| Bhanero Textile Mills Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| COMPANY
INFORMATION |
|
|
| Board
of Directors |
|
|
|
| CHIEF
EXECUTIVE & DIRECTOR |
|
|
|
Mohammad Salim |
|
| DIRECTORS |
|
|
Mohammad Sharif |
|
|
Mohammad Shaheen |
|
|
Mohammad Shakeel |
|
|
Khurram Salim |
|
|
Furrukh Salim |
|
|
Bilal Sharif |
|
|
Zahid Ali H. Jamall
(Nominee NIT) |
|
|
|
| COMPANY
SECRETARY |
|
Asif Mahmood |
|
|
ACA, AClS, AITM, AlCS |
|
|
|
|
| FINANCIAL
MANAGER |
|
Anwar Hussain |
|
|
FCA |
|
|
|
| BANKER5 |
|
City Bank, N.A. |
|
|
ABN Amro Bank Limited |
|
|
United Bank Limited |
|
|
National Development
Finance Corporation |
|
|
Muslim Commercial Bank
Limited |
|
|
American Express Bank
Limited |
|
|
| AUDITORS |
|
Mushtaq & Company |
|
|
Chartered Accountants |
|
|
407, Commerce Centre |
|
|
Hasrat Mohani Road |
|
|
Karachi. |
|
|
|
| REGISTERED
OFFICE |
|
Umer Chambers |
|
|
|
10/2, Bilmoria Street |
|
|
|
Off. I. I. Chundrigar
Road |
|
|
|
Karachi. |
|
|
|
Tel: 2635916-7 Fax:
2637826 |
|
|
|
| MILLS AT |
|
|
Unit 1 is situated at
Kotri |
|
|
|
District Dadu, & |
|
|
|
Unit II is situated at |
|
|
|
Feroz Watwan, |
|
|
|
Sheikhupura. |
|
|
|
| Notice
of Annual General Meeting |
|
|
| NOTICE
is hereby given that 19th Annual General Meeting of the Shareholders of
Bhanero Textile Mills |
|
| Limited
will be held on 26th March, 1999 at 10.00 a.m. at the Registered Office of
the Company, |
|
| Umer
Chambers, 10/2 Bilmoria Street, Off. I. I. Chundrigar Road, Karachi to
transact the following business: |
|
|
| 1.
To confirm the minutes of the last Annual General Meeting held on 19th March,
1998. |
|
|
|
|
| 2.
To receive, consider and adopt the audited accounts of the company for the
year ended 30th |
|
| September,
1998 together with the Auditors' and Directors' Reports thereon. |
|
|
|
|
| 3.
To approve the dividend as recommended by the Board of Directors, for the
year ended |
|
| 30th
September, 1998. |
|
|
|
|
|
|
| 4.
To appoint Auditors for the year 1998-99 and fix their remuneration. The
present Auditors |
|
| M/s
Mushtaq & Co. Chartered Accountants, being eligible, offer themselves for
reappointment. |
|
|
| 5.
To elect seven directors as fixed by the Board for a term of three years in
accordance with |
|
| Section
178 of the Companies Ordinance, 1984. The name's of retiring directors are
Mohammad |
|
| Salim,
Mohammad Sharif, Mohammad Shaheen, Mohammad Shakeel, Khurram Salim, Bilal
Sharif |
|
| Farrukh
Salim, and Mr. Zahid Ali H. Jamall, Nominee Director of National Investment
Trust Limited. |
|
|
|
| 6.
To transact any other business with the permission of the Chairman. |
|
|
| KARACHI:
26th February, 1999 |
|
(BY ORDER OF THE BOARD) |
|
|
|
|
|
|
|
|
Asif Mahmood |
|
|
|
ACA |
|
|
|
COMPANY SECRETARY |
|
|
|
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from 22nd March,
1999 to |
|
| 31st
March, 1999 (both days inclusive). |
|
|
| 2.
A member eligible 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 Registered Office not less than 48 hours
before the |
|
| time
for holding the meeting. |
|
|
| 3.
Any person seeking to contest in election to the office of the Director
should file with |
|
| company
not later than fourteen (14) days before the date of the meeting, a notice of
his/ |
|
| her
intention to offer himself/herself for election as director. |
|
|
| 4.
Shareholders are requested to immediately notify the changes in address, if
any, |
|
|
|
| Directors'
Report to the Members |
|
|
| I,
on behalf of the Board of Directors, welcome the members at the 19th Annual
General Meeting |
|
| and
pleased to present the audited accounts with the auditors report thereon for
the year ended |
|
| September
30, 1998 for your consideration and approval. |
|
|
| FINANCIAL
RESULTS |
|
|
| During
the year under review, with the grace of Allah, your company has performed
well in |
|
| its
operations inspire of the economic pressures. The company has earned a net
profit after tax |
|
| at
Rs. 36,271,084/= against Rs. 32,737,642/= in the corresponding year. The
allocation of |
|
| profit
for the year before tax is summarised as under: |
|
|
|
|
|
Rupees |
|
|
|
|
(in thousands) |
|
|
|
| Profit
for the year before taxation |
|
46,627 |
|
| Provision
for taxation |
|
10,356 |
|
|
|
|
---------- |
|
| Profit
after taxation |
|
36,271 |
|
| Unappropriated
profit brought forward |
|
180 |
|
|
|
|
---------- |
|
| Profit
available for appropriation |
|
36,451 |
|
| Appropriations: |
|
| Pro.
posed cash dividend |
|
6,000 |
|
| Transfer
to general reserve |
|
30,450 |
|
|
---------- |
|
|
|
|
36,450 |
|
|
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
1 |
|
|
|
|
========== |
|
|
| The
gross sales of the company have increased by Rs. 68.464 million as compared
to last |
|
| year's
gross sales. The export sales of the company have also increased by Rs.
97.183 million |
|
| over
the last years export sales. The Selling & Distribution expenses have
increased by Rs.3.494 |
|
| million
as compared to last year. |
|
|
| YEAR
UNDER REVIEW |
|
|
| The
economic condition of the country is not good, which is affecting all sort of
business |
|
| activities
but the manufacturing concerns are effected badly especially the textile
sector. |
|
| A
large number of textile units have become inoperative or are working on below
the rated |
|
| capacity.
The local market of cotton yarn also remained very depressed due to the
unfavourable |
|
| economic
conditions. The electricity charges are becoming a major factor to increase
our cost |
|
| of
production. |
|
|
| FUTURE
OUTLOOK |
|
|
| The
economic conditions are not good and I am not so hopeful for the future of
the textile |
|
| sector
unless the Government takes some remedial measures in this regard. The size
of the |
|
| cotton
crop season 98-99 seems to be below the mark set for the local consumption.
The |
|
| shortfall
has to be covered by the input from international markets. |
|
|
| EXPENSlON
PLAN |
|
|
| The
management is fully aware of the necessity of balancing, modernization and
expansion. |
|
| The
necessary BMR will be done as and when required during the year. |
|
|
| Y2K
COMPLIANCE |
|
|
| We
are pleased to inform you that we have already taken the necessary steps
towards the |
|
| Millennium
Bug on computer system. We have replaced our computer system with the |
|
| IBM
AS-400 advance series and with the qualified staff we have overcome the
problem of Millennium Bug. |
|
|
| PROFIT
DISTRIBUTION |
|
|
| The
directors of your company are pleased to recommend a payment of 20% cash
dividend 'for |
|
| the
year under review. Your company feels that due to tough year ahead the
company like to |
|
| hold
funds to meet any unforeseen circumstances. |
|
|
| AUDITORS |
|
|
| The
present auditors M/s Mushtaq & Company, Chartered Accountants being
eligible, have |
|
| offered
themselves for reappointment. |
|
|
| ELECTION
OF DIRECTOR |
|
|
| The
three years term of the present Board of Directors is going to be expired.
The existing |
|
| Board
will retire in the forthcoming Annual General Meeting schedule to be held o
26th March, |
|
| 1999.
The Board has fixed the number of directors at seven. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| Statement
showing pattern of holding of shares as at September 30, 1998 is annexed to
this report. |
|
|
| THANKS
AND GRATITUDE |
|
| Your
Directors wish to express thanks to all staff and workers for their
co-operation and in the |
|
| performance
of their duties. The directors are confident that with their continued
support the |
|
| company
will reach new hights in future. |
|
|
|
|
On behalf of the Board |
|
|
|
|
|
|
|
Mohammad Salim |
|
|
|
Chief Executive/Director |
|
| Karachi:
26th February, 1999 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of BHANERO TEXTILE MILLS LIMITED as at
September |
|
| 30,
1998 and the related Profit & Loss account and the Statement of Changes
in Financial Position |
|
| 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
purposes of our audit and, after due verification thereof, we report that: |
|
|
| a)
In our opinion, proper books of account have been kept by the Company as
required by Compa- |
|
| nies
Ordinance, 1984. |
|
|
| b)
In our opinion; |
|
|
|
|
| i)
The Balance Sheet and Profit and 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 accounts 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, investment made and the expenditure incurred during
the year |
|
| were
in accordance with the objects of the Company. |
|
|
| c)
In our opinion and to the best of our information and according to the
explanations given to us, |
|
| the
Balance Sheet, Profit & Loss Account and the Statement of changes in
financial position, |
|
| together
with the notes forming part thereof, give 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 September 30, 1998 and of the profit and the
changes in the |
|
| financial
position for the year then ended; and |
|
|
| d)
In our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the Company and deposited in the central Zakat fund established under
section7 of |
|
| the
Ordinance. |
|
|
| e)
The company has made necessary arrangement to comply with the directive dated
September |
|
| 15,
1998 by the Corporate Law Authority in respect of the "millennium"
problem year 2000 systems issue. |
|
|
| KARACHI:
26th February, 1999. |
|
MUSHTAQ & COMPANY |
|
|
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT SEPTEMBER 30, 1998 |
|
|
|
|
NOTE |
1998 |
1997 |
|
|
|
|
RUPEES |
RUPEES |
|
| CAPITAL
AND LIABILITIES |
|
|
|
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Authorised
Capital |
|
3 |
30,000,000 |
30,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
Subscribed and |
|
|
|
|
| paid-up-capital |
|
4 |
30,000,000 |
30,000,000 |
|
|
|
|
|
| REVENUE
RESERVES |
|
|
|
| General
reserves |
|
5 |
188,450,000 |
158,000,000 |
|
| Un-appropriated
profit |
|
|
737 |
179,653 |
|
|
|
|
---------- |
---------- |
|
|
|
|
218,450,737 |
188,179,653 |
|
| Redeemable
capital |
|
6 |
22,486,881 |
27,744,775 |
|
|
|
|
|
|
| LONG
TERM LIABILITIES |
|
|
|
|
| Long
term loans and debentures |
|
7 |
30,346,973 |
31,346,973 |
|
| Obligation
under finance lease |
|
8 |
494,151 |
5,811,546 |
|
| Customs
duty payable |
|
|
1,252,787 |
1,252,787 |
|
| Excise
duty payable |
|
|
9,600,875 |
9,600,875 |
|
|
|
|
---------- |
---------- |
|
|
|
|
41,694,786 |
48,012,181 |
|
| DEFERRED
LIABILITIES |
|
|
|
|
| Staff
retirement gratuity |
|
9 |
8,508,970 |
6,217,527 |
|
| Deferred
taxation |
|
|
6,017,056 |
6,017,056 |
|
|
|
|
---------- |
---------- |
|
|
|
|
14,526,026 |
12,234,583 |
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
| Short
term bank loans |
|
10 |
322,347,413 |
165,777,647 |
|
| Current
maturity of long term liabilities |
|
11,570,139 |
26,314,932 |
|
| Creditors,
accured expenses |
|
|
|
| and
other liabilities |
|
11 |
111,766,951 |
87,305,609 |
|
| Provision
for taxation |
|
|
19,379,700 |
16,852,070 |
|
| Proposed
dividend |
|
|
6,000,000 |
15,000,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
471,064,203 |
311,250,258 |
|
| CONTINGENCIES
AND |
|
|
|
|
| COMMITMENTS |
|
12 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
768,222,633 |
587,421,450 |
|
|
|
|
========== |
========== |
|
|
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
|
|
|
| Operating
assets |
|
13 |
293,818,454 |
299,870,920 |
|
| Capital
work- in - progress |
|
14 |
1,546,535 |
877,430 |
|
|
|
|
---------- |
---------- |
|
|
|
|
295,364,989 |
300,748,350 |
|
|
|
|
|
| LONGTERM
LOANS |
|
15 |
313,655 |
224,669 |
|
|
|
|
|
|
| LONGTERM
INVESTMENTS |
|
16 |
11,374,609 |
11,374,609 |
|
| LONGTERM
DEPOSITS |
|
|
745,226 |
738,676 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
|
|
| Stores,
spares & loose tools |
|
17 |
4,475,658 |
3,741,367 |
|
| Stock
in trade |
|
18 |
62,109,950 |
50,070,742 |
|
| Trade debts |
|
19 |
267,528,896 |
102,144,463 |
|
| Loans
and Advances |
|
20 |
75,807,967 |
89,578,386 |
|
| Deposits,
prepayments and |
|
|
|
| other
receivables |
|
21 |
44,089,964 |
24,151,118 |
|
| Cash
and bank balances |
|
22 |
6,411,719 |
4,649,070 |
|
|
|
|
---------- |
---------- |
|
|
|
|
460,424,154 |
274,335,146 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
768,222,633 |
587,421,450 |
|
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
|
|
Mohammad Salim |
|
Mohammad Shakeel |
|
| Karachi:
26th February, 1999. |
Chief Executive |
|
Director |
|
|
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE |
|
| YEAR
ENDED SEPTEMBER 30, 1998 |
|
|
|
NOTE |
1998 |
1997 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| Sales (Net) |
|
23 |
1,157,488,320 |
1,090,709,300 |
|
| Cost
Of Sales |
|
24 |
946,030,431 |
891,654,164 |
|
|
|
|
---------- |
---------- |
|
| Gross Profit |
|
|
211,457,889 |
199,055,136 |
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
| Administrative |
|
25 |
25,560,526 |
22,163,181 |
|
| Selling
and distribution |
|
26 |
32,423,624 |
28,929,458 |
|
|
|
|
---------- |
---------- |
|
|
|
|
57,984,150 |
51,092,639 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
153,473,739 |
147,962,497 |
|
| Other income |
|
27 |
422,268 |
836,209 |
|
|
|
|
---------- |
---------- |
|
|
|
|
153,896,007 |
148,798,706 |
|
|
|
|
---------- |
---------- |
|
| Financial
charges |
|
28 |
104,814,950 |
102,362,345 |
|
| Workers'
profit participation fund |
|
|
2,454,052 |
2,321,818 |
|
|
|
|
---------- |
---------- |
|
|
|
|
107,269,002 |
104,684,163 |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
46,627,005 |
44,114,543 |
|
|
|
|
|
|
| TAXATION |
|
|
|
| -
Current Year |
|
29 |
10,355,921 |
9,023,779 |
|
| - Prior Year |
|
|
- |
2,353,122 |
|
|
|
|
---------- |
---------- |
|
|
|
|
10,355,921 |
11,376,901 |
|
|
|
|
| Profit
after taxation |
|
36,271,084 |
32,737,642 |
|
| Unappropriated
profit brought forward |
|
179,653 |
442,011 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
36,450,737 |
33,179,653 |
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Proposed
dividend |
|
60,000,001 |
15,000,000 |
|
| Transferred
to general reserve |
|
30,450,000 |
18,000,000 |
|
|
|
---------- |
---------- |
|
|
|
36,450,000 |
33,000,000 |
|
|
|
---------- |
---------- |
|
| Un-appropriated
profit carried forward |
|
737 |
179,653 |
|
|
|
========== |
========== |
|
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
Mohammad Salim |
|
Mohammad Shakeel |
|
| Karachi:
26th February, 1999 |
|
Chief Executive |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 1998 |
|
|
|
|
|
1998 |
1997 |
|
|
|
|
RUPEES |
RUPEES |
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
|
|
|
|
| Profit
before taxation |
|
|
46,627,005 |
44,114,543 |
|
|
|
|
|
|
| Adjustment
for depreciation |
|
|
32,515,216 |
32,837,404 |
|
| Provision
for gratuity |
|
|
3,384,041 |
3,032,035 |
|
| Excise duty |
|
|
- |
(1,608,653) |
|
| Financial
charges |
|
|
104,814,950 |
102,362,345 |
|
| Loss/(Gain)
on disposal of fixed assets |
|
39,603 |
(19,443) |
|
| Dividend
income |
|
|
(378,821) |
(757,636) |
|
| Interest
income |
|
|
(57,520) |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
140,317,469 |
135,846,052 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
186,944,474 |
179,960,595 |
|
|
|
|
|
|
| (Increase)/decrease
in current assets |
|
| Stocks,
stores and spares |
|
|
(12,773,499) |
(9,977,554) |
|
| Trade debts |
|
|
(165,384,433) |
(11,819,078) |
|
| Loan
and advances |
|
|
13,770,419 |
24,397,357 |
|
| Advances,
deposits prepayments |
|
|
|
|
| and
other receivables |
|
|
(12,799,820) |
(2,361,796) |
|
|
|
|
---------- |
---------- |
|
|
|
(177,187,333) |
238,929 |
|
|
|
|
|
|
| (Decrease)/Increase
in current liabilities |
|
| Short
term Bank loans |
|
|
156,569,766 |
(11,659,216) |
|
| Creditors,
accrued and other liabilities |
|
3,119,997 |
17,259,096 |
|
| Workers'
profit participation fund |
|
137,465 |
746,694 |
|
|
|
|
---------- |
---------- |
|
|
|
|
159,827,228 |
6,346,574 |
|
|
|
|
---------- |
---------- |
|
| Cash generated from
operations |
|
|
169,584,369 |
186,546,098 |
|
|
|
|
| Payment for: |
|
|
|
| Taxes |
|
|
(14,967,317) |
(10,101,987) |
|
| Gratuity
paid |
|
|
(1,092,598) |
(1,164,046) |
|
| Financial
charges paid |
|
|
(83,619,713) |
(97,776,698) |
|
|
|
|
---------- |
---------- |
|
|
|
|
(99,679,628) |
(109,042,731) |
|
|
|
|
|
|
| NET
CASH FROM OPERATING ACTIVITIES |
|
69,904,741 |
77,503,367 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
RUPEES |
RUPEES |
|
| B.
CASH FROM INVESTING ACTIVITIES |
|
|
|
|
|
| Proceeds
from disposal of fixed assets |
|
355,000 |
376,500 |
|
| Fixed
capital expenditure |
|
(27,526,455) |
(39,620,487) |
|
