Annual 2008 PWML

ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
1
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
COMPANY INFORMATION
BOARD OF DIRECTORS
Mr. Shaikh Enam Ellahi Chairman

Mr. Shahzada Ellahi Shaikh
Mr. S.M. Yusuf
Mr. Shaukat Ellahi Shaikh
Mr. Shafqat Ellahi Shaikh
Mr. Khawaja Muhammad Ali
Mr. Syed Mohsin Gilani
MANAGING DIRECTOR (Chief Executive)
Mr. Shaukat Ellahi Shaikh
AUDIT COMMITTEE
Mr. Shaikh Enam Ellahi Chairman

Mr. Shahzada Ellahi Shaikh Member
Mr. Shafqat Ellahi Shaikh Member
Mr. Syed Mohsin Gilani Secretary
CHIEF FINANCIAL OFFICER (CFO)
Mr. Muhammad Tariq Sheikh
CORPORATE SECRETARY
Mr. Syed Mohsin Gilani
AUDITORS
Messrs M. Yousuf Adil Saleem & Co.,

Chartered Accountants,
66-E-FCC, Syed Muratab Ali Road,
Gulberg-IV, Lahore.
REGISTERED OFFICE
Nagina House,
91-B-1, M.M. Alam Road,
Gulberg-III, Lahore-54660.
SHARES REGISTRARS
M/s Hameed Majeed Associates (Pvt.) Ltd.
1st Floor, H.M. House,
7-Bank Square, Lahore
Phone # 042-7235081-2,
Fax # 042-7358817
MILLS
Mouza Ghazi Androon,

Sheikhupura Sharaqpur Road,
Tehsil & District Sheikhupura. 2
PROSPERITY WEAVING MILLS LTD.
NAGINA
NAGINA GROUP
NOTICE OF MEETING
17th Annual General Meeting of PROSPERITY WEAVING MILLS LTD. will be held at the Registered
Office of the Company, Nagina House, 91-B-1, M.M. Alam Road, Gulberg-III, Lahore-54660 on
Monday the 27th October, 2008 at 11.00 a.m. to transact the following business:-
1. To confirm minutes of the Extraordinary General Meeting held on 5th January, 2008.
2. To receive and adopt audited accounts of the Company for the year ended on 30th June,
2008 together with the Directors' and Auditors' reports thereon.
3. To appoint auditors and to fix their remuneration.
4. To transact any other ordinary business with the permission of the Chair.
By Order of the Board
Syed Mohsin Gilani

Lahore: September 25, 2008 Corporate Secretary
NOTES
1. The share transfer books of the Company will be closed from the 20th October, 2008 to
Monday the 27th October, 2008 (both days inclusive).
2. A member entitled to attend and vote at the general meeting is entitled to appoint another
member as proxy. Proxies, in order to be effective, must be received at the Company's
egistered office not less than forty eight (48) hours before the time of meeting. Account and
sub-account holders of the Central Depository System appointing proxies must attach attested
copy of their National Identity Card with the proxy form.
3. Account holders and sub-account holders, holding book entry securities of the Company in
CDS of Central Depository Co. of Pakistan Ltd., who wish to attend the Annual General
Meeting are requested to please bring original National Identity Card with copy thereof duly
attested by their Bankers for identification purpose.
4. In case of corporate entity, the Board of Directors resolution / power of attorney with
specimen signature shall be submitted (unless it has been provided earlier) along with proxy
form of the Company.
5. Shareholders are requested to promptly notify the company of any change in their address.
3
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
Vision:
To be the market leader by being the best and providing the best.
Mission:
Being one of the leading manufacturers of high quality greige fabric for apparel and
home furnishing, we are committed to high quality product and customer
satisfaction.
Our mission is to continually improve our products and service for our worldwide
customers and to provide a better return to our shareholders.
We believe in keeping our production facilities equipped with the modern

technologies by continuous upgrading to be competitive in the markets.
We strive towards building log-term and better relationship with our suppliers.
We care for our employees by providing them a healthy and safe working
environment and opportunity for growth through learning and experience.
We do have a social responsibility towards our community in which we operate and

we are committed to safety, health and environment in all our operations.
4
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
Directors' Report
IN THE NAME OF ALLAH THE MOST GRACIOUS
THE MOST BENEVOLENT THE MOST MERCIFUL
The Directors have the honour to present 17th Annual report of the Company together with audited
accounts and auditors' report thereon for the year ended on June 30, 2008. Comparative figures in
the Balance Sheet and Profit & Loss a/c for the year ended on 30th June, 2007 are included.
During the year 43,790,788 linear meters (2006-07: 46,585,019 linear meters) Grey fabrics of various
widths and densities were produced. Converted into statistical standard 50 picks, production
amounted to 52,278,157 linear meters (2006-07: 57,746,681 linear meters). Actual production was
lower by 6.00% than 2006-07 (statistical production is lower by 9.47%). Fabric sales for the year
amounted to 44,220,990 meters (2006-07: 45,494,699 meters).
Total sales are valued at Rs. 2,746,371,590/= (2006-07: Rs. 2,681,574,672/=). Fabric sales value for
the year increased to Rs. 2,669,490,240/= (2006-07: Rs. 2,643,063,815/=). From May 29, 2008 the
Company has started to sell surplus Electricity to Lahore Electric Supply Company (LESCO). Sales
for the period ending June 30, 2008 amounted to Rs. 29,396,864/=.
Cost of sales amounted to 95.08% of sales (2006-07: 94.03% of sales) leaving Gross Profit of 4.92%
(2006-07: 5.97%). Other operating income for the year amounts to Rs. 6,777,660/= (2006-07: Rs.
4,406,056/=).
Distribution costs for the year were 1.17% of sales (2006-07: 1.14% of sales). Administrative
expenses are 0.92% of sales (2006-07: 0.91% of sales). Other operating expenses are 1.48% of
sales (2006-07: 0.03% of sales). Finance costs were Rs. 97,926,270/= or 3.57% of sales. (2006-07:
Rs. 93,654,516/= or 3.49% of sales).
Loss before taxation for the year is Rs. 54,021,234/= or 1.97% of sales. (2006-07: Profit Rs.
15,010,154/= or 0.56% of sales). After providing Rs. 11,056,349/= for taxation (2006-07: Rs.
10,158,749/=) Loss after tax is Rs. 65,077,583/= (2006-07: Profit Rs. 4,851,405/=). Earning per share
amounts to Loss Rs. 3.52 (2006-2007: Re. 0.26).
Under the prevailing circumstances, the loss for the year under report (2006-07) could not be avoided.
Balancing, Modernisation and Replacement of Plant & equipment is absolutely necessary for survival
in the increasing competitive market. During the year, Rs. 293,866/= on Factory Buildings, Rs.
73,339,511/= on Machinery and Equipment, Rs. 397,229/= on Factory Equipment and Rs.
8,075,097/= were spent on electric installation.
Due to Loss Directors regret their inability to recommend payment of dividend.
Government of Pakistan had fixed target for the crop year 2007-08 at 14.14 million bales of lint cotton.
According to Pakistan Cotton Ginners Association, total Kapas (seed cotton) arrivals for the season
amounted to 11,362,925 lint cotton equivalent bales. The crop was thus 8.52% lower than that of crop
year 2006-07.
According to press reports, Government of Pakistan has fixed target of 14.10 million bales of Cotton
(lint) for crop season 2008-09. According to the Pakistan Cotton Ginners Association, for 2008-09
season Kapas (seed cotton) arrivals upto September 15, 2008 amounts to 1,430,147 (2007-08:
1,012,817) lint equivalent bales. Crop upto now is 416,330 lint equivalent bales or 41.11% higher
than the previous year. At this stage it is not possible to visualize the effect the Crop size will have on
price of yarn, our basic raw material.
8
NAGINA
NAGINA GROUP
Severe recession is being feared in U.S.A., U.K., European Union, Japan and China. What effect the
recessesion will have on Pakistan economy is unknown. The Company's business in the current year
(2008-2009), so far, has remained under pressure . The Directors pray that conditions will improve so
that 2008-09 may become a profitable year.
The Company has been certified for Textile – GOTS / EKO sustainable Textile as also Textile Organic
Exchange. Hopefully, the certification will open up fresh marketing opportunities for the Company.
In the light of the company's overall objectives, the Board of Directors regularly reviews the
company's strategic direction, annual plans and performance targets set for the business. The Board
is committed to maintain the high standards of good corporate governance. There has been no
material departure from the best practices of corporate governance as detailed in the listing
regulations of the stock exchanges.
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. Company has maintained
proper books of accounts.
Appropriate accounting policies have been consistently applied in preparation of financial

statements and accounting estimates are based on reasonable and prudent judgment.
International Accounting Standards, as applicable in Pakistan, have been followed in preparation of

financial statements and non-applicability, if any, has been adequately disclosed.
System of internal control is sound in design and has been effectively implemented and monitored.
There is no doubt about the company's ability to continue as a going concern.
Operating and financial data and key ratios of 10 years are annexed.
The statements of shareholding in Form 34 and as prescribed in Listing Regulation as at June 30,
2008 are annexed.
During 2007-2008, trades in the shares of the Company were not carried out by the CFO, Company
Secretary, Directors, their spouses and minor children.
During the year four (4) meetings of the Board of Directors were held. Attendance by each Director is
as follows:
S Name Attended
#
1. Mr. Shaikh Enam Ellahi 4 (four)
2. Mr. S. M. Yusuf 4 (four)
3. Mr. Shaukat Ellahi Shaikh 4 (four)
4. Mr. Shahzada Ellahi Shaikh 4 (four)
5. Mr. Shafqat Ellahi Shaikh 3 (three)
6. Mr. Khawaja Muhammad Ali 2 (two)
7. Mr. Syed Mohsin Gilani 4 (four)
9
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
Leave of absence was granted to Directors who could not attend some of the Board meetings.
The present auditors, Messrs. M. Yousuf Adil Saleem & Co., Chartered Accountants are due to retire
and being eligible offer themselves for re-appointment.
The Directors are pleased to again record their appreciation of the continued hard work and devotion
of the staff and workers of the Company.
On behalf of the Board.
Shaukat Ellahi Shaikh

Mg. Director (Chief Executive)
Lahore: September 25, 2008.
10
NAGINA
NAGINA GROUP
STATEMENT OF COMPLIANCE WITH THE

CODE OF CORPORATE GOVERNANCE
This statement is being presented to comply with the code of corporate governance contained in
listing regulation of Karachi and Lahore Stock Exchanges for the purpose of establishing a
framework of good governance, whereby a listed company is managed in compliance with the
best practices of corporate governance.
The Company has applied the principles contained in the code in the following manner:
1. The company encourages the representation of independent non-executive directors

and directors representing minority interests on its board of directors. At present there
are five non executive directors on the Board, including two directors representing
minority shareholders.
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 resident directors of the Company are registered as taxpayers and none of them
has defaulted in payment of any loan to a banking company, a DFI or a NBFI. None of the
Directors are or were members of any Stock Exchange.
4. No casual vacancy occurred in the Board during the year.
5. The business of the Company is conducted in accordance with the 'Statement of Ethics
and Business Practice' signed by all the directors and employees.
6. The business operations of the Company are carried out in accordance with the
Company's vision/mission statement, overall corporate strategy and significant policies.
A complete record of particulars of significant policies along with the dates on which they
were approved or amended has been maintained.
7. All the powers of the Board have been duly exercised and decisions on material
transactions, including appointment and determination of remuneration and terms and
conditions of employment of the CEO and other executive directors, have been taken by
the Board.
8. The meetings of the Board were presided over by the Chairman and, in his absence, by
a director elected by the Board for this purpose and the Board met at least once in every
quarter. Written notices of the Board meetings, along with agenda and working papers,
were circulated at least seven days before the meeting. The minutes of the meetings
were appropriately recorded and circulated.
9. No specific orientation course was held during the year. However, the management
continue to apprise and familiarize with changes in law to discharge their duties and
responsibilities.
11
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
10. The CFO, Company Secretary and Head of Internal Audit have executed their
responsibilities pursuant to the approved appointment by the Board including their
remuneration and terms and conditions of employment, as determined by the CEO.
11. The directors' report for this year has been prepared in compliance with the
requirements of the Code and fully describes the salient matters required to be
disclosed.
12. The financial statements of the Company were duly endorsed by CEO and CFO before
approval of the Board.
13. The directors, CEO and executives do not hold any interest in the shares of the
Company other than that disclosed in the pattern of shareholding.
14. The Company has complied with all the corporate and financial reporting requirements
of the Code.
15. The audit committee as formed by the Board is fully functional. The committee
comprises three members, all of whom are non-executive directors including the
chairman of the committee.
16. The meetings of the audit committee were held at least once every quarter prior to
approval of interim and final results of the Company and as required by the Code. The
terms of reference of the committee have been formed and advised to the committee for
compliance.
17. The Board has set up an effective internal audit function.
18. The statutory auditors of the company have confirmed that they have been given a
satisfactory rating under the Quality Control review program of the Institute of Chartered
Accountants of Pakistan, that they or any of the partners of the firm, their spouses and
minor children do not hold shares of the company and that the firm and all its partners are
in compliance with International Federation of Accountants (IFAC) guidelines on code of
ethics as adopted by Institute of Chartered Accountants of Pakistan.
19. The statutory auditors or the 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. We confirm that all other material principles contained in the Code have been complied
with.
for & on behalf of the Board
SHAUKAT ELLAHI SHAIKH

Mg. Director (Chief Executive)
12
NAGINA
NAGINA GROUP
OPERATING FINANCIAL & INVESTING RATIOS

AS ON 30TH JUNE:
YEAR PERIOD
ENDED 30TH ENDED 30TH YEAR ENDED 30TH SEPTEMBER
JUNE JUNE
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
COST OF SALES AS %OF SALES % 95.08 94.04 92.45 93.12 93.91 90.42 88.74 91.53 85.52 85.95
GROSS PROFIT AS %OF SALES % 4.92 5.96 7.55 6.88 6.09 9.58 11.26 8.47 14.48 14.05
OPERATING PROFIT AS %OF SALES % 2.84 3.92 5.47 4.17 3.16 5.89 7.14 4.77 10.21 9.65
NET PROFIT/(LOSS) AS %OF SALES % (2.37) 0.18 1.07 0.81 1.82 4.12 3.45 1.13 6.88 4.84
SHARE HOLDER’S EQUITY MLN RS. 290.56 355.00 350.30 321.64 333.14 300.68 272.78 226.98 243.97 182.28
PRE TAX PROFIT TO EQUITY % (18.59) 4.18 14.08 6.85 14.19 24.42 24.89 12.01 36.30 33.34
AFTER TAX PROFIT TO EQUITY % (22.40) 1.32 8.18 4.26 9.74 20.45 19.94 7.32 32.17 25.89
SALES TO CAPITAL EMPLOYED 2.05 2.23 2.38 1.68 1.82 2.47 3.28 3.40 2.23 2.74
GROSS PROFIT TO CAPITAL EMPLOYED % 10.10 13.29 17.95 11.58 11.12 23.66 36.90 28.77 32.30 38.47
PRE TAX PROFIT TO CAPITAL EMPOLYED % (4.04) 1.23 4.39 2.34 4.83 12.14 14.12 6.29 17.32 17.07
AFTER TAX PROFIT TO CAPITAL EMPLOYED % (4.87) 0.39 2.55 1.36 3.32 10.17 11.31 3.83 15.35 13.25
EARNING PER SHARE - PRE TAX RS. (2.92) 0.80 2.94 1.31 2.81 4.37 4.04 1.62 5.27 3.62
EARNING PER SHARE - AFTER TAX RS. (3.52) 0.25 1.71 0.82 1.93 3.66 3.24 0.99 4.67 2.81
DIVIDEND TO CAPITAL
CASH % 0.00 0.00 0.00 0.00 15.00 20.00 15.00 20.00 10.00 30.00
BONUS % 0.00 10.00 10.00 0.00 0.00 0.00 0.00 0.00 75.00 0.00
BREAK UP VALUE PER SHARE RS. 15.72 19.21 20.85 19.15 19.83 17.90 16.24 13.51 14.52 18.99
DEBT EQUITY RATIO 77.53 69.38 67.59 68.17 65.93 50.30 43.27 47.67 52.29 48.80
CURRENT RATIO 1.47 1.01 1.03 0.96 0.93 1.01 1.07 1.04 1.02 1.07
ACID RATIO 0.98 0.66 0.84 0.66 0.77 0.85 0.88 0.87 0.86 0.95
TOTAL DEBTS TO TOTAL ASSETS % 64.39 51.14 51.33 46.15 44.77 26.09 21.23 20.02 26.88 20.95
STOCK AS % OF SALES % 10.81 9.88 6.37 9.70 5.86 5.06 4.15 5.52 5.65 5.16
13
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
Pattern of Shareholding
As at 30th June, 2008
T o tal
S # N am e S h ares P ercen tag e
1) A S S O C IA T E D C O M P A N IE S , U N D E R T A K IN G S A N D
R E L A T E D P A R T IE S
i) M /S . N A G IN A C O TTO N M ILLS LTD . 1,012,302 5.48
ii) M /S . E LLA H I IN TE R N A TIO N A L (P V T) LTD . 3,668,390 19.85
iii) M /S . A R H (P V T) LTD . 1,678,242 9.08
iv) M /S . M O N E LL (P V T) LTD . 9,130 0.05
2) N IT an d IC P
I)
i) NATIONAL
N ATIO N AL BANBANK OF PAKISTAN
K O F PAKISTAN IN VESTARINVESTOR
A/C (FO R M ER A/C
N D FC(FORMER
) NDFC) 3,800 0.02
ii) NATIONAL
N ATIO N AL BANBANK OF PAKISTAN,
K O F PAKISTAN ,TR U STEE DTRUSTEE
EPTT. DEPTT. 1,083 0.01
iii) NBP
N BP TRTRUSTEE
U STEE - N I(U-)TNI(U)
(LO C ) T
FU(LOC)
ND FUND 1,117 0.01
iv) INVESTMENT
IN V E S TM E N T CORPORATION
C O R P O R A TIO N OF
O F PAKISTAN
P A K IS TA N 770 0.01
3) D IR E C T O R C E O A N D T H E IR S P O U S E A N D M IN O R
C H IL D R E N .
i) M R . S H A IK H E N A M E LLA H I 222,687 1.21
ii) M R . S H A H Z A D A E LLA H I S H A IK H 3,205,290 17.34
iii) M R . S H A U K A T E LLA H I S H A IK H 3,213,650 17.39
iv) M R . S H A F Q A T E LLA H I S H A IK H 3,205,180 17.34
v) M R S . H U M A IR A S H A H Z A D A 2,722 0.01
vi) M R S . M O N A S H A U K A T 2,722 0.01
vii) M R S . S H A IS TA S H A F Q A T 2,722 0.01
viii) M R . S .M . YU S U F 1,402 0.01
ix) M R . S YE D M O H S IN G ILA N I 550 -
x) M R . K H A W A JA M U H A M M A D A LI 770 0.01
4) E X E C U T IV E S N il Nil N il Nil
5) P U B L IC S E C T O R C O M P A N IE S & C O R P O R A T IO N S
i) P A K IS TA N K U W A IT IN V E S TM E N T C O . (P V T) LTD . 1,149,940 6.22
ii) NNIB BANK
IB BAN LIMITED
K LIM ITED 127,820 0.69
iii) S TA TE LIF E IN S U R A N C E C O R P . O F P A K IS TA N 140,140 0.76
6) B A N K S , D E V E L O P M E N T F IN A N C E IN S T IT U T IO N S ,
N O N -B A N K IN G F IN A N C E IN S T IT U T IO N S , IN S U R A N C E
C O M P A N IE S , M O D A R A B A S A N D M U T U A L F U N D S N il Nil N il Nil
G E N E R A L P U B L IC (324 S h areh o ld ers) 829,571 4.49

S h areh o ld ers o f th e C o m p an y 344 T o tal:- 18,480,000 100.00
7) S H A R E H O L D E R S H O L D IN G 10% O R M O R E
i) M R . S H A H Z A D A E LLA H I S H A IK H 3,205,290 19.08
17.34
ii) M R . S H A U K A T E LLA H I S H A IK H 3,213,650 19.13
17.39
iii) M R . S H A F Q A T E LLA H I S H A IK H 3,205,180 19.08
17.34
iv) M /S . E LLA H I IN TE R N A TIO N A L (P V T) LTD . 3,668,390 21.84
19.85
M /s. N agina C otton M ils Ltd., had distributed 7,480,000 ordinary shares of M /s. P rosperity
W eaving M ills Ltd., am ong its m em bers, out of w hich 77,000 ordinary shares have yet to be
transferred by the m em bers of M /s. N agina C otton M ills Ltd., T hese shares have been show n
under the head "G eneral P ublic".
14
NAGINA
NAGINA GROUP
15
AUDITORS
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
BALANCE SHEET
AS AT JUNE 30, 2008 (restated)
June 30 June 30
2008 2007
Note Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES

Authorized share capital
20,000,000 (June 30, 2007: 20,000,000) ordinary
shares of Rs. 10 each 200,000,000 200,000,000
Issued, subscribed and paid up share capital 3 184,800,000 184,800,000

Capital reserve 4 16,600,000 16,600,000
Un-appropriated profit 89,154,677 154,232,260
290,554,677 355,632,260
SURPLUS ON REVALUATION OF LAND 43,708,234 43,708,234
NON-CURRENT LIABILITIES
Long-term financing
- from banking companies 5.1 741,791,768 579,863,320
- from directors, subordinated loans 5.2 104,493,000 60,000,000
Liabilities against assets subject to finance lease 6 1,258,986 -
Deferred liabilities
- employee benefits 7.1.1 11,652,020 20,287,314
- deferred taxation 7.2 - 2,819,520
CURRENT LIABILITIES
Trade and other payables 8 90,023,962 79,826,304

Mark-up accrued on loans 9 21,983,950 25,230,541
Short-term borrowings 10 96,554,685 238,782,373
Current portion of long-term liabilities 11 155,257,810 164,497,130
363,820,407 508,336,348
CONTINGENCIES AND COMMITMENTS 12 - -
1,557,279,092 1,570,646,996
The annexed notes from 1 to 42 form an integral part of these financial statements.
Shahzada Ellahi Shaikh

Lahore: September 25, 2008 Director
18
NAGINA
NAGINA GROUP
BALANCE SHEET
AS AT JUNE 30, 2008
(restated)
June 30 June 30
2008 2007
Note Rupees Rupees
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 13 1,021,502,465 1,051,283,725

Long-term deposits 14 374,497 373,497
1,021,876,962 1,051,657,222
CURRENT ASSETS
Stores, spare parts and loose tools 15 34,572,371 25,700,934

Stock-in-trade 16 296,829,387 264,956,166
Trade debts 17 145,829,728 131,417,050
Advances 18 11,143,833 15,185,342
Short-term prepayments 19 669,760 829,235
Other receivables 20 1,043,507 1,656,226
Advance income tax 21 22,329,478 21,965,194
Sales tax refundable 22 13,986,165 13,531,878
Cash and bank balances 23 8,997,901 43,747,749
535,402,130 518,989,774
1,557,279,092 1,570,646,996
Shaukat Ellahi Shaikh

Chief Executive Officer/(Mg. Director)
19
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED JUNE 30, 2008
(restated)
For the year For the year

ended June 30, ended June 30,
2008 2007
Note Rupees Rupees
Sales - net 24 2,746,371,590 2,681,574,672

Cost of sales 25 2,611,344,422 2,521,573,588
Gross profit 135,027,168 160,001,084
Other operating income 26 6,777,660 4,406,056
141,804,828 164,407,140
Distribution cost 27 32,019,499 30,575,748
Administrative expenses 28 25,144,927 24,268,925
Other operating expenses 29 40,735,366 897,797
Finance cost 30 97,926,270 93,654,516
195,826,062 149,396,986
(Loss) / profit before taxation (54,021,234) 15,010,154
Provision for taxation 31 11,056,349 10,158,749
(Loss) / profit for the year (65,077,583) 4,851,405
(Loss) / earnings per share - basic and diluted 32 (3.52) 0.26
Shahzada Ellahi Shaikh Shaukat Ellahi Shaikh

Lahore: September 25, 2008 Director Chief Executive Officer/(Mg. Director)
20
NAGINA
NAGINA GROUP
CASH FLOW STATEMENT

(restated)
2008 2007
Note Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) / profit before taxation (54,021,234) 15,010,154
Adjustments for:
Depreciation of property, plant and equipment 13.1.2 106,897,931 103,629,252
Provision for employee benefits 7.1.1 806,433 8,224,851
Gain on disposal of property, plant and equipment 13.1.4 (4,364,126) (9,408)
Finance cost 30 97,926,270 93,654,516
147,245,274 220,509,365
Working capital changes
(Increase)/decrease in stores, spare parts and loose tools 15 (8,871,437) 2,075,242
Increase in stock-in-trade 16 (31,873,221) (94,617,920)
Increase in trade debts 17 (14,412,678) (5,337,014)
Decrease in advances 18 4,041,509 32,676,641
Decrease/(increase) in short-term prepayments 19 159,475 (402,818)
Decrease/(increase) in other receivables 20 612,719 (153,902)
Increase in trade and other payables 8 10,197,658 17,103,880
(40,145,975) (48,655,891)
Cash generated from operations 107,099,299 171,853,474
Finance cost paid (101,172,861) (97,867,093)
Employee benefits paid 7.1.1 (9,441,727) (5,297,552)
Income taxes paid (14,240,153) (20,643,008)
Sales tax (paid)/refunded 22 (454,287) 13,706,824
(125,309,028) (110,100,829)
Net cash (used in)/from operating activities (18,209,729) 61,752,645
CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment 13.1 (77,373,247) (159,390,722)
Proceeds from disposal of property, plant and equipment 13.1.4 6,505,000 54,000
(Increase)/decrease in long-term deposits 14 (1,000) 55,000
Net cash used in investing activities (70,869,247) (159,281,722)
CASH FLOWS FROM FINANCING ACTIVITIES

Payment of long-term financing 5 (327,199,184) (193,190,712)
Proceeds from long-term financing 5 523,756,000 267,159,824
(Decrease)/increase net in short-term borrowings 10 (142,227,688) 64,695,817
Net cash from financing activities 54,329,128 138,664,929
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (34,749,848) 41,135,852

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 23 43,747,749 2,611,897
CASH AND CASH EQUIVALENTS AT END OF YEAR 8,997,901 43,747,749

21
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
STATEMENT OF CHANGES IN EQUITY

Capital Reserve for Un-

Share capital reserve issue of bonus appropriated Total
(Note - 4) shares profit
Note - - - - - - - - - - - - - - - - - - - - - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - -
Balance as at June 30, 2006 as previously

reported 168,000,000 16,600,000 - 165,701,176 350,301,176
Cumulative effect of prior period error 36.2 - - - 479,679 479,679
Balance as at June 30, 2006 as restated 168,000,000 16,600,000 - 166,180,855 350,780,855
Transferred to reserve for issue of bonus shares - - 16,800,000 (16,800,000) -
Issue of 10% bonus shares 16,800,000 - (16,800,000) - -
Profit for the year ended June 30, 2007 (restated) - - - 4,851,405 4,851,405
Balance as at June 30, 2007 184,800,000 16,600,000 - 154,232,260 355,632,260
Loss for the year ended June 30, 2008 - - - (65,077,583) (65,077,583)
Balance as at June 30, 2008 184,800,000 16,600,000 - 89,154,677 290,554,677

22
NAGINA
NAGINA GROUP
NOTES TO THE FINANCIAL STATEMENTS

1 GENERAL INFORMATION
1.1 Prosperity Weaving Mills Limited ("the Company") was incorporated in Pakistan on November 20, 1991 as a public
limited company under the Companies Ordinance, 1984 ("the Ordinance"). The registered office of the Company is
situated at Nagina House, 91-B-1, M.M. Alam Road, Gulberg-III, Lahore. The Company is currently listed on
Karachi Stock Exchange (Guarantee) Limited and Lahore Stock Exchange (Guarantee) Limited. The principal
activity of the Company is manufacturing and sale of woven cloth and power generation. The Mill is located at
District Sheikhupura in the Province of Punjab.
1.2 These financial statements are presented in Pak Rupees, which is the Company's functional and presentation
currency.
2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance
These financial statements have been prepared in accordance with the requirements of the Ordinance, 1984 ("the
Ordinance") and directives issued by the Securities and Exchange Commission of Pakistan ("SECP"), and approved
accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International
Financial Reporting Standards as notified under the provisions of the Ordinance. Wherever, the requirements of
the Ordinance or directives issued by the SECP differ with the requirements of these standards, the requirements
of the Ordinance or the requirements of the said directives take precedence.
2.2 Initial application of a standard or an interpretation

Amendment to IAS 1 - "Presentation of Financial Statements - Capital Disclosures", introduces new disclosures
about the level of an entity's capital and how it manages capital. Adoption of this amendment has only resulted in
additional disclosures given in note 38 to the financial statements.
2.2.1 New accounting standards and IFRIC interpretations that are not yet effective
The following standards, interpretations and amendments of approved accounting standards are effective for
accounting periods beginning from the dates specified below. These standards are either not relevant to the
Company's operations or are not expected to have significant impact on the Company's financial statements other
than increase in disclosures in certain cases:
Revised IAS 1 - Presentation of financial statements (effective for annual periods beginning on or after 1 January
2009).
Revised IAS 23 - Borrowing costs (effective from 1 January 2009).

IAS 29 - Financial Reporting in Hyperinflationary Economies (applicable for period beginning from 28 April 2008).
IAS 32 (amendment) - Financial instruments: Presentation and consequential amendment to IAS 1 - Presentation
of Financial Statements (effective for annual period beginning on or after 1January 2009).
IFRS 2 (amendment) - Share-based payments (effective for annual periods beginning on or after 1 January 2009).
IFRS 3 (amendment) - Business Combinations and consequential amendments to IAS 27 - Consolidated and
separate financial statements, IAS 28 - Investment in associates and IAS 31 - Interest in Joint Ventures. (effective
prospectively to business combination).
IFRS 5 - Non-current assets held for sale and discontinued operations (applicable for periods beginnings from 01
January 2007).
IFRS 7 - Financial Instruments: Disclosures (applicable for periods beginnings from 28 April 2008).
IFRS 8 - Operating Segments (effective from 1 January 2009).
23
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
IFRIC 12 - Service Concession Arrangements (effective for annual periods beginning on or after 1 January 2008).
IFRIC 13 - Customer Loyalty Programmes (effective for annual periods beginning on or after 1 July 2008).
IFRIC 14 IAS 19 - The Limit on Defined Benefit Asset, Minimum Funding Requirements and their interaction
(effective for annual periods beginning on or after 1 January 2008).
IFRIC 15 - Agreements for the Construction of Real Estate (effective for annual periods beginning on or after 1
January 2009).
IFRIC 16 - Hedges of a Net Investment in a Foreign Operation (annual periods beginning on or after 1 October
2008).
IFAS 2 - Ijarah (effective from annual periods beginning on or after July 01, 2007).
2.3 Basis of preparation
These financial statements have been prepared under historical cost convention modified by:
- revaluation of certain property, plant and equipment
- financial instruments at fair value
- recognition of certain employee retirement benefits at present value
2.4 The principal accounting policies are set out below:
2.4.1 Significant estimates
The preparation of financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under circumstances, results of which form the basis of making
judgment about carrying value of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which estimates are revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
Judgments made by management in the application of IFRS that have significant effect on the financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in the
ensuing paragraphs.
Employee benefits
The Company operates an unfunded gratuity scheme (defined benefit plan) for all its permanent employees who
have completed minimum qualifying period of service as defined under the respective scheme. Provisions are
made annually to cover the obligation under the scheme on the basis of actuarial valuation and are charged to
income.
The calculation requires assumptions to be made of future outcomes, the principal ones being in respect of
increases in remuneration and discount rate used to derive present value of defined benefit obligation. The
assumptions are determined by independent actuaries after every three years.
Property, plant and equipment

The Company reviews the useful lives of property, plant and equipment on regular basis. Any change in the
estimates in future years might affect the carrying amounts of the respective items of property, plant and
equipment with a corresponding effect on the depreciation charge and impairment.
Taxation
The Company takes into account the current income tax law and decisions taken by appellate authorities.
Instances where the Company's view differs from the view taken by the income tax department at the assessment
stage and the Company considers that its view on items of material nature is in accordance with law, the
amounts are shown as contingent liabilities.
24
NAGINA
NAGINA GROUP
2.4.2 Property, plant and equipment
Property, plant and equipment except freehold land and capital work-in-progress are stated at cost less
accumulated depreciation and impairment in value, if any. Freehold land is stated at revalued amount. Capital
work-in-progress and stores held for capital expenditure are stated at cost. Cost also includes borrowing cost
wherever applicable.
Assets' residual values, if significant and their useful lives are reviewed and adjusted, if appropriate at each
balance sheet date.
When significant parts of an item of property, plant and equipment have different useful lives, they are
recognized as separate items of property, plant and equipment.
Subsequent costs are recognized as part of asset, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably. All other
repair and maintenance costs are charged to income during the period in which they are incurred.
Depreciation is charged to profit and loss account applying the reducing balance method over its estimated useful
life at the rates specified in relevant note to the financial statements. Depreciation on additions to property,
plant and equipment is charged from the month in which property, plant and equipment is available for use while
no depreciation is charged for the month in which property, plant and equipment is disposed off.
Exchange differences in respect of foreign currency loans obtained for acquisition of property, plant and
equipment are recognized in the profit and loss account, as and when incurred.
Surplus arising on revaluation of property, plant and equipment is credited to surplus on revaluation of property,
plant and equipment. The surplus on revaluation of property, plant and equipment to the extent of incremental
depreciation charged on the related property, plant and equipment during the year is transferred by the Company
to its un-appropriated profit.
Gain or loss on disposal of property, plant and equipment, if any, is recognized in the profit and loss account, as
and when incurred.
All expenditures connected with specific assets incurred during installation and construction period are carried
under capital work-in-progress. These are transferred to specific assets as and when these assets are available for
use.
2.4.3 Assets subject to finance lease
Assets subject to finance lease are depreciated over their expected useful lives on the same basis as owned
assets.
2.4.4 Stores, spare parts and loose tools
These are valued at the cost, determined on moving average basis less allowance for obsolete and slow moving
items. Items in transit are valued at invoice values plus other charges incurred thereon.
2.4.5 Stock-in-trade
These are valued at the lower of cost and net realizable value applying the following bases:
Raw material First in first out
Work-in-process Average manufacturing cost
Finished goods Average manufacturing cost
Waste Net realizable value
Raw material in transit is stated at invoice value plus other charges paid thereon up to the balance sheet date.
Average manufacturing cost in relation to work-in-process and finished goods consists of direct material, labor
and a proportion of manufacturing overheads based on normal capacity.
Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of
completion and estimated costs necessary to make the sale.
25
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
2.4.6 Impairment
The Company assesses at each balance sheet date whether there is any indication that assets except deferred tax
assets may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess
whether they are recorded in excess of their recoverable amount. Where carrying values exceed the respective
recoverable amount, assets are written down to their recoverable amount and the resulting impairment loss is
recognized in profit and loss account. The recoverable amount is the higher of an asset's fair value less costs to
sell and value in use.
Where impairment loss subsequently reverses, the carrying amount of the assets is increased to the revised
recoverable amount but limited to the extent of carrying amount that would have been determined had no
impairment loss been recognized in prior periods. Reversal of impairment loss is recognized as income.
2.4.7 Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument and de-recognized when the Company loses control of the contractual rights that
comprise the financial asset and in case of financial liability when the obligation specified in the contract is
discharged, cancelled or expired.
Financial instruments are initially recorded at fair value on the date a derivative contract is entered into and are
re-measured to fair value at subsequent reporting dates.
The gain or loss relating to financial instruments is recognized immediately in the profit and loss account.
Particular recognition methods adopted by the Company are disclosed in the individual policy statements
associated with each item of financial instruments.
2.4.8 Off setting of financial assets and financial liabilities
A financial asset and a financial liability is offset and the net amount reported in the balance sheet, if the
Company has a legal enforceable right to set off the transaction and also intends either to settle on a net basis or
to realize the asset and settle the liability simultaneously.
2.4.9 Trade debts and other receivables
Trade debts and other receivables are carried at original invoice amount less an estimate made for doubtful debts
and receivables based on review of outstanding amounts at the period end. Balances considered bad and
irrecoverable are written off when identified.
2.4.10 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash
and cash equivalents consist of cash in hand and balances with banks, highly liquid short-term investments that
are convertible to known amount of cash and are subject to insignificant risk of change in value.
2.4.11 Trade and other payables
Liabilities for trade and other payables are carried at their fair value of the consideration to be paid in the future
for goods and services received whether billed to the Company or not.
2.4.12 Employee benefits
The Company operates an unfunded gratuity scheme (defined benefit plan) for all its permanent employees who
have completed minimum qualifying period of service as defined under the respective scheme. Provisions are
made annually to cover the obligation under the schemes on the basis of actuarial valuation and are charged to
income.
26
NAGINA
NAGINA GROUP
The amount recognized in the balance sheet represents the present value of defined benefit obligations as
adjusted for unrecognized actuarial gains and losses.
Cumulative net unrecognized actuarial gains and losses at the end of previous year which exceeds 10% of the
present value of the Company’s liability is amortized over the average expected remaining working lives of the
employees.
Details of the schemes are given in the relevant note to these financial statements.
2.4.13 Compensated absences
The Company provides for compensated absences of its employees on unavailed balance of leaves in the period in
which the leaves are earned.
2.4.14 Provisions
Provisions are recognized in the balance sheet when the Company has a present, legal or constructive obligation
as a result of past events, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate of the amount of obligation can be made. Provisions are
reviewed at each balance sheet date and adjusted to reflect the current best estimate.
2.4.15 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for goods and services provided in the normal course of business.
Sales of goods are recognized when goods are delivered and title has been passed.
Revenue from sale of electricity is recognized on transmission of electricity to Lahore Electric Supply Company.
Export rebate is recognized on accrual basis at the time of making the export sales.
Profit on saving accounts is accrued on a time basis, by reference to the principal outstanding and at the
effective profit rate applicable.
2.4.16 Borrowings
Loans and borrowings are initially recorded at the proceeds received. In subsequent periods, borrowings are
stated at amortized cost using the effective yield method. Finance cost is accounted for on an accrual basis and
are included in mark-up accrued on loans to the extent of amount remaining unpaid, if any.
2.4.17 Leases
Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognized as assets of the company at their fair value at the inception of
the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the
lessor is included in the balance sheet as liabilities against assets subject to finance lease. The liabilities are
classified as current and long-term depending upon the timing of payment. Lease payments are apportioned
between finance cost and reduction of the liabilities against assets subject to finance lease so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance cost is charged to profit and loss
account.
Rentals payable under operating leases are charged to profit and loss account on a straight-line basis over the
term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are
also spread on a straight-line basis over the lease term.
27
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
2.4.18 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in profit and loss in the period in which they are incurred.
2.4.19 Taxation
Current
The charge for current taxation is based on taxable income at the current rate of taxation after taking into
account applicable tax credits, rebates and exemptions available, if any, or minimum taxation at the rate of half
percent of the turnover whichever is higher. However, for income covered under final tax regime, taxation is
based on applicable tax rates under such regime.
Deferred
Deferred taxation is provided using the liability method for all temporary differences at the balance sheet date
between tax bases of assets and liabilities and their carrying amount for financial reporting purposes. In this
regard the effects on deferred taxation of the portion of income subject to final tax regime is also considered in
accordance with the requirement of "Technical Release - 27" and "Technical Release - 30" of the Institute of
Chartered Accountants of Pakistan.
Deferred income tax liability is recognized for all taxable temporary differences. Deferred income tax asset is
recognized for all deductible temporary differences and carry forward of unused tax losses, if any, to the extent
that it is probable that taxable profit will be available against such temporary differences and tax losses can be
utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to be applied to the
period when the asset is realized or the liability is settled, based on tax rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is charged or credited in the income statements,
except in the case of items credited or charged to equity in that case it is included in equity.
2.4.20 Foreign currencies
Transactions in currencies other than Pak Rupees are recorded at the rates of exchange prevailing on the dates of
the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing on the balance sheet date except where forward exchange
contracts have been entered into for repayment of liabilities, in that case, the rates contracted for are used.
Gains and losses arising on retranslation are included in profit and loss for the year.
2.4.21 Dividend
Dividend is recognized in the period in which it is paid.
2.4.22 Related party transactions
Transactions with related parties are priced on arm’s length basis. Prices for these transactions are determined
on commercial terms and conditions.
28
NAGINA
NAGINA GROUP
June 30 June 30
2008 2007
3 ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL Rupees Rupees
Number of shares
2008 2007
Ordinary shares of Rs. 10 each
9,600,000 9,600,000 - fully paid in cash 96,000,000 96,000,000
8,880,000 8,880,000 - issued as bonus shares 88,800,000 88,800,000
18,480,000 18,480,000 184,800,000 184,800,000
June 30 June 30
2008 2007
Number of shares
3.1 Reconciliation of number of ordinary shares of Rs. 10 each.
At beginning of year 18,480,000 16,800,000

Add: bonus shares issued during the year - 1,680,000
At end of year 18,480,000 18,480,000
3.2 The Company has one class of ordinary shares which carry no right to fixed income.
3.3 Following shares were held by associates of the Company as at balance sheet date:
June 30 June 30
2008 2007
Number of ordinary shares of Rs. 10
each
Nagina Cotton Mills Limited 1,012,302 1,012,302

Ellahi International (Private) Limited 3,668,390 3,668,390
ARH (Private) Limited 1,678,242 1,678,242
Monell (Private) Limited 9,130 9,130
6,368,064 6,368,064
June 30 June 30
2008 2007
Note Rupees Rupees
4 CAPITAL RESERVE 4.1 16,600,000 16,600,000
4.1 This represents the difference between book value of shares held by the Company in Ellahi Electric Company
Limited as at September 30, 2001 and breakup value of such shares at that date, the value at which net assets
and liabilities of Power Unit 3 of Ellahi Electric Company Limited were merged into Prosperity Weaving Mills
Limited.
29
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
June 30 June 30
2008 2007
5 LONG-TERM FINANCING Note Rupees Rupees
5.1 From banking companies 5.1 896,694,370 744,360,450

Less: current portion 154,902,602 164,497,130
741,791,768 579,863,320
5.2 From directors - subordinated loans 5.2.1 104,493,000 60,000,000
846,284,768 639,863,320
5.1 From banking companies :

Description Note Interest ------------------------- Other terms and conditions --------------------------------
Security Arrangements and repayment
Term finance 7.00% (June 30, 2007: 7.00%) The loan is secured by first pari passu This facility has been created under the LTF- 7,568,051 11,352,077
per annum payable hypothecation charge over all present and EOP Scheme of State Bank of Pakistan from
quarterly. future fixed and floating assets of the the existing facility of Rs. 95 million of
Company amounting to Rs. 175 million and Askari Commercial Bank. The facility is
personal guarantee of directors of the repayable in seven equal half yearly
Company. installments, commenced from April 25,
2007.
Term finance Three months average ask This loan has been repaid during the year. This loan has been repaid during the year. - 59,897,923
KIBOR plus spread of 1.75%
with a floor of 9.00% per
annum (June 30, 2007:
Three months average ask
KIBOR plus spread of 1.75%
with a floor of 9.00% per
annum) payable quarterly.
Term finance 5.1.1 6.00% (June 30, 2007: 6.00%) The loan is secured by first registered pari This facility has been converted to LTF-EOP 66,666,668 111,111,112
per annum payable passu charge on fixed assets of the Scheme of State Bank of Pakistan. The loan
quarterly. Company amounting to Rs. 242 million and is repayable in nine equal half yearly
personal guarantee of directors of the installments, commenced from September
Company. 05, 2005.
FAF 5.1.2 7.00% (June 30, 2007: 7.00%) The loan is secured by first registered pari This facility has been converted to LTF-EOP 218,181,816 290,909,090
per annum payable passu charge on fixed assets of the Scheme of State Bank of Pakistan. The loan
quarterly. Company amounting to Rs. 472 million and is repayable in eleven equal half yearly
personal guarantee of directors of the installments, commenced from June 28,
Company. 2006.
Term finance 7.00% per annum payable The loan is secured by first exclusive charge The loan is repayable in twelve equal sami 54,263,000 -
quarterly. of Rs. 60 million on gas power generator annual installments, commencing from
imported through bank and first pari passu January 4, 2009.
registered hypothecation charge on all
present and future fixed assets of the
Company amounting to Rs. 175 million and
personal guarantee of directors of the
Company.
Term finance 7.00% (June 30, 2007: 7.00%) First pari passu charge on all present and The facility has been provided by the bank in 69,644,918 85,716,824
per annum payable future fixed assets including land, building, two tranches of Rs. 31.4 million and Rs. 54.3
quarterly. plant and machinery of the Company million respectively under LTF-EOP scheme
excluding power generation plant of Ellahi of State Bank of Pakistan. The loan is
Electric Company installed at the premises repayable in sixteen equal quarterly
of the Company to the extent of Rs. 160 installments, commenced from October 24,
million and personal guarantee of directors 2007 and November 23, 2007 respectively.
30
NAGINA
NAGINA GROUP
June 30 June 30
2008 2007
Rupees Rupees
Term finance Three months average ask First pari passu charge on all present and The loan is repayable in sixteen equal 21,484,936 26,443,000
KIBOR plus 2.25% (June 30, future fixed assets including land, building, quarterly installments, commencing from
2007: Three months average plant and machinery of the Company November 28, 2007.
ask KIBOR plus 2.25%) per excluding power generation plant of Ellahi
annum payable quarterly. Electric Company installed at the premises
of the Company to the extent of Rs. 160
million and personal guarantee of directors
of the Company.
Term finance Six months KIBOR plus 1.00% This loan has been repaid during the year. This loan has been repaid during the year. - 55,000,000
(June 30, 2007: Six months
KIBOR plus 1.00%) per annum
payable quarterly.
Demand finance Six months KIBOR plus 2.00% First pari passu charge on fixed assets The loan is repayable in eight equal half 87,500,000 100,000,000
(June 30, 2007: Six months (excluding land & building) of the Company yearly installments, commencing from March
KIBOR plus 2.00%) per annum amounting to Rs. 133 million and personal 31, 2009.
payable quarterly. guarantee of directors of the Company.
Car finance Six months KIBOR plus 1.00% Hypothecation of vehicle having cost of Rs. The loan is repayable in 36 equal monthly 13,84,981 3,930,424
with floor of 11.50% per 8.5 million with the bank. installments commenced from January 01,
annum (June 30, 2007: Six 2006.
months KIBOR plus 1.00%
with floor of 11.50% per
annum) payable monthly.
Term finance Six months KIBOR plus 1.75% First pari passu charge on fixed assets of The loan is repayable in seven equal sami 250,000,000 -
per annum payable sami the Company amounting to Rs. 334 million annual installments, commencing from May
annually. and personal guarantee of directors of the 15, 2010.
Company.
Term finance Six months KIBOR plus 1.50% First pari passu charge on all present and The loan is repayable in eight equal sami 120,000,000 -
per annum payable sami future fixed assets including land, building, annual installments, commencing from
annually. plant and machinery of the Company December 31, 2009.
excluding power generation plant of Ellahi
Electric Company installed at the premises
of the Company to the extent of Rs. 160
million and personal guarantee of directors
of the Company.
896,694,370 744,360,450
5.1.1 The Company entered into an interest rate swapping agreement with a commercial bank in respect of this loan. The agreement is effective from September 2005 and has following
significant terms:
Notional amount As per amortization schedule starting from Rs. 177.77 million in accordance with repayment schedule of the loan.
Maturity Similar to the loan.

Mark-up to be paid by Co. on notional amount At 8.56% per annum.
Mark-up (to be received) At average rate for 121-180 days (6 months) on the PKRV Reuters page on the day that is one Karachi Business Day prior to each
interest period start date as published on Reuters page PKRV.
31
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
5.1.2 During November 2004, the Company entered into an interest rate swapping agreement with a commercial bank in respect of this loan. The significant terms of the agreement are as
follows:
Notional amount As per amortization schedule starting from Rs. 100 million and reducing through out the remaining loan period.
Maturity Similar to the loan.
Mark-up to be paid by Co. on notional amount at 7.39% per annum.
Mark-up (to be received) KIBOR 6 – month rate, prevailing on each reset date, published on Reuters page “KIBOR” or other mutually acceptable forms of
media.
The arrangement did not have any material affect during the pervious year.
5.2.1 In view of agreements with a commercial bank for financing facility amounting to Rs. 120 million (disbursed to the Company on July 24, 2006 repayable in sixteen equal quarterly
installments commencing from October 24, 2007) and financing facility amounting to Rs. 120 million (disbursed to the Company on June 30, 2008 repayable in eight equal semi annual
installments commencing from December 31, 2009), the three directors of the Company have extended loans to the Company being subordinate to the said financing facility. These carries
markup at the rate of 6 months KIBOR plus 2.00% per annum and is repayable only after complying with the covenants as per term of the bank's loan. Directors may waive full or partial
payment of mark-up on the loan.
June 30 June 30
2008 2007
6 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE Note Rupees Rupees
Present value of minimum lease payments 1,614,194 -

Less: current portion 355,208 -
6.1 1,258,986 -
This represents vehicles acquired under finance lease arrangement from a banking company. The rentals under lease
arrangement are payable on quarterly basis. The financing rate used as discounting factor was 13.50% per annum.
Taxes, repair and insurance costs are born by the Company. The Company intends to exercise its option to purchase the
above assets upon completion of the lease period.
6.1 The amounts of future payments and period in which these will be due are as follows.
June 30 June 30
2008 2007
Note Rupees Rupees
Minimum lease payments
Not later than one year 555,640 -
Later than one year but not later than five years 1,528,010 -
2,083,650 -
Less: Finance cost allocated to future periods 469,456
1,614,194 -
Less: Current portion 355,208

1,258,986 -
Present value of minimum lease payments

Not later than one year 355,208 -
Later than one year but not later than five years 1,258,986 -
1,614,194 -
7 DEFERRED LIABILITIES
Employee benefits 7.1.1 11,652,020 20,287,314
Deferred taxation 7.2 - 2,819,520
11,652,020 23,106,834
32
NAGINA
NAGINA GROUP
7.1 EMPLOYEE BENEFITS
Provision has been made based on actuarial assumptions. The assumptions are determined by independent
actuaries after every three years. The most recent valuation was carried out as at June 30, 2008 using the
"Projected Unit Credit Method". Actuarial gains/losses are recognized in accordance with limits set-out by IAS-19
("Employee Benefits").
June 30 June 30
2008 2007
7.1.1 Movement in net liability recognized in the balance sheet Rupees Rupees
Balance at beginning of year 20,287,314 17,360,015

Add: expense charged to profit and loss account 806,433 8,224,851
Less: payments made during the year (9,441,727) (5,297,552)
Balance at end of year 11,652,020 20,287,314
7.1.2 Balance sheet reconciliation as at balance sheet date:

Present value obligation 11,652,020 -
Less: unrecognized actuarial gains/(losses) - -
Liability recognized in the balance sheet 11,652,020 -
7.1.3 Charge for the year:

Current service cost 4,881,415 -
Interest cost 2,028,731 -
Actuarial loss charged (6,103,713) -
Expenses recognized in the profit and loss account 806,433 -
7.1.4 Principal actuarial assumptions:

Projected Unit Credit Method, based on the following significant assumptions, is used for valuation of gratuity:
June 30 June 30
2008 2007
Discount rate - per annum 12% 9.00%
Expected rate of growth per annum in future salaries 10% 8.00%
Average expected remaining working life time of employees 15 Years 10 Years
June 30 June 30
2008 2007
7.2 Deferred taxation Rupees Rupees
This comprises of the following:
Deferred tax liability on taxable temporary differences:
Accelerated tax depreciation 32,541,745 11,968,898
Deferred tax asset on deductible temporary differences:
Finance Lease 28,572 -
Provision for employee retirement benefits (1,916,757) (2,556,202)
Unused tax losses (34,365,820) (6,593,176)
(3,712,260) 2,819,520
7.2.1 Deferred tax asset amounting to Rs. 3.71 million has not been recognized as the management assumes that the
taxable profits will not be available and temporary differences will not reverse in foreseeable future.
33
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
(restated)
June 30 June 30
2008 2007
8 TRADE AND OTHER PAYABLES Rupees Rupees
Creditors 40,280,186 32,453,694
Payable to contractors - 764,990
Accrued liabilities 39,711,977 33,028,737
Advance from customers 5,516,926 9,205,234
Retention money 945,238 1,484,525
Withholding tax payable 447,693 332,538
Workers' profit participation fund 8.1 - 781,797
Unclaimed dividend 1,590,786 1,590,786
Others 1,531,156 184,003
90,023,962 79,826,304
8.1 Workers' profit participation fund
Balance at beginning of year 781,797 2,595,716

Interest on funds utilized in the Company's business 8.2 69,655 229,561
851,452 2,825,277
Paid to the fund during the year (851,452) (2,825,277)
- -
Allocation / expense for the year - 781,797
Balance at end of year - 781,797
8.2 Interest on workers' profit participation fund has been provided @ 12.00% (June 30, 2007: 12.00%) per annum.
9 MARK-UP ACCRUED ON LOANS
Mark-up accrued on:

Long-term financing from banking companies 17,658,747 14,864,051
Long-term financing from directors 56,340 7,269,485
Assets subject to finance lease 23,094 -
Short-term borrowings 4,245,769 3,097,005
21,983,950 25,230,541
10 SHORT-TERM BORROWINGS
From banking companies:

Short-term finance 10.2 22,165,269 135,673,707
Running finance 10.3 25,245,623 35,031,601
Book overdraft 10.4 49,143,793 68,077,065
96,554,685 238,782,373
10.1 The aggregate unavailed short-term borrowing facilities amount to Rs.1,536 million (June 30, 2007: Rs.1,461
million).
10.2 These facilities have been obtained from various commercial banks for working capital requirements, and are
secured against first pari passu hypothecation charge over present and future current assets of the Company
amounting to Rs. 670 million (June 30, 2007: 670 million) and second hypothecation charge on current assets of
the Company amounting to Rs. 99 million (June 30, 2007: 99 million). These facilities carry markup rate ranging
from 5.30% to 15.11% (June 30, 2007: 5.66% to 10.39%) per annum. These facilities expire on various dates by
April 30, 2009.
34
NAGINA
NAGINA GROUP
10.3 These facilities have been obtained from various commercial banks for working capital requirements and are
secured against first pari passu charge on current assets of the Company amounting to Rs. 900 million (June 30,
2007: 767 million) and personal guarantee of directors of the Company. These facilities carry markup rate
ranging from 10.31% to 14.59% (June 30, 2007: 9.47% to 11.88%) per annum. These facilities expire on various
dates by March 31, 2009.
10.4 It represents booked overdraft due to cheques issued by the Company in excess of balance with banks which will
be presented for payment in subsequent period.
June 30 June 30
2008 2007
11 CURRENT PORTION OF LONG-TERM LIABILITIES Note Rupees Rupees
Current portion of long-term financing 5 154,902,602 164,497,130

Current portion of finance lease liability 6 355,208 -
155,257,810 164,497,130
12 CONTINGENCIES AND COMMITMENTS
12.1 Contingencies
12.1.1 For contingencies relating to tax matters, please refer note 31.2 to note 31.5 to the financial statements.
12.1.2 Guarantees have been issued by banks in favor of

Government department on the behalf of the Company in
the normal course of business. 52,099,000 52,099,000
12.2 Commitments
Irrevocable letters of credit for:

Import of spare parts 8,009,610 -
Import of sizing material - 10,086,870
Operating lease
Payable within one year 240,000 515,000
8,249,610 10,601,870
13 PROPERTY, PLANT AND EQUIPMENT 13.1 1,021,502,465 1,051,283,725
35
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
13.1 PROPERTY, PLANT AND EQUIPMENT - AT JUNE 30, 2008
- - - - - - - - - - - COST / REVALUATION - - - - - - - - - - - - - - - - - - - - - - DEPRECIATION - - - - - - - - - - - Book value as

at June 30,
Charge for the
2008
year
As at July 01, Additions / As at As at July 01, As at Annual rate of
Description Transfers (Accumulated
2007 (disposals) June 30, 2008 2007 June 30, 2008 depreciation %
depreciation on
disposals)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Company owned Note
Land-freehold 45,915,600 - - 45,915,600 - - - 45,915,600

Building on freehold land
Factory 111,424,726 - - 111,424,726 49,669,173 6,163,867 55,833,040 55,591,686 10
Residential 48,102,195 - - 48,102,195 23,421,569 2,479,750 25,901,319 22,200,876 10
Building on leasehold land 22,097,886 47,154 246,712 22,391,752 9,607,714 1,271,017 10,878,731 11,513,021 10
Plant and machinery 30.1 1,491,751,889 2,128,719 71,210,792 1,562,051,065 620,844,930 92,532,705 711,997,941 850,053,124 10
(3,040,335) (1,379,694)
Electric installation 26,132,034 1,073,000 7,002,097 34,207,131 15,456,079 1,143,297 16,599,376 17,607,755 10
Factory equipment 3,319,162 397,229 - 3,716,391 1,581,176 183,282 1,764,458 1,951,933 10
Furniture and fixture 4,469,902 117,124 - 4,587,026 2,357,722 211,219 2,568,941 2,018,085 10
Office equipment 4,702,919 363,125 - 5,066,044 2,559,114 236,306 2,795,420 2,270,624 10
Arm and ammunition 119,700 - - 119,700 61,591 5,811 67,402 52,298 10
Vehicles 21,423,536 - - 19,912,796 8,228,448 2,542,971 9,740,912 10,171,884 20
(1,510,740) (1,030,507)
1,779,459,549 4,126,351 78,459,601 1,857,494,426 733,787,516 106,770,225 838,147,540 1,019,346,886
- (4,551,075) - - - (2,410,201) - -
Leased assets
Vehicles - 1,915,592 - 1,915,592 - 127,706 127,706 1,787,886 20
1,779,459,549 6,041,943 78,459,601 1,859,410,018 733,787,516 106,897,931 838,275,246 1,021,134,772
- (4,551,075) - - - (2,410,201) -
Capital work-in-progress
Building- civil work 242,612 371,793 (246,712) 367,693 - - - 367,693

Plant and machinery 1,499,942 67,633,204 (69,133,146) - - - - -
Unallocated capital expenditures 13.1.3 3,869,138 5,210,605 (9,079,743) - - - - -
5,611,692 73,215,602 (78,459,601) 367,693 - - - 367,693
June 30, 2008 1,785,071,241 79,257,545 78,459,601 1,859,777,711 733,787,516 106,897,931 838,275,246 1,021,502,465
(4,551,075) (78,459,601) - - (2,410,201)
13.1.1 Transfers to owned assets include transfers from capital work-in-progress to related assets becoming available for use.
restated
June 30 June 30
2008 2007
13.1.2 The depreciation charge for the year has been allocated as follows: Note Rupees Rupees
Cost of sales 25 103,773,918 100,170,997
Administrative expenses 28 3,124,013 3,458,255
106,897,931 103,629,252
13.1.3 Unallocated capital expenditures consist of:
Building- civil work - -

Plant and machinery - 3,854,138
Furniture and fixture - 15,000
- 3,869,138
36
NAGINA
NAGINA GROUP
13.1.4 Disposal of property, plant and equipment
Proceeds from
Gain on disposal
Accumulated disposal of
Cost Book value of property, plant
Description depreciation property, plant Mode of disposal Particulars of buyer
and equipment
and equipment
--------------------------------- Rupees -------------------------------
Motor Vehicle 855,803 594,070 261,733 275,000 13,267 Negotiation Maqsood Ahmed, Lahore
Motor Vehicle 364,782 301,032 63,750 70,000 6,250 Negotiation Sheraz Sadiq, Lahore
Motor Vehicle 290,155 135,406 154,749 160,000 5,251 Negotiation Muhammad Ismail, Lahore
Caterpillar Engine 3,040,336 1,379,694 1,660,642 6,000,000 4,339,358 Negotiation Engro food (Pvt.) Limited, Karachi
June 30, 2008 4,551,076 2,410,202 2,140,874 6,505,000 4,364,126
June 30, 2007 55,740 11,148 44,592 54,000 9,408
13.2 PROPERTY, PLANT AND EQUIPMENT - AT JUNE 30, 2007 (restated)
COST / REVALUATION DEPRECIATION
Charge for the

Adjustment due
Adjustment due year Book value as at
As at July 01, Additions / As at As at July 01, to prior year As at Annual rate of
Description to prior period Transfers (Accumulated June 30, 2007
2006 (disposals) June 30, 2007 2006 error Note June 30, 2007 depreciation %
error depreciation on
disposals)
36
- - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - Rupees - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --- - - - - -
Company owned
Land-freehold 45,915,600 - - - 45,915,600 - - - - 45,915,600

Building on freehold land -
Factory 112,863,104 861,075 2,550,598 251,145 111,424,726 43,214,434 6,927,082 472,343 49,669,173 61,755,553 10
Residential 36,462,611 - 587,494 12,227,078 48,102,195 21,334,896 2,094,009 7,336 23,421,569 24,680,626 10
Building on leasehold land 21,820,672 - - 277,214 22,097,886 8,235,275 1,372,439 - 9,607,714 12,490,172 10
Plant and machinery 1,342,635,206 26,072,500 - 123,044,183 1,491,751,889 532,386,293 88,458,637 - 620,844,930 870,906,959 10
Electric installation 25,432,034 700,000 - - 26,132,034 14,308,643 1,147,436 - 15,456,079 10,675,955 10
Factory equipment 2,967,642 351,520 - - 3,319,162 1,409,782 171,394 - 1,581,176 1,737,986 10
Furniture and fixture 3,577,991 345,957 - 545,954 4,469,902 2,176,051 181,671 - 2,357,722 2,112,180 10
Office equipment 4,481,171 221,748 - - 4,702,919 2,339,714 219,400 - 2,559,114 2,143,805 10
Arm and ammunition 119,700 - - - 119,700 55,134 6,457 - 61,591 58,109 10
Vehicles 19,898,744 1,580,532 - - 21,423,536 5,188,869 3,050,727 - 8,228,448 13,195,088 20
- (55,740) - - - - (11,148) - - -
1,616,174,475 30,133,332 3,138,092 136,345,574 1,779,459,549 630,649,091 103,629,252 479,679 733,787,516 1,045,672,033
- (55,740) - - - (11,148) - -
Capital work-in-progress
Building- civil work 5,292,573 354,388 (5,404,349) 242,612 - - - 242,612

Plant and machinery - 10,148,853 (8,648,911) 1,499,942 - - - 1,499,942
Unallocated capital expenditures 7,407,303 118,754,149 (122,292,314) 3,869,138 - - - 3,869,138
12,699,876 129,257,390 (136,345,574) 5,611,692 - - - 5,611,692
June 30, 2007 1,628,874,351 159,390,722 3,138,092 136,345,574 1,785,071,241 630,649,091 103,629,252 479,679 733,787,516 1,051,283,725
(55,740) (136,345,574) - - (11,148)
37
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
June 30 June 30
2008 2007
14 LONG-TERM DEPOSITS Note Rupees Rupees
Balance at beginning of year 373,497 428,497

Add: paid during the year 1,000 -
374,497 428,497
Less: refund during the year - 55,000
Balance at end of year 374,497 373,497
14.1 These include interest free refundable deposits given to various Government agencies and Central Depository
Company of Pakistan Limited.
15 STORES, SPARE PARTS AND LOOSE TOOLS
Stores 32,264,048 23,695,957

Spare parts 1,462,946 1,122,164
Loose tools 845,377 882,813
34,572,371 25,700,934
16 STOCK-IN-TRADE
Raw material
- yarn 47,340,358 42,655,578
- fuel 17,405,670 5,566,615
Work-in-process 43,838,570 37,354,678
Finished goods 187,334,792 177,755,033
Waste 909,997 1,624,262
296,829,387 264,956,166
17 TRADE DEBTS
Local - unsecured, considered good 71,875,674 26,604,215

Foreign - secured, considered good 17.1 73,954,054 104,812,835
145,829,728 131,417,050
17.1 These are secured through letters of credit.
38
NAGINA
NAGINA GROUP
June 30 June 30
2008 2007
18 ADVANCES Rupees Rupees

Advances to :
Suppliers - unsecured, considered good 9,277,578 12,243,447
Staff - secured, considered good 18.1 1,273,689 1,091,445
Letters of credit 18.2 592,566 1,850,450
11,143,833 15,185,342
18.1 These are repayable within three to six months, which are secured against employee retirement benefits payable
and will be adjusted against salaries of the employees.
18.2 It includes expenses incurred in respect of letters of credit for spare parts.
19 SHORT-TERM PREPAYMENTS
Short-term prepayments 669,760 829,235
20 OTHER RECEIVABLES Note
Export rebate receivable 556,136 956,288

Sundry receivables - unsecured, considered good 249,130 623,928
Receivable against interest rate swapping 5.1 238,241 76,010
1,043,507 1,656,226
21 ADVANCE INCOME TAX
Advance income tax at beginning of year 21,965,194 20,416,547
Advance income tax paid during the year 14,240,153 20,975,546

36,205,347 41,392,093
Provision for taxation - current (13,875,869) (19,426,899)

Advance income tax at end of year 22,329,478 21,965,194
22 SALES TAX REFUNDABLE 13,986,165 13,531,878
22.1 This represents accumulated differences of input tax on purchases and output tax payable.
23 CASH AND BANK BALANCES
Cash in hand - 10,000

Cash with banks on:
Current accounts - local currency 8,962,188 43,694,064
Saving accounts 23.1 35,713 43,685
8,997,901 43,747,749
23.1 These include Rs. 34,926 (June 30, 2007: Rs. 3,688) in foreign currency saving account and carry mark-up rate
ranging from 1.00% to 2.50% (June 30, 2007: 1.00% to 10.65%) per annum.
39
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP

2008 2007
24 SALES - NET Local Export Total Total
- - - - - - -- - - - - - - - - - - - - - Rupees - -- - - - - - - - - - - - - - - -
Textile
Cloth 1,331,619,997 1,356,728,154 2,688,348,151 2,664,082,511
Yarn 7,195,713 - 7,195,713 3,299,936
Waste 40,288,773 - 40,288,773 35,210,921
1,379,104,483 1,356,728,154 2,735,832,637 2,702,593,368
Add: Export rebate - 1,757,463 1,757,463 1,433,804
1,379,104,483 1,358,485,617 2,737,590,100 2,704,027,172
Less: Commission 8,211,885 12,403,489 20,615,374 22,452,500
1,370,892,598 1,346,082,128 2,716,974,726 2,681,574,672
Power
Electricity 29,396,864 - 29,396,864 -
1,400,289,462 1,346,082,128 2,746,371,590 2,681,574,672
(restated)
2008 2007
25 COST OF SALES Note Rupees Rupees

Raw material consumed 25.1 2,117,812,845 2,075,785,933
Packing material consumed 14,212,078 12,020,738
Stores, spare parts and loose tools consumed 26,965,211 23,111,911
Sizing material consumed 83,955,821 78,245,864
Fuel consumed 155,371,319 187,087,982
Salaries, wages and benefits 25.2 111,018,505 108,250,987
Insurance 5,593,451 5,359,022
Lease rentals-land 25.3 275,000 275,000
Repairs and maintenance 1,368,036 1,962,441
Electricity duty 1,829,033 1,809,638
Vehicles running and maintenance 2,645,832 2,367,345
Depreciation 13.1.2 103,773,918 100,170,997
Others 793,956 419,952
2,625,615,005 2,596,867,810
Work-in-process
At end of year (43,838,570) (37,354,678)
(6,483,892) (6,891,140)
Cost of goods manufactured 2,619,131,113 2,589,976,670
Finished stocks
Cloth purchased 1,078,803 7,138,240
At end of year (188,244,789) (179,379,295)
(7,786,691) (68,403,082)
2,611,344,422 2,521,573,588
40
NAGINA
NAGINA GROUP

2008 2007
Note Rupees Rupees
25.1 Raw material consumed
Purchases - net 2,122,497,625 2,088,249,894
2,165,153,203 2,118,441,511
At end of year (47,340,358) (42,655,578)
2,117,812,845 2,075,785,933
25.2 Staff salaries, wages and benefits include employee retirement benefits amounting to Rs. 128,320 (June 30,
2007: Rs. 7,172,570).
25.3 The Company has obtained a lease hold land under operating lease arrangement from Nagina Cotton Mills
Limited, ("a related party") for two years starting from March 01, 2007 and ending on February 28, 2009
against annual rental of Rs. 275,000 (June 30, 2007: 275,000).

26 OTHER OPERATING INCOME 2008 2007
Income from financial assets Note Rupees Rupees
Profit on saving accounts 1,391 141,518
Foreign exchange gain - 1,481,336
Gain on sale of NAFA fund 94,111 375,642
Gain on interest rate swapping 5.1 2,318,032 2,398,152
Income from assets other than financial assets
Gain on disposal of property, plant and equipment 13.1.4 4,364,126 9,408
6,777,660 4,406,056
27 DISTRIBUTION COST
Export
Ocean freight and forwarding 12,993,276 13,332,448
Export development surcharge 3,342,926 3,894,968
Quality claims 563,363 1,451,051
Transportation and octroi 9,105,672 7,377,107
26,005,237 26,055,574
Local
Handling and transportation 3,762,819 2,768,333
Others 2,251,443 1,751,841
6,014,262 4,520,174
32,019,499 30,575,748
41
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP

2008 2007
28 ADMINISTRATIVE EXPENSES Note Rupees Rupees
Directors' remuneration 2,110,161 1,199,485
Directors' meeting fee 10,000 9,000
Staff salaries and benefits 28.1 9,770,180 9,740,710
Vehicles running and maintenance 1,276,018 1,313,430
Lease rentals 28.2 480,000 480,000
Telephone, telex and postage 1,638,030 1,521,794
Traveling and conveyance 1,066,179 1,944,301
Insurance 1,208,712 1,266,489
Repairs and maintenance 131,753 273,470
Fee and subscription 637,494 552,475
Printing and stationery 361,696 358,459
Advertising 57,425 25,450
Entertainment 581,471 375,194
Legal and professional charges 1,538,352 575,463
Auditors' remuneration 28.3 294,991 292,930
Electricity 660,846 721,760
Depreciation 13.1.2 3,124,013 3,458,255
Others 197,606 160,260
25,144,927 24,268,925
28.1 Staff salaries and benefits include employee retirement benefits amounting to Rs. 678,113 (June 30, 2007: Rs.
1,052,281).
28.2 The Company has obtained an office space from Nagina Cotton Mills Limited, ("a related party") against rental
of Rs. 120,000 per quarter.
28.3 Auditors' remuneration
Annual statutory audit 175,000 175,000
Half yearly review 50,000 50,000
Review report on code of corporate governance 40,000 40,000
Out of pocket expenses 29,991 27,930
294,991 292,930
29 OTHER OPERATING EXPENSES

Workers' profit participation fund - 781,797
Donations - 116,000
Foreign exchange loss 1,128,056 -
Loss on forward contracts 39,607,310 -
40,735,366 897,797
30 FINANCE COST
Mark-up on:
Long-term financing from banking companies 67,486,477 69,033,014
Liabilities against assets subject to finance lease 80,330 -
Long-term financing from directors 7,279,855 7,269,485
Short-term borrowings 15,363,453 11,924,140
Workers' profit participation fund 69,655 229,561
Bank charges and commission 8,943,051 9,125,521
99,222,821 97,581,721
Less: Amounts included in the cost of qualifying assets 30.1 1,296,551 3,927,205
97,926,270 93,654,516
30.1 Borrowing costs included in the cost of qualifying assets during the year arose on specific borrowings (See note
13.1).
42
NAGINA
NAGINA GROUP

2008 2007
31 PROVISION FOR TAXATION Note Rupees Rupees
Current 13,875,869 19,426,899
Deferred 7.2 (2,819,520) (9,268,150)
11,056,349 10,158,749
31.1 No numeric tax rate reconciliation for the current period has been presented as the tax charge for the current
period is a final discharge of tax liability under the provisions of the Income Tax Ordinance, 2001.
31.2 In respect of assessment year 2000-2001 the department filed an appeal before the Income Tax Appellate
Tribunal (ITAT) on the issue of applicable tax rates in respect of export of grey cloth, impugned on account of
classification of grey cloth as ‘Textile made ups’ by the Commissioner of Income Tax (Appeals) [CIT (A)] as
against its classification by Tax Officer (TO) ‘as goods manufactured in Pakistan’. Pursuant to the appeal filed
by the department, the honorable ITAT through its order dated April 17, 2008 adjudicated that the main
appeals in this regard has already been decided by ITAT in favor of the Company through its order ITA No, 855
to 859/LB/06 dated November 7, 2007, hence the appeal filed by the department having become in fructuous
was dismissed completely by the ITAT.
31.3 For assessment year 2001-2002 and 2002-2003, the assessments finalized through assessment orders both
dated October 30, 2002, making various additions / disallowances, were contested in appeal before CIT (A) by
the company. Through consolidated order dated September 01, 2003, the CIT (A) maintained all the additions
/ disallowances made by the assessing officer, except for the set aside of levy of Workers’ Welfare Fund
(WWF) on presumptive income. On cross appeals by the Company and the tax department, the ITAT through
its order dated February 21, 2006 deleted the levy of WWF on the presumtive income as well the levy of
surcharge on minimum tax payable under section 80-D of the repealed Ordinance. Also, certain addition out of
profit and loss expenses in the assessment years 2001-2002 were reduced. Appeal effect orders in respect of
assessment years 2001-2002 and 2002-2003 both dated March 31, 2006 have been received through which
refunds have been determined.
31.4 For the Tax Years 2003 and 2004, Deemed assessment in terms of section 120(1) of the income tax ordinance,
2001 (hereinafter referred to as ‘Ordinance’) for the above years have been amended by the TO vide order
dated June 30, 2005 passed under section 122(5A) of the Ordinance, thereby charging minimum tax u/s 113 on
local sales separately, in spite of the fact that the total tax payable (including the tax payable under the final
tax regime) by the Company was more than 0.5% of the aggregate turnover. On appeal, the TO’s consolidated
order was annulled by the CIT (A) through order dated October 15, 2005.The department has filed an appeal
against the CIT (A)’s order with the ITAT, which is still pending.
In respect of the income tax 2003, the Company has also been selected for audit by the department in terms
of section 177 of the Ordinance Vide letter dated November 13, 2006.in this respect document/details, as
required by the TO ,have been submitted, however, no further proceedings have been undertaken by the
department.
In respect of the year 2004, refund has been determined as a result of appellate order dated January 30, 2006
passed by the CIT(A) against the TO’s order dated November 2, 2005 through which the TO has rejected the
Company’s request for application of tax rate of 0.75% on export of fabric. An application for the appeal
effect in respect of CIT (A)’s order has been filed by the Company through letter dated February 16, 2007,
which is still pending.
31.5 Assessments for the Tax year 2005, Transitional 2005 and Tax year 2006 are deemed assessments in terms of
section 120 (1) of the Ordinance, as per the returns filled by the Company.
31.6 The deemed assessment for the tax year 2007 was modified by the taxation Officer vide order March 31, 2008
passed under section 221 of the Ordinance levying the charge of WWF at total income instead total income
assessable under the Income Tax Ordinance 2001. On appeal, the CIT(A), invoked the provisions of section 221
of the Ordinance and decide the case in favor of the Company vide its order dated May 22, 2008. The appeal
effect order of which is still awaited.
31.7 In previous years the Company had made investment amounting to Rs. 50 million in Regular Income
Certificates issued by National Saving Centre ("NSC") which were encashed during the year 2006; however NSC
withheld an amount of Rs. 7.00 million in respect of withholding tax. The Company filed a writ petition with
Honorable Lahore High Court ("LHC") against the incorrect withholding of income tax by NSC on yield of said
certificates, which was exempt from tax. As per decision of LHC, the Company has received the refund of the
amount, however the department has gone into appeal with Honorable Supreme Court of Pakistan ("SC")
against the decision of LHC. The decision on appeal with SC is pending.
43
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
32 (LOSS) / EARNINGS PER SHARE - BASIC AND DILUTED
The calculation of the basic earnings per share is based on the following data:
(restated)
2008 2007
(Loss)/earnings for the purpose of basic (loss)/earning per share
(Loss)/profit after taxation for the year- Rupees (65,077,583) 4,851,405
Number of shares
Weighted average number of ordinary shares in issue during the year 18,480,000 18,480,000
Basic (loss)/earnings (Rupees per share) (3.52) 0.26
Basic earnings per share has been computed by dividing earnings as stated above with weighted average number of
ordinary shares.
There was no dilutive effect on the earnings per share of the Company.
33 NON-CASH TRANSACTIONS
Addition to plant and machinery during the year amounting to Rs. 1.884 million (June 30, 2007: Nil) were financed by
new finance lease.
34 REMUNERATION OF CHIEF EXECUTIVE AND DIRECTORS
Director
2008 2007
Rupees Rupees
Remuneration 1,440,000 642,000

Meeting fee 10,000 9,000
House rent 360,000 288,900
Utilities 310,161 268,585
2,120,161 1,208,485
Number of persons 1 1
34.1 No remuneration has been paid to Chief Executive of the Company.
34.2 In addition to above, one of the Directors of the Company have been provided with free use of the Company
owned car.
44
NAGINA
NAGINA GROUP
35 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

35.1 Mark-up rate risk management
Mark-up rate risk arises from the possibility that changes in mark-up rates will affect the value of financial instruments. Changes in mark-up rates can affect the rates charged on
mark-up bearing liabilities. This can result in an increase in mark-up expense relative to financial borrowings or vice versa. The Company manages its risk by mark-up rate swapping,
by maintaining a fair balance between mark-up rates and financial assets and financial liabilities. The effective mark-up rates for the monetary financial assets and liabilities are
mentioned in respective notes to the financial statements.
June 30, 2008 June 30, 2007
Non mark-up Non mark-up

Mark-up bearing Total Mark-up bearing Total
bearing bearing
Financial assets ----------------------------------------------------------------------------Rupees-------------------------------------------------------------------

Maturity up to one year
Trade debts - 145,829,728 145,829,728 - 131,417,050 131,417,050
Advances - 1,273,689 1,273,689 - 1,091,445 1,091,445
Other receivables - 487,371 487,371 - 699,938 699,938
Cash and bank balances 35,713 8,962,188 8,997,901 43,685 43,704,064 43,747,749
35,713 156,552,976 156,588,689 43,685 176,912,497 176,956,182
Financial liabilities
Maturity up to one year
Trade and other payables - 90,023,962 90,023,962 781,797 79,044,507 79,826,304
Mark-up accrued on loans - 21,983,950 21,983,950 - 25,230,541 25,230,541
Short-term borrowings 96,554,685 - 96,554,685 238,782,373 - 238,782,373
Long-term financing 155,257,810 - 155,257,810 164,497,130 - 164,497,130
Finance lease liability 355,208 - 355,208 - - -
Maturity after one year
Long-term financing 846,284,768 - 846,284,768 639,863,320 - 639,863,320
Finance lease liability 1,614,194 - 1,614,194 - - -
1,100,066,665 112,007,912 1,212,074,577 1,043,924,620 104,275,048 1,148,199,668
On balance sheet gap (1,100,030,952) 44,545,064 (1,055,485,888) (1,043,880,935) 72,637,449 (971,243,486)
Off balance sheet items

Bank guarantees - 52,099,000 52,099,000 - 52,099,000 52,099,000
Letters of credit for
- import of spare parts - 8,009,610 8,009,610 - - -
- import of sizing material - - - - 10,086,870 10,086,870
Operating lease - 240,000 240,000 - 515,000 515,000
Off balance sheet gap - 60,348,610 60,348,610 - 62,700,870 62,700,870
45
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
35.2 Credit risk and concentration of credit risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail
to perform as contracted. Out of total financial assets of Rs. 156,588,689 (June 30, 2007: Rs. 176,956,182),
local trade debts and sundry receivables amounting to Rs. 72,124,804 (June 30, 2007: Rs. 27,228,143) are
subject to credit risk. The Company manages its credit risk by limiting significant exposure to individual
customers and obtaining advance against sales.
35.3 Liquidity risk
Liquidity risk reflects the Company's inability in raising funds to meet commitments. The management closely
monitors the Company's liquidity and cash flow position. This includes maintenance of balance sheet liquidity
ratios, debtors and creditors concentration both in terms of the overall funding mix and avoidance of undue
reliance on large individual customer.
35.4 Foreign exchange risk management

Foreign exchange risk arises mainly where receivables and payables exist due to transactions in foreign
currencies. However, the Company is not exposed to any significant foreign currency risk. As at June 30, 2008,
the total foreign currency risk exposure was Rs. 73,954,054 (June 30, 2007: Rs. 104,812,835) in respect of trade
debts. The Company incurs foreign currency risk on sales and purchases that are entered in a currency other
than Pak Rupees.
35.5 Fair value of financial instruments

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable
willing parties in an arms length transaction.
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their
fair values.
36 PRIOR PERIOD ERROR

During the financial year ended September 30, 2004 the Company had recognized the liability for claims made by the
contractor for construction of the building on freehold land with a corresponding increase in building on freehold land.
This liability was not paid till the close of financial year ended June 30, 2007, however as a result of negotiation with
the contractor during the year ended June 30, 2008, both parties have mutually settled this obligation as not payable.
Financial statements for the year ended June 30, 2007 have been restated to incorporate the impact of this settlement
which has been applied retrospectively and the comparative information has also been restated in accordance with the
treatment specified in International Accounting Standard (IAS) 8 “Accounting Policies” Changes in Accounting Estimates
and Errors. The effect of restatement is summarized below.
36.1 Net impact of prior period restatement Note Rupees

Cost of building on freehold land 13.2 3,138,092
Prior period restatement - effect of depreciation net of taxation 36.2 (635,687)
Decrease in property, plant and equipment for the year ended June 30, 2007 2,502,405
36.2 Year ended June 30, 2007

Decrease in depreciation expense 240,012
(Increase) in income tax expenses (84,004)
Increase in profit for the year ended June 30, 2007 156,008
Period prior to June 30, 2006
Increase in profit for the year ended June 30, 2006 (Depreciation
expense amounting to Rs. 737,968 less tax amounting to Rs. 258,289) 479,679
635,687
36.3 Impact of prior period restatement on earnings per share
Earnings per share for the year ended June 30, 2007 as previously reported 0.25
Impact of prior period restatement on earnings per share 0.01
Earnings per share for the year ended June 30, 2007 (restated) 0.26
46
NAGINA
NAGINA GROUP
37 TRANSACTIONS WITH RELATED PARTIES
The related parties comprise holding company, subsidiaries and associated undertakings, other related group companies,
directors of the company, key management personnel and post employment benefit plans. The Company in the normal
course of business carries out transactions with various related parties.
The transactions with related parties during the year generally consist of sales and purchases.
Nature and description of related party transactions during the year along with monetary value are as follows:

2008 2007
Rupees Rupees
Nature of relation Nature of transactions
Associated company Purchase of yarn 264,561,425 194,132,880

Rent paid 755,000 755,000
Sale of yarn 4,042,500 2,244,565
Sale of fabric - 7,000
Sale of stores and spares 510,643 -
Purchase of stores and spares 568,200 -
Fully paid bonus shares issued - 578,914
Key management personnel

Loan obtained from directors 30,000,000 -
Mark-up accrued on loan from directors 7,279,855 7,269,485
Remuneration and other benefits 2,120,161 1,208,485
38 CAPITAL DISCLOSURE
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern so
that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong
capital base to support the sustained development of its businesses.
The Company manages its capital structure which comprises capital and reserves by monitoring return on net assets and
makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividend paid to shareholders, appropriation of amounts to reserve
or/and issue new shares.
39 PLANT CAPACITY AND ACTUAL PRODUCTION June 30, 2008 June 30, 2007
Air Jet Looms installed 324 324

Installed capacity at 50 Picks (meters) 58,714,474 58,714,474
Actual production (meters) 43,790,788 46,585,019
Actual production after conversion into 50 Picks (meters) 54,502,253 57,746,681
The difference between installed capacity and actual production is in normal course of business.
47
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
40 DATE OF AUTHORIZATION FOR ISSUE
These financial statements have been approved by the board of directors of the Company and authorized for issue
on September 25, 2008.
41 RE-ARRANGEMENT AND RE-CLASSIFICATION
Corresponding figures have been re-arranged and re-classified wherever necessary to reflect more appropriate
presentation of events and transactions for the purpose of comparison. Significant re-arrangements and re-classification
are as follows:
From To Reason Amount
Balance sheet item:

Advance income tax Withholding tax payable Better presentation of balances 332,538
Profit and loss account item:

Cost of sales - Others Cost of sales - Vehicle Better presentation of expense 2,007,233
running and maintenance
42 GENERAL
The figures have been rounded off to the nearest Rupee.

48
NAGINA
NAGINA GROUP
FORM 34
THE COMPANIES ORDINANCE, 1984
(Section 236(1) and 464)
PATTERN OF SHAREHOLDING
1. Incorporation Number 0025740
2. Name of the Company PROSPERITY WEAVING MILLS LTD.
3. Pattern of holding of the shares held by the

shareholders as at 30-06-2008
4. No. of Shareholding Total

Shareholders From To Shares Held
21 1 100 1,075
132 101 500 34,329
56 501 1,000 43,675
95 1,001 5,000 215,308
17 5,001 10,000 129,162
6 10,001 15,000 75,050
1 15,001 20,000 19,800
2 20,001 25,000 42,240
1 25,001 30,000 26,620
1 30,001 35,000 33,700
- 35,001 50,000 -
1 50,001 55,000 53,900
- 55,001 100,000 -
1 100,001 105,000 104,500
- 105,001 125,000 -
1 125,001 130,000 127,820
- 130,001 140,000 -
1 140,001 145,000 140,140
- 145,001 220,000 -
1 220,001 225,000 222,687
- 225,001 1,010,000 -
1 1,010,001 1,015,000 1,012,302
- 1,015,001 1,145,000 -
1 1,145,001 1,150,000 1,149,940
- 1,150,001 1,675,000 -
1 1,675,001 1,680,000 1,678,242
- 1,680,001 3,205,000 -
2 3,205,001 3,210,000 6,410,470
1 3,210,001 3,215,000 3,213,650
- 3,215,001 3,665,000 -
1 3,665,001 3,670,000 3,668,390
77,000
344 Total:- 18,480,000
49
ANNUAL REPORT 2008
NAGINA
NAGINA GROUP
5. Categories of Shareholders Shares Held Percentage
5.1 Directors, Chief Executive Officer, and their spouse

and minor children.
MR. SHAIKH ENAM ELLAHI 222,687 1.21
MR. SHAHZADA ELLAHI SHAIKH 3,205,290 17.34
MR. SHAUKAT ELLAHI SHAIKH 3,213,650 17.39
MR. SHAFQAT ELLAHI SHAIKH 3,205,180 17.34
MRS. HUMAIRA SHAHZADA 2,722 0.01
MRS. MONA SHAUKAT 2,722 0.01
MRS. SHAISTA SHAFQAT 2,722 0.01
MR. S.M. YUSUF 1,402 0.01
MR. KHAWAJA MUHAMMAD ALI 770 0.01
MR. SYED MOHSIN GILANI 550 0.00
9,857,695 53.33
5.2 Associated Companies, undertakings and related parties

M/S. NAGINA COTTON MILLS LTD. 1,012,302 5.48
M/S. ELLAHI INTERNATIONAL (PVT) LTD. 3,668,390 19.85
M/S. ARH (PVT) LTD. 1,678,242 9.08
M/S. MONELL (PVT) LTD. 9,130 0.05
6,368,064 34.46
5.3 NIT and ICP

NATIONAL
NATIONAL BANK OF PAKISTAN
BANK INVESTARINVESTOR
OF PAKISTAN A/C (FORMERA/C
NDFC)
(FORMER NDFC) 3,800 0.02
NATIONAL BANK OF PAKISTAN,TRUSTEE DEPTT.
NATIONAL BANK OF PAKISTAN, TRUSTEE DEPTT. 1,083 0.01
NBP
NBPTRUSTEE
TRUSTEE- NI(U)T (LOC) FUND
- NI(U)T (LOC) FUND 1,117 0.01
INVESTMENT CORPORATION OF PAKISTAN
INVESTMENT CORPORATION OF PAKISTAN 770 0.01
6,770 0.05
5.4 Banks Development Finance Institutions, Non Banking 1,277,760 6.91

Finance Institutions. 1,277,760 6.91
5.5 Insurance Companies 140,140 0.76

140,140 0.76
5.6 Modarabas and Mutual Funds Nil Nil
5.7 Shareholders Holding 10% or more
MR. SHAHZADA ELLAHI SHAIKH 3,205,290 17.34

MR. SHAUKAT ELLAHI SHAIKH 3,213,650 17.39
MR. SHAFQAT ELLAHI SHAIKH 3,205,180 17.34
M/S. ELLAHI INTERNATIONAL (PVT) LTD. 3,668,390 19.85
13,292,510 71.92
5.8 General Public
a. Local 829,351 4.49
b. Foreign Nil Nil
5.9 Others 220 0.00

TOTAL:- 18,480,000 100.00
Note:-
M/s. Nagina Cotton Mils Ltd., had distributed 7,480,000 ordinary shares of M/s. Prosperity Weaving Mills
Ltd., among its members, out of which 77,000 ordinary shares have yet to be transferred by the members
of M/s. Nagina Cotton Mills Ltd., These shares have been shown under the head "General Public".
50
NAGINA
NAGINA GROUP
FORM OF PROXY
The Secretary,
Nagina House
91-B-1, M.M. Alam Road,
Gulberg-III,
Lahore-54660.
I/We ______________________________________________________ of _________________ being

member(s) of PROSPERITY WEAVING MILLS LTD., and holder of ____________________ Ordinary
Shares as per Share Register Folio No. ________________ (In case of Central Depository System Account
Holder A/c No. _______________ Participant I.D. No. __________________________) hereby appoint
__________________________________________ of __________________ who is member of the
company as per Register Folio No. _______________________ (In case of Central Depository System
Account Holder A/c No. _______________ Participant I.D. No. __________________________) or failing
him/her ______________________________________________ of __________________ who is member
of the Company as per Register Folio No. _____________________ (In case of Central Depository System
Account Holder A/c No. _______________ Participant I.D. No. ________________) as my/our proxy to vote
for me/us and on my/our behalf at the 17th Annual General Meeting of the Company to be held on October 27,
2008 and at any adjournment there of.
Affix
Rs. 5/-
Revenue
Stamp
(Signature should agree with the

Specimen signature registered
with the Company)
Signed at ____________________ this the ______________ day of ___________________ 2008
NOTE:
1. If a member is unable to attend the meeting, he/she may sign this form and send it to the Secretary so as
to reach him not less than 48 hours before the time of holding the meeting.
2. Account holders and sub-account holders, holding book entry securities of the Company in CDS of
Central Depository Company of Pakistan Ltd., who wish to attend the Annual General Meeting are
requested to please bring original National Identity Card with copy thereof duly attested by their
Bankers for identification purpose.
3. In case of corporate entity, the Board of Directors' resolution/power of attorney with specimen
signature shall be submitted (unless it has been provided earlier) along with proxy form of the
Company.
51

Annual 2008 PWML

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Annual 2008 PWML

Enviado por

Direitos autorais:

Formatos disponíveis

ANNUAL REPORT 2008

Mr. Shaikh Enam Ellahi Chairman

MANAGING DIRECTOR (Chief Executive)

Mr. Shaukat Ellahi Shaikh

Mr. Shaikh Enam Ellahi Chairman

CHIEF FINANCIAL OFFICER (CFO)

Mr. Muhammad Tariq Sheikh

Mr. Syed Mohsin Gilani

Messrs M. Yousuf Adil Saleem & Co.,

Mouza Ghazi Androon,

3. To appoint auditors and to fix their remuneration.

By Order of the Board

Syed Mohsin Gilani

We believe in keeping our production facilities equipped with the modern

We do have a social responsibility towards our community in which we operate and

Due to Loss Directors regret their inability to recommend payment of dividend.

Appropriate accounting policies have been consistently applied in preparation of financial

International Accounting Standards, as applicable in Pakistan, have been followed in preparation of

There is no doubt about the company's ability to continue as a going concern.

On behalf of the Board.

Shaukat Ellahi Shaikh

STATEMENT OF COMPLIANCE WITH THE

1. The company encourages the representation of independent non-executive directors

4. No casual vacancy occurred in the Board during the year.

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

for & on behalf of the Board

SHAUKAT ELLAHI SHAIKH

OPERATING FINANCIAL & INVESTING RATIOS

G E N E R A L P U B L IC (324 S h areh o ld ers) 829,571 4.49

SHARE CAPITAL AND RESERVES

Issued, subscribed and paid up share capital 3 184,800,000 184,800,000

SURPLUS ON REVALUATION OF LAND 43,708,234 43,708,234

Liabilities against assets subject to finance lease 6 1,258,986 -

Trade and other payables 8 90,023,962 79,826,304

CONTINGENCIES AND COMMITMENTS 12 - -

Shahzada Ellahi Shaikh

Property, plant and equipment 13 1,021,502,465 1,051,283,725

Stores, spare parts and loose tools 15 34,572,371 25,700,934

Shaukat Ellahi Shaikh

PROFIT AND LOSS ACCOUNT

For the year For the year

Sales - net 24 2,746,371,590 2,681,574,672

(Loss) / earnings per share - basic and diluted 32 (3.52) 0.26

Shahzada Ellahi Shaikh Shaukat Ellahi Shaikh

CASH FLOW STATEMENT

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (34,749,848) 41,135,852

Shahzada Ellahi Shaikh Shaukat Ellahi Shaikh

STATEMENT OF CHANGES IN EQUITY

Capital Reserve for Un-

Balance as at June 30, 2006 as previously

Cumulative effect of prior period error 36.2 - - - 479,679 479,679

Balance as at June 30, 2006 as restated 168,000,000 16,600,000 - 166,180,855 350,780,855

Transferred to reserve for issue of bonus shares - - 16,800,000 (16,800,000) -

Issue of 10% bonus shares 16,800,000 - (16,800,000) - -

Balance as at June 30, 2007 184,800,000 16,600,000 - 154,232,260 355,632,260

Balance as at June 30, 2008 184,800,000 16,600,000 - 89,154,677 290,554,677

Shahzada Ellahi Shaikh Shaukat Ellahi Shaikh

NOTES TO THE FINANCIAL STATEMENTS

2 SIGNIFICANT ACCOUNTING POLICIES

2.2 Initial application of a standard or an interpretation