| Dewan Khalid Textile Mills Limited |
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| Annual
Report 2001 |
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| Mission
Statement |
|
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| The
Mission of Dewan Khalid 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 fulfill 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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Vice Chairman / Director |
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Dewan Abdul Rehman
Farooqui |
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Managing Director / Chief
Executive |
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Dewan Mohammad Ayub
Khalid |
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Deputy Managing Director |
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Dewan Mohammad Yousuf
Farooqui |
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Dewan Asim Mushfiq
Farooqui |
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|
Mr. Mohammad Shaft (NIT) |
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| Auditors |
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Messrs. Faruq Ali &
Co. |
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Chartered Accountants |
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|
803, 8th Floor, Land Mark
Plaza, |
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I.I. Chundrigar Road, |
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Karachi. |
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| Tax Advisors |
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Sharif & Company |
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Advocates |
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| Bankers |
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Muslim Commercial Bank
Limited |
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|
Habib Bank Limited |
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Societe Generale The
French & |
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International Bank |
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ABN Amro Bank |
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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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G/11, S.I.T.E., |
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Kotri, |
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Sindh, Pakistan. |
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| NOTICE
OF 24TH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that 24th Annual General Meeting of Dewan Khalid Textile
Mills Limited will |
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| be
held on March 29, 2002 at 06.00 p.m. at Dewan Centre, 3-A, Lalazar, Beach
Hotel Road, Karachi |
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| to
transact the following business: |
|
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| 1.
Recitation from HOLY QURAN. |
|
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| 2.
To read and confirm the minutes of 23rd Annual General Meeting held on March
31, 2001. |
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|
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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 @ 10 %. |
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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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| 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 Abdul Rehman Farooqui) |
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| Karachi. |
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|
Managing Director / Chief Executive |
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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 |
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| 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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|
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| i)
In case of individual, the account holder or sub-account holder and/or the
person whose securities are |
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| 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 |
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| signature
of the nominee shall be produced (unless it has been provided earlier) at the
time of meeting. |
|
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| b)
For Appointing Proxies: |
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| i)
In case of individual, the account holder or sub-account holder and/or the
person whose securities are |
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| in
group account and their registration details are uploaded as per the
regulations, shall submit the proxy |
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| form
as per the above requirements. |
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|
|
|
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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 N1C or original passport at the time
of the meeting. |
|
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| 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 |
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| form
to the Company. |
|
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| 2.
Members are requested to immediately notify the change in their addresses, if
any. |
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| 3.
The Share Transfer Books of the Company will remain closed from March 25,
2002 to April 01, 2002 (both days |
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| inclusive). |
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| DIRECTORS'
REPORT |
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| Your
Directors take pleasure in presenting to you the Twenty Fourth 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 |
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| measures
to cut down expenses and shift to gas generators for power generation. |
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| By
the Grace of Almighty Allah, your
company has earned a net profit of Rs. 6.100 million as compared |
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| with
net profit of Rs. 31.881 million for last year. The highlight of the accounts
are as follows: |
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|
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|
2001 |
2000 |
|
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|
Rupees |
|
|
| Sales |
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|
592,302,818 |
560,640,337 |
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| Cost of Sales |
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|
519,374,622 |
481,274,853 |
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| Gross Profit |
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|
72,928,196 |
79,365,484 |
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| Taxation |
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|
2,446,108 |
8,600,000 |
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| Net
profit after tax |
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|
6,099,570 |
31,880,945 |
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| We
humbly and gratefully bow our heads before Almighty Allah, the Most Gracious
and Merciful, |
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| who
has rewarded and blessed your company with His innumerable bounties in the
difficult times. |
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| IF
YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN) |
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| Your
Directors are pleased to propose appropriation of profit in the following
manner: |
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|
Rupees |
|
|
| Profit
for the year 2000-2001 |
|
6,099,570 |
|
| Un-appropriated
profit brought forward |
|
84,452,990 |
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|
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|
------------------ |
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| Profit
available for appropriation |
|
90,552,560 |
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|
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|
========== |
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| Appropriation |
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| Cash
Dividend @ 10% |
|
3,528,360 |
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| Un-appropriated
profit carried forward |
|
87,024,200 |
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|
------------------ |
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| Total |
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|
90,552,560 |
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|
========== |
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| The
Board of Directors took the decision for appropriation of the profit keeping
in view the expectations |
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| of
the shareholders from Dewan Mushtaq Group, future profitability and present
scenario of textile |
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| industry. |
|
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| 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. |
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|
| SALIENT
FEATURES OF THE ACCOUNTS |
|
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| 1.
Total gross sales of your company amounted to Rs. 684.092 million as compared
with Rs. 649.954 |
|
| million
last year. The increase in sales is attributed to quantity and price. |
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|
|
|
| 2.
Earning Per Share (EPS) of your Company works out to Rs. 1.73 per share as
compared with last |
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| year's
EPS, which was Rs. 9.03 per share. |
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|
|
|
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| 3.
The Board would like to apprise the shareholders that our plants are based on
old technology and |
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| with
the passage of time; they have become less efficient than the new technology
plant and |
|
| machinery.
However, since the plant and machinery are almost fully depreciated,
therefore, your |
|
| company
has been able to maintain profitability and paid dividend every year
regularly. |
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|
|
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| 4.
The use of gas generators have commenced from July 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. |
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|
|
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| 5.
Alhamdolillah, your company has been able to meet all its financial
obligations on time and from |
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| its
own resources. |
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| SYNOPSIS
OF THE YEAR UNDER REVIEW |
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| As
mentioned in our last Annual Report, the prices of cotton showed a downward
trend during the year |
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| 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 |
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| thus
leaving very little margins for the mills. |
|
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| The
gas generators have been put to use in the later part of the year thereby
reducing the power bill. |
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| 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 exporters |
|
| 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 |
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| 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. Faruq Ali & Company, 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 |
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| bestow
peace. harmony, brotherhood and unity in true Islamic spirit to whole of
Muslim Ummah, |
|
| Ammen,
Summa-Ameen. |
|
|
| LO-MY
LORD IS INDEED HEARER OF PRAYER (HOLY QURAN) |
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|
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|
For and on behalf of Board of Directors |
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|
|
|
|
|
|
|
|
Dewan Ghulam Mustafa Khalid |
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|
|
|
Vice Chairman/Director |
|
| 27
February 2002 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Dewan Khalid
Textile Mills Limited, as at September |
|
| 30,
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 statement 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
statement 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; |
|
|
|
| (a)
in our opinion, proper books of accounts have been kept by 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 |
|
| m
note 2.10.4, 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, investment 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 September 30, 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 |
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| Karachi. |
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|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30TH SEPTEMBER, 2001 |
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|
|
Notes |
2001 |
2000 |
|
|
|
Rupees |
|
| CAPITAL
& LIABILITIES |
|
| SHAREHOLDER'S
EQUITY |
|
|
|
| Share Capital |
|
|
|
| Authorized |
|
|
|
| 15,000,000
Ordinary Shares of Rs. 10/= each |
|
150,000,000 |
150,000,000 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| Issued,
Subscribed & Paid up |
|
3 |
35,283,600 |
35,283,600 |
|
| Reserves
and Surplus |
|
4 |
222,024,200 |
219,452,990 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
257,307,800 |
254,736,590 |
|
| LIABILITY
AGAINST ASSETS |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
63,388,275 |
10,520,591 |
|
| DEFERRED
LIABILITY FOR STAFF GRATUITY |
|
15,678,174 |
16,773,483 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
Portion of Lease Liabilities |
|
18,922,737 |
9,768,742 |
|
| Short
Term Running Finances |
|
6 |
356,760,969 |
448,861,418 |
|
| Creditors,
Accrued Expenses & Other Liabilities |
7 |
215,783,156 |
121,522,400 |
|
| Provision
for Taxation |
|
|
31,493,804 |
29,047,696 |
|
| Proposed
Dividend |
|
|
3,528,360 |
14,113,440 |
|
| Unclaimed
Dividend |
|
|
446,303 |
279,840 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
626,935,329 |
623,593,536 |
|
| Contingencies
& Commitments |
|
8 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
963,309,578 |
905,624,200 |
|
|
|
|
========== |
========== |
|
| PROPERTY
& ASSETS |
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
Fixed Assets - at cost less |
|
| accumulated
depreciation |
|
9 |
161,187,823 |
90,341,979 |
|
|
|
|
| CAPITAL
WORK IN PROGRESS |
10 |
51,639,663 |
47,500,195 |
|
| LONG
TERM INVESTMENT |
|
11 |
65,000,000 |
65,000,000 |
|
| LONG
TERM DEPOSITS |
|
12 |
3,098,799 |
66,775 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores & Spares |
|
13 |
7,812,413 |
9,073,348 |
|
| Stock in Trade |
|
14 |
391,452,377 |
462,758,936 |
|
| Trade Debts |
|
|
219,220,867 |
177,685,300 |
|
| Advances,
Deposits, Prepayments and Other Receivables |
15 |
55,151,825 |
45,792.39 |
|
| Cash
and Bank Balances |
|
16 |
8,745,811 |
7,405,277 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
682,383,293 |
702,715,251 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
963,309,578 |
905,624,200 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Dewan Ghulam Mustafa Khalid |
|
|
Dewan Abdul Rehman Farooqui |
|
|
Vice Chairman/Director |
|
|
Managing Director / Chief Executive |
|
|
|
| PROFIT
& LOSS ACCOUNTS |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 2001 |
|
|
|
|
Notes |
2001 |
2000 |
|
|
|
Rupees |
|
|
|
|
| SALES - Gross |
|
|
17 |
684,092,105 |
649,953,614 |
|
| Less: Sale Tax |
|
|
|
87,541,367 |
85,185,445 |
|
| Commission |
|
|
4,205,458 |
4,124,242 |
|
| Export Duty |
|
|
42,462 |
3,590 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
91,789,287 |
89,313,277 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
592,302,818 |
560,640,337 |
|
| COST
OF SALES |
|
18 |
519,374,622 |
481,274,853 |
|
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
72,928,196 |
79,365,484 |
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
& General |
|
19 |
6,873,875 |
4,386,433 |
|
| Selling
and Distribution |
|
20 |
5,936,926 |
3,731,459 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
12,810,801 |
8,117,892 |
|
|
|
|
------------------ |
------------------ |
|
| Operating Profit |
|
|
|
60,117,395 |
71,247,592 |
|
|
|
|
|
|
| OTHER
CHARGES |
|
|
|
|
| Financial
Charges |
|
21 |
49,868,658 |
402,198,501 |
|
| Donation |
|
|
4,975,001 |
288,620 |
|
| Workers'
Profit Participation Fund |
|
|
487,562 |
1,536,956 |
|
| Workers'
Welfare Fund |
|
|
717,997 |
584,043 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,571,717 |
42,629,469 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
8,545,678 |
28,618,123 |
|
| OTHER
INCOME |
|
22 |
-- |
11,862,822 |
|
|
------------------ |
------------------ |
|
| PROFIT
BEFORE TAXATION |
|
8,545,678 |
40,480,945 |
|
| TAXATION
- Current Year |
|
2,446,108 |
8,600,000 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT
AFTER TAXATION |
|
6,099,570 |
31,880,945 |
|
|
|
| UNAPPROPRIATED
PROFIT BROUGHT FORWARD |
84,452,990 |
66,685,485 |
|
|
|
|
------------------ |
------------------ |
|
| Available
for Appropriation |
|
|
90,552,560 |
98,566,430 |
|
|
| Appropriation |
|
| Final
cash dividend 10% (2000: 40%) |
|
3,528,360 |
14,113,440 |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT CARRIED FORWARD |
87,024,200 |
84,452,990 |
|
|
|
|
========== |
========== |
|
| Earning
per Share |
|
29 |
1.73 |
9.03 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Dewan Ghulam Mustafa Khalid |
|
|
Dewan Abdul Rehman Farooqui |
|
|
Vice Chairman/Director |
|
|
Managing Director / Chief Executive |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED 30TH SEPTEMBER, 2001 |
|
