CONTENTS
Company Information | 2 |
Directors' Report | 3 |
Statement of Financial Position | 5 |
Statement of Profit or Loss | 6 |
Statement of Comprehensive Income | 7 |
Statement of Cash Flows | 8 |
Statement of Changes in Equity | 9 |
Notes to the Financial Statements | 10 |
14 |
1
DEWAN FAROOQUE SPINNING MILLS LIMITED
COMPANY INFORMATION
BOARD OF DIRECTORS | |
Executive Directors | : Syed Maqbool Ali |
Chief Executive Officer & Director | |
Non-Exective Director | : Mehmood-Ul-Hassan Asghar - Chairman, Board of Directors |
Mr. Ghazanfar Baber Siddiqi | |
Mr. Abdul Basit | |
Mr. Muhammad Hanif German | |
Mrs. Nida Jamil | |
Independent Director | : Mr. Aziz -ul-Haque |
Audit Committee | : Mr. Aziz -ul-Haque (Chairman) |
Mr. Abdul Basit (Member) | |
Mr. Ghazanfar Baber Siddiqi (Member) | |
Human Resources & Remuneration Committee | : Mr. Aziz -ul-Haque (Chairman) |
Mr. Mehmood-Ul-Hassan Asghar (Member) | |
Syed Maqbool Ali (Member) | |
Auditors | : Feroze Sharif Tariq & Company |
Chartered Accountants | |
4/N/4 Block-6, P.E.C.H.S. Karachi | |
Company Secretary | : Mr. Muhammad Hanif German |
Chief Financial Officer | : Mr. Muhammad Irfan Ali |
Tax Advisor | : Abbas & Atif Law Associates |
Legal Advisor | : Sharif & Co. Advocates |
Bankers | : United Bank Limited |
Bank Islami Pakistan Limited | |
MCB Bank Limited | |
Silk Bank Limited | |
Askari Bank Limited | |
Allied Bank Limited | |
Bank Makramah Limited | |
Registered Office | : Dewan Centre |
3-A, Lalazar Beach Hotel Road | |
Karachi. | |
Shares Registrar & Transfer Agent | : BMF Consultants Pakistan (Private) Limited |
Anum Estate Building, Room No. 310 & 311, | |
3rd Floor, 49, Darul Aman Society, | |
Main Shahrah-e-Faisal, adjacent to Baloch Colony Bridge, | |
Karachi 75350, Pakistan. | |
Factory Office | : 54 Km, Multan Road, Phool Nagar By Pass |
District Kasur, Punjab , Pakistan. | |
Website | : www.yousufdewan.com |
2
IN THE NAME OF ALLAH;
THE MOST GRACIOUS AND THE MOST MERCIFUL
IF YE GIVE THANKS, I WILL GIVE YOU MORE (HOLY QURAN)
Dear Shareholder(s),
Assalam-o-Alykum!
The Board of Directors of your Company is pleased to present unaudited condensed interim financial statements for the first quarter ended September 30, 2024 in compliance with the requirements of section 237 of the Companies Act, 2017 and code of corporate governance issued by Securities and Exchange Commission of Pakistan.
Economic & Industrial Overview
Challenges faced by Pakistan's economy continued impacting the textile industry during the first quarter of FY 2024-25 due to ongoing economic pressures. These challenges have seriously impacted Pakistan's growth, economic progress and political stability. Inconsistent policies, cross subsidization, resource misallocation, underperforming agriculture due to lack Govt. patronage, unemployment, rising energy prices and geopolitical tensions are pressing concerns for Pakistan's Industry. The textile sector, is responsible for around 60 percent of exports and employs 40 percent of the labor force. It also supports numerous other sectors such as cotton and retail through domestic linkages. In Pakistan, the discontinuation of regionally competitive energy pricing led to a substantial rise in production costs. Further, policy changes disallowing domestic EFS, high interest rates and delayed government refunds strained cash flows, undermining our cost competitiveness. Long-term stability of Pakistan depends upon resolving fundamental economic issues. In this context, it is important to recognize the criticality of facilitating the export industries including textile which result in net inflow of dollars and foster economic stability.
Operating results and performance
During the 1st Quarter under review, Company has suffered gross loss of Rs. (84.754) million compared to Rs. (60.197) million in the previous corresponding period, whereas operating expenses of the company marked at Rs. 10.854 million as compared to Rs. 9.442 million of comparable period of last year. Due to working capital constraints, the management continued the production of yarn on contract basis to keep the company operational.
These condensed interim financial statements have been prepared using going concern assumption as the conditions referred in note 2 are temporary and would reverse in foreseeable future. Company has approached its lenders for further restructuring of its liabilities without markup, which is in process. Management is hopeful that such revision will be finalized soon. Moreover, the markup outstanding up to the date of restructuring is Rs.208.531 million, for which the company would be liable to pay in the event of default of terms of agreement, the management is confident that upon finalization of revised restructuring, this amount will remain eligible for waiver, hence no provision of the same has been made in these financial statements. Further, sponsors also provide the support 3
as and when required to meet the working capital requirements of the company and accordingly, the preparation of these financial statements using going concern assumption is justified.
Future Outlook
Due to international recession coupled with geographical tension & high cost of production in our country, textile products are facing severe competition in the international market. Issue of weak demand of textile products in the local market, rising power tariffs owing to removal of energy subsidies along with inflationary pressures are getting worst day by day. Budgetary measures recently introduced in the Finance Act 2024 such as withdrawal of zero rating on local supplies under EFS, change of taxation regime on exports from final tax to normal tax will further effects competitiveness of textile industry. However, gradual reduction of policy rate by the State Bank of Pakistan will relatively reduce cost pressure. Further, for the globally competitiveness in the wake of prevalent economic crunch, we expect the government will focus on structural reforms to boost exports and foreign exchange, and to enable the exporters to compete internationally by prioritizing export-oriented sectors, including the textile industry. This involves facilitating the import of raw materials, parts, and accessories, further decrease in current interest rate presently too exorbitant for any business to sustain and also ensuring the availability of utilities at rationalized power tariff. Further, Taxation structure is also expected to create ease of doing business.
Conclusion
With the grace of Allah Almighty, the management of the company will put its best endeavors to bring better results in future. In conclusion, we bow beg and pray to Almighty Allah, Rahman-o-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 pray to Almighty Allah to bestow Peace, Harmony, Brotherhood and Unity in true Islamic spirit to whole of Muslim Ummah; Ameen; Summa Ameen.
LO-MY LORD IS INDEED HEARER OF PRAYER (HOLY QURAN)
By and under Authority of the Board of Directors
Syed Maqbool Ali | Mehmood-ul-Hassan Asghar |
Chief Executive Officer & Director | Chairman, Board of Directors |
Dated: November 26, 2024 |
4
DEWAN FAROOQUE SPINNING MILLS LIMITED
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 30TH SEPTEMBER 2024
Notes
EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES
Authorized share capital
Un-Audited | Audited |
Sep 30, | June 30, |
2024 | 2024 |
------------- | (Rupees)-------------- |
100,000,000 (2024: 100,000,000 ) Ordinary shares of Rs.10/- each
Issued, subscribed and paid-up capital Revenue reserve - accumulated loss
Capital reserve - revaluation surplus on property, plant and equipment
NON-CURRENT LIABILITIES
Long term loan
Deferred taxation
Deferred liability for staff gratuity
CURRENT LIABILITIES
Trade and other payables
Accrued mark-up
Short term borrowings
Current & overdue portion of long term liabilities
Provision for taxation
CONTINGENCIES AND COMMITMENTS | 6 |
ASSETS | |
NON-CURRENT ASSETS | |
Property, plant and equipment | 7 |
Long term deposits | |
CURRENT ASSETS | |
Stores & spares | |
Stock in trade | |
Trade debts- unsecured, considered good | |
Loans and advances - unsecured, considered good | |
Trade deposits and other receivables - considered good | |
Taxes recoverable | |
Cash and bank balances | 8 |
1,000,000,000
977,507,260
(2,070,106,294)
2,150,229,219
1,057,630,185
6,640,625
227,236,529
31,666,034
612,314,051
390,303,597
412,864,355
445,994,050
-
1,861,476,053
-
3,184,649,426
2,959,380,541
45,109,516
24,937,909
15,516,540
29,921,962
6,023,245
51,671,568
39,804,930
12,283,215
180,159,369
1,000,000,000
977,507,260
(1,994,916,593)
2,164,136,379
1,146,727,046
7,968,750
232,916,919
29,718,553
547,702,240
390,303,597
412,864,355
445,994,050
-
1,796,864,242
-
3,214,195,510
2,991,200,860
38,787,516
25,328,156
15,516,540
33,111,105
5,374,903
49,547,677
39,662,554
15,666,199
184,207,134
3,184,649,426 3,214,195,510
The annexed notes form an integral part of these condensed interim financial statements.
Syed Maqbool Ali | Muhammad Irfan Ali | Mehmood-ul-Hassan Asghar |
Chief Executive Officer & Director | Chief Financial Officer | Chairman Board of Directors |
5
DEWAN FAROOQUE SPINNING MILLS LIMITED
CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)
FOR THE FIRST QUARTER ENDED 30TH SEPTEMBER 2024
July-Sept, | July-Sept, |
2024 | 2023 |
Notes ------------------ | (Rupees)------------------ |
Sales / Revenue - Net
Cost of sales / revenue
Gross (loss)
Operating expenses
Administrative expenses
Selling and distribution expenses
Operating (loss)
Other income
Finance cost | 9 |
(Loss) before taxation | |
Levies | |
Loss before income tax | |
Taxation - Net | |
(Loss) after taxation | |
(Loss) per share - basic and diluted | 10 |
70,579,050-
(155,332,874) (60,196,540)
(84,753,824) (60,196,540)
(7,470,664) (6,447,284)
(3,382,988) (2,994,723)
(10,853,652) (9,442,007)
(95,607,476) (69,638,547)
1,757,989-
(93,849,487) (69,638,547)
(45,526)(43,716)
(93,895,013) (69,682,263)
(882,238)-
(94,777,251) (69,682,263)
5,680,3906,303,209
(89,096,861) (63,379,054)
(0.91)(0.65)
The annexed notes form an integral part of these condensed interim financial statements.
Syed Maqbool Ali | Muhammad Irfan Ali | Mehmood-ul-Hassan Asghar |
Chief Executive Officer & Director | Chief Financial Officer | Chairman Board of Directors |
6
DEWAN FAROOQUE SPINNING MILLS LIMITED
CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS (UN-AUDITED)
FOR THE FIRST QUARTER ENDED 30TH SEPTEMBER 2024
July-Sept, | July-Sept, | |
2024 | 2023 | |
--------------------(Rupees)-------------- | ||
(Loss) after taxation | (89,096,861) | (63,379,054) |
Other Comprehensive Income
Items that will not be subsequently reclassified to profit or loss:
Total comprehensive (loss) for the period | (89,096,861) | (63,379,054) | |
The annexed notes form an integral part of these condensed interim financial statements.
Syed Maqbool Ali | Muhammad Irfan Ali | Mehmood-ul-Hassan Asghar |
Chief Executive Officer & Director | Chief Financial Officer | Chairman Board of Directors |
7
DEWAN FAROOQUE SPINNING MILLS LIMITED
CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED) FOR THE FIRST QUARTER ENDED 30TH SEPTEMBER 2024
Notes
CASH FLOW FROM OPERATING ACTIVITIES
July-Sept, | July-Sept, |
2024 | 2023 |
------------ | (Rupees)------------ |
(Loss) before taxation
Adjustments for non cash and other items:
Gain on sale of fixed assets
Depreciation
Financial charges
Provision for gratuity
Cash flow before working capital changes
Working Capital changes
(Increase) / Decrease in current assets:
Stores & spares
Trade debts
Loans & advances
Trade deposits & other receivables
Increase / (Decrease) in current liabilities:
Trade and other payables
Cash generated from / (used in) operations
Payments for:
Taxes paid
Gratuity paid
Financial charges paid
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure incurred
Sale proceeds on disposal of fixed assets
Long term deposits
Net cash outflow from investing activities | |
CASH FLOW FROM FINANCING ACTIVITIES | |
Long term loan | |
Net cash inflow / (out flow) from financing activities | |
Net increase / (decrease) in cash and cash equivalents | |
Cash and Cash equivalents at the beginning of the year | |
Cash and Cash equivalents at the end of the year | 8 |
The annexed notes form an integral part of these condensed financial statements.
(93,895,013)
(1,757,989)
29,950,908
45,526
3,313,064
(62,343,504)
390,247
3,189,143
(648,342)
(2,123,891)
64,611,811
3,075,464
(1,024,614)
(1,365,583)
(45,526)
639,741
(2,132,600)
5,760,000
(6,322,000)
(2,694,600)
(1,328,125)
(1,328,125)
(3,382,984)
15,666,199
12,283,215
(69,682,263)
33,146,569
43,716
3,488,574
(33,003,404)
279,450
30,894,526
640,815
(1,543,514)
4,158,267
1,426,140
(526,288)
-
(43,716)
856,136
-
-
(379,600)
(379,600)
(703,125)
(703,125)
(226,589)
2,799,314
2,572,725
Syed Maqbool Ali | Muhammad Irfan Ali |
Chief Executive Officer & Director | Chief Financial Officer |
Mehmood-ul-Hassan Asghar Chairman Board of Directors
8
DEWAN FAROOQUE SPINNING MILLS LIMITED
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)
FOR THE FIRST QUARTER ENDED 30TH SEPTEMBER 2024
Issued, | Revenue reserve | Capital Reserve | |
Revaluation surplus | |||
subscribed and | Total | ||
Accumulated loss | on property, plant | ||
Paid-up Capital | |||
& equipment | |||
(Rupees) |
Balance as at July 01, 2023
Total comprehensive loss for the period (Loss) for the period
Other comprehensive income
Transfer to accumulated loss
in respect of incremental depreciation - net of tax
Balance as at September 30, 2023
Balance as at July 01, 2024
Total comprehensive loss for the period (Loss) for the period
Other comprehensive income
Transfer to accumulated loss
in respect of incremental depreciation - net of tax
977,507,260 | (1,679,052,587) | 2,225,864,355 | 1,524,319,028 | ||
-- | (63,379,054) | -- | (63,379,054) | ||
-- | -- | -- | -- | ||
-- | (63,379,054) | -- | (63,379,054) | ||
-- | 15,431,994 | (15,431,994) | -- | ||
977,507,260 | (1,726,999,647) | 2,210,432,361 | 1,460,939,974 | ||
977,507,260 | (1,994,916,593) | 2,164,136,379 | 1,146,727,046 | ||
-- | (89,096,861) | -- | (89,096,861) | ||
-- | -- | -- | -- | ||
-- | (89,096,861) | -- | (89,096,861) | ||
-- | 13,907,160 | (13,907,160) | -- |
Balance as at September 30, 2024 | 977,507,260 | (2,070,106,294) | 2,150,229,219 | 1,057,630,185 |
The annexed notes form an integral part of these condensed financial statements.
Syed Maqbool Ali | Muhammad Irfan Ali | Mehmood-ul-Hassan Asghar |
Chief Executive Officer & Director | Chief Financial Officer | Chairman Board of Directors |
9
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