Saleem Denim Mills Limited
Annual Reports 2003
COMPANY'S INFORMATION
BOARD OF DIRECTORS
		1 .      MR. TAHIR SALEEM CHAUDHRY
		2.      MR. SHAHID SALEEM CHAUDHRY
		3.      MRS. SOBIA SALEEM
		4.      MR. ABDUL HAQ CHAUDHRY
		5.      MRS. NOSHEEN SHAHID
		6.      MR. ABDUL AZIZ CHUDHRY
		7.      MR. GHULAM FARID
AUDITORS
		M. ATHER & COMPANY
		Chartered Accountants
BANKERS
		Muslim Commercial Bank Limited
		Allied Bank of Pakistan Ltd.
REGISTERED OFFICE
		33-K.M., SHEIKHUPURA ROAD,
		FAISALABAD.
MILLS
		33-K.M., SHEIKHUPURA ROAD,
		FAISALABAD.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 17th Annual General Meeting of the Shareholders of SALEEM DENIM
INDUSTRIES LIMITED will be held at the Registered Office 33-K.M., Sheikhupura Road, Faisalabad, on December
31,2003 at 10.00 a.m. to transact the following business:-
1.              To confirm the minutes of the 16th Annual General Meeting held on March 31,2003.
2.              To receive, consider and adopt the Audited Balance Sheet and Profit and Loss Account of the Company
together with the Director's and Auditors' Report for the year ended September 30,2003.
3.              To appoint Auditors and to fix their remuneration. The retiring Auditors M/s M. Ather & Co. Chartered
Accountants, being eligible offer themselves for reappointment.
4.              To transact any other lawful business, with the permission of the chair.
On behalf of the Board
Faisalabad                                                                                                          TAHIR SALEEM CHAUDHRY
Dated: 9th December, 2003                                                                                                   Chief Executive
1.              The Share transfer books of the company will remain closed from December 24 to March 31 2003. (both
days inclusive)
2.              A member entitled to attended and vote at this meeting is entitled to appoint a proxy to attend and vote
instead of him / her. A proxy must be a member.
3.              The instrument appointing a proxy must be received at the Registered Office not later than 48 hours before
the time appointed for meeting.
4.              Shareholders are requested to promptly notify the Company of any change in their address.
VISION & MISSION STATEMENT
"Saleem Denim Industries Ltd." is committed to make sustained efforts towards optimum utilization of its
resources through good corporate governance for serving the interests of all its stakeholders.
STRATEGIC GOALS
*          Efficient deployment of resources
if         Minimization of losses
if         Environmental protection
STATEMENT OF BUSINESS ETHICS
*          Transparency in transactions
if          Sound business policies
if          Judicious use of company's resources
if          Justice to all
if          Integrity at all levels
if         Compliance of laws of the land
DIRECTOR'S REPORT TO THE SHARE HOLDERS
Dear Members,
The directors are pleased to present the annual report for the year ended 30th September, 2003 at this
occasion of the 17th annual general meeting of the company.
GENERAL
The under capacity operation and continuous losses incurred by the company forced us to temporarily
close the operation, because the company could not qualify for additional working capital limits from the
banks/financial institutions.
The matter of settlement of long terms liabilities with M/s Banker's Equity Ltd. remained unresolved. The
company has applied for the settlement / restructuring of liabilities under circular 29 of the SBP and the case
is still being processed. As a result of restructuring we hope to get a substantial relief in the outstanding
liabilities, which will decrease the burden of debt servicing and make the project a viable unit.
FINANCIAL RESULTS
		Rs. In Million	Rs. In Million	Variance
		2003	2002 (Restated)	Favourable/(Adverse)
Sales		10.583	11.36	-0.777
Cost of Sales		15.389	15.228	-0.161
Gross Profit / (Loss)		-4.806	-3.866	-0.938
OPERATING EXPENSES
Administrative		1.755	2.034	0.279
Selling		0.084	0.157	0.073
		1.839	2.191	0.352
Operating profit / (loss)		-6.645	-6.059	-0.586
Other Income		.0.044	0.036	0.008
OTHER CHARGES
Financial		13.12	13.117	0.003
Net Profit / (loss) for the year
before taxation		-19.721	-19.14	-0.581
Taxation		0.288	1.215	0.927
Net Profit / (loss) for the year
after taxation		-20.009	-20.355	0.346
DIVIDEND
Due to accumulated losses incurred by the company the declaration of dividend is not possible.
REASONS FOR ADVERSE VARIANCES
Reasons for adverse results in the current period as compared to the previous year being the shortage of
working capital, slump in the denim market, under capacity operation and inability of the company to
manufacture own products.
OUTSTANDING STATUTORY DUES
Details of outstanding statutory dues are given in Note No. 11 to the accounts. The dues could not be paid in
time because of shortage of funds with the company.
BOARD MEETINGS
During the year under review six board meetings were held. The attendance of the directors was as under:
S.NO.	NAME OF DIRECTORS			NO. OF MEETINGS
1	Mr. Tahir Saleem Chaudhry			6
2	Mr. Shahid Saleem Chaudhry			6
3	Mrs. Sobia Saleem			5
4	Mr. Abdul Haq Chaudhry			6
5	Mrs. Nosheen Shahid			4
6	Mr. Abdul Aziz Chaudhry			4
7	Mr. Ghulam Farid			5
STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAME WORK
The directors would like to confirm in relation to the financial statements and controls, the following:
1.       The financial statements, prepared by the management of the company, present fairly its state of
affairs, the result of its operation, cash flows and change in equity.
2.       Proper books of accounts of the company have been maintained.
3.      Appropriate accounting policies have been consistently applied in preparation of financial
statement and accounting estimates are on reasonable and prudent judgment.
4.       International Accounting Standards, as applicable in Pakistan, have been followed in preparation of
financial statements and any departure there from has been adequately disclosed.
5.       The system of internal control is sound in design and is being effectively implemented and
monitored.
6.       There has been no material departure from the best practices of Corporate Governance, as detailed
in Listing Regulations.
7.       The company strictly complies with standards of the safety rules and regulations. It also follows
environmental friendly policies.
8.      We have formed an audit committee from amongst the members of the Board of Directors.
Following are its members.
1.      Mr. Shahid Saleem
2.       Mrs. Sobia Saleem
3.       Mr.   Ghulam   Farid
9.       To ensure implementation of Management System, internal audit and management review is
planned.
10.    We observe the following ethics and business practices.
a)      Commitment to excellent quality.
b)      Profit maximization
c)       Transparency in financial practices
d)      Continuous betterment of employees.
AUDITOR'S OBSERVATIONS
1.       The balance confirmation letter were sent to M/s Banker's Equity Ltd. as well as M/s National Bank
of Pakistan but no response has been received. The matter being in litigation, the balances
remained unconfirmed.
2.      The stock pledged with M/s National Bank of Pakistan has been taken over by them for adjustment
against over dues and disposed of at a very low price inspite of the higher bidders available. Hence
the disposal has been disputed by the company and the matter is in litigation.
3.       The confirmation letters were circulated but the response is still awaited and we hope to receive the
same in due course of time.
4.       Since we have for the time being closed the operations. So the carrying out of such assessment of
recoverable amount of assets was not possible. In view of expected favourable settlement of
liabilities with Banks / Financial Institution and resumption of operation in near future, we do not see
any impairment losses. However this exercise will be carried in future, and the necessary
adjustments if any will be made.
GOING CONCERN
We are of the opinion that by the favourable settlement of liabilities under circular 29 of the SBP, we will get
substantial relief in debt servicing and will also be able to get new short terms financing limits. Thus the
company is expected to resume profitable operation very soon.
PAYMENT OF TAXES
The company has been regular in payment of taxes except in Income Tax cases where appeals are
pending decisions or the recent demands which could not be cleared because of shortage of funds. We
are trying to clear the dues sooner possible.
FUTURE PROSPECTS
Due to unexpected increases in the prices of cotton, cotton yarn and polyester the manufacturing of denim
became unviable. The company has been working on manufacturing for outsiders basis, but the
continuous losses incurred by the company aggravated the situation and it was considered appropriate to
close the operation forthe time being.
We have applied for the restructuring of our long terms as well as short terms liabilities with the Bankers /
Financial Institutions under the State Bank of Pakistan circular 29 and the case is being processed. We
hope the liabilities will be restructured with substantial relief which will enable the project to qualify
prudential regulations and get the working capital renewed. On resolution of financial problems we hope
the project will be able to resume operation. We also plan to carry out the BMP and improve the quantity as
well as quality of the products which will also enhance profitability.
LABOUR MANAGEMENT RELATIONS
These relations remained normal.
AUDITORS
The present auditors M/s M. Ather & Co. Chartered Accountants retire and being eligible offer themselves
forreappointment.
CORPORATE GOVERNANCE
Compliance of corporate governance is annexed.
PATTERN OF SHAREHOLDING
Pattern of shareholding is annexed.
Place:     Faisalabad
Date:      December 08, 2003                                                                           Tahir Saleem Chaudhry
Chief Executive
STATEMENT OF COMPLIANCE WITH THE CODE OF
CORPORATE GOVERNANCE
The Directors of Saleem Denim Industries Ltd., and its management is fully aware of their responsibilities
under the Code of Corporate Governance as incorporated in the listing regulations of Stock Exchanges in
the country under instructions from Securities & Exchange Commission of Pakistan. We are taking all
necessary steps to ensure Good Corporate Governance as required by the Code.
The company has applied the principles contained in the code in the following manner:
1.       The Company encourages representation of independent non-executive directors and director
representing minority interests on its Board of Directors. However, at present the Board includes
one executive and six non-executive director and no 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.       Only three directors of the company are registered as tax payers and none of them has defaulted in
payment of any loan to banking company, a DPI or and NBFC or being a member of Stock Exchange,
has been declared as a defaulter by that Stock Exchange.
4.       If a casual vacancy occurs in the Board that will be filled up by th directors within 15 days thereof.
5.       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 has been taken by the Board.
6.       The meetings of the Board were presided over by the CEO, written notices of the Board meetings
along with agenda were circulated at least seven days before the meetings. The minutes of the
meetings were appropriately recorded and circulated.