Bhanero Textile Mills Limited
Annual Reports 2003
CORPORATE INFORMATION
BOARD OF DIRECTORS		Mr. Mohammad Salim		Chief Executive / Director
		Mr. Mohammad Sharif		Director
		Mr. Mohammad Shaheen		Director
		Mr. Mohammad Shakeel		Director
		Mr. Khurram Salim		Director
		Mr. Bilal Sharif		Director
		Mr. Hasan Mahmood		Director (Resigned on April 17,2003)
		Mr. Iqbal Mehboob		Director (Appointed on April 17,2003)
COMPANY SECRETARY		Mr. Asif Mahmood
		FCA, FCIS, FITM, FICS, APA
CHIEF FINANCIAL OFFICER		Mr. Anwar Hussain, FCA
AUDIT COMMITTEE		Bilal Sharif		Chairman
		Khurram Salim		Member
		Mohammed Shakeel		Member
AUDITORS		M/s Mushtaq & Company
		Chartered Accountants
		407, Commerce Centre
		Hasrat Mohani Road
		Karachi.
LEGAL ADVISOR		Mr. Shahid Pervaiz Jami,
		Advocates
BANKERS		ABN Amro Bank
		Citi Bank, N.A.
		Hong Kong and Shanghai Banking Corporation
		Standard Chartered Bank
		Muslim Commercial Bank Limited
		United Bank Limited
		Faysal Bank Limited
REGISTERED OFFICE
		Umer Chambers,
		10/2, Bilmoria Street,
		Off. 1. 1. Chundrigar Road,
		Karachi.
		Tel: (021) 263591 6- 17
		Fax:(021)263-7826
		E-mail : khioff@umergroup.com
		website : www.umergroup.com
LIAISON/CORRESPONDENCE
OFFICE :
		6-K, Main Boulvard,
		Gulberg II, Lahore.
		Tel: (042) 5770001 -3
		Fax:(042)5770015
		E-mail : lhroff@umergroup.com
		Website : www.umergroup.com
MILLS AT
		Unit I, is situated
		at Kotri,
		District Dadu,
		Ph: 0221 -87001 3
		Unit II, is situated at
		Feroz Watwan,
		Shaikhupura, Punjab
		Ph: 0496-731 728
Dividend
Your directors have pleasure in recommending a final cash dividend of 100 % i.e. Rs. 10.00 per share
(2002: 50% i.e. Rs. 5.00 per share) for the approval of shareholders at forthcoming the Annual General
Meeting.
YEAR UNDER REVIEW
The year under review was a good year in terms of profits although the prices of raw cotton remained high.
The quality of crop was comparatively better. The low mark up rate was the only support.
FUTURE OUTLOOK
The prices of cotton remained high as compared to the previous year, which is mainly due to the reports
of the heavy damage to cotton crop. The severe pest attack is the main cause. The un-official projection
on the size of crop is close to about 8.5 to 9 million bales. Despite heavy damage to the crop in many areas
of cotton growing belt owing to heavy rains and later severe pest attacks, the officials are hoping that cotton
production may not reach the target of 10 million bales. The prices of cotton in the international market are
also in high tone due to shortage of cotton in china.
The cotton requirements of our textile industry are growing at a fast pace. There has been large scale
balancing and modernization of the textile industry apart from the addition of new spindlage in the recent
past which has considerable raised the consumption of cotton in the country. According to the trade circles,
the mill consumption of cotton has gone up from 9.4 million bales in 1999-2000 to 11.0 million bales in
2002-2003. The mill consumption of cotton is growing at a rate of about half a million bales per year during
the last four years. The cotton requirements of the mills are being placed at 12 million bales in the current
cotton season and around 15 million bales after the year 2005. Keeping in view of the above facts I am
not so hopeful about the future of the textile industry in Pakistan especially for the spinning sector.
Expansion Plan
The management of your company is striving hard for continues balancing & modernization of the machinery
with the latest technology. The management is also focusing on the post WTO scenario of 2005.
The company has replaced the 12 existing chines ring frames form Unit-l that resulted in increase in the
production capacity of Unit-l from 19,200 spindles to 19,584 spindles. The spindles of Unit-ll have also
increased from 20,880 spindles to 25,920 spindles. Thus the total production capacity of your company
is now 45,504 spindles. The management has planned to add 2 auto conners and 3 simplex to meet the
production requirement of the above expansion. It is expected that the above replacement and addition
will improve the production and as well as quality of yarn. Your management has also installed an open-
end machine having 192 rotors.
Human Resource
The management of your company believes that the organization can not be successful in the absence
of motivated and professional human resources. Keeping in view, your company has embarked on a serious
effort of upgrading its manpower through induction of qualified staff.
Corporate & Financial Reporting Framework:
The board of directors is mindful of its responsibilities as established by the Code of Corporate
Governance by Stock Exchanges and the Securities and Exchange Commission of Pakistan. Your
company is always committed to the standards of corporate governance and continually seeking
improvements in the existing system. However, we are pleased to report that your company has
taken necessary steps to comply with the provisions of Code of Corporate Governance as
incorporated in the listing rules of the Stock Exchanges.
We give below our statement on Corporate and Financial Reporting Framework:
a)        The financial statements, presented by the management of the company, present fairly its
state of affairs, the result of its operations and cash flow & changes in equity.
b)        Proper books of accounts of the Company have been maintained.
c)        Appropriate accounting policies have been consistently applied in preparation of financial
statements and the accounting estimates are based on reasonable and prudent judgement.
d)        International accounting standards, as applicable in Pakistan have been followed in
preparation of financial statements and departure there from, if any, has been adequately
disclosed.
e)        The system of internal control is sound in design and has been effectively implemented
and monitored. The process of review is ongoing and any emerging weaknesses in control
will be addressed effectively.
f)         There are no significant doubts upon the company's ability to continue as a going concern.
g)        There has been no material departure from the best practices of corporate governance,
as detailed in the listing regulations of Stock Exchanges.
h) The key operating and financial data of last six years has been provided in the summarized
form.
i) The information about statutory payments on account of taxes, duties and levies is given
in the notes to the accounts.
j) All the directors of the company are registered as taxpayer and none of the company's
directors are in default of payment of any dues to a banking company, DFI, NBFI or Stock
Exchanges.
k) None of the directors of the company are serving on the Board of 10 or more listed
companies.
YEAR WISE OPERATING DATA
		2003	2002	2001	2000	1999	1998
Spindle Installed		45,504	40,080	40,080	39,360	39,360	34,560
Spindles Worked		45,504	40,080	40,080	39,360	39,360	34,560
No. of Shifts		3	3	3	3	3	3
worked per day.
Installed Capacity
after conversation
into 20/s Count.
(Kgs.)		15,319,544	13,103,594	13,103,594	12,828,900	12,828,900	1 1 ,264,400
Actual Production
after conversation
into 20/s Count
		14,528,675	12,711,407	12,502,799	12,576,599	12,224,807	1 1 ,990,976
YEAR WISE FINANCIAL DATA
		2003	2002	2001	2000	1999	1998
		Rupees in	Rupees in	Rupees in	Rupees in	Rupees in	Rupees in
		thousands	thousands	thousands	thousands	thousands	thousands
FIXED ASSETS		500,829	472,431	426,982	341,804	330,809	I        295,365
INVESTMENTS
LONG TERM LOANS
& DEPOSITS
		10,542	14,501	14,497	10,905	6,188	12,433
CURRENT ASSETS		404,468	408,613	335,049	519,464	595,664	459,514
SHARE HOLDERS
EQUITY		508,157	403,163	371,167	325,041	234,826	218,451
REDEEMABLE
CAPITAL			—	-	8,818	16,240	22,487
LONG TERM
LIABILITIES		113,436	76,050	82,019	52,081	82,188	41,694
DEFERRED
LIABILITIES		82,753	81,098	64,071	44,096	16,688	14,526
CURRENT
LIABILITIES		211,502	335,234	259,271	442,137	582,719	470,154
TURNOVER (NET)		1,426,008	1,285,217	1 ,439,058	1,308,310	1,226,323	1,157,488
GROSS PROFIT		221,702	201,730	199,948	370,133	180,069	211,458
OPERATING
PROFIT		159,567	128,756	134,606	300,039	128,780	153,473
FINANCIAL
CHARGES		31,808	52,355	71,253	64,147	52,849	104,814
PROFIT BEFORE
TAXATION		136,629	72,677	83,140	224,111	64,744	46,627
PROFIT AFTER
TAXATION		104,995	46,996	61,126	165,215	48,925	36,271
CASH DIVIDEND		30,000	15,000	15,000	75,000	24,000	14,550
TRANSFER TO
RESERVES			32,000	46,100	90,200	24,900	30,450
PROFIT C/F		74,995	63	67	40	26	1
The company operated an un-funded and unapproved gratuity scheme. The provision was made
annually to cover the obligations under the scheme as at the end of the financial year. The company
has adopted the revised I AS 19 and a result actuarial valuation has been carried out as at September
30, 2003. The projected unit credit method is used to determine the actuarial values as specified
by the IAS 19.
Board of Directors
Change in the Board .
During the year under review the nominee director of NIT Mr. Hasan Mehmood resigned from the
directorship on April 17, 2003, which was accepted in the board meeting, held on the above date.
The board appointed Mr. Iqbal Mehboob in place of retiring director to fill the casual vacancy till the
remaining term. The board appreciated the performance of the retiring director and welcomes the
newly appointed director.
The current members of the Board are listed on Page No. 2. Following meetings of the Board of
Directors were held during the year, which were attended by the Directors as follows:
NAME OF DIRECTORS			MEETINGS ATTENDED
Mr. Mohammad Salim			5
Mr. Mohammad Sharif			4
Mr. Mohammad Shaheen			5