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ASIM TEXTILE MILLS LTD.

 DIRECTORS’ REPORT TO THE MEMBERS

Your directors are pleased to present unaudited accounts for the first quarter ended September 30, 2007.

The company has incurred net loss of Rs. 1.134 million as compared to net loss of Rs. 6.193 million for the corresponding quarter of last year. The decrease in loss is due to non provision of financial charges of Rs. 3.219 million on long term morabaha in current period. The financial charges have not been accounted for due to litigation with bank. Had financial charges been accounted for, the loss for the period would be Rs. 4.353 million as compared to loss of Rs. 6.193 million for the corresponding quarter of last year. We are facing continuous increase in prices of polyester fibre. The prices of cotton have also increased as compared to corresponding quarter of last year. The prices of packing material, stores and spares etc. are also increasing day by day.

 Earning per share (EPS) for this quarter is Rs. (0.07) as compared to EPS of Rs. (0.41) for the corresponding quarter of last year.

 There has been no change in the status of on going court cases with the bank, as reported in the directors’ report of the financial statements for the year ended June 30, 2007.

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

for and on behalf of the Board

Faisalabad.                                                              Zahid Anwar

29.10.2007                                                              Chief Executive