| Dawood Cotton Mills 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 Meeting |
|
| Directors'
Report |
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| Form A |
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| Summarized
Accounts |
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| Auditors'
Report |
|
| Balance
Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Ten
Years at a Glance |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
Ahmed Dawood |
|
|
M. Hussain Dawood |
Chief Executive |
|
|
Nasim |
|
|
Shahzada Dawood (Khawaja
Amanullah Alternate Director) |
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|
A. Aziz Moon |
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|
Haroon Mehanti |
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|
Yousuf A. Deshi |
|
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| Secretary
& G.M. (Finance) |
Yousuf A. Deshi |
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|
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| Auditors |
|
Gangat & Company |
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|
(Chartered Accountants) |
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|
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| Bankers |
|
Habib Bank Limited |
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| Registered
Office |
Dawood Centre, |
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|
Karachi-75530 |
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| Mills |
|
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 49th Annual General Meeting of the Shareholders of
the Company will |
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| be
held on Tuesday the 14th March, 2000, at 9:30 a.m. at the Registered Office
of the Company at |
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| Dawood
Centre, Moulvi Tamizuddin Khan Road, Karachi, to transact the following
business after recita- |
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| tion
from the Holy Quran. |
|
|
| ORDINARY
BUSINESS: |
|
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| 1.
To confirm the minutes of the Annual General Meeting held on 25th March 1999. |
|
|
| 2.
To receive and adopt the Audited Accounts for the year ended September, 30
1999 and reports |
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| of
Directors and Auditors thereon. |
|
|
| 3.
To approve Dividend. |
|
|
| 4.
To appoint auditors for the year 1999-2000 and to fix their remuneration. The
present auditors, |
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| M/s.
Gangat & Company, Chartered Accountants retire, and being eligible, offer
themselves for |
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| re-appointment. |
|
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| 5.
To transact any other ordinary business with the permission of the Chairman. |
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| SPECIAL
BUSINESS: |
|
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| 6.
To consider and, if thought fit, to pass with or without modification the
following resolutions as |
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| a
Special Resolution: |
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| That
the Articles No. 85 of the Articles of Association of the Company be and is
hereby amended |
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| in
the following manner, that is to say, by: |
|
|
| Deletion
of the words... "but such sum shall in no case, exceed Rs. 500/-" |
|
|
| By
order of the Board |
|
|
| Karachi'
January 28,2000. |
|
(YOUSUF A. DESHI) |
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|
Director / Secretary |
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| NOTES: |
|
|
| 1.
The Share transfer books of the Company will remain closed from 04th March
2000 to 14th |
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| March
2000. (both days inclusive). |
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| 2.
Transfers received in order at the Registered Office of the Company at Dawood
Centre, Moulvi |
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| Tamizuddin
Khan Road, Karachi by March 3rd, 2000, will qualify for the payment of
Dividend to |
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| the
transferees. |
|
|
| 3.
A member entitled to attend and vote at the meeting may appoint another
member as his/her/their |
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| proxy
to attend and vote for him/her/them. Proxies in order to be effective must be
received at the |
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| Registered
office of 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. |
|
|
| 5.
Members are also informed that the Supreme Court of Pakistan in a recent
judgment has held |
|
| that
deductions on account of zakat shall not be made from payments against
dividends to the |
|
| members
of all recognized fiqahs on filing declarations as required under the Zakat
Ordinance. |
|
| Accordingly,
you are requested to file a declaration on non judicial stamp paper of Rs.
20/= duly |
|
| attested
by Oath Commissioner before 14th March, 2000. |
|
|
| STATEMENT
OF MATERIAL FACT (IN RESPECT OF THE PROPOSED SPECIAL RESO- |
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| LUTIONS)
UNDER SECTION 160 (1) B OF THE COMPANIES ORDINANCE 1984. |
|
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| The
Board is of the opinion that meeting fees reflect changing circumstances and
requirements. |
|
| Board
meeting fees automatically affect the interest of Directors. |
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|
| Directors'
Report |
|
|
| Dear
Shareholders |
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| Assalam-o-Alaikum |
|
|
| We
are pleased to welcome the members at 49th Annual General Meeting and have
pleasure in |
|
| presenting
the Annual Report together with Company's Audited Accounts and Auditors'
Report |
|
| for
the year ended 30th September, 1999. |
|
|
| The
cotton crop failure of 1998-99 season, crop estimate failure and unregulated
export policy |
|
| of
cotton are factors mainly responsible for the crisis in textile sector. The
imposition of Sales Tax |
|
| @
16% and subsequent increase to 18% has added further burden on costs and the
ensuing |
|
| reduction
in Sales resulted in the building-up of inventory. In these conditions
continuing production |
|
| would
have only compounded the already difficult situation hence the management was
compelled |
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| to
close down plant in March, 1999 and decided to review the situation to
re-start the production |
|
| when
favourable market condition permits. |
|
|
| After
providing for Depreciation of Rs. 11,896,748/- and charging all
administration, selling and |
|
| financial
expenses, the Company was able to reduce the operating loss to
Rs.22,711,429/- as |
|
| against
a loss of Rs. 28,125,984/- in the previous year. However due to strict
financial control |
|
| the
surplus funds were invested in shares and other financial instruments. During
the year under |
|
| review
a sum of Rs. 26.72 crores were invested in shares on which Cash Dividend of
Rs. 1.80 |
|
| crores
and =655,080= Bonus Shares were received the market value of which as of
balance |
|
| sheet
date, is Rs. 5.38 crores. Management also disposed off some of the obsolete
machinery on |
|
| which
the company has earned a profit of Rs. 73.58 lacs. After addition of dividend
and other |
|
| income
your company's pretax profit stood at Rs. 53,646, 834/= with written back
surplus of |
|
| deferred
tax of Rs. 86 lacs, after making a tax provision of the same amount for
current year |
|
| there
was net profit of Rs. 53,646,834/= and adding therein unappropriated profit
of Rs. |
|
| 104,576,697/-
brought forward from previous year a sum of Rs. 158,223,531/- is available
for |
|
| appropriation.
The earning per share this year is Rs. 7.23. |
|
|
| The
profits available for appropriation are as under:- |
|
|
| Profit
before taxation |
|
53,646,834 |
|
|
|
|
| Provision
for taxation |
|
|
|
| Current |
|
(8,600,000) |
|
| Deferred |
|
8,600,000 |
|
|
---------- |
|
| Profit
after taxation |
|
53,646,834 |
|
| Unappropriated
profit brought forward |
104,576,697 |
|
|
---------- |
|
| Total
available for appropriation |
158,223,531 |
|
|
========== |
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| The
Directors recommend the appropriation of profit as under:- |
|
|
| Proposed
Dividend @ Rs.6/= (60%) |
44,541,612 |
|
| per
share on 7,423,602 shares of |
|
| Rs.
10/= each. |
|
| Balance
carried over to next year. |
113,681,919 |
|
|
Rs.158,223,531 |
|
|
| With
regard to Auditors qualification, management is of opinion that no provision
is required in |
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| this respect. |
|
|
| The
present Board of Directors were elected by the Shareholders for three years
at its last Annual |
|
| General
Meeting held on 25th March, 1999, in accordance with the provision of
Companies |
|
| Ordinance
1984. The Board elected Mr. M. Hussain Dawood as Chief Executive of the
Company. |
|
|
| M/s.
Gangat & Company, Chartered Accountants retire, and being eligible offer
themselves for |
|
| reappointment
as auditors of the Company for the year 1999-2000. |
|
|
| On
Behalf of the Board |
|
|
|
M. HUSSAIN DAWOOD |
|
| Karachi
· 28th January, 2000 |
|
Chairman of the Meeting |
|
|
|
| Pattern
of holdings of the shares held by the shareholders |
|
| as
at September 30, 1999 |
|
|
| NUMBER
OF |
|
TYPE OF |
|
TOTAL |
|
| SHAREHOLDERS |
|
SHAREHOLDINGS |
|
SHARES HELD |
|
|
| 633 |
|
1 |
TO |
100 |
22,434 |
|
| 452 |
|
101 |
TO |
500 |
101,927 |
|
| 105 |
.. |
501 |
TO |
1000 |
78,238 |
|
| 85 |
|
1001 |
TO |
5000 |
173,810 |
|
| 9 |
|
5001 |
TO |
10000 |
59,051 |
|
| 1 |
|
25001 |
TO |
30000 |
25,415 |
|
| 1 |
|
30001 |
TO |
35000 |
32,000 |
|
| 1 |
|
40001 |
TO |
45000 |
40,387 |
|
| 1 |
|
65001 |
TO |
70000 |
69,550 |
|
| 4 |
|
70001 |
TO |
75000 |
292,409 |
|
| 1 |
|
80001 |
TO |
85000 |
83,692 |
|
| 1 |
|
90001 |
TO |
95000 |
93,078 |
|
| 1 |
|
135001 |
TO |
140000 |
137,014 |
|
| 1 |
|
145001 |
TO |
150000 |
150,000 |
|
| 1 |
|
245001 |
TO |
250000 |
248,123 |
|
| 1 |
|
250001 |
TO |
255000 |
252,500 |
|
| 1 |
|
265001 |
TO |
270000 |
266,089 |
|
| 1 |
|
340001 |
TO |
345000 |
342,587 |
|
| 1 |
|
350001 |
TO |
355000 |
354,507 |
|
| 1 |
|
770001 |
TO |
775000 |
774,446 |
|
| 1 |
|
1420001 |
TO |
1425000 |
1,420,263 |
|
| 1 |
|
2405001 |
TO |
2410000 |
2,406,082 |
|
| ---------- |
|
---------- |
|
| 1304 |
|
7,423,602 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF |
|
NUMBER OF |
SHARES |
|
|
| SHAREHOLDERS |
|
SHAREHOLDERS |
HELD |
PERCENTAGE |
|
|
|
|
| Individuals |
|
1264 |
1,480,008 |
19.94% |
|
| Investment
Companies |
|
4 |
416 |
0.00% |
|
| Insurance
Companies |
|
5 |
480,336 |
6.47% |
|
| Joint
Stock Companies |
|
13 |
3,198,648 |
43.09% |
|
| Financial
Institutions |
|
10 |
1,839,313 |
24.78% |
|
| Modaraba
Company |
|
1 |
800 |
0.01% |
|
| Others
(See Below) |
|
7 |
424,081 |
5.71% |
|
|
---------- |
---------- |
---------- |
|
|
1304 |
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, 1999 and the related Profit and Loss Account and Cash Flow Statements
together |
|
| with
the notes forming part thereof, for the year then ended, and we state 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; |
|
|
| (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 and the Cash Flow Statement
together with |
|
| the
notes forming part thereof, 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, 1999 and of the profit and the cash
flow for the |
|
| year
then ended; and |
|
|
| (d)
In our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the company and deposited in the Central Zakat Fund established under
section |
|
| 7
of the Ordinance. |
|
|
| GANGAT
& COMPANY |
|
| Chartered Accountant |
|
|
| Karachi:
January 28, 2000. |
|
|
|
| Balance
Sheet as at September 30, 1999 |
|
|
|
Note |
1998 |
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 |
|
113,681,919 |
104,576,697 |
|
|
|
288,387,665 |
279,282,443 |
|
| CAPITAL
& RESERVES |
|
362,623,685 |
353,518,463 |
|
| DEFERRED
LIABILITIES |
|
5 |
|
| Gratuity |
|
23,808,519 |
24,104,773 |
|
| Deferred
Taxation |
|
26,350,000 |
34,950,000 |
|
|
|
50,158,519 |
59,054,773 |
|
| CURRENT
LIABILITIES AND PROVISION |
|
| Creditors,
Accrued and Other Liabilities |
|
6 |
89,448,086 |
108,063,737 |
|
| Unclaimed.
Dividend |
|
|
2,882,160 |
2,507,603 |
|
| Proposed
Dividend |
|
|
44,541,612 |
29,694,408 |
|
|
|
|
|
|
136,871,858 |
140,265,748 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
7 |
|
|
----------- |
----------- |
|
|
549,654,062 |
552,838,984 |
|
|
=========== |
=========== |
|
| PROPERTY
& ASSETS |
|
|
|
|
| FIXED
ASSETS |
|
| Operating
Assets |
|
8 |
106,171,897 |
122,509,417 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
9 |
9,681,394 |
9,681,394 |
|
|
| LONG
TERM DEPOSITS |
|
1,430,622 |
1,430,622 |
|
|
| CURRENT
ASSETS |
|
| Stores
and Spares |
|
10 |
4,098,114 |
4,066,390 |
|
| Stock-in-trade |
|
11 |
51,929,548 |
67,652,343 |
|
| Trade
Debtors |
|
12 |
32,748,714 |
5,143,021 |
|
| Loans,
Advances, Deposits, Prepayments |
|
|
|
| and
Other Receivables (Unsecured) |
|
13 |
1,369,828 |
3,723,219 |
|
|
| Short
Term Investments |
|
14 |
275,085,835 |
7,890,000 |
|
|
|
----------- |
----------- |
|
| Cash
and Bank Balances |
|
15 |
67,138,110 |
330,742,578 |
|
|
432,370,149 |
419,217,551 |
|
|
----------- |
----------- |
|
|
549,654,062 |
552,838,984 |
|
|
=========== |
=========== |
|
| The
annexed notes form an integral part of this Balance Sheet. |
|
|
| Karachi:
January, 28, 2000. |
|
M. HUSSAIN DAWOOD |
|
Nasim Beg |
|
|
Chief Executive |
|
Director |
|
|
|
| Profit
and Loss Accounts |
|
| for
the year ended September 30, 1999 |
|
|
|
|
Note |
1998 |
1999 |
|
|
|
No. |
Rupees |
Rupees |
|
| PARTICULARS |
|
|
| Net
Sales and Operating Revenue |
|
16 |
77,147,394 |
73,687,340 |
|
| Cost of Sales |
|
17 |
(89,854,321) |
(91,578,489) |
|
|
----------- |
----------- |
|
| GROSS
LOSS |
|
(12,706,927) |
(17,891,149) |
|
|
| OPERATING
EXPENSES |
|
| Administrative |
|
18 |
9,508,359 |
9, 717,718 |
|
| Selling |
|
19 |
367,769 |
388,603 |
|
| Financial |
|
20 |
128,374 |
128,514 |
|
|
----------- |
----------- |
|
|
(10,004,502) |
(10,234,835) |
|
|
----------- |
----------- |
|
| OPERATING
LOSS |
|
22,711,429 |
(28,125,984) |
|
|
| Non-Operating
Income |
|
21 |
58,244,845 |
95,382,444 |
|
| Zakat |
|
|
(33,250) |
(100,000) |
|
| Profit
on Sale of Fixed Assets |
|
8.1 |
7,358,228 |
2,321,204 |
|
|
|
----------- |
----------- |
|
| PROFIT
FOR THE YEAR |
|
|
42,858,394 |
69,477,664 |
|
| Liabilities
written back (already taxed) |
|
|
10,788,440 |
3,659,901 |
|
| Other
Charges |
|
22 |
-- |
(4,287,823) |
|
|
----------- |
----------- |
|
| PROFIT
BEFORE TAX |
|
53,646,834 |
68,849,742 |
|
|
========== |
========== |
|
|
| PROFIT
BEFORE TAX |
|
53,646,834 |
68,849,742 |
|
|
| TAXATION |
|
|
| Current |
|
(8,600,000) |
(15,000,000) |
|
|
|
|
| Deferred |
|
8,600,000 |
-- |
|
|
----------- |
----------- |
|
| PROFIT
AFTER TAX |
|
53,646,834 |
53,849,742 |
|
| Unappropriated
Profit brought forward |
|
104,576,697 |
80,421,363 |
|
|
----------- |
----------- |
|
| AMOUNT
AVAILABLE FOR APPROPRIATION |
|
158,223,531 |
134,271,105 |
|
|
========== |
========== |
|
| APPROPRIATION: |
|
|
|
|
|
|
| Proposed
Dividend |
|
44,541,612 |
29,694,408 |
|
| Balance
Carried Forward |
|
113,681,919 |
104,576,697 |
|
|
----------- |
----------- |
|
|
158,223,531 |
134,271,105 |
|
|
=========== |
=========== |
|
| Earnings
per share |
|
27 |
7.23 |
7.25 |
|
|
=========== |
=========== |
|
| The
annexed notes form an integral part of this Profit and Loss Account. |
|
|
| Karachi:
January, 28, 2000. |
|
M. HUSSAIN DAWOOD |
|
Nasim Beg |
|
|
Chief Executive |
|
Director |
|
|
|
| Cash
Flow Statement |
|
| for
the Fear ended September 30, 1999 |
|
|
|
For the Year |
For the Year |
|
|
Ended |
Ended |
|
|
30-09-1999 |
30-09-1998 |
|
| PARTICULARS |
|
|
| Cash
Flow From Operating Activities |
|
| Profit
before taxation |
|
53,646,834 |
6,884,974.20 |
|
|
| Adjustments
for: |
|
| Depreciation |
|
11,896,748 |
13,755,939 |
|
| Profit
on sale of fixed assets |
|
(7,358,228) |
(2,321,204) |
|
| Provision
for gratuity |
|
-- |
81,942 |
|
| Income
from investments |
|
(58,123,595) |
(95,311,938) |
|
| Sundry
sales and receipts |
|
(121,250) |
(70,506) |
|
| Financial
charges |
|
128,374 |
128,514 |
|
|
---------- |
---------- |
|
| Operating
Profit/(Loss) before working capital changes |
|
68,883 |
(14,887,511) |
|
| Net
(decrease) in working capital |
|
(27,465,223) |
(51,660,801) |
|
|
---------- |
---------- |
|
| Cash
used in operations |
|
(27,396,340) |
(66,548,312) |
|
|
| Payments
for: |
|
| Gratuity |
|
(296,254) |
(1,841,803) |
|
| Tax |
|
(9,311,659) |
(17,699,841) |
|
| Financial
charges |
|
(128,374) |
(128,514) |
|
|
---------- |
---------- |
|
| Net
Cash used in Operating Activities (A) |
|
(37,132,627) |
(86,218,470) |
|
|
========== |
========== |
|
| Cash
Flow from Investment Activities |
|
|
|
| Sales
of fixed assets |
|
11,799,000 |
4,005,275 |
|
| Income
from investments |
|
58,123,595 |
95,311,938 |
|
| Sundry
sales & receipts |
|
121,250 |
70,506 |
|
| Acquisition
of Fixed Assets |
|
-- |
(807,000) |
|
|
----------- |
----------- |
|
| Net
cash in fl |
