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BENGAL FIBRE INDUSTRIES LIMITED
Annual Reports 2002
Contents
Notice of Meeting
Directors' Report
Auditors' Review on
Compliance of Code
of Corporate
Governance
Auditors' Report to  the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes
in Equity
Notes to the
Financial Statements
Pattern of
Shareholding
Summary of
Financial Data
Company Information
BOARD OF DIRECTORS
Executive Directors
Mr. Ali Mohammad Haji Mohammad	Chairman
Mr. Abdul Sattar H.A. Rehman Bengali	Chief Executive
Mr. Yunus Haji Hashim Bengali
Non-Executive Directors
Mr. Noor Mohammad Abubakar
Mr. Faisal G. Bengali
Mr. Firasat Ali (NIT)
Mr. Behram Hasan (NIT)
Mr. Khizer Hayat Aamir (SLIC)
BOARD OF AUDIT COMMITTEE
Mr. Faisal G. Bengali	Chairman
Mr. Yunus Haji Hashim Bengali	Member
Mr. Khizer Hayat Aamir	Member
Mr. Abdul Rab	Secretary
PRINCIPAL OFFICERS
Mr. Abdul Ghani H.A. Rehman Bengali
Senior Executive Vice President
Mr. Ahmed Hashim Memon	Chief Engineer
CHIEF FINANCIAL OFFICER
Mr. Rizwan Manai
COMPANY SECRETARY
Mr. Muhammad Iqbal Moon
AUDITORS
Sidat Hyder Qamar & Co.
Chartered Accountants
BANKERS
Habib Bank Limited
Muslim Commercial Bank Limited
United Bank Limited
Allied Bank of Pakistan Limited
Askari Commercial Bank Limited
REGISTERED OFFICE
Bengal House, Aga Khan/G. Allana Road,
Karachi-74000 Phone No. 7526338-41, 7529492
Fax: (09221) 7512857, E-mail: bengal@khi.compol.com
FACTORY
Plot No. 53 & 54, Sector 15,
Korangi Industrial Area,
Karachi, Phone No. 5063591-4 Fax : 5063590
SALES OFFICE
70-Alam Market, Near Ghordhandas Market,
Saleh Mohammad Street, Karachi.
Phones : 2419540-2415675, Fax: 2429520
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN to the members that the thirty-sixth Annual General Meeting will be 1
Registered Office of the Company at Bengal House, Aga Khan/G.Allana Road, Karachi on F
25 October 2002 at 11:00 a.m. to transact the following business:
1)      To receive and consider the Audited Accounts of the Company for the year ended 30 June
together with the Directors' and Auditors' Reports thereon.
2)      To appoint Auditors for the ensuing year, and to fix their remuneration.
3)      To transact with the permission of the Chairman any other business which may be transactec
Annual General Meeting.
By Order of the Board
Karachi: 02 October 2002	MUHAMMAD IQBAL MOOIS
	Company Secretary
NOTES:
1.      The Share Transfer Books of the Company will remain closed from 17 October 2002 to 25 0(
2002 (both days inclusive).
2.      A Member of the Company entitled to attend and vote at the Annual General Meeting may a^
another Member as his/her proxy to attend and vote on his/her behalf. Proxies, in order to be
must be received at the Registered Office of the Company not later than 48 hours before the ti
holding the Meeting. Form of proxy is enclosed.
3. Shareholders are requested to promptly notify the Company of any change in their registered
addresses, to ensure delivery of mail.
4.      To facilitate identification, for right to attend the Annual General Meeting, shareholder whose hoi
are on the Central Depository System (CDS) or his/her Proxy should authenticate his/her ident
showing his/her original National Identity Card (NIC) or original Passport at the time of atte
the meeting, alongwith the Participant's Identity Number and Shareholder's account number allc
by the Central Depository Company.
In case of corporate entity, the Board of Directors' resolution/power of attorney with spec
signature of the nominee shall be produced at the time of the meeting.
Directors Report
The Directors of the Company are pleased to present the thirty-sixth Annual Report together with the audited accounts
of the company for the year ended 30 June 2002.
FINANCIAL RESULTS
		2002               Rupees	2001        Rupees
Operating Profit		20,502,771	62,172,123
Other Income		207,870	433,722
		20,710,641	62,605,845
Financial & other charges		19,344,66)	28,878,112
Profit before Taxation		1,365,976	33,727,733
Taxation		1,371,422	14,456,331
(Loss) /Profit after Taxation		5,446	19,271,402
Accumulated (Loss) brought forward		3,670,787	22,942,189
Accumulated (Loss) carried forward		3,676,233	3,670,787
(Loss)/Earning per share		(0.001)	3
REVIEW OF RESULTS
Net sales during the year under review decreased by 11.5% to Rs. 344,701,650. This decrease is attributable to lower
volume, change in sales mix and reduction in selling prices. In case of operating expenses, inspite of strict cost cutting
policies adopted by the management, there is a nominal increase of 1.40% to Rs. 17,019,355 due to inflation. Financial
charges during the year under review decreased by 20.12% to Rs. 18,950,977 due to effective management of working
capital, consistent repayments of long term debt and relief in mark-up rates allowed by the lenders.
The following are the major factors, which eroded the profitability of the company;
1)       Enhanced imports of yarns at cheaper/under invoiced prices.
2)       Smuggling of Fabric leading to closure of looms.
3)       Reduction in selling prices of yarns.
PRODUCTION & SALES
Total production of Nylon & Polyester yarn during the year under review decreased by 213,687 kgs (7.05%) to 2,815,252
kgs as compared to 3,028,939 kgs produced during the previous year.
Sales volume during the review year decreased by 1.82% from 2,945,947 kgs to 2,892,468 kgs.
Net sales during the year decreased by Rs. 44,799,393 or 11.5% to Rs. 344,701,650.
CAPITAL EXPENDITURE
In order to increase the sales revenue by value addition in existing product, the Company has imported a Draw ^
machine from M/s. Zinser AG of Germany. The import documents for the machine were retired before close i
financial year through disbursement against the consortium lease arrangement with Orix Leasing Pakistan Ltd. & I
Leasing. This machine has successfully been installed at our production site and shall be used to convert the si
pre-oriented yarn into FDY, which was being sold outright due to non availability of down stream production fa
Currently this machine is in trial production.
CODE OF CORPORATE GOVERNANCE
The Company has already complied with certain requirements under the 'Code of Corporate Governance' and w
aligning itself with the remaining areas in due course.
The directors hereby confirm the following as required by clause (xix) of the code;
1)  The financial statements, prepared by the management present fairly the company's state of affairs, the n
of its operations, cash flows and changes in equity.
2) Proper books of account have been maintained.
3)  Appropriate Accounting Policies have been consistently applied in the preparation of financial statemer
4)  International Accounting Standards, as applicable in Pakistan, have been followed in the preparation offina
statements.
5)  The system of internal control of the company is in place and is sound in design and is effectively moniti
6)  The going concern assumption in the preparation of financial statements is appropriate.
7)  The company has endeavoured its full to follow the best practices of corporate governance as detailed i]
listing regulations.
8)  During the year five Board meetings were held. Attendance by each director was as under:-
NAME OF DIRECTORS		NO. OF MEETINGS ATTENDED
Mr. Aii Mohammad Haji Mohammad (Chairman)		4
Mr, Abdul Sattar H.A. Rehman Bengali (Chief Executive)		4
Mr. Yunus Hashim Bengali		5
Mr. Faisal G. Bengali		3
Mr. Noor Mohammad Abubaker		5
Mr. Farooq Haji Mohammad		1
Mr. Firasat Ali		5
Mr. Khizar Hayat Aamir		2
Mr. Kh. Mansoor Mukhlar Shah		3
Mr. Mohammad Latif		1
Ms. Naz Afreen		Nil
During the year, election of directors took place. In place of Mr. Kh. Mansoor Mukhtar Shah (NIT)
Mr. Abdul Latif (SLIC), Ms. Naz Afreen (NIT) and Mr. Khizar Hayat Aamir (SLIC) joined the B(
(subsequent to the end of the year under review, Ms. Naz Afreen resigned from the board and Mr. Beh
Hasan has co-opted the board for her remaining term).
9)  There are no material statutory payments on account of taxes, duties, levies and'charges, which remain outstand
ing.
10) Key operating and financial data for the last six years are annexed.
11) Pattern of shareholding at 30 June 2002 as per revised format under the Code of Corporate Governance is
annexed.
FUTURE OUTLOOK
The future outlook of the company must be viewed in the backdrop of the regional economic scenario:
1)  The major industrialised economies of the world are passing through a recession as such the gigantic capacities
of the Far East continue to take the local manaut'acturer's market share.
2) Fabric of man-made yarns continues to be smuggled into the country. The local yam manufacturers. Fabric
Producers and Processors are all faced with this predicament.
3) The Federal Budget 2002-2003 announced in mid June, reduced the duty on Nylon Yarn with no relief in duty
on caprolactum. This coupled with under invoicing have made local nylon yarn incompetitive.
4)  Under invoicing of imported yarn adds to the plight of local yam manufacturers.
5) Exports of Fabric made from local man-made yam suffer due to duty drawback rebate reduced by the
Government.
6)  In light of the highly competitive market place, the company must resort to cost cutting and optimize efficiency
to Survive.
DIRECTORS
Elections to the Board of Directors of the Company took place on March 11, 2002. The following are currently the
Directors of the Company.
1. Mr. Ali Mohammad Haji Mohammad	(Chairman)
2. Mr. Abdul Sattar H.A. Rehman Bengali	(ChiefExecutive)
3. Mr. Noor Mohammad Abubaker
4.Mr. Farooq Haji Mohammad
5. Mr. Yunus Hashim Bengali
6. Mr. Faisal G. Bengali
7. Mr. Firasat Ali (NIT)
8. Mr. Khizar Hayat Aamir (SLIC)
9. Mr. Behram Hasan (NIT)
STAFF RETIREMENT BENEFIT
The Company operates provident fund schemes for its administrative staff and factory workers, which are managed by the
trustees. During the year total contribution of Rs. 1,209,003 was made by the company towards the funds. Value of
investments in both the funds amounted to Rs. 13,650,689 as at June 30, 2002.
TRADING IN SHARES OF THE COMPANY
During the year no trading transaction in respect of shares of the company entered into by the directors, CEO, CFO,
Company Secretary, their spouses or minor children.
DIVIDEND DECLARATION
Keeping in view the adverse figure of the revenue reserve, the directors of the Company are not in position to declar
dividend.