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Balance sheetAs at june 30,2011

Note 2011 (Rupees in 2010 thousand)

Equity and liabilities

Balance sheetShare capital and reservesAuthorized share capital

370,000,000(2010: 370,000,000) 3,700,000 3,700,000

ordinary shares of rupees 10 each

30,000,000(2010:30,000,000)prefrence 300,000 300,000

shares of rupees 10 each

4000000 4000000

Issued, subscribed and paid up share capital 3 2,455,262 1,455,262

Reserves 4 1931374 1906006

Total equity 4,386,636 3,361,268

Surplus on revaluation on land and invesment properties 5 3685497 3673825

NON-CURRENT LIABILTIES

long term financing 6 1318710 1628067

liabilities against assets subject t finance lease 7 42843 67005

defferred income tax 8 62141 157996

1423694 1853068

CURRENT LIABILTIES

Trade and other payable 9 834691 1040257

Accrued mark-up 10 230138 289987

Short term brrowing 11 5130265 6070435

Current portion of non-current liabilties 12 611744 768459

6806838 8169138

TOTAL LIABILTIES 8230532 10022206

TOTAL EQUITY AND LIABILTIES 16,302,665 17,057,299

CONTINGENCIES AND COMMITMENTS 13

ASSETS 14 6,747,691 6,496,299

NON - CURRENT ASSETS 15 9,563 -

Property, plant and equipment 16 1,721,714 1,720,835

Intangible asset 17 3,248,880 2,249,170

Investment properties 18 35,758 34,887

Long term investments 11763606 10501191

Long term deposits

CURRENT ASSETS

Stores, spare parts and loose tools 19 328,393 345,798

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Stock-in-trade 20 1,657,252 2,393,113

Trade debts 21 707,400 1,329,065

Advances 22 241,331 596,795

Security deposits and short term prepayments 23 19,045 15,578

Accrued Interest 46 141

Due from subsidiary companies 24 601,144 14,987Other receivables 25 432,943 386,941

Short term investments 26 600 642,111

Taxation recoverable 129,909 99,805

Cash and bank balances 27 420,996 78,851

4539059 5903185

Non-current assets classified as held for sale 28 - 652,923

4539059 6556108

TOTAL ASSETS 16,302,665 17,057,299

Profit and Loss AccountFor the year ended june 30,2011

Note 2011 2010

(Rupees in thousand)

SALES 29 12,037,253 10,693,338

COST OF SALES 30 -10,213,705 -8,692,529

GROSS PROFIT 1823548 2000809

DISTRIBUTION COST 31 -425,063 -397,818

ADMINISTRATIVE EXPENSES 32 -218,739 -195,103

OTHER OPERATING EXPENSES 33 -49,432 -37,323

-693234 -630244

1,130,314 1,370,565

OTHER OPERATING INCOME 34 595,770 78,651

PROFIT FROM OPERATIONS 1726084 1449216

FINANCE COST 35 -1,037,294 -1,072,768

PROFIT BEFORE TAXATION 688790 376448

TAXATION 36 -200,939 -98,587

PROFIT AFTER TAXATION 487851 277861

EARNINGS PER SHARE - BASIC AND DILUTED (Rupees) 40 2.2 1.91

The annexed notes from an integral part of these financial statement

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Statement of Comprehensive incomeFor the year ended june 30, 2011

PROFIT AFTER TAXATION487,851 277,861

OTHER COMPREHENSIVE INCOME / (LOSS)

Surplus arising on remeasurement of available for sale investment

to fair value- 32,632

Reclassification adjustment for gain included in profit and loss-462,483 -

Deferred income tax relating to surplus on available for sale

investment- -8,566

Other comprehensive income / (loss) for the year - net of tax -462,483 24,066

TOTAL COMPREHENSIVE INCOM FOR THE YEAR 25368 301927


Cash Flow StatementFor the year ended June 30, 2011 2011 2010

Note (Rupees in thousand)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 37 2,998,394 674,317

Finance cost paid -1,094,698 -968,040

Workers profit participation fund paid -13,397

Income tax paid -162,285 -108,787

Net increase in long term deposits -871 -1,270

Net cash generated from / (used in) operating activities 1,727,143 -403,780

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipment -177891 -281042

Capital expenditure on intangible asset -9836 -

Payment for non-current assets classified as held for sale - -51261

Investments made -174 -200

Return on bank deposits received 1363 934

Proceeds from sale of property, plant and equipment 13132 7765

Proceeds from sale of investments 8715 -

Proceeds from sale of non current-assets classified as held for sale 119200 -

Advance against purcahse of land received back 100000 -Dividend received 16263 13222

Net cash from / (used in) investing activities 70772 -310582

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long term financing 150000 -

Repayment of long term financing -595077 -420840

Short term borrowings - net -940170 1259964

Repayment of liabilities against assets subject to finance lease -70523 -90286

Repayment of lease finance advance - -35922

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Net cash (used in) / from financing activities -1455770 712916

Net increase / (decrease) in cash and cash equivalents 342,145 -1,446

Cash and cash equivalents at the beginning of the year 78851 80297

Cash and cash equivalents at the end of the year 420,996 78,851

The annexed notes form an integral part of these financial statements

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Profit and Loss AccountFor the year ended june 30,2011

Note 2011

(Rupees in

SALES 29 12,037,253

COST OF SALES 30 (10,213,705)

GROSS PROFIT 1823548

DISTRIBUTION COST 31 (425,063)

ADMINISTRATIVE EXPENSES 32 218,739

OTHER OPERATING EXPENSES 33 (49,432)

-693234

1,130,314

OTHER OPERATING INCOME 34 595,770

PROFIT FROM OPERATIONS 1726084

FINANCE COST 35 (1,037,294)

PROFIT BEFORE TAXATION 688790

TAXATION 36 (200,939)

PROFIT AFTER TAXATION 487851

EARNINGS PER SHARE - BASIC AND DILUTED (Rupees) 40 2.20


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2010

thousand)

10,693,338

(8,692,529)

2000809

(397,818)

195,103

(37,323)

-630244

1,370,565

78,651

1449216

(1,072,768)

376448

(98,587)

277861

1.91

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Statement of Comprehensive incomeFor the year ended june 30, 2011

PROFIT AFTER TAXATION

OTHER COMPREHENSIVE INCOME / (LOSS)

Surplus arising on remeasurement of available for sale investment to fair value

Reclassification adjustment for gain included in profit and loss

Deferred income tax relating to surplus on available for sale investment

Other comprehensive income / (loss) for the year - net of tax

TOTAL COMPREHENSIVE INCOM FOR THE YEAR


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Cash Flow StatementFor the year ended June 30, 2011 2011 2010

Note (Rupees in thousand)

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 37 2,998,394 674,317

Finance cost paid -1,094,698 -968,040

Workers profit participation fund paid -13,397

Income tax paid -162,285 -108,787

Net increase in long term deposits -871 -1,270

Net cash generated from / (used in) operating activities 1,727,143 -403,780

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipment -177891 -281042

Capital expenditure on intangible asset -9836 -

Payment for non-current assets classified as held for sale - -51261

Investments made -174 -200

Return on bank deposits received 1363 934

Proceeds from sale of property, plant and equipment 13132 7765Proceeds from sale of investments 8715 -

Proceeds from sale of non current-assets classified as held for sale 119200 -

Advance against purcahse of land received back 100000 -

Dividend received 16263 13222

Net cash from / (used in) investing activities 70772 -310582

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long term financing 150000 -

Repayment of long term financing -595077 -420840

Short term borrowings - net -940170 1259964

Repayment of liabilities against assets subject to finance lease -70523 -90286

Repayment of lease finance advance - -35922

Net cash (used in) / from financing activities -1455770 712916

Net increase / (decrease) in cash and cash equivalents 342,145 -1,446

Cash and cash equivalents at the beginning of the year 78851 80297

Cash and cash equivalents at the end of the year 420,996 78,851


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Statement of Changes in EquityFor the year ended June 30, 2011

Share

premium

Fair vlue

reserve

Balance as at 30 June 2009 1455262 144919 438417

Total comprehensive income for the year ended 30 June 2010 - - 24066


Ordinary shares issued other than through a Right issue during the year ended 30 June 2011 1000000 - -

Total comprehensive income for the year ended 30 June 2011 - - -462483



Share

Capital

Capital Reserves

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Sub-

total

General

reserve

Unappropriat

ed

profit/

(accumulated

loss)

Sub- total

583336 1450491 -429748 1020743 1604079 3059341

24066 - 277861 277861 301927 301927

607402 1450491 -151887 1298604 1906006 3361268

- - - - - 1000000

-462483 - 487851 487851 25368 25368

144919 335964 1786455 1931374 4386636

Reserves Total

Equity

Revenue Reserves Total

Reserves

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Notes to the Financial StatementsFor the year ended June 30, 20111 THE COMPANY AND ITS OPERATIONSKohinoor Textile Mills Limited is a public limited company incorporated in Pakistan under the Companies Act,1913 (now

Companies Ordinance, 1984) and listed on all Stock Exchanges in Pakistan. 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 ComplianceT ese inancia statements ave een prepare in accor ance wit approve accounting stan ar s as app ica e in Pa istan.

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

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

c)Critical accounting estimates and judgments

e prepara on o nanc a s a emen s n con orm y w e approve accoun ng s an ar s requ res e use o cer a n

critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the

Companys 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 Companys 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 impairmentsEstimates wit respect to resi ua va ues, use u ives an pattern o ow o economic ene its are ase on t e ana ysis o

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.

Inventories

Net realizable value of inventories is determined with reference to currently prevailing selling prices less estimated

expenditure to make sales.

Taxation

In making the estimates for income tax currently payable by the Company, the management takes into account the currentincome 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 companys investments in subsidiary companies, the management

considers future cash flows.

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d)Amendments to published approved standards that are effective in current year and are relevant to the Company

The following amendments to published approved standards are mandatory for the Companys accounting periods

beginning on or after 01 July 2010:,

periods beginning on or after 01 January 2010). The amendment provides clarification that the potential settlement of a

liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of

current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an

unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period)notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The

application of the amendment does not affect the results or net assets of the Company as it is only concerned with

IAS 7 (Amendment), Statement of Cash Flows (effective for annual periods beginning on or after 01

January 2010). The amendment provides clarification that only expenditure that results in a recognized

asset in the balance sheet can be classified as a cash flow from investing activity. The clarification

results in an improvement in the alignment of the classification of cash f lows from investing activities

in the cash flow statement and the presentation of recognized assets in the balance sheet. The

application of the amendment does not affect the results or net assets of the Company as it is only

concerned with presentation and disclosures.

IFRS 8 (Amendment), Operating Segments (effective for annual periods beginning on or after 01

January 2010). The amendment is part of the International Accounting Standards Boards (IASB)annual improvements project published in April 2009. The amendment provides clarification that the

requirement for disclosing a measure of segment assets is only required when the Chief Operating

Decision Maker (CODM) reviews that information. The application of the amendment does not affect

the results or net assets of the Company as it is only concerned with presentation and disclosures.

e)Interpretations and amendments to published approved standards that are effective in current year but not relevant to tThere are other new interpretations and amendments to the published approved standards 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 Companys financial statements and are therefore not detailed in these financial statements.

f)Standards and amendments to published approved standards that are not yet effective but relevant to the Company

Following standards and amendments to existing standards have been published and are mandatory for the Companys

accounting periods beginning on or after 01 July 2011 or later periods:IFRS 9 Financial Instruments (effective for annual periods beginning on or after 01 January 2013). This standard is the first

step in the process to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces new

requirements for classifying and measuring financial assets and is likely to affect the Companys accounting for its financial, .

The new disclosure requirements apply to transfer of financial assets. An entity transfers a financial asset when it transfers

the contractual rights to receive cash flows of the asset to another party. These amendments are part of the IASBs

comprehensive review of off balance sheet activities. The amendments will promote transparency in the reporting of

transfer transactions and improve users understanding of the risk exposures relating to transfers of financial assets and the

effect of those risks on an entitys financial position, particularly those involving securitization of financial asset. The

management of the Company is in the process of evaluating the impacts of the aforesaid amendment on the Companys

IFRS 10 Consolidated Financial Statements (effective for annual period beginning on or after 01 January

2013). Concurrent with the issuance of IFRS 10, the IASB has also issued IFRS 11 Joint Arrangements,IFRS 12 Disclosure of Interests in Other Entities, IAS 27 (revised 2011) Consolidated and Separate

Financial Statements and IAS 28 (revised 2011) Investments in Associates. The objective of IFRS

10 is to have a single basis for consolidation for all entities, regardless of the nature of the investee,

and that basis is control. The definition of control includes three elements: power over an investee,

exposure or rights to variable returns of the investee and the ability to use power over the investee

to affect the investors returns. IFRS 10 replaces those parts of IAS 27 Consolidated and Separate

Financial Statements that address when and how an investor should prepare consolidated financial

statements and replaces Standing Interpretations Committee (SIC) 12 Consolidation Special Purpose

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Entities in its entirety. The management of the Company is in the process of evaluating the impacts of

the aforesaid standard on the Companys financial statements.

IFRS 12 Disclosure of Interests in Other Entities (effective for annual period beginning on or after 01

January 2013). IFRS 12 applies to entities that have an interest in subsidiaries, joint arrangements,

associates or unconsolidated structured entities. IFRS 12 establishes disclosure objectives and

specifies minimum disclosures that an entity must provide to meet those objectives. IFRS 12 requires

an entity to disclose information that helps users of its f inancial statements evaluate the nature ofand risks associated with its interests in other entities and the effects of those interests on its financial

statements. The management of the Company is in the process of evaluating the impacts of the

aforesaid standard on the Companys financial statements.

IFRS 13 Fair Value Measurement (effective for annual period beginning on or after 01 January

2013). IFRS 13 establishes a single framework for measuring fair value where that is required by

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he Company

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2.6 Investment propertiesLand 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 loss arising from a change in the fair value of investment properties is included in the profit

and loss account currently.

2.7 Intangible assets

n ang e asse s, w c are non-mone ary asse s w ou p ys ca su s ance, are recogn ze a cos , w c compr sepurchase 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

2.8 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 and loss which is initially measured at fair value.

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 lossInvestment classified as held-for-trading and those designated as such are included in this category. Investments are

classified as held-for-trading if these 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-maturitynves men s w xe or e erm na e paymen s an xe ma ur y are c ass e as e - o-ma ur y w en e ompany

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 amortization, using the effective interest method, of any difference between the initially

c)Available-for-salenves men s n en e o e e or an n e n e per o o me, w c may e so n response o nee or qu y, 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

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.

d)Investment in Subsidiary companies

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.

2.9 Inventories

determined as follows:

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s.

e date of bill of lading.

s applicable thereon.

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2.16 Financial instrumentsnanc a ns rumen s carr e on e a ance s ee nc u e nves men s, epos s, ra e e s, a vances, n eres accrue ,

other receivables, cash and bank balances, long-term financing, liabilities against assets subject to finance lease, 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 lossnanc a asse s are e-recogn ze w en e ompany oses con ro o e con rac ua r g s a compr se e nanc a

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

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 with 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 assetse carry ng amoun o asse s are rev ewe a eac a ance s ee a e or mpa rmen w enever even s are c anges n

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.

Recoverable amount is the higher of an assets fair value less costs to sell and value in use. 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.

2.18 Segment reportingegmen repor ng s ase on e opera ng us ness segmen s o e ompany. n opera ng segmen s a componen o

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 Companys other components. An operating segments

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 arms length prices using admissible valuation methods. Inter

segment sales and purchases are eliminated from the total.

2.19 Dividend and other appropriations

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3. ISSUED SUBSCRIBED AND PAID UP SHARE CAPITAL

2011 2010

1,596,672 1,596,672

26,156,000 26,156,000

26,858,897 26,858,897

38,673,628 38,673,628

152,241,019 52,241,019

245,526,216 145526216

3.1 Movment during the year

145,526,216 145,526,216

100,000,000

245,526,216 145,526,216

3.2)During the period, the Company has issued

100,000,000 ordinary shares of Rupees 10 each at

face value of Rupees 10 per share otherwise than

right issue to Mercury Management Incorporated

(25 million shares), Hutton Properties Limited (52

million shares) and Zimpex (Private) Limited (23

million shares) in accordance with the agreement

dated 10 March 2010 among the three allottees,

the Company and Maple Leaf Cement Factory

Limited subsidiary company after the approval

of Securities and Exchange Commission of

Pakistan.

3.3)Zimpex (Private) Limited which is an associated company held 45,496,057 (2010

shares of Rupees 10 each as at 30 June 2011.

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2011 2010

(Rupee in thousand)

Ordinary shares of Rupees 10 each allotted on reorgani 15,967 15,967

Ordinary shares allotted under scheme ofarrangement of merger of Part II of Maple Leaf

Electric Company Limited

261,560 261,560

Ordinary shares allotted under scheme of

arrangement of merger of

Kohinoor Raiwind Mills Limited and

Kohinoor Gujar Khan Mills Limited.

268,589 268,589

Ordinary shares of Rupees 10 each issued

as fully paid bonus shares

386,736 386,736

Ordinary shares of Rupees 10 each issuedas fully paid in cash

1,522,410 522,410

2455262 1455262

At 01 July 1,455,262 1,455,262

Ordinary shares of Rupees 10 each issued

during the year as fully paid

1,000,000

At 30 June 2,455,262 1,455,262

: 22,510,635) ordinary

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2011 2010

6.LONG TERM FINANCING Note (Rupee in thousand)

From banking companies and other financial

institutions - secured

NIB Bank Limited (NIB - 1) 6.1 31,836 107,716

NIB Bank Limited (NIB - 2) 6.2 150,006 198,803NIB Bank Limited (NIB - 3) 6.3 100,000

NIB Bank Limited (NIB - 4) 6.4 50,000

Allied Bank Limited (ABL -1 ) 6.5 7,232 65,094

Saudi Pak Industrial and Agricultural Investment

Company Limited (SPIAICL-3) 6.6 125,000 156,250

Standard Chartered Bank (Pakistan) Limited

- syndicated term finance 6.7 167,085 186,500

Allied Bank Limited - syndicated term finance 6.7 456,413 543,150

The Bank of Khyber - syndicated term finance 6.7 80,250 95,500

Pak Libya Holding Company Limited - syndicated term finance 6.7 40,125 47,750

Bank Al falah Limited - syndicated term finance 6.7 417,500 477,500

Faysal Bank Limited - syndicated term finance 6.7 250,500 279,750

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

Albaraka Bank (Pakistan) Limited - 8,333


Company Limited (SPIAICL-1) - 18,055


Company Limited (SPIAICL-2) - 10,000

Standard Chartered Bank (Pakistan) Limited (SCB-2) - 100,000

1,875,947 2,321,024

Less:Current portion shown under current liabilities 12 564,714 700,434Other loans - unsecured 1,311,233 1,620,590

Kohinoor Sugar Mills Limited (KSML) 6.11 4,794 4,794

Kohinoor Industries Limited (KIL) 6.12 2,683 2,683

7,477 7,477

1,318,710 1,628,067

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Company.

6.9 Kohinoor Industries Limited (KIL)

The balance is an old one, un-reconciled, unconfirmed and disputed.

6.10 Current portion of long term financing include overdue installments amounting to Rupees 32.678 million (2010 : Rupees

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2011

Note (Rupee in

7.LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE

Future minimum lease payments 101,238

Less: Un-amortized finance charges 11,365

Present value of future minimum lease payments 89,873

Less: Current portion shown under current liabilities 12 47,03042,843

7.1 The future minimum lease payments have been discounted at implicit interest rates

which range from 6.00 % to 18.85% (2010: from 6.00% to 18.00%) 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 22.098 million (2010: Rupees 21.065 million) included in long term

deposits, demand promissory notes, personal guarantees and pledge ofsponsors shares

in public limited companies.8.DEFERRED INCOME TAX

This comprises of following :

Deferred tax liability on taxable temporary differences in respect of:

- Accelerated tax depreciation 394,104

- Surplus on revaluation of investment -

394,104

Deferred tax asset on deductible temporary differences in respect of:

Unused tax losses 331,963

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2010

thousand)

155,263

20,233

135,030

68,02567,005

329,260

164,613

493,873

335,877

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2011 2010

Note (Rupee in thousand)

9.TRADE AND OTHER PAYABLES

Creditors 615,087 788,562

Accrued liabilities 128,401 151,067

Advances from customers 11,089 18,593

Workers profit participation fund 9.1 20,905 21,669

Workers welfare fund 7,686 7,686

Unclaimed dividend 2,681 2,681

Withholding tax payable 4,629 2,715

Payable to employees provident fund trust 36,287 42,096

Others 7,926 5,188

834,691 1,040,257

9.1 Workers profit participation fund

Balance as on 01 July 21,669 1,254

Add: Interest for the year 35 2,445 188

Provision for the year 33 10,188 20,227Less: Payments during the year -13,397

20,905 21,669

9.1.1The 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

10.ACCRUED MARK-UP

Long term financing 88,006 119,580

Short term borrowings 140,535 167,594

Liabilities against assets subject to finance lease 1,597 2,813

230,138 289,987

11.SHORT TERM BORROWINGS

From banking companies - secured

Short term running finances 11.1 1,879,564 2,285,452

Other short term finances 11.2 1,815,701 2,200,553

State Bank of Pakistan (SBP) refinances 11.3 1,435,000 1,555,000

Temporary bank overdraft - 29,430

5,130,265 6,070,435

11.1 The running finance facilities sanctioned by various banks aggregate to

Rupees 2,184 million (2010: Rupees 2,390 million). The rates of mark-uprange from 3.49% to 21.90% (2010: from 3.23% to 25%) 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.

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13. CONTINGENCIES AND COMMITMENTS

13.1 Contingencies

b) The Company has filed an appeal before the 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 255.886 million against

declared loss of Rupees 255.886

million creating refund of Rupees 7.498 million. Department has also filed

cross appeal mainly on issue

of chargeability of 3.5% tax on local purchases amounting to Rupees

955.547 million. The Company

has strong grounds and is expecting favourable outcomec)The Company has filed an appeal before the Appellate Tribunal Inland

Revenue under section 122(5A)

/ 122(1) / 129 of Income Tax Ordinance, 2001 for tax year 2005, which is

pending adjudication. The

Income for the year has been assessed at Rupees 113.440 million against

declared loss of Rupees

205.576 million creating payable of Rupees 74.576 million. Department

has also filed cross appeal

mainly on issue of chargeability of 3.5% tax on local purchases amounting

to Rupees 828.839 million.

The Company has strong grounds and is expecting favourable outcome.d) The Company and the tax authorities have filed appeals before

different appellate authorities regarding sales tax matters. Pending the

outcome of appeals filede e ompany as e recovery su s n c v cour s o upees .

million (2010: 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.ree cases are pen ng e ore e un a a our ppe a e r una ,

Shadman 1, Lahore regarding the reinstatement into service of three

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.

g) Guarantees issued by various commercial banks, in respect of financial

and operational obligations of the Company, to various institutions and

corporate bodies aggregate Rupees 249.620 million as at

30 June 2011 (2010: Rupees 248.962 million)

13.2 Commitments in respect of:

a) The Company has filed an appeal before AppellateTribunal 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 year2003 against order under section 221 dated 24 January

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a) Letters of credit for capital expenditure amount to Rupees Nil (2010:

Rupees 38.865 million).

b) Letters of credit other than for capital expenditure amount to

Rupees 42.070 million (2010: Rupees

325.393 million).

2011 2010

(Rupee in thousand)

14. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets (Note 14.1) 6,745,943 6,409,975

Capital work in progress (Note 14.4) 1,748 86,324

6,747,691 6,496,299

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14.1 Operating fixed Assets

Freehold

land

Office

Building

Factory and Residential and Plant and

Machinery

Other Building Other Building

----------------------------------------------------------------------------------------------------- (Rupees in thousand) ---------

At 30 June 2009

Cost 14,836 12,734 870,159 98,808 4,793,224Accumulated depreciation -5,078 -351,972 -35,102 -1,842,164

Net book value 14,836 7,656 518,187 63,706 2,951,060

Year ended 30 June 2010

Opening net book value 14,836 7,656 518,187 63,706 2,951,060

Revaluation surplus 2,410,233

Additions 1,442 28,949 7,924 216,689

Transfer:

Cost 173,260

Accumulated depreciation -60,029

113,231

Disposals:Cost -9425

Accumulated depreciation 8680

-745

Depreciation charge -444 -43,075 -3,912 -273,014

Closing net book value 2,425,069 8,654 504,061 67,718 3,007,221


Opening net book value 2,425,069 8,654 504,061 67,718 3,007,221

Revaluation surplus 11,672

Additions 71,944 5,853 172,647

Transfer

Cost 399673 182807

Accumulated depreciation -66247

399673 116560

Disposals:

Cost -3228

Accumulated depreciation 945

-2283

Depreciation charge -452 -41,517 -4,039 -271,106

Closing net book value 2,836,414 8,202 534,488 69,532 3,023,039

At 30 June 2011

Cost / revalued amount 2,836,414 14,176 971,052 112,585 5,525,974

Accumulated depreciation -5,974 -436,564 -43,053 -2,502,935

2,836,414 8,202 534,488 69,532 3,023,039

Depreciation rate (%) - 5 10-May 10-May 10

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14.2 Detail of operating fixed assets, exceeding the book value of Rupees 50,000 disposed of during the year is as

Particulars Cost Accumulated Net book Sale Gain/ Mode of Particulars of purchaser

depreciation value proceed (Loss) disposal

Vehicle

Honda Civic

LEF 08-353

1,376 119 1,257 1,400 143 Negotiation Miss Bushra Naz Malik,

156-B, Shah Jamal, Lahore

Honda Civic

ARS-003

1,922 667 1,255 1,077 -178 Negotiation Abdul Hai Mahmood

Bhaimia, 12th street,

Khayaban-e-sehar, Phase

6, DHA Karachi

Honda

Reborn VTI

861 193 668 1,400 732 Insurance

claim

EFU General Insurance

Limited, Rawalpindi

Plant and

Machinery

Diesal

Generator

(Catterpilla

r

3,228 945 2,283 9,200 6,917 Negotiation Frontier Techwood

Industries, Lahore

7,387 1,924 5,463 13,077 7,614

Agrregate

of other

items of

property,

plant and

equipment

with

individual

values not

exceedin

Rupees

50,000

152 151 1 55 54 Negotiation

7,539 2,075 5,464 13,132 7,668

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2011 2010


14.3 Depreciation charged during the year has been allocated as follows:

Cost of sales 30 338,107 350,778

Administrative expenses 32 19,638 20,840

357,745 371,618

14.4 Capital work in progressCivil works and buildings 105 67,593

Plant and machinery 1,643 18,731

1,748 86,324

15.INTANGIBLE ASSET

Computer software


O enin net book vlaue

- -

Addition 9836 -

Amortization -273 -

Closing net book value 9,563 -

Cost as at 30 June 2011 9,836 -

Accumulated amortization (273) -

Net book value 9,563 -

Amortization rate (per annum) 33.33% -

16.INVESTMENT PROPERTIES

Year ended 30 June

Opening net book amount

1,720,835 1,720,835

Fair value gain 879 -

Closing net book amount 1,721,714 1,720,835

16.1)The fair value of investment properties comprising land and building

situated at Lahore and Rawalpindi have been determined at 30 June 2011and 30 June 2010 by an independent valuer having relevant professional

qualifications. 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. No expenses directly related to invetrment

properties were incurred during the year.

17.1) During the period, the Company has made an investment of Rupees

999.710 million by subscribing

153,801,617 ordinary shares of Rupees 10 each of Maple Leaf Cement

Factory Limited - subsidiary

company vide agreement dated 10 March 2010 between Mercury

Management Incorporated, Hutton

Properties Limited, Zimpex (Private) Limited, Maple Leaf Cement FactoryLimited and Kohinoor Textile

Mills Limited, after approval of Securities and Exchange Commission of

Pakistan.

17.2) Based on value in use calculations as at 30 June 2011, there was no

impairment loss on investments in subsidiary companies (tested for

impairment under IAS 36 (Impairment ofAssets). The recoverable amount

of investment in Maple Leaf Cement Factory Limited - subsidiary company

was determined by an independent valuer.

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2011 2010


21. TRADE DEBTS

Considered good:

Secured (against letters of credit) 166,654 747,285

Unsecured 540,746 581,780

707,400 1,329,065Considered doubtful:

Others - unsecured 2,274 0

- Less: Provision for doubtful debts

As at 01 July 0

- Add: Provision for the year 33 2,274 0

As at 30 June 2,274

0 0

21.1 As at 30 June 2011, trade debts of Rupees 493.844

million (2010 : Rupees 568.309 million) were past due but not

impaired. These relate to a number of independentcustomers from whom there is no recent history of default.

The ageing analysis of these trade debts is as follows:

Upto 1 month 293,516 433,697

1 to 6 months 167,262 116,664

More than 6 months 33,066 17,948

493,844 568,309

22. ADVANCES

Considered good:

Employees - interest free

- Executives 1,390 621

- Other employees 224 1,0401,614 1,661

Advances to suppliers 222,985 593,555

Letters of credit 16,732 1,579

241,331 596,795

23. SECURITY DEPOSITS AND SHORT TERM PREPAYMENTS

Current portion of long tern deposits 18 7,622 6,237

Short term prepayments 11,423 9,341

19,045 15,578

24. DUE FROM SUBSIDIARY COMPANIES

Maple Leaf Cement Factory Limited 24.1 63,636 14,987Concept Trading (Private) Limited 24.2 537,508

601,144 14,98724.1 T is inc u es a justment o sa es tax re un s o t e

company against sales tax liability of subsidiary company

including mark up thereon amounting to Rupees 45.512

million (2010 : Rupees Nil) and receivable against allocation

of pool expenses.

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24.2 This represents the receivable from Concept Trading

(Private) Limited - a wholly owned subsidiary company on

account of disposal of available for sale investment in

Security General Insurance Company Limited.

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Note 2011 (Rupees in 2010 housand)

25.OTHER RECEIVABLES

Considered good:

Sales tax refundable 242,402 260,161

Custom duty receivable 3,642 3,642

Mark up subsidy 11,689 -

Export rebate 42,664 47,561Insurance claims 281 175

Research and development support 472 473

Duty draw back 119,555 25,808

Cotton claim - 28,745

Others 12,238 20,376

432,943 386,941

26. SHORT TERM INVESTMENTS

Investments at fair value through profit or loss

Quoted companies 702 13,611

Loss on remeasurement of fair value during the year -102 -5,595

600 8016

26.1 During the current year, the Company has disposed of its

available for sale investment in Security General Insurance

Company Limited to Concept Trading (Private) Limited - a

wholly owned subsidiary company at a price of Rupees 84 per

share by considering the valuation report, prepared by Messers

Anjum Asim Shahid Rahman, chartered Accountants (Member

of Grant Thornton International) based on generally accepted

valuation method.

26.2 Security General Insurance Company Limited ceased to

be an associated company from 22 June 2011

27. CASH AND BANK BALANCES

Cash in hand 1,301 961

Cash at bank:

- On current accounts 98,651 65,217

- On saving accounts 321,044 12,673

419,695 77,890

420,996 78,851

28. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

Land - 552,923

Advance against land - 100,000

652,923

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28.1 During the current year, the Company has disposed off

its land at M.M. Alam Road, Lahore at an amount of Rupees

119.200 million. Advance of Rupees 100 million for purchase of

land has been received back. Further, the Company has ceased

to classify the other land at Raiwind Road as held for sale after

managements assessment that the criteria prescribed by IFRS

5 Non-current Assets Held for Sale and Discontinued

Operations is no longer being met. Now, this land at Raiwind

Road has been classified as a non-current asset under the head

Property, Plant and Equipment in these financial statements

and is being carried at fair value in accordance with IAS 16

Property, Plant and Equipment.

29. SALES

Export 6,661,344 6,406,061

Local 29.1 5,213,062 4,189,295

Duty drawback 116,458 54,845

Export rebate 46,389 43,137

12,037,253 10,693,338

29.1 Local sales 5,213,384 4,189,295

Less: Sales tax 322

5,213,062 4,189,295

29.2 Exchange gain due to currency rate fluctuations relating

to export sales amounting to Rupees

15.966 million (2010: Rupees 35.245 million) has been included

in export sales.

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2011 2010


30.COST OF SALES

Raw materials consumed

30.1 5,349,247 3,347,817

Cloth and yarn procured and consumed 1,443,577 2,464,620

Salaries, wages and other benefits 30.2 699,683 740,125

Dyes and chemicals consumed 341,963 518,965

Processing charges 13,508 12,267

Stores, spare parts and loose tools consumed 513,192 608,508

Packing materials consumed 325,142 374,847

Fuel and power 575,707 619,450

Repair and maintenance 55,592 59,445

Insurance 21,969 22,915

Other factory overheads 33,860 39,795

Depreciation 14.3 338,107 350,778

Work-in-process 9,711,547 9,159,532

Opening stock 891,618 546,792Closing stock -391,129 -891,618

500,489 -344,826

Cost of goods manufactured 10,212,036 8,814,706

Finished goods

O enin stock

736,946 614,769

Closing stock -735,277 -736,946

1,669 -122,177

Cost of sales 10,213,705 8,692,529

30.1 Raw material consumed

Opening stock 709,197 558,033

Add: Purchased during the year 4,997,799 3,498,9815,706,996 4,057,014

Less: Closing stock -357,749 -709,197

5,349,247 3,347,817

30.2 Salaries, wages and other benefits include provident fund

contribution of Rupees 16.631 million

s

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2011 2010


31.DISTRIBUTION COST

Salaries and other benefits

31.1 39,374 39,011

Outward freight and handling 30,995 30,549

Clearing and forwarding 232,933 227,943

Travelling and conveyance 13,732 17,911

Insurance 505 348

Vehicles running expenses 3,389 3,252

Electricity, gas and water 910 808

Postage, telephone and fax 2,247 2,832

Legal and professional 80 -

Sales promotion and advertisement 13,804 16,726

Commission to selling agents 83,955 54,501

Miscellaneous expenses 3,139 3,937

425,063 397,818

31.1 Salaries and other benefits include provident fund contribution ofRupees 1.399 million (2010: Rupees

1.284 million) by the Company.

32.ADMINISTRATIVE EXPENSES

Salaries and other benefits

32.1 107,214 93,990

Travelling and conveyance 6,744 5,587

Repairs and maintenance 9,123 8,280

Rent, rates and taxes 7,061 9,001

Insurance 4,481 4,600

Vehicles running expenses 9,574 7,296

Printing, stationery and periodicals 4,115 4,359

Electricity, gas and water 2,506 2,589

Postage, telephone and fax 5,607 4,878

Legal and professional 5,895 4,433

Security, gardening and sanitation 20,424 19,813

Amortization 15 273 -

Depreciation 14.3 19,638 20,840

Miscellaneous expenses 16,084 9,437

218,739 195,103

32.1 Salaries and other benefits include provident fund contribution of

Rupees 3.008 million (2010: Rupees

2.800 million) by the Company.33. OTHER OPERATING EXPENSES

Auditors remuneration 33.1 1,608 1,265

Donations 33.2 451 8,100

Loss on disposal of land classified as held for sale 34,050

Loss on remeasurement of fair value of investments

at fair value through profit or loss 102

Provision for doubtful debts 2,274

Provision for slow moving stores and spares 744

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2011 2010


34. OTHER OPERATING INCOME

Income from financial assets:

Exchange gain 5,570 19,261

Gain on disposal of investments at fair value through profit or loss 1,227 -Gain on disposal of investment - Security General Insurance

Company Limited 34.1 530,477

Gain on remeasurement of fair value of investments

at fair value through profit or loss - 1,869

Return on bank deposits 1,268 953

Dividend income 266 425

538,808 22,508

Income from related parties:

Dividend income - Security General Insurance Company Limited 15,997 12,797

Mark up on loan to Maple Leaf Cement Factory Limited 2,517 -

18,514 12,797

Income from non-financial assets:

Scrap sales 29,898 29,175

Gain on disposal of property, plant and equipment 14.2 7,668 6,049

Gain on remeasurement of fair value of investment property 879 -

Miscellaneous 3 8,122

38,448 43,346

595,770 78,651

34.1 This represents gain on disposal of available for sale investment in

Security General Insurance

Company Limited to Concept Trading (Private) Limited - a wholly owned

subsidiary company

35. FINANCE COST

Mark-up/finance charges/ interest on:


Short term borrowings 721,918 683,516


Workers profit participation fund (WPPF) 9.1 2,445 188

Employees provident fund trust 6,407 2,968

1,008,331 1,037,520

Bank charges and commission 28,963 35,248

1,037,294 1,072,768

36. TAXATION For the year

Current tax 36.1 132,181 83,824

Deferred tax 68,758 14,763

200,939 98,587

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36.1 Provision for current 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.

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2011

Note (Rupee in

37. CASH GENERATED FROM OPERATIONS

Profit before taxation 688,790

Adjustment for non-cash charges and other items:

Depreciation 357,745

Amortization 273Finance cost 1,034,849

Gain on sale of property, plant and equipment -7,668

Gain on disposal of investments at fair value through profit or loss -1,227

Gain on disposal of investment - Security General Insurance

Company Limited -530,477

Gain on remeasurement of investment property -879

Dividend income -16,263

Return on bank deposits -1,268

Provision for doubtful debts 2,274

Provision for slow moving stores and spares 744

Loss on disposal of non-current assets classified as held for sale 34,050

Gain / (loss) on remeasurement of investments at fair value

through profit or loss 102

Working capital changes 37.1 1,437,349

2,998,394

37.1 Working capital changes

(Increase) / decrease in current assets:

Stores, spare parts and loose tools 16,661

Stock-in-trade 735,861

Trade debts 619,391

Advances 355,464Security deposits and short term prepayments -3,467

Due from subsidiary companies -585,867

Other receivables 491,475

1,629,518

Increase / (decrease) in trade and other payables -192,169

1,437,349

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38. REMUNERATION OF CHIEF EXECUTIVE OFFICER,

DIRECTORS AND EXECUTIVES

2011 2010 2011 2010

-----------------------( Rupees in Thous

Managerial remuneration 4,920 5,300 5,157

Contribution to provident fund 315 308 158 154Housing and utilities - - 133 87

Medical - 84 1,229 1,246

Group insurance - - 95 92

Club subscription 67 64 - -

Others 189 185 - -

5,491 641 6,915 6,736

Number of persons 1 1 3 3

38.1 The Chief Executive Officer and directors are

provided with the Companys maintained vehicles, free

medical facilities and residential telephone facilities for

both business and personal use. Chief Executive Officer

is also provided with free furnished accommodation

alongwith utilities.

vehicles in accordance with the Company policy. The

70,000).

39. TRANSACTIONS WITH RELATED PARTIES

Subsidiary companies

2011 2010 (Rupees in thousand)

Purchase of goods and services 479 484

Sale of goods and services - 147

Purchase of property, plant and equipment - 1,770

Sale of property, plant and equipment 204 419

Purchase of shares - 200

Associated Company

Dividend income 15,997 12,797

Post employment benefit plan

Contribution to provident fund 21,038 20,897

Other related parties

Sale of vehicles 2,477

Chief Executive Officer Directors

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40.EARNINGS PER SHARE - BASIC AND DILUTED

There is no dilutive effect on the basic earning per share which is based on: 2011

Profit attributable to ordinary shares Rupees in thousand 487,851

Weighted average number of ordinary shares Numbers 221,964,572

Earnings per share Rupees 2.2

41. PLANT CAPACITY AND ACTUAL PRODUCTION

SPINNING:

- Rawalpindi Division (Numbers)

Spindles (average) installed / worked 85,680

(Kilograms in

100% Plant capacity converted into 20s count based on

3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 33,620

Actual production converted into 20s count based on

3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 23,547

- Gujar Khan Division (Numbers)

Spindles (average) installed / worked 70,848

2011

(Kilograms in thou

100% Plant capacity converted into 20s count based on 32,042

3 shifts per day for 1,095 shifts (2010: 1,095 shifts )

Actual production converted into 20s count based on 25,989

3 shifts per day for 1,095 shifts (2010: 1,095 shifts) (Numbers)

WEAVING:

- Raiwind Division

Looms installed / worked 204(Square mete

100% Plant capacity at 60 picks based on 3 shifts per 72,568

day for 1,095 shifts (2010: 1,095 shifts)

Actual production converted to 60 picks based on 66,580

3 shifts per day for 1,072 shifts (2010: 1,072 shifts)

PROCESSING OF CLOTH:

- Rawalpindi Division (Meters in thous

Capacity at 3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 41,975

Actual at 3 shifts per day for 1,095 shifts (2010: 1,095 shifts) 21,367

POWER PLANT:

Annual rated capacity (based on 365 days) Actual generation 207,787

Main engines 884

Gas engines 60,935

- Raiwind Division

Annual rated capacity (based on 365 days) 54,460

Actual generation

Gas engines 22,432

- Rawalpindi Division (Mega Watts)

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42. SEGMENT INFORMATION

42.1 2011 2010 2011 2010

(------------------------------------------------ ( R u p e

SALES 5,508,677 4,822,128 3,917,979 3,079,523

COST OF SALES -4,667,274 -3,599,136 -3,375,707 -2,698,019

GROSS PROFIT 841,403 1,222,992 542,272 381,504

DISTRIBUTION COST -16,650 -16,234 -70,903 -57,076

ADMINISTRATIVE EXPENSES -74,787 -64,130 -68,961 -60,939

-91,437 -80,364 -139,864 -118,015

PROFIT BEFORE TAX AND UNALLOCATED

INCOME AND EXPENSES

749,966 1,142,628 402,408 263,489

UNALLOCATED INCOME AND EXPENSES

FINANCE COST

OTHER OPERATING EXPENSES

OTHER OPERATING INCOME

TAXATION

PROFIT AFTER TAXATION

42.2 Reconciliation of reportable segment assets and liabilities

2011 2010 2011 2010

(------------------------------------------ ( R u p e e s i

TOTAL ASSETS FOR REPORTABLE SEGMENT 2,741,104 2,399,058 2,187,389 1,211,488

UNALLOCATED ASSETS

TOTAL ASSETS AS PER BALANCE SHEET

All segment assets are allocated to reportable segments other than those

directly relating to corporate and tax assets

TOTAL LIABILITIES FOR REPORTABLE SEGMENT 998,668 1,142,941 1,860,641 1,927,037

UNALLOCATED LIABILITIES

TOTAL LIABILITIES AS PER BALANCE SHEET

Spinning Weaving

Spinning Weaving

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2011 2010 2011 2010 2011 2010

e s in t h o u s a n d ) -----------------------------------------------)-

5,463,823 5,474,514 -2,853,226 -2,682,827 12,037,253 10,693,338

-5,023,950 -5,078,201 2,853,226 2,682,827 -10,213,705 -8,692,529

439,873 396,313 0 0 1,823,548 2,000,809

-337,510 -324,508 -425,063 -397,818

-74,991 -70,034 -218,739 -195,103

-412,501 -394,542 0 0 -643,802 -592,921

27,372 1,771 0 0 1,179,746 1,407,888

-1,037,294 -1,072,768

-49,432 -37,323

595,770 78,651

-200,939 -98,587

-691,895 -1,130,027487,851 277,861

2011 2010 2011 2010

n t h o u s a n d ) --------------------------------------)-

2,707,311 2,973,709 7,635,804 6,584,255

8,666,861 10,473,044

16,302,665 17,057,299

4,257,469 5,386,980 7,116,778 8,456,958

1,113,754 1,565,248

8,230,532 10,022,206

Company

Processing and home textile Company

Processing and home textileElimination of inersegment

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43.FINANCIAL RISK MANAGEMENT

43.1 Financial risk factorse ompany s ac v es expose o a var e y o nanc a r s s: mar e r s nc u ng

currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The

Companys overall risk management programme focuses on the unpredictability of

financial markets and seeks to minimise potential adverse effects on the Companys

financial performance. The Company uses derivative financial instruments to hedge

certain risk exposures.

Risk management is carried out by the Companys finance department under policies

approved by the Board of Directors. The Companys 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 riskarises 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) and Euro. Currently, the

Companys 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 Companys exposure to currency risk was as follows:

(a) Market risk

Cash at banks - USD 218,000

Trade debts - USD 4,485,184

Trade debts - Euro -

Trade and other payable - USD 57,000

Net exposure - USD 4,646,184

Net exposure - Euro -

The following significant exchange rates were applied

during the year

Rupees per US Dollar

Average rate 85.25

Reporting date rate 86.05

Rupees per EuroAverage rate 114.54

Reporting date rate 124.89

Index Impact on profit

2011

--------------- (RUPEES IN TH

KSE 100 (5% increase) 28

KSE 100 (5% decrease) 28

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(iii) Interest rate risks represen s e r s a e a r va ue or u ure cas ows o a nanc a

instrument will fluctuate because of changes in market interest rates.The Company

has no significant long-term interest-bearing assets. The Companys interest rate risk

arises from long term financing, liabilities against assets subject to finance lease and

short term borrowings. Financial instruments obtained at variable rates expose the

Company to cash flow interest rate risk. Financial instruments obtained at fixed rate

expose the Company to fair value interest rateAt the balance sheet date the interest rate profile of the Companys interest bearing

financial instruments was:

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37,000

11,864,000

832,000

30,000

11,871,000

832,000

83.55

85.4

107.92

104.33

after taxation Impact on statement comprehensive income

2010 2011 2010

USAND) -----------------

401

-401

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2011 2010

(Rupee in thousand)

Fixed rate instruments

Financial liabilities


Short term borrowings 1,435,000 1,555,000

Floating rate instrumentsFinancial assets

Bank balances- saving accounts 321,044 12,673

Financial liabilities

Long term financing 1,686,873 1,920,759

Short term borrowings 3,695,265 4,515,435


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 48.934 million (2010 :

Rupees

65.712 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:Investments 600 642,111

Deposits 43,380 41,124

Trade debts 707,400 1,329,065

Advances 1,614 1,661

Accrued interest 46 141

Due from subsidiary companies 601,144 14,987

Other receivables 24,208 49,296

Bank balances 419,695 77,890

1798087 2156275The 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:

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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 2011, the

Company had Rupees 6,045 million available borrowing limits from financial institutions and

Rupees 420.996 million cash and bank balances. The 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:

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Financial liabilties

at amortized cost

(------------------------------------------ ( R u p e e s in t h o u s a n d ) --------------------------------------)-

Liabilities as per balance sheet

Long term financing 1,883,424

Liabilities against assets subject to finance lease 89,873

Trade and other payables 754,095Accrued mark-up 230,138

Short term borrowings 5,130,265

8,087,795

Loans and Through profit Available for

receivables or loss sale

(--------------------- ( R u p e e s in t h o u s a n d ) ----

As at 30 June 2010

Assets as per balance sheet

Investments - 8,016 634,095

Deposits 41,124 - -

Trade debts 1,329,065 - -

Advances 1,661 - -

Interest accrued 141

Due from subsidiary companies 14,987

Other receivables 49,296 - -

Cash and bank balances 78,851 - -

1,515,125 8,016 634,095

Financial liabilties

at amortized cost(--------------------- ( R u p e e s in t h o u s a n d ) ----

Liabilities as per balance sheet

Long term financing 2,328,501

Liabilities against assets subject to finance lease 135,030

Trade and other payables 947,498

Accrued mark-up 289,987

Short term borrowings 6,070,435

9,771,451

43 a) Capital risk management

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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 theamount 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 employed. Borrowings represent long-

term financing, liabilities against assets subject to

finance lease and short-term borrowings obtained by

the Company as referred to in note

6, note 7an note 11 respective y. Tota capitaemployed includes total equity as shown in the

balance sheet plus borrowings. The gearing ratio as at

year ended 30 June 2011 and 30 June 2010 is as

follows:

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Total

------------------)-

642,111

41,124

1,329,065

1,661

141

14,987

49,296

78,851

2,157,236

------------------)-

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44. DATE OF AUTHORIZATION FOR ISSUET ese inancia statements were

authorised for issue on September

28, 2011 by the Board of Directors of

the Company

45. CORRESPONDING FIGURESNo significant reclassification

rearrangement of correspondingfigures has been made.

46. GENERAL 2011 2010Figures have been rounded off to the

nearest thousand of Rupees unless

stated otherwise. (Rupee in thousand)

Borrowings 7,103,562 8,533,966

Total equity 4,386,636 3,361,268

Total capital employed 11,490,198 11,895,234

Gearing Ratio 62% 72%

Pattern of Shareholding1.CUIN (Incorporation Number) 2805

2.Name of the Company KOHINOOR TEXTILE MILLS LIMITED

3.Pattern of holding of the shares

held by the shareholders as at

30.06.2011

4 S i z e o f

No. of shareholders from to

2618 1 -100

1028 101 -500385 501 -1,000

625 1,001 -5,000

121 5,001 -10,000

45 10,001 -15,000

26 15,001 -20,000

12 20,001 -25,000

9 25,001 -30,000

8 30,001 -35,000

4 35,001 -40,000

7 40,001 -45,000

7 45,001 -50,000

7 50,001 -55,000

5 55,001 -60,000

6 60,001 -65,000

1 65,001 -70,000

2 70,001 -75,000

1 75,001 -80,000

1 85,001 -90,000

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1 90,001 -95,000

4 95,001 -100,000

4 105,001 -110,000

2 115,001 -120,000

1 120,001 -125,000

2 145,001 -150,000

1 150,001 -155,0002 160,001 -165,000

1 165,001 -170,000

1 170,001 -175,000

1 180,001 -185,000

1 200,001 -205,000

1 205,001 -210,000

1 210,001 -215,000

1 215,001 -220,000

1 235,001 -240,000

1 250,001 -255,000

2 275,001 -280,000

1 295,001 -300,000

2 300,001 -305,000

1 315,001 -320,000

1 405,001 410,000

1 440,001 445,000

1 445,001 450,000

1 450,001 455,000

1 470,001 475,000

2 490,001 495,000

1 495,001 500,000

1 620,001 625,000

1 625,001 630,000

1 645,001 650,000

1 690,001 695,000

1 780,001 785,000

1 840,001 845,000

1 855,001 860,000

1 905,001 910,000

1 1,115,001 1,120,000

1 1,560,001 1,565,000

1 1,620,001 1,625,000

1 2,360,001 2,365,000

1 3,325,001 3,330,000

1 3,935,001 3,940,000

1 5,075,001 5,080,000

1 8,260,001 8,265,000

1 9,045,001 9,050,000

1 10,040,001 10,045,000

1 10,825,001 10,830,000

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H o l d i n g

Total shares held

72,426

297,212288,723

1,657,868

893,760

559,950

495,236

276,807

247,750

252,476

157,817

299,846

342,073

367,213

290,604

374,734

67,000

145,937

75,600

88,214

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92,350

399,010

430,524

232,119

121,000

300,000

150,223321,085

169,838

171,793

180,004

201,156

208,272

215,000

218,000

236,000

251,293

553,549

300,000

605,291

315,847

406,936

440,500

447,218

450,216

474,988

988,483

500,000

622,811

627,849

645,500

691,753

784,047

841,200

858,917

905,062

1,116,000

1,560,500

1,621,517

2,362,066

3,326,368

3,936,190

5,077,500

8,261,366

9,045,940

10,040,331

10,827,332

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5Categories of

Shareholders

No. of

Shareholders

Shares

Held

5.1 Directors, CEO and their spouses

& minor children

Mr. Tariq Sayeed Saigol, Chairman/Director 10,040,331

Mr. Taufique Sayeed Saigol, Chief Executive/Director 10,827,332

Mr. Sayeed Tariq Saigol, Director 315,847

Mr. Waleed Tariq Saigol, Director 70,937

Mr. Kamil Taufique Saigol, Director 2,500

Mr. Zamiruddin Azar, Director 5,930

Mr. Arif Ijaz, Director 2,500

Mrs. Shehla Tariq Saigol, spouse of Mr. Tariq Sayeed Saigol 450,216

8 21,715,593

5.2 Associated Companies, undertakings and related parties

Zimpex (Private) Limited 1 45,496,057

5.3 NIT and ICP

National Bank of Pakistan, Trustee Deptt. 3,326,368

IDBP (ICP UNIT) 18,247

5.4 Banks, Development Financial Institutions, 2 3,344,615

Non-Banking Financial Institutions 20 4,014,452

5.5 Insurance Companies 4 848,734

5.6 Modarabas , Leasing and Mutual Funds 7 213,851

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 4,842 31,798,092

b. Foreign Investor (s) 9 120,479,119

5.9 Joint Stock Companies 73 17,231,248

5.10. Public Sector Companies and Corporations 1 300,405

5.11 Executives

5.12 Others

Artal Restaurant Int Limited Employees Provident Fund 1,815

Fikree Development Corporation Limited 2,794

Hussain Trustees Limited 260

Securities & Exchange Commission of Pakistan 1

The Deputy Administrator Abandoned Properties Organization 3,045

The Ida Rieu Poor Welfare Association 354

The Karachi Stock Exchange (Guarantee) Limited-Future Cont. 61,425The Okhai Memon Madressah Association 1

Trustees Al-Abbas Sugar Mills Limited Employees Gratuity Fund 9,075

Trustees Artal Restaurants Intl Employees Provident Fund 760

Trustees Moosa Lawai Foundation 3,751

United Executers & Trustee Company Limited 173

University of Sindh 596

13 84,050

4980 245,526,216

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Percentage of Capital

4.0893

4.4099

0.1286

0.0289

0.001

0.0024

0.001

0.1834

9

18.53

1.3548

0.0074

1

1.635

0.3457

0.0871

12.951

49.0698

7.0181

0.1224

Documents

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