Contents

Company Information Vision & Mission Statement Directors Report to the Shareholders Balance Sheet Profit & Loss Account Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements 02 04 05 06 07 08 09 10

01

1st Quarter ended September 30, 2008

Company Information
Chief Executive Officer Mian Muhammad Latif

Directors

Mian Muhammad Javaid Iqbal Mr. Muhammad Naeem Mr. Muhammad Faisal Latif Mr. Muhammad Farhan Latif Mr. Muhammad Rizwan Latif Mr. Muhammad Zeeshan Latif Mst. Shahnaz Latif Mst. Tehmina Yasmin

Bankers/Financial Institutions
(In Alphabetic Order)

Allied Bank Limited Atlas Bank Limited Askari Bank Limited AlBaraka Islamic Bank, B.S.C. (E.C) Bank Alfalah Limited Citibank, N.A. Faysal Bank Limited First Credit & Investment Bank Limited First Punjab Modaraba Habib Bank Limited Habib Metropolitan Bank Limited KASB Bank Limited National Bank of Pakistan NIB Bank Limited Orix Investment Bank (Pakistan) Limited Pak Oman Investment Company Ltd. Pak Kuwait Investment Company (Pvt.) Ltd. Pak Libya Holding Company (Pvt.) Ltd. Saudi Pak Commercial Bank Limited Saudi Pak Agricultural & Investment Company (Pvt.) Ltd. Standard Chartered Bank (Pakistan) Limited The Bank of Punjab United Bank Limited

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DETIMIL BANEHC

Chief Financial Officer

Mr. Muhammad Arif Shaikh F.C.A.

Company Secretary

Mr. Muhammad Arshad

Company Information
Audit Committee Mr. Muhammad Farhan Latif Mst. Shahnaz Latif Mst. Tehmina Yasmin Chairman Member Member

Auditors

Avais Hyder Liaquat Nauman Chartered Accountants

Legal Advisor

Ch. Shahid Mehmood (Advocate)

Registered Office

Nishatabad, Faisalabad. Tel:041-8754472-8 Fax:041-8752400, 8752700

E-mail Address

chenab@chenabgroup.com

Website Address

www.chenabgroup.com

Works

- Spinning Unit - Weaving Unit - Weaving Unit - Weaving Unit - Weaving Unit - Processing Unit & Stitching Units

- Toba Tek Singh. - Kharianwala, District, Sheikhupura. - Shahkot, District, Nankana Sahib. - Gatti, Faisalabad. - Khurrianwala, Faisalabad.

- Nishatabad, Faisalabad.

03

1st Quarter ended September 30, 2008

Vision & Mission

Vision

To be a competitive and customer focused organization with continuing commitment to excellence and standards.

Mission Statement

To be the business house of first choice for customers. To be a change leader. To produce innovative, relevant and cost effective products. Setting and maintaining high standards. To earn profits by achieving optimum level of production by using state of the art technologies. To provide ideal working conditions to employees and to take care in their career planning and reward them according to their skill and responsibility. To meet social and cultural obligations towards the society being a patriotic and conscientious corporate citizens.

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DETIMIL BANEHC

Directors Report to the Share Holders (Un-audited)

As at September 30, 2008
The directors feel pleasure in presenting before you the un-audited financial statements of the company for the 1st quarter of financial year 2008-09 ended on September 30, 2008. Figures of the corresponding quarter of the last year are also presented for comparison. The balance sheet figures as on June 30, 2008 and September 30, 2008 have been shown as required by International Accounting Standards (IAS) 34 interim financial reporting. SALES REENUE The company has earned sales revenue of Rs.2.215 billion during 1st quarter of the year as compared with the same quarter of the preceding year bringing home sales revenue of Rs.2.023 billion reflecting an increase of 9.49%. FINANCIAL RESULTS Despite stiff competition in the international market, the company has been able to earn net profit of Rs.5.574 million as against profit of Rs.19.500 million earned during the same quarter of the preceding year. BMR The major BMR of the project is almost complete, the results of which shall be coming forth gradually. If the circumstances are found favorable, the management of the company expects good results out of the BMR having been made so far FUTURE OUTLOOK The management is making its all out efforts to utilize production capacity on optimum level resulting an increase in sales volumes to a splendid level but the unfavorable factors like frequent sui gas load shedding and electric shut down and continuous increase in cost of doing business are coming in the way. ACKNOWLEDGEMENT For the support extended by the financial institutions, shareholders and its customers in one way or the other and for the dedicated services rendered by its employees to the cause of the company, the directors are thankful to all of them.

For and on behalf of BOARD OF DIRECTORS

FAISALABAD October 31, 2008

(MIAN MUHAMMAD LATIF) CHIEF EXECUTIVE

05

1st Quarter ended September 30, 2008

Balance Sheet (Un-audited)

As at September 30, 2008
Notes SHARE CAPITAL AND RESERVES Authorised capital 120,000,000 ordinary shares of Rs.10/ each 80,000,000 cumulative preference shares of Rs.10/ each Issued, subscribed and paid up capital Cumulative preference shares Capital reserves Revenue reserves September 30, 2008 Rupees June 30, 2008 Rupees

1,200,000,000 800,000,000 1,150,000,000 800,000,000 526,409,752 119,265,924 2,595,675,676

1,200,000,000 800,000,000 1,150,000,000 800,000,000 526,409,752 113,545,598 2,589,955,350 1,160,265,688 2,201,513,749 95,057,452 170,046,540 2,466,617,741 1,698,605,437 285,107,900 6,880,562,531 1,041,769,900 81,827,892 82,390,810 10,070,264,470 16,287,103,249 7,613,039,206 22,223,563 7,635,262,769 1,175,542,491 4,442,600,098 2,429,040,820 145,473,360 31,823,107 135,968,236 231,534,410 59,857,958 8,651,840,480 16,287,103,249

SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT NONCURRENT LIABILITIES Long term financing Liabilities against assets subject to finance lease Long term morabaha Deferred liability Staff retirement gratuity CURRENT LIABILITIES Trade and other payables Interest / markup payable Short term borrowings Current portion of : Long term financing Liabilities against assets subject to finance lease Provision for taxation income tax CONTINGENCIES AND COMMITMENTS NONCURRENT ASSETS Property, plant and equipment Long term deposits CURRENT ASSETS Stores, spares and loose tools Stock in trade Trade debts Loans and advances Deposits and prepayments Other receivables Tax refunds due from Government Cash and bank balances
DETIMIL BANEHC

1,160,119,638 2,048,612,981 137,272,162 174,694,114 2,360,579,257 1,714,766,304 281,668,583 6,765,719,905 1,058,137,578 35,770,102 103,805,982 4 9,959,868,454 16,076,243,025 7,577,153,225 23,223,563 7,600,376,788 1,112,216,720 4,312,687,125 2,384,795,602 240,333,045 43,259,696 133,575,082 225,133,632 23,865,335 8,475,866,237 16,076,243,025

The annexed notes form an integral part of these financial statements.

MUHAMMAD NAEEM (DIRECTOR)

MIAN MUHAMMAD LATIF (CHIEF EXECUTIVE)

06

Profit and Loss Account (Un-audited)

For the First quarter ended September 30, 2008
1st Quarter Ended September September 30, 2008 30, 2007 Rupees Rupees

Notes

Sales Cost of sales Gross profit Other operating income 6

2,215,501,974 1,678,221,028 537,280,946 527,018 537,807,964

2,023,407,021 1,619,111,571 404,295,450 211,264 404,506,714 79,523,627 42,420,507 3,472,657 241,243,879 366,660,670 37,846,044 18,345,090 19,500,954 0.009

Selling and distribution expenses Administrative expenses Other operating expenses Finance cost

114,864,703 43,413,197 1,420,497 351,120,120 510,818,517

Profit for the period before taxation Provision for taxation Profit for the period after taxation Earnings per share - Basic 7

26,989,447 21,415,172 5,574,275 0.048

The annexed notes form an integral part of these financial statements.

MUHAMMAD NAEEM (DIRECTOR)

MIAN MUHAMMAD LATIF (CHIEF EXECUTIVE)

07

1st Quarter ended September 30, 2008

Cash Flow Statement (Un-audited)

For the First quarter ended September 30, 2008
1st Quarter Ended September September 30, 2008 30, 2007 Rupees Rupees

Notes a) CASH FLOWS FROM OPERATING ACTIVITIES Profit for the period before taxation Adjustment for: Depreciation on property, plant and equipment Provision for staff retirement gratuity Finance cost Operating cash flows before working capital changes Changes in working capital (Increase) / decrease in current assets Stores, spares and loose tools Stock in trade Trade debts Loans and advances Deposits and prepayments Other receivables Tax refunds due from Government Increase in current liabilities Trade and other payables Cash (used in) / generated from operating activities Income tax paid Finance cost paid Staff retirement gratuity paid Net cash generated/(used in) from operating activities b) CASH FLOWS FROM INVESTING ACTIVITIES Additions in property, plant and equipment Proceeds from disposal of property, plant and equipment Long term deposites Net cash used in investing activities c) CASH FLOWS FROM FINANCING ACTIVITIES Long term loans obtained Repayment of: Long term loans Liabilities against assets subject to finance lease Increase in short term bank borrowings net Payment of dividend Net cash from financing activities Net (decrease) / increase in cash and cash equivalents (a+b+c) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
DETIMIL BANEHC

26,989,448 67,262,927 16,072,633 351,120,120 (175,844) 461,269,284

37,846,044 66,930,906 13,335,814 241,243,879 359,356,643

63,325,771 129,912,973 44,245,218 (71,543,936) (11,436,589) 2,393,154 6,400,778 163,297,369 22,024,146 185,321,515 646,590,799 (23,315,749) (354,559,438) (11,425,059) 257,290,553

37,766,090 (336,439,373) (86,239,585) 8,188,192 (7,714,517) 5,251,129 (6,573,456) (385,761,520) 42,070,276 (343,691,244) 15,665,399 (12,202,174) (232,975,355) (7,918,021) (237,430,151)

(32,364,721) 987,774 (1,000,000) (32,376,945)

(36,335,344) 313,620 (36,021,724)

(136,533,071) (9,529,787) (114,842,626) (747) (260,906,231) (35,992,623) 59,857,958 23,865,335

90,000,000 (153,306,162) (18,403,335) 488,334,580 (193) 406,624,890 133,173,015 59,243,631 192,416,646

The annexed notes form an integral part of these financial statements.

MUHAMMAD NAEEM (DIRECTOR)

MIAN MUHAMMAD LATIF (CHIEF EXECUTIVE)

08

Share Capital Issued, subscribed and paid up capital Cumulative preference shares Premium on issue of ordinary shares

Capital Reserves Book difference of capital under scheme of arrangement for amalgamation Preference shares redumption reserve Rupees

Revenue Reserves

Total

General reserve

Unapprpriated profit

Balance as at July 01, 2007 Incremental depreciation on revalued assets for the period Profit for the period 1,150,000,000 1,150,000,000 1,150,000,000 Transferred to preference shares redemption reserve Tranferred to unappropriated profit Balance as at Sep 30, 2007 Incremental depreciation on revalued assets for the period Profit for the period Dividend to cumulative preference shareholders at 9.25% per annum Balance as at June 30, 2008 Incremental depreciation on revalued assets for the period Profit for the period Transferred to preference shares redemption reserve Balance as at Sep 30, 2008

1,150,000,000

800,000,000 800,000,000 800,000,000 800,000,000

120,000,000 120,000,000 120,000,000 120,000,000

63,552,610 63,552,610 63,552,610 63,552,610

342,857,142 342,857,142 342,857,142 342,857,142

276,432,834

6,295,498

2,759,138,084

152,135

152,135

19,500,954

19,500,954

Statement of Changes in Equity

(200,000,000)

200,000,000

76,432,834

225,948,587

2,778,791,173

For the Period ended September 30, 2008

456,405

456,405

(115,292,228)

(115,292,228)

(74,000,000)

(74,000,000)

76,432,834

37,112,764

2,589,955,350

146,050

146,050

5,574,275

5,574,275

76,432,834

42,833,090

2,595,675,676

The annexed notes form an integral part of these financial statements. MUHAMMAD NAEEM (DIRECTOR)

MIAN MUHAMMAD LATIF CHIEF EXECUTIVE

09

1st Quarter ended September 30, 2008

Notes to the Financial Statements (Un-audited)

For the First quarter ended September 30, 2008
1. STATUS AND ACTIVITIES 1.1 Chenab Limited (the Company) is incorporated as a public limited company under the Companies Ordinance, 1984 and is listed on Karachi Stock Exchange. The registered office of the Company is situated at Nishatabad, Faisalabad. The principal business of the Company is export of all kinds of value added fabrics, textile made-ups, casual and fashion garments duly processed. The cloth processing unit is located at Nishatabad, District Faisalabad and stitching units are located at Nishatabad, District Faisalabad and Shorkot Road, District Toba Tek Singh. Weaving units are located at Sheikhupura Road, Khurrianwala, District Faisalabad, Jhumra Road, Gatti, District Faisalabad, Sheikhupura Road, Kharrianwala, District Sheikhupura and Shahkot, District Nankana Sahib. Spinning unit is located at Shorkot Road, District Toba Tek Singh, in the province of Punjab. Pursuant to schemes of arrangement approved by the Honourable Lahore High Court, Lahore, assets, liabilities and reserves of Faisal Weaving (Private) Limited, Latif Weaving (Private) Limited and Chenab Finishing (Private) Limited were merged with the Company with effect from December 31, 1998 and assets, liabilities and reserves of Chenab Fibres Limited were merged with the Company with effect from April 01, 2003. The condensed interim financial statements are presented in Pak Rupee, which is the Company's functional and presentation currency.

1.2

1.3 2.

BASIS OF PREPARATION These condensed interim financial statements have been prepared under the "historical cost convention" except staff retirement gratuity carried at present value and certain property, plant and equipment carried at valuation. These condensed interim financial statements are unaudited and are being submitted to the shareholders as required under Section 245 of the Companies Ordinance, 1984. These condensed interim financial statements have been prepared in accordance with the requirements of the International Accounting Standard 34 "Interim Financial Reporting" as applicable in Pakistan and shall be read in conjunction with the published audited financial statements for the year ended June 30, 2008.

3.

ACCOUNTING POLICIES The accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the published audited financial statements for the year ended June 30, 2008. September 30, 2008 Rupees June 30, 2008 Rupees

4.

CONTINGENCIES AND COMMITMENTS Contingencies In respect of bank guarantees issued on behalf of the Company Sui Northern Gas Pipelines Limited for supply of gas Collector of Customs against demand of custom duty on humidification plant. The Company has claimed exemption from the duty. Collector of Customs, for release of returned goods for re-export District Government against imposition of license fee Foreign customers to secure fulfillment of contractual obligations Demand of custom duty and sales tax not acknowledged in view of pending appeals

123,945,500 1,920,000 2,930,125 200,000 41,812,184 4,541,043 58,719,081 13,197,212

123,945,500 1,920,000 2,523,280 200,000 63,885,000 4,541,043 42,625,522 13,197,212

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Post dated cheques issued in favour of Collector of Customs for release of goods imported for reexport Claim of workers' welfare fund not acknowledged. The Company is claiming exemption. Commitments Under letters of credit for : Raw material and stores

313,756,474

410,072,016

Notes to the Financial Statements (Un-audited)

For the First quarter ended September 30, 2008
5. ACQUISITIONS AND DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT AT COST Quarter Ended September 30, 2008. Acquisition Disposal Rupees Rupees 16,713,492 610,354 174,545 316,865 60,210 17,875,466 (2,294,760) (2,294,760)

Description Note Owned Plant and machinery Electric installations Factory equipment Office equipment Vehicles

1st Quarter Ended September September 30, 2008 30, 2007 Rupees Rupees 6. Cost of sales Cost of goods manufactured (Note 6.1) Finished goods Opening stock Closing stock 1,587,809,549 1,287,182,156 (1,196,770,677) 90,411,479 1,678,221,028 6.1 Cost of goods manufactured Raw material consumed Salaries, wages and benefits Staff retirement benefits Stores and spares Dyes and chemicals Packing material Repairs and maintenance Fuel and power Insurance Research and development support Depreciation / impairment loss Other Work in process Opening stock Closing stock (6.1.1) 778,825,657 164,026,234 12,905,426 98,025,759 139,549,325 145,613,353 4,356,888 130,508,338 5,651,352 174,985 63,696,041 47,931,370 1,591,264,728 2,594,938,814 (2,598,393,993) (3,455,179) 1,587,809,549 6.1.1 Raw material consumed Opening stock Purchases including purchase expenses Closing stock 560,479,128 735,868,984 1,296,348,112 (517,522,455) 778,825,657 802,441,625 157,027,610 10,135,218 95,255,002 146,270,625 141,882,546 2,970,311 127,218,705 5,032,527 940,665 63,234,636 14,414,090 1,566,823,560 2,396,465,262 (2,556,837,351) (160,372,089) 1,406,451,472 651,342,047 1,191,169,008 1,842,511,055 (1,040,069,431) 802,441,625
1st Quarter ended September 30, 2008

1,406,451,472 949,375,946 (736,715,847) 212,660,099 1,619,111,571

(6.1.2)

11

Notes to the Financial Statements (Un-audited)

For the First quarter ended September 30, 2008
1st Quarter Ended September September 30, 2008 30, 2007 Rupees Rupees 7. Earnings per share Basic Profit for the period Less: Dividend on cumulative preference shares at 9.25% per annum Profit attributable to ordinary share holders Weighted average number of ordinary shares outstanding during the period 5,574,275 5,574,275 19,500,954 18,500,000 1,000,954

115,000,000 0.048

115,000,000 0.009

8.

TRANSACTIONS WITH RELATED PARTIES Relationship Nature of transaction Associated undertakings Sales of goods Organizational exp. Received key management personal Sales of vehicals 702,631,702 296,191 179,630,831 93,750 313,620

9.

DATE OF AUTHORISATION FOR ISSUE These condensed interim financial statements were authorised for issue on 31102008 by the Board of Directors of the Company.

10.

General i) There is no unusual item included in the condensed interim financial statements which is affecting liabilities, assets, profit, cash flows or equity of the Company. The provision for taxation and workers' profit participation fund are based on these condensed interim financial statements and are subject to adjustments in annual financial statements. Figures have been rounded off to the nearest Rupees.

ii )

iii)

The annexed notes form an integral part of these financial statements.

MUHAMMAD NAEEM (DIRECTOR)

MIAN MUHAMMAD LATIF (CHIEF EXECUTIVE)

12

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