DYNEA PAKISTAN LIMITED

Annual Reports 2003

Company Information

Vision and Mission Statements

Notice of Meeting

FINANCIAL STATEMENTS

Directors' Report

Key Data

Graphs

Statement of Compliance and Auditors' Review Report

Auditors' Report

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statements

Pattern of Shareholdings

CONSOLIDATED FINANCIAL STATEMENTS

Directors' Report

Auditors' Report

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statements

Board of Directors :

Mr. Tarje Braaten

Chairman (Nominee Dynea ASA Norway)

Mr. Syed Ali

Vice Chairman

Mr. Sarosh R. Dubash

Managing Director / C. E. O.

Mr. Rafiq M. Habib

Director

Mr. Tore Gunar Wikdal

Director (Nominee Dynea ASA Norway)

Mr. Donald John Jenkin

Director (Nominee Dynea ASA Norway)

Mr. Farooq Hasan

Director (Nominee National Investment Trust)

Mr. Ather Saeed Khan

Director (Technical)

Company Secretary :

Mr. Syed Hassan Haider Abidi

Company Secretary / C.F.O.

Audit Committee :

Mr. Syed Ali

Chairman

Mr. Donald John Jenkin

Member

Mr. Farooq Hasan

Member

Bankers :

M/s. Credit Agricole Indosuez

M/s. Citibank

M/s. Habib Bank AG Zurich

M/s. Hongkong & Shanghai Banking Corporation Ltd.

M/s. Habib Bank Limited

M/s. Metropolitan Bank Limited

M/s. National Bank of Pakistan

M/s. PICIC Commercial Bank Limited

M/s. Standard Chartered Bank

M/s. Union Bank Limited

Auditors :

M/s. Ford Rhodes Sidat Hyder & Company

Chartered Accountants

Legal Advisors :

M/s. Sayeed & Sayeed

Advocate & Legal Consultants

M/s.Shahid Anwar Bajwa & Company

M/S. S, M,. Lawt AeenHatee

Share Registrar :

M/s. Noble Computer Services (Pvt.) Ltd.

14-Banglore Town Housing Society,

Sharea Faisal, Karachi.

Registered Office :

2nd Floor, AI-Hannan Centre,

55, Dar-ul-Aman Society, Block - 7/8,

Main Sharea Faisal, Karachi.

Factory :

A-101, 102, 103, 134, 135 and 136,

Lasbella Industrial Estate Development Author

'ty,

Hub Chowki, Distt. Lasbella,

Balochistan.

Vision

Dynea Pakistan is Market Leader in its core and diversified business

by providing Quality Products at Competitive Prices through

Developments of Market, Product Range, Technology and Human

Capital, ensuring Sound Returns to Stakeholders.

Mission

Maximize productivity and sales of Formaldehyde, Amino Resins

and Aminoplast Moulding Compounds and provide satisfaction to

customers.

Notice is hereby given that the 21st Annual General Meeting of the Company will be held at the Auditorium of Finance &

Trade Centre, Sharea Faisal, Karachi on Tuesday 14th October, 2003 at 4:30 p.m. to transact the following business :

ORDINARY BUSINESS

1)     To confirm the minutes of the Twentieth Annual General Meeting.

2)     To confirm the minutes of the Extra Ordinary General Meeting.

3)     To receive, consider and adopt the Audited Accounts of the Company for the year ended 30th June,

2003 together with the Directors' and Auditors' report thereon.

4)     To appoint Auditors of the company for the year 2003-2004 and fix their remuneration.

By Order of the Board

S. HASSAN HAIDER ABIDI

Karachi: 22nd September, 2003.                                                                                            Company Secretary

NOTES:

i) The Share Transfer Books of the Company will remain closed from 12th October, 2003 to 25th October, 2003 (both

days inclusive).

ii) A member entitled to attend and vote at this meeting may appoint another member as his/her proxy to attend the

meeting and vote for him/her. No person shall act as a proxy who is not a rnember of the Company. Proxies in order

to be effective must be received by the Company not less than 48 hours before the meeting.

iii) CDC account holders/sub-account holders are requested to bring their original NIC / Passport with a photocopy duly

attested by their bankers for identification purposes. In case of Corporate entity, the Board of Directors resolution /

power of attorney with specimen, signature  of the nominee shall be podoced (unless it has provided earlier at the

time of the meeting).

iv) Members are requested to promptly communicate to the Company any change in their address to ensure prompt

delivery of mail.

v)      Members are requested not to bring children along with them, they will not be allowed in the meeting.

Your Board of Directors is pleased to place before you the Annual Report together with the audited accounts for the year

ended June 30, 2003.

Financial Results :

The profit and loss account and appropriation recommended by the directors are as under:

2003

2002

Rs. '000

Rs. '000

Operating Profit

-23,736

8,727

Financial charges

-13,453

-7,481

Dividend income from subsidiary company

16,015

20,018

(LossyProfit before taxation

-21,174

21,264

Taxation

Current

-3,373

-2,155

Prior

2,439

-36

Deferred

12,764

-3,972

11,830

-6,163

(Loss)/Profit after taxation

-9,344

15,101

Unappropriated profit brought forward

548

883

(LossyProf it available for appropriation

-8,796

15,984

Appropriations

Proposed final dividend . nil (2002 : 10%)

—

9,436

Transfer to General Reserve

-

6,000

-

15,436

Unappropriated (LossyProfit carried forward

-8,796

548

Earning per Share :

Earning per share for the year June 30, 2003 comes to Rs. (0.50) as compared to Rs. 0.80 in the preceding year.

Operating Performance :

a)     Turnover

This year's turnover of Rs. 510 407 million is higher by 20.42% as compared to that of last year, which was

Rs. 423.844 million. The increase in sales is mainly due to the increase in production capacity of Resin

Division and Aminoplast Division.

b)    Gross Profit

The Gross profit margin has dropped by 7.37% over the preceding year. This is due to the dumping of moulding

compound at below the normal prices by the Chinese exporters.

c)     Financial Charges

These have increased to Rs. 13.45 million as compared to Rs. 7.48 million in the preceding year due to the

financing requirements for the new formaldehyde plant.

Director's Report

d)    Taxation

This year tax has been reversed by Rs. 11.54 million as compared to Rs. 6.16 million tax charged in the preceding

year due to the reversal of last year's normal and deferred taxation.

e)     Dividend

The Board has not recommended any dividend for the year.

Merger:

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