20000302

A. Ali Sundrani (Brief Recording Folder)

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Miscellaneous

Dreamworld Limited

Year ended 30th June 1999

Overview.......

Nearly 30 kilometers, towards Super Highway, in the District West of Karachi a sprawling family resort-cum amusement park has emerged in the pollution free, serene and well secured environment. This unique project of Dreamworld Limited's started generating profit from the very first year of the commercial activity, i.e. last financial year 1997-98. During the year under review, in FY 1998-99, the company's gross revenue at Rs 52 million and Net Profit at Rs 8 million posted growth at 9 percent and at 178 percent respectively over the preceding year's. The financial health of the balance sheet remained robust as there was no long term or short term bank borrowing while interest free membership fees (refundable) on longterm basis deposit amounted to Rs 25 million. In the gross revenue there were two components i.e. resort-revenue and membership fees. Resort revenue shotup by 104 percent to Rs 11.9 million while revenue from membership fees at Rs 39.9 million declined by 4.3 percent. The company by passed the year for profit distribution. But the company declared 5 percent interim cash dividend for 1999-2000.

"The Company is establishing an Amusement Project in Karachi at Super Highway" states a note annexed to the accounts for the FY 1998-99, the period under review.

The Company offers facilites in the name of Dreamworld Family Resort and are unique in the province of Sindh. Some of its features in this resort have no parallel in the country. The project is situated in Karachi at Super Highway about 30 kilometers from central business area of Karachi. Its environment is calm serene, nonpolluted. Above all the company has elaborate arrangements for security of visitors almost starting from highway. On the other hand it is away from sea so the wind is invigorating and without saline attributes. The place is also on the direct route from the great urban and educational centres of most of the Sindh province and connected with large airconditioned coaches.

The facilities here, are reported, to include golf course, cricket ground, night-lit tennis courts, horse riding facilities, indoor games, club house with continental and Pakistani culinary delights, hotel room residency, auditorium, conference room, night camping sites, large video screen, Bar-b-Q lawns, vast man-made lake for booting and fishing sport, snooker and pool rooms, maze, go-carts, water slides, children pool/slide artificial beach and so on and so forth.

This resort is a futuristic project and ongoing additions are its regular features. During FY 1998-99, the period under review, the company incurred capital out-lay of Rs 44.6 million for capital work-in-progress of which the largest component was in civil works in the sum of Rs 34.2 million, followed by Machinery for Rs 3.78 million and Rs 6.59 million was advanced to contractors and suppliers.

The lease hold land at cost amounted to Rs 150 million.

Operating fixed assets at Rs 167.4 million at cost covers mostly building (Rs 98.23 million), plant and machinery (Rs 55.42 million) furniture, fixture office and other equipment (Rs 8.13 million). In the operating fixed assets account additions were made to the extend of Rs 6.9 million.

Dreamworld Limited was incorporated in the province of Sindh in February 1994 with registered office located in Lalazar M.T. Khan Road Karachi, while the address of the resort is NC-137, Deh Taiser District West Karachi.

The year under review is the second year of the commercial operation of the project. It is commendable performance that the company in the very second year of operation, improved net profit by 178.5 percent to Rs 7.91 million over the preceding year's figure of Rs 2.84 million. This achievement is all the more noteworthy that the net profit figure was computed after charging "all expenses and provision for taxation," Ñ as reported by the Chief Executive of the Company, Choudhry Gulzar Ahmed. Net earning per share works out to Rs 0.25.

The investors in the shares of the company have exhibited great confidence as the present price of its share at Rs 15 carries 50 percent premium over the par value and PER is placed at 60 times of its EPS and 1.5 times of the break-up value.

The Board of Directors was unable to recommend dividend for the year under review possibly because of low EPS at 0.25. But the Board opened its dividend account with maiden profit destribution for the next financial year 1999-2000. The beginning has been made with Rs 0.50 per share as interim cash dividend.

The company's share was listed at Karachi Stock Exchange in 1995. Highest price of its share was quoted at Rs 26 in 1996. Lowest price was also quoted at Rs 5.25 in 1996. But after that the market price has remained more or less above the par value.

During the period under review, the Company's Gross Revence, comprising resort revenue and membership fees, amounted to Rs 51.76 million which showed 9.01 percent growth over the preceding financial year's gross revenue at Rs 47.48 million. On the contrary direct expenses declined by 4.3 percent to Rs 38.93 million from Rs 40.69 million in the preceding year.

Paid-up capital at Rs 320 million did not changed since its listing at the stock exchange. But there has been addition in the internal source of finance on account of unappropriated profit at Rs 10.8 million.

The other long term internal source of finance has been the amount of Rs 25 million placed in the Advances and Deposit Account. This amount "represents membership fees which is refundable on cancellation of membership and adjustable with unpaid amount of members dues" Ñ as stated in the note annexed to the account.

Performance Statistics (Million Rupees)

June 30 1999 1998

Capital & Liabilities

Paid-up Capital 320.00 320.00

Unapp. Profit 10.75 2.84

Equity 330.75 322.84

L.T. Liabilities Advances/Deposits 25.00 25.20

C/L Creditors etc. 7.73 8.15

C/L Provision for Taxation 0.49 0.24

Total Current Liabilities 8.22 8.39

Assets ....... .......

Operating Assets 155.44 160.74

Tangible F/A Land 149.85 149.85

Tangible CAP/.... Progress 44.62 34.54

Other Non Current Assets 0.95 1.34

Current Assets 13.11 9.96

Total Assets 363.97 356.43

Sales, Profit & Payout Ñ Ñ

Resort Revenue 11.88 5.83

Membership Fees 39.88 41.65

Gross Revenue 51.76 47.48

Direct Expenses (38.93) (40.69)

Net Revenue 12.83 6.79

Operating Profit 8.13 3.82

Other Income 0.04 0.25

Depreciation 11.99 11.36

Financial Charges 0.30 0.02

Profit Before Taxation 8.17 3.07

Profit After Taxation 7.91 2.84

Dividend Nil Ñ Ñ

Financial Ratios Ñ Ñ

Share Price (Rs) 23/2/2000 15.00 Ñ

Book Value Per Share (Rs) 10.34 Ñ

Price Book Value Ratio 1.45 Ñ

Debt/Equity Ratio 0.100 0.100

Current Ratio 1.59 1.19

Asset Turn Over Ratio 0.14 0.13

Net Revenue to Gross Revenue (%) 24.79 14.30

Operating Profit to Gross Revenue (%) 15.71 8.05

Net Profit to Gross Revenue (%) 15.28 5.98

EPS (Rs) 0.25 0.09

Price/Earning Ratio 60 Ñ

R.O.E. (%) 2.39 0.88

R.O.A. (%) 2.17 0.80

R.O.C.E. (%) 2.22 0.82

COMPANY INFORMATION:

Chairman: Nawab Ahmed.

Chief Executive: Choudhry Gulzar Ahmed.

Directors Nasir Aftab/Mrs Qamar Hilal, Mrs Samina Gulzar/Zafaruddin Siddiqui, Hafiz Saadatullah Khan.

Company Secretary Sheikh Muhammad Abdulla.

Registered Office: 58-A Lalazar, M.T. Khan Road, Karachi.

Phone: NA, Fax: NA, E-mail: NA.

Resort NC-137, Deh Taiser, District West Karachi.

Phone: NA, Fax: NA, E-mail: NA.