Director's Report To The Shareholders

DIRECTORS' REPORT TO THE SHAREHOLDERS

Your directors are pleased to present half yearly accounts for the period ended March 31,2003.These accounts have been reviewed by the auidtors.

FINANCIAL RESULTS:

During the period under review company made a gross profit of Rs.4.576 million(Rs.13.826 million for 6 month period ended 31.3.2..2) and incurred a net loss after taxation of Rs.18.032 million (after tax loss Rs.14.080 million for 6 month period ended 31.3.2002)

Gross profit Margin declined form 6.8% in the previous corresponding period to 2.29% of sales, in the current period. Reason for this decreases attributed to increase in cost of sales, on average prices of polyester fibre increased by 16.36% and that of cotton by 29% during the current period in comparison with prices of the previous year's corresponding period. Cost of electricity also went up during this period.

Administrative expenses during the period under review increased by 46% in comparison with that of corresponding period of last year, mainly due to increase in rent ,rates and taxes, vehicles running expenses and expense and vehicles depreciation. Due to addition of vehicles, vehicles running expenses and vehicle depreciation went up. Corporate asset tax was paid during this period which was outstanding since long due to a dispute .causing increase in the expenses of rent, rates and taxes.

During the period of management shifted selling efforts from export to local market due to better availability of rates,as a result selling expenses were reduced by 30%.

Financial charges during the period under review have reduced by 14% in comparison to the corresponding period of last year ,due to decrease in markup of short term running finance.

In accordance with the requirement of SRO45(1)2003 dated 13.1.2003 of SECP,incremental depreciation due to revaluation of Fixed Assest,for the period under review and previous years, including deferred tax, has been transfered from surplus on Revaluation of Fixed Assests to Accmulated Losses , as per details given in statement of charges in Equity.

EPS for the current period is in negative at Rs.(1.19) in comparison to negative EPS of the corresponding period of last year of Rs.(0.93)

COURT CASES :

Court Cases with Faysal Bank Limited, for reasons explained in the previous directors reports, are still in progress and are at argument stage.

FUTURE PROSPECTUS:

The management of your company will try its best to improve the performance of the company in the future.

ACKNOWLEDGEMENT:

The management would like to place on record its appreciation for the continous support of its shareholders,customers and employees and expect to get the same support in the future.

On behalf of the Board

Faisalabad. Zahidnwar 29.05.2003 Chief Executive

Asim Textile Mills Ltd.

JK House 32-W Susan Road, Madina Town,

Faisalabad 38090, PAKISTAN

Tel: 92-41-8721953-6

Fax: 92-41-8712399