| Bengal Fibre Industries Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 2001 |
|
|
| CONTENTS |
|
|
|
| Company
Information |
|
| Notice
of Meeting |
|
| Directors'
Report |
|
| Auditors' Report |
|
|
| Balance Sheet |
|
|
| Profit
and 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 |
Ali Mohammad Haji
Mohammad |
Chairman |
|
|
|
Abdul Sattar H. A. Rehman
Bengali |
Chief Executive |
|
|
|
Noor Mohammad Abubakar |
|
|
|
Farooq Haji Mohammad |
|
|
|
Yunus Haji Hashim Bengali |
|
|
|
Faisal G. Bengali |
|
|
|
Firasat Ali (NIT) |
|
|
|
Kh. Mansoor Mukhtar Shah
(NIT) |
|
|
|
Muhammad Latif (SLIC) |
|
| PRINCIPAL
OFFICERS |
|
|
|
| HEAD OFFICE |
|
Rizwan Manai |
|
|
|
Chief Accountant |
|
|
|
|
| FACTORY |
|
Abdul Ghani H.A. Rehman
Bengali |
|
|
|
Senior Executive Vice
President |
|
|
|
|
|
|
Ahmed Hashim Memon |
|
|
|
Chief Engineer |
|
|
|
|
| AUDITORS |
|
Sidat Hyder Qamar &
Co. |
|
|
|
Chartered Accountants |
|
|
|
| BANKERS |
|
Habib Bank Limited |
|
|
|
Muslim Commercial Bank
Limited |
|
|
|
United Bank Limited |
|
|
|
National Bank of Pakistan |
|
|
|
Metropolitan 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 that the Thirty-Fifth Annual General Meeting will be held at
Registered |
|
| Office
at Bengal House, Aga Khan/G. Allana Road, Karachi on Tuesday the 06 November,
2001 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, 2001 |
|
| together
with the Directors' and Auditors' Reports thereon. |
|
|
| 2)
To appoint Auditors for the year 2001/2002 and to fix their remuneration. |
|
|
| 3)
To transact any other business of the Company with the permission of the
Chairman. |
|
|
|
|
By Order of the Board |
|
|
|
|
|
| Karachi:
27 September, 2001 |
|
|
ABDUL SATTAR H.A. REHMAN BENGALI |
|
|
|
|
Chief Executive |
|
|
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from Friday 26
October, 2001 to |
|
| Monday
05 November, 2001 (both days inclusive). |
|
|
|
|
| 2.
A member of the Company entitled to attend and vote at the Annual General
Meeting may appoint |
|
| another
member as proxy to attend and vote on his/her behalf. Proxies, in order to be
valid, must be |
|
| received
at the Registered Office of the Company not later than 48 hours before the
time of holding |
|
| the Meeting. |
|
|
|
|
|
|
| 3.
Shareholders are requested to promptly notify the Company of any change in
their addresses to ensure |
|
| delivery of mail. |
|
|
|
|
| 4.
To facilitate identification, for right to attend the Annual General Meeting,
shareholder whose holdings |
|
| are
on the Central Depository System (CDS) or his/her Proxy should authenticate
his/her identity by |
|
| showing
his/her original National Identity Card (NIC) or original Passport at the
time of attending |
|
| the
meeting, alongwith the Participant's Identity Number and Shareholder's
account number allocated |
|
| by
the Central Depository Company. |
|
|
|
|
|
| 5.
In case of corporate entity, the Board of Directors' resolution/power of
attorney with specimen |
|
| signature
of the nominee shall be produced at the time of the meeting. |
|
|
|
|
| Directors'
Report |
|
|
| The
Directors are pleased to present the thirty fifth Annual Report together with
the audited accounts of the |
|
| company
for the year ended 30 June 2001. |
|
|
| FINANCIAL
RESULTS |
|
|
|
|
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
| Operating
Profit/(Loss) |
|
|
62,172,123 |
(6,103,444) |
|
|
|
|
| Other Income |
|
433,722 |
374,912 |
|
|
|
------------------ |
------------------ |
|
|
|
|
62,605,845 |
(5,728,532) |
|
|
|
|
|
|
| Financial
& other charges |
|
|
(28,878,112) |
(25,443,105) |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
be fore Taxation |
|
|
33,727,733 |
(31,171,637) |
|
| Taxation |
|
|
(14,456,331) |
6,010,128 |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
after Taxation |
|
|
19,271,402 |
(25,161,509) |
|
| Accumulated
(Loss)/Profit brought forward |
|
(22,942,189) |
2,219,320 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
Loss carried forward |
|
|
(3,670,787) |
(22,942,189) |
|
|
|
|
========== |
========== |
|
| Earning/(Loss)
per share |
|
|
2.85 |
(3.72) |
|
|
========== |
========== |
|
|
|
|
| REVIEW
OF RESULTS |
|
|
|
| During
the year the filament yarn industry has overcome its difficulties, due mainly
to the following: |
|
|
| 1)
Reduced supply of yarn in the market due to closure of some filament yarn
manufacturing units. |
|
| 2)
Good demand both in local as well as export markets. |
|
| 3)
Higher cost of imports due to depreciation of Pak Rupee. |
|
|
| The
Company closed its year with a pro-tax profit of Rs. 33,727,733. After
providing for taxation, net profit |
|
| amounts
to Rs. 19,271,402. |
|
|
| With
the higher volume sold and improved manufacturing efficiencies together with
control over costs, gross |
|
| profit
increased to Rs. 78,955,784 (20.27%) from Rs. 9,930,904 (3.22%) during the
corresponding period. In case |
|
| of
operating expenses, despite inflation the management was successful in cost
control and as a result operat- |
|
| ing
expenses increased by only Rs. 749,313 or 4.67% to Rs. 16,783,661 at
increased level of activity. |
|
|
| PRODUCTION
& SALES: |
|
| Total
production of Nylon & Polyester yarn during. the year under review
increased by 390,584 kgs (14.80%) |
|
| to
3,028,939 kgs as compared to 2,638,355 kgs produced during the previous year. |
|
|
| Sales
volume during the review year increased by 5.23% from 2,799,498 kgs to
2,945,947 kgs. |
|
|
| Net
sales during the year increased by Rs. 81,532,798 or 26.47% to Rs.
307,968,245. |
|
|
| FUTURE
OUTLOOK |
|
| The
future outlook of the company must be viewed with caution in the present
situation where; |
|
|
| 1)
Polyester Filament yarn manufacturers are burdened with the dual tax i.e.
sales tax at 15% to 23% and |
|
| also
excise duty of Rs. 2.50 per kg on finished yarn even though custom duty at
20% is payable on the import |
|
| of
our raw material polyester chips thereby resulting in negative protection to
the industry. |
|
|
| 2)
Underinvoicing of imported yarn adds adversely to the plight of local yarn
manufacturers. |
|
|
| 3)
The government in the budget for 2001-2002 has slashed the import duty on
Nylon Yarn by 15% |
|
| whereas
a relief of only 5% has been provided in the custom duty on our raw material
Caprolactum. This has |
|
| significantly
reduced the level of protection to locally manufactured Nylon yarn, and will
encourage imports. |
|
|
| 4)
In the budget 2001-2002 due government has increased the sales tax rate from
15% to 20% in respect |
|
| of
our products covered under SRO 389. Furthermore, additional sales tax in
respect of sales to unregistered |
|
| person
has also increased from 1.5% to 3%. The increase in salex tax can not be
passed on to the consumer in |
|
| the
highly competitive market and this will adversely affect future average
selling price of our products. |
|
|
| Cost
of natural gas, and correspondingly our fuel & power cost, is increasing
due to continuous |
|
| increase
in gas prices. |
|
|
| ACKNOWLEDGEMENTS |
|
| The
directors place on record their appreciation for the services rendered by the
employees of the Company. 8 |
|
| We
also view the harmonious relations between management and the employees. The
Board is grateful to the |
|
| company's
bankers for the valuable financial support and timely services. We also thank
to our shareholders |
|
| for
their trust and support. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| Information
about the pattern of holding of shares as on 30 June 2001 is annexed to this
report. |
|
|
| AUDITORS |
|
| The
present auditors M/s. Sidat Hyder Qamar & Co. -- Chartered Accountants,
retire and being eligible, offer |
|
| themselves
for re-appointment. |
|
|
|
|
For and on behalf of the |
|
|
|
Board of Directors |
|
|
|
|
|
|
|
Abdul Sattar H. A. Rehman Bengali |
|
|
|
Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of BENGAL FIBRE
INDUSTRIES LIMITED as at 30 June |
|
| 2001
and the related profit and loss account and cash flow statement and statement
of changes in equity |
|
| 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. |
|
|
| It
is the responsibility of the Company's management to establish and maintain a
system of internal control, |
|
| and
prepare and present tile 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 street 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 2001 and of the profit, 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. |
|
|
| KARACHI:
08 October 2001 |
|
CHARTERED ACCOUNTANTS |
|
|
|
|
|
| Balance
Sheet as at 30 June 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| Capital
and Reserves |
|
| Authorised
Capital |
|
| 10,000,000
(2000: 10,000,000) |
|
| Ordinary
shares of Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 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 |
|
|
(3,670,787) |
(22,942,189) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
91,751,766 |
72,480,364 |
|
|
|
|
| Redeemable
capital |
|
4 |
-- |
3,056,657 |
|
| Long-term
loans and financial arrangements |
5 |
10,000,000 |
26,840,366 |
|
| Liabilities
against assets subject to finance lease |
6 |
18,257,561 |
-- |
|
| Deferred
taxation |
|
7 |
30,811,591 |
18,332,120 |
|
|
| Current
Liabilities |
|
| Finances
under mark-up arrangements |
8 |
47,435,581 |
84,341,132 |
|
| Current
maturity of long-term liabilities |
9 |
21,385,419 |
33,109,239 |
|
| Creditors,
accrued and other liabilities |
10 |
85,214,139 |
57,540,206 |
|
| Unclaimed
dividend |
|
|
85,847 |
92,080 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
154,120,986 |
175,082,657 |
|
| Contingencies
and commitments |
|
11 |
-- |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
304,941,904 |
295,792,164 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Fixed
Assets - Tangible |
|
|
|
| Operating
assets |
|
12.1 |
132,844,151 |
171,606,950 |
|
| Assets
subject to finance lease |
|
12.2 |
25,422,478 |
-- |
|
|
------------------ |
------------------ |
|
|
|
|
158,266,629 |
171,606,950 |
|
| Long-term
deposits |
|
13 |
3,896,804 |
662,860 |
|
|
|
|
|
|
|
| Current Assets |
|
|
|
| Stores
and spares |
|
14 |
34,804,990 |
35,703,014 |
|
| Stock-in-trade |
|
15 |
71,642,402 |
58,615,310 |
|
| Trade
debts - unsecured, considered good |
|
21,987,605 |
21,325,365 |
|
| Advances,
prepayments and |
|
|
|
| other
receivables |
|
16 |
13,309,370 |
7,192,670 |
|
| Cash
and bank balances |
|
17 |
1,034,104 |
685,995 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
142,778,471 |
123,522,354 |
|
|
------------------ |
------------------ |
|
|
|
304,941,904 |
295,792,164 |
|
|
========== |
========== |
|
|
| Auditors'
Report Annexed |
|
| These
financial statements 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 2001 |
|
|
|
|
2001 |
2000 |
|
|
Note |
Rupees |
Rupees |
|
|
| Sales - Net |
|
18 |
389,501,043 |
307,968,245 |
|
| Cost of sales |
|
19 |
310,545,259 |
298,037,341 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
78,955,784 |
9,930,904 |
|
|
|
|
|
|
| Administrative
expenses |
|
20 |
11,189,822 |
10,979,012 |
|
| Selling expenses |
|
20 |
5,593,839 |
5,055,336 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
16,783,661 |
16,034,348 |
|
|
------------------ |
------------------ |
|
| Operating
profit / (loss) |
|
|
62,172,123 |
(6,103,444) |
|
| Other income |
|
21 |
433,722 |
374,912 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
62,605,845 |
(5,728,532) |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
22 |
23,723,332 |
25,193,474 |
|
| Other charges |
|
23 |
5,154,780 |
249,631 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
28,878,112 |
25,443,105 |
|
|
------------------ |
------------------ |
|
| Profit
/ (loss) before taxation |
|
|
33,727,733 |
(31,171,637) |
|
| Taxation |
|
24 |
14,456,331 |
(6,010,128) |
|
|
|
|
------------------ |
------------------ |
|
| Profit
/ (loss) after taxation |
|
|
19,271,402 |
(25,161,509) |
|
| Accumulated
(loss) / profit brought forward |
|
(22,942,189) |
2,219,320 |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
|
(3,670,787) |
(22,942,189) |
|
|
|
|
========== |
========== |
|
| Earning
/ (Loss) per share |
|
25 |
2.85 |
(3.72) |
|
|
========== |
========== |
|
|
| These
financial statements 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 2001 |
|
|
|
|
Note |
2001 |
2000 |
|
|
|
|
Rupees |
Rupees |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Profit
/ (loss) for the year before tax |
|
33,727,733 |
(31,171,637) |
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
12.4 |
16,053,946 |
20,045,271 |
|
| Financial
charges |
|
22 |
23,723,332 |
25,193,474 |
|
| Workers'
welfare fund |
|
|
116,433 |
-- |
|
| Workers'
profit participation fund |
|
|
1,781,272 |
-- |
|
| Loss
on sale of fixed assets |
|
12.3 |
222,294 |
219,578 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
41,897,277 |
45,458,323 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
cash flow before changes in working capital |
75,625,010 |
14,286,686 |
|
|
|
|
| (Increase)
/ decrease in current assets: |
|
| Stores
and spares |
|
|
898,024 |
2,580,613 |
|
| Stock-in-trade |
|
|
(13,027,092) |
14,802,833 |
|
| Trade debts |
|
|
(662,240) |
(4,456,717) |
|
| Advances,
prepayments and |
|
|
|
|
| other
receivables - net |
|
|
(3,293,917) |
952,868 |
|
|
|
------------------ |
------------------ |
|
|
|
(16,085,225) |
13,879,597 |
|
| Increase/(decrease)
in current liabilities: |
|
| Creditors,
accrued and other liabilities - net |
|
27,869,311 |
14,621,565 |
|
|
|
------------------ |
------------------ |
|
|
|
87,409,096 |
42,787,848 |
|
| Income
tax (paid) / refunded - net |
|
|
(4,916,077) |
2,089,135 |
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from operating activities |
|
82,493,019 |
44,876,983 |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Capital
expenditure |
|
12.1 |
(918,111) |
(2,084,712) |
|
|
| Proceeds
from disposal of fixed assets |
12.3 |
23,832,731 |
230,277 |
|
|
| Long-term
deposits |
|
|
(3,233,944) |
(15,000) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated from / (Used in) investing activities |
19,680,676 |
(1,869,435) |
|
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow after investing activities |
|
102,173,695 |
43,007,548 |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long-term
loan obtained |
|
|
-- |
20,000,000 |
|
| Repayment
of redeemable capital |
|
|
(8,507,476) |
(4,673,198) |
|
| Repayment
of long term loans and |
|
|
(29,498,768) |
(31,548,420) |
|
| financial
arrangements |
|
|
|
|
| Lease
rentals paid |
|
|
(1,421,659) |
(261,718) |
|
| Finances
under mark-up arrangement - net |
|
(36,905,551) |
(2,539,414) |
|
| Dividend paid |
|
|
(6,233) |
(2,463) |
|
| Financial
charges paid |
|
|
(25,485,899) |
(27,718,751) |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
(101,825,586) |
(46,743,964) |
|
|
|
------------------ |
------------------ |
|
| Net
increase / (decrease) in cash and cash equivalents |
348,109 |
(3,736,416) |
|
| Cash
and cash equivalents at the beginning of the year |
685,995 |
4,422,411 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at the end of the year |
|
1,034,104 |
685,995 |
|
|
|
========== |
========== |
|
|
|
|
|
| These
financial statements 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 2001 |
|
|
|
Capital |
|
|
|
Share |
Reserve-Share |
Accumulated |
Total |
|
|
Capital |
Premium |
Profit / (Loss) |
|
|
|
|
|
|
Rupees |
Rupees |
Rupees |
Rupees |
|
|
|
|
| Balance
as at 01 July 1999 |
67,581,620 |
27,840,933 |
2,219,320 |
97,641,873 |
|
| Net
loss for the year |
-- |
-- |
(25,161,509) |
(25,161,509) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2000 |
67,581,620 |
27,840,933 |
(22,942,189) |
72,480,364 |
|
| Net
Profit for the year |
-- |
-- |
19,271,402 |
19,271,402 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at 30 June 2001 |
67,581,620 |
27,840,933 |
(3,670,787 |
