HUSEIN INDUSTRIES LIMITED
ANNUAL REPORT 2004
BOARD OF DIRECTORS
Mr. Aziz L. Jamal			Chairman/Chief Executive
Mr. Rashid L. Jamal			Director
Mr. Husein Jamal			Director
Mrs. Aisha Bai Suleman			Director
Mr. Akhtar Wasim Dar			Director
Mr. Ahsan Jamal			Director
Ms. Hina Abdul Rashid			Director
BOARD OF AUDIT COMMITTEE
Mr. Akhtar Wasim Dar			Chairman
Mr. Rashid L. Jamal			Member
Mr. Husein Jamal			Member
Mr. Mahmood-ul-Hassan Malik			Secretary
COMPANY SECRETARY
Mr. M. Anwar Kaludi
REGISTERED & HEAD OFFICE
HT-8, Landhi Industrial & Trading Estate,
Landhi, Karachi-75120.
Tel:        (9221) 5018536-8
Fax:        (9221) 5018545
E-mail:  sales@husein.com
BANKERS
Metropolitan Bank Limited
Habib Bank AG Zurich
Habib Bank Limited
AUDITORS
Hyder Bhimji & Co.
Chartered Accountants
MILLS
Landhi Industrial & Trading Estate,
Landhi, Karachi-75120.
DIRECTORS'REPORT
The Directors have pleasure in presenting before you 51st Annual Report together with Audited
Accounts for the year ended September 30, 2004.
FINANCIAL RESULTS:
					Rupees
Profit before taxation					54,929,064
Taxation Profit after taxation					6,490,271
Unappropriated profit brought forward Profit available for appropriations					194,765
Appropriations Transfer to general reserve
Proposed Dividend Final @ Rs. 2.00 per share Unappropriated profit carried forward					21,251,704
GENERAL
The year under review remained a challenge for our Textile Industry due to high prices of Raw
Cotton, Polyester Fibre and Utilities besides tough competition from other exporting countries.
Imposition of Anti Dumping Duty by European Union Countries on exports of Bed Linen from our
country was yet another factor which restrained your company's profitability for the year under
review. Despite these factors your Company managed to explore the new markets by developing
new products.
Subsequent to the year-end, on 5th November 2004 your company suffered an irreparable loss in
the sad demise of its esteemed Chairman & Chief Executive Mr. Latif E. Jamal whose invaluable
services to the Company are too laudable to be expressed in words. May Almighty Allah rest his
soul in eternal peace. In place of the deceased, the Board appointed Mr. Aziz L. Jamal as Chairman
& Chief Executive whereas Miss Hina Abdul Rashid has been appointed as Director of the Company
to fill in the casual vacancy.
As per directions of the Central Board of Revenue in respect of change of Financial Year of Accounts
of Textile Industry, the current year will be of 9 (nine) months.
The present auditors M/s. Hyder Bhimji & Company have resigned and being eligible offered
themselves for re-appointment.
The Directors would like to place on record their appreciation for the services rendered by the
executives, staff members and workers (1104) (2003: 1191) of the Company with the hope that they
will perform better in future.
Earnings per share for the year ended September 30, 2004 works out to Rs. 4.56 as against last years
Rs. 5.42.
AUDITORS'REPORT TO THE MEMBERS
We have audited the annexed balance sheet of HUSEIN INDUSTRIES LIMITED as at September
30, 2004 and the related profit and loss account, cash flow statement and statement of changes in
equity together with the notes forming part thereof, for the year then ended and we state that we
have obtained all the information and explanations which, to the best of our knowledge and belief,
were necessary for the purposes of our audit.
It is the responsibility of the Company's management to establish and maintain a system of internal
control, and prepare and present the above said statements in conformity with the approved
accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility
is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the above said statements are free of any material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the above said statements. An
audit also includes assessing the accounting policies and significant estimates made by management,
as well as, evaluating the overall presentation of the above said statements. We believe that our
audit provides a reasonable basis for our opinion and, after due verification, we report that:
(a)        in our opinion, proper books of accounts have been kept by the Company as required by
the Companies Ordinance, 1984;
(b)        in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have
been drawn up in conformity with the Companies Ordinance, 1984, and are in
agreement with the books of account and are further in accordance with accounting
policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the Company's
business; and
(iii) the business conducted, investments made and the expenditure incurred during
the year were in accordance with the objects of the Company;
(c)        in our opinion and to the best of our information and according to the explanations given
to us, the balance sheet, profit and loss account, cash flow statement and statement of
changes in equity together with the notes forming part thereof conform with approved
accounting standards as applicable in Pakistan, and, give the information required by the
Companies Ordinance, 1984, in the manner so required and respectively give a true and
fair view of the state of the Company's affairs as at September 30, 2004 and of the profit, its
cash flows and changes in equity for the year then ended; and
(d)        in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII
of 1980), was deducted by the Company and deposited in the Central Zakat Fund established
under Section 7 of that Ordinance.
The financial statements of M/s. Husein Industries Limited for the year ended September 30,
2003 were audited by another firm of Chartred Accountants whose report dated January 05, 2004
expressed an unqualified opinion on these financial statements.
STATEMENT ON CORPORATE AND FINANCIAL FRAME WORK
a)   The Financial Statements, prepared by the Management of the Company, present fairly its state
of affairs, the result of its operations, cash flows and changes in equity.
b)   Proper books of account of the Company have been maintained.
c)    Appropriate accounting policies have been consistently applied in preparation of financial
statements and accounting estimates are based on reasonable and prudent judgement.
d)   International Accounting Standards, as applicable in Pakistan, have been followed in preparation
of financial statements.
e)   The system of internal control is sound in design and has been effectively implemented and
monitored.
f)    There are no significant doubts upon the Company's ability to continue as a going concern.
g)   There has been no material departure from the best practices of corporate governance.
h)   Key operating and financial data for last six years is summarized on page No. 31.
i)    There are no overdue taxes, duties, levies and charges as on 30th September, 2004.
j)    There are no funds based piovident, gratuity and pension fund schemes.
k)   During the year meetings of the Board of Directors were held. Attendance by each Director is
given on page No. 30
1)    The statement showing the pattern of shareholdings in the Company, as on 30th September,
2004 is shown on page Nos. 28 to 29.
in) No trades in the shares of the listed Company were carried out by the Directors, CEO, CFO,
Company Secretary and their spouse and minor children.
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 Board has formed an audit committee. It comprises of three members, including the
Chairman of the Committee, two of whom are non-executive directors.
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 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.
18.        The statutory auditors of the Company have confirmed that they have been given a
satisfactory rating under the quality control review programme 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 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 IFAC guidelines in this regard.
20.        We confirm that all other material principles contained in the Code have been complied with
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.          The Company encourages representation of independent non-executive directors and
directors representing minority interests on its Board of Directors.
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 DPI or an NBFI or, being a member
of a stock exchange, has been declared as a defaulter by that stock exchange.
4.          Mr. Ahsan Jarnal has been appointed as a director of the Company to fill in the casual
vacancy, arose due to sad demise of Mr. Masrur Hasan Khan, who shall hold office for the
remainder of the term of late director.
5.          The Company has prepared a 'Statement of Ethics and Business Practices', which has been
signed by all the directors and employees of the Company.
6.          The Board has developed a vision/mission statement, overall corporate strategy and
significant policies of the Company. 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 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 meetings. The minutes of the meetings
were appropriately recorded and circulated.
9.          The Board arranged orientation courses for its-directors during the year to apprise them of
their duties and responsibilities.
10.        The Board has approved appointment of CFO, Company Secretary and Head of Internal
Audit, 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.
BALANCESHEET
			Note	2004	2003
				Rupees	Rupees
SHARE CAPITAL AND RESERVES
Authorised capital 15,000,000				150,000,000	150,000,000
ordinary shares of Rs. 10 each				106,258,520	106,258,520
Issued, subscribed and paid-up capital			3	33,857,517	33,857,517
				280,642,483	253,642,483
Reserves - capital				344,886	205,058
- revenue				314,844,886	287,705,058
- unrealised gain on long-term investments				381,854	194,765
				315,226,740	287,899,823
Unappropriated profit				421,485,260	394,158,343
				18,809,308	17,891,630
DEFERRED LIABILITIES			4
CURRENT LIABILITIES AND PROVISIONS				511,550,740	379,738,813
Trade and other payables			5	4,454,771	2,522,558
Accrued Mark-up /Interest			6	714,250,959	599,266,804
Short-term borrowings			7	845,640	871,212
Taxation				21,251,704	26,564,630
Proposed final dividend				1,252,353,814	1,008,964,017
				1,692,648,382	1,421,013,990
REVIEW REPORT TO THE MEMBERS ON STA TEMENT OF COMPLIANCE
WITH BESTPRA CTICES OF CODE OF CORPORA TE GO VERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of Husein Industries Limited to comply
with the Listing Regulation no. 37 of the Karachi Stock Exchange Guarantee Limitd, where the
Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of
Directors of the Company. Our responsibility is to review, to the extent where such compliance can
be objectively verified, whether the Statement of Compliance reflects the status of the Company's
compliance with the provisions of the Code of Corporate Governance and report if it does not. A
review is limited primarily to inquiries of the Company personnel and review of various documents
prepared by the Company to comply with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We have not carried out any special review of the internal control system to enable us to
express an opinion as to whether the Board's statement on internal control covers all controls and
the effectiveness of such internal controls.
Based on our review nothing has come to our attention which causes us to believe that the Statement
of Compliance does not appropriately reflect the Companies compliance, in all material respects,
with the best practices contained in the Code of Corporate Governance, as applicable to the Company
for the year ended September 30, 2004.
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED SEPTEMBER 30,2004
			Note	2004	2003
				Rupees	Rupees
Sales			16	1,628,588,233	1,191,048,186
Cost of goods sold			17	1,422,830,133	1,005,898,978
Gross profit				205,758,100	185,149,208
Distribution Cost			18	89,209,419	61,036,160
Administrative expenses			19	37,536,283	36,444,098
Other Operating Expenses			20	3,074,503	4,234,256
Finance costs			21	23,425,779	26,212,118
				153,245,984	127,926,632
Operating profit				52,512,116	57,222,576
Other income			22	2,416,948	4,411,573
Profit before taxation				54,929,064	61,634,149
Taxation			23	6,490,271	4,013,935
Profit after taxation				48,438,793	57,620,214
Profit brought forward				194,765	1,639,181
Profit available for appropriation				48,633,558	59,259,395
Appropriations:
Transfer to revenue reserve - General				27,000,000	32,500,000
Proposed dividend Rs. 2.00 per share (2003: Rs. 2.50 per share)				21,251,704	26,564,630
				48,251,704	59,064,630
Unappropriated profit carried forward				381,854	194,765
Earnings per share			24	4.56	5.42
AS AT SEPTEMBER 30, 2004
			Note	2004	2003
				Rupees	Rupees