KASHMIR POLYTEX LIMITED
CONTENTS
Company Information
Notice of Meeting
Directors' Report
Statement of Compliance with
the Code of Corporate Governance
Auditors' Report
Auditor's Review Report to the Members
on Statement of Compliance with Best Practices
of Code of Corporate Governance
Balance Sheet
Profit and Loss Account
Statement of Changes in Equity
Cash Flow Statement
Notes to the Accounts
Six Years at a Glance
Pattern of Shareholding
COMPANY PROFILE
Board of Directors
Mr. Mohammad Ashraf Khan		Chief Executive / Director
Mr. Farooq Khan		Director
Dr. Mrs. Yasmin Ashraf		Director
Mr. Mohammad Younus Khan		Director
Mrs. Harmeen Ara Hashmi		Director
Mr. Mohammad Akram		Director
Mr. Shahid Mahmood		Director (I.C.P. Nominee)
Company Secretary / CFO:
Mr. Shoaib Abdullah
Audit Committee:
Mr. Younus Khan		Chairman
Mr. Shoaib Abdullah		Secretary
Mr. Muhammad Zahoor		Assistant Manger Accounts
Registered Office:
Plot# A/8-11, Industrial Estate, Mirpur, A.K.
Liaison Office:
501, Fifth Floor, Business Avenue, Main Shahrah-e-Faisal, Karachi.
' Factories:
i)         Plot* A/8-11, Industrial Estate, Mirpur, A.K.
ii)        Plot# 190, Phase-Ill, Industrial Estate,
Qadoon Amazai, N.W.F.P.
Auditors:
Kanwar Furqan Ali & Co.		Chartered Accountants
Legal Advisor:
Yousuf Ali Advocate
Bankers:
National Bank of Pakistan.
Bank AI-Habib Limited.
PICIC Commercial Bank.
NOTICE OF MEETING
Notice is hereby given that the 20th Annual General meeting of the Shareholders of the Company will be held
at Plot* A/8-11, Industrial Estate, Mirpur A.K., on Saturday, October 25, 2003 at 11:00 am to transact the
following business:-
1.          To confirm the Minutes of 19th Annual General Meeting of the Shareholders of the company held on
21 November, 2002.
2.          To receive and adopt the report of the Directors and Audited Accounts of the company for the year
ended June, 2003.
3.          To appoint Auditors for the year ended 2003-2004 and fix their remuneration, the retiring Auditors
M/s. Kanwar Furqan All & Co. Chartered Accountants have offered their services for the ensuing
year.
4.          To transact such other business as may be placed before the meeting with the permission of the
Chairman.
BY ORDER OF THE BOARD
SHOAIB ABDULLAH
Secretary
Note:
1.          The Share Transfer Books of the Company will remain closed from October 20, 2003 to
October 25, 2003 (both days inclusive).
2.          A member entitled to attend and vote at the meeting may appoint another member as his/here proxy
to attend and vote instead of him/her proxies in order be effective, must be received at the registered
office of the Company not less than 48 hours before the meeting.
3.          The shareholders are requested to communicate to the company any change in their addresses.
4.          CDC shareholders desiring to attend the meeting are requested to bring their original National Identity
Card, Account and Participants ID number for identification purpose and in case of proxy, to enclose
an attested copy of his / her National Identity Card.
DIRECTORS' REPORT
The Directors take pleasure in presenting the 20th Annual Report together with Company's Financial Statement for the
year ended June 30, 2003 and the Audited Report thereon.
Financial Review
The Company registered sales at Rs. 143.545 million as compared to Rs. 106.493 million in the proceeding year. The
Company suffered a loss of Rs. 0.654 million after accounting for all charges including depreciation of Rs. 13.984
million. The financial results were improved due to higher capacity utilization i.e. 37% (65% capacity utilization of
Gadoon Unit), the Mirpur Plant remained closed due to non-availability of finances for BMR and working capital.
During the year Company's exports were increased to USD 2.175 million as compared to last year export of
USD 1.451 million. By the Grace of Almighty ALLAH FPCCI's merit trophy for the year 2001-2002 for the export of
Non-Traditional item has been awarded to our Company. Within a short period of time this is a big achievement for a
sick Company, which is revived by the Committee for Revival of Sick Industrial Units. During the year the Company has
been able to supply bags to Pakistan PTA Limited (formerly ICI PTA Limited) and is likely to replace their imported bags
with locally manufactured bags substantially.
However as a result of increase in ocean freight through imposition of War Risk and GRI in our region, profitability has
been jeopardized. China and India are paying much less ocean freight as compared to us as there is no war risk charge
or GRI on the consignment from these countries.
Operating Results
					(Rupees in thousands)
					2003	2002
Loss as per Audited Accounts					-654	-7,852
Accumulated Loss brought Forward					-238,818	-230,966
					-239,472	-238,818
Rescheduling / Restructuring
PICIC, National Bank of Pakistan and Bank AI-Habib have rescheduled the loans as per decision of Committee
for Revival of Sick Industrial Units (CRSIU). Whereas, agreement with ICP led Consortium under SBP Circular 29,
dated October 15, 2002 has been approved and documentation is process. We have already paid Rs. 1.176 million
being the 10% down payment to ICP Consortium. Remaining amount will be paid in 12 quarterly installments commencing
from November 2003. We have also applied to National Bank of Pakistan to settle the liabilities under the SBP guidelines,
which is under consideration. Settlement with IDBP is still in process and hopefully IDBP will accept the decision of
CRSIU.
Payments to the Banks
After the revival package approved by the CRSIU the Company has paid to the financial institutions as follows:-
PICIC		Rs.  12.065    Million
NBP		Rs.    4.080    Million
Bank AI-Habib		Rs.    2.234    Million
ICP		Rs.    0.630    Million
Earning Per Share
The loss per share for the period under review is Rs. 0.09 as compared to Rs. 1.11 in the preceding year.
Dividend
No dividend or bonus shares haves been recommended by the Board to the Shareholders due to losses incurred by the
Company.
Significant Plans and Decisions
The Management is in active consideration of alternate plans to re-start Mirpur Unit and also trying to diversify the
project into Jumbo Bags manufacturing facility. In this regard the management is negotiating with Storsack UK Limited
and some local investors for investment in Mirpur Unit as equity/soft term loan.
Meetings of the Board of Directors
Four Meetings of the Board of Directors of the Company were held during the year. Mr. Shahid Mahmood was appointed
as Director in place of Mr. Javed Iqbal (ICP Nominee), who has resigned the year under review.
Attendance of the Directors are given hereunder:
Board of Directors:			No. of Meeting attended
Mr. Mohammad Ahsraf Khan			4
Mr. Farooq Khan			2
Dr. Mrs. Yasmin Ashraf			4
Mr. Mohammad Younus Khan			3
Mr. Mohammad Akram			2
Mst. Hareem Ara Hashmi			4
Mr. Javed Iqbal    ICP Nominee (resigned)			2
Mr. Shahid Mehmood   ICP Nominee			1
The Market & Future Prospects
By the Grace of Allah the Company has exported Jumbo Bags valuing USD $ 2.175 million mainly to M/s. Storsack UK
Limited. In addition we have also explored other markets and able to export to Germany and Ireland. On the local
scenario after the trial order last year the Company has been able to supply of bags to Pakistan PTA Limited (ICI) on
regular basis.
Audit Committee
In compliance with the Code of Corporation Governance, the Board of Directors has established an Audit Committee
and the following are the Audit Committee's members:-
Mr. Mohammad Younus Khan
Mr. Shoaib Abdullah
Mr. Mohammad Zahoor
Pattern of Share Holding
The pattern of share holding is enclosed with this report.
Six Years Review at a Glance
The Six years review of Accounts is enclosed with this report.
Auditors
The present Auditors M/s. Kanwar Furqan All & Co. Chartered Accountants as Auditors retire and being eligible have
offered themselves as Auditor of the Company.
Acknowledgments
I would like to thank our bankers for their kind financial and moral support to us. I also like to thank Mr. Simon Wildi,
Managing Director of Storsack UK for his kind supports to KASHMIR POLYTEX LIMITED. I also express my appreciation
for the continued support of our Shareholders, Employees & Suppliers during the year.
STATEMENT OF COMPLIANCE WITH
THE CODE OF CORPORATE GOVERNANCE
This statement Is being presented to comply with the Code of Corporate Governance contained In the listing
regulations 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.       Company encourages representation of Independent non-executive directors and directors
representing minority interests  on its Board of Directors. At present the Board includes all
independent non-executive directors except for the Chief Executive.
2.       The Directors have confirmed that none of them is serving as a directors in more than ten listed
companies, including this Company.
3.       All the residents directors of the Company are registered as taxpayer and none of them has defaulted
In payment of any loan to a banking company, a DPI or an NBFL or, being a member of a stock
exchange, has been declared as a defaulter by the stock exchange.
4.       The Company has prepared a "Statement of Ethics and Business Practices", which has been
signed by the employees of the Company and it is in the knowledge of the Company's Directors.
5.       The Company has in place processes and polices as required by the Code. Formal adoption of
these policies by the Board has been undertaken as a ongoing process. The corporate strategy is
reviewed by the Board from time to time.
6.       All the powers of the Board have been duly exercised and decision on material transactions, including
appointment and determination of remuneration and terms and conditions of employment of the
CEO have been taken by the board.
7.       All the four meetings of the Board held during the year were presided over by the Chairman.
Written notices of the Board meetings including the four quarterly meetings, alongwith agenda and
working papers, were circulated at least seven days before the meeting. The minutes of the meetings
were appropriately recorded and circulated.
8.       The directors have been provided with copies of the Listing Regulations of the Karachi and Lahore
Stock Exchanges Company's Memorandum and Articles of Association and the Code of Corporate
Governance and they are well conversant with their duties and responsibilities.
9.       The Board has approved appointment of Head of internal Audit, including his remuneration and
terms and conditions of employment, as determined by the CEO.
10.     The directors' report has been prepared in compliance with the requirements of the Code and fully
describes the salient matters required to the disclosed.
11.     The financial statements of the Company were duly endorsed by the CEO and CFO before approval
of the Board.
12.     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.
13.     The company has complied with all the corporate and financial reporting requirements of the Code.
14.     The Board has formed an audit committee. It comprises three members, including the chairman,
of the committee, who is non executive directors.
15.     Four quarterly meetings of the audit committee were held during the year prior to approval of
interim and final results of the company as required by the Code. The terms of reference of the
committee have been formed and advised to the committee for compliance.
16.     The Board has set-up an effective internal audit function who are considered suitably qualified and
experienced for the purpose and are conversant with the policies and procedures of the company
and they are involved in the internal audit function on a full time basis.
17.     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 firms, 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 the Institute of
Chartered Accountants of Pakistan.
18.     The statutory auditors or the persons 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 FFAC guide lines in this regard.
19.     We confirm that all other material principles contained in the Code have been complied with.
AUDITORS' REPORT TO THE MEMBERS