| Data Textiles Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| DIRECTOR'S
REPORT TO THE SHAREHOLDERS |
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| AUDITOR'S
REPORT |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
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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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| CHIEF
EXECUTIVE |
Mr. Faaiz Rahim Khan |
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| DIRECTOR |
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Mr. Ghayoor-ul-Hassan
Siddiqui |
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Mr. Misbah-ul-Hassan
Siddiqui |
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|
Mr. Muhammad Farooq
Naseem |
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Mr. Muhammad Ayub Khan |
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Mr. Asif Rahim Khan |
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Mr. Umar Sadik |
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| AUDITOR |
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M/s. Mansha Mohsin
Dossani Khan & Co. |
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Chartered Accountants |
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| BANKERS |
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Prime Commercial Bank
Limited |
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A1-Baraka Islamic
Investment Bank Limited |
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National Bank of Pakistan |
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|
Gulf Commercial Bank
Limited |
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| LEGAL
ADVISOR |
Muhammad Naseem &
Co., Advocates |
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|
Ashtar Ali Associates |
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| REGISTERED
OFFICE |
3-A, Race View, Jail
Road, Lahore |
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| MILLS |
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56-Kilometer, Multan
Road, |
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Bhai Pheru, Distt. Kasur. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 12th Annual General Meeting of Shareholders of Data |
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| Textiles
Limited will be held on Friday March 31, 2000 at 04:00 p.m. at the registered |
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| office
of the Company at 3-A, Race View, Jail Road, Lahore, to transact the
following |
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| business. |
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| 1.
To confirm the minutes of the Annual General Meeting of the shareholders held |
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| on
March 31, 1999. |
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| 2.
To receive and adopt the Audited Accounts of the Company for the year ended |
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| September
30, 1999 together with the Directors and Auditor's Reports thereon. |
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| 3.
To appoint Auditors of the Company for the year ending September 30, 2000 and |
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| to
fix their remuneration. The retiring Auditors, M/s. Mansha Mohsin Dossani |
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| Khan
& Co., Chartered Accountants being eligible have offered themselves for |
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| Re-appointment. |
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| 4.
To transact any other business of the Company with the permission of the
Chair. |
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BY ORDER OF THE BOARD |
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| Lahore |
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|
(AKHTAR ALI) |
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| March 08, 2000 |
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COMPANY SECRETARY |
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| NOTES: |
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| a)
The share transfer books of the company will remain closed from 31-03-2000 to |
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| 07-04-2000,
(Both days inclusive). |
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| b)
A member entitled to attend and vote at the meeting may appoint another |
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| member
as his/her proxy to attend and vote. Votes may be given personally or |
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| by
proxy or by attorney or in case of a corporation by representative. Proxies,
in |
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| order
to be effective, must be received at the Registered Office of the Company |
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| duly
stamped, signed and witnessed at least 48 hours before the time of Meeting. |
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| c)
Members are requested to notify the Company immediately, any change in their |
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| addresses. |
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| DIRECTOR'S
REPORT TO THE SHAREHOLDERS |
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| on
behalf of the Board of Directors of Data Textile Limited, I am pleased to
present the |
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| Audited
Financial Accounts along with the auditor's report for the year ending
September |
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| 30,
1999. At this time I would like to review the year ended and address the
issues facing the |
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| company. |
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| Production
Performance: |
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| Type
of Yarn Produced |
|
Current year |
Previous Year |
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|
Production |
Production |
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|
Kgs. |
Kgs. |
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| Cotton Yarn Converted into
20/1 Count |
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1,242,845 |
1,716,906 |
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| We
did not fare well this year due to lack of working capital for cotton. This
resulted in less |
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| than
optimum production and more importantly a higher then predicted average price
of |
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| cotton.
Also with the overall quality of cotton being adversely effected we faced
pressure |
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| on
yields and quality of yarn. As the year progressed we went into production of
fine yarn |
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| qualities
which reduced our consumption of cotton. To counter this position we imported |
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| cotton
but our constraints of banking limits did not let us achieve the desired
stock levels. |
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| However,
a conservative policy in cotton management saw us with a healthier position
of |
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| cotton
towards the end of the year but considerable losses had been incurred by that
time. |
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| Financial
Result: |
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| The
summary of the financial results is being furnished hereunder for a quick
glance. |
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1999 |
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|
Rupees |
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| Sales |
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|
152,781,285 |
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| Cost of Sales |
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|
160,257,891 |
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------------------ |
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| Gross
Profit/(Loss) |
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(7,476,606) |
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| Operating
Expense |
|
(12,862,947) |
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| Financial
& Other charges |
|
(15,747,347) |
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| Other Income |
|
|
1,849,184 |
|
| Extra
Ordinary Items |
|
21,913,851 |
|
| Provision
for Taxation |
|
(770,154) |
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|
|
|
------------------ |
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| Profit/(Loss)
after Taxation |
|
(13,094,019) |
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|
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|
------------------ |
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| Earning
Per Share: |
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(1.32) |
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| This
loss is due to the adverse conditions in the textiles industry which
continued during |
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| the
period, further deteriorating the financial health of the company. The cotton
prices have |
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| been
the main cause of the loss. The cotton price soared upto Rs.2,500 per maund
which |
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| was
higher than the International prices. The cotton yarn prices remained
depressed, hence the |
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| ratio
of cost of goods sold and Sales became unbearable to the extent that we have
encountered |
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| a Gross Loss. |
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| Even
in these conditions we managed some fundamental improvements. This year was a |
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| rebuilding
one for us in which we arranged a loan from non banking sources to help
reduce |
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| the
financing charges and increase our liquidity to prepare for the upcoming
year. Our |
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| continued
effort to reduce bank debt saw us reduce the long term banking loans from Rs.
71 |
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| million
to a mere Rs. 55 million. This has been most significant positive development
in the |
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| year
under review. |
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| Auditors
Report: |
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| The
auditor's have qualified the report on the Depreciation Treatment in 1994.
This is a long |
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| outstanding
qualification & shall be evenly charged to income of the next five years,
as the |
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| charge
off in current year, would have understated the current operating results. |
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| Future
Prospects: |
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| Since
the closing of last year the company has done well not only in terms of
operations but |
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| also
in terms of arrangement of financial limits. You would be pleased to know
that we have |
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| reduced
the debt to Islamic Investment Bank Limited by Rs. 8 million. Also we have
arranged |
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| an
additional working capital limit with Gulf Commercial Bank Limited for Rs. 60
million. |
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| Keeping
in mind the bumper crop o f cotton I can safely say that the next year is the |
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| turnaround
year for your company. |
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| Auditors: |
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| The
present Auditors Messrs. Mansha Mohsin Dossani Khan & Company, Chartered |
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| Accountants,
retired and being eligible, offer themselves for reappointment. |
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| Pattern
of Shareholding: |
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| A
statement showing pattern of Shareholdings in the company is attached. |
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| Acknowledgment: |
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| I
want to thank the employees, customers and suppliers for their continued
support and faith |
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| in
the company. Even in such hard times they have stood by the organization and
have been |
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| the
reason for its revival. I would also say a special thanks to all the
financial institution |
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| which
have supported the company in all possible ways. |
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| Lahore |
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|
FAAIZ RAHIM KHAN |
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| March 06, 2000 |
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|
Chief Executive |
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| AUDITOR'S
REPORT TO THE MEMBERS |
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| We
have audited annexed balance sheet of Data Textiles Limited as at September
30, |
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| 1999
and the related profit and loss account and cash flow statement, together
with the |
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| notes
forming part thereof, for the year then ended and we state that:- |
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| During
the year ended September 30, 1994, the company had provided depreciation on |
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| operating
fixed assets for a period of six months. The said treatment has resulted in |
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| lowering
the accumulated loss by Rs. 4,357,563/- (1998: Rs.7,521,264/-) with a |
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| corresponding
increase in book value of operating fixed assets by Rs. 4,357,567/- |
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| (1998:
4,841,734/-). |
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| Except
for the above and the extent to which these affect the results of the
company, |
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| We
have obtained all the information and explanations which to the best of our
knowledge |
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| and
belief were necessary for the purpose of our audit and, after due
verification thereof, |
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| we report that:- |
|
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| a)
in our opinion, proper books of account have been kept by the company as
required |
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| by
the Companies Ordinance, 1984; |
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|
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| b)
in our opinion: |
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|
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| (i)
the balance sheet and profit and loss account together with the notes thereon |
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| have
been drawn up in conformity with the Companies Ordinance, 1984, and |
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| are
in agreement with the books of account and are further in accordance with |
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| accounting
policies consistently applied; |
|
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| (ii)
the expenditure incurred during the year was for the purpose of Company's |
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| business; and |
|
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| (iii)
the business conducted, investment made and the expenditure incurred during |
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| the
year were in accordance with the objects of the Company. |
|
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| c)
in our opinion and to the best of our information and according to the
explanations |
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| given
to us, the balance sheet, profit and loss account and cash flow statement, |
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| together
with the notes forming part thereof, give the information required by the |
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| Companies
Ordinance, 1984, in the manner so required and respectively give a true |
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| and
fair view of the state of the Company's affairs as at September 30, 1999 and
of |
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| the
loss and the cash flows for the year then ended; and |
|
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| d)
in our opinion, no Zakat was deductible at source under the Zakat and Ushr |
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| Ordinance,
1980. |
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| Lahore |
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|
MANSHA MOHSIN DOSSANI KHAN & CO. |
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| March 06, 2000 |
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|
(Chartered Accountants) |
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|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1999 |
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| CAPITAL
& LIABILITIES |
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|
1999 |
1998 |
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|
NOTE |
Rupees |
Rupees |
|
| Authorized |
|
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|
| 12,000,000
ordinary shares (1998: 12,000,000) |
|
120,000,000 |
120,000,000 |
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| of Rs. 10 each |
|
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|
========== |
========== |
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|
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| Issued,
Subscribed and Paid up |
|
|
|
| 9,909,616
ordinary shares (1998: 9,909,616) |
|
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| of
Rs.10 each fully paid in cash |
|
|
|
99,096,160 |
99,096,160 |
|
| Accumulated
loss |
|
|
|
(97,142,619) |
(84,048,600) |
|
|
|
|
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|
------------------ |
------------------ |
|
|
|
|
1,953,541 |
15,047,560 |
|
|
|
|
|
|
| REDEEMABLE
CAPITAL - SECURED |
|
3 |
31,352,456 |
38,968,273 |
|
|
|
|
|
|
| LONG
TERM LOANS - SECURED |
|
4 |
33,759,096 |
11,600,000 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
5 |
2,004,231 |
2,339,031 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
Term Running Finance - Secured |
|
6 |
14,764,385 |
13,867,331 |
|
| Current
portion of |
|
|
|
|
| Redeemable
Capital |
|
|
22,517,347 |
20,106,224 |
|
| Long term loans |
|
|
2,596,854 |
-- |
|
| Deferred
liabilities |
|
|
390,000 |
-- |
|
| Creditors
accrued and other liabilities |
|
7 |
19,601,222 |
13,947,196 |
|
| Provision
for Taxation |
|
|
|
2,820,896 |
5,154,630 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,690,704 |
53,075,381 |
|
|
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
8 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
131,760,028 |
121,030,245 |
|
|
|
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
| FIXED
CAPITAL EXPENDITURES |
|
|
| Operating
fixed assets-Tangible |
|
9 |
88,636,980 |
97,761,434 |
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|
|
| LONG
TERM DEPOSITS AND |
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|
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| DEFERRED
COSTS |
|
10 |
213,560 |
2,893,090 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
11 |
8,040,332 |
1,737,344 |
|
| Stock in trade |
|
12 |
19,070,628 |
12,710,661 |
|
| Trade
debtors -unsecured |
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|
|
| Considered
good |
|
13 |
4,590,769 |
1,902,063 |
|
| Advances,
deposits, prepayments |
|
|
| and
other receivables |
|
14 |
849,514 |
2,897,878 |
|
| Cash
and bank balances |
|
15 |
10,358,245 |
1,127,775 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
42,909,488 |
20,375,721 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
131,760,028 |
121,030,245 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts, |
|
|
|
|
FAAIZ RAHIM KHAN |
|
ASIF RAHIM KHAN |
|
|
Chief Executive |
|
Director |
|
|
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
|
1999 |
1998 |
|
|
NOTE |
Rupees |
Rupees |
|
|
|
|
| SALES |
|
16 |
152,781,285 |
195,848,222 |
|
| COST
OF SALES |
|
17 |
160,257,891 |
202,327,444 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT/(LOSS) |
|
|
(7,476,606) |
(6,479,222) |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative |
|
18 |
1,128,621,471 |
13,462,072 |
|
| Selling
& distribution |
|
19 |
800 |
314,819 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
12,862,947 |
13,776,891 |
|
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT/(LOSS) |
|
|
(20,339,553) |
(20,256,113) |
|
|
|
|
|
| FINANCIAL
AND OTHER CHARGES |
|
20 |
15,747,347 |
10,918,881 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(36,086,900) |
(31,174,994) |
|
| OTHER
INCOME |
|
21 |
1,849,184 |
635,253 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
BEFORE EXTRA ORDINARY ITEMS |
|
(34,23 7,716) |
(30,539,741) |
|
| EXTRA
ORDINARY ITEMS |
|
22 |
21,913,851 |
67,849,094 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
FOR THE YEAR |
|
|
| BEFORE
PRIOR PERIOD'S ADJUSTMENT |
|
(12,323,865) |
37,309,353 |
|
| PRIOR
PERIOD'S ADJUSTMENT |
|
23 |
-- |
2,213,068 |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
FOR THE YEAR BEFORE TAXATION |
|
(12,323,865) |
39,522,421 |
|
| TAXATION |
|
24 |
(770,154) |
(1,104,772) |
|
|
|
|
------------------ |
------------------ |
|
| PROFIT/(LOSS)
AFTER TAXATION |
|
|
(13,094,019) |
38,417,649 |
|
| UNAPPROPRIATED
PROFIT/(LOSS) BROUGHT FORWARD |
|
(84,048,600) |
(122,466,249) |
|
|
|
|
------------------ |
------------------ |
|
| UNAPPROPRIATED
PROFIT/(LOSS) CARRIED FORWARD |
|
(97,142,619) |
(84,048,600) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an Integral part of these accounts. |
|
|
|
FAAIZ RAHIM KHAN |
|
|
|
ASIF RAHIM KHAN |
|
|
Chief Executive |
|
|
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| FOR
THE YEAR ENDED SEPTEMBER 30 1999 |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit/(loss)
before tax |
|
|
|
(12,523,865) |
39,522,421 |
|
| Adjustment
for Non Cash Transactions: |
|
|
|
|
| Depreciation |
|
|
|
|
9,396,863 |
10,435,767 |
|
| Amortization
of deferred costs |
|
|
|
2,679,530 |
2,679,528 |
|
| Provision
for gratuity |
|
|
|
313,412 |
874,665 |
|
| Reversal
of provision for Worker's profit |
|
|
|
|
| Participation
Fund |
|
|
|
-- |
(1,907,993) |
|
| Profit
on disposal of fixed assets |
|
|
|
(158,909) |
-- |
|
| Profit
on foreign exchange fluctuation |
|
|
(1,147,727) |
-- |
|
| Principal
and interest waived off bank |
|
|
-- |
(67,849,094) |
|
| Extra
ordinary items (Waived off Director's loan) |
|
|
(21,913,851) |
-- |
|
| Financial
charges |
|
|
|
15,746,568 |
10,918,881 |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
|
4,915,886 |
(44,848,246) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(7,407,979) |
(5,325,825) |
|
|
|
|
| (Increase)/Decrease
in current assets |
|
|
| Stores,
spares and loose tools |
|
|
(6,302,983) |
(170,896) |
|
| Stock in trade |
|
|
|
(6,359,967) |
7,049,145 |
|
| Trade debtors |
|
|
|
|
(2,688,706) |
4,098,821 |
|
| Advances,
deposits, prepayments and other receivable |
|
2,048,364 |
(1,288,529) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(13,303,297) |
9,688,541 |
|
|
|
|
|
|
| Increase/(Decrease)
in current liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
|
3,749,096 |
(1,556,847) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(16,962,180) |
2,805,569 |
|
|
|
|
|
|
|
| Cash
generated from/(utilized in) operation |
|
|
| Financial
charges paid |
|
|
|
(9,364,905) |
(9,831,532) |
|
| Gratuity paid |
|
|
|
|
(258,212) |
(201,376) |
|
| Profit
on foreign exchange fluctuation |
|
|
1,147,727 |
-- |
|
| Taxes paid |
|
|
|
|
(3,385,315) |
(2,424,103) |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(11,860,705) |
(12,457,011) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from Operating activities |
|
(A) |
(28,822,885) |
(9,651,142) |
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Fixed
capital expenditures |
|
|
|
(293,500) |
(186,294) |
|
| Sale
of fixed assets |
|
|
|
180,000 |
-- |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from Investing activities |
|
(B) |
(113,500) |
(186,294) |
|
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Loans
from directors |
|
|
10,313,851 |
11,600,000 |
|
| Redeemable
capital - secured |
|
|
|
(5,400,000) |
(393,598) |
|
| Morabaha
finances - secured |
|
|
|
(4,000,000) |
8,250,000 |
|
| Long term loans |
|
|
|
|
36,355,950 |
17,992,249 |
|
| Receipts
of short term running finances |
|
|
4,770,000 |
-- |
|
| Repayment
of short term running finances |
|
|
(3,872,946) |
(27,582,416) |
|
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from Financing activities |
|
(C) |
38,166,855 |
9,866,235 |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
Increase/(Decrease) in Cash and Cash Equivalent |
(A+B+C) |
9,230,470 |
28,799 |
|
| Cash
and Cash Equivalent at the beginning of the year |
|
1,127,775 |
1,098,976 |
|
|
|
|
|
------------------ |
------------------ |
|
| Cash
and Cash Equivalent at the end of the year |
|
|
10,358,245 |
1,127,775 |
|
|
|
|
========== |
========== |
|
|
|
FAAIZ RAHIM KHAN |
|
ASIF RAHIM KHAN |
|
|
Chief Executive |
|
Director |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1999 |
|
|
| 1.
STATUS AND OPERATION |
|
| DATA
TEXTILES LIMITED was incorporated in Pakistan on March 20, 1988 as a |
|
| public
limited company and is listed on Lahore and Karachi stock exchanges in
Pakistan. |
|
| The
principal activity of the Company is to manufacture and sale of yarn. |
|
|
| 1.1
Compliance With International Accounting Standards |
|
| These
accounts comply with International Accounting Standards, as applicable |
|
| in
Pakistan, in all material respects. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention modified |
|
| by
capitalization of certain exchange differences referred to in note 2.8 to the |
|
| accounts. |
|
|
| 2.2
Staff Retirement Benefits |
|
| The
company operates an unfunded gratuity scheme covering all its employees. |
|
| Provision
is made annually to cover the liability under the scheme. |
|
|
| 2.3
Fixed Capital Expenditure and Depreciation |
|
| Operating
fixed assets are stated at cost or revaluation less accumulated |
|
| depreciation
except land and capital work in progress which are stated at cost or |
|
| revaluation.
Cost of operating fixed assets consists of historical cost and |
|
| attributable
expenses in bringing the assets to their working conditions Pre- |
|
| production
and trial run operation results are capitalized. |
|
|
| Depreciation
is charged to income applying reducing balance method so as to |
|
| write
off the cost of operating fixed assets over their useful lives. |
|
|
| Full
year's depreciation is Charged in the year of addition while no depreciation |
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