DIRECTORS' REPORT TO THE SHAREHOLDERS

Your directors are pleased to present 3^rd quarter and nine months accounts for the period ended March 31, 2007.

The company has incurred net loss of Rs. 16.035 million as compared to net loss of Rs. 9.868 million for the corresponding period of last year. It is due to increase in cost of production. There is increase in prices of cotton, polyester fibre, packing material, stores and spares etc. Cost of salaries and wages has also increased

Earning per share (EPS) for the 3^rd quarter is negative at Rs. 0.35 and Rs. 1.06 for nine months period as compared to negative (EPS) of Rs. 0.44 for 3^rd quarter and Rs. 0.65 for nine months 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 year ended June 30, 2006.

Transactions with related parties are carried out at arms length. The prices are determined in accordance with comparable uncontrolled price method. The power purchased from related parties is at WAPDA power tariff.

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

for and on behalf of the Board

 FAISALABAD.                                                                                  ZAHID ANWAR

28.04.2007                                                                                      CHIEF EXECUTIVE