Company Information. - Chenab · PDF fileCompany Information 02-Annual Report 2011 ... Faisalabad. Tel:041-8754472-8 ... strong demand for Pakistani textile products has emerged in

Cash Flow Statement.

Statement of Changes in Equity

Notes to the Financial Statement

Pattern of Shareholding (Ordinary Shares).

Pattern of share holding (Preference Shares).

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Company Information.

Vision and Mission Statement.

Financial Highlights.

Notice of Annual General Meeting

Directors’ Report to the Members

Statement of Compliance with the Codeof Corporate Governance.

Review Report on Compliance withthe Code of Corporate Governance.

Auditors’ Report to the Members

Balance Sheet

Profit & Loss Account

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Statement of Comprehansive Incom 19

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Form of Proxy

Contents

Company Information

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Chief Executive Officer Mian Muhammad Latif

Directors Mian Muhammad Javaid Iqbal

Mr. Muhammad Naeem

Mr. Muhammad Faisal Latif

Mr. Muhammad Farhan Latif

Mr. Muhammad Zeeshan Latif

Mst. Shahnaz Latif

Bankers/Financial Institutions

(In Alphabetic Order)

Company Secretary/

Allied Bank Limited.

Askari Bank Limited.

AlBaraka Bank (Pakistan) Limited. (ABBL)

Bank Alfalah Limited.

Citibank, N.A.

Faysal Bank Limited.

First Credit & Investment Bank Limited

First Punjab Modaraba.

Habib Bank Limited.

Habib Metropolitan Bank Limited.

KASB Bank Limited.

National Bank of Pakistan.

NIB Bank Limited

Orix Leasing (Pakistan) Limited.

Pak Oman Investment Company Ltd.

Pak Kuwait Investment Company (Pvt.) Ltd.

Pak Libya Holding Company (Pvt.) Ltd.

Saudi Pak Industrial & Agricultural Investment

Company (Pvt.) Ltd.

SILK Bank Limited.

Summit Bank Limited.

The Bank of Punjab

United Bank Limited.

Standard Chartered Bank (Pakistan) Limited

Chief Financial Officer

Audit Committee Mr. Muhammad Farhan Latif - Chairman

- Member

Mst. Shahnaz Latif

Mr. Muhammad Zeeshan Latif - Member

Auditors Avais Hyder Liaquat Nauman

Chartered Accountants

Legal Advisor Ch. Shahid Mehmood (Advocate)

Registered Office Nishatabad, Faisalabad.

Tel:041-8754472-8

Fax:041-8752400, 8752700

E-mail Address [email protected]

Website Address www.chenabgroup.com

Works -Spinning Unit

-Weaving Unit

-Weaving Unit

-Processing &

Stitching Units

- Toba Tek Singh.

- Kharianwala, Distt., Sheikhupura.

- Shahkot, Distt., Nankana Sahib.

- Nishatabad, Faisalabad.

Mr. Muhammad Arshad

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Vision

Mission Statement

To be a competitive and customer focused organization with continuing commitment to excellence and standards.

To be the business house of first choice for customers.

To be a change leader.

To produce innovative, relevant and cost effective products.

Setting and maintaining high standards.

To earn profits by achieving optimum level of production by using state of the art technologies.

To provide ideal working conditions to employees and to take care in their career planning and reward them according to their skill and responsibility.

To meet social and cultural obligations towards the society being a patri-otic and conscientious corporate citizens.

2011 2010 2009 2008 2007 2006Operational performance

(Rupees'000)Sales-net 4,374,335 8,857,796 9,091,378 8,506,911 8,161,233 6,957,562

Cost of sales 5,541,365 9,055,287 7,107,004 6,827,606 6,613,983 5,389,463Gross profit (1,167,030) (197,491) 1,984,374 1,679,305 1,547,250 1,568,099

Operation (loss) / profit (354,594) (630,845) 1,472,588 1,117,616 996,406 953,013Loss/Profit before taxtion (2,857,923) (1,939,628) (13,730) (15,294) 160,439 216,078Loss/Profit after taxtion (2,887,751) (2,027,969) (96,663) (95,791) 74,782 150,165

Financial positionProperty,Plant and equipment 11,659,237 11,855,461 7,389,014 7,035,076 7,168,721 5,953,381Intangible asset - - - - - 1,625Capital work in progress - - 4,965 577,962 287,246 153,566Long term deposits 8,851 19,736 20,988 22,224 22,849 -Fixed capital expenditure 11,668,088 11,875,197 7,414,967 7,635,262 7,478,816 6,108,572

Total assets 17,204,093 19,386,318 16,941,257 16,287,102 14,982,858 14,174,127

Current assetStore,spare parts and

stocks in trade 2,355,099 3,726,497 5,829,472 5,618,142 5,093,303 4,833,445Other current assets 3,161,152 3,767,204 3,633,466 2,973,840 2,345,492 3,104,244Cash and cash equivalents 19,754 17,420 63,352 59,858 65,247 127,866

Total 5,536,005 7,511,121 9,526,290 8,651,840 7,504,042 8,065,555

Current liabilities

Short term bank borrowing 7,266,478 7,436,954 7,129,404 6,880,563 5,473,669 4,971,835Currant portion of long term

loans/morabaha 1,388,646 870,414 624,996 1,041,770 782,047 1,218,606Other current liabilities 3,621,008 2,827,932 2,618,726 2,147,931 2,109,275 1,718,840

Total 12,276,132 11,135,300 10,373,126 10,070,264 8,364,991 7,909,281

Net working capital (6,740,127) (3,624,179) (846,836) (1,418,424) (860,949) 156,274Long term loans/Finance lease,

morabaha 1,900,281 2,322,499 2,717,133 2,296,571 2,550,142 2,228,194

Shareholder's equity (2,295,908) 556,878 2,493,877 2,589,955 2,759,138 2,745,37215,323,263 16,892,722 16,265,376 14,982,857 14,174,127

Profiability analysisGross profit to sale (%) (26.68) (2.23) 21.83 19.74 18.96 22.54Loss/Profit befor tax to sales (%) (65.33) (21.90) (0.15) (0.18) 1.97 3.11Loss/Profit after tax to sales (%) (66.02) (22.89) (1.06) (1.13) 0.92 2.16Return on Investment (%) (16.79) (10.46) (0.57) (0.59) 0.50 1.06Return on equity (%) 125.78 (364.17) (3.88) (3.70) 2.71 5.47Earnings per share(Rupees) (0.83) (0.83) (0.83) (0.83) 0.01 0.67

Financial analysisCurrent ratio(time) 0.45 0.67 0.92 0.86 0.90 1.02Debt to equity (time) (1.43) 5.73 1.34 1.29 1.21 1.26Total Debt to Total Assets 0.19 0.16 0.20 0.20 0.22 0.24Total Debt to Fixed Assets 0.28 0.27 0.45 0.44 0.45 0.56

Fianancial Highlights

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Notice of Annual General Meeting

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Notice is hereby given that 27th Annual General Meeting of the shareholders of the Company will be held at 11.00 A.M. on Monday the 31st October, 2011 at the Registered office of the Company at Nishatabad, Faisalabad to transact the following business:-

1 To confirm the minutes of the last meeting.

2 To consider and approve the Annual Audited Financial Statements of the Company for the year ended June 30, 2011 together with Directors and Auditors Reports thereon.

3 To appoint Auditors for the next financial year 2011-20112 and to fix their remuneration. The Retiring Auditors, M/s. Avais Hyder Liaquat Nauman, Chartered Accountants, Faisalabad being eligible, offer themselves for re-appointment.

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

BY ORDER OF THE BOARD

FAISALABAD (MUHAMMAD ARSHAD)OCTOBER 10, 2011 COMPANY SECRETARY

NOTES:

1 The Share Transfer Books of Ordinary/Preference Shares of the Company will remain closed from October 24, 2011 to October 31, 2011 (both days inclusive). Transfers received in order by Company’s Registrar, M/s. Consulting One (Pvt.) Ltd, 478-D, Peoples Colony, Faisalabad upto close of business hours on October22, 2011 will be considered in time.

2 A member entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him/her at the meeting. Proxies must be deposited at the Company’s Registered Office not less than 48 hours before the time for holding the meeting. A proxy must be a member of the company.

3 Shareholders whose shares are deposited with Central Depository Company (CDC), or their Proxies are requested to bring their original National Identity Cards (CNICs) or Passports alongwith the Participants ID numbers and their account numbers at the time of attending the Annual General Meeting for verification.

4 All other members should bring their Original National Identity Cards for identification purpose.

5 The shareholders are requested to notify the company immediately the change in their address, if any.

The directors take the opportunity to present before you report and audited accounts of the company for the year ended June 30, 2011.

SALES REVENUE

Sales revenue for the year under report was earned at Rs.4.374 billion as compared with Rs.8.857 billion achieved during the preceding year.

FINANCIAL RESULTS AND REASONS FOR LOSS

This has been another difficult financial year for the company which brought a financial loss of Rs.2.887 billion to it on account of various national/international factors including frequent shut downs of electricity/gas under the garb of load management by the authorities concerned affecting production and quality of the products adversely.

Due to continuous financial losses, the working capital resources of the company have also been squeezed and in this situation, the banks of the company did not extend any financial assistance to it for its smooth running.

However, the financial results for the year ended June 30, 2011 with comparative figures are as under:-

2011(Rupees)

2010(Rupees)

Sales 4,374,335,091 8,857,795,931Cost of sales 5,541,364,694 9,055,286,804Gross (loss) profit (1,167,029,603) (197,490,873)Other operating income 5,863,716 135,668,917Operating loss (profit) (1,161,165,887) (61,821,956)Selling and distribution expenses 164,017,494 363,687,892Administrative expenses 190,203,074 198,245,997Other operating expenses 373,124 7,087,892Finance cost 1,342,163,362 1,308,783,863

1,696,757,054 1,877,805,644Loss before taxation (2,857,922,941) (1,939,627,600)Provision for taxation 29,828,216 88,341,710

Loss for the year---------------------(2,887,751,157)============

---------------------(2,027,969,310)============

Earnings per share - Basic (25.11)============

(17.63)============

DIVIDEND ON PREFERENCE SHARES

In view of financial losses, the payment of dividend on non voting cumulative preference shares has been deferred till the availability of profits for appropriation.

Directors’ Report to the Members

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NON PAYMENT OF DEBT OBLIGATIONS

Due to continuous heavy financial losses sustained by the company, it could not pay debt obligations towards its financial creditors. To regularize the financial affairs, the company has applied for restructuring of financial facilities. Some of the financial institutions have extended their grace in granting restructuring whereas; it is under process of grant with some of the creditors.

FUTURE PROSPECTS

Although, strong demand for Pakistani textile products has emerged in the international market,yet this opportunity can be availed only if the Government of Pakistan provides a comprehensive package for the revival of value added textile industry alongwith interruption free supply of electricity/gas coupled with help from financial institutions in providing additional working capital and restructuring financial facilities on economical rate of mark up.

AUDITORS’ OBSERVATIONS

ON GOING CONCERN ASSESSMENT

(i) Since the company on account of financial losses has not been able to comply with terms of certain loan arrangements with banks and financial institutions who have filed cases for recovery and winding up of the company or served legal notices against the company which the management of the company is defending apart from approaching them for amicable decision.

(ii) Similarly, the company has not been able to redeem preference shares of the company on exercise of put option for two consecutive years by the holders of preference shares due to continuous financial losses. The matter for issue of ordinary shares on the event of first default as per terms of prospectus is pending with SECP, Islamabad after which the issue of ordinary shares against second default shall be taken in hand.

(iii) The management is in the process of making arrangements with renowned foreign buyers to obtain export business against advance payments before shipments to improve the tight liquidity position of the company.

(iv) The management is also actively following up the recovery of past due trade debts and is fully confident that keeping in view the past history of the customers, all past due trade debts will be recovered in full.

The management has re-planned its business operations to focus on export market and regain its previous position built over many years of successful operations. The management is hopeful of restoring its previous status and prestige in the export market, subject to successful negotiations with the foreign buyers for improvement of liquidity.

In view of the above, the management is confident that it will be successful in its efforts and company will be able to continue as a going concern.

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Your company fully understands its corporate responsibility towards the society and fulfills it by providing financial support to its deserving employees, contributing considerable amount to the national exchequer, applying solution for energy conservation and environment protection.

The company has provided healthy safe and learning working environment to its employees andencourages attendance in the training courses, seminars, workshops and conferences both within country and abroad. The company lends regular support to the special persons by providing them jobs best suited to them. It also offers apprenticeship to fresh graduates in all the relevant departments on regular basis to elevate their professional and technical skills.

Your company has also installed environment friendly gas based four power plants at all operational units with a view to reduce power cost and has also installed first waste water treatment plant in the city resulting in energy conservation and improvement in the environment.

PATTERN OF SHARHEOLDING

The pattern of shareholding as at June 30, 2011 including the information under the code of corporate governance for ordinary and non voting cumulative preference shares are annexed.

BOARD OF DIRECTORS

There has been no change in the directorship of the company since last annual general meeting of the shareholders of the company except that Mr. Muhammad Rizwan Latif resigned from directorship on 27-12-2010 and in his place Mst. Shahnaz Latif joined the board.

The board appreciated the services of the outgoing director and welcome to the incoming director.

BOARD MEETINGS

During the year under review six board meetings were held. Attendance by each director is appended below:-

S.NO. NAME OF DIRECTOR NO OF MEETINGS ATTENDED1 Mian Muhammad Latif 72 Mian Muhammad Javaid Iqbal 73 Mr. Muhammad Naeem 74 Mr. Muhammad Faisal Latif 75 Mr. Muhammad Farhan Latif 76 Mr. Muhammad Rizwan Latif 37 Mr. Muhammad Zeeshan Latif 78 Mst. Shahnaz Latif 49 Mst. Tehmina Yasmin 1

Leaves of absence were granted to the directors who could not attend the meetings.

CORPORATE SOCIAL RESPONSIBILITY

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AUDIT COMMITTEE

The board of directors in compliance to the code of corporate governance has constituted an audit committee consequent upon re-election of directors as below:-

(1) Muhammad Farhan Latif. - Chairman (Non Executive)(2) Muhammad Zeeshan Latif. - Member (Non Executive)(3) Mst. Shahnaz Latif. - Member (Non Executive)

The meetings of the audit committee were held atleast once every quarter prior to approval of interim and final results of the company. The meetings were also attended by the CFO, Head of Internal Audit and External Auditors as and when it was required.

CODE OF CORPORATE GOVERNANCE

As required by the Code of Corporate Governance, directors are pleased to report that:-

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

(ii) Proper books of accounts of the company have been maintained.

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

(iv) International Accounting/Financial Reporting Standards, as applicable in Pakistan have

been followed in preparation of financial statements.

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

(vi) Going concern issue is separately explained.

(vii) There has been no material departure from the best practices of corporate governance as detailed in the listing regulations of the Karachi Stock Exchange.

(viii) Key operating and financial data for the last six years is annexed.

(ix) Reasons for not declaring dividend are disclosed.

(x) There are no statutory payments on account of taxes, duties, levies and charges which are outstanding as on June 30, 2011 except for those disclosed in the financial statements.

(xi) No material changes and commitments affecting the financial position of your company have occurred between the end of the financial year to which this balance sheet relates and the date of the Directors’ Report.

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AUDITORS

The External Auditors, M/s. Avais Haider Liaquat Nauman, Chartered Accountants, Faisalabad retire and being eligible offer themselves for re-appointment. The Audit Committee and the Board has also recommended their re-appointment as External Auditors of the Company for the next financial year 2011-2012.

ACKNOWLEDGEMENT

The board of directors places on record its appreciation for the support of the shareholders, government agencies, financial institutions and customers.

The board would also like to express their appreciation for the services and dedicated efforts being continuously rendered by all the employees of the company and hope that they will continue with these efforts in future also.

For and on behalf of BOARD OF DIRECTORS

FAISALABAD (MIAN MUHAMMAD LATIF)October 10, 2011 CHIEF EXECUTIVE

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Statement of Compliancewith best practices of the code of corporate governance

This statement of compliance is being presented to comply with the Code of Corporate Governance contained in listing regulations of Karachi Stock Exchange for the purpose of establishing a framework whereby a listed Company is managed in compliance with best practices for good Corporate Governance. This statement has been prepared after considering the current situation of the Company as described in notes to the financial statements. The Company has applied the principles contained in the Code in the following manner:

1. The Company encourages representation of independent non-executive directors and directors representing minority interest on its Board. However, at present Board includes four executive directors including Chief Executive Officer (CEO) and three non-executive directors and no director representing minority shareholder.

2. The directors have confirmed that none of them is serving as a director in more than ten listed

companies, including this Company.

3. All the directors of the Company are registered as tax payers and none of them has defaulted in payment of any loan to banking company, a DFI or an NBFI.

4. A casual vacancy occurred in the Board on December 24, 2010 was filled up by the Board within 03 days thereof.

5. The Company has prepared a ‘Statement of Ethics and Business Practices’, which has been signed by all 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 decision on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors, have been taken by the Board.

8. The 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 were circulated at least seven days before the meetings. The working papers were circulated generally seven days before the meeting. The minutes of the meetings were appropriately recorded and circulated.

9. The Directors are conversant with their duties and responsibilities under the relevant laws applicable to Company and provisions of Code of Corporate Governance.

10. The appointment of Company Secretary, CFO and Head of Internal Audit, including their remuneration and terms and conditions of employment, as recommended by the CEO has been approved by the Board.

11. The director’s report for this year has been prepared in compliance with the requirements of the

Code and fully describes the salient matters required to be disclosed.

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

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

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

15. The Board has formed an Audit Committee, It comprises of three members, all of whom are non-executive directors.

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 found and communicated to the Committee for compliance.

17. The Board has set-up an effective internal audit function with employees who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company and they are involved in the internal audit function on a full time basis. The internal audit department reports to the Audit Committee.

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 person 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. The related party transactions and pricing methods have been placed before the Audit Committee and approved by the Board of Directors. The transactions were made on terms equivalent to those that prevail in arm’s length transactions.

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

For and on behalf of the Board of Directors

(MIAN MUHAMMAD LATIF)

Chief Executive Officer

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Avais Hyder Liaquat NaumanChartered Accountants

Avais Hyder Liaquat NaumanAvais Hyder Liaquat Nauman478-D, Peoples Colony No.1Faisalabad - PakistanTelephone : (92-41) 854 1165, 854 1965Telefax : (92-41) 854 2765E-mail : [email protected]

Avais Hyder Liaquat Nauman is a correspondent

independent accounting and consult ing f irms.

f irm of International, an aff i l iat ion ofRSM

LahoreOther off ices at:

: (92-42) 3587 2731/2/3: (92-21) 3565 5975/6

: (92-51) 211 4096/7/8: (92-91) 527 7205/527 8310: (92-81) 282 9809

KarachiIslamabadPeshawar

Quetta

Date: October 10, 2011 AVAIS HYDER LIAQUAT NAUMAN Faisalabad CHARTERED ACCOUNTANTS

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 for the year ended June 30, 2011 prepared by the Board of Directors ofChenab Limited (the Company) to comply with the Listing Regulation No. 35 of the Karachi Stock Exchange, 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 have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers all controls and the effectiveness of such internal controls.

Further, Sub- Regulation (xiii a) of Listing Regulations 35 of the Karachi Stock Exchange requires the Company to place before the Board of Directors for their consideration and approval of 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 June 30, 2011.

We have also expressed an adverse opinion in our audit report to the financial statements for the year ended June 30, 2011.

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Avais Hyder Liaquat NaumanChartered Accountants

Avais Hyder Liaquat NaumanAvais Hyder Liaquat Nauman478-D, Peoples Colony No.1Faisalabad - PakistanTelephone : (92-41) 854 1165, 854 1965Telefax : (92-41) 854 2765E-mail : [email protected]

Avais Hyder Liaquat Nauman is a correspondent

independent accounting and consult ing f irms.

f irm of International, an aff i l iat ion ofRSM

LahoreOther off ices at:

: (92-42) 3587 2731/2/3: (92-21) 3565 5975/6

: (92-51) 211 4096/7/8: (92-91) 527 7205/527 8310: (92-81) 282 9809

KarachiIslamabadPeshawar

Quetta

AUDITORS’ REPORT TO THE MEMBERS We have audited the annexed balance sheet of Chenab Limited as at June 30, 2011 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the 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) As described in Note 1.3 to the financial statements, the financial statements have been

prepared on going concern basis. The company incurred a net loss of Rs. 2,887.75 million for the year ended June 30, 2011 and its accumulated loss is Rs. 4,772.32 million. The shareholders’ equity as at June 30, 2011 is negative Rs. 2,295.91 million. The company’s current liabilities exceed its current assets by Rs. 6,740.13 million. The trade debts of Rs. 1,799.15 million are past due against which no impairment loss has been recognized. The company is facing operational and financial problems. There is no sufficient appropriate audit evidence that the management’s plans are feasible and ultimate outcome will improve the company’s current situation. In our opinion, the going concern assumption used in the preparation of these financial statements is inappropriate, therefore, the company may not be able to realize its assets and discharge its liabilities in the normal course of business.

(b) in our opinion, proper books of account have been kept by the company as required by the

Companies Ordinance, 1984;

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(c) 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.

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; (d) in our opinion, because of the significance of the matters discussed in paragraph (a) above,

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 do not conform with approved accounting standards as applicable in Pakistan and do not give the information required by the Companies Ordinance, 1984 in the manner so required and do not give a true and fair view of the state of the company’s affaires as at June 30, 2011 and of the loss, its comprehensive loss, cash flows and changes in equity for the year then ended; and

(e) in our opinion, no Zakat was deductible at source under the Zakat and Ushr

Ordinance, 1980.

AVAIS HYDER LIAQUAT NAUMAN CHARTERED ACCOUNTANTS Engagement Partner:- Syed Ali Adnan Tirmizey

Dated: October 10, 2011. Place: Faisalabad.

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Balance SheetAs at june 30, 2011

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorised capital120,000,000 ordinary shares

of Rs.10/- each

80,000,000 cumulative preference shares of Rs.10/- each

Issued, subscribed and paid up capital

Cumulative preference sharesCapital reservesRevenue reserves

SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT

NON-CURRENT LIABILITIES

Long term financingLiabilities against assets

subject to finance leaseDeferred liabilities

CURRENT LIABILITIES

Trade and other payablesInterest / markup payableShort term borrowingsCurrent portion of :

Long term financingLiabilities against assets

subject to finance leaseProvision for taxation - income tax

CONTINGENCIES AND COMMITMENTS

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

Director

(Muhammad Naeem)

Note

3456

7

8

910

111213

8

9

14

2011 2010Rupees Rupees

1,200,000,000 1,200,000,000

800,000,000 800,000,000

1,150,000,000 1,150,000,000800,000,000 800,000,000526,409,752 526,409,752

(4,772,317,801) (1,919,532,120)(2,295,908,049) 556,877,632

5,156,590,479 5,209,204,302

1,866,733,990 2,254,543,238

33,546,581 67,955,648166,998,188 162,437,191

2,067,278,759 2,484,936,077

2,007,795,137 2,080,254,6321,583,696,780 572,015,2747,266,477,945 7,436,953,608

1,265,396,400 870,413,512

123,250,292 87,275,44429,515,650 88,388,024

12,276,132,204 11,135,300,494

- -

17,204,093,393 19,386,318,505

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Chief Executive Officer

(Mian Muhammad Latif)

ASSETS

NON-CURRENT ASSETS

Property, plant and equipmentLong term deposits

CURRENT ASSETS

Stores, spares and loose toolsStock in tradeTrade debtsLoans and advancesDeposits and prepaymentsOther receivablesTax refunds due from GovernmentCash and bank balances

Note

15

16

1718192021222324


11,659,236,722 11,855,461,2048,851,468 19,735,910

11,668,088,190 11,875,197,114

1,108,469,107 1,235,107,7341,246,629,813 2,491,388,7142,802,036,404 3,302,962,149

103,027,030 136,617,13625,931,317 20,313,478

107,310,668 128,805,315122,847,043 178,506,49319,753,821 17,420,372

5,536,005,203 7,511,121,391

17,204,093,393 19,386,318,505

Profit and loss account

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For the year ended june 30, 2011

Director

(Muhammad Naeem)Chief Executive Officer


2011 2010Note Rupees Rupees

Sales 25 4,374,335,091 8,857,795,931Cost of sales 26 5,541,364,694 9,055,286,804Gross (loss) (1,167,029,603) (197,490,873)

Other operating income 27 5,863,716 135,668,917(1,161,165,887) (61,821,956)

Selling and distribution expenses 28 164,017,494 363,687,892Administrative expenses 29 190,203,074 198,245,997Other operating expenses 30 373,124 7,087,892Finance cost 31 1,342,163,362 1,308,783,863

1,696,757,054 1,877,805,644Loss before taxation (2,857,922,941) (1,939,627,600)

Provision for taxation 32 29,828,216 88,341,710

Loss for the year (2,887,751,157) (2,027,969,310)

Earnings per share- Basic and diluted 36 (25.11) (17.63)


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Statement of Comprehensive Income

Director



For the year ended june 30, 2011


(Loss) for the year (2,887,751,157) (2,027,969,310)

Other comprehensive income for the year

Surplus realised on disposal of assets during the year 7 2,054,614 -

Incremental depreciation on revalued assets for the year 7 32,910,862 90,970,246

34,965,476 90,970,246

Total comprehensive (loss) for the year (2,852,785,681) (1,936,999,064)


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Cash Flow Statementfor the year ended june 30, 2011


a) CASH FLOWS FROM OPERATING ACTIVITIES

Loss before taxation (2,857,922,941) (1,939,627,600)Adjustments for: Depreciation on property, plant and equipment 231,209,397 281,930,252 Provision for staff retirement gratuity 43,366,398 70,366,985 Loss on disposal of property, plant and equipment 373,124 - Finance cost 1,342,163,362 1,308,783,863 Balances written back - net (1,518,233) (130,114,872)

Operating cash flows before working capital changes (1,242,328,893) (408,661,372)

Changes in working capital

Decrease / (increase) in current assets

Stores, spares and loose tools 126,638,627 119,128,876Stock in trade 1,244,758,901 1,983,846,157Trade debts 500,925,745 (177,447,087)Loans and advances (15,531,865) 13,661,091Deposits and prepayments 5,266,603 22,702,107Other receivables 21,494,647 2,571,029Tax refunds due from Government 53,569,811 10,519,404

1,937,122,469 1,974,981,577(Decrease) / increase in current liabilities

Trade and other payables (114,620,054) 8,325,0471,822,502,415 1,983,306,624

Cash generated from operations 580,173,522 1,574,645,252

Income tax paid (37,488,980) (87,100,200)Finance cost paid (327,422,067) (1,083,318,789)Staff retirement gratuity paid (12,774,956) (25,095,324)

Net cash generated from operating activities 202,487,519 379,130,939

b) CASH FLOWS FROM INVESTING ACTIVITIES

Additions in property, plant and equipment (47,897,168) (611,664,212)Proceeds from disposal of property, plant and equipment 12,539,129 3,938,931

Net cash (used in) investing activities (35,358,039) (607,725,281)

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Director




c) CASH FLOWS FROM FINANCING ACTIVITIES

Long term financing obtained 158,357,630 155,660,000Repayment of:

Long term financing (151,183,990) (261,483,216)Liabilities against assets subject to finance lease (1,494,008) (19,063,768)

(Decrease) / increase in short term borrowings - net (170,475,663) 307,549,932

Net cash (used in) / generated from financing activities (164,796,031) 182,662,948

Net increase / (decrease) in cash and cash equivalents (a+b+c) 2,333,449 (45,931,394)

Cash and cash equivalents at the beginning of the year 17,420,372 63,351,766

Cash and cash equivalents at the end of the year 19,753,821 17,420,372


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Statement of Changes In EquityFor the year ended june 30, 2011

Director



Balance as at July 01, 2009 1,150,000,000 800,000,000 120,000,000 63,552,610 342,857,142 76,432,834 (58,965,890) 2,493,876,696

Total comprehensive (loss) for the year - - - - - - (1,936,999,064) (1,936,999,064)

Balance as at June 30, 2010 1,150,000,000 800,000,000 120,000,000 63,552,610 342,857,142 76,432,834 (1,995,964,954) 556,877,632

Total comprehensive (loss) for the year - - - - - - (2,852,785,681) (2,852,785,681)

Balance as at June 30, 2011 1,150,000,000 800,000,000 120,000,000 63,552,610 342,857,142 76,432,834 (4,848,750,635) (2,295,908,049)


Share capitalPreference

shares redemption

reserve

General reserve

Total

Revenue reservesCapital reserves

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

Cumulative preference

shares

Premium on issue of ordinary shares

(Accumulated loss)Merger reserve

Issued, subscribed and paid up capital

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Notes to the Financial StatementsFor the year ended june 30, 2011

1. STATUS AND ACTIVITIES

1.1

1.2

1.3

1.4

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

Pursuant to schemes of arrangement approved by the Honourable Lahore High Court, Lahore, assets, liabilities andreserves of Faisal Weaving (Private) Limited, Latif Weaving (Private) Limited and Chenab Finishing (Private) Limitedwere merged with the Company with effect from December 31, 1998 and assets, liabilities and reserves of ChenabFibres Limited were merged with the Company with effect from April 01, 2003.

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

The Company has incurred operating losses of Rs. 2,887.751 million and the accumulated loss of the Company as atthe balance sheet date is Rs. 4,772.318 million. The current liabilities exceed its current assets by Rs. 6,740.127million. The Company has not redeemed preference shares on exercise of put options for two consecutive years byholders of preference shares due to tight cash flow situation. The Company has not been able to comply with termsof certain loan agreements. Certain banks and financial institutions have filed cases for recovery and winding up ofthe Company and / or served legal notices against the Company which the management is defending. The litigationhas also adversely affected the process of negotiations with banks for extension and re-scheduling of credit facilities.The management is making efforts to enter into settlements to meet the creditor's obligations. The management is inthe process of making arrangements with renowned foreign buyers to obtain export business against advancepayments before shipments and hopeful that this arrangement will improve the tight liquidity position of the Company.

On the operational side, the management started toll manufacturing to overcome the core issue of under utilisation of

its production facilities which the Company is experiencing from the last many years, but unfortunately due to

continued load management by the utility suppliers, the desired results could not be achieved and the core issue of

higher operating cost due to lower production and higher financial cost due to increase in markup rates could not be

resolved. The management has re-planned its business operations to focus on export market and regain its previous

position built over many years of successful operations. The management is hopeful of restoring its previous status

and prestige in the export market, subject to successful negotiations with the foreign buyers for improvement of

liquidity. The management is confident that the Company will be able to continue as a going concern.

Chenab Limited (the Company) is incorporated as a public limited company under the Companies Ordinance, 1984and is listed on Karachi Stock Exchange. The registered office of the Company is situated at Nishatabad, Faisalabad.The principal business of the Company is export of all kinds of value added fabrics, textile made-ups, casual andfashion garments duly processed. The cloth processing unit is located at Nishatabad, District Faisalabad, andstitching units are located at Nishatabad, District Faisalabad and Shorkot Road, District Toba Tek Singh. Weavingunits are located at Sheikhupura Road, Khurrianwala, District Faisalabad, Jhumra Road, Gatti, District Faisalabad,Sheikhupura Road, Kharrianwala, District Sheikhupura and Shahkot, District Nankana Sahib. Spinning unit is locatedat Shorkot Road, District Toba Tek Singh, in the province of Punjab.

These financial statements are presented in Pak Rupee, which is the Company's functional and presentationcurrency.

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2.1.1

-

-

-

-

2.1.2

-

2.1.3

-

-

-

-

IAS 1 (Amendments), Clarifies that an entity will present an analysis of other comprehensive income foreach component of equity, either in the statement of changes in equity or in the notes to the financialstatements. These amendments are effective for accounting periods beginning on or after July 01, 2011.The amendments may result in certain changes in disclosures.

The following new and revised standards are effective and mandatory for financial statements for theperiods beginning on or after July 1, 2010 and therefore, have been applied in preparing these financialstatements.

Standards, amendments to standards and interpretations becoming effective in future periods

IAS 17 (Amendment), ‘Leases’. Prior to the amendment, IAS 17 generally required a lease of land withan indefinite useful life to be classified as an operating lease, unless title passed at the end of the leaseterm. The amendment provides clarification that when a lease includes both land and buildings,classification as a finance or operating lease is performed separately in accordance with IAS 17’s generalprinciples. A lease newly classified as a finance lease should be recognized retrospectively. Theapplication of this amendment does not have any impact on the Company’s financial statements.

Standards, amendments to standards and interpretations becoming effective in current year butnot relevant

IFRS 7, ‘Disclosures on transfers of financial assets’ (Amendments). The new disclosure requirementsapply to transferred financial assets. An entity transfers a financial asset when it transfers the contractualrights to receive cash flows of the asset to another party. These amendments are part of the IASBscomprehensive review of off balance sheet activities. The amendments will promote transparency in thereporting of transfer transactions and improve users’ understanding of the risk exposures relating totransfers of financial assets and the effect of those risks on an entity’s financial position, particularly thoseinvolving securitization of financial asset. These amendments are effective for the accounting periodscommencing on or after July 01, 2012. It is not expected to have any impact on the Company’s financialstatements.

The following amendments and interpretations to existing standards have been published and aremandatory for the company’s accounting periods beginning on or after their respective effective dates:

IAS 7 (Amendment), ‘Statement of cash flows’. The amendment provides clarification that onlyexpenditure that results in a recognized asset in the balance sheet can be classified as a cash flow frominvesting activity. The clarification results in an improvement in the alignment of the classification of cashflows from investing activities in the cash flow statement and the presentation of recognized assets in thebalance sheet. The application of this amendment does not have any impact on the Company’s financialstatements.

IAS 1 (Amendment), ‘Presentation of financial statements’. The amendment provides clarification that thepotential settlement of a liability by the issue of equity is not relevant to its classification as current or noncurrent. By amending the definition of current liability, the amendment permits a liability to be classified asnon-current (provided that the entity has an unconditional right to defer settlement by transfer of cash orother assets for at least 12 months after the accounting period) notwithstanding the fact that the entitycould be required by the counterparty to settle in shares at any time. The application of this amendmentdoes not have any impact on the Company’s financial statements.

There are certain new standards, amendments and interpretations that are mandatory for accountingperiods of the Company beginning on or after July 1, 2010 but are considered not to be relevant to theCompany's operations, therefore, not disclosed in the financial statements.

Standards, amendments to standards and interpretations becoming effective in current period

IFRS 7 Financial Instruments: Disclosures (effective for accounting periods beginning on or after July 01,2011). These amendments add an explicit statement that qualitative disclosure should be made in thecontext of the quantitative disclosures to better enable users to evaluate an entity’s exposure to risksarising from financial instruments. In addition, the IASB amended and removed existing disclosurerequirements. The amendments may result in certain changes in disclosures.

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-

-

-

2.1.4

-

2.2 Basis of preparation

These financial statements have been prepared under the "historical cost convention" except: -

- revaluation of certain property, plant and equipment.- recognition of employee retirement benefits at present value.

The principal accounting policies adopted are set out below:

2.3 Leases

2.4

The amount recognised in the balance sheet represents the present value of defined benefit obligation as adjustedfor unrecognised actuarial gains and losses.

Standards, amendments to standards and interpretations becoming effective in future periods butnot relevant

Asset held under finance lease is recognised as asset of the Company at its fair value at the inception of the leaseor, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is includedin the balance sheet as liability against asset subject to finance lease. The liability is classified as current and noncurrent depending upon the timing of payment. Lease payments are apportioned between finance charges andreduction of the liability against asset subject to finance lease so as to achieve a constant rate of interest on theremaining balance of the liability. Finance charges are charged to profit and loss account, unless they are directlyattributable to qualifying assets, in which case they are capitalised in accordance with the Company's general policyon borrowing costs.

Staff retirement benefits

There are other amendments to the standards and interpretations that are effective from different futureperiods but are considered not to be relevant to the Company's operations, therefore, not disclosed inthese financial statements.

The Company operates a defined benefit plan - unfunded gratuity scheme covering all permanent employees.Provision is made annually on the basis of actuarial recommendation to cover the period of service completed byemployees using Projected Unit Credit Method. Cumulative unrecognised net actuarial gains and losses that exceedten percent of present value of defined benefit obligation are amortised over the expected average remaining workinglives of participating employees.

Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks andrewards of ownership to the lessee. All other leases are classified as operating leases.

IFRS 9 ‘Financial instruments’ introduces new requirements for the classification and measurement offinancial assets and financial liabilities and for their derecognition. While the International AccountingStandards Board has prescribed the effective date; period beginning on or after July 01, 2013 with earlierapplication permitted, the Securities and Exchange Commission of Pakistan and the State Bank ofPakistan have still not notified its effective date for adoption locally. As a result, there will be no impact onthe Company's financial statements till application of IFRS 9 is notified.

IAS 24, ‘Related party disclosures’ (Revised), issued in November 2009. It supersedes IAS 24, ‘Relatedparty disclosures’, issued in 2003. IAS 24 (revised) is mandatory for accounting periods beginning on orafter July 01, 2011. The revised standard clarifies and simplifies the definition of a related party andremoves the requirement for government-related entities to disclose details of all transactions with thegovernment and other government-related entities. It is not expected to have any impact on theCompany’s financial statements.

IFRIC 19, ‘Extinguishing financial liabilities with equity instruments’, effective for accounting periodsbeginning on or after July 01, 2011. The interpretation clarifies the accounting by an entity when the termsof a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of theentity to extinguish all or part of the financial liability (debt for equity swap). It requires a gain or loss to berecognized in profit or loss, which is measured as the difference between the carrying amount of thefinancial liability and the fair value of the equity instruments issued. If the fair value of the equityinstruments issued cannot be reliably measured, the equity instruments should be measured to reflect thefair value of the financial liability extinguished. It is not expected to have any impact on the Company’sfinancial statements.

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2.5

2.6 Provisions

2.7 Provision for taxation

Current

Deferred

2.8 Dividend and other appropriations

2.9 Property, plant and equipment

Provision for current taxation is based on income taxable at the current tax rates after taking into account tax rebatesand tax credits available under the law.

Depreciation is charged to income applying the reducing balance method at the rates specified in the property, plantand equipment note, except plant and machinery and electric installations. Plant and machinery is depreciatedapplying the unit of production method subject to minimum charge of Rs. 100 million to cover obsolescence andelectric installations are depreciated applying the straight line method over their economic serviceable life taken at 25years.

Property, plant and equipment except land and capital work in progress are stated at cost / revaluation lessaccumulated depreciation and impairment in value, if any. Land is stated at revalued amount. Capital work inprogress is valued at cost.

When parts of an item of property, plant and equipment have different useful lives, they are recognised as separateitems of property, plant and equipment.

Deferred tax is provided using the liability method for all temporary differences at the balance sheet date between taxbases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax asset is recognised for all deductible temporary differences and carry forward of unused tax losses, ifany, to the extent that it is probable that taxable profit will be available against which such temporary differences andtax losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when theasset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at thebalance sheet date.

Dividend is recognised as a liability in the period in which it is approved. Appropriations of profits are reflected in thestatement of changes in equity in the period in which such appropriations are made.

In respect of additions and disposals during the year, depreciation is charged from the month of acquisition orcapitalisation and up to the month preceding the month of disposal respectively.

Assets' residual values, if significant and their useful lives are reviewed and adjusted, if appropriate, at each balancesheet date.

Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements arecapitalised.

Provisions are recognised when the Company has a present, legal or constructive obligation as a result of past eventand it is probable that an outflow of resources embodying economic benefits will be required to settle the obligationand a reliable estimate of the amount can be made. However, provisions are reviewed at each balance sheet dateand adjusted to reflect the current best estimate.

Trade and other payables

Liabilities for trade and other payables are measured at cost which is the fair value of the consideration to be paid infuture for goods and services received, whether billed to the Company or not.

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Gains or losses on disposal of property, plant and equipment are included in current income.

Assets subject to finance lease

2.10 Borrowing costs

2.11

2.12 Stores, spares and loose tools

2.13 Stock in trade

Raw materialWork in processFinished goods

Wastes are valued at net realisable value.

In view of certainty of ownership of the assets at the end of the lease period, assets subject to finance lease arestated at cost less accumulated depreciation. These assets are depreciated over their expected useful lives on thesame basis as owned assets except building under lease which is depreciated on straight line basis over its leaseterm of 61 years.

Average cost

Average manufacturing cost

All expenditure connected with specific assets incurred during installation and construction period are carried undercapital work in progress. These are transferred to specific assets as and when these assets are available for use.

Surplus arising on revaluation is credited to surplus on revaluation of property, plant and equipment. The surplus onrevaluation of property, plant and equipment to the extent of incremental depreciation charged on the related assetsis transferred to unappropriated profit / (accumulated loss) through statement of comprehensive income. Surplusrealised on disposal of revalued asset is transferred to unappropriated profit / (accumulated loss) through statementof comprehensive income.

These are valued at moving average cost less allowances for obsolete or slow moving items, if any. Items in transitare valued at cost comprising invoice value and other charges incurred thereon.

Average manufacturing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which areassets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost ofthose assets, until such time as the assets are substantially ready for their intended use. Investment income earnedon the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted fromthe borrowing costs eligible for capitalisation.

Impairment

Net realisable value represents the estimated selling price in the ordinary course of business less estimated cost ofcompletion and estimated cost to make the sales. Average manufacturing cost consists of direct materials, labourand a proportion of manufacturing overheads.

Stock in trade except wastes are valued at lower of cost and net realisable value. Cost is determined as follows:

All other borrowing costs are recognised in profit and loss account in the period in which these are incurred.

The Company assesses at each balance sheet date whether there is any indication that assets except deferred taxassets may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assesswhether they are recorded in excess of their recoverable amounts. Where carrying values exceed the respectiverecoverable amounts, assets are written down to their recoverable amounts and the resulting impairment loss isrecognised in profit and loss account, unless the relevant asset is carried at a revalued amount, in which case theimpairment loss is treated as a revaluation decrease. The recoverable amount is the higher of an asset's fair valueless cost to sell and value in use.

Where impairment loss subsequently reverses, the carrying amount of the asset is increased to the revisedrecoverable amount but limited to the carrying amount that would have been determined had no impairment lossbeen recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit andloss account, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairmentloss is treated as a revaluation increase.

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2.14 Trade debts and other receivables

2.15 Cash and cash equivalents

2.16

2.17

2.18 Offsetting of financial asset and financial liability

2.19

2.20 Related party transactions

2.21 Critical accounting estimates and judgments

The preparation of financial statements in conformity with IASs / IFRSs requires management to make judgments,estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,income and expenses. The estimates and associated assumptions are based on historical experience and variousother factors that are believed to be reasonable under the circumstances, the results of which form the basis ofmaking judgments about carrying values of assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates.

Significant areas requiring the use of management estimates in these financial statements relate to the useful life ofdepreciable assets, provision for doubtful receivables and slow moving inventory and staff retirement gratuity.However, assumptions and judgments made by management in the application of accounting policies that havesignificant effect on the financial statements are not expected to result in material adjustment to the carrying amountsof assets and liabilities in the next year.

Exchange differences are included in current income. All non-monetary items are translated into Pak Rupee atexchange rates prevailing on the dates of transactions.

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractualprovisions of the instrument and de-recognised when the Company loses control of the contractual rights thatcomprise the financial assets and in case of financial liabilities when the obligation specified in the contract isdischarged, cancelled or expired.

A financial asset and a financial liability is off-set and the net amount reported in the balance sheet, if the Companyhas a legal enforceable right to set-off the transaction and also intends either to settle on a net basis or to realise theasset and settle the liability simultaneously.

Revenue recognition

Sales are recorded on dispatch of goods.

Trade debts are carried at original invoice amount less an estimate made for doubtful receivables based on review ofoutstanding amounts at the year end. Balances considered bad are written off when identified. Other receivables arerecognised at nominal amount which is fair value of the consideration to be received in future.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimates are revised.

Transactions with related parties are priced on arm’s length basis. Prices for these transactions are determined onthe basis of comparable uncontrolled price method, which sets the price by reference to comparable goods andservices sold in an economically comparable market to a buyer unrelated to the seller.

Foreign currency translation

Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cashand cash equivalents consist of cash in hand, balances with banks, highly liquid short term investments that areconvertible to known amount of cash and are subject to insignificant risk of change in value.

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivablefor goods and services provided in the normal course of business.

Other particular recognition methods adopted by the Company are disclosed in the individual policy statementsassociated with each item of financial instruments.

Transactions in currencies other than Pak Rupee are recorded at the rates of exchange prevailing on the dates oftransactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currenciesare retranslated at the rates prevailing on the balance sheet date except where forward exchange contracts havebeen entered into for repayment of liabilities, in that case, the rates contracted for are used.

Financial instruments

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3. Issued, subscribed and paid up capital

2011 2011 2010Rupees Rupees

35,985,702 359,857,020 359,857,020

73,869,559 738,695,590 738,695,590

5,144,739

51,447,390 51,447,390 115,000,000 1,150,000,000 1,150,000,000

3.1

4. Cumulative preference shares

2011 2011 2010Rupees Rupees

80,000,000 800,000,000 800,000,000

4.1

a) 75% of market value of shares or

b) 75% of book value (break up value) or

c) face value of shares

The date to exercise put option has been expired on September 25, 2010.

4.2

4.3


5. Capital reserves

Premium on issue of ordinary shares 120,000,000 120,000,000 Merger reserve 5.1 63,552,610 63,552,610 Preference shares redemption reserve 5.2 342,857,142 342,857,142

526,409,752 526,409,752

In case the Company fails to redeem cumulative preference shares upon exercise of put option by the holders for anytwo consecutive years, the holders were entitled to convert the cumulative preference shares into ordinary shares ata price equal to lower of:

Nil (2010: 6,603,556) ordinary shares of Rs. 10/- each fully paid in cash are held by an associated undertaking of theCompany.

The holders of 55,080,498 cumulative preference shares called upon to convert preference shares into ordinaryshares due to non-redemption of their holding on exercise of put option for two consecutive years. The Companyproposed to issue new ordinary shares to preference shareholders holding 49,984,998 cumulative preference shareswho have called upon to convert their shares, as per conversion formula laid down in the Prospectus and Articles ofAssociation of the Company. In view of the reservations by the investors regarding conversion formula, the matter isdeferred till amicable resolution with the consensus of the investors. The matter of conversion of balance of5,095,500 cumulative preference shares is also pending till the resolution of matter with the investors who have firstexercised the put option.

The cumulative preference shares have been classified as part of equity capital in accordance with the terms andconditions of issue, taking into consideration the classification of share capital as indicated in the various provisionsof the Companies Ordinance, 1984. Further the contradictions between classification of share capital in the variousprovisions of the Companies Ordinance, 1984 and International Accounting Standards is pending for clarificationbefore the Securities and Exchange Commission of Pakistan.

The preference shares are non-voting, cumulative and redeemable. These are listed on Karachi Stock Exchange(Guarantee) Limited. The holders are entitled to cumulative preferential dividend at 9.25% per annum on the paid upvalue of preference shares. In case profits in any year are insufficient to pay preferential dividend, the dividend will beaccumulated and payable in next year.

2010Number of shares

Cumulative preference shares

Ordinary shares of Rs. 10/- each issued as fullypaid under scheme of arrangement foramalgamation.

80,000,000

73,869,559

Number of shares

Ordinary shares of Rs. 10/- each issued as fullypaid bonus shares.

35,985,702

2010

Ordinary shares of Rs. 10/- each fully paid incash.

5,144,739

115,000,000

of Rs. 10/- each fully paid in cash.

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5.1 It represents book difference of capital under schemes of arrangement for amalgamation.

5.2


6. Revenue reserves

General reserve 76,432,834 76,432,834 (Accumulated loss)

Opening balance (1,995,964,954) (58,965,890) Total comprehensive loss for the year (2,852,785,681) (1,936,999,064)

(4,848,750,635) (1,995,964,954)(4,772,317,801) (1,919,532,120)

7. SURPLUS ON REVALUATION OFPROPERTY, PLANT AND EQUIPMENT

Opening balance 5,209,204,302 1,159,681,490 Surplus on revaluation carried out during the year - 4,140,493,058

5,209,204,302 5,300,174,548

Surplus realised on disposal of assets during the year (2,054,614) - Incremental depreciation on revalued assets for the year (32,910,862) (90,970,246) Deferred tax on surplus (17,648,347) -

5,156,590,479 5,209,204,302

7.1


8. Long term financing

SecuredUnder mark up arrangements

From banking companies Fixed assets finance 8.1 239,227,233 239,227,233

Demand finances 8.1 417,640,000 392,660,000 Term finances 8.1 1,236,724,170 1,119,227,170 Long term finances 8.1 243,139,748 377,543,131

From financial institutions Term finances 8.1 561,960,533 562,860,533 Long term finances 8.1 78,434,529 78,434,506 Not subject to mark up

From financial institution Term finance IX 8.2 58,351,091 58,351,091

2,835,477,304 2,828,303,664 Less : Current portion

Installments due 716,187,546 198,937,964 Payable within one year 549,208,854 671,475,548

1,265,396,400 870,413,512 1,570,080,904 1,957,890,152

Unsecured - From directors and associate 8.3 296,653,086 296,653,086 1,866,733,990 2,254,543,238

This represents surplus on revaluation of freehold land, building on freehold land and plant and machinery.Revaluation of freehold land on market value, building on freehold land and plant and machinery on depreciatedreplacement values was carried out by independent valuers M/S Inspectorates Corporation International (Private)Limited as at June 30, 1997, by M/S Bahauddin Siddiqui and Associates as at December 31, 1998, by M/S EmpireEnterprises as at June 30, 2007 and by M/S Consultancy Support & Services as at December 31, 2009. Revaluationof freehold land on market value was also carried out by independent valuer M/S BFA (Private) Limited as at May 19,2006. Revaluation of electric installation and generator on depreciated replacement values carried out byindependent valuer M/S Consultancy Support & Services as at December 31, 2009.

This represents reserve created for redemption of cumulative preference shares as per terms of the issue. Theappropriation to the reserve was made on straight line basis over the term of cumulative preference shares. Noappropriation has been made since 2008 due to insufficient profits.

31

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8.1

Balance Number of Payment Commencement Ending Markup

Rupees installments rests date date rate

Fixed assets finance 239,227,233 10 Half yearly 30-Sep-10 31-Mar-15

Demand finances

I 91,660,000 4 (un-equal) Quarterly 7-May-14 7-Nov-15

III 65,000,000 15 Quarterly 26-Jun-10 26-Dec-13

IV 146,000,000 10 Half yearly 30-Sep-10 31-Mar-15

V 80,000,000 10 Quarterly 26-Sep-10 26-Dec-12

VI 34,980,000 10 Half yearly 14-Dec-12 28-Feb-18417,640,000

Term finances

I 48,048,000 48 Monthly 1-Jul-07 1-Jun-11

II 192,140,409 12 Half yearly 31-Jul-14 30-Apr-20

III 106,250,000 60 Monthly 1-Oct-09 1-Sep-14

IV 475,352,000 20 Quarterly 30-Sep-10 30-Jun-15with a floor of 11% p.a

V 121,000,000 10 Quarterly 30-Sep-10 31-Dec-12with a floor of 12% p.a

VI 130,000,000 60 Monthly 1-Nov-09 1-Oct-14

VII 45,183,761 16 Quarterly 30-Jun-10 31-Mar-14

VIII 118,750,000 12 Half yearly 31-Jul-14 30-Apr-201,236,724,170

Long term finances

IV 65,754,249 20 Quarterly 30-Sep-07 30-Jun-13

VII 40,000,000 8 Half yearly 20-Jun-07 20-Dec-10VIII 38,433,050 14 Quarterly 1-Jan-07 31-Jan-11IX 85,893,953 20 Quarterly 31-Dec-06 30-Sep-12X 13,058,496 24 Quarterly 28-Mar-10 28-Dec-15

243,139,748

From financial institutions:Term finances

I 300,000,000 20 Quarterly 1-Mar-11 1-Dec-15II 93,750,000 60 Monthly 23-Jan-11 23-Dec-15

with a floor of 10% p.a and rebate

of 6% p.a during the grace period

III 47,916,667 60 Monthly 27-Jan-11 27-Dec-15with a floor of 10% p.a and rebate

of 6% p.a during the grace period

IV 37,500,000 8 Quarterly 1-Mar-11 1-Dec-12V 48,537,616 12 Quarterly 29-Jul-11 29-Apr-14VI 17,578,125 16 Quarterly 29-Apr-09 29-Jan-13VII 16,678,125 16 Quarterly 29-Apr-09 29-Jan-13

561,960,533Long term finances

II 3,090,689 36 Monthly 9-Jan-07 9-Dec-09III 12,586,768 48 Monthly 28-Apr-07 28-Mar-11IV 24,381,000 9 Half yearly 31-Dec-07 31-Dec-12V 12,179,477 13 Quarterly 31-Mar-07 28-Feb-10VI 18,888,895 13 Quarterly 31-Mar-07 28-Feb-11VII 7,307,700 13 Quarterly 31-Mar-07 31-Mar-11

78,434,529

The terms of repayment of certain term finances have been revised. The terms of repayment of all finances are asunder;

1 Month KIBOR + 0.5% p.a

1 Month KIBOR + 0.5% p.a

6 Months KIBOR + 3% p.a

SBP rate + 2% p.a

SBP rate + 2% p.a

SBP rate + 2% p.a

6 Months KIBOR

6 Months KIBOR + 0.5% p.a



From banking companies:


Nature of loans

SBP rate + 2% p.a

SBP rate + 2% p.a


6 months KIBOR

SBP rate + 2% p.a

SBP rate + 2% p.a











SBP rate + 2% p.a


SBP rate + 2% p.a

SBP rate + 2% p.a

SBP rate + 2% p.a

32

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8.2

8.3


9. Liabilities against assets subject tofinance lease

Opening balance 155,231,092 169,931,002 Grace period markup 3,059,789 4,363,858

158,290,881 174,294,860 Paid / adjusted during the year (1,494,008) (19,063,768)

156,796,873 155,231,092 Shown under current liabilities

Installments due (81,166,568) (33,300,250) Payable within one year (42,083,724) (53,975,194)

(123,250,292) (87,275,444) 33,546,581 67,955,648

These represent plant and machinery and generators acquired under separate lease agreements.

Rupees

146,451,741 12,182,462 12,053,644 9,906,228 9,952,898

190,546,973

(21,182,441) (12,567,659) (33,750,100) 156,796,873

The purchase option is available to the Company on payment of last installment and surrender of deposit at the end of thelease period. The terms of repayment of a lease have been revised during the year.

2016

Year ending June 30,

The principal plus financial charges are payable over the lease period in 48, 54, 63, and 72 monthly and 9 half yearlyinstallments. The liability represents the total minimum lease payments discounted at 14.84% to 16.34% per annum (2010:14.84% to 16.34% per annum) being the interest rates implicit in leases.

Allocated to future periods

2013

It is interest free. Directors' loan of Rs. 196.617 million (2010: Rs. 196.617 million) is subordinated to fixed assetsfinance and term finances III, VI and VII and long term finance VII from banking companies and term finances IV, V,VI and VII from financial institutions. Terms of repayment have not been decided so far.

The future minimum lease payments to which the Company is committed as at June 30, 2011 are as under:

Mark up of Rs. 58.351 million outstanding as at November 30, 2009 has been converted into term finance IX. It wasrepayable in 4 equal quarterly installments commenced from September 01, 2010 and ending on June 01, 2011. It isnot subject to mark up. The securities are disclosed in Note 8.1.

The loans are secured against first charge over fixed assets of the Company ranking pari pasu with the chargescreated in respect of export and running finances (Refer Note 13.2) and murabaha finances (Refer Note 13.3). Theseare further secured by personal guarantee of directors of the Company.

The effective rate of mark up ranges from 7% to 16.59% per annum (2010: 7% to 17.26% per annum).

Financial charges

2012

20142015

Payable

33

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ual R

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1

Reconciliation of minimum lease payments and their present value is given below:

Due within one year 146,451,741 123,250,292 113,372,744 87,275,444Due after one year but

not later than five years 44,095,232 33,546,581 71,406,350 67,955,648Rupees 190,546,973 156,796,873 184,779,094 155,231,092

2011 201010. Deferred liabilities Note Rupees Rupees

Deferred taxation 10.1 17,648,347 - Staff retirement gratuity 10.2 149,349,841 162,437,191

166,998,188 162,437,191

10.1 Deferred taxation

Deferred tax on surplus 17,648,347 -

10.1.1 It comprises of the following:

Deferred tax liability:Difference between accounting and tax basis of assets 612,781,666 -

Deferred tax assets:Liabilities against assets subject to finance lease (23,597,929) - Carry forward tax losses (571,535,390) -

17,648,347 -

10.2 Staff retirement gratuity

10.2.1


10.2.2 Balance sheet reconciliation as at June 30,

Present value of defined benefit obligation 145,577,017 157,621,721 Cumulative net unrecognised actuarial gain 3,772,824 4,815,470

149,349,841 162,437,191

10.2.3 Movement in net liability recognised

Opening balance 162,437,191 197,439,911 Charge for the year 10.2.4 43,366,398 70,366,985 Paid / adjusted during the year (12,774,956) (50,746,918) Benefits due but not paid (43,678,792) (54,622,787) Balance at June 30, 149,349,841 162,437,191

Present value of minimum

lease payments

Present value of minimum lease

payments

General description

Minimum lease

payments

2011 2010

Minimum lease

payments

The scheme provides terminal benefits for all employees of the Company who attain the minimumqualifying period of service as defined in the scheme. Annual charge is based on actuarial valuation,carried out as at June 30, 2011 using Projected Unit Credit Method.

34

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ual R

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10.2.4 Charge for the year

Service cost 25,218,289 47,224,874 Interest cost 18,148,109 23,142,111

43,366,398 70,366,985

10.2.5 Principal actuarial assumptions

Discount factor used 12% Per annum 12% Per annumExpected rate of increase in salaries 12% Per annum 11% Per annumExpected average remaining working

lives of participating employees 6 years 6 years

10.2.6 Trend information

2011 2010 2009 2008 2007-----------------------------------------------Rupees-----------------------------------------------------

Present value ofdefined benefit

obligation 145,577,017 157,621,721 192,850,923 165,457,552 145,285,915

Experience adjustment on

obligation (1,042,646) 226,482 - 2,162,585 (628,975)


11. Trade and other payables

Creditors 11.1 1,331,151,470 1,313,179,423 Accrued liabilities 492,511,452 456,151,546 Advance from customers 11.2 142,251,434 219,438,926 Bills payable 14,710,253 71,108,046 Workers' welfare fund - 7,087,892 Unclaimed dividend 366,071 366,071 Withholding tax payable 19,340,020 8,176,403 Other 7,464,437 4,746,325

2,007,795,137 2,080,254,632

11.1 It includes Rs. 1,412,135/- ( 2010: Rs. 3,773,661/- ) payable to an associated undertaking.

11.2 It includes Nil ( 2010: Rs. 49,533,484/- ) advance from associated undertaking.


12. Interest / markup payable

Interest / mark up payable on secured:Long term financing 587,954,896 255,641,726Liabilities against assets subject to finance lease 21,182,441 12,683,535Short term borrowings 974,559,443 303,690,013

1,583,696,780 572,015,274

35

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ual R

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13. Short term borrowings

SecuredUnder mark up arrangements

From banking companiesExport finances 13.2 6,292,277,000 6,465,918,000 Finance against trust receipts 13.2 202,086,482 375,258,313 Running finance 13.2 689,251,738 421,043,188 Murabaha finances 13.3 72,000,000 72,000,000 Cash finances 13.4 10,862,725 102,734,107

7,266,477,945 7,436,953,608

13.1

13.2

13.3

13.4


14. CONTINGENCIES AND COMMITMENTS

Contingencies

In respect of bank guarantees issued on behalf of the Company

Sui Northern Gas Pipelines Limited for supply of gas 136,985,500 136,745,000

Collector of Customs against demand of custom duty on humidification plant.The Company has claimed exemption from the duty. 1,920,000 1,920,000

District Government against imposition of license fee 200,000 200,000

Demand of custom duty and sales tax notacknowledged in view of pending appeals 44,607,198 46,458,052

Demand of wealth tax not acknowledged in view of pending appeals 1,016,400 1,016,400

Claim of workers' welfare fund not acknowledged.The Company is claiming exemption from levy 2,475,972 233,247

Post dated cheques issued in favour of Collector of Customs for release of goods imported for re-export 32,496,022 29,369,301

Demands of Employees' Old Age Benefits Institution, PunjabEmployees' Social Security Institution are not

acknowledged in view of pending litigations 15,452,641 15,452,641

Commitments

Under letters of credit for raw material and stores - 2,148,130

The effective rate of mark up ranges from 7.50% to 17.99% per annum (2010: 7.50% to 16.34% per annum).

The aggregate unavailed short term borrowing facilities available to the Company are Nil (2010: Rs. 221.546 million).

These are secured against pledge of stocks and by personal guarantee of directors of the Company.

These are secured against first charge over fixed assets of the Company ranking pari pasu with the charges createdin respect of long term financing (Refer Note 8.1) and export and running finances (Refer Note 13.2). These arefurther secured by personal guarantee of directors of the Company.

These are secured against joint pari passu charge over current assets, lien on import / export documents and secondcharge over current and fixed assets of the Company. These are further secured by personal guarantee of directorsof the Company. Certain export and running finances are further secured against first charge over fixed assets of theCompany ranking pari pasu with the charges created in respect of long term financing (Refer Note 8.1) andmurabaha finances (Refer Note 13.3). An export finances of Rs. 374.13 million (2010: Rs. 269.50 million) is alsosecured against equitable mortgage / deposit of title deeds of personal properties of directors and an associate.

36

-Ann

ual R

epor

t 201

1

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37

-Ann

ual R

epor

t 201

1

15.2

Freehold land 85,698,753 - 85,698,753

Building on freehold land 2,113,027,714 595,418,630 1,517,609,084

Plant and machinery 5,572,478,375 1,365,529,586 4,206,948,789

Electric installations 304,493,573 81,403,712 223,089,861

Generators 245,077,888 120,685,193 124,392,695 8,320,776,303 2,163,037,121 6,157,739,182

Freehold land 85,698,753 - 85,698,753

Building on freehold land 2,113,027,714 532,184,918 1,580,842,796

Plant and machinery 5,541,796,729 1,277,279,208 4,264,517,521

Electric installations 304,027,519 69,228,523 234,798,996

Generators 245,077,888 114,138,209 130,939,679 8,289,628,603 1,992,830,858 6,296,797,745

15.3

Written Saledown value proceeds

Plant and machinery (By negotiation) 584,000 17,594 566,406 700,000

1,500,000 47,194 1,452,806 1,400,000

5,800,000 111,373 5,688,627 5,275,000

3,300,000 63,367 3,236,633 3,000,000

11,184,000 239,528 10,944,472 10,375,000

Vehicles(Sold under

Company policy) 1,238,900 893,831 345,069 345,069 Mr. Amer Nasir (Employee)999,000 509,890 489,110 489,110 Mr. Abdul Aziz (Employee)484,980 269,520 215,460 215,460 Mr. Tariq Mehmood Khan (Employee)

(By negotiation) 2,314,275 1,654,392 659,883 659,883 Mr. Riaz Ul Haq

Chak No. 328 G.B Dakkhana Khas, Toba Tak Singh.392,550 337,943 54,607 54,607 Mr. Waqar Hussain

Mohala Ramzanabad, Street No.6,

Near Railway Station, Faisalabad.(Insurance claim) 407,957 204,305 203,652 400,000 Adam Jee Insurance Company Limited

MCB Building, Bank Square, Circular Road, Faisalabad.5,837,662 3,869,881 1,967,781 2,164,129

2011 Rupees 17,021,662 4,109,409 12,912,253 12,539,129

2010 Rupees 8,676,454 4,737,523 3,938,931 3,938,931

Detail of disposals of property, plant and equipment

Written down value

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

Description

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

CostAccumulated depreciation

Had there been no revaluation, related figures of freehold land, building on freehold land and plant and machinery at June 30, 2011 would have been asfollows:

Accumulated depreciation

Description

2011

Written down value

Cost

2010

DescriptionCost /

ValuationParticulars

Accumulated depreciation

Shafi Exports (Pvt) LimitedJandan Wala Karkhana Factory Area, Faisalabad.

11 Km, Jaranwala Road, Faisalabad.

Jhang Road, Faisalabad.

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

Moeen Paper Mills

Saleem and Co

Orient Coating and Finishing Mills (Pvt.) Limited

Jaranwala Road, Khurrianwala, Faisalabad.

38

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ual R

epor

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16. Long term deposits

Lease key money 12,563,598 12,563,598 Security deposits 8,804,768 8,804,768

21,368,366 21,368,366 Less: Current portion - Lease key money 12,516,898 1,632,456

8,851,468 19,735,910

17. Stores, spares and loose tools

StoresIn hand 998,474,568 1,206,956,197 In transit 3,438,585 17,389,792

1,001,913,153 1,224,345,989

Spares 106,511,119 10,682,708

Loose tools 44,835 79,037 1,108,469,107 1,235,107,734

17.1


18. Stock in trade

Raw material 245,604,647 280,682,701 Work in process 661,571,441 1,373,758,465 Finished goods 334,279,098 768,403,277 Waste 5,174,627 68,544,271

1,246,629,813 2,491,388,714

18.1

18.2


19. Trade debts

Considered goodSecured

Foreign 47,697,586 117,383,517 Unsecured

Foreign 19.1 2,383,154,461 2,730,865,669 Local 19.2 371,184,357 454,712,963

2,754,338,818 3,185,578,632 2,802,036,404 3,302,962,149

19.1

19.2

Stock in trade amounting to Rs. 20.906 million (2010: Rs. 233.274 million) is pledged as security with the banks.

This includes receivable (2010: Rs. 435.796 million) from a local company M/S Chen One Stores Limited which wasrelated party in the previous year due to common management.

Stock in trade amounting to Rs. 575.112 million (2010: Rs. 884.951 million) is at net realisable value.

Stores and spares include items that may result in fixed capital expenditure but are not distinguishable.

This includes receivable (2010: Rs. 1,884.833 million) from foreign companies M/S C.G.I Limited United ArabEmirates, M/S Chenab USA and M/S Interfab PTY Limited Australia which were related parties in the previous yeardue to common management.

39

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ual R

epor

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20. Loans and advances

Considered goodLoans to employees

Executives 1,208,000 2,537,625 Others 403,930 2,593,500

AdvancesSuppliers / contractors 56,846,797 30,121,699 Income tax 44,568,303 93,690,274 Letters of credit fee, margin and expenses - 7,674,038

103,027,030 136,617,136

21. Deposits and prepayments

DepositsSecurity deposits 1,292,858 1,322,858 Current portion of long term deposits 16 12,516,898 1,632,456 Guarantee margin 9,835,323 14,639,728

Prepayments 2,286,238 2,718,436 25,931,317 20,313,478

22. Other receivables

Export rebate / duty drawback 72,885,219 101,394,692 Excise duty 13,521,988 12,242,789 Other 20,903,461 15,167,834

107,310,668 128,805,315

23. Tax refunds due from Government

Sales tax 116,288,649 169,858,460 Income tax 6,558,394 8,648,033

122,847,043 178,506,493

24. Cash and bank balances

Cash in hand 8,721,616 6,167,635 Cash at banks

In current accounts 11,032,205 11,252,737 19,753,821 17,420,372

25. Sales

Export Fabrics / made ups / garments 25.1 2,490,087,606 7,994,932,820 Add: Export rebate / duty drawback 43,913,852 130,262,757

2,534,001,458 8,125,195,577 Less:

Commission 5,852,384 8,118,178 Discount 21,968,245 125,887,092

27,820,629 134,005,270 2,506,180,829 7,991,190,307

Local Yarn 420,775,504 - Fabrics / made ups 1,013,582,940 824,479,308 Processing, conversion and stitching charges 433,795,818 42,126,316

4,374,335,091 8,857,795,931

25.1 It includes exchange gain amounting to Rs. 20,057,810/- (2010: Rs. 58,101,473/-).

40

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26. Cost of sales

Cost of goods manufactured 26.1 5,043,870,871 8,702,269,810 Finished goods

Opening stock 836,947,548 1,189,964,542 Closing stock (339,453,725) (836,947,548)

497,493,823 353,016,994 Cost of sales 26.2 5,541,364,694 9,055,286,804

26.1 Cost of goods manufactured

Raw material consumed 26.1.1 1,919,446,652 4,701,214,095 Salaries, wages and benefits 476,270,649 628,154,081 Staff retirement benefits 33,167,033 53,453,821 Stores and spares 290,779,062 275,280,711 Dyes and chemicals 488,985,004 486,360,452 Packing material 399,596,842 369,353,777 Repairs and maintenance 10,506,346 13,460,772 Fuel and power 346,974,168 459,405,773 Insurance 20,667,990 22,492,022 Research and development support - 776,342 Depreciation 15.2 221,718,415 270,887,699 Other 123,571,686 110,806,131

4,331,683,847 7,391,645,676 Work in process

Opening stock 1,373,758,465 2,684,382,599 Closing stock (661,571,441) (1,373,758,465)

712,187,024 1,310,624,134 5,043,870,871 8,702,269,810

26.1.1 Raw material consumed

Opening stock 280,682,701 600,887,730 Purchases including purchase expenses 1,884,368,598 4,381,009,066

2,165,051,299 4,981,896,796 Closing stock (245,604,647) (280,682,701)

1,919,446,652 4,701,214,095

26.2


27. Other operating income

Income from assets other than financial assets:Scrap sale 1,551,483 1,624,045Rental income 2,794,000 3,930,000Balances written back - net 1,518,233 130,114,872

5,863,716 135,668,917

It includes an amount of Rs. 495.198 million (2010: Rs. 632.983 million) in respect of write down of inventories to netrealisable values.

41

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28. Selling and distribution expenses

Advertisement and publicity 334,946 477,339 Carriage and freight 137,806,874 253,938,399 Export clearing and forwarding 17,214,279 73,749,925 Export development surcharge 5,598,217 19,636,878 Other 3,063,178 15,885,351

164,017,494 363,687,892

29. Administrative expenses

Directors' remuneration 6,000,000 6,000,000 Salaries and benefits 90,144,579 85,067,224 Staff retirement benefits 10,199,365 16,913,164 Electricity 3,826,542 2,043,796 Postage, telephone and telex 4,331,996 6,369,517 Vehicles running and maintenance 18,685,808 17,852,694 Travelling and conveyance 20,695,546 28,160,379 Printing and stationery 9,215,779 5,012,272 Entertainment 6,313,533 7,472,726 Fees and subscriptions 1,578,178 1,431,199 Legal and professional 3,510,769 2,916,630 Rent, rates and taxes 1,232,496 1,386,577 Auditors' remuneration 29.1 1,353,000 1,336,000 Repairs and maintenance 894,449 1,005,827 Depreciation 15.2 9,490,982 11,321,724 Insurance 2,345,440 2,240,310 Other 384,612 1,715,958

190,203,074 198,245,997

29.1 Auditors' remuneration

Audit fee 1,000,000 1,000,000 Sundry services 253,000 236,000 Out of pocket expenses 100,000 100,000

1,353,000 1,336,000

30. Other operating expenses

Loss on disposal of property, plant and equipment 373,124 - Workers' welfare fund - 7,087,892

373,124 7,087,892

31. Finance cost

Interest / mark up on:Long term financing 376,425,944 369,084,883 Liabilities against assets subject to finance lease 11,689,707 22,551,752Short term borrowings 890,569,647 831,245,854

Bank charges and commission 63,478,064 85,901,374 1,342,163,362 1,308,783,863

42

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32. Provision for taxation

Current For the year 29,515,650 88,388,024 For prior years 312,566 (46,314)

Deferred - - 29,828,216 88,341,710

32.1

33. REMUNERATION TO CHIEF EXECUTIVE OFFICER, DIRECTORS AND EXECUTIVES

Chief ChiefExecutive Executive

Officer Officer

Remuneration 1,600,000 2,400,000 16,344,835 1,600,000 2,400,000 19,208,666

House rent allowance 480,000 720,000 4,903,451 480,000 720,000 5,762,600

Medical allowance 160,000 240,000 1,634,483 160,000 240,000 1,920,867

Utility allowance 160,000 240,000 1,634,483 160,000 240,000 1,920,867

Other - - 1,152,846 - - 2,039,653

2,400,000 3,600,000 25,670,098 2,400,000 3,600,000 30,852,653

Number of persons 1 3 21 1 3 25

34. TRANSACTIONS WITH RELATED PARTIES

2011 2010

Rupees Rupees

Relationship Nature of transaction

Associated undertakings Sale of goods 305,558,900 3,142,378,686 Organisational expenses recovered 269,536 537,258

Services received 7,710,205 13,215,302 Rental income 994,000 3,930,000

The relationship between tax expense and accounting profit has not been presented in these financial statements asthe income from local sales is not subject to tax and income from export sales and rentals is subject to final tax undersection 169 of the Income Tax Ordinance, 2001. Therefore provision for taxation has been made under section 154,155 and 169 of the Income Tax Ordinance, 2001.

The Chief Executive Officer and Directors are entitled to free use of Company maintained vehicles. The monetary value isRs. 3,441,295/- (2010: Rs. 4,266,586/- ). The Directors have waived off their meeting fee.

Directors

The Company in the normal course of business carries out transactions with various related parties which comprise ofassociated undertakings, directors and key management personnel. Amounts due from and to related parties are shownunder relevant notes to the financial statements. Remuneration to Chief Executive Officer, Directors and Executives isdisclosed in Note 33. Other significant transactions with related parties are as under:

Executives

2011 2010

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

Directors Executives

43

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35. INSTALLED CAPACITY AND ACTUAL PRODUCTION

Unit

2011 2010 2011 2010

Mtrs 9,000,000 9,000,000 3,926,674 4,617,510

Mtrs 59,000,000 59,000,000 7,200,536 30,125,734

Mtrs 3,500,000 3,500,000 2,419,013 1,954,662

Reasons for shortfall

- Temporary closure due to load management by suppliers of gas and electricity and for maintenance.

- Actual production is planned to meet the market demand.

-

2011 2010

36. Earnings per share- Basic and diluted

Loss for the year (2,887,751,157) (2,027,969,310)

Weighted average number of ordinary shares outstanding during the year 115,000,000 115,000,000

Earnings per share- Basic and diluted Rupees (25.11) (17.63)

36.1 There is no dilutive effect on the basic earnings per share of the Company.

37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

37.1 FINANCIAL INSTRUMENTS BY CATEGORY 2011 2010

Rupees RupeesFinancial assets:

Loans and receivables at amortised cost Trade debts 2,802,036,404 3,302,962,149 Loans and advances 1,611,930 5,131,125 Deposits 11,128,181 15,962,586 Other receivables 20,903,461 15,167,834 Cash and bank balances 19,753,821 17,420,372

2,855,433,797 3,356,644,066 Financial liabilities:

Financial liabilities at amortised costLong term financing 3,132,130,390 3,124,956,750 Liabilities against assets

subject to finance lease 156,796,873 155,231,092 Trade and other payables 1,846,203,683 1,843,945,246 Interest / markup payable 1,583,696,780 572,015,274 Short term borrowings 7,266,477,945 7,436,953,608

13,985,305,671 13,133,101,970

Garments

It is difficult to describe precisely the production capacity of textile products being manufactured since itfluctuates widely depending upon various factors such as simple / multi-function articles, small and largesize articles, special articles and the pattern of articles adopted.

Rated capacity per annum

The Company finances its operations through the mix of equity, debt and working capital management with a view tomaintain an appropriate mix between various sources of finance to minimise risk. The overall risk management is carried outby the finance department under the oversight of Board of Directors in line with the policies approved by the Board.

Product Actual production per annum

Fabrics

Made ups

Textile

44

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37.2 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

37.2.1 Credit risk and concentration of credit risk

2011 2010 Rupees Rupees

8,851,468 19,735,910 2,802,036,404 3,302,962,149 1,611,930 5,131,125 11,128,181 15,962,586 20,903,461 15,167,834 11,032,205 11,252,737 2,855,563,649 3,370,212,341

2011 2010 Rupees Rupees

2,430,852,047 2,848,249,186 371,184,357 454,712,963 2,802,036,404 3,302,962,149

The aging of trade debts as at balance sheet date is as under:

Not past due 1,002,888,683 2,473,079,190 Past due within one year 1,119,074,616 828,395,065 Past due over one year 680,073,105 1,487,894

1,799,147,721 829,882,959 2,802,036,404 3,302,962,149

For trade debts credit quality of the customer is assessed, taking into consideration its financial positionand previous dealings. Individual credit limits are set. The management regularly monitor and reviewcustomers credit exposure. The majority of export sales debtors of the Company are situated at MiddleEast, USA and Europe. The Company is exposed to concentration of credit risk towards one customerM/S C.G.I Limited UAE.

The Company’s most significant customers are foreign departmental stores and trading houses. Thebreak-up of amount due from customers is as follows:

Domestic retailers

The Company’s activities expose it to a variety of financial risks (credit risk, liquidity risk and market risk). Risksmeasured and managed by the Company are explained below:

No provision has been made in respect of past due trade debts. Out of these past due debts, Rs. 184.087million has been recovered subsequently. The management is confident that its efforts will result in therecovery of above old outstanding balances, and hence, pending negotiations and resolution of thematter, no provision has been made in these financial statements.

Deposits Other receivables

Based on the past experience and taking into consideration, the financial position, and previous record ofrecoveries, the Company believes that trade debts past due do not require any impairment. The creditrisk exposure is limited in respect of deposits and bank balances as bank balances and majority ofdeposits are placed with foreign and local banks having good credit rating from international and localcredit rating agencies.

Due to the Company’s long standing relations with counterparties and after giving due consideration totheir financial standing, the management does not expect non performance by these counter parties ontheir obligations to the company.

Bank balances

Trade debts Long term deposits

Credit risk represents the accounting loss that would be recognised at the reporting date if counter partiesfailed completely to perform as contracted. The maximum exposure to credit risk at the reporting date isas follows:

Export

Loans and advances

45

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37.2.2 Liquidity risk

Financial liabilities:

Long term financing 3,132,130 3,912,526 1,047,747 299,641 1,984,618 580,520

Liabilities against assets

subject to finance lease 156,797 190,547 132,295 14,157 44,095 -

Trade and other payables 1,846,204 1,846,204 1,846,204 - - -

Short term borrowings 7,266,478 7,700,571 7,700,571 - - -

12,401,609 13,649,848 10,726,817 313,798 2,028,713 580,520

Financial liabilities:

Long term financing 3,124,957 4,030,555 532,992 390,398 2,822,127 285,037

Liabilities against assets

subject to finance lease 155,231 181,785 61,405 33,684 86,696 -

Trade and other payables 1,843,945 1,843,945 1,843,945 - - -

Short term borrowings 7,436,954 7,855,538 7,855,538 - - -

12,561,087 13,911,823 10,293,880 424,082 2,908,823 285,037

Two to five years

More than five years

------------------------------------------------Rupees in '000'--------------------------------------------

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financialliabilities. The Company’s approach to manage liquidity is to maintain sufficient level of liquidity of the Company onthe basis of expected cash flows, requirements of holding highly liquid assets and maintaining adequate reserveborrowing facilities to cover liquidity risk. This includes maintenance of balance sheet liquidity ratios throughworking capital management. Following are the contractual maturities of financial liabilities including interestpayments as at June 30, 2011 and 2010;

2011

More than five years

------------------------------------------------Rupees in '000'--------------------------------------------

Two to five years

The contractual cash flows relating to mark up have been determined on the basis of weighted average mark uprates on long term and short term borrowings. The Company is exposed to the liquidity risk. The Company is facingtight liquidity situation and could not meet its financial obligations as they fall due. Under the stressed conditions, inorder to guard against the liquidity risk, the Company is exploring solutions by approaching diversified fundingsources as explained in detail in Note 1.3.

Carrying amount

Contractual cash flows

Six months or less

Six to twelve months

2010

Carrying amount

Contractual cash flows

Six months or less

Six to twelve months

46

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37.2.3 Market risk

i)

Sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

Cash flow sensitivity analysis for variable rate instruments

ii) Currency risk

iii)

37.3 Fair values of financial instruments

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willingparties in an arm's length transaction.

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates andequity prices will affect the Company’s income or the value of its holdings of financial instruments. Theobjective of market risk management is to manage and control market risk exposures within acceptableparameters while optimizing returns.

The carrying values of all the financial assets and financial liabilities reported in the financial statements approximatetheir fair values.

Equity price risk

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in market interest rates.

Majority of interest rate risk arises from long term and short term borrowings from banks. The interestrate profile of the Company’s interest bearing financial instruments is presented in relevant notes tothe financial statements.

Sensitivity to interest rate risk arises from mismatches of financial assets and financial liabilities thatmature or reprice in a given period. The Company manages these mismatches through riskmanagement strategies where significant changes in gap position can be adjusted.

The Company does not account for any fixed rate financial assets and liabilities at fair value throughprofit and loss, therefore a change in interest rates at the reporting date would not effect profit andloss account.

If the interest rate had increased / decreased by 1% at the reporting date with all other variables heldconstant, loss for the year would have been higher / lower by Rs. 102.813 million (2010: Rs. 103.25million) and equity would have been lower / higher by 102.813 million (2010: Rs. 103.25 million).

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in foreign exchange rates. Foreign currency risk arises mainly where receivablesand payables exist due to transactions with foreign undertakings. The Company is exposed tocurrency risk on foreign debtors and bills payable. The total foreign currency risk exposure onreporting date amounted to Rs. 2,394.196 million (2010: Rs. 2,827.742 million).

At June 30, 2011, if the currency had weakened / strengthened by 5% against the foreign currencieswith all other variables held constant, loss for the year would have been lower / higher by Rs. 120.81million (2010: Rs. 141.27 million) and equity for the year would have been higher / lower by Rs.120.81 million (2010: Rs. 141.27 million).

Trading and investing in equity securities give rise to equity price risk. The Company is not exposedto equity price risk.

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37.4 Capital risk management

2011 2010 Note Rupees Rupees

Total debt 8, 9 & 13 10,258,752,122 10,420,488,364 Less: Cash and cash equivalents 24 19,753,821 17,420,372 Net debt 10,238,998,301 10,403,067,992 Total equity (2,099,290,963) 753,494,718 Total capital 8,139,707,338 11,156,562,710 Gearing ratio 125.79% 93.25%

37.5 Overdue loans and mark up

38. DATE OF AUTHORISATION FOR ISSUE

The financial statements were authorised for issue on ____________ by the Board of Directors of the Company.

39.

40. Figures have been rounded off to the nearest Rupee except where mentioned rounding off in Rupees in thousands.

DIVIDEND FOR CUMULATIVE PREFERENCE SHARES

The dividend for cumulative preference shares amounting to Rs. 296 million will be accumulated and payable in the ensuingyears when the sufficient amount of profit will be available for appropriation.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a goingconcern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and tomaintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure,the Company may adjust the amount of dividends paid to shareholders, issue new shares or obtain / repay long termfinancing from / to financial institutions / sponsor directors.

On reporting date, the carrying amount of loans relevant to above overdues were long term financing Rs. 2,349.409million (2010: Rs. 439.638 million), lease finances Rs. 120.450 million (2010: Rs.118.400 million) and short termborrowings Rs. 991.326 million (2010: Rs. 271.540 million).

The overdue installments of Rs. 0.524 million (2010: Rs. 5.188 million) alongwith mark up of Rs. 1.037 million (2010:Rs. 1.528 million) were subsequently paid. The Company has applied to the banking companies for restructuring ofthe overdue loans and mark up.

The salient information relating to capital risk management of the Company as of June 30, 2011 and 2010 were asfollows:

Consistent with others in the industry, the Company manages its capital risk by monitoring its debt levels and liquidassets and keeping in view future investment requirements and expectation of the shareholders. Debt is calculatedas total external borrowings ('long term financing', ' liabilities against assets subject to finance lease' and 'short termborrowings' as shown in the balance sheet). Equity comprises of shareholders’ equity as shown in the balance sheetunder 'share capital and reserves' and subordinated long term finance from directors.

The gearing ratio has been deteriorated due to operating loss for the year. The Company is taking measures toimprove the gearing ratio which are explained in detail in Note 1.3.

On the reporting date, the installments of long term financing amounting to Rs. 716.187 million (2010: Rs. 198.883million) alongwith mark up of Rs. 488.985 million (2010: Rs. 174.395 million), lease finances amounting to Rs. 81.167million (2010: Rs. 33.300 million) alongwith mark up of Rs. 21.182 million (2010: Rs. 12.683 million) and short termborrowings amounting to Rs. 991.326 million (2010: Rs. 271.540 million) alongwith mark up of Rs. 697.275 million(2010: Rs. 248.975 million) were over due.

October 10, 2011

Director



muhammad.sajjad

Cross-Out

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Share Holders From To Total Shares84 1 100 4,195513 101 500 241,546301 501 1,000 295,382514 1,001 5,000 1,580,254170 5,001 10,000 1,413,97252 10,001 15,000 666,03634 15,001 20,000 623,76524 20,001 25,000 564,42516 25,001 30,000 454,2809 30,001 35,000 302,38215 35,001 40,000 581,6005 40,001 45,000 213,0006 45,001 50,000 293,0382 50,001 55,000 108,9702 60,001 65,000 120,1802 65,001 70,000 140,0002 70,001 75,000 146,9465 75,001 80,000 388,3983 80,001 100,000 269,0574 100,001 125,000 437,3254 150,001 200,000 721,1601 250,001 300,000 573,3383 300,001 400,000 974,7621 400,001 500,000 482,0001 700,001 750,000 750,0002 950,001 1,000,000 1,968,0001 1,100,001 1,200,000 1,128,6481 1,275,001 1,300,000 1,296,5421 1,500,001 1,700,000 1,501,5271 2,100,001 2,125,000 2,113,4831 2,125,001 2,150,000 2,131,0191 2,500,001 2,525,000 2,518,2851 2,800,001 2,825,000 2,813,5452 3,500,001 4,000,000 7,111,0522 6,000,001 7,000,000 12,436,6781 7,000,001 7,500,000 7,459,1841 8,000,001 8,500,000 8,416,9481 14,500,001 15,000,000 14,876,4831 16,500,001 17,000,000 16,681,4831 20,000,001 20,500,000 20,201,112

1791 115,000,000

Note: The Slabs not applicable, have not been shown.

Pattern of Holding of Ordinary SharesHeld by Shares Holders as at June 30, 2011

Form “34”

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Categories of Shareholders

Categories of Shareholders Number Share held Percentage

Directors, Chief Executive

and their spouse, children

Mian Muhammad Latif Chief Executive Officer 1 16,681,483 14.51

Mian Muhammad Javaid Iqbal Director 1 14,876,483 12.94

Mr.Muhammad Naeem Director 1 20,201,112 17.57

Mr.Muhammad Faisal Latif Director 1 2,813,545 2.45

Mr.Muhammad Farhan Latif Director 1 8,416,948 7.32

Mr.Muhammad Zeeshan Latif Director 1 6,138,587 5.34

Mst.Shahnaz Latif Director 1 7,459,184 6.49

Mst.Tehmina Yasmin Spouse 1 2,518,285 2.19

Mst.Prveen Akthar Spouse 1 285,338 0.25

Mr Umair Javaid Son 1 2,419,019 2.10

Financial Institutions,Insurance Companies,Investment Companies,

Joint Stock Companies ,Leasing Companies,Mutual Fund & etc.

Financial Institutions 2 1,129,438 0.98

Insurance Companies 1 22,998 0.02

Investment Companies 1 25,000 0.02

Joint Stock Companies 24 7,413,864 6.45

Individuals 1753 24,598,716 21.39

1791 115,000,000 100.00

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ShareHolders From To Total Shares

19 1 100 738

539 101 500 267,379

18 501 1,000 17,733

6 1,001 5,000 21,000

5 5,001 10,000 40,904

2 10,001 20,000 30,000

2 20,001 30,000 53,797

2 30,001 40,000 74,380

2 40,001 50,000 95,199

0 60,001 70,000 64,500

2 75,001 100,000 191,000

4 100,001 200,000 589,253

1 200,001 300,000 250,000

1 800,001 825,000 812,000

1 900,001 950,000 914,500

1 950,001 1,000,000 1,000,000

1 1,200,001 1,300,000 1,250,000

1 1,475,001 1,500,000 1,490,000

1 1,500,001 1,600,000 1,512,137

2 1,800,001 2,000,000 3,815,998

1 2,475,001 2,500,000 2,500,000

1 3,975,001 4,000,000 4,000,000

1 4,750,001 4,775,000 4,763,000

1 4,975,001 5,000,000 5,000,000

1 5,000,001 8,000,000 7,889,482

3 9,500,001 10,000,000 30,000,000

1 13,000,001 13,500,000 13,357,000619 80,000,000

Note: The Slabs not applicable, have not been shown.

Sharesholder's Number of Number ofCategory Shareholders Shares Held

Son of Director 1 979,000 1.22

Financial Institutions 11 69,999,482 87.50

Insurance Companies 1 95,500 0.12

Joint Stock Companies 3 1,518,637 1.90

Individuals 599 2,750,586 3.44

Others 4 4,656,795 5.82

619 80,000,000 100.00

Pattern of Holding of Preference SharesHeld by Shares Holders as at June 30,2011

Percentage

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Form of Proxy

I/We _____________________________ of ______________________ being a Member of Chenab Limited (the “Company”) holding ________________ shares, hereby appoint ________________ of _______________, who is also a Member of the Company, as my/our proxy to vote for me/us, and on my/our behalf at the 27th Annual General Meeting of the Company to be held on October 31, 2011 andat any adjournment thereof. Signed this ___________________ day of __________________ 2011

Folio No. CDC Account No.

Participant I.D.

Account No.

WITNESSES: 1. Signature _____________________ Name _____________________ CNIC _____________________ Address _____________________ ___________________ The Signature should agree with the specimen 2. Signature _____________________ signature registered with the Company. Name _____________________ CNIC _____________________ Address _____________________ Note: 1. This Proxy, duly completed, signed and witnessed, must be received at the registered office of the

Company, Nishatabad, Faisalabad no later than forty-eight (48) hours before the time appointed for the Meeting.

2. No person shall act as proxy who is not a member of the Company (except that a corporation may

appoint a person who is not a member). 3. If a Member appoints more than one proxy and more than one instruments of proxy are deposited by

a member with the Company, all such instruments of proxy shall be rendered invalid. 4. The Proxy shall produce his original CNIC or original passport at the time of the Meeting. 5. In case of individual CDC Account holders, attested copy of NIC or passport (as the case may be) of

the beneficial owner will have to be provided with this Proxy. 6. In case of corporate entity, the Board of Directors Resolution/Power of Attorney with specimen

signature of the nominee shall be submitted alongwith this Proxy (unless it has been provided earlier).

Revenue Stamp Rs.5/-

Documents

Company Information. - Chenab · PDF fileCompany Information 02-Annual Report 2011 ... Faisalabad. Tel:041-8754472-8 ... strong demand for Pakistani textile products has emerged in