| Dewan Khalid Textile 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 the Meeting |
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| Statement
Under Section 160 |
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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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| Notes to the Accounts |
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| Pattern of Share Holding |
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| Mission Statement |
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| The
mission of Dewan Khalid Textile Mills Limited is to be the |
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| finest
Organisation, and to conduct business responsibly |
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| in
a straight forward way. |
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| Our
basic aim is to benefit the customers, employees and |
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| shareholders
and to fulfil our commitments to the society. Our |
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| hallmark
is honesty, initiative and teamwork o2c our people and |
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| our
ability to respond effectively to change in all aspects of life |
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| 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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| 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 |
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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. MOHAMMED SHAFI (NIT) |
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| AUDITORS |
MESSRS. FARUQ ALI &
CO. |
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Chartered Accountants |
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Habib Square, |
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M. A. Jinnah Road, |
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Karachi, Pakistan. |
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| TAX ADVISORS |
SHARIF & COMPANY |
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Advocates |
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| BANKERS |
MUSLIM COMMERCIAL BANK
LIMITED |
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HABIB BANK LIMITED |
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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 |
G-11, S. I. T. E., |
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Kotri (Sindh). |
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| NOTICE
OF TWENTY SECOND ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 22nd Annual General Meeting of Dewan Khalid Textile
Mills Limited will be |
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| held
on 25th March, 2000 at 5:30 p.m. at Dewan Centre, 3-A Lalazar Beach Hotel
Road, Karachi, to transact the |
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| following business: |
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| ORDINARY BUSINESS: |
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| 1.
Recitation from HOLY QURAN. |
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| 2.
To read the confirm the minutes of the 21st Annual General Meeting held on
24th March, 1999. |
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| 3.
To receive, consider and adopt the annual audited accounts for the year ended
30 September 1999, |
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| together
with the Directors' and Auditors' Report thereon. |
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| 4.
To elect Seven directors of the Company for a period of the three years. The
number of directors to be |
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| elected
is fixed by the Board of Directors in accordance with the provisions of
Section 178 (1) of the |
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| Companies
Ordinance, 1984. The following retiring directors are eligible for
re-election. |
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| 1.
Dewan Ziaur Rehman Farooqui |
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| 2.
Dewan Ghulam Mustafa Khalid |
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| 3.
Dewan Abdul Rehman Farooqui |
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| 4.
Dewan Mohammad Yousuf Farooqui |
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| 5.
Dewan Mohammad Ayub Khalid |
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| 6.
Dewan Asim Mushfiq Farooqui |
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| 7.
Mr. Mohammad Shafi (NIT) |
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| 5.
To approve the declaration of Cash Dividend @ 12.5% and issue of bonus shares
@ 10%. |
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| 6.
To .appoint Auditors of the Company for the year ending 30 September 2000 and
to fix their |
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| remuneration. |
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| SPECIAL BUSINESS: |
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| 7.
To consider and approve short term loans and advances out of surplus funds
available with the |
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| Company
to Dewan Sugar Mills Limited in compliance with the provisions of Section 208
of the |
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| Companies
Ordinance, 1984. |
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| 8.
To approve remuneration payable to the Chief Executive and whole-time working
Director. |
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| 9.
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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| Date: 04 March 2000 |
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(DEWAN ABDUL REHMAN
FAROOQUI) |
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| Place: Karachi. |
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Managing Director/Chief
Executive |
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| NOTES: |
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| 1.
The Shares Transfer Books of the Company will remain closed from 24th March,
2000 to 31st March, 2000 |
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| (both days inclusive). |
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| 2.
A member entitled to attend, speak and vote at the meeting is entitled to
appoint a proxy to attend, speak |
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| and
vote for him/her (A proxy must be member of the company). |
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| 3.
An instrument of proxy and a power of attorney or other authority (if any)
under which it is signed or a |
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| notarised/certified. copy of such power of
attorney, in order to be valid must be deposited at the |
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| registered office of the company not less
than 48 hours before the time of the meeting. |
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| 4.
Members are requested to notify any change in their address immediately. |
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| "Statement
under Section 160 of the Companies Ordinance, 1984 is attached with the
Annual Report |
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| circulated
to the members of the company". |
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| STATEMENT
UNDER SECTION 160 |
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| OF
THE COMPANIES ORDINANCE, 1984 |
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| This
statement is annexed to the Notice of 22nd General Meeting of Dewan Khalid
Textile Mills |
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| Limited
(hereinafter referred to as DKTML.) to be held on 25th March, 2000 and sets
out material |
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| facts
concerning the Special Business to be transacted at the Meeting. |
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| 1.
Investments in Associated Companies |
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| The
Board of Directors considers to advance temporary short term financing to the
associated |
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| company
out of surplus funds available with the company. Details of such financing
are given |
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| below: |
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| (i)
Name of borrower company and asso- |
- Dewan Sugar Mills
Limited |
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| ciated
undertaking together with the |
Rupees Fifty Million only |
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| amount
of loans and advance. |
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| (ii)
Rate of interest to be charged on each |
- 1% above the rate on
which the lending |
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| loan
and advance together with the |
Company has obtained its
own borrowing |
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| particulars
of collateral security to be |
- No Security is
considered necessary as all the |
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| obtained from borrower. |
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companies are under
common management |
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control |
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| (iii)
Period for which these loans and |
- Twelve Months |
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| advances will be made |
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| (iv)
The terms of repayment or any other |
- The loans and advances
are adjustable within |
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| terms
of loans and advances. |
a period of twelve months
or as and when |
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required by the lending
Company. |
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| (v)
Purpose of loans and advances |
- The purpose of loans
and advances is to |
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provide any immediate
requirement of working |
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capital of the borrowing
Companies. |
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| (vi)
Benefits likely to accrue to the |
- The investing Company
and its shareholders |
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| Company
and its shareholders from |
will be benefited in a
manner that their invest- |
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| loans and advances |
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ment will fetch a return
of one percent over |
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and above the mark-up
rate at which the |
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|
investing Company has
borrowed. Further, |
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the surplus funds will
not remain idle and will |
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be invested in the most
efficient manner |
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whereby the investing
Company, not only getting |
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good return but the funds
will also remain |
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at the disposal of the
investing Company as |
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such loans and advances
are repayable on |
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|
demand. |
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| None
of the Directors or their spouse has any vested or non-vested interest
whether directly, or indirectly in |
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| the proposed business. |
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| In
this regard following resolution is proposed to be passed, with or without
modification, as a |
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| SPECIAL RESOLUTION". |
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| Resolved
that the Board of Directors of the Company be and is hereby authorised to
make |
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| temporary
short term loans/advances to Dewan Sugar Mills Limited upto maximum limit of |
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| Rs.
50 Million at the mark up rate of 1% above the rate on which the Company has
obtained the |
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| borrowing. |
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| These
temporary loans/advances shall be adjusted as and when required by the
Company and |
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| shall
not exceed 12 months period". |
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| DIRECTORS'
REPORT |
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| Your
Directors take pleasure in presenting to you the 22nd Annual Report of the
Company together |
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| with
the audited accounts for the financial year ended on 30 September, 1999. |
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| Alhamdolillah,
the results for the year under review are satisfactory despite adverse
factors like |
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| instability
in yarn prices and failure of cotton crop, etc. |
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| By
the Grace of Almighty Allah, your company has earned a Net Profit of Rs. 8.99
million as compared |
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| with
Net profit of Rs. 11.17 million of last year. The highlights of the accounts
are as follows: |
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1999 |
1998 |
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|
(Rupees) |
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| Gross Sales |
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441,421,001 |
712,386,348 |
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| Cost of Sales |
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376,970,775 |
640,385,467 |
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| Gross Profit |
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61,206,791 |
65,884,151 |
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| Taxation |
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5,905,000 |
8,525,000 |
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| Net Profit After Tax |
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8,993,048 |
11,175,616 |
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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
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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| Profit For the Year 1998-99 |
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Rs. |
8,993,048 |
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| Un-appropriated
Profit Brought Forward |
Rs. |
69,400,177 |
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-------------------- |
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| Profit
Available For Appropriation |
Rs. |
78,393,225 |
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============ |
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| Appropriation |
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| Cash Dividend - 1997-98 |
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Rs. |
4,490,640 |
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| Final Cash Dividend |
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Rs. |
4,009,500 |
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| Reserve
for Issue of Bonus Shares |
Rs. |
3,207,600 |
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| Un-appropriated
Profit Carried Forward |
Rs. |
66,685,485 |
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-------------------- |
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| Total |
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Rs. |
78,393,225 |
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============ |
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| The
Board of Directors has taken the decision for appropriation of the profit
keeping in view |
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| expectations
of shareholders from Dewan Mushtaq Group, statutory requirements, future
profitability |
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| and
present scenario of Textile Industry. |
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| The
Board also decided to apprise its valued shareholders current status and
future situation of Textile |
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| 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. 441.42 million as compared
with Rs. 712.38 |
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| million last year. |
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| 2.
Earning Per Share of your Company works out to Rs. 2.80 as compared with last
year's EPS, which |
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| was Rs. 3.83. |
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| 3.
During the year under review, textile industry remained in the clutches of
grave crisis. Cotton crop |
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| once
again failed miserably and cotton prices remained at high level. Average
price of cotton hovered |
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| around
Rs. 2,200/- per maund, excluding 15% sales tax. |
|
|
| 4.
The Board is pleased to inform its shareholders that the major work of
Balancing, Modernisation |
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| and
Replacement (BMR) has been successfully carried out. This has resulted in
increased |
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| productivity
and improved quality as is evident from better margins. |
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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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| FUTURE PROSPECTS |
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| The
outlook for local textile industry appears encouraging for the next year. The
1999-2000 cotton crop is |
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| expected
to be around 9.75 million bales (25% more than 1998-1999). The size of cotton
crop is more than |
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| the
requirement of local textile industry which needs around 9.00 million bales
in the current season for |
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| domestic
consumption, up from 8.30 million bales in 1999. This would leave a
reasonable buffer stock to |
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| help
keep the prices stable. |
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|
| The
large cotton harvest has provided much needed impetus to the textile trade
both in domestic and |
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| export
market. Due to lower prices of cotton a sizable number of idle spindles and
closed spinning units |
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| have
come into production. Infact due to low price of cotton certain number of
textile mills switched from |
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| high
Polyester Cotton blended yarn to blends with more ratio of cotton than
polyester. This has given a |
|
| substantial
boost to the export of cotton and polyester cotton blended yarn. As a result,
export of textiles |
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| increased
by 10.5 percent to Rs. 3.088 billion from Rs. 2.794 billion in the
corresponding period last year. |
|
|
| The
management has successfully implemented a major Balancing, Modernizing and
Replacement pro- |
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| gram
to bring the productive capacity upto date in order to remain competitive in
its field of operation. |
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| The
production facilities were temporarily shut down to carry out renovation work
for building and ancillary |
|
| facilities.
Though production of several weeks was lost due to this BMR work but your
Company was |
|
| able
to maintain it's sales revenue and increased it's profitability over the past
year as the quality of yarn |
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| and
it's productivity increased due to this equipment modernisation. |
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| VOTE OF THANKS: |
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| The
board puts on record its gratitude to its valuable shareholders, federal and
provincial government |
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| functionaries,
banks, and customers whose co-operation, continued support and patronage |
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| have
enabled your company to surpass the desired results. |
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| The
board also express its thanks for the valuable teamwork, loyalty and laudable
efforts rendered |
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| by
the executives, staff members and workers of your Company, during the year
under review and |
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| wishes
to place on record its appreciation for the same. |
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| AUDITORS: |
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| The
Auditors of your Company, M/s. Faruq Ali & Co., Charted Accountants,
retire and offer their |
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| services
for re-appointment for the ensuing year on the same remuneration. |
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| YEAR 2000 |
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| The
onset of Year 2000 has cleared all the hyperbole regarding the famous Y2K
problem. We are |
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| pleased
to inform our shareholders that all our Hardware and Software is functioning
as usual without |
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| any
problem. Alhamdolillah, all the applications are working perfectly and the
results obtained |
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| from
computer generated information reconciles to the manual records that were
maintained in |
|
| order
to cater to any unforeseen circumstances. |
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| CONCLUSION: |
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| 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 |
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| to
Almighty Allah to bestow peace, harmony, brotherhood and unity in true
Islamic spirit to whole |
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| of
Muslim Ummah, Ameen, Summa-Ameen. |
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|
| LO-MY
LORD IS INDEED HEARER OF PRAYER (HOLY QURAN) |
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|
For and on behalf of the
Board of Directors |
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|
|
DEWAN ABDUL REHMAN
FAROOQUI |
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| Karachi: March 02, 2000 |
|
Managing Director/Chief
Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of Dewan Khalid Textile Mills Limited,
as at 30th |
|
| September,
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 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 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 thereon
have been |
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| drawn
up in conformity with Companies Ordinance, 1984 and are in agreement with the |
|
| books
of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
| (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 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 30th September 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 |
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| deducted
by the Company and deposited in the Central Zakat Fund established under
Section |
|
| 7 of that Ordinance. |
|
|
| Faruq Ali & Co., |
|
| Chartered Accountants |
|
| Karachi. |
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| Date: 02 March, 2000 |
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|
|
| BALANCE SHEET |
|
| AS
AT 30 SEPTEMBER, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Notes |
(Rupees) |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
| SHAREHOLDER'S
EQUITY |
|
| Share Capital |
|
| Authorised |
|
| 15,000,000
Ordinary shares of Rs. 10/- each |
|
150,000,000 |
150,000,000 |
|
|
============ |
============ |
|
| Issued,
Subscribed & Paid up |
|
3 |
32,076,000 |
29,160,000 |
|
| Reserves and Surplus |
|
4 |
204,893,085 |
207,316,177 |
|
|
|
-------------------- |
-------------------- |
|
|
|
236,969,085 |
236,476,177 |
|
| Deferred Liability for |
|
|
|
| Assets
Subject to Finance Lease |
|
5 |
20,289,333 |
30,051,213 |
|
| Provision for Gratuity |
|
|
14,737,577 |
13,219,760 |
|
|
|
|
| Current Liabilities |
|
|
|
| Current
Portion of Lease Liabilities |
|
|
9,761,880 |
7,588,481 |
|
| Short
Term Running Finances |
|
6 |
254,113,925 |
11,248,829,636 |
|
| Creditors,
Accrued expenses & Other Liabilities |
7 |
202,400,244 |
37,562,956 |
|
| Provision for Taxation |
|
|
20,447,696 |
14,542,696 |
|
| Dividend Payable |
|
8 |
7,741,267 |
186,282 |
|
|
|
-------------------- |
-------------------- |
|
|
|
494,465,012 |
308,710,051 |
|
|
|
-------------------- |
-------------------- |
|
|
|
766,461,007 |
588,457,201 |
|
|
|
============ |
============ |
|
| PROPERTY
AND ASSETS |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
Fixed Assets (at cost |
|
|
|
| less
accumulated depreciation) |
|
9 |
93,248,914 |
96,076,595 |
|
| Capital Work in Progress |
|
|
-- |
4,554,381 |
|
| Long Term Investment |
|
10 |
65,000,000 |
65,000,000 |
|
| Long Term Deposits |
|
11 |
66,775 |
66,775 |
|
|
|
|
| Current Assets |
|
|
|
|
|
|
| Stores and Spares |
|
12 |
7,705,484 |
7,920,213 |
|
| Stock in Trade |
|
13 |
449,456,867 |
235,702,291 |
|
| Trade
Debts - Unsecured (Considered good) |
|
103,517,911 |
130,184,937 |
|
| Advances,
Deposits, Prepayments |
|
|
|
| and Other Receivables |
|
14 |
41,254,203 |
43,714,122 |
|
| Cash and Bank Balance |
|
15 |
6,210,853 |
5,237,887 |
|
|
|
-------------------- |
-------------------- |
|
|
|
608,145,318 |
422,759,450 |
|
|
|
-------------------- |
-------------------- |
|
|
|
766,461,007 |
588,457,201 |
|
|
|
============ |
============ |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| DEWAN
GHULAM MUSTAFA KHALID |
|
DEWAN ABDUL REHMAN
FAROOQUI |
|
| Director |
|
Managing Director/Chief
Executive |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED 30 SEPTEMBER, 1999 |
|
|
|
|
1999 |
1998 |
|
|
Notes |
(Rupees) |
|
|
| Sales - Net |
|
16 |
438,304,363 |
706,629,158 |
|
| Less · Export Duty |
|
|
126,797 |
359,540 |
|
|
|
-------------------- |
-------------------- |
|
|
|
438,177,566 |
706,269,618 |
|
| Cost of Sales |
|
17 |
376,970,775 |
640,385,467 |
|
|
|
-------------------- |
-------------------- |
|
| Gross Profit |
|
61,206,791 |
65,884,151 |
|
| Operating Expenses |
|
| Administrative & General |
|
18 |
4,599,462 |
5,329,501 |
|
| Selling & Distribution |
|
19 |
6,987,239 |
10,205,094 |
|
|
-------------------- |
-------------------- |
|
|
11,586,701 |
15,534,595 |
|
|
-------------------- |
-------------------- |
|
| Operating Profit |
|
49,620,090 |
50,349,556 |
|
| Other Charges |
|
| Financial Charges |
|
20 |
33,112,492 |
38,513,300 |
|
| Donation |
|
287,150 |
445,439 |
|
| Workers'
Profit Participation Fund |
|
811,022 |
569,541 |
|
| Workers' Welfare Fund |
|
511,378 |
426,006 |
|
|
-------------------- |
-------------------- |
|
|
34,722,042 |
39,954,286 |
|
|
-------------------- |
-------------------- |
|
|
14,898,048 |
10,395,270 |
|
| Other Income |
|
21 |
-- |
9,305,346 |
|
|
|
-------------------- |
-------------------- |
|
| Profit before Taxation |
|
14,898,048 |
19,700,616 |
|
| Taxation - Current Year |
|
5,905,000 |
8,525,000 |
|
|
-------------------- |
-------------------- |
|
| Profit after taxation |
|
8,993,048 |
11,175,616 |
|
| Unappropriated
profit brought forward |
|
69,400,177 |
61,140,561 |
|
|
-------------------- |
-------------------- |
|
| Available
for Appropriation |
|
78,393,225 |
72,316,177 |
|
|
| Appropriation |
|
| Final
cash dividend - 12.5% (1998:Nil) |
|
4,009,500 |
-- |
|
| Cash
dividend 14% 1997-98 |
|
4,490,640 |
-- |
|
| Reserve
for issue of bonus shares - 10% (1998: 10%) |
|
3,207,600 |
2,916,000 |
|
|
-------------------- |
-------------------- |
|
|
11,707,740 |
2,916,000 |
|
|
-------------------- |
-------------------- |
|
| Unappropriated
profit carried forward |
|
66,685,485 |
69,400,177 |
|
|
============ |
============ |
|
| The
annexed notes form an integral part of these accounts. |
|
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