Your Directors are pleased to present the accounts for the first quarter ended December 31, 2003.

Operating Results
Operating results of the Company are as under:

Sales have increased as compared to the corresponding previous quarter, however the profit has gone down, mainly due to a steep rise in the cotton prices.

Future Prospects
There has been an abnormal increase in cotton prices, by more than 50%, over the last year. It also appears European Commission is moving towards imposing anti-dumping duty on bed linen exports from Pakistan to the European Union. With these negative factors, sustaining the growth in sales and realizing a reasonable profit margin have become difficult.

The Company on its part has taken steps to alleviate the adverse impact on the financial results. These include going for higher value additions, changing the product mix, looking to markets outside the European Union, develop local market for high value added products, vary the production strategy of spinning units so as to reduce cotton consumption, control costs, etc.

We should however keep in mind that these are long term measure and the benefits will be realized over a period of time and cannot be achieved in the short run.

Acknowledgement
We acknowledge and appreciate the efforts of employees and the assistance and support of the various Government Departments and Bankers.