KTM 2016

Annual Report 2010
Kohinoor Textile Mills Limited
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
Design & Printed by:
A KOHINOOR MAPLE LEAF GROUP COMPANY
Annual Report 2010
Annual Report 2010
CONTENTS
KOHINOOR TEXTILE MILLS LIMITED
Company Profile
Company Information
Vision Statement
Mission Statement
Statement of Ethics and Business Practices
Statement of Strategic Objectives
Notice of Annual General Meeting
Organization chart
Directors' Report
Brief Profile of Directors
Key Operating and Financial Data-Six Years Summary
Calendar of Major Events
Horizontal Analysis of Financial Statements
Vertical Analysis of Financial Statements
Distribution of wealth
Statement of Compliance with Best Practices of
Code of Corporate Governance
Review Report to the Members on Statement of
Compliance with Best Practices of Code of
Corporate Governance
Auditors' Report
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Financial Statements
Pattern of Holding of the Shares
2
3
4
4
5
6
7
10
20
21
22
23
24
26
27
28
30
31
32
33
70
CONSOLIDATED FINANCIAL STATEMENTS

Directors' Report on Consolidated Financial Statements
Auditors' Report
Balance Sheet
Profit and loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Consolidated Financial Statements
FORM OF PROXY
74
75
76
78
79
80
81
01
Annual Report 2010
Annual Report 2010
COMPANY INFORMATION
BOARD OF DIRECTORS
MR. TARIQ SAYEED SAIGOL
CHAIRMAN
MR. TAUFIQUE SAYEED SAIGOL
CHIEF EXECUTIVE
COMPANY PROFILE
MR. SAYEED TARIQ SAIGOL

MR. WALEED TARIQ SAIGOL
MR. KAMIL TAUFIQUE SAIGOL
MR. ZAMIRUDDIN AZAR
MR. ABDUL HAI MEHMOOD BHAIMIA
CHAIRMAN
MEMBER
MEMBER
MEMBER
CHIEF FINANCIAL OFFICER

MS. BUSHRA NAZ MALIK
COMPANY SECRETARY
MR. MUHAMMAD ASHRAF
INTERNAL AUDITOR
MR. ZEESHAN AHMAD
AUDITORS
M/S. RIAZ AHMAD & COMPANY
CHARTERED ACCOUNTANTS
REGISTERED OFFICE
42-LAWRENCE ROAD, LAHORE.
TEL: (92-042) 36302261-62
FAX: (92-042) 36368721
SHARE REGISTRAR
VISION CONSULTING LTD
3-C, LDA FLATS,
LAWRENCE ROAD, LAHORE.
TEL: (92-042) 36375531-36375339
FAX: (92-042) 36374839
E-Mail: info@vcl.com.pk & vclcom@yahoo.com
Website: www.vcl.com.pk
BANKERS
AL BARAKA ISLAMIC BANK B.S.C. (E.C.)
ALLIED BANK LIMITED
ASKARI BANK LIMITED
BANK ALFALAH LIMITED
FAYSAL BANK LIMITED
MCB BANK LIMITED
MEEZAN BANK LIMITED
NATIONAL BANK OF PAKISTAN
NIB BANK LIMITED
SILK BANK LIMITED
STANDARD CHARTERED BANK (PAKISTAN) LIMITED
HSBC BANK MIDDLE EAST LIMITED
THE BANK OF PUNJAB
UNITED BANK LIMITED
MILLS
PESHAWAR ROAD, RAWALPINDI
TEL: (92-051) 5473940-3 FAX: (92-051) 5471795
8th K.M., MANGA RAIWIND ROAD, DISTRICT KASUR.
TEL: (92-042) 35394133-35 FAX: (92-042) 35394132
GULYANA ROAD, GUJAR KHAN, DISTRICT RAWALPINDI
TEL: (92-0513) 564472-74 FAX: (92-0513) 564337
WEB SITE: www.kmlg.com
Note: KTML financial statements are also available at
the above website.
THEN AND NOW
he Company commenced operation

in 1953 as a private limited company
and became a public limited company
in 1968. The initial capacity of its Rawalpindi
unit comprised 25,000 spindles and 600
looms. Later, fabric processing facilities
were added and spinning capacity was
augmented. Additional production facilities
were acquired on the Raiwind-Manga Road
near Lahore in District Kasur and on the
Gulyana Road near Gujar Khan, by way of
merger.
The Company's production facilities now
comprise 151,902 ring spindles capable of
spinning a wide rang of counts using cotton
and Man-made fibers. The weaving facilities
at Raiwind comprise 204 looms capable of
weaving wide range of greige fabrics.
The processing facilities at the Rawalpindi

unit are capable of dyeing and printing
fabrics for the home textile market. The
stitching facilities produce a diversified
range of home textiles for the export market.
Both the dyeing and stitching facilities are
being augmented to take advantage of
greater market access.
Fully equipped laboratory facilities for
quality control and process optimization
have been up at all three sites. The
Company has been investing heavily in
Information Technology, training of its
human resources and preparing its
management to meet the challenges of
market integration.
Kohinoor Textile Mills Limited continues to
ensure that its current competitive position
is maintained as well as supporting the
ongoing improvement process in our
endeavour to maintain world best practice
manufacturing.
SALES TREND
TANGIBLE FIXED ASSETS-NET
12,000
10,693
6,496
6,000
10,000
7,140
8,000
6,000
7,000
7,558
8,459
6,904
4,695
4,000
2,000
RUPEES IN MILLION
MR. ZAMIRUDDIN AZAR

MR. KAMIL TAUFIQUE SAIGOL
RUPEES IN MILLION
AUDIT COMMITTEE
5,000
3,971
4,000
3,000
2,666
3,973
4,140
3,561
2,000
1,000
0
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
02
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
03
04
Annual Report 2010
Annual Report 2010
Vision Statement
Mission Statement
The Kohinoor Textile Mills Limited Stated Vision

Is To Achieve And Then Remain As The Most
Progressive And Profitable Company In Pakistan
In Terms Of Industry Standards And
Stakeholders Interest.
The Company Shall Achieve Its Mission Through A Continuous

Process Of Having Sourced, Developed, Implemented And
Managed The Best Leading Edge Technology, Industry Best
Practice, Human Resource And Innovative Products And Services
And Sold These To Its Customers, Suppliers And Stakeholders.
05
Annual Report 2010
Statement of Ethics and

Business Practices
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
all employees are fully aware of these principles, it is the responsibility of each employee
to implement the Company's policies. Contravention is viewed as misconduct.
The code emphasizes the need for a high standard of honesty and integrity which are
vital for the success of any business.
PRINCIPLES
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
Company such as interest in an organization supplying goods/services to the
Company or purchasing its products. In case a relationship with such an
organization exists the same must be disclosed to the Management.
2. Dealings with third parties which include Government officials, suppliers,
buyers, agents and consultants must always ensure that the integrity and
reputation of the Company is not in any way compromised.
3. Directors and employees are not allowed to accept any favours, gifts or
kickbacks from any organization dealing with the Company.
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
Company.
5. The Company has strong commitment to the health and safety of its
employees and preservation of environment and the Company will
persevere towards achieving continuous improvement of its HSE
performance by reducing potential hazards preventing pollution and
improving awareness. Employees are required to operate the Company's
facilities and processes keeping this commitment in view.
6. Commitment and team work are key elements to ensure that the Company's
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
Annual Report 2010
Statement Of
Strategic Objectives
2010- 2011
Following are the main principles which constitute the strategic objectives of Kohinoor
Textile Mills Limited:
1. Effective use of available resources and improved capacity utilization of the
Company's production facilities;
2. Modernization of production facilities in order to ensure the most effective
production;
3. Effective marketing and innovative concepts;
4. Implementation of effective technical and human resource solutions;
5. Strengthening independence in terms of secure supply of low-cost services and
resources, including energy supply, transportation and logistics services;
6. Explore alternative energy resources;
7. Further improvements in corporate code governance through restructuring of
assets and optimization of management processes;
8. Personnel development, creating proper environment for professional growth of
highly skilled professionals, ensuring safe labour environment, competitive staff
remuneration and social benefits in accordance with scope and quality of their
work;
9. Compliance with local and international environmental and quality
management standards, implementation of technologies allowing to comply
with the limitations imposed on pollutant emissions; and
10.Implementation of projects in social and economic development of
communities.
07
Annual Report 2010
Annual Report 2010
08
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
Company i.e. M/s. Vision Consulting Ltd, 3-C, LDA Flats, Lawrence Road, Lahore upto the close of
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.
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
Passport. Representatives of corporate members should bring the usual documents required for such
purpose.
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.
Manager
Operations
& Utilities
Manager
Maintenance
Manager
Tax &
Corporate
Company
Secretary
Manager
MIS
General
Manager
Finance
Senior
Manager
Information
Senior
Manager
Commercial
Senior
Manager
Marketing
1.
General
Manager
Production
NOTES:
General
Manager
Finance
(MUHAMMAD ASHRAF)
Company Secretary
General
Manager
Spinning
Lahore: October 09, 2010
General
Manager
Processing
BY ORDER OF THE BOARD
Manager
Marketing
& Home
To transact any other business with the permission of the Chair.
Manager
Procurement
4.
Director
KTML
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 reappointment.
Functional Reporting
3.
Chief Executive Officer

KTML
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.
Managing Director
KRM
2.
Chairman
To confirm the minutes of the Extraordinary General Meeting held on May 03, 2010.
ORGANIZATION CHART OF KTML
1.
Chief Financial Officer/

Group Director Finance
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
Registered Office, 42-Lawrence Road, Lahore, to transact the following business: -
Manager
Human
Resource
NOTICE OF ANNUAL GENERAL MEETING
09
Annual Report 2010
DIRECTORS' REPORT TO THE SHAREHOLDERS

The Directors feel pleasure in presenting the 42nd annual report along with audited financial
statements for the year ended June 30, 2010.
REVIEW OF OPERATIONS
The financial year ended June 30, 2010, was characterized by extremes of market
conditions which led to varying degrees of success in the operating units of the Company,
from windfall profits in the
spinning division to only
nominally positive performance
in the processing and made-ups
division. Extremely strong yarn
markets due to high domestic
demand in China and India,
coupled with the purchase of raw
materials at competitive prices,
led to substantial profits for both
of the Company's spinning units.
Weaving profit was satisfactory

though reduced from the
previous year because of the high
price of yarn. Similarly, strong
fabric prices were one of several
challenges in the made-ups
division.
The Company sold made-ups to

major retailers, a market in which
price increases are not instantaneous and are rarely, if ever, at par with the increases in the
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
level as the cost increases incurred during the year which necessitated financing the madeups division from some of the gains of the spinning units. These factors also contributed to
the fabric division's sub-par performance relative to previous projections.
10
Annual Report 2010
Locally, the Company continues

to face continuous cost
increases, especially in labour,
gas and electricity. In addition,
extremely high general inflation
has raised the price of raw
materials and inputs across the
board. Inflation and most, if not
all, costs are expected to rise in
the future as supplies of basic
necessities such as power and
food grow tighter.
In order to mitigate the effects of
these cost increases, the Company has initiated another major round of cost cutting efforts
with a focus on increasing efficiency to reduce labour costs in the made-ups division and
using lower-cost materials to create quality yarns with open-end and compact spinning
equipment in the 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
Rs. 8,692.529 million
(2009: Rs. 7,198.993
million). The
resulting
increase in
gross profit
to Rs.
2,000.809
million
(2009: Rs.
1,259.906 million) is
primarily due to the
abnormally strong performance of the
spinning units due to the factors outlined above.
Operating profit for the year under review was recorded at Rs. 1,449.216 million (2009:
Rs. 723.554 million). The Company made an after tax profit of Rs. 277.861 million, a
substantial improvement from a loss of Rs. 439.811 million during the previous year.
11
Annual Report 2010
INFORMATION TECHNOLOGY
The Directors have shown their

inability to pay any dividend due
to cash flow constraints. However,
Management of the Company is
committed to ensure efficient
operation of the Company to
deliver value to the customers and
other stakeholders. Earning per
Share for the year ended 30 June
2010 was Rs. 1.91.
Your company is equipped with highly advanced ERP solution (Oracle e-Business suite 11i)
along with IT professionals who are involved in essential management of sensitive data,
exclusive computer networking and
systems-engineering. In your Company a
diverse teams of business and technical
experts are ready to help defining our
business objectives, design a dynamic
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 eBusiness suite R12 to adopt the best for
its business reporting.
The Directors recommend as

under:
Rupees in Thousand
Profit before taxation
376,448
Provision for taxation
(98,587)
Profit after taxation
277,861
SOCIAL COMPLIANCE AND HUMAN RESOURCE
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
human-oriented approach towards its employees, consumers and all stakeholders, which is
an intrinsic requirement for achieving sustainable development. The Company believes that
our people are our asset. Therefore, the Company puts great stress on the Company values,
good practices and the improvement of working conditions and the health and safety
protection of its employees.
DEBT:EQUITY RATIO
100%
90%
80%
PERCENTAGE
70%
58
49
56
56
44
44
58
66
60%
50%
40%
30%
20%
42
51
42
34
10%
0%
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
DEBT
EQUITY
G.P % TO SALE
SHARE HOLDERS EQUITY

20%
18%
8,000
RUPEES IN MILLION
7,000
16%
6,000
5,000
3726
4,000
3,000
14.26%
14.80%
14.64%
15.38%
18.71%
14.89%
14%
2,623
2,668
12%
3935
3059
3361
10%
8%
6%
4%
2,000
1,000
2%
0%
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
12
Annual Report 2010
The Company has taken a number of measures to

develop its employees to meet the challenges of today's
competitive corporate world. The Company has
invested extensively in employee development
programs, health and safety training in our in-house
training facility instead with the latest audio / visual
equipment.
Complying with our human resource policies, the
Company does not employ any child labour and is an
equal opportunity employer. Company maintains a high
standard of employees working and living conditions;
providing free, safe and clean residential facilities,
utilities, medical care, life insurance and education.
2004 -2005 2005 -2006 2006 -2007 2007 -2008 2008 -2009 2009 -2010
13
Annual Report 2010
The Company has taken a number of measures to develop its employees to meet the
challenges of today's competitive corporate world. The Company has invested extensively
in employee development programs by providing technical, computer, management,
health & safety training in our in house training facility installed with the latest audio / visual
equipment.
The Company is committed to comply with international standards and is a Social
Accountability Standard SA-8000:2001 certified company.
Annual Report 2010
QUALITY MANAGEMENT SYSTEMS

Yo u r C o m p a n y i s I S O 9001:2008 certified. The
surveillance audits are being
regularly and successfully
completed on six monthly
bases.
Conforming to the Company's
Quality Management Systems,
Product quality is consistently
maintained and monitored at
every stage. Yarn and fabric is
tested in most modern textile
testing laboratories working at
all divisions. These laboratories
are equipped with latest
equipments and are environmentally controlled to the most stringent of international
standards. Quality control in made ups production facilities is based on AQL system,
ensuring high control on quality of products. Internal / external audits and management
reviews, clearly demonstrate control improvements and Company's long term commitment
to improve its management systems to any reputed international standard.
SOCIAL SECTOR PROJECTS

By the grace of God, the
management of your Company is
pleased to inform that the
construction of Sayeed Saigol
Cardiac Complex at the Gulab Devi
Chest Hospital, Lahore has now
been completed and handed over
to the administration of Gulab Devi
Chest Hospital, Lahore. Your
Company has contributed a sum of
total Rs. 65.634 million as donors.
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
Annual Report 2010
Annual Report 2010
SAFETY, HEALTH AND ENVIRONMENT
SECURITY
Your Company provides and maintains so far as practicable, equipment,

systems and working conditions which are safe and without risk to the
health of all employees, visitors, contractors and public. Management has
maintained its strong commitment to a safe environment in its operations
throughout the year.
Your Company is well cognizant of its responsibilities in ensuring the

health and safety of the workplace and its people. At
your Company, health and safety policies and practices
are monitored and reviewed regularly. We believe that
Workplace safety is the responsibility of the
management, which involves making the workplace
safer for the employees and thus safeguarding
their health. Workplace safety ensures that an
employee can feel secure about undertaking his
routine tasks with complete determination and
confidence. Workplace safety aims at eliminating the
health risks involves in a particular job and hence makes the
job profile a secure option for interested candidates.
The Company is well aware of the relationship between the textile

production and related environment issues. Keeping in view the ethical
obligations to the environment, the working on implementation of ISO14001-2004 Environment Management System the documentation and
environment monitoring
process has been
completed and
certification process is
targeted to be completed
by the end of the current
year.
Installation of effluent
treatment plant (ETP)
has been completed and
results have been tested
through internal lab tests
and EPA approved
external labs.
Therefore, KTML participates in all social responsibility

education and monitoring activities. KTML supports United
State's Customs Trade Partnership against Terrorism (C TPAT) and is committed to improve security conditions
within the organization as well as throughout its supply
chain from the factory to overseas.
KTML is proud to be a partner of Customs Trade Partnership against Terrorism (C - TPAT)
and is a certified Company and is meeting all requirements of this security standard.
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
Annual Report 2010
Annual Report 2010
BUSINESS PROCESS RE-ENGINEERING
COMPLIANCE OF CODE OF CORPORATE GOVERNANCE
Your Company is in process to implement the

methodologies to redesign business process. The
methodology includes the five activities: Prepare for reengineering, Map and analyze as-is-process, Design
To-be process, Implement re-engineered process,
learn and Improve continuously.
The Board of Directors periodically reviews

the Company's strategic direction.
Business plans and targets are set by the
Chief Executive and reviewed by the Board.
The Board is committed to maintain a high
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
considering the level of liquid assets necessary to meet
these; monitoring balance sheet liquidity ratios against
internal and external regulatory requirements; and
maintaining debt financing plans.
FUTURE OUTLOOK
The well-publicized hikes in the price of raw material
have taken on extreme proportions worldwide. Locally,
the recent floods have damaged and destroyed a large,
but so far unmeasured, portion of the Pakistani cotton
crop. Rains in China have also disturbed cotton
production in that region. Combined with very intense
and growing domestic demand in China and India, as well as Brazil's recent transformation
into an importer of cotton, these factors seem to indicate continued high raw material
prices for the foreseeable future. This
situation is further exacerbated by the
continued ban on cotton exports by
the Indian government, which has
disturbed all aspects of the textile
production chain. Future prospects
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
season is in full swing and the ultimate
fate of the Indian export ban has been
decided.
18
A)
b)
c)
d)
e)
f)
g)
h)
i)
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.
Proper books of account of the Company have been maintained.
Appropriate accounting policies have been consistently applied in preparation
of financial statements and accounting estimates are based on reasonable and
prudent judgment.
International Accounting Standards, as applicable in Pakistan, have been
followed in preparation of financial statements and any departure there from, has
been adequately disclosed.
The system of internal control is sound in design and has been effectively
implemented and monitored.
There are no significant doubts upon the Company's ability to continue as a going
concern.
There has been no material departure from the best practices of corporate
governance, as detailed in the listing regulations of the stock exchanges.
Outstanding taxes and other government levies are given in related note(s) to the
audited accounts.
Key operating and financial data of last six years is annexed.
Value of investment of provident fund trust, based on their unaudited accounts

of June 30, 2010 is as under:
Provident fund
(Rs. in thousand)
188,066
19
Annual Report 2010
DIRECTORS AND BOARD MEETINGS
Annual Report 2010
AUDIT COMMITTEE
During the year under review, five meetings

of the Board of Directors were held and the
attendance of Directors was as under: -
Name
Designation
Mr.
Mr.
Mr.
Mr.
Chairman
Member
Member
Member
Zamiruddin Azar
Sayeed Tariq Saigol
Waleed Tariq Saigol
Kamil Taufique Saigol
(Non Executive / independent Director)

(Non Executive / independent Director)
(Executive Director)
(Executive Director)
The Main terms of reference of the Audit Committee of the Company include the following:
a.
Names of Directors
Meetings Attended
b.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Tariq Sayeed Saigol

Taufique Sayeed Saigol
Sayeed Tariq Saigol
Waleed Tariq Saigol
Kamil Taufique Saigol
Zamiruddin Azar
Abdul Hai Mehmood Bhaimia
5
4
4
5
3
5
5
c.
Leave of absence was granted to Directors who could not attend the Board meetings.
However, Mr. Taufique Sayeed Saigol and Mr. Kamil Taufique Saigol participated in the
proceedings of Board of Directors' Meeting dated 28-04-2010 through teleconference.
CRITERIA TO EVALUATE BOARD PERFORMANCE
d.
e.
Following are the main criteria:
f.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Financial policies reviewed and updated;

Capital and operating budgets approved annually;
Board receives regular financial reports;
Procedure for annual audit;
Board approves annual business plan;
Board focuses on goals and results;
Availability of board's guideline to management;
Regular follow up to measure the impact of board's decisions;
Assessment to ensure compliance with code of ethics and corporate
governance.
During the financial year no share transfers involving Directors, Company Secretary, CFO
and Executives of the Company (including their spouses and minor children) were reported.
20
g.
h.
i.
Determination of appropriate measures to safeguard

the Company's assets;
Review of preliminary announcements of results prior
to publication;
Review of quarterly, half-yearly and annual financial
statements of the Company, prior to their approval by
the Board of Directors, focusing on:
Major judgmental areas;
Significant adjustments resulting from the audit;
The going-concern assumption;
Any changes in accounting policies and practices;
Compliance with applicable accounting standards; and
Compliance with listing regulations and other statutory and regulatory

requirements.
Ensuring coordination between the internal and external auditors of the Company;
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;
Ascertaining that the internal control system including financial and operational
controls, accounting system and reporting structure are adequate and effective;
Instituting special projects, value for money studies or other investigations on any
matter specified by the Board of Directors;
Monitoring compliance with the best practices of corporate governance and
identification of significant violations thereof; and
Consideration of any other issue or matter as may be assigned by the Board of
Directors.
Further issuance of capital otherwise than right

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,
the Company has allotted 100 million ordinary shares of Rs. 10/- each otherwise than
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
21
Annual Report 2010
as on April 26, 2010, for subscription of shares at par value in proportion to the paid up
value of shares held by them out of the above mentioned 100 million shares.
Annual Report 2010
BRIEF PROFILE OF DIRECTORS

Incorporation of wholly owned subsidiary company

The Company has set up a wholly owned subsidiary company namely Concept Trading
(Private) Limited during the year incorporated on March 11, 2010 having authorised share
capital of Rs. 500,000/- divided into 50,000 ordinary shares of Rs. 10/- each with issued,
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
subsidiary company.
Pattern of Shareholding
The statement of shareholding of the Company in accordance with Code of Corporate
Governance and Companies Ordinance, 1984 as at June 30, 2010 is annexed.
Auditors
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.
The auditors will retire at the conclusion of the Annual General Meeting. Being eligible, they
have offered themselves for re-appointment.
The Board has recommended the appointment of M/s. Riaz Ahmad & Company, Chartered
Accountants, as auditors for the ensuing year as suggested by the Audit Committee subject
to approval of the members in the forthcoming Annual General Meeting.
Acknowledgement
The Directors are grateful to the Company's members, financial institutions and customers
for their cooperation and support. They also appreciate hard work and dedication of all the
employees working at various divisions.
Mr. Tariq Sayeed Saigol is a member of the Saigol Family

who pioneered in Textile manufacturing after partition and
later ventured into the financial sector, chemicals,
synthetic fibers, sugar, edible oil refining, civil engineering,
construction, cement and energy.
Lahore
September 29, 2010
22
TAUFIQUE SAYEED SAIGOL

Chief Executive
Chairman / Director
Maple Leaf Cement Factory Limited
Mr. Saigol was schooled at Aitchison College, Lahore and

graduated from Government College, Lahore following which he studied Law at University Law
College, Lahore.
He started his career in 1968 at Kohinoors Chemical Complex at Kala Shah Kaku. Upon trifurcation
of the Group 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.
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.
Mr. Saigol has been a member of the Federal Export Promotion Board and Central Board of State
Bank of Pakistan. He has also served on several Government Commissions and Committees on a
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
adopted by the Government in 2000 and also its critique prepared in 2006. He joined the Central
Board of State Bank of Pakistan for a second term in 2007 and is a member of the Prime Ministers
Economic Advisory Council established in 2008.
He takes keen interest in the development of education and health care in Pakistan. He has been a
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
Pakistan, member of the Syndicate of University of Health Sciences and Member Board of
Governors of Aitchison College, Lahore. He is conferred with Sitara-e-Isaar by President of Pakistan
in 2006.
He is a keen golfer and has represented Pakistan at Golf in
Sri Lanka and Pakistan in 1967.
For and on behalf of the Board
Chairman / Chief Executive/Director

Kohinoor Maple Leaf Industries Limited
Tarbela Hydro Limited
Zimpex (Private) Limited
Chief Executive/Director
Director
Tarbela Hydro Limited
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 Industrial Engineer from
Cornell University, USA in 1974. He is widely traveled and his special forte is in the export business.
He is a business man of impeccable credibility and vision and has substantial experience of working
in different environments.
23
BRIEF PROFILE OF DIRECTORS

Annual Report 2010
Chief Executive/Director
Director
Mr. Tariq Sayeed Saigol is a member of the Saigol Family

who pioneered in Textile manufacturing after partition and
later ventured into the financial sector, chemicals, synthetic
fibers, sugar, edible oil refining, civil engineering, construction, cement and energy.
Mr. Saigol was schooled at Aitchison College, Lahore and graduated from Government College,
Lahore following which he studied Law at University Law
College, Lahore.
Director
Security General Insurance Company Ltd.
He started his career in 1968 at Kohinoors Chemical

Complex at Kala Shah Kaku. Upon trifurcation of the Group
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.
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 Director
from 2003-2006.
Mr. Saigol has been a member of the Federal Export

Promotion Board and Central Board of State Bank of Pakistan. He has also served on several
Government Commissions and Committees on a 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 adopted by the Government in 2000 and also its
critique prepared in 2006. He joined the Central Board of
State Bank of Pakistan for a second term in 2007 and is a Director
member of the Prime Ministers Economic Advisory Council Maple
Leaf Cement Factory Limited
established in 2008.
in different environments.

Shabbir Tiles & Ceramics Limited
Pak Grease Mfg. Co. (Pvt) Limited
Askari General Insurance Limited

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
Industrial Engineer from Cornell University, USA in 1974. He is widely traveled and his special forte
is in the export business.
He is a business man of impeccable credibility and vision and has substantial experience of working
24
Director
Chief Financial Officer
Mr. Sayeed Saigol is the Chief Executive of Maple Leaf

Cement. He graduated from McGill University with a
degree in management. Mr. Sayeed Saigol also has
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
the board of governors of the Lahore University of Management Sciences (LUMS).

Mr. Waleed Saigol is the Managing Director of Kohinoor Raiwind Mills. He holds a bachelors
BOARD COMMITTEES
AUDIT COMMITTEE
The committee is responsible for assisting the board of directors in the board's oversight
responsibilities relating to the integrity of the Company's financial statements, financial
reporting process, and systems of internal accounting and financial controls; the
qualifications, independence, and performance of the independent auditor and the
performance of the Company's internal audit department; and the Company's legal and
regulatory compliance.
The audit committee is appointed by the board to assist the board in monitoring and
consists of following:
CHAIRMAN
He takes keen interest in the development of education and health care in Pakistan. He has been a
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
Pakistan, member of the Syndicate of University of Health Sciences and Member Board of
Governors of Aitchison College, Lahore. He is conferred with
Sitara-e-Isaar by President of Pakistan in 2006.
Director
He is a keen golfer and has represented Pakistan at Golf in
Sri Lanka and Pakistan in 1967.
Annual Report 2010
Mr. Zamiruddin Azar

MEMBERS
Mr. Sayeed Tariq Saigol
Mr. Waleed Tariq Saigol
Mr. Kamil Taufique Saigol
Scope and Objectives
The Integrity of the financial statements of the Company.
The independent auditors' qualifications, independence, and performance.
The performance of the Company's internal audit function.
The compliance by the Company With Legal And Regulatory Requirements.

25
Annual Report 2010
PROJECT MANAGEMENT COMMITTEE
Annual Report 2010
Members
Director
Project Management Committee of senior representatives is formed to direct the

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 Marketing
Head of the Department Human Resource
Head of the Department Engineering

Head of the Department Commercial

Our BPR team implies specific business

objectives such as cost reduction, time
reduction, output quality improvement etc.
We focus on the most important processes

that reflect our business vision.
Understand and measure the existing

process to avoid repeating of old mistakes
and to provide a baseline for future
improvements.
Design and build the prototype of new

processes and ensure quick delivery of
results and involvement and satisfaction of
customers.

The Scope and objective of the Project Management Committee is to:
Steer and guide the project.
Review progress and outputs.
Review outcomes and their impact on the project.
Agree important decisions and changes to plan.
Discuss risks, problems, issues and explore solutions.
Keep an eye on how things are going and what could be improved.
The project work is performed on schedule and deliverables/reports are delivered

on time.
The project work is done within the allocated budget.
The project team have well-defined roles and responsibilities.
There are effective methods for planning, communicating, and making decisions.
The project reflects on its work and takes a positive and flexible approach to
updating plans.
No. of Meetings Held: 10

MANAGEMENT INFORMATION SYSTEM COMMITTEE
Management Information Systems (MIS) are the term given to the discipline focused on the
integration of computer systems with the aims and objectives on an organization. The
development and management of information technology assists executives and the
general workforce in performing any tasks related to the processing of information.
Members
Director
BUSINESS PROCESS RE-ENGINEERING COMMITTEE
Business Process Re-engineering team see that which technology allows you to do, and
then determine if this helps you rethink the process by starting with the capabilities of
modern information technology.

Deputy Manager Information Technology
26
27
Annual Report 2010
Annual Report 2010
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.

ENERGY MANAGEMENT COMMITTEE
Energy Management Committee (EMC) is formed to improve performance through wise
energy use
Members
Director
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.

28
29
2009-2010
Annual Report 2010
2008-2009
2007-2008
2006-2007
2005-2006
8,458,899
7,558,322
7,140,167
6,903,625
4,695,280
2,000,809
1,449,216
376,448
98,587
277,861
1,259,906
723,554
(536,676)
(96,865)
(439,811)
1,162,700
1,013,140
130,805
134,325
(3,520)
1,045,526
575,658
(28,293)
11,529
(39,822)
1,021,807
803,056
354,984
56,780
298,204
669,444
320,804
147,598
59,071
88,527
6,496,299
4,004,892
10,501,191
4,140,233
4,003,422
8,143,655
3,972,540
3,998,629
7,971,169
3,971,021
3,661,682
7,632,703
3,561,259
1,800,012
5,361,271
2,666,186
1,803,215
4,469,401
Current assets
Current liabilities
Net working capital
Capital employed
6,556,108
8,169,138
(1,613,030)
8,888,161
5,131,884
6,762,527
(1,630,643)
6,513,012
5,757,221
5,477,572
279,649
8,250,818
4,547,065
4,231,049
316,016
7,948,719
3,939,417
3,855,596
83,821
5,445,092
3,170,105
3,106,544
63,561
4,532,962
Less: Redeemable Capital, long term loan

& other liabilities
Less: Surplus on revaluation of property
Share holders Equity
1,853,068
3,673,825
3,361,268
2,190,079
1,263,592
3,059,341
3,052,128
1,263,592
3,935,098
2,959,093
1,263,592
3,726,034
2,776,985
2,668,107
1,910,160
2,622,802
1,455,262
1,906,006
3,361,268
1,455,262
1,604,079
3,059,341
1,455,262
2,479,836
3,935,098
1,455,262
2,270,772
3,726,034
1,058,374
1,609,733
2,668,107
962,158
1,660,644
2,622,802
Profitability(Rs.000)
Gross Profit
Operating profit
Profit / (Loss) before tax
Provision for income tax
Profit / (Loss) after tax
Financial Position (Rs.000)
Tangible fixed assets-net
Investment & Other assets
Represented By:
Share capital
Reserves & un-app. Profit
Investors information
Gross Profit to sales (%age)
Net Profit to sales (%age)
Profit margin
Debt : equity ratio
Current ratio
Acid test ratio
Breakup value per share of Rs.10 each
Earning per share
Dividend
Bonus
Average collection period
Inventory turn over
Average age of inventory
Summary of Cash flows
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net change in cash and cash equivalents
Quantitative Data
Yarn (Kgs "000") :
Production (cont. into 20s)
KTM Division
KGM Division
18.71
2.60
0.03
34 : 66
0.80
0.47
23.10
1.91
14.89
(5.20)
(0.05)
42 : 58
0.76
0.45
21.02
(3.02)
15.38
(0.05)
(0.00)
44 : 56
1.05
0.69
27.04
(0.02)
14.64
(0.56)
(0.01)
44 : 56
1.07
0.59
25.60
(0.32)
14.80
4.32
0.04
51 : 49
1.02
0.47
25.21
2.82
14.26
1.89
0.02
42 : 58
1.02
0.51
27.26
0.93
40.60
4.17
87.53
51.58
4.17
87.53
58.18
3.73
98.09
49.83
3.62
100.70
10.00
40.39
4.32
84.41
10.00
45.80
4.08
89.39
(403,780)
(310,582)
712,916
(1,446)
106,116
(644,726)
543,520
4,910
(51)
(776,196)
787,903
11,656
(215,658)
(1,155,933)
998,512
(373,079)
(226,700)
(636,823)
1,151,994
288,471
2010
2004-2005
9-Months
10,693,338
Net sale (Rs. 000)
176,304
(1,320,706)
1,147,547
3,145
Rs " 000 "

Wealth Generated
Net sales
Other operating income
35,298
26,318
61,616
36,605
28,899
65,504
33,388
26,028
59,416
31,223
23,680
54,903
22,675
15,026
37,701
Cloth (Linear meters "000"):

Processing (Rawalpindi Division)
Production
Sales
Weaving (Raiwind Division)
Production
Sales
30
7,202
4,104
11,306
6,042
2,987
9,029
6,790
4,265
11,055
6,788
3,862
10,650
7,595
3,639
11,234
5,461
2,192
7,653
34,653
34,065
30,626
28,783
22,988
23,581
27,358
26,768
30,855
21,860
17,623
16,991
21,489
21,691
22,727
23,316
21,986
22,220
20,806
21,094
20,090
20,942
16,409
16,267
%age
Rs " 000 "
%Age
99.27%
0.73%
8,458,899
126,551
98.53%
1.47%
10,771,989
100.00%
8,585,450
100.00%
7,952,404
73.82%
6,508,657
75.81%
497,243
4.62%
546,013
6.36%
873,126
1,072,768
8.11%
9.96%
807,226
1,260,230
9.40%
14.68%
98,587
277,861
0.92%
2.58%
10,771,989
100.00%
Marketing, selling and

administration expenses
Employees' remuneration
Financial charges
Government taxes
(Includes income tax)
Profit / (Loss) for the period
(96,865)
(439,811)
8,585,450
-1.13%
-5.12%
100.00%
73.82%
75.81%
Cost of sales (excluding

employees' remuneration)

4.62%
6.36%


8.11%
9.40%
Financial charges
0.92%
Government taxes
Sales/Tran.for wvg.(actual count)

KTM Division
KGM Division
2009
10,693,338
78,651
Distribution of Wealth
9.96%
35,211
31,295
66,506
Annual Report 2010
2.58%
Profit / (Loss)
for the period
14.68%
Financial charges
-1.13%
Government taxes
-5.12%
Profit / (Loss)
for the period
31
Annual Report 2010
VERTICAL ANALYSIS OF FINANCIAL STATEMENTS
HORIZONTAL ANALYSIS OF FINANCIAL STATEMENTS

2010
Balance Sheet
2010
Annual Report 2010
2009
2008
% change
% change
Rs " 000
Rs " 000 "
w.r.t 2009
w.r.t 2008
2010
Balance Sheet
Rs " 000
2009
%
Rs " 000
Rupees in thousand
3,361,268
3,059,341
3,935,098
9.87
(14.58)
Total equity
3,361,268
19.71
3,059,341
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
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
Total current liabilities
8,169,138
6,762,527
5,477,572
20.80
49.14
Total current liabilities
8,169,138
Total equity and liabilities
17,057,299
13,275,539
13,728,390
28.49
24.25
Total equity and liabilities
Total non-current assets
10,501,191
8,143,655
7,971,169
28.95
31.74
Total non-current assets
6,556,108
5,131,884
5,757,221
27.75
13.88
Total current assets
17,057,299
13,275,539
13,728,390
28.49
24.25
Total assets
Total assets
23.04
3,935,098
28.66
1,263,592
9.52
1,263,592
9.20
2,190,079
16.50
3,052,128
22.23
47.89
6,762,527
50.94
5,477,572
39.90
17,057,299
100.00
13,275,539
100.00
13,728,390
100.00
10,501,191
61.56
8,143,655
61.34
7,971,169
58.06
6,556,108
38.44
5,131,884
38.66
5,757,221
41.94
17,057,299
100.00
13,275,539
100.00
13,728,390
100.00
10,693,338
100.00
8,458,899
100.00
7,558,322
100.00
10,693,338
8,458,899
7,558,322
26.42
41.48
Net sales
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
Net sales
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
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
78,651
126,551
403,301
(37.85)
(80.50)
78,651
0.74
126,551
1.50
403,301
5.34
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
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
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
98,587
(96,865)
134,325
201.78)
(26.61)
98,587
0.92
(96,865)
(1.15)
134,325
1.78
277,861
(439,811)
(3,520)
163.18)
(7,993.78)
277,861
2.60
(439,811)
(5.20)
Distribution cost

Finance cost
Profit/ (Loss) before taxation
Loss after taxation
32
Rs " 000 "
Rupees in thousand
Total equity
Total current assets
2008
%
Loss after taxation
(3,520)
(0.05)
33
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE

FOR THE YEAR ENDED JUNE 30, 2010
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
is managed in compliance with the best practices of corporate governance.
The Company has applied the principles contained in the Code in the following manner:1. The Company encourages the representation of non-executive Directors on its Board of Directors. At present
the Board of Directors includes four independent non-executive Directors namely:
i.
Mr. Tariq Sayeed Saigol
ii.
Mr. Sayeed Tariq Saigol
iii.
Mr. Zamiruddin Azar
iv.
Mr. Abdul Hai Mehmood Bhaimia
2. The Directors have confirmed that none of them is serving as a Director in more than ten listed companies,
including this Company.
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 four members. Two of them are non-executive
Directors including the Chairman of the Committee.
16. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final
results of the Company and as required by the Code. The terms of reference of the Committee have been formed
and advised to the Committee for compliance.
17. The Board has set-up an effective internal audit function.
18. The Statutory Auditors of the Company have confirmed that they have been given a satisfactory rating under the
Quality Control Review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the
partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all
its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics
as adopted by Institute of Chartered Accountants of Pakistan.
19. The Statutory Auditors or the persons associated with them have not been appointed to provide other services
except in accordance with the Listing Regulations and 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.
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.
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
appointment and determination of remuneration and terms and conditions of employment of the CEO and other
Executive Directors, have been taken by the Board.
(Taufique Sayeed Saigol)

Lahore: September 29, 2010
Chief Executive
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
AUDITORS' REPORT TO THE MEMBERS
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH

BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate
Governance prepared by the Board of Directors of KOHINOOR TEXTILE MILLS LIMITED ("the Company") for the
year ended 30 June 2010, to comply with the Listing Regulations of the respective Stock Exchanges, where the
Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the
Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether
the statement of compliance reflects the status of the Company's compliance with the provisions of the Code of
Corporate Governance and report if it does not. A review is limited primarily to inquiries of the Company personnel
and review of various documents prepared by the Company to comply with the Code.
As part of our audit of financial statements, we are required to obtain an understanding of the accounting and internal
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider
whether the Board's statement on internal control covers all risks and controls, or to form an opinion on the
effectiveness of such internal controls, the Company's corporate governance procedures and risks.
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
transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which
are not executed at arm's length price recording proper justification for using such alternate pricing mechanism.
Further, all such transactions are also required to be separately placed before the audit committee. We are only
required and have ensured compliance of requirement to the extent of approval of related party transactions by the
Board of Directors and placement of such transactions before the audit committee. We have not carried out any
procedures to determine whether the related party transactions were undertaken at arm's length price or not.
Based on our review, nothing has come to our attention, which causes us to believe that the Statement of
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the best
practices contained in the Code of Corporate Governance as applicable to the Company for the year ended 30 June
2010.
We have audited the annexed balance sheet of KOHINOOR TEXTILE MILLS LIMITED as at 30 June 2010 and the
related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in
equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the
information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our
audit.
It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare
and present the above said statements in conformity with the approved accounting standards and the requirements of
the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of
any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the above said statements. An audit also includes assessing the accounting policies and significant
estimates made by management, as well as, evaluating the overall presentation of the above said statements. We
believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that:
(a) in our opinion, proper books of account have been kept by the company as required by the Companies Ordinance,
1984;
(b) in our opinion:
i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are
further in accordance with accounting policies consistently applied except for the changes as stated in Notes
2.1(d)(i), 2.5 and 2.8 (d) with which we concur;
ii) the expenditure incurred during the year was for the purpose of the company's business; and
iii) the business conducted, investments made and the expenditure incurred during the year were in accordance
with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet,
profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in
equity together with the notes forming part thereof conform with approved accounting standards as applicable in
Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so required and
respectively give a true and fair view of the state of the company's affairs as at 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
ISLAMABAD
Date: September 29, 2010

Atif Bin Arshad
ISLAMABAD
36
37
2010
NOTE
BALANCE SHEET
(Restated)
2009
Issued, subscribed and paid up share capital

Reserves
Total equity
Surplus on revaluation of property
NON-CURRENT LIABILITIES
Long term financing
Liabilities against assets subject to finance lease
Lease finance advance
Deferred tax
CURRENT LIABILITIES
Trade and other payables
Accrued mark-up
Short term borrowings
Current portion of non-current liabilities
TOTAL LIABILITIES
CONTINGENCIES AND COMMITMENTS
TOTAL EQUITY AND LIABILITIES
3
4
5
6
7
8
9
10
11
12
2010
NOTE
(Rupees in thousand)
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Authorized share capital
370,000,000 ( 2009: 170,000,000)
ordinary shares of Rupees 10 each
30,000,000 ( 2009: 30,000,000) preference
shares of Rupees 10 each
AS AT 30 JUNE 2010
3,700,000
1,700,000
300,000
4,000,000
1,455,262
1,906,006
3,361,268
3,673,825
300,000
2,000,000
1,455,262
1,604,079
3,059,341
1,263,592
1,628,067
67,005
157,996
1,853,068
1,918,571
100,919
35,922
134,667
2,190,079
1,040,257
289,987
6,070,435
768,459
8,169,138
10,022,206
849,755
185,259
4,810,471
917,042
6,762,527
8,952,606
17,057,299
13,275,539
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Investment properties
Long term investments
Long term deposits
CURRENT ASSETS
Stores, spare parts and loose tools
Stock-in-trade
Trade debts
Advances
Security deposits and short term prepayments
Interest accrued
Other receivables
Short term investments
Taxation recoverable
Cash and bank balances
Non-current assets classified as held for sale
(Restated)
2009
14
15
16
17
6,496,299
1,720,835
2,249,170
34,887
10,501,191
4,140,233
1,720,835
2,248,970
33,617
8,143,655
18
19
20
21
22
345,798
2,393,113
1,329,065
596,795
15,578
141
401,928
642,111
99,805
78,851
5,903,185
303,947
1,779,826
1,050,101
303,362
28,383
122
301,732
607,610
74,842
80,297
4,530,222
652,923
6,556,108
601,662
5,131,884
17,057,299
13,275,539
23
24
25
26
13
TOTAL ASSETS
The annexed notes form an integral part of these financial statements.
CHIEF EXECUTIVE
38
DIRECTOR
39
PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30 JUNE 2010
STATEMENT OF COMPREHENSIVE INCOME

2010
NOTE
SALES
COST OF SALES
27
28
GROSS PROFIT
DISTRIBUTION COST
ADMINISTRATIVE EXPENSES
OTHER OPERATING EXPENSES
OTHER OPERATING INCOME
29
30
31
32
10,693,338
(8,692,529)
8,458,899
(7,198,993)
2,000,809
1,259,906
(397,818)
(195,103)
(37,323)
(630,244)
1,370,565
(464,848)
(175,965)
(22,090)
(662,903)
597,003
78,651
126,551
1,449,216
PROFIT FROM OPERATIONS
(1,260,230)
PROFIT / (LOSS) BEFORE TAXATION
376,448
(536,676)
PROVISION FOR TAXATION
(98,587)
96,865
277,861
(439,811)
1.91
(3.02)
PROFIT/ (LOSS) AFTER TAXATION

EARNING/ (LOSS) PER SHARE - BASIC AND DILUTED (Rupees)
33
34
40
277,861
(439,811)
32,632
(409,506)
8,566
(107,495)
24,066
(302,011)
Adjustment of cross currency interest rate swap
(206,054)
Deferred tax on adjustment of cross currency interest rate swap
(72,119)
(133,935)
24,066
(435,946)
301,927
(875,757)
PROFIT/ (LOSS) AFTER TAXATION

OTHER COMPREHENSIVE INCOME/ (LOSS)
Surplus / (deficit) on remeasurement of available for sale investment

Deferred tax on remeasurement of available for sale investment
Other comprehesive income / (loss) for the year - net of tax
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR

CHIEF EXECUTIVE
2009
723,554
(1,072,768)
FINANCE COST
2010
2009
DIRECTOR
CHIEF EXECUTIVE
DIRECTOR
41
42
DIRECTOR
3,361,268
1,906,006
1,298,604
(151,887)
607,402
CHIEF EXECUTIVE
Balance as at 30 June 2010
1,455,262
144,919
462,483
1,450,491
301,927
301,927
277,861
277,861
24,066
24,066
-
1,450,491
583,336
1,455,262
144,919
438,417
(435,946)
(133,935)
(302,011)
Total comprehensive loss for the year
ended 30 June 2009
Total comprehensive income for the year

ended 30 June 2010
3,059,341
1,604,079
1,020,743
(439,811)
(439,811)
(429,748)
(875,757)
(875,757)
40,000
(40,000)
Transfer to accumulated loss
3,935,098
1,460,554
(29,937)
1,490,491
740,428
144,919
213,068
133,935
1,019,282
213,068
1,490,491
806,214
133,935
527,360
2,479,836
213,068
213,068
(29,937)
1,460,554
2,266,768
3,722,030
Share
premium
Share
Capital
1,455,262
Balance as at 30 June 2008-Restated
DIRECTOR
Effect of change in accounting policy -Note 2.8 (d)
CHIEF EXECUTIVE
STATEMENT OF CHANGES IN EQUITY

The annexed notes form an integral part of these financial

statements.
144,919
200,000
(408,395)
815,947
35,922
(99,954)
543,520
4,910
75,387
80,297
Proceeds from long term financing

Repayment of long term financing
Short term borrowings - net
Repayment of liabilities against assets subject to finance lease
Repayment of lease finance advance
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
1,455,262
(420,840)
1,259,964
(90,286)
(35,922)
712,916
(1,446)
80,297
78,851
CASH FLOWS FROM FINANCING ACTIVITIES
(490,255)
(190,230)
(20,225)
2,230
4,817
7,395
25,000
16,542
(644,726)
Accumulated
loss
(281,042)
(51,261)
(200)
934
7,765
13,222
(310,582)
General
Reserve
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipment
Payment for non-current assets classified as held for sale
Investments made
Return on bank deposits received
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments
Proceeds from sale of non current-assets classified as held for sale
Dividends received
Net cash used in investing activities
SubTotal
106,116
Hedging
Reserve
(403,780)
Fair
value
reserve
Net cash generated from / (used in) operating activities
Sub
Total
1,500,213
(1,311,367)
(25)
(77,912)
(4,793)
Revenue Reserves
674,317
(968,040)
(108,787)
(1,270)
Capital Reserves
35
Reserves
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations
Finance cost paid
Workers' profit participation fund paid
Income tax paid
Net increase in long term deposits
2009
Total
Reserves
2010
NOTE
Total
Equity
CASH FLOW STATEMENT

43
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. THE COMPANY AND ITS OPERATIONS
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
registered office of the Company is situated at 42-Lawrence Road, Lahore. The principal activity of the Company is
manufacturing of yarn and cloth, processing and stitching the cloth and trade of textile products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all years presented, unless otherwise stated:
2.1
Basis of Preparation
a) Statement of Compliance
These financial statements have been prepared in accordance with approved accounting standards as
applicable in Pakistan. Approved accounting standards comprise of such International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under
the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance,
1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall
prevail.
b) Accounting Convention
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
financial statements represent separate financial statements of the Company. The consolidated financial
statements of the Group are being issued separately.
c) Critical accounting estimates and judgments
The preparation of financial statements in conformity with the approved accounting standards requires the
use of certain critical accounting estimates. It also requires the management to exercise its judgment in the
process of applying the Company's accounting policies. Estimates and judgments are continually
evaluated and are based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. The areas where various assumptions and
estimates are significant to the Company's financial statements or where judgments were exercised in
application of accounting policies are as follows:
Financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques based on assumptions that are dependent on conditions existing at balance sheet
date.
Useful lives, patterns of economic benefits and impairments
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 Company. Further, the Company reviews the value of assets for
possible impairment on an annual basis. Any change in the estimates in the future might affect the carrying
amount of respective item of property, plant and equipment, with a corresponding effect on the
depreciation charge and impairment.
44
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.
Provisions for doubtful debts
The Company reviews its receivable against any provision required for any doubtful balances on an
ongoing basis. The provision is made while taking into consideration expected recoveries, if any.
Impairment of investments in subsidiary companies
In making an estimate of recoverable amount of the company's investments in subsidiary companies, the
management considers future cash flows.
d) Standards and amendments to published approved accounting standards that are effective in
current year
i) Changes in accounting policies and disclosures arising from standards and amendments to
published approved accounting standards that are effective in the current year
IAS 1 (Revised) 'Presentation of Financial Statements' (effective for annual periods beginning on or
after 01 January 2009).The revised standard prohibits the presentation of items of income and
expenses (that is non-owner changes in equity) in the statement of changes in equity, requiring nonowner changes in equity to be presented separately from owner changes in equity in a statement of
comprehensive income. As a result the Company presents in the statement of changes in equity all
owner changes in equity, whereas all non-owner changes in equity are presented in the statement of
comprehensive income. Comparative information has been re-presented so that it also is in conformity
with the revised standard. As the change in accounting policy only impacts presentation aspects, there
is no impact on earnings per share.
IFRS 7 (Amendment) Financial instruments: Disclosures (effective for annual periods beginning on or
after 01 January 2009). This amendment requires enhanced disclosures about fair value
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
results in additional disclosures, there is no impact on earnings per share.
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 presentation and
disclosure of segment information based on the internal reports regularly reviewed by the Company's
chief operating decision makers in order to assess each segment's performance and to allocate
resources to them. Previously, the Company did not present segment information as IAS 14 limited
reportable segments to those that earn a majority of their revenue from sales to external customers
and therefore did not require the different stages of vertically integrated operations to be identified as
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 change in accounting policy only results in additional disclosures of segment information, there is
no impact on earnings per share.
ii) Other amendment to published approved accounting standards that is effective in the current
year
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 acquisition,
construction or production of a qualifying asset (one that takes a substantial period of time to get ready
for its intended use or sale) as part of the cost of that asset. The Company's accounting policy on
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.
45
e) Standards, interpretations and amendments to published approved accounting standards that are
effective in current year but not relevant
taxable profits will be available against which the deductible temporary differences, unused tax losses and tax
credits can be utilized.
There are other new standards, interpretations and amendments to the published approved accounting
standards that are mandatory for accounting periods beginning on or after 01 July 2009 but are considered
not to be relevant or do not have any significant impact on the Company's financial statements and are
therefore not detailed in these financial statements.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse,
based on tax rates that have been enacted or substantively enacted by the balance sheet 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 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 are recognized when the Company has a legal or constructive obligation as a result of past events
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.
Following standard and amendments to existing standards have been published and are mandatory for the
Company's accounting periods beginning on or after 01 July 2010 or later periods:
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
equity investments are to be measured at fair value while eliminating the cost model for unquoted equity
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.
The management of the Company is in the process of evaluating impacts of the aforesaid standard on the
Company's financial statements.
There are other amendments resulting from annual Improvements projects initiated by International
Accounting Standards Board in April 2009 and May 2010, specifically in IFRS 7 'Financial Instruments:
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
relevant to the Company's financial statements. These amendments are unlikely to have a significant
impact on the Company's financial statements and have therefore not been analyzed in detail.
g) Standards, interpretations and amendments to published approved accounting standards that are
not effective in current year and not considered relevant
There are other accounting standards, amendments to published approved accounting standards and new
interpretations that are mandatory for accounting periods beginning on or after 01 July 2010 but are
considered not to be relevant or do not have any significant impact on the Company's financial statements
and are therefore not detailed in these financial statements.
2.2
Employee benefit
The Company operates an approved funded provident fund scheme covering all permanent employees. Equal
monthly contributions are made both by the Company and employees at the rate of 8.33 percent of basic
salary and cost of living allowance to the fund. The Company's contributions to the fund are charged to profit
and loss account.
2.3
Taxation
Current
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 rates or tax
rates expected to apply to the profit for the year if enacted. The charge for current tax also includes
adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years.
46
Provisions
2.5

Owned
Property, plant and equipment except freehold land and capital work in progress are stated at cost less
accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant 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. Freehold land is stated at revalued
amount less any identified impairment loss. Capital work in progress is stated at cost less any identified
impairment loss.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefit associated with the item will flow to the
Company and the cost of the item can be measured reliably. All other repair and maintenance costs are
charged to profit and loss account during the period in which they are incurred.
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
impairment loss. Previously, freehold land was stated at cost less any identified impairment loss. The effect of
revaluation of freehold land has been dealt with in accordance with the requirements of International
Accounting Standard (IAS) 16 "Property, Plant 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 not impact on profit or loss.
Depreciation
Depreciation on all property, plant and equipment is charged to profit and loss account applying the 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 14.1. Depreciation on additions is charged from the month the assets are available for
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
on depreciation is significant.
Derecognition
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the
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
arising from differences between the carrying amount of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences and deferred tax assets to the extent that it is probable that
Finance lease
Leases where the Company has substantially all the risks and rewards of ownership are classified as finance
lease. Assets subject to finance lease are capitalized at the commencement of the lease term at the lower of
47
present value of minimum lease payments under the lease agreements and the fair value of the leased assets,
each determined at the inception of the lease.
amount initially recognised minus principal repayments, plus or minus the cumulative amortisation, using
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
account when the investments are derecognized or impaired, as well as through the amortisation process.
The related rental obligation, net of finance cost, is included in liabilities against assets subject to finance
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
recognition, investments which are classified as available-for-sale are measured at fair value. Gains or
losses on available-for-sale investments are recognized directly in statement of other comprehensive
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
profit and loss account. These are sub-categorized as under:
Depreciation of assets subject to finance lease is recognized in the same manner as for owned assets.
Depreciation of the leased assets is charged to profit and loss account.
2.6
Land and buildings held for capital appreciation or to earn rental income are classified as investment
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
properties is carried out with sufficient regularity.
Quoted
For investments that are actively traded in organized capital markets, fair value is determined by reference
to stock exchange quoted market bids at the close of business on the balance sheet date.
Gains or losses arising from a change in the fair value of investment properties are included in the profit and
loss account currently.
2.7
Unquoted
Intangible assets
Fair value of unquoted investments is determined on the basis of appropriate valuation techniques as
allowed by IAS 39 "Financial Instruments: Recognition and Measurement".
Intangible assets, which are non-monetary assets without physical substance, are recognized at cost, which
comprise purchase price, non-refundable purchase taxes and other directly attributable expenditure relating
to their implementation and customization. After initial recognition an intangible asset is carried at cost less
accumulated amortization and impairment losses, if any. Intangible assets are amortized from the month,
when these assets are available for use, using the straight line method, whereby the cost of the intangible
asset is amortized over its estimated useful life over which economic benefits are expected to flow to the
Company. The useful life and amortization method is reviewed and adjusted, if appropriate, at each balance
sheet date.
2.8
During the current year ended, the Company has changed the accounting estimate for valuation of its
unquoted available for sale investment. Fair value of unquoted, available for sale investment is now
determined by using net assets based valuation method. Previously, valuation 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 Standard (IAS) 8 "Accounting Policies,
Changes in Accounting Estimates and Errors". Had there been no change in this accounting estimate,
short term investments, fair value reserve and deferred taxation would have been lower by Rupees 32.633
million, Rupees 24.067 million and Rupees 8.566 million respectively with no effect on the profit or loss.
Investments
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 reevaluates such designation on regular basis.
Investments in subsidiary companies are stated at cost less impairment loss, if any, in accordance with the
provisions of IAS 27 'Consolidated and Separate Financial Statements'.
Investments are initially measured at fair value plus transaction costs directly attributable to acquisition, except
for "investment at fair value through profit and loss " which is measured initially at fair value.
During the current year, the Company has changed its accounting policy for measurement of its
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
and measured at fair value. Effect of this change in accounting policy is recognized retrospectively in
accordance with the requirements of International Accounting Standard (IAS) 8 "Accounting Policies,
Changes in Accounting Estimates and Errors". Had there been no change in this accounting policy, fair
value reserve and investment in subsidiary companies would have been lower by Rupees 1,668.617
million.
The Company assesses at the end of each reporting period whether there is any objective evidence that
investments are impaired. If any such evidence exists, the Company applies the provisions of IAS 39
'Financial Instruments: Recognition and Measurement' to all investments, except investments in subsidiary
companies, which are tested for impairment in accordance with the provisions of IAS 36 'Impairment of
Assets'.
a) Investment at fair value through profit or loss
Investment classified as held-for-trading and those designated as such are included in this 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 and loss account.
b) Held-to-maturity
Investments with fixed or determinable payments and fixed maturity are classified as held-to-maturity
when the Company 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 investments that are
intended to be held to maturity are subsequently measured at amortized cost. This cost is computed as the
48
2.9
Inventories
Inventories, except for stock in transit and waste stock/ rags are stated at lower of cost and net realizable value.
Cost is determined as follows:
Useable stores, spare parts and loose tools are valued principally at moving average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value plus
other charges paid thereon.
49
outstanding and rates applicable thereon.
Stock-in-trade
Cost of raw material, work-in-process and finished goods is determined as follows:.
(i) For raw materials:
Annual average basis.
(ii) For work-in-process and finished goods:
Average manufacturing costincluding a portion of

production overheads.
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon. Waste stock /
rags are valued at net realizable value.
Net realizable value signifies the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessarily to make a sale.
2.10 Derivative financial instruments
Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered
into and are remeasured 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 instrument, and if so, the nature of
the item being hedged. The Company designates certain derivatives as cash flow hedges.
The Company documents at the inception of the transaction the relationship between the hedging instruments
and hedged items, as well as its risk management objective and strategy for undertaking various hedge
transactions. The Company also documents its assessment, both at hedge inception and on an ongoing
basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting
changes in cash flow of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognized in statement of other comprehensive income. The gain or loss relating to the ineffective
portion is recognized immediately in the profit and loss account.
Amounts accumulated in statement of other comprehensive income are recognized in profit and loss account
in the periods when the hedged item will affect profit or loss.
2.11 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit accounts and
other short term highly liquid instruments that are readily convertible into known amounts of cash and which
are subject to insignificant risk of changes in values.
2.12 Non current assets classified as held for sale
Non-current assets are classified as held for sale if its carrying amount will be recovered principally through a
sale transaction rather than continuous use. These are measured at lower of carrying amount and fair value
less costs to sell.
2.13 Borrowing cost
Interest, mark-up and other charges on long-term finances are capitalized up to the date of commissioning of
respective qualifying assets acquired out of the proceeds of such long-term finances. All other interest, markup and other charges are recognized in profit and loss account.
2.14 Revenue recognition
Revenue from difference sources is recognized as under:
a) Revenue from local sales is recognized on dispatch of goods to customers while in case of export sales it is
recognized on the date of bill of lading.
b) Dividend on equity investments is recognized when right to receive the dividend is established.
`
50
c) Profit on deposits with banks is recognized on time proportion basis taking into account the amounts
2.15 Foreign currencies

These financial statements are presented in Pak Rupees, which is the Companys functional currency. All
monetary assets and liabilities denominated in foreign currencies are translated into Pak Rupees 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 prevailing at the transaction date. All nonmonetary items are translated into Pak Rupees at exchange rates prevailing on the date of transaction or on
the date when fair values are determined. Exchange gains and losses are included in the income currently.
2.16 Financial instruments
Financial instruments carried on the balance sheet include investments, deposits, trade debts, 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, accrued mark-up and trade and other
payables etc. Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of instrument. Initial recognition is made at fair value plus transaction costs directly
attributable to acquisition, except for financial instrument at fair value through profit or loss which is measured
initially at fair value.
Financial assets are de-recognized when the Company loses control of the contractual rights that comprise
the financial asset. The Company loses such control if it realizes the rights to benefits specified in contract, the
rights expire or the Company surrenders those rights. Financial liabilities are de-recognized when the
obligation specified in the contract is discharged, cancelled or expired. Any 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 in the following individual policy
statements associated with each item and in the accounting policy of investments.
a) Trade and other receivables
Trade debts and other receivables are carried at original invoice value less an estimate made for doubtful
debts based on a review of all outstanding amounts at the year end. Bad debts are written off when
identified.
b) Borrowings
Borrowings are recognized initially at fair value and are subsequently stated at amortized cost. Any
difference between the proceeds and the redemption value is recognized in the profit and loss account
over the period of the borrowings using the effective interest method.
c) Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally the
transaction cost.
2.17 Impairment
a) Financial assets
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.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a difference
between its carrying amount and the present value of estimated future cash flows 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.
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.
51
3. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

b) Non financial assets
The carrying amount of assets are reviewed at each balance sheet date for impairment whenever events
are 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 recoverable amount, assets
are written down to their recoverable amounts. The resulting impairment loss is taken to the profit and loss
account except for impairment loss on revalued 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.
2010
2009
(Number of shares)
1,596,672
1,596,672
Ordinary shares of Rupees 10 each allotted on

reorganisation of Kohinoor Industries Limited
15,967
15,967
26,156,000
26,156,000
Ordinary shares allotted under scheme of

arrangement of merger of Part II of Maple Leaf
Electric Company Limited
261,560
261,560
26,858,897
26,858,897
Ordinary shares allotted under scheme of

arrangement of merger of Kohinoor Raiwind
Mills Limited and Kohinoor Gujar Khan Mills
Limited.
268,589
268,589
38,673,628
38,673,628
Ordinary shares of Rupees 10 each issued as

bonus shares
386,736
386,736
52,241,019
52,241,019
Ordinary shares of Rupees 10 each issued for

cash
522,410
522,410
145,526,216
145,526,216
1,455,262
1,455,262
2.18 Related party transactions and transfer pricing

Transactions and contracts with related parties are carried out at an arm's length price determined in
accordance with comparable uncontrolled price method.
2.19 Segment reporting
Segment reporting is based on the operating (business) segments of the Company. An operating segment is a
component of the Company that engages in business activities from which it may earn revenues and incur
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
make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
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, assets, liabilities and
other balances which can not be allocated to a particular segment on a reasonable basis are reported as
unallocated.
The Company has three reportable business segments. Spinning (Producing different quality of yarn using
natural and artificial fibers), Weaving (Producing different quality of greige fabric using yarn) and Processing
and Home Textile (Processing greige fabric for production of printed and dyed fabric and manufacturing of
home textile articles) .
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.
2010
2009
3.1 Zimpex (Private) Limited which is an associated company held 22,510,635 (2009: 22,510,635) ordinary
shares of Rupees 10 each as at 30 June 2010.
(Restated)
NOTE
2010
2009
4. RESERVES
Composition of reserves is as follows:
Capital
Share premium
Fair value reserve - net of deferred tax
144,919
462,483
607,402
144,919
438,417
583,336
1,450,491
(151,887)
1,298,604
1,906,006
1,450,491
(429,748)
1,020,743
1,604,079
Revenue
General reserve
Accumulated loss
2.20 Dividend and other appropriations

Dividend distribution to the Company's shareholders is recognized as a liability in the Company's financial
statements in the period in which the dividends are declared and other appropriations are recognized in the
period in which these are approved by the Board of Directors.
4.1
4.2
4.1 This reserve can be utilized by the Company only for the purposes specified in section 83(2) of the
Companies Ordinance, 1984.
4.2 Fair value reserve - net of deferred tax
2.21 Off setting

Financial assets and financial liabilities are set off and the net amount is reported in the financial statements
when there is a legal enforceable right to set off and the Company intends either to settle on a net basis, or to
realize the assets and to settle the liabilities simultaneously.
Balance as at 01 July
Add/ (less) : Fair value adjustment on investment in Security
General Insurance Company Limited during the year
Less: Related deferred tax asset/ liability on investment in
Security General Insurance Company Limited
Balance as at 30 June
52
438,417
740,428
32,632
(409,506)
8,566
(107,495)
462,483
438,417
53
NOTE
2009
2010
6.1
This represents demand finance facility of Rupees 400 million, obtained for import of state of art machinery
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
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
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
to Rupees 150.431 million were converted to LTF-EOP consisting of Rupees 61.725 million at 6 % per annum
and Rupees 88.706 million at 7 % fixed rate of mark up.
5. SURPLUS ON REVALUATION OF PROPERTY

Freehold land
5.1
5.1
1,263,592
1,263,592
2,410,233
3,673,825
1,263,592
Freehold land is now stated at revalued amount as a result of change in accounting policy from cost model to
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.
The Bank of Punjab (BOP - 1)

NIB Bank Limited (NIB - 1)
Albaraka Islamic Bank B.S.C (E.C) (AIB)
Allied Bank Limited (ABL -1 )
Saudi Pak Industrial and Agricultural Investment Company
Limited (SPIAICPL-1)
Standard Chartered Bank (Pakistan) Limited (SCB-2)
Standard Chartered Bank (Pakistan) Limited - Syndicated term
finance
Allied Bank Limited - Syndicated term finance
The Bank of Khyber - Syndicated term finance
Pak Libya Holding Company - Syndicated term finance
Bank Al Falah Limited - Syndicated term finance
Faysal Bank Limited - Syndicated term finance
Faysal Bank Limited (FBL - 1)
Less: Current portion shown under current liabilities
6.2
6.1
6.2
6.3
6.4
6.5
26,623
107,716
198,803
8,333
65,094
46,598
139,815
223,200
41,666
113,067
6.6
18,055
21,666
6.7
10,000
20,000
6.8
6.9
156,250
100,000
187,500
175,000
6.10
6.10
6.10
6.10
6.10
6.10
186,500
543,150
95,500
47,750
477,500
279,750
-
200,000
568,750
100,000
50,000
500,000
300,000
20,226
34,376
2,321,024
700,434
1,620,590
2,741,864
830,770
1,911,094
4,794
4,794
2,683
7,477
1,628,067
2,683
7,477
1,918,571
12
6.3
Kohinoor Sugar Mills Limited (KSML)

Kohinoor Industries Limited (KIL)
6.12

This represents a term finance facility of Rupees 300 million under State Bank of Pakistan (LTF-EOP) scheme
for a period of five years with a grace period of one year. The financing is for import of 72 Picanol Omni Plus
wide width Air Jet Looms and Tying & Knotting machine plus five (5) Gen Set gas generators being part of
BMR. It is repayable in equal quarterly installments, commencing after expiry of grace period. The facility is
secured against first pari passu charge over fixed assets of Raiwind Division and personal guarantees of the
sponsor directors. It carries fixed mark up at the rate of 7% per annum.
6.4

This represents murabaha finance facility of Rupees 100 million, obtained for construction of buildings. The
facility is allowed for a period of four years including a grace period of one year. The facility is 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 assets i.e. land and building
constructed for ring spinning and stitching. It carries mark up at the rate of 3-years KIBOR plus 2% per annum
with floor of 12.75% per annum.
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
allowed for a period of five years with a grace period of one year. The facility is repayable in sixteen (16) equal
quarterly installments commenced after conclusion of grace period. It is secured by 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 the rate of 6 months KIBOR plus
1.75% per annum and facility of Rupees 75 million carries mark up at the rate of 6 months KIBOR plus 2.50%
per annum with no floor and cap. On December 28, 2006 loans amounting to Rupees 124.732 million were
converted to LTF-EOP at 7% per annum fixed rate of mark up.
Other loans - Unsecured

6.11

This represents LTF-EOP facility of Rupees 157 million obtained for import of textile machinery for a period of
three years including a grace period of six months. It is repayable in ten equal quarterly installments. It is
secured by first exclusive hypothecation charge on the imported machinery and allied equipment, including
installation and local component costs. It carries mark up at fixed rate of 6 % per annum.
2009
2010
6. LONG TERM FINANCING

From banking companies and other financial institutions Secured
The Bank of Punjab - (BOP-1)
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
installments commenced from February 19, 2006. It is secured by first exclusive charge on imported
machinery. It carries mark up at a fixed rate of 7% per annum.
6.7

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
machines being part of BMR. This facility for a period of five years with a grace period of one year and is
repayable in equal quarterly installments.
6.8

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 installments. It is
secured by first pari passu charge by way of hypothecation on all present and future plant and machinery of
the Company and by way of mortgage on land measuring 121 acres, 2 kanals and 1 marla, situated at main
Peshawar Road, Rawalpindi with 25% margin. Initially ranking charge will be created which will be upgraded
within 90 days from the date of disbursement. The facility carries mark up at the rate of 3 months KIBOR plus
170 bps per annum with quarterly repricing effective from March 03, 2008.
6.9
NOTE
2010
2009
7. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

Minimum lease payments
Less: Un-amortized finance charges
Present value of minimum lease payments
7.1
12
The minimum lease payments has been discounted at implicit interest rates which range from 6.00 % to
18.00% (2009: from 6.00% to 17.64%) per annum to arrive at their present values. The lease rentals are
payable in monthly and quarterly installments. In case of any default an additional charge at the rate of 0.1
percent per day shall be payable. Taxes, repairs, replacements and insurance costs are to be borne by the
Company. The lease agreements carry renewal and purchase option at the end of the lease term. There are
no financial restrictions in lease agreements. These are secured by deposit of Rupees 21.065 million (2009:
Rupees 24.841 million) included in long term security deposits, demand promissory notes, personal
guarantees and pledge of sponsors' shares in public limited companies.
7.2 Minimum lease payments and present value of minimum lease payments are regrouped as under:
30 June 2009
30 June 2010
This represents the term finance facility of Rupees 200 million, obtained for the purpose of financing the
unwinding cost of cross currency swap deal with the bank and is allowed for a period of two years. The facility
is payable in eight equal quarterly installments. It is secured by ranking charge of Rupees 266.666 million on
land of Kohinoor Textile Mills Limited situated at Rawalpindi. It carries mark up at the rate of 3-months
average KIBOR plus 2.75% per annum with no floor and cap.
Minimum
lease
payments
Present
value of
minimum
lease
payments
Minimum
lease
payments
6.10 Syndicated Term Finance

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 Islamic and
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
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
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
been modified. Now the loan is repayble in twenty 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 at 3 months average KIBOR plus 150 bps to be repriced at the end of
each quarter.
6.11 Kohinoor Sugar Mills Limited (KSML)
A civil suit has been filed by KSML for recovery of disputed liability which is being contested by the Company.
Due not later than one year

Due later than one year but not later than five years
6.13 Current portion of long term liabilities include overdue installments amounting to Rupees 134.816 million
(2009: Nil)
56
Present
value of
minimum
lease
payments
------------------------(Rupees in thousand)---------------------88,922
86,272
85,937
68,025
69,326
67,005
118,426
100,919
155,263
135,030
207,348
187,191
8. DEFERRED TAX
2010
2009
This comprises of following :

Deferred tax liability on taxable temporary differences in respect of :
- Accelerated tax depreciation allowance
329,260
289,245
- Surplus on revaluation of investment
164,613
156,047
493,873
445,292
335,877
310,625
157,996
134,667
6.12 Kohinoor Industries Limited (KIL)

The balance is an old one, un-reconciled, unconfirmed and disputed.
207,348
20,157
187,191
86,272
100,919
155,263
20,233
135,030
68,025
67,005
Deferred tax asset on deductible temporary differences in respect of:

Unused tax losses
57
8.1 The movement in deferred tax assets and liabilities during the year without taking into consideration the off
setting balances within the same tax jurisdiction is as follows:
NOTE
2009
2010
10. ACCRUED MARK-UP

Deferred tax liabilities
Deferred tax assets
Accelerated Surplus on Unrealized

tax
revaluation gain on
derivative
depreciation
of
allowance investment financial
instrument
Balance as at 01July 2008
Total
Unused
tax
losses
Net liability
(asset)
Total
Long term financing
119,580
62,793
167,594
120,542
2,813
1,924
289,987
185,259
------------------------------------------(Rupees in thousand)---------------------------------------356,607 263,542

72,119 692,268 225,369 225,369 466,899
Charged to other comprehensive income
(107,495)
Charged to profit and loss account
(67,362)
289,245

(179,614)
(67,362)
85,256
156,047
445,292
310,625
8,566
8,566
40,015
40,015
25,252
25,252
14,763
493,873
335,877
335,877
157,996
329,260
164,613
NOTE
310,625
-
8,566
2010
2009
9.1
31
788,562
151,067
18,593
21,669
7,686
2,681
2,715
47,284
1,040,257
Short term running finance
11.1
2,285,452
1,253,594
Other short term finances
11.2
2,200,553
1,968,863
State Bank of Pakistan (SBP) refinances
11.3
1,555,000
1,580,000
29,430
8,014
6,070,435
4,810,471
134,667
9. TRADE AND OTHER PAYABLES

Creditors
Accrued liabilities
Advances from customers
Workers' profit participation fund
Workers' welfare fund
Unclaimed dividend
Withholding tax payable
Payable to employees' provident fund trust
Others
11. SHORT TERM BORROWINGS

From banking companies - Secured
85,256 (152,618)
(72,119) (179,614)
700,490
99,980
32,839
1,254
2,681
2,388
5,138
4,985
849,755
Temporary bank overdraft
11.1 The running finance facilities sanctioned by various banks aggregate to Rupees 2,390 million (2009: Rupees
1,255 million). The rates of mark-up range from 3.23% to 25% (2009: from 3.63% to 18.50%) per annum.
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
personal guarantees of the sponsor directors.
11.2 The other short term finance facilities sanctioned by various banks aggregate to Rupees 3,638 million (2009:
Rupees 2,348 million). The rates of mark-up range from 6.63% to 18.00% (2009: from 6.08% to 18.48%) per
annum. 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
11.3 The export refinance facilities sanctioned by various banks aggregate to Rupees 1,665 million (2009: 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 Company and personal guarantees of the
sponsor directors.
9.1 Workers' profit participation fund

Balance as on 01 July
Add: Provision for the year
Add: Interest for the year
Less: Payments during the year
31
1,254
20,227
188
21,669
1,279
164
189
1,254
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
funds utilized by the Company till the date of allocation to workers.
58
NOTE
2010
2009
12. CURRENT PORTION OF NON-CURRENT LIABILITIES

Long term financing - secured
700,434
830,770
68,025
86,272
768,459
917,042
59
60
20
10
20
10
10
30
10
10
5
5 - 10
5
-
1,542
(711)
831
363,121
(83,566)
279,555
106,320
(57,302)
49,018
26,827
(12,792)
14,035
69,785
(37,941)
31,844
58,250
(45,078)
13,172
30,892
(22,095)
8,797
5,173,748
(2,166,527)
3,007,221
106,732
(39,014)
67,718
(3,275)
31,844
(4,944)
13,172
(954)
8,797
(3,912)
67,718
(43,075)
504,061
899,108
(395,047)
504,061
(32,226)
279,555
(3,278)
2,313
(965)
(7,979)
49,018
(444)
8,654
(45)
39
(6)
(1,345)
14,035
-
(9,425)
8,680
(745)
(273,014)
3,007,221
173,260
(60,029)
113,231
-
14,176
(5,522)
8,654
(450)
831
(12,748)
11,032
(1,716)
(371,618)
6,409,975
(6,118)
2,450
(3,668)
(173,260)
60,029
(113,231)
6,118
(2,450)
3,668
4,047,897
2,410,233
325,179
4,949
368,320
56,692
49,233
5,061
11,999
3,387
32,464
2,655
15,775
2,341
14,836
2,410,233
-
14,836
14,836
7,656
1,442
12,734
(5,078)
7,656
518,187
28,949
870,159
(351,972)
518,187
63,706
7,924
9,712
39
4,793,224
(1,842,164)
2,951,060
98,808
(35,102)
63,706
2,951,060
216,689
98,419
(49,186)
49,233
23,485
(11,486)
11,999
67,130
(34,666)
32,464
55,909
(40,134)
15,775
30,853
(21,141)
9,712
(1,046)
9,712
(2,681)
63,706
(39,839)
518,187
(405)
7,656
14,836
6,552,906
(2,505,009)
4,047,897
7,660
(2,711)
4,949
479,689
(111,369)
368,320
(32,459)
368,320
(4,646)
2,849
(1,797)
(8,720)
49,233
(121)
75
(46)
(1,042)
11,999
(142)
117
(25)
(3,175)
32,464
(45)
(45)
(6,047)
15,775
-
(7,443)
6,409
(1,034)
(273,270)
2,951,060
-
(932)
4,949
(12,397)
9,450
(2,947)
(369,616)
4,047,897
(4,418)
3,379
(1,039)
(4,418)
3,379
(1,039)
-
3,899,877
521,622
5,881
329,338
71,441
52,552
7,198
10,657
2,430
30,341
5,323
20,046
1,821
10,487
271
2,941,986
284,417
40,549
25,838
435,605
122,421
7,599
462
14,836
-
408,248
(78,910)
329,338
95,867
(43,315)
52,552
21,176
(10,519)
10,657
61,949
(31,608)
30,341
54,133
(34,087)
20,046
30,582
(20,095)
10,487
4,520,668
(1,578,682)
2,941,986
72,970
(32,421)
40,549
747,738
(312,133)
435,605
------------------------------------------------------------------------------(RUPEES IN THOUSAND)---------------------------------------------------------------------------------
9,275,570
(2,865,595)
6,409,975
Depreciation Rate (%)
4,140,233
2,425,069
2,425,069
6,496,299
At 30 June 2010
Cost / revalued amount
Accumulated depreciation
Net book value
92,336
2,425,069
86,324
Depreciation charge
Closing net book value
14.4
Disposals:
Cost
Capital work in progress (Note 14.4)
Opening net book value

Revaluation
Additions
Transfer:
Cost
4,047,897
Year ended 30 June 2010
6,409,975
Cost
Net book value
14.1
At 30 June 2009
Operating fixed assets (Note 14.1)
Depreciation charge
PROPERTY, PLANT AND EQUIPMENT
Disposals:
Cost
14
2010
2009

Additions
Transfer
Cost
NOTE
14.1 OPERATING FIXED ASSETS
a) Letters of credit for capital expenditure amount to Rupees 38.865 million (2009: Rupees 43.996 million).
Freehold
land
Office
Building
13.2 Commitments in respect of:
12,272
(4,673)
7,599
Factory &
Other
Building
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
June, 2010 (2009: Rupees 319.430 million)
14,836
14,836
Residential &
Other
Building
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
these financial statements since the Company is confident about favourable outcome of the cases.
Plant &
Machinery
Owned Assets
d) The Company has filed recovery suits in civil courts of Rupees 4.589 million against various suppliers and
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
the cases.
Services &
Other
Equipment
Computer &
IT
Installations
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
has been made in these financial statements which on the basis adopted by the authorities would amount
to Rupees 33.473 million (2009: 33.473 million), since the Company has strong grounds against the
assessments framed by the tax authorities.
At 30 June 2008
Cost
Net book value
Furniture &
Fixture
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
loss for the year has been assessed at Rupees.255.684 million creating refund of Rupees 7.498 million.
b) Letters of credit other than for capital expenditure amount to Rupees 325.393 million (2009: Rupees
235.345 million).
Vehicles
Office
Equipment
Vehicles
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
before Honorable Appellate Tribunal Inland Revenue which is pending adjudication. This is a cross appeal.
Although the learned Commissioner Inland Revenue (Appeals) has already annulled the order under
section 221 of the Income Tax Ordinance, 2001, vide order dated 30 July 2009, the Taxation Officer has
illegally repeated the original assessment. Therefore, an appeal has also been filed before Commissioner
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
has strong gounds and is expecting favourable outcome.
Plant &
Machinery
Leased Assets
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
was restricted to Rupees .27.540 million against declared loss of Rupees 122.933 million.
7,660
(1,779)
5,881
Total
13.1 Contingencies
6,048,099
(2,148,222)
3,899,877
13. CONTINGENCIES AND COMMITMENTS
61
Bajaj Enterprises, 58-B

Room #162- Mozang Road, Lahore
1,870
4,817
2,947
9,450
6,049
7,765
1,716
11,032
561
632
71
954
1,676
1,800
4,023
124
Negotiation
Ghazi Fabrics International Ltd, Lahore

1,414
1,617
1,556
203
Negotiation
ZahidJee Textile Mills Ltd,

Faisalabad
434
539
775
105
Negotiation
North Star Textiles,

Lahore
1,254
1,567
2,326
313
Negotiation
Ghulam Abbas
s/o Mulazim Hussain
402
591
610
189
Negotiation

Negotiation
419
231
350,778
20,840
347,202
22,414
371,618
369,616
67,593
18,731
15,897
76,439
86,324
92,336
15. INVESTMENT PROPERTIES
419
Mr Fuad Zafar, R/O

House # 27-E, Phase-1, DHA Lahore Cantt
Negotiation
28
30
14.4 CAPITAL WORK IN PROGRESS

Civil works and buildings
Plant and machinery
600
308
Cost of sales
292
557
12,397
12,748
1,025
4,147
1,759
880
2,639
799
650
--------------( R u p e e s i n t h o u s a n d)-----------
14.3 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 by
Messers Hasib Associates (Private) Limited at Rupees 769.192 million as at 26 June 2008. Fair value of land
situated at Rawalpindi has been determined by Messers Asrem (Private) Limited at Rupees 951.643 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 sheet date.
(Restated)
2010
2009
NOTE
16. LONG TERM INVESTMENTS
Investment in subsidiary companies
Quoted
186,608,808 (2009: 186,608,808) ordinary shares of
Rupees 10 each fully paid Equity held 50.13% (2009:
50.13%)
16.1
2,248,970
16.2
200
2,248,970
Un-quoted
849
Particulars of purchaser
Mode of
disposal
Gain
Sale
Proceeds
Net Book
Value
Accumulated
Depreciation
Cost
2010
2009
Concept Trading (Private) Limited

19,998 (2009:Nil) ordinary shares of Rupees 10 each fully
paid Equity held 99.99% (2009:Nil)
2009
2010
Agregate of other items of

property, plant & equipment with
individual book values not
exceeding Rupees.50,000
Crosol MK 4.5 card Model 1990
Machine-Drawing ToyodaHara
DYH 500-c Complete Model
Honda City RIY-6720 Model 2002
Suzuki Cultus LED- 840.07
Toyota Corolla LRR-2233
2,249,170
Description
14.2 DETAIL OF DISPOSAL OF OPERATING FIXED ASSETS
62
NOTE
2,248,970
16.1 Based on value in use calculations as at 30 June 2010, there was no impairment loss on investments in
subsidiary companies (tested for impairment under IAS 36 "Impairment of Assets").
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.
63
NOTE
2010
2009
17. LONG TERM DEPOSITS

Security deposits
Less: current portion shown under current assets
22
41,124
6,237
34,887
44,901
11,284
33,617
18. STORES, SPARE PARTS AND LOOSE TOOLS

Stores
Spare parts
Loose tools
NOTE
21. ADVANCES - considered good
Advances to :
- Executives
- Other employees
- Suppliers
Letters of credit
18.1
250,003
95,795
345,798
215,516
87,871
560
303,947
2009
2010
19. STOCK-IN-TRADE
Raw material
Work-in-process
Finished goods
19.1
764,549
891,595
736,969
2,393,113
618,265
546,792
614,769
1,779,826
19.1 This includes raw material in transit of Rupees 55.351 million (2009: Rupees 60.232 million)
2010
2009
20. TRADE DEBTS
621
1,040
593,555
595,216
2,255
466
299,019
301,740
1,579
596,795
1,622
303,362
6,237
9,341
15,578
11,284
17,099
28,383
260,161
3,642
47,561
175
215,877
3,642
32,302
181
14,987
473
25,808
28,745
20,376
401,928
10,657
25,735
13,338
301,732
13,611
(5,595)
8,016
13,611
(7,464)
6,147
7,000
7,000
627,095
634,095
642,111
594,463
601,463
607,610
22. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS

Current portion of security deposits
Short term prepayments
17
18.1 This includes stores in transit of Rupees 14.333 million (2009: Rupees 8.484 million).
NOTE
2009
2010
23. OTHER RECEIVABLES

Sales tax refundable
Custom duty receivable
Export rebate
Insurance claims
Due from subsidiary company
(Maple Leaf Cement Factory Limited)
Research and development support
Draw back of taxes and levies
Cotton claim
Others
23.1
23.1 This represents amount receivable against allocation of pool expenses.
Considered good:
Secured (against letters of credit)
Unsecured
747,285
581,780
592,941
457,160
1,329,065
1,050,101
20.1 As at 30 June 2010, trade debts of Rupees 568.309 million (2009 : Rupees 225.526 million) were 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:
2009
2010
Upto 1 month
1 to 6 months
More than 6 months
64
433,697
116,664
17,948
190,322
20,427
14,777
568,309
225,526
NOTE
24. SHORT TERM INVESTMENTS
Investments at fair value through profit and loss - Held for trading
Quoted companies
Loss on remeasurement of fair value during the year
Available for sale

Associated Company - unquoted
6,398,541 (2008 : 6,398,541) Ordinary shares of Rupees 10
each fully paid.Equity held 9.40% (2008 : 9.40%)
Surplus on revaluation of investment
24.1
65
24.1 Fair value per share of Rupees 99.10 (2009: Rupees 94) is calculated by independent valuer on the basis of
net assets based valuation method. Security General Insurance Company Limited is associated Company
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
shares of Security General Insurance Company representing 6.71% (2009 : 6.71%) equity.
25. CASH AND BANK BALANCES
Cash in hand
Cash at bank:
- On current accounts
- On saving accounts
2009
2010
961
721
65,217
12,673
77,890
78,851
65,685
13,891
79,576
80,297
NOTE
28. COST OF SALES
3,347,817
3,192,060
2,464,620
1,405,218
740,125
690,336
518,965
505,493
12,267
22,452
Stores, spare parts and loose tools consumed
608,508
234,522
Packing materials consumed
374,847
322,317
Fuel and power
619,450
453,899
Raw materials consumed
28.1
Cloth and yarn procured and consumed

Salaries, wages and other benefits
28.2
Dyes and chemicals consumed

Processing charges
25.1 The balances in current and saving accounts carry interest ranging from 0.40% to 13% (2009: from 0.20%
to 12%) per annum.
Repair and maintenance
59,445
36,086
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
350,778
347,202
9,159,532
7,265,864
Opening stock
546,792
471,943
Closing stock
(891,618)
(546,792)
(344,826)
(74,849)
8,814,706
7,191,015
Opening stock
614,769
622,747
Closing stock
(736,946)
(614,769)
(122,177)
7,978
8,692,529
7,198,993
558,033
470,160
3,498,981
3,279,933
4,057,014
3,750,093
709,197
558,033
3,347,817
3,192,060
Depreciation
26. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Land
Advance against land
2010
2009
552,923
100,000
652,923
551,662
50,000
601,662
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
country resulting in slump in property market. During the current year, due to continued stressed property market, the
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
committed to disposal of these land at a reasonable price. The proceeds of disposal are expected to exceed the
carrying amount of the land.
2010
2009
27. SALES
Export
Local
Duty drawback
Export rebate
6,406,061
4,189,295
54,845
43,137
10,693,338
5,452,211
2,971,466
35,222
8,458,899
14.3
Work-in-process
Cost of goods manufactured

Finished goods
Cost of sales
28.1 Raw material consumed
Opening stock
Exchange gain due to currency rate fluctuations relating to export sales amounting to Rupees 35.245 million
(2009: Rupees 105.328 million) has been included in export sales.
66
2010
2009
Add: Purchased during the year

Less: Closing stock
28.2 Salaries, wages and other benefits include provident fund contribution of Rupees 16.813 million (2009:
Rupees 15.893 million) by the Company.
67
NOTE
29. DISTRIBUTION COST
Outward freight and handling
Clearing and forwarding
Travelling and conveyance
Insurance
Vehicles' running expenses
Electricity, gas and water
Postage, telephone and fax
Sales promotion and advertisement
Commission to selling agents
Miscellaneous expenses
29.1
2010
2009
39,011
30,549
227,943
17,911
348
3,252
808
2,832
16,726
54,501
3,937
397,818
33,876
28,492
160,317
18,651
405
3,699
679
3,201
17,370
190,877
7,281
464,848
30. ADMINISTRATIVE EXPENSES
Repairs and maintenance
Rent, rates and taxes
Insurance
Printing, stationery and periodicals
Legal and professional
Security, gardening and sanitation
Depreciation
30.1
14.3
93,990
5,587
8,280
9,001
4,600
7,296
4,359
2,589
4,878
4,433
19,813
20,840
9,437
195,103
83,014
4,382
9,743
2,908
4,483
7,099
4,795
1,175
3,987
2,995
18,915
22,414
10,055
175,965
NOTE
31. OTHER OPERATING EXPENSES
Auditors' remuneration
Donations
Miscellaneous
68
31.1
31.2
9.1
2010
2009
1,265
8,100
20,227
7,686
45
37,323
1,045
21,000
45
22,090
2010
2009
31.1 Auditors' remuneration
Statutory audit fee
Certifications
1,000
265
1,265
750
295
1,045
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.
NOTE
32. OTHER OPERATING INCOME
Income from financial assets:
Exchange gain
Gain/ (loss) on disposal of investments
Gain/ (loss) on remeasurement of fair value of investments at
fair value through profit and loss
Return on bank deposits
Dividend income
2010
2009
19,261
-
78,350
(4,727)
1,869
953
425
22,508
(7,464)
2,237
546
68,942
12,797
15,996
29,175
6,049
8,122
43,346
78,651
30,479
1,870
8,190
1,074
41,613
126,551
329,679
677,043
21,169
188
2,968
1,031,047
35,248
6,473
1,072,768
397,809
575,378
24,842
196,057
164
322
1,194,572
24,616
41,042
1,260,230
Income from associated company :

Dividend income : Security General Insurance Company Limited
Income from non-financial assets:
Scrap sales
Gain on disposal of property, plant and equipment
Gain on sale of land classified as held for sale
Miscellaneous
33. FINANCE COST

Mark-up/finance charges/ interest on:
Long term financing
Loss on cross currency swap
Workers' profit participation fund (WPPF)
Provident fund
Bank charges and commission
Exchange loss
14.2
9.1
69
NOTE
34. PROVISION FOR TAXATION
Current year:
Current
Deferred
34.1
2010
2009
83,824
14,763
98,587
55,753
(152,618)
(96,865)
34.1 Provision for current year income tax represents final tax on export sales, minimum tax on local sales and tax
on income from other sources under the relevant provisions of the Income Tax Ordinance, 2001.Numeric tax
reconciliation has not been presented, being impracticable.
NOTE
35. CASH GENERATED FROM OPERATIONS
Profit / (loss) before taxation
Adjustment for non-cash charges and other items:
Depreciation
Finance cost
Gain on sale of property, plant and equipment
Loss on disposal of investments - at fair value through profit and
loss account
Dividend income
Gain on sale of non-current assets classified as held for sale
Gain/ (loss) on remeasurement of investments at fair value
through profit and loss
Working capital changes
35.1 Working capital changes

(Increase)/ decrease in current assets:
Stock-in-trade
Trade debts
Advances
Other receivables
Increase in current liabilities
70
35.1
2009
2010
376,448
(536,676)
371,618
1,072,768
(6,049)
369,616
1,260,230
(1,870)
(13,222)
(953)
-
4,727
(16,542)
(2,237)
(8,190)
(1,869)
(1,124,424)
674,317
7,464
423,691
1,500,213
(41,851)
(613,287)
(278,964)
(293,433)
12,805
(100,196)
(1,314,926)
(13,000)
(106,764)
290,359
67,060
(19,269)
(7,475)
210,911
190,502
(1,124,424)
212,780
423,691
36. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in these financial statements in respect of remuneration including certain benefits
to the chief executive, directors and executives of the Company are given below:
Chief Executive
2010
2009
Number of persons
Managerial remuneration
Contribution to provident
Fund
Housing and utilities
Medical
Group insurance
Club subscription
Others
Directors
2010
2009
Executives
2010
2009
31
31
1
1
3
3
-----------------------------------------------( Rupees in Thousand )-----------------------------------4,800
4,800
5,157
4,297
44,856
32,715
308
84
64
185
5,441
308
185
73
5,366
154
87
1,246
92
6,736
99
87
1,246
59
5,788
3,005
9,021
2,586
252
6,096
65,816
2,410
5,458
1,849
122
4,132
46,686
The Chief Executive Officer and directors are provided with the Company's maintained vehicles, free medical
facilities and residential telephone facilities for both business and personal use. Chief executive is also provided free
furnished accommodation alongwith utilities.
Executives are provided with the Company's maintained vehicles in accordance with the Company policy.
The aggregate amount charged in these financial statements in respect of directors' meeting fee paid to 2 (2009: 2)
directors was Rupees 70,000 (2009: Rupees 60,000).
37. TRANSACTIONS WITH RELATED PARTIES
The related parties comprise of subsidiaries, associated undertakings, directors of the company and their close
relatives, key management personnel and staff retirement fund. Detail of transactions with related parties, other than
those which have been specifically disclosed elsewhere in these financial statements are as follows:
2010
2009
Transaction with Subsidiary Companies
Purchase of goods and services
Sale of goods and services
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of shares
484
147
1,770
419
200
4,523
1,485
-
Transaction with Associated Company

Dividend income
12,797
15,996
Post employment benefit plan

Contribution to provident fund
Interest on provident fund
20,897
2,968
19,122
322
71
2010
2009
PROCESSING OF CLOTH :
(Meters in thousand)
- Rawalpindi Division
38. EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earning/ (loss) per share which is
41,975
41,975
Actual at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts)
34,653
30,626
POWER PLANT:
based on:
Profit/ (loss) attributable to ordinary shares
Capacity at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts)
Rupees in thousand
277,861
(439,811)
Weighted average number of ordinary shares
Numbers
145,526,216
145,526,216
Earnings/ (loss) per share
Rupees
1.91
(3.02)
Annual rated capacity (based on 365 days)
(Numbers)
85,834
85,680
100% Plant capacity converted into 20s count based on 3 shifts per day
2,198
7,124
Gas engines
78,080
64,663
54,460
54,312
26,212
28,166
Actual generation
Gas engines
Stitching
37,945
37,950
Actual production converted into 20s count based on 3 shifts per day for
The plant capacity of this division is indeterminable due to multi product plants involving varying processes
of manufacturing and run length of order lots.
35,298
35,211
- Gujar Khan Division

Spindles (average) installed / worked;
Main engines
(Kilograms in thousand)
1,095 shifts (2009: 1,095 shifts)
207,787
- Raiwind Division
SPINNING:
for 1,095 shifts (2009: 1,095 shifts)
207,787
Actual generation
39. PLANT CAPACITY AND ACTUAL PRODUCTION
(Mega Watts)
(Numbers)
66,068
70,848
REASONS FOR LOW PRODUCTION

-
Due to stoppage for normal maintenance, doffing, change of spin plans and cloth quality, interruption in gas
andelectricity supply.
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
31,295
26,318
Cloth processing units working capacity was limited to actual export / local orders in hand.
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)
40. POST BALANCE SHEET EVENT
WEAVING:
- Raiwind Division
Looms installed / worked
In accordance with the approval of the shareholders in their Extraordinary General Meeting held on 03 May 2010 and
(Numbers)
204
subsequent permission granted by the Securities and Exchange Commission of Pakistan (SECP), the Company
204
100% Plant capacity at 60 picks based on 3 shifts per day for 1,095 shifts
(2009: 1,095 shifts)
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 Zimpex (Private) Limited in accordance
with the agreement dated 10 March 2010 between the three allottees, the Company and Maple Leaf Cement Factory
72,568
72,568
68,605
68,271
Limited subsidiary company.
Actual production converted to 60 picks based on 3 shifts per day for

1,072 shifts (2009: 1,092 shifts)
72
73
74
41.2
41.1
41.
30 June 2010
30 June 2009
Weaving
30 June 2009
30 June 2010
30 June 2009
Elimination of inter-segment
transactions
204,718
(18,129)
(55,961)
(74,090)
130,628
1,222,992
(16,234)
(64,130)
(80,364)
1,142,628
2,571,181
(2,160,689)
410,492
(53,782)
(51,207)
(104,989)
305,503
3,079,523
(2,698,019)
381,504
(57,076)
(60,939)
(118,015)
263,489
5,474,514
1,771
(70,034)
(394,542)
(324,508)
396,313
(5,078,201)
4,756,984
182,962
(68,797)
(461,734)
(392,937)
644,696
(4,112,288)
-
1,918,824
2,682,827
-
(1,918,824)
(2,682,827)
2,399,058
2,514,724
1,211,488
1,701,352
689,813
842,797
2,005,937
1,725,080
2,604,786
2,973,709
5,429,033
2,978,474
7,194,550
6,080,989
13,275,539
7,996,910
5,278,629
13,275,539
6,584,255
10,473,044
17,057,299
5,300,536
11,756,763
17,057,299
8,458,899
(7,198,993)
1,259,906
(464,848)
(175,965)
(640,813)
619,093
(1,260,230)
(22,090)
126,551
96,865
(1,058,904)
(439,811)
10,693,338
(8,692,529)
2,000,809
(397,818)
(195,103)
(592,921)
1,407,888
(1,072,768)
(37,323)
78,651
(98,587)
(1,130,027)
277,861
30 June 2009
Company
30 June 2010
Spinning
Weaving
Company
Processing and home textile
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)------------------------------------------------------------------------
3,049,558
(2,844,840)
4,822,128
All segment liabilities are allocated to reportable segments other than trade and other payables, corporate borrowings and current and deferred tax liabilities.
UNALLOCATED LIABILITIES
TOTAL LIABILITIES FOR REPORTABLE SEGMENT
30 June 2010
----------------------------------------------------------- ( R u p e e s in t h o u s a n d ) -------------------------------------------------------------
30 June 2009
(3,599,136)
30 June 2010
Spinning
All segment assets are allocated to reportable segments other than those directly relating to corporate and tax assets.
UNALLOCATED ASSETS
TOTAL ASSETS FOR REPORTABLE SEGMENT
Reconciliation of reportable segment assets and liabilities
PROFIT / (LOSS) AFTER TAXATION
PROFIT BEFORE TAX AND UNALLOCATED INCOME

AND EXPENSES
UNALLOCATED INCOME AND EXPENSES
FINANCE COST
DISTRIBUTION COST
GROSS PROFIT
COST OF SALES
SALES
SEGMENT INFORMATION
41.3
Geographical Information
41.3.1
The Company's revenue from external customers by geographical location is detailed below:
2010
2009
Europe
America
Asia, Africa, Australia
Pakistan
1,664,667
4,040,326
799,050
4,189,295
10,693,338
41.3.2
All non current assets as at reporting date are located and operated in Pakistan.
41.4
Revenue from major customers
1,714,770
3,407,655
365,008
2,971,466
8,458,899
The Company's revenue is earned from a large mix of customers.
42. FINANCIAL RISK MANAGEMENT

42.1 Financial risk factors
The Company's activities expose it to a variety of financial risks: market risk (including currency risk, other
price risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the Company's financial performance. The Company uses derivative financial instruments to hedge
certain risk exposures.
Risk management is carried out by the Company's finance department under policies approved by the Board
of Directors. The Company's finance department evaluates and hedges financial risks. The Board provides
principles for overall risk management, as well as policies covering specific areas such as currency risk, other
price risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non derivative
financial instruments and investment of excess liquidity.
(a) Market risk

(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
transactions or receivables and payables that exist due to transactions in foreign currencies.
The Company is exposed to currency risk arising from various currency exposures, primarily with
respect to the United States Dollar (USD), Euro and GBP. Currently, the Company's foreign exchange
risk exposure is restricted to bank balances, the amounts receivable / payable from / to the foreign
entities. The Company uses forward exchange contracts to hedge its foreign currency risk, when
considered appropriate. The Company's exposure to currency risk was as follows:
75
Cash at banks - USD

Trade debts - USD
Trade debts - Euro
Trade debts - GBP
Trade and other payable - USD
Net exposure - USD
Net exposure - Euro
Net exposure - GBP
The following significant exchange rates were applied
during the year:
Rupees per US Dollar
Average rate
Reporting date rate
Rupees per Euro
verage rate
Reporting date rate
Rupees per GBP
Average rate
Reporting date rate
2010
2009
72
37
10,473
11,864
245
832
18
26
30
10,519
11,871
245
832
18
-
Impact on profit/ (loss) after taxation
Impact on statement of other

comprehensive income
2010
2009
2010
2009
-------------------------------- (RUPEES IN THOUSAND) -----------------------------------KSE 100 (5% increase)
KSE 100 (5% decrease)
401
(401)
307
(307)
(iii)Interest rate risk

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.
83.55
85.40
78.73
81.10
The Company has no significant long-term interest-bearing assets. The Company's interest rate risk arises
from long term financing, liabilities against assets subject to finance lease, lease finance advance and
short term borrowings. Borrowings obtained at variable rates expose the Company to cash flow interest
rate risk. Borrowings obtained at fixed rate expose the Company to fair value interest rate risk.
107.92
104.33
107.74
114.54
At the balance sheet date the interest rate profile of the Companys interest bearing financial instruments
was:
132.08
128.66
126.45
135.05
Sensitivity analysis
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD, Euro
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
impact on loss after taxation for the previous year was Rupees 42.655 million, Rupees 1.403 million and
Rupees 0.122 million respectively lower / higher, 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 sensitivity
analysis is unrepresentative of inherent currency risk as the year end exposure does not reflect the
exposure during the year.
(ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
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
exposed to commodity price risk.
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
on the assumption that the equity index had increased / decreased by 5% with all other variables held
constant and all the Company's equity instruments moved according to the historical correlation with the
index:
76
Index
2010
2009
Fixed rate instruments
Financial liabilities
Long term financing
Floating rate instruments
Financial assets
Bank balances- saving accounts
Long term financing
407,742
1,555,000
-
549,141
1,580,000
8,017
12,673
13,891
1,920,759
4,515,435
135,030
-
2,200,200
3,230,471
179,174
35,922
Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss. Therefore, a change in interest rate at the balance sheet date would not affect profit or loss of the
Company.
Cash flow sensitivity analysis for variable rate instruments
If interest rate at the year end date, fluctuates by 1% higher / lower with all other variables held constant,
profit after taxation for the year would have been Rupees 65.712 million lower / higher and loss after
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.
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
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:
Due to the Company's long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, management does not expect non-performance by these
counter parties on their obligations to the Company. Accordingly the credit risk is minimal.
2010
2009
607,610
642,111
20,060
41,124
1,050,101
1,329,065
122
141
24,176
20,551
79,576
77,890
1,781,645
2,110,882
Investments
Deposits
Trade debts
Accrued interest
Other receivables
Bank balances
(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through
an adequate amount of committed credit facilities. At 30 June 2010, the Company had Rupees 7.533
million available borrowing limits from financial institutions and Rupees 78.851 million cash and bank
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
liabilities, including interest payments. The amount disclosed in the table are undiscounted cash flows:
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
Amount
Cash
Flows
Rating
2009
2010
Short Term Long term Agency (Rupees in thousand)
Banks
National Bank of Pakistan
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Faysal Bank Limited
Habib Bank Limited
MCB Bank Limited
NIB Bank Limited
The Royal Bank of Scotland Limited
My Bank Limited
The Bank of Punjab
Meezan Bank Limited
Silk bank Limited
Standard Chartered Bank (Pakistan) Limited
United Bank Limited
Al-Baraka Islamic Bank Limited
Bank Al Habib Limited
Investments
78
6 month
or less
6-12
month
1-2
Year
More than
2 Years
------------------------------------ (Rupees in thousand) -----------------------------A-1+

A1+
A1+
A1+
A-1+
A-1+
A1+
A1+
A1+
A2
A1+
A-1
A-3
A1+
A-1+
A-1
A-1+
AAA
AA
AA
AA
AA
AA+
AA+
AAAA
AAAAAAAAA
AA+
A
AA+
JCR-VIS
PACRA
PACRA
PACRA
JCR-VIS
JCR-VIS
PACRA
PACRA
PACRA
PACRA
PACRA
JCR-VIS
JCR-VIS
PACRA
JCR-VIS
JCR-VIS
PACRA
JCR-VIS
754
32,531
7,822
1,421
4,108
67
9,907
12,313
88
30
540
319
2,945
2,309
133
2,565
38
77,890
4,656
31,292
5,703
2,536
1,872
103
12,611
11,106
76
30
1,763
30
837
2,611
4,350
79,576
634,095
601,463
711,985
681,039
Non derivative financial

liabilities:
Long term financing
Liabilities against assets
subject to finance lease
Accrued mark-up
2,950,434
542,361
398,510
699,117
1,310,446
135,030
155,263
989,594
989,594
185,259
289,987
6,070,435 6,268,109
9,813,547 10,548,659
53,450
989,594
185,259
5,796,162
7,566,826
32,487
471,947
902,944
45,157
744,274
24,169
1,334,615
6-12
month
1-2
Year
More than
2 Years
2,328,501

Carrying
Amount
Non derivative financial
Liabilities
Long term financing
subject to
Accrued mark-up
Contractua
l Cash
Flows
6 month
or less
------------------------------------ (Rupees in thousand) -----------------------------2,749,341
3,413,720
506,992
606,169
1,031,773
1,268,786
187,191
35,922
808136
185,259
4,810,471
8,776,320
207,348
36,460
989,594
185,259
4,991,732
9,824,113
35,963
36,460
989,594
185,259
4,438,253
6,192,521
52,959
553,479
1,212,607
50,812
1,082,585
67,614
1,336,400
79
The contractual cash flows relating to the above financial liabilities have been determined on the basis of
interest rates / mark up rates effective as at 30 June. The rates of interest / mark up have been disclosed in note
6, note 7, and note 11 to these financial statements.
at amortized cost
42.2 Fair values of financial assets and liabilities

The carrying values of all financial assets and liabilities reflected in financial statements approximate their fair
values. The following table provides an analysis of financial instruments that are measured subsequent to
initial recognition at fair value, grouped in to levels 1 to 3 based on the degree to which fair value is observable:
Level 1
Level 2
Total
Level 3
-----------------------------(Rupees in thousand)---------------------------As at 30 June 2010

Assets
Available for sale financial assets
As at 30 June 2009
Assets
634,095
634,095
601,463
601,463
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 Company is the current bid
price. These financial instruments are classified under level 1 in above referred table. The Company has no
such type of financial instruments as on 30 June 2010.
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 value a financial
instrument are observable, those financial instruments are classified under level 2 in above referred table.
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
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 that is available to
the company for similar financial instruments. The Company has no such type of financial instruments as on
30 June 2010.
Through
Loans and
profit and
receivables
loss
Available
for sale
Total

Assets as per balance sheet
Investments
Deposits
Trade debts
Interest accrued
Other receivables
80
41,124
1,329,065
141
20,551
78,851
1,469,732
8,016
-
634,095
-
8,016
634,095
642,111
41,124
1,329,065
141
20,551
78,851
2,111,843
Liabilities as per balance sheet

Long term financing
Accrued mark-up
2,328,501
135,030
989,594
289,987
6,070,435
9,813,547
Through
Loans and
Available
profit and
Total
receivables
for sale
loss
Investments
Deposits
Trade debts
Interest accrued
Other receivables
20,060
1,050,101
122
24,176
80,297
1,174,756
6,147
-
601,463
-
6,147
601,463
607,610
20,060
1,050,101
122
24,176
80,297
1,782,366
at amortized cost
Long term financing
Accrued mark-up
2,749,341
187,191
35,922
808,136
185,259
4,810,471
8,776,320
42.4 a) Capital risk management

The Companys objectives when managing capital are to safeguard the Companys 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 Company 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 the industry and the requirements of the lenders, the Company monitors the capital
structure on the basis of gearing ratio. This ratio is calculated as borrowings divided by total capital
81
employed. Borrowings represent long-term financing, liabilities against assets subject to finance lease,
lease finance advance and short-term borrowings obtained by the Company as referred to in note 6, note
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:
2010
2009
Borrowings
Total equity
Total capital employed
Gearing Ratio
8,533,966
3,361,268
11,895,234
72%
,782,925
3,059,341
10,842,266
72%
43. DATE OF AUTHORIZATION FOR ISSUE

These financial statements were authorised for issue on September 29, 2010 by the Board of Directors of the
Company.
44. CORRESPONDING FIGURES
No significant reclassification/ rearrangement of corresponding figures has been made.
45. GENERAL
Figures have been rounded off to the nearest thousand of Rupees unless stated otherwise.
__________________
CHIEF EXECUTIVE
82
__________________
DIRECTOR
PATTERN OF SHAREHOLDING
1. CUIN (Incorporation Number)
0002805
2. Name of the Company
3. Pattern of holding of the shares held by the shareholders as at
30.06.2010
S i z e
4.
No. of
Shareholders
2,628
1,066
406
650
132
45
30
22
13
7
6
7
8
3
5
7
2
3
2
1
5
2
3
1
2
1
1
1
1
1
1
1
1
1
1
1
1
2
1
2
1
1
From
1
101
501
1,001
5,001
10,001
15,001
20,001
25,001
30,001
35,001
40,001
45,001
50,001
55,001
60,001
65,001
70,001
85,001
90,001
95,001
100,001
105,001
110,001
120,001
125,001
130,001
145,001
150,001
160,001
165,001
200,001
205,001
210,001
215,001
245,001
250,001
275,001
290,001
300,001
315,001
335,001
o f
H o l d i n g
To
100
500
1,000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
90,000
95,000
100,000
105,000
110,000
115,000
125,000
130,000
135,000
150,000
155,000
165,000
170,000
205,000
210,000
215,000
220,000
250,000
255,000
280,000
295,000
305,000
320,000
340,000
Total
Shares Held
73,362
310,476
304,401
1,713,151
990,944
547,146
548,833
515,611
353,850
228,179
234,446
297,802
387,153
152,384
290,604
439,734
132,208
217,998
178,214
94,700
495,088
201,227
321,077
110,074
245,000
126,529
133,317
149,999
150,223
160,085
169,838
201,156
208,272
215,000
218,000
246,081
251,293
553,549
293,000
605,291
315,847
338,510
83
S i z e
o f
Total
Shares Held
No. of
Shareholders
From
To
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
340,001
395,001
445,001
450,001
480,001
490,001
495,001
520,001
560,001
645,001
690,001
780,001
840,001
875,001
905,001
1,115,001
1,280,001
2,030,001
2,360,001
3,235,001
3,325,001
5,075,001
8,040,001
8,260,001
9,045,001
10,040,001
10,825,001
22,510,001
35,205,001
345,000
400,000
450,000
455,000
485,000
495,000
500,000
525,000
565,000
650,000
695,000
785,000
845,000
880,000
910,000
1,120,000
1,285,000
2,035,000
2,365,000
3,240,000
3,330,000
5,080,000
8,045,000
8,265,000
9,050,000
10,045,000
10,830,000
22,515,000
35,210,000
5,105
Percentage
No. of
Shareholders Shares Held of Capital
H o l d i n g
340,584
400,000
447,218
450,216
483,000
988,483
500,000
525,000
560,500
645,500
691,753
784,047
841,200
877,134
905,062
1,116,000
1,283,007
2,031,482
2,362,066
3,238,871
3,326,368
5,077,500
8,040,081
8,261,366
9,045,940
10,040,331
10,827,332
22,510,635
35,205,888
145,526,216
TOTAL
Note : The Slabs not applicable above have not been shown.
5
Categories of Shareholders
5.1 Directors, CEO and their spouses & minor children
No. of
Shareholders
Mr. Tariq Sayeed Saigol, Chairman/Director

Mr. Taufique Sayeed Saigol, Chief Executive/Director
Mr. Sayeed Tariq Saigol, Director
Mr. Waleed Tariq Saigol, Director
Mr. Kamil Taufique Saigol, Director
Mr. Zamiruddin Azar, Director
Mr. Abdul Hai Mehmood Bhaimia, Director
Mrs. Shehla Tariq Saigol, spouse of Mr. Tariq Sayeed Saigol
8
Shares Held
10,040,331
10,827,332
315,847
20,937
2,500
5,930
23,643
450,216
21,686,736
Percentage
of Capital
6.8993
7.4401
0.2170
0.0144
0.0017
0.0041
0.0163
0.3094
14.9023
5.2. Associated Companies, undertakings and related parties

22,510,635
15.4684
3,326,368
18,247
3,344,615
2.2858
0.0125
2.2983
21
6
8
3,627,578
1,305,345
2,245,333
2.4927
0.8970
1.5429
4,944
10
88
1
-
29,723,755
43,575,197
17,082,061
300,405
-
20.4251
29.9432
11.7381
0.2064
-
16
5,105
1,815
2,794
260
506
1
3,045
354
61,425
1
9,075
760
3,751
20,000
20,000
173
596
124,556
145,526,216
0.0856
100.0000
5.3 NIT and ICP

National Bank of Pakistan, Trustee Deptt.
IDBP (ICP UNIT)
5.4 Banks, Development Financial Institutions, Non-Banking
Financial Institutions
5.5 Insurance Companies
5.6 Modarabas, Leasing and Mutual Funds
5.7 Shareholders holding Ten Percent or
more voting interest in the Company
refer 5.2 & 5.8 b
5.8 General Public
a. Individuals
b. Foreign Investor (s)
5.9 Joint Stock Companies
5.10 Public Sector Companies and Corporations
5.11 Executives
5.12 Others
Artal Restaurant Int Limited Employees Provident Fund
Fikree Development Corporation Limited
Hussain Trustees Limited
Manage Committee of Tameer-e-Millat Foundation
Securities & Exchange Commission of Pakistan
The Deputy Administrator. Abandoned Properties
The Ida Rieu Poor Welfare Association
The Karachi Stock Exchange (Guarantee) Limited-Future Cont.
The Okhai Memon Madressah Association
Trustees Al-Abbas Sugar Mills Limited Employees Gratuity Fund
Trustees Artal Restaurants Intl Employees Provident Fund
Trustees Moosa Lawai Foundation
Trustees Nestle Pakistan Limited Employees Provident Fund
Trustees Nestle Pakistan Limited Managerial Staff Pension
United Executers & Trustee Company Limited
University of Sindh
Grand Total :
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
of the group for the year ended 30th June, 2010.
We have audited the annexed consolidated financial statements comprising consolidated

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
profit and loss account, consolidated statement of comprehensive income, consolidated
cash flow statement and consolidated statement of changes in equity together with the
notes forming part thereof, for the year then ended. We have also expressed separate
opinion on the financial statements of Kohinoor Textile Mills Limited. The financial
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
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
responsibility is to express an opinion on these financial statements based on our audit
GROUP RESULTS
The Group has earned gross profit of Rs. 5,056 million as compared to Rs. 6,323 million
of corresponding year. The group has suffered pre-tax loss of Rs. 2,193 million this year as
compared to Rs. 1,454 million during the last year.
The overall group financial results are as follows:
Gross sales
Gross profit
Financial Charges
2010
2009
24,440,066
23,812,751
5,056,138
6,322,818
939,061
3,206,130
3,132,244
4,660,471

The subsidiary company of Kohinoor Textile Mills Limited has shown gross profit of
21.56% as compared to 32.49% of previous year.
ACKNOWLEDGEMENT
Our audit was conducted in accordance with the International Standards on Auditing and
accordingly included such tests of accounting records and such other auditing procedures as
we considered necessary in the circumstances.
In our opinion, the consolidated financial statements present fairly the financial position of
Kohinoor Textile Mills Limited and its subsidiary companies as at 30 June 2010 and the
results of their operations for the year then ended.
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
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.

Atif Bin Arshad
Lahore: September 29, 2010
Taufique Sayeed Saigol

Chief Executive
ISLAMABAD
88
89
CONSOLIDATED BALANCE SHEET

2010
2009
NOTE
AS AT 30 JUNE 2010
NOTE
EQUITY AND LIABILITIES
ASSETS
SHARE CAPITAL AND RESERVES
NON-CURRENT ASSETS
Authorized share capital

370,000,000 ( 2009: 170,000,000)
ordinary shares of Rupees 10 each
30,000,000 ( 2009: 30,000,000) preference
shares of Rupees 10 each
3,700,000
1,700,000
300,000
4,000,000
300,000
2,000,000
1,455,262
1,462,928
2,918,190
2,405,263
5,323,453
1,455,262
2,456,202
3,911,464
3,669,866
7,581,330

Intangible assets
Long term loans to employees
Long term deposits and prepayments
Issued, subscribed and paid up share capital

Reserves
Shareholders' equity
Non controlling interest
Equity attributable to equity holders of the Group
3
4
Surplus on revaluation of property

Share deposit money
6
7
3,673,825
1,000,000
1,263,592
-
8
9
10
4,227,075
8,289,800
767,748
2,739
26,493
157,996
13,471,851
2,745,185
7,200,000
963,133
35,922
2,580
18,990
204,422
11,170,232
4,439,979
1,211,799
10,131,273
1,635,888
17,418,939
30,890,790
3,193,658
626,453
9,192,793
3,648,540
16,661,444
27,831,676
Non-current assets classified as held for sale
40,888,068
36,676,598
TOTAL ASSETS
NON-CURRENT LIABILITIES
Long term financing
Redeemable capital
Long term deposits
Employees' benefits
Deferred tax
CURRENT LIABILITIES
Accrued mark-up
Current portion of non-current liabilities
11
12
13
14
15
16
17
TOTAL LIABILITIES
CONTINGENCIES AND COMMITMENTS
TOTAL EQUITY AND LIABILITIES
CURRENT ASSETS
Stock -in- trade
Trade debts
Loans and advances
Due from gratuity fund trust
Interest accrued
Other receivables
Short term investments
Taxation recoverable
2010
2009
19
20
21
22
23
27,531,515
1,720,835
1,774
3,293
86,460
29,343,877
24,521,559
1,720,835
7,332
5,666
85,102
26,340,494
24
25
26
27
42
28
2,753,208
2,897,831
2,080,465
863,437
137,402
797
494,916
1,114,449
396,310
152,453
10,891,268
3,240,141
2,430,740
1,732,345
398,158
8,184
171,689
1,105
320,778
1,014,173
236,900
180,229
9,734,442
652,923
11,544,191
601,662
10,336,104
40,888,068
36,676,598
29
30
31
32
33
18
The annexed notes form an integral part of these consolidated financial statements.
CHIEF EXECUTIVE
90
DIRECTOR
91
CONSOLIDATED PROFIT AND LOSS ACCOUNT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

NOTE
SALES
COST OF SALES
GROSS PROFIT
34
35
DISTRIBUTION COST
36
37
38

PROFIT FROM OPERATIONS
39
FINANCE COST
LOSS BEFORE TAXATION
40

LOSS AFTER TAXATION
NON CONTROLLING INTEREST
Dividend on preference shares
Share in loss for the year
41
LOSS AFTER TAXATION AND NON CONTROLLING INTEREST

LOSS PER SHARE - BASIC AND DILUTED (Rupees)
2010
2009
24,440,066
(19,383,928)
5,056,138
23,812,751
(17,489,933)
6,322,818
(3,667,408)
(388,042)
(197,309)
(4,252,759)
803,379
135,682
939,061
(2,912,955)
(326,873)
(60,807)
(3,300,635)
3,022,183
183,947
3,206,130
(3,132,244)
(2,193,183)
(4,660,471)
(1,454,341)
(113,034)
(2,306,217)
31,546
(1,422,795)
52,794
(1,315,024)
(1,262,230)
(1,043,987)
52,794
(516,554)
(463,760)
(959,035)
(7.17)
(6.59)
46
CHIEF EXECUTIVE
92
2010
2009
LOSS AFTER TAXATION
(2,306,217)
(1,422,795)
OTHER COMPREHENSIVE LOSS

Surplus / (deficit) on remeasurement of available for
sale investment
Deferred tax on remeasurement of available for
sale investment
Adjustment of cross currency interest rate swap

Deferred tax on adjustment of cross currency interest
rate swap
Other comprehensive income / (loss) for the year - net
of tax
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
104,708
(737,065)
(27,486)
77,222
193,478
(543,587)
(571,802)
72,119
(499,683)
77,222
(1,043,270)
(2,228,995)
(2,466,065)
(993,274)
(1,235,721)
(1,699,421)
(766,644)
(2,228,995)
(2,466,065)
Total comprehensive loss attributable to :

Equity holders of parent
Non controlling interest
DIRECTOR
CHIEF EXECUTIVE
DIRECTOR
93
94
DIRECTOR
2,918,190 2,405,263 5,323,453

689,932 1,462,928
(760,559)
772,996 1,450,491
CHIEF EXECUTIVE
628,077
144,919
1,455,262
(28,882)
(28,882)
(993,274) (1,235,721) (2,228,995)
(1,043,987) (1,043,987) (993,274)
50,713
50,713
Dividend paid to non-controlling interest holders
Total comprehensive loss
3,911,464 3,669,866 7,581,330

283,428 1,733,919 2,456,202
722,283 1,450,491
577,364
144,919
1,455,262
(52,478)
(52,478)
-
(959,035) (959,035) (1,699,421) (1,699,421) (766,644) (2,466,065)
(740,386)
(423,109) (317,277)
Dividend paid to non-controlling interest holders
40,000
(40,000)
-
Total
equity
5,610,885 4,488,988 10,099,873

1,202,463 2,692,954 4,155,623
1,462,669 1,490,491
317,277
144,919 1,000,473
Total comprehensive loss
DIRECTOR
CHIEF EXECUTIVE
Transfer from general reserve
1,455,262
180,229
Sub-Total
152,453
Cash and cash equivalents at the end of the year
Hedging
reserves
913,964
(1,023,619)
35,922
1,828,531
(80,576)
(2)
(52,539)
1,621,681
708
179,521
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Proceeds from long term financing

Redeemable capital
Repayment of long term financing
Short term borrowings - net
Repayment of liabilities against assets subject to finance lease
Proceeds from share deposit money
Redeemable capital
Repayment of term finance certificates
Long term deposits from stockist - net
Dividend paid
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Fair value
reserve
625,536
300,000
(420,840)
(35,922)
938,480
(175,168)
1,000,000
(3,400)
(599)
159
(28,882)
2,199,364
(27,776)
180,229
CASH FLOWS FROM FINANCING ACTIVITIES
Share
premium
(1,840,294)
(190,230)
455
(30,225)
12,079
10,143
13,792
25,000
28,259
(1,971,021)
Non
controlling
Interest
(1,980,444)
(51,261)
2,373
(65,775)
6,589
13,644
3,664
22,653
(2,048,557)
Total
5,080,447
(4,464,982)
(3,744)
(25)
(2,264)
(259,384)
350,048
Total
General Un-appropriated
Sub-Total reserves
reserve profit /(loss)
2,717,867
(2,546,898)
(10,021)
8,184
(1,358)
(346,357)
(178,583)
Capital reserves
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipment
Payment for non current assets classified as held for sale
Long term loans to employees
Investments made
Return on bank deposits received
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments
Sale of non current assets classified as held for sale
Dividend received
Net cash used in investing activities
2010
2009
( Rupees in thousand)
Share
capital
43
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations
Finance cost paid
Compensated absences paid
Workers' Profit Participation Fund paid
Funds received/ paid to gratuity fund trust
Long term deposits
Income taxes paid
Net cash generated from / (used in) operating activities
NOTE
Share holders' Equity

Reserves
Revenue reserves
CONSOLIDATED CASH FLOW STATEMENT

95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.
THE GROUP AND ITS OPERATIONS

1.1 Holding Company
Kohinoor Textile Mills Limited ("the Holding Company") 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 registered office of the Company is situated
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
and indirectly holds 50.12% (2009: Nil) shares of Vital Trading (Private) Limited. The principal
activity of the Holding Company is manufacturing of yarn and cloth, processing and stitching the
cloth and trade of textile products.
2.1 Basis of Preparation

a) Statement of Compliance
These consolidated financial statements have been prepared in accordance with approved
accounting standards as applicable in Pakistan. Approved accounting standards comprise of
such International Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board as are notified under the Companies Ordinance, 1984, provisions of and
directives issued under the Companies Ordinance, 1984. In case requirements differ, the
provisions or directives of the Companies Ordinance, 1984 shall prevail.
b) Accounting Convention
These consolidated financial statements have been prepared under the historical cost
convention, except for:
-
1.2 Subsidiary Companies

a) Maple Leaf Cement Factory Limited ("the Subsidiary") was incorporated in Pakistan on 13 April,
1960 under the Companies Act, 1913 (now the Companies Ordinance, 1984) as a public
company limited by shares and was listed on stock exchanges in Pakistan on 17 August, 1994.
The registered office of the Subsidiary is situated at 42-Lawrence Road, Lahore. The Subsidiary
is engaged in production and sale of cement.
b) Concept Trading (Private) Limited ('the Subsidiary') was incorporated in Pakistan on March 11,
2010 as a trading concern. The registered office of the Company is situated at 42-Lawrence
Road, Lahore.
c) Vital Trading (Private) Limited ('the Subsidiary') was incorporated in Pakistan on March 11, 2010
as a trading concern. The registered office of the Company is situated at 42-Lawrence Road,
Lahore.
1.3 Basis of consolidation
The financial statements of the Subsidiaries are included in the consolidated financial statements
from the date control commences until the date that control ceases.
The assets and liabilities of the Subsidiaries have been consolidated on a line by line basis and the
carrying value of investment held by the Holding Company is eliminated against Holding Company's
share in paid up capital of the Subsidiaries.
Material intra-group balances and transactions have been eliminated.
Non controlling interest is that part of net results of the operations and of net assets of the
Subsidiaries attributable to interests which are not owned by the Holding Company. Non controlling
interest is presented as a separate item in the consolidated financial statements.
2.
96
modification of foreign currency translation adjustments;

revaluation of free hold land at fair value;
revaluation of investment properties at fair value;
recognition of employee retirement benefits at present value; and
measurement at fair value of certain financial assets.
c) Critical accounting estimates and judgments

The preparation of consolidated financial statements in conformity with the approved accounting
standards require the use of certain critical accounting estimates. It also requires the
management to exercise its judgment in the process of applying the Group's accounting policies.
Estimates and judgments are continually evaluated and are based on historical experience,
including expectation of future events that are believed to be reasonable under the
circumstances. The areas where various assumptions and estimates are significant to the
Group's financial statements or where judgments were exercised in application of accounting
policies are as follows:
Financial instruments
The fair value of financial instruments that are not traded in an active market is determined by
using valuation techniques based on assumptions that are dependent on conditions existing at
balance sheet date.
Useful lives, patterns of economic benefits and impairments
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
of assets for possible impairments on an annual basis. Any change in the estimates in the future
might affect the carrying amount of respective item of property, plant and equipment, with a
corresponding effect on the depreciation charge and impairment.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Taxation
The significant accounting policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all years presented, unless otherwise
stated:
In making the estimates for income tax currently payable by the Group, the management takes
into account the current income tax law and the decisions of appellate authorities on certain
issues in the past.
97
Provisions for doubtful debts

The Group reviews its receivable against any provision required for any doubtful balances on an
ongoing basis. The provision is made while taking into consideration expected recoveries, if any.
Impairment of investments in associated companies
In making an estimate of recoverable amount of the Group's investments in associated
companies, the management considers future cash flows.
d) Standards and amendments to published approved accounting standards that are
effective in current year
i) Changes in accounting policies and disclosures arising from standards and
amendments to published approved accounting standards that are effective in the
current year
IAS 1 (Revised) 'Presentation of Financial Statements' (effective for annual periods
beginning on or after 01 January 2009).The revised standard prohibits the presentation of
items of income and expenses (that is non-owner changes in equity) in the statement of
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
presents in the statement of changes in equity all owner changes in equity, whereas all nonowner changes in equity are presented in the statement of comprehensive income.
Comparative information has been re-presented so that it also is in conformity with the
revised standard. As the change in accounting policy only impacts presentation aspects,
there is no impact on earnings per share.
IFRS 7 (Amendment) Financial instruments: Disclosures (effective for annual periods
beginning on or after 01 January 2009). This amendment requires enhanced disclosures
about fair value 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 results in additional disclosures, there is no impact on
earnings per share.
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
presentation and disclosure of segment information based on the internal reports regularly
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
segment information as IAS 14 limited reportable segments to those that earn a majority of
their revenue from sales to external customers and therefore did not require the different
stages of vertically integrated operations to be identified as separate segments. Under the
management approach, the Group has determined operating segments on the basis of
business activities i.e. Spinning, Weaving, Processing, Home Textile and cement. As the
change in accounting policy only results in additional disclosures of segment information,
there is no impact on earnings per share.
98
ii) Other amendment to published approved accounting standards that is effective in the
current year
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
acquisition, construction or production of a qualifying asset (one that takes a substantial
period of time to get ready for its intended use or sale) as part of the cost of that asset. The
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.
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
changes. For example, all payments to purchase a business are to be recorded at fair value at
the acquisitions date, with contingent payments classified as debt subsequently remeasured 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
non-controlling interest's proportionate share of the acquiree's net assets. All acquisitionrelated costs should be expensed. This amendment does not have any effect on the Group's
financial statements.
IAS 27 (Revised) 'Consolidated and separate financial statements' (effective from July
1,2009). The revised standard requires the effects of all transactions with non-controlling
interests to be recorded in equity if there is no change in control and these transactions will no
longer result in good will or gains and losses. The standard also specifies the accounting
when control is lost. Any remaining interest in entity is re-measured to fair value, and a gain or
loss is recognised in profit or loss. This amendment does not have any effect on the Group's
IAS 28 (Amendment) 'Investment in associates' (effective from January 1, 2009). An
investment in associate is treated as a single asset for the purpose of impairment testing. Any
impairment loss is not allocated to specific assets included within the investment, for example,
goodwill. Reversals of impairment are recorded as an adjustment to the investment balance
to the extent that the recoverable amount of the associate increases. This amendment do not
have any effect on the Group's financial statements.
e) Standards, interpretations and amendments to published approved accounting
standards that are effective in current year but not relevant
There are other new standards, interpretations and amendments to the published approved
accounting standards that are mandatory for accounting periods beginning on or after 01 July
2009 but are considered not to be relevant or do not have any significant impact on the Group's
financial statements and are therefore not detailed in these consolidated financial statements.
f) Standard and amendments to published approved accounting standards that are not yet
effective but relevant
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:
99
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 equity investments are to be measured at fair value while
eliminating the cost model for unquoted equity 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. The management of the
Group is in the process of evaluating impacts of the aforesaid standard on the Group's financial
statements.
There are other amendments resulting from annual Improvements projects initiated by
International Accounting Standards Board in April 2009 and May 2010, specifically in IFRS 7
'Financial Instruments: 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 relevant to the Group's financial statements.
These amendments are unlikely to have a significant impact on the Group's financial statements
and have therefore not been analyzed in detail.
g) Standards, interpretations and amendments to published approved accounting
standards that are not effective in current year and not considered relevant
There are other accounting standards, amendments to published approved accounting
standards and new interpretations that are mandatory for accounting periods beginning on or
after 01 July 2010 but are considered not to be relevant or do not have any significant impact on
the Group's financial statements and are therefore not detailed in these consolidated financial
statements.
2.2 Employee benefits
Holding Company
The Holding Company operates an approved funded contribution provident fund covering all of its
permanent employees. Equal monthly contributions are made both by the Holding Company and
employees at the rate of 8.33 percent of basic salary and cost of living allowance to the fund. The
Holding Company's contributions to the fund are charged to profit and loss account.
Subsidiary Company - Maple Leaf Cement Factory Limited
a) Defined contribution plan
The Subsidiary operates a defined contributory approved provident fund for all of its employees.
Equal monthly contributions are made both by the Subsidiary and employees at the rate of 10%
of the basic salary to the fund.
b) Defined benefit plan
The Subsidiary operates un-funded gratuity scheme for all workers of the Company who have
completed minimum qualifying period of service as defined under the respective scheme.
Provisions are made to cover the obligations under the schemes on the basis of actuarial
valuation and are charged to income.
100
The amount recognized in the balance sheet represents the present value of defined benefit
obligations as adjusted for unrecognized actuarial gains and losses.
Cumulative net unrecognized actuarial gains and losses at the end of previous year which
exceeds 10% of the present value of the Companys gratuity is amortized over the average
expected remaining working lives of the employees.
c) Liability for employees' compensated absences
The Subsidiary accounts for the liability in respect of employees' compensated absences in the
year in which these are earned. Provision to cover the obligations is made using the current
salary level of employees.
2.3 Taxation
Current
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
rates or tax rates expected to apply to the profit for the year if enacted. The charge for current tax
also includes adjustments, where considered necessary, to provision for tax made in previous years
arising from assessments framed during the year for such years.
Deferred
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary
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
taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences
and deferred tax assets to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax losses and tax credits can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences
reverse, based on tax rates that have been enacted or substantively enacted by the balance sheet
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
is also recognized in other comprehensive income or directly in equity, respectively.
2.4 Provisions
Provisions are recognized when the Group has a legal or constructive obligation as a result of past
event and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at
each balance sheet date and are adjusted to reflect the current best estimates.
101
2.5 Property, plant and equipment

Holding Company
Owned
Property, plant and equipment except freehold land and capital work in progress are stated at cost
less accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant
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.
Freehold land is stated at revalued amount less any identified impairment loss. Capital work in
progress is stated at cost less any identified impairment loss.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Holding 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.
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
amount less any identified impairment loss. Previously, freehold land was stated at cost less any
identified impairment loss. The effect of revaluation of freehold land has been dealt with in
accordance with the requirements of International Accounting Standard (IAS) 16 "Property, Plant
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
impact on profit or loss.
Depreciation
Depreciation on all property, plant and equipment is charged to profit and loss account applying the
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
month the assets are available for 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 on depreciation is significant.
Derecognition
An item of property, plant and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
is included in the profit and loss account in the year the asset is derecognized.
Leased
Finance lease
Leases where the Holding Company has substantially all the risks and rewards of ownership are
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
and the fair value of the leased assets, each determined at the inception of the lease.
102
The related rental obligation, net of finance cost, is included in liabilities against assets subject to
finance lease. The liabilities are classified as current and long term depending upon the timing of
payments.
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.
Depreciation on assets subject to finance lease is recognized in the same manner as for owned
assets. Depreciation of the leased assets is charged to profit and loss account.
Subsidiary Company - Maple Leaf Cement Factory Limited
Owned
Property, plant and equipment, except freehold land and capital work-in-progress, are stated at cost
less accumulated depreciation and impairment losses, if any. Subsequent costs are included in the
asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company and cost of the item
can be measured reliably.
Freehold land and capital work-in-progress are stated at cost less impairment losses, if any. All
expenditure connected with specific assets incurred during installation and construction period are
carried under capital work-in-progress. These are transferred to specific assets as and when these
are available for use.
Cost in relation to certain plant and machinery represents historical cost, exchange differences
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.
Transactions relating to jointly owned assets with Pak American Fertilizers Limited (PAFL), as stated
in note 19.4, are recorded on the basis of advices received from the housing colony.
All other repair and maintenance costs are charged to income during the period in which these are
incurred.
Gains / losses on disposal or retirement of property, plant and equipment, if any, are taken to profit
and loss account.
Depreciation is calculated at the rates specified in note 19.1 on reducing balance method except that
straight-line method is used for the plant and machinery and buildings relating to dry process plant
after deducting residual value. Depreciation on additions is charged from the month in which the
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.
Leased
Finance lease
Assets held under finance lease arrangements are initially recorded at the lower of present value
ofminimum lease payments under the lease agreements and the fair value of the leased assets.
103
Depreciation on leased assets is charged applying reducing balance method at the rates used for
similar owned assets, so as to depreciate the assets over their estimated useful lives in view of
certainty of ownership of assets at the end of lease term.
2.6 Un-allocated capital expenditure
All cost or expenditure attributable to work-in-progress are capitalized and apportioned to buildings
and plant and machinery at the time of commencement of commercial operations.
2.7 Investment Properties
Land and buildings held for capital appreciation or to earn rental income are classified as investment
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 properties is carried out with sufficient regularity.
Gain or losses arising from a change in the fair value of investment properties are included in the
profit and loss account currently.
2.8 Intangible assets
Intangible assets, which are non-monetary assets without physical substance, are recognized at
cost, which comprise purchase price, non-refundable purchase taxes and other directly attributable
expenditure relating to their implementation and customization. After initial recognition an intangible
asset is carried at cost less accumulated amortization and impairment losses, if any. Intangible
assets are amortized from the month, when these assets are available for use, using the straight line
method, whereby the cost of the intangible asset is amortized over its estimated useful life over
which economic benefits are expected to flow to the Group. The useful life and amortization method
is reviewed and adjusted, if appropriate, at each balance sheet date.
Currently, intangible asset (computer software) is amortised using the straight-line method over a
period of three years. Amortisation on additions to intangible assets is charged from the month in
which an asset is put to use and on disposal upto the month of disposal.
2.9 Investments
Classification of investment is made on the basis of intended purpose for holding such investment.
Management determines the appropriate classification of its investments at the time of purchase
and re-evaluates such designation on regular basis.
Investments are initially measured at fair value plus transaction costs directly attributable to
acquisition, except for "investment at fair value through profit or loss" which is measured initially at
fair value.
The Group assesses at the end of each reporting period whether there is any objective evidence that
investments are impaired. If any such evidence exists, the Group applies the provisions of IAS 39
'Financial Instruments: Recognition and Measurement' to all investments, except investments in
subsidiary companies, which are tested for impairment in accordance with the provisions of IAS 36
'Impairment of Assets'.
104
a) Investments at fair value through profit or loss

Investments classified as held-for-trading and those designated as such are included in this
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
and loss account.
b) Held-to-maturity
Investments with fixed or determinable payments and fixed maturity are classified as held-tomaturity 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
investments that are intended to be held to maturity are subsequently measured at amortized
cost. This cost is computed as the amount initially recognised minus principal repayments, plus
or minus the cumulative amortisation, using 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 account when the investments
are derecognized or impaired, as well as through the amortisation process.
c) Available-for-sale
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 recognition, investments which are classified as available-for-sale are measured at
fair value. Gains or losses on available-for-sale investments are recognized directly in statement
of other comprehensive 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 profit and loss account. These are sub-categorized as
under:
Quoted
For investments that are actively traded in organized capital markets, fair value is determined by
reference to stock exchange quoted market bids at the close of business on the balance sheet
date.
Unquoted
Fair value of unquoted investments is determined on the basis of appropriate valuation
techniques as allowed by IAS 39 "Financial Instruments: Recognition and Measurement".
Change in Accounting Estimate
During the current year ended, the Holding Company has changed the accounting estimate for
valuation of its unquoted available for sale investment. Fair value of unquoted, available for sale
investment is now determined by using net assets based valuation method. Previously, valuation
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
Standard (IAS) 8 "Accounting Policies, Changes in Accounting Estimates and Errors". Had there
been no change in this accounting estimate, short term investments, fair value reserve and
deferred taxation would have been lower by Rupees 32.633 million, Rupees 24.067 million and
Rupees 8.566 million respectively with no effect on the profit or loss.
105
2.10 Inventories
Inventories, except for stock in transit and waste stock / rags are stated at lower of cost and net
realizable value. Cost is determined as follows:
Useable stores, spare parts and loose tools are valued principally at moving average cost, while
items considered obsolete are carried at nil value. Items in transit are valued at cost comprising
invoice value plus other charges paid thereon.
Stock-in-trade
Cost of raw material, work-in-process and finished goods is determined as follows:
(i)
(ii)
For raw materials:

For work-in-process and finished goods:
Annual average basis.

Average manufacturing cost including
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon.
Waste stock / rags are valued at net realizable value.
Net realizable value signifies the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessarily to make a sale.
2.11 Derivative financial instruments
Derivative financial instruments are initially recognized at fair value on the date a derivative contract
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
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives
as cash flow hedges.
The Group documents at the inception of the transaction the relationship between the hedging
instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions. The Group also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions
are highly effective in offsetting changes in cash flow of hedged items
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges is recognized in statement of other comprehensive income. The gain or loss
relating to the ineffective portion is recognized immediately in the profit and loss account.
Amounts accumulated in statement of other comprehensive income are recognized in profit and loss
account in the periods when the hedged item will affect profit or loss.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit
accounts and other short term highly liquid instruments that are readily convertible into known
amounts of cash and which are subject to insignificant risk of changes in values.
106
2.13 Non-current assets classified as held for sale

Non-current assets are classified as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than continuous use. These are measured at lower of carrying
amount and fair value less costs to sell.
2.14 Borrowing costs
Interest, mark-up and other charges on long-term finances are capitalized up to the date of
commissioning of 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.
2.15 Revenue recognition
a) Revenue from local sales is recognized on dispatch of goods to customers while in case of export
sales it is recognized on the date of bill of lading.
b) Dividend on equity investments is recognized when the Group's right to receive payment is
established.
c) Profit on deposits with banks is recognized on time proportion basis taking into account the
amounts outstanding and rates applicable thereon.
2.16 Foreign currencies
These financial statements are presented in Pak Rupees, which is the Groups functional currency.
All monetary assets and liabilities denominated in foreign currencies are translated into Pak Rupees
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
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.
Exchange gains and losses are included in the income currently.
2.17 Financial instruments
Financial instruments carried on the balance sheet include investments, deposits, trade debts,
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,
accrued mark-up and trade and other payables etc. Financial assets and liabilities are recognized
when the Group becomes a party to the contractual provisions of instrument. Initial recognition is
made at fair value plus transaction costs directly attributable to acquisition, except for financial
instrument at fair value through profit or loss which is measured initially at fair value.
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
specified in contract, the rights expire or the Group surrenders those rights. Financial liabilities are
de-recognized when the obligation specified in the contract is discharged, cancelled or expired. Any
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
in the following individual policy statements associated with each item and in the accounting policy of
investments.
a) Trade and other receivables
Trade debts and other receivables are carried at original invoice value less an estimate made for
doubtful debts based on a review of all outstanding amounts at the year end. Bad debts are
written off when identified.
107
b) Borrowings
Borrowings are recognized initially at fair value and are subsequently stated at amortized cost.
Any difference between the proceeds and the redemption value is recognized in the profit and
loss account over the period of the borrowings using the effective interest method.
c) Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is
normally the transaction cost.
2.18 Impairment
a) Financial Assets
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.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as a
difference between its carrying amount and the present value of estimated future cash flows
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.
Individually significant financial assets are tested for impairment on an individual basis. The
remaining financial assets are assessed collectively in groups that share similar credit risk
characteristics.
b) Non financial assets
The carrying amount of assets are reviewed at each balance sheet date for impairment
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
recoverable amount, assets are written down to their recoverable amounts. The resulting
impairment loss is taken to the profit and loss account except for impairment loss on revalued
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.
2.19 Related party transactions
Transactions and contracts with related parties are carried out at an arm's length price determined in
accordance with comparable uncontrolled price method.
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,
assets, liabilities and other balances which can not be allocated to a particular segment on a
reasonable basis are reported as unallocated.
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),
Processing and Home Textile (Processing greige fabric for production of printed and dyed fabric and
manufacturing of home textile articles) and cement .
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.
2.21 Dividend and other appropriations
Dividend distribution to the Group's shareholders is recognized as a liability in the Group's financial
statements in the period in which the dividends are declared and other appropriations are
recognized in the period in which these are approved by the Board of Directors.
2.22 Off setting of financial assets and liabilities
Financial assets and liabilities are set off and the net amount is reported in the financial statements
when there is legally enforceable right to set off and the Group intends either to settle on a net basis,
or to realize the asset and settle the liability simultaneously.
2.23 Equity instruments
These are recorded at their face value.
3. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
1,596,672
1,596,672
15,967
15,967
26,156,000
26,156,000
Ordinary shares allotted under scheme of arrangement of

merger of Part II of Maple Leaf Electric Company Limited
261,560
261,560
26,858,897
26,858,897
Ordinary shares allotted under scheme of arrangement of

merger of Kohinoor Raiwind Mills Limited and Kohinoor
Gujar Khan Mills Limited.
268,589
268,589
38,673,628
38,673,628
Ordinary shares of Rupees 10 each issued as bonus shares
386,736
386,736
52,241,019
145,526,216
52,241,019
145,526,216
522,410
1,455,262
522,410
1,455,262
2.20 Segment reporting

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
revenues and incur expenses, including revenues and expenses that relate to the transactions with
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
segment and assess its performance, and for which discrete financial information is available.
108
2010
2009
2010
2009
Number of shares
Ordinary shares of Rupees 10 each allotted on
reorganization of Kohinoor Industries Limited
Ordinary shares of Rupees 10 each issued for cash
3.1 Zimpex (Private) Limited, which is an associated company, held 22,510,635 (2009:22,510,635)
ordinary shares of Rupees 10 each at 30 June 2010.
109
4. RESERVES
NOTE
2010
2009
Composition of reserves is as follows:

Capital:
Share premium
4.1
144,919
144,919
Fair value reserve - net of deferred tax
4.2
628,077
577,364
772,996
722,283
Revenue:
General reserve
Unappropriated profit / (loss)
1,450,491
(760,559) 283,428
689,932 1,733,919
1,462,928 2,456,202
SURPLUS ON REVALUATION OF PROPERTY

NOTE
Freehold land
1,263,592
2,410,233
3,673,825
1,263,592
1,263,592
6.1 Freehold land is now stated at revalued amount as a result of change in accounting policy from cost
model to revaluation model. The revaluation of freehold land was 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.
NOTE
1,450,491
4.1 This reserve can be utilized by the Group only for the purposes specified in section 83(2) of the
Companies Ordinance, 1984.
6.1
2010
2009
7 SHARE DEPOSIT MONEY
7.1
2010
2009
1,000,000
7.1 This represents amount received by Subsidiary from sponsors against future issue of shares, as per
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,
Holding company.
8 LONG TERM FINANCING
4.2 Fair value reserve - net of deferred tax

Balance as at 01 July
Add/ (less) : Fair value adjustment on investment in Security
General Insurance Company Limited during the year
Related deferred tax asset/ liability on investment in
Balance as at 30 June
NOTE
577,364
1,000,473
68,763
(573,706)
(18,050)
50,713
628,077
150,597
(423,109)
577,364
5. NON-CONTROLLING INTEREST
Opening balance
Add: Share during the year
- Hedging reserve
- Surplus on revaluation of investment to fair value
- Loss for the year
Less : Dividend paid on preference shares
110
3,669,866 4,488,988
26,509
(1,262,230)
(1,235,721)
(182,406)
(120,478)
(463,760)
(766,644)
(28,882)
2,405,263
(52,478)
3,669,866
Holding company
The Bank of Punjab (BOP - 1)
Allied Bank Limited (ABL - 1)
Saudi Pak Industrial and Agricultural Investment
Company Limited (SPIAICL-1)
Standard Chartered Bank (Pakistan) Limited Syndicated term finance
Allied Bank Limited - Syndicated term finance
The Bank of Khyber - Syndicated term finance
Pak Libya Holding Company - Syndicated term finance
Bank Al Falah Limited - Syndicated term finance
Faysal Bank Limited - Syndicated term finance
Faysal Bank Limited (FBL)
2010
2009
8.1
8.2
8.3
8.4
8.5
26,623
107,716
198,803
8,333
65,094
46,598
139,815
223,200
41,666
113,067
8.6
18,055
21,666
8.7
10,000
20,000
8.8
8.9
156,250
100,000
187,500
175,000
8.10
8.10
8.10
8.10
8.10
8.10
186,500
543,150
95,500
47,750
477,500
279,750
-
200,000
568,750
100,000
50,000
500,000
300,000
20,226
34,376
111
NOTE
Subsidiary Company
Habib Bank Limited (HBL - 1)
Habib Bank Limited (HBL - 2)
Long term finance facility
Syndicated term finance
Less:
Current portion shown under current liabilities
2010
2009
580,000
210,519
790,520
1,499,400
955,503
1,500,000
5,401,463
5,197,367
17
1,181,865
4,219,598
2,459,659
2,737,708
8.15
8.16
4,794
2,683
7,477
4,227,075
4,794
2,683
7,477
2,745,185
8.11
8.12
8.13
8.14
Other loans - Unsecured
Kohinoor Sugar Mills Limited (KSML)

Kohinoor Industries Limited (KIL)
8.1 The Bank of Punjab - (BOP-1)

This represents demand finance facility of Rupees 400 million, obtained for import of state of art
machinery 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 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 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 to Rupees. 150.431 million were converted to LTF-EOP
consisting of Rupees 61.725 million at 6 % per annum and Rupees 88.706 million at 7 % fixed rate of
mark up.
8.2 NIB Bank Limited (NIB - 1)
This represents LTF-EOP facility of Rupees 157 million obtained for import of textile machinery for a
period of three years including a grace period of six months. It is repayable in ten equal quarterly
installments. It is secured by first exclusive hypothecation charge on the imported machinery and allied
equipment, including installation and local component costs. It carries mark up at fixed rate of 6 % per
annum.
8.3 NIB Bank Limited (NIB - 2)
This represents a term finance facility of Rupees 300 million under State Bank of Pakistan (LTF-EOP)
scheme for a period of five years with a grace period of one year. The financing is for import of 72 Picanol
Omni Plus wide width Air Jet Looms and Tying & Knotting machine plus five (5) Gen Set gas generators
being part of BMR. It is repayable in equal quarterly installments, commencing after expiry of grace
period. The facility is secured against first pari passu charge over fixed assets of Raiwind Division and
personal guarantees of the sponsor directors. It carries fixed mark up at the rate of 7% per annum.
112
8.4 Albaraka Islamic Bank B.S.C (E.C) (AIB)

This represents Murabaha finance facility of Rupees 100 million, obtained for construction of buildings.
The facility is allowed for a period of four years including a grace period of one year. The facility is
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
assets i.e. land and building constructed for ring spinning and stitching. It carries mark up at the rate of
3-years KIBOR plus 2% per annum with floor of 12.75% per annum.
8.5 Allied Bank Limited (ABL-1 )
This represents term finance facility of Rupees 300 million , obtained for import of state of art machinery
and is allowed for a period of five years with a grace period of one year. The facility is repayable in
sixteen (16) equal quarterly installments commenced after conclusion of grace period. It is secured by
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
the rate of 6 months KIBOR plus 1.75% per annum and facility of Rupees 75 million carries mark up at
the rate of 6 months KIBOR plus 2.50% per annum with no floor and cap. On December 28, 2006 loans
amounting to Rupees 124.732 million were converted to LTF-EOP at 7% per annum fixed rate of markup.
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
for a period of five years with a grace period of six months. The facility is repayable in eighteen (18)
equal quarterly installments commenced from February 19, 2006. It is secured by first exclusive charge
on imported machinery. It carries mark up at a fixed rate of 7% per annum.
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
machines being part of BMR. This facility for a period of five years with a grace period of one year and is
repayable in equal quarterly installments.
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
installments. It is secured by first pari passu charge by way of hypothecation on all present and future
plant and machinery of the Company and by way of mortgage on land measuring 121 acres, 2 kanals
and 1 marla, situated at main Peshawar Road, Rawalpindi with 25% margin. Initially ranking charge will
be created which will be upgraded within 90 days from the date of disbursement. The facility carries
mark up at the rate of 3 months KIBOR plus 170 bps per annum with quarterly repricing effective from
March 03, 2008.
8.9 Standard Chartered Bank (Pakistan) Limited (SCB-2)
This represents the term finance facility of Rupees 200 million, obtained for the purpose of financing the
unwinding cost of cross currency swap deal with the bank and is allowed for a period of two years. The
facility is payable in eight equal quarterly installments. It is secured by ranking charge of Rupees
266.666 million on land of Kohinoor Textile Mills Limited situated at Rawalpindi. It carries mark up at the
rate of 3-months average KIBOR plus 2.75% per annum with no floor and cap.
113
8.10 Syndicated Term Finance

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
Islamic and 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 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 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 been modified. Now the loan is repayable in twenty
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
at 3 months average KIBOR plus 150 bps to be repriced at the end of each quarter.
8.11 Habib Bank Limited (HBL - 1)
Original term finance facility amounting to Rupees 1.160 billion (equivalent to Japanese Yens 1.974
billion approximately) was obtained from HBL by Subsidiary, in different tranches as per agreement
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)
Scheme of State Bank of Pakistan, has entered into restructuring agreement with HBL dated February
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
statements. The remaining principal balance amounting Rupees 580 million is repayable in nine semi
annual installments commencing from June 2010.
This facility carries mark-up at the rate of 6-months KIBOR plus 1.00%, effective mark up rate ranging
from 13.43% to 14.26% (2009: 15.69% to 18.20%) per annum payable on quarterly basis in arrears.
The finance facility is secured against first pari passu equitable mortgage/hypothecation charge of
Rupees 2.250 billion on all present and future fixed assets of the Subsidiary (including land measuring
2,097 Kanals and 5 Marlas situated at Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of
directors of the Subsidiary.
8.12 Habib Bank Limited (HBL - 2)
During current financial year, the Subsidiary has obtained this term finance facility having sanctioned
limit amounting Rupees 500.000 million from HBL for financing the Waste Heat Recovery Plant. The
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
Pakistan, has entered into restructuring agreement with HBL dated February 18, 2010. As per terms of
restructuring agreement HBL has transferred amounting to Rupees 210.519 million to new Long Term
Finance Facility (LTFF) as disclosed in note 8.13 to these consolidated financial statements. The
remaining principal balance of this term finance facility amounting to Rupees 210.519 million is
repayable in nine semi annually installments commencing from July 2010.
This facility carries mark-up at the rate of 6-months KIBOR plus 1.00% (effective mark-up rate ranging
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
and future assets of the Subsidiary (including land measuring 2,097 Kanals and 5 Marlas situated at
Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of directors of the Subsidiary Company.
114
8.13 Long term finance facility

This facility has been created under the terms of restructuring agreement with HBL as disclosed in note
8.11 and 8.12 to these consolidated financial statements. Tenor of this LTFF is four and a half years. The
principal amount of this LTFF is repayable in nine semi annual installments commencing from June
2010. The facility carries mark-up at the rate of 9.7% per annum payable on quarterly basis in arrears.
This finance facility is secured against first pari passu equitable hypothecation/mortgage charge of
Rupees 2.250 billion on all present and future fixed assets of the Subsidiary (including land measuring
2,097 Kanals and 5 Marlas situated at Dadu Khel Pakka Sharki, Mianwali) and personal guarantees of
the directors of the Subsidiary.
8.14 Syndicated Term Finances
The Subsidiary has obtained syndicated term finance facility during the year ended June 30, 2008.
During the current financial year the Company has arranged restructuring of syndicated term finance
facility and entered into Second Addendum dated March 30, 2010 through lead arranger and
investment agent Allied Bank Limited (ABL).
The salient terms of this syndicated term finance facility, as per Second addendum, are as follows:
- Lead arranger and agent bank
Allied Bank Ltd. (ABL)
- Lenders
Banks and DFIs
- Facility amount
Rupees 1.500 billion
- Tenor
9 Years including Grace period
Grace period 2.75 years ; Repayment- 6.25 years
- Mark-up rate
For half year ended December 2009 at mark up rate 15.4%
From December 2009 onwards: 3 months KIBOR plus 100 bps
Mark up to increase to 3 months KIBOR plus 170 bps after 5 years or complete settlement of deferred
mark up, whichever is later.
Restructuring conditions:
(a) Mark up due in December 2009 to be paid by the Subsidiary on completion of the restructuring
agreement.
(b) Accrued mark up from December 2009 to March 2011 will be converted into interest free debt and
will be paid in 24 equal quarterly installments starting in March 2012 and ending in December 2017.
Token mark up payment of 0.5% of the deferred mark up amount will be paid on installment amount.
Accrued mark up from March 2011 to June 2011 will be paid in September 2011.
Regular mark up payments will commence from September 2011 and will be payable on due dates.
115
2010
2009
- Principal repayment
36 quarterly installments will be paid as per following schedule. First 10 quarterly installments are just
token payments.
Period
- The Bank of Khyber

- Saudi Pak Industrial and Agricultural Investment Company Limited
- The Bank of Punjab
- First Women Bank Limited
- Atlas Bank Limited.
- Allied Bank Limited
Rupees in million
March 2010 - June 2012

September 2012 - June 2015
September 2018 - December 2018
0.30
37.50
44.50
56.00
70.00
181.00
A civil suit has been filed by KSML for recovery of disputed liability which is being contested by the
Holding Company.
- Security
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.
8.16 Kohinoor Industries Limited (KIL)

The balance is an old one, un-reconciled, unconfirmed and disputed.
- Further conditions as per rescheduling

(a) PKR 1.000 billion to be injected at the completion of restructuring agreement as sponsor's loan
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
statements.
(b) Redeemable Capital Sukuk / Syndicate members would be represented on board by one seat. The
process would be initiated right after completion of restructuring agreement and depending upon
regulatory formalities the process would be completed as soon as possible but not later than the next
elections due in December 2010. The representative shall have a minimum of 10 years of professional
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.
2010
2009
116
60,000
60,000
60,000
60,000
30,000
1,500,000
8.15 Kohinoor Sugar Mills Limited (KSML)
- Final maturity
December 2018
- Faysal Bank Limited

- Pak Libya Holding Company (Private) Limited
- MCB Bank Limited
- Askari Bank Limited
- Arif Habib Bank Limited
- Pak Brunei Investment Company Limited
- Soneri Bank Limited
- HSBC Bank Middle East Limited (formerly The Hong Kong and
Shanghai Banking Corporation Limited)
59,976
59,976
59,976
59,976
29,988
194,922
1,499,400
359,856
239,904
149,940
104,958
89,964
89,964
-
360,000
240,000
150,000
105,000
105,000
90,000
90,000
8.17 Current portion of long term liabilities include overdue installments amounting to Rupees 263.696
million (2009: Nil)
9
REDEEMABLE CAPITAL - Secured
NOTE
Islamic Sukuk certificates under musharaka agreement

Opening balance
Add: Sukuk certificates issued during the year
Less: Sukuk certificates paid during the year

17
2010
2009
8,000,000
300,000
8,300,000
8,000,000
8,000,000
3,400
6,800
8,289,800
800,000
7,200,000
The Company has issued Islamic Sukuk Certificates under Musharaka agreement amounting to Rupees
8.000 billion during the year ended June 30, 2008. During the current financial year the Company has
arranged restructuring of issued Sukuk Certificates and entered into First Addendum with Investment Agent
Allied Bank Limited (ABL). During the year, the Company has issued new Sukuk Certificates (as Bridge
Finance) to existing Sukuk lenders amounting to Rupees 300.000 million.
90,000
117
The salient terms and conditions of secured Sukuk issue of Rupees 8.300 billion made by the Company are
detailed below:
Rentals are payable quarterly in arrears calculated on a 365 days year basis on
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
rescheduling , after every 3 months. Rentals, during the year, have been
calculated at mark-up rates ranging from 13.20% to 15.44% (2009: 14.85% to
17.37%) per annum.
Allied Bank Limited (ABL)

Meezan Bank Limited
Balance sheet reprofiling and replacement of conventional debts with
Shariah Compliant Financing.
The Sukuk have been issued under section 120 "issue of securities and
redeemable capital not based on interest" of the Companies Ordinance 1984.
The Sukuk Certificates have been registered and inducted into the Central
Depository System ("CDS") of the Central Depository Company of Pakistan
("CDC").
Banks, DFIs, NBFIs and any other persons.

Rupees 8.000 billion
9 Years including grace period of 2.75 years and repayment is to be
made in 6.25 years.
Rupees 300.000 million
2 years
For half year ended December 2009 at the rate 15.4%
From December 2009 onwards: 3 months KIBOR plus 100 basis point per cent
(bps)
Mark up to increase to 3 months KIBOR plus 170 bps after 5 years or complete
settlement of deferred mark-up, whichever is later.
(a) Mark up due in December 2009 has been paid by the Company on
completion of the restructuring agreement.
(b) Accrued mark up from December 2009 to March 2011 will be converted into
interest free debt and will be paid in 24 equal quarterly installments starting
March 2012 ending December 2017. Token mark up payment of 0.5% of the
deferred mark up amount will be paid on the installment amount.
First Pari passu charge over all present and future fixed assets of the Company
amounting to Rupees 10.667 billion and pledge of investment in shares of
Security General Insurance Company Limited.
- Transaction structure
Accrued mark up from March 2011 to June 2011 will be paid in September 2011.
Regular mark up payments will commence from September 2011 and will
be payable on due dates.
Base rate is average 3 months KIBOR prevailing on the base rate setting date.
36 quarterly installments will be paid as per following schedule. 1st 10
quarterly installments are just token payments.
Period
118
Rupees in million
March 2010 - June 2012

1.70
200.00

September 2018 - December 2018
237.50
300.00
375.00
966.50
- Sell Down/
Transferability
Allied Bank Limited

The facility as approved by Meezan Bank Limited, shariah advisor of the issue,
is as follows:
(a) Investors (as Investor Co-owners) and the Company (as managing Coowner) have entered into a Musharaka Agreement as partners for the
purpose of acquiring Musharaka assets from the Company (acting as
Seller) and jointly own these Musharaka assets.
(b) Investors have appointed ABL to act as Investor Agent for the Sukuk Issue.
(c) Investor co-owners have contributed their share in the Musharaka in cash
that has been utilised by managing co-owner for acquiring Musharaka
assets. Managing co-owner has contributed its Musharaka share in kind.
(d) Upon acquisition of Musharaka assets, Investor Agent and managing coowner have executed Assets Purchase Agreement with the Company
(acting as Seller).
(e) The Company (as Issuer) has issued Sukuk Certificates to Investors that
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
linked to the rental bench marked.
(g The Company will purchase Musharaka share of investors on quarterly
basis after expiry of 2.75 years from the rescheduling date.
As Sukuks have been induced into Central Depository Company (CDC),
transfers are made in accordance with Central Depository Act , 1997 and
other applicable CDC regulations.
119
- Further conditions as
per rescheduling
(a) PKR 1.000 billion to be injected at the completion of restructuring

agreement as sponsor's loan which may be converted into Equity /
Preference Shares following regulatory approvals. Preference dividend to
be capped at 10% per annum. Please refer note 7 to these consolidated
(b) To cover partial cash deficit projected in half year ended June 2010,
existing Sukuk lenders to disburse 2 years bridging of PKR 300.000 million
(as Bridge Finance) simultaneously with the payment of December 2009
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
quarterly basis. It will be secured against ranking charge on fixed assets
and specific properties comprising of 393 kanals at Kala Shah Kaku and
additional piece of land at Faisalabad. The security outside the Subsidiary
will have a minimum value of PKR 400.000 million.
(c) Redeemable Capital Sukuk / Syndicate members would be represented
on board by one seat. The process would be initiated right after completion
of restructuring agreement and depending upon regulatory formalities the
process would be completed as soon as possible but not later than
the next election due in December 2010. The representative shall have a
minimum of 10 years of professional 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.
10.3 Minimum lease payments and present value of minimum lease payments are regrouped as under:
2010
2009
Present value
Minimum
of minimum
lease
lease
payments
payments
Minimum
lease
payments
Due not later than one year
--------------------- (Rupees in thousand)--------------------541,505

447,223
483,973
388,881
Due later than one year but not later

than five years
865,381
767,748
1,117,276
963,133
1,406,886
1,214,971
1,601,249
1,352,014
11. LONG TERM DEPOSITS

These represent interest-free security deposits from stockists and are repayable on cancellation or
withdrawal of the dealerships. These are being utilized by the Subsidiary in accordance with the terms of
dealership agreements.
12. EMPLOYEES' BENEFITS

NOTE
Employees' compensated absences
Gratuity fund
2010
2009
12.1
42
19,629
6,864
18,990
-
26,493
18,990
2,844,401
282,194
2,927,122
254,708
3,126,595
3,181,830
56,154
2,782,588
4,459
125,398
63,826
2,818,229
4,547
90,806
2,968,599
157,996
2,977,408
204,422
10. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

NOTE
Minimum lease payments
Less: Un-amortized finance charges
Less: Security deposits of subsidiary
Present value of minimum lease payments
17
2010
2009
1,406,886
161,915
30,000
1,214,971
447,223
767,748
1,601,249
214,505
34,730
1,352,014
388,881
963,133
10.1 The present value of minimum lease payments has been discounted at an implicit interest rate ranges
from 6.00% to 18.18% (2009: from 4.72% to 18.18%) per annum to arrive at their present value.
10.2 The lease rentals are payable in monthly, quarterly and half yearly installments. In case of any default
an additional charge at the rate of 0.1 percent per day shall be payable. Taxes, repairs, replacements
and insurance costs are to be borne by the Group. The lease agreements carry renewal and purchase
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
security deposits, demand promissory notes, personal guarantees and pledge of sponsors' shares in
public limited companies.
120
Present value
of minimum
lease
payments
12.1 These represent amounts payable against un-availed leaves of employees.
13. DEFERRED TAX

This comprises of following :
Deferred tax liability on taxable temporary differences in respect of :
- Accelerated tax depreciation allowance
- Surplus on revaluation of investment
Deferred tax asset on deductible temporary differences in respect of:
- Lease finances
- Unused tax losses
- Employees' compensated absences
- Minimum tax recoverable against normal tax charge in future years
121
13.1 The movement in deferred tax assets and liabilities during the year without taking into consideration the
off setting balances within the same tax jurisdiction is as follows:
Deferred tax assets
Deferred tax liability

Accelerated
tax
depreciation
allowance
Balance as at July 01, 2008

Balance as at June 30, 2009
Balance as at June 30, 2010
3,328,669
(401,547)
2,927,122
(82,721)
2,844,401
Surplus on
revaluation of
investment
Unrealized
gain on
derivative
financial
instrument
Total
Lease
finances
Unused tax
losses
Employees'
compensated
absences
Minimum
tax
recoverable
against
normal tax
charge
Net liability/
(asset)
Total
14.2 The Group 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 funds utilized by the Group till the date of allocation to workers.
15. ACCRUED MARK-UP
NOTE
----------------------------------------------------------------Rupees in thousand-------------------------------------------------------------448,187
72,119 3,848,975 132,131 2,976,535
4,536
114,133 3,227,335
(193,479)
(72,119) (265,598)
(401,547) (68,305) (158,306)
11
(23,327) (249,927)
254,708
3,181,830
63,826 2,818,229
4,547
90,806 2,977,408
27,486
27,486
(82,721)
(7,672)
(35,641)
(88)
34,592
(8,809)
282,194
3,126,595
56,154 2,782,588
4,459
125,398 2,968,599
621,640
(265,598)
(151,620)
204,422
27,486
(73,912)
157,996
Long term financing

Redeemable capital
2010
2009
276,739
622,378
261,088
51,594
104,617
237,007
240,698
44,131
1,211,799
626,453
6,047,173
2,200,553
1,555,000
328,547
5,244,278
1,968,863
1,580,000
399,652
10,131,273
9,192,793
14. TRADE AND OTHER PAYABLES

NOTE
Creditors
Bills payable - secured
Accrued liabilities
Security deposits, repayable on demand
Advances from customers
Contractors' retention money
Royalty and excise duty payable
Excise duty payable
Payable to employees' provident fund trust
Unclaimed dividend
Withholding tax payable
Sales tax payable
Others
14.1
1,736,200
785,705
647,792
41,705
239,813
45,813
69,688
21,669
7,686
717,549
2,831
4,214
12,761
48,846
57,707
4,439,979
1,272,913
837,321
311,536
33,153
170,392
10,376
11,345
1,254
442,106
7,856
4,214
5,163
71,512
14,517
3,193,658

Balance as on 01 July
Add: Provision for the year
Add: Interest for the year
Less: Payment during the year
122
14.1
2010
2009
1,254
1,279
20,227
188
21,669
164
(189)
1,254
16. SHORT TERM BORROWINGS
From banking companies - Secured

Short term running finance
Other short term finances
State Bank of Pakistan (SBP) refinances
Temporary bank overdraft
16.1
16.2
16.3
16.4
16.1 The running finance facilities are sanctioned by various banks aggregate to Rupees 6,152 million
(2009: Rupees 5,713 million). The rates of mark-up range from 3.23% to 25.00% (2009: from 7.50% to
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
contracts, book debts and personal guarantees of the sponsor directors.
16.2 The other finance facilities are sanctioned by various banks aggregate to Rupees 3,638 million (2009:
Rupees 2,348 million). The rates of mark-up range from 6.63% to 18.00% (2009: from 6.08% to
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
contracts, book debts and personal guarantees of the sponsor directors.
16.3 The export refinance facilities sanctioned by various banks aggregate to Rupees 1,665 million (2009:
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
16.4 These have arisen due to issuance of cheques for amounts in excess of the balance with banks which
will be presented for payment in subsequent period.
123
17. CURRENT PORTION OF NON-CURRENT LIABILITIES
f)
NOTE
Long term financing - Secured

Redeemable capital
Liabilities against assets subject to finance leases
8
9
10
2010
2009
1,181,865
6,800
447,223
1,635,888
2,459,659
800,000
388,881
3,648,540
Subsidiary company
a)
The Subsidiary has filed writ petitions before the Lahore High Court (LHC) against the legality of
judgment passed by the Customs, Excise & Sales Tax Appellate Tribunal whereby the Company
was held liable on account of wrongful adjustment of input sales tax on raw materials and electricity
bills; the amount involved pending adjudication before the LHC amounting to Rupees13.252 million.
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
be in favour of the Subsidiary.
b)
The Subsidiary has filed an appeal before the Customs, Central Excise and Sales Tax Appellate
Tribunal, Karachi against the order of the Deputy Collector Customs whereby the refund claim of the
Subsidiary amounting to Rupees 12.350 million was rejected and the Subsidiary was held liable to
pay an amount of Rupees 37.051 million by way of 10% customs duty allegedly leviable in terms of
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
of customs duty and sales tax in terms of SRO 279(I)/94 dated April 02, 1994.
18. CONTINGENCIES AND COMMITMENTS

18.1 Contingencies
Holding company
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 was restricted to Rupees 27.540 million against declared loss of Rupees
122.933 million.
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
before Honorable Appellate Tribunal Inland Revenue which is pending adjudication. This is a cross
appeal. Although the learned Commissioner Inland Revenue (Appeals) has already annulled the
order under section 221 of the Income Tax Ordinance, 2001, vide order dated 30 July 2009, the
Taxation Officer has illegally repeated the original assessment. Therefore, an appeal has also been
filed before Commissioner 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 has strong grounds and is expecting favourable
outcome.
The LHC, upon the Company's appeal, vide its order dated November 06, 2001 has decided the
matter in favour of the Subsidiary; however, the Collector of Customs has preferred a petition before
the Supreme Court of Pakistan, which is pending adjudication. No provision has been made in
these consolidated financial statements in respect of the above stated amount as the management
is confident that the ultimate outcome of this case will be in favour of the Subsidiary.
c)
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 loss for the year has been assessed at Rupees 255.684 million creating refund of
Rupees 7.498 million.
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 has been made in these financial statements which on the basis adopted
by the authorities would amount to Rupees 33.473 million (2009: 33.473 million), since the
Company has strong grounds against these assessments framed by the tax authorities.
d) The Company has filed recovery suits in civil courts of Rupees 4.589 million against various
suppliers and 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 the cases.
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 these financial statements since the Company is confident about favourable
outcome of the cases.
124
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 June, 2010 (2009: Rupees 319.430 million)
The Federal Board of Revenue (FBR) has filed an appeal before the Supreme Court of Pakistan
against the judgment delivered by the LHC in favour of the Subsidiary in a writ petition. The
Subsidiary, through the said writ petition, had challenged the demand raised by the FBR for
payment of duties and taxes on the plant and machinery imported by the Company pursuant to the
exemption granted in terms of SRO 484 (I) / 92 dated May 14, 1992. The FBR, however, alleged that
the said plant & machinery could be locally manufactured and duties and taxes were therefore not
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.
As regards the balance disputed amount, the matter was decided in favour of the Subsidiary as per
the judgment of LHC. After preferring the appeal before the Supreme Court of Pakistan, the matter
has been referred to ADRC, Islamabad. No provision has been made in these consolidated financial
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
Subsidiary.
d)
The Customs Department has filed an appeal before the Supreme Court of Pakistan against the
judgment of Sindh High Court, which held that dump trucks were part of plant and machinery and
the Tribunal had rightly subjected them to concessionary rate of duty. The Subsidiary had paid
excess customs duties amounting Rupees 7.347 million on these trucks. The appeal is pending
adjudication before the Supreme Court of Pakistan. 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.
125
e) The Subsidiary has filed an appeal before the Supreme Court of Pakistan against the judgment of
the Division Bench of the High Court of Sindh at Karachi. The Division Bench, by judgment dated
September 15, 2008, has partly accepted the appeal by declaring that the levy and collection of
infrastructure cess / fee prior to December 28, 2006 was illegal and ultra vires and after December
28, 2006, it was legal and the same was collected by the Excise Department in accordance with law.
The appeal has been filed against the declaration that after December 28, 2006, the Excise
Department has collected the infrastructure cess / fee in accordance with law. The Province of
Sindh and Excise and Taxation Department has also preferred appeal against the judgment
decided against them. The Supreme Court has consolidated both the appeals.
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
million furnished by the Company will be encashed by the Government of Sindh. 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.
f) Competition Commission of Pakistan (the Commission), vide order dated August 27, 2009, has
imposed penalty on 20 cement factories of Pakistan at the rate of 7.5% of the turnover value as
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
4(1) of the Competition Commission Ordinance, 2007 have been violated. However, after the
abeyance of Islamabad High Court pursuant to the judgment of Hon'ble Supreme Court of Pakistan
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,
2010. 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.
g) The Additional Collector, Karachi has issued show cause notice alleging therein that the Subsidiary
has wrongly claimed the benefits of SRO No. 575(I)/2006 dated June 05, 2006 on the import of prefabricated 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
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
of this case will be in favour of the Subsidiary.
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
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
before the Honourable Lahore High Court.
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
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
Subsidiary has filed petition before the Honourable Lahore High Court, which is pending
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
j) Through order in original No. 18/2009 dated December 24, 2009 ('ONO'), the Additional
Commissioner Inland Revenue, (Legal), Large Taxpayers Unit, Lahore ('ACIR - Legal') finalized the
adjudication proceedings in respect of audit conducted by departmental auditors and raised a
demand of principal Sales Tax and Federal Excise duty ('FED') aggregating to Rupees 336.738
million along with default surcharge and penalties. The company has preferred appeals against this
exparte order under the applicable provisions of Sales Tax Act and Federal Excise Act before
Commissioner Inland Revenue, Appeals CIR(A). Such appeals have not yet been taken up for
hearing by Commissioner Inland Revenue, Appeals [CIR(A)]. 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.
k) The Subsidiary had challenged the levy of Neelum-Jhelum Hydro Power Development Fund for the
alleged construction of Neelum-Jhelum Hydro Power Project. The titled petition was disposed off by
the Hon'ble Lahore High Court in view of its earlier order, whereby it has been held that the
Respondents shall forthwith grant refund/adjustment of the amount charged without authority from
the Subsidiary for the period of February 2008 to June 2008. The Company is in the process of filling
writ petition before High Court for the remaining period.
l) 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
at 30 June 2010 (2009: Rupees 332.363 million).
m) Also refer note 31.1 to these consolidated financial statements for contingencies relating to tax
matters.
Claims
n) Claims against the Subsidiary not acknowledged as debt aggregated Rupees 3.750 million as at 30
June 2010 (2009: Rupees 3.750 million).
18.2 Commitments in respect of
a) Commitments for capital expenditure other than letter of credit amount to Rupees 178.127 million
(2009: Rupees 340.973 million).
b) Letters of credit for capital expenditure amount to Rupees 668.696 million (2009: Rupees 678.346
million).
c) Letters of credit other than for capital expenditure amount to Rupees 440.577 million (2009: Rupees
367.146 million).
d) Bills discounted amounting to Rupees 40.143 million (2009: Rupees 177.854 million)
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
at 30 June 2010 (2009: Rupees 332.363 million).
127
128
129
2,478,779
2,478,779
2,478,779
68,546
2,410,233
-
68,546
68,546
5 - 10
14,176
(5,522)
8,654
(444)
8,654
7,656
1,442
12,734
(5,078)
7,656
(405)
7,656
68,546
7,599
462
12,272
(4,673)
7,599
68,546
-
68,546
68,546
40,549
25,838
72,970
(32,421)
40,549
Computer &
IT
Installations
Owned Assets
Services &
Other
Equipment
Furniture &
Fixture
Office
Equipment
5 - 20
25,291,569
(8,554,521)
16,737,048
(9,425)
8,680
(745)
(1,073,969)
16,737,048
173,260
(60,029)
113,231
17,440,245
258,286
24,869,448
(7,429,203)
17,440,245
(7,443)
6,410
(1,033)
(1,076,136)
17,440,245
(4,868)
3,387
(1,481)
18,200,348
318,547
24,563,212
(6,362,864)
18,200,348
10
30,892
(22,095)
8,797
(954)
8,797
9,712
39
30,853
(21,141)
9,712
(1,046)
9,712
10,487
271
30,582
(20,095)
10,487
30
58,250
(45,078)
13,172
(4,944)
13,172
15,775
2,341
55,909
(40,134)
15,775
(6,047)
15,775
20,046
1,776
54,133
(34,087)
20,046
10
233,913
(141,369)
92,544
(216)
127
(89)
(17,707)
92,544
103,253
7,087
227,042
(123,789)
103,253
(158)
90
(68)
(17,734)
103,253
(669)
181
(488)
96,329
25,214
202,655
(106,326)
96,329
10
26,827
(12,792)
14,035
(45)
39
(6)
(1,345)
14,035
11,999
3,387
23,485
(11,486)
11,999
(121)
75
(46)
(1,042)
11,999
10,657
2,430
21,176
(10,519)
10,657
8,227
20,790
16,544
1,759
4,147
8,896
24,042
21,829
Machine-Drawing ToyodaHara DYH 500-c Complete Model

Crosol MK 4.5 card Model 1990
Aggregate of other items of property, plant & equipment with
individual book values not exceeding Rupees 50,000
2010
2009
4,023
1,556
775
880
302
411
Daihatsu cuore
895
2,326
1,084
Toyota corolla
478
2,639
774
Suzuki baleno
228
813
568
Suzuki cultus
610
557
1,236
799
Toyota corolla
849
Honda City RIY-6720 Model 2002
5,285
3,252
669
124
203
105
313
423
109
189
296
340
189
292
10,143
13,644
3,600
1,800
1,617
539
1,567
950
470
800
580
530
591
600
Vehicles
Quarry
Equipment
Share of Joint
Assets
4,858
10,392
2,931 Negotiation
1,676 Negotiation
1,414 Negotiation
434 Negotiation
1,254 Negotiation
527 Auctions
361 Auctions
20
1,542
(711)
831
(450)
831
(6,118)
2,450
(3,668)
4,949
-
7,660
(2,711)
4,949
(932)
4,949
5,881
7,660
(1,779)
5,881
(257)
-
(47,315)
22,891
(24,424)
24,681
-
47,315
(22,634)
24,681
(6,170)
24,681
30,851
47,315
(16,464)
30,851
Quarry
Equipment
Particulars of purchaser
10 - 20
1,322,798
(210,515)
1,112,283
(71,465)
1,112,283
(173,260)
60,029
(113,231)
1,240,287
56,692
1,439,366
(199,079)
1,240,287
(73,546)
1,240,287
1,242,392
71,441
1,367,925
(125,533)
1,242,392
Vehicles
Leased Assets
Zeeshan Ashraf
Sadaf Latif
Ghulam Abbas s/o Mulazim Hussain
Employees of the company
Ghazi Fabrics International Ltd, Lahore

Bajaj Enterprises, 58-B Room # 1 62- Mozang Road, Lahore
North Star Textiles, Lahore

Zahid Jee Textile Mills Ltd, Faisalabad
Saifullah contractor
Dr. Khalid
34,908,225
(10,661,374)
24,246,851
(24,042)
20,790
(3,252)
(1,415,593)
24,246,851
22,875,159
2,410,233
380,304
32,141,730
(9,266,571)
22,875,159
(21,829)
16,544
(5,285)
(1,417,301)
22,875,159
(5,537)
3,568
(1,481)
23,676,688
623,026
31,546,070
(7,869,382)
23,676,688
Total
Mr. Fuad Zafar, R/O House # 27-E, Phase-1, DHA Lahore Cantt
10
5,999
(3,607)
2,392
(252)
2,392
2,511
133
5,866
(3,355)
2,511
(129)
2,511
1,169
1,471
4,395
(3,226)
1,169
Plant &
Machinery
611 Insurance claim EFU Insurance Co.
284 Auctions
190 Negotiation
402 Negotiation
20
218,088
(159,179)
58,909
(5,951)
5,904
(47)
(14,472)
58,909
47,315
(22,891)
24,424
49,004
-
176,724
(127,720)
49,004
(7,158)
49,004
22,775
33,387
143,337
(120,562)
22,775
Mode of
disposal
20
187,966
(110,063)
77,903
(8,405)
6,040
(2,365)
(15,052)
77,903
6,118
(2,450)
3,668
82,644
9,008
181,245
(98,601)
82,644
(14,107)
9,969
(4,138)
(16,187)
82,644
88,389
14,580
180,772
(92,383)
88,389
308 Negotiation
Accumulated
Net Book Value Sale Proceeds
Gain
Depreciation
-----------------------( R u p e e s i n t h o u s a n d)----------------------Cost
5 - 10
106,732
(39,014)
67,718
(3,912)
67,718
63,706
7,924
98,808
(35,102)
63,706
(2,681)
63,706
Plant &
Machinery
24,521,559
22,875,159
1,646,400
------------------------------------------------------------------------------(RUPEES IN THOUSAND)---------------------------------------------------------------------------------
Residential &
Other
Building
24,246,851
3,226,768
57,896
27,531,515
2010
2009
(RUPEES IN THOUSAND)
Toyota Corolla LRR-2233
Description
5 - 10
4,930,694
(1,356,908)
3,573,786
(210,370)
3,573,786
3,750,191
33,965
4,896,729
(1,146,538)
3,750,191
(208,088)
3,750,191
3,830,670
127,609
4,769,120
(938,450)
3,830,670
Factory &
Other
Building
19.2 DETAIL OF DISPOSAL OF OPERATING FIXED ASSETS
Depreciation Rate
Cost / revalued amount

Net book value
At 30 June 2010
Depreciation charge
Disposals:
Cost

Revaluation
Additions
Transfer:
Cost
Cost
Net book value
At 30 June 2009
Depreciation charge
Disposals:
Cost

Additions
Transfer
Cost
At 30 June 2008
Cost
Net book value
Freehold land
OPERATING FIXED ASSETS
19.1
Office
Building
PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets (Note 19 .1)
Capital work in progress (Note 19.4)
Stores, spare parts and loose tools held for capital expenditure
19.
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).
19.4 Ownership of the housing colony assets included in the operating fixed assets is shared by the
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
the year-end were as follows:
NOTE
2010
2009
- buildings
- roads and bridge
- air strip
4,105
202
16
3,990
202
16
- plant and machinery

- furniture, fixtures and equipment
- vehicles
273
1,233
170
273
1,219
166
5,999
5,866
35
37
2010
2009
Opening balance
Add: Expenditure incurred during the year:
Vehicles' running and maintenance
Finance cost
Communication
Insurance expenses
59,581
3,367
5,619
2,899
1,328
1,615
115
201,620
50
160
5,797
270
274,540
16
51,639
45
59,581
20. INVESTMENT PROPERTIES
19.5 Depreciation charged during the year has been allocated as follows:
Cost of sales
19.6.1 Un-allocated capital expenditure - net
1,379,838
35,755
1,415,593
1,382,070
35,231
1,417,301
67,593
17,897
2,644,753
1,250,009
274,540
59,581
206,579
2,000
1,414
286,080
2,000
2,944
3,505
1,505
3,200,384
1,620,016
26,384
26,384
3,226,768
1,646,400
19.6 CAPITAL WORK IN PROGRESS
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 situated at Rawalpindi has been determined by Messers Asrem (Private) Limited at Rupees 951.643
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
sheet date.
Tangible assets
Civil works
Plant and machinery
Un-allocated capital expenditure
19.6.1
Advances to suppliers against:

Plant and machinery
Purchase of land
Vehicles
Civil works
Intangible assets
Computer software and consultancy cost
130
21. INTANGIBLE ASSETS (computer softwares)

NOTE
Opening balance
Less: Amortization for the year
Book value as at 30 June
35
2010
2009
7,332
15,082
(5,558)
1,774
(7,750)
7,332
23,250
21,476
1,774
33.33%
23,250
15,918
7,332
33.33%
Gross carrying value

Cost
Accumulated amortization
Book value
Amortization rate
131
22. LONG TERM LOANS TO EMPLOYEES - Secured
25. STOCK-IN-TRADE
NOTE
2010
2009
NOTE
House building
3,566
5,926
Raw material
Vehicles
1,863
2,860
Others
287
5,716
301
9,087
2,423
3,421
3,293
5,666
Less : Current portion of long term loans to employees
27
22.1 These loans are secured against charge / lien on employees' retirement benefits and carry interest at
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
chief executive at the year-end (2009: Rupees Nil).
23. LONG TERM DEPOSITS AND PREPAYMENTS
NOTE
Security deposits
Prepayments
Less: current portion of long term deposits and
prepayments shown under current assets
28
2010
2009
94,093
96,339
333
1,333
94,426
97,672
7,966
12,570
86,460
85,102
24. STORES, SPARES PARTS AND LOOSE TOOLS
783,595
641,577
Packing material
65,302
70,614
Work in process
Finished goods
983,697
1,065,237
2,897,831
915,368
803,181
2,430,740
25.1 This includes raw material in transit of Rupees 55.351 million (2009: Rupees 60.232 million)
26. TRADE DEBTS
24.1
865,902
1,509,872
Spares parts
Loose tools
24.2
1,853,852
1,697,133
38,454
33,136
2,758,208
5,000
3,240,141
-
2,753,208
3,240,141
24.1 This includes stores in transit of Rupees 129.243 million (2009: Rupees 234.884 million)
Considered good:
Secured (against letters of credit)
Unsecured
Less: Provision for doubtful debts
24.3 Stores having carrying value amounting to Rupees 62.423 million (2009: Nil) pledged as security
against borrowings.
1,251,743
986,420
855,031
745,925
2,106,774
26,309
1,732,345
-
2,080,465
1,732,345
As at 30 June 2010, trade debts of Rupees 819.745 million (30 June 2009 : Rupees 653.568 million) were
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:
NOTE
Upto 1 month
More than 6 months
2010
2009
593,127
531,245
156,108
70,510
819,745
33,795
88,528
653,568
2,423
3,421
621
2,255
7,844
850,970
6,161
368,157
859,435
376,573
1,579
863,437
18,164
398,158
27. LOANS AND ADVANCES - Considered good

Current portion of long term loans to employees
Advances to :
- Executives
- Other employees
- Suppliers
24.2 This includes spare parts in transit of Rupees 80.540 million (2009: Rupees 22.045 million)
132
2010
2009
1 to 6 months
Stores
Less: Provision for slow moving and obsolete items
25.1
2010
2009
Letters of credit
22
133
28. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS

NOTE
Current portion of security deposits
23
Margin against letter of credit

Margin against bank guarantee
Prepayments
29. OTHER RECEIVABLES

Sales tax refundable
7,966
12,570
25,120
68,163
31,458
72,858
137,402
27,376
63,580
171,689
276,958
232,674
3,642
32,302
181
25,735
3,642
Custom duty receivable

Export rebate
Insurance claims
Research and development support
47,561
175
473
Cotton claim
28,745
25,808
62,060
49,494
494,916
Duty drawback of taxes and levies

Inland freight subsidy receivable
Others
NOTE
2010
2009
Mutual funds
Fair value adjustment
16,000
60
16,060
25,000
(3,666)
21,334
5,000
5,000
447,926
375,850
452,926
1,114,449
380,850
1,014,173
Available for sale

Associated company - Unquoted
30.2
4,570,389 (2009: 4,570,389) Ordinary shares of Rupees.
10 each fully paid.
Equity held: 6.71% (2009: 6.71%)
26,244
320,778
2010
2009
30.1 Fair value per share of Rupees 99.10 (2009: Rupees 94) is calculated by independent valuer on the
basis of net assets based valuation method. Security General Insurance Company Limited is
associated Company due to common directorship.
30.2 Fair value of the investment as at June 30, 2010 was determined based on the valuation report
prepared by the Messers Maqbool Haroon and Company, Chartered Accountants.
30. SHORT TERM INVESTMENTS

Holding company
Investments at fair value through profit and loss - Held for trading
Quoted companies
Available for sale
Associated company - Unquoted
30.1
30.2.1 These shares are pledged by Subsidiary with Allied Bank Limited as collateral against short
term finance facility of Rupees 400 million.
13,611
(5,595)
8,016
7,000
13,611
(7,464)
6,147
7,000
6,398,541 (2009 : 6,398,541) Ordinary shares of Rupees 10 each fully paid

Equity held 9.40% (2009 : 9.40%)
627,095
634,095
594,463
601,463
Subsidiary company
Investments at fair value through profit or loss
Quoted Companies
134
2010
2009
31. TAXATION RECOVERABLE
Opening Balance as 01 July
Add : Provision for taxation
- Current year
- Prior year
Tax deducted at source / advance tax
31.1
12,115
(8,763)
3,352
12,115
(7,736)
4,379
236,900
97,591
(186,061)
(885)
(186,946)
(120,563)
488
(120,075)
346,356
396,310
259,384
236,900
a) Income tax assessments of the Subsidiary up till tax year 2009, except for the tax years 2003 and
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
yet been finalised.
135
b) Provision for current year, in view of available tax losses, represents minimum tax due on
turnover under section 113 and tax deducted at source under section 5,15 and 154 of the Income
Tax Ordinance, 2001.
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
the Company's taxable income has been enhanced by Rupees 177.750 million. The Company
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
such order, while CIR(A) upheld the departmental contentions on certain issues, a substantial
relief was extended, reducing the taxable income for the year by an amount of Rupees 107
million as against the additions towards taxable income aggregating to Rupees 173 million
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
by him through order. Subsidiary's appeal is pending for hearing by ATIR.
d) Additional Commissioner Inland Revenue passed an order u/s 122(5A) and made additions of
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
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
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
113 of the Income Tax Ordinance.
e) The Deputy Commissioner (Adjudication) has passed an order in original no. 42/2009 dated
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
Rupees 1,500 being penalty u/s 33(5) of Sales Tax Act 1990 and Rupees 148,894 being default
surcharge u/s 8 and Rupees 7,444,666 being penalty u/s 19(1) of Federal Excise Act 2005.
f) The Deputy Commissioner (Adjudication) has passed an order in original no. 51/2009 dated
October 10, 2009 for late filing return and delayed deposit of dues for the tax period November
2008 against the Company, raising demand Rupees 158,675 being default surcharge u/s 34 and
Rupees 3,500 being penalty u/s 33(5) of Sales Tax Act, 1990 and Rupees 453,427 being default
surcharge under section 8 and Rupees 7,809,004 being penalty u/s 19(1) of Federal Excise Act
2005.
i) Tax losses available for carry forward to Subsidiary as at June 30, 2010 aggregated Rupees
10.424 billion (2009: Rupees 7.959 billion).
2010
2009
32. CASH AND BANK BALANCES
Cash in hand
Cash at bank:
- On current accounts
- On saving accounts
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
section 113 of the Income Tax Ordinance, 2001.
136
5,710
93,010
57,302
150,312
95,262
79,257
174,519
180,229
152,453
32.1 The balances in current and saving account carry interest ranging from 0.40% to 13% (2009: From
0.20% to 12%) per annum.
32.2 The balances in current and deposit accounts include US $ 37,000 (2009: US $ 72,465).
33. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Land
Advance against land
552,923
100,000
652,923
551,662
50,000
601,662
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 reasonable
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
continued stressed property market, the 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 committed to disposal of these land at a reasonable price.
The proceeds of disposal are expected to exceed the carrying amount of the land.
34. SALES
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
the Company in respect of tax years 2003 to 2007.The Company has challenged initiation of the
aforementioned proceedings by filing a writ petition before the Lahore High Court, which, vide
order dated 30 December, 2008 has granted stay of proceedings in respect of tax year 2003. The
main petition is pending adjudication before the court.
2,141
NOTE
Export
Local - net of sales tax and excise duty
Duty drawback
Rebate
34.1
2010
2009
13,234,879
11,107,205
54,845
43,137
24,440,066
11,937,475
11,840,054
35,222
23,812,751
34.1 Local sales are exclusive of sales tax amounting to Rupees 1,349.218 million (2009: Rupees 1,708.158
million) and excise duty amounting to Rupees 1,618.793 million (2009: Rupees 1,901.663 million).
137
35. COST OF SALES
36. DISTRIBUTION COST

NOTE
Raw materials consumed

Cloth and yarn procured and consumed
Dyes and chemicals consumed
Processing charges
Stores, spare parts and loose tools consumed
Packing materials
Fuel and power
Repair and maintenance
Insurance
Other factory overheads
Depreciation
Amortization
Work-in-process
Opening stock
Closing stock
Cost of goods manufactured
Finished goods
Opening stock
Closing stock
Cost of sales
35.1
35.2
19.5
21
2010
2009
3,923,408
2,464,620
1,056,915
518,965
12,267
1,119,658
1,460,026
7,351,678
151,766
67,432
202,182
1,379,838
5,558
19,714,313
3,657,167
1,405,218
991,885
505,493
22,452
696,619
1,364,752
7,402,291
123,841
57,897
157,585
1,382,070
7,750
17,775,020
915,368
(983,720)
(68,352)
687,683
(915,368)
(227,685)
19,645,961
17,547,335
803,181
(1,065,214)
(262,033)
19,383,928
745,779
(803,181)
(57,402)
17,489,933
581,345
4,070,306
4,651,651
728,243
3,923,408
484,086
3,754,426
4,238,512
581,345
3,657,167
35.1 Raw material consumed

Opening stock
Add: Purchases
Less: Closing stock
35.2 Salaries, wages and other benefits include provident fund contribution of Rupees 28.225 million
(2009: Rupees 24.351 million) and employee benefits (gratuity) amounting to Rupees 5.386 million
(2009: Rupees 1.536 million).
138
NOTE
Outward freight and handling
Clearing and forwarding
Insurance
Sales promotion and advertisement
Commission to selling agents
36.1
2010
2009
73,637
3,118,158
227,943
26,685
348
8,057
808
6,247
23,732
171,202
10,591
3,667,408
62,565
2,299,401
160,317
24,460
405
7,795
679
5,267
24,308
299,280
28,478
2,912,955
Rupees 2.053 million) and employee benefits (gratuity) amounting to Rupees 0.230 million (2009:
Rupees 0.085 million).
37. ADMINISTRATIVE EXPENSES
NOTE
Repairs and maintenance
Rent, rates and taxes
Insurance
Printing, stationery and periodicals
Security, gardening and sanitation
Provision for doubtful debts
Provision for slow moving and obsolete items
Depreciation
37.1
19.5
2010
2009
164,365
16,234
12,745
9,133
4,600
17,979
13,193
2,589
10,624
16,105
19,813
26,309
5,000
35,755
33,598
388,042
153,428
16,617
13,734
3,049
4,483
17,216
11,503
1,175
10,824
12,437
18,915
35,231
28,261
326,873
139
Rupees 4.545 million) and employee benefits (gratuity) amounting to Rupees 1.276 million (2009:
Rupees 0.421 million).
38. OTHER OPERATING EXPENSES
NOTE
Auditors' remuneration
Donations
Miscellaneous
38.1
38.2
14.1
14
2010
2009
2,610
14,502
20,227
7,686
152,284
197,309
1,850
43,543
-
2,060
550
2,610
1,300
550
1,850
15,414
60,807
38.1 Auditors' remuneration:

Statutory audit fee
Certifications
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.
39. OTHER OPERATING INCOME
Income from financial assets:
NOTE
Exchange gain
Gain/ (loss) on disposal of investments
Gain/ (loss) on remeasurement of fair value of
investments at fair value through profit and loss account
Dividend income
Income from associated company:
Dividend income : Security General Insurance Company Limited
Income from non-financial assets:
Scrap sales
Gain on disposal of property, plant and equipment
19.2
Miscellaneous
140
2010
2009
19,261
3,664
78,350
(3,330)
1,869
6,281
715
(13,200)
12,306
837
31,790
74,963
21,938
27,422
57,860
10,392
13,702
41,523
4,858
8,190
26,991
81,954
135,682
81,562
183,947
40. FINANCE COST

NOTE
Mark-up/finance charges/ interest on:
Long term financing
Redeemable capital
Provident fund
Workers' Profit Participation Fund (WPPF)
Bank charges and commission
Loss on cross currency swap
Exchange loss
14.1
2010
2009
540,266
1,151,738
1,164,673
87,177
2,968
188
2,947,010
129,883
13,970
41,381
3,132,244
668,611
1,311,908
1,134,648
119,445
322
164
3,235,098
115,208
830,747
479,418
4,660,471
186,061
(73,912)
112,149
120,563
(151,621)
(31,058)
885
113,034
(488)
(31,546)
41. PROVISION FOR TAXATION

Current year
Current
Deferred
Prior year
Current
41.1 Provision of current year income tax represents final tax on export sales, minimum tax on local sales
and tax on income from other sources under the relevant provisions of the Income Tax Ordinance,
2001. Numeric tax reconciliation has not been presented, being impracticable.
42. EMPLOYEE BENEFITS - Gratuity
The future contribution rates of this scheme include allowance for deficit and surplus. Projected unit credit
method, based on the following significant assumptions, is used for valuation of this plan:
- discount rate
- expected return on plan assets
- expected rate of growth per annum in future salaries
- average expected remaining working life time of employees
2010
12%
12%
11%
10 years
2009
12%
12%
11%
10 years
141
The amounts recognized in the balance sheet are as follows:

Fair value of plan assets
Present value of defined benefit obligation
Benefits payable to outgoing Members
43,201
(77,070)
-
47,997
(60,082)
-
(Deficit)/ surplus
Unrecognized actuarial (gain)/ loss
(33,869)
27,005
(12,085)
20,269
Net asset/ (liability) as at 30 June
(6,864)
8,184
Net asset/ (liability) as at 01 July,

Payments to fund during the year
Amount paid to the Subsidiary
Net asset/ (liability) as at 30 June
8,184
(6,864)
1,929
(10,113)
9,768
(2,042)
458
-
(6,864)
8,184
Movement in the present value of defined benefit

obligation is as follows:
Present value of defined benefit obligation as at 01 July
Current service cost
Interest cost
Benefits paid
Actuarial (gain)/ loss
Present value of defined benefit obligation as at 30 June
Movement in the fair value of plan assets is as follows:
Fair value of plan assets as at 01 July
Expected return on plan assets
Contributions
Benefits paid
Payment to outgoing members
Actuarial (loss) / gain
Fair value of plan assets as at 30 June
Actual return/ (loss) on plan assets as at 30 June
Plan assets comprise of:
Defence Saving Certificates
(including accrued interest less zakat)
National Investment Trust Units
Cash at bank
Term deposit receipts - KASB Bank
Benefit payments due, but not paid
142
2010
2009
Charged to profit and loss are as follows:
Current service cost
Interest cost
Expected return on plan assets
Acturial losses charge
50,663
3,328
6,080
(3,205)
3,216
60,082
47,997
5,759
1,929
(1,959)
(10,113)
(412)
43,201
5,348
61,382
7,366
458
(4,069)
(17,140)
47,997
(9,774)
24,778
17,886
1,914
23,431
(30)
43,201
20,777
2,442
-
3,987
7,210
(5,759)
1,426
6,864
3,328
6,080
(7,366)
2,042
Comparison of present value of defined benefit obligation

The fair value of plan assets and the surplus or deficit of gratuity fund for five years is as follows:
2010
2009
2008
2007
2006
----------------------- Rupees in thousand ----------------------Present value of defined benefit obligation
Fair value of plan assets
60,082
3,987
7,210
(1,959)
7,750
77,070
2010
2009
(Deficit)/ surplus
Experience adjustment on obligation
Experience adjustment on plan assets
(77,070)
(60,082)
(50,663)
(46,512)
(45,937)
43,201
47,997
61,382
60,785
100,830
(33,869)
(12,085)
10,719
14,273
54,893
7,750
3,216
(1,653)
(3,825)
12,381
(17,140)
(6,697)
2,603
7,007
(412)
The Subsidiary's policy with regard to actuarial gains / losses is to follow the minimum recommended
approach under IAS 19: "Employee Benefits".
The latest actuarial valuation of the gratuity scheme has been carried out on 30 June 2010.
47,997
43. CASH GENERATED FROM OPERATIONS
Loss before taxation
2010
2009
(2,193,183)
(1,454,341)
1,415,593
5,558
26,309
5,000
3,132,244
(10,392)
(3,664)
70,207
-
1,417,301
7,750
4,660,471
(4,858)
3,330
13,200
(8,190)
Adjustment for non-cash charges and other items:

Depreciation
Amortization of intangible assets
Provision for doubtful debts
Provision for slow moving and obsolete items
Finance cost
Gain on sale of fixed assets
(Gain) / Loss on sale of investments
Loss on remeasurement of investments

143
2010
2009
NOTE
Employees' compensated absences
Provision for employee benefits
Dividend income
Working capital changes
43.1
43.1 Working capital changes

(Increase) / decrease in current assets:
Stock-in-trade
Trade debts
Loans and advances
Gratuity fund trust
Other receivables
10,661
6,864
(22,653)
(6,281)
281,604
2,717,867
481,933
(467,091)
(374,429)
(481,821)
34,287
(161,926)
(969,047)
Increase/ (decrease) in current liabilities

1,250,651
281,604
6,046
(28,259)
(12,306)
480,303
5,080,447
376,550
(323,726)
351,481
71,620
1,584
(93,283)
25,829
410,055
70,248
480,303
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:
Managerial remuneration
Housing and utilities
Medical
Group insurance
Club subscription
Others
144
Chief Executive
Directors
Executives
2010
2009
2010
2009
2010
2009
2
2
5
5
61
63
----------------( Rupees in thousand )--------------9,337
691
504
467
64
185
11,248
9,337
691
466
383
185
73
11,135
11,412
377
1,992
1,362
92
15,235
9,791
262
1,701
1,258
59
13,071
Executives are provided with free use of company maintained vehicles in accordance with the Group policy.
The aggregate amount charged in the financial statements in respect of directors' meeting fee paid to 4
(2009: 4) directors was Rupees 205 thousand (2009: Rupees 190 thousand).
45. TRANSACTIONS WITH RELATED PARTIES
The related parties comprise of subsidiaries, associated undertakings, directors of the Group and their close
relatives, key management personnel and staff retirement fund. Detail of transactions with related parties,
other than those which have been specifically disclosed elsewhere in these consolidated financial
statements are as follows:
2010
2009
Associated company
Dividend income
Share deposit money received
Post employment benefits plan
Interest on provident fund
Funds received from gratuity fund
46. LOSS PER SHARE - BASIC AND DILUTED
44. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Number of persons
The Chief Executive Officer and directors are provided with the Company's maintained vehicles, free
medical facilities and residential telephone facilities for both business and personal use. Chief executive is
also provided free furnished accommodation alongwith utilities.
72,529
5,325
26,575
3,086
252
6,096
113,863
64,113
4,608
24,170
2,441
122
4,132
99,586
There is no dilutive effect on the basic loss per share which is based on:
Loss attributable to ordinary shares
Rupees in thousand
Weighted average number of ordinary shares
Numbers
Loss per share
Rupees
21,938
1,000,000
27,422
-
23,823
2,968
15,048
30,949
322
1,584
2010
2009
(1,043,987)
(959,035)
145,526,216
145,526,216
(7.17)
(6.59)
47. PLANT CAPACITY AND ACTUAL PRODUCTION

SPINNING:
(Numbers)
85,680
85,834
100% Plant capacity converted into 20s count based on
3 shifts per day for 1,095 shifts (2009: 1,095 shifts).
37,950
37,945
Actual production converted into 20s count based on

3 shifts per day for 1,095 shifts (2009:1,095 shifts).
35,211
35,298
145
2010
- Gujar Khan Division
2009
(Numbers)
70,848
66,068
100% Plant capacity converted into 20s count based on
33,313
27,732
Actual production converted into 20s count based on

31,295
26,318
- Raiwind Division
Actual generation
Gas engines
54,460
54,312
26,212
28,166
STITCHING:
The plant capacity of this division is indeterminable due to multi-product plants involving varying
processes of manufacturing and run length of order lots.
2010
WEAVING:
(Metric tons in thousand)

CEMENT:
(Numbers)
- Raiwind Division
Looms installed / worked
204
204
(Square meters in thousand)

100% Plant capacity at 60 picks based on
72,568
84,875
Actual production converted to 60 picks based on

68,605
68,271
PROCESSING OF CLOTH :
3,690
3,130
3,690
3,137
REASONS FOR LOW PRODUCTION

- Due to stoppage for normal maintenance, doffing, change of spin plans and cloth quality,
interruption in gas and electricity supply.
- The generation of power was limited to actual demand.

41,975
Actual at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts)
34,653
30,626
- Shortfall in production of cement was mainly due to break-down in cement mills and market
48. POST BALANCE SHEET EVENT
POWER PLANT:
(Mega Watts)
207,787
207,787
Main engines
2,198
7,124
Gas engines
78,080
64,663
Actual generation
146
Annual rated capacity (Based on 300 days)

Annual production for the year
(Meters in thousand)
41,975
Clinker:
- Cloth processing units working capacity was limited to actual export / local orders in hand.
Capacity at 3 shifts per day for 1,095 shifts (2009: 1,095 shifts)
2009
In accordance with the approval of the shareholders in their Extraordinary General Meeting held on 03 May
2010 and subsequent permission granted by the Securities and Exchange Commission of Pakistan (SECP),
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
Zimpex (Private) Limited in accordance with the agreement dated 10 March 2010 between the three allottees,
the Holding Company and Maple Leaf Cement Factory Limited Subsidiary Company.
147
148
130,628
(18,129)
(55,961)
(74,090)
3,049,558
(2,844,840)
204,718
30 June 2009
30 June 2009
(324,508)
(70,097)
(394,605)
(53,782)
(51,207)
(104,989)
305,503
(57,076)
(60,939)
(118,015)
263,489
1,708
5,474,514
(5,078,201)
396,313
2,571,181
(2,160,689)
410,492
3,079,523
(2,698,019)
381,504
2,399,058
2,514,724
1,211,488
842,797
2,005,937
1,725,080
2,604,786
2,973,709
49.3.2
49.4
The Group's revenue is earned from a large mix of customers.
All non current assets as at reporting date are located and operated in Pakistan.
Revenue from major customers
1,664,667
4,040,326
7,627,868
11,107,205
24,440,066
1,714,770
3,407,655
6,850,272
11,840,054
23,812,751
2010
2009
(RUPEES IN THOUSAND)
The Group's revenue from external customers by geographical location is detailed below:
689,813
1,701,352
49.3.1
Europe
America
Asia, Africa, Australia
Pakistan
30 June 2009
Cement
30 June 2009 30 June 2010
All segment liabilities are allocated to reportable segments other than trade and other payables, corporate borrowings and current and deferred tax liabilities.
Geographical Information
UNALLOCATED LIABILITIES
TOTAL LIABILITIES FOR REPORTABLE SEGMENT
30 June 2010

30 June 2010
30 June 2009
Elimination of inter-segment
transactions
(2,448,236)
(150,779)
(2,599,015)
2,463,897
(3,269,590)
(192,876)
(3,462,466)
(407,137)
(392,937)
(68,797)
(461,734)
182,962
15,359,777
(10,296,865)
5,062,912
13,747,212
(10,691,883)
3,055,329
4,756,984
(4,112,288)
644,696
-
(1,924,749)
1,924,749
-
(2,683,311)
2,683,311
-
----------------------------------------------------------- ( R u p e e s in t h o u s a n d ) -------------------------------------------------------------
30 June 2010
Weaving
23,401,059
23,401,059
23,830,834
23,830,834
2,978,474
5,429,033
6,080,989
36,676,598
31,397,969
5,278,629
36,676,598
10,472,980
40,888,069
29,131,370
11,756,699
40,888,069
30,595,609
30,415,089
Spinning
Weaving
Group
Cement
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)------------------------------------------------------------------------
1,142,628
(16,234)
(64,130)
(80,364)
4,822,128
(3,599,136)
1,222,992
30 June 2010
Spinning
All segment assets are allocated to reportable segments other than those directly relating to corporate and tax assets.
UNALLOCATED ASSETS
TOTAL ASSETS FOR REPORTABLE SEGMENT
Reconciliation of reportable segment assets and liabilities
PROFIT / (LOSS) AFTER TAXATION
PROFIT BEFORE TAX AND UNALLOCATED INCOME AND

EXPENSES
UNALLOCATED INCOME AND EXPENSES
FINANCE COST
DISTRIBUTION COST
SALES
COST OF SALES
GROSS PROFIT
SEGMENT INFORMATION
49.3
49.2
49.1
49.
30 June 2009
23,812,751
(17,489,933)
6,322,818
(2,913,084)
(326,744)
(3,239,828)
3,082,990
(4,660,471)
(60,807)
183,947
31,546
(4,505,785)
(1,422,795)
30 June 2010
24,440,066
(19,383,928)
5,056,138
(3,667,408)
(388,042)
(4,055,450)
1,000,688
(3,132,244)
(197,309)
135,682
(113,034)
(3,306,905)
(2,306,217)
Group

50.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, other price
risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
Company's financial performance. The Group uses derivative financial instruments to hedge certain risk
exposures.
Risk management is carried out by the Group's finance department under policies approved by the Board of
Directors. The Group's finance department evaluates and hedges financial risks. The Board provides
principles for overall risk management, as well as policies covering specific areas such as currency risk,
other price risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non
derivative financial instruments and investment of excess liquidity.
(a) Market risk

(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
transactions or receivables and payables that exist due to transactions in foreign currencies.
The Group is exposed to currency risk arising from various currency exposures, primarily with respect
to the United States Dollar (USD), Euro, GBP and Yen. Currently, the Group's foreign exchange risk
exposure is restricted to bank balances, the amounts receivable / payable from / to the foreign entities.
The Group uses forward exchange contracts to hedge its foreign currency risk, when considered
appropriate. The Group's exposure to currency risk was as follows:
2010
2009
(Amounts in thousand)
Cash at banks - USD

Trade debts - USD
Trade debts - Euro
Trade debts - GBP
Trade and other payable - USD

Trade and other payable - Euro
Trade and other payable - Yen
Finance lease liability - USD
Outstanding Letters of credit - USD
Outstanding Letters of credit - Euro
Outstanding Letters of credit -Yen
37
17,770
832
9,119
1,003
10,667
7,341
1,056
4,884
72
15,388
245
18
11,163
1,168
17,200
11,879
80
1,226
725,520
149
2010
2009
Net exposure - USD
Net exposure - Euro
Net exposure - GBP
Net exposure - Yen
9,320
1,227
-
7,662
2,149
18
4,884
742,720
The following significant exchange rates were applied during the year:
Rupees per US Dollar
Average rate
Reporting date rate
The table below summarises the impact of increase / decrease in the Karachi Stock Exchange (KSE)
Index on the Group's loss after taxation for the year and on equity (fair value reserve). The analysis is
based on the assumption that the equity index had increased / decreased by 5% with all other
variables held constant and all the Group's equity instruments moved according to the historical
correlation with the index:
Index
Impact on loss
after taxation
2010
2010
2009
83.78
85.60
78.81
81.10
Rupees per Euro

Average rate
Reporting date rate
112.10
104.58
107.87
114.54
Rupees per GBP

Average rate
Reporting date rate
132.08
128.66
126.45
135.05
Rupees per Yen

Average rate
Reporting date rate
0.9241
0.9662
0.7867
0.8475
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
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
rate risk.
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD,
Euro, GBP and Yen with all other variables held constant, the impact on loss after taxation for the year
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
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
sensitivity analysis is unrepresentative of inherent currency risk as the year end exposure does not
reflect the exposure during the year.
At the balance sheet date the interest rate profile of the Groups interest bearing financial instruments
was:
(ii) Other Price risk

Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
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
Group is not exposed to commodity price risk.
--------------------- (RUPEES IN THOUSAND) ---------------------
KSE 100 (5% increase)

KSE 100 (5% decrease)
1,371
(1,371)
1,593
(1,593)
(iii) Interest rate risk

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.
2010
2009
Fixed rate instruments
Financial Assets
Loans to employees
Bank Balances at PLS account
5,429
44,629
8,786
65,366
407,742
549,141
3,201,896
2,942,000
Long term financing
150
2009
Impact on statement of other

comprehensive income
8,017
151
Floating rate instruments
2010
2009
Holding Company
Financial assets
Bank balances- saving accounts
12,673
13,891
Long term financing
Redeemable capital
5,001,198
8,296,600
6,929,377
1,214,971
-
4,655,703
8,000,000
6,250,793
1,343,997
35,922
Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss. Therefore, a change in interest rate at the balance sheet date would not affect loss of the
Group.
Cash flow sensitivity analysis for variable rate instruments
If interest rate at the year end date, fluctuates by 1% higher / lower with all other variables held
constant, loss after taxation for the year would have been Rupees 214.421 million (30 June 2009:
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
balance sheet dates were outstanding for the whole year.
(b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
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:
2010
2009
Investments
Deposits
Trade debts
Accrued Interest
Other receivables
Loans and advances
Bank balances
1,114,449
125,551
2,106,774
797
49,669
264,219
150,312
3,811,771
1,014,173
98,874
1,732,345
1,105
37,082
5,695
174,519
3,063,793
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:
152
Short
Term
Rating
Long
term
A-1+
A1+
A1+
A1+
A1+
A-1+
A1+
A1+
A1+
A2
A1+
A-1
A-3
A1+
A-1+
A-1
A-1+
AAA
AA
AA
AA
AA
AA+
AA+
AAAA
AAAA+
AAAA
AA+
A
AA+
2010
Agency
2009
Banks
National Bank of Pakistan
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Faysal Bank Limited
Habib Bank Limited
MCB Bank Limited
NIB Bank Limited
The Royal Bank of Scotland Limited
My Bank Limited
The Bank of Punjab
Meezan Bank Limited
Silkbank Limited
Standard Chartered Bank (Pakistan) Limited
United Bank Limited
Al-Baraka Islamic Bank Limited
Bank Al Habib Limited
JCR-VIS
754
PACRA 32,531
PACRA
7,822
PACRA
1,421
PACRA
4,108
JCR-VIS
67
PACRA
9,907
PACRA 12,313
PACRA
88
PACRA
30
PACRA
540
JCR-VIS
319
JCR-VIS 2,945
PACRA
2,309
JCR-VIS
133
JCR-VIS 2,565
PACRA
38
77,890
4,656
31,292
5,703
2,536
1,872
103
12,611
11,106
76
30
1,763
30
837
2,611
4,350
79,576
Subsidiary Companies
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
Group's investments
Rating
United Composite Islamic Fund
Faysal Saving Growth Fund
NAFA Government Securities Liquid Fund
Noman Abid Reliance Inome Fund
Alfalah GHP cash fund
Fauji Cement Company Limited
Highnoon Laboratories Limited
A
N/A
N/A
N/A
AM 3AM 3
N/A
N/A
1,087,021 982,313
12,800
4,267
4,267
14,053
2,008
539
2,744
1,106,364 1,003,647
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
due consideration to their strong financial standing, management does not expect non-performance
by these counterparties on their obligations to the Group. Accordingly the credit risk is minimal.
Carrying
Amount
Contractual
Cash Flows
Less than
one year
More than
5 Years
1 to 5
Years
----------------------------- (Rupees in thousand) -------------------------
Non derivative financial liabilities:
(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities.
The Group manages liquidity risk by maintaining sufficient cash and the availability of funding through an
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
balances. Inspite the fact that the Group 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
liabilities, including interest payments. The amount disclosed in the table are undiscounted cash flows:
3,080,439 4,527,362
8,296,600 13,959,857
718,231 2,413,858 1,395,273

283,820 6,231,669 7,444,368
Long term deposits
1,079,941 1,203,843
2,739
2,739
429,186
-

Accrued mark-up
2,642,912 2,642,912 2,642,912

921,812
921,812 921,812
4,060,838 4,060,838 4,060,838
Long term financing

Redeemable capital
774,657
2,739
-
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:
Holding Company
Holding Company
Carrying
Amount
Contractual
Cash Flows
6 months
or less
6-12
months
1-2 Years
Carrying
Amount
More than
2 Years
Contractual
Cash Flows
6 months
or less
6-12
months
1-2 Years
More than
2 Years
---------------------------------- (Rupees in thousand) -------------------------------------------------------------- (Rupees in thousand) -----------------------------

Long term financing
542,361
398,510
699,117 1,310,446
Long term financing
2,749,341 3,413,720
506,992
606,169 1,031,773 1,268,786

187,191
35,922
808,136
207,348
36,460
808,136
35,963
36,460
808,136
52,959
-
50,812
-
67,614
-
Accrued mark-up
185,259
185,259
185,259
4,810,471 4,991,732 4,438,253
553,479

135,030
155,263
53,450
32,487
45,157
24,169
989,594
989,594
989,594
Accrued mark-up
289,987
185,259
185,259
6,070,435 6,268,109 5,796,162
471,947
9,813,547 10,548,659 7,566,826
902,944
154
2,328,501 2,950,434
744,274 1,334,615
8,776,320 9,642,655 6,011,063 1,212,607 1,082,585 1,336,400
155
Subsidiary Company
Carrying
Amount
Contractual
Cash Flows
Less than
one year
More than
5 Years
1 to 5
Years
----------------------------- (Rupees in thousand) -------------------------

2,455,503 3,365,222 662,012 2,703,210
8,000,000 11,646,716 2,035,200 9,611,516
Long term deposits
1,164,823
2,580

Accrued mark-up
1,675,984 1,675,984 1,675,984

441,194
441,194 441,194
4,382,322 4,831,813 4,831,813
968,850
2,580
-
18,122,406 23,322,680 10,036,524 13,286,156
Long term financing

Redeemable capital
1,359,171
2,580
390,321
-
The contractual cash flows relating to the above financial liabilities have been determined on the basis of
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.
50.2 Fair values of financial assets and liabilities
The carrying values of all financial assets and liabilities reflected in financial statements approximate their
fair values. The following table provides an analysis of financial instruments that are measured
subsequent to initial recognition at fair value, grouped in to levels 1 to 3 based on the degree to which fair
value is observable:
Level 1
As at 30 June 2010
Assets
As at 30 June 2009
Assets
Level 2
Level 3
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 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
that is available to the Group for similar financial instruments. The Group has no such type of financial
instruments as on 30 June 2010.
50.3 Financial instruments by categories
Loans and
receivables
As at 30 June 2010
Investments
Deposits
Trade debts
Accrued interest
Other receivables
Loans and advances
1,087,021
982,313
- 1,087,021
982,313
Available
for sale
Total
------------------- (Rupees in thousand) -----------------
125,551
2,106,774
797
49,669
264,219
152,453
2,699,463
27,428 1,087,021 1,114,449

125,551
- 2,106,774
797
49,669
- 264,219
- 152,453
27,428 1,087,021 3,813,912
Through
profit or
loss
at amortized cost
Total
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
current bid price. These financial instruments are classified under level 1 in above referred table. The
Group has no such type of financial instruments as on 30 June 2010.
156
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
value a financial instrument are observable, those financial instruments are classified under level 2 in
above referred table.

Long term financing
Redeemable capital
Accrued mark-up
5,408,940
8,296,600
1,214,971
10,131,273
3,632,506
1,211,799
29,896,089
157
Loans and
receivables
As at 30 June 2009
Investments
Deposits
Trade debts
Other receivables
Loans and advances
Through
profit or
loss
Available
for sale
Total
2010
2009
Rupees in thousands
98,874
1,732,345
37,082
5,695
180,229
2,054,225
31,860
31,860
982,313 1,014,173
98,874
1,732,345
37,082
5,695
180,229
982,313 3,068,398
at amortized cost

Long term financing
Redeemable capital
Accrued mark-up
balance sheet plus borrowings. The gearing ratio as at year ended 30 June 2010 and 30 June 2009 is as
follows:
5,204,844
8,000,000
1,352,014
Borrowings
25,051,784
23,785,573
Total equity
5,323,453
30,375,237
7,581,330
31,366,903
82.47%
75.83%
Total capital employed

Gearing Ratio
These financial statements were authorised for issue on September 29, 2010 by the Board of Directors of the
Holding Company.
52. CORRESPONDING FIGURES
No significant reclassification/ rearrangement of corresponding figures has been made.
53. GENERAL
Figures have been rounded off to the nearest thousand of Rupees unless stated otherwise.
35,922
9,192,793
2,484,030
626,453
26,896,056
50.4 Capital risk management

The Groups objectives when managing capital are to safeguard the Groups 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
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
CHIEF EXECUTIVE
DIRECTOR
159

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:
Affix
Revenue Stamps of Rs. 5/
Signature:
Name:
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
Fold Here
The Company Secretary

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

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Annual Report 2010

Kohinoor Textile Mills Limited

Registered Office : 42 - Lawrence Road, Lahore Pakistan.

Design & Printed by:

A KOHINOOR MAPLE LEAF GROUP COMPANY

Kohinoor Textile Mills Limited

Annual Report 2010

Kohinoor Textile Mills Limited

Annual Report 2010

CONSOLIDATED FINANCIAL STATEMENTS

Kohinoor Textile Mills Limited

Kohinoor Textile Mills Limited

Annual Report 2010

Annual Report 2010

MR. TAUFIQUE SAYEED SAIGOL

MR. SAYEED TARIQ SAIGOL

CHIEF FINANCIAL OFFICER

THEN AND NOW

he Company commenced operation

The processing facilities at the Rawalpindi

TANGIBLE FIXED ASSETS-NET

MR. ZAMIRUDDIN AZAR

Kohinoor Textile Mills Limited

Annual Report 2010

Kohinoor Textile Mills Limited

Annual Report 2010

The Kohinoor Textile Mills Limited Stated Vision

The Company Shall Achieve Its Mission Through A Continuous

Kohinoor Textile Mills Limited

Annual Report 2010

Statement of Ethics and

Kohinoor Textile Mills Limited

Annual Report 2010

Kohinoor Textile Mills Limited

Kohinoor Textile Mills Limited

Annual Report 2010

Annual Report 2010

Lahore: October 09, 2010

BY ORDER OF THE BOARD

To transact any other business with the permission of the Chair.

Chief Executive Officer

ORGANIZATION CHART OF KTML

Chief Financial Officer/

NOTICE OF ANNUAL GENERAL MEETING

Kohinoor Textile Mills Limited

Annual Report 2010

DIRECTORS' REPORT TO THE SHAREHOLDERS

Weaving profit was satisfactory

The Company sold made-ups to

Kohinoor Textile Mills Limited

Annual Report 2010

Locally, the Company continues

Kohinoor Textile Mills Limited

Kohinoor Textile Mills Limited

Annual Report 2010

The Directors have shown their

The Directors recommend as

Profit before taxation

Provision for taxation

Profit after taxation

SOCIAL COMPLIANCE AND HUMAN RESOURCE

Accumulated loss brought forward

Accumulated loss carried forward