PROSPERITY WEAVING MILLS LTD .

INTRODUCTION OF TEXTILE INDUSTRY Textile is a vital part of the world economy with many nations heavily dependent on thesector for foreign exchange earnings and employment generation. Today textiles andclothing trade accounts for nearly 6% of total world exports. Many of the least developedand small developing countries have built a huge dependency on the sector which oftena c c o u n t s f o r m o r e t h a n 9 0 % o f i n d u s t r i a l e x p o r t s a n d m o r e t h a n 5 0 % o f t o t a l employment. With increased global competition, many sectors within the textile industryare increasing production efficiency. Research, innovations and development in technicaltextiles, yarn quality, clothing products, process performance, fabric finishing, colorationtechnology and marketing can bring significant advancements in the textile sector and market supremacy.Fabric processing is the most critical stage of value addition in the entire value chain.Woven or knit fabric can either be dyed or printed depending upon the requirement of thecustomer who is the garment or made-ups manufacturer. The use of colored cotton beingu n i q u e a n d a t t r a c t i v e h a s t h e p o t e n t i a l t o b e c o m e a p a r t o f c o t t o n f a b r i c a n d a p p a r e l market.Pakistan textile sector is by far the most important sector of the economy contributing6 7 % t o e x p o r t earnings and engaging 35% of labour force. The entire value c h a i n represents production of cotton, ginning, spinning, weaving, dyeing, printing and finally

PROSPERITY WEAVING MILLS LTD . garments manufacturing. Pakistan has emerged as one of the major cotton textile productsuppliers in the world with a market share of about 8% in world cotton cloth trade.Pakistans textile sector has made considerable advances in production capacity andcapability in the last five years. Over the last five years this sector has invested about 6.0 b i l l i o n $ i n m o d e r n i z a t i o n a n d h i g h e r v a l u e a d d i t i o n . A s t h e c u r r e n t t r e n d i s f o r t h e establishment of air-jet looms units, open-width processing units, and in printing major strength is of rotary screen printing machines, further investment are being made for theimport of latest machinery for bleaching, dyeing, printing and finishing. Import of textile printing and finishing machines increased from Rs1.51 billion in 2001 -02 to Rs 5.58 billion in 2005-06, thus showing an average increase of 54% per annum.T h e n e w i d e a o f f r e e t r a d e u n d e r W o r l d T r a d e O r g a n i z a t i o n (W T O ) i s r e s h a p i n g , restructuring and redefining the volume of foreign trade and its direction in almost alleconomies of the world. In pre-WTO period the West was supplying garments and textile p r o d u c t s t o t h e E a s t w i t h c o m p l e t e d o m i n a n c e o n t e x t i l e t r a d e . N o w , t h e s c e n a r i o i s changing fast. The USA and European countries can not afford high cost of labour wagesi n t e x t i l e m i l l s

and can not compete with the low cost of production in textile a n d garment sectors. As such, spinning, weaving and finishing capacity of US and Europeancountries is reducing drastically and is increasing fast in some of the Asian countries likeChina, India, Pakistan, Bangladesh, Sri Lanka and Vietnam due to cheap labor.

PROSPERITY WEAVING MILLS LTD . NAGINA GROUP HISTORY Nagina Group was founded on May 16 th 1967 with the incorporation of Nagina CottonM i l l s L i m i t e d . S i n c e t h e n N a g i n a G r o u p h a s e x p a n d e d i t s o p e r a t i o n s i n t e x t i l e manufacturing and has diversified into other sectors. Currently, Nagina Groups textile manufacturing capacity is 100,956 spindles and 324 air jet looms.A s t e a d y a n d w e l l t h o u g h t o u t g r o w t h strategy coupled with a solid commitment toq u a l i t y h a s e a r n e d N a g i n a G r o u p a f a m i l y o f s a t i s f i e d c u s t o m e r s , h a r d w o r k i n g employees, appreciative shareholders and the confidence of the banking community.Textile power generation and trading activities are the core business allowing to thegroup to enjoy annual turnover of US$ 80 million. Expansion of group capacity will enhance the turnover to US$ 100 million. The core businesses of Nagina Group generatean annual turnover in excess of 100 Million US dollars.Export of products is part of the group philosophy and account for over 65 percent of group turnover. Due to decades of dealing with Pakistani, North American, European andF a r E a s t e r n c u s t o m e r s N a g i n a G r o u p h a s c r e a t e d a s k i l l e d a n d k n o w l e d g e a b l e management fully capable of understanding and responding to customer needs in recordtime.

PROSPERITY WEAVING MILLS LTD . Nagina Group consists of three publicly listed companies on the Kar a c h i S t o c k Exchange (Nagina Cotton Mills Limited, Prosperity Weaving Mills Limited, ProsperityWeaving Mills Limited), five private companies (Monell (Pvt.) Limited, Icaro (Pvt.)Limited, Haroon Omer (Pvt.) Limited, Ellahi International (Pvt.) Limited), ARH (Pvt.)Limited), and employs over 3,500 employees. Nagina Group was selected in 2003 byF o r b e s M a g a z i n e a s o n e o f t h e b e s t 2 0 0 i n t e r n a t i o n a l c o m p a n i e s w i t h a n a n n u a l turnover of under a billion US dollars. Ellcot spinning mills limited Established in 1991,

Ellcot Spinning Mills Limited operates state of the art spinnin gmachinery comprising of 54,528 Spindles with related process machines. The company produces high quality yarns of 100% cotton, synthetic, and polyester / cotton blends.Both carded and combed Yarns for weaving and knitting application are produced inmany b lends. Ellcot Spinning Mills Limited high quality yarns are used to produce apparel fabrics, sheeting, toweling, canvas, and Knitted products. Nagina Cotton Mills Established in 1967, Nagina Cotton Mills Limited ( Winner of Forbes Global Award "Best under a Billion-200" ) is the mother company of Nagina Group. The company operates state of the art spinning machinery comprising of 46,428 Spindles with related process machines. Latest equipment from Japan, Europe and China allow production of high quality spun yarns in carded and combed versions for use in high speed looms and

PROSPERITY WEAVING MILLS LTD . k n i t t i n g m a c h i n e s . The directors are pleased to report that the prestigious International business magazineFORBES included Nagina Cotton Mills Limited in their list of "Best under a billion -200". According to FORBES Our list of 200 successful companies outside the U.S. isdrawn from among 19,000 publicly traded concerns with annual sales below $1 billion.We screened out most corporations that did not have operating margins of at least 5%in the latest year and average returns on equity of at least 5% over the past five, aimingf o r b u s i n e s s e s t h a t w e r e p r o f i t a b l e a n d t h a t r e w a r d e d s h a r e h o l d e r s . A handful of companies that failed these tests were considered if they had outstandingresults otherwise. The remaining 4,000odd concerns were graded against one another u s i n g v a r i o u s d o l l a r b a s e d p e r f o r m a n c e m e a s u r e s , a n d t h e t o p 5 0 0 r e v i e w e d f o r inclusion on this list History of PROSPERITY WEAVING MILLS LIMITED Prosperity Weaving Mills Limited ( An ISO 9001:2000 Certified Company ) started production of high quality apparel and home furnishing greige fabrics in June, 1993.The plant is equipped with Benninger Zell Warping and sizing, Toyota high speed Air J e t W e a v i n g l o o m s , L U W A h u m i d i f i c a t i o n / c h i l l i n g a n d s t a t e o f a r t a d v a n c e d computerized process and quality control machines. The mill comprises a total of 324looms of various widths. Fabric production is over 55,000,000 (Fifty five million)linear meters ann ually and caters to the quality conscious buyers of Europe, NorthAmerica, and the Far East. All kinds of sheeting, flannel, canvas, duck, drills, twills, satins, down proof, rip stop, stretch

and dobby fabrics are produced in 100% cotton andsynthetic blends.The fabric is mainly produced for dyeing quality and extra care is taken to produce fault free minimum contamination fabrics of long piece length Vision Statement To be the market leader by being the best and providing the best . Mission Statement To be the leading producer of cotton and blended yarn for knitting a n d weaving for local and international customers manufacturing well knowntextile brands.To strive for excellence and sustain position as a preferred supplier for yarnwith a customer focused strategy.Continuous enhancement in the quality objectives for customer satisfactionand operational efficiencies To achieve the comparative advantage by employing latest technologies for enhancing the efficiency and productivity.To build enduring relationship with our suppliers by giving them fair returnon their products and services.T o p r o v i d e a p r o f e s s i o n a l , o p e n a n d p a r t i c i p a t i v e e n v i r o n m e n t t o o u r dedicated employees for developing their potential and team performance.To give consistent financial returns to the shareholders on their investments.To be responsible to the society, employees and communities in which we operate by initiating health care, education and social welfare activities. PROFILE OF THE COMPANYBoard of Directors Shaikh Enam EllahiMr. S.M. Yusuf Mr. Shaukat Ellahi ShaikhMr. Shahid AzizMr. Shahzada Ellahi ShaikhMr. Shafqat Ellahi ShaikhMr. Syed Mohsin Gilani

To achieve the comparative advantage by employing latest technologies for enhancing the efficiency and productivity.To build enduring relationship with our suppliers by giving them fair returnon their products and services.T o p r o v i d e a p r o f e s s i o n a l , o p e n a n d p a r t i c i p a t i v e e n v i r o n m e n t t o o u r dedicated employees for developing their potential and team performance.To give consistent financial returns to the shareholders on their investments.To be responsible to the society, employees and communities in which we operate by initiating health care, education and social welfare activities. PROFILE OF THE COMPANYBoard of Directors Shaikh Enam Ellahi Mr. S.M. Yusuf Mr. Shaukat Ellahi Shaikh Mr. Shahid Aziz Mr. Shahzada Ellahi Shaikh Mr. Shafqat Ellahi Shaikh Mr. Syed Mohsin Gilani. Chairman Group Mr. Shaikh Enam Ellahi Managing Director (Chief Executive)

Mr. Shafqat Ellahi Shaikh Audit Committee Mr. Shaikh Enam Ellahi ChairmanMr. Shahzada Ellahi Shaikh Member Mr. Shaukat Ellahi Shaikh Member Mr. Syed Mohsin Gilani Secretary Chief Financial Officer (CFO) Mr. Muhammad tariq sheikh Corporate Secretary Mr. Syed Mohsin Gilani Auditors Messrs Rahman Sarfraz Rahim Iqbal Rafiq & Co Chartered Accountants,Apartment No. 4, Block-B90 - Canal Park, Gulberg-IILahore. Registered Office Nagina House,91-B-1, M.M. Alam Road,Gulberg-III, Lahore-54660. Mills Mouza Rossa,Manga Mandi Raiwind Road,Tehsil & District Kasur. PRODUCTS PORTFOLIO All kinds of sheeting, flannel, canvas, duck, drills, twills, satins, down proof, ripstop, stretch and dobby fabrics are produced in 100% cotton and synthetic blends. We produce up to 800 thread count (T-800).

PROSPERITY WEAVING MILLS LTD . MACHINERY Warping o Benninger Zell Germany 4 Sets Sizing o Benninger Zell Germany 4 Sets Total Looms o 240 Looms of 75 Width + 84 Looms of 134 = 324 Looms Looms Description o

132 Looms of JAT-600 (Toyoda-Japan), Width = 75 o 60 Looms of JAT-610 (Toyoda-Japan), Width = 75 o 48 Looms of JAT-710 (Toyoda-Japan) Width = 75 o 84 Looms of JAT-710 (Toyoda-Japan), Width = 134 Air-Compressor o Atlas Copco Germany Humidification/Chilling o Luwa Swiss

PROSPERITY WEAVING MILLS LTD . CULTURAL VALUES Prosperity Weaving Mills Limited emphasizes the basic values to fulfill the customersrequirementsThrough: Commitment Fairness Integrity Team Work Prosperity Weaving Mills Limited is also full aware with needs of modern machinery andcompetitive environment in textile sectors. Prosperity is strongly competed with other spinning mills through quality, infra structure, flexible policies and more innovative product.

PROSPERITY WEAVING MILLS LTD . PROSPERITY WEAVING MILLS SYSTEMS Every organization has its own systems on which all the working activities conducted.Limited has two separate yarn systems, one is Yarn package which provides informationabout daily production summary, yarn clearance summary, stock summary

and other isa c c o u n t i n g p a c k a g e w h i c h m a i n t a i n s t h e i r d a y t o d a y a c t i v i t i e s l i k e S a l e r e c o r d i n g , delivery orders, contracts etc. Features of Yarn Production Management and Yarn Sales Management These are much modernize computer system All the days activities are maintained with these systems Most of the employee of Ellcot operates these systems If any information is required so these systems provides all necessary information Internet facility is also provide to all employees so they are keeping in touch withlatest development happening in textile sectors

PROSPERITY WEAVING MILLS LTD . MAJOR COMPETITORS Major Competitors in Blended Yarns AMTEX Faisalabad Sargoda Group J.K Group Gazi Group Crescent Textile Mills Island Textile Mills Karachi Nishat Textile Mills Mahmood Textile Mills

Major Competitors in Cotton Yarns Suraj Textile Mills Saif Textile Mills Banairo Textile Mills

Dewan Textile Mills Gadoon Textile Mills Nishat Textile Mills Superior Textile Mills Nisar Textile Mills Tanweer Textile Mills SWOT ANALYSIS The overall evaluation of companys Strength Weaknesses Opportunity Threats Strengths Professional Ownership Professional Management Effective Cost of Production

Large Production Capacity State of the art of the machinery setup Large economy of the scale. Highly Skilled Technician Self Power Generation Strong Financial Liquidity Dedicated Employees Healthy Working Environment

ISO 9001:2000 Certified company Advanced technologies Internal communication and information system is very fast and strong. Diversification of Quality Specialized fashion products Weaknesses Quality issue due to old Machineries Bureaucratic Culture No training system is present in the company Centralized Structure Low salary No specific H.R Department to understand the growing needs of employees. Opportunities Their must be increase in traveling of marketing managers to expand the businessmore effectively. Produce fine fabric to capture more export market Introduces yarn dyed fabric for apparel and bed wear to expand the business in dying nit. Threats/ Challenges Quality issuesdue to old unit of yarn manufacturing Market will loose if quality does not maintain Uncertain Economic Conditions Increase in competition Political instability ORGANIZATIONAL STRUCTURE 18

MangerAccounts forFinanceMangerAccounts forCashMarketingManagerStaff Managing Director G.MFinanceG.M GroupAccountsG.MMarketingExportG.M AuditG.MCommercialG.M AdminFinanceManagerChief FinancialOfficerManagerAccounts RawMaterialPurchaseG.MMarketingLocalAssistantMarketingManagerAudit OfficerCommercialManagerImportManagerAdminOfficerStaff AssistantManagerFinance MangerAccounts StorePurchaseMangerAccounts forBanksMangerAccounts forSale Chairman AssistantPurchaseManagerG.M ExportExportManagerAssistantExportManagerPurchaseManagerStaff Staff