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UNIVERSITY OF CENTRAL PUNJAB

Company: Nishat Textile Limited. Product: Nishat Production Analysis. Submitted To:

PROF. AZFAR ALI. Submitted By:

Ali Murtaza Qureshi Malik Kashif Arslan Javed M. Saleem Ahmad Noman Section: M Submission Date:

(L1F10MBAM0094) (L1F10MBAM2113) (L1F10MBAM0106) (L1F10MBAM2200) (L1S10MBAM2185)

7 June , 2011

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ACKNOWLEDGEMENTS

We feel very lucky that ALLAH give us a chance to show our abilities in the field of reporting .After ALLAH we are thankful to our kind Prof. Azfar Ali for helping us to make this report. He guided us very sincerely for the completion of this report. We are also very much thankful to Mr.Badar-ulHassan (Chief Financial Officer) for giving us their precious time, very useful advices and information for the completion of this report. We worked very hard for completion of this report and finally by the Grace of GOD we have been able to complete our report on NISHAT TEXTILES LIMITED.

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MISSION STATEMENT: To provide quality products to customers and explore new markets to promote and expand sales of the company through good governance and foster a sound and dynamic team, so as to achieve optimim pice of product of the company for sustainable and equitable growth and prosperity of the company.

Vision Statement of Nishat Textiles Limited: To transform the company into yarn, cloth and processed cloth and manufacturing company that is fully meaningful role on sustainable basis Pakistan. a modern and dynamic finished products equipped to play a in the economy of

To transform the company into modern and dynamic power generating company that is fully equipped to play a meaningful role on sustain able basis in the economy of Pakistan.

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History of Company: NISHAT MILLS LIMITED (NML) commenced business in 1951 as a partnership concern, which was converted into private limited company in 1959. In 1961, the company went public and was listed on the Karachi stock exchange, the only stock exchange in the country at that time. NML started out as a weaving unit with 500 semi-automatic looms; later 10000spindles were added, laying the foundation on nations biggest textiles composite project. Composite project at Nishat mills limited Faisalabad covering 98 acre of land is providing all production process under one roof i.e. spinning, weaving, processing, stitching and power generation. The Founder A man of vision, courage and integrity, Mohammad Yahiya was born in 1918 i n Chiniot. In 1947 when he was running a leather business in C a l c u t t a , h e witnessed the momentous that swept the indo-Pak sub-continent and resulted in t he emergence of Pakistan. Like many of his contemporaries, he also migrated to the new country to help establish its industrial base. His is a story of success through sheer hard work and an undaunted spirit of enterprise. Beginning with a cotton export house, he soon branched out into ginning, cotton and jute textiles, chemicals and insurance. He was elected Chairman of All Pakistan textile Mills Association (APTMA), the prime textile body in the country. He died in 1969, at the age of 51 having achieved so much success in so short period. The Chairman Today Main Mohammad Mansha, the chairman of Nishat Group, like his father, continues the spirit of entrepreneurship and has led the group to become a multi dimensional corporation, with wide ranging interests. Nishat has grown from a cotton export house into the premier business group of the country with 5 listed companies, concentrating on 5 core business, Textiles, Cement, Banking, and Power Generation & Insurance companies. Today, Nishat is considered to be a part with multinationals operating locally in terms of its quality products and management skills. Firmly believing in Growth through Professional Management the corporate culture of NML is based on decentralization, delegation of authority, encouraging the acceptance of responsibility and inculcating quality consciousness.

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COMPANY INFORMATION BOARD OF DIRECTORS:

Main Umer Mansha Mian Hassan Mansha Mr. Khalid Qadeer Qureshi Mr. Muhammad Azam Mr. Muhammad Ali Zeb Mr. Syed Zahid Hussain (Chairman/ Chief Executive Officer)

Ms. Nabiha Shahnawaz Cheema AUDIT COMMITTEE:

Mr. Khalid Qadeer Qureshi Mr. Muhammad Azam (Chairman/ Member) (Member) (Member)

Ms. Nabiha Shahnawaz Cheema

CHIEF FINANCIAL OFFICER: Mr. Badar-Ul-Hassan COMPANY SECRETARY:

Mr. Khalid Mehmood Chohan

AUDITORS: Riaz Ahmad & Company LEGAL ADVISOR:

(Chartered Accountants)

Mr. M Aurangzeb Khan, Advocate, Chamber No 6, District Court Faisalabad.

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BANKERS OF THE COMPANY:

Albarka Islamic Bank Allied Bank Limited Askari Bank Limited Bank Alfalah Limited Barclays Bank PLC Bank Islamic Pakistan Limited Citibank N.A Deutsche Bank Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank HSBC Bank Middle East JS Bank Limited KASB Bank Limited Meezan Bank Limited National Bank Limited NIB Bank Limited Pakistan Kuwait Investment Company Limited Samba Bank Limited Saudi Pak Industrial & Agricultural Investment Company Silk Bank Standard Chartered Bank (Pakistan) Limited The Royal Bank of Scotland United Bank Limited

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NISHAT TEXTILES (LTD.)

The Textile Industry:
Over the years, Pakistan is said to be the single crop economy i.e. cotton and textile that claims the lion's share in terms of the contribution in the national economy of Pakistan. Despite efforts to bring in diversification in country's overall economic get-up the textile sector continues to be the most important segment of the national economy. Its share in the economy, in terms of GDP, exports, employment, foreign exchange earnings, investment and revenue generation altogether placed the textile industry as the single largest determinant of the economic growth of the country. Despite harsh and hard international economic conditions, Pakistan's textile industry has weathered the storm by coming out of the international crisis in a very positive manner. During the year exports were controlled from falling and significant investment was made in value-added expansion and in Balancing-Modernization- Replacement (BMR). Besides fall out of the events of September 11, the implementation of WTO's agreement, various bilateral agreements have been signed and implemented. As a result global scenario has changed. Government and the corporate textile sector adjusted their policies to achieve maximum benefits of free trade. So, local structure of the corporate culture, investment pattern and fiscal and monetary policies were significantly changed.

IMPORTS textile machinery:

Import of textile machinery and equipment has picked up since 1997-98 when a bumper cotton crop was harvested and the Textile Industry reaped massive profits due to lower input cost. In the last five years more than Rs9 billion have been invested for the import of spinning machinery. Nishat is one of the major customers in terms of importing Textile Machinery from almost all developed countries. It is expected that an additional Rs10 billion would be required for Balancing, Modernization and Replacement (BMR) in the spinning sector during the next three years for producing superior quality yarn besides several units are in various stages of installation in Karachi also. These facilities would improve value-addition in fabrics, besides increasing the volume of fabrics and quality garments exports from the country. Textile is the only sector where investment has been substantial and regular during past three years. The most encouraging factor of this investment is diversity.

University of central Punjab The entrepreneurs, who earlier concentrated on Spinning and Weaving, have now established compact units adding state-of-the-art finishing units and knitting machines to add value to their products. The latest addition to this is the setting up of denim cloth producing units. At present, the export competitiveness of the textile industry can be improved by aggressive marketing techniques and quality improvements which have to be taken care of micro-level that is each textile unit should make its own independent efforts to sell its products in different international markets. All the individual textile units should implement the ISO 9001 program for quality standard and ISO 14000 for environmental standards to counter the threat of globalization.

EXPORTS of Textile:
Despite sluggish trends in the international markets, exports of textile manufactures increased from $5.75 billion in 2000-2001 to $5.8 billion in 2001-02. The encouraging factor was the increase in the exports of value-added items. The share of value-added products in total textile exports from Pakistan this year was 57.13 per cent as compared to 54 per cent last year. Cotton cloth export also increased to $1.13 billion during this period as compared to $1.03 billion in 2000-01, indicating an increase of 9.7 per cent. The exports of bed-wear fetched $918 million against $745 million; showing growth of 23 per cent, while towels exports increased by 12 per cent to $270 million against 242 million. Readymade Garments improved by 7 per cent to $882 million from$827 million, whereas Made-up articles increased by 6 per cent to $351 million as compared to $331 million. The exports of five sub-groups i.e. Cotton Yarn, knitwear, Tents, Canvas/Tarpaulin, Art, Silk/Synthetic Textile and other manufactures declined during the period. Cotton yarn, which earned $1.1 billion during 2000-2001, earned $ $911 million. The textile quota exports to the United States, European Union, Canada and Turkey grew by over 18 per cent with nominal increase in value during the first seven months of the calendar year 2002 compared to the same period last year. The highest amount of increase of 55 per cent in quota exports followed by US 29 per cent and EU 12 per cent. Exports to Canada declined by 21 per cent in quantity. In terms of value, exports grew by 30 per cent to Turkey and 13 per cent to the EU. Exports declined in case of Canada by 29 per cent and 9 per for the US. The total exports to the US were 420 million square meters worth $481 million; European Union imported 1058-million square meter worth $509 million. Canada imported 16 million square meters worth $18 million and Turkey, 101 million square meters worth $28 million. The average unit price of Pakistan's textile quota exports dropped considerably i.e. 30 per cent in case of US, 9.6 per cent for the EU and 16 per cent in case of Turkey. The only increase 0.21 per cent was recorded in average unit price of exports to EU. The WTO agreement provides for making textile trade completely free from 2005.

University of central Punjab The textile export figures for the first ten months of the current year released by the Export Promotion Bureau revealed that the textile quota exports to the US improved by 24 per cent while the increase in exports to EU countries at the end of October 2002 registered an increase of 16.6 per cent in terms of value and 13 per cent in terms of quantity.

CHALLENGE:
To get maximum benefit from quota free regime, all out efforts are needed to boost textile exports and increase access to the international markets. To boost the exports, the State Bank of Pakistan has introduced three facilitating schemes for the exporters namely, Foreign Currency Export Financing Scheme (FCEFS), Political Risk Guarantee Scheme (PRGS) and the Export Guarantee Scheme (EGS). The bank would provide 210 days credit facility to exporters for South America as compared to 120 days credit facility to other markets.

Quality Policy:

We work together as a team for implementation and continual improvement of total quality system in order to achieve satisfaction of our internal and external customers.

Textile Vision 2006:

An open market driven, innovative & dynamic Textile Sector which is:Internationally Integrated. Globally Competitive Fully equipped to exploit the opportunities created by the MFA Phase out and this enables Pakistan to be amongst the Top Five Textile Exporting Countries not only in Asia all over the world with the tremendous Textile companies Low Road Scenario represented a situation where only the historic export growth rates in textile sub-sectors were maintained. The overall average export growth for the textile sector after analysis was finalized at 6% per annum. Do-Able Scenario envisaged increase in unit price realization of yarn, fabric, textile madeups and garments with an attempt to maintain the market share in each individual market. It also suggested penetration in the non-quota markets along with increased share of synthetic and blended yarns, fabrics and garments. The overall export growth in this scenario was estimated at 12% per annum. High Road Scenario the most ambitious of the scenarios that not only adopted the apparel sector as the engine of textile export growth but also recommended diversification in products that hold greatest potential but unfortunately have been neglected e.g. woven garments, sportswear, specialized industrial garments, and women wear. Besides broadening

University of central Punjab of export product portfolio with extra push in synthetic and man-made fibers, fabrics and garments,

NISHAT GROUP OF COMPANIES: NISHAT MILLS LTD, FAISALABAD NISHAT DYEING AND FINISHING, LAHORE NISHAT FABRICS, BHIKHI NISHAT SPINNING, FEROZE WATTOAN NISHAT SEWING, LAHORE

PRODUCT LINE : Products line of Nishat mills limited consists of following items, BEDDING

Sheet sets

Quilt cover sets Bed spreads Comforters Bed skirts Oxford pillow cases Blanket covers Sleeping bags

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CURTAINS & ACCESSORIES Embroidered curtains

Pencil pleat tape curtains Pinch pleat lined & unlined curtains Tab top & rod pocket curtains Assorted pelmets and window dressings Oxford cushion covers Frilled and piped cushion covers Frilled, piped and pleated tie backs

TABLE, FURNITURE & KITCHEN ACCESSORIES

Tea cozy Table mats Table cloth and napkins Aprons Kitchen gloves Pot holders Chair pads with circle tacks Couch cove

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TEXTILE CAPACITY: Production process consists of spinning, weaving, processing, and finishing. The processing includes dyeing, engraving. The textile capacity of the group is the largest in the country. An addition of 20000 new spindles, 100 new air jets looms and new dyeing plant has increased the existing capacity of 24000 spindles, 740 looms and dyeing and finishing capacity of 5 million meters. The group is the largest exporter of textile products from Pakistan for more than a decade. Export Oriented Organization Nishat mills limited is an export oriented organization. Nishat mills limited exports more than 90% of its products mainly to the Far East, Europe and United States. D.G khan Cement Company limited In 1992, Nishat group acquired D.G Khan Cement Company LIMITED from the government of Pakistan. DGKCC is the second largest project of the group and is ideally located in the heart of the Pakistan. DGKCC Unit No I has a capacity of 2,200 tons per day, a new unit having the capacity of 3,300 ton was established in 1997, international Finance Corporation and Common Wealth Development Corporation have finance this unit. With addition of unit NO 2, DGKCC has become the largest manufacture cement of Pakistan. Muslim commercial bank In 1991, Nishat Group ventured into the financial sector through the acquisition of Muslim Commercial Bank. MCB has the grown ever since and is now the largest in the private sector. MCB has a network of over 1500 branches employing over 12,000 people. Management of Nishat Mills Limited Nishat Mills Limited employees are highly qualified professionals and have a young, energetic and dedicated team of professionals who have a lot of knowledge to their credit. Managers are responsible for the task assigned to them in their departments and also have to match whether their respective department is achieving the desired efficiency level or not.

There are at least three basic requirements for a successful company and the managers of Nishat Mill Limited are made to think on these lines: 1. It must provide a product (good or service) that suits best to the companys capabilities and for which there is a sufficient market.

University of central Punjab 2. It must provide the product with consistent quality at a level that appeals to intended customers and satisfy their needs. 3. It must provide a product at a cost that always an adequate profit and a reasonable sale price. INTERNATIONAL STANDARD OF ORGANIZATION (ISO) Nishat mills limited have achieved ISO 9001 and ISO 9002 certificate in 1997. In order to achieve this certificate following requirements should be fulfilled, (1) MANAGEMENT RESPONSIBILITIES Management responsibilities includes the following, i. Quality policy According to the ISO 9001 and ISO 9002, it is utmost responsibility of management to devise policies that provide quality products to customers. Nishat is working hard to ensure that they produce quality products. ii. Customer expectation It is essential that customer expectation should be fulfilled. It is the responsibility of management to do so. Since Nishat is an export-oriented organization so utmost attention is paid to meet customers need and requirements. iii. Resource management Utilization of resources play crucial role in the success or failure of organization. If resources are effectively utilized, they become cause of success for organization. Nishat is effectively using its resources and thus has achieved ISO 9001 and ISO 9002. In the financial year of 1999-00, it declared dividend of 26%, which is highest so far. This performance shows that Nishat mills limited have sky-high goals. Human resource management also exists. They have ensured that, right man is placed at right job and also at the right time. Various training programs are offered for upgrading the skills of staff.

iv. Responsibility and authority Nishat is fairly decentralized organization. Middle level management makes most of decisions and matters are decided in a friendly environment. Nishat cares a lot for its staff. Orders are not dictated but they are made with effective participation from staff. v. Management representatives Nishat governing body is highly talented. Board of directors include professional of great repute. They are committed toward achieving a good name for Nishat mills limited.

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General market review and future prospects Worldwide businesses were adversely affected by onset of global economic recession in financial year 2008-2009. There has been some recovery of economies from the recession in financial year 2009-2010; however, its effect is still far from over. Global recession is not the only cause of our concern. Serious internal issues also affected our textile industry quite badly. The high cost of production resulting from higher cotton prices, rising energy costs, increasing prices of imported inputs due to depreciation of Pakistani rupee, double digit inflation and prolonged power cuts are posing serious threats to textile sector. On these fronts the situation is expected to remain volatile in the future. Our company did extremely well during the current financial year and achieved 32.11% growth in total net revenue from the corresponding previous year. Despite all the challenges faced by our textile Sector, Nishat achieved this success through full utilization of its production capacity, timely investments, effective business planning, aggressive marketing strategy, strong customer base and diversified product Range. Our textile industry has been going through one of the toughest periods in decades. It has been facing tough challenges but the worse can be expected in the next year when the loss of cotton crop resulting from unprecedented rains and floods in the Country will adversely affect the textile sector. Currently, the impact of this huge natural calamity cannot be assessed. All the sectors of our economy in general and the agriculture dependant business such as textile sector in particular will have to face extremely tough challenges including but not limited to raw material shortages causing prices of supplies to increase, higher cost of imported raw material, expected devaluation of Rupee and higher inflation. In this need of hour, the Government is required to introduce very effective measures to protect our export businesses of which textile sector is the biggest contributor. Besides the disastrous effect of floods in the future, we foresee more challenges which include tough competition from neighboring countries and continuing trend of slower sales of textile products in US and European markets. As evident from our excellent results in the current year we are keeping close

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eye on market situation and taking proactive measures to mitigate the impact of emerging challenges. As a part of our future marketing strategy we are exploring new avenues and particularly focusing on developing work wear business. We believe that addition of this business will enable us to fill our capacities in the lean months and will result in consistent growth of business throughout the year. We are actively analyzing the market situation and damage to the cotton crop caused by the floods in the country and hopeful that we will be able to develop an effective strategy to ensure ample supply of cotton and other resources at minimum costs possible. Our strength lies in our strategic planning and marketing capabilities along with our vertically integrated production facilities that can turn raw cotton to a final finished consumer product that always attract attention of customers all over the world. Our intentions are much focused to add further value added products and systems and to further diversify our product range.

Spinning In financial year 2009-2010, cotton prices have significantly increased owing mainly to reduction in cotton imports, reduced cotton crop of China and increasing demand of cotton yarn in the Far East. China has appeared as the major importer of cotton. Consequently, cotton prices had increased by 75% by the end of the current year. This increase in cotton prices caused significant increase in yarn prices and resulted in higher sales for spinning business and an increase in margins. Increased cotton prices, prolonged power shortages, high borrowing rates and high rate of inflation have forced a number of spinners to close down the business. In third quarter of the current year the Government of Pakistans measure to control the cotton yarn prices in the domestic market through restrictions on export of yarn such as imposition of quantitative quota and regulatory duty on cotton yarn export further affected the spinning business. Despite all these challenges, overall increase in demand of cotton yarn and higher selling prices increased the profitability for spinners. Our spinning business in Nishat has successfully overcome all these challenges and has shown positive growth through close monitoring of the market situation and with timely measures. We achieved growth in our sale quantities as well as sale prices and increased our profitability with timely investment in cotton to stabilize fluctuations in the cotton prices. In the current year our local cotton purchase price was Rs 4,016 per maund and imported cotton purchase price was Rs. 6,004 per maund. Furthermore, continuous diminution in Pak Rupee, increasing demand of cotton yarn, slight improvement in global economic scenario favorably supported export of cotton yarn. Furthermore, during the current financial year Nishat has upgraded its spinning machinery with erection

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of most modern and efficient Ring Frames and Cone Winding machines in two spinning units and replacement of similar machines of other units to help increase automation, reduce labor cost and produce better quality yarn. The installation of our Yarn Dyeing facility of 7 Tons / day is in progress This is expected to start operating from July 2010. Weaving Financial year 2009-2010 was a very turbulent year for our weaving business. Sharp increase in cotton prices, high volatility in yarn prices together with continued effects of global economic recession started during the previous year made the current year extremely challenging. We did extremely well in achieving 9.27% increase in our sales over the previous year through our wide range of customers and specialized products. We managed to increase our work wear and military uniform business together with increasing the abrasive fabric business mainly due to revival of the car industry, however, fashion business is still slow owing to immense pressure on prices. However, sharp increase in cotton and yarn prices and pressure on selling prices in Europe and America has squeezed our profit margins since this sharp rise in cotton and yarn prices could not be fully passed on to our customers. It has been very difficult for us to get appropriate price increase particularly from the customers in Europe. In the next year timing of purchase of yarn will be of particular importance as it was this year. A drop and more stability in cotton and yarn prices next year will consequently decrease our selling prices but result in better margins for us. Our customers are currently wary of volatility in cotton and yarn prices and thus are careful of placing orders in advance. However, overall sentiment among customers is positive for the coming year and we will continue focusing on our excellent customer relationships. Recently we have installed 50 new state of the art Toyota air jet looms to expand our production capacity at one of our units. Focus on reducing our production costs through better production facilities, effective strategy for yarn purchases and new products and niche marketing are keys to success going forward.

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Processing and Home Textile During the current financial year the markets had been very volatile owing to impact of continued global economic recession, significant increase in cotton, yarn and grey fabric prices and lower demand in international markets that had resulted in negative impacts on processing and home textile business also. However, during the current year, global economic Recession in American and European markets slightly eased out. Despite these challenges, Nishat has once again proved its ability to survive in the difficult times and it has achieved growth of 25.76% in sales volumes, however, with the significant increase in prices of our raw material we could only maintain our profitability levels of the previous year. Our proactive marketing approach, strong relationship with customers, large production facilities, own power generation facilities, ability to utilize alternative energy sources and vertical integration of entire textile process made this possible for us. Furthermore, some more businesses were developed by us that improved our exports. In particular Turkish and Spanish markets and new customers like Angora, Next, Kohl, HLL etc have significantly contributed towards enabling us to utilize our optimum production and stitching capacities. We have been able to maintain our position as one of the largest exporters of Pakistans textile industry. We expect that in future there will be more challenges due to tough competition from neighboring countries and highly volatile cotton, yarn and grey prices especially after the damages to cotton crop caused by the floods in our country. In order to cope with these circumstances we are taking all necessary measures, which include ensuring timely sufficient and cheap purchase of grey cloth, negotiating prices with all customers based on prevailing market conditions, focusing on maintaining certain contribution margins and retaining key customers. Furthermore, we have already started focusing on further developing our business in up-market brands over and above the regular mill-runner articles. Nishat is becoming a stronger player with regard to special fabric supplies to several European armed forces that requires extraordinary quality requirements and consistency throughout the production. Our local retail business of Nishat Linen shops has also expanded during the current year. Moving to the next year, the prices of cotton, yarn and grey will largely affect the volumes and profitability of our business. Moreover, we have upgraded our processing plant with the narrow width printing machine. One hundred stitching machines were also installed along with the switch-track system that will enhance the working efficiency enormously besides the improved product quality. We are further focusing on

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to improve our production capacities as well as production efficiencies along with optimum utilization of human resources. We have also planned installation of a new bleaching plant and increasing our sewing capacity with the purchase of number of new sewing machines which will help us further enhance our ability to handle large volumes and on time deliveries. Garments Our garments sector has shown tremendous improvement in financial 20092010 over the corresponding previous year which is attributable to our commitment to provide world class products to our high end customers. The current financial year started with challenges of high prices of cotton and frequent electricity and gas shut downs. Our energy bills are much higher compared to the previous years. However, with strong commitment, effective management planning and better business strategies towards facing these challenges we have been successful in achieving excellent results. Nishat Apparel produces close to half a million garments every month making it one of the largest export oriented apparel units of the country under one roof. Professionalism, systematic approach, clear cut future strategies and investments in human resource are our hallmarks. This labor intensive project provides a great employment opportunity to a large number of households in the area. Our future strategies include investments in building and machineries, thus increasing the capacities to well over 600,000 units per month. For this purpose we have already ordered worlds best laundry machines and are in process of acquiring modernized equipment to add two new production lines. With these changes, continuous growth and tremendous customer support, we believe Nishat Apparel is now set to show even better results in future. Furthermore, during the current year, we have launched a fully operational product development department to create a client focused development process through research.

Power Generation Nishat Mills has installed most modern captive power plants at all its sites to keep running with a low cost power at all the divisions like Spinning, Weaving, Processing and Stitching and Garment units without any failures. Our own power generation facility has provided us with a huge competitive edge in the times of frequent power outages. This also played a vital role to maintain an extra ordinary record of timely shipments. The plants are based on natural gas fired generators which besides generating electricity, efficiently produce steam through exhaust gas and chilling through hot water from engine cooling

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system. This concept utilizes the fuel to the fullest. In order to mitigate the power crises being faced by the country, Nishat Mills is supplying surplus power from its different sites to PEPCO distribution companies.

POWER PLANTS

FAISALABAD BHIKKI LAHORE

GENERATION DIESEL/ GAS CAPACITY FURNACE ENGINES (MW) OIL ENGINE 31.38 2 5 14.71 29.17 3 7 4 Information technology 4 8 4

GAS/ STEAM TURBINES 1 4 -

FEROZEWATWAN 9.7

We are fully focused to develop this key resource of the Company in line with the increasing requirements of the business. During the current year our Information Technology Division have concentrated on further extending and upgrading various parts of the IT infrastructure including upgrading computer systems and improving procedures. Our data management group spent significant time on introducing new IT systems in various processes as well as upgrading integration of running applications at various locations. We also introduced time management system and new costing systems at various locations. The network was expanded to new locations including Nishat Linen Shops. Network equipment was sufficiently upgraded and firewalls were replaced. During the year formal IT Policy including Disaster Recovery Plan was developed which was also approved by the Board of the Directors of the Company. Our entire IT division continues to work towards improving IT services and providing the best secure and stable technology environment to the Company.

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NISHAT

FINANCIAL STATEMENTS STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010

(RUPEES IN THOUSANDS) Year-2010 SALES COST OF SALES GROSS PROFIT DISTRIBUTION COST ADMINISTRATIVE EXPENSES OTHER OPERATING EXPENSE 31,535,647 (25,555,462) 5,980,185 (1,714,598) (545,166) (289,080) Year-2009 23,870,379 (19,518,838) 4,351,541 (1,315,630) (435,012) (191,608)

(2,548,844) 3,431,341 OTHER OPERATING INCOME PROFIT FROM OPERATIONS FINANCE COST PROFIT BEFORE TAXATION PROVISION FOR TAXATION PROFIT AFTER TAXATION 981,650

1,942,250 2,409,291 599,006

4,412,991 (1,126,922) 3,286,069 (370,608) 2915461

3,008,297 (1,446,796) 1,561,501 (293,500) 1,286,001

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EARNING PER SHARE OTHER COMPREHENSIVE INCOMES Surplus/deficit arising on remeasurement of available for sale investment Reclassification adjustments for gains included in profit or loss Deffered income tax relating to surplus on available for sale investment. Other comprehensive income/loss for the year-net of tax Total comprehensive income/loss for the year

10.50

6.23

6,314,129

(10,191,299)

(52,118)

(1,011,649)

164,138

5,250,362

(10,027,161)

8,165,823

(8,759,160)

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FINANCIAL HIGHLIGHTS
(RUPEES IN THOUSANDS)

YEAR-2010 Profit & Loss Net sales Gross profit Profit before tax profit after tax 31,535,647 5,980,185 3,286,069 2,915,461

YEAR-2009 23,870,379 4,351,541 1,561,501 1,286,001

Cash Outflows Tax paid 343,036 Financial charges 1,096,389 paid Fixed capital 1,955,703 expenditure Balance Sheet Current assets Current liabilities Operating fixed assets Total assets Long term loans and finances Share holders equity Ratios Current ratio

257,289 1,458,602 917,312

11,732,928 10,568,415 11,476,005 46,182,314 2,980,694 31,376,313

8,294,838 9,602,265 11,102,355 31,512,686 2,334,411 19,330,767

1.11:1

0.86:1

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Gearing ratio Gross profit% Net profit%(before tax) Earning per share Proposed dividend % Bonus % Production Machines No. of spindles No. of Sulzar looms No. of Airjet looms No. of Thermosole Dyeing machines No. of Rotary Printing machines

25.53 18.96 10.42

34.34 18.23 6.54

10.50 25 -

6.23 20 -

199,502 44 619

198,120 64 565

5 3

5 3