Dewan Salman Fibre Mills Ltd. - Annual Reports 2003

DEWAN SALMAN FIBRE MILLS LIMITED

ANNUAL REPORTS 2003

CONTENTS

COMPANY INFORMATION

BOARD OF DIRECTORS :

DEWAN ZIA-UR-REHMAN FAROOQUI

President/Chief Executive

DEWAN ASIM MUSHFIQ FAROOQUI

Managing Director

LEE BAEG EUY

DEWAN GHULAM MUSTAFA KHALID

DEWAN MOHAMMAD YOUSUF FAROOQUI

DEWAN ABDUL REHMAN FAROOQUI

DEWAN MOHAMMAD AYUB KHALID

ALTERNATE DIRECTORS :

SANG-HUN PARK

AUDIT COMMITTEE :

DEWAN GHULAM MUSTAFA KHALID - Chairman

DEWAN MOHAMMAD YOUSUF FAROOQUI - Member

DEWAN ABDUL REHMAN FAROOQUI - Member

AUDITORS :

FARUQ ALI & CO.

CHARTERED ACCOUNTANTS

FcROZE SHARIF TARIQ & CO.

CHARTERED ACCOUNTANTS

CHEIF FINANCIAL OFFICER :

GHAZANFAR ALI KHAN

COMPANY SECRETARY :

SYED MOONIS ABDULLAH ALVI

LEGAL ADVISORS :

KHALID ANWER & COMPANY

ADVOCATES

TAX ADVISORS :

SHARIF & COMPANY

ADVOCATES

FACTORY OFFICE :

PLOT NO. 1, DEWAN FAROOQUE INDUSTRIAL PARK

DISTRICT HARIPUR (N. W. F. P.)

HEAD OFFICE :

DEWAN CENTRE, 3-A LALAZAR,

BEACH HOTEL ROAD, KARACHI-74000.

REGISTERED OFFICE

DEWAN CENTRE, 46, NAZIMUDDIN ROAD, F-7/4, ISLAMABAD.

BANKERS :

ABN AMRO BANK N.V.

AL BARAKA ISLAMIC INVESTMENT BANK

ALLIED -BANK OF PAKISTAN LTD.

AMERICAN EXPRESS BANK

ASKARI COMMERCIAL BANK LTD.

BANK AL FALAH

BANK OF CEYLON

BANK OF KHYBER

BOLAN BANK LIMITED

CITIBANK N.A.

CREDIT AGRICOLE INDOSUEZ

FAYSAL BANK LTD.

HABIB BANK LTD.

HABIB BANK AG ZURICH

HONG KONG & SHANGHAI BANKING CORPORATION LTD.

MASHREQ BANK LTD.

MEEZAN BANK LTD.

MUSLIM COMMERCIAL BANK LTD.

NATIONAL BANK OF PAKISTAN

PICIC COMMERCIAL BANK LTD.

STANDARD CHARTERED BANK

SAUDI PAK COMMERCIAL BANK LTD.

UNITED BANK LTD.

UNION BANK LTD.

THE MISSION STATEMENT

• "THE MISSION OF DEWAN SALMAN FIBRE LIMITED IS TO BE

THE LEADER IN SYNTHETIC FIBRE MANUFACTURING IN PAKISTAN

AND BECOME A GLOBAL PLAYER IN THE FIELD.

• TO ASSUME LEADERSHIP ROLE IN THE TECHNOLOGICAL

ADVANCEMENT OF THE INDUSTRY AND TO ACHIEVE THE HIGHEST

LEVEL OF QUALITATIVE AND QUANTITATIVE INDIGENIZATION.

• TO BE THE FINEST ORGANIZATION IN ITS INDUSTRY, AND TO

CONDUCT ITS BUSINESS RESPONSIBLY AND IN A STRAIGHT

FORWARD MANNER.

• TO SEEK LONG-TERM AND GOOD RELATIONS WITH OUR SUPPLIERS

AND CUSTOMERS WITH FAIR, HONEST, AND MUTUALLY

PROFITABLE DEALINGS.

• TO ACHIEVE THE BASIC AIM OF BENEFITING OUR CUSTOMERS,

EMPLOYEES, SHAREHOLDERS, OTHER STAKE HOLDERS

AND TO FULLFIL ITS COMMITMENTS TO OUR SOCIETY.

• 7O CREATE A WORK ENVIRONMENT HIGHLIGHTING TEAM WORK,

WHICH MOTIVATES, RECOGNIZES AND REWARDS ACHIEVEMENTS

AT ALL LEVELS OF THE ORGANIZATION, BECAUSE "IN ALLAH WE

TRUST AND BELIEVE" AND HUMAN RESOURCE IS OUR

CAPITAL AND ASSET.

• TO BE HONEST AND BE ABLE TO RESPOND EFFECTIVELY TO

CHANGES IN ALL ASPECTS OF LIFE, INCLUDING TECHNOLOGY,

CULTURE PROACTIVE AND ENVIRONMENT.

• TO BE A CONTRIBUTING CORPORATE CITIZEN FOR THE

BETTERMENT OF SOCIETY AND TO EXHIBIT A SOCIALLY

RESPONSIBLE BEHAVIOR.

TO CONDUCT BUSINESS WITH INTEGRITY AND STRIVE TO BE THE BEST".

NOTICE OF FOURTEENTH ANNUAL GENERAL MEETING

Notice is hereby given that the Fourteenth Annual General Meeting of Dewan Salman Fibre Limited

will be held on 31st October 2003 at 4.00 p.m. at Dewan Centre, 46, Nazim-ud-Din Road, Sector F-

7/4, Islamabad, to transact the following business:

1. Recitation from Holy Quran.

2. To read and confirm the minutes of the Extra Ordinary General Meeting held on 28th May 2003.

3. To receive, consider and adopt the Annual Audited Accounts for the year ended 30th June

2003. together with the Directors' and Auditors' Report thereon.

4. To appoint Auditors of the Company for the year ending 30th June 2004 and to fix their

remuneration.

5. To consider any other business with the permission of the chairman.

By order of the Board

Syed Moonis Abdullah Alvi

Company Secretary

Date: 10 October 2003

Place: Islamabad

NOTES:

A member of the Company entitled to attend and vote at this meeting may appoint another

member as his/her proxy to attend and vote instead of him/her. Proxies, in order to be effective,

must be received by the Company not less than 48 hours before the meeting, CDC Account

holders will further have the following guidelines as laid down by the Securities and Exchange

Commission of Pakistan.

a) For Attending Meeting:

i) In case of individual, the account holder or sub-account holder and/or the person

whose securities are in group account and their registration details are uploaded as

per the regulations, shall authenticate his/her identity by showing his/her original

National Identity Card (NIC) or original passport at the time of attending the meeting.'

ii) In case of corporate entity, the Board of Directors' resolution/power of attorney with

the specimen signature of the nominee shall be produced (unless it has been

provided earlier) at the time of meeting.

b) For Appointing Proxies:

i) In case of individual, the account holder or sub-account holder and/or the person

whose securities are in group account and their registration details are uploaded as

per the regulations, shall submit the proxy form as per the above requirements.

ii) Two persons whose names, addresses and NIC numbers shall be mentioned on the

form shall witness the proxy.

iii) Attested copies of NIC or passport of the beneficial owners and proxy shall be

furnished with the proxy form.

iv) The proxy shall produce his/her original NIC or original passport at the time of the

meeting.

v) In case of corporate entity, the Board of Directors' resolution/power of attorney with

the specimen signature of the nominee shall be produced (unless it has been

provided earlier) along with the proxy form to the Company.

2. Members are requested to immediately notify the change in their addresses, if any.

3. The Share Transfer Books of the Company will remain closed from 22nd October 2003 to 31st

October 2003 (both days inclusive).

DIRECTORS' REPORT

Your Directors take pleasure in presenting to you the Fourteenth Annual Report of the Company

together with the Audited Accounts for the year ending 30th June 2003.

The year 2002-2003 was a period of great struggle for the synthetic fibre industry. The international

economic situation hampered due to various events. The spread of Severe Acute Respiratory

Syndrome (SARS) virus in the Far East and later Iraq war have adversely affected the export of textiles

creating general slow down and stock buildups in the textile chain and thus lower demand for PSF.

High crude oil prices in the international market impacted in keeping consistently high prices of

petrochemicals including PTA, MEG and ACN this year. Moreover, the reduction of import duty on

polyester fibre from 25% to 20% and on acrylic fibre and tow from 20% to 15% in the budget further

depressed the profitability.

The expansion project of Ibrahim Fibres came on-line causing further over capacity in the domestic

staple fibre industry, which has reached over 600,000 metric tons per annum. As a result of over supply,

local prices of polyester products remained underpressure through out the period, thus further eroding

the already meager margins in the industry. With the expansion in the textile industry and demand

fot value added products, the PSF market has shown robust growth and the indications are that the

new capacities will be absorbed in the market and equilibrium in demand and supply can be reached

much earlier than what has been anticipated. In order to counter the over supply situation in the

country, your company embarked upon exporting its products and the Board is happy to report that

we have made inroads in various markets such as Syria, Turkey, Iran, Morocco, Egypt and various ED

countries.

Your directors are pleased to report that the company is in the final stage of completing conversion

of power generation process from furnace oil to gas.

The salient features of the accounts are:

(Rs. in 000)

Gross Sales

18,660,932

Sales Tax

2,917,840

Depreciation

1,077,875

Gross Profit

1,438,377

Operating Profit

1,081,086

Net Profit before tax

86,662