| Bengal Fibre Industries Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
and Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Summary
of Financial Data |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
Ali Mohammad Haji
Mohammad |
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Chairman |
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|
Abdul Sattar H. A. Rehman
Bengali |
Chief Executive |
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|
Noor Mohammad Abubakar |
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|
Farooq Haji Mohammad |
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|
Yunus Haji Hashim Bengali |
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Faisal G. Bengali |
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|
Firasat Ali (NIT) |
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Kh. Mansoor Mukhtar Shah
(NIT) |
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Muhammad Latif (SLIC) |
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| PRINCIPAL
OFFICERS |
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| HEAD OFFICE |
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Rizwan Manai |
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Chief Accountant |
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| FACTORY |
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Abdul Ghani H.A. Rehman
Bengali |
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Senior Executive Vice
President |
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Ahmed Hashim Memon |
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Chief Engineer |
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| AUDITORS |
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Sidat Hyder Qamar &
Co. |
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Chartered Accountants |
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| BANKERS |
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Habib Bank Limited |
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Muslim Commercial Bank
Limited |
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United Bank Limited |
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National Bank of Pakistan |
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Metropolitan Bank Limited |
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Allied Bank of Pakistan
Limited |
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Askari Commercial Bank
Limited |
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| REGISTERED
OFFICE |
Bengal House, Aga Khan/G.
Allana Road, |
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Karachi-74000 Phone No.
752633841, 7529492 |
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Fax: (09221) 7512857,
E-mail: bengal@khi.compol.com. |
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| FACTORY |
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Plot No. 53 & 54,
Sector 15, |
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Korangi Industrial Area, |
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Karachi, Phone No.
50635914 |
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Fax: 5063590 |
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| SALES OFFICE |
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70-Alam Market, Near
Ghordhandas Market |
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Saleh Mohammad Street,
Karachi. |
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Phones: 2419540-2415675,
Fax: 2429520 |
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| NOTICE OF ANNUAL GENERAL
MEETING |
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| NOTICE
IS HEREBY GIVEN that the Thirty-Fourth Annual General Meeting will be held at
Registered |
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| Office
at Bengal House, Aga Khan/G. Allana Road, Karachi on Wednesday the 20
December, 2000 at |
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| 11.00
a.m. to transact the following business: |
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| 1)
To receive and consider the Audited Accounts of the Company for the year
ended 30 June, 2000 |
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| together
with the Directors' and Auditors' Reports thereon. |
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|
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| 2)
To appoint Auditors for the year 2000/2001 and to fix their remuneration. |
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| 3)
To transact any other business of the Company with the permission of the
Chairman. |
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By Order of the Board |
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ABDUL SATTAR H.A. REHMAN BENGALI |
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| Karachi:
02 November 2000 |
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|
Chief Executive |
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| NOTES: |
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| 1.
The Share Transfer Books of the Company will remain closed from Saturday the
18 November, 2000 |
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| to
Saturday the 25th November, 2000 (both days inclusive). |
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|
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| 2.
A member of the Company entitled to attend and vote at the Annual General
Meeting may appoint |
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| another
member as proxy to attend and vote on his/her behalf. Proxies, in order to be
valid, must be |
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| received
at the Registered Office of the Company not less than 48 hours before the
time of holding the |
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| Meeting. |
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|
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| 3.
Shareholders are requested to promptly notify the Company of any change in
their addresses to ensure |
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| delivery of mail. |
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| 4.
To facilitate identification, for right to attend the Annual General Meeting,
shareholder whose holdings |
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| are
on the Central Depository System (CDS) or his/her Proxy should authenticate
his/her identity by |
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| showing
his/her original National Identity Card (NIC) or original Passport at the
time of attending |
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| the
meeting, along with the Participant's Identity Number and Shareholder's
account number allocated |
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| by
the Central Depository Company. |
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| In
case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
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| signature
of the nominee shall be produced at the time of the meeting. |
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| DIRECTORS'
REPORT |
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| The
Directors are pleased to present the thirty fourth Annual Report together
with the audited accounts of the |
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| company
for the year ended 30 June, 2000. |
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2000 |
1999 |
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|
Rupees |
Rupees |
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| Operating
(Loss)/profit |
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|
(6,103,444) |
34,854,711 |
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| Other Income |
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|
374 ,912 |
160,042 |
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|
|
|
------------------ |
------------------ |
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|
(5,728,532) |
35,014,753 |
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|
| Financial
& other charges |
|
|
(25,443,105) |
(29,349,493) |
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|
------------------ |
------------------ |
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|
(31,171,637) |
5,665,260 |
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| Taxation |
|
|
6,010,128 |
(446,167) |
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|
|
------------------ |
------------------ |
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| (Loss)
/ profit after taxation |
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|
(25,161,509) |
5,219,093 |
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| Accumulated
Profit brought forward |
|
2,219,320 |
379,308 |
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|
------------------ |
------------------ |
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|
(22,942,189) |
5,598,401 |
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| Appropriation: |
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| Interim
dividend Nil (1999 @ 5%) |
|
-- |
(3,379,081) |
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|
------------------ |
------------------ |
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| Accumulated
(Loss) / profit carried forward |
|
(22,942,189) |
2,219,320 |
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|
========== |
========== |
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| (Loss)
/ earning per share |
|
Rs. (3.72) |
Re. 0.77 |
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| REVIEW
OF RESULTS |
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| In
the budget for the year 1999-2000 the Government has slapped additional
import levies on the company's |
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| main
raw material Polyester Chips which was increased from the previous 25% to
35%. This resulted in an |
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| increase
in the raw material cost of the company to the extent of 21.60%. This
anomalous situation was |
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| vehemently
contested before the National Tariff Commission and in January 2000 the
Government rectified the |
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| fiscal anomaly. |
|
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| Another
major factor affecting the operating results of the company for the year
under review was the dumping |
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| of
yarn by the Far Eastern Countries. This resulted in reduction of 2.85% in the
net average selling price of |
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| products
of the company. Furthermore, the Government in the budget for the year
1999-2000 enhanced the |
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| additional
Sales tax levied on sales to non-registered person by 2%. In view of the fact
that the Art Silk Fabric |
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| Industry
is mainly in the unorganized sector the bulk of such additional Sales tax had
to be absorbed within the |
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| selling
price of yarn. |
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| As
will be noted from the above the main cause of the negative operating results
had been the fiscal policy of |
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| the
Government, and your company has closed its year with pre-tax loss of Rs. 3
I, 171,637 as compared to |
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| preceding
year's pre-tax profit of Rs. 5,665,260. After accounting for taxation and
deferred taxation, net loss |
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| amounts
to Rs. 25,161,509 as compared to net profit of Rs. 5,219,093 in the previous
year. In case of operating |
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| expenses
inspite of inflationary trend prevailing in the country, your management is
successful in his cost |
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| cutting
policies and as a result operating expenses declined by 4.32% to Rs.
16,034,348. |
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| PRODUCTION
& SALES: |
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| Total
production of nylon and polyester yarn during the year under review increased
by 2.67% to 2,638,355 kgs |
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| as
compared to 2,569,716 kgs produced during the preceding year. |
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| Sales
volume during the year increased by 16.31% as compared to the preceding year
i.e. during the review year |
|
| 2,799,498
kgs sold as compared to 2,406,961 kgs in 1998-99. Net sales during the year
under review increased by |
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| 10%
to Rs. 307,968,245. This increase is attributable to the higher sales volume
and change in sales mix. |
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| However,
selling prices remained under pressure. |
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| FUTURE
OUTLOOK |
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| Although
the Government at the recommendation of the National Tariff Commission
reversed the increase in |
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| import
levies on Polyester Chips, and at the same time it has reduced the import
duty on imported man-made |
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| yarn,
with the import of yarn at substantially low values the local manufacturers
of yarn are placed at a fiscal |
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| disadvantage.
The company through the good offices of the Filament yarn Manufacturers
Association has |
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| taken
up the matter with the Government and requested for removal of Excise Duty @
Rs. 2.50 per kg levied on |
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| end
products of the company. It is hoped that the Government will favourably
remedy this anomaly. |
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| The
future outlook of the Company must be viewed in relation to economic
conditions prevalent in the country. |
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| Your
directors are cautiously optimistic, and feel that after a volatile financial
year 1999-2000, we are likely to |
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| see
improved performance in the current year. |
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| ACKNOWLEDGEMENTS |
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| The
directors place on record their appreciation for the services rendered by the
employees of the Company. |
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| We
also view the harmonious relations between management and the employees. The
Board is grateful to the |
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| company's
bankers for the valuable financial assistance and timely services rendered by
them. We also thank |
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| to
our shareholders for the trust and support. |
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|
| PATTERN
OF SHAREHOLDING |
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| Information
about the pattern of holding of shares as on 30 June 2000 is annexed to this
report. |
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| AUDITORS |
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| The
present auditors M/s. Sidat Hyder Qamar & Co. -- Chartered Accountants,
retire and being eligible, offer |
|
| themselves
for re-appointment. |
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|
For and on behalf of the |
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|
Board of Directors |
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|
Abdul Sattar H. A. Rehman Bengali |
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|
Chief Executive |
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| AUDITORS'
REPORT TO THE MEMBERS |
|
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| We
have audited the annexed balance sheet of BENGAL FIBRE
INDUSTRIES LIMITED as at 30 June |
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| 2000 and the related profit and loss account and cash flow statement
and statement of changes in equity |
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| 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. |
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| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
|
| the
requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on these |
|
| statements
based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
|
| require
that we plan and perform the audit to obtain reasonable assurance about
whether the above said |
|
| statements
are free of any material misstatement. An audit includes examining on a test
basis, evidence |
|
| supporting
the amounts and disclosures in the above said statements. An audit also
includes assessing the |
|
| accounting
policies and significant estimates made by management, as well as, evaluating
the overall presentation |
|
| of
the above said statements. We believe that our audit provides a reasonable
basis for our opinion and, after |
|
| due
verification, we report that: |
|
|
| a)
in our opinion, proper books of account have been kept by the Company as
required by the Companies |
|
| 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 account and are further in accordance with 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, investments 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 and loss account, cash flow statement and statement of changes
in equity together |
|
| with
the notes forming part thereof conform with approved accounting standards as
applicable in |
|
| Pakistan,
and, 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 30 June |
|
| 2000
and of the loss, its cash flows and changes in equity for the year then
ended; and |
|
|
|
|
| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
|
|
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|
SIDAT HYDER QAMAR & Co. |
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| Karachi:
2 November 2000 |
|
Chartered Accountants |
|
|
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 2000 |
|
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|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Capital
and Reserves |
|
| Authorised
Capital |
|
| 10,000,000
(1999: 10,000,000) |
|
| Ordinary
shares of Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
|
|
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|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
3 |
67,581,620 |
67,581,620 |
|
| Capital
reserve - share premium |
|
|
27,840,933 |
27,840,933 |
|
| Accumulated
(loss) / Profit |
|
|
(22,942,189) |
2,219,320 |
|
|
------------------ |
------------------ |
|
|
|
72,480,364 |
97,641,873 |
|
|
|
|
| Redeemable
capital |
|
4 |
3,056,657 |
8,507,476 |
|
| Long-term
loans and financial arrangements |
5 |
26,840,366 |
34,498,786 |
|
| Deferred
taxation |
|
6 |
18,332,120 |
25,845,487 |
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
| Finance
under mark-up arrangements |
7 |
84,341,132 |
86,880,546 |
|
| Current maturity |
|
|
8 |
33,109,239 |
36,470,235 |
|
| Creditors,
accrued and other liabilities |
9 |
57,540,206 |
45,457,019 |
|
| Unclaimed
dividend |
|
|
92,080 |
94,543 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
175,082,657 |
168,902,343 |
|
| Contingencies
and commitments |
|
10 |
-- |
-- |
|
|
------------------ |
------------------ |
|
|
|
295,792,164 |
335,395,965 |
|
|
|
========== |
========== |
|
|
| Fixed
Assets - Tangible |
|
|
|
| Operating
assets |
|
|
171,606,950 |
189,513,558 |
|
| Assets
subject to finance lease |
|
|
-- |
503,806 |
|
|
|
------------------ |
------------------ |
|
|
|
171,606,950 |
190,017,364 |
|
|
|
|
| Long-term
deposits |
|
|
662,860 |
647,860 |
|
|
|
| Current Assets |
|
| Stores
and spares |
|
12 |
35,703,014 |
38,283,627 |
|
| Stock-in-trade |
|
13 |
586,153,101 |
73,418,143 |
|
| Trade
debts - unsecured, considered good |
|
213,253,651 |
16,868,648 |
|
| Advances,
deposits, prepayments and |
|
|
| other
receivables |
|
14 |
71,926,701 |
11,737,912 |
|
| Cash
and bank balances |
|
15 |
6,859,951 |
4,422,411 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
123,522,354 |
144,730,741 |
|
|
------------------ |
------------------ |
|
|
|
295,792,164 |
335,395,965 |
|
|
|
========== |
========== |
|
|
|
|
|
| Auditors'
Report Annexed |
|
| These
accounts should be read with the annexed notes. |
|
|
|
Abdul Sattar H.A. Rehman Bengali |
|
|
Ali Mohammad Haji Mohammad |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| For
the Year Ended 30 June 2000 |
|
|
|
|
2000 |
1999 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales - Net |
|
16 |
307,968,245 |
278,950,648 |
|
| Cost of sales |
|
17 |
298,037,341 |
227,338,274 |
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
9,930,904 |
51,612,374 |
|
|
|
|
|
|
| Administrative
expenses |
|
18 |
10,979,012 |
11,668,356 |
|
| Selling expenses |
|
18 |
5,055,336 |
5,089,307 |
|
|
|
------------------ |
------------------ |
|
|
|
16,034,348 |
16,757,663 |
|
|
------------------ |
------------------ |
|
| Operating
(loss) / profit |
|
|
(6,103,444) |
34,854,711 |
|
| Other income |
|
19 |
374,912 |
160,042 |
|
|
------------------ |
------------------ |
|
|
|
(5,728,532) |
35,014,753 |
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
20 |
25,193,474 |
24,968,782 |
|
| Other charges |
|
21 |
249,631 |
4,380,711 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
25,443,105 |
29,349,493 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ profit before taxation |
|
|
(31,171,637) |
5,665,260 |
|
| Taxation |
|
22 |
(6,010,128) |
446,167 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)
/ profit after taxation |
|
|
(25,161,509) |
5,219,093 |
|
| Accumulated
Profit brought forward |
|
2,219,320 |
379,308 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(22,942,189) |
5,598,401 |
|
|
| Appropriation: |
|
| Interim
dividend - Nil (1999: @ 5 %) |
|
-- |
(3,379,081) |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
(loss) / profit carried forward |
|
(22,942,189) |
2,219,320 |
|
|
|
|
========== |
========== |
|
| (Loss)
/ earning per share |
|
23 |
Rs. (3.72) |
Re. 0.77 |
|
|
========== |
========== |
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
Abdul Sattar H.A. Rehman Bengali |
|
|
Ali Mohammad Haji Mohammad |
|
|
Chief Executive |
|
|
Director |
|
|
|
| CASH
FLOW STATEMENT |
|
| For
the Year Ended 30 June 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
Rupees |
Rupees |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| (Loss)
/ profit for the year before tax |
|
(31,171,637) |
5,665,260 |
|
| Adjustment for: |
|
|
|
|
|
| Depreciation |
|
11.4 |
20,045,271 |
22,180,014 |
|
| Financial
charges |
|
20 |
25,193,474 |
24,764,901 |
|
| Workers'
welfare fund |
|
|
-- |
270,000 |
|
| Workers'
welfare fund - prior years |
|
-- |
(436,534) |
|
| Loss
on sale of fixed assets |
|
11.3 |
219,578 |
124,655 |
|
|
|
|
------------------ |
------------------ |
|
|
|
45,458,323 |
46,903,036 |
|
|
|
------------------ |
------------------ |
|
| Operating
profit before changes in operating assets |
|
14,286,686 |
52,568,296 |
|
|
| (Increase)
/ decrease in current assets: |
|
|
|
| Stores
and spares |
|
|
2,580,613 |
(507,616) |
|
| Stock-in-trade |
|
|
|
14,802,833 |
6,122,189 |
|
| Trade debts |
|
|
|
(4,456,717) |
521,665 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other
receivables |
|
|
952,868 |
(4,880,510) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
13,879,597 |
1,255,728 |
|
| Increase/(decrease)
in current liabilities: |
|
| Creditors,
accrued and other liabilities |
|
14,621,565 |
(50,299,683) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
42,787,848 |
3,524,341 |
|
|
|
|
|
|
| Tax
refunded / (paid) |
|
|
2,089,135 |
(2,310,894) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from operating activities |
|
44,876,983 |
1,213,447 |
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
| Capital
expenditure |
|
11.1 |
(2,084,712) |
(2,717,143) |
|
| Proceed
from sale of fixed assets |
|
11.3 |
230,277 |
781,604 |
|
| Long-term
deposits |
|
|
(15,000) |
(110,656) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) investing activities |
|
(1,869,435) |
(2,046,195) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow after investing activities |
|
43,007,548 |
(832,748) |
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Long-term
loan obtained |
|
|
20,000,000 |
50,000,000 |
|
| Repayment
o f redeemable capital |
|
|
(4,673,198) |
(4,006,515) |
|
| Repayments
of long term loans |
|
|
(31,548,420) |
(27,428,190) |
|
| Lease
rentals paid |
|
|
(261,718) |
(1,800,726) |
|
| Finance
under mark-up arrangement |
|
(2,539,414) |
14,767,199 |
|
| Dividend paid |
|
|
(2,463) |
(7,045,357) |
|
| Interest paid |
|
|
(27,718,751) |
(21,078,557) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash (used in) / generated from financing activities |
(46,743,964) |
3,407,854 |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease) / increase in cash and cash equivalents |
(3,736,416) |
2,575,106 |
|
| Cash
and cash equivalents at the beginning of the year |
4,422,411 |
1,847,305 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
685,995 |
4,422,411 |
|
|
|
========== |
========== |
|
|
|
|
|
| These
accounts should be read with the annexed notes. |
|
|
|
|
Abdul Sattar H.A. Rehman Bengali |
|
|
Ali Mohammad Haji Mohammad |
|
|
Chief Executive |
|
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| For
the Year Ended 30 June 2000 |
|
