KTML Annual 2010

Annual Report 2010
Kohinoor Textile Mills Limited

A KOHINOOR MAPLE LEAF GROUP COMPANY
Design & Printed by:
Registered Office : 42 - Lawrence Road, Lahore Pakistan.

T : +92 - 42 - 3630 2261, 36302262 F : +92 - 42 - 3636 8721
w w w . k m l g . c o m
Kohinoor Textile Mills Limited Annual Report 2010 Kohinoor Textile Mills Limited Annual Report 2010
CONTENTS
KOHINOOR TEXTILE MILLS LIMITED
Company Profile 2
Company Information 3
Vision Statement 4
Mission Statement 4
Statement of Ethics and Business Practices 5
Statement of Strategic Objectives 6
Notice of Annual General Meeting 7
Organization chart
Directors' Report 10
Brief Profile of Directors
Key Operating and Financial Data-Six Years Summary 20
Calendar of Major Events
Horizontal Analysis of Financial Statements 21
Vertical Analysis of Financial Statements 22
Distribution of wealth 23
Statement of Compliance with Best Practices of
Code of Corporate Governance 24
Review Report to the Members on Statement of
Compliance with Best Practices of Code of
Corporate Governance 26
Auditors' Report 27
Balance Sheet 28
Profit and Loss Account 30
Cash Flow Statement 31
Statement of Changes in Equity 32
Notes to the Financial Statements 33
Pattern of Holding of the Shares 70
CONSOLIDATED FINANCIAL STATEMENTS
Directors' Report on Consolidated Financial Statements 74

Auditors' Report 75
Balance Sheet 76
Profit and loss Account 78
Cash Flow Statement 79
Statement of Changes in Equity 80
Notes to the Consolidated Financial Statements 81
FORM OF PROXY
01
COMPANY INFORMATION
BOARD OF DIRECTORS COMPANY PROFILE

MR. TARIQ SAYEED SAIGOL CHAIRMAN
MR. TAUFIQUE SAYEED SAIGOL CHIEF EXECUTIVE
MR. SAYEED TARIQ SAIGOL
MR. WALEED TARIQ SAIGOL
MR. KAMIL TAUFIQUE SAIGOL
MR. ZAMIRUDDIN AZAR
MR. ABDUL HAI MEHMOOD BHAIMIA
AUDIT COMMITTEE BANKERS

MR. ZAMIRUDDIN AZAR CHAIRMAN AL BARAKA ISLAMIC BANK B.S.C. (E.C.)
MR. SAYEED TARIQ SAIGOL MEMBER ALLIED BANK LIMITED THEN AND NOW The processing facilities at the Rawalpindi
MR. WALEED TARIQ SAIGOL MEMBER ASKARI BANK LIMITED unit are capable of dyeing and printing
MR. KAMIL TAUFIQUE SAIGOL MEMBER
T
BANK ALFALAH LIMITED he Company commenced operation fabrics for the home textile market. The
FAYSAL BANK LIMITED in 1953 as a private limited company stitching facilities produce a diversified
CHIEF FINANCIAL OFFICER range of home textiles for the export market.
MS. BUSHRA NAZ MALIK MCB BANK LIMITED and became a public limited company
Both the dyeing and stitching facilities are
MEEZAN BANK LIMITED in 1968. The initial capacity of its Rawalpindi
being augmented to take advantage of
COMPANY SECRETARY NATIONAL BANK OF PAKISTAN unit comprised 25,000 spindles and 600 greater market access.
MR. MUHAMMAD ASHRAF NIB BANK LIMITED looms. Later, fabric processing facilities
SILK BANK LIMITED were added and spinning capacity was Fully equipped laboratory facilities for
INTERNAL AUDITOR STANDARD CHARTERED BANK (PAKISTAN) LIMITED augmented. Additional production facilities quality control and process optimization
MR. ZEESHAN AHMAD HSBC BANK MIDDLE EAST LIMITED were acquired on the Raiwind-Manga Road have been up at all three sites. The
THE BANK OF PUNJAB near Lahore in District Kasur and on the Company has been investing heavily in
AUDITORS Gulyana Road near Gujar Khan, by way of Information Technology, training of its
UNITED BANK LIMITED
M/S. RIAZ AHMAD & COMPANY merger. human resources and preparing its
CHARTERED ACCOUNTANTS management to meet the challenges of
The Company's production facilities now market integration.
REGISTERED OFFICE MILLS
42-LAWRENCE ROAD, LAHORE. comprise 151,902 ring spindles capable of
· PESHAWAR ROAD, RAWALPINDI Kohinoor Textile Mills Limited continues to
TEL: (92-042) 36302261-62 spinning a wide rang of counts using cotton
TEL: (92-051) 5473940-3 FAX: (92-051) 5471795 ensure that its current competitive position
FAX: (92-042) 36368721 and Man-made fibers. The weaving facilities
· 8th K.M., MANGA RAIWIND ROAD, DISTRICT KASUR. is maintained as well as supporting the
at Raiwind comprise 204 looms capable of ongoing improvement process in our
TEL: (92-042) 35394133-35 FAX: (92-042) 35394132
SHARE REGISTRAR weaving wide range of greige fabrics. endeavour to maintain world best practice
· GULYANA ROAD, GUJAR KHAN, DISTRICT RAWALPINDI
VISION CONSULTING LTD manufacturing.
3-C, LDA FLATS, TEL: (92-0513) 564472-74 FAX: (92-0513) 564337
LAWRENCE ROAD, LAHORE. WEB SITE: www.kmlg.com
SALES TREND TANGIBLE FIXED ASSETS-NET
TEL: (92-042) 36375531-36375339
12,000 7,000
FAX: (92-042) 36374839 Note: KTML financial statements are also available at 10,693 6,496
10,000 6,000
E-Mail: info@vcl.com.pk & vclcom@yahoo.com
RUPEES IN MILLION
RUPEES IN MILLION
8,459
the above website. 7,140 7,558 5,000
Website: www.vcl.com.pk 8,000
6,904 3,971 3,973 4,140
4,000 3,561
6,000 2,666
4,695 3,000
4,000
2,000
2,000 1,000
0
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010 2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
02 03
Vision Statement Mission Statement
The Kohinoor Textile Mills Limited Stated Vision The Company Shall Achieve Its Mission Through A Continuous
Is To Achieve And Then Remain As The Most Process Of Having Sourced, Developed, Implemented And
Progressive And Profitable Company In Pakistan Managed The Best Leading Edge Technology, Industry Best
In Terms Of Industry Standards And Practice, Human Resource And Innovative Products And Services
Stakeholders Interest. And Sold These To Its Customers, Suppliers And Stakeholders.
04 05
Statement of Ethics and Statement Of

Business Practices Strategic Objectives
2010 - 2011
2010- 2011
The following principles constitute the code of conduct which all Directors and
employees of Kohinoor Textile Mills Limited are required to apply in their daily work
and observe in the conduct of Company's business. While the Company will ensure that Following are the main principles which constitute the strategic objectives of Kohinoor
all employees are fully aware of these principles, it is the responsibility of each employee Textile Mills Limited:
to implement the Company's policies. Contravention is viewed as misconduct.
1. Effective use of available resources and improved capacity utilization of the
The code emphasizes the need for a high standard of honesty and integrity which are Company's production facilities;
vital for the success of any business.
PRINCIPLES 2. Modernization of production facilities in order to ensure the most effective
production;
1. Directors and employees are expected not to engage in any activity which
can cause conflict between their personal interest and the interest of the 3. Effective marketing and innovative concepts;
Company such as interest in an organization supplying goods/services to the
Company or purchasing its products. In case a relationship with such an 4. Implementation of effective technical and human resource solutions;
organization exists the same must be disclosed to the Management.
2. Dealings with third parties which include Government officials, suppliers, 5. Strengthening independence in terms of secure supply of low-cost services and
buyers, agents and consultants must always ensure that the integrity and resources, including energy supply, transportation and logistics services;
reputation of the Company is not in any way compromised.
6. Explore alternative energy resources;
3. Directors and employees are not allowed to accept any favours, gifts or
kickbacks from any organization dealing with the Company.
7. Further improvements in corporate code governance through restructuring of
assets and optimization of management processes;
4. Directors and employees are not permitted to divulge any confidential
information relating to the Company to any unauthorized person. Nor
should they issue any misleading statements pertaining to the affairs of the 8. Personnel development, creating proper environment for professional growth of
Company. highly skilled professionals, ensuring safe labour environment, competitive staff
remuneration and social benefits in accordance with scope and quality of their
5. The Company has strong commitment to the health and safety of its work;
employees and preservation of environment and the Company will
persevere towards achieving continuous improvement of its HSE 9. Compliance with local and international environmental and quality
performance by reducing potential hazards preventing pollution and management standards, implementation of technologies allowing to comply
improving awareness. Employees are required to operate the Company's with the limitations imposed on pollutant emissions; and
facilities and processes keeping this commitment in view.
10.Implementation of projects in social and economic development of
6. Commitment and team work are key elements to ensure that the Company's communities.
work is carried out effectively and efficiently. Also all employees will be
equally respected and actions such as sexual harassment and disparaging
remarks based on gender, religion, race or ethnicity will be avoided.
06 07
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 42 n d Annual General Meeting of the members of
KOHINOOR TEXTILE MILLS LIMITED will be held on Saturday, October 30, 2010 at 3:00 p.m. at its
Group Director Finance

Chief Financial Officer/
Registered Office, 42-Lawrence Road, Lahore, to transact the following business: -
Corporate
Resource
Manager
Manager
Human
Tax &
1. To confirm the minutes of the Extraordinary General Meeting held on May 03, 2010.
Operations
& Utilities
Company
Secretary
Manager
2. To receive, consider and adopt the audited accounts of the Company for the year ended June 30,
2010 together with the Directors' and Auditors' Reports thereon.
Functional Reporting
3. To appoint Auditors for the ensuing year and fix their remuneration. The present Auditors M/s. Riaz
Ahmad & Company, Chartered Accountants, retire and being eligible offer themselves for re-
appointment.
Maintenance
ORGANIZATION CHART OF KTML
Manager
Manager
4. To transact any other business with the permission of the Chair.
MIS
BY ORDER OF THE BOARD
Information
Manager
Senior
Manager
General
Finance
Chief Executive Officer
Chairman
Director
(MUHAMMAD ASHRAF)
KTML
KTML
Lahore: October 09, 2010 Company Secretary
Commercial
Manager
Senior
Manager
Spinning
General
NOTES:
1. Share transfer books of the Company will remain closed from 23-10-2010 to 30-10-2010 (both days
inclusive). Physical transfers/CDS Transaction IDs received in order at Share Registrar of the
Marketing
Manager
Company i.e. M/s. Vision Consulting Ltd, 3-C, LDA Flats, Lawrence Road, Lahore upto the close of
Processing
Senior
Manager
General
business on October 22, 2010 will be considered in time.
2. A member eligible to attend and vote at this meeting may appoint another member as his/her proxy
to attend and vote instead of him/her. Proxies in order to be effective must reach the Company's
Registered Office not less than 48 hours before the time for holding the meeting.
Production
Manager
General
Marketing
Manager
& Home
3. CDC Shareholders, entitled to attend and vote at this meeting, must bring with them their National
Identity Cards / Passports in original along with Participants' ID Numbers and their Account Numbers
to prove his/her identity, and in case of Proxy, must enclose an attested copy of his/her NIC or
Managing Director
Passport. Representatives of corporate members should bring the usual documents required for such
purpose.
Procurement
Manager
General
Finance
KRM
Manager
4. Shareholders are requested to immediately notify the change in their addresses, if any, to the
Company's Share Registrar.
5. Members, who have not yet submitted photocopies of their computerized National Identity Cards to
our Share Registrar, are requested to send the same at the earliest.
08 09
DIRECTORS' REPORT TO THE SHAREHOLDERS Locally, the Company continues

to face continuous cost
increases, especially in labour,
The Directors feel pleasure in presenting the 42nd annual report along with audited financial gas and electricity. In addition,
statements for the year ended June 30, 2010. extremely high general inflation
has raised the price of raw
REVIEW OF OPERATIONS materials and inputs across the
board. Inflation and most, if not
The financial year ended June 30, 2010, was characterized by extremes of market all, costs are expected to rise in
conditions which led to varying degrees of success in the operating units of the Company, the future as supplies of basic
from windfall profits in the necessities such as power and
spinning division to only food grow tighter.
nominally positive performance
in the processing and made-ups In order to mitigate the effects of
division. Extremely strong yarn these cost increases, the Company has initiated another major round of cost cutting efforts
markets due to high domestic with a focus on increasing efficiency to reduce labour costs in the made-ups division and
demand in China and India, using lower-cost materials to create quality yarns with open-end and compact spinning
coupled with the purchase of raw equipment in the spinning units.
materials at competitive prices,
led to substantial profits for both
of the Company's spinning units.
FINANCIAL REVIEW
During the year under review, the Company's

revenues increased by 26.42% to
Rs. 10,693.338 million (2009:
Rs. 8,458.899 million), while costs of
sales rose by 20.75% to
Weaving profit was satisfactory Rs. 8,692.529 million
though reduced from the (2009: Rs. 7,198.993
previous year because of the high million). The
price of yarn. Similarly, strong resulting
fabric prices were one of several increase in
challenges in the made-ups gross profit
division. to Rs.
2,000.809
million
(2009: Rs.
1,259.906 million) is
The Company sold made-ups to primarily due to the
major retailers, a market in which abnormally strong performance of the
price increases are not instantaneous and are rarely, if ever, at par with the increases in the spinning units due to the factors outlined above.
yarn and raw material markets in terms of both timing and magnitude. While significant
price increases were granted by the Company's customers, these were not on the same Operating profit for the year under review was recorded at Rs. 1,449.216 million (2009:
level as the cost increases incurred during the year which necessitated financing the made- Rs. 723.554 million). The Company made an after tax profit of Rs. 277.861 million, a
ups division from some of the gains of the spinning units. These factors also contributed to substantial improvement from a loss of Rs. 439.811 million during the previous year.
the fabric division's sub-par performance relative to previous projections.
10 11
The Directors have shown their INFORMATION TECHNOLOGY

inability to pay any dividend due
to cash flow constraints. However, Your company is equipped with highly advanced ERP solution (Oracle e-Business suite 11i)
Management of the Company is along with IT professionals who are involved in essential management of sensitive data,
committed to ensure efficient exclusive computer networking and
operation of the Company to systems-engineering. In your Company a
deliver value to the customers and diverse teams of business and technical
other stakeholders. Earning per experts are ready to help defining our
Share for the year ended 30 June business objectives, design a dynamic
2010 was Rs. 1.91. business to consumer and business to
business solution and implement it timely
and cost effectively.
The Company is in process of upgrading

its ERP solution to next level i.e. Oracle e-
The Directors recommend as
Business suite R12 to adopt the best for
under:
its business reporting.
Rupees in Thousand
Profit before taxation 376,448
Provision for taxation (98,587)
SOCIAL COMPLIANCE AND HUMAN RESOURCE
Profit after taxation 277,861
Accumulated loss brought forward (429,748) HUMAN RESOURCE
Accumulated loss carried forward (151,887) The Company is devoted to promoting the social and ethical accountability and taking a
DEBT:EQUITY RATIO human-oriented approach towards its employees, consumers and all stakeholders, which is
100% an intrinsic requirement for achieving sustainable development. The Company believes that
90% our people are our asset. Therefore, the Company puts great stress on the Company values,
80%
70% 58
49
56 56 58
66
good practices and the improvement of working conditions and the health and safety
60% protection of its employees.
PERCENTAGE
50%
40%
30%
51
The Company has taken a number of measures to
42 42
20%
10%
44 44 34 develop its employees to meet the challenges of today's
0% competitive corporate world. The Company has
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
invested extensively in employee development
DEBT EQUITY programs, health and safety training in our in-house
training facility instead with the latest audio / visual
SHARE HOLDERS EQUITY G.P % TO SALE equipment.
18.71%
8,000 20%
18%
7,000 14.26% 14.80% 14.64% 15.38% 14.89%
6,000
16% Complying with our human resource policies, the
RUPEES IN MILLION
14%
5,000 12%
Company does not employ any child labour and is an
3726 3935
4,000
2,623 2,668 3059 3361 10% equal opportunity employer. Company maintains a high
3,000 8%
2,000 6% standard of employees working and living conditions;
1,000
4% providing free, safe and clean residential facilities,
2%
0
0% utilities, medical care, life insurance and education.
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
12 13
The Company has taken a number of measures to develop its employees to meet the QUALITY MANAGEMENT SYSTEMS
challenges of today's competitive corporate world. The Company has invested extensively
Yo u r C o m p a n y i s I S O -
in employee development programs by providing technical, computer, management,
9001:2008 certified. The
health & safety training in our in house training facility installed with the latest audio / visual
surveillance audits are being
equipment.
regularly and successfully
completed on six monthly
The Company is committed to comply with international standards and is a Social
bases.
Accountability Standard SA-8000:2001 certified company.
Conforming to the Company's
Quality Management Systems,
SOCIAL SECTOR PROJECTS
Product quality is consistently
By the grace of God, the maintained and monitored at
management of your Company is every stage. Yarn and fabric is
pleased to inform that the tested in most modern textile
construction of Sayeed Saigol testing laboratories working at
Cardiac Complex at the Gulab Devi all divisions. These laboratories
Chest Hospital, Lahore has now are equipped with latest
been completed and handed over equipments and are environmentally controlled to the most stringent of international
to the administration of Gulab Devi standards. Quality control in made ups production facilities is based on AQL system,
Chest Hospital, Lahore. Your ensuring high control on quality of products. Internal / external audits and management
Company has contributed a sum of reviews, clearly demonstrate control improvements and Company's long term commitment
total Rs. 65.634 million as donors. to improve its management systems to any reputed international standard.
CORPORATE SOCIAL RESPONSIBILITY (4 th CSR Award)
Kohinoor Maple Leaf Group has also received an award on account of its performance of
th
various social obligations during the year 2008-09 at the 4 Corporate Social Responsibility
st
(CSR) Award Ceremony held on 21 January, 2010 at Karachi.
Mr. Sohail Sadiq General Manager Finance is

receiving 4th CSR National Excellence Award -2009
from
Mr. Sheikh Muhammad Afzal Alias
Provincial Minister for Environment & Alternate
Energy Government of Sindh.
14 15
SAFETY, HEALTH AND ENVIRONMENT SECURITY
Your Company provides and maintains so far as practicable, equipment, Your Company is well cognizant of its responsibilities in ensuring the
systems and working conditions which are safe and without risk to the health and safety of the workplace and its people. At
health of all employees, visitors, contractors and public. Management has your Company, health and safety policies and practices
maintained its strong commitment to a safe environment in its operations are monitored and reviewed regularly. We believe that
throughout the year. Workplace safety is the responsibility of the
management, which involves making the workplace
The Company is well aware of the relationship between the textile safer for the employees and thus safeguarding
production and related environment issues. Keeping in view the ethical their health. Workplace safety ensures that an
obligations to the environment, the working on implementation of ISO- employee can feel secure about undertaking his
14001-2004 “Environment Management System” the documentation and routine tasks with complete determination and
environment monitoring confidence. Workplace safety aims at eliminating the
process has been health risks involves in a particular job and hence makes the
completed and job profile a secure option for interested candidates.
certification process is
targeted to be completed Therefore, KTML participates in all social responsibility
by the end of the current education and monitoring activities. KTML supports United
year. State's Customs Trade Partnership against Terrorism (C -
TPAT) and is committed to improve security conditions
Installation of effluent within the organization as well as throughout its supply
treatment plant (ETP) chain from the factory to overseas.
has been completed and
results have been tested KTML is proud to be a partner of Customs Trade Partnership against Terrorism (C - TPAT)
through internal lab tests and is a certified Company and is meeting all requirements of this security standard.
and EPA approved
external labs.
The Company takes

care and applies
appropriate procedures to design /manufacture textile products so as to ensure
that no harmful substances are present in its products. It adopts recognized
“environment friendly” working methods and makes
careful selection of dye stuffs, optimizes dye baths,
uses chlorine free bleaching techniques, low
formaldehyde finishing methods and heavy metal
free materials. By employing these recognized
methods, the Company produces safe products and
has been able to comply with requirements of
European legislation regarding use of azo dyes and
been certified under OEKO Tex 100 Standard,
confirming the Company's commitment to using
harmless dyes and chemicals in its production
processes.
16 17
BUSINESS PROCESS RE-ENGINEERING COMPLIANCE OF CODE OF CORPORATE GOVERNANCE
Your Company is in process to implement the The Board of Directors periodically reviews
methodologies to redesign business process. The the Company's strategic direction.
methodology includes the five activities: Prepare for re- Business plans and targets are set by the
engineering, Map and analyze as-is-process, Design Chief Executive and reviewed by the Board.
To-be process, Implement re-engineered process, The Board is committed to maintain a high
learn and Improve continuously. standard of corporate governance. The
Board has reviewed the Code of Corporate
Governance and confirms that:
LIQUIDITY MANAGEMENT
Management monitors forecasts of the Company's liquidity

reserve and cash and cash equivalents on the basis of
expected cash flow. In addition, the Company's liquidity
management policy involves projecting cash flows and A) The financial statements, prepared by the management of the Company, present
considering the level of liquid assets necessary to meet fairly its state of affairs, the result of its operations, cash flows and changes in
these; monitoring balance sheet liquidity ratios against equity.
internal and external regulatory requirements; and b) Proper books of account of the Company have been maintained.
maintaining debt financing plans. c) Appropriate accounting policies have been consistently applied in preparation
of financial statements and accounting estimates are based on reasonable and
FUTURE OUTLOOK prudent judgment.
d) International Accounting Standards, as applicable in Pakistan, have been
followed in preparation of financial statements and any departure there from, has
The well-publicized hikes in the price of raw material been adequately disclosed.
have taken on extreme proportions worldwide. Locally, e) The system of internal control is sound in design and has been effectively
the recent floods have damaged and destroyed a large, implemented and monitored.
but so far unmeasured, portion of the Pakistani cotton f) There are no significant doubts upon the Company's ability to continue as a going
crop. Rains in China have also disturbed cotton concern.
production in that region. Combined with very intense g) There has been no material departure from the best practices of corporate
and growing domestic demand in China and India, as well as Brazil's recent transformation governance, as detailed in the listing regulations of the stock exchanges.
into an importer of cotton, these factors seem to indicate continued high raw material h) Outstanding taxes and other government levies are given in related note(s) to the
prices for the foreseeable future. This audited accounts.
situation is further exacerbated by the i) Key operating and financial data of last six years is annexed.
continued ban on cotton exports by
the Indian government, which has
disturbed all aspects of the textile Value of investment of provident fund trust, based on their unaudited accounts
production chain. Future prospects of June 30, 2010 is as under:
therefore remain unclear for the time
being. The Company hopes to clarify
its position for the future before the
end of November, when the cotton (Rs. in thousand)
season is in full swing and the ultimate Provident fund 188,066
fate of the Indian export ban has been
decided.
18 19
DIRECTORS AND BOARD MEETINGS AUDIT COMMITTEE
Name Designation
During the year under review, five meetings
of the Board of Directors were held and the Mr. Zamiruddin Azar Chairman (Non Executive / independent Director)
attendance of Directors was as under: - Mr. Sayeed Tariq Saigol Member (Non Executive / independent Director)
Mr. Waleed Tariq Saigol Member (Executive Director)
Mr. Kamil Taufique Saigol Member (Executive Director)
The Main terms of reference of the Audit Committee of the Company include the following:
a. Determination of appropriate measures to safeguard

Names of Directors Meetings Attended the Company's assets;
b. Review of preliminary announcements of results prior
Mr. Tariq Sayeed Saigol 5 to publication;
Mr. Taufique Sayeed Saigol 4 c. Review of quarterly, half-yearly and annual financial
Mr. Sayeed Tariq Saigol 4 statements of the Company, prior to their approval by
Mr. Waleed Tariq Saigol 5 the Board of Directors, focusing on:
Mr. Kamil Taufique Saigol 3 Major judgmental areas;
Mr. Zamiruddin Azar 5 Significant adjustments resulting from the audit;
Mr. Abdul Hai Mehmood Bhaimia 5 The going-concern assumption;
Any changes in accounting policies and practices;
Leave of absence was granted to Directors who could not attend the Board meetings. Compliance with applicable accounting standards; and
However, Mr. Taufique Sayeed Saigol and Mr. Kamil Taufique Saigol participated in the Compliance with listing regulations and other statutory and regulatory
proceedings of Board of Directors' Meeting dated 28-04-2010 through teleconference. requirements.
d. Ensuring coordination between the internal and external auditors of the Company;
CRITERIA TO EVALUATE BOARD PERFORMANCE e. Review of the scope and extent of internal audit and ensuring that the internal audit
function has adequate resources and is appropriately placed within the Company;
Following are the main criteria: f. Ascertaining that the internal control system including financial and operational
controls, accounting system and reporting structure are adequate and effective;
1. Financial policies reviewed and updated; g. Instituting special projects, value for money studies or other investigations on any
2. Capital and operating budgets approved annually; matter specified by the Board of Directors;
3. Board receives regular financial reports; h. Monitoring compliance with the best practices of corporate governance and
4. Procedure for annual audit; identification of significant violations thereof; and
5. Board approves annual business plan; i. Consideration of any other issue or matter as may be assigned by the Board of
6. Board focuses on goals and results; Directors.
7. Availability of board's guideline to management;
8. Regular follow up to measure the impact of board's decisions; Further issuance of capital otherwise than right
9. Assessment to ensure compliance with code of ethics and corporate
governance. In accordance with the approval of the valued shareholders in the Extra Ordinary General
Meeting held on May 03, 2010 and subsequent sanction granted by the Securities and
Exchange Commission of Pakistan under Section 86(1) of the Companies Ordinance, 1984,
During the financial year no share transfers involving Directors, Company Secretary, CFO the Company has allotted 100 million ordinary shares of Rs. 10/- each otherwise than
and Executives of the Company (including their spouses and minor children) were reported. through a right issue at par value to the respective subscriber. In accordance with the
covenant forming part of share subscription arrangement, the Company has despatched
consent letters to the registered members whose names were born in the members register
20 21
as on April 26, 2010, for subscription of shares at par value in proportion to the paid up BRIEF PROFILE OF DIRECTORS
value of shares held by them out of the above mentioned 100 million shares.
MR. TARIQ SAYEED SAIGOL Chairman / Chief Executive/Director
Incorporation of wholly owned subsidiary company Kohinoor Maple Leaf Industries Limited
Mr. Tariq Sayeed Saigol is a member of the Saigol Family Tarbela Hydro Limited
who pioneered in Textile manufacturing after partition and Zimpex (Private) Limited
The Company has set up a wholly owned subsidiary company namely Concept Trading
later ventured into the financial sector, chemicals, Chairman / Director
(Private) Limited during the year incorporated on March 11, 2010 having authorised share
synthetic fibers, sugar, edible oil refining, civil engineering, Kohinoor Textile Mills Limited
capital of Rs. 500,000/- divided into 50,000 ordinary shares of Rs. 10/- each with issued, construction, cement and energy. Maple Leaf Cement Factory Limited
subscribed and paid up Capital of Rs. 200,000/- divided into 20,000 ordinary shares of Rs.
10/- each. Mr. Taufique Sayeed Saigol and Mr. Kamil Taufique Saigol are Directors of Mr. Saigol was schooled at Aitchison College, Lahore and
subsidiary company. graduated from Government College, Lahore following which he studied Law at University Law
College, Lahore.
Pattern of Shareholding
He started his career in 1968 at Kohinoor’s Chemical Complex at Kala Shah Kaku. Upon trifurcation
of the Group in 1976, he became Chief Executive of Kohinoor Textile Mills Limited, Rawalpindi.
The statement of shareholding of the Company in accordance with Code of Corporate Since 1984, he has been Chairman of the Kohinoor Maple Leaf Group which has interests in textiles,
Governance and Companies Ordinance, 1984 as at June 30, 2010 is annexed. cement manufacturing and energy.
Auditors He has been Chairman of All Pakistan Textile Mills Association in 1992-94, President of Lahore
Chamber of Commerce and Industry for 1995-97 and Chairman, All Pakistan Cement
Manufacturers Association from 2003-2006.
The present auditors of the Company M/s. Riaz Ahmad & Company, Chartered Accountants
audited the financial statements of the Company and have issued report to the members. Mr. Saigol has been a member of the Federal Export Promotion Board and Central Board of State
The auditors will retire at the conclusion of the Annual General Meeting. Being eligible, they Bank of Pakistan. He has also served on several Government Commissions and Committees on a
have offered themselves for re-appointment. number of subjects, including Export Promotion, reorganization of WAPDA and EPB, Right Sizing of
State owned Corporations and Resource Mobilization. He is the author of Textile Vision 2005
The Board has recommended the appointment of M/s. Riaz Ahmad & Company, Chartered adopted by the Government in 2000 and also its critique prepared in 2006. He joined the Central
Accountants, as auditors for the ensuing year as suggested by the Audit Committee subject Board of State Bank of Pakistan for a second term in 2007 and is a member of the Prime Minister’s
to approval of the members in the forthcoming Annual General Meeting. Economic Advisory Council established in 2008.
He takes keen interest in the development of education and health care in Pakistan. He has been a
Acknowledgement member of the Board of Governors of Lahore University of Management Sciences, Founding
Chairman of the Board of Governors of Chandbagh School, founder Trustee of Textile University of
The Directors are grateful to the Company's members, financial institutions and customers Pakistan, member of the Syndicate of University of Health Sciences and Member Board of
for their cooperation and support. They also appreciate hard work and dedication of all the Governors of Aitchison College, Lahore. He is conferred with Sitara-e-Isaar by President of Pakistan
employees working at various divisions. in 2006.
He is a keen golfer and has represented Pakistan at Golf in

Sri Lanka and Pakistan in 1967. Chief Executive/Director
MR. TAUFIQUE SAYEED SAIGOL Director
For and on behalf of the Board Maple Leaf Cement Factory Limited
He is Chief Executive of Kohinoor Textile Mills Limited and Kohinoor Maple Leaf Industries Limited
director in all KMLG Group companies. Mr. Taufique Sayeed Tarbela Hydro Limited
Saigol is a leading and experienced industrialist of Zimpex (Private) Limited
Pakistan. He graduated as an Industrial Engineer from
Cornell University, USA in 1974. He is widely traveled and his special forte is in the export business.
Lahore TAUFIQUE SAYEED SAIGOL
September 29, 2010 Chief Executive He is a business man of impeccable credibility and vision and has substantial experience of working
in different environments.
22 23
BRIEF PROFILE OF DIRECTORS in different environments. Director

Chief Executive/Director
Maple Leaf Cement Factory Limited Maple Leaf Cement Factory Limited
MR. TARIQ SAYEED SAIGOL MR. SAYEED TARIQ SAIGOL
Director Chief Financial Officer
Kohinoor Textile Mills Limited Kohinoor Textile Mills Limited
Mr. Tariq Sayeed Saigol is a member of the Saigol Family Kohinoor Maple Leaf Industries Limited
Mr. Sayeed Saigol is the Chief Executive of Maple Leaf Maple Leaf Cement Factory Limited
who pioneered in Textile manufacturing after partition and Cement. He graduated from McGill University with a
later ventured into the financial sector, chemicals, synthetic degree in management. Mr. Sayeed Saigol also has
fibers, sugar, edible oil refining, civil engineering, construction, cement and energy. several years of work experience in the textile industry. Prior to joining Maple Leaf Cement
he was involved in setting up and managing an apparel dyeing company. He is a member of
Mr. Saigol was schooled at Aitchison College, Lahore and graduated from Government College,
the board of governors of the Lahore University of Management Sciences (LUMS).
Lahore following which he studied Law at University Law
College, Lahore. Director MR. WALEED TARIQ SAIGOL
He started his career in 1968 at Kohinoor’s Chemical Maple Leaf Cement Factory Limited
Complex at Kala Shah Kaku. Upon trifurcation of the Group Security General Insurance Company Ltd. Mr. Waleed Saigol is the Managing Director of Kohinoor Raiwind Mills. He holds a bachelors
in 1976, he became Chief Executive of Kohinoor Textile
Mills Limited, Rawalpindi. Since 1984, he has been Chairman of the Kohinoor Maple Leaf Group
which has interests in textiles, cement manufacturing and energy.
BOARD COMMITTEES
He has been Chairman of All Pakistan Textile Mills Association in 1992-94, President of Lahore
Chamber of Commerce and Industry for 1995-97 and AUDIT COMMITTEE
Chairman, All Pakistan Cement Manufacturers Association Director
from 2003-2006. Kohinoor Textile Mills Limited The committee is responsible for assisting the board of directors in the board's oversight
Maple Leaf Cement Factory Limited responsibilities relating to the integrity of the Company's financial statements, financial
Mr. Saigol has been a member of the Federal Export reporting process, and systems of internal accounting and financial controls; the
Promotion Board and Central Board of State Bank of Pakistan. He has also served on several qualifications, independence, and performance of the independent auditor and the
Government Commissions and Committees on a number of subjects, including Export Promotion, performance of the Company's internal audit department; and the Company's legal and
reorganization of WAPDA and EPB, Right Sizing of State owned Corporations and Resource regulatory compliance.
Mobilization. He is the author of Textile Vision 2005 adopted by the Government in 2000 and also its
critique prepared in 2006. He joined the Central Board of The audit committee is appointed by the board to assist the board in monitoring and
State Bank of Pakistan for a second term in 2007 and is a Director consists of following:
member of the Prime Minister’s Economic Advisory Council Maple Leaf Cement Factory Limited
established in 2008. CHAIRMAN
He takes keen interest in the development of education and health care in Pakistan. He has been a
Mr. Zamiruddin Azar
member of the Board of Governors of Lahore University of Management Sciences, Founding
Chairman of the Board of Governors of Chandbagh School, founder Trustee of Textile University of MEMBERS
Pakistan, member of the Syndicate of University of Health Sciences and Member Board of
Governors of Aitchison College, Lahore. He is conferred with Mr. Sayeed Tariq Saigol
Sitara-e-Isaar by President of Pakistan in 2006. Director Mr. Waleed Tariq Saigol
Kohinoor Textile Mills Limited Mr. Kamil Taufique Saigol
He is a keen golfer and has represented Pakistan at Golf in Shabbir Tiles & Ceramics Limited
Sri Lanka and Pakistan in 1967. Pak Grease Mfg. Co. (Pvt) Limited
Askari General Insurance Limited Scope and Objectives
MR. TAUFIQUE SAYEED SAIGOL The Integrity of the financial statements of the Company.
He is Chief Executive of Kohinoor Textile Mills Limited and director in all KMLG Group companies. Mr.
Taufique Sayeed Saigol is a leading and experienced industrialist of Pakistan. He graduated as an The independent auditors' qualifications, independence, and performance.
Industrial Engineer from Cornell University, USA in 1974. He is widely traveled and his special forte
The performance of the Company's internal audit function.
is in the export business.
He is a business man of impeccable credibility and vision and has substantial experience of working The compliance by the Company With Legal And Regulatory Requirements.
24 25
PROJECT MANAGEMENT COMMITTEE Members

Project Management Committee of senior representatives is formed to direct the Director
organization to ensure the proper supervision and effectiveness of project operations . Head of the Department Finance
Members Head of the Department Production
Director Head of the Department Information Technology
Head of the Department Finance Head of the Department Marketing
Head of the Department Production Head of the Department Human Resource
Head of the Department Marketing Head of the Department Engineering
Head of the Department Human Resource
Head of the Department Commercial Scope and Objectives
Head of the Department Information Technology
Head of the Department Engineering Our BPR team implies specific business
objectives such as cost reduction, time
Scope and Objectives reduction, output quality improvement etc.
We focus on the most important processes
that reflect our business vision.
The Scope and objective of the Project Management Committee is to:
Understand and measure the existing
Steer and guide the project. process to avoid repeating of old mistakes
Review progress and outputs. and to provide a baseline for future
Review outcomes and their impact on the project. improvements.
Agree important decisions and changes to plan. Design and build the prototype of new
processes and ensure quick delivery of
Discuss risks, problems, issues and explore solutions.
results and involvement and satisfaction of
Keep an eye on how things are going and what could be improved. customers.
The project work is performed on schedule and deliverables/reports are delivered No. of Meetings Held: 08
on time.
The project work is done within the allocated budget.
MANAGEMENT INFORMATION SYSTEM COMMITTEE
The project team have well-defined roles and responsibilities.
Management Information Systems (MIS) are the term given to the discipline focused on the
There are effective methods for planning, communicating, and making decisions.
integration of computer systems with the aims and objectives on an organization. The
The project reflects on its work and takes a positive and flexible approach to development and management of information technology assists executives and the
updating plans. general workforce in performing any tasks related to the processing of information.
No. of Meetings Held: 10 Members
Director
BUSINESS PROCESS RE-ENGINEERING COMMITTEE Head of the Department Information Technology
Business Process Re-engineering team see that which technology allows you to do, and Head of the Department Finance
then determine if this helps you rethink the process by starting with the capabilities of Head of the Department Marketing
modern information technology.
Head of the Department Human Resource
Deputy Manager Information Technology
26 27
Scope and Objectives

· MIS is especially useful in the collation of business data and the production of reports
to be used as tools for decision
making that would otherwise be
broadly useless to decision makers.
· MIS supports financial statements
and performance reports to assist in
the planning, monitoring and
implementation of strategy.
· MIS systems use raw data to run
simulations hypothetical scenarios
that answer a range of 'what if'
questions for alterations in strategies.
No. of Meetings Held: 07
ENERGY MANAGEMENT COMMITTEE

Energy Management Committee (EMC) is formed to improve performance through wise
energy use
Members
Director
Head of the Department Engineering
Head of the Department Production
Head of the Department Finance
Scope and Objective
Our team is committed for annual energy cost reductions
from continuous improvements.
Developed to minimize environmental impacts. It
incorporates energy efficiency, water conservation,
waste minimization, pollution prevention, resource
efficient materials and indoor air quality in all phases of a building's life.
EMC design plan that helps us meet our climate protection
commitments.
The appointment of a full time energy management coordinator
ensures the plan proceeds.
Responsible for energy procurement, monitoring and targeting
energy savings, maintaining program of energy saving measures,
raising energy awareness and corporate wide energy monitoring
and reporting.
No. of Meetings Held: 09
28 29
2009-2010 2008-2009 2007-2008 2006-2007 2005-2006 2004-2005 2010 2009

9-Months
Rs " 000 " %age Rs " 000 " %Age
Net sale (Rs. 000) 10,693,338 8,458,899 7,558,322 7,140,167 6,903,625 4,695,280
Profitability(Rs.000)
Gross Profit 2,000,809 1,259,906 1,162,700 1,045,526 1,021,807 669,444
Wealth Generated
Operating profit 1,449,216 723,554 1,013,140 575,658 803,056 320,804 Net sales 10,693,338 99.27% 8,458,899 98.53%
Profit / (Loss) before tax 376,448 (536,676) 130,805 (28,293) 354,984 147,598
Provision for income tax 98,587 (96,865) 134,325 11,529 56,780 59,071 Other operating income 78,651 0.73% 126,551 1.47%
Profit / (Loss) after tax 277,861 (439,811) (3,520) (39,822) 298,204 88,527
Financial Position (Rs.000) 10,771,989 100.00% 8,585,450 100.00%

Tangible fixed assets-net 6,496,299 4,140,233 3,972,540 3,971,021 3,561,259 2,666,186
Investment & Other assets 4,004,892 4,003,422 3,998,629 3,661,682 1,800,012 1,803,215
10,501,191 8,143,655 7,971,169 7,632,703 5,361,271 4,469,401
Current assets 6,556,108 5,131,884 5,757,221 4,547,065 3,939,417 3,170,105 Distribution of Wealth
Current liabilities 8,169,138 6,762,527 5,477,572 4,231,049 3,855,596 3,106,544
Net working capital (1,613,030) (1,630,643) 279,649 316,016 83,821 63,561 Cost of sales (excluding
Capital employed 8,888,161 6,513,012 8,250,818 7,948,719 5,445,092 4,532,962
employees' remuneration) 7,952,404 73.82% 6,508,657 75.81%
Less: Redeemable Capital, long term loan
& other liabilities 1,853,068 2,190,079 3,052,128 2,959,093 2,776,985 1,910,160
Less: Surplus on revaluation of property 3,673,825 1,263,592 1,263,592 1,263,592 - - Marketing, selling and
Share holders Equity 3,361,268 3,059,341 3,935,098 3,726,034 2,668,107 2,622,802
administration expenses 497,243 4.62% 546,013 6.36%
Represented By:
Share capital 1,455,262 1,455,262 1,455,262 1,455,262 1,058,374 962,158
Reserves & un-app. Profit 1,906,006 1,604,079 2,479,836 2,270,772 1,609,733 1,660,644 Employees' remuneration 873,126 8.11% 807,226 9.40%
3,361,268 3,059,341 3,935,098 3,726,034 2,668,107 2,622,802
Financial charges 1,072,768 9.96% 1,260,230 14.68%
Government taxes
Investors information
Gross Profit to sales (%age) 18.71 14.89 15.38 14.64 14.80 14.26 (Includes income tax) 98,587 0.92% (96,865) -1.13%
Net Profit to sales (%age) 2.60 (5.20) (0.05) (0.56) 4.32 1.89
Profit margin 0.03 (0.05) (0.00) (0.01) 0.04 0.02 Profit / (Loss) for the period 277,861 2.58% (439,811) -5.12%
Debt : equity ratio 34 : 66 42 : 58 44 : 56 44 : 56 51 : 49 42 : 58
Current ratio 0.80 0.76 1.05 1.07 1.02 1.02
Acid test ratio 0.47 0.45 0.69 0.59 0.47 0.51 10,771,989 100.00% 8,585,450 100.00%
Breakup value per share of Rs.10 each 23.10 21.02 27.04 25.60 25.21 27.26
Earning per share 1.91 (3.02) (0.02) (0.32) 2.82 0.93
Dividend
73.82% 75.81%
Bonus - - - - 10.00 10.00
Average collection period 40.60 51.58 58.18 49.83 40.39 45.80 Cost of sales (excluding Cost of sales (excluding
Inventory turn over 4.17 4.17 3.73 3.62 4.32 4.08 employees' remuneration) employees' remuneration)
Average age of inventory 87.53 87.53 98.09 100.70 84.41 89.39
4.62% 6.36%
Summary of Cash flows Marketing, selling and Marketing, selling and
Net cash flow from operating activities (403,780) 106,116 (51) (215,658) (226,700) 176,304 administration expenses administration expenses
Net cash flow from investing activities (310,582) (644,726) (776,196) (1,155,933) (636,823) (1,320,706) 8.11% 9.40%
Net cash flow from financing activities 712,916 543,520 787,903 998,512 1,151,994 1,147,547
Net change in cash and cash equivalents (1,446) 4,910 11,656 (373,079) 288,471 3,145
Employees' remuneration Employees' remuneration
Quantitative Data 9.96% 14.68%

Yarn (Kgs "000") :
Production (cont. into 20s)
Financial charges Financial charges
KTM Division 35,211 35,298 36,605 33,388 31,223 22,675
KGM Division 31,295 26,318 28,899 26,028 23,680 15,026 0.92% -1.13%
66,506 61,616 65,504 59,416 54,903 37,701
Government taxes Government taxes
Sales/Tran.for wvg.(actual count)
KTM Division 7,202 6,042 6,790 6,788 7,595 5,461 2.58% -5.12%
KGM Division 4,104 2,987 4,265 3,862 3,639 2,192
11,306 9,029 11,055 10,650 11,234 7,653 Profit / (Loss) Profit / (Loss)
Cloth (Linear meters "000"): for the period for the period
Processing (Rawalpindi Division)
Production 34,653 30,626 22,988 27,358 30,855 17,623
Sales 34,065 28,783 23,581 26,768 21,860 16,991
Weaving (Raiwind Division)

Production 21,489 22,727 21,986 20,806 20,090 16,409
Sales 21,691 23,316 22,220 21,094 20,942 16,267
30 31
HORIZONTAL ANALYSIS OF FINANCIAL STATEMENTS VERTICAL ANALYSIS OF FINANCIAL STATEMENTS
2010 2009 2008 % change % change 2010 2009 2008

Balance Sheet 2010 Rs " 000” Rs " 000 " w.r.t 2009 w.r.t 2008 Balance Sheet Rs " 000 “ % Rs " 000 % Rs " 000 " %
Rupees in thousand Rupees in thousand
Total equity 3,361,268 3,059,341 3,935,098 9.87 (14.58) Total equity 3,361,268 19.71 3,059,341 23.04 3,935,098 28.66
Total surplus on revaluation of property 3,673,825 1,263,592 1,263,592 190.74 190.74 Total surplus on revaluation of property 3,673,825 21.54 1,263,592 9.52 1,263,592 9.20
Total non-current liabilities 1,853,068 2,190,079 3,052,128 (15.39) (39.29) Total non-current liabilities 1,853,068 10.86 2,190,079 16.50 3,052,128 22.23
Total current liabilities 8,169,138 6,762,527 5,477,572 20.80 49.14 Total current liabilities 8,169,138 47.89 6,762,527 50.94 5,477,572 39.90
Total equity and liabilities 17,057,299 13,275,539 13,728,390 28.49 24.25 Total equity and liabilities 17,057,299 100.00 13,275,539 100.00 13,728,390 100.00
Total non-current assets 10,501,191 8,143,655 7,971,169 28.95 31.74 Total non-current assets 10,501,191 61.56 8,143,655 61.34 7,971,169 58.06
Total current assets 6,556,108 5,131,884 5,757,221 27.75 13.88 Total current assets 6,556,108 38.44 5,131,884 38.66 5,757,221 41.94
Total assets 17,057,299 13,275,539 13,728,390 28.49 24.25 Total assets 17,057,299 100.00 13,275,539 100.00 13,728,390 100.00
Profit and Loss Account Profit and Loss Account
Net sales 10,693,338 8,458,899 7,558,322 26.42 41.48 Net sales 10,693,338 100.00 8,458,899 100.00 7,558,322 100.00
Cost of sales 8,692,529 7,198,993 6,395,622 20.75 35.91 Cost of sales 8,692,529 81.29 7,198,993 85.11 6,395,622 84.62
Gross profit 2,000,809 1,259,906 1,162,700 58.81 72.08 Gross profit 2,000,809 18.71 1,259,906 14.89 1,162,700 15.38
Distribution cost 397,818 464,848 381,161 (14.42) 4.37 Distribution cost 397,818 3.72 464,848 5.50 381,161 5.04
Administrative expenses 195,103 175,965 149,542 10.88 30.47 Administrative expenses 195,103 1.82 175,965 2.08 149,542 1.98
Other operating expenses 37,323 22,090 22,158 68.96 68.44 Other operating expenses 37,323 0.35 22,090 0.26 22,158 0.29
Other operating income 78,651 126,551 403,301 (37.85) (80.50) Other operating income 78,651 0.74 126,551 1.50 403,301 5.34
Profit from operations 1,449,216 723,554 1,013,140 100.29 43.04 Profit from operations 1,449,216 13.55 723,554 8.55 1,013,140 13.40
Finance cost 1,072,768 1,260,230 882,335 (14.88) 21.58 Finance cost 1,072,768 10.03 1,260,230 14.90 882,335 11.67
Profit/ (Loss) before taxation 376,448 (536,676) 130,805 170.14) 187.79 Profit/ (Loss) before taxation 376,448 3.52 (536,676) (6.34) 130,805 1.73
Provision for taxation 98,587 (96,865) 134,325 201.78) (26.61) Provision for taxation 98,587 0.92 (96,865) (1.15) 134,325 1.78
Loss after taxation 277,861 (439,811) (3,520) 163.18) (7,993.78) Loss after taxation 277,861 2.60 (439,811) (5.20) (3,520) (0.05)
32 33
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE disclosed in the pattern of shareholding.
FOR THE YEAR ENDED JUNE 30, 2010 14. The Company has complied with all the corporate and financial reporting requirements of the Code.
15. The Board has formed an Audit Committee. It comprises four members. Two of them are non-executive
Directors including the Chairman of the Committee.
This statement is being presented to comply with the Code of Corporate Governance contained in Listing Regulations of
Stock Exchanges in Pakistan for the purpose of establishing a framework of good governance, whereby a listed company 16. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final
is managed in compliance with the best practices of corporate governance. 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.
The Company has applied the principles contained in the Code in the following manner:-
17. The Board has set-up an effective internal audit function.
1. The Company encourages the representation of non-executive Directors on its Board of Directors. At present
the Board of Directors includes four independent non-executive Directors namely: 18. The Statutory Auditors of the Company have confirmed that they have been given a satisfactory rating under the
Quality Control Review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the
i. Mr. Tariq Sayeed Saigol
partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all
ii. Mr. Sayeed Tariq Saigol its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics
as adopted by Institute of Chartered Accountants of Pakistan.
iii. Mr. Zamiruddin Azar
19. The Statutory Auditors or the persons associated with them have not been appointed to provide other services
iv. Mr. Abdul Hai Mehmood Bhaimia
except in accordance with the Listing Regulations and the Auditors have confirmed that they have observed
2. The Directors have confirmed that none of them is serving as a Director in more than ten listed companies, IFAC guidelines in this regard.
including this Company.
20. We confirm that all other material principles contained in the Code have been complied with.
3. All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in
payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been
declared as a defaulter by that stock exchange.
4. No casual vacancy occurred in the Board of Directors of the Company during the year ended June 30, 2010.
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.
For and on behalf of the Board
6. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the
Company. A complete record of particulars of significant policies along with the dates on which they were
approved or amended has been maintained.
7. All the powers of the Board have been duly exercised and decisions on material transactions, including (Taufique Sayeed Saigol)
appointment and determination of remuneration and terms and conditions of employment of the CEO and other
Lahore: September 29, 2010 Chief Executive
Executive Directors, have been taken by the Board.
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 the Board meetings,
along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of
the meetings were appropriately recorded and circulated.
9. The Board had arranged Orientation Courses for its Directors during the preceding years to make them aware of
their duties and responsibilities. The Directors have also provided declarations that they are aware of their
duties, powers and responsibilities under the Companies Ordinance, 1984 and the listing regulations of the
Stock Exchanges.
There was no need felt by the Directors for any further Orientation Courses in this regard.
10. The Board has approved appointment of CFO, Company Secretary and Head of Internal Audit, including their
remuneration and terms and conditions of employment, as determined by the CEO.
11. The Directors' 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
34 35
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH AUDITORS' REPORT TO THE MEMBERS
BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have audited the annexed balance sheet of KOHINOOR TEXTILE MILLS LIMITED as at 30 June 2010 and the
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in
Governance prepared by the Board of Directors of KOHINOOR TEXTILE MILLS LIMITED ("the Company") for the equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the
year ended 30 June 2010, to comply with the Listing Regulations of the respective Stock Exchanges, where the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our
Company is listed. audit.
It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the and present the above said statements in conformity with the approved accounting standards and the requirements of
Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
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 We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
and review of various documents prepared by the Company to comply with the Code. 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
As part of our audit of financial statements, we are required to obtain an understanding of the accounting and internal disclosures in the above said statements. An audit also includes assessing the accounting policies and significant
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider estimates made by management, as well as, evaluating the overall presentation of the above said statements. We
whether the Board's statement on internal control covers all risks and controls, or to form an opinion on the believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
effectiveness of such internal controls, the Company's corporate governance procedures and risks. (a) in our opinion, proper books of account have been kept by the company as required by the Companies Ordinance,
1984;
Further, Listing Regulations of the Karachi, Lahore and Islamabad Stock Exchanges require the Company to place
before the Board of Directors for their consideration and approval related party transactions distinguishing between (b) in our opinion:
transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
are not executed at arm's length price recording proper justification for using such alternate pricing mechanism. conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are
Further, all such transactions are also required to be separately placed before the audit committee. We are only further in accordance with accounting policies consistently applied except for the changes as stated in Notes
required and have ensured compliance of requirement to the extent of approval of related party transactions by the 2.1(d)(i), 2.5 and 2.8 (d) with which we concur;
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 undertaken at arm's length price or not. 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
Based on our review, nothing has come to our attention, which causes us to believe that the Statement of with the objects of the company;
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the best
practices contained in the Code of Corporate Governance as applicable to the Company for the year ended 30 June (c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet,
2010. 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 30 June 2010 and of the profit, its
comprehensive income, 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).
RIAZ AHMAD & COMPANY
Chartered Accountants
Name of engagement partner:
Atif Bin Arshad RIAZ AHMAD & COMPANY
ISLAMABAD Chartered Accountants
Date: September 29, 2010 Name of engagement partner:
Atif Bin Arshad
ISLAMABAD
Date: September 29, 2010
36 37
BALANCE SHEET AS AT 30 JUNE 2010
(Restated) (Restated)
2010 2009 2010 2009
NOTE (Rupees in thousand) NOTE (Rupees in thousand)
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES ASSETS
NON-CURRENT ASSETS
Authorized share capital Property, plant and equipment 14 6,496,299 4,140,233
370,000,000 ( 2009: 170,000,000) Investment properties 15 1,720,835 1,720,835
ordinary shares of Rupees 10 each 3,700,000 1,700,000 Long term investments 16 2,249,170 2,248,970
30,000,000 ( 2009: 30,000,000) preference Long term deposits 17 34,887 33,617
shares of Rupees 10 each 300,000 300,000 10,501,191 8,143,655
4,000,000 2,000,000
Issued, subscribed and paid up share capital 3 1,455,262 1,455,262
Reserves 4 1,906,006 1,604,079
Total equity 3,361,268 3,059,341 CURRENT ASSETS
Surplus on revaluation of property 5 3,673,825 1,263,592 Stores, spare parts and loose tools 18 345,798 303,947
Stock-in-trade 19 2,393,113 1,779,826
NON-CURRENT LIABILITIES Trade debts 20 1,329,065 1,050,101
Long term financing 6 1,628,067 1,918,571 Advances 21 596,795 303,362
Liabilities against assets subject to finance lease 7 67,005 100,919 Security deposits and short term prepayments 22 15,578 28,383
Lease finance advance - 35,922 Interest accrued 141 122
Deferred tax 8 157,996 134,667 Other receivables 23 401,928 301,732
1,853,068 2,190,079 Short term investments 24 642,111 607,610
CURRENT LIABILITIES Taxation recoverable 99,805 74,842
Trade and other payables 9 1,040,257 849,755 Cash and bank balances 25 78,851 80,297
Accrued mark-up 10 289,987 185,259 5,903,185 4,530,222
Short term borrowings 11 6,070,435 4,810,471
Current portion of non-current liabilities 12 768,459 917,042
8,169,138 6,762,527 Non-current assets classified as held for sale 26 652,923 601,662
TOTAL LIABILITIES 10,022,206 8,952,606 6,556,108 5,131,884
CONTINGENCIES AND COMMITMENTS 13
TOTAL EQUITY AND LIABILITIES 17,057,299 13,275,539 TOTAL ASSETS 17,057,299 13,275,539
The annexed notes form an integral part of these financial statements.
CHIEF EXECUTIVE DIRECTOR
38 39
PROFIT AND LOSS ACCOUNT STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010 FOR THE YEAR ENDED 30 JUNE 2010
2010 2009 2010 2009
NOTE (Rupees in thousand) (Rupees in thousand)
SALES 27 10,693,338 8,458,899

PROFIT/ (LOSS) AFTER TAXATION 277,861 (439,811)
COST OF SALES 28 (8,692,529) (7,198,993)
OTHER COMPREHENSIVE INCOME/ (LOSS)

GROSS PROFIT 2,000,809 1,259,906
DISTRIBUTION COST 29 (397,818) (464,848)

ADMINISTRATIVE EXPENSES 30 (195,103) (175,965) Surplus / (deficit) on remeasurement of available for sale investment 32,632 (409,506)
OTHER OPERATING EXPENSES 31 (37,323) (22,090)
(630,244) (662,903) Deferred tax on remeasurement of available for sale investment 8,566 (107,495)
1,370,565 597,003 24,066 (302,011)
OTHER OPERATING INCOME 32 78,651 126,551

Adjustment of cross currency interest rate swap - (206,054)
PROFIT FROM OPERATIONS 1,449,216 723,554

Deferred tax on adjustment of cross currency interest rate swap - (72,119)
FINANCE COST 33 (1,072,768) (1,260,230) - (133,935)
PROFIT / (LOSS) BEFORE TAXATION 376,448 (536,676)
Other comprehesive income / (loss) for the year - net of tax 24,066 (435,946)
PROVISION FOR TAXATION 34 (98,587) 96,865
PROFIT/ (LOSS) AFTER TAXATION 277,861 (439,811)
EARNING/ (LOSS) PER SHARE - BASIC AND DILUTED (Rupees) 1.91 (3.02) TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR 301,927 (875,757)
The annexed notes form an integral part of these financial statements. The annexed notes form an integral part of these financial statements.
CHIEF EXECUTIVE DIRECTOR CHIEF EXECUTIVE DIRECTOR
40 41
(Rupees in thousand)
CASH FLOW STATEMENT
3,722,030
213,068
3,935,098
(875,757)
3,059,341
301,927
3,361,268
Equity
FOR THE YEAR ENDED 30 JUNE 2010
Total
DIRECTOR
2010 2009
NOTE (Rupees in thousand)
2,266,768
213,068
2,479,836
(875,757)
1,604,079
301,927
1,906,006
Reserves
CASH FLOWS FROM OPERATING ACTIVITIES
Total
-
Cash generated from operations 35 674,317 1,500,213
Finance cost paid (968,040) (1,311,367)
1,460,554
1,460,554
(439,811)
1,020,743
277,861
1,298,604
Workers' profit participation fund paid - (25)
Total
Sub
-
Income tax paid (108,787) (77,912)
Net increase in long term deposits (1,270) (4,793)
Revenue Reserves
(29,937)
(29,937)
40,000
(439,811)
(429,748)
277,861
(151,887)
Accumulated
loss
Net cash generated from / (used in) operating activities (403,780) 106,116
1,490,491
1,490,491
(40,000)
1,450,491
1,450,491
CASH FLOWS FROM INVESTING ACTIVITIES
Reserve
General
Capital expenditure on property, plant and equipment (281,042) (490,255)
-
(51,261) (190,230)
Reserves
Payment for non-current assets classified as held for sale
Investments made (200) (20,225)
806,214
213,068
1,019,282
(435,946)
583,336
24,066
607,402
Return on bank deposits received 934 2,230
Sub-
Total
-
Proceeds from sale of property, plant and equipment 7,765 4,817
Proceeds from sale of investments - 7,395
133,935
133,935
(133,935)
- 25,000
Hedging
Reserve
Proceeds from sale of non current-assets classified as held for sale
-
Capital Reserves
Dividends received 13,222 16,542
Net cash used in investing activities (310,582) (644,726)
527,360
213,068
740,428
(302,011)
438,417
24,066
462,483
reserve
value
Fair
-
CASH FLOWS FROM FINANCING ACTIVITIES
144,919
144,919
144,919
144,919
Proceeds from long term financing - 200,000
premium
Share
Repayment of long term financing (420,840) (408,395)
-
Short term borrowings - net 1,259,964 815,947
Lease finance advance - 35,922
1,455,262
1,455,262
1,455,262
1,455,262
Capital
The annexed notes form an integral part of these financial statements.

Share
Repayment of liabilities against assets subject to finance lease (90,286) (99,954)
-
Repayment of lease finance advance (35,922) -
Net cash from financing activities 712,916 543,520
Net increase / (decrease) in cash and cash equivalents (1,446) 4,910
Cash and cash equivalents at the beginning of the year 80,297 75,387
STATEMENT OF CHANGES IN EQUITY
Effect of change in accounting policy -Note 2.8 (d)

Cash and cash equivalents at the end of the year 78,851 80,297
Total comprehensive income for the year

Balance as at 30 June 2008-Restated
Total comprehensive loss for the year

The annexed notes form an integral part of these financial
statements.
Balance as at 30 June 2008

Transfer to accumulated loss
ended 30 June 2010

ended 30 June 2009
CHIEF EXECUTIVE
42 43
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010 Taxation
In making the estimates for income tax currently payable by the Company, the management takes into
account the current income tax law and the decisions of appellate authorities on certain issues in the past.
1. THE COMPANY AND ITS OPERATIONS
Provisions for doubtful debts
Kohinoor Textile Mills Limited is a public limited company incorporated in Pakistan under the Companies Act,1913
(now Companies Ordinance, 1984) and listed on the Karachi, Lahore and Islamabad Stock Exchanges. The The Company reviews its receivable against any provision required for any doubtful balances on an
registered office of the Company is situated at 42-Lawrence Road, Lahore. The principal activity of the Company is ongoing basis. The provision is made while taking into consideration expected recoveries, if any.
manufacturing of yarn and cloth, processing and stitching the cloth and trade of textile products.
Impairment of investments in subsidiary companies
In making an estimate of recoverable amount of the company's investments in subsidiary companies, the
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES management considers future cash flows.
The significant accounting policies applied in the preparation of these financial statements are set out below. These d) Standards and amendments to published approved accounting standards that are effective in
policies have been consistently applied to all years presented, unless otherwise stated: current year
2.1 Basis of Preparation i) Changes in accounting policies and disclosures arising from standards and amendments to
published approved accounting standards that are effective in the current year
a) Statement of Compliance
IAS 1 (Revised) 'Presentation of Financial Statements' (effective for annual periods beginning on or
These financial statements have been prepared in accordance with approved accounting standards as
after 01 January 2009).The revised standard prohibits the presentation of items of income and
applicable in Pakistan. Approved accounting standards comprise of such International Financial
expenses (that is ‘non-owner changes in equity’) in the statement of changes in equity, requiring ‘non-
Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under
owner changes in equity’ to be presented separately from owner changes in equity in a statement of
the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance,
comprehensive income. As a result the Company presents in the statement of changes in equity all
1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall
owner changes in equity, whereas all non-owner changes in equity are presented in the statement of
prevail.
comprehensive income. Comparative information has been re-presented so that it also is in conformity
b) Accounting Convention with the revised standard. As the change in accounting policy only impacts presentation aspects, there
is no impact on earnings per share.
These financial statements have been prepared under the historical cost convention, except for the certain
financial instruments, investment properties and freehold land which are carried at their fair values. These IFRS 7 (Amendment) ‘Financial instruments: Disclosures’ (effective for annual periods beginning on or
financial statements represent separate financial statements of the Company. The consolidated financial after 01 January 2009). This amendment requires enhanced disclosures about fair value
statements of the Group are being issued separately. measurement and liquidity risk. In particular, the amendment requires disclosure of fair value
measurements by level of a fair value measurement hierarchy. As the change in accounting policy only
c) Critical accounting estimates and judgments
results in additional disclosures, there is no impact on earnings per share.
The preparation of financial statements in conformity with the approved accounting standards requires the
IFRS 8 'Operating Segments' (effective for annual periods beginning on or after 01 January 2009). It
use of certain critical accounting estimates. It also requires the management to exercise its judgment in the
introduces the "management approach" to segment reporting. IFRS 8 requires presentation and
process of applying the Company's accounting policies. Estimates and judgments are continually
disclosure of segment information based on the internal reports regularly reviewed by the Company's
evaluated and are based on historical experience and other factors, including expectations of future events
chief operating decision makers in order to assess each segment's performance and to allocate
that are believed to be reasonable under the circumstances. The areas where various assumptions and
resources to them. Previously, the Company did not present segment information as IAS 14 limited
estimates are significant to the Company's financial statements or where judgments were exercised in
reportable segments to those that earn a majority of their revenue from sales to external customers
application of accounting policies are as follows:
and therefore did not require the different stages of vertically integrated operations to be identified as
Financial instruments separate segments. Under the management approach, the Company has determined operating
segments on the basis of business activities i.e. Spinning, Weaving, Processing and Home Textile. As
The fair value of financial instruments that are not traded in an active market is determined by using
the change in accounting policy only results in additional disclosures of segment information, there is
valuation techniques based on assumptions that are dependent on conditions existing at balance sheet
no impact on earnings per share.
date.
ii) Other amendment to published approved accounting standards that is effective in the current
Useful lives, patterns of economic benefits and impairments
year
Estimates with respect to residual values, useful lives and pattern of flow of economic benefits are based
IAS 23 (Amendment) 'Borrowing Costs' (effective for annual periods beginning on or after 01 January
on the analysis of the management of the Company. Further, the Company reviews the value of assets for
2009). It requires an entity to capitalize borrowing costs directly attributable to the acquisition,
possible impairment on an annual basis. Any change in the estimates in the future might affect the carrying
construction or production of a qualifying asset (one that takes a substantial period of time to get ready
amount of respective item of property, plant and equipment, with a corresponding effect on the
for its intended use or sale) as part of the cost of that asset. The Company's accounting policy on
depreciation charge and impairment.
borrowing cost, as disclosed in note 2.13, complies with the above mentioned requirements to
capitalize borrowing cost and hence this change has not impacted the Company's accounting policy.
44 45
e) Standards, interpretations and amendments to published approved accounting standards that are taxable profits will be available against which the deductible temporary differences, unused tax losses and tax
effective in current year but not relevant credits can be utilized.
There are other new standards, interpretations and amendments to the published approved accounting Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse,
standards that are mandatory for accounting periods beginning on or after 01 July 2009 but are considered based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is
not to be relevant or do not have any significant impact on the Company's financial statements and are charged or credited in the profit and loss account, except to the extent that it relates to items recognized in
therefore not detailed in these financial statements. other comprehensive income are directly in equity. In this case the tax is also recognized in other
comprehensive income or directly in equity, respectively.
f) Standard and amendments to published approved accounting standards that are not yet effective
but relevant 2.4 Provisions
Following standard and amendments to existing standards have been published and are mandatory for the Provisions are recognized when the Company has a legal or constructive obligation as a result of past events
Company's accounting periods beginning on or after 01 July 2010 or later periods: and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligations and a reliable estimate of the amount can be made.
IFRS 9 'Financial Instruments' (effective for annual periods beginning on or after 01 January 2013). IFRS 9
has superseded the IAS 39 'Financial Instruments: Recognition and Measurement'. It requires that all 2.5 Property, plant and equipment
equity investments are to be measured at fair value while eliminating the cost model for unquoted equity
Owned
investments. Certain categories of financial instruments available under IAS 39 will be eliminated.
Moreover, it also amends certain disclosure requirements relating to financial instruments under IFRS 7. Property, plant and equipment except freehold land and capital work in progress are stated at cost less
The management of the Company is in the process of evaluating impacts of the aforesaid standard on the accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant and equipment
Company's financial statements. consists of historical cost, borrowing cost pertaining to erection/construction period of qualifying assets and
other directly attributable cost of bringing the asset to working condition. Freehold land is stated at revalued
There are other amendments resulting from annual Improvements projects initiated by International
amount less any identified impairment loss. Capital work in progress is stated at cost less any identified
Accounting Standards Board in April 2009 and May 2010, specifically in IFRS 7 'Financial Instruments:
impairment loss.
Disclosures', IFRS 8 'Operating Segments', IAS 1 'Presentation of Financial Statements', IAS 7 'Statement
of Cash Flows', IAS 24 'Related Party Disclosures' and IAS 36 'Impairment of Assets' that are considered Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as
relevant to the Company's financial statements. These amendments are unlikely to have a significant appropriate, only when it is probable that future economic benefit associated with the item will flow to the
impact on the Company's financial statements and have therefore not been analyzed in detail. Company and the cost of the item can be measured reliably. All other repair and maintenance costs are
charged to profit and loss account during the period in which they are incurred.
g) Standards, interpretations and amendments to published approved accounting standards that are
not effective in current year and not considered relevant During the current year, the Company has changed its accounting policy for measurement of freehold land
from cost model to revaluation model. Freehold land is now stated at revalued amount less any identified
There are other accounting standards, amendments to published approved accounting standards and new
impairment loss. Previously, freehold land was stated at cost less any identified impairment loss. The effect of
interpretations that are mandatory for accounting periods beginning on or after 01 July 2010 but are
revaluation of freehold land has been dealt with in accordance with the requirements of International
considered not to be relevant or do not have any significant impact on the Company's financial statements
Accounting Standard (IAS) 16 "Property, Plant and Equipment". Had there been no change in this accounting
and are therefore not detailed in these financial statements.
policy, property, plant and equipment would have been lower by Rupees 2,410.233 million. This change in
2.2 Employee benefit accounting policy has not impact on profit or loss.
The Company operates an approved funded provident fund scheme covering all permanent employees. Equal Depreciation
monthly contributions are made both by the Company and employees at the rate of 8.33 percent of basic
Depreciation on all property, plant and equipment is charged to profit and loss account applying the reducing
salary and cost of living allowance to the fund. The Company's contributions to the fund are charged to profit
balance method so as to write off the cost / depreciable amount of the asset over their estimated useful lives at
and loss account.
the rates given in Note 14.1. Depreciation on additions is charged from the month the assets are available for
2.3 Taxation use while no depreciation is charged in the month in which the assets are disposed off. The residual values
and useful lives of assets are reviewed by the management, at each financial year end and adjusted if impact
Current
on depreciation is significant.
Provision for current tax is based on the taxable income for the year determined in accordance with the
Derecognition
prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax
rates expected to apply to the profit for the year if enacted. The charge for current tax also includes An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits
adjustments, where considered necessary, to provision for tax made in previous years arising from are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the
assessments framed during the year for such years. profit and loss account in the year the asset is derecognized.
Deferred Leased
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences Finance lease
arising from differences between the carrying amount of assets and liabilities in the financial statements and
Leases where the Company has substantially all the risks and rewards of ownership are classified as finance
the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally
lease. Assets subject to finance lease are capitalized at the commencement of the lease term at the lower of
recognized for all taxable temporary differences and deferred tax assets to the extent that it is probable that
46 47
present value of minimum lease payments under the lease agreements and the fair value of the leased assets, amount initially recognised minus principal repayments, plus or minus the cumulative amortisation, using
each determined at the inception of the lease. the effective interest method, of any difference between the initially recognized amount and the maturity
amount. For investments carried at amortised cost, gains and losses are recognized in profit and loss
The related rental obligation, net of finance cost, is included in liabilities against assets subject to finance
account when the investments are derecognized or impaired, as well as through the amortisation process.
lease. The liabilities are classified as current and long term depending upon the timing of payments.
c) Available-for-sale
Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the
balance outstanding. The finance cost is charged to profit and loss account over the lease term. Investments intended to be held for an indefinite period of time, which may be sold in response to need for
liquidity, or changes to interest rates or equity prices are classified as available-for-sale. After initial
Depreciation of assets subject to finance lease is recognized in the same manner as for owned assets.
recognition, investments which are classified as available-for-sale are measured at fair value. Gains or
Depreciation of the leased assets is charged to profit and loss account.
losses on available-for-sale investments are recognized directly in statement of other comprehensive
2.6 Investment properties income until the investment is sold, de-recognized or is determined to be impaired, at which time the
cumulative gain or loss previously reported in statement of other comprehensive income is included in
Land and buildings held for capital appreciation or to earn rental income are classified as investment
profit and loss account. These are sub-categorized as under:
properties. Investment properties are carried at fair value which is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specific asset. The valuation of the Quoted
properties is carried out with sufficient regularity.
For investments that are actively traded in organized capital markets, fair value is determined by reference
Gains or losses arising from a change in the fair value of investment properties are included in the profit and to stock exchange quoted market bids at the close of business on the balance sheet date.
loss account currently.
Unquoted
2.7 Intangible assets
Fair value of unquoted investments is determined on the basis of appropriate valuation techniques as
Intangible assets, which are non-monetary assets without physical substance, are recognized at cost, which allowed by IAS 39 "Financial Instruments: Recognition and Measurement".
comprise purchase price, non-refundable purchase taxes and other directly attributable expenditure relating
During the current year ended, the Company has changed the accounting estimate for valuation of its
to their implementation and customization. After initial recognition an intangible asset is carried at cost less
unquoted available for sale investment. Fair value of unquoted, available for sale investment is now
accumulated amortization and impairment losses, if any. Intangible assets are amortized from the month,
determined by using net assets based valuation method. Previously, valuation was carried out using
when these assets are available for use, using the straight line method, whereby the cost of the intangible
dividend stream method. Effect of this change in accounting estimate is recognized prospectively in
asset is amortized over its estimated useful life over which economic benefits are expected to flow to the
accordance with the requirements of International Accounting Standard (IAS) 8 "Accounting Policies,
Company. The useful life and amortization method is reviewed and adjusted, if appropriate, at each balance
Changes in Accounting Estimates and Errors". Had there been no change in this accounting estimate,
sheet date.
short term investments, fair value reserve and deferred taxation would have been lower by Rupees 32.633
2.8 Investments million, Rupees 24.067 million and Rupees 8.566 million respectively with no effect on the profit or loss.
Classification of investment is made on the basis of intended purpose for holding such investment. d) Investment in Subsidiary Companies
Management determines the appropriate classification of its investments at the time of purchase and re- Investments in subsidiary companies are stated at cost less impairment loss, if any, in accordance with the
evaluates such designation on regular basis. provisions of IAS 27 'Consolidated and Separate Financial Statements'.
Investments are initially measured at fair value plus transaction costs directly attributable to acquisition, except During the current year, the Company has changed its accounting policy for measurement of its
for "investment at fair value through profit and loss " which is measured initially at fair value. investments in subsidiary companies. Investment in subsidiary companies are now measured at cost less
impairment loss, if any. Previously investment in subsidiary companies was classified as available for sale
The Company assesses at the end of each reporting period whether there is any objective evidence that
and measured at fair value. Effect of this change in accounting policy is recognized retrospectively in
investments are impaired. If any such evidence exists, the Company applies the provisions of IAS 39
accordance with the requirements of International Accounting Standard (IAS) 8 "Accounting Policies,
'Financial Instruments: Recognition and Measurement' to all investments, except investments in subsidiary
Changes in Accounting Estimates and Errors". Had there been no change in this accounting policy, fair
companies, which are tested for impairment in accordance with the provisions of IAS 36 'Impairment of
value reserve and investment in subsidiary companies would have been lower by Rupees 1,668.617
Assets'.
million.
a) Investment at fair value through profit or loss
2.9 Inventories
Investment classified as held-for-trading and those designated as such are included in this category.
Inventories, except for stock in transit and waste stock/ rags are stated at lower of cost and net realizable value.
Investments are classified as held-for-trading if they are acquired for the purpose of selling in the short
Cost is determined as follows:
term. Gains or losses on investments held-for-trading are recognised in profit and loss account.
Stores, spare parts and loose tools
b) Held-to-maturity
Useable stores, spare parts and loose tools are valued principally at moving average cost, while items
Investments with fixed or determinable payments and fixed maturity are classified as held-to-maturity
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value plus
when the Company has the positive intention and ability to hold to maturity. Investments intended to be
other charges paid thereon.
held for an undefined period are not included in this classification. Other long term investments that are
intended to be held to maturity are subsequently measured at amortized cost. This cost is computed as the
48 49
Stock-in-trade outstanding and rates applicable thereon.
Cost of raw material, work-in-process and finished goods is determined as follows:. ` 2.15 Foreign currencies
(i) For raw materials: Annual average basis. These financial statements are presented in Pak Rupees, which is the Company’s functional currency. All
monetary assets and liabilities denominated in foreign currencies are translated into Pak Rupees at the rates
(ii) For work-in-process and finished goods: Average manufacturing costincluding a portion of
of exchange prevailing at the balance sheet date, while the transactions in foreign currency during the year are
production overheads.
initially recorded in functional currency at the rates of exchange prevailing at the transaction date. All non-
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon. Waste stock / monetary items are translated into Pak Rupees at exchange rates prevailing on the date of transaction or on
rags are valued at net realizable value. the date when fair values are determined. Exchange gains and losses are included in the income currently.
Net realizable value signifies the estimated selling price in the ordinary course of business less the estimated 2.16 Financial instruments
costs of completion and the estimated costs necessarily to make a sale.
Financial instruments carried on the balance sheet include investments, deposits, trade debts, advances,
2.10 Derivative financial instruments interest accrued, other receivables, cash and bank balances, long-term financing, liabilities against assets
subject to finance lease, lease finance advance, short-term borrowings, accrued mark-up and trade and other
Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered
payables etc. Financial assets and liabilities are recognized when the Company becomes a party to the
into and are remeasured to fair value at subsequent reporting dates. The method of recognizing the resulting
contractual provisions of instrument. Initial recognition is made at fair value plus transaction costs directly
gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of
attributable to acquisition, except for “financial instrument at fair value through profit or loss” which is measured
the item being hedged. The Company designates certain derivatives as cash flow hedges.
initially at fair value.
The Company documents at the inception of the transaction the relationship between the hedging instruments
Financial assets are de-recognized when the Company loses control of the contractual rights that comprise
and hedged items, as well as its risk management objective and strategy for undertaking various hedge
the financial asset. The Company loses such control if it realizes the rights to benefits specified in contract, the
transactions. The Company also documents its assessment, both at hedge inception and on an ongoing
rights expire or the Company surrenders those rights. Financial liabilities are de-recognized when the
basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting
obligation specified in the contract is discharged, cancelled or expired. Any gain or loss on subsequent
changes in cash flow of hedged items.
measurement (except available for sale investments) and de-recognition is charged to the profit or loss
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow currently. The particular measurement methods adopted are disclosed in the following individual policy
hedges is recognized in statement of other comprehensive income. The gain or loss relating to the ineffective statements associated with each item and in the accounting policy of investments.
portion is recognized immediately in the profit and loss account.
a) Trade and other receivables
Amounts accumulated in statement of other comprehensive income are recognized in profit and loss account
Trade debts and other receivables are carried at original invoice value less an estimate made for doubtful
in the periods when the hedged item will affect profit or loss.
debts based on a review of all outstanding amounts at the year end. Bad debts are written off when
2.11 Cash and cash equivalents identified.
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit accounts and b) Borrowings
other short term highly liquid instruments that are readily convertible into known amounts of cash and which
Borrowings are recognized initially at fair value and are subsequently stated at amortized cost. Any
are subject to insignificant risk of changes in values.
difference between the proceeds and the redemption value is recognized in the profit and loss account
2.12 Non current assets classified as held for sale over the period of the borrowings using the effective interest method.
Non-current assets are classified as held for sale if its carrying amount will be recovered principally through a c) Trade and other payables
sale transaction rather than continuous use. These are measured at lower of carrying amount and fair value
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally the
less costs to sell.
transaction cost.
2.13 Borrowing cost
2.17 Impairment
Interest, mark-up and other charges on long-term finances are capitalized up to the date of commissioning of
a) Financial assets
respective qualifying assets acquired out of the proceeds of such long-term finances. All other interest, mark-
up and other charges are recognized in profit and loss account. A financial asset is considered to be impaired if objective evidence indicate that one or more events had a
negative effect on the estimated future cash flow of that asset.
2.14 Revenue recognition
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a difference
Revenue from difference sources is recognized as under:
between its carrying amount and the present value of estimated future cash flows discounted at the original
a) Revenue from local sales is recognized on dispatch of goods to customers while in case of export sales it is effective interest rate. An impairment loss in respect of available for sale financial asset is calculated by
recognized on the date of bill of lading. reference to its current fair value.
b) Dividend on equity investments is recognized when right to receive the dividend is established. Individually significant financial assets are tested for impairment on a individual basis. The remaining
financial assets are assessed collectively in groups that share similar credit risk characteristics.
` c) Profit on deposits with banks is recognized on time proportion basis taking into account the amounts
50 51
3. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
b) Non financial assets 2010 2009 2010 2009
The carrying amount of assets are reviewed at each balance sheet date for impairment whenever events (Number of shares) (Rupees in thousand)
are changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. If 1,596,672 1,596,672 Ordinary shares of Rupees 10 each allotted on 15,967 15,967
such indication exists, and where the carrying value exceeds the estimated recoverable amount, assets reorganisation of Kohinoor Industries Limited
are written down to their recoverable amounts. The resulting impairment loss is taken to the profit and loss
26,156,000 26,156,000 Ordinary shares allotted under scheme of 261,560 261,560
account except for impairment loss on revalued assets, which is adjusted against the related revaluation
arrangement of merger of Part II of Maple Leaf
surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset.
Electric Company Limited
26,858,897 26,858,897 Ordinary shares allotted under scheme of 268,589 268,589
2.18 Related party transactions and transfer pricing arrangement of merger of Kohinoor Raiwind
Mills Limited and Kohinoor Gujar Khan Mills
Transactions and contracts with related parties are carried out at an arm's length price determined in Limited.
accordance with comparable uncontrolled price method.
38,673,628 38,673,628 Ordinary shares of Rupees 10 each issued as 386,736 386,736
bonus shares
2.19 Segment reporting Ordinary shares of Rupees 10 each issued for
52,241,019 52,241,019 522,410 522,410
Segment reporting is based on the operating (business) segments of the Company. An operating segment is a cash
component of the Company that engages in business activities from which it may earn revenues and incur 145,526,216 145,526,216 1,455,262 1,455,262
expenses, including revenues and expenses that relate to the transactions with any of the Company's other
components. An operating segment's operating results are reviewed regularly by the chief executive officer to 3.1 Zimpex (Private) Limited which is an associated company held 22,510,635 (2009: 22,510,635) ordinary
make decisions about resources to be allocated to the segment and assess its performance, and for which shares of Rupees 10 each as at 30 June 2010.
(Restated)
discrete financial information is available. NOTE 2010 2009
Segment results that are reported to the chief executive officer include items directly attributable to a segment 4. RESERVES (Rupees in thousand)
as well as those that can be allocated on a reasonable basis. Those income, expenses, assets, liabilities and
other balances which can not be allocated to a particular segment on a reasonable basis are reported as Composition of reserves is as follows:
unallocated. Capital
The Company has three reportable business segments. Spinning (Producing different quality of yarn using 144,919 144,919
Share premium 4.1
natural and artificial fibers), Weaving (Producing different quality of greige fabric using yarn) and Processing 462,483 438,417
Fair value reserve - net of deferred tax 4.2
and Home Textile (Processing greige fabric for production of printed and dyed fabric and manufacturing of 607,402 583,336
home textile articles) .
Revenue
Transaction among the business segments are recorded at arm's length prices using admissible valuation
methods. Inter segment sales and purchases are eliminated from the total. General reserve 1,450,491 1,450,491
Accumulated loss (151,887) (429,748)
1,298,604 1,020,743
2.20 Dividend and other appropriations 1,906,006 1,604,079
Dividend distribution to the Company's shareholders is recognized as a liability in the Company's financial
4.1 This reserve can be utilized by the Company only for the purposes specified in section 83(2) of the
statements in the period in which the dividends are declared and other appropriations are recognized in the
Companies Ordinance, 1984.
period in which these are approved by the Board of Directors.
4.2 Fair value reserve - net of deferred tax
2.21 Off setting Balance as at 01 July 438,417 740,428

Financial assets and financial liabilities are set off and the net amount is reported in the financial statements
Add/ (less) : Fair value adjustment on investment in Security
when there is a legal enforceable right to set off and the Company intends either to settle on a net basis, or to
General Insurance Company Limited during the year 32,632 (409,506)
realize the assets and to settle the liabilities simultaneously.
Less: Related deferred tax asset/ liability on investment in
Security General Insurance Company Limited 8,566 (107,495)
Balance as at 30 June 462,483 438,417
52 53
NOTE 2010 2009 6.1 The Bank of Punjab - (BOP-1)
This represents demand finance facility of Rupees 400 million, obtained for import of state of art machinery
5. SURPLUS ON REVALUATION OF PROPERTY
and is allowed for a period of four years with a grace period of six months. The loan is repayable in 7 equal half
yearly installments commenced after conclusion of grace period. It is secured by bank's exclusive
Investment properties 1,263,592 1,263,592
hypothecation charge on machinery imported and personal guarantees of sponsor directors. Facility
amounting to Rupees 300 million carries mark up at the rate of 6 months average KIBOR plus 100 basis
Freehold land 5.1 2,410,233 -
points (bps) and additional facility of Rupees 100 million carries mark up at the rate of 6 months average
KIBOR plus 275 bps with a floor of 5% per annum, payable quarterly. On November 29, 2006 loans amounting
3,673,825 1,263,592
to Rupees 150.431 million were converted to LTF-EOP consisting of Rupees 61.725 million at 6 % per annum
5.1 Freehold land is now stated at revalued amount as a result of change in accounting policy from cost model to and Rupees 88.706 million at 7 % fixed rate of mark up.
revaluation model. The revaluation of freehold lands were carried out by Independent valuer M/s ARCH-e'-
decon (Evaluators, Surveyors, Architects & Engineers) as at 30 March 2010. The value of land has increased
by Rupees 2,410.233 million due to revaluation. 6.2 NIB Bank Limited (NIB - 1)
2010 2009 This represents LTF-EOP facility of Rupees 157 million obtained for import of textile machinery for a period of
6. LONG TERM FINANCING (Rupees in thousand) three years including a grace period of six months. It is repayable in ten equal quarterly installments. It is
From banking companies and other financial institutions - secured by first exclusive hypothecation charge on the imported machinery and allied equipment, including
Secured installation and local component costs. It carries mark up at fixed rate of 6 % per annum.
The Bank of Punjab (BOP - 1) 6.1 26,623 46,598

NIB Bank Limited (NIB - 1) 6.2 107,716 139,815 6.3 NIB Bank Limited (NIB - 2)
NIB Bank Limited (NIB - 2) 6.3 198,803 223,200 This represents a term finance facility of Rupees 300 million under State Bank of Pakistan (LTF-EOP) scheme
Albaraka Islamic Bank B.S.C (E.C) (AIB) 6.4 8,333 41,666 for a period of five years with a grace period of one year. The financing is for import of 72 Picanol Omni Plus
Allied Bank Limited (ABL -1 ) 6.5 65,094 113,067 wide width Air Jet Looms and Tying & Knotting machine plus five (5) Gen Set gas generators being part of
Saudi Pak Industrial and Agricultural Investment Company BMR. It is repayable in equal quarterly installments, commencing after expiry of grace period. The facility is
Limited (SPIAICPL-1) 6.6 18,055 21,666 secured against first pari passu charge over fixed assets of Raiwind Division and personal guarantees of the
Saudi Pak Industrial and Agricultural Investment Company sponsor directors. It carries fixed mark up at the rate of 7% per annum.
Limited (SPIAICPL-2) 6.7 10,000 20,000
Saudi Pak Industrial and Agricultural Investment Company
Limited (SPIAICPL-3) 6.8 156,250 187,500 6.4 Albaraka Islamic Bank B.S.C (E.C) (AIB)
Standard Chartered Bank (Pakistan) Limited (SCB-2) 6.9 100,000 175,000
Standard Chartered Bank (Pakistan) Limited - Syndicated term This represents murabaha finance facility of Rupees 100 million, obtained for construction of buildings. The
finance 6.10 186,500 200,000 facility is allowed for a period of four years including a grace period of one year. The facility is repayable in
Allied Bank Limited - Syndicated term finance 6.10 543,150 568,750 sixteen equal quarterly installments commenced with first payment due at the end of 15th month from the date
The Bank of Khyber - Syndicated term finance 6.10 95,500 100,000 of disbursement. It is secured by pari passu charge and hypothecation on fixed assets i.e. land and building
Pak Libya Holding Company - Syndicated term finance 6.10 47,750 50,000 constructed for ring spinning and stitching. It carries mark up at the rate of 3-years KIBOR plus 2% per annum
Bank Al Falah Limited - Syndicated term finance 6.10 477,500 500,000 with floor of 12.75% per annum.
Faysal Bank Limited - Syndicated term finance 6.10 279,750 300,000
Standard Chartered Bank (Pakistan) Limited (SCB-1) - 20,226
Faysal Bank Limited (FBL - 1) - 34,376 6.5 Allied Bank Limited (ABL-1)
This represents term finance facility of Rupees 300 million , obtained for import of state of art machinery and is
2,321,024 2,741,864 allowed for a period of five years with a grace period of one year. The facility is repayable in sixteen (16) equal
Less: Current portion shown under current liabilities 12 700,434 830,770 quarterly installments commenced after conclusion of grace period. It is secured by first exclusive charge on
1,620,590 1,911,094 machinery imported. Facility amounting to Rupees 100 million carries mark up at the rate of 6 months KIBOR
plus 1.25% per annum, facility of Rupees 125 million carries mark up at the rate of 6 months KIBOR plus
Other loans - Unsecured 1.75% per annum and facility of Rupees 75 million carries mark up at the rate of 6 months KIBOR plus 2.50%
4,794 4,794 per annum with no floor and cap. On December 28, 2006 loans amounting to Rupees 124.732 million were
Kohinoor Sugar Mills Limited (KSML) 6.11 converted to LTF-EOP at 7% per annum fixed rate of mark up.
2,683 2,683
Kohinoor Industries Limited (KIL) 6.12 7,477 7,477
1,628,067 1,918,571 6.6 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 1)
This represents the LTF-EOP facility of Rupees 65 million for import of textile machinery and is allowed for a
54 55
period of five years with a grace period of six months. The facility is repayable in eighteen (18) equal quarterly 2010 2009
installments commenced from February 19, 2006. It is secured by first exclusive charge on imported NOTE (Rupees in thousand)
machinery. It carries mark up at a fixed rate of 7% per annum. 7. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
6.7 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 2) Minimum lease payments 155,263 207,348
Less: Un-amortized finance charges 20,233 20,157
This represents a term finance of Rupees 40 million under State Bank of Pakistan (LTF-EOP) scheme at
subsidized and fixed rate of mark up of 7% per annum. The financing is for import of warping and sizing Present value of minimum lease payments 135,030 187,191
machines being part of BMR. This facility for a period of five years with a grace period of one year and is Less: Current portion shown under current liabilities 12 68,025 86,272
repayable in equal quarterly installments. 67,005 100,919
7.1 The minimum lease payments has been discounted at implicit interest rates which range from 6.00 % to
6.8 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 3) 18.00% (2009: from 6.00% to 17.64%) per annum to arrive at their present values. The lease rentals are
This represents term finance facility of Rupees 250 million obtained for debt reprofiling for a period of five payable in monthly and quarterly installments. In case of any default an additional charge at the rate of 0.1
years including grace period of one year. The facility is repayable in 8 equal six monthly installments. It is percent per day shall be payable. Taxes, repairs, replacements and insurance costs are to be borne by the
secured by first pari passu charge by way of hypothecation on all present and future plant and machinery of Company. The lease agreements carry renewal and purchase option at the end of the lease term. There are
the Company and by way of mortgage on land measuring 121 acres, 2 kanals and 1 marla, situated at main no financial restrictions in lease agreements. These are secured by deposit of Rupees 21.065 million (2009:
Peshawar Road, Rawalpindi with 25% margin. Initially ranking charge will be created which will be upgraded Rupees 24.841 million) included in long term security deposits, demand promissory notes, personal
within 90 days from the date of disbursement. The facility carries mark up at the rate of 3 months KIBOR plus guarantees and pledge of sponsors' shares in public limited companies.
170 bps per annum with quarterly repricing effective from March 03, 2008.
7.2 Minimum lease payments and present value of minimum lease payments are regrouped as under:
6.9 Standard Chartered Bank (Pakistan) Limited (SCB-2) 30 June 2010 30 June 2009
This represents the term finance facility of Rupees 200 million, obtained for the purpose of financing the
Present
unwinding cost of cross currency swap deal with the bank and is allowed for a period of two years. The facility Present
Minimum value of
is payable in eight equal quarterly installments. It is secured by ranking charge of Rupees 266.666 million on Minimum value of
lease minimum
land of Kohinoor Textile Mills Limited situated at Rawalpindi. It carries mark up at the rate of 3-months lease minimum
payments lease
average KIBOR plus 2.75% per annum with no floor and cap. payments lease
payments
6.10 Syndicated Term Finance payments
Syndicated Finance of Rupees 1.750 billion was arranged through Standard Chartered Bank (Pakistan) ------------------------(Rupees in thousand)----------------------
limited (SCBL) to swap highly priced loans. Long term facility was arranged and availed in Islamic and 88,922 86,272
Due not later than one year 85,937 68,025
conventional mode of financing. Standard Chartered Bank (Pakistan) Limited (Arranger), Allied Bank Limited
and Bank of Khyber disbursed Rupees 868.750 million under Islamic mode of financing whereas Bank Alfalah 118,426 100,919
Due later than one year but not later than five years 69,326 67,005
Limited, Faysal Bank Limited and Pak Libya Holding Company disbursed Rupees 850 million under
conventional means of financing. Tenor of the loan was 5 years including one year grace period and was 135,030 207,348 187,191
155,263
repayable in 16 equal quarterly installments. During the year, the Company has entered into supplimental to
its syndicated term finance facility agreement where by the repayment schedule of the purchase price has 2010 2009
been modified. Now the loan is repayble in twenty four installments within a tenor of six years . It is secured by (Rupees in thousand)
8. DEFERRED TAX
first pari passu charge over the fixed assets of the Company including surplus land and buildings at Peshawar
Road, Rawalpindi. It carries mark-up at 3 months average KIBOR plus 150 bps to be repriced at the end of This comprises of following :
each quarter. Deferred tax liability on taxable temporary differences in respect of :
6.11 Kohinoor Sugar Mills Limited (KSML) - Accelerated tax depreciation allowance 329,260 289,245
A civil suit has been filed by KSML for recovery of disputed liability which is being contested by the Company. - Surplus on revaluation of investment 164,613 156,047
6.12 Kohinoor Industries Limited (KIL) 493,873 445,292
The balance is an old one, un-reconciled, unconfirmed and disputed. Deferred tax asset on deductible temporary differences in respect of:
6.13 Current portion of long term liabilities include overdue installments amounting to Rupees 134.816 million Unused tax losses 335,877 310,625
(2009: Nil) 157,996 134,667
56 57
8.1 The movement in deferred tax assets and liabilities during the year without taking into consideration the off 2010 2009
setting balances within the same tax jurisdiction is as follows: NOTE (Rupees in thousand)
10. ACCRUED MARK-UP
Deferred tax liabilities Deferred tax assets Long term financing 119,580 62,793
Accelerated Surplus on Unrealized Unused
Net liability
tax revaluation gain on Total tax Total (asset) Short term borrowings 167,594 120,542
depreciation of derivative
losses
allowance investment financial
instrument Liabilities against assets subject to finance lease 2,813 1,924
------------------------------------------(Rupees in thousand)----------------------------------------
Balance as at 01July 2008 356,607 263,542 72,119 692,268 225,369 225,369 466,899 289,987 185,259
11. SHORT TERM BORROWINGS
Charged to other comprehensive income (107,495) (72,119) (179,614) - - (179,614)
From banking companies - Secured
Charged to profit and loss account (67,362) - - (67,362) 85,256 85,256 (152,618)
Short term running finance 11.1 2,285,452 1,253,594
Balance as at 30 June 2009 289,245 156,047 - 445,292 310,625 310,625 134,667
Other short term finances 11.2 2,200,553 1,968,863
Charged to other comprehensive income - 8,566 - 8,566 - - 8,566
Charged to profit and loss account 40,015 - - 40,015 25,252 25,252 14,763 State Bank of Pakistan (SBP) refinances 11.3 1,555,000 1,580,000
Balance as at 30 June 2010 329,260 164,613 - 493,873 335,877 335,877 157,996 Temporary bank overdraft 29,430 8,014
6,070,435 4,810,471
2010 2009 11.1 The running finance facilities sanctioned by various banks aggregate to Rupees 2,390 million (2009: Rupees
NOTE 1,255 million). The rates of mark-up range from 3.23% to 25% (2009: from 3.63% to 18.50%) per annum.
9. TRADE AND OTHER PAYABLES These arrangements are secured by pledge of raw material, charge on current assets of the Company
including hypothecation of work-in-process, stores and spares, letters of credit, firm contracts, book debts and
Creditors 788,562 700,490 personal guarantees of the sponsor directors.
Accrued liabilities 151,067 99,980 11.2 The other short term finance facilities sanctioned by various banks aggregate to Rupees 3,638 million (2009:
Advances from customers 18,593 32,839 Rupees 2,348 million). The rates of mark-up range from 6.63% to 18.00% (2009: from 6.08% to 18.48%) per
Workers' profit participation fund 9.1 21,669 1,254 annum. These arrangements are secured by pledge of raw material, charge on current assets of the Company
Workers' welfare fund 31 7,686 - including hypothecation of work-in-process, stores and spares, letters of credit, firm contracts, book debts and
Unclaimed dividend 2,681 2,681 personal guarantees of the sponsor directors.
Withholding tax payable 2,715 2,388
Payable to employees' provident fund trust - 5,138 11.3 The export refinance facilities sanctioned by various banks aggregate to Rupees 1,665 million (2009: Rupees
Others 47,284 4,985 2,950 million). The rates of mark-up range from 6.50% to 8.50%(2009: 7.50%) per annum. These
1,040,257 849,755 arrangements are secured by way of charge on current assets of the Company and personal guarantees of the
sponsor directors.
9.1 Workers' profit participation fund 2010 2009
Balance as on 01 July 1,254 1,279
12. CURRENT PORTION OF NON-CURRENT LIABILITIES
Add: Provision for the year 31 20,227 -
Add: Interest for the year 188 164
Less: Payments during the year - 189 Long term financing - secured 6 700,434 830,770
21,669 1,254
Liabilities against assets subject to finance lease 7 68,025 86,272
9.1.1 The Company retains workers’ profit participation fund for its business operations till the date of allocation to
workers. Interest is paid at prescribed rate under the Companies Profit (Workers Participation) Act, 1968 on 768,459 917,042
funds utilized by the Company till the date of allocation to workers.
58 59
13. CONTINGENCIES AND COMMITMENTS
(12,397)
(12,748)
(369,616)
(371,618)
(2,148,222)
(4,418)
(1,039)
(2,947)
(2,505,009)
(1,716)
(2,865,595)
6,048,099
3,899,877
3,899,877
3,379
4,047,897
6,552,906
4,047,897
4,047,897
6,409,975
9,275,570
6,409,975
9,450
521,622
325,179
2,410,233
11,032
-
13.1 Contingencies
-
-
-
Total
a) The Company has filed an appeal before Honorable Appellate Tribunal Inland Revenue, Lahore for tax year
2003 under section 129/132 of Income Tax Ordinance, 2001, which is pending adjudication. The tax loss
(932)
(450)
(3,668)
(6,118)
(1,779)
7,660
5,881
5,881
4,949
7,660
4,949
4,949
831
1,542
831
(2,711)
(711)
2,450
-
-
-
-
Vehicles
was restricted to Rupees .27.540 million against declared loss of Rupees 122.933 million.
-
-
20
Leased Assets
In addition to the above, another appeal for tax year 2003 against order under section 221 dated 24
January 2009, on the disallowance of depreciation expense of Rupees 62.665 million has been filed
(32,459)
(32,226)
(173,260)
(113,231)
(78,910)
(83,566)
408,248
329,338
329,338
368,320
479,689
368,320
368,320
279,555
363,121
279,555
(111,369)
71,441
56,692
60,029
-
-
-
-
Machinery
-
-
Plant &
before Honorable Appellate Tribunal Inland Revenue which is pending adjudication. This is a cross appeal.
10
Although the learned Commissioner Inland Revenue (Appeals) has already annulled the order under
------------------------------------------------------------------------------(RUPEES IN THOUSAND)---------------------------------------------------------------------------------
section 221 of the Income Tax Ordinance, 2001, vide order dated 30 July 2009, the Taxation Officer has
(4,646)
(8,720)
(2,450)
(3,278)
(7,979)
(43,315)
(1,797)
(49,186)
(965)
(57,302)
95,867
52,552
52,552
49,233
98,419
49,233
49,233
49,018
106,320
49,018
7,198
2,849
5,061
3,668
2,313
6,118
-
-
-
-
illegally repeated the original assessment. Therefore, an appeal has also been filed before Commissioner
Vehicles
20
Inland Revenue under section 187 of Income Tax Ordinance, 2001 for tax year 2003, the appellate order of
which is pending. The revenue involved on account of penalty was Rupees.17.484 million. The Company
(45)
(121)
(1,042)
(1,345)
(10,519)
(46)
(6)
(12,792)
21,176
10,657
10,657
23,485
14,035
26,827
14,035
(11,486)
11,999
11,999
11,999
has strong gounds and is expecting favourable outcome.
75
39
2,430
3,387
-
-
-
-
Equipment
-
Office
10
b) The Company has filed an appeal before the Honorable Appellate Tribunal Inland Revenue under section
122(5A) / 122(1) / 129 of Income Tax Ordinance, 2001 for tax year 2004 which is pending adjudication. The
(142)
(3,175)
(3,275)
(31,608)
(25)
(34,666)
(37,941)
61,949
30,341
30,341
32,464
67,130
32,464
32,464
31,844
69,785
31,844
5,323
2,655
117
-
-
-
-
Furniture &
loss for the year has been assessed at Rupees.255.684 million creating refund of Rupees 7.498 million.
-
-
-
Fixture
10
c). The Company and the tax authorities have filed appeals before different appellate authorities regarding
sales tax matters. Pending the outcome of appeals filed by the Company and tax authorities, no provision
(45)
(6,047)
(4,944)
(34,087)
(45)
(40,134)
(45,078)
54,133
20,046
20,046
15,775
55,909
15,775
15,775
13,172
58,250
13,172
1,821
2,341
Computer &
Installations
-
-
-
-
has been made in these financial statements which on the basis adopted by the authorities would amount
-
-
-
30
IT
to Rupees 33.473 million (2009: 33.473 million), since the Company has strong grounds against the
assessments framed by the tax authorities.
(954)
(1,046)
(20,095)
(21,141)
(22,095)
30,582
10,487
10,487
9,712
30,853
9,712
9,712
8,797
30,892
8,797
39
271
-
-
-
-
Services &
Equipment
-
-
-
-
-
d) The Company has filed recovery suits in civil courts of Rupees 4.589 million against various suppliers and
Other
10
Owned Assets
customers for goods supplied by/ to them. Pending the outcome of the cases, no provision there against
has been made in these financial statements since the Company is confident about favourable outcome of
(7,443)
(9,425)
(60,029)
(273,270)
(273,014)
(1,578,682)
(4,418)
(1,039)
(1,034)
(1,842,164)
(745)
(2,166,527)
4,520,668
2,941,986
2,941,986
3,379
2,951,060
4,793,224
2,951,060
2,951,060
3,007,221
5,173,748
3,007,221
6,409
8,680
284,417
216,689
173,260
113,231
-
Machinery
the cases.
Plant &
10
e) Four cases are pending before the Punjab Labour Appellate Tribunal, Shadman 1, Lahore regarding the
reinstatement into service of four employees dismissed from their jobs. No provision has been made in
(2,681)
(3,912)
Residential &
(32,421)
(35,102)
(39,014)
72,970
40,549
40,549
63,706
98,808
63,706
63,706
67,718
106,732
67,718
7,924
25,838
-
-
-
-
Building
-
-
-
-
-
these financial statements since the Company is confident about favourable outcome of the cases.
Other
5
f) Guarantees issued by various commercial banks, in respect of financial and operational obligations of
the Company, to various institutions and corporate bodies aggregate Rupees 248.962 million as at 30
(39,839)
(43,075)
(312,133)
(351,972)
(395,047)
747,738
435,605
435,605
518,187
870,159
518,187
518,187
504,061
899,108
504,061
28,949
122,421
-
-
-
-
Factory &
Building
-
-
-
-
-
5 - 10
Other
June, 2010 (2009: Rupees 319.430 million)
13.2 Commitments in respect of:
(405)
(444)
(4,673)
(5,078)
(5,522)
12,272
7,599
7,599
7,656
12,734
7,656
7,656
8,654
14,176
8,654
462
1,442
-
-
-
-
Building
a) Letters of credit for capital expenditure amount to Rupees 38.865 million (2009: Rupees 43.996 million).
-
-
-
-
-
Office
5
b) Letters of credit other than for capital expenditure amount to Rupees 325.393 million (2009: Rupees
235.345 million).
14,836
14,836
14,836
14,836
14,836
14,836
14,836
2,425,069
2,425,069
2,425,069
2,410,233
-
-
-
-
-
14.1 OPERATING FIXED ASSETS
Freehold
-
-
-
-
-
-
land
2010 2009
Accumulated depreciation
Year ended 30 June 2009

14 PROPERTY, PLANT AND EQUIPMENT
Opening net book value
Opening net book value
Cost / revalued amount
Depreciation Rate (%)

Closing net book value
Closing net book value

Depreciation charge
Depreciation charge
At 30 June 2008
At 30 June 2009
At 30 June 2010
Operating fixed assets (Note 14.1) 14.1 6,409,975 4,047,897
Net book value
Net book value
Net book value

Revaluation
Disposals:
Disposals:
Additions
Additions
Transfer:
Transfer
Cost
Cost
Cost
Cost
Capital work in progress (Note 14.4) 14.4 86,324 92,336
Cost
Cost
6,496,299 4,140,233
60 61
2010 2009
House # 27-E, Phase-1, DHA Lahore Cantt

Ghazi Fabrics International Ltd, Lahore

14.3 Depreciation charged during the year has been
Particulars of purchaser
Maple Leaf Cement Factory Limited
Room #162- Mozang Road, Lahore

allocated as follows:
Cost of sales 28 350,778 347,202

Administrative expenses 30 20,840 22,414
ZahidJee Textile Mills Ltd,
Bajaj Enterprises, 58-B

s/o Mulazim Hussain
371,618 369,616
Mr Fuad Zafar, R/O
North Star Textiles,

14.4 CAPITAL WORK IN PROGRESS
Ghulam Abbas
Civil works and buildings 67,593 15,897
Faisalabad
Plant and machinery 18,731 76,439
Lahore
86,324 92,336
15. INVESTMENT PROPERTIES

Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
Negotiation
disposal
Mode of
The fair value of investment properties comprising land and building situated at Lahore have been determined by
Messers Hasib Associates (Private) Limited at Rupees 769.192 million as at 26 June 2008. Fair value of land
--------------( R u p e e s i n t h o u s a n d)-----------
situated at Rawalpindi has been determined by Messers Asrem (Private) Limited at Rupees 951.643 million as at 20
Gain
308
402
1,254
434
1,414
1,676
561
6,049
1,870
May 2008. The fair value was determined on the basis of professional assessment of the current prices in an active
market for similar properties in the same location and condition. The valuers have certified that there is no material
change in fair value during the current financial year and as on the balance sheet date.
Proceeds
(Restated)
Sale
2010 2009
600
419
591
1,567
539
1,617
1,800
632
7,765
4,817
16. LONG TERM INVESTMENTS
Net Book
Value
292
419
189
313
105
203
124
71
1,716
2,947
Investment in subsidiary companies
Quoted
Maple Leaf Cement Factory Limited 16.1 2,248,970 2,248,970
Accumulated
186,608,808 (2009: 186,608,808) ordinary shares of

Depreciation
14.2 DETAIL OF DISPOSAL OF OPERATING FIXED ASSETS
Rupees 10 each fully paid Equity held 50.13% (2009:

557
231
610
2,326
775
1,556
4,023
954
11,032
9,450
50.13%)
Un-quoted
Concept Trading (Private) Limited 16.2 200 -

849
650
799
2,639
880
1,759
4,147
1,025
12,748
12,397
Cost
19,998 (2009:Nil) ordinary shares of Rupees 10 each fully

paid Equity held 99.99% (2009:Nil)
2,249,170 2,248,970
Honda City RIY-6720 Model 2002
property, plant & equipment with
16.1 Based on value in use calculations as at 30 June 2010, there was no impairment loss on investments in
Crosol MK 4.5 card Model 1990
Machine-Drawing ToyodaHara
DYH 500-c Complete Model
subsidiary companies (tested for impairment under IAS 36 "Impairment of Assets").

Suzuki Cultus LED- 840.07
2010
2009
exceeding Rupees.50,000
Agregate of other items of
individual book values not

Description
Toyota Corolla LRR-2233
16.2 Concept Trading (Private) Limited (Subsidiary Company) was incorporated on 11 March 2010 with authorized
share capital of 50,000 shares of Rupees 10 each amounting to Rupees 500,000. Issued, subscribed and paid
up capital of the Company is 20,000 ordinary shares of Rupees 10 each amounting to Rupees 200,000.
Concept Trading (Private) Limited has not commenced business till 30 June 2010.
62 63
2010 2009 NOTE 2010 2009
NOTE (Rupees in thousand) 21. ADVANCES - considered good (Rupees in thousand)
17. LONG TERM DEPOSITS Advances to :
- Executives 621 2,255
Security deposits 41,124 44,901 - Other employees 1,040 466
Less: current portion shown under current assets 22 6,237 11,284 - Suppliers 593,555 299,019
34,887 33,617 595,216 301,740
18. STORES, SPARE PARTS AND LOOSE TOOLS
Letters of credit 1,579 1,622
596,795 303,362
Stores 18.1 250,003 215,516
22. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS
Spare parts 95,795 87,871
Loose tools - 560 Current portion of security deposits 17 6,237 11,284
345,798 303,947 Short term prepayments 9,341 17,099
15,578 28,383
18.1 This includes stores in transit of Rupees 14.333 million (2009: Rupees 8.484 million).
NOTE 2010 2009 23. OTHER RECEIVABLES

19. STOCK-IN-TRADE Sales tax refundable 260,161 215,877
Custom duty receivable 3,642 3,642
Raw material 764,549 618,265 Export rebate 47,561 32,302
19.1
Work-in-process 891,595 546,792 Insurance claims 175 181
Finished goods 736,969 614,769 Due from subsidiary company
(Maple Leaf Cement Factory Limited) 23.1 14,987 10,657
2,393,113 1,779,826
Research and development support 473 25,735
Draw back of taxes and levies 25,808 -
19.1 This includes raw material in transit of Rupees 55.351 million (2009: Rupees 60.232 million)
Cotton claim 28,745 -
2010 2009 Others 20,376 13,338
(Rupees in thousand) 401,928 301,732
20. TRADE DEBTS
23.1 This represents amount receivable against allocation of pool expenses.
Considered good:
NOTE
Secured (against letters of credit) 747,285 592,941
Unsecured 581,780 457,160 24. SHORT TERM INVESTMENTS
1,329,065 1,050,101 Investments at fair value through profit and loss - Held for trading
Quoted companies 13,611 13,611
20.1 As at 30 June 2010, trade debts of Rupees 568.309 million (2009 : Rupees 225.526 million) were past due but Loss on remeasurement of fair value during the year (5,595) (7,464)
not impaired. These relate to a number of independent customers from whom there is no recent history of 8,016 6,147
default. The ageing analysis of these trade debts is as follows:
Available for sale
2010 2009 Associated Company - unquoted
Security General Insurance Company Limited 24.1 7,000 7,000
Upto 1 month 433,697 190,322 6,398,541 (2008 : 6,398,541) Ordinary shares of Rupees 10
1 to 6 months 116,664 20,427 each fully paid.Equity held 9.40% (2008 : 9.40%)
More than 6 months 17,948 14,777 Surplus on revaluation of investment 627,095 594,463
634,095 601,463
568,309 225,526 642,111 607,610
64 65
24.1 Fair value per share of Rupees 99.10 (2009: Rupees 94) is calculated by independent valuer on the basis of 2010 2009
net assets based valuation method. Security General Insurance Company Limited is associated Company NOTE (Rupees in thousand)
due to common directorship.
24.2 Maple Leaf Cement Factory Limited, a subsidiary of the Company holds 4,570,389 (2009:4,570,389) ordinary
28. COST OF SALES
shares of Security General Insurance Company representing 6.71% (2009 : 6.71%) equity.
2010 2009
Raw materials consumed 28.1 3,347,817 3,192,060
25. CASH AND BANK BALANCES (Rupees in thousand)
Cloth and yarn procured and consumed 2,464,620 1,405,218
Cash in hand 961 721 Salaries, wages and other benefits 28.2 740,125 690,336
Cash at bank: Dyes and chemicals consumed 518,965 505,493
- On current accounts 65,217 65,685 12,267 22,452
Processing charges
- On saving accounts 12,673 13,891
79,576 Stores, spare parts and loose tools consumed 608,508 234,522
77,890
78,851 80,297 Packing materials consumed 374,847 322,317
Fuel and power 619,450 453,899
25.1 The balances in current and saving accounts carry interest ranging from 0.40% to 13% (2009: from 0.20% Repair and maintenance 59,445 36,086
to 12%) per annum.
Insurance 22,915 19,717
25.2 The balances in current and deposit accounts include US $ 37,000 (2009: US $ 72,465) Other factory overheads 39,795 36,562
Depreciation 14.3 350,778 347,202
2010 2009 9,159,532 7,265,864
26. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE (Rupees in thousand) Work-in-process
Opening stock 546,792 471,943
Land 552,923 551,662
Closing stock (891,618) (546,792)
Advance against land 100,000 50,000
(344,826) (74,849)
652,923 601,662
Cost of goods manufactured 8,814,706 7,191,015
The Company intends to dispose off land located at Raiwind Road and M.M Alam Road, Lahore after final
negotiations with its intended buyers. An active programme commenced to locate a buyer at a reason price. During
the year ended 30 June 2009, land could not be disposed of due to unusually adverse investment scenario of the Finished goods
country resulting in slump in property market. During the current year, due to continued stressed property market, the Opening stock 614,769 622,747
company was still unable to liquidate these land at its target price. These events precluded that disposal of land
during the year, however, the management considers that these events were beyond its control and remains Closing stock (736,946) (614,769)
committed to disposal of these land at a reasonable price. The proceeds of disposal are expected to exceed the (122,177) 7,978
carrying amount of the land. Cost of sales 8,692,529 7,198,993
2010 2009
(Rupees in thousand) 28.1 Raw material consumed
27. SALES Opening stock 558,033 470,160
Add: Purchased during the year 3,498,981 3,279,933
Export 6,406,061 5,452,211
4,057,014 3,750,093
Local 4,189,295 2,971,466
Duty drawback 54,845 - Less: Closing stock 709,197 558,033
Export rebate 43,137 35,222 3,347,817 3,192,060
10,693,338 8,458,899
28.2 Salaries, wages and other benefits include provident fund contribution of Rupees 16.813 million (2009:
Exchange gain due to currency rate fluctuations relating to export sales amounting to Rupees 35.245 million Rupees 15.893 million) by the Company.
(2009: Rupees 105.328 million) has been included in export sales.
66 67
2010 2009 2010 2009
29. DISTRIBUTION COST 31.1 Auditors' remuneration
Salaries, wages and other benefits 29.1 39,011 33,876 Statutory audit fee 1,000 750
Outward freight and handling 30,549 28,492 Certifications 265 295
Clearing and forwarding 227,943 160,317 1,265 1,045
Travelling and conveyance 17,911 18,651
Insurance 348 405 31.2 Donation includes Rupees 7.882 million paid to Gulab Devi Hospital, Lahore. None of the directors and their
spouses have any interest in the donees' fund.
Vehicles' running expenses 3,252 3,699
Electricity, gas and water 808 679 2010 2009
Postage, telephone and fax 2,832 3,201 NOTE (Rupees in thousand)
Sales promotion and advertisement 16,726 17,370 32. OTHER OPERATING INCOME
Commission to selling agents 54,501 190,877 Income from financial assets:
Miscellaneous expenses 3,937 7,281 Exchange gain 19,261 78,350
397,818 464,848 Gain/ (loss) on disposal of investments - (4,727)
Gain/ (loss) on remeasurement of fair value of investments at
29.1 Salaries, wages and other benefits include provident fund contribution of Rupees 1.284 million (2009: fair value through profit and loss 1,869 (7,464)
Rupees 1.009 million) by the Company. 953 2,237
Return on bank deposits
30. ADMINISTRATIVE EXPENSES Dividend income 425 546
Salaries, wages and other benefits 30.1 93,990 83,014 22,508 68,942
Repairs and maintenance 8,280 9,743 Income from associated company :
Rent, rates and taxes 9,001 2,908
Insurance 4,600 4,483 Dividend income : Security General Insurance Company Limited 12,797 15,996
Printing, stationery and periodicals 4,359 4,795 Income from non-financial assets:
Electricity, gas and water 2,589 1,175 Scrap sales 29,175 30,479
Postage, telephone and fax 4,878 3,987 Gain on disposal of property, plant and equipment 14.2 6,049 1,870
Legal and professional 4,433 2,995 Gain on sale of land classified as held for sale - 8,190
Security, gardening and sanitation 19,813 18,915 Miscellaneous 8,122 1,074
Depreciation 14.3 20,840 22,414 43,346 41,613
Miscellaneous expenses 9,437 10,055 78,651 126,551
195,103 175,965 33. FINANCE COST
30.1 Salaries, wages and other benefits include provident fund contribution of Rupees 2.800 million (2009: Mark-up/finance charges/ interest on:
Rupees 2.220 million) by the Company. Long term financing 329,679 397,809
Short term borrowings 677,043 575,378
2010 2009
(Rupees in thousand) Liabilities against assets subject to finance lease 21,169 24,842
NOTE
Loss on cross currency swap - 196,057
31. OTHER OPERATING EXPENSES
Workers' profit participation fund (WPPF) 9.1 188 164
Auditors' remuneration 31.1 1,265 1,045
Provident fund 2,968 322
Donations 31.2 8,100 21,000
1,031,047 1,194,572
Workers' profit participation fund 9.1 20,227 -
Bank charges and commission 35,248 24,616
Workers' welfare fund 7,686 -
Exchange loss 6,473 41,042
Miscellaneous 45 45
1,072,768 1,260,230
37,323 22,090
68 69
2010 2009 36. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
NOTE (Rupees in thousand) The aggregate amounts charged in these financial statements in respect of remuneration including certain benefits
34. PROVISION FOR TAXATION to the chief executive, directors and executives of the Company are given below:
Current year:
Current 34.1 83,824 55,753 Chief Executive Directors Executives
Deferred 14,763 (152,618) 2010 2009 2010 2009 2010 2009
98,587 (96,865) Number of persons 31 31
1 1 3 3
-----------------------------------------------( Rupees in Thousand )------------------------------------
34.1 Provision for current year income tax represents final tax on export sales, minimum tax on local sales and tax Managerial remuneration 4,800 4,800 5,157 4,297 44,856 32,715
on income from other sources under the relevant provisions of the Income Tax Ordinance, 2001.Numeric tax Contribution to provident
reconciliation has not been presented, being impracticable. Fund 308 308 154 99 3,005 2,410
Housing and utilities - - 87 87 9,021 5,458
2010 2009 Medical 84 - 1,246 1,246 2,586 1,849
Group insurance - 185 92 59 252 122
35. CASH GENERATED FROM OPERATIONS Club subscription 73 - - - -
64
Profit / (loss) before taxation 376,448 (536,676) Others - - - 6,096 4,132
185
Adjustment for non-cash charges and other items: 5,366 6,736 5,788 65,816 46,686
5,441
Depreciation 371,618 369,616
Finance cost 1,072,768 1,260,230 The Chief Executive Officer and directors are provided with the Company's maintained vehicles, free medical
Gain on sale of property, plant and equipment (6,049) (1,870) facilities and residential telephone facilities for both business and personal use. Chief executive is also provided free
furnished accommodation alongwith utilities.
Loss on disposal of investments - at fair value through profit and
loss account - 4,727 Executives are provided with the Company's maintained vehicles in accordance with the Company policy.
Dividend income (13,222) (16,542) The aggregate amount charged in these financial statements in respect of directors' meeting fee paid to 2 (2009: 2)
Return on bank deposits (953) (2,237) directors was Rupees 70,000 (2009: Rupees 60,000).
Gain on sale of non-current assets classified as held for sale - (8,190) 37. TRANSACTIONS WITH RELATED PARTIES
Gain/ (loss) on remeasurement of investments at fair value
The related parties comprise of subsidiaries, associated undertakings, directors of the company and their close
through profit and loss (1,869) 7,464 relatives, key management personnel and staff retirement fund. Detail of transactions with related parties, other than
Working capital changes 35.1 (1,124,424) 423,691 those which have been specifically disclosed elsewhere in these financial statements are as follows:
674,317 1,500,213 2010 2009
35.1 Working capital changes
(Increase)/ decrease in current assets: Transaction with Subsidiary Companies
Stores, spare parts and loose tools (41,851) (13,000) Purchase of goods and services 484 4,523
Stock-in-trade (613,287) (106,764) Sale of goods and services 147 1,485
Trade debts (278,964) 290,359 Purchase of property, plant and equipment 1,770 -
Advances (293,433) 67,060 Sale of property, plant and equipment 419 -
Security deposits and short term prepayments 12,805 (19,269) Purchase of shares 200 -
Other receivables (100,196) (7,475)
(1,314,926) 210,911 Transaction with Associated Company
Increase in current liabilities Dividend income 12,797 15,996
Trade and other payables 190,502 212,780
(1,124,424) 423,691
Post employment benefit plan
Contribution to provident fund 20,897 19,122
Interest on provident fund 2,968 322
70 71
2010 2009 PROCESSING OF CLOTH :
- Rawalpindi Division (Meters in thousand)
38. EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED Capacity at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts) 41,975 41,975
There is no dilutive effect on the basic earning/ (loss) per share which is Actual at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts) 34,653 30,626
based on: POWER PLANT:
Profit/ (loss) attributable to ordinary shares Rupees in thousand 277,861 (439,811) - Rawalpindi Division (Mega Watts)
Weighted average number of ordinary shares Numbers 145,526,216 145,526,216 Annual rated capacity (based on 365 days) 207,787 207,787
Earnings/ (loss) per share Rupees 1.91 (3.02) Actual generation
Main engines 2,198 7,124
39. PLANT CAPACITY AND ACTUAL PRODUCTION Gas engines 78,080 64,663
SPINNING: - Raiwind Division
- Rawalpindi Division (Numbers) Annual rated capacity (based on 365 days) 54,460 54,312
Spindles (average) installed / worked; 85,680 85,834 Actual generation
(Kilograms in thousand) Gas engines 26,212 28,166

100% Plant capacity converted into 20s count based on 3 shifts per day
Stitching
for 1,095 shifts (2009: 1,095 shifts) 37,950 37,945
The plant capacity of this division is indeterminable due to multi product plants involving varying processes
Actual production converted into 20s count based on 3 shifts per day for
of manufacturing and run length of order lots.
1,095 shifts (2009: 1,095 shifts) 35,211 35,298
REASONS FOR LOW PRODUCTION
- Gujar Khan Division (Numbers)
Spindles (average) installed / worked; - Due to stoppage for normal maintenance, doffing, change of spin plans and cloth quality, interruption in gas
70,848 66,068
andelectricity supply.
(Kilograms in thousand)
100% Plant capacity converted into 20s count based on 3 shifts per day - Cloth processing units working capacity was limited to actual export / local orders in hand.
for 1,095 shifts (2009: 1,095 shifts ) 33,313 27,732 - The generation of power was limited to actual demand.
Actual production converted into 20s count based on 3 shifts per day for
1,095 shifts (2008: 1,095 shifts) 31,295 26,318
40. POST BALANCE SHEET EVENT
WEAVING:
In accordance with the approval of the shareholders in their Extraordinary General Meeting held on 03 May 2010 and
- Raiwind Division (Numbers)
subsequent permission granted by the Securities and Exchange Commission of Pakistan (SECP), the Company
Looms installed / worked 204 204
has, after the reporting period, issued 100,000,000 ordinary shares of Rupees 10 each otherwise than through a right
(Kilograms in thousand) issue to Mercury Management Incorporated, Hutton Properties Limited and Zimpex (Private) Limited in accordance
100% Plant capacity at 60 picks based on 3 shifts per day for 1,095 shifts with the agreement dated 10 March 2010 between the three allottees, the Company and Maple Leaf Cement Factory
(2009: 1,095 shifts) 72,568 72,568 Limited – subsidiary company.
Actual production converted to 60 picks based on 3 shifts per day for

1,072 shifts (2009: 1,092 shifts) 68,605 68,271
72 73
74
41. SEGMENT INFORMATION
Spinning Weaving Processing and home textile Elimination of inter-segment Company
41.1 transactions
30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009
----------------------------------------------------------- ( R u p e e s in t h o u s a n d ) -------------------------------------------------------------
SALES 4,822,128 3,049,558 3,079,523 2,571,181 5,474,514 4,756,984 (2,682,827) (1,918,824) 10,693,338 8,458,899
COST OF SALES (3,599,136) (2,844,840) (2,698,019) (2,160,689) (5,078,201) (4,112,288) 2,682,827 1,918,824 (8,692,529) (7,198,993)
GROSS PROFIT 1,222,992 204,718 381,504 410,492 396,313 644,696 - - 2,000,809 1,259,906
DISTRIBUTION COST (16,234) (18,129) (57,076) (53,782) (324,508) (392,937) - - (397,818) (464,848)
ADMINISTRATIVE EXPENSES (64,130) (55,961) (60,939) (51,207) (70,034) (68,797) - - (195,103) (175,965)
(80,364) (74,090) (118,015) (104,989) (394,542) (461,734) - - (592,921) (640,813)
PROFIT BEFORE TAX AND UNALLOCATED INCOME
AND EXPENSES 1,142,628 130,628 263,489 305,503 1,771 182,962 - - 1,407,888 619,093
UNALLOCATED INCOME AND EXPENSES
FINANCE COST (1,072,768) (1,260,230)
OTHER OPERATING EXPENSES (37,323) (22,090)
OTHER OPERATING INCOME 78,651 126,551
PROVISION FOR TAXATION (98,587) 96,865
(1,130,027) (1,058,904)
PROFIT / (LOSS) AFTER TAXATION 277,861 (439,811)
41.2 Reconciliation of reportable segment assets and liabilities
Spinning Weaving Processing and home textile Company

30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009
---------------------------------------------------------------------(R u p e e s in t h o u s a n d)------------------------------------------------------------------------
TOTAL ASSETS FOR REPORTABLE SEGMENT 2,399,058 2,514,724 1,211,488 1,701,352 2,973,709 2,978,474 6,584,255 7,194,550
UNALLOCATED ASSETS 10,473,044 6,080,989
17,057,299 13,275,539
All segment assets are allocated to reportable segments other than those directly relating to corporate and tax assets.
TOTAL LIABILITIES FOR REPORTABLE SEGMENT 689,813 842,797 2,005,937 1,725,080 2,604,786 5,429,033 5,300,536 7,996,910
UNALLOCATED LIABILITIES 11,756,763 5,278,629

17,057,299 13,275,539
All segment liabilities are allocated to reportable segments other than trade and other payables, corporate borrowings and current and deferred tax liabilities.
41.4
41.3
41.3.2
41.3.1
Europe
America
Pakistan
(a) Market risk
(i) Currency risk

42.1 Financial risk factors
certain risk exposures.

Asia, Africa, Australia
42. FINANCIAL RISK MANAGEMENT

Geographical Information
Revenue from major customers
financial instruments and investment of excess liquidity.

The Company's revenue is earned from a large mix of customers.
All non current assets as at reporting date are located and operated in Pakistan.
2010
4,189,295
799,050
4,040,326
1,664,667
10,693,338
considered appropriate. The Company's exposure to currency risk was as follows:

The Company's revenue from external customers by geographical location is detailed below:
transactions or receivables and payables that exist due to transactions in foreign currencies.
2009
8,458,899
2,971,466
365,008
3,407,655
1,714,770
price risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non derivative
principles for overall risk management, as well as policies covering specific areas such as currency risk, other
The Company's activities expose it to a variety of financial risks: market risk (including currency risk, other
programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
risk exposure is restricted to bank balances, the amounts receivable / payable from / to the foreign
The Company is exposed to currency risk arising from various currency exposures, primarily with
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
Risk management is carried out by the Company's finance department under policies approved by the Board
entities. The Company uses forward exchange contracts to hedge its foreign currency risk, when
effects on the Company's financial performance. The Company uses derivative financial instruments to hedge
respect to the United States Dollar (USD), Euro and GBP. Currently, the Company's foreign exchange
price risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
of Directors. The Company's finance department evaluates and hedges financial risks. The Board provides
75
2010 2009 Impact on statement of other
Index Impact on profit/ (loss) after taxation
(Rupees in thousand) comprehensive income
Cash at banks - USD 37 72
2010 2009 2010 2009
Trade debts - USD 11,864 10,473
-------------------------------- (RUPEES IN THOUSAND) ------------------------------------
Trade debts - Euro 832 245
Trade debts - GBP - 18 KSE 100 (5% increase) 401 307 - -
Trade and other payable - USD 30 26 KSE 100 (5% decrease) (401) (307) - -
Net exposure - USD 11,871 10,519
Net exposure - Euro 832 245 (iii)Interest rate risk
Net exposure - GBP - 18 This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
The following significant exchange rates were applied because of changes in market interest rates.
during the year:
The Company has no significant long-term interest-bearing assets. The Company's interest rate risk arises
Rupees per US Dollar 83.55 78.73 from long term financing, liabilities against assets subject to finance lease, lease finance advance and
Average rate 85.40 81.10 short term borrowings. Borrowings obtained at variable rates expose the Company to cash flow interest
Reporting date rate rate risk. Borrowings obtained at fixed rate expose the Company to fair value interest rate risk.
Rupees per Euro 107.92 107.74 At the balance sheet date the interest rate profile of the Company’s interest bearing financial instruments
verage rate 104.33 114.54 was:
Reporting date rate
Rupees per GBP 132.08 126.45 2010 2009
Average rate 128.66 135.05 (Rupees in thousand)
Reporting date rate Fixed rate instruments
Sensitivity analysis Financial liabilities
Long term financing 407,742 549,141
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD, Euro
Short term borrowings 1,555,000 1,580,000
and GBP with all other variables held constant, the impact on profit after taxation for the year would have
been Rupees 46.633 million, Rupees 3.993 million and Rupees Nil respectively higher / lower and the Liabilities against assets subject to finance lease - 8,017
impact on loss after taxation for the previous year was Rupees 42.655 million, Rupees 1.403 million and Floating rate instruments
Rupees 0.122 million respectively lower / higher, mainly as a result of exchange gains / losses on Financial assets
translation of foreign exchange denominated financial instruments. Currency risk sensitivity to foreign Bank balances- saving accounts 12,673 13,891
exchange movements has been calculated on a symmetric basis. In management's opinion, the sensitivity
analysis is unrepresentative of inherent currency risk as the year end exposure does not reflect the Financial liabilities
exposure during the year. Long term financing 1,920,759 2,200,200
(ii) Other price risk
Liabilities against assets subject to finance lease 135,030 179,174
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will Lease finance advance - 35,922
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting all similar financial instrument traded in the market. The Company is not Fair value sensitivity analysis for fixed rate instruments
exposed to commodity price risk. The Company does not account for any fixed rate financial assets and liabilities at fair value through profit
Sensitivity analysis or loss. Therefore, a change in interest rate at the balance sheet date would not affect profit or loss of the
Company.
The table below summarises the impact of increase / decrease in the Karachi Stock Exchange (KSE) Index
on the Company's profit after taxation for the year and on equity (fair value reserve). The analysis is based Cash flow sensitivity analysis for variable rate instruments
on the assumption that the equity index had increased / decreased by 5% with all other variables held If interest rate at the year end date, fluctuates by 1% higher / lower with all other variables held constant,
constant and all the Company's equity instruments moved according to the historical correlation with the profit after taxation for the year would have been Rupees 65.712 million lower / higher and loss after
index: taxation for the previous year was Rupees 56.458 million higher / lower, mainly as a result of higher / lower
interest expense on floating rate borrowings. This analysis is prepared assuming the amounts of liabilities
outstanding at balance sheet dates were outstanding for the whole year.
76 77
(b) Credit risk The Company's exposure to credit risk and impairment losses related to trade debts is disclosed in Note 20.
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other Due to the Company's long standing business relationships with these counterparties and after giving due
party by failing to discharge an obligation. The carrying amount of financial assets represents the maximum consideration to their strong financial standing, management does not expect non-performance by these
credit exposure. The maximum exposure to credit risk at the reporting date was as follows: counter parties on their obligations to the Company. Accordingly the credit risk is minimal.
2010 2009 (c) Liquidity risk
(Rupees in thousand) Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
Investments 642,111 607,610 liabilities.
Deposits 41,124 20,060 The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through
Trade debts 1,329,065 1,050,101 an adequate amount of committed credit facilities. At 30 June 2010, the Company had Rupees 7.533
Accrued interest 141 122 million available borrowing limits from financial institutions and Rupees 78.851 million cash and bank
Other receivables 20,551 24,176 balances. Inspite the fact that the Company is in a negative working capital position at the year end,
management believes the liquidity risk to be low. Following are the contractual maturities of financial
Bank balances 77,890 79,576
liabilities, including interest payments. The amount disclosed in the table are undiscounted cash flows:
2,110,882 1,781,645
Contractual maturities of financial liabilities as at 30 June 2010
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (If available) or to historical information about counterparty default rate:
Carrying Contractual 6 month 6-12 1-2 More than
Rating 2010 2009 Amount Cash or less month Year 2 Years
Short Term Long term Agency (Rupees in thousand) - Flows
Banks ------------------------------------ (Rupees in thousand) ------------------------------
National Bank of Pakistan A-1+ AAA JCR-VIS 754 4,656 Non derivative financial
Allied Bank Limited A1+ AA PACRA 32,531 31,292 liabilities:
Askari Bank Limited A1+ AA PACRA 7,822 5,703 Long term financing 2,328,501 2,950,434 542,361 398,510 699,117 1,310,446
Bank Alfalah Limited A1+ AA PACRA 1,421 2,536 Liabilities against assets
Faysal Bank Limited A-1+ AA JCR-VIS 4,108 1,872 subject to finance lease 135,030 155,263 53,450 32,487 45,157 24,169
Habib Bank Limited A-1+ AA+ JCR-VIS 67 103 Trade and other payables 989,594 989,594 989,594 - - -
MCB Bank Limited A1+ AA+ PACRA 9,907 12,611 Accrued mark-up 289,987 185,259 185,259 - - -
NIB Bank Limited A1+ AA- PACRA 12,313 11,106 Short term borrowings 6,070,435 6,268,109 5,796,162 471,947 - -
The Royal Bank of Scotland Limited A1+ AA PACRA 88 76 9,813,547 10,548,659 7,566,826 902,944 744,274 1,334,615
My Bank Limited A2 A- PACRA 30 30
Contractual maturities of financial liabilities as at 30 June 2009
The Bank of Punjab A1+ AA- PACRA 540 1,763
Meezan Bank Limited A-1 AA- JCR-VIS 319 -
Silk bank Limited A-3 A- JCR-VIS 2,945 30 Carrying Contractua 6 month 6-12 1-2 More than
Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA 2,309 837 Amount l Cash or less month Year 2 Years
United Bank Limited A-1+ AA+ JCR-VIS 2,611 - Flows
133
Non derivative financial ------------------------------------ (Rupees in thousand) ------------------------------
Al-Baraka Islamic Bank Limited A-1 A JCR-VIS 2,565 4,350
Liabilities
Bank Al Habib Limited A-1+ AA+ PACRA 38 -
Long term financing 2,749,341 3,413,720 506,992 606,169 1,031,773 1,268,786
77,890 79,576
Liabilities against assets
subject to 187,191 207,348 35,963 52,959 50,812 67,614
Investments Lease finance advance 35,922 36,460 36,460 - - -
Security General Insurance Company Limited Trade and other payables 808136 989,594 989,594 - - -
A JCR-VIS 634,095 601,463 Accrued mark-up 185,259 185,259 185,259 - - -
711,985 681,039 Short term borrowings 4,810,471 4,991,732 4,438,253 553,479 - -
8,776,320 9,824,113 6,192,521 1,212,607 1,082,585 1,336,400
78 79
The contractual cash flows relating to the above financial liabilities have been determined on the basis of Financial liabilities
interest rates / mark up rates effective as at 30 June. The rates of interest / mark up have been disclosed in note at amortized cost
6, note 7, and note 11 to these financial statements.
42.2 Fair values of financial assets and liabilities (Rupees in thousand)
The carrying values of all financial assets and liabilities reflected in financial statements approximate their fair Liabilities as per balance sheet
values. The following table provides an analysis of financial instruments that are measured subsequent to Long term financing 2,328,501
initial recognition at fair value, grouped in to levels 1 to 3 based on the degree to which fair value is observable: Liabilities against assets subject to finance lease 135,030
Trade and other payables 989,594
Level 1 Level 2 Level 3 Total Accrued mark-up 289,987
-----------------------------(Rupees in thousand)---------------------------- Short term borrowings 6,070,435
As at 30 June 2010
9,813,547
Assets
Available for sale financial assets - 634,095 - 634,095 Through
Loans and Available
profit and Total
As at 30 June 2009 receivables for sale
loss
Assets
-----------------------------(Rupees in thousand)----------------------------
Available for sale financial assets - 601,463 - 601,463
As at 30 June 2009
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance Assets as per balance sheet
sheet date. The quoted market price used for financial instruments held by the Company is the current bid Investments - 6,147 601,463 607,610
price. These financial instruments are classified under level 1 in above referred table. The Company has no Deposits 20,060 - - 20,060
such type of financial instruments as on 30 June 2010.
Trade debts 1,050,101 - - 1,050,101
The fair value of financial instruments that are not traded in an active market is determined by using valuation Interest accrued 122 122
techniques. These valuation techniques maximise the use of observable market data where it is available and Other receivables 24,176 - - 24,176
rely as little as possible on entity specific estimates. If all significant inputs required to fair value a financial
Cash and bank balances 80,297 - - 80,297
instrument are observable, those financial instruments are classified under level 2 in above referred table.
1,174,756 6,147 601,463 1,782,366
If one or more of the significant inputs is not based on observable market data, the financial instrument is
classified under level 3.The carrying amount less impairment provision of trade receivables and payables are Financial liabilities
assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is at amortized cost
estimated by discounting the future contractual cash flows at the current market interest rate that is available to
the company for similar financial instruments. The Company has no such type of financial instruments as on (Rupees in thousand)
30 June 2010.
Liabilities as per balance sheet
Through Long term financing 2,749,341
Loans and Available
profit and Total Liabilities against assets subject to finance lease 187,191
receivables for sale
loss
Lease finance advance 35,922
-----------------------------(Rupees in thousand)---------------------------- Trade and other payables 808,136
As at 30 June 2010 Accrued mark-up 185,259
Assets as per balance sheet Short term borrowings 4,810,471
8,776,320
Investments - 8,016 634,095 642,111
42.4 a) Capital risk management
Deposits 41,124 - - 41,124
Trade debts 1,329,065 - - 1,329,065 The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
Interest accrued 141 141 maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital
Other receivables 20,551 - - 20,551 structure, the Company may adjust the amount of dividends paid to shareholders, return capital to
Cash and bank balances 78,851 - - 78,851 shareholders through repurchase of shares, issue new shares or sell assets to reduce debt. Consistent
with others in the industry and the requirements of the lenders, the Company monitors the capital
1,469,732 8,016 634,095 2,111,843
structure on the basis of gearing ratio. This ratio is calculated as borrowings divided by total capital
80 81
employed. Borrowings represent long-term financing, liabilities against assets subject to finance lease, PATTERN OF SHAREHOLDING
lease finance advance and short-term borrowings obtained by the Company as referred to in note 6, note 1. CUIN (Incorporation Number) 0002805
7and note 11 respectively. Total capital employed includes ‘total equity’ as shown in the balance sheet plus
‘borrowings’. The gearing ratio as at year ended 30 June 2010 and 30 June 2009 is as follows: 2. Name of the Company KOHINOOR TEXTILE MILLS LIMITED
3. Pattern of holding of the shares held by the shareholders as at 30.06.2010
4. S i z e o f H o l d i n g
2010 2009
(Rupees in thousand) No. of Total
From To
Shareholders Shares Held
Borrowings 8,533,966 ,782,925
2,628 1 100 73,362
Total equity 3,361,268 3,059,341
1,066 101 500 310,476
Total capital employed 11,895,234 10,842,266 406 501 1,000 304,401
Gearing Ratio 72% 72% 650 1,001 5,000 1,713,151
132 5,001 10,000 990,944
45 10,001 15,000 547,146
43. DATE OF AUTHORIZATION FOR ISSUE
30 15,001 20,000 548,833
These financial statements were authorised for issue on September 29, 2010 by the Board of Directors of the 22 20,001 25,000 515,611
Company. 13 25,001 30,000 353,850
7 30,001 35,000 228,179
6 35,001 40,000 234,446
44. CORRESPONDING FIGURES 7 40,001 45,000 297,802
8 45,001 50,000 387,153
No significant reclassification/ rearrangement of corresponding figures has been made.
3 50,001 55,000 152,384
5 55,001 60,000 290,604
7 60,001 65,000 439,734
45. GENERAL
2 65,001 70,000 132,208
Figures have been rounded off to the nearest thousand of Rupees unless stated otherwise. 3 70,001 75,000 217,998
2 85,001 90,000 178,214
1 90,001 95,000 94,700
5 95,001 100,000 495,088
2 100,001 105,000 201,227
3 105,001 110,000 321,077
1 110,001 115,000 110,074
2 120,001 125,000 245,000
__________________ __________________
1 125,001 130,000 126,529
CHIEF EXECUTIVE DIRECTOR 1 130,001 135,000 133,317
1 145,001 150,000 149,999
1 150,001 155,000 150,223
1 160,001 165,000 160,085
1 165,001 170,000 169,838
1 200,001 205,000 201,156
1 205,001 210,000 208,272
1 210,001 215,000 215,000
1 215,001 220,000 218,000
1 245,001 250,000 246,081
1 250,001 255,000 251,293
2 275,001 280,000 553,549
1 290,001 295,000 293,000
2 300,001 305,000 605,291
1 315,001 320,000 315,847
1 335,001 340,000 338,510
82 83
No. of Percentage
S i z e o f H o l d i n g
Shareholders Shares Held of Capital
No. of Total
From To 5.2. Associated Companies, undertakings and related parties
Shareholders Shares Held
Zimpex (Private) Limited 1 22,510,635 15.4684
1 340,001 345,000 340,584
1 395,001 400,000 400,000
1 445,001 450,000 447,218 5.3 NIT and ICP
1 450,001 455,000 450,216 National Bank of Pakistan, Trustee Deptt. 3,326,368 2.2858
1 480,001 485,000 483,000
2 490,001 495,000 988,483 IDBP (ICP UNIT) 18,247 0.0125
1 495,001 500,000 500,000 2 3,344,615 2.2983
1 520,001 525,000 525,000 5.4 Banks, Development Financial Institutions, Non-Banking
1 560,001 565,000 560,500
1 645,001 650,000 645,500 Financial Institutions 21 3,627,578 2.4927
1 690,001 695,000 691,753 5.5 Insurance Companies 6 1,305,345 0.8970
1 780,001 785,000 784,047 5.6 Modarabas, Leasing and Mutual Funds 8 2,245,333 1.5429
1 840,001 845,000 841,200
1 875,001 880,000 877,134 5.7 Shareholders holding Ten Percent or
1 905,001 910,000 905,062 more voting interest in the Company
1 1,115,001 1,120,000 1,116,000 refer 5.2 & 5.8 b
1 1,280,001 1,285,000 1,283,007
5.8 General Public
1 2,030,001 2,035,000 2,031,482
1 2,360,001 2,365,000 2,362,066 a. Individuals 4,944 29,723,755 20.4251
1 3,235,001 3,240,000 3,238,871 b. Foreign Investor (s) 10 43,575,197 29.9432
1 3,325,001 3,330,000 3,326,368 5.9 Joint Stock Companies 88 17,082,061 11.7381
1 5,075,001 5,080,000 5,077,500
1 8,040,001 8,045,000 8,040,081 5.10 Public Sector Companies and Corporations 1 300,405 0.2064
1 8,260,001 8,265,000 8,261,366 5.11 Executives - - -
1 9,045,001 9,050,000 9,045,940 5.12 Others
1 10,040,001 10,045,000 10,040,331
1 10,825,001 10,830,000 10,827,332 Artal Restaurant Int Limited Employees Provident Fund 1,815
1 22,510,001 22,515,000 22,510,635 Fikree Development Corporation Limited 2,794
1 35,205,001 35,210,000 35,205,888 Hussain Trustees Limited 260
5,105 TOTAL 145,526,216 Manage Committee of Tameer-e-Millat Foundation 506
Note : The Slabs not applicable above have not been shown. Securities & Exchange Commission of Pakistan 1
The Deputy Administrator. Abandoned Properties 3,045
5 Categories of Shareholders
5.1 Directors, CEO and their spouses & minor children No. of Percentage The Ida Rieu Poor Welfare Association 354
Shareholders Shares Held of Capital The Karachi Stock Exchange (Guarantee) Limited-Future Cont. 61,425
Mr. Tariq Sayeed Saigol, Chairman/Director 10,040,331 6.8993 The Okhai Memon Madressah Association 1
Mr. Taufique Sayeed Saigol, Chief Executive/Director 10,827,332 7.4401 Trustees Al-Abbas Sugar Mills Limited Employees Gratuity Fund 9,075
Mr. Sayeed Tariq Saigol, Director 315,847 0.2170 Trustees Artal Restaurants Intl Employees Provident Fund 760
Mr. Waleed Tariq Saigol, Director 20,937 0.0144 Trustees Moosa Lawai Foundation 3,751
Mr. Kamil Taufique Saigol, Director 2,500 0.0017 Trustees Nestle Pakistan Limited Employees Provident Fund 20,000
Mr. Zamiruddin Azar, Director 5,930 0.0041 Trustees Nestle Pakistan Limited Managerial Staff Pension 20,000
Mr. Abdul Hai Mehmood Bhaimia, Director 23,643 0.0163 United Executers & Trustee Company Limited 173
Mrs. Shehla Tariq Saigol, spouse of Mr. Tariq Sayeed Saigol 450,216 0.3094
University of Sindh 596
8 21,686,736 14.9023
16 124,556 0.0856
Grand Total : 5,105 145,526,216 100.0000
84 85
Consolidated Financial Statements of
86 87
DIRECTORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS AUDITORS' REPORT TO THE MEMBERS
The Directors are pleased to present the audited consolidated financial statements We have audited the annexed consolidated financial statements comprising consolidated
of the group for the year ended 30th June, 2010. balance sheet of Kohinoor Textile Mills Limited (the Holding Company) and its subsidiary
companies (together referred to as Group) as at 30 June 2010 and the related consolidated
GROUP RESULTS profit and loss account, consolidated statement of comprehensive income, consolidated
cash flow statement and consolidated statement of changes in equity together with the
The Group has earned gross profit of Rs. 5,056 million as compared to Rs. 6,323 million notes forming part thereof, for the year then ended. We have also expressed separate
of corresponding year. The group has suffered pre-tax loss of Rs. 2,193 million this year as opinion on the financial statements of Kohinoor Textile Mills Limited. The financial
compared to Rs. 1,454 million during the last year. statements of the Subsidiary Companies were audited by other firms of auditors, whose
reports have been furnished to us and our opinion, in so far as it relates to the amounts
The overall group financial results are as follows: included for such companies, is based solely on the reports of such other auditors. These
financial statements are the responsibility of the Holding Company's management. Our
2010 2009 responsibility is to express an opinion on these financial statements based on our audit
Gross sales 24,440,066 23,812,751 Our audit was conducted in accordance with the International Standards on Auditing and
Gross profit 5,056,138 6,322,818 accordingly included such tests of accounting records and such other auditing procedures as
Profit from operations 939,061 3,206,130 we considered necessary in the circumstances.
Financial Charges 3,132,244 4,660,471
In our opinion, the consolidated financial statements present fairly the financial position of
Maple Leaf Cement Factory Limited Kohinoor Textile Mills Limited and its subsidiary companies as at 30 June 2010 and the
results of their operations for the year then ended.
The subsidiary company of Kohinoor Textile Mills Limited has shown gross profit of
21.56% as compared to 32.49% of previous year. As stated in note 2.1(d)(i) and 2.5 to the consolidated financial statements, the Group has
changed its accounting policies and disclosures arising from standards and amendments to
ACKNOWLEDGEMENT published approved accounting standards, with which we concur.
The Directors are grateful to the Group's members, financial institutions, customers and
employees for their cooperation and support. They also appreciate the hard work and
dedication of the employees working at various divisions.
For and on behalf of the Board

RIAZ AHMAD & COMPANY
Chartered Accountants
Name of engagement partner:

Atif Bin Arshad
Taufique Sayeed Saigol ISLAMABAD

Lahore: September 29, 2010 Chief Executive
Date: September 29, 2010
88 89
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2010
2010 2009 2010 2009
EQUITY AND LIABILITIES ASSETS
SHARE CAPITAL AND RESERVES NON-CURRENT ASSETS
Authorized share capital
370,000,000 ( 2009: 170,000,000) Property, plant and equipment 19 27,531,515 24,521,559
ordinary shares of Rupees 10 each 3,700,000 1,700,000 Investment properties 20 1,720,835 1,720,835
30,000,000 ( 2009: 30,000,000) preference Intangible assets 21 1,774 7,332
shares of Rupees 10 each 300,000 300,000 Long term loans to employees 22 3,293 5,666
4,000,000 2,000,000 Long term deposits and prepayments 23 86,460 85,102
29,343,877 26,340,494
Issued, subscribed and paid up share capital 3 1,455,262 1,455,262
Reserves 4 1,462,928 2,456,202
Shareholders' equity 2,918,190 3,911,464
Non controlling interest 5 2,405,263 3,669,866
Equity attributable to equity holders of the Group 5,323,453 7,581,330
CURRENT ASSETS
Surplus on revaluation of property 6 3,673,825 1,263,592 Stores, spare parts and loose tools 24 2,753,208 3,240,141
Share deposit money 7 1,000,000 - Stock -in- trade 25 2,897,831 2,430,740
Trade debts 26 2,080,465 1,732,345
NON-CURRENT LIABILITIES Loans and advances 27 863,437 398,158
Long term financing 8 4,227,075 2,745,185 Due from gratuity fund trust 42 - 8,184
Redeemable capital 9 8,289,800 7,200,000 Security deposits and short term prepayments 28 137,402 171,689
Liabilities against assets subject to finance lease 10 767,748 963,133 Interest accrued 797 1,105
Lease finance advance - 35,922 Other receivables 29 494,916 320,778
Long term deposits 11 2,739 2,580 Short term investments 30 1,114,449 1,014,173
Employees' benefits 12 26,493 18,990 Taxation recoverable 31 396,310 236,900
Deferred tax 13 157,996 204,422 Cash and bank balances 32 152,453 180,229
13,471,851 11,170,232 10,891,268 9,734,442
CURRENT LIABILITIES
Trade and other payables 14 4,439,979 3,193,658
Accrued mark-up 15 1,211,799 626,453
Short term borrowings 16 10,131,273 9,192,793 Non-current assets classified as held for sale 33 652,923 601,662
Current portion of non-current liabilities 17 1,635,888 3,648,540 11,544,191 10,336,104
17,418,939 16,661,444
TOTAL LIABILITIES 30,890,790 27,831,676
CONTINGENCIES AND COMMITMENTS 18
TOTAL EQUITY AND LIABILITIES 40,888,068 36,676,598 TOTAL ASSETS 40,888,068 36,676,598
The annexed notes form an integral part of these consolidated financial statements.
90 91
CONSOLIDATED PROFIT AND LOSS ACCOUNT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010 FOR THE YEAR ENDED 30 JUNE 2010
2010 2009 2010 2009
SALES 34 24,440,066 23,812,751 LOSS AFTER TAXATION (2,306,217) (1,422,795)

COST OF SALES 35 (19,383,928) (17,489,933)
GROSS PROFIT 5,056,138 6,322,818 OTHER COMPREHENSIVE LOSS
Surplus / (deficit) on remeasurement of available for

DISTRIBUTION COST 36 (3,667,408) (2,912,955) 104,708 (737,065)
sale investment
ADMINISTRATIVE EXPENSES 37 (388,042) (326,873) Deferred tax on remeasurement of available for
OTHER OPERATING EXPENSES 38 (197,309) (60,807) sale investment (27,486) 193,478
(4,252,759) (3,300,635) 77,222 (543,587)
803,379 3,022,183
OTHER OPERATING INCOME 39 135,682 183,947 Adjustment of cross currency interest rate swap - (571,802)
PROFIT FROM OPERATIONS 939,061 3,206,130 Deferred tax on adjustment of cross currency interest
rate swap - 72,119
FINANCE COST 40 (3,132,244) (4,660,471) - (499,683)
LOSS BEFORE TAXATION (2,193,183) (1,454,341) Other comprehensive income / (loss) for the year - net
of tax 77,222 (1,043,270)
PROVISION FOR TAXATION 41 (113,034) 31,546

TOTAL COMPREHENSIVE LOSS FOR THE YEAR (2,228,995) (2,466,065)
LOSS AFTER TAXATION (2,306,217) (1,422,795)
NON CONTROLLING INTEREST
Dividend on preference shares 52,794 52,794 Total comprehensive loss attributable to :
Share in loss for the year (1,315,024) (516,554)
(1,262,230) (463,760) Equity holders of parent (993,274) (1,699,421)
LOSS AFTER TAXATION AND NON CONTROLLING INTEREST (1,043,987) (959,035) Non controlling interest (1,235,721) (766,644)
LOSS PER SHARE - BASIC AND DILUTED (Rupees) 46 (7.17) (6.59) (2,228,995) (2,466,065)
CHIEF EXECUTIVE DIRECTOR CHIEF EXECUTIVE DIRECTOR
92 93
CONSOLIDATED CASH FLOW STATEMENT
(959,035) (959,035) (1,699,421) (1,699,421) (766,644) (2,466,065)
(993,274) (1,235,721) (2,228,995)
DIRECTOR
2010 2009
(52,478)
(28,882)
5,610,885 4,488,988 10,099,873
3,911,464 3,669,866 7,581,330
2,918,190 2,405,263 5,323,453

equity
Total
-
NOTE ( Rupees in thousand)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 43 2,717,867 5,080,447
controlling
(52,478)
(28,882)
Interest
Non
Finance cost paid (2,546,898) (4,464,982)
-
Compensated absences paid (10,021) (3,744)
Workers' Profit Participation Fund paid - (25)
Total
-
Funds received/ paid to gratuity fund trust 8,184 -
Long term deposits (1,358) (2,264)
Sub-Total reserves
(1,043,987) (1,043,987) (993,274)

1,202,463 2,692,954 4,155,623
283,428 1,733,919 2,456,202
689,932 1,462,928
Total
Income taxes paid (346,357) (259,384)
-
Net cash generated from / (used in) operating activities (178,583) 350,048
CASH FLOWS FROM INVESTING ACTIVITIES
-
Capital expenditure on property, plant and equipment (1,980,444) (1,840,294)
Revenue reserves
General Un-appropriated
Payment for non current assets classified as held for sale (51,261) (190,230)
(760,559)
reserve profit /(loss)
40,000
Long term loans to employees 2,373 455
-
Investments made (65,775) (30,225)
Share holders' Equity

Return on bank deposits received 6,589 12,079
(40,000)
1,462,669 1,490,491
722,283 1,450,491
772,996 1,450,491
Proceeds from sale of property, plant and equipment 13,644 10,143
Reserves
-
-
-
-
Proceeds from sale of investments 3,664 13,792
Sub-Total
(740,386)
Sale of non current assets classified as held for sale - 25,000
50,713
-
-
Dividend received 22,653 28,259
Net cash used in investing activities (2,048,557) (1,971,021)
reserves
Hedging
(423,109) (317,277)
Capital reserves
317,277
CASH FLOWS FROM FINANCING ACTIVITIES
-
-
-
Proceeds from long term financing 625,536 913,964
Fair value
144,919 1,000,473
577,364
628,077
50,713
reserve
Redeemable capital 300,000 -
Repayment of long term financing (420,840) (1,023,619)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Lease finance advance (35,922) 35,922
premium
144,919
144,919
Share
Short term borrowings - net 938,480 1,828,531
-
-
-
-
-
Repayment of liabilities against assets subject to finance lease (175,168) (80,576)
capital
1,455,262
1,455,262
1,455,262
Proceeds from share deposit money 1,000,000 -
Share
-
-
-
-
-
Redeemable capital (3,400) -

Repayment of term finance certificates (599) -
Long term deposits from stockist - net 159 (2)
Dividend paid to non-controlling interest holders
Dividend paid to non-controlling interest holders

Dividend paid (28,882) (52,539)
Net cash from financing activities 2,199,364 1,621,681
Net increase / (decrease) in cash and cash equivalents (27,776) 708
Cash and cash equivalents at the beginning of the year 180,229 179,521
Transfer from general reserve


Total comprehensive loss
Total comprehensive loss

Cash and cash equivalents at the end of the year 152,453 180,229
CHIEF EXECUTIVE
94 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.1 Basis of Preparation
a) Statement of Compliance
1. THE GROUP AND ITS OPERATIONS These consolidated financial statements have been prepared in accordance with approved
1.1 Holding Company accounting standards as applicable in Pakistan. Approved accounting standards comprise of
such International Financial Reporting Standards (IFRS) issued by the International Accounting
Kohinoor Textile Mills Limited ("the Holding Company") is a public limited company incorporated in Standards Board as are notified under the Companies Ordinance, 1984, provisions of and
Pakistan under the Companies Act,1913 (now Companies Ordinance, 1984) and listed on the directives issued under the Companies Ordinance, 1984. In case requirements differ, the
Karachi, Lahore and Islamabad Stock Exchanges. The registered office of the Company is situated provisions or directives of the Companies Ordinance, 1984 shall prevail.
at 42-Lawrence Road, Lahore. The Holding Company holds 50.13% (2009: 50.13%) shares of
Maple Leaf Cement Factory Limited, 99.99% (2009: Nil) shares of Concept Trading (Private) Limited b) Accounting Convention
and indirectly holds 50.12% (2009: Nil) shares of Vital Trading (Private) Limited. The principal These consolidated financial statements have been prepared under the historical cost
activity of the Holding Company is manufacturing of yarn and cloth, processing and stitching the convention, except for:
cloth and trade of textile products.
- modification of foreign currency translation adjustments;
1.2 Subsidiary Companies - revaluation of free hold land at fair value;
a) Maple Leaf Cement Factory Limited ("the Subsidiary") was incorporated in Pakistan on 13 April, - revaluation of investment properties at fair value;
1960 under the Companies Act, 1913 (now the Companies Ordinance, 1984) as a public - recognition of employee retirement benefits at present value; and
company limited by shares and was listed on stock exchanges in Pakistan on 17 August, 1994. - measurement at fair value of certain financial assets.
The registered office of the Subsidiary is situated at 42-Lawrence Road, Lahore. The Subsidiary
c) Critical accounting estimates and judgments
is engaged in production and sale of cement.
The preparation of consolidated financial statements in conformity with the approved accounting
b) Concept Trading (Private) Limited ('the Subsidiary') was incorporated in Pakistan on March 11, standards require the use of certain critical accounting estimates. It also requires the
2010 as a trading concern. The registered office of the Company is situated at 42-Lawrence management to exercise its judgment in the process of applying the Group's accounting policies.
Road, Lahore. Estimates and judgments are continually evaluated and are based on historical experience,
c) Vital Trading (Private) Limited ('the Subsidiary') was incorporated in Pakistan on March 11, 2010 including expectation of future events that are believed to be reasonable under the
as a trading concern. The registered office of the Company is situated at 42-Lawrence Road, circumstances. The areas where various assumptions and estimates are significant to the
Lahore. Group's financial statements or where judgments were exercised in application of accounting
policies are as follows:
1.3 Basis of consolidation
Financial instruments
The financial statements of the Subsidiaries are included in the consolidated financial statements
The fair value of financial instruments that are not traded in an active market is determined by
from the date control commences until the date that control ceases.
using valuation techniques based on assumptions that are dependent on conditions existing at
The assets and liabilities of the Subsidiaries have been consolidated on a line by line basis and the balance sheet date.
carrying value of investment held by the Holding Company is eliminated against Holding Company's
share in paid up capital of the Subsidiaries. Useful lives, patterns of economic benefits and impairments
Material intra-group balances and transactions have been eliminated. Estimates with respect to residual values, useful lives and pattern of flow of economic benefits
are based on the analysis of the management of the Group. Further, the Group reviews the value
Non controlling interest is that part of net results of the operations and of net assets of the of assets for possible impairments on an annual basis. Any change in the estimates in the future
Subsidiaries attributable to interests which are not owned by the Holding Company. Non controlling might affect the carrying amount of respective item of property, plant and equipment, with a
interest is presented as a separate item in the consolidated financial statements. corresponding effect on the depreciation charge and impairment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Taxation
The significant accounting policies applied in the preparation of these consolidated financial statements In making the estimates for income tax currently payable by the Group, the management takes
are set out below. These policies have been consistently applied to all years presented, unless otherwise into account the current income tax law and the decisions of appellate authorities on certain
stated: issues in the past.
96 97
Provisions for doubtful debts ii) Other amendment to published approved accounting standards that is effective in the
The Group reviews its receivable against any provision required for any doubtful balances on an current year
ongoing basis. The provision is made while taking into consideration expected recoveries, if any. IAS 23 (Amendment) 'Borrowing Costs' (effective for annual periods beginning on or after 01
January 2009). It requires an entity to capitalize borrowing costs directly attributable to the
Impairment of investments in associated companies acquisition, construction or production of a qualifying asset (one that takes a substantial
In making an estimate of recoverable amount of the Group's investments in associated period of time to get ready for its intended use or sale) as part of the cost of that asset. The
companies, the management considers future cash flows. Group's accounting policy on borrowing cost, as disclosed in note 2.14, complies with the
above mentioned requirements to capitalize borrowing cost and hence this change has not
impacted the Group's accounting policy.
d) Standards and amendments to published approved accounting standards that are
effective in current year
IFRS 3 (Revised) 'Business combinations' (effective from July 1, 2009). The revised standard
continues to apply the acquisition method to business combinations, with some significant
i) Changes in accounting policies and disclosures arising from standards and changes. For example, all payments to purchase a business are to be recorded at fair value at
amendments to published approved accounting standards that are effective in the the acquisitions date, with contingent payments classified as debt subsequently re-
current year measured through the income statement. There is a choice on an acquisition-by-acquisition
basis to measure the non- controlling interest in all the acquiree either at fair value or at the
IAS 1 (Revised) 'Presentation of Financial Statements' (effective for annual periods non-controlling interest's proportionate share of the acquiree's net assets. All acquisition-
beginning on or after 01 January 2009).The revised standard prohibits the presentation of related costs should be expensed. This amendment does not have any effect on the Group's
items of income and expenses (that is ‘non-owner changes in equity’) in the statement of financial statements.
changes in equity, requiring ‘non-owner changes in equity’ to be presented separately from
owner changes in equity in a statement of comprehensive income. As a result the Group IAS 27 (Revised) 'Consolidated and separate financial statements' (effective from July
presents in the statement of changes in equity all owner changes in equity, whereas all non- 1,2009). The revised standard requires the effects of all transactions with non-controlling
owner changes in equity are presented in the statement of comprehensive income. interests to be recorded in equity if there is no change in control and these transactions will no
Comparative information has been re-presented so that it also is in conformity with the longer result in good will or gains and losses. The standard also specifies the accounting
revised standard. As the change in accounting policy only impacts presentation aspects, when control is lost. Any remaining interest in entity is re-measured to fair value, and a gain or
there is no impact on earnings per share. loss is recognised in profit or loss. This amendment does not have any effect on the Group's
financial statements.
IFRS 7 (Amendment) ‘Financial instruments: Disclosures’ (effective for annual periods
beginning on or after 01 January 2009). This amendment requires enhanced disclosures IAS 28 (Amendment) 'Investment in associates' (effective from January 1, 2009). An
about fair value measurement and liquidity risk. In particular, the amendment requires investment in associate is treated as a single asset for the purpose of impairment testing. Any
disclosure of fair value measurements by level of a fair value measurement hierarchy. As the impairment loss is not allocated to specific assets included within the investment, for example,
change in accounting policy only results in additional disclosures, there is no impact on goodwill. Reversals of impairment are recorded as an adjustment to the investment balance
earnings per share. to the extent that the recoverable amount of the associate increases. This amendment do not
have any effect on the Group's financial statements.
IFRS 8 'Operating Segments' (effective for annual periods beginning on or after 01 January
2009). It introduces the "management approach" to segment reporting. IFRS 8 requires e) Standards, interpretations and amendments to published approved accounting
presentation and disclosure of segment information based on the internal reports regularly standards that are effective in current year but not relevant
reviewed by the Group's chief operating decision makers in order to assess each segment's
performance and to allocate resources to them. Previously, the Group did not present There are other new standards, interpretations and amendments to the published approved
segment information as IAS 14 limited reportable segments to those that earn a majority of accounting standards that are mandatory for accounting periods beginning on or after 01 July
their revenue from sales to external customers and therefore did not require the different 2009 but are considered not to be relevant or do not have any significant impact on the Group's
stages of vertically integrated operations to be identified as separate segments. Under the financial statements and are therefore not detailed in these consolidated financial statements.
management approach, the Group has determined operating segments on the basis of f) Standard and amendments to published approved accounting standards that are not yet
business activities i.e. Spinning, Weaving, Processing, Home Textile and cement. As the effective but relevant
change in accounting policy only results in additional disclosures of segment information,
there is no impact on earnings per share. Following standard and amendments to existing standards have been published and are
mandatory for the Group's accounting periods beginning on or after 01 July 2010 or later periods:
98 99
IFRS 9 'Financial Instruments' (effective for annual periods beginning on or after 01 January The amount recognized in the balance sheet represents the present value of defined benefit
2013). IFRS 9 has superseded the IAS 39 'Financial Instruments: Recognition and obligations as adjusted for unrecognized actuarial gains and losses.
Measurement'. It requires that all equity investments are to be measured at fair value while
eliminating the cost model for unquoted equity investments. Certain categories of financial Cumulative net unrecognized actuarial gains and losses at the end of previous year which
instruments available under IAS 39 will be eliminated. Moreover, it also amends certain exceeds 10% of the present value of the Company’s gratuity is amortized over the average
disclosure requirements relating to financial instruments under IFRS 7. The management of the expected remaining working lives of the employees.
Group is in the process of evaluating impacts of the aforesaid standard on the Group's financial
statements.
c) Liability for employees' compensated absences
There are other amendments resulting from annual Improvements projects initiated by
The Subsidiary accounts for the liability in respect of employees' compensated absences in the
International Accounting Standards Board in April 2009 and May 2010, specifically in IFRS 7
year in which these are earned. Provision to cover the obligations is made using the current
'Financial Instruments: Disclosures', IFRS 8 'Operating Segments', IAS 1 'Presentation of
salary level of employees.
Financial Statements', IAS 7 'Statement of Cash Flows', IAS 24 'Related Party Disclosures' and
IAS 36 'Impairment of Assets' that are considered relevant to the Group's financial statements.
These amendments are unlikely to have a significant impact on the Group's financial statements 2.3 Taxation
and have therefore not been analyzed in detail.
Current
g) Standards, interpretations and amendments to published approved accounting
standards that are not effective in current year and not considered relevant Provision for current tax is based on the taxable income for the year determined in accordance with
the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax
There are other accounting standards, amendments to published approved accounting rates or tax rates expected to apply to the profit for the year if enacted. The charge for current tax
standards and new interpretations that are mandatory for accounting periods beginning on or also includes adjustments, where considered necessary, to provision for tax made in previous years
after 01 July 2010 but are considered not to be relevant or do not have any significant impact on arising from assessments framed during the year for such years.
the Group's financial statements and are therefore not detailed in these consolidated financial
statements.
Deferred
2.2 Employee benefits Deferred tax is accounted for using the balance sheet liability method in respect of all temporary
Holding Company timing differences arising from difference between the carrying amount of the assets and liabilities in
the consolidated financial statements and corresponding tax bases used in the computation of
The Holding Company operates an approved funded contribution provident fund covering all of its taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences
permanent employees. Equal monthly contributions are made both by the Holding Company and and deferred tax assets to the extent that it is probable that taxable profit will be available against
employees at the rate of 8.33 percent of basic salary and cost of living allowance to the fund. The which the deductible temporary differences, unused tax losses and tax credits can be utilized.
Holding Company's contributions to the fund are charged to profit and loss account.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences
Subsidiary Company - Maple Leaf Cement Factory Limited reverse, based on tax rates that have been enacted or substantively enacted by the balance sheet
a) Defined contribution plan date. Deferred tax is charged or credited in the profit and loss account, except to the extent that it
relates to items recognized in other comprehensive income or directly in equity. In this case, the tax
The Subsidiary operates a defined contributory approved provident fund for all of its employees. is also recognized in other comprehensive income or directly in equity, respectively.
Equal monthly contributions are made both by the Subsidiary and employees at the rate of 10%
of the basic salary to the fund.
2.4 Provisions
b) Defined benefit plan
Provisions are recognized when the Group has a legal or constructive obligation as a result of past
The Subsidiary operates un-funded gratuity scheme for all workers of the Company who have event and it is probable that an outflow of resources embodying economic benefits will be required to
completed minimum qualifying period of service as defined under the respective scheme. settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at
Provisions are made to cover the obligations under the schemes on the basis of actuarial each balance sheet date and are adjusted to reflect the current best estimates.
valuation and are charged to income.
100 101
2.5 Property, plant and equipment The related rental obligation, net of finance cost, is included in liabilities against assets subject to
Holding Company finance lease. The liabilities are classified as current and long term depending upon the timing of
payments.
Owned
Each lease payment is allocated between the liability and finance cost so as to achieve a constant
Property, plant and equipment except freehold land and capital work in progress are stated at cost rate on the balance outstanding. The finance cost is charged to profit and loss account over the lease
less accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant term.
and equipment consists of historical cost, borrowing cost pertaining to erection/construction period
of qualifying assets and other directly attributable cost of bringing the asset to working condition. Depreciation on assets subject to finance lease is recognized in the same manner as for owned
Freehold land is stated at revalued amount less any identified impairment loss. Capital work in assets. Depreciation of the leased assets is charged to profit and loss account.
progress is stated at cost less any identified impairment loss. Subsidiary Company - Maple Leaf Cement Factory Limited
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as Owned
appropriate, only when it is probable that future economic benefits associated with the item will flow Property, plant and equipment, except freehold land and capital work-in-progress, are stated at cost
to the Holding Company and the cost of the item can be measured reliably. All other repair and less accumulated depreciation and impairment losses, if any. Subsequent costs are included in the
maintenance costs are charged to profit and loss account during the period in which they are asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable
incurred. that future economic benefits associated with the item will flow to the Company and cost of the item
can be measured reliably.
During the current year, the Holding Company has changed its accounting policy for measurement
of freehold land from cost model to revaluation model. Freehold land is now stated at revalued Freehold land and capital work-in-progress are stated at cost less impairment losses, if any. All
amount less any identified impairment loss. Previously, freehold land was stated at cost less any expenditure connected with specific assets incurred during installation and construction period are
identified impairment loss. The effect of revaluation of freehold land has been dealt with in carried under capital work-in-progress. These are transferred to specific assets as and when these
accordance with the requirements of International Accounting Standard (IAS) 16 "Property, Plant are available for use.
and Equipment". Had there been no change in this accounting policy, property, plant and equipment
would have been lower by Rupees 2,410.233 million. This change in accounting policy has no Cost in relation to certain plant and machinery represents historical cost, exchange differences
impact on profit or loss. capitalized upto June 30, 2004 and the cost of borrowings during the construction period in respect
of loans and finances taken for the specific projects.
Depreciation
Transactions relating to jointly owned assets with Pak American Fertilizers Limited (PAFL), as stated
Depreciation on all property, plant and equipment is charged to profit and loss account applying the
in note 19.4, are recorded on the basis of advices received from the housing colony.
reducing balance method so as to write off the cost/ depreciable amount of the asset over their
estimated useful lives at the rates given in Note 19.1. Depreciation on additions is charged from the
All other repair and maintenance costs are charged to income during the period in which these are
month the assets are available for use while no depreciation is charged in the month in which the
incurred.
assets are disposed off. The residual values and useful lives of assets are reviewed by the
management, at each financial year end and adjusted if impact on depreciation is significant.
Gains / losses on disposal or retirement of property, plant and equipment, if any, are taken to profit
Derecognition and loss account.
An item of property, plant and equipment is derecognized upon disposal or when no future economic Depreciation is calculated at the rates specified in note 19.1 on reducing balance method except that
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset straight-line method is used for the plant and machinery and buildings relating to dry process plant
is included in the profit and loss account in the year the asset is derecognized. after deducting residual value. Depreciation on additions is charged from the month in which the
Leased asset is put to use and on disposals upto the month of disposal. The assets' residual values and
useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.
Finance lease
Leased
Leases where the Holding Company has substantially all the risks and rewards of ownership are Finance lease
classified as finance lease. Asset subject to finance lease are capitalized at the commencement of
the lease term at the lower of present value of minimum lease payments under the lease agreements Assets held under finance lease arrangements are initially recorded at the lower of present value
and the fair value of the leased assets, each determined at the inception of the lease. ofminimum lease payments under the lease agreements and the fair value of the leased assets.
102 103
Depreciation on leased assets is charged applying reducing balance method at the rates used for a) Investments at fair value through profit or loss
similar owned assets, so as to depreciate the assets over their estimated useful lives in view of Investments classified as held-for-trading and those designated as such are included in this
certainty of ownership of assets at the end of lease term. category. Investments are classified as held-for-trading if they are acquired for the purpose of
selling in the short term. Gains or losses on investments held-for-trading are recognised in profit
2.6 Un-allocated capital expenditure
and loss account.
All cost or expenditure attributable to work-in-progress are capitalized and apportioned to buildings b) Held-to-maturity
and plant and machinery at the time of commencement of commercial operations.
Investments with fixed or determinable payments and fixed maturity are classified as held-to-
2.7 Investment Properties maturity when the Group has the positive intention and ability to hold to maturity. Investments
intended to be held for an undefined period are not included in this classification. Other long term
Land and buildings held for capital appreciation or to earn rental income are classified as investment investments that are intended to be held to maturity are subsequently measured at amortized
properties. Investment properties are carried at fair value which is based on active market prices, cost. This cost is computed as the amount initially recognised minus principal repayments, plus
adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. The or minus the cumulative amortisation, using the effective interest method, of any difference
valuation of the properties is carried out with sufficient regularity. between the initially recognized amount and the maturity amount. For investments carried at
amortised cost, gains and losses are recognized in profit and loss account when the investments
Gain or losses arising from a change in the fair value of investment properties are included in the are derecognized or impaired, as well as through the amortisation process.
profit and loss account currently.
c) Available-for-sale
2.8 Intangible assets
Investments intended to be held for an indefinite period of time, which may be sold in response to
Intangible assets, which are non-monetary assets without physical substance, are recognized at need for liquidity, or changes to interest rates or equity prices are classified as available-for-sale.
cost, which comprise purchase price, non-refundable purchase taxes and other directly attributable After initial recognition, investments which are classified as available-for-sale are measured at
expenditure relating to their implementation and customization. After initial recognition an intangible fair value. Gains or losses on available-for-sale investments are recognized directly in statement
asset is carried at cost less accumulated amortization and impairment losses, if any. Intangible of other comprehensive income until the investment is sold, de-recognized or is determined to be
assets are amortized from the month, when these assets are available for use, using the straight line impaired, at which time the cumulative gain or loss previously reported in statement of other
method, whereby the cost of the intangible asset is amortized over its estimated useful life over comprehensive income is included in profit and loss account. These are sub-categorized as
which economic benefits are expected to flow to the Group. The useful life and amortization method under:
is reviewed and adjusted, if appropriate, at each balance sheet date.
Quoted
Currently, intangible asset (computer software) is amortised using the straight-line method over a For investments that are actively traded in organized capital markets, fair value is determined by
period of three years. Amortisation on additions to intangible assets is charged from the month in reference to stock exchange quoted market bids at the close of business on the balance sheet
which an asset is put to use and on disposal upto the month of disposal. date.
2.9 Investments Unquoted

Fair value of unquoted investments is determined on the basis of appropriate valuation
Classification of investment is made on the basis of intended purpose for holding such investment. techniques as allowed by IAS 39 "Financial Instruments: Recognition and Measurement".
Management determines the appropriate classification of its investments at the time of purchase
and re-evaluates such designation on regular basis. Change in Accounting Estimate
During the current year ended, the Holding Company has changed the accounting estimate for
Investments are initially measured at fair value plus transaction costs directly attributable to
valuation of its unquoted available for sale investment. Fair value of unquoted, available for sale
acquisition, except for "investment at fair value through profit or loss" which is measured initially at
investment is now determined by using net assets based valuation method. Previously, valuation
fair value.
was carried out using dividend stream method. Effect of this change in accounting estimate is
recognized prospectively in accordance with the requirements of International Accounting
The Group assesses at the end of each reporting period whether there is any objective evidence that
Standard (IAS) 8 "Accounting Policies, Changes in Accounting Estimates and Errors". Had there
investments are impaired. If any such evidence exists, the Group applies the provisions of IAS 39
been no change in this accounting estimate, short term investments, fair value reserve and
'Financial Instruments: Recognition and Measurement' to all investments, except investments in
deferred taxation would have been lower by Rupees 32.633 million, Rupees 24.067 million and
subsidiary companies, which are tested for impairment in accordance with the provisions of IAS 36
Rupees 8.566 million respectively with no effect on the profit or loss.
'Impairment of Assets'.
104 105
2.10 Inventories 2.13 Non-current assets classified as held for sale
Inventories, except for stock in transit and waste stock / rags are stated at lower of cost and net Non-current assets are classified as held for sale if its carrying amount will be recovered principally
realizable value. Cost is determined as follows: through a sale transaction rather than continuous use. These are measured at lower of carrying
amount and fair value less costs to sell.
Stores, spare parts and loose tools
2.14 Borrowing costs
Useable stores, spare parts and loose tools are valued principally at moving average cost, while Interest, mark-up and other charges on long-term finances are capitalized up to the date of
items considered obsolete are carried at nil value. Items in transit are valued at cost comprising commissioning of respective qualifying assets acquired out of the proceeds of such long-term
invoice value plus other charges paid thereon. finances. All other interest, mark-up and other charges are recognized in profit and loss account.
Stock-in-trade 2.15 Revenue recognition

a) Revenue from local sales is recognized on dispatch of goods to customers while in case of export
Cost of raw material, work-in-process and finished goods is determined as follows: sales it is recognized on the date of bill of lading.
(i) For raw materials: Annual average basis. b) Dividend on equity investments is recognized when the Group's right to receive payment is
established.
(ii) For work-in-process and finished goods: Average manufacturing cost including
c) Profit on deposits with banks is recognized on time proportion basis taking into account the
amounts outstanding and rates applicable thereon.
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon. 2.16 Foreign currencies
Waste stock / rags are valued at net realizable value. These financial statements are presented in Pak Rupees, which is the Group’s functional currency.
Net realizable value signifies the estimated selling price in the ordinary course of business less the All monetary assets and liabilities denominated in foreign currencies are translated into Pak Rupees
estimated costs of completion and the estimated costs necessarily to make a sale. at the rates of exchange prevailing at the balance sheet date, while the transactions in foreign
currency during the year are initially recorded in functional currency at the rates of exchange
2.11 Derivative financial instruments prevailing at the transaction date. All non-monetary items are translated into Pak Rupees at
exchange rates prevailing on the date of transaction or on the date when fair values are determined.
Derivative financial instruments are initially recognized at fair value on the date a derivative contract
Exchange gains and losses are included in the income currently.
is entered into and are re-measured to fair value at subsequent reporting dates. The method of
recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging 2.17 Financial instruments
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives Financial instruments carried on the balance sheet include investments, deposits, trade debts,
as cash flow hedges. advances, interest accrued, other receivables, cash and bank balances, long-term financing,
liabilities against assets subject to finance lease, lease finance advance, short-term borrowings,
The Group documents at the inception of the transaction the relationship between the hedging accrued mark-up and trade and other payables etc. Financial assets and liabilities are recognized
instruments and hedged items, as well as its risk management objective and strategy for when the Group becomes a party to the contractual provisions of instrument. Initial recognition is
undertaking various hedge transactions. The Group also documents its assessment, both at hedge made at fair value plus transaction costs directly attributable to acquisition, except for “financial
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions instrument at fair value through profit or loss” which is measured initially at fair value.
are highly effective in offsetting changes in cash flow of hedged items
Financial assets are de-recognized when the Group loses control of the contractual rights that
comprise the financial asset. The Group loses such control if it realizes the rights to benefits
The effective portion of changes in the fair value of derivatives that are designated and qualify as
specified in contract, the rights expire or the Group surrenders those rights. Financial liabilities are
cash flow hedges is recognized in statement of other comprehensive income. The gain or loss
de-recognized when the obligation specified in the contract is discharged, cancelled or expired. Any
relating to the ineffective portion is recognized immediately in the profit and loss account.
gain or loss on subsequent measurement (except available for sale investments) and de-recognition
is charged to the profit or loss currently. The particular measurement methods adopted are disclosed
Amounts accumulated in statement of other comprehensive income are recognized in profit and loss
in the following individual policy statements associated with each item and in the accounting policy of
account in the periods when the hedged item will affect profit or loss.
investments.
2.12 Cash and cash equivalents a) Trade and other receivables
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit Trade debts and other receivables are carried at original invoice value less an estimate made for
accounts and other short term highly liquid instruments that are readily convertible into known doubtful debts based on a review of all outstanding amounts at the year end. Bad debts are
amounts of cash and which are subject to insignificant risk of changes in values. written off when identified.
106 107
b) Borrowings Segment results that are reported to the chief executive officer include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. Those income, expenses,
Borrowings are recognized initially at fair value and are subsequently stated at amortized cost.
assets, liabilities and other balances which can not be allocated to a particular segment on a
Any difference between the proceeds and the redemption value is recognized in the profit and
reasonable basis are reported as unallocated.
loss account over the period of the borrowings using the effective interest method.
c) Trade and other payables The Group has four reportable business segments. Spinning (Producing different quality of yarn
using natural and artificial fibers), Weaving (Producing different quality of greige fabric using yarn),
Liabilities for trade and other amounts payable are initially recognized at fair value, which is Processing and Home Textile (Processing greige fabric for production of printed and dyed fabric and
normally the transaction cost. manufacturing of home textile articles) and cement .
2.18 Impairment Transaction among the business segments are recorded at arm's length prices using admissible
valuation methods. Inter segment sales and purchases are eliminated from the total.
a) Financial Assets
A financial asset is considered to be impaired if objective evidence indicate that one or more 2.21 Dividend and other appropriations
events had a negative effect on the estimated future cash flow of that asset.
Dividend distribution to the Group's shareholders is recognized as a liability in the Group's financial
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a statements in the period in which the dividends are declared and other appropriations are
difference between its carrying amount and the present value of estimated future cash flows recognized in the period in which these are approved by the Board of Directors.
discounted at the original effective interest rate. An impairment loss in respect of available for
sale financial asset is calculated by reference to its current fair value. 2.22 Off setting of financial assets and liabilities
Individually significant financial assets are tested for impairment on an individual basis. The Financial assets and liabilities are set off and the net amount is reported in the financial statements
remaining financial assets are assessed collectively in groups that share similar credit risk when there is legally enforceable right to set off and the Group intends either to settle on a net basis,
characteristics. or to realize the asset and settle the liability simultaneously.
b) Non financial assets 2.23 Equity instruments
The carrying amount of assets are reviewed at each balance sheet date for impairment These are recorded at their face value.
whenever events changes in circumstances indicate that the carrying amounts of the assets may
not be recoverable. If such indication exists, and where the carrying value exceeds the estimated 3. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
recoverable amount, assets are written down to their recoverable amounts. The resulting 2010 2009
impairment loss is taken to the profit and loss account except for impairment loss on revalued 2010 2009
Number of shares (Rupees in thousand)
assets, which is adjusted against the related revaluation surplus to the extent that the impairment
loss does not exceed the surplus on revaluation of that asset. 1,596,672 1,596,672 Ordinary shares of Rupees 10 each allotted on 15,967 15,967
reorganization of Kohinoor Industries Limited
2.19 Related party transactions
26,156,000 26,156,000 Ordinary shares allotted under scheme of arrangement of 261,560 261,560
merger of Part II of Maple Leaf Electric Company Limited
Transactions and contracts with related parties are carried out at an arm's length price determined in
accordance with comparable uncontrolled price method. 26,858,897 26,858,897 Ordinary shares allotted under scheme of arrangement of 268,589 268,589
merger of Kohinoor Raiwind Mills Limited and Kohinoor
2.20 Segment reporting Gujar Khan Mills Limited.
38,673,628 38,673,628 Ordinary shares of Rupees 10 each issued as bonus shares 386,736 386,736
Segment reporting is based on the operating (business) segments of the Group. An operating
segment is a component of the Group that engages in business activities from which it may earn
52,241,019 52,241,019 Ordinary shares of Rupees 10 each issued for cash 522,410 522,410
revenues and incur expenses, including revenues and expenses that relate to the transactions with 145,526,216 145,526,216 1,455,262 1,455,262
any of the Group's other components. An operating segment's operating results are reviewed
regularly by the chief executive officer to make decisions about resources to be allocated to the 3.1 Zimpex (Private) Limited, which is an associated company, held 22,510,635 (2009:22,510,635)
segment and assess its performance, and for which discrete financial information is available. ordinary shares of Rupees 10 each at 30 June 2010.
108 109
4. RESERVES 6 SURPLUS ON REVALUATION OF PROPERTY
2010 2009
2010 2009 NOTE (Rupees in thousand)
NOTE (Rupees in thousand) Investment properties 1,263,592 1,263,592
Composition of reserves is as follows: Freehold land 6.1 2,410,233 -
3,673,825 1,263,592
Capital:
6.1 Freehold land is now stated at revalued amount as a result of change in accounting policy from cost
Share premium 4.1 144,919 144,919 model to revaluation model. The revaluation of freehold land was carried out by Independent valuer
Fair value reserve - net of deferred tax 4.2 628,077 577,364 M/s ARCH-e'-decon (Evaluators, Surveyors, Architects & Engineers) as at 30 March 2010. The value
of land has increased by Rupees 2,410.233 million due to revaluation.
772,996 722,283
Revenue: 2010 2009
General reserve 1,450,491 1,450,491 NOTE (Rupees in thousand)
Unappropriated profit / (loss) (760,559) 283,428 7 SHARE DEPOSIT MONEY 7.1 1,000,000 -
689,932 1,733,919 7.1 This represents amount received by Subsidiary from sponsors against future issue of shares, as per
1,462,928 2,456,202 conditions of restructuring agreements as disclosed in note 8.14 and 9 to these consolidated financial
statements. Security and Exchange Commission of Pakistan through its letter June 30, 2010 has
allowed the Company to issue 153,846,153 shares at Rupees 6.5 per share at a discount of Rupees
3.50 per share otherwise than right upto extent of Rupees 1.00 billion to Kohinoor Textile Mills Limited,
4.1 This reserve can be utilized by the Group only for the purposes specified in section 83(2) of the
Holding company.
Companies Ordinance, 1984.
8 LONG TERM FINANCING
2010 2009
4.2 Fair value reserve - net of deferred tax NOTE (Rupees in thousand)
Balance as at 01 July 577,364 1,000,473 Holding company
The Bank of Punjab (BOP - 1) 8.1 26,623 46,598
Add/ (less) : Fair value adjustment on investment in Security
NIB Bank Limited (NIB - 1) 8.2 107,716 139,815
General Insurance Company Limited during the year 68,763 (573,706)
NIB Bank Limited (NIB - 2) 8.3 198,803 223,200
Related deferred tax asset/ liability on investment in
Security General Insurance Company Limited (18,050) Albaraka Islamic Bank B.S.C (E.C) (AIB) 8.4 8,333 41,666
150,597
Allied Bank Limited (ABL - 1) 8.5 65,094 113,067
50,713 (423,109)
Saudi Pak Industrial and Agricultural Investment
Balance as at 30 June 628,077 577,364 Company Limited (SPIAICL-1) 8.6 18,055 21,666
Saudi Pak Industrial and Agricultural Investment
Company Limited (SPIAICL-2) 8.7 10,000 20,000
5. NON-CONTROLLING INTEREST Saudi Pak Industrial and Agricultural Investment
Opening balance 3,669,866 4,488,988 Company Limited (SPIAICL-3) 8.8 156,250 187,500
Standard Chartered Bank (Pakistan) Limited (SCB-2) 8.9 100,000 175,000
Add: Share during the year
Standard Chartered Bank (Pakistan) Limited -
- Hedging reserve - (182,406) Syndicated term finance 8.10 186,500 200,000
- Surplus on revaluation of investment to fair value 26,509 (120,478) Allied Bank Limited - Syndicated term finance 8.10 543,150 568,750
- Loss for the year (1,262,230) (463,760) The Bank of Khyber - Syndicated term finance 8.10 95,500 100,000
(1,235,721) (766,644) Pak Libya Holding Company - Syndicated term finance 8.10 47,750 50,000
Less : Dividend paid on preference shares (28,882) (52,478) Bank Al Falah Limited - Syndicated term finance 8.10 477,500 500,000
2,405,263 3,669,866 Faysal Bank Limited - Syndicated term finance 8.10 279,750 300,000
Standard Chartered Bank (Pakistan) Limited (SCB-1) - 20,226
Faysal Bank Limited (FBL) - 34,376
110 111
2010 2009
NOTE (Rupees in thousand) 8.4 Albaraka Islamic Bank B.S.C (E.C) (AIB)
Subsidiary Company This represents Murabaha finance facility of Rupees 100 million, obtained for construction of buildings.
Habib Bank Limited (HBL - 1) 8.11 580,000 955,503 The facility is allowed for a period of four years including a grace period of one year. The facility is
Habib Bank Limited (HBL - 2) 8.12 210,519 - repayable in sixteen equal quarterly installments commenced with first payment due at the end of 15th
month from the date of disbursement. It is secured by pari passu charge and hypothecation on fixed
Long term finance facility 8.13 790,520 -
assets i.e. land and building constructed for ring spinning and stitching. It carries mark up at the rate of
Syndicated term finance 8.14 1,499,400 1,500,000 3-years KIBOR plus 2% per annum with floor of 12.75% per annum.
5,401,463 5,197,367
8.5 Allied Bank Limited (ABL-1 )
Less: This represents term finance facility of Rupees 300 million , obtained for import of state of art machinery
Current portion shown under current liabilities 17 1,181,865 2,459,659 and is allowed for a period of five years with a grace period of one year. The facility is repayable in
4,219,598 2,737,708 sixteen (16) equal quarterly installments commenced after conclusion of grace period. It is secured by
Other loans - Unsecured first exclusive charge on machinery imported. Facility amounting to Rupees 100 million carries mark up
at the rate of 6 months KIBOR plus 1.25% per annum, facility of Rupees 125 million carries mark up at
Kohinoor Sugar Mills Limited (KSML) 8.15 4,794 4,794 the rate of 6 months KIBOR plus 1.75% per annum and facility of Rupees 75 million carries mark up at
Kohinoor Industries Limited (KIL) 8.16 2,683 2,683 the rate of 6 months KIBOR plus 2.50% per annum with no floor and cap. On December 28, 2006 loans
7,477 7,477 amounting to Rupees 124.732 million were converted to LTF-EOP at 7% per annum fixed rate of mark-
4,227,075 2,745,185 up.
8.1 The Bank of Punjab - (BOP-1) 8.6 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 1)
This represents the LTF-EOP facility of Rupees 65 million for import of textile machinery and is allowed
This represents demand finance facility of Rupees 400 million, obtained for import of state of art for a period of five years with a grace period of six months. The facility is repayable in eighteen (18)
machinery and is allowed for a period of four years with a grace period of six months. The loan is equal quarterly installments commenced from February 19, 2006. It is secured by first exclusive charge
repayable in 7 equal half yearly installments commenced after conclusion of grace period. It is secured on imported machinery. It carries mark up at a fixed rate of 7% per annum.
by bank's exclusive hypothecation charge on machinery imported and personal guarantees of sponsor
directors. Facility amounting to Rupees 300 million carries mark up at the rate of 6 months average 8.7 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 2)
KIBOR plus 100 basis points (bps) and additional facility of Rupees 100 million carries mark up at the This represents a term finance of Rupees 40 million under State Bank of Pakistan (LTF-EOP) scheme at
rate of 6 months average KIBOR plus 275 bps with a floor of 5% per annum, payable quarterly. On subsidized and fixed rate of mark up of 7% per annum. The financing is for import of warping and sizing
November 29, 2006 loans amounting to Rupees. 150.431 million were converted to LTF-EOP machines being part of BMR. This facility for a period of five years with a grace period of one year and is
consisting of Rupees 61.725 million at 6 % per annum and Rupees 88.706 million at 7 % fixed rate of repayable in equal quarterly installments.
mark up.
8.8 Saudi Pak Industrial and Agricultural Investment Company Limited (SPIAICL - 3)
8.2 NIB Bank Limited (NIB - 1) This represents term finance facility of Rupees 250 million obtained for debt reprofiling for a period of
five years including grace period of one year. The facility is repayable in 8 equal six monthly
This represents LTF-EOP facility of Rupees 157 million obtained for import of textile machinery for a installments. It is secured by first pari passu charge by way of hypothecation on all present and future
period of three years including a grace period of six months. It is repayable in ten equal quarterly plant and machinery of the Company and by way of mortgage on land measuring 121 acres, 2 kanals
installments. It is secured by first exclusive hypothecation charge on the imported machinery and allied and 1 marla, situated at main Peshawar Road, Rawalpindi with 25% margin. Initially ranking charge will
equipment, including installation and local component costs. It carries mark up at fixed rate of 6 % per be created which will be upgraded within 90 days from the date of disbursement. The facility carries
annum. mark up at the rate of 3 months KIBOR plus 170 bps per annum with quarterly repricing effective from
8.3 NIB Bank Limited (NIB - 2) March 03, 2008.
8.9 Standard Chartered Bank (Pakistan) Limited (SCB-2)
This represents a term finance facility of Rupees 300 million under State Bank of Pakistan (LTF-EOP)
This represents the term finance facility of Rupees 200 million, obtained for the purpose of financing the
scheme for a period of five years with a grace period of one year. The financing is for import of 72 Picanol
unwinding cost of cross currency swap deal with the bank and is allowed for a period of two years. The
Omni Plus wide width Air Jet Looms and Tying & Knotting machine plus five (5) Gen Set gas generators
facility is payable in eight equal quarterly installments. It is secured by ranking charge of Rupees
being part of BMR. It is repayable in equal quarterly installments, commencing after expiry of grace
266.666 million on land of Kohinoor Textile Mills Limited situated at Rawalpindi. It carries mark up at the
period. The facility is secured against first pari passu charge over fixed assets of Raiwind Division and
rate of 3-months average KIBOR plus 2.75% per annum with no floor and cap.
personal guarantees of the sponsor directors. It carries fixed mark up at the rate of 7% per annum.
112 113
8.10 Syndicated Term Finance 8.13 Long term finance facility
Syndicated Finance of Rupees 1.750 billion was arranged through Standard Chartered Bank
(Pakistan) limited (SCBL) to swap highly priced loans. Long term facility was arranged and availed in This facility has been created under the terms of restructuring agreement with HBL as disclosed in note
Islamic and conventional mode of financing. Standard Chartered Bank (Pakistan) Limited (Arranger), 8.11 and 8.12 to these consolidated financial statements. Tenor of this LTFF is four and a half years. The
Allied Bank Limited and Bank of Khyber disbursed Rupees 868.750 million under Islamic mode of principal amount of this LTFF is repayable in nine semi annual installments commencing from June
financing whereas Bank Alfalah Limited, Faysal Bank Limited and Pak Libya Holding Company 2010. The facility carries mark-up at the rate of 9.7% per annum payable on quarterly basis in arrears.
disbursed Rupees 850 million under conventional means of financing. Tenor of the loan was 5 years This finance facility is secured against first pari passu equitable hypothecation/mortgage charge of
including one year grace period and was repayable in 16 equal quarterly installments. During the year, Rupees 2.250 billion on all present and future fixed assets of the Subsidiary (including land measuring
the Company has entered into supplimental to its syndicated term finance facility agreement where by 2,097 Kanals and 5 Marlas situated at Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of
the repayment schedule of the purchase price has been modified. Now the loan is repayable in twenty the directors of the Subsidiary.
four installments within a tenor of six years . It is secured by first pari passu charge over the fixed assets
of the Company including surplus land and buildings at Peshawar Road, Rawalpindi. It carries mark-up 8.14 Syndicated Term Finances
at 3 months average KIBOR plus 150 bps to be repriced at the end of each quarter.
The Subsidiary has obtained syndicated term finance facility during the year ended June 30, 2008.
8.11 Habib Bank Limited (HBL - 1) During the current financial year the Company has arranged restructuring of syndicated term finance
Original term finance facility amounting to Rupees 1.160 billion (equivalent to Japanese Yens 1.974 facility and entered into Second Addendum dated March 30, 2010 through lead arranger and
billion approximately) was obtained from HBL by Subsidiary, in different tranches as per agreement investment agent Allied Bank Limited (ABL).
entered into February 11, 2008, to finance the Waste Heat Recovery Plant. During the current financial
year the Subsidiary, under the Long Term Finance Facility - Export Oriented Project (LTFF-EOP) The salient terms of this syndicated term finance facility, as per Second addendum, are as follows:
Scheme of State Bank of Pakistan, has entered into restructuring agreement with HBL dated February - Lead arranger and agent bank
18, 2010. As per terms of restructuring agreement HBL has transferred amounting Rupees 580 million
to new Long Term Finance Facility (LTFF) as disclosed in note 8.13 to these consolidated financial Allied Bank Ltd. (ABL)
statements. The remaining principal balance amounting Rupees 580 million is repayable in nine semi - Lenders
annual installments commencing from June 2010. Banks and DFIs
This facility carries mark-up at the rate of 6-months KIBOR plus 1.00%, effective mark up rate ranging - Facility amount
from 13.43% to 14.26% (2009: 15.69% to 18.20%) per annum payable on quarterly basis in arrears. Rupees 1.500 billion
The finance facility is secured against first pari passu equitable mortgage/hypothecation charge of - Tenor
Rupees 2.250 billion on all present and future fixed assets of the Subsidiary (including land measuring
9 Years including Grace period
2,097 Kanals and 5 Marlas situated at Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of
directors of the Subsidiary. Grace period 2.75 years ; Repayment- 6.25 years
- Mark-up rate
8.12 Habib Bank Limited (HBL - 2) For half year ended December 2009 at mark up rate 15.4%
During current financial year, the Subsidiary has obtained this term finance facility having sanctioned From December 2009 onwards: 3 months KIBOR plus 100 bps
limit amounting Rupees 500.000 million from HBL for financing the Waste Heat Recovery Plant. The
Mark up to increase to 3 months KIBOR plus 170 bps after 5 years or complete settlement of deferred
tenor of this term finance facility is six years including a grace period of one year. The Subsidiary, under
the Long Term Finance Facility - Export Oriented Project (LTFF-EOP) Scheme of State Bank of mark up, whichever is later.
Pakistan, has entered into restructuring agreement with HBL dated February 18, 2010. As per terms of Restructuring conditions:
restructuring agreement HBL has transferred amounting to Rupees 210.519 million to new Long Term (a) Mark up due in December 2009 to be paid by the Subsidiary on completion of the restructuring
Finance Facility (LTFF) as disclosed in note 8.13 to these consolidated financial statements. The agreement.
remaining principal balance of this term finance facility amounting to Rupees 210.519 million is
(b) Accrued mark up from December 2009 to March 2011 will be converted into interest free debt and
repayable in nine semi annually installments commencing from July 2010.
will be paid in 24 equal quarterly installments starting in March 2012 and ending in December 2017.
This facility carries mark-up at the rate of 6-months KIBOR plus 1.00% (effective mark-up rate ranging Token mark up payment of 0.5% of the deferred mark up amount will be paid on installment amount.
from 12.88% to 20.00%) per annum payable on quarterly basis in arrears. This finance facility is
secured against first pari passu hypothecation/mortgage charge of Rupees 2.250 billion on all present Accrued mark up from March 2011 to June 2011 will be paid in September 2011.
and future assets of the Subsidiary (including land measuring 2,097 Kanals and 5 Marlas situated at Regular mark up payments will commence from September 2011 and will be payable on due dates.
Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of directors of the Subsidiary Company.
114 115
- Principal repayment 2010 2009
36 quarterly installments will be paid as per following schedule. First 10 quarterly installments are just (Rupees in thousand)
token payments. - The Bank of Khyber 59,976 60,000
- Saudi Pak Industrial and Agricultural Investment Company Limited 59,976 60,000
Period Rupees in million
- The Bank of Punjab 59,976 60,000
March 2010 - June 2012 0.30 - First Women Bank Limited 59,976 60,000
September 2012 - June 2015 37.50 - Atlas Bank Limited. 29,988 30,000
September 2015 - June 2016 44.50 - Allied Bank Limited 194,922 -
September 2016 - June 2017 56.00 1,499,400 1,500,000
September 2017 - June 2018 70.00
September 2018 - December 2018 181.00 8.15 Kohinoor Sugar Mills Limited (KSML)
- Final maturity A civil suit has been filed by KSML for recovery of disputed liability which is being contested by the
December 2018 Holding Company.
- Security
8.16 Kohinoor Industries Limited (KIL)
First pari passu charge over all present and future fixed assets of the Company amounting to Rupees
3.333 billion and pledge of investment in shares of Security General Insurance Company Limited. The balance is an old one, un-reconciled, unconfirmed and disputed.
- Further conditions as per rescheduling
8.17 Current portion of long term liabilities include overdue installments amounting to Rupees 263.696
(a) PKR 1.000 billion to be injected at the completion of restructuring agreement as sponsor's loan million (2009: Nil)
which may be converted into Equity / Preference Shares following regulatory approvals. Preference
dividend to be capped at 10% per annum. Please refer to note 7 to these consolidated financial 9 REDEEMABLE CAPITAL - Secured
2010 2009
statements.
(b) Redeemable Capital Sukuk / Syndicate members would be represented on board by one seat. The
Islamic Sukuk certificates under musharaka agreement
process would be initiated right after completion of restructuring agreement and depending upon
Opening balance 8,000,000 8,000,000
regulatory formalities the process would be completed as soon as possible but not later than the next
Add: Sukuk certificates issued during the year 300,000 -
elections due in December 2010. The representative shall have a minimum of 10 years of professional
8,300,000 8,000,000
experience to add depth to the board. The representative would be the member of the audit committee
of the board and would be considered to be its Chairman at the discretion of the board.
Less: Sukuk certificates paid during the year 3,400
2010 2009
Less: Current portion shown under current liabilities 17 6,800 800,000
8,289,800 7,200,000
- Faysal Bank Limited 359,856 360,000
- Pak Libya Holding Company (Private) Limited 239,904 240,000 The Company has issued Islamic Sukuk Certificates under Musharaka agreement amounting to Rupees
- MCB Bank Limited 149,940 150,000 8.000 billion during the year ended June 30, 2008. During the current financial year the Company has
- Askari Bank Limited arranged restructuring of issued Sukuk Certificates and entered into First Addendum with Investment Agent
104,958 105,000
Allied Bank Limited (ABL). During the year, the Company has issued new Sukuk Certificates (as Bridge
- Arif Habib Bank Limited - 105,000 Finance) to existing Sukuk lenders amounting to Rupees 300.000 million.
- Pak Brunei Investment Company Limited 89,964 90,000
- Soneri Bank Limited 89,964 90,000
- HSBC Bank Middle East Limited (formerly The Hong Kong and
Shanghai Banking Corporation Limited) - 90,000
116 117
The salient terms and conditions of secured Sukuk issue of Rupees 8.300 billion made by the Company are Rentals are payable quarterly in arrears calculated on a 365 days year basis on
detailed below: the outstanding Musharaka Investment of the investors. The first such rental
payment will fell due of six months from the date of first contribution and after
Allied Bank Limited (ABL)
rescheduling , after every 3 months. Rentals, during the year, have been
Meezan Bank Limited calculated at mark-up rates ranging from 13.20% to 15.44% (2009: 14.85% to
Balance sheet reprofiling and replacement of conventional debts with 17.37%) per annum.
Shariah Compliant Financing. The Sukuk have been issued under section 120 "issue of securities and
Banks, DFIs, NBFIs and any other persons. redeemable capital not based on interest" of the Companies Ordinance 1984.
Rupees 8.000 billion The Sukuk Certificates have been registered and inducted into the Central
9 Years including grace period of 2.75 years and repayment is to be Depository System ("CDS") of the Central Depository Company of Pakistan
made in 6.25 years. ("CDC").
Rupees 300.000 million First Pari passu charge over all present and future fixed assets of the Company
2 years
amounting to Rupees 10.667 billion and pledge of investment in shares of
For half year ended December 2009 at the rate 15.4%
From December 2009 onwards: 3 months KIBOR plus 100 basis point per cent Security General Insurance Company Limited.
(bps) Allied Bank Limited
Mark up to increase to 3 months KIBOR plus 170 bps after 5 years or complete - Transaction structure The facility as approved by Meezan Bank Limited, shariah advisor of the issue,
settlement of deferred mark-up, whichever is later. is as follows:
(a) Mark up due in December 2009 has been paid by the Company on (a) Investors (as Investor Co-owners) and the Company (as managing Co-
completion of the restructuring agreement. owner) have entered into a Musharaka Agreement as partners for the
(b) Accrued mark up from December 2009 to March 2011 will be converted into purpose of acquiring Musharaka assets from the Company (acting as
interest free debt and will be paid in 24 equal quarterly installments starting Seller) and jointly own these Musharaka assets.
March 2012 ending December 2017. Token mark up payment of 0.5% of the (b) Investors have appointed ABL to act as Investor Agent for the Sukuk Issue.
deferred mark up amount will be paid on the installment amount. (c) Investor co-owners have contributed their share in the Musharaka in cash
that has been utilised by managing co-owner for acquiring Musharaka
Accrued mark up from March 2011 to June 2011 will be paid in September 2011. assets. Managing co-owner has contributed its Musharaka share in kind.
Regular mark up payments will commence from September 2011 and will (d) Upon acquisition of Musharaka assets, Investor Agent and managing co-
be payable on due dates. owner have executed Assets Purchase Agreement with the Company
Base rate is average 3 months KIBOR prevailing on the base rate setting date. (acting as Seller).
36 quarterly installments will be paid as per following schedule. 1st 10 (e) The Company (as Issuer) has issued Sukuk Certificates to Investors that
quarterly installments are just token payments. represent latter's undivided share in the Musharaka assets.
(f) Investors have made the usufruct of their undivided share in the
Musharaka assets available to the Company against rental payments
Period Rupees in million
linked to the rental bench marked.
March 2010 - June 2012 1.70 (g The Company will purchase Musharaka share of investors on quarterly
September 2012 - June 2015 200.00 basis after expiry of 2.75 years from the rescheduling date.
September 2015 - June 2016 237.50 - Sell Down/ As Sukuks have been induced into Central Depository Company (CDC),
September 2016 - June 2017 300.00 Transferability transfers are made in accordance with Central Depository Act , 1997 and
September 2017 - June 2018 375.00 other applicable CDC regulations.
September 2018 - December 2018 966.50
118 119
- Further conditions as (a) PKR 1.000 billion to be injected at the completion of restructuring 10.3 Minimum lease payments and present value of minimum lease payments are regrouped as under:
per rescheduling agreement as sponsor's loan which may be converted into Equity /
2010 2009
Preference Shares following regulatory approvals. Preference dividend to
be capped at 10% per annum. Please refer note 7 to these consolidated Present value Present value
Minimum Minimum
financial statements. of minimum of minimum
lease lease
(b) To cover partial cash deficit projected in half year ended June 2010, lease lease
payments payments
existing Sukuk lenders to disburse 2 years bridging of PKR 300.000 million payments payments
(as Bridge Finance) simultaneously with the payment of December 2009
--------------------- (Rupees in thousand)---------------------
mark up. This would be repaid in bullet in 2 years at the rate of 3 months
KIBOR plus 100 bps, however, mark up payment would be current and on Due not later than one year 541,505 447,223 483,973 388,881
quarterly basis. It will be secured against ranking charge on fixed assets Due later than one year but not later
and specific properties comprising of 393 kanals at Kala Shah Kaku and than five years 865,381 767,748 1,117,276 963,133
additional piece of land at Faisalabad. The security outside the Subsidiary 1,406,886 1,214,971 1,601,249 1,352,014
will have a minimum value of PKR 400.000 million.
(c) Redeemable Capital Sukuk / Syndicate members would be represented 11. LONG TERM DEPOSITS
on board by one seat. The process would be initiated right after completion These represent interest-free security deposits from stockists and are repayable on cancellation or
of restructuring agreement and depending upon regulatory formalities the withdrawal of the dealerships. These are being utilized by the Subsidiary in accordance with the terms of
process would be completed as soon as possible but not later than dealership agreements.
the next election due in December 2010. The representative shall have a 12. EMPLOYEES' BENEFITS
minimum of 10 years of professional experience to add depth to the board. 2010 2009
The representative would be the member of the audit committee of the NOTE (Rupees in thousand)
board and would be considered to be its Chairman at the discretion of the Employees' compensated absences 12.1 19,629 18,990
board. Gratuity fund 42 6,864 -
26,493 18,990
10. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
2010 2009 12.1 These represent amounts payable against un-availed leaves of employees.
NOTE (Rupees in thousand) 13. DEFERRED TAX
Minimum lease payments 1,406,886 1,601,249
This comprises of following :
Less: Un-amortized finance charges 161,915 214,505
Less: Security deposits of subsidiary 30,000 34,730 Deferred tax liability on taxable temporary differences in respect of :
Present value of minimum lease payments 1,214,971 1,352,014 - Accelerated tax depreciation allowance 2,844,401 2,927,122
Less: Current portion shown under current liabilities 17 447,223 388,881 - Surplus on revaluation of investment 282,194 254,708
767,748 963,133
3,126,595 3,181,830
10.1 The present value of minimum lease payments has been discounted at an implicit interest rate ranges Deferred tax asset on deductible temporary differences in respect of:
from 6.00% to 18.18% (2009: from 4.72% to 18.18%) per annum to arrive at their present value.
- Lease finances 56,154 63,826
10.2 The lease rentals are payable in monthly, quarterly and half yearly installments. In case of any default - Unused tax losses 2,782,588 2,818,229
an additional charge at the rate of 0.1 percent per day shall be payable. Taxes, repairs, replacements - Employees' compensated absences 4,459 4,547
and insurance costs are to be borne by the Group. The lease agreements carry renewal and purchase - Minimum tax recoverable against normal tax charge in future years 125,398 90,806
option at the end of the lease term. There are no financial restrictions in lease agreements. These are
secured by deposit of Rupees 54.841 million (2009: Rupees 59.571 million) included in long term 2,968,599 2,977,408
security deposits, demand promissory notes, personal guarantees and pledge of sponsors' shares in 157,996 204,422
public limited companies.
120 121
13.1 The movement in deferred tax assets and liabilities during the year without taking into consideration the 14.2 The Group retains workers’ profit participation fund for its business operations till the date of allocation
off setting balances within the same tax jurisdiction is as follows: to workers. Interest is paid at prescribed rate under the Companies Profit (Workers Participation) Act,
Deferred tax liability Deferred tax assets
1968 on funds utilized by the Group till the date of allocation to workers.
Minimum
Unrealized
Accelerated tax
tax
Surplus on gain on
Lease Unused tax
Employees'
recoverable
Net liability/ 15. ACCRUED MARK-UP
revaluation of derivative Total compensated Total (asset)
depreciation
investment financial
finances losses
absences
against
2010 2009
allowance normal tax
instrument
charge NOTE (Rupees in thousand)
----------------------------------------------------------------Rupees in thousand--------------------------------------------------------------
Balance as at July 01, 2008 3,328,669 448,187 72,119 3,848,975 132,131 2,976,535 4,536 114,133 3,227,335 621,640 Long term financing 276,739 104,617
Charged to other comprehensive income - (193,479) (72,119) (265,598) - - - - (265,598)
Charged to profit and loss account (401,547) - - (401,547) (68,305) (158,306) 11 (23,327) (249,927) (151,620) Redeemable capital 622,378 237,007
Balance as at June 30, 2009 2,927,122 254,708 - 3,181,830 63,826 2,818,229 4,547 90,806 2,977,408 204,422
Charged to other comprehensive income - 27,486 - 27,486 - - - - 27,486
Short term borrowings 261,088 240,698
Charged to profit and loss account (82,721) - - (82,721) (7,672) (35,641) (88) 34,592 (8,809) (73,912) Liabilities against assets subject to finance lease 51,594 44,131
Balance as at June 30, 2010 2,844,401 282,194 - 3,126,595 56,154 2,782,588 4,459 125,398 2,968,599 157,996
1,211,799 626,453
14. TRADE AND OTHER PAYABLES
2010 2009 16. SHORT TERM BORROWINGS
NOTE (Rupees in thousand) From banking companies - Secured
Creditors 1,736,200 1,272,913 Short term running finance 16.1 6,047,173 5,244,278
Bills payable - secured 785,705 837,321 Other short term finances 16.2 2,200,553 1,968,863
Accrued liabilities 647,792 311,536 State Bank of Pakistan (SBP) refinances 16.3 1,555,000 1,580,000
Security deposits, repayable on demand 41,705 33,153 Temporary bank overdraft 16.4 328,547 399,652
Advances from customers 239,813 170,392 10,131,273 9,192,793
Contractors' retention money 45,813 10,376
Royalty and excise duty payable 69,688 11,345 16.1 The running finance facilities are sanctioned by various banks aggregate to Rupees 6,152 million
Workers' profit participation fund 14.1 21,669 1,254 (2009: Rupees 5,713 million). The rates of mark-up range from 3.23% to 25.00% (2009: from 7.50% to
Workers' welfare fund 7,686 - 18.50%). These arrangements are secured by pledge of raw material, charge on current assets of the
Group including hypothecation of work-in-process, stores and spare parts, letters of credit, firm
Excise duty payable 717,549 442,106 contracts, book debts and personal guarantees of the sponsor directors.
Payable to employees' provident fund trust 2,831 7,856
Unclaimed dividend 4,214 4,214 16.2 The other finance facilities are sanctioned by various banks aggregate to Rupees 3,638 million (2009:
Withholding tax payable 12,761 5,163 Rupees 2,348 million). The rates of mark-up range from 6.63% to 18.00% (2009: from 6.08% to
Sales tax payable 48,846 71,512 18.48%). These arrangements are secured by pledge of raw material, charge on current assets of the
Holding Company including hypothecation of work-in-process, stores and spares, letters of credit, firm
Others 57,707 14,517
contracts, book debts and personal guarantees of the sponsor directors.
4,439,979 3,193,658
16.3 The export refinance facilities sanctioned by various banks aggregate to Rupees 1,665 million (2009:
14.1 Workers' profit participation fund Rupees 2,950 million). The rates of mark-up range from 6.50% to 8.50% (2009: 7.50% per annum).
These arrangements are secured by way of charge on current assets of the Holding Company and
Balance as on 01 July 1,254 1,279
personal guarantees of the sponsor directors.
Add: Provision for the year 20,227 -
Add: Interest for the year 188 164 16.4 These have arisen due to issuance of cheques for amounts in excess of the balance with banks which
Less: Payment during the year - (189) will be presented for payment in subsequent period.
21,669 1,254
122 123
17. CURRENT PORTION OF NON-CURRENT LIABILITIES f) Guarantees issued by various commercial banks, in respect of financial and operational
2010 2009 obligations of the Company, to various institutions and corporate bodies aggregate Rupees
NOTE (Rupees in thousand) 248.962 million as at 30 June, 2010 (2009: Rupees 319.430 million)
Long term financing - Secured 8 1,181,865 2,459,659 Subsidiary company

Redeemable capital 9 6,800 800,000 a) The Subsidiary has filed writ petitions before the Lahore High Court (LHC) against the legality of
10 447,223 388,881 judgment passed by the Customs, Excise & Sales Tax Appellate Tribunal whereby the Company
Liabilities against assets subject to finance leases
was held liable on account of wrongful adjustment of input sales tax on raw materials and electricity
1,635,888 3,648,540 bills; the amount involved pending adjudication before the LHC amounting to Rupees13.252 million.
18. CONTINGENCIES AND COMMITMENTS No provision has been made in these consolidated financial statements in respect of the
aforementioned matter as the management is confident that the ultimate outcome of this case will
18.1 Contingencies be in favour of the Subsidiary.
Holding company The Subsidiary has filed an appeal before the Customs, Central Excise and Sales Tax Appellate
b)
a) The Company has filed an appeal before Honorable Appellate Tribunal Inland Revenue, Lahore for Tribunal, Karachi against the order of the Deputy Collector Customs whereby the refund claim of the
tax year 2003 under section 129/132 of Income Tax Ordinance, 2001, which is pending Subsidiary amounting to Rupees 12.350 million was rejected and the Subsidiary was held liable to
adjudication. The tax loss was restricted to Rupees 27.540 million against declared loss of Rupees pay an amount of Rupees 37.051 million by way of 10% customs duty allegedly leviable in terms of
122.933 million. SRO 584(I)/95 and 585(I)/95 dated July 01, 1995. The impugned demand was raised by the
Department on the alleged ground that the Subsidiary was not entitled to exemption from payment
In addition to the above, another appeal for tax year 2003 against order under section 221 dated 24 of customs duty and sales tax in terms of SRO 279(I)/94 dated April 02, 1994.
January 2009, on the disallowance of depreciation expense of Rupees 62.665 million has been filed
before Honorable Appellate Tribunal Inland Revenue which is pending adjudication. This is a cross The LHC, upon the Company's appeal, vide its order dated November 06, 2001 has decided the
appeal. Although the learned Commissioner Inland Revenue (Appeals) has already annulled the matter in favour of the Subsidiary; however, the Collector of Customs has preferred a petition before
order under section 221 of the Income Tax Ordinance, 2001, vide order dated 30 July 2009, the the Supreme Court of Pakistan, which is pending adjudication. No provision has been made in
Taxation Officer has illegally repeated the original assessment. Therefore, an appeal has also been these consolidated financial statements in respect of the above stated amount as the management
filed before Commissioner Inland Revenue under section 187 of Income Tax Ordinance, 2001 for is confident that the ultimate outcome of this case will be in favour of the Subsidiary.
tax year 2003, the appellate order of which is pending. The revenue involved on account of penalty c) The Federal Board of Revenue (FBR) has filed an appeal before the Supreme Court of Pakistan
was Rupees 17.484 million. The Company has strong grounds and is expecting favourable against the judgment delivered by the LHC in favour of the Subsidiary in a writ petition. The
outcome. Subsidiary, through the said writ petition, had challenged the demand raised by the FBR for
b) The Company has filed an appeal before the Honorable Appellate Tribunal Inland Revenue under payment of duties and taxes on the plant and machinery imported by the Company pursuant to the
section 122(5A) / 122(1) / 129 of Income Tax Ordinance, 2001 for tax year 2004 which is pending exemption granted in terms of SRO 484 (I) / 92 dated May 14, 1992. The FBR, however, alleged that
adjudication. The loss for the year has been assessed at Rupees 255.684 million creating refund of the said plant & machinery could be locally manufactured and duties and taxes were therefore not
Rupees 7.498 million. exempt. A total demand of Rupees 1.387 billion was raised by the FBR out of which an amount of
Rupees 269.328 million was deposited by the Subsidiary as undisputed liability.
c) The Company and the tax authorities have filed appeals before different appellate authorities
regarding sales tax matters. Pending the outcome of appeals filed by the Company and tax As regards the balance disputed amount, the matter was decided in favour of the Subsidiary as per
authorities, no provision has been made in these financial statements which on the basis adopted the judgment of LHC. After preferring the appeal before the Supreme Court of Pakistan, the matter
by the authorities would amount to Rupees 33.473 million (2009: 33.473 million), since the has been referred to ADRC, Islamabad. No provision has been made in these consolidated financial
Company has strong grounds against these assessments framed by the tax authorities. statements in respect of the aforementioned disputed demands aggregating Rupees 1.118 billion
as the management is confident that the ultimate outcome of this case will be in favour of the
d) The Company has filed recovery suits in civil courts of Rupees 4.589 million against various Subsidiary.
suppliers and customers for goods supplied by/ to them. Pending the outcome of the cases, no
d) The Customs Department has filed an appeal before the Supreme Court of Pakistan against the
provision there against has been made in these financial statements since the Company is
judgment of Sindh High Court, which held that dump trucks were part of plant and machinery and
confident about favourable outcome of the cases.
the Tribunal had rightly subjected them to concessionary rate of duty. The Subsidiary had paid
e) Four cases are pending before the Punjab Labour Appellate Tribunal, Shadman 1, Lahore excess customs duties amounting Rupees 7.347 million on these trucks. The appeal is pending
regarding the reinstatement into service of four employees dismissed from their jobs. No provision adjudication before the Supreme Court of Pakistan. No provision has been made in these
has been made in these financial statements since the Company is confident about favourable consolidated financial statements as the management is confident that the ultimate outcome of this
outcome of the cases. case will be in favour of the Subsidiary.
124 125
e) The Subsidiary has filed an appeal before the Supreme Court of Pakistan against the judgment of j) Through order in original No. 18/2009 dated December 24, 2009 ('ONO'), the Additional
the Division Bench of the High Court of Sindh at Karachi. The Division Bench, by judgment dated Commissioner Inland Revenue, (Legal), Large Taxpayers Unit, Lahore ('ACIR - Legal') finalized the
September 15, 2008, has partly accepted the appeal by declaring that the levy and collection of adjudication proceedings in respect of audit conducted by departmental auditors and raised a
infrastructure cess / fee prior to December 28, 2006 was illegal and ultra vires and after December demand of principal Sales Tax and Federal Excise duty ('FED') aggregating to Rupees 336.738
28, 2006, it was legal and the same was collected by the Excise Department in accordance with law. million along with default surcharge and penalties. The company has preferred appeals against this
The appeal has been filed against the declaration that after December 28, 2006, the Excise exparte order under the applicable provisions of Sales Tax Act and Federal Excise Act before
Department has collected the infrastructure cess / fee in accordance with law. The Province of Commissioner Inland Revenue, Appeals CIR(A). Such appeals have not yet been taken up for
Sindh and Excise and Taxation Department has also preferred appeal against the judgment hearing by Commissioner Inland Revenue, Appeals [CIR(A)]. No provision has been made in these
decided against them. The Supreme Court has consolidated both the appeals. consolidated financial statements as the management is confident that the ultimate outcome of this
case will be in favour of the Subsidiary.
The total financial exposure of the Subsidiary involved in the case amounts to Rupees 144.378
million. In the event of an adverse decision in appeal, the guarantees aggregating Rupees 145.700 k) The Subsidiary had challenged the levy of Neelum-Jhelum Hydro Power Development Fund for the
million furnished by the Company will be encashed by the Government of Sindh. No provision has alleged construction of Neelum-Jhelum Hydro Power Project. The titled petition was disposed off by
been made in these consolidated financial statements as the management is confident that the the Hon'ble Lahore High Court in view of its earlier order, whereby it has been held that the
ultimate outcome of this case will be in favour of the Subsidiary. Respondents shall forthwith grant refund/adjustment of the amount charged without authority from
f) Competition Commission of Pakistan (the Commission), vide order dated August 27, 2009, has the Subsidiary for the period of February 2008 to June 2008. The Company is in the process of filling
imposed penalty on 20 cement factories of Pakistan at the rate of 7.5% of the turnover value as writ petition before High Court for the remaining period.
disclosed in the last financial statements. The Commission has imposed penalty amounting
Rupees 586.187 million on the Company. The Commission has alleged that provisions of section l) Guarantees issued by various commercial banks, in respect of financial and operational obligations
4(1) of the Competition Commission Ordinance, 2007 have been violated. However, after the of the Subsidiary, to various institutions and corporate bodies aggregate Rupees 343.179 million as
abeyance of Islamabad High Court pursuant to the judgment of Hon'ble Supreme Court of Pakistan at 30 June 2010 (2009: Rupees 332.363 million).
dated July 31, 2009, the titled petition has become in fructuous and the Subsidiary has filed a writ
petition no. 15618/2009 before the Lahore High Court and the next date of hearing is September 16, m) Also refer note 31.1 to these consolidated financial statements for contingencies relating to tax
2010. No provision has been made in these consolidated financial statements as the management matters.
is confident that the ultimate outcome of this case will be in favour of the Subsidiary. Claims
g) The Additional Collector, Karachi has issued show cause notice alleging therein that the Subsidiary n) Claims against the Subsidiary not acknowledged as debt aggregated Rupees 3.750 million as at 30
has wrongly claimed the benefits of SRO No. 575(I)/2006 dated June 05, 2006 on the import of pre- June 2010 (2009: Rupees 3.750 million).
fabricated buildings structure. Consequently, the Subsidiary is liable to pay Government dues
amounting Rupees 5.552 million. The Subsidiary has submitted reply to the show cause notice and 18.2 Commitments in respect of
currently proceedings are pending before the Additional Collector. No provision has been made in
these consolidated financial statements as the management is confident that the ultimate outcome a) Commitments for capital expenditure other than letter of credit amount to Rupees 178.127 million
of this case will be in favour of the Subsidiary. (2009: Rupees 340.973 million).
h) The custom department has filed an appeal against the judgment dated 19/05/2009 passed in
favour of the Subsidiary pursuant to which the Subsidiary is not liable to pay custom duty amount of b) Letters of credit for capital expenditure amount to Rupees 668.696 million (2009: Rupees 678.346
million).
Rupees 589,998/- relating to import of some machinery vide L/C No. 0176-01-46-518-1201 in terms
of SRO 484(1)/92 dated 14/05/1992 and SRO 978(1)/95 dated 04/10/1995. The appeal is pending c) Letters of credit other than for capital expenditure amount to Rupees 440.577 million (2009: Rupees
before the Honourable Lahore High Court. 367.146 million).
i) The Subsidiary has preferred an appeal against the order in original No. 576/99 dated 18/09/1999
whereby the company was denied the benefit of SRO 484(1)/92 dated 14/05/1992 and SRO d) Bills discounted amounting to Rupees 40.143 million (2009: Rupees 177.854 million)
978(1)/95 dated 04-10-1995. Accordingly the demand of Rupees 806,558/- was raised against the
Subsidiary. Appeal was dismissed by Central Excise and Sales Tax Tribunal on 19/05/2009. The e) Guarantees issued by various commercial banks, in respect of financial and operational obligations
of the Subsidiary, to various institutions and corporate bodies aggregate Rupees 343.179 million as
Subsidiary has filed petition before the Honourable Lahore High Court, which is pending
at 30 June 2010 (2009: Rupees 332.363 million).
adjudication. A rectification application under section 194 is also pending before the Customs
Federal Excise and Sales Tax, Appellate Tribunal beside the customs reference. No provision has
been made in these consolidated financial statements as the management is confident that the
ultimate outcome of this case will be in favour of the Subsidiary.
126 127
128
2010 2009
(RUPEES IN THOUSAND)
19. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets (Note 19 .1) 24,246,851 22,875,159
Capital work in progress (Note 19.4) 3,226,768 1,646,400
Stores, spare parts and loose tools held for capital expenditure 57,896 -
27,531,515 24,521,559
Owned Assets Leased Assets

19.1 OPERATING FIXED ASSETS
Factory & Residential & Services & Computer &
Office Plant & Furniture & Office Quarry Share of Joint Plant & Quarry Total
Freehold land Other Other Other IT Vehicles Vehicles
Building Machinery Fixture Equipment Equipment Assets Machinery Equipment
Building Building Equipment Installations
------------------------------------------------------------------------------(RUPEES IN THOUSAND)---------------------------------------------------------------------------------
At 30 June 2008
Cost 68,546 12,272 4,769,120 72,970 24,563,212 30,582 54,133 202,655 21,176 180,772 143,337 4,395 1,367,925 7,660 47,315 31,546,070
Accumulated depreciation (4,673) (938,450) (32,421) (6,362,864) (20,095) (34,087) (106,326) (10,519) (92,383) (120,562) (3,226) (125,533) (1,779) (16,464) (7,869,382)
Net book value 68,546 7,599 3,830,670 40,549 18,200,348 10,487 20,046 96,329 10,657 88,389 22,775 1,169 1,242,392 5,881 30,851 23,676,688

Opening net book value 68,546 7,599 3,830,670 40,549 18,200,348 10,487 20,046 96,329 10,657 88,389 22,775 1,169 1,242,392 5,881 30,851 23,676,688
Additions - 462 127,609 25,838 318,547 271 1,776 25,214 2,430 14,580 33,387 1,471 71,441 623,026
Transfer
Cost - - - - (4,868) - - (669) - - - - - - - (5,537)
Accumulated depreciation - - - - 3,387 - - 181 - - - - - - - 3,568
- - - - (1,481) - - (488) - - - - - - - (1,481)
Disposals:
Cost - - - - (7,443) - - (158) (121) (14,107) - - - - - (21,829)
Accumulated depreciation - - - - 6,410 - - 90 75 9,969 - - - - - 16,544
- - - - (1,033) - - (68) (46) (4,138) - - - - - (5,285)
Depreciation charge - (405) (208,088) (2,681) (1,076,136) (1,046) (6,047) (17,734) (1,042) (16,187) (7,158) (129) (73,546) (932) (6,170) (1,417,301)
Closing net book value 68,546 7,656 3,750,191 63,706 17,440,245 9,712 15,775 103,253 11,999 82,644 49,004 2,511 1,240,287 4,949 24,681 22,875,159
At 30 June 2009
Cost 68,546 12,734 4,896,729 98,808 24,869,448 30,853 55,909 227,042 23,485 181,245 176,724 5,866 1,439,366 7,660 47,315 32,141,730
Accumulated depreciation (5,078) (1,146,538) (35,102) (7,429,203) (21,141) (40,134) (123,789) (11,486) (98,601) (127,720) (3,355) (199,079) (2,711) (22,634) (9,266,571)
Net book value 68,546 7,656 3,750,191 63,706 17,440,245 9,712 15,775 103,253 11,999 82,644 49,004 2,511 1,240,287 4,949 24,681 22,875,159
Opening net book value 68,546 7,656 3,750,191 63,706 17,440,245 9,712 15,775 103,253 11,999 82,644 49,004 2,511 1,240,287 4,949 24,681 22,875,159
Revaluation 2,410,233 - - - - - - - - - - - - - - 2,410,233
Additions - 1,442 33,965 7,924 258,286 39 2,341 7,087 3,387 9,008 - 133 56,692 - - 380,304
Transfer:
Cost 173,260 6,118 47,315 (173,260) (6,118) (47,315) -
Accumulated depreciation (60,029) (2,450) (22,891) 60,029 2,450 22,891 -
- - - - 113,231 - - - - 3,668 24,424 - (113,231) (3,668) (24,424) -
Disposals:
Cost - - - - (9,425) - - (216) (45) (8,405) (5,951) - (24,042)
Accumulated depreciation - - - - 8,680 - - 127 39 6,040 5,904 - 20,790
- - - - (745) - - (89) (6) (2,365) (47) - - - - (3,252)
Depreciation charge - (444) (210,370) (3,912) (1,073,969) (954) (4,944) (17,707) (1,345) (15,052) (14,472) (252) (71,465) (450) (257) (1,415,593)
Closing net book value 2,478,779 8,654 3,573,786 67,718 16,737,048 8,797 13,172 92,544 14,035 77,903 58,909 2,392 1,112,283 831 - 24,246,851
At 30 June 2010
Cost / revalued amount 2,478,779 14,176 4,930,694 106,732 25,291,569 30,892 58,250 233,913 26,827 187,966 218,088 5,999 1,322,798 1,542 - 34,908,225
Accumulated depreciation (5,522) (1,356,908) (39,014) (8,554,521) (22,095) (45,078) (141,369) (12,792) (110,063) (159,179) (3,607) (210,515) (711) (10,661,374)
Net book value 2,478,779 8,654 3,573,786 67,718 16,737,048 8,797 13,172 92,544 14,035 77,903 58,909 2,392 1,112,283 831 - 24,246,851
Depreciation Rate - 5 - 10 5 - 10 5 - 10 5 - 20 10 30 10 10 20 20 10 10 - 20 20 -
19.2 DETAIL OF DISPOSAL OF OPERATING FIXED ASSETS
Accumulated Mode of
Description Cost Net Book Value Sale Proceeds Gain Particulars of purchaser
Depreciation disposal
-----------------------( R u p e e s i n t h o u s a n d)-----------------------
Toyota Corolla LRR-2233 849 557 292 600 308 Negotiation Mr. Fuad Zafar, R/O House # 27-E, Phase-1, DHA Lahore Cantt
Honda City RIY-6720 Model 2002 799 610 189 591 402 Negotiation Ghulam Abbas s/o Mulazim Hussain
Suzuki cultus 568 228 340 530 190 Negotiation Sadaf Latif
Suzuki baleno 774 478 296 580 284 Auctions Zeeshan Ashraf
Toyota corolla 1,084 895 189 800 611 Insurance claim EFU Insurance Co.
Daihatsu cuore 411 302 109 470 361 Auctions Dr. Khalid
Toyota corolla 1,236 813 423 950 527 Auctions Saifullah contractor
Machine-Drawing ToyodaHara DYH 500-c Complete Model 2,639 2,326 313 1,567 1,254 Negotiation North Star Textiles, Lahore
Machine-Drawing ToyodaHara DYH 500-c Complete Model 880 775 105 539 434 Negotiation Zahid Jee Textile Mills Ltd, Faisalabad
Machine-Drawing ToyodaHara DYH 500-c Complete Model 1,759 1,556 203 1,617 1,414 Negotiation Ghazi Fabrics International Ltd, Lahore
Crosol MK 4.5 card Model 1990 4,147 4,023 124 1,800 1,676 Negotiation Bajaj Enterprises, 58-B Room # 1 62- Mozang Road, Lahore
Aggregate of other items of property, plant & equipment with
individual book values not exceeding Rupees 50,000 8,896 8,227 669 3,600 2,931 Negotiation Employees of the company
2010 24,042 20,790 3,252 13,644 10,392

2009 21,829 16,544 5,285 10,143 4,858
129
19.3 The Subsidiary has given on lease, land measuring 8 Kanals and 16 Marlas (2009: 6 Kanals and 16
Marlas) to Sui Northern Gas Pipelines Limited at an annual rent of Rupees 4,267 (2009: Rupees 4,267). 19.6.1 Un-allocated capital expenditure - net
2010 2009
19.4 Ownership of the housing colony assets included in the operating fixed assets is shared by the (Rupees in thousand)
Subsidiary jointly with Pak American Fertilizer Limited in the ratio of 101:245 since the time when both
the companies were managed by Pakistan Industrial Development Corporation (PIDC). These assets
are in possession of the housing colony establishment for mutual benefits. The cost of these assets at Opening balance 59,581 3,367
the year-end were as follows: Add: Expenditure incurred during the year:
2010 2009 Salaries, wages and other benefits 5,619 2,899
NOTE (Rupees in thousand) Travelling and conveyance 1,328 1,615
Vehicles' running and maintenance 115 16
- buildings 4,105 3,990
Finance cost 201,620 51,639
- roads and bridge 202 202
Legal and professional 50 -
- air strip 16 16
Communication 160 45
- plant and machinery 273 273 Insurance expenses 5,797 -
- furniture, fixtures and equipment 1,233 1,219 Miscellaneous expenses 270 -
- vehicles 170 166 274,540 59,581
5,999 5,866
20. INVESTMENT PROPERTIES
19.5 Depreciation charged during the year has been allocated as follows:
The fair value of investment properties comprising land and building situated at Lahore have been determined
Cost of sales 35 1,379,838 1,382,070 by Messers Hasib Associates (Private) Limited at Rupees 769.192 million as at 26 June 2008. Fair value of
Administrative expenses 37 35,755 35,231 land situated at Rawalpindi has been determined by Messers Asrem (Private) Limited at Rupees 951.643
1,415,593 1,417,301 million as at 20 May 2008. The fair value was determined on the basis of professional assessment of the
current prices in an active market for similar properties in the same location and condition. The valuers have
certified that there is no material change in fair value during the current financial year and as on the balance
19.6 CAPITAL WORK IN PROGRESS sheet date.
Tangible assets
Civil works 67,593 17,897 21. INTANGIBLE ASSETS (computer softwares)
Plant and machinery 2,644,753 1,250,009 2010 2009
Un-allocated capital expenditure 19.6.1 274,540 59,581 NOTE (Rupees in thousand)
Advances to suppliers against: Opening balance 7,332 15,082
Plant and machinery 206,579 286,080 Less: Amortization for the year 35 (5,558) (7,750)
Purchase of land 2,000 2,000 Book value as at 30 June 1,774 7,332
Vehicles 1,414 2,944
Gross carrying value
Civil works 3,505 1,505
Cost 23,250 23,250
3,200,384 1,620,016
Accumulated amortization 21,476 15,918
Intangible assets
Book value 1,774 7,332
Computer software and consultancy cost 26,384 26,384 Amortization rate 33.33% 33.33%
3,226,768 1,646,400
130 131
22. LONG TERM LOANS TO EMPLOYEES - Secured 25. STOCK-IN-TRADE
2010 2009 2010 2009
House building 3,566 5,926 Raw material 25.1 783,595 641,577

Vehicles 1,863 2,860 Packing material 65,302 70,614
Others 287 301 Work in process 983,697 915,368
5,716 9,087 Finished goods 1,065,237 803,181
27 2,423 3,421 2,897,831 2,430,740
Less : Current portion of long term loans to employees
3,293 5,666 25.1 This includes raw material in transit of Rupees 55.351 million (2009: Rupees 60.232 million)
22.1 These loans are secured against charge / lien on employees' retirement benefits and carry interest at 26. TRADE DEBTS
2010 2009
the rates ranging from 6% to 12% per annum (2009: 6% to 12% per annum). These loans are
recoverable in monthly installments ranging from 30 to 120. No amount was due from directors and Considered good: (Rupees in thousand)
chief executive at the year-end (2009: Rupees Nil). Secured (against letters of credit) 1,251,743 986,420
23. LONG TERM DEPOSITS AND PREPAYMENTS Unsecured 855,031 745,925
2010 2009 2,106,774 1,732,345
NOTE (Rupees in thousand) Less: Provision for doubtful debts 26,309 -
Security deposits 94,093 96,339 2,080,465 1,732,345

Prepayments 333 1,333 As at 30 June 2010, trade debts of Rupees 819.745 million (30 June 2009 : Rupees 653.568 million) were
94,426 97,672 past due but not impaired. These relate to a number of independent customers from whom there is no recent
history of default. The ageing analysis of these trade debts is as follows:
Less: current portion of long term deposits and
prepayments shown under current assets 28 7,966 12,570 2010 2009
86,460 85,102
Upto 1 month 593,127 531,245
24. STORES, SPARES PARTS AND LOOSE TOOLS 1 to 6 months 156,108 33,795
Stores 24.1 865,902 1,509,872 More than 6 months 70,510 88,528
Spares parts 24.2 1,853,852 1,697,133 819,745 653,568
Loose tools 38,454 33,136 27. LOANS AND ADVANCES - Considered good
2,758,208 3,240,141 Current portion of long term loans to employees 22 2,423 3,421
Less: Provision for slow moving and obsolete items 5,000 - Advances to :
2,753,208 3,240,141 - Executives 621 2,255
- Other employees 7,844 6,161
24.1 This includes stores in transit of Rupees 129.243 million (2009: Rupees 234.884 million)
- Suppliers 850,970 368,157
24.2 This includes spare parts in transit of Rupees 80.540 million (2009: Rupees 22.045 million) 859,435 376,573
24.3 Stores having carrying value amounting to Rupees 62.423 million (2009: Nil) pledged as security Letters of credit 1,579 18,164
against borrowings. 863,437 398,158
132 133
28. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS 2010 2009
2010 2009 NOTE (Rupees in thousand)
NOTE (Rupees in thousand) Mutual funds 16,000 25,000
Current portion of security deposits 23 7,966 12,570 Fair value adjustment 60 (3,666)
Margin against letter of credit 25,120 68,163 16,060 21,334
Margin against bank guarantee 31,458 27,376
Available for sale
Prepayments 72,858 63,580 Associated company - Unquoted
137,402 171,689 Security General Insurance Company Limited 30.2 5,000 5,000
29. OTHER RECEIVABLES 4,570,389 (2009: 4,570,389) Ordinary shares of Rupees.
10 each fully paid.
Sales tax refundable 276,958 232,674
Equity held: 6.71% (2009: 6.71%)
Custom duty receivable 3,642 3,642
Fair value adjustment 447,926 375,850
Export rebate 47,561 32,302
452,926 380,850
Insurance claims 175 181
1,114,449 1,014,173
Research and development support 473 25,735
Cotton claim 28,745 - 30.1 Fair value per share of Rupees 99.10 (2009: Rupees 94) is calculated by independent valuer on the
Duty drawback of taxes and levies 25,808 - basis of net assets based valuation method. Security General Insurance Company Limited is
Inland freight subsidy receivable 62,060 - associated Company due to common directorship.
Others 49,494 26,244
30.2 Fair value of the investment as at June 30, 2010 was determined based on the valuation report
494,916 320,778 prepared by the Messers Maqbool Haroon and Company, Chartered Accountants.
30. SHORT TERM INVESTMENTS
30.2.1 These shares are pledged by Subsidiary with Allied Bank Limited as collateral against short
Holding company
term finance facility of Rupees 400 million.
Investments at fair value through profit and loss - Held for trading
Quoted companies 13,611 13,611 2010 2009
Fair value adjustment (5,595) (7,464) (Rupees in thousand)
8,016 6,147 31. TAXATION RECOVERABLE
Available for sale
Associated company - Unquoted Opening Balance as 01 July 236,900 97,591
Security General Insurance Company Limited 30.1 7,000 7,000 Add : Provision for taxation
- Current year (186,061) (120,563)
6,398,541 (2009 : 6,398,541) Ordinary shares of Rupees 10 each fully paid
- Prior year (885) 488
Equity held 9.40% (2009 : 9.40%)
(186,946) (120,075)
Fair value adjustment 627,095 594,463
Tax deducted at source / advance tax 346,356 259,384
634,095 601,463
396,310 236,900
Subsidiary company
Investments at fair value through profit or loss 31.1 a) Income tax assessments of the Subsidiary up till tax year 2009, except for the tax years 2003 and
Quoted Companies 12,115 12,115 2006 which have been selected for tax audit, are deemed assessments in terms of section
120(1) of the Income Tax Ordinance, 2001. The tax audit for the tax year 2003 and 2006 have not
Fair value adjustment (8,763) (7,736)
yet been finalised.
3,352 4,379
134 135
b) Provision for current year, in view of available tax losses, represents minimum tax due on i) Tax losses available for carry forward to Subsidiary as at June 30, 2010 aggregated Rupees
turnover under section 113 and tax deducted at source under section 5,15 and 154 of the Income 10.424 billion (2009: Rupees 7.959 billion).
Tax Ordinance, 2001.
2010 2009
c) In consequence of tax audit conducted by income tax department (the Department) for tax year
2003, the Department, vide order dated December 31, 2008, has amended the deemed
assessment in respect of tax year 2003 under section 122(5) of the Income Tax Ordinance and 32. CASH AND BANK BALANCES
the Company's taxable income has been enhanced by Rupees 177.750 million. The Company Cash in hand 2,141 5,710
has preferred an appeal against aforesaid amendment order before the commissioner of Inland
Revenue (Appeals), which was disposed off through order dated November 1, 2009.Through Cash at bank:
such order, while CIR(A) upheld the departmental contentions on certain issues, a substantial - On current accounts 93,010 95,262
relief was extended, reducing the taxable income for the year by an amount of Rupees 107 - On saving accounts 57,302 79,257
million as against the additions towards taxable income aggregating to Rupees 173 million 150,312 174,519
contested by the Subsidiary. The Subsidiary has preferred further appeal before the Appellate
Tribunal Inland Revenue (ATIR) against the order of CIR(A) against the disallowances confirmed 152,453 180,229
by him through order. Subsidiary's appeal is pending for hearing by ATIR.
32.1 The balances in current and saving account carry interest ranging from 0.40% to 13% (2009: From
d) Additional Commissioner Inland Revenue passed an order u/s 122(5A) and made additions of 0.20% to 12%) per annum.
Rupees 21.600 million in Company's taxable income and raised a tax demand Rupees 1.900
million against the Subsidiary. The Subsidiary has preferred an appeal before Commissioner 32.2 The balances in current and deposit accounts include US $ 37,000 (2009: US $ 72,465).
Inland Revenue (Appeals) against the above addition in taxable income which relates to the
admissibility of initial allowance on exchange loss capitalized under section 76(5) of the Income 33. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Tax Ordinance. The Subsidiary has also challenged the inclusion of 'scrap sales' and 'profit on
sale of fixed assets' in turnover for the purpose of computing minimum tax liability under section Land 552,923 551,662
113 of the Income Tax Ordinance. Advance against land 100,000 50,000
e) The Deputy Commissioner (Adjudication) has passed an order in original no. 42/2009 dated 652,923 601,662
August 08, 2008 for late filing of return and delayed deposit of dues for the tax period October
2009 against the Subsidiary, raising demand Rupees 34,420 being default surcharge u/s 34 and The Company intends to dispose off land located at Raiwind Road and M.M Alam Road, Lahore after final
Rupees 1,500 being penalty u/s 33(5) of Sales Tax Act 1990 and Rupees 148,894 being default negotiations with its intended buyers. An active programme commenced to locate a buyer at a reasonable
surcharge u/s 8 and Rupees 7,444,666 being penalty u/s 19(1) of Federal Excise Act 2005. price. During the year ended 30 June 2009, land could not be disposed off due to unusually adverse
investment scenario of the country resulting in slump in property market. During the current year, due to
f) The Deputy Commissioner (Adjudication) has passed an order in original no. 51/2009 dated continued stressed property market, the company was still unable to liquidate these land at its target price.
October 10, 2009 for late filing return and delayed deposit of dues for the tax period November These events precluded that disposal of land during the year, however, the management considers that
2008 against the Company, raising demand Rupees 158,675 being default surcharge u/s 34 and these events were beyond its control and remains committed to disposal of these land at a reasonable price.
Rupees 3,500 being penalty u/s 33(5) of Sales Tax Act, 1990 and Rupees 453,427 being default The proceeds of disposal are expected to exceed the carrying amount of the land.
surcharge under section 8 and Rupees 7,809,004 being penalty u/s 19(1) of Federal Excise Act
2005. 34. SALES
2010 2009
In reference to above both orders appeals are pending before the Appellate Tribunal of Inland
Revenue.
g) The Department has initiated proceedings under section 161 and 205 of the Ordinance against Export 13,234,879 11,937,475
the Company in respect of tax years 2003 to 2007.The Company has challenged initiation of the Local - net of sales tax and excise duty 34.1 11,107,205 11,840,054
aforementioned proceedings by filing a writ petition before the Lahore High Court, which, vide Duty drawback 54,845 -
order dated 30 December, 2008 has granted stay of proceedings in respect of tax year 2003. The Rebate 43,137 35,222
main petition is pending adjudication before the court. 24,440,066 23,812,751
h) Numerical reconciliation between the average tax rate and applicable tax rate has not been
presented in these financial statements as the Subsidiary is chargeable to minimum tax under 34.1 Local sales are exclusive of sales tax amounting to Rupees 1,349.218 million (2009: Rupees 1,708.158
section 113 of the Income Tax Ordinance, 2001. million) and excise duty amounting to Rupees 1,618.793 million (2009: Rupees 1,901.663 million).
136 137
35. COST OF SALES 36. DISTRIBUTION COST
2010 2009 2010 2009
Salaries, wages and other benefits 36.1 73,637 62,565
Raw materials consumed 35.1 3,923,408 3,657,167
Outward freight and handling 3,118,158 2,299,401
Cloth and yarn procured and consumed 2,464,620 1,405,218
Clearing and forwarding 227,943 160,317
Salaries, wages and other benefits 35.2 1,056,915 991,885
Dyes and chemicals consumed 518,965 505,493
Insurance 348 405
Processing charges 12,267 22,452
Stores, spare parts and loose tools consumed 1,119,658 696,619
Electricity, gas and water 808 679
Packing materials 1,460,026 1,364,752
Postage, telephone and fax 6,247 5,267
Fuel and power 7,351,678 7,402,291
Sales promotion and advertisement 23,732 24,308
Repair and maintenance 151,766 123,841
Commission to selling agents 171,202 299,280
Insurance 67,432 57,897
Miscellaneous expenses 10,591 28,478
Other factory overheads 202,182 157,585
3,667,408 2,912,955
Depreciation 19.5 1,379,838 1,382,070
Amortization 21 5,558 7,750 36.1 Salaries, wages and other benefits include provident fund contribution of Rupees 2.176 million (2009:
19,714,313 17,775,020 Rupees 2.053 million) and employee benefits (gratuity) amounting to Rupees 0.230 million (2009:
Rupees 0.085 million).
Work-in-process
Opening stock 915,368 687,683 37. ADMINISTRATIVE EXPENSES
2010 2009
Closing stock (983,720) (915,368)
(68,352) (227,685)
Cost of goods manufactured 19,645,961 17,547,335 Salaries, wages and other benefits 37.1 164,365 153,428
Finished goods
Repairs and maintenance 12,745 13,734
Opening stock 803,181 745,779
Rent, rates and taxes 9,133 3,049
Closing stock (1,065,214) (803,181)
Insurance 4,600 4,483
(262,033) (57,402)
Cost of sales 19,383,928 17,489,933
Printing, stationery and periodicals 13,193 11,503
35.1 Raw material consumed Electricity, gas and water 2,589 1,175
Opening stock 581,345 484,086 Postage, telephone and fax 10,624 10,824
Add: Purchases 4,070,306 3,754,426 Legal and professional 16,105 12,437
4,651,651 4,238,512 Security, gardening and sanitation 19,813 18,915
Less: Closing stock 728,243 581,345 Provision for doubtful debts 26,309 -
3,923,408 3,657,167 Provision for slow moving and obsolete items 5,000 -
Depreciation 19.5 35,755 35,231
35.2 Salaries, wages and other benefits include provident fund contribution of Rupees 28.225 million Miscellaneous expenses 33,598 28,261
(2009: Rupees 24.351 million) and employee benefits (gratuity) amounting to Rupees 5.386 million
388,042 326,873
(2009: Rupees 1.536 million).
138 139
37.1 Salaries, wages and other benefits include provident fund contribution of Rupees 4.970 million (2009: 40. FINANCE COST
2010 2009
Rupees 4.545 million) and employee benefits (gratuity) amounting to Rupees 1.276 million (2009:
Rupees 0.421 million). NOTE (Rupees in thousand)
Mark-up/finance charges/ interest on:
38. OTHER OPERATING EXPENSES
2010 2009 Long term financing 540,266 668,611
NOTE (Rupees in thousand) Redeemable capital 1,151,738 1,311,908
Auditors' remuneration 38.1 2,610 1,850
Liabilities against assets subject to finance lease 87,177 119,445
Donations 38.2 14,502 43,543
Provident fund 2,968 322
Workers' profit participation fund 14.1 20,227 -
Workers' Profit Participation Fund (WPPF) 14.1 188 164
Workers' welfare fund 14 7,686 -
2,947,010 3,235,098
Miscellaneous 152,284 15,414
Bank charges and commission 129,883 115,208
197,309 60,807
Loss on cross currency swap 13,970 830,747
38.1 Auditors' remuneration: Exchange loss 41,381 479,418
Statutory audit fee 2,060 1,300 3,132,244 4,660,471
Certifications 550 550
2,610 1,850 41. PROVISION FOR TAXATION
Current year
38.2 Donations include Rupees 13.882 million paid to Gulab Devi hospital, Lahore. None of the directors
and their spouses have any interest in the donees' fund. Current 186,061 120,563
39. OTHER OPERATING INCOME Deferred (73,912) (151,621)
2010 2009 112,149 (31,058)
NOTE (Rupees in thousand) Prior year
Income from financial assets:
Exchange gain 19,261 78,350 Current 885 (488)
3,664 113,034 (31,546)
Gain/ (loss) on disposal of investments (3,330)
Gain/ (loss) on remeasurement of fair value of
investments at fair value through profit and loss account 1,869 (13,200) 41.1 Provision of current year income tax represents final tax on export sales, minimum tax on local sales
Return on bank deposits 6,281 12,306 and tax on income from other sources under the relevant provisions of the Income Tax Ordinance,
Dividend income 715 837 2001. Numeric tax reconciliation has not been presented, being impracticable.
31,790 74,963
Income from associated company: 42. EMPLOYEE BENEFITS - Gratuity
Dividend income : Security General Insurance Company Limited 21,938 27,422
The future contribution rates of this scheme include allowance for deficit and surplus. Projected unit credit
Income from non-financial assets: method, based on the following significant assumptions, is used for valuation of this plan:
Scrap sales 57,860 41,523
2010 2009
Gain on disposal of property, plant and equipment 19.2 10,392 4,858
- discount rate 12% 12%
Gain on sale of land classified as held for sale - 8,190
Miscellaneous 13,702 26,991 - expected return on plan assets 12% 12%
- expected rate of growth per annum in future salaries 11% 11%
81,954 81,562
135,682 183,947 - average expected remaining working life time of employees 10 years 10 years
140 141
2010 2009
(Rupees in thousand) 2010 2009
The amounts recognized in the balance sheet are as follows: (Rupees in thousand)
Fair value of plan assets 43,201 47,997 Charged to profit and loss are as follows:
Present value of defined benefit obligation (77,070) (60,082) Current service cost 3,987 3,328
Benefits payable to outgoing Members - - Interest cost 7,210 6,080
Expected return on plan assets (5,759) (7,366)
(Deficit)/ surplus (33,869) (12,085)
Acturial losses charge 1,426 -
Unrecognized actuarial (gain)/ loss 27,005 20,269
6,864 2,042
Net asset/ (liability) as at 30 June (6,864) 8,184
Comparison of present value of defined benefit obligation
Net asset/ (liability) as at 01 July, 8,184 9,768
The fair value of plan assets and the surplus or deficit of gratuity fund for five years is as follows:
Charged to profit and loss account (6,864) (2,042)
Payments to fund during the year 1,929 458 2010 2009 2008 2007 2006
Amount paid to the Subsidiary (10,113) - ----------------------- Rupees in thousand -----------------------
Net asset/ (liability) as at 30 June (6,864) 8,184 Present value of defined benefit obligation (77,070) (60,082) (50,663) (46,512) (45,937)
Movement in the present value of defined benefit
Fair value of plan assets 43,201 47,997 61,382 60,785 100,830
obligation is as follows:
Present value of defined benefit obligation as at 01 July 60,082 50,663 (Deficit)/ surplus (33,869) (12,085) 10,719 14,273 54,893
Current service cost 3,987 3,328 Experience adjustment on obligation 7,750 3,216 (1,653) (3,825) 12,381
Interest cost 7,210 6,080
Experience adjustment on plan assets (412) (17,140) (6,697) 2,603 7,007
Benefits paid (1,959) (3,205)
Actuarial (gain)/ loss 7,750 3,216 The Subsidiary's policy with regard to actuarial gains / losses is to follow the minimum recommended
Present value of defined benefit obligation as at 30 June 77,070 60,082 approach under IAS 19: "Employee Benefits".
Movement in the fair value of plan assets is as follows: The latest actuarial valuation of the gratuity scheme has been carried out on 30 June 2010.
Fair value of plan assets as at 01 July 47,997 61,382
Expected return on plan assets 5,759 7,366 43. CASH GENERATED FROM OPERATIONS
2010 2009
Contributions 1,929 458
Benefits paid (1,959) (4,069)
Payment to outgoing members (10,113) - Loss before taxation (2,193,183) (1,454,341)
Actuarial (loss) / gain (412) (17,140)
Fair value of plan assets as at 30 June Adjustment for non-cash charges and other items:
43,201 47,997
Actual return/ (loss) on plan assets as at 30 June 5,348 (9,774) Depreciation 1,415,593 1,417,301
Plan assets comprise of: Amortization of intangible assets 5,558 7,750
Defence Saving Certificates - 24,778 Provision for doubtful debts 26,309 -
(including accrued interest less zakat) Provision for slow moving and obsolete items 5,000 -
National Investment Trust Units 17,886 20,777 Finance cost 3,132,244 4,660,471
Cash at bank 1,914 2,442 Gain on sale of fixed assets (10,392) (4,858)
Term deposit receipts - KASB Bank 23,431 - (Gain) / Loss on sale of investments (3,664) 3,330
Benefit payments due, but not paid (30) - Loss on remeasurement of investments 70,207 13,200
43,201 47,997 Gain on sale of land classified as held for sale - (8,190)
142 143
2010 2009 The Chief Executive Officer and directors are provided with the Company's maintained vehicles, free
NOTE (Rupees in thousand) medical facilities and residential telephone facilities for both business and personal use. Chief executive is
also provided free furnished accommodation alongwith utilities.
Employees' compensated absences 10,661 6,046
Provision for employee benefits 6,864 - Executives are provided with free use of company maintained vehicles in accordance with the Group policy.
Dividend income (22,653) (28,259) The aggregate amount charged in the financial statements in respect of directors' meeting fee paid to 4
Return on bank deposits (6,281) (12,306) (2009: 4) directors was Rupees 205 thousand (2009: Rupees 190 thousand).
Working capital changes 43.1 281,604 480,303
2,717,867 5,080,447 45. TRANSACTIONS WITH RELATED PARTIES
The related parties comprise of subsidiaries, associated undertakings, directors of the Group and their close
43.1 Working capital changes
relatives, key management personnel and staff retirement fund. Detail of transactions with related parties,
(Increase) / decrease in current assets: other than those which have been specifically disclosed elsewhere in these consolidated financial
Stores, spare parts and loose tools 481,933 376,550 statements are as follows:
Stock-in-trade (467,091) (323,726) 2010 2009
Trade debts (374,429) 351,481 (Rupees in thousand)
Loans and advances (481,821) 71,620 Associated company
Gratuity fund trust - 1,584 Dividend income 21,938 27,422
Security deposits and short term prepayments 34,287 (93,283) Share deposit money received 1,000,000 -
Other receivables (161,926) 25,829
Post employment benefits plan
(969,047) 410,055
Increase/ (decrease) in current liabilities Contribution to provident fund 23,823 30,949
Trade and other payables 1,250,651 70,248 Interest on provident fund 2,968 322
281,604 480,303 Funds received from gratuity fund 15,048 1,584
44. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES 46. LOSS PER SHARE - BASIC AND DILUTED
2010 2009
The aggregate amount charged in the financial statements for the year for remuneration including certain
benefits to the chief executive, directors and executives of the Group is as follows: There is no dilutive effect on the basic loss per share which is based on:
Loss attributable to ordinary shares Rupees in thousand (1,043,987) (959,035)
Chief Executive Directors Executives Weighted average number of ordinary shares Numbers 145,526,216 145,526,216
2010 2009 2010 2009 2010 2009 Loss per share Rupees (7.17) (6.59)
Number of persons 2 2 5 5 61 63
----------------( Rupees in thousand )--------------- 47. PLANT CAPACITY AND ACTUAL PRODUCTION
SPINNING:
Managerial remuneration 9,337 9,337 11,412 9,791 72,529 64,113
Contribution to provident fund 691 691 377 262 5,325 4,608 - Rawalpindi Division (Numbers)
Housing and utilities 504 466 1,992 1,701 26,575 24,170 Spindles (average) installed / worked; 85,680 85,834
Medical 467 383 1,362 1,258 3,086 2,441
Group insurance - 185 92 59 252 122
100% Plant capacity converted into 20s count based on
Club subscription 64 73 - - - - 3 shifts per day for 1,095 shifts (2009: 1,095 shifts). 37,950 37,945
Others 185 - - - 6,096 4,132 Actual production converted into 20s count based on
11,248 11,135 15,235 13,071 113,863 99,586 3 shifts per day for 1,095 shifts (2009:1,095 shifts). 35,211 35,298
144 145
2010 2009 - Raiwind Division
(Numbers) Annual rated capacity (based on 365 days) 54,460 54,312
- Gujar Khan Division
Actual generation
Spindles (average) installed / worked; 70,848 66,068 Gas engines 26,212 28,166
STITCHING:
100% Plant capacity converted into 20s count based on
3 shifts per day for 1,095 shifts (2009: 1,095 shifts). 33,313 27,732 The plant capacity of this division is indeterminable due to multi-product plants involving varying
processes of manufacturing and run length of order lots.
Actual production converted into 20s count based on
3 shifts per day for 1,095 shifts (2009: 1,095 shifts). 31,295 26,318
2010 2009
WEAVING: (Metric tons in thousand)

CEMENT:
- Raiwind Division (Numbers)
Clinker:
Looms installed / worked 204 204
(Square meters in thousand) Annual rated capacity (Based on 300 days) 3,690 3,690
Annual production for the year 3,130 3,137
100% Plant capacity at 60 picks based on
3 shifts per day for 1,095 shifts (2009: 1,095 shifts). 72,568 84,875
REASONS FOR LOW PRODUCTION
Actual production converted to 60 picks based on
3 shifts per day for 1,072 shifts (2009: 1,092 shifts). 68,605 68,271 - Due to stoppage for normal maintenance, doffing, change of spin plans and cloth quality,
interruption in gas and electricity supply.
PROCESSING OF CLOTH : - Cloth processing units working capacity was limited to actual export / local orders in hand.
- Rawalpindi Division (Meters in thousand)
- The generation of power was limited to actual demand.
Capacity at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts) 41,975 41,975
- Shortfall in production of cement was mainly due to break-down in cement mills and market
Actual at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts) 34,653 30,626
48. POST BALANCE SHEET EVENT

POWER PLANT:
In accordance with the approval of the shareholders in their Extraordinary General Meeting held on 03 May
- Rawalpindi Division (Mega Watts)
2010 and subsequent permission granted by the Securities and Exchange Commission of Pakistan (SECP),
Annual rated capacity (based on 365 days) 207,787 207,787 the Holding Company has, after the reporting period, issued 100,000,000 ordinary shares of Rupees 10 each
otherwise than through a right issue to Mercury Management Incorporated, Hutton Properties Limited and
Actual generation
Zimpex (Private) Limited in accordance with the agreement dated 10 March 2010 between the three allottees,
Main engines 2,198 7,124 the Holding Company and Maple Leaf Cement Factory Limited – Subsidiary Company.
Gas engines 78,080 64,663
146 147
148
49. SEGMENT INFORMATION
Spinning Weaving Processing and home textile Cement Elimination of inter-segment Group
49.1 transactions
30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009
----------------------------------------------------------- ( R u p e e s in t h o u s a n d ) -------------------------------------------------------------
SALES 4,822,128 3,049,558 3,079,523 2,571,181 5,474,514 4,756,984 13,747,212 15,359,777 (2,683,311) (1,924,749) 24,440,066 23,812,751
COST OF SALES (3,599,136) (2,844,840) (2,698,019) (2,160,689) (5,078,201) (4,112,288) (10,691,883) (10,296,865) 2,683,311 1,924,749 (19,383,928) (17,489,933)
GROSS PROFIT 1,222,992 204,718 381,504 410,492 396,313 644,696 3,055,329 5,062,912 - - 5,056,138 6,322,818
DISTRIBUTION COST (16,234) (18,129) (57,076) (53,782) (324,508) (392,937) (3,269,590) (2,448,236) - - (3,667,408) (2,913,084)
ADMINISTRATIVE EXPENSES (64,130) (55,961) (60,939) (51,207) (70,097) (68,797) (192,876) (150,779) - - (388,042) (326,744)
(80,364) (74,090) (118,015) (104,989) (394,605) (461,734) (3,462,466) (2,599,015) - - (4,055,450) (3,239,828)
PROFIT BEFORE TAX AND UNALLOCATED INCOME AND
EXPENSES 1,142,628 130,628 263,489 305,503 1,708 182,962 (407,137) 2,463,897 - - 1,000,688 3,082,990
UNALLOCATED INCOME AND EXPENSES
FINANCE COST (3,132,244) (4,660,471)
OTHER OPERATING EXPENSES (197,309) (60,807)
OTHER OPERATING INCOME 135,682 183,947
PROVISION FOR TAXATION (113,034) 31,546
(3,306,905) (4,505,785)
PROFIT / (LOSS) AFTER TAXATION (2,306,217) (1,422,795)
49.2 Reconciliation of reportable segment assets and liabilities
Spinning Weaving Processing and home textile Cement Group

30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009 30 June 2010 30 June 2009
---------------------------------------------------------------------(R u p e e s in t h o u s a n d)------------------------------------------------------------------------
TOTAL ASSETS FOR REPORTABLE SEGMENT 2,399,058 2,514,724 1,211,488 1,701,352 2,973,709 2,978,474 23,830,834 23,401,059 30,415,089 30,595,609
UNALLOCATED ASSETS 10,472,980 6,080,989

40,888,069 36,676,598
All segment assets are allocated to reportable segments other than those directly relating to corporate and tax assets.
TOTAL LIABILITIES FOR REPORTABLE SEGMENT 689,813 842,797 2,005,937 1,725,080 2,604,786 5,429,033 23,830,834 23,401,059 29,131,370 31,397,969
UNALLOCATED LIABILITIES 11,756,699 5,278,629

40,888,069 36,676,598
All segment liabilities are allocated to reportable segments other than trade and other payables, corporate borrowings and current and deferred tax liabilities.
49.3 Geographical Information
49.3.1 The Group's revenue from external customers by geographical location is detailed below:
2010 2009
(RUPEES IN THOUSAND)
Europe 1,664,667 1,714,770

America 4,040,326 3,407,655
Asia, Africa, Australia 7,627,868 6,850,272
Pakistan 11,107,205 11,840,054
24,440,066 23,812,751
49.3.2 All non current assets as at reporting date are located and operated in Pakistan.
49.4 Revenue from major customers
The Group's revenue is earned from a large mix of customers.
exposures.
(a) Market risk

(i) Currency risk
Trade debts - GBP

Trade debts - Euro
Trade debts - USD
50.1 Financial risk factors
Cash at banks - USD
Finance lease liability - USD

50. FINANCIAL RISK MANAGEMENT
Trade and other payable - Yen

Trade and other payable - USD
Trade and other payable - Euro
Outstanding Letters of credit -Yen

Outstanding Letters of credit - USD
Outstanding Letters of credit - Euro
derivative financial instruments and investment of excess liquidity.
appropriate. The Group's exposure to currency risk was as follows:
2010
9,119
7,341
10,667
1,003
832
17,770
37
-
-
1,056
4,884
transactions or receivables and payables that exist due to transactions in foreign currencies.
2009
11,879
11,163
(Amounts in thousand)
80
17,200
1,168
18
245
15,388
72
725,520
1,226
other price risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non
principles for overall risk management, as well as policies covering specific areas such as currency risk,
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, other price
Risk management is carried out by the Group's finance department under policies approved by the Board of
Company's financial performance. The Group uses derivative financial instruments to hedge certain risk
Directors. The Group's finance department evaluates and hedges financial risks. The Board provides
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management programme
The Group is exposed to currency risk arising from various currency exposures, primarily with respect
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
The Group uses forward exchange contracts to hedge its foreign currency risk, when considered
to the United States Dollar (USD), Euro, GBP and Yen. Currently, the Group's foreign exchange risk
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
exposure is restricted to bank balances, the amounts receivable / payable from / to the foreign entities.
149
2010 2009
Sensitivity analysis
The table below summarises the impact of increase / decrease in the Karachi Stock Exchange (KSE)
Net exposure - USD 9,320 7,662 Index on the Group's loss after taxation for the year and on equity (fair value reserve). The analysis is
Net exposure - Euro 1,227 2,149 based on the assumption that the equity index had increased / decreased by 5% with all other
Net exposure - GBP - 18 variables held constant and all the Group's equity instruments moved according to the historical
correlation with the index:
Net exposure - Yen 4,884 742,720
Impact on loss Impact on statement of other
The following significant exchange rates were applied during the year: Index
after taxation comprehensive income
Rupees per US Dollar
Average rate 83.78 78.81 2010 2009 2010 2009
Reporting date rate 85.60 81.10 --------------------- (RUPEES IN THOUSAND) ---------------------
Rupees per Euro
Average rate 112.10 107.87 KSE 100 (5% increase) 1,371 1,593 - -
Reporting date rate 104.58 114.54 KSE 100 (5% decrease) (1,371) (1,593) - -
Rupees per GBP
Average rate 132.08 126.45 (iii) Interest rate risk
Reporting date rate 128.66 135.05 This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
Rupees per Yen
Average rate 0.9241 0.7867 The Group has no significant long-term interest-bearing assets. The Group's interest rate risk arises
from long term financing, redeemable capital, liabilities against assets subject to finance lease, lease
Reporting date rate 0.9662 0.8475 finance advance and short term borrowings. Borrowings obtained at variable rates expose the Group
to cash flow interest rate risk. Borrowings obtained at fixed rate expose the Group to fair value interest
Sensitivity analysis rate risk.
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD, At the balance sheet date the interest rate profile of the Group’s interest bearing financial instruments
Euro, GBP and Yen with all other variables held constant, the impact on loss after taxation for the year was:
would have been Rupees 39.890 million, Rupees 6.416 million, Rupees NIL and Rupees 0.236
million (30 June 2009: Rupees 31.069 million, Rupees 12.302 million, Rupees 0.122 million and 2010 2009
Rupees 31.473 million) respectively higher / lower, mainly as a result of exchange gains / losses on
translation of foreign exchange denominated financial instruments. Currency risk sensitivity to foreign
exchange movements has been calculated on a symmetric basis. In management's opinion, the Fixed rate instruments
sensitivity analysis is unrepresentative of inherent currency risk as the year end exposure does not
reflect the exposure during the year. Financial Assets
Loans to employees 5,429 8,786
(ii) Other Price risk Bank Balances at PLS account 44,629 65,366
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will Financial liabilities
fluctuate because of changes in market prices (other than those arising from interest rate risk or Long term financing 407,742 549,141
currency risk), whether those changes are caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar financial instrument traded in the market. The Short term borrowings 3,201,896 2,942,000
Group is not exposed to commodity price risk.
Liabilities against assets subject to finance lease - 8,017
150 151
2010 2009 Holding Company
(Amounts in thousand) Rating 2010 2009
Floating rate instruments
Short Long
Agency (Rupees in thousand)
Financial assets Term term
Bank balances- saving accounts 12,673 13,891 Banks
Financial liabilities National Bank of Pakistan A-1+ AAA JCR-VIS 754 4,656
Allied Bank Limited A1+ AA PACRA 32,531 31,292
Long term financing 5,001,198 4,655,703
Redeemable capital 8,296,600 8,000,000 Askari Bank Limited A1+ AA PACRA 7,822 5,703
Short term borrowings 6,929,377 6,250,793 Bank Alfalah Limited A1+ AA PACRA 1,421 2,536
Liabilities against assets subject to finance lease 1,214,971 1,343,997 Faysal Bank Limited A1+ AA PACRA 4,108 1,872
Lease finance advance - 35,922 Habib Bank Limited A-1+ AA+ JCR-VIS 67 103
MCB Bank Limited A1+ AA+ PACRA 9,907 12,611
Fair value sensitivity analysis for fixed rate instruments
NIB Bank Limited A1+ AA- PACRA 12,313 11,106
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit The Royal Bank of Scotland Limited A1+ AA PACRA 88 76
or loss. Therefore, a change in interest rate at the balance sheet date would not affect loss of the
My Bank Limited A2 A- PACRA 30 30
Group.
The Bank of Punjab A1+ AA- PACRA 540 1,763
Cash flow sensitivity analysis for variable rate instruments
Meezan Bank Limited A-1 A+ JCR-VIS 319 -
If interest rate at the year end date, fluctuates by 1% higher / lower with all other variables held Silkbank Limited A-3 A- JCR-VIS 2,945 30
constant, loss after taxation for the year would have been Rupees 214.421 million (30 June 2009: Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA 2,309 837
Rupees 202.864 million) lower / higher, mainly as a result of higher / lower interest expense on
floating rate borrowings. This analysis is prepared assuming the amounts of liabilities outstanding at United Bank Limited A-1+ AA+ JCR-VIS 133 2,611
balance sheet dates were outstanding for the whole year. Al-Baraka Islamic Bank Limited A-1 A JCR-VIS 2,565 4,350
Bank Al Habib Limited A-1+ AA+ PACRA 38 -
(b) Credit risk
77,890 79,576
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
Subsidiary Companies
other party by failing to discharge an obligation. The carrying amount of financial assets represents the
maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows: Total bank balance of Rupees 72.422 million (2009: Rupees 94.943 million) placed with banks have a
short term credit rating of at least A1+ (2009: A1+).
2010 2009
2010 2009
Group's investments Rating (Amounts in thousand)
Investments 1,114,449 1,014,173
Security General Insurance Company Limited A 1,087,021 982,313
Deposits 125,551 98,874
Trade debts 2,106,774 1,732,345 United Composite Islamic Fund N/A - 12,800
Accrued Interest 797 1,105 Faysal Saving Growth Fund N/A - 4,267
Other receivables 49,669 37,082 NAFA Government Securities Liquid Fund N/A - 4,267
Loans and advances 264,219 5,695 Noman Abid Reliance Inome Fund AM 3- 14,053 -
Bank balances 150,312 174,519 Alfalah GHP cash fund AM 3 2,008 -
3,811,771 3,063,793 Fauji Cement Company Limited N/A 539 -
Highnoon Laboratories Limited N/A 2,744 -
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings (If available) or to historical information about counterparty default rate: 1,106,364 1,003,647
152 153
The Group's exposure to credit risk and impairment losses related to trade debts is disclosed in Note 26. Subsidiary Company
Due to the Group's long standing business relationships with these counterparties and after giving Carrying Contractual Less than 1 to 5 More than
due consideration to their strong financial standing, management does not expect non-performance Amount Cash Flows one year Years 5 Years
by these counterparties on their obligations to the Group. Accordingly the credit risk is minimal.
----------------------------- (Rupees in thousand) -------------------------
Non derivative financial liabilities:

(c) Liquidity risk
Long term financing 3,080,439 4,527,362 718,231 2,413,858 1,395,273
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with Redeemable capital 8,296,600 13,959,857 283,820 6,231,669 7,444,368
financial liabilities.
subject to finance lease 1,079,941 1,203,843 429,186 774,657 -
The Group manages liquidity risk by maintaining sufficient cash and the availability of funding through an
Long term deposits 2,739 2,739 - 2,739 -
adequate amount of committed credit facilities. At 30 June 2010, the Group had Rupees 4,313.53 million
available borrowing limits from financial institutions and Rupees 152.453 million cash and bank Trade and other payables 2,642,912 2,642,912 2,642,912 - -
balances. Inspite the fact that the Group is in a negative working capital position at the year end, Accrued mark-up 921,812 921,812 921,812 - -
management believes the liquidity risk to be low. Following are the contractual maturities of financial Short term borrowings 4,060,838 4,060,838 4,060,838 - -
liabilities, including interest payments. The amount disclosed in the table are undiscounted cash flows: 20,085,281 27,319,363 9,056,799 9,422,923 8,839,641
Contractual maturities of financial liabilities as at 30 June 2010: Contractual maturities of financial liabilities as at 30 June 2009
Holding Company
Holding Company
Carrying Contractual 6 months 6-12 More than

Carrying Contractual 6 months 6-12 More than 1-2 Years
1-2 Years Amount Cash Flows or less months 2 Years
Amount Cash Flows or less months 2 Years
---------------------------------- (Rupees in thousand) -----------------------------
---------------------------------- (Rupees in thousand) -----------------------------
Long term financing 2,749,341 3,413,720 506,992 606,169 1,031,773 1,268,786
Long term financing 2,328,501 2,950,434 542,361 398,510 699,117 1,310,446
Liabilities against assets subject to finance lease 187,191 207,348 35,963 52,959 50,812 67,614
subject to finance lease 135,030 155,263 53,450 32,487 45,157 24,169 Lease finance advance 35,922 36,460 36,460 - - -
Trade and other payables 989,594 989,594 989,594 - - - Trade and other payables 808,136 808,136 808,136 - - -
Accrued mark-up 289,987 185,259 185,259 - - - Accrued mark-up 185,259 185,259 185,259 - - -
Short term borrowings 6,070,435 6,268,109 5,796,162 471,947 - - Short term borrowings 4,810,471 4,991,732 4,438,253 553,479 - -
9,813,547 10,548,659 7,566,826 902,944 744,274 1,334,615 8,776,320 9,642,655 6,011,063 1,212,607 1,082,585 1,336,400
154 155
Subsidiary Company The fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques. These valuation techniques maximise the use of observable market data where it
is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair
Carrying Contractual Less than 1 to 5 More than value a financial instrument are observable, those financial instruments are classified under level 2 in
Amount Cash Flows one year Years 5 Years above referred table.
If one or more of the significant inputs is not based on observable market data, the financial instrument is
----------------------------- (Rupees in thousand) -------------------------
classified under level 3.The carrying amount less impairment provision of trade receivables and
payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market interest rate
Long term financing 2,455,503 3,365,222 662,012 2,703,210 - that is available to the Group for similar financial instruments. The Group has no such type of financial
instruments as on 30 June 2010.
Redeemable capital 8,000,000 11,646,716 2,035,200 9,611,516 -
Liabilities against assets 50.3 Financial instruments by categories
subject to finance lease 1,164,823 1,359,171 390,321 968,850 -
Through
Long term deposits 2,580 2,580 - 2,580 - Loans and Available
profit or Total
Trade and other payables 1,675,984 1,675,984 1,675,984 - - loss
As at 30 June 2010 ------------------- (Rupees in thousand) -----------------
Accrued mark-up 441,194 441,194 441,194 - -
Short term borrowings 4,382,322 4,831,813 4,831,813 - - Assets as per balance sheet
18,122,406 23,322,680 10,036,524 13,286,156 - Investments - 27,428 1,087,021 1,114,449
Deposits 125,551 - - 125,551
The contractual cash flows relating to the above financial liabilities have been determined on the basis of Trade debts 2,106,774 - - 2,106,774
interest rates / mark up rates effective as at 30 June. The rates of interest / mark up have been disclosed in
note 8, note 9 and note 10 to these financial statements. Accrued interest 797 - - 797
Other receivables 49,669 - - 49,669
50.2 Fair values of financial assets and liabilities
Loans and advances 264,219 - - 264,219
The carrying values of all financial assets and liabilities reflected in financial statements approximate their Cash and bank balances 152,453 - - 152,453
fair values. The following table provides an analysis of financial instruments that are measured 2,699,463 27,428 1,087,021 3,813,912
subsequent to initial recognition at fair value, grouped in to levels 1 to 3 based on the degree to which fair
value is observable:
Financial liabilities
at amortized cost
Level 1 Level 2 Level 3 Total
------------------- (Rupees in thousand) -----------------
As at 30 June 2010 Liabilities as per balance sheet
Assets Long term financing 5,408,940
Available for sale financial assets - 1,087,021 - 1,087,021
Redeemable capital 8,296,600
As at 30 June 2009 Liabilities against assets subject to finance lease 1,214,971
Assets Lease finance advance -
Available for sale financial assets - 982,313 - 982,313 Short term borrowings 10,131,273
Trade and other payables 3,632,506
The fair value of financial instruments traded in active markets is based on quoted market prices at the
balance sheet date. The quoted market price used for financial instruments held by the Group is the Accrued mark-up 1,211,799
current bid price. These financial instruments are classified under level 1 in above referred table. The 29,896,089
Group has no such type of financial instruments as on 30 June 2010.
156 157
Loans and
Through
Available
balance sheet plus ‘borrowings’. The gearing ratio as at year ended 30 June 2010 and 30 June 2009 is as
profit or Total follows:
loss
------------------- (Rupees in thousand) ----------------- 2010 2009
As at 30 June 2009
Rupees in thousands
Assets as per balance sheet
Investments - 31,860 982,313 1,014,173 Borrowings 25,051,784 23,785,573
Deposits 98,874 - - 98,874 Total equity 5,323,453 7,581,330
Trade debts 1,732,345 - - 1,732,345 Total capital employed 30,375,237 31,366,903
Other receivables 37,082 - - 37,082
Gearing Ratio 82.47% 75.83%
Loans and advances 5,695 - - 5,695
Cash and bank balances 180,229 - - 180,229 51. FINANCIAL RISK MANAGEMENT
2,054,225 31,860 982,313 3,068,398
These financial statements were authorised for issue on September 29, 2010 by the Board of Directors of the
Holding Company.
Financial liabilities
at amortized cost
52. CORRESPONDING FIGURES
No significant reclassification/ rearrangement of corresponding figures has been made.
Liabilities as per balance sheet
Long term financing 5,204,844
53. GENERAL
Redeemable capital 8,000,000
Figures have been rounded off to the nearest thousand of Rupees unless stated otherwise.
Liabilities against assets subject to finance lease 1,352,014
Lease finance advance 35,922
Short term borrowings 9,192,793
Trade and other payables 2,484,030
Accrued mark-up 626,453
26,896,056
50.4 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders 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 Group may adjust the amount of dividends paid to shareholders, return capital to shareholders
through repurchase of shares, issue new shares or sell assets to reduce debt. Consistent with others in CHIEF EXECUTIVE DIRECTOR
the industry and the requirements of the lenders, the Group monitors the capital structure on the basis
of gearing ratio. This ratio is calculated as borrowings divided by total capital employed.
Borrowings represent long-term financing, redeemable capital, liabilities against assets subject to
finance lease, lease finance advance and short-term borrowings obtained by the Group as referred to in
note 8, note 9 and note 10 respectively. Total capital employed includes ‘total equity’ as shown in the
158 159
KOHINOOR TEXTILE MILLS LIMITED
42-LAWRENCE ROAD, LAHORE
PROXY FORM
I/We
of
being a member of KOHINOOR TEXTILE MILLS LIMITED hereby appoint
(NAME)
of another member of the Company
or failing him/her
(NAME)
of another member of the Company

(being a member of the Company) as my/our proxy to attend and vote for and on my/our behalf, at the Annual General
Meeting of the Company to be held at its Registered Office, 42-Lawrence Road, Lahore on Saturday, October 30, 2010 at
3:00 p.m. and any adjournment thereof.
As witnessed given under my/our hand(s) day of 2010.
1. Witness:
Signature: Affix
Revenue -
Name: Stamps of Rs. 5/
Address:
Signature of Member
2. Witness:
Signature: Shares Held

Name: Shareholder's Folio No.
Address: CDC A/c No.
CNIC No.
________________________________________________________________________________________________
Notes:
1. Proxies, in order to be effective, must be reached at the Companys Registered Office, not less than 48 hours
before the time for holding the meeting and must be duly stamped, signed and witnessed.
2. CDC Shareholders, entitled to attend and vote at this meeting, must bring with them their National
Identity Cards/Passports in original to prove his/her identity, and in case of Proxy, must enclose an
attested copy of his/her NIC or Passport. Representatives of corporate members should bring the
usual documents required for such purpose.
Fold Here
Fold Here
AFFIX
CORRECT
POSTAGE
The Company Secretary

42-Lawrence Road, Lahore.
Phone No's: (042) 36302261 - 62
Fold Here
Fold Here

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KTML Annual 2010

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Annual Report 2010

Kohinoor Textile Mills Limited

Registered Office : 42 - Lawrence Road, Lahore Pakistan.

KOHINOOR TEXTILE MILLS LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

Directors' Report on Consolidated Financial Statements 74

BOARD OF DIRECTORS COMPANY PROFILE

AUDIT COMMITTEE BANKERS

Vision Statement Mission Statement

Statement of Ethics and Statement Of

NOTICE OF ANNUAL GENERAL MEETING

Group Director Finance

DIRECTORS' REPORT TO THE SHAREHOLDERS Locally, the Company continues

During the year under review, the Company's

The Directors have shown their INFORMATION TECHNOLOGY

The Company is in process of upgrading

CORPORATE SOCIAL RESPONSIBILITY (4 th CSR Award)

Mr. Sohail Sadiq General Manager Finance is

SAFETY, HEALTH AND ENVIRONMENT SECURITY

The Company takes

BUSINESS PROCESS RE-ENGINEERING COMPLIANCE OF CODE OF CORPORATE GOVERNANCE

Management monitors forecasts of the Company's liquidity

DIRECTORS AND BOARD MEETINGS AUDIT COMMITTEE

a. Determination of appropriate measures to safeguard

He is a keen golfer and has represented Pakistan at Golf in

BRIEF PROFILE OF DIRECTORS in different environments. Director

PROJECT MANAGEMENT COMMITTEE Members

Scope and Objectives

ENERGY MANAGEMENT COMMITTEE

2009-2010 2008-2009 2007-2008 2006-2007 2005-2006 2004-2005 2010 2009

Financial Position (Rs.000) 10,771,989 100.00% 8,585,450 100.00%

Quantitative Data 9.96% 14.68%

Weaving (Raiwind Division)

HORIZONTAL ANALYSIS OF FINANCIAL STATEMENTS VERTICAL ANALYSIS OF FINANCIAL STATEMENTS

2010 2009 2008 % change % change 2010 2009 2008

Rupees in thousand Rupees in thousand

Profit and Loss Account Profit and Loss Account

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

CHIEF EXECUTIVE DIRECTOR

SALES 27 10,693,338 8,458,899

OTHER COMPREHENSIVE INCOME/ (LOSS)

DISTRIBUTION COST 29 (397,818) (464,848)

OTHER OPERATING INCOME 32 78,651 126,551

PROFIT FROM OPERATIONS 1,449,216 723,554

PROFIT / (LOSS) BEFORE TAXATION 376,448 (536,676)

PROFIT/ (LOSS) AFTER TAXATION 277,861 (439,811)

CHIEF EXECUTIVE DIRECTOR CHIEF EXECUTIVE DIRECTOR

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

STATEMENT OF CHANGES IN EQUITY

Effect of change in accounting policy -Note 2.8 (d)

Total comprehensive income for the year

Total comprehensive loss for the year

Balance as at 30 June 2008

Balance as at 30 June 2009

Balance as at 30 June 2010

ended 30 June 2010

2.21 Off setting Balance as at 01 July 438,417 740,428

Balance as at 30 June 462,483 438,417

The Bank of Punjab (BOP - 1) 6.1 26,623 46,598

Year ended 30 June 2010

Opening net book value

Opening net book value

Cost / revalued amount