AL-KHAIR GODON LIMITED
Annual Reports 2003
CONTENTS
Company Information
Notice of Annual General Meeting
Directors' Report to the Members
Corporate Governance & Statement of Compliance
Auditors Review Report
Auditors' Report to the Members
Balance Sheet
Profit and Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Pattern of Shareholding
Accounts of Subsidiary Company
Consolidated Accounts of the Company and its Subsidiary
COMPANY INFORMATION
BOARD OF DIRECTORS :
CHAIRMAN		Mr. Umer Hayat Sheikh
CHIEF EXECUTIVE		Mr. Mohammad Saeed Sheikh
DIRECTORS		Mr. Mohammad Afzal Sheikh
		Sheikh Pervaiz Afzal
		Mr. Mohammad Amin Sheikh
		Mr. Nadeem Afzal
		Mian Mazhar Iqbal
AUDIT COMMITTEE		Sheikh Pervaiz Afzal      Chairman
		Sheikh Nadeem Afzal    Member
		Mian Mazhar Iqbal         Member
		Qaiser Saleem Khan     Secretary
COMPANY SECRETARY :		Mr. Mohammad Amin Sheikh
AUDITORS :		M/s. Tahir Siddiqi & Co.
		Chartered Accountants.
		(A member firm of BR International)
LEGAL ADVISOR :		Mr. Mohammad Mushtaq Hussain
BANKERS:		Allied Bank of Pakistan Ltd.
		Islamic Investment Bank Ltd.
		Orix Investment Bank Ltd.
REGISTERED OFFICE
& FACTORY SITE :		92/3, Phase III, Industrial Estate,
		Gadoon Amazai,
		District Swabi, (N.W.F.P)
		Tel: (0938) 70260
		Fax: (0938) 70270
CORPORATE OFFICE:		AI-Khair House,
		43-T, Gulberg II,
		Lahore.
		Tel: (042) 111-111-043
		Fax: (042)5716588-89
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 13th Annual General Meeting of AI-Khair Gadoon Limited, will be held on
Thursday the October 30, 2003 at 9:00 A.M. at the Registered Office of the Company at 92/3, Phase III,
Industrial Estate, Gadoon Amazai, District Swabi, NWFP., to transact the following business:
1.    To confirm the minutes of the 12th Annual General Meeting held on September 30, 2002.
2.    To receive, consider and adopt the Audited Accounts of the Company for the year ended June 30,
2003, together with the Directors' and Auditors' Reports thereon.
3.    To approve the Dividend declared for the year ended June 30, 2003
4.    To appoint Auditors of the Company and fix their remuneration.
5.    To transact any other business with the permission of the Chairman.
BY ORDER OF THE BOARD
(MOHAMMAD AMIN SHEIKH)
Dated: October 07, 2003                                                                                        Company Secretary
NOTES:
1.    Share Transfer Books of the Company will    remain   closed   from October 24 to October 30, 2003
(both days inclusive). Transfers received in order upto the close of business on October 23, 2003 at
the Corporate Office of the Company at AI-Khair House, 43-T, Gulberg II, Lahore will be entitled to
voting rights at the Annual General Meeting and entitled to dividend.
2.    A member of the Company entitled to attend and vote at the meeting may appoint another member
as his/her proxy to attend and vote. Votes may be given personally or by proxy or by Attorney or in
case of a Corporation by representative. The instrument of proxy duly executed should be lodged
at the Corporate Office of the Company at AI-Khair House, 43 - T, Gulberg II, Lahore not later than
48 hours before the time of meeting.
3.    Filing of declaration for exemption of Zakat. Members are requested to file their declaration under the
Zakat and Ushr Ordinance, 1980 on non-judicial Stamp Paper of Rs. 20/- for exemption of Zakat, if
desired.
4.    Members are requested to notify the change in their address, if any, immediately.
DIRECTORS' REPORT TO THE MEMBERS
The directors of your company feel pleasure in presenting 13th annual report together with the audited accounts and auditors report thereon for
the year ended June 30, 2003.
Operations Review
The start of sales to Afghanistan & CIS countries has enabled the Company to raise its activities to make the project viable. The withdrawal of
exemptions by the Government had very badly effected the Industry situated at Gadoon Amazai Industrial Estate but the opening of
Afghanistan market has slightly improved the situation. We are expecting an increase in the volume of production and sales in the coming year.
The overall general economic recession is making it difficult for the company to improve its sales in the International market as well as in local
market but the Company's aggressive marketing strategy is accelerating the activities by improving the production, revenue and export as well.
Subsidiary Company
The subsidiary company M/s AI-Khair Mirpur (Pvt) Limited has also slightly improved its sales. The economic and political conditions of
Pakistan have restrained the Company to boost its activities but a reduction in mark-up rates has improved the financial results of the
Company. The sales has been increased from Rs. 261 (m) to 281 (m). The instability of raw material prices in international market has adversely
effected the operations. The profit before charging taxes is Rs. 11.741 (m) as against Rs. 6.473 (m) during the year.
Financial Results
During the year under review, the positive improvement in operations of the Company has resultantly raised the expenses as well, but the rise
in expenses is reciprocated by the reduction in financial costs. The profit for the year ended June 30, 2003 after providing for taxation is as
follows:-
Net Profit after taxation provision				Rs. 1,596,413
Un-appropriated profit brought forward				Rs. 6,819,487
Profit available for appropriations				Rs.8,415,900
Cash Dividend of Re. 0.5 per share of Rs. 10 each				Rs.5,000,000
Un-appropriated profit carried forward to balance sheet				Rs. 3,415,900
The earning per share before taxation provision works out to Rs. 0. 24 per share.
Gratuity Scheme
A non funded gratuity scheme has been maintained and provision has been made in accounts accordingly.
Board Meetings
The Board comprises of three executive and four non-executive directors. All the directors take active part in the management affairs of the
Company. During the year eight board meetings were held and attended as follows:-
Mr. Umer Hayat Sheikh		6	Mohammad Saeed Sheikh		8
Mohammad Afzal Sheikh		8	Mohammad Amin Sheikh		8
Sheikh Pervaiz Afzal		7	Mian Mazhar Iqbal		8
Mr. Nadeem Afzal Sheikh		8
Code of Corporate Governance
The Securities and Exchange Commission of Pakistan in assistance with the Institute of Chartered Accountants of Pakistan formulated a Code
of Corporate Governance . The compliance of Corporate Governance is annexed.
Auditors
The present auditors M/s Tahir Siddiqi & Co., Chartered Accountants retire and being eligible offer themselves for re-appointment.
Pattern of Shareholding
The pattern of shareholding of the company is annexed.
Staff and Organization
The board of directors recognizes the efforts of all the executives and employees of the Company in making efforts to the progress during the
year and hopeful for future growth with existing team.
ON BEHALF OF THE BOARD
UMER HAYAT SHEIKH
Lahore: October 07, 2003                                                                                         Chairman
CORPORATE GOVERNANCE AND STATEMENT OF
COMPLIANCE WITH BEST PRACTICES OF CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
Statement of Directors responsibilities
The Board is committed to follow the code of Corporate Governance to maintain high quality standards of
good corporate governance. The Company is complying with the provisions of the code as set out by the
Securities and Exchange Commission of Pakistan.
There has been no material departure from the practices of code of corporate governance as detailed in
listing regulations.
a)       Presentation of Financial Statements
The financial statements, prepared by the management of the Company, fairly present
company's state of affairs, the results of its operations, cash flows and changes in equity.
b)      Books of Accounts
The company has maintained proper books of accounts.
c)      Accounting Policies
Appropriate accounting policies have been consistently applied in preparation of financial
statements.
d)      Application of International Accounting Standards
International Accounting Standards, as applicable in Pakistan have been followed in
preparation of Financial Statements.
e)      Internal Control Systems
The system of internal control is sound in design and has been effectively implemented and
monitored.
f)       Going Concern
There is no doubt about the company's ability to operate in foreseeable future.
g)      Audit Committee
An audit committee was established to assist the board of directors to discharge its
responsibilities for Corporate Governance, reporting requirements and internal controls. The
committee comprises of 3 non executive directors including the chairman of the committee.
The audit committee is responsible for design and implementation of sound internal controls
of the Company. The reviewing of financial reports, internal audit and assistance in external
audit are also the main functions of the Committee.
Statement of Compliance with Corporate Governance
The Company is in process of implementation of the Code of Corporate Governance issued by the Stock
Exchanges and stated that the provisions of the Code, relevant for the year ended June 30, 2003, have
been complied with.
UMER HAYAT SHEIKH
Lahore: October 07, 2003                                                                                   Chairman
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH
BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the statement of compliance with the best practices contained in the Code of
Corporate governance prepared by the Board of Directors of AI-Khair Gadoon Limited to comply with the
Listing Regulation No. 37 of the Karachi Stock Exchange, Chapter No. XIII of the Listing Regulations of
the Lahore Stock Exchange and Chapter XI of the Listing Regulations of Islamabad Stock Exchange
where the Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors
of the Company. Our Responsibility is to review, to the extent where such compliance can be objectively
verified, whether the Statement of Compliance reflects the status of the Company's compliance with the
provisions of the Code of Corporate Governance and report if it does not. A review is limited primarily to
inquire of the Company personnel and review of various documents prepared by the Company to comply
with the Code.
As part of our audit of financial statements we are required to obtain an understanding of the accounting
and internal control systems sufficient to plan the audit and develop an effective audit approach. We
have not carried out any special review of the internal control system to enable us to express an opinion
as to whether the boar's statement on internal control covers all controls and the effectiveness of such
internal controls.
Based on our review nothing has come to our attention which causes us to believe that the statement of
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the
best practices contained in the Code of Corporate Governance.
Tahir Siddiqi & Co.
Lahore: October 08, 2003                                                                                          Chartered Accountants
(A member firm of BR Int'l)
AUDITORS REPORT TO THE MEMBERS
We have audited the annexed balance sheet of AL-KHAIR GADOON LIMITED as at June 30, 2003 and
the related profit and loss account, cash flow statement and statement of changes in equity together with