KOHINOOR WEAVING MILLS LIMITED
Annual Reports 2003
CONTENTS
Company Profile
Company Information
Mission Statement
Statement of Ethics and Business Practices
Notice of Annual General Meeting
Key Operating and Financial Data
Directors' Report to the Shareholders
Pattern of Shareholding
Performance Overview
Statement of Compliance with The Code of Corporate Governance
Review Report to the Members on Statement of Compliance
with best Practices of Code of Corporate Governance
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
COMPANY PROFILE
THEN AND NOW
Kohinoor Weaving Mills Limited was incorporated as a Public
Limited Company on December 21st 1987 and is located at
Manga Raiwind Road, District Kasur. The Company started
producing greige cloth in 1990 on 48 Sulzer looms.
Further Expansions saw the installation of 96 Tsudakoma air-jet
weaving machines in 1993 and 96 Picanol Omni air-jet weaving
machines during the period 1998-2000. The original Sulzer
looms were replaced with Picanol Omni Plus air-jet weaving
machines during 2001. In the current year another 16 Picanol
air-jet weaving machines equipped with Staubli jacquards were
installed for producing high value added fabrics. Today with 256
looms Kohinpor Weaving Mills Limited is the largest air-jet
weaving facility in Pakistan and one of the most modern and
technologically advanced greige weaving plants in the world.
Kohinoor Weaving Mills Limited Ultra-modern site has been
planned and developed to accommodate a true 'Manufacturing
Centre of Excellence'. The production facilities are located on
120 acres with building area of approximately 800,000 square
feet. Two new divisions of the Company have commenced
operations.
The Kohinoor dyeing division can bleach, dye and finish up to
2.5 million meters per month of narrow width fabric using state-
of-art European machinery from Monforts and Kusters. The
Kohinoor hosiery division can produce 180,000 dozen pairs of
sports socks per month using top-of-the-line machinery from
Italy including Matec, Lonati, Rosso, Cubotex and Tecnopea.
Kohinoor Weaving Mills Limited continues to invest in people,
technology, systems and processes to ensure that our current
competitive position is maintained as well as supporting the
ongoing improvement process in our endeavour to maintain
world best practice manufacturing.
KOHINOOR MAPLE LEAF GROUP
As part of the Kohinoor Mapel Leaf Group, Kohinoor Weaving
Mills Limited enjoys the support of its sister companies for
sourcing raw materials such as yarn and dyeing of its greige
fabric for home furnishings.
COMPANY INFORMATION
BOARD OF DIRECTORS
Tariq Sayeed Saigpl	Chairman
Aamir Fayyaz Sheikh	Chief Executive
Sayeed Tariq Saigol
Asad Fayyaz Sheikh
Ali Fayyaz Sheikh
Zamiruddin Azar
Gul Nawaz	NIT Nominee
AUDIT COMMITTEE
Zamiruddin Azar	Chairman
Sayeed Tariq Saigol	Member
Ali Fayyaz Sheikh	Member
Muhammad Ashraf	Secretary
CHIEF FINANCIAL OFFICER
Syed Mohsin Raza Naqvi
COMPANY SECRETARY
Muhammad Ashraf
MANAGER INTERNAL AUDIT
Kashif Nazir
AUDITORS
Riaz Ahmad & Company
Chartered Accountants
BANKERS
Al Baraka Islamic Bank Limited B.S.C (E.G.)
Askari Commercial Bank Limited
Bank Altaian Limited
Faysal Bank Limited
Habib Bank Limited
Muslim Commercial Bank Limited
National Bank of Pakistan
PICIC Commercial Bank Limited
Saudi Pak Commercial Bank Limited
Union Bank Limited
United Bank Limited
REGISTERED OFFICE &
SHARES DEPARTMENT
42 Lawrence Road, Lahore, Pakistan.
Tel: (92-42) 6302261, 6302262
Fax : (92-42) 6368721
MILLS
8th Kilometre, Manga Raiwind Road,
Distt. Kasur.
Tel: (92-4951)391941
Fax: (92-4951) 391 946
e-mail : kwml@kmlg.com
web site: www.kmlg.com
MISSION STATEMENT
The Kohinoor Weaving Mills Limited stated
mission is to achieve and then remain as the
most progressive and profitable company in
Pakistan in terms of industry standards and
stakeholders interest.
The Company shall achieve its mission through
a continuous process of having sourced, developed,
implemented and managed the best leading
edge technology, industry best practice, human
resource and innovative products and services
and sold these to its customers, suppliers
and stakeholders.
STATEMENT OF ETHICS AND BUSINESS PRACTICES
We believe a complete code of ethics is a
pre-requisite for all Directors and employees of the
Kohinoor Weaving Mills Limited. We endeavour
to have fully groomed employees committed to the
philosophy behind the code of ethics to carry out
honestly activities assigned to them. Our aim is
to have highest standard of excellence for the product
and the betterment for all those involved directly or
indirectly with our Company.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 16th Annual General Meeting of the members of Kohinoor Weaving Mills Limited
will be held on Wednesday December 31, 2003 at 03:00 p.m. at its Registered Office, 42-Lawrence Road, Lahore,
to transact the following business :-
1.       To confirm the minutes of the Extra Ordinary General Meeting held on December 02, 2003.
2.       To receive, consider and adopt the audited accounts of the Company for the year ended September 30,
2003 together with the Directors' and Auditors' Reports thereon.
3.       To approve final dividend in cash @ 15% and by way of bonus issue of fully paid bonus shares @ 10 % for
the year ended September 30, 2003.
4.       To appoint Auditors to hold office till the conclusion of the next Annual General Meeting and to fix their
remuneration.
5.       To transact any other business with the permission of the Chair.
(Muhammad Ashraf)
Lahore : December 09, 2003.                                                                                                 Company Secretary
NOTES:
1.       Share transfer books of the Company will remain closed from 23-12-2003 to 31-12-2003 (both days
inclusive) and no transfer will be accepted during this period. The members whose names appear in
the register of members as at the close of business on 22-12-2003 will qualify for the payment of
dividend and issue of bonus shares. However, 10% bonus shares would not qualify for 15% cash
dividend.
2.       A member entitled to vote at this meeting is entitled to appoint another member as proxy. Proxies in
order to be effective must be received at 42-Lawrence Road, Lahore, the Registered Office of the
Company not later than 48 hours before the meeting and must be duly stamped, signed and
witnessed.
3.       CDC Shareholders, entitled to attend and vote at this meeting, must bring with them their National
Identity Cards/Passports in original alongwith Participants' ID Numbers and their Account Numbers to
prove his/her identity, and in case of Proxy, must enclose an attested copy of his/her NIC or Passport.
Representatives of corporate members should bring the. usual documents required for such purpose.
4.       Shareholders are requested to promptly notify the Company of any change in their addresses.
KEY OPERATING AND FINANCIAL DATA
FROM 1997-98 TO 2002-03
		2002-03	2001-02	2000-01	1999-00	1998-99	1997-98
OPERATING DATA
Sales		3,825,002	3,892,343	2,711,343	2,140,007	2,014,905	1,271,409
Cost of Goods sold		3,378,156	3,325,658	2,128,777	1,649,640	1,539,679	957,531
Gross Profit		446,846	566,684	582,566	490,367	475,225	313,888
Profit Before Taxation		203,171	329,298	355,487	332,653	346,016	166,016
Profit After Taxation		161,213	284,951	320,978	308,701	331,016	146,316
Cash Dividend		36,094	43,750	131,250	126,875	136,500	38,500
FINANCIAL DATA
Paid Up Capital		240,625	218,750	218,750	175,000	140,000	140,000
Total Equity & Reserve		1,315,759	1,172,731	931,530	741,801	559,976	385,760
Long Term Loans		1,069,318	672,906	595,000	-	-	169,671
Fixed assets		2,224,964	1,841,607	1,595,299	703,738	711,415	640,247
Current Assets		1,769,767	1,411,716	1,162,664	982,543	913,925	735,052
Current Liabilities		1,877,337	1,577,479	1,324,103	975,210	1,023,765	898,590
KEY RATIOS
Gross Margin %		11.68	14.56	21.49	22.91	23.59	24.69
Operating Margin %		7.71	11.32	18	18.54	20.04	19.57
Net Profit Margin %		4.21	7.32	.      11.84	14.43	16.43	11.51
Return on Capital Employed %		12.25	24.3	34.46	41.61	59.11	50.58
Current Ratio		1:1	1:1	0.94:1	1:1	0.95:1	0.88:1
Earning Per Share (Rupees)		6.7	11.84	14.67	14.11	23.64	10.45
Cash Dividend %		15	20	60	72.5	97.5	28
STATISTICS
Number of looms Installed		240	240	240	228	228	204
Number of looms worked		240	240	240	228	228	204
Director Report
The directors are pleased to submit their annual report along with the audited financial statements of the company for the year
ended September 30,2003.
Overview of Textile Industry
The year under review has been a difficult one after the fateful events following 9/11. The unsettled conditions in the Middle East,
the invasion of Iraq and the continuing war on terrorism, have had a major impact on global markets and economies all around the
world. International markets remained in disarray and the US and European markets faced slow down in their economies which
adversely affected retail businesses. This lowered demand for textile products where keen competition was faced. Price of quality
cotton, particularly of extra long staple varieties and polyester staple fibre, have substantially increased. Intensified competition
from china and increase in price of inputs has lowered margins on textile products.
Growth in the out Put of large scale manufactured textile products showed decline during the fiscal year ended June 30, 2003,
mainly due to higher cotton prices and strengthening of Pak Rupee which has made Pakistani textile products less attractive in
international markets. Increase in European Union quota by 15% and grant of duty free access to value added textile products and
low interest rates could not fully reduce the adverse currency appreciation effect and rise in cost of manufacturing in the textile
industry.
Operating and financial results
Your Company earned a pre tax profit of Rs. 203.171 million on sales of Rs. 3,825.002 million against pretax profit of Rs. 329.298
million on last year sales of Rs. 3,892.343 million. Sales have witnessed a slight decrease of 1.73%, where as cost of goods sold is
higher by 1.56% when compared to last year costs.
Continued appreciation of Pak Rupee is a major reason for reduced sales and consequently reduced profits. Total dollar sales
made during the year ended September 30, 2003 were approximately US $ 61 million. Effective dollar rate realized during the
financial year ended on September 30,2003 was Rs. 1.43 less than the rate realized during the last year.
Dyeing Division started its commercial production during the year with operational and technical problems arising out of the
bankruptcy of our machinery manufacturer, which were overcome by hiring experienced foreign technicians from Europe resulting
in additional cost for the year under review. The Company had to initially offer introductory prices in order to develop a new
customer base for its dyeing division resulting in low contribution margins. We are pleased to inform that with increased confidence
of our customers in ourquality is leading to gradual improvement in contribution margins.