UNITED

ISO 9002 KINGDOM ASPECTS UKAS

APPROVED ACCREDITATION
SERVICE
MOODY ENVIRONMENTAL
MANAGEMENT
CERTIFICATION 041

Reg. No. : 9901118 Certificate No. 1495

CONTENTS
Page
Company Profile 02
Corporate Vision / Mission Statement 03
Notice of Annual General Meeting 04
Directors’ Report 05
Six Years at a Glance 09
Statement of Compliance with the Code of Corporate Governance 10
Review Report to the Members on Statement of Compliance
with best practices of Code of Corporate Governance 12
Auditors’ Report to the Members 13
Balance Sheet 14
Profit and Loss Account 15
Cash Flow Statement 16
Statement of Changes in Equity 17
Notes to the Financial Statements 18
Pattern of Shareholding 36
Proxy Form
COMPANY PROFILE

Board of Directors

Shaikh Mohammad Muneer Chairman / Chief Executive

Shaikh Mohammad Naseer Director
Shaikh Mohammad Jawed Director
Shaikh Mohammad Pervez Director
Shaikh Mohammad Tariq Director
Shaikh Mohammad Tanveer Director
Mr. Shahzad Naseer Director
Mr. S.M Naveed Director
Mr. Irfan Muneer Director
Mr. Fawad Jawed Director
Secretary
Mr. Islam Ahmed
Auditors
Mushtaq & Co.
Chartered Accountants
Bankers
Meezan Bank Ltd.
Citibank N.A.
ABN Amro Bank N.V
Union Bank Ltd.
Standard Chartered Bank Ltd.
Faysal Bank Ltd.
Habib Bank AG Zurich
Habib Bank Ltd.
United Bank Ltd.
The Hong Kong and Shanghai Banking Corporation Ltd.
Registered Office
Din House, 35-A/1, Lalazar Area,
Opp. Beach Luxury Hotel, Karachi.
Audit Committee
Shaikh Mohammad Jawed Chairman
Shaikh Mohammad Pervez Member
Mr. Shahzad Naseer Member
Chief Financial Officer
Mr. Noman Ahmed
Mills
Unit-I and II Kot Akbar Khan, 70km Multan Road, Tehsil Pattoki,
Distric Kasur, Punjab.
Unit-III Revenue State, Bhai Kot, Tablighi Chowk, Raiwind Road, Tehsil and Distt. Lahore.
Website : www.dingroup.com

02
CORPORATE VISION / MISSION STATEMENT

Vision

We aim at transforming Din Textile Mills Ltd. (DTML) into a

complete Textile unit to further explore international market of very
high value products. Our emphasis would be on product and market
diversification, value addition and cost effectiveness. We intend to
fully equip the Company acquire pioneer role in the economic
development of the Country.

Mission

The Company should secure and provide a rewarding return on

investment to its shareholders and investors, quality products to its
customers, a secured and friendly environment place of work to its
employees and present itself as a reliable partner to all business
associates.

03
NOTICE OF A NNUAL GENERAL MEETING

Notice is hereby given that the 20th Annual General Meeting of Din Textile Mills Limited will be held on
Monday the 17 th September, 2007 at 11:00 a.m. at Dilkusha Hall, Pearl Continental Hotel, Club Road, Karachi
to transact the following business.

1. To confirm the minutes of the Extra Ordinary General Meeting of the Company held on 13th March,
2007.

2. To receive, consider and adopt the audited accounts of the Company for the year ended June 30, 2007
together with Directors' and Auditors' Report thereon.

3. To appoint Auditors, and fix their remuneration.

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

By Order of the Board

Karachi: August 17, 2007 ISLAM AHMED

Company Secretary

Notes:

1. The share transfer books of the Company will remain closed from 10 th September, 2007 to 17 th
September, 2007 (both day inclusive).

2. A Member entitled to attend, speak and vote at the Annual General Meeting may appoint another
member as his/her proxy to attend the meeting and vote instead of him/her. A proxy in order to be
effective must be received by the Company not less than 48 hours before the time of the meeting.

3. Members whose shares are deposited with Central Depository Company of Pakistan Limited are
requested to bring their National Identity Cards along with the participants' I.D. number and their
account number in Central Depository Company of Pakistan Limited to facilitate identification at the
time of Annual General Meeting. In case of proxy an attested copy of proxy's Identity Card, Account
and Participants I.D. number be enclosed. In case of corporate entity, the Board of Directors,
resolution / power of attorney with specimen signature of the nominee shall be produced at the time of
the meeting (unless it has been provided earlier).

4. Shareholders are advised to notify immediately of any change in their addresses to our share
department, Din Textile Mills Ltd., Din House, 35 -A/l, Lalazar Area, Opp. Beach Luxury Hotel, M. T.
Khan Road, Karachi- 74000.

04
DIRECTORS' REPORT

The directors of your Company are pleased to place their report together with the auditors report and audited
financial statements of the Company for the year ended June 30 th, 2007 before the 20 th, Annual General
Meeting.
During the year under review, the Company has earned profit before taxation of Rs. 90.53 million. Depreciation
of Rs. 210.71 million and financial charges of Rs. 136.96 million have been charged. Provision for current year
taxation on income has been made of Rs. 20.27 million.

2007 2006
Rupees Rupees

Profit before taxation 90,530,769 34,581,102

Provision for taxation
Current 20,271,117 13,153,566
Prior year - 2.016,209
Deferred (96,086,671) (29,195)
(75,815,554) 15,140,580
Profit after taxation 166,346,323 19,440,522
Un-appropriated Profit brought forward 539,582,326 520,141,804
Un-appropriated Profit carried forward 705,928,649 539,582,326
Earning per share 8.98 1.05

The directors have not recommended any dividend for the year due to tight liquidity position resulting from
heavy repayment of long term liability of financial institutions.

Operational Analysis
The key business performance indices for the year of your company are as follows:

2007 2006 Variance %

Rupees Rupees
Total Sales 2,772,414,780 2,510,860,532 + 10.42
Local Sales 1,295,143,034 1,532,081,690 - 15.47
Export Sales 1,477,271,746 978,778,842 + 50.93
Gross Profit 293,401,901 233,523,238 + 25.64

Sales and Gross Profit Analysis

Overall sales of your company increased by 10.42 percent . Export sales have increased by 50.93 percent
.

The cotton prices were higher as compared to the preceding year, which caused adverse impact on the textile
sector. In addition to purchase of raw cotton from local market your company has also imported raw cotton
from abroad for production of fine quality yarn.

Increase in oil prices in the international market and local market has affected every sector of economy. Fuel,
power and the gas cost of the existing units of your company has also increased.

05
The finance cost increase in the current year. But the finance cost of your company is not increase due to better
finance management of the finance team.
In spite extra ordinary increases in costs, the Company has been able to generate gross profit to Rs. 293.40
million as compared to Rs. 233.52 million during the preceding year. This improvement was possible due to
aggressive marketing efforts in local and international market, which made it possible to fetch maximum price
for the Company's products under most competitive market conditions.

Salient Feature of the Accounting Results

The achievement of the year under review may be compared against preceding year in percentage as follows:

- Sales-net for the year Rs. 2, 714.49 million increased by 10.64 percent (2006: Rs. 2,453.34 million).
- Cost of sales Rs. 2,421.09 million increased by 9.07 percent (2006: Rs. 2,219.81 million).
- Gross pr ofit has improved by 25.64 percent to Rs. 293 .40 million (2006: Rs. 233.52 million). Gross
profit ratio is 10.81 (2006: 9.52) percent.
- Administrative expenses Rs. 35.26 million increased by 0.30 percent (2006: 35.15 million).
- Selling expenses Rs. 33.62 million increased by 22.91percent (2006: 27.35 million).
- Finance cost Rs. 136.96 million decreased by 3.99 percent (2006: Rs. 142.64 million)
- Profit before taxation increased by 161.79 percent Rs. 90.53 million (2006: Rs. 34.58 million).

Future Prospects
Our Country's textile industry is facing unfair competition from its neighboring countries, India, China and
Bangladesh. The Governments of neighboring countries are provi ding rebates, subsidies and facilities to their
industry to sustain growth in the international market. Our Government should also come up in front to provide
equivalent rebates, subsidies and facilitates to bring our industry at par with our regional competitors.
Two Gas Generators of 1.7 MW has been installed and there benefit of which is coming from April 2007.

The Companys focus is towards production and exports of value added yarns.

The new unit, having most modern technology of Reiter, imported from Switzerland and Germany, is
producing valuable compact yarn which is fetching premium price. In future our premium price/value -added
products are expected to help to improve the solvency, liquidity and profitability position of your company.

Despite ad verse factors like rising trend of mark-up rates prevailing in the financial market, increase of fuel
prices, depressed yarn prices and increase in cotton prices , your management is still making its best effort to
improve its results in line with the history of the Company.

Direct Expenses Incurred on Sales

Direct expenses incurred on sales (commission and claims) have been deducted from sales (refer to note 27 to
financial statements) for presentation in profit and loss account. It has no effect on profit for . the year

Related Parties
The Board of Directors has approved the policy for transaction/contract between Company and its related
Parties on an arms length basis and relevant rates are to be determined as per the comparable un -controlled
price method.

06
Taxation
Provision for taxation in respect of export proceeds and other income has been fully provided. For outstanding
taxes and levies, please refer to notes 34 and 23 to the annexed audited financial statements.

Statement of Compliance with the Best Practices on Transfer Pricing

The Company has fully complied with the best practices of transfer pricing as contained in the listing regulation
of Stock Exchanges.

Environment, Health, Safety and Social Actions

Din Textile Mills Ltd provides an d maintains, so far as reasonably practicable, plant equipment, systems and
working conditions which are safe and without risk to the health of all employees and public. Management has
maintained safe environment in all its operations throughout the year.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK
(Code of Corporate Governance)
The Board of Directors have pleasure to inform you that the Company has taken necessary steps to comply with
the provisions of the Code of Corporate Governance as incorporated in the listing regulations of the Karachi
and Lahore Stock Exchanges. Statement of Compliance with the Code of Corporate Governance is annexed.
The Company complies with the Code in the following manner.

(a) The financial statements, prepared by the management of the Company, present fairly its state of
affairs, the result of its operations, cash flows and changes in equity.

(b) Proper books of account of the Company have been maintained.

(c) Appropriate accounting policies have been consistently applied in preparation of the financial
statements and accounting estimates are based on reasonable and prudent judgment.

(d) International Financial Reporting Standards, as applicable in Pakistan, have been followed in
preparation of financial statements and any departure there from has been adequately disclosed.

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

(f) There are no significant doubts upon the Companys ability to continue as a going concern.
(g) There has been no material departure from the best practices of corporate governance, as detailed in
the listing regulations.

(h) We have prepared and circulated a statement of ethics and business strategy among directors and
employees.

(i) The board of directors has adopted a mission statement and a statement of overall corporate strategy.

(j) As required by the Code of Corporate Governance, we have included the following information in this
report:


Statement of pattern of shareholding

Statement of shares held by associated undertakings and related parties

Statement of the board meetings held during the year and attendance by each director

Key operating and financial statistics for last six years

07
Board Meetings

During the year, six (6) meetings of the Board of Directors were held and the attendance of the Board members
was as under:-

Sr. Name of Director No. of Meeting

No. Attended
1. Shaikh Mohammad Muneer 5
2. Shaikh Mohammad Naseer 6
3. Shaikh Mohammad Jawed 6
4. Shaikh Mohammad Pervez 6
5. Shaikh Mohammad Tariq 6
6. Shaikh Mohammad Tanveer 6
7. Mr. Shahzad Naseer 6
8. Mr. S. M. Naveed 6
9. Mr. Irfan Muneer 6
10. Mr. Fawad Jawed 6

There has been no reported trading during the year in the shares of the Company carried out by the directors,
CEO, CFO, and Company Secretary and their spouses or minor children.

Audit Committee

The 
Board of Directors in compliance with the Code of Corporate Governance has established an
Audit committee. The names of its members are given in the Company profile.

The terms of reference of the Audit Committee is based on the scope as defined by the Securities and
Exchange Commission of Pakistan (SECP) and the guidelines given by the Board of Directors from
time to time to improve the system and procedures.

Within the framework of terms of reference determined by the Board of Directors, the Audit
Committee, among other things, will recommend appointment of external auditors and review of
periodical statements.

Auditors

The present auditors M/s Mushtaq and Company, Chartered Accountants, Karachi, retire and being eligible,
offer themselves for re -appointment under the terms of the Code of Corporate Governance, they have been
recommended by Audit Committee for the re -appointment as auditors until the conclusion of the next Annual
General Meeting.

In the end, the Board would like to record its appreciation for ongoing support and confidence of all our
bankers and for technical assistance and hard work of the advisors and employees of the Company.

For and On behalf of

The Board of Directors

Karachi: SHAHZAD NASEER

Date : August 17, 2007 Director

08
SIX YEARS AT A GALANCE
FOR THE YEAR ENDED JUNE 30, 2007

(Rs in '000)
2002 2003 2004 2005 2006 2007

Sales 1,513,765 1,540,195 1,656,202 1,280,167 2,453,338 2,714,494

Cost of Sales 1,256,231 1,317,050 1,524,665 1,161,063 2,219,814 2,421,093
Gross Profit 257,534 223,145 131,537 119,104 233,524 293,401
Other Income 9,448 1,529 2,723 3,542 8,031 7,730
Administration & Selling 57,668 56,949 66,236 38,198 62,507 68,879
Other Charges 7,715 6,497 1,962 2,758 1,820 4,765
Financial Charges 56,036 37,841 28,781 58,989 142,646 136,957
Profit befor Taxation 145,563 123,387 37,281 22,701 34,582 90,530
Taxation 23,000 (14,453) 18,628 143,367 15,141 (75,816)
Profit after Taxation 122,563 137,840 18,653 (120,666) 19,441 166,346

Balance Sheet
Share Capital 154,419 154,419 154,419 185,303 185,303 185,303
Reserve 546,082 683,923 671,692 520,142 539,582 705,929
Share Holder Equity 700,501 838,342 826,111 705,445 724,886 891,232
Long Term Obligations 186,959 61,248 230,481 1,451,312 1,371,295 1,117,955
Current Liability & Provision 299,658 389,386 770,783 1,081,426 951,651 1,152,843
Total 1,187,118 1,288,976 1,827,375 3,238,183 3,047,832 3,162,030

Fixed Assets-Tangible 621,529 692,743 822,975 2,153,547 2,120,558 2,005,359

Long Term Loans And Advances - - - - 1,218 1,638
Long Term Security Deposit 12,892 9,424 1,066 3,593 3,850 3,012
Current Assets 552,697 586,809 1,003,334 1,081,043 922,206 1,152,021
Total 1,187,118 1,288,976 1,827,375 3,238,183 3,047,832 3,162,030

09
 STATEMENT OF COMPLIANCE
WITH THE CODE OF CORPORATE GOVERNANCE

This statement is being presented to comply with the Code of Corporate Governance contained in the listing
regulations of Karachi and Lahore Stock Exchange s for the purpose of establishing a framework of good
governance, whereby a listed company is managed in compliance with the best practices of corporate
governance.

The company has applied the principle contained in the Code in the following manner;

1. The Company encourages representation of independent non -executive directors. At present the Board
includes five non-executive directors.

2. The directo rs have confirmed that none of them is serving as a director in more than ten listed
companies, including this company.

3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in
payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock
exchange, has been declared as a defaulted by that stock exchange.

4. There was no casual vacancy of directors during the year.

5. The Company has prepared a "Statement of Ethics and Business Practices", w hich has been signed by
all the directors and employees of the Company.

6. The Board has developed vision and mission statement, over all corporate strategy and significant
policies of the company. Which have been approved by the Board of Directors.

7. All the powers of the Board have been duly exercised and decisions on material transactions, including
appointment and determination of remuneration and terms and conditions of employment of the CEO
and other executive directors have been taken by the Board.

8. The meeting of the Board was 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. The Board held six
meetings during the year. Written notices of the Board meeting, 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 Directors of the company attended the orientation courses for their duties and respon sibilities.

10. There was no change in the position of Company Secretary, Chief Financial Officer or Head of
Internal Audit during the year.

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.

10
12. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the
Board.

13. The directors, CEO and executives do not hold any interest in the shares of the Company other than
that disclosed in the pattern of shareholding.

14. The Company has complied with all the corporate and financial reporting requirements of the Code.

15. The Board has formed an audit committee. It comprises three members, of whom two are non -
executive directors including the chairman of the committee.

16. The meeting of the audit committee were held at least once every quarter prior to approval of interim
and final results of the Company and as required by the Code. The terms of reference of the committee
have been formed and advised to the committee for compliance.

17. The Board has set up an internal audit function.

18. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating
under the quality control review program of the Institute of Chartered Accountants of Pakistan, that
they or any of the partners of the firm their spouses and minor children do not hold shares of the
company and that the firm and all its partners are in compliance with International Federation of
Accountants ( IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of
Pakistan.

19. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the listing regulations and the auditors have confirmed that they
have observed IFAC guidelines in this regard.

20. We confirm that all other material principles contained in the Code have been complied with.

On behalf of the Board of Directors

Karachi: SHAHZAD NASEER

Date: August 17, 2007 Director

11
MUSHTAQ & co. 407-Commerce Centre,
Hasrat Mohani Road,
Branch Office:
19-B, Block-G,
CHARTERED ACCOUNTANTS Karachi- 74200, Gulberg-III,
Pakistan Lahore.

Tel: 2638521-4 Fax: 2639843 Tel: 5884926, 5865618

E-mail: [email protected]

AUDITORS' REVIEW REPORT TO THE MEMBERS

On Statement of Compliance with Best Practices of Code of
Corporate Governance

We have reviewed the statement of compliance with the best practices contained in the Code of Corporate
Governance as applicable to the company for the year ended June 30, 2007 prepared by the Board of Directors
of Din Textile Mills Limited to comply with the Listing Regulation No. 37 of the Karachi Stock Exchange
(Guarantee) Limited and Chapter XIII o f Lahore Stock Exchange (Guarantee) Limited where the Company is
listed.

The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of
the company. Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the statement of compliance reflects the status of the companys compliance with the provisions of the
Code of Corporate Governance and report if it does not. A review is limited primarily to inquiries of the
company personnel and review of various documents prepared by the company to comply with the Code.

As part of our audit of financial statements we are required to obtain an understanding of the accounting and
internal control system sufficient to plan the au dit and develop an effective audit appro ach. We have not carried
out any special review of the internal control system to enable us to express an opinion as to whether the
Boards statement on internal control covers all controls and the effectiveness of such internal controls.

Based on our review , no thing has come to our attention which causes us to believe that the statement of
compliance does not appropriately reflect the Companys compliance, in all material respect, with the best
practices contained in the Code of Corporate Governance as applicable to the company for the year ended June
30, 2007.

Karachi: MUSHTAQ & COMPANY

Date: August 17, 2007 Chartered Accountants
MUSHTAQ & co. 407-Commerce Centre,
Hasrat Mohani Road,
Branch Office:
19-B, Block-G,
CHARTERED ACCOUNTANTS Karachi- 74200, Gulberg-III,
Pakistan Lahore.

Tel: 2638521-4 Fax: 2639843 Tel: 5884926, 5865618

E-mail: [email protected]

AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed balance sheet of Din Textile Mills Limited as at June 30, 2007 and the related
profit and loss account, cash flow statement and statement of changes in equity together with the notes forming
part thereof, for the year then ended and we state that we have obtained all the information and explanations
which, to the best of our knowledge and belief, were necessary for the purpose of our audit.
It is the responsibility of the company 's management to establish and maintain a system of internal control, and
prepare and present the above said statements in conformity with the approved accounting standards and the
requirements of the companies Ordinance, 1984. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also includes assessing the
accounting policies and significant estimates made by the management, as well as, evaluating the overall
presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion
and, after due verifications, we report that;

(a) in our opinion, proper books of accounts have been kept by the company as required by the Companies
Ordinance, 1984;

(b) in our opinion;

(i) the balance sheet and profit and loss account together with the notes thereon have been drawn
up in confo rmity with the Companies Ordinance, 1984, and are in agreement with the books
of accounts and are further in accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the companys business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were
in accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, 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 companys affairs as at June 30,
2007 and of the profit, 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).
(e) Without qualifying our opinion, we report that direct expenses incurred on sales have been deducted
from sales (refer to note 27) for presentation in profit and loss account. It has no effect on profit for the year
.

Karachi: MUSHTAQ & COMPANY

Date : August 17, 2007 Chartered Accountants
BALANCE SHEET
AS AT JUNE 30, 2007 Note 2007 2006
Rupees Rupees
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 5 2,001,836,292 2,107,863,245
Capital work in progress 6 3,522,360 12,694,287
2,005,358,652 2,120,557,532
Long term loans and advances 7 1,638,070 1,218,200
Long term deposits 8 3,012,053 3,850,235
CURRENT ASSETS
Stores, spare parts and loose tools 9 96,769,077 88,084,540
Stock in trade 10 644,740,014 538,258,530
Trade debts 11 352,912,862 213,028,850
Loans and advances 12 37,279,589 41,948,202
Trade deposits and short term prepayments 13 2,717,155 1,018,094
Other receivables 14 9,032,661 13,987,103
Cash and bank balances 15 8,569,793 25,880,618
1,152,021,151 922,205,937
TOTAL ASSETS 3,162,029,926 3,047,831,904
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized capital
50,000,000 ordinary shares of Rs. 10 each 500,000,000 500,000,000
Issued, subscribed and paid up capital 16 185,303,210 185,303,210
Reserves 17 705,928,649 539,582,326
891,231,859 724,885,536
NON CURRENT LIABILITIES
Long term financing from banking companies
and other financial institutions 18 501,550,000 662,500,000
Long term loan from directors 19 500,000,000 500,000,000
Liabilities against assets subject to finance lease 20 1,541,263 2,778,590
Deferred liabilities
Staff retirement benefit - gratuity 21 38,479,897 33,545,824
Taxation 22 76,384,134 172,470,805
114,864,031 206,016,629
CURRENT LIABILITIES
Trade and other payables 23 133,667,150 117,276,525
Accrued mark up and interest 24 19,378,763 20,226,274
Short term borrowings 25 772,218,414 684,576,031
Current portion of
Long term borrowings 225,000,000 125,000,000
Liabilities against assets subject to finance lease 2,578,446 4,572,319
1,152,842,773 951,651,149
CONTINGENCIES AND COMMITMENTS 26

TOTAL EQUITY AND LIABILITIES 3,162,029,926 3,047,831,904

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

SHAIKH MOHAMMAD TARIQ SHAHZAD NASEER

Director Director

14
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2007

Note 2007 2006

Rupees Rupees

Sales - Net 27 2,714,494,462 2,453,337,735

Cost of sales 28 (2,421,092,561) (2,219,814,497)

Gross profit 293,401,901 233,523,238

Other operating income 29 7,729,597 8,030,563

Distribution cost 30 (33,619,431) (27,352,174)

Administrative expenses 31 (35,259,284) (35,154,815)

Other operating expenses 32 (4,764,777) (1,820,058)

Finance cost 33 (136,957,237) (142,645,652)

Profit before taxation 90,530,769 34,581,102

Taxation 34 75,815,554 (15,140,580)

Profit for the year 166,346,323 19,440,522

Earning per share - basic and diluted 35 8.98 1.05

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

SHAIKH MOHAMMAD TARIQ SHAHZAD NASEER

Director Director

15
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2007

Note 2007 2006

Rupees Rupees

Cash Flow From Operating Activities

Cash generated from operations 36 219,147,391 502,170,576

Finance cost paid (137,804,748) (145,996,248)
Taxes (paid)/refunded - Net (22,204,356) 22,247,844
Dividend paid (74,835) (26,821)
Staff retirement benefit - gratuity paid (6,116,939) (4,265,264)

Net cash generated from operating activities 52,946,513 374,130,087

Cash Flow From Investing Activities

Proceeds from sale of property, plant & equipment 2,770,163 9,637,584

Fixed capital expenditure (95,001,544) (163,133,020)
Long term loans and advances (419,870) (1,218,200)
Long term deposits 838,182 (257,246)

Net cash used in investing activities (91,813,069) (154,970,882)

Cash Flow From Financing Activities

Proceeds net-off repayments from

Long term financing from banking companies
and other financial institutions (60,950,000) (532,500,000)
Long term loan from directors - 500,000,000
Liabilities against assets subject to finance lease (5,136,652) (19,205,307)
Long term morabaha - (100,000,000)

Net cash used in financing activities (66,086,652) (151,705,307)

Net increase/(decrease) in cash and cash equivalents (104,953,208) 67,453,898

Cash and cash equivalents at the beginning of the year (658,695,413) (726,149,311)

Cash and cash equivalents at the end of the year (763,648,621) (658,695,413)

Cash and cash equivalents

Cash and bank balances 15 8,569,793 25,880,618

Short term borrowings 25 (772,218,414) (684,576,031)
(763,648,621) (658,695,413)

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

SHAIKH MOHAMMAD TARIQ SHAHZAD NASEER

Director Director

16
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2007

Reserves
Capital Revenue
Share Capital Total
Unappropriated Sub Total
Merger reserve General
Profit

----------------------------------------------R u p e e s-------------------------------------------------

Balance as at July 01, 2005 185,303,210 10,376,660 400,000,000 109,765,144 520,141,804 705,445,014

Profit for the year - - - 19,440,522 19,440,522 19,440,522

Balance as at June 30, 2006 185,303,210 10,376,660 400,000,000 129,205,666 539,582,326 724,885,536

Profit for the year - - - 166,346,323 166,346,323 166,346,323

Balance as at June 30, 2007 185,303,210 10,376,660 400,000,000 295,551,989 705,928,649 891,231,859

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

SHAIKH MOHAMMAD TARIQ SHAHZAD NASEER

Director Director

17
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2007

1 STATUS AND ACTIVITIES

The Company is limited by shares, incorporated in Pakistan on June 13, 1988 and is quoted on stock exchanges at Karachi
and Lahore. The principal business of the Company is to manufacture and sale of yarn. The Mills are located at Pattoki and
Raiwind in the province of Punjab. The registered office of the Company is situated at 35-A/1Lalazar area, opposite Beach
Luxury Hotel, Karachi in the province of Sindh, Pakistan.

2 STATEMENT OF COMPLIANCE

2.1 These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan
and the requirements of Companies Ordinance, 1984. Approved accounting standards comprise of such International
Financial Reporting Standards (IFRSs) as notified under the provisions of the Companies Ordinance, 1984. Whenever, the
requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of
Pakistan differ with the requirements of these standards, the requirements of the Companies Ordinance, 1984 or the
requirements of the said directives take precedence.

2.2 Standards, Interpretations and amendments to published approved accounting standards

2.2.1 Amendments to published standards effective in 2006

IAS 19 (Amendment) - Employee Benefits, is mandatory for the company's accounting periods beginning on or after July
01, 2006. It introduces the option of an alternative recognition approach for actuarial gains and losses. It also adds new
disclosure requirements. The company does not intend to adopt the alternative approach for recognition of actuarial gains
and losses. Adoption of this amendment only impacts the format and extent of disclosures as presented in note 21 to the
financial statements.

2.2.2 Standards, amendments and interpretations effective in 2006 but not relevant

Other new standards, amendments and interpretations that are mandatory for accounting periods beginning on or after July
01, 2006 are considered not to be relevant or have any significant effect to the company's operations.

2.2.3 International financial reporting standards or interpretations not yet effective but relevant
The following new standards and amendments of approved accounting standards are only effective for accounting periods
beginning on or after July 01, 2007.
IAS - 1 Presentation of financial statements - amendments relating to capital disclosures
IAS - 23 (Revised) Borrowing Costs
IAS - 41 Agriculture
IFRS - 2 Share based payment
IFRS - 3 Business combinations
IFRS - 5 Non-current Assets Held for Sale and Discontinued Operations
IFRS - 6 Exploration for and Evaluation of Mineral Resources
In addition, interpretations in relation to certain IFRSs have been issued by the International Accounting Standards Board
(IASB) that are not yet effective.
The company expects that the adoption of the above standards, amendments and interpretations will have no impact on the
company's financial statements in the period of initial application other than increased disclosures.

18
3 BASIS OF MEASUREMENT
These financial statements have been prepared under the historical cost convention except for revaluation of certain
financial instruments at fair value and recognition of certain staff retirement benefits at present value.

The preparation of financial statements in conformity with approved accounting standards requires management to make
estimates, assumptions and use judgments that affect the application of policies, reported amounts of assets, liabilities,
income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical
experience and other factors, including reasonable expectations of future events. Revision to accounting estimates are
recognized prospectively commencing from the period of revision.

Judgments and estimates made by the management that may have significant risk of material adjustments to the financial
statements in subsequent years are discussed in note 41.
Functional and presentation currency
These financial statements are presented in Pak Rupee which is company's functional currency.
4 SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of theses financial statements are set out below. These
policies have been consistently applied to all the years presented unless otherwise stated.

4.1 Property, plant and equipments - owned

Property, plant and equipment except for free-hold land are stated at cost less accumulated depreciation and any identified
impairment loss, if any. Freehold land is stated at cost less any identified impairment loss.
Depreciation on all items of property, plant and equipment except for freehold land is charged to income applying the
reducing balance method at the rates specified in the note 5.
Depreciation on additions during the year is charged on pro-rata basis when the asset is available for use. Similarly the
depreciation on deletion is charged on pro-rata basis up to the period when the asset is derecognized.

Expenditure incurred subsequent to the initial recognition of asset is capitalized only when it increases the future economic
lives embodied in the items of above assets. All other expenditure is recognized in the profit and loss account as an
expense.

Gain or loss on disposal of property, plant and equipment are charged to income during the period in which they are
incurred.

4.2 Accounting for leases and assets subject to finance leases

Assets held under finance leases are recognized as assets of the company at their fair value at the date of acquisition or, if
lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.
Financial charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the
outstanding liability.
Depreciation is charged at rates used for similar owned assets, so as to depreciate the assets over their estimated useful
lives in view of certainty of ownership of the assets at the end of the lease term.
Income arising from sale and lease back transactions, if any, is deferred and amortized equally over the lease period.

Lease rentals payable on assets held under operating leases are charged to income in arriving at operating profits.
4.3 Capital work in progress
Capital work in progress is stated at cost less any identified impairment loss. Transfers are made to relevant fixed assets
category as and when assets are available for use.

19
4.4 Stores, spare parts and loose tools
These are valued at lower of cost and net realizable value. Cost is determined by moving average method. Items considered
obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value plus other charges incurred
thereon.
4.5 Stock in trade
These are valued at lower of cost and net realizable value (NRV) except waste which is valued at NRV, cost is determined
as follows:
Weighted average cost except those in transit which are stated at
Raw material
cost comprising invoice value plus other charges incurred thereon

Finished goods and work in process Raw material cost plus appropriate manufacturing overheads
Net realizable value signifies the selling prices prevailing in the market less selling expenses incidental to sales.
4.6 Trade debts
Trade debts originated by the Company are recognized and carried at original invoice value less any allowance for
uncollectible amounts. An estimated provision for doubtful debts is made when collection of the full amount is no longer
probable. Bad debts are written off as incurred.
4.7 Cash and cash equivalents
Cash in hand, cash at bank and short term deposits, which are held to maturity, are carried at cost. For the purpose of cash
f low statements, cash and cash equivalent are short term highly liquid instruments that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in values.
4.8 Staff retirement benefit
Defined benefit plan
The company operates an unfunded gratuity scheme covering for all its permanent employees who have attained the
minimum qualifying period for entitlement to the gratuity.
Provision is made annually to cover the obligation on the basis of actuarial valuation and charged to income currently. The
most recent actuarial valuation was carried on June 30, 2007 using the Projected Unit Credit Method.
Actuarial gains and losses are recognized as income or expense when the net cumulative unrecognized actuarial gains and
losses for the plan at the end of previous reporting period exceeds 10 percent of the present value of defined benefit
obligation at that date.

4.9 Taxation
Current
Provision for current taxation is based on taxable income at current enacted rates of taxation after taking into account tax
credits, rebates and exemptions available, if any. The charge for current tax includes any adjustment to past years
liabilities.
Deferred
Deferred tax is provided, using the balance sheet liability method, on all temporary differences at the balance sheet date
between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all
deductible temporary differences and carry-forward of unused tax losses and tax credits to the extent that it is probable that
future taxable profits will be available against which deferred tax asset can be utilized, except where the deferred tax asset
relating to the deductible temporary difference arises from the initial recognition of an asset or liability that, at the time of
transaction, affects neither the accounting nor taxable profits.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized.

Deferred tax asset and liability is measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on the rates (and tax laws) that have been enacted or substantively enacted at the
balance sheet date.

20
4.10 Trade and other payables
Liabilities for trade and other amounts payable are carried at cost which is fair value of the consideration to be paid in the
future for goods and services received, whether or not billed to the company.

4.11 Provisions
A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of past
event, and it is probable that an out flow of resource embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of obligation.
4.12 Borrowing cost
All mark up, interest and other charges incurred are charged to current income on an accrual basis.
4.13 Revenue recognition
Revenue is recognized on dispatch of goods or on performance of services. Return on deposits is recognized on a time
proportion basis by reference to the principal outstanding and the applicable rate of return.

4.14 Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into Pak Rupee at the rate of exchange prevailing at the
balance sheet date, except those covered by forward contracts, which are stated at contracted rates. Foreign currency
transactions are translated into Pak Rupees at the rates prevailing at the date of transaction except for those covered by
forward contracts, which are translated at contracted rates. Non monetary items are translated into Pak Rupee on the date of
transaction or on the date when fair values are determined. Exchange differences are included in income currently.

4.15 Financial instruments

All the financial assets and financial liabilities are recognized at the time when the company becomes a party to the
contractual provisions of the instruments. Any gain or loss on derecognition of the financial assets and financial liabilities
is taken to profit and loss account currently.
4.16 Offsetting of financial assets and liabilities
A financial asset and financial liability is offset and the net amount is reported in the balance sheet if the company has a
legal enforceable right to set off the recognized amounts and intends either to settle on net basis or to realize the assets and
the liabilities simultaneously.
4.17 Impairment
At each balance sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount to which the asset belongs. Recoverable amount is the greater of net selling price and value in use.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. Impairment losses are recognized as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is
recognized as income immediately.
4.18 Related party transactions
All transactions with related parties are carried out by the company at arms' length price using the method prescribed under
the Companies Ordinance, 1984 with the exception of loan taken from related parties which is interest/ mark up free.
4.19 Dividend
The dividend distribution to the shareholders is recognized as a liability in the period in which it is approved by the
shareholders.

21
 5 PROPERTY, PLANT AND EQUIPMENT

Cost Depreciation
Charge / Book value as at
Particulars As at Addition/ As at Rate As at As at
(deletion) for June 30, 2007
July 01, 2006 (Deletion) June 30, 2007 July 01, 2006 June 30, 2007
the year
-----------------------Rupees-------------------------- -----------------------Rupees------------------------- -----Rupees-----
OWNED
Freehold Land 58,188,022 (293,207) 57,894,815 - - - - 57,894,815
Building on Freehold Land 416,841,327 15,871,165 432,712,492 10% 124,254,888 29,788,300 154,043,188 278,669,304
Plant and Machinery 2,335,151,122 84,114,791 2,419,265,913 10% 705,334,539 164,709,297 870,043,836 1,549,222,077
Electric Installation 85,974,416 1,321,154 87,295,570 10% 37,122,928 4,985,059 42,107,987 45,187,583
Tools and Equipment 40,343,308 1,036,042 41,379,350 10% 10,091,746 3,051,219 13,142,965 28,236,385
Furniture and Fixtures 6,480,759 751,453 7,232,212 10% 2,359,760 470,191 2,829,951 4,402,261
Office Equipment 1,993,038 69,700 2,062,738 10% 1,117,482 93,081 1,210,563 852,175
Computer 6,637,853 904,166 7,542,019 30% 4,223,379 995,592 5,218,971 2,323,048
Vehicles 35,718,707 105,000 32,298,871 20% 17,909,852 3,459,522 18,950,399 13,348,472
(3,524,836) (2,418,975)

22
2,987,328,552 104,173,471 3,087,683,980 902,414,574 207,552,261 1,107,547,860 1,980,136,120
(3,818,043) (2,418,975)
LEASED
Plant and Machinery 17,550,900 - 17,550,900 10% 1,431,553 1,611,935 3,043,488 14,507,412
Vehicles 8,628,000 1,905,452 10,533,452 20% 1,798,080 1,542,612 3,340,692 7,192,760
Total Rupees 2007 3,013,507,452 106,078,923 3,115,768,332 905,644,207 210,706,808 1,113,932,040 2,001,836,292
(3,818,043) (2,418,975)

Total Rupees 2006 2,772,415,717 256,246,164 3,013,507,452 699,100,648 213,822,170 905,644,207 2,107,863,245
(15,154,429) (7,278,611)

2007 2006
Note Rupees Rupees
5.1 Depreciation for the year has been
allocated as under:
Cost of sales 28 207,093,944 209,732,872
Administrative expenses 31 3,612,864 4,089,298
210,706,808 213,822,170
 5.2 DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT

Accumulated Sale Mode of

Particulars Cost Book value Name of buyer Address
depreciation proceeds disposal
---------------------------Rupees-------------------------------

Vehicles 601,523 382,640 218,883 225,000 Ghulam Hussain Ismail Nagar, Lahore. Negotiation

EFU General Insurance

699,976 603,481 96,495 550,000 Karachi Insurance claim
Company Limited

379,100 314,901 64,199 60,000 Muhammad Iqbal Hussain Main Market Gulberg, Lahore Negotiation

485,000 330,946 154,054 115,000 Saif Ullah Khan Tajpura , Lahore. Negotiation

5,117 3,514 1,603 10,000 Amir Rasheed Main Market, Gulberg, Lahore Negotiation

EFU General Insurance

645,397 346,965 298,432 550,000 Karachi Insurance claim
Company Limited

23
708,723 436,528 272,195 270,000 Rana Nisar Ahmad Phool Nagar, Tehsil Pattoki Negotiation

3,524,836 2,418,975 1,105,861 1,780,000

Government
Land 293,207 - 293,207 990,163 National High Way Authority Lahore land acquisition
claim

293,207 - 293,207 990,163

 2007 2006
Rupees Rupees
6 CAPITAL WORK IN PROGRESS
Building-civil work - 11,865,530
Plant and machinery 3,522,360 828,757
3,522,360 12,694,287
7 LONG TERM LOANS AND ADVANCES
Loans to employees - considered good
Executives 7.1 680,000 1,185,000
Others 3,487,838 3,178,732
4,167,838 4,363,732
Less: current portion
Executives 240,000 660,000
Others 2,289,768 2,485,532
2,529,768 3,145,532
1,638,070 1,218,200

7.1 Executives
Opening balance 1,185,000 1,845,000
Disbursement during the year 500,000 -
1,685,000 1,845,000
Less: Repayment during the year (1,005,000) (660,000)
680,000 1,185,000
7.1.1 All the loans are granted to the employees in accordance with their terms of employment.
7.1.2 The maximum aggregate amount due from executives at the end of any month during the year was Rs. 1,310,000
(2006: Rs. 1,790,000).
2007 2006
Rupees Rupees
8 LONG TERM DEPOSITS
Security deposits
Electricity 449,898 887,600
Leasing company 878,015 1,308,495
Others 1,684,140 1,654,140
3,012,053 3,850,235
9 STORES, SPARE PARTS AND LOOSE TOOLS
Stores 50,058,519 46,351,946
Spare parts 46,492,575 41,598,962
Loose tools 217,983 133,632
96,769,077 88,084,540
10 STOCK IN TRADE
Raw material 537,654,961 461,136,416
Work in process 23,832,496 15,142,278
Finished goods 75,325,112 58,364,668
Waste 7,927,445 3,615,168
644,740,014 538,258,530

24
 2007 2006
Rupees Rupees
11 TRADE DEBTS
Considered good
Secured 148,090,157 48,722,326
Unsecured 204,822,705 164,306,524
352,912,862 213,028,850
12 LOANS AND ADVANCES
Considered good
Current portion of loans to employees 7 2,529,768 3,145,532
Advances to/for
Suppliers/expenses 18,157,839 15,159,967
Suppliers against letters of credit 12,922,903 21,644,292
Advance income tax - net 3,669,079 1,998,411
37,279,589 41,948,202
13 TRADE DEPOSITS AND SHORT TERM PREPAYMENTS
Security deposits 1,621,400 1,018,094
Prepayments 1,095,755 -
2,717,155 1,018,094
14 OTHER RECEIVABLES
Considered good
Export rebate 276,580 421,292
Sales tax 8,756,081 13,565,811
9,032,661 13,987,103
15 CASH AND BANK BALANCES
Cash with banks
Current accounts 7,930,379 25,306,766
Saving accounts 15.1 639,414 573,852
8,569,793 25,880,618
15.1 It carries mark up at the rate of 1 percent (2006: 3.5 percent) per annum.

16 ISSUED, SUBSCRIBED AND PAID UP CAPITAL

2007 2006
Number of shares

13,479,600 13,479,600 Ordinary shares of Rs. 10 each fully paid 134,796,000 134,796,000
in cash.

1,962,334 1,962,334 Ordinary shares of Rs. 10 each fully paid 19,623,340 19,623,340
for consideration other than cash.

3,088,387 3,088,387 Ordinary shares of Rs. 10 each issued as 30,883,870 30,883,870

fully paid bonus shares.

18,530,321 18,530,321 185,303,210 185,303,210

16.1 Associated Company [Din Leather (Pvt) Limited] held 6,000 (2006: 6,000) ordinary shares of the Company.

16.2 The shareholders' are entitled to receive all distributions to them including dividend and other entitlements in the form of
bonus and right shares as and when declared by the Company. All shares carry "one vote" per share without restriction.

25
 2007 2006
Rupees Rupees
17 RESERVES
Capital
Merger reserve 17.1 10,376,660 10,376,660
Revenue
General 400,000,000 400,000,000
Unappropriated profit 295,551,989 129,205,666
705,928,649 539,582,326

17.1 This represent book difference of capital under scheme of arrangement for amalgamation with Din Power Limited in the
year 2001.
2007 2006
Rupees Rupees
18 LONG TERM FINANCING
Secured - From banking companies and other financial institutions
ABN Amro Bank Limited 18.1 62,500,000 87,500,000
Habib Bank Limited 18.2 600,000,000 700,000,000
Pak Oman Investment Company Limited 18.3 64,050,000 -
726,550,000 787,500,000
Less: Current portion (225,000,000) (125,000,000)
501,550,000 662,500,000

18.1 This loan is secured against first pari passu hypothecation charge of Rs. 134 million over plant and machinery and
equipment of the company inclusive of 25 percent margin. This loan is repayable in 8 equal semi annual installments of
Rs. 12.5 million each commencing from May 29, 2006. It carries mark up at rate of six months KIBOR plus 0.8 % payable
semi annually. The effective rate of mark up is 10.8 percent per annum.
18.2 This is secured against first pari passu hypothecation charge over all present and future overall existing and future fixed
and floating assets of the Company excluding land, and is repayable in 8 equal semi annually installments of Rs. 100
million each commencing from May 26, 2006. It carries mark up at the rate of 6 percent per annum payable quarterly.
which is also the effective rate of mark up.
18.3 This loan is secured against first pari passu hypothecation charge over all present and future assets with 25 percent margin.
This loan is repayable in 12 equal semi annual installments of Rs. 5,337,500 each commencing from December 04, 2008.
It carries mark up at rate of 7 percent per annum, which is also effective rate of mark up.
19 LONG TERM LOAN FROM DIRECTORS
This is unsecured, interest free and not repayable within next twelve months.
2007 2006
Rupees Rupees
20 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE
Minimum lease payment
Up to one year 2,718,426 4,767,825
More than one year but less than five years 1,588,126 2,844,076
4,306,552 7,611,901
Less: Financial charges not yet due
Up to one year 139,980 195,506
More than one year but less than five years 46,863 65,486
186,843 260,992
Present value of minimum lease payment
Up to one year 2,578,446 4,572,319
More than one year but less than five years 1,541,263 2,778,590
4,119,709 7,350,909
Less: Current portion shown under current liabilities 2,578,446 4,572,319
1,541,263 2,778,590

26
20.1 These represent finance leases which have been obtained under the lease arrangement for vehicles and plant and
machinery. The total minimum lease payments are payable in 36 monthly installments. The internal rate of return ranges
from 6.75 to 10 (2006: 6.75 to 7) percent per annum are used as discounting factor. The company intend to exercise the
option of purchasing the leased assets upon completion of lease term. These are secured against demand promissory notes
and security deposits.
2007 2006
Rupees Rupees
21 STAFF RETIREMENT BENEFIT-GRATUITY

21.1 Movement in the net liability recognized in the balance sheet

Opening net liability 33,545,824 28,761,720

Expense for the year 21.2 11,051,012 9,049,368

44,596,836 37,811,088
Benefits paid during the year (6,116,939) (4,265,264)

Closing net liability 38,479,897 33,545,824

21.2 Expense recognized in the profit and loss account

Current service cost 7,842,886 6,634,666
Interest cost 3,208,126 2,414,702

11,051,012 9,049,368
21.3 The movement in the present value of defined benefit obligation

Present value of defined benefit obligation 35,879,389 27,799,444

Current service cost 7,842,886 6,634,666
Interest cost 3,208,126 2,414,702
Actuarial (loss/gain) 5,883,393 3,295,841
Benefits paid (6,116,939) (4,265,264)
46,696,855 35,879,389

21.4 Historical information

2007 2006 2005 2004 2003
Present value of defined
benefit obligation 46,696,855 35,879,389 27,799,444 24,023,982 18,568,308
Experience adjustments
on plan liabilities (5,883,393) (3,295,841) 1,005,009 (631,570) 588,837

2007 2006
Rupees Rupees
21.5 Reconciliation
Present value of defined benefit obligation 46,696,855 35,879,389
Unrecognized actuarial gain/(loss) (8,216,958) (2,333,565)
38,479,897 33,545,824
21.6 General description
The scheme provides for terminal benefits for all of its permanent employees who attain the minimum qualifying period.
Annual charge is made using the actuarial technique of Projected Unit Credit Method.
2007 2006
Rupees Rupees
21.7 Principal actuarial assumption
Following are a few important actuarial assumption used in the valuation.
% %
Discount rate 9 9
Expected rate of increase in salary 8 7

27
 2007 2006
Rupees Rupees
22 DEFERRED TAXATION
The liability of deferred taxation comprises of temporary differences.
Taxable temporary differences
Accelerated tax depreciation allowance 167,237,691 178,341,324
Deductible temporary differences
Provision for staff retirement benefit - gratuity (6,733,982) (5,870,519)
Unused tax credits-unabsorbed tax depreciation (84,119,575) -
76,384,134 172,470,805
22.1 In view of applicability of presumptive tax regime on major portion of taxable income. Deferred tax liability has been
worked out after taking effect of income covered under presumptive tax regime.
2007 2006
Rupees Rupees
23 TRADE AND OTHER PAYABLES
59,936,417 46,558,791
Creditors
41,072,193 32,632,504
Accrued liabilities
1,599,132 1,490,514
Advances from customers
2,738,614 2,683,074
Security deposits
774,596 8,992,296
Retention money
23.1 4,429,581 4,429,581
Excise duty on loans
23.2 14,759,966 14,759,965
Sales tax claim payable
592,394 854,965
Withholding tax payable
23.3 4,797,116 1,832,859
Workers' profit participation fund
2,967,141 3,041,976
Unclaimed dividend
133,667,150 117,276,525

23.1 The company has provided for excise duty payable on loans from banks/financial institutions. The High Court of Sindh has
decided the case in favor of the company. The Supreme Court of Pakistan have allowed the appeal of Federation of
Pakistan but the details of the judgment are still awaited. The full position as regards to the liability of the company will
become known once the judgment is received.
23.2 The company has filed appeal in high court of Sindh at Karachi against the order of custom/excise and sales tax appellate
tribunal Karachi regarding penalty and additional tax.
2007 2006
Rupees Rupees
23.3 Workers' profit participation fund
Opening balance 1,832,859 1,228,827
Interest on fund utilized in company's business 33 32,339 12,801
1,865,198 1,241,628
Paid during the year (1,832,859) (1,228,827)
32,339 12,801
Allocation for the year 4,764,777 1,820,058
Closing balance 4,797,116 1,832,859
24 ACCRUED MARK-UP AND INTEREST
Mark up/interest accrued on secured loans
Long term financing 5,127,769 5,121,210
Short term borrowings 14,245,620 14,780,620
Finance lease 5,374 324,444
19,378,763 20,226,274

28
 2007 2006
Rupees Rupees
25 SHORT TERM BORROWINGS
From banking companies
Secured
Running finance 25.1 61,095,419 404,464,540
Term finance 25.1 455,000,000 63,734,637
Morabaha 25.1 256,122,995 216,376,854

772,218,414 684,576,031

25.1 Total credit limits available for short term bank borrowings are Rs 3,465 million (2006: Rs. 2,640 millions). These
borrowings were secured against first pari passu hypothecation charge over company's stocks and book debts and lien on
export documents. Mark up is payable on quarterly basis and mark up ranges from 5.72 to 13.41 (2006: 6 to 12.61)
percent per annum. Average effective interest rate is 9.67 percent. These facilities are expiring on various dates by April
30, 2008.
2007 2006
Rupees Rupees
26 CONTINGENCIES AND COMMITMENTS
Contingencies
Bills discounted with recourse 167,067,025 35,388,900
Bank guarantees issued in the ordinary course of business 49,309,200 30,309,200
Commitments
Capital commitment in respect of civil work - 2,995,540
Letters of credit for capital expenditure 2,244,280 -
Letters of credit for other than capital expenditure 43,056,908 23,083,598

27 SALES - NET
Yarn
Export 27.1 948,517,689 972,388,818
Indirect export 528,754,057 6,390,024
Local 1,206,707,062 1,453,760,537
Raw cotton 45,981,415 7,729,944
Waste 42,454,557 70,591,209
2,772,414,780 2,510,860,532
Less:
Commission and claims (57,920,318) (57,522,797)

2,714,494,462 2,453,337,735

27.1 This includes net exchange loss and export rebate received amounting to Rs. 3,460,535 (2006: Rs. 5,989,022) and Rs.
2,293,036 (2006: Rs. 2,346,501) respectively.
2007 2006
Rupees Rupees

28 COST OF SALES
Cost of goods manufactured 28.1 2,272,212,953 2,101,950,546
Finished goods
Opening stock 61,979,836 62,818,069
Purchases 170,152,329 117,025,718
Closing stock (83,252,557) (61,979,836)

2,421,092,561 2,219,814,497

29
 2007 2006
Rupees Rupees
28.1 Cost of goods manufactured
Raw material consumed 28.1.1 1,512,869,166 1,354,141,805
Packing material consumed 40,660,582 31,857,949
Stores and spares consumed 51,869,916 48,990,793
Salaries, wages and other benefits 28.1.2 200,499,022 162,294,124
Fuel and power 237,482,091 251,883,007
Insurance 10,875,317 18,655,046
Repairs and maintenance 4,516,669 377,122
Depreciation 5.1 207,093,944 209,732,872
Vehicle running and maintenance 3,573,909 3,744,605
Books and periodicals 459,203 536,796
Postage and telephone 595,900 437,826
Traveling and conveyance 1,649,977 1,697,375
Legal and professional 24,000 175,400
Rent, rates and taxes 1,835,326 1,319,913
Other overheads 6,898,149 12,246,866

2,280,903,171 2,098,091,499
Work in process
Opening stock 15,142,278 19,001,325
Closing stock (23,832,496) (15,142,278)
(8,690,218) 3,859,047

2,272,212,953 2,101,950,546
28.1.1 Raw material consumed

Opening stock 461,136,416 572,148,828

Purchases 1,520,866,539 1,176,341,500
1,982,002,955 1,748,490,328
Closing stock (537,654,961) (461,136,416)
1,444,347,994 1,287,353,912
Dyeing charges 68,521,172 66,787,893

1,512,869,166 1,354,141,805

28.1.2 Salaries, wages and other benefits include Rs. 10,078,201 (2006: Rs. 8,600,997) in respect of staff retirement benefit.

2007 2006
Rupees Rupees
29 OTHER OPERATING INCOME

Income from non financial assets

Scrap sales 6,358,502 6,268,801
Gain on sale of property, plant & equipment 1,371,095 1,761,762

7,729,597 8,030,563

30 DISTRIBUTION COST
Ocean freight 18,077,557 13,271,281
Air freight - 175,355
Local freight 7,776,931 6,544,010
Clearing and forwarding 2,677,402 2,787,231
Export development surcharge 2,402,292 1,732,566
Samples and others 2,670,954 2,393,974
Traveling expense 14,295 447,757
33,619,431 27,352,174

30
 2007 2006
Rupees Rupees
31 ADMINISTRATIVE EXPENSES
Director's remuneration 37 6,264,000 7,740,000
Staff salaries and other benefits 31.1 10,404,752 8,629,472
Traveling and conveyance 1,313,538 1,606,345
Vehicle running and maintenance 2,368,822 3,053,303
Rent, rates and taxes 204,684 348,775
Electricity, gas and water 1,256,217 1,147,989
Printing and stationery 633,700 537,252
Fees, subscription and periodicals 868,412 343,200
Legal and professional 1,369,514 503,745
Auditors' remuneration 31.2 435,000 310,000
Repairs and maintenance 798,995 1,493,684
Postage and telephone 2,259,972 3,086,158
Entertainment 234,936 207,823
Advertisement 126,379 24,655
Donation 31.3 58,576 632,860
Depreciation 5.1 3,612,864 4,089,298
Others 3,048,923 1,400,256
35,259,284 35,154,815

31.1 Staff salaries and other benefits includes Rs. 972,811 (2006: Rs. 448,371) in respect of staff retirement benefits.
2007 2006
Rupees Rupees
31.2 Auditors' remuneration

Audit fee 275,000 250,000

Half yearly and other reviews 60,000 60,000
Tax services 100,000 -
435,000 310,000

31.3 No directors or their spouses had any interest in the donee funds.
32 OTHER OPERATING EXPENSES
Workers' profit participation fund 23.3 4,764,777 1,820,058

4,764,777 1,820,058
33 FINANCE COST
Mark up/interest on
Long term financing 49,053,335 70,158,664
Finance lease 250,059 946,625
Short term borrowings 80,185,800 65,796,359
Workers' profit participation fund 23.3 32,339 12,801
Bank charges and commission 7,435,704 5,731,203

136,957,237 142,645,652
34 TAXATION
Provision for taxation
Current 20,271,117 13,153,566
Prior year - 2,016,209
Deferred (96,086,671) (29,195)

(75,815,554) 15,140,580

31
34.1 The assessment of the company will be finalized in respect of export proceeds under presumptive tax regime under section
169. Other than export income, assessment will be finalized under the universal self assessment scheme of Income Tax
Ordinance, 2001.
34.2 The numerical reconciliation between the average tax rate and the applicable tax rate has not been presented in these
financial statements as the total income of the company falls under sections 154 and 169 of the Income Tax Ordinance,
2001. Assessment has been finalized up to Tax year 2006.
2007 2006
35 EARNING PER SHARE -BASIC AND DILUTED
Basic earning per share
Profit after taxation Rupees 166,346,323 19,440,522
Weighted average number of ordinary shares
outstanding during the year Numbers 18,530,321 18,530,321
Earning per share - Basic Rupees 8.98 1.05
Diluted earning per share
There is no dilutive effect on the basic earnings per share of the Company.
2007 2006
Rupees Rupees
36 CASH GENERATED FROM OPERATIONS
Profit before taxation 90,530,769 34,581,102
Adjustment for
Depreciation 210,706,808 213,822,170
Staff retirement benefit - gratuity 11,051,012 9,049,368
Finance cost 136,957,237 142,645,652
Gain on disposal of property, plant and equipment (1,371,095) (1,761,762)
357,343,962 363,755,428
Profit before working capital changes 447,874,731 398,336,530
(Increase)/decrease in current assets
Stores, spare parts and loose tools (8,684,537) (6,494,559)
Stock in trade (106,481,484) 115,709,692
Trade debts (139,884,012) 35,266,899
Loans and advances 6,339,281 (4,958,021)
Deposits and short term prepayments (1,699,061) (159,899)
Other receivables 4,954,442 (10,312,788)
(245,455,371) 129,051,324
(Decrease)/increase in current liabilities
Trade and other payables 16,728,031 (25,217,278)
Cash generated from operations 219,147,391 502,170,576

37 REMUNERATION TO DIRECTORS AND EXECUTIVES

2007 2006
Directors Executive Directors Executive
-----------------------------------Rupees------------------------------------
Remuneration 5,598,750 7,368,770 5,811,000 8,224,934
House rent allowance 67,500 2,947,508 1,350,000 3,289,973
Utility and medical allowance 597,750 736,877 579,000 822,493

6,264,000 11,053,155 7,740,000 12,337,400

Number of persons 5 11 5 12
37.1 The chief executive of the Company has waived off his remuneration.

32
38 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURE

2007

Interest/Mark up bearing Non Interest/Mark up bearing

More than one Within one More than one Total Credit Risk
Within one year year Sub Total year year Sub Total
----------------------------------------------------- Rupees ------------------------------------------------------------------
FINANCIAL ASSETS
Long term deposits - - - - 3,012,053 3,012,053 3,012,053 3,012,053
Trade debts - - - 352,912,862 - 352,912,862 352,912,862 352,912,862
Loans and advances - - - 2,529,768 1,638,070 4,167,838 4,167,838 4,167,838
Trade deposits and - - -
short term prepayments 1,621,400 - 1,621,400 1,621,400 1,621,400
Other receivables - - - - - - - -
Cash and bank balances 639,414 - 639,414 7,930,379 - 7,930,379 8,569,793
639,414 - 639,414 364,994,409 4,650,123 369,644,532 370,283,946 361,714,153
FINANCIAL LIABILITIES
Long term financing from
Banking companies and
other financial institutions 225,000,000 501,550,000 726,550,000 - - - 726,550,000
Directors - - 500,000,000 500,000,000 500,000,000
Finance lease 2,578,446 1,541,263 4,119,709 - - 4,119,709
Long term morabaha - - -
Trade and other payable - - - 112,878,471 - 112,878,471 112,878,471
Accrued mark up and interest - - - 19,378,763 - 19,378,763 19,378,763
Short term borrowings 772,218,414 - 772,218,414 - - - 772,218,414
999,796,860 503,091,263 1,502,888,123 132,257,234 500,000,000 632,257,234 2,135,145,357
On balance sheet gap (999,157,446) (503,091,263) (1,502,248,709) 232,737,175 (495,349,877) (262,612,702) (1,764,861,411)

2006
Interest/Mark up bearing Non Interest/Mark up bearing
More than one Within one More than one Total Credit Risk
Within one year year Sub Total year year Sub Total
----------------------------------------------------------------------------- Rupees ---------------------------------------------------------------------------
FINANCIAL ASSETS
Long term deposits - - - - 3,850,235 3,850,235 3,850,235 3,850,235
Trade debts - - - 213,028,850 - 213,028,850 213,028,850 213,028,850
Loans and advances - - - 3,145,532 1,218,200 4,363,732 4,363,732 4,363,732
Trade deposits and
short term prepayments - - - 1,018,094 - 1,018,094 1,018,094 1,018,094
Cash and bank balances 573,852 - 573,852 25,306,766 - 25,306,766 25,880,618 -
573,852 - 573,852 242,499,242 5,068,435 247,567,677 248,141,529 222,260,911
FINANCIAL LIABILITIES
Long term financing from
Banking companies 125,000,000 662,500,000 787,500,000 - - - 787,500,000
Directors - - 500,000,000 500,000,000 500,000,000
Finance lease 4,572,319 2,778,590 7,350,909 - - 7,350,909
Long term morabaha - - -
Trade and other payable - - - 96,596,465 - 96,596,465 96,596,465
Accrued mark up and interest - - - 20,226,274 - 20,226,274 20,226,274
Short term borrowings 684,576,031 - 684,576,031 - - - 684,576,031
814,148,350 665,278,590 1,479,426,940 116,822,739 500,000,000 616,822,739 2,096,249,679
On balance sheet gap (813,574,498) (665,278,590) (1,478,853,088) 125,676,503 (494,931,565) (369,255,062) (1,848,108,150)

33
 2007 2006
Rupees Rupees
OFF BALANCE SHEET ITEMS
Bills discounted with recourse 167,067,025 35,388,900
Bank guarantees issued in the ordinary course of business 49,309,200 30,309,200
Capital commitment in respect of civil work - 2,995,540
Letter of credit for capital expenditures 2,244,280 -
Letter of credit for other than capital expenditures 43,056,908 23,083,598

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

38.1 Financial risk management objectives

The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign exchange rates, market interest rates
such as Karachi Inter-Bank Offered Rate and London Inter-Bank Offered Rate, credit and liquidity risk associated with various financial assets
and liabilities respectively.

The company finances its operations through equity, borrowings and management of working capital with a view to maintain a reasonable mix
between the various sources of finance to minimize risk.

(a) Concentration of credit risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as
contracted. The company's credit risk is primarily attributable to its trade debts and balances with banks. The credit risk on liquid funds is
limited because the counter parties are banks with reasonable high credit ratings. The company has no significant concentration of credit risk as
exposure is spread over a large number of counter parties in the case of trade debts. Out of total financial assets of Rs. 370.283 million (2006:
Rs. 248.142 million) financial assets which are subject to credit risk amount to Rs. 361.714 million (2006: Rs. 222.260 million). To manage
exposure to credit risk, the company applies credit limits to its customer and also obtain collaterals and security deposits, where considered
necessary.
(b) Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rate. Currency risk arises
mainly where receivables and payables exist due to transactions with foreign buyers and suppliers. Payables exposed to foreign currency risk are
covered through forward foreign exchange contracts.
(c) Interest rate risk
Interest rate risk is the risk that the value of a financial instruments will fluctuate due to changes in market interest rates. The company usually
borrows funds at fixed and market based rates and as such the risk is minimized. Significant interest rate and cash flow risk exposures are
primarily managed by contracting floor and cap of interest rates.
(d) Liquidity risk
Liquidity risk reflects an enterprise's inability in raising funds to meet commitments. The company follows an effective cash management and
planning policy to ensure availability of funds and to take appropriate measures for new requirements.
38.2 Fair value of financial instruments
The carrying value of all financial instruments reflected in the financial statements approximate to their fair values. Fair value is determined on
the basis of objective evidence at each reporting date.
39 PLANT CAPACITY AND PRODUCTION
It is difficult to describe precisely the production capacity in textile industry since it fluctuates widely depending on various factors such as
count of yarn spun, raw material used, spindle speed and twist. It would also vary according to the pattern of production adopted in a particular
year.
2007 2006
Total number of spindles installed 61,728 61,728
Total number of spindles worked 60,371 60,090
Number of shifts per day 3 3
Installed capacity converted into 20/1 count (Kgs) 21,527,724 22,036,361
Actual production converted into 20/1 count (Kgs) 19,708,233 20,941,578
Actual production is lower than installed capacity due to the manufacturing of specialized yarn and normal repair and maintenance.

34
40 TRANSACTION WITH RELATED PARTIES
The related parties comprises associated companies, directors and key management personnel. Amounts due to related
parties are shown in the relevant notes to the financial statements. Other transactions with the related parties and associated
undertakings, other than remuneration and benefits to key management personnel under the term of their employment
which is disclose in note 37, are as follows:
2007 2006
Rupees Rupees
Transactions with related parties
Din Leather (Private) Limited - sale of vehicle - 194,969

Balances with related parties

MCB Bank Limited - balance in bank accounts 4,828,685 23,342,356

41 ACCOUNTING ESTIMATES AND JUDGMENTS

Income taxes
The company takes into account the current income tax law and decisions taken by the appellate authorities. Instances
where the company's view differs from the view taken by the income tax departments at the assessment stage and where the
company considers that its view on items of material nature is in accordance with law, the amounts are shown as contingent
liabilities. Furthermore, the company may be able to avail the benefit of the payment of turnover tax, provided sufficient
taxable profits are available in next five years when this credit can be utilized.

Staff retirement benefit - gratuity

Certain actuarial assumptions have been adopted as disclosed in note 21 to the financial statements for valuation of present
value of defined benefit obligation. Any changes in these assumptions in future year might affect unrecognized gains and
losses in those years.
Property, plant and equipment
The company reviews the value of the assets for possible impairment on an annual basis. Any changes in the estimates in
future years might affect the carrying amounts of the respective items of property, plant and equipment with a
corresponding affect on the depreciation charge and impairment.
42 DATE OF AUTHORIZATION FOR ISSUE
These financial statements have been authorized for issue on August 17, 2007 by the Board of Directors of the Company.

43 CORRESPONDING FIGURES
Prior year figures have been reclassified consequent upon certain changes in current year's presentation. Following is the
summary of reclassification made.

Note Reclassification Nature (Rupees)

From To
Short term loans and Long term loans and Loans and advances 1,218,200
7 advances advances

44 GENERAL
These financial statements have been signed by two directors as chief executive officer was out of the country.
Figures have been rounded off to the nearest Rupee.

SHAIKH MOHAMMAD TARIQ SHAHZAD NASEER

Director Director

35
PATTERN OF SHARE HOLDING
AS AT JUNE 30, 2007
Number of Share Holding Total
Shareholders From To Shares Held
83 1 100 5,702
228 101 500 54,634
329 501 1,000 206,586
99 1,001 5,000 197,458
25 5,001 10,000 163,020
9 10,001 15,000 110,520
1 20,001 25,000 25,000
2 25,001 30,000 58,080
1 30,001 35,000 33,000
2 35,001 40,000 74,100
1 40,001 45,000 41,000
1 45,001 50,000 47,086
1 55,001 60,000 57,000
1 70,001 75,000 71,000
1 85,001 90,000 85,440
1 205,001 210,000 208,200
1 220,001 225,000 222,600
1 300,001 305,000 300,182
1 305,001 310,000 309,214
1 470,001 475,000 470,027
1 650,001 655,000 651,500
2 775,001 780,000 1,560,000
3 780,001 785,000 2,343,901
1 845,001 850,000 848,038
1 895,001 900,000 896,412
1 1,010,001 1,015,000 1,014,528
1 1,030,001 1,035,000 1,031,114
2 1,565,001 1,570,000 3,133,519
1 2,095,001 2,100,000 2,096,672
1 2,210,001 2,215,000 2,214,788

803 18,530,321

36
DETAILS OF PATTERN OF S HAREHOLDING
AS AT JUNE 30, 2007

Category-wise
Category No. of No. of Category Percentage
Categories of Shareholders
No. Shares held Folios/CDC wise Shareheld %
Accounts
1 Individuals 4,190,182 759 4,190,182 22.61
2 Investment Companies 225,300 3 225,300 1.22
3 Joint Stock Companies 371,080 17 371,080 2.00
4 Directors, Chief Executive and their Spouse
and minor Children 14 13,021,283 70.27
1. Shaikh Mohammad Muneer 470,027
2. Shaikh Mohammad Naseer 1,200
3. Shaikh Mohammad Jawed 1,238
4. Shaikh Mohammad Pervez 2,096,672
5. Shaikh Mohammad Tariq 2,214,788
6. Shaikh Mohammad Tanveer 783,380
7. Mr. Shahzad Naseer 1,566,760
8. Mr. Shaikh Mohammad Naveed 1,566,759
9. Mr. Irfan Muneer 848,038
10. Mr. Fawad Jawed 780,229
11. Mrs. Saeeda Parveen W/o Mr. S.M. Muneer 960
12. Mrs. Uneza Jawed W/o Mr. S.M. Jawed 780,292
13. Mrs. Ghazala Pervez W/o Mr. S.M. Pervez 1,014,528
14. Mrs. Amna Tariq W/o Mr. S.M. Tariq 896,412
5 Executives - - -
6 FINANCIAL INSTITUTIONS
National Bank of Pakistan Trustees Dept. 609,396
4
National Development Finance Corporation 8,400 617,796 3.33
7 Associated Company and Related Parties
Din Leather (Pvt.) Limited 6,000 1 6,000 0.03
8 Public Sector companies and Corporations
9 Banks, DFIs, NBFIs, Insurance Companies
Modarbas and Mutual Funds 86,560 4 86,560 0.47
10 Freign Investors 12,120 1 12,120 0.07
11 Co-operative Socities - - - -
12 Charitable Trusts - - - -
13 Others - - - -

TOTAL 18,530,321 803 18,530,321 100.00

Shareholders Holding ten percent or more voting interest in the listed company

Total Paid-up Capital of the Company 18,530,321 Shares

10% of the Paid-up Capital 1,853,032 Shares

No. of Percentage
Name of Shareholders Description
Shares held %

Shaikh Mohammad Pervez Falls in category # 4 2,096,672 11.31

Shaikh Mohammad Tariq Falls in category # 4 2,214,788 11.95

37
PROXY FORM

Folio No. CDC Participants ID No. A/C. No.

I/We

Of being

a member(s) of DIN TEXTILE MILLS LIMITED a holder of

Ordinary Shares as per Register Folio No. hereby appoint

Mr./Mrs./Miss: of

Share Register folio No.

is also a member of DIN TEXTlLE MILLS LIMITED, as my proxy to vote for me on my

behalf at the Twentieth Annual General Meeting of the Company to be held on 17th

September 2007 and at any adjournment thereof.

Signed this day of 2007

Witness:
Signature
1. on Rs. 5.00
Revenue Stamps

2. N.B. (Signature should agree with the specimen

Signature registered with the Company)

Notice:

A member entitled to vote at this meeting may appoint a proxy. Proxies in order to be effective must be
received at registered Office of the Company duly stamped, signed and witnessed not later than 48 hours before
the time of the meeting.