.210

776.450

739.119

PROFIT & LOSS

Turnover (net) 1,930.499

1,309.870

945.592

905.213

861.864

759.236

Gross profit 140.924

113.695

10.840

39.275

29.653

46.894

Operating profit 96.921

47.912

(25.385)

(3.481)

2.425

56.124

Finance cost 73.295

62.357

66.582

57.389

46.390

39.699

Profit/(Loss) before taxation 23.625

(14.445)

(91.968)

(60.870)

(43.966)

16.425

(Loss)/profit after taxation (17.960)

(9.393)

(95.629)

(24.359)

(33.912)

10.124

Earnings per share (Rs.) (1.27)

(0.67)

(6.78)

(1.73)

(2.41)

0.72

Number of spindle installed 29,016

29,016

29,016

29,016

29,016

29,016

Number of spindle worked 29,016

29,016

29,016

29,016

29,016

29,016

Number of shifts per day 3 3 3 3 3 3

Actual production converted

into 20's count (Kgs in million) 12.050 12.536 11.974 12.365 12.683 9.942

2011 2010 2009 2008 2007

Year Ended 30th June

2006


13

BALANCE SHEET

AS AT JUNE 30, 2011

CHIEF EXECUTIVE DIRECTOR

2011 2010

Note Rupees Rupees

NON - CURRENT ASSETS

Property, plant and equipment 5 879,202,564 740,645,419

Long term deposits 6 3,593,820 3,373,820

882,796,384 744,019,239CURRENT ASSETS

Stores, spare parts and loose tools 7 11,342,016

7,716,336

Stock in trade 8 146,656,267

140,134,766

Trade debts 9 33,376,010

38,556,415

Loans and advances 10 23,389,437

17,894,711

Trade deposits and short term prepayments 11 5,717,390

3,817,014

Other receivables 12 509,094

518,919

Tax refunds due from Government 13 34,927,345

37,446,384

Cash and bank balances 14 32,079,658

17,179,282

287,997,217

263,263,827

1,170,793,601

1,007,283,066

SHARE CAPITAL AND RESERVES

15,000,000 (2010: 15,000,000) ordinary shares of Rs. 10 each 150,000,000 150,000,000

Issued, subscribed and paid up capital

15 141,000,000 141,000,000 Accumulated loss (242,669,207)

(233,725,284)

(101,669,207)

(92,725,284)

SURPLUS ON REVALUATION OF PROPERTY,

PLANT AND EQUIPMENT - net of tax 16 237,229,714

158,463,840

DEFERRED INCOME 17 29,139,140

33,995,664

NON - CURRENT LIABILITIES

Long term financing from banking companies 18 391,615,283

427,482,562

Long term financing from directors and associates 19 52,500,000 38,500,000

Liabilities against assets subject to finance lease 20 99,250,872 94,670,097

Long term morabaha 21 - 3,564,583

Deferred liabilities 22 85,254,911 25,939,263

628,621,066 590,156,505

Authorized

14,100,000 (2010: 14,100,000) ordinary shares of Rs. 10 each fully

paid in cash

CURRENT LIABILITIES

Trade and other payables 23 55,975,754

36,900,063

Accrued interest / mark up 24 26,623,635

13,376,723

Short term borrowings 25 126,648,854

142,603,768

Current portion of:

long term financing from banking companies 18 140,726,206

91,515,004

liabilities against assets subject to finance lease 20 3,850,000 1,829,000 Long term morabaha 21 3,564,583 5,768,749

Provision for taxation 20,083,856

25,399,034

377,472,888 317,392,341 Contingencies and commitments 26

1,170,793,601 1,007,283,066

The annexed notes form an integral part of these financial statements.


14CHIEF EXECUTIVE DIRECTOR

INCOME STATEMENTFOR THE YEAR ENDED JUNE 30, 2011

2011 2010

Note Rupees Rupees

Sales 27 1,930,498,585

1,309,870,016

Cost of sales 28 (1,789,574,888)

(1,196,174,545)

Gross profit 140,923,697

113,695,471

Other operating income 29 7,550,372 6,212,905

Distribution cost 30 (25,067,746) (14,558,102)

Administrative expenses 31 (25,213,954) (26,972,001)

Other operating expenses 32 (1,271,851) (30,465,958)

Finance cost 33 (73,295,359)

(62,357,638)

Profit / (loss) before taxation 23,625,159

(14,445,323)

Provision for taxation 34 (41,585,308)

5,051,917

Loss for the year (17,960,149)

(9,393,406)

Loss per share - basic and diluted 35 (1.27) (0.67)




STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED JUNE 30, 2011

2011 2010

Note Rupees Rupees

loss for the year (17,960,149) (9,393,406)

Other comprehensive income / (loss) for the year - -

Total comprehensive loss for the year (17,960,149)

(9,393,406)



16

STATEMENT OF CASH FLOW FOR THE YEAR ENDED JUNE 30, 2011


2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES Note Rupees Rupees

Profit / (loss) before taxation 23,625,159 (14,445,323)

Adjustments for:

Depreciation 37,360,204 33,340,734

Provision for staff retirement benefits - gratuity 4,694,573 5,738,756

Loss on disposal of property, plant and equipment 28,422 491,853

Gain on disposal of property, plant and equipment (1,345,227) (367,666)

Finance cost 73,295,359

62,357,638

Exchange loss on translation of supplier credit -

29,974,105

Amortization of deferred income (4,856,524)

(4,856,524)

Operating cash flows before working capital changes 132,801,966 112,233,573

(Increase) / decrease in current assets

Stores, spare parts and loose tools (3,625,680)

2,107,493

Stock in trade (6,521,501)

(107,959)

Trade debts 5,180,405

(2,989,947)

Loans and advances (5,494,726)

(7,599,090)

Trade deposits and short term prepayments (1,900,376)

(85,407)

Other receivables 9,825

(9,825)

Tax refunds due from Government (1,546,022)

(325,091)

Decrease in trade and other payables 19,075,691

(14,675,625)

5,177,616 (23,685,451)

Cash generated from operations 137,979,582

88,548,122

Payments for :

Finance cost (31,986,399)

(21,529,116)

Taxation (21,333,973)

(4,304,677)

Staff retirement benefits - gratuity (5,839,200)

(3,249,900)

Net cash generated from operating activities 78,820,010

59,464,429

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (53,142,622)

(15,923,581)

Proceeds from disposal of property, plant and equipment 5,283,000

2,352,600

Long term deposits (220,000)

139,050

Net cash used in investing activities (48,079,622) (13,431,931)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long term financing from banking companies -

22,314,683

Repayment of:

Long term financing to banking companies (12,781,098)

(19,014,029)

Long term financing from directors and associates 14,000,000

-

Liabilities against assets subject to finance lease (1,104,000) (1,814,364)

Short term borrowings (15,954,914) (29,964,532)

Due to directors and associates - (2,297,705)

Net cash used in financing activities (15,840,012) (30,775,947)

Net increase in cash and cash equivalents 14,900,376 15,256,551

Cash and cash equivalents at beginning of the year 17,179,282 1,922,731

Cash and cash equivalents at end of the year 32,079,658 17,179,282




STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED JUNE 30, 2011

Balance as at July 01, 2009 141,000,000

(229,930,241)

(88,930,241)

Surplus realized on disposal of property,

plant and equipment - net of deferred tax -

357,143

357,143

Incremental depreciation on revalued

assets for the year - net of deferred tax -

5,241,220

5,241,220

Loss for the year - (9,393,406) (9,393,406)

Balance as at June 30, 2010 141,000,000 (233,725,284) (92,725,284)

Surplus realized on disposal of property,

plant and equipment - net of deferred tax -

169,735

169,735

Incremental depreciation on revalued

assets for the year - net of deferred tax -

8,846,491

8,846,491

Loss for the year -

(17,960,149)

(17,960,149)

Balance as at June 30, 2011 141,000,000

(242,669,207)

(101,669,207)


---------------------------- Rupees --------------------------

Issued,

subscribed and

paid up capital

Accumulated loss Total


18

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30, 2011

1 LEGAL STATUS AND NATURE OF BUSINESS

1.1

1.2

2 BASIS OF PREPARATION

2.1 Statement of compliance

2.2 Functional and presentation currency

2.3

2.3.1

¤

¤

¤

¤

IAS 1 (Amendment), 'Presentation of Financial Statements' . The amendment is part of the IASB's

annual improvements project published in April 2009. The amendment provides clarification that

the potential settlement of a liability by the issue of equity is not relevant to its classification as

current or non-current. By amending the definition of current liability, the amendment permits a

liability to be classified as non-current (provided that the entity has an unconditional right to defer

settlement by transfer of cash or other assets for at least 12 months after the accounting period)

notwithstandingthe fact that the entity could be required by the counterparty to settle in shares at

any time. The company will apply IAS 1(amendment) from January 1, 2010. It is not expected to

have a material impact on the company's financial statements.

IAS 17 (Amendment). 'Leases' is effective from annual periods beginningon or after January 1, 2010.

The IASB deleted guidance stating that a lease of land with an indefinite economic life normally is

classified as an operating lease, unless at the end of the lease term title is expected to pass to the

lessee. The amendment clarify that when a lease includes both the land and building elements, an

entity should determine the classification of each element based on paragraphs 7-13 of IAS 17,

taking account of the fact that land normally has an indefiniteeconomic life. The amendment is not

relevant to the company's operations.

IAS 32 (Amendment), 'Financial Instruments: Presentation- Classificationof Rights Issues is effective

for annual periods beginning on or after January 1, 2010. The IASB amended IAS 32 to allow rights,

options or warrants to acquire a fixed number of entity's own equity instruments for a fixed amount

of any currency to be classified as equity instruments provided the entity offers right, options or

warrants pro rata to all of its existing owners of the same class of its own non-derivative equity

instruments. These amendments are unlikely to have an implication on the company's financial

statements.

IAS 36 (Amendment), 'Impairment of Assets' (effective for annual periods beginning on or after

January 1, 2010). The amendments clarify that the largest unit to which goodwill should be

allocated is the operating segment level as defined in IFRS 8 before applying the aggregationcriteria

of IFRS 8. The amendment apply prospectively. The amendment is not relevant to company's

operations.

These financial statements are presented in Pak Rupees, which is the company's functional and presentation

currency and figures are rounded to the nearest rupee.

Standards, interpretations and amendments to published approved accounting standards

Standards, interpretations and amendments to published approved accounting standards that

are effective in the current year

Following are the amendments that are applicable for accounting periods beginning on or after

January 1, 2010:

These financial statements have been prepared in accordance with approved accounting standards as

applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting

Standards (IFRS) issued by the International Accounting Standard Board as are notified under Companies

Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case

requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail.

The company is limited by shares, incorporated in Pakistan on April 13, 1987 and is quoted on stock exchanges

at Karachi, Lahore and Islamabad. The principal business of the company is manufactureand sale of yarn. The

registered office of the company is situated at 112-C, E/1, Ghalib Road, Gulberg III, Lahore.

The manufacturingunit is located at 38 Kilometer Sheikhupura Road, Tehsil Jaranwala, District Faisalabad in

the province of Punjab.

¤

¤

¤

¤

¤

¤

IAS 27 (amendment), ‘Consolidated and separate financial statements’. The amendment clarifies

that the consequential amendments from IAS 27 made to IAS 21 The Effect of Changes in foreign

exchange Rates, IAS 28 Investments in associates and IAS 31 Interests in Joint Ventures apply

prospectively for annual periods beginning on or after 1 July 2009 or earlier when IAS 27 is applied

earlier.

IFRS 2 (Amendment),"Share-based Payment - Group Cash-settledShare-based Payment Transactions

is effective for annual periods beginning on or after January 01, 2010. The IASB amended IFRS 2 to

require an entity receiving goods or services (receiving entity) in either an equity settled or a cash-

settled share-based payment transaction to account for the transaction in its separate or individual

financial statements. This principal even applies if another group entity or shareholder settles the

transaction (settling entity) and the receiving entity has no obligation to settle the payment.

Retrospective application is subject to the transitional requirements in IFRS 2.

IFRS 3 (amendments), ‘Business combinations’. These amendments clarify that the amendments to

IFRS 7 Financial instruments: Disclosures, IAS 32 Financial Instruments: Presentation and IAS 39

Financial Instruments: Recognition and Measurement, that eliminate the exemption for contingent

consideration, do not apply to contingent consideration that arose from business combinations

whose acquisition dates precede the application of IFRS 3 (as revised in 2008). Moreover, these

amendments limit the scope of the measurement choices that only the components of NCI that are

the present ownership interests which entitle their holders to a proportionate share of the entity’s

net assets, in the event of liquidation, shall be measured either at fair value, or at the present

ownership instruments’ proportionate share of the acquiree’s identifiable net assets. These

amendments require an entity (in a business combination) to account for the replacement of the

acquiree’s share-based payment transactions (whether by obligation or voluntarily), i.e., split

between consideration and post-combination expenses. However, if the entity replaces the

acquiree’s awards that expire as a consequence of the business combination, these are recognized

as post-combinationexpenses. These amendments do not have a material impact on the company’s

financial statements.

¤ IAS 39 (Amendment),'Cash Flow Hedge Accounting'. This amendment provides clarification when to

recognize gains or losses on hedging instruments as a reclassification adjustments in a cash flow

hedge of forecast transaction that results subsequently in the recognition of a financial instrument.

The amendmentclarifies that gains or losses should be reclassified from equity to income statement

in the period in which the hedged forecast cash flow affects income statement. The company will

apply IAS 39 (Amendment) from January 1, 2010. It is not expected to have any significant impact

on the company's financial statements.

IFRS 8, ‘Operating segments’. The amendment provides that the requirement for disclosing a

measure of segment assets is only required when the Chief Operating Decision Maker (CODM)

reviews that information. It does not have a material impact on the company’s financial statements.

IFRS 5 (Amendment), 'Measurement of Non-CurrentAssets (or disposal group) Classified as Held-for-

Sale'. The amendment is part of the IASB's annual improvements project published in April 2009.

The amendment provides clarification that IFRS 5 specifies the disclosures required in respect of non-

current asset (or disposal group) classified as held-for-sale or discontinued operations. It also

clarifies that the general requirement of IAS 1 still apply, particularly paragraph 15 (to achieve a

fair presentation)and paragraph 125 (sources of estimationuncertainty) of IAS 1. The companywill

apply IFRS 5 (Amendment) from January 1, 2010. It is not expected to have a material impact on

the company's financial statements.

IFRIC 19 (amendment), ‘Extinguishing financial liabilities with equity instruments’. IFRIC 19 clarifies

that equity instruments issued to a creditor to extinguish a financial liability are consideration paid

in accordance with a paragraph 41 of IAS 39 Financial instruments: Recognition and Measurement.

The equity instruments issued are measured at their fair value, unless this cannot be reliably

measure, in which case they are measured at the fair value of the liability extinguished.Any gain or

loss is recognized immediately in profit or loss. This interpretationdoes not have a material impact

on the company’s financial statements.


19


20

2.3.2

¤

¤

¤

¤

¤

¤

¤

Standards, interpretations and amendments to existing standards that are applicable to the

company but are not yet effective:

IFRIC - 14 IAS 19- The Limit on a Defined Benefit Assets, Minimum Funding Requirements and their

Interaction (effective for annual periods beginning on or after January 1, 2011). These amendments

remove unintended consequences arising from the treatment of prepayments where there is a

minimum funding requirement. These amendmentsresult in prepaymentsof contributionsin certain

circumstances being recognized as an asset rather than an expense. These amendments are unlikely

to have an impact on the company's financial statements.

IFRIC 13, 'Customer Loyalty Programmes' (effective for annual periods beginning on or after January

1, 2011). The amendment clarify that the fair value of the award credits takes into account the

amount of discounts or incentives that otherwise would be offered to customers that have not

earned the award credits.

IAS 24. 'Related Party Disclosures (revised 2009)' (effective for annual periods beginning on or after

January 1, 2011). The revised IAS amends the definition of a related party and modifies certain

related party disclosure requirements for government-related entities. These amendments are

unlikely to have an impact on the company's financial statements.

The following amendments and interpretations to existing standards have been published and are

mandatory for the company’s accounting periods beginning on or after their respective effective

dates:

IFRS 7, 'Financial Instruments: Disclosures' (effective for annual periods beginning on or after

January 1, 2011). The amendments add an explicit statement that qualitative disclosures should be

made in the contact of the quantitative disclosures to better enable users to evaluate an entity's

exposure to risks arising from financial statements. In addition, the IASB amended and removed

existing disclosure requirements. These amendments would result in increase in disclosures in the

financial statements of the company.

IFRS-9 'Financial Instruments' (effective for annual periods beginning on or after January 1, 2013).

IFRS 9 is the first standard issued as a part of a wider project to replace IAS 39. IFRS 9 retains but

simplifies the mixed measurement model and establishes two primary classificationsdepends on the

entity's business model and the contractual cash flow characteristics of the financial asset. The

guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply.

IAS 34 (Amendment), ‘Interim financial reporting’, is effective for annual period beginning on or

after January 1,2011 . The amendment provides guidance to illustrate how to apply disclosure

principles in IAS 34 and add disclosure requirements around the circumstances likely to affect fair

values of financial instruments and their classification, transfers of financial instruments between

different levels of the fair value hierarchy, changes in classification of financial assets and changes

in contingent liabilities and assets. This amendment is not expected to have a material impact on

the company’s financial statements.

IAS 1 (amendment), ‘Presentation of financial statements’,is effective for annual periods beginning

on or after January 1, 2011. The amendment clarifies that an entity may choose to present the

required analysis of items of other comprehensive income either in the statement of changes in

equity or in the notes to the financial statements. The amendment is not expected to have a

material impact on the company’s financial statements.


21

2.3.3

¤

Standards, interpretations and amendments to published standards that are effective but not

relevant to the company

The other new standards, amendments and interpretations that are mandatory for accounting

periods beginning on or after July 1, 2010 are considered not to be relevant or to have any

significant impact on the company’s financial reporting and operations.

3 BASIS OF MEASUREMENT

3.1 Provision for taxation

3.2 Staff retirement benefits - gratuity

3.3 Financial instruments

3.4 Property, plant and equipment

3.5

3.5.1

3.5.2

3.5.3

4 SIGNIFICANT ACCOUNTING POLICIES

4.1 Property, plant and equipment - owned

Recognition

The company takes into account the current income tax law and decisions taken by the appellateauthorities.

Instances where the company's' view differs from the view taken by the income tax department at the

assessment stage and where the company considers that its view on items of material nature is in accordance

with law, the amounts are shown as contingent liabilities.

Certain actuarial assumptionshave been adopted as disclosed in relevant note to the financial statements for

valuation of present value of defined benefit obligation. Any changes in these assumptions in future year

might affect unrecognized gains and losses in those years.

Other areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates

are significant to the financial statements are as follows.

Estimation of net realizable value

Computation of deferred taxation

Disclosure of contingencies

The fair value of financial instruments that are not traded in active market is determined by using valuation

techniques based on assumptions that are dependent on market conditions existing at balance sheet date.

The significant accounting policies adopted in the preparation of theses financial statements are set out below.

These policies have been consistently applied to all the years presented unless otherwise stated.

Property, plant and equipment except for freehold land are stated at cost / revaluation less

accumulated depreciationand any identified impairment loss, if any. Freehold land is stated at cost

/ revaluation less any identified impairment loss, if any. Cost of tangible assets consists of historical

cost pertaining to erection / construction period and other directly attributable cost of bringing the

asset to working condition.

These financial statements have been prepared under the historical cost convention except for certain items of

property, plant and equipment at revalued amount, revaluation of certain financial instruments at fair value and

recognition of certain staff retirement benefits at present value.

The company reviews recoverable amount, useful life , residual value and possible impairment on an annual

basis. Any changes, if material in the estimates in future years might affect the carrying amounts of the

respective items of property, plant and equipment with a corresponding affect on the depreciation charge

and impairment.

The company's significant accounting policies are stated in note 4. Not all of these significant policies require the

management to make difficult, subjective or complex judgments or estimates. The following is intended to provide

an understanding of the policies the management considers critical because of their complexity, judgment of

estimation involved in their applicationand their impact on these financial statements. Estimatesand judgments are

continually evaluated and are based on historical experience, including expectations of future events that are

believed to be reasonable under the circumstances.These judgments involve assumptions or estimates in respect of

future events and the actual results may differ from these estimates. The areas involving higher degree of

judgments or complexityor areas where assumptionsand estimates are significant to the financial statements are as

follows.


22

Depreciation

Derecognition

4.2 Accounting for leases and assets subject to finance lease

4.2.1 Finance lease

Recognition

Depreciation

Surplus arising on revaluation of an item of property, plant and equipment is credited to surplus on

revaluation of property, plant and equipment, except to the extent that it reverses deficit on

revaluation of the same assets previously recognized in profit or loss, in which case the surplus is

credited to profit or loss to the extent of deficit previously charged to income. Deficit on

revaluation of an item of property, plant and equipment is charged to profit or loss to the extent

that it exceeds the balance, if any held in surplus on revaluation of property, plant and equipment

relating to previous revaluation of that item. On subsequent sale or retirement of revalued item of

property, plant and equipment the attributable surplus remaining in the surplus on revaluation of

property, plant and equipment is transferred directly to unappropriated profit. The surplus on

revaluation of property, plant and equipment to the extent of incremental depreciation charged on

the related assets is transferred to unappropriated profit.

Depreciation on all items of property, plant and equipment except for freehold land is charged to

income applying the reducing balance method so as to write off historical cost / revalued amount of

an asset over its estimated useful life at the rates as disclosed in note 5. The assets' residual values

and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is

significant.

An item of property, plant and equipment is derecognized on disposal or when no future economic

benefits are expected from its use or disposal. Any gain or loss arising on Derecognition of the asset

(calculated as the difference between the net disposal proceeds and carrying amount of the assets)

is included in the income statement in the year the asset is derecognized.

Depreciation on additions is charged from the month in which the asset is acquired or capitalized

while no depreciation is charged in the month of disposal.

Assets acquired under a finance lease are depreciated in the same manner and at the same rates

used for similar owned assets, so as to depreciate these assets over their estimated useful lives in

view of certainty of ownership of these assets at the end of lease term. Depreciation of the leased

assets is charged to income.

Subsequent cost are included in the asset's carrying amount or recognized as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will

flow to the company and the cost of the item can be measured reliably. All other repair and

maintenance costs are charged to income during the period in which they are incurred.

Leases where the company has substantially all the risks and rewards of ownership are classified as

finance lease. Assets subject to finance lease are initially recognized at the commencement of the

lease term at the lower of present value of minimum lease payments under the lease agreements

and the fair value of the leased assets, each determined at the inception of the lease. Subsequently

these assets are stated at cost less accumulated depreciation and any identified impairment loss.

The related rental obligations, net off finance cost, are included in liabilities against assets subject

to finance lease. The liabilities are classified as current and non current depending upon the timing

of payments.

Financial chargesLease payments are allocated between the liability and finance cost so as to achieve a constant rate

on the balance outstanding. The finance cost is charged to income over the lease term.

Deferred income

Income arising from sale and lease back transaction, if any, which results in finance lease, is

deferred and amortized equally over the lease period.

4.2.2 Operating lease

Leases where significant portion of the risk and rewards of ownership are retained by the lessor are

classified as operating leases. Payments made under operating leases are charged to the income on

a straight-line basis over the period of lease.


23

4.3 Capital work in progress

4.4

4.5 Stores, spare parts and loose tools

4.6 Stock in trade

4.6.1

In hand

In transit

4.6.2

4.6.3

4.7 Trade debts and other receivables

4.8 Cash and cash equivalents

Cash in hand, cash at bank and short term deposits, which are held to maturity, are carried at cost. For the

purpose of cash flow statements, cash and cash equivalent comprise cash in hand, with banks on current &

saving accounts and short term borrowings.

Finished goods and work in process

These are stated at cost which represents the fair value of consideration given.

These are valued at lower of cost and net realizable value except waste which is valued at net realizable

value. Cost is determined as follows.

Raw material cost plus appropriate manufacturing

overheads

Net realizable value

Raw material

Weighted average cost

Cost comprising invoice value plus other charges incurred

thereon

Trade debts originated by the companyare recognizedand carried at original invoice value less any allowance

for uncollectible amounts. An estimated provision for doubtful debts is made when there is objective

evidence that collection of the full amount is no longer probable. The amount of provision is charged to

income. Bad debts are written off as incurred. Other receivables are stated at amortized cost / at nominal

amount which is the fair value of the consideration to be received in future. Known impaired receivables are

written off, while receivables considered doubtful are provided for.

Net realizable value signifies the estimated selling prices in the ordinary course of business less estimated

costs of completion and the estimated costs necessary to make the sales.

Waste

These are valued at lower of cost and net realizable value. Cost is determined by moving average method.

Items considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value

plus other charges incurred thereon. Stores held for capital expenditure are stated at cost less any

accumulated impairment in value, if any.

Capital work in progress is stated at cost less any identified impairment loss. Transfers are made to relevant

fixed assets category as and when assets are available for intended use.

Long term deposits

4.9 Staff retirement benefits

Defined benefit plan

Net cumulative unrecognized actuarial gains / losses relating to previous reporting periods in excess of the

higher of 10 percent of present value of defined benefit obligation or 10 percent of the fair value of plan

assets are recognized as income or expense over the estimated remaining working lives of the employees.

Provision is made annually to cover the obligation on the basis of actuarial valuation and charged to income

currently. The most recent actuarial valuation was carried on June 30, 2011 using the Projected Unit Credit

Method.

The company operates an unfunded gratuity scheme covering for all its permanent employees who have

attained the minimum qualifying period for entitlement to the gratuity.


24

4.10 Taxation

4.10.1 Current

4.10.2 Deferred

4.11 Trade and other payables

4.12 Provisions

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the profit and

loss account, except to the extent that it relates to items recognized directly in equity or below equity, in

which case it is recognized in equity or below equity respectively.

Deferred tax is provided, using the balance sheet liability method, on all temporary differences at

the balance sheet date between the tax base of assets and liabilities and their carrying amounts for

financial reporting purposes.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to

the extent that it is no longer probable that sufficient taxable profits will be available to allow all or

part of the deferred tax asset to be utilized.

Deferred tax asset and liability is measured at the tax rates that are expected to apply to the period

when the asset is realized or the liability is settled, based on the rates (and tax laws) that have

been enacted or substantively enacted at the balance sheet date.

Liabilities for trade and other payable are carried at cost which is fair value of the considerationto be paid in

the future for goods and services received, whether or not billed to the company.

A provision is recognized in the balance sheet when the company has a legal or constructive obligation as a

result of past event, and it is probable that an out flow of resource embodying economic benefits will be

required to settle the obligation and a reliable estimate can be made of the amount of obligation. However,

provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

Provision for current taxation is based on taxability of certain income streams of the companyunder

presumptive/ final tax regime at the applicable tax rates and remaining income streams chargeable

at current rate of taxation under the normal tax regime after taking into account tax credit and tax

rebates available, if any. The charge for current tax includes any adjustment to past years

liabilities.

Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets

are recognized for all deductible temporary differences and carry forward of unused tax losses and

tax credits to the extent that it is probable that future taxable profits will be available against

which deferred tax asset can be utilized, except where the deferred tax asset relating to the

deductible temporary difference arises from the initial recognition of an asset or liability that, at

the time of transaction, affects neither the accounting nor taxable profits.

4.13 Borrowings and borrowing costs

Borrowing costs are recognized as an expense in the period in which these are incurred except to the extent

of the borrowing costs that are directly attributable to the acquisition, construction or production of a

qualifying asset. Such borrowing costs are capitalized as part of the cost of that asset up to the date of its

commissioning. Investment income earned on the temporary investment of specific borrowings pending their

expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Borrowings are recorded at the proceeds received. Finance costs are accounted for on an accrual basis and

are included in current liabilities to the extent of the amount remaining unpaid.

4.14 Revenue recognition

Revenue is recognized on dispatch of goods or on performance of services. Return on deposits is recognized

on a time proportion basis by reference to the principal outstanding and the applicable rate of return.


25

4.15 Foreign currencies

4.16 Financial instruments

4.17 Offsetting of financial assets and liabilities

4.18 Impairment

Financial assets and financial liabilities are recognized when the company becomes a party to the contractual

provisions of the instrument and derecognized when the company loses control of contractual rights that

comprise the financialassets and in case of financial liabilities when the obligation specified in the contract is

discharged, cancelled or expired. Any gain or loss on derecognition of financial assets and financial liabilities

is included in the profit and loss account for the year.

A financial asset and financial liability is offset and the net amount is reported in the balance sheet if the

company has a legal enforceable right to set off the recognized amounts and intends either to settle on net

basis or to realize the assets and the liabilities simultaneously.

At each balance sheet date, the company reviews the carrying amounts of its assets to determine whether

there is any indication that those assets have suffered an impairment loss. If any such indication exists, the

recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any.

Recoverable amount is the greater of net selling price and value in use.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of

the asset is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised

estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying

amount that would have been determined, had no impairment loss been recognized for the asset in prior

years. A reversal of an impairment loss is recognized as income immediately.

All financial assets and financial liabilities are initially measured at cost, which is the fair value of the

consideration given and received respectively. These financial assets and liabilities are subsequently

measured at fair value, amortized cost or cost, as the case may be. The particular recognition methods

adopted are disclosed in the individual policy statements associated with each item.

Monetary assets and liabilities in foreign currencies are translated into pak rupee at the rate of exchange

prevailing at the balance sheet date, except those covered by forward contracts, which are stated in

contracted rates. Foreign currency translations are translated into pak rupee at the rates prevailing at the

date of transaction except for those covered by forward contracts, which are translated at contracted rates.

No monetary items are translated into pak rupees on the date of transaction or on the date when fair values

are determined. Exchange differences are included in income currently.

4.19 Related party transactions

4.20 Government grants

4.21 Research and development cost

4.22 Dividend and other appropriations

The dividend distributionto the shareholders is recognized as a liability in the period in which it is approved

by the shareholders. Appropriation of profits are reflected in the statements of changes in equity in the

period in which such appropriations are made.

All transactions with related parties are carried out by the company at arms' length price using the method

prescribed under the Companies Ordinance, 1984 with the exception of loan taken from related parties which

is interest / mark up free. Prices for these transactions are determined on the basis of comparable

uncontrolled price method, which sets the price by reference to comparable goods and services sold in an

economically comparable market to a buyer unrelated to the seller.

Government grants for meeting revenue expenses are set off from respective expenses in the year in which

they become receivable.

Research and development cost is charged to profit and loss account in the year in which it is incurred.


26

5 PROPERTY, PLANT AND EQUIPMENT

5.1 Operating assets

Owned assets

Freehold land

Building on freehold land

Plant and machinery

Factory equipment

Office & electric equipment

Furniture and fixture

Vehicles

Leased assets

Plant and machinery

Owned Assets

Freehold land


Plant and machinery

Factory equipment

Office & electric equipment

Furniture and fixture

Vehicles

Leased assets

Plant and machinery

Vehicles

(Adjustments) Surplus

89,922,500 - - - 15,430,000 105,352,500 - - - - -

190,000,030 2,655,200 - (25,383,775) 13,535,044 180,806,499 5% 21,151,498 8,752,440 (25,383,775) 4,520,163

- -

437,902,129 49,184,238 - (64,996,475) 95,026,766 513,513,839 5% 55,392,189 22,585,139 (64,996,475) 12,696,606

(3,602,819) (284,248)

112,250 - - - 112,250 10% 71,773 4,048 - 75,821

6,700,492 702,270 - - - 7,391,562 10% 3,635,307 323,898 - 3,951,283

(11,200) (7,922)

2,885,002 - -

-

-

2,885,002

10% 1,808,867

107,614

- 1,916,481

7,123,216 600,914 -

(3,428,628)

2,749,112

6,256,514

20% 3,151,814

1,026,503

(3,428,628) 605,934

(788,100) (143,754)

92,365,821 - -

-

-

92,365,821

5% 1,154,573

4,560,562

- 5,715,135

827,011,440 53,142,622 -

(93,808,878)

126,740,922

908,683,987

86,366,021

37,360,204

(93,808,878) 29,481,423

(4,402,119) (435,924)

(Adjustments) Surplus

89,922,500 - -

-

-

89,922,500

-

-

-

- -

189,622,820 377,210 -

-

-

190,000,030

5% 12,269,832

8,881,666

- 21,151,498

458,815,022 14,211,604 27,363,603

-

-

437,902,129

5% 37,808,407

21,789,780

4,768,468 55,392,189

(62,488,100) (8,974,466)

96,800 15,450 -

-

-

112,250

10% 67,848

3,925

- 71,773

6,167,631 532,861 -

-

-

6,700,492

10% 3,333,964

301,343

- 3,635,307

2,885,002 - -

-

-

2,885,002

10% 1,689,296

119,571

- 1,808,867

5,876,260 786,456 4,691,000

-

-

7,123,216

20% 1,827,107

1,089,876

1,988,544 3,151,814

(4,230,500) (1,753,713)

27,363,603 92,365,821 (27,363,603)

-

-

92,365,821

5% 4,768,468

1,154,573

(4,768,468) 1,154,573

4,691,000 - (4,691,000)

-

-

-

20% 1,988,544

-

(1,988,544) -

785,440,638 108,289,402 -

-

-

827,011,440

63,753,466

33,340,734

- 86,366,021

(66,718,600) (10,728,179)

Accumulated

depreciation

as at June 30,

2011

Additions /

(deletions)

Annual

depreciation

rate %

2010

Transfers /

adjustments

Cost as at

June 30,

2010

Cost as at

July 01,

2009

Depreciation

charge /

(deletion)

for the year

2011

Transfers /

adjustments

Cost as at

July 01,

2010

Accumulated

depreciation

as at June 30,

2010

Rupees

Cost as at

June 30,

2011

Transfers

Accumulated

depreciation

as at July 01,

2009

Transfers

Rupees

Accumulated

depreciation

as at July 01,

2010

Additions /

(deletions)

Revaluation

Depreciation

charge /

(deletion)

for the year

Revaluation

Annual

depreciation

rate %

105,352,500

176,286,336

500,817,233

36,429

3,440,279

968,521

5,650,580

86,650,686

879,202,564

89,922,500

168,848,532

382,509,940

40,477

3,065,185

1,076,135

3,971,402

91,211,248

-

740,645,419

Book value

as at

June 30,

2011

Book value

as at

June 30,

2010

5.1.1 Depreciation for the period has been allocated as under.

5.1.2

5.1.3

Freehold land


Plant and machinery

Vehicles

Administrative expenses

Cost of sales

Had there been no revaluation, the carrying amount of the specific class of assets would have been as follows.

The Company had its freehold land, buildings on freehold land, plant and machinery and vehicles revalued. Revaluation of the assets was carried out by the independent valuers " M/S International Design

Group " on October 31, 2007 . Freehold land was revalued at market value and building on free hold land, machinery and vehicles are valued at depreciated replacement cost.

2011 2010

Rupees Rupees

28.1 35,902,189 31,505,588

31 1,458,015 1,835,146

37,360,204 33,340,734

Note

2011 2010

Rupees Rupees

30,070,354 30,070,354

82,327,896 91,984,411

348,142,799 355,063,454

3,133,349 3,650,592

463,674,398 480,768,811

Note


27

5.2 Disposal of property, plant and equipment

Outsiders

Vehicle Mr. Abdul Majeed Negotiation 338,100

99,176

238,924

300,000

Plant and machinery Muhammad Ramzan Negotiation 1,000,000

142,124

857,876

1,150,000

Plant and machinery FAG Textiles Negotiation 1,000,000

142,124

857,876

1,150,000

Plant and machinery Abbas corporation Negotiation 1,602,819

-

1,602,819

2,300,000

Vehicle Mr. Safdar Rasool Negotiation 400,000

20,000

380,000

355,000

Employees

Vehicle Mr. Amjad Ali Negotiation 50,000 24,578 25,422 22,000

Office & electric equip. Mr. Muhammad Tariq Negotiation 11,200

7,922

3,278

6,000

Total 4,402,119

435,924

3,966,195

5,283,000

2011 2010

Note Rupees Rupees

5.3 Gain on disposal of property, plant and equipment

Cost 4,402,119

66,718,598

Less : Accumulated depreciation (435,924)

(10,728,178)

3,966,195 55,990,420

Sale proceeds (5,283,000) (94,718,424)

Net gain on disposal of property, plant and equipment (1,316,805) (38,728,004)

Particulars Name of buyer Cost Accumulated

depreciation

Rupees

Written down

value Sale proceeds Mode of disposal


28

2011 2010

Note Rupees Rupees

6. Long term deposits

Utilities 3,368,720 3,368,720

Others 225,100 5,100

3,593,820 3,373,820

7. Stores, spare parts and loose tools

Stores 4,771,811 4,022,534

Spare parts 6,531,131

3,657,175

Loose tools 39,074

36,627

11,342,016

7,716,3368. Stock in trade

Raw material 122,803,718

92,958,824

Raw material in transit -

30,363,325

Work in process 16,271,827

10,246,737

Finished goods 6,700,142

6,193,893

Waste 880,580

371,987

146,656,267

140,134,766

8.1 It includes carrying value of pledged stock amounting to Rs. 116,658,904 (June 30, 2010: Rs. 132,613,818)

8.2

2011 2010

9. Trade debts Note Rupees Rupees

Considered good - secured

Foreign 6,296,850 -

Considered good - unsecured

Local 9.1 27,079,160

38,556,415

33,376,010 38,556,415

9.1

2011 2010

Note Rupees Rupees

10. Loans and advances

Considered good - unsecured

Advances

Executives 10.1

800,000

800,000

Employees 10.1.2 393,870

359,483

For services/expenses 54,439

196,308

Suppliers 22,141,128

16,538,920

23,389,437 17,894,711

800,000 -

- 800,000

This includes Rs. Nil (June 30, 2010 : 2,800,000) receivable from associated company Bilal Textiles (Private) Limited. As at June

30, 2011. Bilal Textiles (Private) Limited does not meet the criteria of associated company therefore balance due from Bilal

Textile (Private) Limited is not disclosed separately.

Raw material amounting to Rs. 166.581 million (June 30, 2010 : Rs. Nil), finished goods amounting to Rs. 13.096 million (June 30,

2010: Rs. Nil) stated at their net realizable value aggregating Rs. 122.803 million ( June 30, 2010 : Rs. Nil ) and Rs. 6.700 million

(June 30, 2010 : Rs. Nil) respectively. The amount charged to profit and loss in respect of stocks written down to their net

realizable value is Rs. 50.173 million (June 30, 2010 : Rs. Nil )

10.1 Executives

Opening 800,000 -

Disbursed during the year - 800,000

Repayment during the year - -

800,000 800,000

10.1.1

10.1.2 All the loans are granted to the employees, free of interest in accordance with their terms of employment.

The maximum aggregate amount due from executives at the end of any month during the year was Rs. 800,000 (June 30, 2010 :

Rs. 800,000).


29

2011 2010

11. Trade deposits and short term prepayments Rupees Rupees

Deposits

Leasing companies - 83,050

Bank guarantee margin 4,070,150 3,087,750

Prepayments 1,647,240 646,214

5,717,390 3,817,014

12. Other receivables

Considered good

Export rebate 509,094

509,094

Others -

9,825

509,094

518,919

13. Tax refunds due from Government

Advance income tax 25,217,697

29,282,758

Sales tax 9,709,648

8,163,626

34,927,345

37,446,384

13.1 Advance income tax

Opening 29,282,758

24,978,081

Deducted during the year 21,333,973

4,304,677

Adjusted against provision for taxation (25,399,034)

-

25,217,697

29,282,758

14. Cash and bank balances

Cash with banks

In current accounts 7,608,142

15,583,851

In business plus account 24,181,535

430,161

31,789,677 16,014,012Cash in hand 289,981 1,165,270

32,079,658

17,179,282

15. Issued, subscribed and paid up capital

15.1

15.2

The shareholders' are entitled to receive all distributions to them including dividend and other entitlements in the form of bonus

and right shares as and when declared by the company. All shares carry "one vote" per share without restriction.

There is no movement in share capital during the year.

2011 2010

16. Surplus on revaluation of property, plant and equipment - net of tax Note Rupees Rupees

Surplus on revaluation of property, plant

and equipment at the beginning of the year 211,562,446

220,175,312

Addition during the year 126,740,923 -

Transfer to unappropriated profit in respect of:

Disposal of property, plant and equipment 169,735

357,143

Incremental depreciation on revalued assets 8,846,491

5,241,220

Related deferred tax liability 4,854,891

3,014,503

13,871,117

8,612,866

Surplus on revaluation of property, plant

and equipment as at the end of year 324,432,252 211,562,446

Related deferred tax liabilities on

Revaluation at the beginning of the year 53,098,606 56,113,109

Related deferred tax liability on addition to surplus 38,958,823 -

Amount realized during the year

Incremental depreciation on revalued assets (4,763,495) (2,822,195)

Disposal of property, plant and equipment (91,396) (192,308)

87,202,538 53,098,606

237,229,714 158,463,840


30

2011 2010

17. Deferred income Note Rupees Rupees

Opening balance 33,995,664 -

Arised during the year - 38,852,188

Amortized during the year (4,856,524) (4,856,524)

29,139,140 33,995,664

17.1

2011 2010

18. Long term financing from banking companies Note Rupees Rupees

Secured

Under mark up arrangements

Demand finance

Demand finance - I 18.1

90,074,932 90,074,932

Demand finance - II 18.2

7,084,823 8,703,323

Demand finance - III 18.3

13,382,500 14,126,500

Demand finance - IV 18.4

174,170,823 174,170,823

Demand finance - IV (unserviceable) 18.5

62,820,000 64,653,000

Demand finance - VIII 18.6

38,244,937 40,369,937

Term finance

Term finance - I 18.7

18,639,284 18,639,284

Term finances - III 18.8

7,335,804 7,335,804

Term finance - IV 18.9

40,000,000 40,000,000

Car finance - I 18.10

- 115,849

Frozen mark up

Demand finance - I 18.11 35,359,332 35,359,332

Demand finance - II 18.12 499,000 575,000

Demand finance - III 18.13 283,091 327,091

Demand finance - IV 18.14 41,498,478 21,142,206

Demand finance - VIII 18.15 2,948,485 3,404,485

532,341,489 518,997,566

Less : Current portion from banking companies

Overdue installments 88,059,208 51,000,205

Installments due within one year 52,666,998 40,514,799

140,726,206 91,515,004

391,615,283

427,482,562

18.1

18.2

18.3

This represents excess of sale proceeds over carrying amount in sale and lease back transactions. This amount is being amortized

over the lease term in equal proportion.

The loan is obtained to finance imported polyester subsequentlyrestructured as Demand Finance. The loan is repayable in three

years monthly installments, commenced from March, 2009 and expired on October, 2011. The loan is subject to markup at the

rate of 3 months KIBOR ask rate plus 1 percent(June 30, 2010: 3 months KIBOR ask rate plus 1 percent) per annum payable

quarterly. The loan is secured against joint pari passu charge over land, building and machinery for Rs. 462.67 million(NIBbank's

share in charge is Rs. 206.67 million), specific / exclusive charge of Rs. 124.246 million on machinery and 3 gas generators,

second charge of Rs. 100.00 million over stocks and receivable and personal guarantee of the sponsoring directors of the

company.

The loan is obtained to finance fixed assets of the company. The loan is subject to mark up at the rate of 10 percent per annum

payable quarterly (June 30, 2010 : 10 percent per annum payable quarterly). The loan is repayable in thirty two quarterly

installments, commenced from March 31, 2010 and expired on December 31, 2017. The loan is secured against first registered

specific charge for Rs. 33.515 million over the textile machinery, first registered pari passu charge for Rs. 66.00 million over all

present ad future fixed assets (including land, building and machinery) of the company.

The loan is obtained to adjust the existing RF facility of the company. The loan is subject to mark up at the rate of 10 percent per

annum (June 30, 2010 : 10 percent per annum) payable quarterly . The loan is repayable in thirty two quarterly installments,

commenced from March 31, 2010 and expired on December 31, 2017. The loan is secured against first registered specific charge

for Rs. 33.515 million over the textile machinery, first registered pari passu charge for Rs. 66.00 million over all present ad future

fixed assets (including land, building and machinery) of the company.


31

18.4

18.5

18.6

18.7

18.8

18.11

18.12

18.13

18.14

Overdue markup is converted into demand finance facility amounted to Rs. 65.825 million. The loan is repayable in 34 quarterly

installments started from September 30, 2009 and ending on December 31, 2017. It is interest free loan. The loan is secured

against ranking charge on fixed assets of the company to cover markup for Rs. 65.825 million.

The loan was obtained to adjust the RF and FAPC facilities and it is rescheduled as term finance on January 27, 2009 with mark up

at the rate 3 months KIBOR (ask side) plus 1 percent (June 30, 2010 : 3 months KIBOR (ask side) plus 1 percent). The loan is

repayable in 15 monthly installmentscommencing from April 2012 and expired on June 2013. The loan is secured against joint pari

passu charge over land, building and machinery for Rs. 462.67 million(NIB bank's share in charge is Rs. 206.67 million), specific /

exclusive charge of Rs. 124.246 million on machinery and 3 gas generators, second charge of Rs. 100.00 million over stocks and

receivable and personal guarantee of the sponsoring directors of the company.

The loan was obtained to finance machinery / generated under SBP LTF - EOP and it is rescheduledas term finance on January 27,

2009 with mark up at the rate 3 months KIBOR (ask side) plus 1 percent from July 1, 2008 (June 30, 2010 : 3 months KIBOR (ask

side) plus 1 percent). The loan is repayable in 2 monthly installments commenced from February 2009 and expire on March 2009.

The loan is secured against joint pari passu charge over land, building and machinery for Rs. 462.67 million(NIB bank's share in

charge is Rs. 206.67 million), specific / exclusive charge of Rs. 124.246 million on machinery and 3 gas generators, second charge

of Rs. 100.00 million over stocks and receivable and personal guarantee of the sponsoring directors of the company.

The loan is obtained to finance imported polyester subsequently restructured as demand finance. The loan is repayable in 32

quarterly installments commenced from March 31, 2010 and expired on December 31, 2017. The loan is secured against registered

specific charge for Rs.33.515 million, registered pari passu charge of Rs.66 million on all present and future fixed assets of the

company and accepted drafts and TRs.

The loan was obtained to finance machinery / generated and it is rescheduled as term finance on January 27, 2009 with mark up

at the rate 3 months KIBOR (ask side) plus 1 percent from July 1, 2008 (June 30, 2010: 3 months KIBOR (ask side) plus 1 percent).

The loan is repayable in 7 monthly installments commencing from October 2011 and expire on April 2012. The loan is secured

against joint pari passu charge over land, building and machinery for Rs. 462.67 million(NIB bank's share in charge is Rs. 206.67

million), specific / exclusive charge of Rs. 124.246 million on machinery and 3 gas generators, second charge of Rs. 100.00 million

over stocks and receivable and personal guarantee of the sponsoring directors of the company.

18.9

18.10

The loan is rescheduled and merged in one Demand finance, previously disclosed as DF-IV amounted to Rs.25 million, DF-V

amounted to Rs. 70 million, DF-VI amounted to Rs.17 million DF-VII amounted to Rs. 65.208 million and lease finance facility

amounted Rs.6.925 million. The loan is subject to markup at the rate of 3 months average KIBOR of quarter (June 30, 2010 : 3

months average KIBOR ). The loan is repayable in 30 installments payable quarterly commenced from September 30, 2009 and

expired on December 31, 2017. The loan is secured against registeredjoint pari passu charge of Rs.190 million on the present and

future fixed assets(including land, building, plant and machinery) of the company valuing Rs.472 million (already registered with

SECP), additional second charge on a plot amounting to Rs. 40 million, ranking charge on fixed assets of the companyof RS. 29.933

million, ranking charge on fixed assets (including land, building and machinery) of the company of Rs. 54.660, exclusive

hypothecation charge over plant and machinery amounting to Rs. 50.350 million, floating charge over plant and machinery

amounting to Rs. 23.140. Exclusive hypothecation over plant and machinery amounting to Rs. 2.188 and personal guarantees of

sponsoring director.

It was repayable in 60 equal monthly installments commencedfrom September 05, 2005. It is rescheduledon January 27,2009 with

same repayment schedule expiring in August 2010. It is secured against hypothecation of vehicle, lien over registration book of

vehicle and post dated cheques. It is subject to markup at the rate of 14 percent per annum (June 30, 2010 : 14 percent per

annum).

Deferred mark up on demand finance I as disclosed above for Rs. 35.359 million (June 30, 2010: for Rs. 35.359 million) freezed and

converted into long term financing. Frozen markup is payable in 24 equal monthly installments after the repayment of principal

installments.

Deferred mark up on demand finance II as disclosed above for Rs.0.499 million (June 30, 2010 : for Rs. 0.575 million) freezed and

converted into long term financing. Frozen markup is payable in 28 equal quarterly installments of Rs. 0.019 million and 5

installments Rs. 0.020 million commenced from December 2009.

Deferred mark up on demand finance III as disclosed above of Rs.0.283 million (June 30, 2010 : for Rs. 0.327 million) freezed and

converted in to long term financing. Frozen markup is payable in 33 equal quarterly installments of Rs. 0.011 million commenced

from December 2009.

Deferred mark up on demand finance IV of Rs. 41.498 million (June 30, 2010: Rs. 21.142 million) freezed and converted in to long

term financing. During the year markup of Rs. 20.356 is deferred and freezed. Frozen markup is will be paid in lump sum on

December 31, 2017.

and

from

18.15 Deferred mark on demand finance VIII as disclosed above for Rs.2.948 million (June 30, 2010 : for Rs. 3.404) freezed

converted into long term financing. Frozen markup is payable in 33 quarterly installments of Rs. 0.114 million commenced

December 2009.


32

2011 2010

19. Long term financing from directors and associates Note Rupees Rupees

Unsecured

From directors and associates 19.1 52,500,000 38,500,000

52,500,000 38,500,000

19.1

20.

Later than five years

72,160,000

96,499,098

20.1

20.2

2011 2010

Note Rupees Rupees

Lease liability 90,661,821

91,765,821

Deferred markup transferred to memo account 12,439,051

4,733,277

103,100,872

96,499,098

20.3 Current maturity of the lease liabilities

Over due installments 725,000

-

Payable within one year 3,125,000

1,829,000

3,850,000

1,829,000

122,432,821

47,554,000

74,878,821

----------------------Rupees----------------------

19,791,277

Financial

charges for

future periods

Present value

of minimum

lease payments

Minimum lease

payments

Minimum lease

payments

23,309,000

3,126,000

43,100,277

Financial charges

for future periods

2011 2010

Present value of

minimum lease

payments

--------------------Rupees---------------------

37,865,000

Liabilities against assets subject to finance lease

These are unsecured, interest free and not repayable in next the twelve months. These loans are subordinated to the loans from

banking companies.

11,771,000

51,303,051

69,862,821

7,921,000

3,850,000 1,297,000

1,829,000

107,727,821

Up to one year

29,388,051 21,915,000

Later than one year but

not later than five years

103,100,872

168,659,098

170,801,872

67,701,000

The lease is obtained under sale and lease back transaction of plant and machinery. The total lease rentals due under the lease

agreements are payable in 33 quarterly installments commenced from December 31, 2009. The present value of minimum lease

payments has been discounted at interest rate implicit in the lease, which equates to an interest rate of 3 months average KIBOR

of the last day of quarter. The cost of repairs and insurance are borne by the lessee. The liability is secured by a lease agreement

lien on leased assets, trust receipts to be executed in bank's favor and 33 post dated cheques for complete adjustment of

principal. The company intend to exercise the option of purchasing the leased assets at residual value upon completion of lease

term.

Amount of lease liability includes an amount of Rs. 12.439 million (June 30, 2010 : Rs. 4.733 million ) deferred markup transferred

to memo account. The deferred markup is payable in 16 quarterly installments starting from March 31, 2014 and ending on

December 31, 2017. The breakup of the present value of minimum lease payment is given below.

21. Long term morabaha

From banking company - secured 21.1 3,564,583

9,333,332

Less : Current portion from banking companies

Overdue installments

3,564,583

778,332

Installments due within one year

-

4,990,417

3,564,583 5,768,749

- 3,564,583

21.1 The loan is obtained for the purchase of raw material, stocks, spares parts etc. The loan is subject to markup at KIBOR minus 5

percent subject to a floor of 6 percent per anum (June 30, 2010 : 3 months KIBOR ask rate plus 2 percent per annum payable

quarterly) payable monthly. The loan is payable in equal 22 monthly installments commenced from July 01, 2010 and ending on

April 01, 2012. The morabaha finance is secured by way of first exclusive charge along with equitable and registered mortgageof

Rs. 30.100 million and Rs. 0.100 respectively over land measuring 69 kanal and 3 marla located in tehsil Jaranwala, district

Faisalabd having value of Rs. 28.760 million against outstanding amount of Rs. 9.33 million.


33

2011 2010

Note Rupees Rupees

22. Deferred liabilities

Staff retirement benefits - gratuity 22.1 8,995,834 10,140,461

Deferred tax 22.2 76,259,077 15,798,802

85,254,911 25,939,263

22.1 Staff retirement benefits-gratuity

22.1.1 Movement in the liability

Opening liability 10,140,461 7,651,605

Expense recognized in profit and loss account 4,694,573 5,738,756

Paid during the year (5,839,200) (3,249,900)

Closing liability 8,995,834 10,140,461

22.1.2 Movement in present value of defined benefit obligation

Present value of defined benefit obligation 12,869,572

9,715,856

Current service cost 3,440,096

4,731,430

Interest cost 1,074,459

871,944

Actuarial loss 644,338

800,242

Benefits paid (5,839,200)

(3,249,900)

Present value of defined benefit obligation 12,189,265

12,869,572

22.1.3 Historical information

2011 2010

22.1.4 Liability recognized in the balance sheet Note Rupees Rupees

Present value of obligation 12,189,265 12,869,572

Unrecognized actuarial losses (3,193,431) (2,729,111)

8,995,834 10,140,461

Service cost 3,440,096 4,731,430

Interest cost 1,074,459 871,944

Actuarial loss recognized 644,338 135,382

5,158,893 5,738,756

22.1.6 General description

2011 2010

22.1.7 Principle actuarial assumptions Note Rupees Rupees

Discount factor used 14% 13%

Expected rate of salary increases 10% 10%

22.1.8 Expected gratuity expense for the year ended June 30, 2012

Expected gratuity expense for the year ending June 30, 2012 works out Rs. 5,366,290.

2011

(2,283,234)

22.1.5 Expense recognized in profit and loss

20092010

12,869,572

(436,465)

9,113,769

2007

The scheme provides for terminal benefits for all of its permanent employees who attain the minimum qualifying period.

Annual charges is made using the actuarial technique of Projected Unit Credit Method.

2008

(800,242)

9,715,856

747,490

9,783,870

Present value of defined benefit

obligation

Experience adjustments on plan

liabilities (644,338)

12,189,265


34

25. Short term borrowings

Secured

From banking companies

Cash finance 25.2 116,658,904

132,613,818

Running finance 25.3 9,989,950

9,989,950

126,648,854

142,603,768

25.1

25.2

25.3 These are secured against hypothecation of stock of cotton bales with a margin of 15 percent, second charge of Rs. 100 million

over stocks and receivables and personal guarantee of sponsoring directors. These are subject to mark up at the rate of 3 months

KIBOR plus 1 percent (2010 : 3 months KIBOR plus 1 percent). The effective markup rate is 14.09 percent. This facility has

expired.

These are subject to mark up ranging between 3 months KIBOR to 3 months KIBOR plus 2 percent(2010:3 months KIBOR plus 4.5

bps with a floor of 13 percent per annum. The effective markup rate is 14.25 percent.

The aggregate of credit limits available for short term borrowings from banking companies are Rs. 277.28 million (2010 : 370

million). These above facilities are expiring on various date by October 31, 2011 and are renewable on expiry.

These are secured against pledge of cotton bales at 10 percent margin, imported cotton at invoice value, polyester / yarn at 15

percent margin under lock and key of banks' approved macadam, securities as mentioned in note 18.4 above and personal

guarantees of sponsoring directors.

2011 2010

22.2 Deferred taxation Note Rupees Rupees

Opening balance 15,798,802 27,400,069

Provided during the year on surplus arised during the year 38,958,823 -

Provided / (reversed) during the year through profit and loss 21,501,452 (11,601,267)

76,259,077 15,798,802

This comprises the following:

Deferred tax liability on taxable temporary differences:

Surplus on revaluation of property, plant and equipment 87,202,538

53,098,606

Tax depreciation allowance 128,191,910

104,679,879

215,394,448

157,778,485Deferred tax asset on deductible temporary differences:

Finance lease (33,833,582)

(30,201,323)

Tax losses and tax credits (105,301,787)

(111,778,360)

(139,135,370)

(141,979,683)

76,259,078 15,798,802

2011 2010

23. Trade and other payables Note Rupees Rupees

Creditors 26,465,264

19,458,884

Accrued liabilities 21,496,493

16,645,611

Unclaimed dividend 235,838

235,838

Withholding tax payable 7,216,044

441,977

Others 562,115

117,753

55,975,754 36,900,063

24. Accrued interest / mark up

Interest / mark up on secured finances:

Long term financing from banking companies

11,837,746

437,077

Liabilities against assets subject to finance lease 1,367,000

897,000

Long term morabaha -

449,930

Short term borrowings 13,418,889

11,592,716

+26,623,635

13,376,723


35

26. Contingencies and commitments

Contingencies

26.1

2011 2010

Rupees Rupees

26.2

100,000

100,000

26.3

12,516,218

19,266,058

26.4 Bank guarantee issued in favor of Sui Northern Gas Pipelines Limited for supply of gas 18,082,000

16,170,000

26.5 Bank guarantee issued in favor of Collector of custom karachi 2,675,000

2,275,000

Commitments outstanding

There are no commitments as at June 30, 2011 (June 30, 2010 : Rs. Nil)

2011 2010

27. Sales - net Note Rupees Rupees

Yarn

Local 1,783,846,184

1,214,319,088

Export 27.1 124,715,910

77,658,162

1,908,562,094

1,291,977,250

Raw Material Sales 6,657,600

10,264,947

Waste 15,278,891 7,627,819

1,930,498,585 1,309,870,016

27.1 It includes exchange gain amounting to Rs. 0.449 million (June 30, 2010 : Rs.0.044 million).

28. Cost of sales

Cost of goods manufactured 28.1 1,790,589,730

1,197,252,308

Finished goods

Opening stock 6,565,880

5,488,117

Closing stock (7,580,722)

(6,565,880)

1,789,574,888

1,196,174,545

The NIB Bank Limited has filed suit C.O.S No. 85/2009 before Honorable Lahore High court, Lahore against the company for

recovery of Rupees. 297.403 million as outstandingdues against the banking facilities provided by the bank. The company has also

filed a suit C.O.S No. 99/2009 against the bank before the Honorable Lahore High court, Lahore. The outcome of the case is not

ascertainable as at June 30, 2011.

Indemnity bonds issued against exemption of sales tax and custom duty on import of

machinery and local procurement of raw material

Claims not acknowledged in view of pending appeals before appellate authorities / high

court

28.1 Cost of goods manufactured

Raw material consumed 28.1.1 1,485,740,809

925,843,542

Cost of raw material sold 28.1.1 7,028,052

10,358,240

Packing material consumed 22,438,322

18,303,427

Salaries, wages and benefits 93,538,105

85,769,260

Retirement benefits 3,583,535

4,310,905

Stores and spares consumed 13,248,552

11,612,214

Fuel and power 123,405,722 97,885,441

Repairs and maintenance 6,822,371

8,905,274

Insurance 2,299,354

1,493,763

Depreciation 5.1.1 35,902,189 31,505,588

Others 2,607,809 2,670,293

1,796,614,820 1,198,657,947Work in process

Opening stock 10,246,737 8,841,098

Closing stock (16,271,827) (10,246,737)

(6,025,090) (1,405,639)

1,790,589,730 1,197,252,308


36

2011 2010

28.1.1 Raw material consumed Rupees Rupees

Opening stock 92,958,824 105,698,931

Purchases 1,522,613,755 923,461,675

1,615,572,579 1,029,160,606

Cost of raw material sold (7,028,052) (10,358,240)

Closing stock (122,803,718)

(92,958,824)

1,485,740,809

925,843,542

29. Other operating income

From other than financial assets

Scrap sales 1,348,621

988,715

Gain on sale of property, plant and equipment 1,345,227

367,666

Amortization of deferred income 17 4,856,524

4,856,524

7,550,372

6,212,90530. Distribution cost

Ocean freight 2,771,508

1,219,818

Commission 12,877,893

6,176,955

Local freight 2,995,287

1,618,398

Staff salaries and benefits 3,059,603

2,644,450

Miscellaneous export expenses 1,348,377

1,317,534

Wharfage 186,409

210,980

Export development surcharge 290,033

201,500

Others 1,538,636

1,168,467

25,067,746 14,558,102

31. Administrative expenses

Directors' remuneration 1,800,000

1,800,000

Staff salaries and benefits 9,216,696

7,922,799

Staff retirement benefits - gratuity 1,111,038

1,427,851

Postage and telecommunication 693,727

686,306

Vehicles running and maintenance 585,643

573,085

Traveling and conveyance 1,537,382

853,654

Printing and stationery 358,913

395,956

Fee and subscriptions 296,054

194,755

Newspapers and periodicals 10,901

8,184

Advertisement 92,225

67,550

Insurance 172,480

204,675

Auditors' remuneration 31.1 550,000

545,000

Legal and professional 1,712,599

7,358,050

Rent, rates and taxes 278,257

50,856

Donations 31.2 447,550

115,000

Repairs and maintenance 266,805

169,908

Depreciation 5.1.1 1,458,015

1,835,146

Others 4,625,669 2,763,226

25,213,954 26,972,001

31.1 Auditors' remuneration

Audit fee 500,000 500,000

Half yearly 50,000 45,000

550,000 545,000

31.2 None of the directors or their spouses had any interest in the donee institutions.


37

2011 2010

32. Other operating expenses Note Rupees Rupees

Loss on disposal of property, plant and equipment 28,422 491,853

Exchange loss on translation of supplier's credit - 29,974,105

Workers profit participation fund 1,243,429 -

Workers welfare fund 32.1 - -

1,271,851

30,465,958

32.1

33. Finance cost

Interest / mark up on

Long term financing from banking companies 38,901,920

33,876,752

Liabilities against assets subject to finance lease 12,237,922

6,313,707

Long term morabaha 706,048

1,522,667

Short term borrowings 20,248,435

19,551,153

Bank charges and commission 33.1 1,201,034 1,093,359

73,295,359

62,357,638

33.1

34. Provision for taxation 2011 2010

Note Rupees Rupees

Current 20,083,856 6,549,350

Deferred 21,501,452

(11,601,267)

41,585,308

(5,051,917)

34.1 Relationship between tax expense and accounting profit

34.2

35. Loss per share - basic and diluted 2011 2010

Loss for the year (17,960,149) (9,393,406)

Weighted average number of ordinary shares 14,100,000 14,100,000

Loss per share - basic (1.27) (0.67)

There is no dilutive effect on basic loss per share of the company.

Honorable High Court in writ petition bearing number W.P. No. 8763/2011 has decided that the amendment made in the Workers' Welfare

Fund ordinance through Finance Act 2006 and 2008 is unconstitutional and unlawful. Therefore, no provision for workers welfare fund has

been made in the financial statements as there is taxable loss for the year.

Rupees

Rupees

Numbers

The relationship between tax expense and accounting profit has not been presented in these financial statements as the total

income of the company attracts minimum tax under section 113 of the Income Tax Ordinance, 2001. Income tax assessment has

been finalized up to June 30, 2010.

The assessment of the company will be finalized in respect of export proceeds under presumptive tax regime under section 169.

Other than export income, assessment will be finalized under the universal self assessment scheme of Income Tax Ordinance,

2001.

It includes exchange loss of Rs. Nil (2010 : Rs. Nil) realized on foreign currency loan and assets.

36 Financial instruments and related disclosures

The company has exposures to the following risks from its use of financial instruments.

36.1 Credit risk

36.2 Liquidity risk

36.3 Market risk

36.1 Credit risk

36.1.1 Exposure to credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual

obligations, and arises principally from the trade debts, loans and advances, trade deposits and short term prepayments and cash and

bank balances. Out of total financial assets of Rs. 73.417 million (June 30, 2010 : Rs. 62.650 million), financial assets which are subject to

credit risk aggregate to Rs. 41.337 million (June 30, 2010 : Rs. 45.470 million). The carrying amount of financial assets represents the

maximum credit exposure. The maximum exposure to credit risk at the reporting date is as follows.

The board of directors has overall responsibility for the establishment and oversight of company's risk management framework. The board is also

responsible for developing and monitoring the company's risk management policies.


38

2011 2010 Rupees Rupees

Long term deposits 3,593,820 3,373,820

Trade debts 33,376,010 38,556,415

Loans and advances 393,870 359,483

Trade deposits and short term prepayments 4,070,150 3,170,800

Other receivables -

9,825

Cash and bank balances 32,079,658

17,179,282

73,513,508

62,649,625

36.1.2


Domestic 27,079,160

38,556,415

Export 6,296,850

-

33,376,010

38,556,415

36.1.3 The maximum exposure to credit risk for trade debts at the balance sheet date by type of customer is as follows.


Yarn 32,653,628 38,475,106

Waste 722,382

81,309

33,376,010

38,556,41536.1.4 The aging of trade debtors at the balance sheet is as follows.

2011 2010

Not past due 4,447,000

2,587,000

Past due 0 - 90 days 26,129,010

33,169,415

Past due 91 days - 1 year -

-

More than one year 2,800,000

2,800,000

33,376,010

38,556,415

36.2 Liquidity risk

Gross debtors

Rupees

Based on the past experience, sales volume, consideration of financial position, past track records and recoveries and economic

conditions, the company believes that there is no need for provision of balance outstanding more than one year. Moreover this balance

due over more than one year is receivable from an associated company Bilal Textiles (Private) Limited.

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to

managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both

normal and stressed conditions, without incurring unacceptable losses or risking damages to the company's reputation. The following are

the contractual maturities of financial liabilities, including interest payments and excluding the impact of netting agreements.

The maximum exposure to credit risk for trade debts at the balance sheet date by geographical region is as follows.

Export debtor is situated in Sri Lanka.


39

Carrying

amount

Contractual

cash flows

Six months

or less

Six to twelve

months

Two to five

years

More than

five years

532,341,489

730,427,747

33,775,612

32,560,612

125,219,578

538,871,945

52,500,000

52,500,000

-

-

38,500,000

3,564,583

4,043,221

(1,957,805)

2,289,494

3,711,532

-

103,100,872

170,801,872

2,195,000

9,576,000

51,303,051

107,727,821

55,975,754

55,975,754

55,975,754

-

26,623,635

26,623,635

26,623,635

-

126,648,854

139,542,509

139,542,509

-

-

-

900,755,187

1,179,914,738

256,154,705

44,426,106

194,234,161

685,099,766

Carrying

amount

Contractual

cash flows

Six months

or less

Six to twelve

months

Two to five

years

More than

five years

518,997,566

730,427,747

33,775,612

32,560,612

125,219,578

538,871,945

38,500,000

38,500,000

-

-

-

38,500,000

9,333,332

9,811,970

3,810,944

2,289,494

3,711,532

-

96,499,097

156,958,000

2,195,000

4,163,000

43,527,000

107,073,000

36,900,063

36,900,063 36,900,063 -

13,376,723

13,376,723

13,376,723

-

142,603,768

157,092,915

157,092,915

-

-

-

856,210,549

1,143,067,418

247,151,257

39,013,106

172,458,110

684,444,945

36.2.1

36.3 Market risk

36.3.1 Currency risk

Exposure to currency risk

US Dollar Japanese Yen Euro Rupees

Trade debts 2011 73,347.12 - - 6,296,850

Trade debts 2010 - - - -

The company is exposed to currency risk on trade debts, borrowing and import of plant and machinery, raw material and stores that are

denominated in a currency other than the respective functional currency of the company, primarily in US Dollar, Japanese Yen and Euro.

The currencies in which these transactions primarily are denominated is US Dollar, Japanese Yen and Euro. The company's exposure to

foreign currency risk is as follows.

Accrued mark up and interest

Short term borrowings

The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark up rates effective as at

June 30. The rates of mark up have been disclosed in relevant notes to these financial statements.

Market risk is the risk that the value of the financial instrument may fluctuate as a result of changes in market interest rates or the

market price due to a change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply

and demand of securities, and liquidity in the market. The company is exposed to currency risk and interest rate risk only.

Long term loans from

directors

Long term murabaha

Finance lease

Trade and other payables

Financial liabilities

Long term financing

Trade and other payables

Accrued markup / interest

Short term borrowings

Non - derivative

Finance lease

Rupees

2010

2011

RupeesNon - derivative

Financial liabilities

Long term financing

Long term loans from

directors

Long term murabaha

Sensitivity analysis

5% strengtheningof Pak Rupee against the followingcurrencies at June 30, would have increased / (decreased) equity and profit and loss

by the amount shown below. The analysis assumes that all other variables, in particular interest rates, remain constant. 5% weakening of

Pak Rupee against the above currencies at periods ends would have had the equal but opposites effect on the above currencies to the

amount shown below, on the basis that all other variables remain constant.

The following significant exchange rates applied during the year.

Financial assets 2011 2010 2011 2010

US Dollar to Rupee 85.38 82.15 87.35 83.40

Financial liabilities 2011 2010 2011 2010

US Dollar to Rupee 82.35 83.10

Average rates Reporting date rates

Average rates Reporting date rates

14,000,000


40

36.3.2 Interest rate risk


Fixed rate instrumentsFinancial assets -

-

Financial liabilities 78,575,013

63,199,760

Variable rate instrumentsFinancial assets 24,181,535

430,161

Financial liabilities 687,080,785

704,234,004

Fair value sensitivity analysis for fixed rate instruments

Cash flow sensitivity analysis for variable rate instruments

720,943

(720,943)

-

-

612,643

(612,643)

-

-

36.4 Fair value of financial assets and liabilities

2011 201036.5 Off balance sheet items Rupees Rupees

Claims not acknowledged in view of pending appeals

before appellate authorities / High court 100,000

100,000

12,516,218

19,266,058

Bank guarantee issued in favor of Sui Northern

Gas Pipelines Limited for supply of gas 18,082,000

16,170,000

Bank guarantee issued in favor of the dirctors excise and taxation, Karachi 2,675,000

2,275,000

36.6

37 Capital risk management

Indemnity bonds issued against exemption of sales tax and custom duty on import of machinery and

local procurement of raw material

The effective rate of interest / mark up for the monetaryfinancial assets and liabilities are mentioned in respective notes to the financial

statements.

The company's prime object when managing capital is to safeguard its ability to continue as a going concern in order to provide adequate returns

for shareholder and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, issue new shares or

sell assets to reduce debt.

Rupees

Cash flow sensitivity - variable rate instruments 2011

Cash flow sensitivity - variable rate instruments 2010

The carrying value of all financial instruments reflected in the financial statements approximate to their fair values. Fair value is

determined on the basis of objective evidence at each reporting date.

Profit and loss Equity

100 bp

increase

100 bp

decrease

100 bp

increase

100 bp

decrease

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market

interest rates. Majority of the interest rate exposures arises from long term financing form banking companies, long term murabaha,

liabilities against assets subject to finance lease, short term borrowings and deposits in current accounts with banks. At the balance sheet

date the interest rate profile of the company's interest bearing financial instrument is as follows.

The company does not account for any fixed rate financial assets and liabilities at fair value through profit and loss. Therefore, a change

in interest rates at the reporting date would not affect profit and loss account.

A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the

amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is

performed on the same basis for June 30, 2011.


41

2011 2010

Rupees 818,155,798 805,933,763

Rupees (101,669,207) (92,725,284)

Rupees 716,486,591 713,208,479

Percentage 114.19 113.00

38 Plant capacity and production

2011 2010

Total number of spindles installed 29,016

29,016

Total number of spindles worked 29,016

29,016

Number of shifts per day 3

3

Installed capacity converted into 20/1 count (Kgs.) 12,610,305

13,240,820

Actual production converted into 20/1 count (Kgs.) 12,050,322 12,536,113

39 Transactions with related parties

2011 2010

Rupees Rupees

Associated companies Sales of polyester 6,657,600

-

Purchase of cotton 18,602,120

-

Purchase of polyester 1,162,800

-

Key management personnel Salaries and benefits 8,203,000

7,348,000

Retirement benefits 1,065,000

1,641,000

Total equity

Total capital employed

There are no transactionswith key managementpersonnel other than under their terms of employments/ entitlements. Balance outstanding from

related parties are unsecured and repayable on demand or as contracted. Amounts due to related parties are shown in the relevant notes to the

financial statements. Trade debts, long term financing from directors and associates, short term borrowings and remuneration to chief executive

and executives are disclosed in notes 9, 18, 24 and 39 to the financial statements respectively.

Gearing ratio

It is difficult to describe precisely the production capacity in textile industry since it fluctuates widely depending on various factors such as count

of yarn spun, raw material used, spindle speed and twist. It would also vary according to the pattern of production adopted in a particular year.

Installed capacity has been increased due to better speed of new machinery after balancing, modernization and replacement (BMR). Actual

production in last year was more than the installed capacity due to the conversion of fine count to 20/1 count.

Consistent with others in the industry, the company monitors capital on the basis of the gearing ratio. The ratio is calculated as total borrowings

divided by total capital employed. Borrowings represent long term financing from banking companies, long term financing from directors and

associates, long term murabaha and short term borrowings. Total capital employed includes total equity as shown in the balance sheet plus

borrowings.

Borrowings

Relationship Nature of transaction

The company has related party relationship with its associated undertakings, its directors and executives officers. Transactions with related

parties essentially entail sale and purchase of goods and / or services from the aforementioned concerns. All transactions are carried out on

commercial basis.

Key managementpersonnel are those persons having authorityand responsibilityfor planning, directing and controllingthe activities of the entity.

The company considers all members of their management team, including the chief executive officer and directors to be its key management

personnel.

40 Remuneration to chief executive and executives

Executive Chief executive Executive

Remuneration 4,290,010 1,200,000 3,717,160

House rent allowance 1,930,504 540,000

1,672,722

Utility allowance 182,486 60,000

158,118

6,403,000 1,800,000 5,548,000

Number of persons 4 1 4

20102011

Rupees

1,800,000

Chief executive

Rupees

1,200,000

1

540,000

60,000


42

60,808,114

441,977

has

3,368,720

64,653,000

41 Corresponding figures

Note

6

18

18

23

42 Events after the balance sheet date

There are no subsequent events occurring after the balance sheet date.

43 Date of authorization for issue

These financial statements have been authorized for issue on October 06, 2011 by the board of directors of the company.

Better Classification

Better ClassificationLong term financing - demand

finances

Long term financing - frozen mark

up

Trade and other payables -

Others

Figures have been rearranged / reclassified whenever necessary for the purpose of comparison. Following reclassification / rearrangement

been made in financial statements for compliance, better understanding and presentation.

From To Nature Amount

Trade and other payables -

witholding tax payable

Long term deposits - others Long term deposits - utilities

Long term financing - demand

finance IV

Long term financing - demand

finance IV (unserviceable)





43

PATTERN OF SHAREHOLDING AS AT JUNE 30, 2011

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

--

Numbers

Individual 883

Investment Companies 2

Joint Stock Companies 6

Financial Institution 1

Insurance Companies 1

893

0.18%

0.00%

25,933

33

14,100,000

0.37%

100%

Category of members Sahres Held

52,100

14,013,401

8,533

99.39%

0.06%

14,100,000

Percentage

1 1295001 1300000

893

1

1

1

1

1 1105001 1110000 1,109,500

1,300,000

1 1120001 1125000 1,122,380

1 380001 385000 381,505

1 695001 700000 700,000

1 75001 80000 78,500

1 170001 175000 171,000

2 50001 55000 105,400

1 60001 65000 60,598

1 25001 30000 25,500

1 35001 40000 36,000

5 15001 20000 92,811

6 20001 25000 137,888

33 5001 10000 269,014

9 10001 15000 117,129

107 501 1000 98,427

113 1001 5000 308,621

136 1 100 9,961

468 101 500 200,606

1300001

1330001

1360001

3780001

NUMBER OF SHARE

HOLDERS

SHARE HOLDINGTOTAL SHARES HELD

FROM TO

1,300,100

1,330,076

1,360,613

3,784,371

1305000

1335000

1365000

3785000


44

1

2

3

4

5

6

10,000

GENERAL PUBLIC 876 8,273,149 58.675

893 14,100,000 100.000

PUBLIC SECTORS COMPANIES

State Life Insurance Coporation 1 52,100 0.370

FINANCIAL INSTITUTION

First Providence Modaraba 1 33 0.000

Mr. Abdul Sattar 1

Mr. Amjad Ali

Investment Corporation of Pakistan 1 8,500 0.060

Mr. Muhammad Sarwar 1

10,000 0.071

1 53,300 0.378

1 381,505 2.706

Mr. Naeem Omer 1 3,784,371 26.840

Mr. Muhammad Asghar 1 1,330,076 9.433

IDBP (ICP UNITS) (CDC) 1 33 0.000

CHIEF EXECUTIVE/DIRECTORS

N.I.T & I.C.P.

1 171,000 1.213

Mr. Muhammad Zubai

Sr. No. CATAGORIES OF SHAREHOLDERSNUMBER OF SHARE HOLDER

TOTAL SHARES HELD PERCENTAGE

0.071

JOINT STOCK COMPANIES 6 25,933 0.184

Mr. Anwar Abbas


45

I/We

of

a member(s) of BILAL FIBERS LIMITED, a holder of

being

PROXY FORM

Folio No. CDC Participants Identity Card No. A/C No.

ordinary shares as per Registered Folio No.

hereby appoint

of

Shares Registered Folio No.

who is also member of BILAL FIBERS LIMITED, as my proxy to vote for me and my behalf at the

25th Annual General Meeti ng of the Company to be held on Thursday, the 27th Octobe r, 2011 and

at any adjournment thereof.

Signed this day of 2011

Witness:

Pleaseaffix

Revenue Stamp

N.B. (Signature should agree with specimen

signature registered with the Company)

1.

2.

NOTICE:A member entitled to vote at this meeting may appoint a proxy. Proxies in order to be effective mustbe received at Registered Officer of the Company duly stamped and signed not later than 48 hoursbefore the time of meeting.

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