Mission Statement - yousufdewan.comyousufdewan.com/DMTML/Financial Highlights/dmtml/Annual...

Mission Statement

The Mission of Dewan Mushtaq Textile Mills Limited is to be the finestOrganisation, and to conduct business responsibly

and in a straight forward way.

Our basic aim is to benefit the customers, employeesand shareholders and to fulfill our commitments to the society.Our hallmark is honesty, innovation, teamwork of our peopleand our ability to respond effectively to change in all aspects

of life including technology, culture and environment.

We will create a work environment, which motivates, recognizesand rewards achievements at all levels of the Organisation

because

In Allah We Believe & In People We Trust

We will always conduct ourselves with integrityand strive to be the best.

CONTENTS

Company Information

Notice of Annual General Meeting

Directors Report

Financial Highlights

Statement of Compliance with the Best Practices of Code of Corporate Governance

Review Report to the Members on Statement of Compliance with Best Practices of

Code of Corporate Governance

Auditors Report

Balance Sheet

Profit and Loss Account

Statement of Comprehensive Income

Cash Flow Statement

Statement of Changes in Equity

Notes to the Accounts

Pattern of Share Holding

Form of Proxy

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9

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40

COMPANY INFORMATION ANNUAL REPORT 2011

1

Board of Directors

Audit Committee

Auditors

Company Secretary

Chief Financial Officer

Tax Advisors

Legal Advisor

Bankers

Registered Office

Factory Office

Shares Registrar &Transfer Agent

:

:

:

:

:

:

:

:

:

:

:

Dewan Mohammad Yousuf FarooquiChairman, Board of Directors

Dewan Abdul Baqi FarooquiChief Executive Officer

Dewan Abdullah Ahmed Farooqui

Dewan Abdul Rehman Farooqui

Dewan Asim Mushfiq Farooqui

Syed Muhammad Salahuddin

Mehmood ul Hassan Asghar

Sharif & Co.Advocates

Muslim Commercial Bank LimitedHabib Bank LimitedSilk Bank Limited

A-30, S.I.T.E., Hyderabad,Sindh Pakistan.

Mr. Haroon Iqbal

Mr. Aziz-ul-Haque

Dewan Abdul Rehman Farooqui - ChairmanMr. Haroon Iqbal - MemberMr. Aziz-ul-Haque - Member

Feroze Sharif Tariq & Co.Chartered Accountants4/N/H Block-6, P.E.C.H.S.,Karachi.

A. K. Brohi & Co. Advocates

Bank Islami Pakistan Limited

Finance & Trade CentreBlock-A, 8th Floor,Shahrah-e-Faisal,Karachi.

BMF Consultants Pakistan (Private) Ltd.Anum Estate Building, Room No. 310 & 311,3rd Floor, 49, Darul Aman Society, Main Shahrah-e-Faisal, AdjacentBaloch Colony Bridge, Karachi-75350, Pakistan

DEWAN MUSHTAQ TEXTILE MILLS LIMITED

NOTICE OF 50THANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Fiftieth Annual General Meeting of Dewan Mushtaq Textile Mills Limited (“DMTML” or “the Company”) will be held on Wednesday, October 26, 2011, at 11:00 a.m. at Dewan Cement Limited Factory Site, at Deh Dhando, Dhabeji, District Malir, Karachi, Pakistan; to transact the following businesses upon recitation from Holy Qur'aan and other religious recitals:

1. To confirm the minutes of the preceding General Meeting of the Company held on Friday, October 29, 2010;

2. To receive, consider, approve and adopt the annual audited financial statements of the Company for the year ended June 30, 2011, together with the Directors' and Auditors' Reports thereon;

3. To appoint the Statutory Auditors' of the Company for the ensuing year, and to fix their remuneration;

4. To consider any other business with the permission of the Chair.

Date : September 30, 2011Place : Karachi

NOTES:1. The Share Transfer Books of the Company will remain closed for the period from October 20, 2011 to October 26,

2011 (both days inclusive).

2. Members are requested to immediately notify change in their addresses, if any, at our Shares Registrar Transfer rdAgent BMF Consultants Pakistan (Private) Limited, located at Anum Estate Building, Room No. 310 & 311, 3

Floor, 49, Darul Aman Society, Main Shahrah-e-Faisal, adjacent to Baloch Colony Bridge, Karachi, 75350, Pakistan.

3. A member of the Company entitled to attend and vote at this meeting, may appoint another member as his/her proxy to attend and vote instead of him/her. Proxies, in order to be effective, must be received by the Company at the abovesaid address, not less than 48 hours before the meeting.

4. CDC Account holders will further have to observe the following guidelines, as laid down in Circular 01 dated January 20, 2000, issued by the Securities and Exchange Commission of Pakistan:

a) For Attending Meeting:i) In case of individual, the account holder or sub-account holder, and/or the person whose securities are in group

account and their registration details are uploaded as per the regulations, shall authenticate his/her identity by showing his/her original National Identity Card (CNIC), or original passport at the time of attending the meeting.

ii) In case of corporate entity, the Board of Directors' resolution/power of attorney, alongwith the specimen signature of the nominee, shall be produced (unless it has been provided earlier) at the time of meeting.

2

By Order of the Board

Syed Muhammad SalahuddinCompany Secretary

ANNUAL REPORT 2011


3

b) For Appointing Proxies:i) In case of individual, the account holder or sub-account holder, and/or the person whose securities are in group

account and their registration details are uploaded as per the regulations, shall submit the proxy form as per the above requirements.

ii) Two persons, whose names, addresses, and CNIC numbers shall be mentioned on the form, shall witness the proxy.

iii) Attested copies of CNIC or passport of the beneficial owners and proxy shall be furnished alongwith the proxy form.

iv) The proxy shall produce his/her original CNIC or original passport at the time of the meeting.

v) In case of corporate entity, the Board of Directors' resolution/power of attorney, alongwith the specimen signature of the nominee, shall be produced (unless it has been provided earlier) along with the proxy form to the Company.

ANNUAL REPORT 2011


DIRECTORS’ REPORT

IF YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN)

IN THE NAME OF ALLAH; THE MOST GRACIOUS AND MERCIFUL

4

ANNUAL REPORT 2011


Dear Shareholder(s),Assalam-o-Alykum!

The Board of Directors, other members of the management of your Company are pleased to present the Annual Audited Financial Statements of the Company for the year ended June 30, 2011 together with the Auditors' Report thereon.

Operating results and performance:The operating results for the year under review are as follows:

SALES (NET)

COST OF SALES

GROSS PROFIT

OPERATING EXPENSES

OTHER OPERATING INCOME

OPERATING LOSS

FINANCE COST

LOSS BEFORE TAXATION

TAXATION

PROFIT AFTER TAXATION

1,504,372,543

(1,473,868,870)

30,503,673

(32,774,956)

529,167

(1,742,116)

(299,123)

(2,041,239)

13,029,287

10,988,048

"Rupees”

The turnover of the Company has increased by Rs 452.82 million as compared to the last year. Company has earned gross profit of Rs 30.50 million and suffered pretax loss of Rs 2.04 million during the year as compared to gross profit of Rs 71.67 million and pretax profit of Rs 38.09 million of previous year.

The year under review has been the most unusual in the recent history of textile industry. The volatility in the market witnessed during the current year has never been witnessed before. Among the various inputs, the textile industry uses, cotton prices fluctuated the most. At the start of the financial year, cotton price prevailing in the market was around Rs 4,500/maund, afterwards owing to its unprecedented increasing trends it peaked in March at Rs 14,000/maund. But later on during the last quarter of the year cotton prices dropped back to Rs. 5,000/maund causing considerable losses to the textile industry. Your company had to put extraordinary endeavors to come out of above adverse scenario and record a gross profit for the year under review, while working capital limits from lenders were not available to enable it to buy its raw material at the commencement of cotton season when the prices of cotton were at the lowest. Additionally, during the year, profitability of the company suffered due to increase in cost of production, increase in prices of gas, electricity, salary and wages, freight and transportation. Increased cost of stores spares and packing material has also affected the company results.

As far as loans of banks/financial institutions are concerned, two recovery suits were instituted in the past by Banks/Financial Institutions alleging default of the company which are being successfully defended by our Counsels, who are all of well repute. The respective counsels have already filed their respective submissions in respect of litigations / suits being handled by them and all of them are of the opinion that these suits can be successfully defended on legal grounds. It may also be pointed out that there is vested interest working to destabilize our company and is instrumental in bringing about cartelization in Banks/Financial Institutions to achieve their vested interest by trying to engineer alleged default of the Company. We have also instituted suits and complaints against them in courts/forums of appropriate jurisdictions.

DIRECTORS’ REPORT

5

ANNUAL REPORT 2011


The Auditors have qualified the report due to significance of the matter as referred in Para (a) of the Auditors Report. The management has explained the status of matter in respective notes to the financial statements. The management is fully confident that the company will have favorable decisions from concerned courts.

Future OutlookOnce again flood in the country has caused devastating effects on the economy of the country. This flood has also destroyed vast area of agriculture land, especially the cotton growing area. Almost 35% of the total output of cotton has been destroyed, which will further push up the prices of the cotton. Due to these facts, it seems that coming financial year will be a difficult one for the textile industry in Pakistan.

Human ResourceManagement of the Company has a clear vision that human resources and strong leadership practices are important enablers of high productivity and sustainable competitive advantage of our Company. Therefore, management of the Company gives much importance to the optimal use of human resources by way of proper guidance, motivation and incentive schemes for the employees.

Post Balance Sheet EventsSubsequent to the balance sheet date proposed financial restructuring of banking facilities have entered the final stage of negotiations and will be closed in near future.

There has been no other event subsequent to the balance sheet date that would require an appropriate disclosure or adjustment to the financial statements referred herein.

Statement of Compliance under Code of Corporate Governance Security and Exchange Commission of Pakistan framed a code of corporate governance, which was incorporated through the listing regulations of all stock exchanges of the country. The directors of your Company have ensured implementation of all provisions of code of corporate governance applicable for the period ended June 30, 2011.

Review report on statement of Compliance with code of corporate governance of Auditors is annexed with this report.

Directors of the Company are pleased to confirm that there is no material departure from the best practices as detailed in the listing regulations.

1. The financial Statements presented by the management of the Company give a fair account of the state of affairs, the results of its operations, cash flow and changes in equity.

2. Proper books of accounts have been maintained as required under the Companies Ordinance, 1984.

3. Accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.

4. International Financial Reporting Standards as applicable in Pakistan have been followed in preparation of financial statements and any departure there from, if any, has been adequately disclosed.

5. The system of internal controls, which is in place, is sound in design and has been effectively implemented and monitored.

6. The fair value of investment of Provident Fund Trust as on June 30, 2011 is Rs.3,207,242/-

7. The management has explained their views in detail regarding the going concern ability of the Company in note 1.1 to the annexed financial statements.

8. There has been no material departure from the best practices of the corporate governance.

DIRECTORS’ REPORT

6

ANNUAL REPORT 2011


9. The Company has constituted an Audit Committee from amongst the non-executive members of its Board.

10. The Board has prepared and circulated a Statement of Ethics and Business Practices amongst its members and the company's employees.

11. As required under the Code of Corporate Governance, the following information has been presented in this report:

i) Pattern of Shareholding;ii) Shares held by associated undertaking and related persons;

BoardThe Board of Directors comprises of individuals with diversified knowledge who endeavor to contribute towards the aim of the Company with the best of their abilities. During the year four meetings of the Board were held. The attendance of directors was as follows:

Names

Dewan Muhammad Yousuf Farooqui

Dewan Abdul Baqi Farooqui

Dewan Asim Mushfiq Farooqui

Dewan Abdullah Ahmed Farooqui

Dewan Abdul Rehman Farooqui

Mr. Haroon Iqbal

Mr. M. A. Lodhi

No. ofMeetingsattended

3

4

2

2

4

4

3

Leave of absence was granted to directors who could not attend these meetings.

Earnings per ShareEarnings per share during the period under report worked out to Rs. 3.20 (2010: Rs.10.32)

Appointment of AuditorsThe present auditors, M/s. Feroze Sharif Tariq & Co., Chartered Accountants, Karachi, retire and being eligible for reappointment under the Companies Ordinance, 1984, and the Code of Corporate Governance issued by the Securities and Exchange Commission of Pakistan, have offered themselves for the same. The Board of Directors of your company, based on the recommendations of the Audit Committee of the board, propose M/s. Feroze Sharif Tariq & Co., Chartered Accountants, for reappointment as auditors of the company for the ensuing year.

Pattern of ShareholdingThe prescribed shareholding information, both under the Companies Ordinance, 1984, and the Listing Regulations, vis-à-vis, Code of Corporate Governance, is attached at the end of this report.

Dewan Muhammad Yousuf FarooquiChairman / Director

DIRECTORS’ REPORT

7

LO-MY LORD IS INDEED HEARER OF PRAYER (HOLY QURAN)

Date: September 30, 2011Place: Karachi.

By and under Authority of the Board of Directors

ANNUAL REPORT 2011


Key operating and financial dataKey operating and financial data for preceding six years is annexed.

Vote of Thanks & Conclusion

On the behalf of the Board, I appreciate the valuable, loyal, and commendable services rendered to the Company by its executives, members of the staff and workers.

In conclusion, we bow, beg and pray to Almighty Allah, Rahman-o-Ar-Rahim, in the name of our beloved Prophet Muhammad (peace be upon him) for the continued showering of his blessings, guidance, strength, health, and prosperity to us, our company, country and nation; and also pray to Almighty Allah to bestow peace, harmony, brotherhood, and unity in true Islamic spirit to whole of the Muslim Ummah; Ameen; Summa Ameen.

FINANCIAL HIGHLIGHTS

8

2006 2007 2008 2009 2010

Sales (Net) 1,065 1,136 1,570 1,034 1,052

Gross Profit 96 94 76 37 72

Profit / (Loss) before Tax 20 16 3 (78) 38

Profit / (Loss) After Tax 11 10 (8) (69) 35

Assets Employed 1,436 1,381 896 724 808

Return on Equity 3.12% 3.01% (3.64%) (77.25%) 27.15%

Current Assets 821 802 458 389 504

Shareholder's Equity 345 342 223 90 130

Deferred Liabilities 58 56 56 55 52

Current Liabilities 1,033 982 618 392 542

Gross Profit Ratio (%) 8.99% 8.24% 4.84% 3.55% 6.82%

Net Profit / (Loss) Ratio (%) 1.01% 0.91% (0.52%) (6.70%) 3.37%

Earning / (Loss) per Share (Rs.) 3.13 3.00 (2.36) (20.19) 10.32

Dividend (%)cash - - - - - stock 10% - - - -

ProductionActual Production atActual Average Count (kg) 7,089,662 7,259,365 6,981,430 6,033,631 5,218,949

Actual Production Converted to 20 Count (kg) 12,617,208 11,923,759 11,062,114 9,492,977 10,442,000

(Rupees in Million)

ANNUAL REPORT 2011


2011

- -

1,504

31

(2)

11

855

6.74%

553

163

22

669

2.03%

0.73%

3.20

6,222,569

11,756,662

STATEMENT OF COMPLIANCE WITH THE CODE OFCORPORATE GOVERNANCE FOR THE PERIOD ENDED JUNE 30, 2011

This statement is being presented to comply with the code of Corporate Governance contained in listing regulations of Karachi Stock Exchange for the purpose of establishing the framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance.

The company has applied the principles contained in the Code in the following manner:

1. The company encourages representation of Independent non-executive directors. At present, the Board includes four non-executive directors.

2. The directors have confirmed that none of them is serving as a director in more than ten listed companies, including Dewan Mushtaq Textile Mills Limited.

3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a member of stock exchange, has been declared as a defaulter by that Stock Exchange.

4. Casual vacancies occurring in the board during the Financial year were duly filled up by the Board.

5. The Company has prepared a 'Statement of Ethics and Business Practices', which has been signed by all the directors and employees of the company.

6. The board has developed a vision / mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained.

7. All the powers of the Board have been duly exercised and decision on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors, have been taken by the Board.

8. The meetings of the board were presided over by the Chairman, if he is available, and the Board met once in every quarter. Written notices of the Board meetings, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated.

9. The Board arranged an orientation course for its directors during the year to appraise them of their duties and responsibilities.

10. The directors report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed.

11. The Financial Statement of the Company were duly endorsed by CEO and CFO before approval of the Board.

12. The directors, CEO and executives do not hold any interest in the shares of the Company other than that has already been disclosed in the pattern of shareholder.

13. The company has complied with all the corporate and financial reporting requirements of the code.

14. The Board has formed an audit committee. It comprises three members, including the chairman.

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ANNUAL REPORT 2011


15 The meetings of the audit committee were held at least once every quarter prior to the approval of interim and final results of the Company and as required by the Code. The terms of reference to the committee have been formed and advised to the committee for compliance.

16. The Board has set-up an effective internal audit function.

17. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan.

18. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard.

19. We confirm that all other material principles contained in the Code have complied with.

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Date : September 30, 2011Place : Karachi

ANNUAL REPORT 2011


Dewan Muhammad Yousuf FarooquiChairman / Director

REVIEW REPORT TO THE MEMBERS ON THE STATEMENT OF COMPLIANCEWITH BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE

11

Feroze Sharif Tariq & CompanyChartered Accountants

Audit Engaging Partner: Mohammad TariqDate : September 30, 2011Place : Karachi

We have reviewed the 'Statement of Compliance with the Best Practices' contained in the 'Code of Corporate

Governance' prepared by the Board of Directors of Dewan Mushtaq Textile Mills Limited to comply with the

respective Listing Regulation No(s). 37 of the Karachi Stock Exchange (Guarantee) limited, where the company is

listed.

The responsibility for compliance with the 'Code of Corporate Governance' is that of the board of directors of the

company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the

'Statement of Compliance' reflects the status of the company's compliance with the provisions of the 'Code of Corporate

Governance' and report if it does not. A review is limited primarily to inquiries of the company personnel and review of

the various documents prepared by the company to comply with the code.

As part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal

control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special

review of the internal control system to enable us to express an opinion as to whether the board's statement on internal

control covers all controls, and the effectiveness of such controls.

Further, Sub-Regulation (xiii) of Listing Regulation on 35 (previously Regulation no 37) notified by The Karachi Stock

Exchange (Guarantee) Limited vide circular KSE/N-269 dated 19 January 2009 requires the Company to place before

the Board of Directors for their consideration and approval, related party transactions distinguishing between

transactions carried out on term equivalent to those that prevail in arm's length transactions and transactions which are

not executed at arm's length price recording proper justification for using such alternate pricing mechanism. Further, all

such transactions are also required to be separately placed before the audit committee. We are only required and have

ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and

placement of such transactions before the audit committee. We have not carried out any procedures to determine whether

the related party transactions were undertaken at arm's length price or not.

Based on our review nothing has come to our attention, which causes us to believe that the 'Statement of Compliance'

does not appropriately reflect the company's compliance, in all material respects, with the best practices contained in the

Code of Corporate Governance as applicable to the company for the year June 30, 2011.


AUDITORS' REPORT TO THE MEMBERS

12

We have audited the annexed Balance Sheet of Dewan Mushtaq Textile Mills Limited, as at June 30, 2011, and related

Profit and Loss account, Statement of Comprehensive Income, Cash Flow Statement and Statement of Changes in

Equity together with the 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 purpose of our audit.

It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare

and present the above said statements in conformity with the approved accounting standards and the requirements of the

Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that

we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in

the above said statements. An audit also includes assessing the accounting policies and significant estimates made by

management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit

provides a reasonable basis for our opinion and, after due verification, we report that:

a) The company has not made provision of markup for the year amounting to Rs. 62.209 million (refer note 27.1).

Had the provision of markup been made in the financial statements, the profit after taxation of the company

amounting to Rs. 10.988 million would have been converted to loss after taxation of Rs. 51.221 million and

markup payable would have been higher and shareholders' equity would have been lower by Rs. 121.191

million.

b) in our opinion, proper books of account have been kept by the company as required by the Companies

Ordinance, 1984;

c) in our opinion:

i) the Balance Sheet and Profit & Loss Account together with the notes thereon 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 the 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;


Feroze Sharif Tariq & CompanyChartered Accountants

13

Audit Engaging Partner: Mohammad TariqDate : September 30, 2011Place : Karachi

d) in our opinion, except for the matter discussed in paragraph (a) and its effect, the financial statements give a true

and fair view of the financial position of the company at June 30, 2011 and to the best of our information and

according to the explanations given to us, the Balance Sheet, Profit & Loss Account, statement of

Comprehensive income, Cash Flow Statement and Statement of Changes in Equity together with the notes

forming part thereof conform with approved accounting standards as applicable in Pakistan, and, g ive 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, 2011 and of the profit its Comprehensive

income, Cash flows and Changes in Equity for the year then ended; and

e) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980.

f) Without further qualifying our opinion we draw attention to note 1.1 to the financial statements, which

indicates that the company made net profit of Rs. 10.988 million with out providing the markup as disclosed in

para 'a' above during the year ended June 30, 2011; and its Current liabilities exceeded its current assets by Rs.

116.033 million, lenders (Banks and Financial institutions) of the company have filed suits to recover amount

of Rs. 675.665 million through sale of hypothecated assets of the company as disclosed in note 13.2 to the

financial Statements. These conditions, along with other matters as set forth in note 1.1, indicate the existence

of a material uncertainty which may cast significant doubt about the company's ability to continue as going

concern.


Director Dewan Abdul Rehman FarooquiDewan Muhammad Yousuf Farooqui

Chairman / Director

Statement under section 241(2) of The Companies Ordinance, 1984The Chief Executive Officer of the Company is presently out of the country. Therefore, these financial statementshave been signed by the two directors of the Company duly authorised by the Board of Directors.

BALANCE SHEET BALANCE SHEET AS AT JUNE 30, 2011

14

ANNUAL REPORT 2011


June 30,2011

June 30,2010

EQUITY AND LIABILITIES

CAPITAL & RESERVES

Authorized

10,000,000 (2010: 10,000,000) Ordinary Shares of Rs. 10/- each 100,000,000 100,000,000

Issued, Subscribed and Paid-up Capital 6 34,340,280 34,340,280

General Reserve - (a Revenue Reserve) 45,000,000 45,000,000

Unappropriated Profit 83,797,063 51,156,690

163,137,343 130,496,970

NON-CURRENT LIABILITIES

Long Term Finance - Secured 7 -- 83,333,334

Deferred Liabilities

Provision for Staff Gratuity 8 22,398,798 23,064,795

Deferred taxation 9 -- 28,725,622

22,398,798 51,790,417

CURRENT LIABILITIES

Trade and Other Payables 10 157,247,042 152,297,619Mark-up accrued on loans 40,513,694 40,513,694

Current Portion of Long Term Loan 7 250,000,000 166,666,666

Short Term Borrowings - Secured 11 190,984,311 167,934,836

Provision for Income Tax 12 30,588,024 14,891,689

669,333,071 542,304,504Contingencies and Commitments 13

854,869,212 807,925,225

ASSETS

NON-CURRENT ASSETS

Tangible Fixed Assets 14 248,882,074 273,092,284Available for Sale Investment - at fair value 15 51,846,392 30,194,067Long Term Deposits 840,510 840,510

CURRENT ASSETS

Stores, Spares and Loose Tools 16 15,373,478 8,091,514Stock-in-Trade 17 93,868,141 116,046,182Trade Debts - Considered Good 18 376,748,922 336,672,619Loans and Advances - Unsecured, Considered good 19 8,514,613 8,805,760Trade Deposits, Prepayments and Statutory Balances - Considered good 20 27,900,569 9,728,604Other Receivables - Unsecured, Considered good 2,222,226 6,563,949Income Tax Refunds and Advances - net 25,463,025 15,105,042Cash and Bank Balances 21 3,209,262 2,784,694

553,300,236 503,798,364

854,869,212 807,925,225

(Rupees)Notes

Shareholders Equity

The annexed notes form an integral part of these financial statements

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2011

15

ANNUAL REPORT 2011


2011 2010

SALES - Net 22 1,504,372,543 1,051,557,562

Cost of Sales 23 (1,473,868,870) (979,882,248)

Gross Profit 30,503,673 71,675,314

Operating Expenses

Administrative and General Expenses 24 (27,898,620) (18,000,157)

Distribution Costs and Selling Expenses 25 (4,876,336) (8,134,503)

(32,774,956) (26,134,660)

(2,271,283) 45,540,654

Other Operating Income 26 529,167 62,197

(Loss) / Profit from Operations (1,742,116) 45,602,851

Finance Cost 27 (299,123) (763,216)

Other Charges 28 -- (2,241,982)

Impairment in investment -- (4,505,677)

(299,123) (7,510,875)

(Loss) / Profit before taxation (2,041,239) 38,091,976

Taxation

- Current (15,696,335) (5,261,872)

- Deferred 28,725,622 2,601,380

13,029,287 (2,660,492)

Profit after taxation 10,988,048 35,431,484

Earning Per Share - Basic 29 3.20 10.32


(Rupees)Notes


Chairman / Director


STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED JUNE 30, 2011

16

ANNUAL REPORT 2011


2011 2010

10,988,048 35,431,484

Other comprehensive Income:

Available for sale financial assets.

- Changes in fair value 21,652,325 -

- Reversal of impairment loss - 794,580

- Impairment charged to profit and loss. - 4,505,677

21,652,325 5,300,257

32,640,373 40,731,741


Net profit / (loss) for the year

Total comprehensive income for the year


Chairman / Director


CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2011

17

ANNUAL REPORT 2011


2011 2010

CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) before Taxation (2,041,239) 38,091,976

Adjustment for Non-Cash and Other Items:

Depreciation 28,106,421 31,252,772Gain on Sale of Fixed Assets (426,878) (62,197)Impairment Loss -- 4,505,677Provision for Gratuity 4,190,207 7,588,972Finance Cost 299,123 763,216

32,168,873 44,048,440

30,127,634 82,140,416Working Capital Changes

(Increase) / Decrease in Current Assets

Stores, Spares and Loose Tools (7,281,964) 1,483,348

Stock-in-Trade 22,178,041 (3,926,498)

Trade Debts (40,076,303) (113,063,986)

Loans and Advances 291,147 7,653,807Trade deposits, Prepayments & Statutory balances (18,171,965) (3,139,865)

Other Receivables 4,341,723 (2,242,894)

Increase / (Decrease) in Current Liabilities

Trade and Other Payables 4,949,423 44,564,343

(33,769,898) (68,671,745)

Taxes Paid - net of refunds (10,357,983) (4,366,825)

Gratuity Paid (4,856,204) (8,195,944)

(15,214,187) (12,562,769)

Net Cash Inflow/ (Outflow) from Operating Activities (18,856,451) 905,902

CASH FLOW FROM INVESTING ACTIVITIES

Fixed Capital Expenditure (4,538,705) (63,950)

Sale Proceed of Fixed Assets 1,069,372 95,000

Net Cash Inflow / (Outflow) from Investing Activities (3,469,333) 31,050

CASH FLOW FROM FINANCING ACTIVITIES

Long Term Financing -- --Dividend Paid -- --Finance Cost Paid (299,123) (763,216)

Net Cash Inflow/ (Outflow) from Financing Activities (299,123) (763,216)

Net (decrease) / Increase in Cash and Cash Equivalents (22,624,907) 173,736Cash and Cash Equivalents at the Beginning (165,150,142) (165,323,878)

Cash and Cash Equivalents at the End (Note 33) (187,775,049) (165,150,142)


(Rupees)


Chairman / Director


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2011

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ANNUAL REPORT 2011


Share

Capital

General

Reserve

Impairment

Loss/Gain on

available for

sale

investment

Unappropriate

d Profit

Total

Balance as on July 01, 2009 34,340,280 45,000,000 (5,300,257) 15,725,206 89,765,230

Total comprehensive income for the year -- -- 5,300,257 35,431,484 40,731,740

Balance as on June 30, 2010 34,340,280 45,000,000 -- 51,156,690 130,496,970

Balance as on July 01, 2010 34,340,280 45,000,000 -- 51,156,690 130,496,970

Total comprehensive income for the year -- -- 21,652,325 10,988,048 32,640,373

Balance as on June 30, 2011 34,340,280 45,000,000 21,652,325 62,144,738 163,137,343


Rupees


Chairman / Director


NOTES TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 2011

1. Corporate InformationDewan Mushtaq Textile Mills Limited (the Company) was incorporated in Pakistan, as a public limited company on November 04, 1970, under the Companies Act, 1913 (Now the Companies Ordinance, 1984) and its shares are listed on the Karachi Stock Exchange in Pakistan. The registered office of the company is located at Finance & Trade Centre, Block-A 8th Floor, Shahrah-e-faisal, Karachi, Pakistan; while its manufacturing facilities are located at A-30, S.I.T.E., Hyderabad, Sindh, Pakistan. The Principal activity of the Company is trading, manufacturing and sale of yarn.

1.1 Going Concern AssumptionThe financial statements for the year ended June 30, 2011 reflect profit after taxation of Rs. 10.988 million without providing financial charges for the year amounting to Rs. 61.714 million as disclosed in note 27.1 to these financial statements. As of June 30, 2011, Company's current liabilities exceeded its current asset by Rs. 116.033 million. Furthermore, the Company is facing litigations with the lenders (Banks) as disclosed in note 13.2 to the financial statements, therefore, the banks have not renewed financing facilities/credit limits for the Company.

2 Statement of ComplianceThese financial statements have been prepared in accordance with approved accounting standards, as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail.

Standards, interpretations and amendments to approved accounting standards are effective during the year

The accounting policies adopted in the preparation of these financial statements are consistent with those of the previous financial year, except as follows:

The Company has adopted the following new amended IFRS and IFRIC interpretations which became effective during the year:

IFRS 2 - Group Cash -settled Share-based Based Payment ArrangementsIAS 32 - Financial Instruments: Presentation- Classification of Rights issues (Amendments)IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments

Improvements to various standards issued by IASB:

Issued in 2009IFRS 5 - Non current assets Held for Sale and Discontinued operationsIFRS 8 - Operating SegmentsIAS 1 - Presentation of Financial StatementsIAS 7 - Statement of Cash flows Presentation of Financial Statements IAS 17 - LeasesIAS 36 - Impairment of AssetsIAS 39 - Financial Instruments: Recognition and Measurement

The management is confident that the out come of the litigations filed by the banks / financial institutions will be in favor of the company. These financial statements have been prepared under going concern assumption as the aforesaid situation is temporary not permanent and would reverse in future.

Company approached its lenders for the restructuring of its entire debt in the past. The management believes that the restructuring proposal presented is workable and will be accepted by the lenders. At present the proposed financial restructuring of banking facilities have entered into the final stage of negotiations and will be closed in near future.

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ANNUAL REPORT 2011


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ANNUAL REPORT 2011


Issued in May 2010IFRS 3 - Business CombinationsIAS 27 - Consolidated and separate Financial Statements

The adoption of the above standards, amendments and interpretations did not have any effect on the financial statements.

The company has not early adpoted any standard, interpretations or amendment that has been issued but is not yet effective.

Standards, interpretations and amendments to approved accounting standards that are not yet effective:

The following revised standards, interpretations and amendments with respect to the approved accounting standards as applicable in Pakistan would be effective from the dates mentioned below against the respective standard, interpretation or amendment:

Standards, interpretations and amendments Effective date(accounting periods beginning on or after)

IAS - 1 Presentation of Financial statements - amendments to revise theway other comprehensive income Presentated January 01, 2011IFRS 7 Financial Instruments: Disclosures - Amendmentsenhancing disclosures about transfers of financial assets January 01, 2010IAS - 12 Income tax (Amendment)- Deferred taxes:Recovery of underlying assets. January 01, 2011IAS - 19 Employees Benefits- Amended Standard resultingfrom the post- employment benefits and termination benefits projects. January 01, 2011IAS - 24 Related Party Disclosures (Revised) January 01, 2011IFRIC 14 Prepayments of a Minimum FundingRequirements (Amendment) January 01, 2011

The Company expects that the adoption of the above revisions, interpretations and amendments of the standards will not affect the Company's financial statements in the period of initial application.

In addition to the above, amendments to various accounting standards have also been issued by the IASB . Such improvements are generally effective for accounting periods beginning on or after January 01, 2011. The Company expects that such improvements to the standards will not have any material impact on the Company's financial statements in the period of initial application.

Further, the following new standards have been issued by IASB which are yet to be notified by the SECP for the Purpose of applicability in Pakistan.

Standards IASB Effective date (Annual periods beginning on or after)

IFRS 9 - Financial Instruments January 01, 2015IFRS 10 - Consolidated financial Statements January 01, 2013IFRS 11 - Djoint Arrangements January 01, 2013IFRS 12 - Disclosure of interest in Other Entities January 01, 2013IFRS 13 - Fair Value Measurement January 01, 2013

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ANNUAL REPORT 2011


3 Significant Accounting Judgements, Estimates and AssumptionThe preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. Estimates and judgments are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

In the process of applying the Company’s accounting policies, management has made the following estimates and judgments which are significant to the financial statements:

3.1 Property, plant and equipmentEstimates with respect to residual values and depreciable lives and pattern of flow of economic benefits are based on the recommendation of technical team of the Company. Further, the Company reviews the value of the assets for possible impairment on an annual basis. Any change in the estimates in future years might affect the carrying amounts of the respective items of tangible fixed assets with a corresponding affect on the depreciation charge and impairment.

3.2 TaxationIn making the estimates for income taxes payable by the Company, the management considers applicable tax laws and the decisions of appellate authorities on certain cases issued in past. Deferred tax assets are recognized for all unused tax losses and credits to the extent that it is probable that taxable profit will be available against which such losses and credits can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

3.3 Stock-in-tradeThe Company reviews the Net Realizable Value (NRV) of stock-in-trade to assess any diminution in the respective carrying values.

3.4 Provision for doubtful receivablesA provision for impairment of trade and other receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of receivables. These estimates and underlying assumptions are reviewed on an ongoing basis.

3.5 Staff retirement benefitsCertain actuarial assumptions have been adopted as disclosed in note 8 to the financial statements for valuation of present value of defined benefit obligations and fair value of plan assets. Any changes in these assumptions in future years might affect unrecognized gains and losses in those years. The actuarial valuation involves making assumptions about discount rate, future salary increases and mortality rates.

4 Approval of Financial StatementsThese financial statements were approved by the Board of Directors and authorized for issue on October 04, 2010.

5 Summary of Significant Accounting Policies

5.1 Basis of Measurement and PresentationThe financial statements have primarily been prepared under the historical cost convention without any adjustments for the effect of inflation or current values, except for the financial assets and liabilities which are carried at their fair values and certain employee benefits are based on actuarial valuation and stock in trade which are valued at net realizable value, if it is less than the cost. Further, accrual basis of accounting is followed except for cash flow information.

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ANNUAL REPORT 2011


5.2 Post Employment BenefitsDefined Benefit PlanThe Company operates an unfunded gratuity scheme for its non-mangement staff. Provisions are made, based on actuarial recommendations. Actuarial valuation is carried out using the 'Projected Unit Credit' method, as required by International Accounting Standard 19 "Employee Benefits" in line with the recognition of the resulting actuarial gain or loss over a period of three years, the frequency of carrying out an actuarial valuation is three years.

Defined Contribution PlanThe company upto June 30, 2010 was operating an un-funded gratuity scheme for its management employees as well. Provision was made accordingly in the financial statements to cover obligations under the scheme. The Company has fully provided for the liability under the gratuity scheme as of June 30, 2010. Effective from July 01, 2010, the company has, in place of gratuity scheme, established a recognised provident fund for its permanent management staff. Equal contributions are being made in respect thereof by company and employees in accordance with the terms of of the fund.

5.3 Trade and Other PayablesTrade and other payables are stated at their cost.

5.4 TaxationCurrent YearProvision in respect of current year's taxation is based on the method of taxation prescribed under the Income Tax Ordinance, 2001, whereby taxable income is determined and tax charged at the current rates of taxation after taking into account tax credits and rebates available, if any, or the minimum tax liability determined under Section 113 of the Income Tax Ordinance, 2001, whichever is higher.

DeferredDeferred tax is provided using the liability method on all temporary differences at the balance sheet date, between the tax bases of assets and liabilities and their carrying amount for financial statements reporting purposes. Deferred tax liabilities are generally recognized for all temporary taxable differences.

Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date.

5.5 Property, Plant and Equipment- Owned

Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment losses, if any; except for lease hold land and capital works in progress which are stated at cost accumulated upto the balance sheet date.

- LeasedThe company accounts for fixed assets acquired under finance leases by recording the assets and the related liability. These amounts are determined as the fair values or discounted value of minimum lease payments; whichever is the lower, as at inception, less accumulated depreciation and impairment losses. Financial charges are allocated to the accounting period in a manner so as to provide a constant periodic rate of charge on the outstanding liability.

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ANNUAL REPORT 2011


- DepreciationDepreciation is charged from the month of acquisition or transfer of assets from capital work in progress on proportionate basis and until disposal or retirement, using the reducing balance method whereby the cost of an asset is written off over its estimated useful life and the rates applied are in no case less than the rates prescribed by the Central Board of Revenue. The depreciation method and useful lives of the items of property, plant and equipment are reviewed periodically and altered if circumstances or expectations have changed significantly. Any change is accounted for as a change in accounting estimate by changing the depreciation charge for the current and future periods.

The assets' residual values and useful lives are reviewed at each financial year end, and adjusted , if appropriate, at each balance sheet date.

- Repairs, renewals and maintenanceMajor repairs and renewals are capitalized . Normal repairs and maintenance are charged as expense when incurred. Gains or losses on disposal or retirement of assets are determined as the difference between the sale proceeds and the carrying amounts of these assets, and are included in the income currently.

5.6 LeasesFinance leases, which transfer to the company, substantially all the risks and benefits incidental to ownership, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

5.7 Investment in Associated Companies (Available for sale)Available for sale investments are initially recognized at cost being the fair value of the consideration given including acquisition charges associated with.

After initial recognition, investment which are classified as available for sale are remeasured at fair value. Unrealized gains and losses on available for sale investments are recognized in equity till the investment is sold or otherwise disposed off, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in income.

5.8 Stores, Spares and Loose ToolsThese are stated at the lower of cost and net realizable value. The cost of inventory is based on the weighted average cost. Items in transit are stated at cost accumulated upto the date of the balance sheet.

Provision is made for any slow moving and obsolete items.

5.9 Stock-in-TradeThese are valued as follows :

Raw Material : At lower of weighted average cost or net realizable value. Cost of raw material and components represents invoice value plus other charges paid thereon.

Finished Goods : At lower of weighted average cost or net realizable value. Cost of finished goods comprises of prime cost and an appropriate portion of production overheads.

Waste : At net realizable value.Work-in-Process : At weighted average cost. This comprises the direct cost of raw materials,

wages, and appropriate manufacturing overheads.Stock in Transit : At cost accumulated upto the balance sheet date.Stock at fair price shop : At cost calculated on the First-in-first -out method of valuation.Packing Material : At lower of weighted average cost or net realizable value.

Net Realizable Value signifies the estimated selling price in the ordinary course of business less cost necessary to be incurred in order to make the sale.

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ANNUAL REPORT 2011


5.10 Trade Debts & Other ReceivablesTrade debts originated by the company are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for a doubtful receivable is made when collection of the whole or part of the amount is no longer probable. Bad debts are written off as incurred.

5.11 Foreign Currency TranslationTransactions in foreign currencies are initially recorded using the rates of exchange ruling at the date of transaction. Monetary assets and liabilities in foreign currencies are translated into Rupees at the exchange rates prevailing on the balance sheet date. In order to hedge its exposure to foreign exchange risks, the company enters into forward exchange contracts. Such transactions are translated at contracted rates. All exchange differences are included in the Profit and Loss Account.

5.12 Revenue Recognition- Revenue from sales is recognized on dispatch of goods to customers.

- Dividend income is recognized on the basis of declaration by the Investee company.

5.13 Borrowing CostBorrowing Costs are recognized initially in fair value net of transaction costs incurred.

Borrowing cost directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets until such time the assets are substantially ready for their intended use. All other borrowing costs are charged to income in the period in which they are incurred.

5.14 ProvisionsA provision is recognized in the balance sheet when the company has a legal or constructive obligation, and, as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and that a reliable estimate can be made for the amount of this obligation.

5.15 Financial InstrumentsRecognitionAll financial assets and liabilities are recognized at the time when the company becomes a party to the contractual provisions of the instrument. Any gain or loss on derecognition of the financial assets and financial liabilities are taken to profit and loss account to which it arises.

Off SettingFinancial asset and financial liability is set off and the net amount is reported in the balance sheet if the company has a legal right to set off the transaction and also intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. Corresponding income on assets and charge on liability is also offset.

DerivativesDerivatives that do not qualify for hedge accounting are recognized in the balance sheet at estimated fair value with corresponding effect to profit and loss. Derivative financial instruments are carried as assets when fair value is positives and liabilities when fair value is negative.

5.16 Cash and Cash EquivalentsCash and Cash Equivalents for cash flow purposes include cash in hand, current and deposit accounts held with banks. Running finances facilities availed by the company which are payable on demand and form an integral part of the Company's cash management are included as part of cash and cash equivalents for the purpose of statement of cash flows.

Provision for obsolete and slow moving stock is determined based on the management assessments regarding their future useability.

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ANNUAL REPORT 2011


5.17 Impairment of AssetsThe carrying amounts of the assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount, whereby the asset is written down and that impairment losses are recognized in the profit and loss account.

5.18 Related Party TransactionsAll transactions with related parties are carried out by the company at arm's length prices.

5.19 Loans, Advances and Other ReceivablesLoans, advances and other receivables are recognized initially at cost, and subsequently at their amortized/ residual cost.

5.20 Short Term and Long Term LoansLoans, advances and other receivables are recognized initially at cost, and subsequently at their amortized/ residual cost.

5.21 Dividend and appreciation to reservesDividends and appreciations to reserves, subsequent to the balance sheet date are considered as non-adjusting events and are recognised in the financial statements in the period in which such dividends and appropriations are approved.

6 Issued, Subscribed and Paid-up Capital

Fully Paid in cash 6,900,000 6,900,000

Issued as fully paid bonus shares 27,440,280 27,440,28034,340,280 34,340,280

June 30, June 30,

2011 2010(Rupees)No. of Ordinary Shares of Rs. 10/- each

2011 2010

690,000 690,000

2,744,028 2,744,0283,434,028 3,434,028

6.1 The shareholders are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at the meetings of the company. All shares rank equally in respect to the company's residual assets.

6.2 The pattern of shareholding, as required under the Code of Corporate Governance issued by the Securities and Exchange Commission of Pakistan, is attached at the end of this report.

7 Long term Finances secured

Term Finance 250,000,000 250,000,000Less Current maturity shown under current liability 250,000,000 166,666,666

-- 83,333,334

The company has obtained loan Term finance facility against santioned limited of 250 million from commercial Bank. It secured by way of first ranking charge over fixed assets of the company for Rs. 334 million margin 25% to be upgraded ti 1st pari passu with in 60 days from date of disbursement. It carries markup at the rate of three month KIBOR plus 3.5% payable quarterly. It is repayable in 12 equal instalments commencing from October 26, 2009.

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ANNUAL REPORT 2011


8 Provision for Staff GratuityBalance at beginning 23,064,795 23,671,766Payments during the year 4,856,204 8,195,943

18,208,591 15,475,823Provision for the year 4,190,207 7,588,972

22,398,798 23,064,795

8.1 Balance Sheet ReconciliationPresent value of defined benefit obligations 7,295,395 7,487,091Add: Actuarial Gains 546,636 560,890Add: Benefits due but not paid 14,556,767 15,016,814

22,398,798 23,064,795

8.2 Charge for the YearService cost 3,291,754 6,039,066Interest cost 898,453 1,549,906

4,190,207 7,588,972

8.3 Principal Actuarial AssumptionExpected rate of increase in salaries 11 % per annum 11 % per annumDiscount factor used 12 % per annum 12 % per annumRetirement age 5 years 6 years

8.4 The charge for the year has been allocated as follows

Cost of Sales 4,190,207 6,846,890 Distribution Cost - 236,253 Administrative expenses - 505,828

4,190,207 7,588,972

8.2

9 Deferred TaxationThe liability for deferred taxation comprises of timing differences relating to:

Deferred tax liability arising due to accelerated tax depreciation 37,443,029 36,798,300

Deferred tax assets arising out of staff gratuity, tax loss and others (37,443,029) (8,072,678)

-- 28,725,622

June 30, June 30,

2011 2010(Rupees)

Note

9.1 The movement for the year, in the company's net deferred tax position was as follows:

Balance at beginning 28,725,622 31,327,002

Increase in deferred tax liabilities 644,729 (2,633,171)Decrease in deferred tax assets (29,370,351) 31,791Deferred tax for the year (28,725,622) (2,601,380)

-- 28,725,622

10 Trade and Other PayablesTrade Creditors 111,390,475 82,127,518

Accrued Expenses 45,548,248 67,619,800

Unclaimed Dividend 308,319 308,319

Workers' Profit Participation Fund 10.1 - 2,241,982

157,247,042 152,297,619

10.1 Workers' Profit Participation FundBalance as at 1st July 2,241,982 --Contribution for the year -- 2,241,982

2,241,982 2,241,982Payment made during the year (2,241,982) --Balance as at 30th June -- 2,241,982

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ANNUAL REPORT 2011


11 Short Term Borrowings - Secured

Short Term Running Finance 11.1 174,122,557 149,158,570Book Overdraft 11.2 16,861,754 18,776,266

190,984,311 167,934,836

11.1 The company has facilities for short term running finances under mark-up arrangements amounting to Rs. 150 million (2010: Rs. 150 million) from banks. The facility carries mark-up at the rate of 14.91%~16.30% (2010: 14.38 % ~15.51%) . These facilities are secured against joint hypothecation charge on stocks-in-trade and trade debts amounting to Rs. 200 million (2010: Rs. 200 million).and mark-up is payable on quarterly basis. Facility was not renewed by the bank.

The facility for opening of letters of credit as at June 30, 2011, amounted to Rs. 100 million (2010: Rs. 100 million).

The facility for post shipment export refinance as at June 30, 2011, amounted to Rs. 60 million (2010: Rs. 60 million). This facility is secured against lien on export bills/ contracts.

11.2 It represents unpresented cheques.

June 30, June 30,

2011 2010(Rupees)

Note

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ANNUAL REPORT 2011


12 Provision for TaxationBalance at the beginning 14,891,689 9,629,817Add: Provisions for Taxation

Current year 15,696,335 5,261,872

Less: Adjustment --

30,588,024 14,891,689

The income tax returns of the company has been filed upto tax year 2010 to income tax department and the assessments of the company have been finalized upto and including the tax year 2009. However, the commissioner of income tax may at any time during a period of five years from the date of filling of return may select the deemed assessment for audit.

12.1 Relationship between income tax expense and accounting profit

Accounting Profit as per accounts (2,041,239) 38,091,976

Applicable tax rate 35% 35%

Tax payable on accounting profit (714,434) 13,332,192

Tax effect of timing difference on depreciation 1,150,990 3,344,641

Tax effect of export sales subject to tax separately U/s.169 157,727 86,265

(233,099) 572,254

(361,184) (17,335,352)

Tax payable under normal rules -- --

12.2 Minimum tax payable under income tax ordinance 2001 15,696,335 5,261,872

13 Contingencies and Commitments13.1 Guarantees issued by banks Nil 18.288 million

Tax effect of expenses / provision that are not deductible indetermining taxable loss charged to profit and loss account

Effect of Loss carried / (brought) forward

13.2 In respect of loans disclosed in the financial statements, banks have filed suits in Honorable High Court of Sindh at Karachi for recovery of amounts to the extent of Rs. 675.665 million as its claim of loans, through attachment and sale of Company’s hypothecated / mortgaged properties The management has disputed the claims and is strongly contesting the cases. The management has filed counter claims alleging that the bank claim is highly exaggerated as it has charged markup on markup and other levies higher than the rate of markup agreed and other charges in violation of State Bank of Pakistan rules and all other applicable laws of Pakistan. The management is hopeful that the decision will be in favor of the company and the base less suits shall be rejected by the concerned court.

June 30, June 30,

2011 2010(Rupees)

Note

Particulars As at Additions / (Deletions) / As at

July 01, Transfers Transfers June

2010 30, 2011

Owned

Lease hold land 730,000 -- -- 730,000

Factory Building on 112,372,579 -- -- 112,372,579

lease hold land

Non Factory Building on 3,902,386 -- -- 3,902,386

lease hold land

Labour Quarters 6,823,847 -- -- 6,823,847

Plant and Machinery 576,172,848 4,538,706 580,711,554

Factory Equipments 1,690,465 -- -- 1,690,465

Vehicles 29,666,401 -- (1,412,000) 28,254,401

Furniture and Fixture 7,861,354 -- -- 7,861,3542011 739,219,880 4,538,706 (1,412,000) 742,346,586

2010 739,438,930 63,950 (283,000) 739,219,880

Cost

Rupees

Rate

% As at Adjustment / For the As at

July 01, Transfers Year June

2010 30, 2011

-- -- -- -- --

10 57,830,128 -- 5,454,245 63,284,373

--

5 2,084,571 -- 90,891 2,175,462

--

25 6,816,962 -- 1,721 6,818,683

10 371,990,532 -- 20,645,167 392,635,699

10 1,460,428 -- 23,004 1,483,432

20 21,134,349 (769,506) 1,605,511 21,970,354

10 5,002,527 -- 285,883 5,288,410 466,319,496 (769,506) 28,106,421 493,656,412

435,316,921 (250,197) 31,252,772 466,319,496

Depreciation

Rupees

2011 2010

RUPEES RUPEES

26,215,028 28,865,374

1,891,394 2,387,39828,106,421 31,252,772

OPERATING FIXED ASSETS - At Cost Less Accumulated Depreciation

Particulars As at As at

July 01, June

2009 30, 2010

Owned

Lease hold land 730,000 730,000

Factory Building on 112,372,579 112,372,579

lease hold land

Non Factory Building on 3,902,386 3,902,386

lease hold land

Labour Quarters 6,823,847 6,823,847

Plant and Machinery 576,172,848 576,172,848

Factory Equipments 1,633,515 1,690,465

Vehicles 29,949,401 29,666,401

Furniture and Fixture 7,854,354 7,861,3542010 739,438,930 739,219,880

2009 738,776,380 739,438,930

Cost

Rupees

Rate Written Down

% As at Adjustment / For the As at Value As At

July 01, Transfers Year June June

2009 30, 2010 30, 2010

-- -- -- -- -- 730,000

10 51,769,855 -- 6,060,272 57,830,128 54,542,451

--

5 1,988,896 -- 95,675 2,084,571 1,817,815

--

25 6,814,666 -- 2,295 6,816,962 6,886

10 349,303,608 -- 22,686,924 371,990,532 204,182,316

10 1,440,220 -- 20,208 1,460,428 230,037

20 19,314,082 (250,197) 2,070,464 21,134,349 8,532,052

10 4,685,594 -- 316,934 5,002,527 2,858,827435,316,921 (250,197) 31,252,772 466,319,496 272,900,384

400,345,933 -- 34,970,988 435,316,921 304,122,009

Depreciation

Rupees

14.1.1 Allocation of Depreciation

Depreciation for the year has been allocated as follows:

Cost of Sales

Administrative and General Expense

Written Down

Value As At

June

30, 2011

730,000

49,088,206

1,726,924

5,164

188,075,855

207,033

6,284,047

2,572,944248,690,174

272,900,384

Additions /

Transfers

--

--

--

--

--

56,950

--

7,00063,950

662,550

(Deletions) /

Transfers

--

--

--

--

--

(283,000)

-- (283,000)

--

29

ANNUAL REPORT 2011


14 Tangible Fixed Assets14.1 Property, Plant and Equipment 248,690,174 272,900,38414.2 Capital Works-in-Progress 191,900 191,900

248,882,074 273,092,284

14.1 Property, Plant and Equipment - At cost less accumulated depreciation

June 30, June 30,

2011 2010(Rupees)

30

ANNUAL REPORT 2011


14.1.2 Disposal of Fixed AssetsParticulars of operating assets having net book value exceeding Rs. 50,000 disposed of during the year are as follows:

Vehicle 1,412,000 769,506 642,494 1,069,372 426,878 negotiation employee

1,412,000 769,506 642,494 1,069,372 426,878

Sale ProceedsMode ofDisposal PurchaserDescription Cost

Accumulated

DepreciationWritten down

ValueGain / (Loss)

June 30, June 30,2011 2010

14.2 Capital Works-in-ProgressBuildings and Civil Works 191,900 191,900

191,900 191,900

(Rupees)

15 Long Term InvestmentShares in Dewan Salman Fibre Limited(A Listed Associated Company)19,864,518 (2010: 19,864,518) fully paid upordinary shares of Rs.10/- each.(including 15,864,518 bonus shares) 40,000,000 40,000,000

Deficit due to change in fair value of investments 11,846,392 (9,805,933)

Aggregate Market value as at June 30, 2011@ Rs. 2.61 (2010: Rs.1.52) per share

51,846,392 30,194,067

Percentage of Equity held 5.42% 5.42%

15.1 The market price of related company's share wherein company has investment shows decreasing trend from the date of balance sheet to the date the financial statements were authorized for issue. The market price of DSFL's share as of September 30, 2011 (i.e. the date on which the financial statements were authorized for issue) is Rs.1.94 per share, thereby decreasing the market value of the investment by Rs.13.309 million.

16 Stores, Spares & Loose ToolsStores and Spares 12,719,481 6,451,686Packing Material 2,653,997 1,639,828

15,373,478 8,091,514

June 30, June 30,2011 2010

(Rupees)

31

ANNUAL REPORT 2011


17 Stock-in-TradeRaw Materials 10,949,369 20,397,561Work-in-Process 11,576,237Finished Goods 69,067,226 84,382,272Waste 2,275,309 2,749,901

93,868,141 116,046,182

17.1 Stock-in-trade and trade debtors are under hypothecation as security for the company's short term finances (See Note 11.1)

18 Trade Debts - Considered GoodLocal Receivables - Unsecured 376,748,922 336,672,619

376,748,922 336,672,619

18.1 The aging of Debtors at the reporting date was:

Up to one month 150,699,569 124,568,8691 to 6 months 143,164,590 141,402,500More than 6 months 82,884,763 70,701,250

376,748,922 336,672,619

19 Loans and Advances - Unsecured, Considered GoodAdvances for Expenses 4,727,242 5,490,468Loans and Advances to employees 19.1 3,760,982 1,921,358Advance against imports 26,389 1,393,934

8,514,613 8,805,760

19.1 Advances include Rs.0.182 million (2010: Rs. 0.365 million) due from executive of the company and maximum aggregate amount due from executives at the end of any month during the year was Rs. 0.725 million (2010: Rs. 0.800 million).

Based on past experience the management believes that no impairment allowance is necessary in respect of trade debts due to major amount of trade debts have been recovered subsequent to the balance sheet date and for the rest of the trade debts management believes that the same will be recovered in short course of time. The credit quality of the company's receivable can be measured with their past performance of no default

June 30, June 30,

2011 2010(Rupees)

Note

8,516,448

32

ANNUAL REPORT 2011


20 Trade Deposits, Prepayments and Statutory Balances - Considered goodDeposits 20,944,662 2,715,744Prepayments -- 14,062Sales Tax Receivable 6,955,907 6,998,798

27,900,569 9,728,604

21 Cash and Bank BalancesCash in Hand 209,951 95,413Cash at Banks - Current Accounts 2,999,311 2,689,281

3,209,262 2,784,695

22 Sales - Net Yarn

- Local 1,486,851,467 1,050,665,680 - Export 11,846,160 --

Waste 7,701,166 1,708,635Gross Sales 1,506,398,793 1,052,374,315

Commission: - on Local Sales (1,909,974) (816,753) - on Export Sales (116,276) --

(2,026,250) (816,753)

1,504,372,543 1,051,557,562

23 Cost of SalesRaw Material Consumed 23.1 1,141,247,232 666,336,409Packing Material 23,074,491 14,314,377Stores and Spares Consumed 20,325,914 12,652,632Fuel and Power 95,870,937 86,707,850Salaries, Wages and Other Benefits 23.2 110,801,701 88,881,923Insurance 1,556,685 2,047,224Repairs and Maintenance 1,786,678 267,558Depreciation 14.1.1 26,215,028 28,865,374

1,420,878,666 900,073,347Work-in-Process - Opening 8,516,448 3,479,656Work-in-Process - Closing (11,576,237) (8,516,448)Cost of Goods Manufactured 1,417,818,877 895,036,555Finished Goods - Opening 87,132,173 104,449,065Purchase of Yarn 40,260,355 67,528,801Finished Goods - Closing (71,342,535) (87,132,173)

1,473,868,870 979,882,248

June 30, June 30,

2011 2010(Rupees)

Note

23.1 Raw Material ConsumedOpening Stock 20,397,561 4,190,963Purchases - net 1,131,799,040 682,543,007

1,152,196,601 686,733,970Closing Stock (10,949,369) (20,397,561)Raw Material Consumed 1,141,247,232 666,336,409

33

ANNUAL REPORT 2011


23.2 Salaries, wages and other benefits include Rs. 6.738 million (2010: Rs.6.847 million) relating to staff retirement benefits.

24 Administrative and General ExpensesSalaries, Allowances and Other Benefits 24.1 9,113,081 6,566,336Rent, Rates and Taxes 3,447,206 250,876Traveling, Conveyance and Entertainment 539,174 336,533Printing and Stationery 361,123 289,290Postage, Telephone and Telex 306,312 322,019Vehicles Expenses 2,813,798 2,100,747Legal and Professional Charges 2,024,866 556,483Fees and Subscription 283,480 194,527Depreciation 14.1.1 1,891,394 2,387,398Auditors Remuneration 24.2 390,000 390,000Repairs and Maintenance 3,088,699 3,993,948Donation 24.3 3,639,487 612,000

27,898,620 18,000,157

24.1 Salaries, allowances and other benefits include Rs. 0.578 million(2010: Rs.0.506 million) relating to staff retirement benefits.

24.2 Represents Audit fee (Annual, half yearly review and review of Code and corporate Governance) for the year.

24.3 Interest of the directors or their spouses in the donations made during the year is as follows:

Dewan Farooque Trust - related party 3,000,000 2,500,000

Dewan M. Yousuf Farooqui- Chairman board of Trustees

Dewan Abdul Baqi Farooqui - Trustee

Mr. Haroon Iqbal - Trustee

Mr. Aziz-ul-Haque - Trustee

Mrs. Hina Yousuf (Director’s Spouse) - Trustee

June 30, June 30,

2011 2010(Rupees)

Note

34

ANNUAL REPORT 2011


25 Distribution Costs and Selling ExpensesSalaries and wages 25.1 2,487,431 3,066,889Packing Expenses 868,860 552,215Cartage & freight 39,500 1,031,471Export Expenses 59,616 246,471Ocean Freight 399,452 --Advertisement & Publicity 57,190 42,642Others 964,287 3,194,815

4,876,336 8,134,503

25.1 Salaries, wages and other benefits include Rs. 0.282 million (2010: Rs.0.236 million) relating to staff retirement benefits.

26 Other IncomeExchange Gain 102,289Gain on Sale/ Disposal of Fixed Assets 426,878 62,197

529,167 62,197

27 Finance CostMark-up on Short Term Borrowings -- 117,870Mark up on Long Term -- --Discounting Charges on Sales -- 64,181Bank Charges and Commission 299,123 581,165 299,123 763,216

27.1 Company has not made the provision of markup on long term and short term borrowings from banks for the year ended June 30, 2011 amounting to Rs. 62.209 million keeping in view of the cases and litigations being faced with lenders as disclosed in note 13.2. Management is hopeful and feels that the decision of the court will be in favor of the company . However had the company provided this amount in the financial statements during the year the profit of the company would have been decreased by Rs. 62.209 million and consequently accrued markup would have been increased by the same amount.

28 Other ChargesWorkers Profit Participation Fund 10.1 -- 2,241,982

-- 2,241,982

29 Earnings Per Share - BasicProfit after Taxation 10,988,048 35,431,484

Weighted Average Number of Ordinary Shares 3,434,028 3,434,028

Earning Per Share - Basic Rupees 3.20 10.32

29.1 No figure for diluted earning per share has been presented as the company has not yet issued any instruments which would have an impact on basic earning per Share when exercised.

June 30, June 30,

2011 2010(Rupees)

Note

35

ANNUAL REPORT 2011


30 Remuneration of Chief Executive, Director and Executives

The aggregate amount charged in the accounts for remuneration, including all benefits, to the Chief Executive,Directors and Executives of the Company was as follows:

30.1 The Executives of the company is provided use of company maintained cars.

31 Related Party TransactionsSales 10.991 million 9.695 millionPurchases 47.040 million 79.191 millionDonation to Dewan Farooq Trust 3.000 million 0.600 million

All transactions were carried out on commercial terms and conditions and were valued at arm's length price.Reimbursement of expenses were on actual basis. Remuneration and benefits to key management personnelunder the terms of their employment are given in Note 30 above

32 Plant Capacity and Production

Particulars

Kgs Kgs

Actual production at actual average count 6,222,569 5,218,949

Actual production converted to 20 count 11,756,662 10,442,000

Attainable capacity converted to 20 count 12,375,434 10,522,629

Number of spindles installed 25,776 25,776

Number of spindles worked 24,809 23,714

Number of shifts worked 1,080 1,074

2011 2010

The main reason for reduction in capacity utilization was due to short supply of raw material to the plant causedby the working capital constraints.

Particulars

Chief Directors Executives Total Chief Directors Executives Total

Executive Executive

Managerial Remuneration -- -- 5,199,871 5,199,871 -- -- 1,218,914 1,218,914

Meeting fees -- -- -- -- -- -- -- --

House rent allowance -- -- 2,339,942 2,339,942 -- -- 548,511 548,511

Utilities allowance -- -- 519,987 519,987 -- -- 121,891 121,891

Conveyance -- 18,000 18,000 --

--

-- 900 900

Total -- -- 8,077,800 8,077,800 1,890,216 1,890,216

Number of persons -- -- 5 5 -- 3 3

June/11 June/10

Rupees Rupees

--

--

Provident Fund 3.410 million Nil

June 30, June 30,

2011 2010(Rupees)

36

ANNUAL REPORT 2011


33 Cash and Cash EquivalentsCash and Bank Balances 21 3,209,262 2,784,694Short term Borrowings 11 (190,984,311) (167,934,836)

(187,775,049) (165,150,142)

34 Financial InstrumentsThe Company has exposures to the following risks from its use of financial instruments:

Credit riskLiquidity riskMarket risk

The Board of Directors has overall responsibility for the establishment and oversight of Company’s risk management framework. The Board is also responsible for developing and monitoring the Company’s risk management policies.

34.1 Credit riskCredit risk is the risk that one party to the financial instruments will fail to discharge an obligation and cause the other party to incur a financial loss. The Company believes that it is not exposed to major concentration of credit risk. However, to reduce exposure to credit risk, if any, the management monitors the credit exposure towards the customers and makes provisions against those balances considered doubtful of recovery.

The maximum exposure to credit risk at the reporting date is:

Long term Investments 51,846,392 30,194,067Trade Debts - Considered Good 376,748,922 336,672,619Loans and Advances - Unsecured, Considered good 8,514,613 8,805,760Trade Deposits, Prepayments and Statutory Balances - Considered good 20,944,662 2,715,744Other Receivables - Unsecured, Considered good 2,222,226 6,563,949Cash and Bank Balances 2,999,311 2,689,281

463,276,126 387,641,420

34.2 Liquidity RiskLiquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure as far as possible to always have sufficient liquidity to meet its liability when due.

The company is exposed to liquidity risk in respect of non current interest bearing liabilities, short term borrowings, trade and other payable and mark up accrued.

June 30, June 30,

2011 2010(Rupees)

Note

37

ANNUAL REPORT 2011


Carrying Contractual cash Six months or Six to One year Two to five

amount flows less twelve onward years

Financial liabilities

250,000,000 414,198,059 (134,360,732) (33,675,799) (122,417,237) (123,744,291)

Trade and other payables 157,247,042 157,247,042 (64,471,287) (92,775,755) - -

Short term Borrowings 190,984,311 218,677,036 (218,677,036) - -

598,231,353 790,122,137 (417,509,055) (126,451,554) (122,417,237) (123,744,291)

Carrying Contractual cash Six months or Six to One year Two to five

amount flows less twelve onward years


250,000,000 414,198,059 (134,360,732.00) (33,675,799) (122,417,237) (123,744,291)

Trade and other payables 152,297,619 152,297,619 (62,442,024) (89,855,595) - -

Short term Borrowings 167,934,836 192,285,387 (192,285,387) - -

570,232,455 758,781,065 (389,088,143) (123,531,394) (122,417,237) (123,744,291)

2011

Rupees

Long term Finances

Long term Finances

2010

Rupees

The following are the contractual maturities of the financial liabilities, including estimated interest payments:

The contractual cash flows relating to the above financial liabilities have been determined on the basis of markup rates effective as at June 30, 2011. The rates of markup have been disclosed in relevant notes to the financial statements.

34.3 Market riskMarket risk is the risk that the value of a financial instrument will fluctuate resulting in as a result of changes in market prices or the market prices due to change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity in the market.

34.4 Currency riskForeign currency risk arises mainly due to conversion of foreign currency assets and liabilities into local currency. The Company is not materially exposed to foreign currency risk on foreign currency assets and liabilities.

34.5 Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of the financial instruments will fluctuate because of changes in market interest rates, majority of the interest rate exposure arises from short and long term borrowings from bank and term deposits and deposits in profit and loss sharing accounts with banks. At the balance sheet date the interest rate profile of the company's interest-bearing financial instruments are:

38

ANNUAL REPORT 2011


2011 2010

- -

- - 440,984,311 (405,803,939) 440,984,311 (405,803,939)

RupeesFixed rate instruments


Variable rate instruments

Financial assets

Carrying amounts

34.6 Risk management policiesRisk management is carried out by the management under policies approved by board of directors. The board provides principles for overall risk management, as well as policies covering specific areas like foreign exchange risk, interest rate risk and investing excessive liquidity.

34.7 Capital risk managementThe Company’s objective when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure the Company may adjust the amount of dividends paid to shareholders, issue new shares and take other measures commensuration to the circumstances.

Consistent with others in the industry, the company manages its capital risk by monitoring its debt levels and liquid assets and keeping in view future investment requirements and expectation of the shareholder. Debt is calculated as total borrowings ('long term loan' and short term borrowings' as shown in the balance sheet). total capital compises shareholders' equity as shown in the balance sheet under 'share capital and reserves'.

Total Borrowings 440,984,311 417,934,836Less Cash and Bank Balances 3,209,262 (2,784,694)Net debt 437,775,049 415,150,142Total equity 163,137,342 130,496,971Total Capital 600,912,391 545,647,113

Gearing ratio 72.85% 76.08%

39

ANNUAL REPORT 2011


34.8 Fair value of financial instrumentsFair value is an amount for which an assets could be exchanged, or a liability settled, between knowledgeable willing parties in arm's length transaction. Consequently, differences may arise between the carrying value and the fair value estimates.

As at the reporting date the fair value of all financial assets and liabilities are estimated to approximate their carrying values.

35 General i) Comparative figures have been rearranged and reclassified wherever necessary for the purpose of

better presentation and comparision. However, there was no material reclassification to report

ii) Figures have been rounded off to nearest rupee

iii) Items included in the financial statements are measured uding the currency of the primary economic envirement in which the company operates. The financial Statements are presented in Pakistani rupees, which is the Company's functional and Presentational currency.


Chairman / Director


PATTERN OF SHAREHOLDING UNDER REGULATION 37(XX) (I)OF THE CODE OF CORPORATE GOVERNANCE AS ON 30TH JUNE 2011

40

ANNUAL REPORT 2011


Srl # Categories of ShareholdersNumber of

Shareholders

Number of Shares

held

% of

Shareholding

1. Associated Companies 1 231,099 6.73%

2. NIT and ICP 6 334,823 9.75%

3. Directors, CEO, their Spouses & Minor Children 6 1,859,410 54.15%

4. Executives 2 1,000 0.03%

5. Public Sector Companies & Corporations 11 24,661 0.72%

6. Banks, Development Finance lnstitutions, Non-Banking Finance

Companies, Insurance Companies, Modarbas & Mutual Funds

3 372 0.01%

7. Individuals 677 982,665 28.62%

TOTAL 706 3,434,030 100.00%

Srl # NamesNumber of

Shareholders

Number of Shares

held

% of

Shareholding

1. Associated Companies

1.1 Dewan Motors (Pvt.) Limited 1 231,099 6.73%

2. NIT and ICP

2.1 Investment Corp. of Pakistan 1 68 0.00%

2.2 IDBP (ICP UNIT) 1 811 0.02%

2.3 National Bank of Pakistan-Trustee Deptt. Ni(u)t Fund 1 240,424 7.00%

2.4 National Bank of Pakistan 2 87,329 2.54%

2.5 National Investment Trust Limited 1 6,191 0.18%

6 334,823 9.75%

3. Directors, CEO, their Spouses & Minor Children

Directors and CEO

3.1 Dewan Muhammad Yousuf Farooqui 1 815,607 23.75%

3.2 Dewan Abdullah Ahmed Swaleh Farooqui 1 224,217 6.53%

3.3 Dewan Abdul Baqi Farooqui 1 234,395 6.83%

3.4 Dewan Asim Mushfiq Farooqui 1 242,176 7.05%

3.5 Dewan Abdul Rehman Farooqui 1 288,999 8.42%

3.6 Mr. Haroon Iqbal 1 500 0.01%

3.7 Mr. Aziz ul Haque 1 500 0.00%

7 1,806,394 52.59%

Spouses of Directors and CEO

3.8 Mrs. Heena Yousuf 1 54,016 1.57%

1 54,016 1.57%

Minor Children of Directors and CEO

Srl # NamesNumber of

Shareholders

Number of Shares

held

% of

Shareholding

1 Dewan Muhammad Yousuf Farooqui 1 815,607 23.75%

DETAILS OF CATEGORIES OF SHAREHOLDERS

SHAREHOLDERS HOLDING 10% OR MORE OF THE VOTING SHARES/ INTERESTS IN THE COMPANY

DETAILS OF TRADING IN THE SHARES OF THE COMPANY BY DIRECTORS, CEO, CFO, COMPANY

SECRETARY, THEIR SPOUSES AND MINOR CHILDREN

During the year under review, none of the CEO, CFO, Directors, Company Secretary, their spouses and minor children have

traded in the shares of the Company.

41

ANNUAL REPORT 2011


FORM 34

1. Incorporation Number

2. Name of the Company

3. Pattern of holding of the shares held by the

Shareholders as at

4. Number of

ShareholdersTotal Shares held

353 1 - 100 Shares 7,208

217 101 - 500 Shares 50,651

48 501 - 1,000 Shares 36,317

45 1,001 - 5,000 Shares 99,211

11 5,001 - 10,000 Shares 73,335

15 10,001 - 15,000 Shares 175,326

2 15,001 - 25,000 Shares 43,684

1 25,001 - 30,000 Shares 27,008

1 30,001 - 40,000 Shares 36,083

3 40,001 - 55,000 Shares 161,901

1 55,001 - 65,000 Shares 64,442

1 65,001 - 145,000 Shares 144,974

1 145,001 - 225,000 Shares 224,217

2 225,001 - 235,000 Shares 465,494

1 235,001 - 240,000 Shares 236,973

2 240,001 - 245,000 Shares 482,600

1 245,001 - 290,000 Shares 288,999

1 290,001

- 820,000

Shares 815,607

706 3,434,030


Shareholdings

TOTAL

THE COMPANIES ORDINANCE, 1984

(Section 236(1) and 464)

PATTERN OF SHAREHOLDING

001561

3 0 0 6 2 0 1 1

5. Percentage

5.154.18%

5.26.73%

5.3 NIT and ICP 9.75%

5.40.00%

5.5 Insurance Companies 0.01%

5.6 Modarabas and Mutual Funds 0.00%

5.7 Shareholders holding 10% 23.75%

5.8 General Public 0.00%

a. Local 28.62%

b. Foreign 0.00%

5.90.72%

Others (Joint Stock Companies, Brokrage Houses,

Employees Funds & Trustees)24,661

121

815,607

982,665

-

334,823

Banks, Development Financial Institutions, Non-

Banking Finance Companies66

185

Directors, Chief Executive Officer, their spouses

and minor children1,860,410

Associated Companies, undertakings and related

parties231,099

Categories of Shareholders Shares held

42

ANNUAL REPORT 2011


I/we

of being a member (s) of

DEWAN MUSHTAQ TEXTILE MILLS LIMITED and holder of

Ordinary Shares as per Registered Folio No./CDC Participant's ID and Account No.

hereby appoint

of

or failing him

Of

who is also member of DEWAN MUSHTAQ TEXTILE MILLS LIMITED vide Registered Folio

No./CDC Participant's ID and Account No. as my/our proxy to vote for me/us and

on my/our behalf at the 50th Annual General Meeting of the Company to be held on Wednesday, 26th

October,2011 at 11:00 a.m. and any adjournment thereof.

Signed this day of 2011.

Signature

Witness: Witness:SIGNATURE SIGNATURE

Name : Name :

Address : Address :


50TH ANNUAL GENERAL MEETING

FORM OF PROXY

AffixRevenueStampRs. 5/-

This form of Proxy duly completed must be deposited at our Shares RegistrarTransfer Agent BMF Consultants Pakistan (Private) Ltd.

Not later than 48 hours before the time of holding the meeting A Proxy should also be a member of the Company.

Anum Estate Building, Room No. 310 & 311, 3rd Floor, 49, Darul Aman Society, Main Shahrah-e-Faisal,Adjacent Baloch Colony Bridge, Karachi-75350, Pakistan.

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