| Dewan Musthaq Textile Mills Limited |
|
|
|
|
|
|
| (Annual
Report 1996) |
|
|
|
| CONTENTS |
|
| Company
Information |
|
| Notice
of the Meeting |
|
| Statement
Under Section 160 |
|
| Director's
Report |
|
| Auditors'
Report to the Members |
|
| Balance
Sheet |
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Share Holding |
|
|
|
|
| COMPANY
INFORMATION |
|
| BOARD
OF DIRECTORS |
|
| DEWAN
ZIAUR REHMAN FAROOQUI |
Chairman |
|
| DEWAN
GHULAM MUSTAFA KHALID |
Vice Chairman |
|
| DEWAN
MUHAMMAD AYUB KHALID |
Managing Director/Chief
Executive |
|
| DEWAN
MOHAMMAD YOUSUF FAROOQUI |
Deputy Managing Director |
|
| DEWAN
ABDUL REHMAN FAROOQUI |
|
| DEWAN
ASIM MUSHFIQ FAROOQUI |
|
| MR.
AZHAR KHAWAJA |
|
|
| AUDITORS |
|
| MESSRS.
FARUQ ALI & CO. |
|
| Chartered
Accountants |
|
|
| Habib
Square, |
|
|
| M.
A. Jinnah Road, |
|
|
| Karachi,
Pakistan. |
|
|
|
|
|
| BANKERS |
|
| HABIB
BANK LIMITED |
|
|
|
| REGISTERED
OFFICE |
|
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| DEWAN
CENTRE |
|
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| 3-A,
Lalazar, |
|
|
| Beach
Hotel Road, |
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|
| Karachi
- 74000, |
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|
| Pakistan. |
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|
| MILLS |
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|
|
| A-30,
S. I. T. E., |
|
|
| Hyderabad
(Sindh). |
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|
|
| NOTICE
OF THIRTY FIFTH ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the Thirty Fifth Annual General Meeting of Dewan Mushtaq
Textile Mills |
|
| Limited
will be held on Saturday, 28 June 1997 at 6.00 p.m. at Dewan Centre, 3-A
Lalazar Beach Hotel |
|
| Road,
Karachi, to transact the following business: |
|
|
| ORDINARY
BUSINESS: |
|
| 1.
Recitation from HOLY QURAN. |
|
|
|
|
| 2.
To read and confirm the minutes of the Thirty Fourth Annual General Meeting
held on 31st |
|
| March,
1996. |
|
|
|
|
| 3.
To receive, consider and adopt the annual audited accounts for the year ended
30th September |
|
| 1996,
together with the Directors' and Auditors Report thereon. |
|
|
|
|
| 4.
To approve the declaration of 20% Cash Dividend. |
|
|
|
| 5.
To appoint Auditors of the Company for the year ending 30th September 1997
and to fix their |
|
| remuneration. |
|
|
|
|
| SPECIAL
BUSINESS: |
|
| 6.
To consider and approve shot-term loans and advances out of surplus funds
available with the |
|
| Company to Dewan Sugar Mills Limited in
compliance with the provisions of Section 208 of the |
|
| Companies Ordinance, 1984. |
|
|
| 7.
To transact any other business with the permission of the Chairman. |
|
|
|
|
For and on behalf of Board of Directors |
|
|
| Karachi:
06 June, 1997. |
|
(DEWAN MOHAMMAD AYUB
KHALID) |
|
| Place
: Karachi. |
|
Managing Director/Chief
Executive |
|
|
| NOTES: |
|
| 1.
The Share Transfer Books of the Company will remain closed from 15th June,
1997 to 28th June, |
|
| 1997
(Both days inclusive). |
|
|
|
|
| A
member entitled to attend, speak and vote at the meeting is entitled to
appoint a proxy to attend, |
|
| speak
and vote for him/her. A proxy must be member of the company. |
|
|
|
|
| 3.
An instrument of proxy and a power of attorney or other authority (if any)
under which it is signed |
|
| or a notarilly certified copy of such power
of attorney in order to be valid must be deposited at the |
|
| registered office of the Company not less
than 48 hours before the time of the meeting. |
|
|
|
| 4.
Members are requested to notify the Company any change in their addresses
immediately. |
|
|
|
|
| "Statement
under Section 160 of the Companies Ordinance, 1984 attached with the Annual |
|
| Report
circulated to the members of the company." |
|
|
|
|
|
|
|
| STATEMENT
UNDER SECTION 160 |
|
| OF
THE COMPANIES ORDINANCE, 1984 |
|
| This
statement is annexed to the Notice of Thirty Fifth Annual General Meeting of
Dewan Mushtaq |
|
| Textile
Mills Limited to be held on 28th June, 1997 and sets out the material fact
concerning the |
|
| Special
Business to be transacted at the Meeting. |
|
|
| The
Board of Directors considers to advance temporary short term financing to an
associated com- |
|
| pany-Dewan
Sugar Mills Limited, out of the surplus funds available with the Company. The |
|
| Directors
of the Company have no other vested interest in Dewan Sugar Mills Limited
except that |
|
| some
of them are also Shareholders and Directors of Dewan Sugar Mills Limited. |
|
|
| In
this regard following resolution is proposed to be passed as a "SPECIAL
RESOLUTION". |
|
|
| "RESOLVED
that the Chief Executive of the Company be and is hereby authorised to make
tem- |
|
| porary
short term loans/advances to DEWAN SUGAR MILLS LIMITED being an associated
com- |
|
| pany
upto a maximum limit of Rs. 25 Million at 1% above the Mark-up rate on which
Dewan |
|
| Textile
Mills Limited has made its own borrowings". |
|
|
| "FURTHER
RESOLVED that these temporary loans/advances shall be adjusted as and when |
|
| required
by the Company and shall not exceed 12 (Twelve) months period". |
|
|
|
|
| DIRECTORS'
REPORT |
|
| Your
Directors take pleasure in presenting to you the 35th Annual Report of the
Company together |
|
| with
the audited accounts for the financial year ended on September 30, 1996. |
|
|
| Alhamdolillah,
this year again the results of the Company remained satisfactory, despite
many neg- |
|
| ative
factors. Although the cotton prices remained at lower level than last year,
the same was coun- |
|
| tered
by instability in yarn prices and upsurge in conversion cost, particularly
power. |
|
|
| By
grace of Almighty Allah, your Company has earned a Net Profit of Rs. 26.934
million as com- |
|
| pared
with Net Profit of Rs. 8.15 million of last year. Current year's Profit
includes Cash Dividend |
|
| Income
of Rs. 25.6 million from Dewan Salman Fibre Ltd. The significant dividend
income has once |
|
| again
provided a helping hand to your Company's cash flow under the prevalent grim
situation of |
|
| the
industry. |
|
|
| We
humbly gratefully bow our heads before Almighty Allah, the most gracious and
merciful, who |
|
| has
rewarded and blessed your Company with His bounties. |
|
|
| IF
YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN) |
|
|
| Your
Directors are pleased to propose appropriation of profit in the following
manner: |
|
|
| Profit
for the year 1996 |
|
Rs. |
26,934,483 |
|
|
| Profit
brought forward from previous year |
Rs. |
5,106,282 |
|
|
|
---------- |
|
| Total
amount available for appropriation |
Rs. |
32,040,765 |
|
|
|
|
========== |
|
| Appropriation |
|
|
|
| Proposed
cash dividend @ 20% |
|
Rs. |
3,524,400 |
|
| Un-appropriated
profit carried forward |
Rs. |
28,516,365 |
|
|
|
|
---------- |
|
|
|
Total |
Rs. |
32,040,765 |
|
|
|
========== |
|
| REVIEW
ON ACCOUNTS |
|
|
|
| The
Company has earned a Net Profit of Rs. 26.934 million, after charging
Depreciation of Rs. 2.708 |
|
| million
and making a provision for Taxation of Rs. 4.3 million. The earning per share
of the |
|
| Company
for the year under review works out to Rs. 15.28. The financial obligations
of the |
|
| Company
are being met timely. Alhamdolilah, the Company has been able to exhibit
satisfactory |
|
| results
in an overall distressing situation of textile sector. |
|
|
| The
Textile Industry, during the year, under review, remained under grave crisis.
The cotton crop |
|
| once
again failed miserably for the fourth consecutive year and cotton prices
remained at high level |
|
| during
the year. The average price of raw cotton remained around Rs. 2,100/- per
maund, exclud- |
|
| ing
18% sales tax. |
|
|
| FUTURE
PROSPECTS |
|
| The
Textile Industry of Pakistan is still suffering from successive cotton crop
failures. The future is |
|
| entirely
dependent on sizable cotton crop and serious consideration by the Government
to restore |
|
| this
industry. Although the caretaker and the present Government did announce
certain packages |
|
| for
this sector in order to put it back on the track, the current situation
requires revolutionary cor- |
|
| rective
measures to arrest the decline in fortune of the industry over the last few
years. This has |
|
| brought
some optimism and some of the closed units also started operating, but now
short capacity |
|
| in
weaving sector has become a bottleneck for textile spinning industry.
Expansion in weaving |
|
| capacity
is expected as the situation of weaving sector is improving. The expansion of
weaving sec- |
|
| tor
is inevitable for the survival of spinning sector and Textile Industry as a
whole. |
|
|
| Current
year is again a difficult one and we do not see any mitigation in this
situation as the finan- |
|
| cial
crisis is not over and in such circumstances, we can only pray to Almighty
Allah to help our |
|
| Textile
Industry to come out of this dilemma. |
|
|
| NOTE
OF THANKS |
|
| The
Board expresses its thanks for the valuable services, loyalty and laudable
efforts rendered by the |
|
| executives,
staff members and workers of the Company, during the year under review, and
wish to |
|
| place
on record its appreciation for the same. |
|
|
| AUDITORS |
|
| The
Auditors of your Company, M/s. Faruq Ali & Company, Chartered
Accountants, retire and offer |
|
| their
services for re-appointment for the ensuing year on the same remuneration. |
|
|
|
| CONCLUSION |
|
| In
conclusion, we bow, beg and pray to Almighty Allah, Rehman-o-Rahim, in the
name of our |
|
| beloved
prophet, Muhammad, peace be upon him, for continued showering of His
Blessings, |
|
| Guidance,
Strength, Health and Prosperity to us, our Company, Country and Nation; and
also pray |
|
| to
Almighty Allah to bestow peace, harmony, brotherhood and unity in true
Islamic spirit to whole |
|
| of
Muslim Ummah, Ameen, Summa-Ameen. |
|
|
| LO-MY
LORD IS INDEED HEARER OF PRAYER (HOLY QURAN) |
|
|
|
|
For and on behalf of
Board of Directors |
|
|
Dewan Mohammad Ayub
Khalid |
|
| Karachi:
May 21, 1997 |
|
Managing Director/Chief
Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| We
have audited the annexed Balance Sheet of Dewan Mushtaq Textile Mills
Limited, as at 30 |
|
| September,
1996 and the related Profit and Loss Account and Cash Flow Statement together
with the |
|
| notes
forming part thereof, for the year then ended and we state that we have
obtained all the infor- |
|
| mation
and explanations which to the best of our knowledge and belief were necessary
for the purpos- |
|
| es
of our audit and, after due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies Ordinance, 1984; |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance Sheet and Profit and Loss Account together with the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with |
|
| the
books of account and are further m accordance with accounting policies
consistently |
|
| applied; |
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's
busi- |
|
| ness; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year |
|
| were in accordance with the objects of the
Company; |
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to |
|
| us, the Balance Sheet, Profit and Loss
Account and the Cash Flow Statement, together with the |
|
| Notes forming part thereof, give the
information required by the Companies Ordinance, 1984 |
|
| in the manner so required and respectively
give a true and fair view of the state of the |
|
| Company's affairs as at 30 September 1996
and of the profit and the Cash Flow for the year |
|
| then ended and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 was |
|
| deducted by the Company and deposited in
the Central Zakat Fund established under Section |
|
| 7 of that Ordinance. |
|
|
| Faruq
Ali & Company |
|
| Chartered
Accountants |
|
| Karachi: |
|
| Date:
21 May, 1997 |
|
|
|
| BALANCE
SHEET AS ON 30 SEPTEMBER, 1996 |
|
|
|
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
1996 |
1995 |
|
|
Notes |
Rupees |
Rupees |
|
| Share
Capital |
|
|
| Authorized |
|
| 10,000,000
(1995: 10,000,000) |
|
| Ordinary
shares of Rs. 10 Each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed & Paid up |
|
3 |
17,622,000 |
17,622,000 |
|
| Reserves
and Surplus |
|
4 |
73,516,365 |
50,106,282 |
|
|
|
|
---------- |
---------- |
|
|
|
|
91,138,365 |
67,728,282 |
|
| Deferred
Liability |
|
5 |
8,530,853 |
5,975,978 |
|
| Current
Liabilities |
|
| Short
Term Running Finances |
|
6 |
106,407,558 |
213,119,145 |
|
|
| Creditors,
Accrued Expenses & |
|
| Other
Liabilities |
|
7 |
50,164,895 |
24,933,922 |
|
|
|
|
|
| Provision
for Taxation |
|
|
13,250,641 |
8,950,641 |
|
| Dividend
Payable |
|
8 |
3,681,083 |
3,674,591 |
|
|
|
|
---------- |
---------- |
|
|
|
|
173,504,177 |
250,678,299 |
|
|
| Contingent
Liabilities and Commitments |
9 |
|
|
---------- |
---------- |
|
|
|
273,173,395 |
324,382,559 |
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
|
| Fixed
Assets (at cost less |
|
| accumulated
depreciation) |
|
10 |
22,948,265 |
25,087,774 |
|
| Long
Term Investment |
|
11 |
40,003,000 |
40,003,000 |
|
| Long
Term Deposits |
|
12 |
55,736 |
47,736 |
|
|
|
|
| Current
Assets |
|
|
| Stores
and Spares |
|
|
13 |
11,088,437 |
9,917,332 |
|
| Stock
in Trade |
|
|
14 |
133,912,182 |
199,643,226 |
|
| Trade
Debts - unsecured |
|
| (Considered
good) |
|
|
51,077,549 |
35,052,317 |
|
| Advances,
Deposits, Prepayments |
|
| and
Other Receivables |
|
15 |
12,848,613 |
12,903,169 |
|
| Cash
and Bank Balances |
|
16 |
1,239,613 |
1,728,005 |
|
|
---------- |
---------- |
|
|
|
210,166,394 |
259,244,049 |
|
|
|
---------- |
---------- |
|
|
|
273,173,395 |
324,382,559 |
|
|
========== |
========== |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
|
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1996 |
|
|
|
|
|
|
1996 |
1995 |
|
|
|
Notes |
Rupees |
Rupees |
|
|
|
| Sales
- Net |
|
17 |
368,893,002 |
349,775,726 |
|
| Less:
Excise Duty & Sales Tax |
|
|
7,368,677 |
9,052,068 |
|
|
|
|
---------- |
---------- |
|
|
|
|
361,524,325 |
340,723,658 |
|
| Cost
of Sales |
|
18 |
339,102,269 |
319,566,361 |
|
|
|
|
---------- |
---------- |
|
| Gross
Profit |
|
|
22,422,056 |
21,157,297 |
|
| Operating
Expenses |
|
| Administrative
& General |
|
19 |
3,959,448 |
3,946,949 |
|
| Selling
& Distribution |
|
20 |
4,520,449 |
3,787,613 |
|
|
|
|
---------- |
---------- |
|
|
|
|
8,479,897 |
7,734,562 |
|
|
---------- |
---------- |
|
| Operating
Profit |
|
|
13,942,159 |
13,422,735 |
|
| Other
Charges |
|
| Financial
Expenses |
|
21 |
7,817,457 |
7,210,400 |
|
| Workers'
Profit Participation Fund |
|
306,235 |
310,617 |
|
| Workers'
Welfare Fund |
|
|
184,003 |
185,496 |
|
|
|
|
---------- |
---------- |
|
|
|
|
8,307,695 |
7,706,513 |
|
|
|
|
---------- |
---------- |
|
|
|
|
5,634,464 |
5,716,222 |
|
| Other
Income |
|
22 |
25,600,019 |
5,634,572 |
|
|
|
|
---------- |
---------- |
|
| Profit
before Taxation |
|
|
31,234,483 |
11,350,794 |
|
|
| Taxation |
|
| Current
Year |
|
|
4,300,000 |
3,200,000 |
|
|
|
|
---------- |
---------- |
|
| Profit
after Taxation |
|
|
26,934,483 |
8,150,794 |
|
| Unappropriated
profit brought forward |
|
5,106,282 |
479,888 |
|
|
|
|
---------- |
---------- |
|
|
|
|
32,040,765 |
8,630,682 |
|
| Appropriation |
|
|
|
|
|
| Transferred
to General Reserve |
|
-- |
-- |
|
| Proposed
Cash Dividend : @ 20% (1995: 20%) |
|
352,440 |
3,524,400 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,524,400 |
3,524,400 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
28,516,365 |
5,106,282 |
|
|
========== |
========== |
|
|
|
|
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER 1996 |
|
|
1996 |
1995 |
|
|
|
Rupees |
Rupees |
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Net
profit before tax |
|
|
31,234,483 |
11,350,794 |
|
|
| Adjustment
to reconcile profit to cash generated in |
|
| operating
activities: |
|
|
| Depreciation |
|
|
2,708,734 |
2,954,831 |
|
| Provision
for gratuity |
|
|
2,554,875 |
2,114,275 |
|
| (Gain)
on sale of fixed assets |
|
|
-- |
(301,102) |
|
|
|
|
---------- |
---------- |
|
|
|
5,263,609 |
4,768,004 |
|
|
---------- |
---------- |
|
|
|
|
36,498,092 |
16,118,798 |
|
|
|
|
| (Increase)
/ Decrease in Stores and Spares |
|
(1,171,105) |
387,169 |
|
| (Increase)
/ Decrease in Stock in Trade |
|
65,731,044 |
(20,603,272) |
|
| (Increase)
/ Decrease in Trade Debts |
|
(16,025,232) |
(34,762,459) |
|
| (Increase)
/ Decrease in Advances, Deposits, |
|
| Prepayments
and Other Receivables |
|
54,556 |
59,530 |
|
| Increase
/ (Decrease) in Creditors, Accrued |
|
| Expenses
and Other Liabilities |
|
25,230,973 |
(711,758) |
|
| Increase
/ (Decrease) in Short Term Running |
|
|
|
| Finances |
|
(106,711,587) |
47,715,804 |
|
|
---------- |
---------- |
|
|
|
|
(32,891,351) |
(7,914,986) |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,606,741 |
8,203,812 |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Payments
for Taxes |
|
|
-- |
3,246,267 |
|
| Payments
for Dividend |
|
|
3,517,908 |
4,652,794 |
|
|
|
|
---------- |
---------- |
|
|
|
|
3,517,908 |
7,899,061 |
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Capital
Expenditure |
|
569,225 |
1,163,000 |
|
| Sale
of Fixed Assets |
|
|
-- |
(450,000) |
|
| Payments
of Long Term Deposits |
|
8,000 |
-- |
|
|
|
---------- |
---------- |
|
|
|
|
577,225 |
713,000 |
|
|
---------- |
---------- |
|
| Net
Increase/(Decrease) in Cash |
|
(488,392) |
(408,249) |
|
| Cash
and Bank Balances as on 01 October 1995 |
|
1,728,005 |
2,136,254 |
|
|
|
|
---------- |
---------- |
|
| Cash
and Bank Balance as on 30 September 1996 |
|
1,239,613 |
1,728,005 |
|
|
========== |
========== |
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| THE
YEAR ENDED 30 SEPTEMBER 1996 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| Dewan
Mushtaq Textile Mills Limited is a public limited company incorporated in
Pakistan under |
|
| the
Companies Act, 1913 (Now Companies Ordinance, 1984) and is listed on Karachi
Stock |
|
| Exchange.
The Principal activity of the Company is manufacturing and sale of yarn. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting Convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
|
|
| 2.2
Staff retirement benefits |
|
| The
Company operates an unfunded gratuity scheme. Annual provisions are made in
the |
|
| financial
statements to cover obligations under this scheme. |
|
|
| 2.3
Taxation |
|
| Provision
for current taxation is based on current rates of tax after taking into
account tax |
|
| credits
available, if any. |
|
| The
Company accounts for deferred taxation on all material timing differences
using the lia- |
|
| bility
method. However, deferred tax is not provided if it can be established with
reasonable |
|
| probability
that these timing differences will not reverse in the foreseeable future. |
|
|
|
| 2.4
Tangible Fixed Assets and Depreciation |
|
| The
Fixed Assets are stated at cost less accumulated depreciation except for
lease hold land |
|
| and
Capital Work-in-Progress which are stated at cost. |
|
| Depreciation
is provided on reducing balance method and the rates applied are in no case
less |
|
| than
the rates prescribed by the Central Board of Revenue. |
|
| Full
years depreciation is charged in the year of acquisition, while no
depreciation is charged |
|
| in
the year of their disposal. |
|
| Major
repairs and renewals are capitalized. |
|
| Profit
or Loss on disposal of Fixed Assets is included in the current year income. |
|
|
| 2.5
Stores and Spares |
|
| These
are valued at average cost except for those in transit which are valued at
cost. |
|
|
|
| 2.6
Stock-in-Trade |
|
| These
are valued as follows: |
|
| Raw
Material |
: |
At average cost |
|
| Finished
Goods |
: |
At lower of Cost or Net
Realizable Value |
|
| Waste |
|
: |
At selling price |
|
| Work-in-Process |
: |
At average cost |
|
| Stock
in Transit |
: |
At cost |
|
| Stock
at Fair Price Shop : |
At cost calculated on the
basis of First-in-first- |
|
|
|
out method of valuation. |
|
| Packing
Material |
: |
At average cost. |
|
|
|
| Cost
of finished goods comprises of prime cost and appropriate portion of
production over- |
|
| heads. |
|
| Net
Realizable Value signifies the estimated selling price in the ordinary course
of business |
|
| less
cost necessary to be incurred in order to make the sale. |
|
|
|
|
| 2.7
Foreign currencies |
|
| Transactions
in Foreign currencies are recorded using the rates of exchange ruling at the
date |
|
| of
transaction. |
