| Dewan Textile Mills Limited |
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| Annual
Report 1999 |
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| Mission
Statement |
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The mission of Dewan Textile Mills Limited is to be the finest |
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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 fulfill our commitments to the society.
Our |
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hallmark is honesty, initiative and teamwork of 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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| 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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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
DEWAN GHULAM MUSTAFA
KHALID |
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Chairman |
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DEWAN ZIA-UR-REHMAN
FAROOQUI |
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Managing Director/Chief
Executive |
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DEWAN MOHAMMAD AYUB
KHALID |
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Resident Director |
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DEWAN MOHAMMAD YOUSUF
FAROOQUI |
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DEWAN MOHAMMAD HAMZA
FAROOQUI |
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MR. IQBAL NAEEM PASHA |
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| AUDITORS |
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MESSRS. FEROZE SHARIF
TARIQ & CO. |
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Chartered Accountants |
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| TAX
ADVISORS |
SHARIF & COMPANY |
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Advocates |
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| BANKERS |
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MUSLIM COMMERCIAL BANK
LIMITED |
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CITI BANK N. A. |
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HABIB BANK LIMITED |
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STANDARD CHARTERED BANK |
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BANK OF AMERICA |
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AMERICAN EXPRE55 BANK |
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SOCIETE GENERALE, |
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THE FRENCH &
INTERNATIONAL BANK |
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ABN AMRO BANK |
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| REGISTERED
OFFICE |
DEWAN CENTRE |
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3-A, Lalazar, |
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Beach Hotel Road, |
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Karachi - 74000, |
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Pakistan. |
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| MILLS |
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H/20 & H/26,
S.I.T.E., |
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Kotri, District Dadu, |
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Sindh, Pakistan. |
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| NOTICE
OF THIRTIETH ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the 30th Annual General Meeting of Dewan Textile Mills
Limited will |
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| be
held on 25th March, 2000 at 2:30 p.m. at Dewan Centre, 3-A, Lalazar, Beach
Hotel Road, Karachi, |
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| to
transact the following business: |
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| ORDINARY
BUSINESS: |
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| 1.
Recitation from HOLY QURAN. |
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| 2.
To read and confirm the minutes of the Twenty Ninth Annual General Meeting
held on 24th |
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| March
1999. |
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| 3.
To receive, consider and adopt the annual audited accounts for the year ended
30 September |
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| 1999,
together with the Directors' and Auditor's Report thereon. |
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| 4.
To approve the declaration of cash dividend at the rate of 25% and issue of
bonus shares @ 10%. |
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| 5.
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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| 6.
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 |
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| the
Companies Ordinance, 1984. |
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| 7.
To approve remuneration payable to the Chief Executive and whole-time working
Director. |
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| 8.
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 Ghulam Mustafa Khalid) |
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| Place:
Karachi |
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Chairman |
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| NOTES: |
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| 1.
The Shares Transfer Books of the Company will remain closed from 24 March
2000 to 31 March 2000 (both |
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| 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 registered |
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| 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 changes 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 the Thirtieth Annual General Meeting of
Dewan Textile Mills |
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| Limited
(hereinafter referred to as DTML) to be held on 25th March, 2000 and sets out
material fact |
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| concerning
the Special Business to be transacted at the Meeting. |
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| 1.
Investment 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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| companies
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 |
- Dewan Sugar Mills
Limited |
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| associated
undertaking together with |
Rupees Fifty Million only |
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| the
amount of loan 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. |
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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 |
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working 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 |
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| loans
and advances |
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investment will fetch a
return of one percent |
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over 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 |
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getting good return but
the funds will also |
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remain at the disposal of
the investing |
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Company as such loans and
advances are |
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repayable on 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 'SPECIAL |
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| RESOLUTION.' |
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| "Resolved
that the Board of Directors of the Company be and is hereby authorised to
make temporary short |
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| term
loans / advances to Dewan Sugar Mills Limited up to maximum limit of Rs. 50
million at the mark up |
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| rate
of 1% above the rate on which the Company has obtained the borrowing. |
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| These
temporary loans / advances shall be adjusted as and when required by the
Company and shall not |
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| exceed
12 months period." |
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| DIRECTORS'
REPORT |
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| Your
Directors take pleasure in preventing to you the 30th 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.
43.11 million as compared |
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| with
Net profit of Rs. 33.14 million of lair 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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1,907,147,124 |
1,913,427,949 |
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| Cost of Sales |
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1,567,364,807 |
1,635,513,021 |
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| Gross Profit |
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312,308,240 |
248,192,334 |
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| Taxation |
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22,200,000 |
22,000,000 |
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| Net
Profit After Tax |
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43,119,186 |
33,147,163 |
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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. |
43,119,186 |
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| Un-appropriated
Profit Brought Forward |
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Rs. |
194,468,870 |
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------------------ |
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| Profit
Available For Appropriation |
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Rs. |
237,588,056 |
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========== |
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| Appropriation |
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| Cash
Dividend - 1997-98 |
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Rs. |
13,721,400 |
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| Final
Cash Dividend |
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Rs. |
19,057,500 |
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| Reserve
for Issue of Bonus Shares |
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Rs. |
7,623,000 |
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| Un-appropriated
Profit Carried Forward |
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Rs. |
197,186,156 |
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------------------ |
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| Total |
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Rs. |
237,588,056 |
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========== |
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| The
Board of Directors has taken the decision for appropriation of the profit
keeping in view expec- |
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| tations
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 |
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| Textile
Industry in detail through this report. |
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| SALIENT
FEATURES OF THE ACCOUNTS: |
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| 1.
Total gross sales of your company amounted to Rs. 1.907 billion as compared
with Rs. 1.913 |
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| billion
last year. |
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| 2.
Earning Per Share of your Company works our to Rs. 5,66 as compared with last
years EPS, |
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| which
was Rs. 4.76. |
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| 3.
During the year under review, textile industry remained in the clutches of
grave crisis. |
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| Cotton
crop once again failed miserably and cotton prices remained at high level,
Average |
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| price
of cotton hovered around Rs. 2,200/- per maund, excluding 15% sales tax. |
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| 4.
The Board is pleased to inform its shareholders that the major work of
Balancing, |
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| Modernisation
and Replacement (BMR) has been successfully carried out. This has resulted |
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| in
increased 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 |
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| from
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 |
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| crop
is expected to be around 9.75 million bales (25% more than 1998-1999). The
size of cotton crop |
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| is
more than the requirement of local textile industry which needs around 9.00
million bales in the |
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| current
season for domestic consumption, up from 8.30 million bales in 1999. This
would leave a rea- |
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| sonable
buffer stock to 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 |
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| end
export market. Due to lower prices of cotton a sizable number of idle
spindles and closed spin- |
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| ning
units have come into production. Infact due to low price of cotton certain
number of textile |
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| mills
switched from high Polyester Cotton blended yarn to blends with more ratio of
cotton than |
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| polyester.
This has given a substantial boost to the export of cotton and polyester
cotton blended |
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| yarn.
As a result, export of textiles increased by 10.5 percent to Rs. 3.088
billion from Rs. 2.794 billion |
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| in
the corresponding period last year. |
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| The
management has successfully implemented a major Balancing, Modernizing and
Replacement |
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| program
to bring the productive capacity upto date in order to remain competitive in
its field of |
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| operation.
The production facilities were temporarily shut down to carry out renovation
work for |
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| building
and ancillary facilities. Though production of several weeks was lost due to
this BMR work |
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| but
your Company was able to maintain it's sales revenue and increased it's
profitability over the |
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| past
year as the quality of yarn 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 govern- |
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| ment
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. Feroz Sharif Tariq & Co., Chartered
Accountants, retire and offer |
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| their
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 with- |
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| out
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 |
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| beloved
prophet, Mohammad, peace be upon him, for continued showering of His
Blessings, |
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| 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 GHULAM MUSTAFA KHALID |
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| Karachi:
March 02, 2000 |
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Chairman |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed Balance Sheet of Dewan Textile Mills Limited, as at
30 September, 1999 |
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| and
the related Profit and Loss Account and Cash Flow Statement together with the
notes forming part |
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| thereof,
for the year then ended and we state that we have obtained all the
information and explanations |
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| which
to the best of our knowledge mad belief were necessary for the purpose of our
audit and, after |
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| due
verification thereof, we report that; |
|
|
| (a)
in our opinion, proper books of account have been kept by the Company as
required by the |
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| 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 the Companies Ordinance, 1984 and are in agreement with |
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| the
books of account and are further in accordance with accounting policies
consistently |
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| applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's |
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| business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year |
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| 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 |
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| in
the manner so required and respectively give a true and fair view of the
state of the |
|
| Company's
affairs as at 30 September 1999 and of the profit and 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. |
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|
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| Karachi. |
|
Feroze Sharif Tariq & Company |
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| Date:
02 March, 2000 |
|
Chartered Accountants |
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|
|
| BALANCE
SHEET AS AT 30 SEPTEMBER 1999 |
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|
|
Notes |
1999 |
1998 |
|
|
|
|
(Rupees) |
|
| CAPITAL
AND LIABILITIES |
|
|
| SHARE
HOLDER'S EQUITY |
|
|
|
| SHARE
CAPITAL |
|
|
|
| Authorised |
|
|
|
| 30,000,000
Ordinary shares of Rs. 10/- each |
|
300,000,000 |
300,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Issued,
Subscribed and Paid-up |
|
3 |
76,230,000 |
69,300,000 |
|
| Reserves
and surplus |
|
4 |
537,809,156 |
534,398,870 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
614,039,156 |
603,698,870 |
|
|
|
|
|
|
| LIABILITY
AGAINST ASSETS - |
|
|
|
| SUBJECT
TO FINANCE LEASE |
|
5 |
224,143,656 |
76,100,118 |
|
|
|
|
| DEFERRED
LIABILITIES: |
|
|
|
| Staff Gratuity |
|
|
25,179,712 |
29,242,207 |
|
| Taxation |
|
|
26,252,244 |
26,252,244 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,431,956 |
55,494,451 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of assets subject to finance lease |
|
52,733,460 |
20,598,751 |
|
| Short-term
finances - Secured |
|
6 |
1,021,197,487 |
639,378,169 |
|
| Creditors,
accrued expenses and other liabilities |
7 |
401,960,617 |
88,122,548 |
|
| Dividends |
|
8 |
29,775,631 |
81,385 |
|
| Provision
for taxation |
|
|
139,287,660 |
117,087,660 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,644,954,855 |
865,268,513 |
|
| Contingencies
& Commitments |
|
9 |
------------------ |
------------------ |
|
|
|
|
2,534,569,623 |
1,600,561,952 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
| OPERATING
FIXED ASSETS - (at cost less |
|
|
| accumulated
depreciation) |
|
10 |
478,468,569 |
213,570,175 |
|
| CAPITAL
WORK IN PROGRESS |
|
11 |
41,713,636 |
106,481,010 |
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
12 |
210,000,000 |
210,000,000 |
|
| LONG
TERM DEPOSITS |
|
13 |
5,074,919 |
5,074,919 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
14 |
43,963,347 |
52,070,112 |
|
| Stock
- in - Trade |
|
15 |
905,679,922 |
462,806,806 |
|
| Stock-
in- Transit |
|
|
123,529,089 |
-- |
|
| Trade
debts (Considered good) |
|
16 |
414,336,897 |
271,844,851 |
|
| Advances,
deposits, prepayments and |
|
|
|
|
| other
receivables |
|
17 |
300,691,104 |
276,677,768 |
|
| Cash
and bank balances |
|
18 |
11,112,140 |
2,036,311 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,799,312,499 |
1,065,435,848 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
2,534,569,623 |
1,600,561,952 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
DEWAN GHULAM MUSTAFA KHALID |
|
DEWAN ABDUL REHMAN FAROOQUI |
|
|
Chairman |
|
Director |
|
|
| Note: |
Chief Executive of the
Company is out of Pakistan, therefore the Balance Sheet and Profit and Loss |
|
|
Account are signed by two
Directors. |
|
|
|
|
| PROFIT
& LOSS ACCOUNT FOR THE YEAR ENDED 30 SEPTEMBER 1999 |
|
|
|
|
Notes |
1999 |
1998 |
|
|
|
|
(Rupees) |
|
|
|
|
|
| SALES |
|
19 |
1,885,021,600 |
1,886,666,248 |
|
| Less:
Export Duty |
|
|
3,258,463 |
2,960,893 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,879,763,137 |
1,883,705,355 |
|
| COST
OF SALES |
|
20 |
1,567,364,897 |
1,635,513,021 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
312,398,240 |
248,192,334 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative
& general expenses |
|
21 |
18,161,583 |
20,420,693 |
|
| Selling
and distribution expenses |
|
22 |
63,533,109 |
79,545,108 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
91,694,692 |
99,965,801 |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
230,703,548 |
148,226,533 |
|
|
|
|
|
| OTHER
CHARGES |
|
|
|
| Financial
charges |
|
23 |
160,055,369 |
120,079,987 |
|
| Donation |
|
24 |
516,000 |
570,950 |
|
| Workers'
profit participation fund |
|
|
3,506,6 |
