Data Agro Limited - Annual Reports 2003


DATA AGRO LIMITED
Annual Reports 2003

Company Information

Notice of Meeting
Directors' Report Including Corporate Governance
Key Operating & Financial Data
Auditors' Compliance Review Report
Statement of Ethics & Business Practices
Auditors' Report
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Pattern of Share Holding

COMPANY INFORMATION

Chief Executive:	Mr. Faaiz Rahim Khan

Directors:	Mr. Umar Sadik
	Mr. Shamim Ahmad Khan
	Mr. Muhammad Ayub Khan
	Mr. Asif Rahim Khan
	Mrs. Badar Hussain
	Mr. Sohail Ahmad Khan

Company Secretary:	Mr. Usman Khalil

Audit Committee:	Mr. Faaiz Rahim Khan (Chairman)
	Mr. Shamim Ahmad Khan (Member)
	Mr. Muhammad Ayub Khan (Member)

Auditors:	M/s Mansha Mohsin Dossani Khan & Co.
	Chartered Accountants
	3rd. Floor Sharjah Centre,
	62-Shadman Market, Lahore.

Bankers:	Al-Baraka Islamic Bank B.S.C. (E.C.)
	Habib Bank Limited
	Allied Bank of Pakistan Limited
	The Bank of Punjab
	Muslim Commercial Bank Ltd.
	PICIC Commercial Bank Ltd.

Legal Advisor:	Ashtar AN & Associates

Registered Office:	3-A, Race View, Jail Road,
	Lahore.

Factory:	Khanewal -Kabirwala Road,
	District Khanewal.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 11^th Annual General Meeting of Shareholders of Data Agro
Limited will be held on Friday, October 31, 2003 at 11.00 A.M. at the Registered Office of the
company at 3-A, Race View, Jail Road, Lahore to transact the following business:

1. To confirm the minutes of the 10^th Annual General Meeting held on December 31, 2002.

2. To receive and adopt the Audited Accounts of the company along with Directors and
Auditors reports thereon, for the year ended June 30, 2003.

3. To appoint Auditors of the company for the year ending June 30, 2004 and to fix their
remuneration. The retiring Auditors M/s Mansha Mohsin Dossani Khan & Company
(Chartered Accountants), being eligible has offered themselves for re-appointment.

4. Any other business with the permission of the chair.

The Share Transfer Books of the Company will remain close from October 28, 2003
to November 03, 2003 ( both days inclusive ).

BY ORDER OF THE BOARD

(USMAN KHALIL)
Company Secretary

Lahore

September 30, 2003.

NOTES:

(a) A member entitled to attend and vote at the above meeting may appoint another as
proxy. Proxies in order to be effective must be received at the Registered Office of the
Company not later than forty eight hours before the time of meeting must be duly
stamped, signed and witnessed.

(b) Members are requested to notify the Company of any change in their addresses.

DIRECTOR'S REPORT

The Directors of your company are pleased to present the 11 * annual report alongwith the audited accounts for
the year ended June 30,2003.

Performance Review

In this year the company has processed seeds of cotton, wheat, paddy etc. There is an increase in the capacity
utilization as compared to last year. The company has also processed 2378 Metric Tons of seeds of third parties

				2003	2002
				(Metric Tons)	(Metric Tons)
Production				424	331

Financial Results

The summary of the financial results is being furnished hereunder for a quick glance.

				2003	2002
				(Rupees)	(Rupees)
Sales				20,974,064	20,403,341
Cost of Sale				17,086,460	16,490,176
Gross Profit				3,887,604	3,913,165
Less:
Operating Expenses				4,759,130	4,578,814
Financial & Other Charges				33,871	326,788
Other Income				120,099	279,709
Taxation				248,536	112,483
Profit/ (Loss) after Taxation				-1,033,834	-825,211

In the previous years the main activity of the company was to produce cotton and wheat seed. The overall
performance of the Cotton Seed Industry was subdued over the past three years due to a number of reasons. To
overcome this disappointing growth of industry, the management has taken concrete steps to enhance its
operational activities and at the same time bring in diversification in its products.

During the period under review, your company has done well even though sale price of products did not rise as
was earlier predicted. The Company has sold delinted cotton seed, Fuzzy cotton seed and wheat seed besides
harvesting of Wheat and Rice crops. The company has also processed seeds of third parties. On account of
diversification, we have started commercial production of our hybrid corn seed after its successful trial
production. Expenses incurred on the production of hybrid corn seed and maintenance of harvesters decreases
the profitability of the company. Further outcome of Hybrid corn seed will be reflected in the next quarter.

We have further decreased the debt burden by Rs. 6 million with the aid of interest free loan. The debt equity and
current ratio of the company has improved tremendously . The capacity utilization is still low and needs to be
increased. We want to attain the capacity utilization slowly without taking any fresh loans from external sources
and without compromising quality standards. These steps have been taken in order to reduce the financial cost
on the company.

Earning pershare

Earning per share of Rs. 10/- each is Rs. (0.26) as compared to Rs. 0.21 last year.
Code of Corporate Governance

The Board has adopted the Code of Corporate Governance, which was recently inserted in the listing
<egulations of the Stock Exchanges as directed by the Securities & Exchange Commission of Pakistan. As
required by the Code, it is stated that:

1. The financial statements prepared by the management present fairly the company's state of
affairs, the result of its operations, cash flows and changes in equity.

2. Proper books of accounts have been maintained.

3. Appropriate accounting policies have been consistently applied in preparation of financial
statements.

4. International Accounting Standards, as applicable in Pakistan have been followed in
preparation of financial statements.

5. The system of internal control is sound in design and has been effectively implemented and
monitored. The process of review will continue and any weakness in controls will be
reviewed.

6. The company has followed the best practices of Corporate Governance, as detailed in the

listing regulations wherever possible.

7. An Audit Committee has been formed consisting of one executive and two non-executive
directors. (1) Mr. Faaiz Rahim Khan (2) Mr. Muhammad Ayub Khan (3) Mr. Shamim Ahamd
Khan.

8. Key operating and financial data of last six years is annexed.

9. During the year four board meetings were held. Attendance by each director is as follws:

Name of Directors	Number of Board		Leave Granted
	Meetings Attended
Mr. Faaiz Rahim Khan	5		-
Mr. Umar Sadik	5
Mr. Asif Rahim Khan	3		2
Mr. Shamim Ahamd Khan	4		1
Mr. Muhammad Ayub Khan	4		1
Mr. Sohail Ahmad Khan	3		2
Mrs. Badar Hussain	2		3

10. The Company has not declared any dividend due to operational losses.

Future Outlook

Our major focus for the next year is capacity utilization without compromising quality and seeking further
diversification in our products. After the successful production of hybrid corn seed, our team of technical experts
is now engaged in producing our own organic fertilizer and micronutrients. The resulting products will enable
greater yield to crops and enhance fertility to the land. We hope that our diversification strategy will bring
promising results foryourcompany.

In the next quarter we are aiming to harvest basmati rice, processing and sale of wheat seed and purchase of
cotton seed for delinting.

The management has raised additional funding of Rs. 4.500 million aggregating it to Rs. 39.879 million (interest
free director's loan) (2002: Rs. 35.378 million). These funds have been utilized in retirement of interest bearing
debts. Moreover, positive equity of Rs. 6.228 million and working capital of Rs. 3.548 million reflects the
turnaround position of Company's financial health.

Auditors

The present Auditors Messrs. Mansha Mohsin Dossani Khan & Company, Chartered Accountants, retired and
being eligible, offers themselves for reappointment.

Pattern of Shareholding

A statement showing pattern of Shareholding in the company is attached.

Acknowledgment

I want to thank our employees, customers and suppliers for their continued support and faith in the company. All
our shareholders must closely examine the results and see that we are making progress in the right direction. I
would like to express our gratitude to share holders who have patiently waited forthe revival of the company.

Lahore FAAIZ RAHIM KHAN

September 19,2003 Chief Executive

KEY OPERATING AND FINANCIAL DATA FOR THE LAST SIX YEARS

BALANCE SHEET
Capital & Liabilities		2003	2002	2001	2000	1999	1998	1997
		Rupees	Rupees	Rupees	Rupees	Rupees	Rupees	Rupees
Share Capital & Reserves
Authorised Capital
5,000,000 Ordinary Shares of Rs. 10
each fully paid in cash		50,000,000	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000	50,000,000
Issued, Subscribed and Paidup Capital
4,000,000 Ordinary Shares of Rs. 10
each fully paid in cash		40,000,000	40,000,000	40,000,000	40,000,000	40,000,000	40,000,000	40,000,000
Accumulated Profit/ (Loss)		-66,731,151	-65,697,317	-64,872,106	-65,748,941	-59,472,615	-34,941,541	-41,517,000
		-26,731,151	-25,697,317	-24,872,106	-25,748,941	-19,472,615	-5,058,459	-1,517,000
Surplus on Revaluation of Fixed Assets		32,959,224	32,959,224	32,959,224	32,959,224	32,959,224	32,959,224	32,959,000
Redeemable Capital		-	3,500,758	9,500,758	15,500,332	30,167,254	49,310,738	9,788,000
Liabilities against Assets subject of Finance Lease		-	-	-	1,520,120	3,420,356	-	-
Long Term Loans		39,878,943	35,378,943	31,378,943	28,878,943	-	-	11,634,000
Current Liabilities ^^		8,296,064	10,365,945	12,792,399	13,815,569	41,631,639	13,890,519	67,936,000
Short Term Running Finance		-	-	-	-	4,382,042	3,452,330	54,829,000
Redeemable Capital		3,500,758	6,000,000	6,000,000	6,000,000	27,030,906	5,342,661	1,912,000
Liabilities against assets subject to Finance Lease		-	-	1,520,120	2,375,147	1,899,644	-	322,000
Advances and Deposits		426,778	190,728	189,728	2,123,109	3,403,319	211,653	26,000
Creditors, Accrued & Other Liabilities		4,253,192	4,062,734	4,949,076	3,182,499	4,865,639	4,883,875	10,847,000
Provision for Taxation		115,336	112,483	133,475	134,814	50,089	-	-

		54,403,080	56,507,553	61,759,218	66,925,247	88,