| Dawood Cotton Mills Limited |
|
|
|
|
|
|
|
|
| Annual Report 1997 |
|
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|
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|
|
| CONTENTS |
|
| Company
Information |
|
| Notice of Meeting |
|
| Directors' Report |
|
| Form A |
|
|
| Summarised
Accounts: |
|
| Auditors' Report |
|
| Balance Sheet |
|
| Profit & Loss Account |
|
| Cash Flow Statement |
|
| Notes to the Accounts |
|
| Ten Years at a Glance |
|
|
|
|
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
| Ahmed
Dawood |
Chief Executive/Chairman |
|
| M.
Hussain Dawood |
|
| Shahzada
Dawood |
|
| Shahid
Ghaffar |
|
| Abdul
Aziz Moon |
|
| Haroon
Mehanti |
|
| Yousuf
A. Deshi |
|
|
| Secretary
& Finance Manager |
|
| Yousuf
A. Deshi |
|
|
| Auditors |
|
| Gangat
& Company |
|
| (Chartered
Accountants) |
|
|
| Bankers |
|
| Habib
Bank Limited |
|
|
| Registered
Office |
|
| Dawood
Centre, |
|
| Karachi-75530 |
|
|
| Mills |
|
| Landhi
Industrial Area, |
|
| Karachi-75120 |
|
|
|
| Notice
of Meeting |
|
|
| Notice
is hereby given that the 47th Annual General Meeting of the Shareholders of
Dawood |
|
| Cotton
Mills Limited will be held on Thursday, the 26th March 1998 at 4.00 p.m at
the Registered |
|
| Office
of the Company at Dawood Centre, Moulvi Tamizuddin Khan Road, Karachi, to
transact |
|
| the
following business after recitation from the Holy Quran. |
|
|
| ORDINARY
BUSINESS: |
|
|
| 1.
To confirm the minutes of the Annual General Meeting held on 31st March 1997. |
|
|
| 2.
To receive and adopt the Audited Accounts for the year ended September 30, |
|
| 1997
and reports of Directors' and Auditors' thereon. |
|
|
| 3.
To approve Dividend. |
|
|
| 4.
To appoint auditors for the year 1997-98 and to fix their remuneration. The
present |
|
| auditors,
M/s. Gangat & Company, Chartered Accountants, retire and being eligible, |
|
| offer
themselves for re-appointment. |
|
|
|
| NOTES |
|
|
| 1.
The Share transfer books of the Company will remain closed from 17-03 98 to
26-03 98 (both |
|
| days
inclusive). |
|
|
| 2.
Transfers received in order at the registered office of the Company Dawood
Centre Moulvi Tamizuddin |
|
| Khan
Road, Karachi. by March 16, 1998 will qualify for the payment of dividend to
the transferees. |
|
|
| 3.
A member entitled to attend and vote at the meeting may appoint another
member as his/her |
|
| proxy
to attend and vote for him/her. Proxies in order to be effective must be
received at the |
|
| registered
office of the Company not less than 48 hours before the time of holding the
meeting. |
|
|
| 4.
Members are requested to communicate to the Company of any change in their
addresses. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders |
|
| Assalam-u-Alaikum |
|
|
| Your
directors hereby present their 47th Annual Report together with the Audited
Accounts |
|
| and
Auditor's Report for the year ended 30th September, 1997. |
|
|
| As
reported in the half yearly report, the plant remained Closed until December,
1997. |
|
| The
Management re-started the plant by the grace of Almighty Allah, by the end of
December |
|
| 1997,
However due to continued rise in costs of production such as electricity,
gas, water |
|
| and
labour and other input costs, combined with substantial decline in sales by
Rs. 102.77 |
|
| million
as compared with the previous year, affected company's operating results.
Management's |
|
| continued
efforts to improve the results of the Company brought about reduction in
costs |
|
| which
enabled the Company to achieve nominal operating profit of Rs. 2,91.756 as
against |
|
| loss
of Rs. 146,846/= in previous year. |
|
|
| Strict
financial management yielded a non operating income of Rs. 52,08 Million |
|
| as
against Rs. 40.97 million in previous year. |
|
|
| After
charging all administrative and selling expenses including depreciation of
Rs.15,261,451/= |
|
| and
after providing Rs.16,500,000/= for taxation your Company has earned a net
profit |
|
| after
tax of Rs.35,084,288/= and taking into account unappropriated profit of Rs.
78.743,284/= |
|
| brought
forward form last year a sum of Rs.113,827,572 was available for
appropriation. |
|
| The
earnings per share during the year is Rs. 4.73 per share. |
|
|
| Your
Directors have recommended to appropriate the profits as follows:- |
|
|
| Dividend
@ Rs.4.50(450/%) Per Share of |
|
| Rs.
10/= each on paid up Capital of Rs. 74,236,020/= Rs. |
|
33,406,209 |
|
|
| Balance
to be carried forward |
|
Rs. |
80,421,363 |
|
|
---------- |
---------- |
|
|
Rs. |
113,827,572 |
|
|
---------- |
---------- |
|
|
| M/s.
Gangat & Company, Chartered Accountants retire and being eligible offer
themselves |
|
| for
re-appointment as auditors of the Company for the year 1997-98. |
|
|
| Directors
wish to place on record, their appreciation and gratitude at the devotion
shown |
|
| by
the employees of the Company. |
|
|
| We
invite you to join us in seeking guidance & blessings of the Almighty in
accelerating |
|
| the
operational growth, profitability and efficiency of the Mills in the coming
year. |
|
|
| Date
: February, 20,1998 |
|
|
|
|
| Pattern
of holding of the shares held by the shareholders |
|
| as
at September 30, 1997 |
|
|
| NUMBER OF |
|
TYPE OF |
|
TOTAL |
|
| SHAREHOLDERS |
SHAREHOLDINGS |
|
SHARES HELD |
|
|
| 630 |
1 |
to |
100 |
22,344 |
|
| 469 |
101 |
to |
500 |
106,256 |
|
| 100 |
105 |
to |
1000 |
73,935 |
|
| 94 |
1001 |
to |
5000 |
188,269 |
|
| 12 |
5001 |
to |
10000 |
86,222 |
|
| 1 |
20001 |
to |
25000 |
21,398 |
|
| 6 |
25001 |
to |
30000 |
159,160 |
|
| 3 |
30001 |
to |
35000 |
98,636 |
|
| 2 |
35001 |
to |
40000 |
76,681 |
|
| 1 |
40001 |
to |
45000 |
40,387 |
|
| 1 |
45001 |
to |
50000 |
45,500 |
|
| 2 |
50001 |
to |
55000 |
101,774 |
|
| 1 |
90001 |
to |
95000 |
93,078 |
|
| 1 |
110001 |
to |
115000 |
114,639 |
|
| 1 |
125001 |
to |
130000 |
129,176 |
|
| 1 |
135001 |
to |
140000 |
137,014 |
|
| 1 |
145001 |
to |
150000 |
150,000 |
|
| 1 |
150001 |
to |
155000 |
153,663 |
|
| 1 |
190001 |
to |
195000 |
192,632 |
|
| 1 |
245001 |
to |
250000 |
247,123 |
|
| 1 |
340001 |
to |
345000 |
342,587 |
|
| 1 |
350001 |
to |
355000 |
354,507 |
|
| 1 |
770001 |
to |
775000 |
774,446 |
|
| 1 |
895001 |
to |
900000 |
899,149 |
|
| 1 |
1150001 |
to |
1155000 |
1,151,013 |
|
| 1 |
1660001 |
to |
1665000 |
1,664,013 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
|
| 1335 |
|
7,423,602 |
|
| ========== |
========== |
========== |
========== |
========== |
|
|
|
| CATEGORIES
OF |
|
NO. OF |
SHARES |
|
|
| SHAREHOLDERS |
|
SHAREHOLDERS |
HELD |
PERCENTAGE |
|
|
|
|
| Individuals |
|
1291 |
1,738,573 |
23.42% |
|
| Investment
Companies |
|
5 |
10,416 |
0.14% |
|
| Insurance
Companies |
|
5 |
479,336 |
6.46% |
|
| Joint
Stock Companies |
|
15 |
2,864,126 |
38.58% |
|
| Financial
Institutions |
|
10 |
1,868,770 |
25.17% |
|
| Modaraba
Companies |
|
2 |
38,300 |
0.52% |
|
| Others
(See below) |
|
7 |
424,081 |
5.71% |
|
|
---------- |
---------- |
---------- |
|
|
1335 |
7,423,602 |
100.00% |
|
| OTHERS |
|
========== |
========== |
========== |
|
|
|
|
| Trusts
(Charitable Organisations) |
2 |
394,894 |
5.32% |
|
| Co-Operative,
Societies |
|
2 |
3,481 |
0.05% |
|
| Administrative,
Abandoned |
1 |
25,415 |
0.34% |
|
| Properties
Organisation |
|
|
|
| Administrator
General of Sindh |
1 |
285 |
0.00% |
|
| Kukab
Agencies (Pakistan) |
1 |
6 |
0.00% |
|
|
---------- |
---------- |
---------- |
|
|
7 |
424,081 |
5.71% |
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed Balance Sheet of DAWOOD COTTON MILLS LIMITED as at |
|
| September
30, 1997 and the related Profit and Loss Account and Cash Flow Statement
together |
|
| with
the notes forming part thereof, for the year then ended. |
|
|
| Profit
Participation Fund as required has not been provided in accounts. |
|
|
| Subject
to the foregoing reservation, we state that we have obtained all the
information and |
|
| explanations
which to the best of our knowledge and belief were necessary for the purpose |
|
| of
the 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 thereto |
|
| have
been drawn up in conformity with the Companies Ordinance, 1984 and |
|
| are
in agreement with the books of account and are further in accordance with |
|
| accounting
policies consistently applied; |
|
|
| (ii)
the expenditures incurred during the year were for purpose of the Company's |
|
| business; |
|
|
| (iii)
the business conducted, investments made and the expenditures 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 September 30, 1997 and
of |
|
| the
profit and the Cash Flow Statement 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 the ordinance. |
|
|
|
GANGAT & COMPANY |
|
| Karachi:
February 20,1998, |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at September 30, 1997 |
|
|
Note |
1997 |
1996 |
|
| CAPITAL
& LIABILITIES |
|
No. |
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| SHARE
CAPITAL |
|
| Authorised: |
|
| 1,00,00,000
Ordinary |
|
| Shares
of Rs. 10/- each |
|
100,000,000 |
10 00,00,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed & Paid Up: |
|
2 |
74,236,020 |
74,236,020 |
|
|
| RESERVES
& SURPLUS: |
|
| Revenue
Reserves |
|
3 |
1420,00 000 |
]4,20,00,000 |
|
| Capital
Reserve -- Share Premium |
|
4 |
32,705,746 |
32,705.75 |
|
| Unappropriated
Profit |
|
8,04 21,363 |
7,87 43,284 |
|
|
---------- |
---------- |
|
|
25,51.27,109 |
253,449,030 |
|
|
---------- |
---------- |
|
| CAPITAL
& RESERVES |
|
32,93,63,129 |
327,685,050 |
|
| DEFERRED
LIABILITIES |
|
5 |
|
| Gratuity |
|
25,864,634 |
3,44,65,225 |
|
| Deferred
Taxation |
|
34,950,000 |
3,49,50,000 |
|
|
---------- |
---------- |
|
|
6,08,14,634 |
6,94 15,225 |
|
| CURRENT
LIABILITIES AND PROVISION |
|
| Creditors,
Accrued and Other Liabilities |
|
11,87,84,167 |
11,71,72,282 |
|
| Profit
Participation Fund |
|
1,726.68 |
1,726,683 |
|
| Unclaimed
Dividend |
|
7,931,868 |
7,398,269 |
|
| Proposed
Dividend |
|
3 34,06,209 |
1,85,59,005 |
|
|
---------- |
---------- |
|
|
161,848,927 |
14,48,56,239 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
|
8 |
-- |
-- |
|
|
---------- |
---------- |
|
|
552,026,690 |
54,19,56,514 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of this Balance Sheet. |
|
|
| Karachi:
February 20.1998. |
|
|
|
Note |
1997 |
1996 |
|
| PROPERTY
& ASSETS |
|
No. |
Rupees |
Rupees |
|
|
|
|
|
|
| FIXED
ASSETS |
|
| Operating
Assets |
|
9 |
137,142,427 |
152,921,117 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
10 |
9,681,394 |
9,681,394 |
|
| LONG
TERM DEPOSITS |
|
1,430,622 |
1,430,622 |
|
| CURRENT
ASSETS |
|
|
| Stores
and Spares |
|
11 |
3,635,708 |
4,022,485 |
|
| Stock-in-trade |
|
12 |
22,682,000 |
7,276,478 |
|
| Trade
Debtors |
|
13 |
9,358,075 |
15,643,398 |
|
| Loans,
Advances, Deposits |
|
| Prepayments
and Other Receivables (Unsecured) |
|
14 |
2,995,661 |
493,821 |
|
| Short
Term Investments |
|
15 |
7,890,000 |
89,110,000 |
|
| Cash
and Bank Balances |
|
16 |
357,210,803 |
261,377,199 |
|
|
---------- |
---------- |
|
|
403,772,247 |
377,923,381 |
|
|
---------- |
---------- |
|
|
552,026,690 |
54,19,56,514 |
|
|
========== |
========== |
|
|
|
|
|
|
|
| Profit
and Loss Accounts |
|
| for
the year ended September 30, 1997 |
|
|
|
Note |
1997 |
1996 |
|
| PARTICULARS |
|
No. |
Rupees |
Rupees |
|
|
| Net
Sales and Operating Revenue |
|
17 |
70,378,206 |
173,148,890 |
|
| Cost
of Sales |
|
18 |
(5,86,02,214) |
(15,87,10,940) |
|
|
---------- |
---------- |
|
| GROSS
PROFIT |
|
11,775,992 |
14,437,950 |
|
|
========== |
========== |
|
| OPERATING
EXPENSES |
|
| Administrative |
|
19 |
11,021,294 |
13,042,148 |
|
| Selling |
|
20 |
343,056 |
1,084,904 |
|
| Financial |
|
21 |
119,886 |
457,744 |
|
|
---------- |
---------- |
|
|
(1,14,84,236) |
(1,45,84,796) |
|
|
---------- |
---------- |
|
| OPERATING
PROFIT / (LOSS) |
|
291,756 |
(1,46,846) |
|
|
| Non-Operating
Income |
|
22 |
5,20,80,347 |
40,965,802 |
|
| Zakat |
|
-- |
(75,382) |
|
| Profit
on sale of Fixed Assets |
|
9.10 |
1,42,185 |
5,122,206 |
|
|
---------- |
---------- |
|
| PROFIT
FOR THE YEAR |
|
52,514,288 |
45,865,780 |
|
| Other
Charges |
|
23 |
(10,80,000) |
(10,09,411) |
|
|
---------- |
---------- |
|
| PROFIT
BEFORE TAX |
|
51,434,288 |
44,856,369 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of this Profit and Loss Account. |
|
|
| Karachi:
February 20, 1998. |
|
|
|
Note |
1997 |
1996 |
|
| PARTICULARS |
|
No. |
Rupees |
Rupees |
|
|
| PROFIT
BEFORE TAX |
|
51,434,288 |
44,856,369 |
|
| TAXATION |
|
24 |
|
| Current |
|
(1,65,00,000) |
(1,66,50,000) |
|
| Deferred |
|
-- |
16,650,000 |
|
|
---------- |
---------- |
|
| PROFIT
AFTER TAX |
|
34,934,288 |
4,48,56~369 |
|
| Capital
Gain |
|
25 |
150,000 |
-- |
|
|
---------- |
---------- |
|
|
35,084,288 |
44,856,369 |
|
| Unappropriated
Profit from the previous year |
|
78,743,284 |
52,445,920 |
|
|
---------- |
---------- |
|
| TOTAL AMOUNT AVAILABLE FOR
APPROPRIATION |
|
11,38,27,572 |
97,302,289 |
|
|
========== |
========== |
|
| APPROPRIATION: |
|
| Proposed
Dividend |
|
33,406,209 |
18,559,005 |
|
| Balance
Carried Forward |
|
80,421,363 |
78,743,284 |
|
|
---------- |
---------- |
|
|
38,27,572 |
97,302,289 |
|
|
========== |
========== |
|
|
|
|
|
| Cash
Flow Statement |
|
| for
the year ended September 30, 1997 |
|
|
|
For the Year |
For the Year |
|
| P
A R T I C U L A R S |
|
Ended |
Ended |
|
|
30-09-1997 |
30-09-1996 |
|
|
| Cash
Flow From Operating Activities |
|
| Profit/(loss)
before taxation |
|
5,14,34,288 |
44,856,369 |
|
|
| Adjustments
for : |
|
| Depreciation |
|
1,52,61,451 |
16,988,674 |
|
| Profit
on sale of fixed assets |
|
(142,185) |
(51,22,206) |
|
| Provision
for gratuity |
|
534,226 |
4,550,568 |
|
| Income
from investments |
|
(5,18,92,756) |
(4,08,87,804) |
|
| Sundry
sales & receipts |
|
(187,591) |
(77,998) |
|
| Financial
charges |
|
119,886 |
457,744 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
|
1,51,27,319 |
20,765,347 |
|
| Net
(increase)/decrease in working capital |
|
69,853,821 |
129,289,077 |
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
84,981,140 |
15,00,54,424 |
|
| Payments
for: |
|
| Gratuity |
|
(91,34,817) |
(94,57,504) |
|
| Tax |
|
(1,47,57,198) |
(1,06,74,246) |
|
| Financial
charges |
|
(1,19,886) |
(4,57,744) |
|
|
---------- |
---------- |
|
| Net
Cash from Operating Activities (A) |
|
6,09,69,239 |
129,464,930 |
|
|
========== |
========== |
|
| Cash
Flow from Investment Activities |
|
| Sales
of fixed assets |
|
874,424 |
6,097,000 |
|
| Income
from investments |
|
5,18,92,756 |
4,08,87,804 |
|
| Sundry
Sales & Receipts |
|
187,591 |
77,998 |
|
| Acquisition
of Fixed Assets |
|
(2,15,000) |
-- |
|
| Capital
Gain |
|
1,50,000 |
-- |
|
|
---------- |
---------- |
|
| Net
cash from / (used in) investing activities (B) |
|
5,28,89771 |
47,062,802 |
|
|
========== |
========== |
|
| Cash
Flow from Financing Activities |
|
| Dividend
Paid |
|
(1,80,25,406) |
(33,817) |
|
| Long
term Investment (Shares) |
|
-- |
(6,98,313) |
|
|
---------- |
---------- |
|
| Net
cash from / (used in) financing activities (C) |
|
(1,80,25,406) |
(7,32,130 |
|
|
========== |
========== |
|
| Net
(increase) / decrease in cash and |
|
| cash
equivalents (A+B+C) |
|
9,58,33,604 |
175,795,602 |
|
| Cash
and cash equivalents at the beginning of the year |
|
26,13,77,199 |
8,55,81,597 |
|
|
|
|
| Cash
and cash equivalents at the end of the year |
|
35,72,10,803 |
26,13,77,199 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
| Cash
Flow Statement |
|
| for
the year ended September 30, 1997 |
|
|
|
For the Year |
For the Year |
|
| P
A R T I C U L A R S |
|
Ended |
Ended |
|
|
30-09-1997 |
30-09-1996 |
|
|
|
|
| Movement
in Working Capital |
|
|
| (Increase)
/ Decrease in Current Assets |
|
|
| Stores
and Spares |
|
3,86,777 |
(5,03,142) |
|
| Stock-in-trade |
|
(1,54,05,522) |
62,78,344 |
|
| Trade Debts |
|
62,85,323 |
(93,51,987) |
|
| Loans,
Advances. Deposits. Prepayments |
|
| and
Other Receivables |
|
| (including
advance payment of income tax ) |
|
(25,01,840) |
249,823 |
|
| Short
Term Investments |
|
8,12,20,000 |
13,00,00,000 |
|
|
