AZGARD-9

1 FOR THE HALF YEAR ENDED MARCH 31, 2005 (Un-audited)Financial StatementsAzgard Nine LimitedAZGARD-9 Book Post (Printed Matter)If undelivered, please return to:Azgard Nine LimitedAZGARD-9 Ismail Aiwan-e-Science, Off Shahrah-e-Roomi,Lahore-54600, Tel: +92 (0)42 NINE LIMITEDC ompany Information02 Directors' Review03 Review Report to the Members04 Balance Sheet05 Profit & Loss Account06 Cash Flow Statement07 Statement of Changes in Equity08 Notes to the Accounts09 Consolidated Balance Sheet14 Consolidated Profit & Loss Account15 Consolidated Cash Flow Statement16 Consolidated Statement of Changes in Equity17 Consolidated Notes to the Accounts18 CONTENTS02 HALF YEARLY FINANCIAL STATEMENTSCOMPANY INFORMATIONBOARD OF DIRECTORSMr. Mueen AfzalChairmanMr. Ahmed ExecutiveChief Justice (Retd.) Mian Mahboob AhmadMr. Aehsun ShaikhMr. Ali Jehangir SiddiquiMr. Khalid Al-SagarMr.

2 Muhammad Mukarram COMPANY SECRETARYMr. Javaid Iqbal CHIEF FINANCIAL OFFICERMs. Bushra Naz Malik AUDIT COMMITTEEC hief Justice (Retd.) Mian Mahboob Ahmad - ChairmanMr. Mueen AfzalMr. Aehsun ShaikhMr. Ali Jehangir SiddiquiMr. Khalid Al-SagarMANAGEMENT TEAMMr. Ahmed Mr. Aehsun ShaikhMs. Bushra Naz MalikMr. Muhammad TalibMr. Aamir UsmanMr. Mazhar Hussain MirzaMr. Irfan NazirMr. Per FredrikssonFINANCE COMMITTEEMr. Ahmed H. ShaikhMr. Ali Jehangir SiddiquiMs. Bushra Naz MalikBANKERSM uslim Commercial Bank LimitedCitibank Amro BankFaysal Bank LimitedHabib Bank LimitedSaudi Pak Commercial Bank LimitedSaudi Pak Industrial & Agricultural Investment Company (Private) LimitedPICIC Commercial Bank LimitedBank of PunjabThe Hong Kong and Shanghai Banking CorporationUnited Bank LimitedUnion Bank LimitedHabib Bank AG ZurichNDLC - IFIC Bank LimitedNational Bank of PakistanLEGAL ADVISORSH amid Law AssociatesHassan & HassanAdvocatesAUDITORSR ahman Sarfaraz & Accountants TAX ADVISORS Ford Rhodes Sidat Hyder & AccountantsHameed Chaudhri & Accountants REGISTERED OFFICEI smail Aiwan-e-ScienceOff Shahrah-e-RoomiLahore, 54600Ph: +92 (0)42 111-786-645 Fax: +92 (0)42 5761791 PROJECT LOCATIONSUnit KM off Manga, Raiwind Road,District : +92 (0)42 5384081 Fax: +92 (0)42 5384093 Unit IIAlipur Road.

3 +92 (0)661 422503, 422651 Fax: +92 (0)661 422652 AZGARD NINE LIMITED03By the Grace of God, your Board of Directors feels immense pleasure in presenting the2nd quarter and half yearly financial statements for the period ended March 31, MARKET CONDITIONSF ollowing conditions prevailed during the period: Reimposition of import duties has been the biggest challenge facing exports. Fuel prices have been at an all time high. Interest rates have increased substantially over the last three RESULTS OF THE COMPANYI nspite of these conditions, our company continued to perform well. The major highlights ascompared to the last corresponding period are as follows:TURNOVERThe Company s turnover increased by 10%. This sales growth is due to increase in productioncapacity and better product profitability of the company has increased. Net margin after tax has increased to major factors contributing to this have been: More efficient raw material procurement Growth in sales Better product mixConsequently the un-diluted EPS has improved to Rs.

4 For six months from Rs. ,an improvement of 59% for the OUTLOOKThe textile sector faces challenges due to an increase in oil prices, higher interest rates andthe reimposition of duties. The management however, is confident that with its BMR plans,which are on schedule - the company will continue to be would like to place on record deep appreciation for the dedication of all the staff membersof the company, shareholders, financial institutions, customers and suppliers whose worthysupport has helped us to behalf of the BoardLahore: May 21, 2005 Chief ExecutiveDIRECTORS' REVIEW04 HALF YEARLY FINANCIAL STATEMENTSREVIEW REPORT TO THE MEMBERSWe have reviewed the annexed balance sheet of AZGARD NINE LIMITED as at 31 March 2005and the related profit and loss account, cash flow statement and statement of changes inequity together with the notes forming part thereof (herein after referred to as the financialstatements ) for the half year then ended.

5 These financial statements are the responsibilityof the company s management. Our responsibility is to issue a report on these financialstatements based on our review. The figures of profit and loss account for the quarter ended31 March 2005 have not been reviewed as we are required to review only cumulative figuresfor the half year ended on that financial statements for the year ended 30 September 2004 and for the half year endedon 31 March 2004 were audited/reviewed by another firm of chartered accountants whoissued reports dated 28 December 2004 and 30 May 2004 respectively. The aforesaid auditorsreport expressed a modified opinion and the review report gave an unqualified conducted our review in accordance with the International Standard on Auditing applicableto review engagements. This Standard requires that we plan and perform the review to obtainmoderate assurance as to whether the financial statements are free of material review is limited primarily to inquiries of company personnel and analytical proceduresapplied to financial data and thus provides less assurance than an audit.

6 We have not performedan audit and, accordingly, we do not express an audit on our review, nothing has come to our attention that causes us to believe that theannexed financial statements are not presented fairly, in all material respects, in accordancewith approved accounting standards as applicable in SARFARAZ & CO.,CHARTERED NINE LIMITED05 March 31,September 30,20052004 NoteRupeesRupeesCAPITAL AND RESERVESA uthorised Capital3,000,000,0003,000,000,000 Share Capital41,737,308,6801,737,308,680 Reserves381,772,578362,142,241 Unappropriated profit582,931,680410,657,9822,702,012,93 82,510,108,903 SURPLUS ON REVALUATION OF FIXED ASSETS299,290,147306,564,511 NON-CURRENT LIABILITIESLONG TERM FINANCES - Secured635,420,000750,000,000 LIABILITIES AGAINST ASSETSSUBJECT TO FINANCE LEASE91,317,690116,503,819 LONG TERM DEPOSITS6,828,7411,147,729 CURRENT LIABILITIESC urrent portion of.

7 Long term finances - secured364,580,000300,000,000 Liabilities against assets subjectto finance lease53,990,51163,081,881 Short term finances52,518,349,6271,492,909,892 Creditors, accruals and other liabilities 1,369,984,338691,981,192 Provision for taxation77,824,87164,824,871 Dividend650,818,40295,4144,435,547,7492, 612,893,250 CONTINGENCIES AND COMMITMENTS88,170,417,2656,297,218,212 NON-CURRENT ASSETS FIXED ASSETS OPERATING ASSETS 92,988,892,4142,847,936,402 CAPITAL WORK IN PROGRESS 10287,086,45184,292,3383,275,978,8652,93 2,228,740 INTANGIBLE ASSETS83,087,58888,375,589 LONG TERM INVESTMENTS 2,684,6062,666,296 LONG TERM DEPOSITS 24,890,82518,517,830 CURRENT ASSETS Stores, spares and loose tools 111,521,08472,608,693 Stock-in-trade 2,186,576,5761,394,729,330 Trade debtors 848,027,996945,111,856 Advances, deposits, prepaymentsand other receivables 912,150,256712,923,170 Short term investment 633,858,547109,148,931 Cash and bank balances 91,640,92220,907,7774,783,775,3813,255,4 29,7578,170,417,2656,297,218,212 The annexed notes form an integral part of these : Lahore Chief ExecutiveDirectorDate.

8 May 21, 2005 BALANCE SHEET (Unaudited)as at March 31, 200506 HALF YEARLY FINANCIAL STATEMENTSQ uarter EndedSix Months EndedQuarter EndedSix Months EndedNoteMarch 31,March 31,March 31,March 31,2005200520042004 RupeesRupeesRupeesRupeesSALES - Net828,095,2451,505,999,428782,198,2971, 368,096,299 COST OF SALES11576,645,5941,042,609,963627,478,1 801,046,686,677 GROSS PROFIT251,449,651463,389,465154,720,1173 21,409,622 ADMINISTRATIVE ANDSELLING EXPENSES82,079,983140,988,62746,750,0148 1,334,581 OPERATING PROFIT169,369,668322,400,838107,970,1032 40,075,041 OTHER INCOME49,057,45574,407,423219,011351,244 218,427,123396,808,261108,189,114240,426 ,285 OTHER CHARGESF inancial charges53,476,93991,329,55825,859,70157, 872,481 Miscellaneous340,000340,000 Workers' (Profit) Participation Fund8,247,50915,273,935 62,064,448106,943,49325,859,70157,872,48 1 PROFIT BEFORE TAXATION156,362,675289,864,76882,329,413 182,553,804 PROVISION FOR TAXATIONC urrent6,141,17513,000,0003,574,7808,500, 000 PROFIT AFTER TAXATION150,221,500276,864,76878,754,633 174,053,804 EARNINGS PER SHARE - - annexed notes form an integral part of these : Lahore Chief ExecutiveDirectorDate: May 21, 2005 PROFIT AND LOSS ACCOUNT(Unaudited)for the half year ended March 31, 2005 AZGARD NINE LIMITED07 CASH FLOW STATEMENT (Unaudited)for the half year ended March 31, 2005 March 31,March 31,20052004 RupeesRupeesA.

9 CASH FLOW FROM OPERATING ACTIVITIESP rofit before taxation289,864,768 182,553,804 Items not involving movement of funds134,287,312 134,327,860 Long term deposits and deferred cost(6,372,995)(21,048,162)Operating profit before changes in working capital417,779,085 295,833,502 Changes in working capital(259,013,312)(294,978,364) Operating profit after changes in working capital158,765,773 855,138 Financial charges paid(71,306,980)(52,600,433)Taxes paid(15,908,982)(7,836,892)Dividend paid(36,142,447)(269)NET CASH IN/(OUT) FLOW FROMOPERATING ACTIVITIES35,407,364 (59,582,456)B. CASH FLOW FROM INVESTING ACTIVITIESF ixed capital expenditures(445,801,376)(462,725,746)In tangible assets(1,407,126) Sale proceed of fixed assets1,181,059 Sale proceed of short term Investments1,961,245 276,480 Purchase of long term Investments (10,000)Purchase of short term Investments(456,086,244) NET CASH USED IN INVESTING ACTIVITIES(900,152,442)(462,459,266)C.

10 CASH FLOW FROM FINANCING ACTIVITIESR edeemable Capital(50,000,000)59,920,646 Finance lease liabilities-net(34,277,499)(33,618,100)L ong term deposits(5,681,012)(111,708)Short term finances-net1,025,436,734503,610,799 NET CASH FLOW FROM FINANCING ACTIVITIES935,478,223 529,801,637 NET INCREASE IN CASH AND CASHEQUIVALENTS (A+B+C)70,733,145 7,759,915 CASH AND CASH EQUIVALENT AT THEBEGINNING OF THE PERIOD20,907,777 21,601,750 CASH AND CASH EQUIVALENT AT THEEND OF THE PERIOD91,640,922 29,361,665 The annexed notes form an integral part of these : Lahore Chief ExecutiveDirectorDate: May 21, 2005 AZGARD NINE LIMITED08 STATEMENT OF CHANGES IN EQUITY (Unaudited)for the half year ended March 31, 2005 Balance as at September 30, 2003 868,654,340 143,675,125 105,152,005 2,215,724 251,042,854 161,710,634 1,281,407,828 330,249,524 Profit for the period 174,053,804 174,053,804 Surplus on revaluation of fixed assets transferred to retained earnings during the period 11,842,507 11,842,507 (11,842,507)Revaluation of investments (1,620,264) (1,620,264) (1,620,264)