| Bhanero Textile Mills Limited |
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| Annual
Report 2000 |
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| Company
Information |
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| BOARD
OF DIRECTORS |
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| CHIEF
EXECUTIVE & DIRECTOR |
Mr. Mohammad Salim |
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| DIRECTORS |
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Mr. Mohammad Sharif |
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Mr. Mohammad Shaheen |
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Mr. Mohammad Shakeel |
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Mr. Khurram Salim |
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Mr. Furrukh Salim |
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Mr. Bilal Sharif |
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| COMPANY
SECRETARY |
Mr. Asif Mahmood |
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|
ACA, FCIS, FITM, FICS |
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| FINANCE
MANAGER |
Mr. Anwar Hussain (FCA) |
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| BANKERS |
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ABN Amro Bank |
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Citi Bank, N.A. |
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United Bank Limited |
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National Bank of Pakistan |
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National Development
Finance Corporation |
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Muslim Commercial Bank
Limited |
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Standard Chartered Bank |
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Bank Al Habib |
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Hong Kong & Shanghai
Bank Corporation |
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| AUD1TORS |
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M/s Mushtaq & Company |
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Chartered Accountants |
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407, Commerce Centre |
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Hasrat Mohani Road |
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Karachi. |
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| REGISTERED
OFFICE |
Umer Chambers |
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10/2, Bilmoria Street |
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Off. I. I. Chundrigar
Road |
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Karachi. |
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Tel: 2635916-7 Fax:
2637826 |
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Email:
Khioff@umergroup.com |
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Website:
http://www.umergroup.com |
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| MILLS AT |
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Unit I is situated at
Kotri |
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District Dadu, |
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Ph: 0221-870013 |
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Unit II is situated at |
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Feroz Watwan, |
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Sheikhupura. Punjab |
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Ph: 0342-4408970 |
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| REGIONAL
OFFICE |
6-K, Main Boulvard, |
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Gulberg II, Lahore. |
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Tel: (042) 5712437 -8 |
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Fax: (042) 5711864 |
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E-mail:
lhroff@umergroup.com |
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web site:
www.umergroup.com |
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| Notice
of Annual General Meeting |
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| NOTICE
is hereby given that 21st Annual General Meeting of the members of Bhanero
Textile Mills |
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| Limited
will be held on March 29, 2001 at 06:00 p.m. at the Registered Office of the
Company |
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| i.e.
Umer Chambers, 10/2 Bilmoria Street, Off: I. I. Chundrigar Road, Karachi to
transact the following business: |
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| 1.
To confirm the minutes of the last Annual General Meeting held on March 27,
2000. |
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| 2.
To receive, consider and adopt the audited accounts of the company for the
year ended September, |
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| 30,
2000 together with the Auditors' and Directors' Reports thereon. |
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| 3.
To approve the dividend as recommended by the Board of Directors, for the
year ended |
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| September 30, 2000. |
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| 4.
To appoint Auditors for the year 2000-2001 and fix their remuneration. The
present Auditors |
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| M/s
Mushtaq & Co. Chartered Accountants, being eligible, offer themselves for
reappointment. |
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| 5.
To transact any other business with the permission of the Chairman. |
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(BY ORDER OF THE BOARD) |
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|
ASIF MAHMOOD |
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|
ACA |
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| KARACHI:
March 02, 2001 |
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COMPANY SECRETARY |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from March 21,
2001 to |
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| April
01, 2001 (both days inclusive). |
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| 2.
A member eligible to attend and vote at this Meeting may appoint another
member as |
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| his/her
proxy to attend and vote instead of him/her. Proxies in order to be effective
must |
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| be
received by the Company at the Registered Office not less than 48 hours
before the |
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| time
for. holding the meeting. |
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| 3.
In case of proxy for any individual beneficially owner of CDC, entitled to
attend and vote |
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| at
this meeting, it is necessary to deposit the attested copies of beneficial
owner's National |
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| Identity
card, account and participant's ID numbers. The proxy shall produce his
original |
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| identity
card at the time of the meeting. Representative of corporate members should |
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| bring
the legal documents for such purpose. |
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| 4.
Shareholders are requested to immediately notify the changes in their
address, if any, |
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| Directors'
Report to the Members |
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| I,
on behalf of the Board of directors, welcome the members at the 21st Annual
General Meeting |
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| and
pleased to present the audited accounts with the auditors report there on for
the year ended |
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| September
30, 2000 for your consideration and approval. |
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| FINANCIAL
RESULTS |
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| During
the year under review, with the grace of Allah, your company has promoted
well in its |
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| operations.
The company has earned a net profit after tax at Rs. 165,214,571 against |
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| Rs.
48,925,469/= in the corresponding year. The allocation of profit for the year
before tax is |
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| summarised
as under: |
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Sept, 30 |
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|
2000 |
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|
(Rupees 000) |
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| Profit
after taxation |
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165,214 |
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| Unappropriated
profit brought forward |
|
26 |
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------------------ |
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| Profit
available for appropriation |
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165,240 |
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| Appropriations: |
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| Proposed
cash dividend @ 250% |
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75,000 |
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| Transfer
to general reserve |
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90,200 |
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------------------ |
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165,200 |
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------------------ |
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| Unappropriated
profit carried forward |
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40 |
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------------------ |
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| Earning
per share |
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Rs. 55.07 |
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| The
gross sales of the company has increased by Rs. 94.096 million as compared to
last year's |
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| gross
sales with a growth of 7.5%. The export sales of the company have also
increased by Rs. |
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| 130.460
million over the export sales of last year. The Selling & Distribution
expenses have |
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| increased
by Rs. 10.479 million. The financial charges have also increased by Rs.
11,298 million |
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| as
compared to the last year. |
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| YEAR
UNDER REVIEW |
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| The
year under review ended with an exceptional profit. I am pleased to inform
you that the |
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| company
has earned a remarkable profit during the year under review. The cotton crop
was good |
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| and
the prices were depressed due to international recession. In other words all
factors remains |
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| in
favour through out the year. |
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| FUTURE
OUTLOOK |
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| Considering
the increase in the cotton prices during the cotton season 2000-2001, it
seems |
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| that
the profitability of the company for the next year may not be comparable to
the profits of |
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| the
year under review The Government should allow export refinance facility for
further few |
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| years
to flourish the textile sector. |
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| EXPANSION
PLAN |
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| The
management believes n continues balancing & modernization with the latest
technology |
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| available
at the moment to survive in international market and to boost exports of
cotton yarn. |
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| BREAK
UP VALUE & EARNING PER SHARE. |
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| The
break up value of your share as on September 30, 2000 was Rs.108 as compared
to |
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| Rs.
78.28 of last year. The earning per share of the year under review was Rs.
55.07 as |
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| compared
to Rs. 16.31 of the last year. |
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| PROFIT
DISTRIBUTION |
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| The
directors of the company are pleased to recommend a payment of 250% cash
dividend for |
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| the
year under review. |
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| AUDITORS |
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| The
present auditors M/s Mushtaq & Company, Chartered Accountants retiring at
the Annual |
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| General
Meeting and being eligible, have offered themselves for reappointment. |
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| PATTERN
OF SHAREHOLDING |
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| Statement
showing pattern of holding of shares as at September 30, 2000 is annexed to
this |
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| report. |
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| THANKS
AND GRATITUDE |
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| Your
directors would like to place their appreciation of the hard work and
dedication shown by |
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| the
executives, officers, staff members and workers of the company n the
performance of their |
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| duties.
The directors do hope that it will be continued in future. |
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For and on behalf of the Board |
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|
Mohammad Salim |
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| Karachi:
March 2, 2001 |
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Chief Executive/Director |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| We
have audited the annexed balance sheet of BHANERO TEXTILE MILLS LIMITED as at
September |
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| 30,
2000 and the related profit and loss account, cash flow statement and
statement of changes in |
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| equity
together with the notes forming part thereof, for the year then ended and we
state that we have |
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| obtained
all the information and explanations which to the best of our knowledge and
belief, were |
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| 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 |
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| control,
and prepare and present the above said statements in conformity with the
approved accounting |
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| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
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| opinion
on these statements based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
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| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the |
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| above
said statements are free of any material misstatement. An audit includes
examining, on a test |
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| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
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| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
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| evaluating
the overall presentation of the above said statements. We believe that our
audit provides a |
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| reasonable
basis for our opinion and, after due verification, we report that: |
|
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| (a)
in our opinion, proper books of accounts have been kept by the company as
required by the Companies |
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| Ordinance 1984; |
|
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| (b)
in our opinion: |
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|
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| (i)
the balance sheet and profit and loss account together with the notes thereon
have been drawn |
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| up
in conformity with the Companies Ordinance, 1984, and are in agreement with
the books of |
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| accounts
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 |
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| in
accordance with the objects of the company. |
|
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| (c)
In our opinion and to the best of our information and according to the
explanations given to us, the |
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| balance
sheet, profit and loss account, cash flow statement and statement of changes
in equity |
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| together
with the notes forming part thereof conform with approved accounting standard
as applicable |
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| 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 September |
|
| 30,
2000 and of the profit, its cash flows and changes in equity for the year
then ended; and |
|
|
| (d)
in our opinion zakat deductible at source under the zakat and ushr ordinance,
1980 (XVIII of 1980), |
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| was
deducted by the company and deposited in the Central Zakat Fund established
under section 7 |
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| of
that ordinance. |
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|
MUSHTAQ & COMPANY |
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| KARACHI:
March 02, 2001. |
|
Chartered Accountants |
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| BALANCE
SHEET AS AT SEPTEMBER 30, 2000 |
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|
NOTE |
2000 |
1999 |
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|
RUPEES |
RUPEES |
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| CAPITAL
AND LIABILITIES |
|
|
|
| CAPITAL
AND RESERVES: |
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|
|
| Authorised
share capital |
|
3 |
30,000,000 |
30,000,000 |
|
|
|
|
|
========== |
========== |
|
|
| Issued,
subscribed and |
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| paid-
up share capital |
|
4 |
30,000,000 |
30,000,000 |
|
|
|
|
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| REVENUE
RESERVES: |
|
|
|
| General reserves |
|
5 |
295,000,000 |
204,800,000 |
|
| Un-appropriated
profit |
|
|
40,777 |
26,206 |
|
|
|
|
------------------ |
------------------ |
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|
|
|
325,040,777 |
234,826,206 |
|
|
|
|
| Redeemable
capital |
|
6 |
8,818,025 |
16,239,978 |
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|
|
|
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| LONG
TERM LIABILITIES: |
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|
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|
| Long term loans |
|
7 |
31,013,639 |
71,346,973 |
|
| Obligation
under finance lease |
|
8 |
10,226,821 |
-- |
|
| Custom
duty payable |
|
9 |
1,252,787 |
1,252,787 |
|
| Excise
duty payable |
|
10 |
9,587,657 |
9,587,657 |
|
|
------------------ |
------------------ |
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|
|
52,080,904 |
82,187,417 |
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|
|
|
| DEFERRED
LIABILITIES: |
|
|
|
| Staff
retirement benefit |
|
11 |
17,005,380 |
10,671,309 |
|
| Deferred
taxation |
|
|
27,090,852 |
6,017,056 |
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|
------------------ |
------------------ |
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|
|
|
44,096,232 |
16,688,365 |
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| CURRENT
LIABILITIES: |
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| Short
term bank borrowings |
|
12 |
1,866,172,581 |
354,599,958 |
|
| Current
maturity of long term liabilities |
13 |
32,647,346 |
7,735,904 |
|
| Creditors,
accrued |
|
|
|
| and
other liabilities |
|
14 |
88,209,200 |
181,394,516 |
|
| Provision
for taxation |
|
|
59,663,582 |
14,988,374 |
|
| Proposed
dividend |
|
|
75,000,000 |
24,000,000 |
|
|
|
|
------------------ |
------------------ |
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|
|
|
442,137,386 |
582,718,752 |
|
| CONTINGENCIES
AND |
|
|
|
| COMMITMENTS |
|
15 |
-- |
-- |
|
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|
------------------ |
------------------ |
|
|
|
|
872,173,324 |
932,660,718 |
|
|
========== |
========== |
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|
| The
annexed notes form an integral part of these accounts |
|
|
| Karachi:
March 02, 2001. |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
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| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
fixed assets |
|
16 |
334,659,710 |
329,947,317 |
|
| Capital
work-in-progress |
|
17 |
7,144,461 |
861,367 |
|
|
|
|
------------------ |
------------------ |
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|
|
|
341,804,171 |
330,808,684 |
|
|
|
|
| LONG
TERM LOANS |
|
18 |
5,780,268 |
2,452,899 |
|
| LONG
TERM INVESTMENTS |
|
19 |
2,578,992 |
2,976,755 |
|
| LONG
TERM DEPOSITS |
|
|
2,546,277 |
758,226 |
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
| Stores,
spares and loose tools |
|
20 |
13,952,322 |
16,231,517 |
|
| Stock in trade |
|
21 |
98,191,513 |
158,595,724 |
|
| Trade debts |
|
22 |
254,771,428 |
214,866,196 |
|
| Loans
and advances |
|
23 |
98,074,411 |
100,527,516 |
|
| Deposits,
prepayments and |
|
|
|
| other
receivables |
|
24 |
10,689,818 |
15,273,439 |
|
| Cash
and bank balances |
|
25 |
43,784,124 |
90,169,762 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
519,463,616 |
595,664,154 |
|
|
------------------ |
------------------ |
|
|
|
872,173,324 |
932,660,718 |
|
|
|
========== |
========== |
|
|
|
Mohammad Salim |
|
|
Mohammad Shakeel |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
NOTE |
2000 |
1999 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| Sales (Net) |
|
26 |
1,308,310,098 |
1,226,323,095 |
|
| Cost of Sales |
|
27 |
938,177,509 |
1,046,254,379 |
|
|
|
|
------------------ |
------------------ |
|
| Gross Profit |
|
|
|
370,132,589 |
180,068,716 |
|
|
| OPERATING
EXPENSES |
|
|
|
| Administrative |
|
28 |
33,835,333 |
25,508,364 |
|
| Selling
and Distribution |
|
29 |
36,258,693 |
25,780,391 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
70,094,026 |
51,288,755 |
|
|
|
|
------------------ |
------------------ |
|
| Operating Profit |
|
|
300,038,563 |
128,779,961 |
|
| Other Income |
|
30 |
413,021 |
617,918 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
300,451,584 |
129,397,879 |
|
|
|
|
| Financial
Charges |
|
31 |
641,469,821 |
52,848,816 |
|
| Other Charges |
|
32 |
12,193,105 |
11,805,414 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
76,340,087 |
64,654,230 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
224,111,497 |
64,743,649 |
|
|
|
|
|
|
| TAXATION: |
|
33 |
|
| - Current Year |
|
|
45,192,738 |
14,470,844 |
|
| - Deferred |
|
|
21,073,796 |
-- |
|
| - Prior Year |
|
|
(7,369,608) |
1,347,336 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
58,896,926 |
15,818,180 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
165,214,571 |
48,925,469 |
|
| Unappropriated
profit brought forward |
|
26,206 |
737 |
|
|
------------------ |
------------------ |
|
| Available
for appropriation |
|
|
165,240,777 |
48,926,206 |
|
|
| APPROPRIATIONS |
|
| Transferred
from general reserves |
|
|
-- |
(8,550,000) |
|
| Dividend
paid from the profit of 1998 @ 28.5% |
|
-- |
8,550,000 |
|
| Proposed
dividend @ 250% (1999 @ 80%) |
|
75,000,000 |
24,000,000 |
|
| Transferred
to general reserves |
|
|
90,200,000 |
24,900,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
165,200,000 |
48,900,000 |
|
|
|
|
------------------ |
------------------ |
|
| Un-appropriated
profit carried forward |
|
40,777 |
26,206 |
|
|
|
|
========== |
========== |
|
| EARNING
PER SHARE |
|
34 |
Rs. 55.07 |
Rs. 16.31 |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Mohammad Salim |
|
|
Mohammad Shakeel |
|
|
Chief Executive |
|
|
Director |
|
|
| Karachi:
March 2, 2001 |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED SEPTEMBER 30, 2000 |
|
|
|
|
|
2000 |
1999 |
|
|
|
|
RUPEES |
RUPEES |
|
|
|
| A.
CASH FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
|
224,111,497 |
64,743,649 |
|
| Adjustment
for depreciation |
|
|
37,027,880 |
36,419,883 |
|
| Provision
for gratuity |
|
|
7,835,500 |
3,580,897 |
|
| Financial
charges |
|
|
64,146,982 |
52,848,816 |
|
| Loss/(Gain)
on disposal of fixed assets |
|
569,855 |
(243,888) |
|
| Dividend
Income |
|
|
(397,763) |
(265,175) |
|
| Interest Income |
|
|
(585,113) |
(107,510) |
|
| Provision
for diminution in |
|
|
|
|
| value
of investments |
|
|
397,763 |
8,397,854 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
108,995,104 |
100,630,877 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
333,106,601 |
165,374,526 |
|
|
| (Increase)/decrease
in current assets |
|
| Stocks,
stores and spares |
|
|
62,683,406 |
(108,241,633) |
|
| Trade debts |
|
|
(39,905,232) |
52,662,700 |
|
| Loans
and advances |
|
|
12,085,749 |
542,908 |
|
| Deposits,
prepayments and other receivables |
|
4,583,621 |
4,753,978 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
39,447,544 |
(50,282,047) |
|
|
|
| (Decrease)/
Increase in current liabilities |
|
| Short
term bank borrowings |
|
|
(167,982,700) |
32,252,545 |
|
| Creditors,
accrued and other liabilities |
|
(101,983,828) |
96,711,945 |
|
| Worker's
profit participation fund |
|
|
8,387,782 |
866,856 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(261,578,746) |
129,831,346 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
11 0,975 399 |
244,923,825 |
|
|
|
|
|
| Payment for: |
|
| Taxes |
|
|
(2,780,566) |
(22,319,484) |
|
| Gratuity |
|
|
(1,501,429) |
(1,418,558) |
|
| Financial
charges |
|
|
(62,205,193) |
(81,461,491) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(66,487,188) |
(105,199,533) |
|
|
|
|
------------------ |
------------------ |
|
| NET
CASH INFLOW FROM OPERATING ACTIVITIES |
44,488,211 |
139,724,292 |
|
|
|
|
========== |
== |
