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BOARD OF DIRECTORS BASHIR H. ALIMOHAMMED - Chairman & Chief Executive A.RAZAK HAJI SATTAR YASIN HAJI KASSAM YOUNUS HAJI LATIF ZAIN BASHIR ZIAD BASHIR ABDUL AZIZ YOUSUF MOHAMMED SALIM GHAFFAR A. RAZZAK HAJI SATTAR - Chairman YOUNUS HAJI LATIF - Member ZAIN BASHIR - Member ABN AMRO BANK NV AMERICAN EXPRESS BANK LIMITED BANK AL HABIB LIMITED CITIBANK, N.A. CREDIT AGRICOLE INDOSUEZ DEUTSCHE BANK AG HABIB BANK AG ZURICH HABIB BANK LIMITED MEEZAN BANK LIMITED NATIONAL BANK OF PAKISTAN STANDARD CHARTERED BANK UNION BANK LIMITED UNITED BANK LIMITED HYDER BHIMJI & CO. Chartered Accountants PLOT NO.82 MAIN NATIONAL HIGHWAY LANDHI, KARACHI-75120 PLOT NO.HT/3A LANDHI INDUSTRIAL AREA KARACHI-75120 LANDHI INDUSTRIAL AREA KARACHI-75120 finance@gulahmed.com www.gulahmed.com

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Directors Review Your Directors are pleased to present the accounts for the 3rd quarter and the period of nine months ended June 30,2003. Operating Results Operating results of Company are as under: Rs.000s 3rd Quarter 9 Months ending June 30, 2003 Sales Gross profit Profit after tax 1,436,489 250,799 70,146 4,105,564 772,745 212,351

Although sales as compared to the previous corresponding period have declined, we have been able to maintain the profit of the Company mainly due to reduction in financial charges as a result of favorable interest rates. Future Prospects We expect improvement in the sales during the last quarter of the current year. However the European Commission has not yet concluded its anti-dumping investigation of bed linen exports from Pakistan to the European Community due to which some uncertainty prevails. Acknowledgement We appreciate the sustained efforts of the employees to serve the interests of the Company as well as co-operation and support of the various Government Departments and Bankers. For and on behalf of the Board

ZIAD BASHIR Director Karachi: July 26, 2003

GUL AHMED TEXTILE MILLS LIMITED BALANCE SHEET AS AT JUNE 30, 2003
Jun-03 Rs.000s SHARE CAPITAL AND RESERVES Authorised capital 50,000,000 ordinary shares of Rs.10 each Issued, subscribed and paid-up capital Reserves Unappropriated profit LONG TERM LOANS - SECURED DEFERRED LIABILITIES Taxation Gratuity CURRENT LIABILITIES AND PROVISIONS Short term running finance - secured Current maturity of long term loans Creditors and accrued liabilities Other liabilities Dividend 500,000 340,733 1,447,645 214,450 2,002,828 420,813 80,670 41,393 122,063 3,215,627 249,670 598,895 8,946 4,073,138 6,618,842 500,000 340,733 1,447,645 2,099 1,790,477 757,049 80,670 35,974 116,644 1,873,264 275,381 547,130 5,442 170,366 2,871,583 5,535,753 Sep-02

TANGIBLE FIXED ASSETS Operating assets Capital work-in-progress LONG TERM LOANS AND ADVANCES LONG TERM DEPOSITS LONG TERM INVESTMENT CURRENT ASSETS Stores and spares Stock-in-trade Trade debts (unsecured - considered good) Loans, advances, prepayments and other receivables (considered good) Short term investment Cash and bank balances

2,453,458 219,948 2,673,406 7,733 3,985 58,450 220,820 1,267,338 1,415,752 380,052 533,384 57,922 3,875,268 6,618,842

2,458,875 111,068 2,569,943 10,236 4,685 204,798 1,033,507 737,433 337,165 545,213 92,773 2,950,889 5,535,753

The annexed notes form an integral part of these accounts. ZAIN BASHIR Director ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED PROFIT AND LOSS ACCOUNT

FOR THE PERIOD ENDED JUNE 30, 2003
Quarter Ended June 30 2003 2002 Rs.000s Sales Cost of Sales Opening stock of finished goods Cost of goods manufactured Purchases and processing charges Closing stock of finished goods Gross profit Administrative expenses Selling expenses Operating profit Other income Financial charges - net Workers' profit participation fund Workers' welfare fund Profit before taxation Provision for taxation Profit after taxation Unappropriated profit brought forward Unappropriated profit carried forward Earning per share (Rs.) 1,436,489 561,491 1,114,032 98,480 (588,313) 1,185,690 250,799 79,080 48,186 127,266 123,533 1,433 124,966 41,914 4,153 753 46,820 78,146 8,000 70,146 144,304 214,450 2.06 1,457,243 620,431 1,008,343 48,884 (499,232) 1,178,426 278,817 58,050 49,898 107,948 170,869 1,334 172,203 88,159 4,202 400 92,761 79,442 10,000 69,442 172,642 242,084 2.04 4,105,564 625,294 3,119,705 176,133 (588,313) 3,332,819 772,745 209,594 139,018 348,612 424,133 4,488 428,621 149,830 13,940 2,500 166,270 262,351 50,000 212,351 2,099 214,450 6.23 4,357,251 727,503 3,030,701 195,710 (499,232) 3,454,682 902,569 166,198 148,940 315,138 587,431 5,144 592,575 305,437 14,357 2,400 322,194 270,381 40,000 230,381 11,703 242,084 6.76 Nine Months Ended June 30 2003 2002

The annexed notes form an integral part of these accounts.

ZAIN BASHIR Director

ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED

CASH FLOW STATEMENT FOR THE PERIOD ENDED JUNE 30, 2003
Nine Month Ended June, 2003 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Adjustments for: Depreciation Gratuity Financial charges Provision for slow moving/obsolete stores and spares Provision for doubtful debts Profit on sale of operating assets Interest income/exchange differences Changes in working capital: (Increase)/Decrease in current assets Stores and spares Stock-in-trade Trade debts Loans, advances, prepayments and other receivables Increase/(Decrease) in current liabilities Creditors, accrued and other liabilities Cash (used in)/generated from operations Receipts from/(Payments) for : Gratuity Financial charges Income tax Long term loans and advances Net cash (used in)/generated from operating activities CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Sale proceeds of operating assets Long term investment Long term deposits Interest income/exchange difference Net cash used in investing activities (321,657) 10,709 (58,450) 700 19,285 (349,413) Rs.000s CASH FLOW FROM FINANCING ACTIVITIES Long term borrowings - repayment Dividend paid (361,947) (170,366) (89,611) (170,366) (168,458) 5,578 (112) (20,316) (183,308) (17,272) (233,831) (679,035) (4,718) (934,856) 63,663 (871,193) (240,614) (3,528) (179,892) (85,786) 2,503 (507,317) (65,978) (21,592) 251,831 (81,129) 83,132 (45,033) 38,099 830,577 (1,160) (279,111) (68,933) (2,871) 478,502 Nine Month Ended June, 2002

Rs.000s 262,351 209,515 8,947 171,498 1,250 716 (2,030) (21,668) 630,579 270,381 209,635 5,882 287,848 1,338 1,341 (1,536) 17,589 792,478

GUL AHMED TEXTILE MILLS LIMITED

CASH FLOW STATEMENT FOR THE PERIOD ENDED JUNE 30, 2003
Nine Month Ended June, 2003 Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period

Nine Month Ended June, 2002 (259,977) 35,217 (1,678,487) (1,643,270)

(532,313) (1,389,043) (1,235,278) (2,624,321)

Cash and cash equivalents at the end of the period

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include: Short term investment Cash and bank balances Short term running finance 533,384 57,922 (3,215,627) (2,624,321) 553,529 81,966 (2,278,765) (1,643,270)

The annexed notes form an integral part of these accounts.

ZAIN BASHIR Director

ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LTD

STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED JUNE 30, 2003
Rs.000s Share Capital Balance as at September 30, 2001 Profit for the nine months ended June 30, 2002 Balance as at June 30, 2002 Profit for the period July 01, 2002 to September 30, 2002 Transferred to general reserve Dividend Balance as at September 30, 2002 Profit for the nine months ended June 30, 2003 Balance as at June 30, 2003 340,733 340,733 340,733 340,733 Revenue Reserve 1,120,000 1,120,000 175,000 1,295,000 1,295,000 Capital Reserve 152,645 152,645 152,645 152,645 Unappropriated Profit 11,703 230,381 242,084 105,381 (175,000) (170,366) 2,099 212,351 214,450 Total 1,625,081 230,381 1,855,462 105,381 (170,366) 1,790,477 212,351 2,002,828

NOTES: 1) These accounts are un-audited and have been prepared in accordance with the requirements of SRO 764(1)/2001 dated 05 November 2001 issued by the Securities and Exchange Commission of Pakistan and have been prepared in accordance with the requirements of International Accounting Standard 34 'Interim Financial Reporting'. 2) Accounting policies adopted for the preparation of these accounts are the same as those applied in the preparation of the accounts for the year ended September 30, 2002. 3) Allocations for the workers' profit participation fund, workers' welfare fund and taxation are provisional and final liability will be determined on the basis of annual results. 4) These financial statements were authorised for issue on July 26, 2003 by the Board of Directors of the Company. 5) Corresponding figures have been rearranged where necessary for comparison purposes. 6) Figures have been rounded off to the nearest thousand rupees. 7) These accounts have been signed by two Directors as the Chairman/Chief Executive is out of country.

ZAIN BASHIR Director

ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED

CONSOLIDATED BALANCE SHEET AS AT JUNE 30, 2003
Rs.000s Amount SHARE CAPITAL AND RESERVES Authorised capital 50,000,000 ordinary shares of Rs.10 each Issued, subscribed and paid-up capital Reserves Unappropriated profit LONG TERM LOANS - SECURED DEFERRED LIABILITIES Taxation Gratuity CURRENT LIABILITIES AND PROVISIONS Short term running finance - secured Current maturity of long term loans Creditors and accrued liabilities Other liabilities 500,000 340,733 1,447,645 215,400 2,003,778 420,813 80,670 41,393 122,063 3,215,627 249,670 599,467 8,946 4,073,710 6,620,364

TANGIBLE FIXED ASSETS Operating assets Capital work-in-progress LONG TERM LOANS AND ADVANCES LONG TERM DEPOSITS CURRENT ASSETS Stores and spares Stock-in-trade Trade debts (unsecured - considered good) Loans, advances, prepayments and other receivables (considered good) Short term investment Cash and bank balances

2,453,458 219,948 2,673,406 7,733 3,985 220,820 1,273,513 1,405,352 381,348 533,384 120,823 3,935,240 6,620,364

The annexed notes form an integral part of these accounts. ZAIN BASHIR Director ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED JUNE 30, 2003
Quarter Ended June 30 Consolidated 2003 Rs.000s Sales Cost of Sales Opening stock of finished goods Cost of goods manufactured Purchases and processing charges Closing stock of finished goods Gross profit Administrative expenses Selling expenses Operating profit Other income Financial charges - net Workers' profit participation fund Workers' welfare fund Financial charges - net Profit before taxation Provision for taxation Profit after taxation Unappropriated profit brought forward Unappropriated profit carried forward 1,432,861 561,491 1,114,126 98,480 (594,488) 1,179,609 253,252 79,083 48,380 127,463 125,789 1,433 127,222 41,841 4,153 753 46,747 80,475 8,000 72,475 144,304 216,779 4,101,936 625,295 3,119,799 176,133 (594,488) 3,326,739 775,197 210,451 139,212 349,663 425,534 4,488 430,022 150,281 13,940 2,500 166,721 263,301 50,000 213,301 2,099 215,400 Nine Months Ended June 30 Consolidated 2003

Earning per shares (Rs.) The annexed notes form an integral part of these accounts. ZAIN BASHIR Director

2.13

6.26

ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED JUNE 30, 2003
Rs.000s 9 Months Ending June, 2003 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Adjustments for: Depreciation Gratuity Financial charges Provision for slow moving/obsolete stores and spares Provision for doubtful debts Profit on sale of operating assets Interest income/exchange differences Changes in working capital: (Increase)/Decrease in current assets Stores and spares Stock-in-trade Trade debts Loans, advances, prepayments and other receivables Increase/(Decrease) in current liabilities Creditors, accrued and other liabilities Cash used in operations Receipts from/(Payments) for : Gratuity Financial charges Income tax Long term loans and advances Net cash used in operating activities CASH FLOW FROM INVESTING ACTIVITIES Capital expenditure Sale proceeds of operating assets Long term deposits Interest income/exchange difference Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Long term borrowings - repayment Dividend paid Net cash used in financing activities
Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period

263,301 209,515 8,947 171,949 1,250 716 (2,030) (21,668) 631,980

(17,272) (240,006) (668,635) (6,014) (931,927) 64,235 (867,692) (235,712) (3,528) (180,343) (85,786) 2,503 (502,866) (321,657) 10,709 700 19,285 (290,963) (361,947) (170,366) (532,313) (1,326,142) (1,235,278) (2,561,420)

Cash and cash equivalents at the end of the period

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include: Short term investment Cash and bank balances Short term running finance

533,384 120,823 (3,215,627) (2,561,420)

The annexed notes form an integral part of these accounts. ZAIN BASHIR Director ZIAD BASHIR Director

GUL AHMED TEXTILE MILLS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED JUNE 30, 2003
Rs.000s Share Capital Balance as at September 30, 2001 Profit for the nine months ended June 30, 2002 Balance as at June 30, 2002 Profit for the peiod July 01, 2002 to September 30, 2002 Transferred to general reserve Dividend Balance as at September 30, 2002 Profit for the nine months ended June 30, 2003 Balance as at June 30, 2003 340,733 340,733 340,733 340,733 Revenue Reserve 1,120,000 1,120,000 175,000 1,295,000 1,295,000 Capital Reserve 152,645 152,645 152,645 152,645 Unappropriated Profit 11,703 230,381 242,084 105,381 (175,000) (170,366) 2,099 213,301 215,400 Total 1,625,081 230,381 1,855,462 105,381 (170,366) 1,790,477 213,301 2,003,778

NOTES: 1) The consolidated accounts comprise the consolidated balance sheet, of Gul Ahmed Textile Mills Limited ,its wholly owned subsidiary company Gul Ahmed International Limited (FZC) and GTM (Europe) Limited which is the wholly owned subsidiary of Gul Ahmed International Ltd (FZC), as at June 30 2003 and the related consolidated profit and loss account, consolidated cash flow statement and statement of changes in equity together with the notes forming part thereof. 2) These accounts are un-audited and have been prepared in accordance with the requirements of SRO 764(1) / 2001 dated 05 November 2001 issued by the Securities and Exchange Commission of Pakistan and have been prepared in accordance with the requirements of International Accounting Standard 34 'Interim Financial Reporting'. 3) Accounting policies adopted for the preparation of these quarterly accounts are the same as those applied in the preparation of the accounts of the parent company for the preceding year ended September 30, 2002 4) These financial statements were authorised for issue on July 26,2003 by the Board of Directors of the Company. 5) Corresponding figures have not been given as the subsidiary companies have been incorporated during the year. 6) Figures have been rounded off to the nearest thousnad rupees. 7) These account have been signed by two Directors as the Chairman / Chief Executive is out of the country. ZAIN BASHIR Director ZIAD BASHIR Director

BASHIR H. ALIMOHAMMED Chairman and Chief Executive