| Dawood Cotton Mills Limited |
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| Annual
Report 2000 |
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| Contents |
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| Company
Information |
|
| Notice
of Meeting |
|
| Directors' Report |
|
| Form A |
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| Summarised
Accounts |
|
| Auditors'
Report |
|
| Balance Sheet |
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| Profit & Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Ten Years at a Glance |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
Ahmed Dawood |
|
|
M. Hussain Dawood |
Chief Executive |
|
|
Shahzada Dawood |
|
|
Khawaja Amanullah |
|
|
A. Aziz Moon |
|
|
Haroon Mehanti |
|
|
Yousuf A. Deshi |
|
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| Secretary
& G.M. (Finance) |
Yousuf A. Deshi |
|
|
| Auditors |
|
Gangat & Company |
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|
(Chartered Accountants) |
|
|
| Bankers |
|
Habib Bank Limited |
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|
| Registered
Office |
|
Dawood Centre, |
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|
Karachi-75530 |
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| Mills |
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Landhi Industrial Area, |
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|
Karachi-75120 |
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| Notice
of Meeting |
|
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| Notice
is hereby given that the 50th Annual General Meeting of the Shareholders of
the Company |
|
| will
Insha Allah be held on Thursday the 15th March, 2001, at 10.00 a.m. at the
Registered Office of the |
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| Company
at Dawood Centre, Moulvi Tamizuddin Khan Road, Karachi, to transact the
following business |
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| after
recitation from the Holy Quran. |
|
|
| ORDINARY
BUSINESS: |
|
|
| 1.
To confirm the minutes of the 49th Annual General Meeting held on 14th March
2000. |
|
|
| 2.
To receive, consider and adopt the audited accounts for the year ended
September, 30 2000 and |
|
| reports
of Directors and Auditors thereon. |
|
|
| 3.
To consider and approve payment of dividend. |
|
|
| 4.
To appoint auditors for the year 2000-2001 and to fix their remuneration. The
present auditors, |
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| M/s.
Gangat & Company, Chartered Accountants, retire and being eligible, offer
themselves |
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| for
re-appointment. |
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| 5.
To transact any other ordinary business with the permission of the Chairman. |
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|
By order of the Board |
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|
(YOUSUF A. DESHI) |
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| Karachi
January 26, 2001 |
|
Director / Secretary |
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| NOTES: |
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| 1.
The Share transfer books of the Company will remain closed from 02nd March
2001 to 15th March |
|
| 2001.
(both days inclusive). |
|
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| Transfers
received in order at the Registered Office, by the Company at the close of business on |
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| March
1st, 2001, will be treated in time for entitlement of Dividend Payment to the
transferees. |
|
|
| 3.
A member entitled to attend and vote at the meeting may appoint another
member as his/her/their proxy to |
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| attend
and vote for him/her/them. Proxies in order to be effective must be received
at the Registered office of |
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| 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. |
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|
| Directors'
Report |
|
|
| Dear
Shareholders |
|
| Assalam-o-Alaikum |
|
|
| Your
Directors are pleased to present their 50th Annual Report together with
Audited Accounts and |
|
| Auditors'
Report for the year ended 30th September, 2000. |
|
|
| As
reported in the Half Yearly Report plans for the revival of the spinning
units was finalized. The |
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| Management
has pleasure to inform you that by the grace of Almighty Allah one of the
units consisting |
|
| of
15,540 spindles started production from July, 2000. The sale of existing
inventory together with |
|
| current
production registered an increase of sale from Rs. 48.26 million to Rs. 84.41
million. The |
|
| company
managed to convert operating loss of Rs. 12.71 million to gross profit of Rs.
5.80 million |
|
| and
reduced its operating loss from Rs. 22.71 million to Rs. 7.02 million. |
|
|
| Your
company earned dividend income of Rs. 49,946,800/= and interest of Rs.
13,937,688/= totaling |
|
| Rs.
63,884,488/: on its investment which is an increase of 9.91% over previous
year. In addition, |
|
| the
company earned profits on sale of fixed assets amounting to Rs. 158,271/= and
by disposing of |
|
| some
of the investment in shares and F.E.B.C earned capital gains of Rs.
43,192,951/=. |
|
|
| After
charging all administrative and selling expenses and providing for
depreciation of Rs. 10,861,033/=, |
|
| taxation
Rs. 7,500,000/= your company earned after tax profit of Rs. 92,717,626/=.
Adding thereto |
|
| un-appropriated
profit of Rs. 113,681,919/: brought forward from previous year a sum of Rs. |
|
| 206,399,545/~-
was available for appropriation. The earning per share this year is Rs. 12.49
per |
|
| share. |
|
|
| The
Management is pleased to inform you that the company has purchased second
hand finishing |
|
| plant
for Rs. 52.10 million and negotiations are in process for purchase of other
essential machinery |
|
| including
Generators and Shuttleless looms etc. It is expected that before the closure
of current |
|
| financial
year, these looms will Insha Allah commence production and thus company's
profitability is |
|
| expected
to improve further. |
|
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| The
Directors have proposed following appropriation of profit :- |
|
|
| Proposed
Dividend @ Rs. 6.50 (65%) |
Rs. 48,253,413 |
|
| per
share on 7,423,602 shares of |
|
| Rs.
10/= each. |
|
| Balance
carried over to next year. |
Rs. 158,146,132 |
|
|
----------- |
|
|
Rs. 206,399,545 |
|
|
========== |
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| The
management is seeking legal advice with respect to Auditors qualification, of
the balance sheet. |
|
|
| The
retiring auditors M/s. Gangat & Company, Chartered Accountants have
offered their services for |
|
| the
ensuing year. The Board wish to place on record appreciation of the devotion
shown by all the |
|
| employees
of the Company and also call upon you to join us in seeking guidance and
blessing |
|
| of
Almighty Allah |
|
|
|
On Behalf of the Board |
|
|
|
|
|
|
M. HUSSAIN DAWOOD |
|
| January,
26, 2001 |
|
Chief Executive & Chairman of the meeting |
|
|
|
|
|
| Pattern
of holdings of the shares held by the shareholders |
|
| as
at September 30, 2000 |
|
|
| NUMBER
OF |
TYPE OF |
|
TOTAL |
|
| SHAREHOLDERS |
SHAREHOLDINGS |
|
SHARES HELD |
|
| 623 |
1 |
TO |
100 |
22,044 |
|
| 449 |
101 |
TO |
500 |
103,582 |
|
| 104 |
501 |
TO |
1000 |
77,515 |
|
| 88 |
1001 |
TO |
5000 |
174,751 |
|
| 8 |
5001 |
TO |
10000 |
55,568 |
|
| 1 |
25001 |
TO |
30000 |
25,415 |
|
| 1 |
30001 |
TO |
35000 |
32,000 |
|
| 1 |
40001 |
TO |
45000 |
40,387 |
|
| 1 |
90001 |
TO |
95000 |
93,078 |
|
| 4 |
110001 |
TO |
115000 |
445,651 |
|
| 1 |
135001 |
TO |
140000 |
137,014 |
|
| 1 |
150001 |
TO |
155000 |
152,000 |
|
| 1 |
265001 |
TO |
270000 |
266,089 |
|
| 1 |
340001 |
TO |
345000 |
342,587 |
|
| 1 |
350001 |
TO |
355000 |
354,507 |
|
| 1 |
500001 |
TO |
505000 |
500,623 |
|
| 1 |
770001 |
TO |
775000 |
774,446 |
|
| 1 |
1420001 |
TO |
1425000 |
1,420,263 |
|
| 1 |
2405001 |
TO |
2410000 |
2,406,082 |
|
| ----------- |
|
----------- |
|
| 1289 |
|
7,423,602 |
|
| ========== |
|
========== |
|
|
|
| CATEGORIES
OF |
|
Number of |
Shares |
|
|
| SHAREHOLDERS |
|
Shareholders |
Held |
Percentage |
|
|
| Individuals |
|
1249 |
1,471,823 |
19.83 % |
|
| Investment
Companies |
|
4 |
416 |
0.00% |
|
| Insurance
Companies |
|
5 |
732,836 |
9.88% |
|
| Joint
Stock Companies |
|
15 |
3,357,723 |
45.23% |
|
| Financial
Institutions |
|
8 |
1,436,423 |
19.35% |
|
| Modaraba
Company |
|
1 |
300 |
0.00% |
|
| Others
(See Below) |
|
7 |
424,081 |
5.71% |
|
|
----------- |
----------- |
----------- |
|
|
1289 |
7,423,602 |
100.00% |
|
|
========== |
========== |
========== |
|
| OTHERS |
|
| Trust
(Charitable Organisations) |
2 |
394,894 |
5.32% |
|
| Co-Operative
Societies |
|
2 |
3,481 |
0.05% |
|
| Administrator,
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, |
|
| 2000
and the related profit and loss account, cash flow statement and statement of
changes in equity |
|
| together
with the notes forming part thereof, for the year then ended and we state
that we have obtained all |
|
| the
information and explanations which, to the best of our knowledge and belief,
were necessary for the |
|
| purposes
of our audit. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
|
| and
prepare and present the above said statements in conformity with the approved
accounting standards |
|
| and
the requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on |
|
| these
statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
|
| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said |
|
| statements
are free of any material misstatement. An audit includes examining, on a test
basis, evidence |
|
| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
|
| accounting
policies and significant estimates made by management, as well as, evaluating
the overall |
|
| presentation
of the above said statements. We believe that our audit provides a reasonable
basis for our |
|
| opinion
and, after due verification, we report that -- |
|
|
| 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; and |
|
|
| (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, cash flow statement and statement of changes
in equity |
|
| together
with the notes forming part thereof conform with approved accounting
standards as applicable |
|
| in
Pakistan, and, 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,
2000 and of the profit, its cash flows and changes in equity for the year
then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of |
|
| 1980),
was deducted by the company and deposited in the Central Zakat Fund
established under |
|
| Section
7 of that Ordinance. |
|
|
| GANGAT
& COMPANY |
|
| Chartered
Accountants |
|
|
| Karachi:
January 26, 2001. |
|
|
|
| Balance
Sheet as at September 30, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
No. |
Rupees |
Rupees |
|
| CAPITAL
& LIABILITIES |
|
| SHARE
CAPITAL |
|
| Authorised: |
|
| 10,000,000
Ordinary |
|
| Shares
of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| Issued,
Subscribed & Paid Up: |
|
2 |
74,236,020 |
74,236,020 |
|
|
| RESERVES
& SURPLUS: |
|
| Revenue
Reserves |
|
3 |
142,000,000 |
142,000,000 |
|
| Capital
Reserve -- Share Premium |
|
4 |
32,705,746 |
32,705,746 |
|
| Unappropriated
Profit |
|
158,146,132 |
113,681,919 |
|
|
----------- |
----------- |
|
|
332,851,878 |
288,387,665 |
|
|
----------- |
----------- |
|
| CAPITAL
& RESERVES |
|
407,087,898 |
362,623,685 |
|
| DEFERRED
LIABILITIES |
|
5 |
|
| Gratuity |
|
|
24,039,469 |
23,808,519 |
|
| Deferred
Taxation |
|
|
26,350,000 |
26,350,000 |
|
|
|
----------- |
----------- |
|
|
|
50,389,469 |
50,158,519 |
|
| CURRENT
LIABILITIES AND PROVISION |
|
|
| Creditors,
Accrued and Other Liabilities |
|
6 |
90,819,001 |
89,448,086 |
|
|
| Unclaimed
Dividend |
|
3,316,601 |
2,882,160 |
|
| Proposed
Dividend |
|
48,253,413 |
44,541,612 |
|
|
----------- |
----------- |
|
|
142,389,015 |
136,871,858 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
7 |
|
|
----------- |
----------- |
|
|
599,866,382 |
549,654,062 |
|
|
========== |
========== |
|
|
|
|
| PROPERTY
& ASSETS |
|
|
| FIXED
ASSETS |
|
| Operating
Assets |
|
8 |
95,837,160 |
106,171,897 |
|
| Capital
work in progress |
|
|
52,100,000 |
-- |
|
|
|
----------- |
----------- |
|
|
|
147,937,160 |
106,171,897 |
|
| LONG
TERM INVESTMENTS |
|
9 |
235,622,430 |
279,317,229 |
|
| LONG
TERM DEPOSITS |
|
6,516,430 |
1,430,622 |
|
| CURRENT
ASSETS |
|
| Stores
and Spares |
|
10 |
4,737,542 |
4,098,114 |
|
| Stock-in-trade |
|
11 |
26,335,764 |
51,929,548 |
|
| Trade
Debtors |
|
12 |
6,934,293 |
32,748,714 |
|
| Loans,
Advances, Deposits, Prepayments |
|
|
| and
Other Receivables (Unsecured) |
|
13 |
656,064 |
1,369,828 |
|
| Short
Term Investments |
|
14 |
-- |
5,450,000 |
|
| Cash
and Bank Balances |
|
15 |
171,126,699 |
67,138,110 |
|
|
|
----------- |
----------- |
|
|
209,790,362 |
162,734,314 |
|
|
----------- |
----------- |
|
|
599,866,382 |
549,654,062 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of this Balance Sheet. |
|
|
| Karachi:
January 26, 2001. |
|
M. HUSSAIN DAWOOD |
|
HAROON MEHANTI |
|
|
Chief Executive |
|
Director |
|
|
|
| Profit
and Loss Accounts |
|
| for
the year ended September 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
No. |
Rupees |
Rupees |
|
| PARTICULARS |
|
| Net
Sales and Operating Revenue |
|
16 |
84,406,169 |
77,147,394 |
|
| Cost of Sales |
|
17 |
(78,602,186) |
(89,854,321) |
|
|
|
----------- |
----------- |
|
| GROSS
PROFIT/(LOSS) |
|
5,803,983 |
(12,706,927) |
|
|
| OPERATING
EXPOSES |
|
| Administrative |
|
18 |
12,016,980 |
9,508,359 |
|
| Selling |
|
19 |
659,391 |
367,769 |
|
| Financial |
|
20 |
151,894 |
128,374 |
|
|
----------- |
----------- |
|
|
(12,828,265) |
(10,004,502) |
|
|
----------- |
----------- |
|
| OPERATING
LOSS |
|
(7,024,282) |
(22,711,429) |
|
| Non-Operating
Income |
|
21 |
63,945,686 |
58,244,845 |
|
| Zakat |
|
(50,000) |
(33,250) |
|
| Profit
on Sale of Fixed Assets |
|
8.1 |
158,271 |
7,358,228 |
|
|
----------- |
----------- |
|
| PROFIT
FOR THE YEAR |
|
57,029,675 |
42,858,394 |
|
| Liabilities
written back (already taxed) |
|
-- |
10,788,440 |
|
| Other
Charges |
|
22 |
(5,000) |
-- |
|
|
----------- |
----------- |
|
| PROFIT
BEFORE TAX |
|
57,024,675 |
53,646,834 |
|
|
========== |
========== |
|
|
| PROFIT
BEFORE TAX |
|
57,024,675 |
53,646,834 |
|
| TAXATION |
|
| Current |
|
(7,500,000) |
(8,600,000) |
|
| Deferred |
|
-- |
8,600,000 |
|
|
----------- |
----------- |
|
| PROFIT
AFTER TAX |
|
49,524,675 |
53,646,834 |
|
| Capital Gain |
|
23 |
43,192,951 |
-- |
|
|
|
----------- |
----------- |
|
|
92,717,626 |
53,646,834 |
|
| Unappropriated
Profit brought forward |
|
113,681,919 |
104,576,697 |
|
|
----------- |
----------- |
|
| AMOUNT
AVAILABLE FOR APPROPRIATION |
|
206,399,545 |
158,223,531 |
|
|
========== |
========== |
|
| APPROPRIATION: |
|
| Proposed
Dividend |
|
48,253,413 |
44,541,612 |
|
| Balance
Carried Forward |
|
158,146,132 |
113,681,919 |
|
|
----------- |
----------- |
|
|
206,399,545 |
158,223,531 |
|
|
========== |
========== |
|
| Earning
per share |
|
28 |
12.49 |
7.23 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of this Profit and Loss Account. |
|
|
| Karachi:
January 26, 2001. |
|
M. HUSSAIN DAWOOD |
|
HAROON MEHANTI |
|
|
Chief Executive |
|
Director |
|
|
|
|
| Cash
Flow Statement |
|
| for
the year ended September 30, 2000 |
|
|
|
For the Year |
For the Year |
|
|
Ended |
Ended |
|
| PARTICULARS |
|
30-09-2000 |
30-09-1999 |
|
| Cash
Flow From Operating Activities |
|
| Profit
before taxation |
|
57,024,675 |
53,646,834 |
|
| Capital Gain |
|
43,192,951 |
-- |
|
|
----------- |
----------- |
|
|
100,217,626 |
53,646,834 |
|
| Adjustments
for: |
|
|
|
| Depreciation |
|
10,861,033 |
11,896,748 |
|
| Profit
on sale of fixed assets |
|
(158,271) |
(7,358,228) |
|
| Provision
for gratuity |
|
245,102 |
-- |
|
| Income
from investments |
|
(63,884,488) |
(58,123,595) |
|
| Sundry
sales and receipts |
|
(10,888) |
( 121,250) |
|
| Financial
charges |
|
151,894 |
128,374 |
|
| Insurance
Claim received |
|
(50,310) |
-- |
|
| Capital Gain |
|
(43,192,951) |
-- |
|
|
----------- |
----------- |
|
| Operating
Profit/(Loss) before working capital |
|
4,178,747 |
68,883 |
|
| Net
Increase (decrease) in working capital |
|
73,331,645 |
(27,465,223) |
|
| Cash
used in operations |
|
77,510,392 |
(27,396,340) |
|
| Payments
for: |
|
|
|
| Gratuity |
|
(14,152) |
(296,254) |
|
| Tax |
|
(22,528,189) |
(9,311,659) |
|
| Financial
charges |
|
(151,894) |
(128,374) |
|
|
----------- |
----------- |
|
| Net
Cash used in Operating Activities (A) |
|
54,816,157 |
(37,132,627) |
|
|
========== |
========== |
|
| Cash
Flow from Investment Activities |
|
|
|
| Sales
of fixed assets |
|
505,625 |
11,799,000 |
|
| Income
from investments |
|
63,884,488 |
58,123,595 |
|
| Capital Gain |
|
43,192,951 |
-- |
|
| Sundry
sales & receipts |
|
10,888 |
121,250 |
|
| Insurance
claim received |
|
50,310 |
-- |
|
| Acquisition
of Fixed Assets |
|
(873,650) |
-- |
|
| Capital
work-in-progress |
|
(52,100,000) |
-- |
|
|
----------- |
----------- |
|
| Net
cash in flow from investing activities (B) |
|
54,670,612 |
70,043,845 |
|
|
========== |
========== |
|
| Cash
Flow from Financing Activities |
|
|
|
| Dividend
Paid |
|
(44,107,171) |
(29,319,851) |
|
| Long
term investments (Shares) |
|
43,694,799 |
(267,195,835) |
|
| Long
term Deposit |
|
(5,085,808) |
-- |
|
|
----------- |
----------- |
|
| Net
cash used in financing activities (C) |
|
(5,498,180) |
(296,515,686) |
|
|
========== |
========== |
|
| Net
Increased/(decrease) in cash and cash equivalents (A+B+C) |
103,988,589 |
(263,604,468) |
|
| Cash
and cash equivalents at the beginning of the year |
|
67,138,110 |
330,742,578 |
