| Dewan Textile Mills Limited |
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| Annual
Report 2001 |
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| Mission
Statement |
|
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| The
Mission of Dewan Textile Mills Limited is to be the finest |
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| Organisation,
and to conduct business responsibly |
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| in
a straightforward way. |
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| Our
basic aim is to benefit the customers, employees |
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| and
shareholders and to fulfil our commitments to the society. |
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| Our
hallmark is honesty, initiative and teamwork of our people |
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| and
our ability to respond effectively to change in all aspects |
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| of
life including technology, culture and environment. |
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| We
will create a work environment, which motivates, recognises |
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| and
rewards achievements at all levels of the Organisation |
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| because |
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| In
Allah We Trust & In People We Believe. |
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| We
will always conduct ourselves with integrity |
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| and
strive to be the best. |
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| CONTENTS |
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| Company
Information |
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| Notice
of the Meeting |
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| Directors'
Report |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Share Holding |
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| COMPANY
INFORMATION |
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| Board
of Directors |
Dewan Zia-ur-Rehman
Farooqui |
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|
Chairman |
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|
Dewan Ghulam Mustafa
Khalid |
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|
Chief Executive /
Managing Director |
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|
Dewan Mohammad Ayub
Khalid |
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|
Resident Director |
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|
Dewan Mohammad Yousuf
Farooqui |
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|
Dewan Mohammad Hamza
Farooqui |
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|
Dewan Abdul Rehman
Farooqui |
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|
Mr. Iqbal Naeem Pasha |
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| Auditors |
|
Messrs. Feroze Sharif
Tariq & Co. |
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|
Chartered Accountants |
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| Tax Advisors |
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Sharif & Company |
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|
Advocates |
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|
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| Bankers |
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Muslim Commercial Bank
Limited |
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|
Citibank N.A. |
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|
Habib Bank Limited |
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|
Standard Chartered
Grindlays Bank |
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|
Union Bank Limited |
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|
American Express Bank |
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|
Societe Generale, |
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|
The French &
International Bank |
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|
ABN Amro Bank |
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|
United Bank Limited |
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| Registered
Office |
Dewan Centre |
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|
3-A, Lalazar, |
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Beach Hotel Road, |
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|
Karachi-74000, |
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Pakistan. |
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| Mills |
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H/20 & H/26,
S.I.T.E., |
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|
Kotri, District Dadu, |
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|
Sindh, Pakistan. |
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| NOTICE
OF 32nd ANNUAL GENERAL MEETING |
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| Notice
is hereby given that 32nd Annual General Meeting of Dewan Textile Mills
Limited will be held |
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| on
March 29, 2002 at 07.00 p.m. at Dewan Centre, 3-A, Lalazar, Beach Hotel Road,
Karachi to transact |
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| the
following business: |
|
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| 1.
Recitation from HOLY QURAN. |
|
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| 2.
To read and confirm the minutes of 31st Annual General Meeting held on March
31, 2001. |
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| 3.
To receive, consider and adopt the Annual Audited Accounts for the year ended
September 30, |
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| 2001
together with the Directors' and Auditors' reports thereon. |
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|
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| 4.
To approve the declaration of final cash dividend @ 15 %. |
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|
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| 5.
To appoint auditors of the Company for the year ending September 30, 2002 and
to fix their |
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| remuneration. |
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|
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| 6. To transact any other business with the
permission of the Chairman. |
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|
By and on behalf of Board of Directors |
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| March 07, 2002 |
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|
(Dewan Ghulam Mustafa Khalid) |
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| Karachi. |
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|
Chief Executive/Managing Director |
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| NOTES: |
|
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| 1.
A member of the Company entitled to attend and vote at this meeting may
appoint another member of his/her proxy |
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| 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 |
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| Securities
and Exchange Commission of Pakistan. |
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|
|
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| a)
For Attending Meeting: |
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|
|
|
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| 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 |
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| his/her
identity by showing his/her original National Identity Card (NIC) or original
Passport at the time |
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| of
attending the meeting. |
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|
|
|
|
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| 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: |
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|
|
|
|
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| 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. |
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|
|
|
|
| ii)
Two persons whose names, addresses and NIC numbers shall be mentioned on the
form shall witness |
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| the proxy. |
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|
|
|
|
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| iii)
Attested copies of NIC or passport of the beneficial owners and proxy shall
be furnished with the proxy |
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| form. |
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|
|
|
|
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| 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 March 25,
2002 to April 01, 2002 (both days |
|
| inclusive). |
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|
| DIRECTORS'
REPORT |
|
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| Your
Directors take pleasure in presenting to you the Thirty Second Annual Report
of the Company |
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| together
with the audited accounts for the financial year ended on September 30, 2001. |
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|
| Alhamdolillah,
the results for the year under review can be termed
satisfactory considering the overall |
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| situation
being faced by the local textile industry. The results have been achieved
primarily due to drastic |
|
| measures
to cut down expenses and shift to gas generators for power generation. |
|
|
| By
the Grace of Almighty Allah, your
company has earned a Net Profit of Rs. 21.774 million as |
|
| compared
with Net profit of Rs. 121.636 million for last year. The highlight of the
accounts are as |
|
| follows: |
|
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
|
|
| Sales |
|
|
2,567,020,106 |
2,278,230,878 |
|
| Cost of Sales |
|
|
2,126,677,141 |
1,865,600,892 |
|
| Gross profit |
|
|
440,342,965 |
412,629,986 |
|
| Taxation |
|
|
22,839,215 |
32,000,000 |
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| Net
profit after tax |
|
|
21,774,568 |
121,636,429 |
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| We
humbly and gratefully bow our heads before Almighty Allah, the Most Gracious
and Merciful, who |
|
| has
rewarded and blessed your company with His innumerable bounties in the
difficult times. |
|
|
| IF
YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN) |
|
|
| Your
Directors are pleased to propose appropriation of profit in the following
manner: |
|
|
|
|
Rupees |
|
|
| Profit
for the year 2000-2001 |
|
21,774,568 |
|
| Un-appropriated
profit brought forward |
|
268,510,785 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
290,285,353 |
|
|
|
|
========== |
|
|
|
|
| Appropriation |
|
|
| Cash
Dividend @ 15% |
|
12,577,950 |
|
| Un-appropriated
profit carried forward |
|
277,707,403 |
|
|
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|
------------------ |
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| Total |
|
|
290,285,353 |
|
|
|
|
========== |
|
|
| The
Board of Directors took the decision for appropriation of the profit keeping
in view the expectations |
|
| of
the shareholders from Dewan Mushtaq Group, future profitability and present
scenario of Textile |
|
| Industry. |
|
|
| The
Board also decided to appraise its valued shareholders with the current
status and future prevalent |
|
| situation
of Textile industry in detail through this report. |
|
|
| SALIENT
FEATURES OF THE ACCOUNTS |
|
|
| 1.
Total gross sales of your company amounted to Rs. 2.779 billion as compared
with Rs. 2.443 billion |
|
| last
year. The increase in sales is attributed to quantity and price. |
|
|
|
|
| 2.
Earning Per Share (EPS) of your Company works out to Rs. 2.60 per share as
compared with last |
|
| year's
EPS, which was Rs. 14.50 per share. |
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|
|
|
|
| 3.
The use of gas generators have commenced from July 2001 and the cost saving
will be realised in |
|
| the
next year as the reduction in power bill has started in the later part of the
year. |
|
|
|
|
| 4.
Alhamdolillah, your company has been able to meet all its financial
obligations on time and from |
|
| its
own resources. |
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|
|
| SYNOPSIS
OF THE YEAR UNDER REVIEW |
|
| As
mentioned in our last Annual Report, the prices of cotton showed a downward
trend during the year |
|
| 1999-2000.
As expected the prices moved upward during the year under review, which may
be related |
|
| to
a lower production of cotton as a result of water shortage. Yarn prices
remained at the same level |
|
| thus
leaving very little margins for the mills. |
|
|
| The
gas generators have been put to use in the later part of the year thereby
reducing the power bill. |
|
| However,
the full saving will be reflected in the ensuing year when the generators
will be used for the |
|
| whole year. |
|
|
| FUTURE
OUTLOOK |
|
| The
recession-ridden cotton yarn market has been hit by fears of war and the
business transactions of |
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| almost
all the counts of cotton and blended yarn are lower by at least 40 to 50
percent. Some of the big |
|
| dealers
stopped transacting their business due to aggravated situation between India
and Pakistan, which |
|
| hampered
the trade deals in Asia's biggest cotton yarn market. The demand of yarn,
grey cloth, and |
|
| cotton
made-ups has also substantially declined in the last couple of months, which
forced the explorers |
|
| to
stop purchasing yarn from the local market. The industry is facing serious
financial difficulties due |
|
| to
suspension of orders and pilling up of stocks thus pushing the yarn market
into unprecedented crisis. |
|
|
| The
present government is striving hard to boost the Pakistan economy of which
the textile sector is |
|
| the
biggest contributor. Steps like enhancement of quotas and reduction in
textile tariff by the United |
|
| States
of America and duty free access recently offered by the European Union will
improve the textile |
|
| sector.
These efforts are paying off and lately, the export activity has picked up.
It is felt that the rest |
|
| of
the year would be better. |
|
|
| VOTE
OF THANKS |
|
| The
board puts on record its gratitude to its valuable shareholders, federal and
provincial government |
|
| functionaries,
banks, development financial institutions and customers whose co-operation,
constant |
|
| support
and patronage have enabled your company to achieve the desired results. The
board also |
|
| expresses
its thanks for the valuable teamwork, loyalty and laudable efforts rendered
by the executives, |
|
| staff
members and workers of your company, during the year under review and wishes
to place on record |
|
| its
appreciation for the same. |
|
|
| AUDITORS |
|
| The
auditors of your company, M/s. Feroze Sharif Tariq & Co., Chartered
Accountants, retire and offer |
|
| their
services for re-appointment for the ensuing year. |
|
|
| CONCLUSION |
|
| In
conclusion, we bow, beg and pray to Almighty Allah, Rehman-o-Rahim, in the
name of our beloved |
|
| prophet,
Mohammad, 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, |
|
| Aremen,
Summa-Ameen. |
|
|
| LO-MY
LORD IS INDEED HEARER OF PRAYER (HOLY QURAN) |
|
|
|
|
For and on behalf of Board of Directors |
|
|
|
|
|
|
|
|
|
Dewan Ghulam Mustafa Khalid |
|
|
| 27
February 2002 |
|
Chief Executive / Managing Director |
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of M/s. Dewan
Textile Mills Limited, as at 30 September, |
|
| 2001
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 the 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 thereof, we report that; |
|
|
| (a)
in our opinion, proper books of accounts 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 in accordance with accounting |
|
| policies
consistently applied, except for the change in accounting policy as described |
|
| in
note 2.10.3, with which we concur; |
|
|
|
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's |
|
| business; 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, 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 30 September, 2001 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. |
|
|
|
|
| 27 February, 2002 |
|
| Karachi |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER 2001 |
|
|
|
Notes |
2001 |
2000 |
|
|
|
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
| SHAREHOLDERS'
EQUITY |
|
| SHARE
CAPITAL |
|
| Authorised |
|
| 30,000,000
ordinary shares of Rs. 10/- each |
|
300,000,000 |
300,000,000 |
|
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up |
|
3 |
83,853,000 |
83,853,000 |
|
| Reserves
and surplus |
|
4 |
610,707,403 |
601,510,785 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
694,560,403 |
685,363,785 |
|
|
| LIABILITY
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
327,108,617 |
297,818,614 |
|
|
|
| DEFERRED
LIABILITIES |
|
| Staff Gratuity |
|
|
41,895,113 |
40,525,870 |
|
| Taxation |
|
|
26,252,244 |
26,252,244 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
68,147,357 |
66,778,114 |
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of liability against assets subject to finance lease |
109,067,258 |
77,653,016 |
|
| Short-term
finances - Secured |
|
6 |
834,288,096 |
816,448,831 |
|
| Creditors,
accrued expenses and other liabilities |
7 |
416,087,392 |
358,713,813 |
|
| Dividends |
|
8 |
12,807,747 |
50,441,225 |
|
| Provision
for taxation |
|
|
194,126,875 |
171,287,660 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,566,377,368 |
1,474,544,545 |
|
| CONTINGENCIES
& COMMITMENTS |
9 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,656,193,745 |
2,524,505,058 |
|
|
|
========== |
========== |
|
|
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
| TANGIBLE
FIXED ASSETS - (at cost less |
|
|
| accumulated
depreciation) |
|
10 |
643,768,824 |
538,821,280 |
|
| CAPITAL
WORK IN PROGRESS |
11 |
316,139,390 |
229,863,843 |
|
| LONG
TERM INVESTMENT |
|
12 |
210,000,000 |
210,000,000 |
|
| LONG
TERM DEPOSITS |
|
13 |
28,101,350 |
17,585,170 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
14 |
31,513,588 |
28,399,130 |
|
| Stock - in - trade |
|
|
15 |
708,703,805 |
817,100,757 |
|
| Trade
debts - (Considered good) |
|
16 |
434,151,014 |
417,918,085 |
|
| Advances,
deposits, prepayments and other receivable |
17 |
2,826,426,661 |
263,145,796 |
|
| Cash
find bank balances |
|
18 |
1,173,108 |
1,670,997 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,458,184,181 |
1,528,234,765 |
|
|
|
------------------ |
------------------ |
|
|
|
2,656,193,745 |
2,524,505,058 |
|
|
|
========== |
========== |
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Dewan Ghulam Mustafa Khalid |
|
Dewan Abdul Rehman Farooqui |
|
|
Chief Executive/Managing Director |
|
Director |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER 2001 |
|
|
|
|
Notes |
2001 |
2000 |
|
|
|
Rupees |
|
|
|
|
| GROSS SALES |
|
19 |
2,778,957,132 |
2,443,392,648 |
|
| LESS: |
|
|
|
|
| Sales Tax |
|
|
171,119,012 |
129,127,246 |
|
| Commission
on Export Sales |
|
|
30,972,994 |
27,965,817 |
|
| Commission
on Local Sales |
|
|
6,295,239 |
4,294,892 |
|
| Export Duty |
|
|
3,549,781 |
3,773,815 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
211,937,026 |
165,161,770 |
|
|
|
|
------------------ |
------------------ |
|
| NET SALES |
|
|
|
2,567,020,106 |
2,278,230,878 |
|
| COST
OF SALES |
|
20 |
2,126,677,141 |
1,865,600,892 |
|
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
440,342,965 |
412,629,986 |
|
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
& general expenses |
21 |
22,813,256 |
23,656,738 |
|
| Selling
& distribution expenses |
|
22 |
87,745,212 |
82,973,634 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
110,558,468 |
106,630,372 |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
329,784,497 |
305,999,614 |
|
|
|
|
|
|
|
| OTHER
CHARGES |
|
|
|
| Financial
charges |
|
23 |
2,834,260,611 |
181,679,747 |
|
| Donation |
|
24 |
905,100 |
512,935 |
|
| Workers'
profit participation fund |
|
|
2,272,667 |
6,190,346 |
|
| Workers'
welfare fund |
|
|
846,680 |
2,306,207 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
287,450,508 |
190,689,235 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
42,333,989 |
115,310,379 |
|
|
|
|
|
| OTHER
INCOME |
|
25 |
2,279,794 |
38,326,050 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
|
44,613,783 |
153,636,429 |
|
|
| TAXATION
(Current Year) |
|
|
22,839,215 |
32,000,000 |
|
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
|
21,774,568 |
121,636,429 |
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
268,510,785 |
197,186,156 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
290,285,353 |
318,822,585 |
|
| APPROPRIATION |
|
|
|
|
| Final
cash dividend - 15% (2000: 60%) |
|
12,577,950 |
50,311,800 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
277,707,403 |
268,510,785 |
|
|
|
|
|
========== |
========== |
|
| Earnings
per Shares - Basic |
|
|
2.60 |
14.50 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Dewan Ghulam Mustafa Khalid |
|
Dewan Abdul Rehman Farooqui |
|
|
Chief Executive/Managing Director |
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED30 SEPTEMBER 2001 |
|
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