| Dilon Limited |
|
|
|
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| CONTENTS |
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors' Report |
|
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
|
| Profit
& Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
|
|
| COMPANY
INFORMATION |
|
|
| DIRECTORS |
|
Ahmed Dawood |
|
|
|
M. Hussain Dawood Chief
Executive |
|
|
|
Shahzada Dawood |
|
|
|
Khawaja Amanullah |
|
|
|
Abdul Aziz Moon |
|
|
|
Haroon Mehanti |
|
|
|
Yousuf A. Deshi |
|
|
|
|
| SECRETARY & |
|
|
| G.M. (Finance) |
|
Yousuf A. Deshi |
|
|
|
|
| AUDITORS |
|
Gangat & Company |
|
|
|
(Chartered Accountants) |
|
|
| BANKERS |
|
Habib Bank Limited |
|
|
|
Muslim Commercial Bank
Ltd. |
|
|
|
National Bank of Pakistan |
|
|
|
|
| REGISTERED
OFFICE |
Dawood Centre |
|
|
|
Karachi-75530 |
|
|
|
|
| MILLS |
|
Landhi Industrial Area |
|
|
|
Karachi-75120 |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the 26th Annual General Meeting of the Shareholders of
Dilon Limited will |
|
| Insha
Allah be held at the Company's Registered Office at Dawood Centre, Moulvi
Tamizuddin Khan |
|
| Road,
Karachi, at 9:30 A.M. on Wednesday the 1st December, 1999 for the purpose of
transacting the |
|
| following
ordinary business after recitation from the Holy Quran. |
|
|
| 1.
To confirm the minutes of the Extra Ordinary General Meeting held on 25th
March, 1999. |
|
|
|
|
| 2.
To receive, consider and adopt the audited accounts of the company for the
year ended June |
|
| 30,
1999 and reports 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, |
|
| M/s.
Gangat & Company, Chartered Accountants, retire and being eligible, offer
themselves for |
|
| re-appointment. |
|
|
|
|
|
| 5.
To transact any other business with the permission of the Chairman of the
meeting. |
|
|
|
|
|
By Order of the Board |
|
|
|
|
|
|
|
|
|
(Yousuf A. Deshi) |
|
| Karachi:
October 26, 1999 |
|
|
Director/Secretary |
|
|
| NOTES: |
|
|
| 1.
The Share transfer books of the company will remain closed from 25-11-1999 to
01-12-1999 |
|
| (both
days inclusive). |
|
|
|
|
| 2.
Transfers received at the registered office of the Company at Dawood Centre,
Moulvi Tamizuddin |
|
| Khan
Road, Karachi, at the close of business on 24-11-1999 will qualify for the
payment of |
|
| dividend
to the transferees. |
|
|
|
|
| 3.
A member of the company who is entitled to attend and vote at the meeting may
appoint another |
|
| member
as his/her proxy duly authorised under a power of attorney or by proxy to
attend the |
|
| meeting
and vote instead of him/her. Proxies in order to be effective must be
received at the |
|
| registered
office of the Company not less than 48 hours before the time of holding the
meeting |
|
| (Proxy
Form is enclosed). |
|
|
| 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 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 1st December, 1999. |
|
|
|
| DIRECTORS'
REPORT |
|
|
| Dear
Shareholders, |
|
|
| Assalam-o-Alaikum. |
|
|
| Your
directors hereby present their 26th Annual Report together with the Audited
Accounts and Auditors |
|
| Report
for the year ended 30th June, 1999. |
|
|
| As
reported in the half yearly review that prices of filament yarn declined due
to dumping of imported |
|
| yarn,
compared with previous year by over 19%. However due to improvement in the
quality of yarn, |
|
| increased
in volume was achieved by 34% and sale by Rs. 1.04 crores or 8.30% over
corresponding |
|
| period
of last year. The operating profit, however reduced from Rs. 114 lacs to Rs.
76.44 lacs which is |
|
| attributed
to primarily reduction in selling prices and increase in cost of inputs,
utilities and stores and |
|
| spares.
The Nylon plant which was closed since 1994 because of its being uneconomical
and obsolete |
|
| was
disposed off during the year. The company earned capital gain of Rs. 13.8
lacs out of sale of |
|
| investment.
Fresh investments in shares of Rs. 5.09 crores were made during the year. |
|
|
| The
company after charging all administrative expenses and after providing
diminution in value of |
|
| investment,
depreciation of Rs. 3,897,499/= and Rs. 40,00,000/= for taxation earned after
tax profit of |
|
| Rs.
4,531,349/= and taking into account unappropriated profit of Rs. 5,798,619/=
brought forward from |
|
| previous
year a sum of Rs. 10,329,968/= was available for appropriation. The earning
per share this |
|
| year
works out to Rs. 1.92. |
|
|
| Your
directors propose the appropriation of the profit as under:- |
|
|
|
|
Rupees |
|
|
| Profit
before taxation |
|
|
|
8,531,349 |
|
| Provision
for taxation: |
|
|
|
|
|
| Current |
|
|
|
|
(4,000,000) |
|
|
|
|
|
|
------------------ |
|
| Profit
after taxation |
|
|
|
4,531,349 |
|
| Unappropriated
profit brought forward |
|
|
5,798,619 |
|
|
|
|
------------------ |
|
| Available
for appropriation |
|
|
|
10,329,968 |
|
| Less: |
|
|
|
|
|
| Proposed
dividend @ Rs. 3.00 (30%) per share on |
|
|
|
|
| 2,359,500
shares of Rs. 10/- each. |
|
|
(7,078,500) |
|
|
|
|
------------------ |
|
| Balance
carried over to next year |
|
|
|
3,251,468 |
|
|
|
|
========== |
|
|
| Present
Board of Directors were elected by the shareholders for three years at the
last extra ordinary |
|
| 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 re- |
|
| appointment
as auditor of the company for the year 1999-2000. |
|
|
| Your
directors wish to place on record appreciation and devotion shown by all the
employees of the |
|
| company
and also call upon you to join us in seeking guidance and blessings of
Almighty Allah. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
|
|
(M. HUSSAIN DAWOOD) |
|
|
|
|
|
|
Chief Executive & |
|
| October 26, 1999 |
|
|
Chairman of the meeting |
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of DILON LIMITED as at June 30, 1999
and the related |
|
| profit
and loss account and cash flow statement, together with the notes forming
part thereof, for the |
|
| year
then ended and we state that we have obtained all the informations and
explanations which to the |
|
| best
of our knowledge and belief were necessary for the purpose 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 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 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 June 30, 1999 and of the profit and the cash flow statement 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 |
|
| Karachi
:October 26, 1999 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| CAPITAL
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| SHARE
CAPITAL |
|
|
|
| Authorised |
|
|
|
|
| 5,000,000
ordinary shares of |
|
|
|
| Rs.
10 each (1998 · 5,000,000) |
|
|
50,000,000 |
50,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up capital |
|
2 |
23,595,000 |
23,595,000 |
|
|
|
|
|
|
|
|
|
| RESERVES
& SURPLUS |
|
|
|
|
| Revenue
reserves |
|
3 |
67,500,000 |
67,500,000 |
|
| Unappropriated
profit |
|
|
3,251,468 |
5,798,619 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
70,751,468 |
73,298,619 |
|
|
|
|
|
------------------ |
------------------ |
|
| CAPITAL
& RESERVES |
|
|
94,346,468 |
96,893,619 |
|
| DEFERRED
LIABILITIES |
|
4 |
12,849,447 |
12,564,054 |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Creditors,
accrued and other liabilities |
|
5 |
26,004,864 |
22,356,317 |
|
| Provision
for taxation |
|
|
5,782,063 |
2,644,000 |
|
| Proposed
dividend |
|
|
7,078,500 |
8,258,250 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
38,865,427 |
33,258,567 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
6 |
-- |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
146,061,342 |
142,716,240 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating assets |
|
7 |
34,894,944 |
44,599,449 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
8 |
39,046,001 |
203,812 |
|
|
|
|
|
|
| LONG
TERM DEPOSITS |
|
|
456,550 |
456,550 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
9 |
6,576,848 |
8,165,987 |
|
| Stock-in-trade |
|
10 |
11,390,558 |
20,913,536 |
|
| Trade
debts-unsecured, |
|
|
|
| considered good |
|
|
19,558,448 |
11,688,775 |
|
| Loans,
advances, deposits, |
|
|
|
| prepayments
and other receivables |
|
11 |
8,586,193 |
4,254,221 |
|
| Cash
and bank balances |
|
12 |
25,551,800 |
52,433,910 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
71,663,847 |
97,456,429 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
146,061,342 |
142,716,240 |
|
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Karachi
· October 26, 1999 |
|
|
|
M. HUSSAIN DAWOOD |
|
|
A. AZIZ MOON |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
Note |
1999 |
1998 |
|
|
|
R u pees |
R u pees |
|
|
|
|
| PARTICULARS |
|
|
|
| Sales - net |
|
13 |
135,895,359 |
125,472,387 |
|
| Cost
of goods sold |
|
14 |
(122,847,058) |
(108,981,186) |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
13,048,301 |
16,491,201 |
|
|
|
|
------------------ |
------------------ |
|
| Administrative
& selling expenses |
|
15 |
5,314,790 |
5,067,529 |
|
| Financial
expenses |
|
16 |
59,335 |
47,681 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(5,374,125) |
(5,115,210) |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
7,674,176 |
11,375,991 |
|
| Other income |
|
17 |
10,324,171 |
5,995,975 |
|
| Capital gain |
|
18 |
1,379,529 |
-- |
|
| Profit
on sales of fixed assets |
|
7.3 |
1,617,994 |
46,067 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
for the year |
|
|
20,995,870 |
17,418,033 |
|
| Other charges |
|
19 |
(12,464,521) |
(1,201,902) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
8,531,349 |
16,216,131 |
|
| Taxation |
|
20 |
(4,000,000) |
(2,550,000) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
4,531,349 |
13,666,131 |
|
| Unappropriated
profit brought forward |
|
|
5,798,619 |
390,738 |
|
|
|
|
------------------ |
------------------ |
|
| Available
for appropriation |
|
|
10,329,968 |
14,056,869 |
|
|
|
|
|
|
| APPROPRIATION |
|
|
|
| Proposed
dividend Rs. 3.00 per share |
|
|
| (1998-Rs.
3.50 per share) |
|
(7,078,500) |
(8,258,250) |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
3,251,468 |
5,798,619 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
M. HUSSAIN DAWOOD |
|
|
|
A. AZlZ MOON |
|
|
Chief Executive |
|
|
|
Director |
|
|
| Karachi:
October 26,1999 |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
| Cash
Flow from Operating Activities |
|
|
| Profit
before taxation |
|
8,531,349 |
16,216,131 |
|
| Adjustments for: |
|
|
|
|
| Depreciation |
|
3,897,499 |
4,988,374 |
|
| Profit
on sales of fixed assets |
|
(1,617,994) |
(46,067) |
|
| Provision
for gratuity |
|
345,393 |
-- |
|
| Provision
for diminution in value of investments |
|
11,832,345 |
-- |
|
| Income
from investments |
|
(10,324,171) |
(5,995,975) |
|
| Capital gain |
|
(1,379,529) |
-- |
|
| Financial
charges |
|
59,335 |
47,681 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
11,344,227 |
15,210,144 |
|
| Net
(increase)/decrease in working capital |
|
3,943,281 |
(8,126,731) |
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
15,287,508 |
7,083,413 |
|
|
|
|
|
| Payment for: |
|
|
|
| Gratuity |
|
(60,000) |
(564,148) |
|
| Tax |
|
(2,391,001) |
(1,561,131) |
|
| Financial
charges |
|
(59,335) |
(47,681) |
|
| Net
cash from operating activities (A) |
|
12,777,172 |
4,910,453 |
|
|
|
|
|
| Cash
Flow from Investment Activities |
|
|
| Purchase
of Investment |
|
(56,247,345) |
-- |
|
| Sales
of fixed assets |
|
7,425,000 |
55,300 |
|
| Sales
of investments |
|
6,952,340 |
-- |
|
| Income
from investments |
|
10,324,171 |
5,995,975 |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in investing activities (B) |
|
(31,545,834) |
6,051,275 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Cash
Flow from Financing Activities |
|
|
| Acquisition
of fixed assets |
|
-- |
(374,400) |
|
| Dividend paid |
|
(8,113,448) |
(6,892,748) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in)/from financing activities (c) |
|
(8,113,448) |
(7,267,148) |
|
|
|
========== |
========== |
|
|
|
|
|
| Net
increase/(decrease) in cash and cash |
|
|
|
| equivalents (A+B+C) |
(26,882,110) |
|
-- |
3,694,580 |
|
| Cash
and cash equivalents at the beginning of the year |
|
52,433,910 |
48,739,330 |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
25,551,800 |
52,433,910 |
|
|
|
|
========== |
========== |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| Movement
in Working Capital |
|
|
|
|
|
|
|
| (Increase)/Decrease
in Current Assets: |
|
|
|
|
|
| Stores
and spares |
|
|
1,589,139 |
(2,066,493) |
|
| Stock-in-trade |
|
|
9,522,978 |
(3,249,979) |
|
| Trade debts |
|
|
(7,869,673) |
(7,812,461) |
|
| Loans,
advances, deposits, prepayments |
|
|
|
|
| and
other receivables |
|
|
|
|
| (excluding
advance payment of income tax) |
|
|
(2,802,908) |
(89,151) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
439,536 |
(13,218,084) |
|
| Increase/(Decrease)
in Current Liabilities: |
|
|
| Creditors,
accrued and other liabilities |
|
|
| (excluding
dividend) |
|
3,503,745 |
5,091,353 |
|
|
|
------------------ |
------------------ |
|
| Net
(increase)/decrease in working capital |
|
3,943,281 |
(8,126,731) |
|
|
|
========== |
========== |
|
|
|
|
|
|
| Cash
and Cash Equivalents |
|
|
|
| Cash
and cash equivalents included in the cash flow |
|
|
| statement
comprise of the following balance sheet amounts |
|
|
|
|
| Cash
in hand and balance with banks |
|
|
25,551,800 |
2,433,910 |
|
| Short-term
deposit with bank |
|
|
-- |
50,000,000 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents |
|
|
25,551,800 |
52,433,910 |
|
|
|
|
========== |
========== |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
SIGNIFICANT ACCOUNTING POLICIES |
|
| As
in previous years, the financial statements are prepared under the historical
cost convention |
|
| without
any adjustments for the effect of inflation or current values. The following
is a summary |
|
| of
the significant accounting policies employed by the Company. |
|
|
| 1.1
Tangible fixed assets |
|
| These
are stated at historical cost less accumulated depreciation, save capital
work- |
|
| in-progress
if any, which is stated at cost. |
|
|
|
|
| Except
for leasehold land which is amortised on straight line method at 1 percent of
the |
|
| original
costs, depreciation on operating assets is provided on the diminishing
balance |
|
| method
at the normal tax rates. The rates of depreciation are as follow: |
|
|
| Building
on leasehold land |
10% |
Plant & machinery |
10% |
|
| Furniture
& fixture |
10% |
Electric installation |
10% |
|
| Office
equipment |
15% |
Vehicles |
|
20% |
|
|
| Acquisitions
during the year are depreciated for the full year irrespective of the date of |
|
| purchase
and no depreciation is charged on assets in the year of their disposal. |
|
|
|
|
| Minor
renewals or replacement and repairs and maintenance are expensed. Major |
|
| renewals
or betterments are capitalised. Gains and losses on disposal of assets are |
|
| reflected
in income currently. |
|
|
| 1.2
Long term investment |
|
| Except
for the investment in Karnaphuli Paper Mills Limited which is stated at
nominal |
|
| value,
all other investments are stated at cost. Income from these investments is |
|
| credited
to revenue in the year in which it is received. |
|
|
| 1.3
Stores and spares |
|
| These
are valued at average cost. |
|
|
| 1.4
Stock-in-trade |
|
| Raw
materials and work-in-process are stated at average cost. Finished goods are |
|
| valued
at lower of average cost and net realisable value. |
|
|
| 1.5 Taxation |
|
| The
charge of current taxation for the year is based on profits reflected in the
profit and |
|
| loss
account adjusted for fiscal purposes. |
|
|
| The
Company has fully accounted for deferred tax in respect of timing differences
arising |
|
| from
depreciation allowances on fixed assets using liability method. |
|
|
| 1.6
Revenue recognition |
|
| Sales
of goods are recognised on delivery of goods. |
|
|
|
