DIRECTORS' REPORT TO THE SHAREHOLDERS

Your directors are pleased to present the 3^rd quarter and nine months unaudited accounts for the period ended March 31, 2006.

By the grace of Almighty Allah, there is improvement in results. The loss after taxation has decreased to Rs. 9.868 million as compared to net loss of Rs. 40.002 million of corresponding period of last year. It is due to better utilization of production facilities and measures taken by management for producing quality yarn.  In order to improve the production and quality of yarn, during the last period ended 30.06.2005, new spindle bosters for 11 frames were imported and replaced with old ones. Now in the current year new air compressors have been imported and replaced with old ones. The management is trying its best to improve the performance of the company.

Earning per share (EPS) for the 3rd quarter is negative at Rs. 0.44 and Rs. 0.65 for nine months as compared to negative (EPS) of Rs. 0.55 for 3rd quarter and Rs. 2.64 for nine months in the corresponding period of last year.

There has been no change in the position of on going court cases with the bank, as reported in the director’s report of the financial statements for the period ended 30.06.2005.

Transactions with related parties are carried out at arms length. The prices are determined in accordance with comparable un-controlled price method.

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

28.04.2006                                                                                      CHIEF EXECUTIVE