Dilon Limited - Annual Reports 2003




DILON LIMITED
Annual Reports 203

COMPANY INFORMATION

Board of Directors
M. Hussain Dawood (Chairman)
Shahzada Dawood (Chief Executive)
Khawaja Amanullah
Abdul Samad Dawood
A. Aziz Moon
Haroon Mahenti
Yousuf A. Deshi

Board Audit Committee
Khawaja Amanullah (Chairman)
Abdul Samad Dawood (Member)
A. Aziz Moon (Member)

Company Secretary
Yousuf A. Deshi

Auditors
Gangat & Co.
Chartered Accountants

Bankers
Habib Bank Limited
Bank AI-Habib Limited

Registered Office
35-A, Shahrah-e-Abdul Hameed Bin Baadees
(Empress Road), Lahore.
Phones: (042) 6301601 -7

Karachi Office / Shares Department
Dawood Centre,
M. T. Khan Road,
Karachi - 75530

Mills
Landhi Industrial Area,
Karachi-75120

OPERATING HIGHLIGHTS

Six Years at a Glance

PARTICULARS	UNIT	2003	2002	2001	2000	1999	1998
A) INCOME STATEMENT
1 Sales Value	Rs. In Thousands	159,668	174,236	186,614	121,456	135,895	125,472
2 Gross Profit	Rs. In Thousands	19,476	29,994	29,762	9,280	13,048	16,491
3 Operating Profit	Rs. In Thousands	10,314	21,340	21,559	3,007	7,674	11,376
4 Profit Before Taxation	Rs. In Thousands	18,585	30,137	29,521	24,201	8,531	16,216
5 Profit After Taxation	Rs. In Thousands	13,634	19,337	18,533	20,891	4,531	13,666
B) DIVIDEND
1 Cash Dividend	%	60%	70%	70%	70%	30%	35%
C) BALANCE SHEET
1 Total Assets Employed	Rs. In Thousands	165,235	160,567	168,575	162,383	146,061	142,716
2 Current Assets	Rs. In Thousands	70,747	133,885	138,998	130,541	71,664	97,456
3 Current Liabilities	Rs. In Thousands	41,097	42,796	54,036	50,327	38,865	33,259
4 Paid-up Capital	Rs. In Thousands	23,595	23,595	23,595	23,595	23,595	23,595
5 Shareholders Equity	Rs. In Thousands	115,774	103,558	100,737	98,721	94,346	96,894
6 No. of Ordinary Shares	Thousands	2,359.50	2,359.50	2,359.50	2,359.50	2,359.50	2,359.50
D) RATIO ANALYSIS
1 Gross Profit	%	12.2	17.21	15.95	7.64	9.6	13.14
2 Earnings Per Share	Rs.	5.78	8.2	7.85	8.85	1.92	5.79
3 Dividend Yield	%	10.08	23.73	25.93	28	10.34	12.75
4 Return on Equity	%	11.78	18.67	18.4	21.16	4.8	14.1
5 Break-up Value of Shares	Rs.	49.07	43.89	42.7	41.84	39.98	41.07
6 Market Value of Shares	Rs.	59.5	29.5	27	25	29	27.45
E) PRODUCTION
1 Capacity	Thousand Kgs	1,400	1,400	1,400	1,400	1,400	1,400
2 Actual Production	Thousand Kgs	1,581	1,549	1,565	1,565	1,418	1,383
3 Capacity Utilization	%	112.93	110.64	111.79	111.79	101.29	98.79
F) OTHERS
1 Employees	Nos.	181	113	67	72	72	72
2 Capital Expenditure	Rs. In Thousands	-	385	1,338	65	-	374

NOTICE OF MEETING

Notice is hereby given that the 30th Annual General Meeting of the Members of the Company will Insha
Allah be held on Saturday, October 25, 2003 at 12:00 noon at the Company's Registered Office, at 35-A,
Shahrah-e-Abdul Hameed Bin Badees (Empress Road), Lahore 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 October 18,2002.

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'Report thereon.

3. To consider and approve payment of Final cash dividend at the rate of Rs. 21- per share (20%) in
addition to 40% interim cash dividend already paid as recommended by the Board of Directors.

4. To appoint auditors for the year 2003-2004 and to fix their remuneration. The present auditors, M/s.
Gangat & Company, Chartered Accountants, retire and being eligible, offer themselves for
re-appointment.

5. To transact any other ordinary business with the permission of the Chairman.

By Order of the Board

(YousufA. Deshi)
Karachi: September 26, 2003 Director/Secretary

1. The Share transfer books of the company will remain closed from 17.10.2003 to 25.10.2003 (both
days inclusive).

2. Transfers received at the registered office of the Company or at Dawood Centre, M.T. Khan Road,
Karachi, at the close of the business on October 16, 2003 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, speak and vote for him/her.

4. The vote may be given personally or by an attorney or in case of corporation duly authorised
representative. An instrument of proxy or power of attorney or other authority (if any) under which it
has been signed or notarially certified copy of such authority must be valid if deposited at registered
office of the Company or at Dawood Centre, M.T. Khan Road, Karachi not less than 48 hours before
the time of the meeting.

5. Members are requested to communicate to the Company of any change in their addresses.

DIRECTORS' REPORT

The Directors are pleased to present their Annual Report together with the Audited Financial Statements
for the year ended June 30,2003 before the thirtieth Annual General Meeting of the Company.

Operating Results

The gross profit has decreased to Rs. 19,475,741 during the year under review, as compared to
Rs. 29,994,196 for the previous year. The gross profit percentage has also decreased to 12.20% as
compared to 17.21 % for the previous year. The net profit before taxation for the year is Rs. 18,584,961 as
compared to Rs. 30,136,916 for the previous year, after providing for all the operating, administrative,
selling & distribution and financial expenses. The summary of the financial results is:

				2003	2002
				Rupees	Rupees
Sales				159,668,397	174,236,456
Gross profit				19,475,741	29,994,196
Operating profit				10,313,891	21,760,053
Other income				9,227,101	9,173,774
Profit before taxation				18,584,961	30,136,916
Provision for taxation
(including deferred taxation)				4,950,604	10,800,000
Profit after taxation				13,634,357	19,336,916
Un-appropriated profit brought forward				12,462,698	9,642,282
Profit available for appropriation				26,097,055	28,979,198
Dividend

The Directors recommend a payment of final cash dividend of 20% (Rs. 2.00 per share) on the paid up
capital of the Company. This is in addition to the interim dividend @ 40% already paid during the year.
Accordingly the following appropriations have been made:

Profit available for appropriation				26,097,055	28,979,198
Appropriations:
Interim dividend @ 40% already paid (2002 : 30%)				9,438,000	7,078,500
Final dividend on ordinary shares @ 20% (2002 : 40%)				4,719,000	9,438,000
				14,157,000	16,516,500
Un-appropriated profit carried forward				11,940,055	12,462,698
Earnings Per Share - Basic				5.78	8.2

Corporate and Financial Reporting Frame Work

a) The financial statements have been prepared by the management, present fairly its state of affairs,
the result of its operations, cash flows and changes in equity;

b) Proper books of accounts have been maintained by the Company;

c) Appropriate accounting policies have been consistently applied except for the change referred in
Notes 3.1 and 3.7 to accounts in preparation of financial statements and accounting estimates are
based on reasonable and prudent judgment;

d) International Accounting Standards, as applicable in Pakistan, have been followed in preparation of
financial statements and any departure therefrom has been adequately disclosed;

e) The system of internal control is sound in design and has been effectively implemented and
monitored;

f) There are no significant doubts upon the Company's ability to continue as a going concern;

g) The annual audited financial statements are circulated within four months of the close of the financial
year.

Pattern of Shareholdings

A statement reflecting the pattern of shareholdings is annexed to the Annual Report.
Key Operating and Financial Data

A statement summarizing the key operating and financial data for six years including current year is
attached to the Annual Report:

Vision / Mission

The statement reflecting the Vision / Mission of the Company is annexed to the Annual Report.
Ethics and Business Practices

The statement describing the Ethics and Business Practices of the Company is also annexed to the
Annual Report.

Board Audit Committee

The Board has constituted an audit committee.

Internal Audit

The Board has also appointed the head of Internal Audit function.

Statutory Payments

As on the closing date, no government taxes, duties, levies and charges were outstanding / overdue
except the routine payments of various levies and the amounts in dispute pending in various appellate
forums.

Value of Investments of Gratuity Funds

The face value of the investments made out of the gratuity of the management cadre staff was NIL on the
closing date.

Trade in the shares of the Company

There was no trading in the shares of the Company by the following during the period under consideration.

1. Chief Executive

2. Directors

3. Chief Financial Officer

4. Company Secretary

Board Meetings

During the financial year under consideration, four (4) meetings were held and the attendance by the
respective directors was as following:

		No. of Meetings
Directors		Due for attendance	Attended	Not attended
1 Mr. M. Hussain Dawood		4	4	"
2 Mr. Shahzada Dawood		4	4
3 Mr.Khawaja Amanullah		4	3	1 (Being indisposed)
4 - Mr. Abdul Samad Dawood		2	1	1
- (Mr. M. Saleem Farooqui as his alternate)		2	2	-
				(Being indisposed)
5 Mr. A. Aziz Moon		4	4	.

6 Haroon Mahenti		4	2	2
⁷ Yousuf A. Deshi		4	4

Future Prospects

The sales during the year have reduced because of decrease in sales volume and the average selling
price of yarn mainly due to influx of imported yarn in the market. Because of the Iraq war, the prices of raw
material have also gone up as compared with the prices of last year resulting into shrinkage of the profits
of the Company. If the world oil prices remain high, it will continue to depress margins.

Auditors

The Auditors, Messrs Gangat & Co. Chartered Accountants, retire at the conclusion of the Annual