Notes To The Accounts

NOTES TO THE ACCOUNTS:

1. The accounts are un-audited and are being presented to members as required by notification # 2(52)/SE 2001 dated 05-11-2001 of SECP.

2. Accounting policies adopted for the preparation of 1st quarter accounts are the same as those applied in the preparation of the preceding annual published accounts of the company.

3. Contingencies & commitments:

Contingencies:

As disclosed in last annual published accounts, the company is not repaying the long term loan as it has filed a suit in the Lahore High Court, Lahore against Fasal Bank Limited for compensation of loss suffered on acquisition of unremunerative agriculture land and disposal of the same, for not providing timely cash finance facilities despite written commitments and for charging illegal profits against the principles of Islamic banking in contravention of the objective clause of its Articles and Memorandum of Association. The amount claimed for the first two counts is Rs. 141.831 M (including claims of Central Duty) and for the last count has been left for the court determine.

As per company lawyer's opinion the case is based on strong legal grounds and is likely to be decided in company's favour, if so happened the amount of long term loan would decrease by the amount so decided by the court. Accordingly the current portion of these loans has not been transferred to current liabilities keeping in view the expected outcome of the case. Faysal Bank Limited has also filed a counter suit against the company.

Commitments

Nil

4. FIGURES.

-Comparative figures have been re-arranged wherever necessary for the purpose of Comparison.

- Comparative figures relating to balance sheet are of last annual audited accounts.

- Figures have been rounded off to the nearest thousand rupees.

Asim Textile Mills Ltd.

JK House 32-W Susan Road, Madina Town,

Faisalabad 38090, PAKISTAN

Tel: 92-41-8721953-6

Fax: 92-41-8712399