Bhanero Textile Mills Limited Annual Report 2019 PDF

of Companies
th
40 Annual Report 2019
UMER GROUP OF COMPANIES
BHANERO TEXTILE MILLS LIMITED

BHANERO TEXTILE of Companies MILLS LIMITED
VISION
A premier quality company providing quality
products and maintaining an excellent level of
ethical and professional standards
MISSION STATEMENT
To become a leading manufacturer of textile
products in the international and local market & to
explore new era to achieve the highest level of
success.
Index
CONTENTS PAGE
Corporate Information 1
Notice of the Annual General Meeting 2-4
Chairman's Review Report 5
Directors' Report 6-12
Statement of Compliance with the Best Practice 13-14
Review Report to the Members 15
Auditors' Report to the Members 16-18
Statement of Financial Position 19-20
Statement of Profit or Loss 21
Statement of Comprehensive Income 22
Statement of Changes in Equity 23
Statement of Cash Flows 24
Notes to the Financial Statements 25-57
Categories of Shareholders 58
List of Shareholders 59-60
Pattern of Shareholding 61
Year wise Operating Data 62
Directors' Report (Urdu) 63-73
Proxy Form 74
Proxy Form (Urdu) 75

CORPORATE INFORMATION
Board of Directors Mr. Khurrum Salim Chief Executive / Director
Mr. Bilal Sharif Non Executive Director
Mr. Muhammad Amin Non Executive Director
Mr. Adil Shakeel Non Executive Director
Mr. Muhammad Salim Executive Director
Mrs. Saba Yousaf Non Executive Director
Mr. Muhammad Shaheen Non Executive Director / Chairman
Mr. Hamza Shakeel Non Executive Director
Mr. Iqbal Mehboob Independent Director
Chief Financial Officer Asim Mirza, ACMA, CPA(Aust), MBA

Company Secretary Mr. Mohammad Ahmed (M.Econ)
Audit Committee Mr. Iqbal Mehboob Chairman

Mr. Hamza Shakeel Member
Mr. Bilal Sharif Member
Human Resource and Mr. Iqbal Mehboob Chairman

Remuneration Committee Mr. Mohammad Amin Member
Mr. Hamza Shakeel Member
Auditors M/s Mushatq and Company

Chartered Accountants
407, Commerce Centre,
Hasrat Mohani Road,
Karachi
Legal Advisor Mr. Shahid Pervaiz Jami

Bankers Bank Alfalah Limited
Dubai Islamic Bank
Faysal Bank Ltd.
Habib Bank Limited
MCB Bank Limited
Meezan Bank Limited
Samba Bank Limited
United Bank Limited
Bank Islami Pakistan Ltd
Habib Metropolitan Bank Ltd
Hameed Majeed Associated (Private) Limited

Share Registrar 5th Floor Karachi Chamber, Karachi
Umer House, 23/1, Sector 23, S. M. Farooq Road,

Registered Office
Korangi Industrial Area, Karachi, Pakistan
Tel : 021 35115177 - 80 ; Fax: 021 -35063002-3
Email: khioff@umergroup.com Website: http://www.umergroup.com
9th Floor, City Towers, 6 -K, Main Boulevard
Liaison / Correspondence office Gulberg - II, Lahore, Pakistan
Tel : 042 111 130 130 ; Fax: 042 -35770015
Email: lhroff@umergroup.com Website: http://www.umergroup.com
Mills At: Unit I is situated at:

Kotri Distric Dadu, Sindh. Tel : 0223 870013
Unit II and Unit III are situated at:
Feroz Watwan, Sheikhupura, Punjab. Tel: 056 3731723
ANNUAL REPORT 2019 1

NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the 40th Annual General Meeting of the members of Bhanero Textile Mills Limited will
be held on Saturday 26th October 2019 at 09:30 AM, at the registered office of the company i.e. Umer House, 23/I,
Sector 23, S. M. Farooq Road, Korangi Industrial Area, Karachi, to transact the following business:
Ordinary Business:
1. To confirm the minutes of the last Annual General Meeting held on 25th October 2018.
2. To receive, consider and adopt the audited financial statements of the company for the year ended 30th June,
2019 together with the Auditors' and Directors' Report thereon.
3. To approve the cash dividend @ 558.00% (i.e. PKR 55.80 per share) for the year ended 30th June, 2019, as
recommended by the Board of Directors.
4. To appoint the auditors for the next term i.e. year 2019-2020 and fix their remuneration. The retiring auditor M/S
Mushtaq and Company, Chartered Accountants, being eligible, offer themselves for reappointment.
5. To transact any other business with the permission of the chairman.
Special Business:
6. To approve the enhancement in remuneration of the Chief Executive Officer and Executive Director of the
company.
7. The board of directors accorded their approval for circulation of annual audited financial statements together with
auditors report, directors' report, chairman's review report to every member of the company and every person
who is entitled to receive notice of general meeting through electronically under provisions of section 223(6) of the
Companies Act, 2017"Act".
Statement under section 134(3) of the Companies Act,2017 regarding Special Business
The statement sets out the material facts concerning the special business given in agenda item (6) of the notice
intended to be transacted at the annual general meeting.
The shareholders approval is sought for enhancement in remuneration of the Chief Executive Officer and
Executive Director of the company. The existing remuneration of the both CEO and executive director is PKR
650,000/- per month.
For this purpose, following ordinary resolution is proposed to be passed with or without modification by the
shareholders at the annual general meeting of the company scheduled for 26th October, 2019.
“Resolved That, the company hereby approves the monthly remuneration of Mr. Khurrum Salim the Chief
Executive Officer, a sum not exceeding PKR 800,000/- and Mr. Muhammad Salim the executive director a sum
not exceeding PKR 1,000,000/- .
The statement sets out the material facts concerning the special business given in agenda item (7) of the notice
intended to be transacted at the annual general meeting.
The directors of the company accorded their approval for circulation of annual audited financial statements along
with auditors report, directors' report, chairman's review report through electronically (CD,DVD,USB) at their
registered address under provisions of section 223(6) of the Companies Act, 2017.
Accordingly, to validate the approval under “Act” the board of directors recommended the following ordinary
resolution be passed at the annual general meeting of the company scheduled for 26th October, 2019.
“Resolved That, consent and approval of the members of the company be and is hereby accorded to validate the
circulation of annual audited financial statements along with auditors report, directors' report, chairman's review
report through electronically (CD,DVD,USB) at their registered address under provisions of section 223(6) of the
Companies Act, 2017”.
(By the order of the Board)

Karachi:
Mohammad Ahmed
Dated: September 26, 2019 Company Secretary

Notes:
1. The Shares Transfer Books of the Company will remain closed from 18th October 2019 to 26th October, 2019
(both days inclusive). Transfers received in order at the registered office of the company i.e. Umer House, 23/I,
Sector 23, S. M. Farooq Road, Korangi Industrial Area, Karachi by 17th October 2019 will be treated in time for the
purpose of entitlement of dividend in respect of the period ended 30th June, 2019.
2. Members are requested to attend in person along with Computerized National Identity Card (“CNIC”) or appoint
some other member as proxy and send their proxy duly witnessed so as to reach the registered office of the
company not later than 48 hours before the time of holding the meeting.
3. Pursuant to section 132(2) of Companies Act, 2017 the company shall facilitate its members to attend the annual
general meeting through video-link by providing video-conference facility, if available, in the city where 10% or
more shareholders of the company reside, provided that the Company receives their demand to participate in
annual general meeting through video-link at least seven (07) days prior to the date of meeting.
In this regard, it is requested to fill the following Form and submit at the registered address of the Company at least
10 days before holding of the Annual General Meeting:
“I/We, ________ being a member of Bhanero Textile Mills Limited, holder of ________ Ordinary Shares vide folio
______ hereby opt for video conference facility at _____________.”
________________
Signature of Member
4. Any individual Beneficial Owner of CDC, entitled to attend and vote at this meeting, must bring his/her original
CNIC or Passport, Account and participant's I.D. numbers, to prove his/her identity, and in case of proxy must
enclose an attested copy of his/her CNIC or Passport. Representatives of corporate members should bring the
usual documents required for such purpose. The account/ sub account holders of CDC will further have to follow
the guidelines as laid down in Circular No. 1 of 2000 dated January 26, 2000 issued by Securities & Exchange
Commission of Pakistan.
5. Section 242 of Companies Act 2017 which states that, “Any dividend payable in cash shall only be paid through
electronic mode directly into the bank account designated by the entitled shareholders”. In compliance of section
242 SECP issued a circular CLD/CCD/PR(11)/2017 No.18/2017 dated 1-Aug-17 requiring listed companies to
obtain electronic dividend mandate from the Shareholders and in this regard a notice had already been sent to all
the shareholders.
Further, Securities and Exchange Commission of Pakistan (SECP) vide notification No. SRO 1145(1)2017 dated
November 6, 2017 in terms of provision of section 242 of the Companies Act, 2017 issued regulations for
distribution of dividends by the listed companies requiring entitled shareholders to provide valid information
pertaining to designated bank account including name of bank , title of account , address of bank branch and
international bank account number.
In this regard we request all registered shareholders to provide the bank details in order to credit their cash
dividends directly to their bank account, if declared. Also provide us verification of bank detail with your concern
bank and submit to in case of book-entry securities in CDS, to CDS participants and in case of physical securities
to the Company's Share Registrar.
6. In compliance of section 244 of Companies Act 2017 and SECP circular No. CLD/CCD/PR(11)/2017 Direction
No.16 of 2017 dated 7-July -2017 regarding dividends, shares or modaraba certificates remains unclaimed or
unpaid for a period of three years from the date it is due or payable shall be vested with Federal Government after
complying the requirements of Companies Act 2017.
In compliance of SRO 1013(1)/2017 dated 6th September, 2017 the claimant wise details of unclaimed shares,
dividend or modarba certificates as on June 30, 2019 have been uploaded on our website: www.umergroup.com.
In this regard, the said shareholders are requested to approach the Company Registered Office or Share
Registrar Office with regard to any unclaimed dividend, shares or modarba certificates.

7. Members are requested to immediately inform of any change in their addresses and bank details to our share
Registrar, Hameed Majeed Associates (Private) Limited.
8. Pursuant to Notification vide SRO 787(1)/2014 of September 08, 2014, SECP has directed to facilitate the
members of the company receiving Annual Financial Statements and Notices through electronic mail system (e-
mail). We are pleased to offer this facility to our members who desire to receive Annual Financial Statements and
Notices of the Company through e-mail in future. In this respect members are hereby requested to convey their
consent via e-mail on a standard request form which is available at the Company website i.e.
www.umergroup.com. Please ensure that your e-mail has sufficient rights and space available to receive such e-
mail which may be larger than 2MB file in size. Further, it is the responsibility of the member to timely update the
Share Registrar of any change in the registered e-mail address.
9. Pursuant to the provisions of the Finance Act 2019 effective July 1, 2019, the rates of deduction of income tax from
dividend payments under section 150 of the Income Tax Ordinance, 2001 have been revised as follows:
a. For filer of income tax return 15%
b. For non-filers of income tax return 30%
To enable the Company to make tax deduction on the amount of cash dividend @ 15% instead of 30%,
shareholders whose names are not entered into the Active Taxpayers List (ATL) provided on the website of FBR,
despite the fact that they are filers, are advised to make sure that their names are entered in ATL before the first
day of book closure, otherwise tax on their cash dividend will be deducted @ 30% instead of 15%.
Withholding Tax exemption from the dividend income, shall only be allowed if copy of valid tax exemption
certificate or stay order from a competent court of law is made available to Hameed Majeed Associates (Private)
Limited, by the first day of Book Closure.
Further, according to clarification received from Federal Board of Revenue (FBR), with-holding tax will be
determined separately on 'Filer/Non-Filer' status of Principal shareholder as well as joint holder(s) based on their
shareholding proportions, in case of joint accounts.
In this regard all shareholders who hold shares jointly are requested to provide shareholding proportions of
Principal shareholder and Joint-holder(s) in respect of shares held by them (only if not already provided) to our
Share Registrar, in writing.
In the event of non-receipt of the information by 24th October 2019, each shareholder will be assumed to have
equal proportion of shares and the tax will be deducted accordingly.
10. E-Voting, members can exercise their right to demand a poll subject to meeting requirements of Section 143 -145
of Companies Act, 2017 and applicable clauses of Companies (Postal Ballot) Regulations 2018.

CHAIRMAN REVIEW REPORT
I am pleased to enclose herewith Chairman Review Report for the year ended June 30, 2019 as required under
section 192(4) of Companies Act, 2017 on overall performance and effectiveness of the board of Bhanero Textile Mills
Limited (Board) in achieving its objectives.
Since over past a decade there is an emphasis on the board performance due more complexity and challenging
economic environment on global spectrum. By recognizing the importance of high standards of corporate governance
that aligns with the needs of the company and the interests of all our stakeholders the leadership and effectiveness of
the Board is primarily rests with the chairman.
The board has performed and discharge its duties as per provisions of Companies Act 2017 (Act), regulations under
Code of Corporate Governance 2017 (Code), guidelines and directives issued by Securities and Exchange
Commission of Pakistan (SECP) and regulatory compliance required for listed companies by Pakistan Stock
Exchange (PSX). The outcome of evaluation process that was conducted internally under the regulation 10(V) of
Code of Corporate Governance 2017 is encouraging and depicts that overall performance of the board is quite
satisfactory that played an effective and active role in achieving its objectives.
The board has clear vision and mission that defines overall corporate strategy of the organization for allocating of
resources, developing policies and plans and devising a formal code of conduct that drives the organization in
achieving it ultimate objectives and goals.
The board has in place a well designed risk identification process for risk assessment and its consequences on the
organizational ability which is followed by the risk mitigating course of action and comprehensively articulated
contingency plan.
The board strictly adhere to corporate governance standards and always strives for incessant improvement rather
perfection. The board ensure the compliance of code with regard to the appointment of chief financial officer, company
secretary and head of internal audit. The board in consultation with audit committee has developed a robust internal
audit department which functionally reports to the audit committee to assures independence of audit function. The
internal audit team comprised of appropriate members encompassing requite experience and skills to discharge their
responsibilities effectively.
The board of directors determines the terms of reference for both audit and human resources committees headed by
an independent director and complying the mandatory requirement of financial literate member for an audit committee
under the code of corporate governance.
The Board of nine directors comprised of independent director, executive, non-executive and female directors are
strictly in line with the regulations issued under Code. Besides, being conversant with Code, Act and regulations
issued by the SECP, the board of directors are fully aware of their responsibilities, duties and powers under
memorandum and article of association of the company. All the existing board members including an appointment of a
female director under casual vacancy during the year are compliant as per regulations under Code for directors
training program (DTP).
Karachi: Mohammad Shaheen

Date: September 26, 2019 (Chairman)

Directors Report
The Directors of Bhanero Textile Mills Limited have immense pleasure in presenting the annual report along with auditors' report on
the financial statements of the company for the year ended June 30, 2019.
Financial Results
Financial results of company for the year ended to June 30, 2019 are as under;
2019 2018
Rupees Rupees
Sales 9,347,772,864 8,073,845,411

Cost of sales 8,054,100,783 7,205,449,439
Gross profit 1,293,672,081 868,395,972
Other income 227,825,645 111,986,664
Less: Selling, Admin, Finan & Other Expenses 564,615,060 438,222,883
Profit before taxation 956,882,666 542,159,753
Less: Taxation
Current year 91,837,659 27,378,416
Prior year (34,512) 3,594,287
Deferred 32,669,693 29,150,541
124,472,840 60,123,244
Profit after taxation 832,409,826 482,036,509

Basic and diluted earnings per share 277.47 160.68
Financial Performance
By the grace of Almighty Allah, the company earned the profit after tax of PKR 832.410 million during the year ended 30 June, 2019
(2018: PKR 482.036 million).
Despite bleak economic scenario, the company by the grace Allah managed to increase its sales and profitability in current year
ended 30th June, 2019 as compared to corresponding year on the same period.
The company sales increased from PKR 8,073.845 million to PKR 9,347.773 million whereas gross profit is increased from PKR
868.396 million to PKR 1,293.672 million during the current year ended June 30, 2019 as compared to corresponding year.
Dividends & Reserves Appropriation
In the preceding year 2018 the dividend at 643.00% i.e PKR 64.30 has been paid by the company whereas for the current year the
board of directors are pleased to recommend a final cash dividend of 558.00% i.e PKR 55.80 per share in line with the
recommendation of audit committee for the approval shareholders in forthcoming annual general meeting scheduled for October
26, 2019.
Moreover, the directors proposed to transfer an amount of PKR 700.000 million to the general reserve to meet any unforeseen
contingencies in future.

Earnings and Breakup Value per Share
The company is strongly committed towards enhancing the value to shareholders wealth which is represented by the increase in
both earnings per share from PKR 160.68 to PKR 277.47 and breakup value of share from 1,420.91 to PKR 1,637.71 during the
current year ended June 30, 2019 as compared to the corresponding year ended June 30, 2018.
Working Capital Management
The company ensures its capacity to continue its operations smoothly and has sufficient ability to satisfy current maturity of long-
term obligations, short-term debt and upcoming operational expenses.
The repayments amounting to PKR 81.367 on account of long-term loans have been made during the year 2019 whereas PKR
192.553 million have been made towards dividend for the year 2019 to the shareholders of the company.
The short-term liquidity of company is fairly steady as reflected by current ratio of 2.73 (2018: 3.48) is considered fairly satisfactory
for the year under review.
Capital Structure
The balanced capital structure is arguably one of its most important choices for company from a technical perspective that will
determine its the growth.
The company managed an optimum mix of debt and equity to enhance the shareholders' value that renders healthier return to its
investors.
The financial stability strength of company may be assessed with the fact that shareholder equity stood at PKR 4,913.118 million
(2108 : PKR 4,262.737 million) showing a growth of 15.26% in total equity during the current year ended June 30, 2019 as
compared to the corresponding year. The gearing ratio of 0.46 (2018: 0.28) during the current year ended June 30, 2019 is
generally considered as normal for well-established companies as per industry norms.
Balancing, Modernization and Replacement
During the year an addition amounting to PKR 520.000 million approximately has been made towards upgradation of plant and
machinery to keep pace with latest invention in production technology and enhancement of power generation efficiency.

Credit Rating
The final rating of A+/A 1 (Single A Plus / A-One) has been assigned to the company by the rating company Messer's JCR-VIS
during the current year. The outlook on the assigned rating is “Stable”.
Financial Statements
As required under Companies Act 2017, listing regulations of PSX and directives issued by the SECP the Chief Executive Officer
and Chief Financial Officer presented the financial statements of the company for the year ended June 30, 2019, duly endorsed
under their respective signatures for consideration, approval and authorization by the board of directors for issuance and
circulation.
The financial statements of the company have been duly audited by the auditors of the company, Mushtaq & Company, Chartered
Accountants and the auditors have issued clean audit report on the financial statements for the year ended 30th June 2019 and
clean review report on Statement of Code of Corporate Governance. These reports are attached with the financial statements.
Accounting Standards
The accounting policies of the Company fully reflect the requirements of the Companies Act 2017 and such approved International
Accounting Standards and International Financial Reporting Standards as have been notified under this Act as well as through
directives issued by the Securities and Exchange Commission of Pakistan.
Overview of Agriculture Sector in Pakistan
The fact that agriculture was pivotal to the country with 40 per cent of the economy dependent upon it, the agriculture sector had
been a victim of neglect despite being one of the country's major employer and a major earner of foreign exchange.
The cotton is a major crop in Punjab and Sindh and a key component of the agriculture economy however, our cotton fields are
decreasing with cultivators opting for other crops that fetch better profits to them. Another concern that need to addressed is the
local demand for cotton which is around 15-16 million bales and Pakistan was importing 4-5 million bales to meet its domestic
needs by depleting the foreign exchange of the country.
Besides, there has been noticeable reduction in the acreage for cotton crop and falling of production from 14.7 million bales to 10.7
million bales and realistic consideration should be given if the government need to revive the production of cotton to compete with
the major producers in the world like China, India, USA, Brazil and achieve the optimistic target of cotton production in the next four
years of 20 million bales.
It is generally accepted that textile Industry itself hesitates to grow into manufacturing of Value Added products which is evident
from percentage of value added output increasing as compared to basic textile product i.e. Yarn. However, in current scenario there
has been a complete consensus amongst all the stakeholders regarding shifting of focus from export of raw material to value added
textile goods. The value added sector is the largest employment generator in the entire textile chain and exports up to circa $5.5
billion. Needless to mention that a developing country like Bangladesh had increased its exports to $38 billion by selling its
garments and cotton-based products and Pakistan can do the same and take its exports to $40 billion from $23 billion through value
addition of textile goods.
We need to rationalize duty structures, minimize taxes, duties on the import of raw material, increase the rebates, subsidized the
utilities and discourage the export of raw material to ensure ample availability of raw material for value added sector. The correct
measures by the government will enhance the exports and accelerates industrialization besides creating employment
opportunities in the country. Recent Trade War between USA and China together with protest against low wages in Bangladesh is
blessing in disguise for value added segment of Pakistan, as buyers of Textile products across the world are thinking to diversify
their supplier countries.
Nowadays, there has been considerable discussion around the globe on sustainable cotton and some developed countries like US
and UK are utilizing recycling and reusing textiles, fibers and waste materials which is an effective method to build sustainability in
the apparel industry. Sustainable cotton is therefore grown in a way that can maintain levels of production with minimal
environmental impact which can support viable producer livelihoods and communities. Moreover, the waste cotton is often already
dyed thus re-dyeing may not be necessary. Secondly, cotton is an extremely resource-intense crop in terms of water, fertilizers,
pesticides and insecticides
We being not exception to this must emphasis on taking the advantage of latest development on global arena. Though in 2006
Pakistan has formed a committee to focus on sustainable cotton production and in 2010 a significant milestone was achieved by
production of the Better Cotton in Pakistan.

The BCI had given us a platform to start implementing the Better Cotton Standard System encompassing holistic approach to
sustainable cotton production by covering all three pillars of sustainability: environmental, social and economic however, still a lot
more need to be done in this regard as our economy is largely depends on cotton which requires huge amount of resources like
water, fertilizers, insecticides and pesticides so must engaged foreign experts, academia, and researchers to get their input for
enhancing the sustainable cotton production.
The following benefits can be reaped by implementation of sustainable cotton program;
- Avoiding the negative impact on both human health and biodiversity.

- The Farmers feel incentivized to grow cotton due to improved profitability by reducing costly inputs such as water, fertilizers
and pesticides.
- Sustainable cotton grown in a way that can maintain levels of production with minimal environmental impact which can
support viable producer livelihoods and communities without facing long-term ecological constraints and socioeconomic
pressures from the world.
- The textile recycling offers many environmental benefits by decreasing the landfill space that poses risk to the groundwater
and greenhouse gases emission from the s dumped textiles.
- The recycled cotton can lead to significant savings of natural resources and reduce pollution from agriculture.
- The increasing demand of the cotton can be fulfilled locally.
Thus, we can say BCI's long-term vision for sustainable cotton production becomes common-place around the globe and our
governments, institutes and organizations should take responsibility for training cotton farmers on sustainable agricultural
practices as the world is increasingly aware of the need to recognize and act on the various aspects of sustainability.
Compliance with Code of Corporate Governance
The Statement of Compliance with the Code of Corporate Governance is annexed.
Statement on Corporate and Financial Reporting Framework:
The Directors of your company are aware of their responsibilities under Companies Act 2017, Regulations under Code of
Corporate Governance 2017, Rule Book of the Pakistan Stock Exchange Limited and directives issued by Securities & Exchange
Commission of Pakistan. As a part of the compliance to the regulators we confirm the following:
• These financial statements, prepared by the management of the company, present fairly its state of affairs, the result of its
operations, cash flows and changes in equity.
• Proper books of account of the company have been maintained.
• Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates
are based on reasonable and prudent judgment.
• International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial
statements.
• The system of internal control was sound in design and has been effectively implemented and monitored.
• There were no significant doubts upon the company's ability to continue as a going concern.
• There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.
• We have prepared and circulated a Code of Conduct and business strategy among directors and employees.
• The Board of Directors has adopted a vision and mission statement and a statement of overall corporate strategy.
• All the directors have attended its general meeting unless preclude due to reasonable reason.
• All the directors are assigned with their responsibilities, roles, remuneration, powers and obligation at the commencement of
their terms in accordance with Code of Corporate Governance, Companies Act and Article of Association.

• All the directors of the Company are accredited / exempted under Directors Training Program (DTP) as required by the Code of
Corporate Governance regulation.
• There has been a proper updated record of the significant policies duly approved by the board of directors on human resource,
whistle blower, procurement, communication mechanism with stakeholders, environment, health and safety, director's
remuneration, anti-money laundering and risk management etc.
• As required by the Code of Corporate Governance (Code) and Companies Act 2017 (Act) , we have included the following
information in this report:
• Statement of pattern of shareholding has been given separately.

• Statement of shares held by associated undertakings and related persons.
• Statement of the board meetings and annual general meeting held during the year and attendance by each director has
been given separately.
• Chairman review report under the provisions of section 192(4) of the Act.
• Statement of compliance duly signed by the chairman under regulation 40 of the Code.
• Key operating and financial statistics for last six years along with information for taxes and levies have been adequately
disclosed in the annexed audited financial statements.
• The company strictly follow the guidelines issued by SECP on prohibition of insider trading for listed companies and no trading
in the Company's shares was carried by its Directors, CEO, CFO, Company Secretary, Head of Internal Audit and their spouses
and minor children except as disclosed in pattern of shareholding.
Pattern of Shareholding
The pattern of shareholding and additional information regarding pattern of shareholding is attached separately
Related Party
There is a robust policy in place for all related party transactions (RPT) in pursuant to the notification issued by Securities and
Exchange Commission of Pakistan vide SRO 768(1)2019 and the guidelines have been duly incorporated in the company policy
with regard to transactions and maintenance of records.
Board Evaluation
The company has opted to conduct evaluation process of the board internally in compliance of the regulation 10(3)(v) of code of
corporate governance 2017 for assessing the board performance, members of the board and its committee members.
A comprehensive review has been carried out entailing statutory documents, the minutes of board and committee meetings,
policies currently in place and other ancillary documents, questionnaires, interactions with the board and committee members.
Board Composition
A casual vacancy aroused during the year which was duly filled by the directors in their meeting held on January 31, 2019 under the
provisions of section 155(3) of the Companies Act, 2017.
Mrs. Saba Yousaf has been appointed as a non-executive director in place of outgoing non-executive director Mr. Muhammad
Sharif to fill the casual vacancy.
As required under regulation 36 of CCG 2017 the board of nine directors is comprised as follows;
Sr Gender
Category Total
No Male Female
(i) Independent Director 1 0 1
(ii) Executive Directors 2 0 2
Non- Executive
(ii) 5 1 6
Directors

Board and Audit Committee Meetings
• All the directors, eligible to attend the meeting have attended the annual general meeting of the company held on October 25,
2018 in person under regulation 10(6) of the Code of Corporate Governance.
• Following are the number of meeting held and attended by board of directors, audit committee and human resource &
remuneration committee during 2018-19:
Committees
Board of Directors Human Resource
Audit
and Remuneration
Name of Directors
Eligible Eligible Eligible
to Attended to Attended to Attended
attend attend attend
Mr. Muhammad Salim 5 5 - - - -
Mr. Muhammad Sharif 3 3 - - - -
Mr. Muhammad
5 5 - - - -
Shaheen
Mr. Khurrum Salim 5 5 - - - -
Mr. Bilal Sharif 5 5 6 6 - -
Mr. Muhammad Amin 5 5 - - 2 2
Mr. Adil Shakeel 5 5 - - - -
Mr. Hamza Shakeel 5 5 6 6 2 2
Mr. Iqbal Mehboob 5 5 6 6 2 2
Mrs. Saba Yousaf 2 2 - - - -
Audit Committee
The audit committee comprises of three members of which chairman is an independent director whereas all the other are non-
executive directors and discharge its responsibilities under terms of reference assigned by the board of directors.
The appointment of financial literate member has been made in line with regulation 28(1)(c) of chapter X in the Code of Corporate
Governance, 2017.
The meetings of audit committee were held at regular intervals in compliance with the Regulation 28(2) of chapter X in the Code of
Corporate Governance, 2017 (Code) to review the both interim and annual financial statements before the approval of board of
directors along with an additional meetings once a year with an external auditors without the CFO and other with an internal auditor
without the presence of the CFO and external auditor.
An audit committee is one of the major operating committees of a company's board of directors that is in charge of overseeing
financial reporting and disclosures, monitoring of accounting policies, oversight of any external auditors, regulatory compliance
and the discussion of risk management policies with management.
Audit committees maintain communication with the company's chief financial officer (CFO) and head of internal audit. The
committee also has the authority to initiate special investigations in cases where it is determined that accounting practices are
problematic or suspected and an internal auditor assists the committee in such efforts.

Human Resource and Remuneration Committee
The human resource and remuneration committee (HRRC) is comprised of three members of which all are non-executive directors
whereas chairman is an independent director. The HRRC review compliance with any legislative guidelines relating to
compensation and benefits, review compliance with employment, labor and human rights legislation.
The HRRC on behalf of the Board of Directors oversee and administer the company's human resource policies, plans, and
procedures, review, approve, or recommend for Board approval, decisions relating to the fair and competitive compensation of
executives, directors, committee members and other key personnel.
Corporate Social Responsibility Policy
The companies CSR strategies encourage the company to make a positive impact on the environment and stakeholders including
consumers, employees, investors, communities, and society by engaging in philanthropic contribution for the benefit of the society,
initiating community support investment and educational programs, recognizing the need to protect the natural environment by
following best practices for waste disposal, recycling , energy conservation and utilizing environmentally-friendly technologies. The
company arranges reforestation excursions at regular intervals to create awareness.
Health, Safety and Environment Policy
The company is strongly committed towards health and safety at work and strictly adhere to the rules and regulations for managing
health and safety effectively and minimizing all sorts of negative impact to optimized sustainable environment.
The company's health, safety and environment policy statement demonstrate a pleasant and workable environment by making
every possible effort to remove or reduce the risks to the health, safety of all workers, contractors and visitors, and anyone else who
may be affected by business operations and ensuring the compliance towards health, safety and environment legislation.
Directors Remuneration Policy
The feature of executive director's remuneration policy is prepared and recommended by human resource and
remuneration committee (HRRC) to the board subject to the provisions of the Companies Act 2017, Companies' Article of
Association and Code of Corporate Governance Regulations.
The remuneration of the executive directors is determined by considering the market competitiveness which is identical in akin
companies, whilst also considering level of competencies, experience, scope of the board assignments and yearly meetings.
The executive directors entitled for the fixed monthly remuneration recommended by HRRC which is approved in the board
meeting, followed by the approval of members in General Meeting.
No fee or remuneration has been paid either to non-executive or independent directors.
Statutory Auditors
The present auditor's M/s Mushtaq & Co., Chartered Accountants shall retire on the conclusion of the annual general meeting
scheduled on October 26, 2019 however, being eligible they have offered themselves for re-appointment. The audit committee has
suggested the appointment of M/s Mushtaq & Co., Chartered Accountants, as external auditor for the year ended 30th June 2020.
The external auditors M/s Mushtaq & Co., Chartered Accountants have been given satisfactory rating under the quality control
review program of the Institute of Chartered Accountants of Pakistan. The firm and all its partner are in compliance with the
International Federation of Accountants' Guidelines on the Code of Ethics as adopted by Institute of Chartered Accountants of
Pakistan. The Board of Directors also recommended the appointment of M/s Mushtaq & Co., Chartered Accountants, as external
auditor for the year ended 30th June 2020.
Material Changes and Commitments
No material changes and commitments affecting the financial position of the Company have occurred between the end of financial
year of the Company to which the balance sheet relates and the date of directors' report.
Acknowledgement
I am highly indebted to Board of Directors, valued shareholders, customers, bankers, suppliers and other stakeholders for their
support, trust and confidence. I also appreciate to all employees for their loyalty dedication and hard work which enabled the
Company to achieve its objectives.
For and on behalf of the Board
Khurram Salim Muhammad Salim

Chief Executive Director
Karachi: September 26, 2019

STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
The statement is being presented to comply with the requirement of regulation 40 contained in Code of Corporate Governance,
2017 for the purpose of establishing a framework of good corporate governance, whereby a company quoted at Pakistan Stock
Exchange Limited is managed in compliance with best practices of corporate governance.
The company has complied with the requirements of the Regulations in the following manner:
1. The total number of directors are nine (9) as per the following:
a. Male : Eight (8)

b. Female : One(1)
2. The composition of board is as follows:
Sr Category Name
a) Independent Director Mr. Iqbal Mehboob
b) Executive Directors Mr. Khurrum Salim
Mr. Muhammad Salim
c) Non- Executive Directors Mr. Muhammad Shaheen
Mr. Muhammad Amin
Mr. Bilal Sharif
Mr. Adil Shakeel
Mr. Hamza Shakeel
Mrs. Saba Yousaf
3. The directors have confirmed that none of them is serving as a director on more than five listed companies, including this
company (excluding the listed subsidiaries of listed holding companies where applicable).
4. The company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to disseminate it
throughout the company along with its supporting policies and procedures.
5. The board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. A
complete record of particulars of significant policies along with the dates on which they were approved or amended has been
maintained.
6. All the powers of the board have been duly exercised and decisions on relevant matters have been taken by board/
shareholders as empowered by the relevant provisions of the Act and these Regulations.
7. The meetings of the board were presided over by the Chairman and, in his absence, by a director elected by the board for this
purpose. The board has complied with the requirements of Act and the Regulations with respect to frequency, recording and
circulating minutes of meeting of board.
8. The board of directors have a formal policy and transparent procedures for remuneration of directors in accordance with the
Act and these Regulations.
9. All the directors on the Board are accredited / exempted from directors training programs.
The Board has arranged directors training program during the financial year for the following:
Mrs. Saba Yousaf - (Non-Executive Director)
10. The board has approved appointment of CFO, Company Secretary and Head of Internal Audit, including their remuneration and
terms and conditions of employment and complied with relevant requirements of the Regulations.
11. CFO and CEO duly endorsed the financial statements before approval of the board

STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2017
12. The board has formed committees comprising of members given below:
Audit Committee
Name Designation
Mr. Iqbal Mehboob Chairman - Independent Director
Mr. Bilal Sharif Member - Non- Executive Director
Mr. Hamza Shakeel Member - Non- Executive Director
Human Resource & Remuneration Committee
Name Designation
Mr. Iqbal Mehboob Chairman - Independent Director
Mr. Muhammad Amin Member - Non- Executive Director
Mr. Hamza Shakeel Member - Non- Executive Director
13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for
compliance.
14. The frequency of meetings of the committees were as per following:
Name of Committee Frequency of Meeting

Audit Committee Quarterly
HR and Remuneration Committee Half Yearly
Nomination Committee Not applicable
Risk Management Committee Not applicable
15. The board has set up an effective internal audit function who are considered suitably qualified and experienced for the purpose
and are conversant with the policies and procedures of the company.
16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the quality control
review program of the ICAP and registered with Audit Oversight Board of Pakistan, that they or any of the partners of the firm,
their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with
International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP.
17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in
accordance with the Act, these regulations or any other regulatory requirement and the auditors have confirmed that they have
observed IFAC guidelines in this regard.
18. We confirm that all other requirements of the Regulations have been complied with.
For and on behalf of the Board
Karachi: Mohammad Shaheen

Date: September 26, 2019 (Chairman)

MUSHTAQ & COMPANY
CHARTERED ACCOUNTANTS
H O: 407, Commerce Centre, Hasrat Mohani Road, Karachi. Tel: 021-32638521-3
Email Address: [email protected]
Member firm
Independent Auditor's Review Report

To the members of Bhanero Textile Mills Limited on the
Statement of Compliance with the Code of Corporate Governance
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2017 (the Regulations) prepared by the Board of Directors of Bhanero Textile Mills Limited for the year ended June 30,
2019 in accordance with the requirements of regulation 40 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to
review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the
Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is
limited primarily to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with
the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control
systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board of
Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal
controls, the Company's corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee,
place before the Board of Directors for their review and approval, its related party transactions and also ensure compliance with the
requirements of section 208 of the Companies Act, 2017. We are only required and have ensured compliance of this requirement to
the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee.
We have not carried out procedures to assess and determine the Company's process for identification of related parties and that
whether the related party transactions were undertaken at arm's length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not
appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as
applicable to the Company for the year ended June 30, 2019.
MUSHTAQ & COMPANY

Chartered Accountants
Place: Lahore Engagement Partner:

Dated: September 26, 2019 Zahid Hussain Zahid, (ACA)
Lahore Ofce: 19-B, Block G, Gulberg-III, Lahore. Tel: 042-35858624-6

Islamabad Ofce: 313 . First oor millennium heights, F-11/1, Islamabad Tel: 051-2224970

MUSHTAQ & COMPANY
Member firm
Independent auditor's report to the members of

Bhanero Textile Mills Limited
Report on the Audit of the Financial Statements
Opinion
we have audited the annexed financial statements of Bhanero Textile Mills Limited (the Company), which comprise the statement
of financial position as at June 30, 2019, and the statement of profit or loss, the statements of other comprehensive income, the
statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies and other explanatory information, 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 the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement of financial position,
statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows
together with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give
the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair
view of the state of the Company's affairs as at June 30, 2019 and of the profit and other comprehensive income, the changes in
equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board
for Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the
Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter(s)
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Following are the Key audit matter(s):
Key audit matter(s) How the matter was addressed in our audit
1 Valuation of Inventory We checked the appropriateness of management's assumptions

applied in calculating the value of the inventory and provisions by:
We refer to accounting policies, note 18 & 19.
- assessing the Company's accounting policies over recognizing
The total value of inventory consisting of Stores and
inventory in compliance with applicable accounting standards;
Stocks as of June 30, 2019, is amounted to Rs. 3.680
billion representing 43.78 % of the total assets (2018: - attending inventory counts and reconciling the count results to the
Rs. 2.415 billion, 36.34 % of the total assets). inventory listings to test the completeness of data;
Inventories are measured at the lower of cost and net
- evaluating the design and implementation of key inventory
realizable value. As a result, the management apply
controls;
judgement in determining the appropriate values for
slow-moving or obsolete items. - testing the costing of the inventory and performed net realizable
value testing to assess whether the cost of the inventory exceeds
The inventory is material to our audit because the
net realizable value, obtained through a detailed review of sales
inventory is exposed to price fluctuation due to
subsequent to the year-end;
market factors. The valuation of Finished Goods also


MUSHTAQ & COMPANY
Member firm
Key audit matter(s) How the matter was addressed in our audit
involves complex methods of allocation of factory - assessing whether bases of allocation of the variable and fixed
overheads to inventory. costs are reasonable; and
Due to above said factors, inventory costing was - an analytic review was also performed on inventory.
considered a significant risk of inventory
We assessed the Company's disclosures in the financial statements in
overvaluation.
respect of inventory.
Information Other than the Financial Statements and Auditor's Report Thereon
Management is responsible for the other information. The other information comprises director's report and last six years' financial
analysis but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting
and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017) and for such internal
control as management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of directors are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of these financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.


MUSHTAQ & COMPANY
Member firm
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provided the board of directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit
of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the statement of financial position, the statement of profit or loss and other comprehensive income, the statement of changes
in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the
Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company's
business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the company and
deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor's report is Zahid Hussain Zahid, ACA.
Place: Lahore MUSHTAQ & COMPANY

Dated: September 26, 2019 Chartered Accountants


Statement of Financial Position
As At June 30, 2019
June 30, 2019 Jun 30, 2018

Note
EQUITY AND LIABILITIES Rupees Rupees
SHARE CAPITAL AND RESERVES
Authorized capital
6,000,000 (2018: 6,000,000) ordinary shares of
Rs.10 each 60,000,000.00 60,000,000
Issued, subscribed and paid up capital 5 30,000,000 30,000,000

Reserves 6 4,700,000,000 4,000,000,000
Unappropriated profit 183,117,492 232,737,034
4,913,117,492 4,262,737,034
NON CURRENT LIABILITIES

Long term financing - secured 7 1,121,716,016 885,233,720
DEFERRED LIABILITIES 8 473,570,951 408,166,202
CURRENT LIABILITIES
Trade and other payables 9 725,976,725 771,694,591

Unclaimed dividend 10 1,105,177 758,605
Accrued markup / interest 11 37,601,814 15,177,821
Short term borrowings - secured 12 992,656,991 220,457,778
Current portion of long term financing 13 140,182,704 81,367,073
1,897,523,411 1,089,455,868
CONTINGENCIES AND COMMITMENTS 14 - -
TOTAL EQUITY AND LIABILITIES 8,405,927,870 6,645,592,824
The annexed notes from 1 to 50 form an integral part of these financial statements.
Karachi: Khurram Salim Mohammad Salim Asim Mirza

Date: 26th September 2019 Chief Executive Director Chief Financial Officer

Statement of Financial Position
As At June 30, 2019
June 30, 2019 Jun 30, 2018

Note
ASSETS Rupees Rupees
NON CURRENT ASSETS
Property, plant and equipment 15 3,168,486,197 2,794,870,715
Capital work in progress 16 24,922,707 31,454,693
Long term deposits 17 28,532,816 28,532,816

3,221,941,720 2,854,858,224
CURRENT ASSETS
Stores, spares and loose tools 18 111,668,839 68,013,768

Stock in trade 19 3,569,018,484 2,347,207,583
Trade debts 20 758,161,471 841,493,842
Loans and advances 21 68,358,803 28,699,627
Trade deposits and short term prepayments 22 109,173,307 83,460,335
Other receivables 23 14,106,501 17,447,274
Income tax refundable 24 238,907,724 206,106,353
Sales tax refundable 25 170,868,560 130,039,795
Bank balances 26 143,722,461 68,266,023
5,183,986,150 3,790,734,600
TOTAL ASSETS 8,405,927,870 6,645,592,824


Statement of Profit or Loss
For The Year Ended June 30, 2019
Note June 30, 2019 June 30, 2018
Rupees Rupees
Sales 27 9,347,772,864 8,073,845,411

Cost of sales 28 8,054,100,783 7,205,449,439
Gross profit 1,293,672,081 868,395,972
Other income 29 227,825,645 111,986,664

1,521,497,726 980,382,636
Distribution cost 30 178,150,675 184,654,595

Administrative expenses 31 145,357,054 126,889,297
Other operating expenses 32 74,784,807 32,707,628
Finance cost 33 166,322,524 93,971,363
564,615,060 438,222,883
Profit before tax 956,882,666 542,159,753
Provision for taxation 34

Current tax - current year 91,837,659 27,378,416
Current tax - prior year (34,512) 3,594,287
Deferred 32,669,693 29,150,541
124,472,840 60,123,244
Profit after taxation for the year 832,409,826 482,036,509
Earnings per share - basic and diluted 35 277.47 160.68


Statement of Comprehensive Income
Note June 30, 2019 June 30, 2018

Rupees Rupees
Profit after taxation for the year 832,409,826 482,036,509
Other comprehensive income
Items that may be reclassified subsequently to

profit and loss
Items that will not be reclassified subsequently

to profit and loss
Actuarial gain on remeasurement of employees

retirement benefits - gratuity 8.1.2 13,487,793 5,902,811
Related deferred tax on remeasurement of

employees retirement benefits - gratuity (2,617,161) (1,104,580)
10,870,632 4,798,231
Total comprehensive Income for the year 843,280,458 486,834,740


Statement of Changes in Equity
Revenue Reserves
Share capital Unappropriated Total
General reserve
profits
Rupees
Balance as at June 30, 2017 30,000,000 3,700,000,000 156,302,336 3,886,302,336
Total comprehensive income for the year

Profit for the year - - 482,036,509 482,036,509
Other comprehensive (loss)/gain - - 4,798,231 4,798,231
Transfer to general reserve - 300,000,000 (300,000,000) -
Final dividend paid for the year ended June 30, 2017
at the rate of PKR 36.80 per share - - (110,400,042) (110,400,042)
Total comprehensive income for the year

Profit for the year - - 832,409,826 832,409,826
Other comprehensive (loss)/gain 10,870,632 10,870,632
Final dividend paid for the year ended June 30, 2018
at the rate of PKR 64.30 per share - - (192,900,000) (192,900,000)
Transfer to general reserve - 700,000,000 (700,000,000) -


Statement of Cash Flows
June 30, 2019 June 30, 2018
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 956,882,666 542,159,753
Adjustments for:
Depreciation on property, plant and equipment 250,170,999 223,452,139
Provision for staff retirement benefits - gratuity 46,468,510 53,736,070
Provision for bad debts 16,004,393 -
Infrastructure fee ETO 20,465,816 14,899,340
Infrastructure fee - Gas 10,373,816 21,880,288
(Gain) on disposal of property, plant and equipment (220,041,190) (107,594,412)
Finance cost 166,322,524 93,971,363
Operating cash flows before changes in working capital 1,246,647,534 842,504,541
Working capital changes

(Increase)/decrease in current assets
Inventories (1,265,465,972) 367,970,706
Trade debts 67,327,978 (297,042,543)
Loans and advances (39,659,176) 2,920,950
Trade deposits (25,712,972) (16,017,028)
Other receivables 3,340,773 (14,471,005)
Sales tax refundable (40,828,765) 64,021,564
(1,300,998,134) 107,382,644
(Decrease)/Increase in trade and other payables (45,717,866) 283,929,714
Cash generated by operations (100,068,466) 1,233,816,899
Finance cost paid (143,898,531) (93,052,968)
Staff retirement benefits - gratuity paid (33,702,454) (30,127,965)
Income taxes paid (124,604,518) (116,521,460)
Long term deposits - (2,327,380)
(302,205,503) (242,029,773)
Net cash (used in) / generated from operating activities (402,273,969) 991,787,126
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment 320,255,625 145,106,008

Additions in property, plant and equipment (717,468,930) (1,002,437,277)
Net cash used in investing activities (397,213,305) (857,331,269)
CASH FLOWS FROM FINANCING ACTIVITIES *
Payment of long term financing (81,367,073) (77,463,948)

Proceeds from long term financing 376,665,000 537,839,000
Short term borrowings - net 772,199,213 (456,100,605)
Dividend paid (192,553,428) (110,250,240)
Net cash generated from / (used in) financing activities 874,943,712 (105,975,793)
Net increase / (decrease) in cash and cash equivalents 75,456,438 28,480,064

Cash and cash equivalents at the beginning of the year 68,266,023 39,785,959
Cash and cash equivalents at the end of the year 143,722,461 68,266,023
* No non-cash item are included in these activities.


Notes to the financial statements
For the year ended June 30, 2019
1 THE COMPANY AND ITS OPERATIONS
1.1 Bhanero Textile Mills Limited ("the Company") was incorporated on 30th March 1980 as a public limited company in Pakistan under
repealed Companies Ordinance, 1984 now the Companies Act, 2017 and is quoted on Pakistan Stock Exchanges Limited. The
registered office of the Company is located at Umer House, 23/1, Sector 23, S. M. Farooq Road, Korangi Industrial Area Karachi.
1.2 The company is principally engaged in manufacturing and sales of yarn and fabric. The production facilities are located at Kotri,
District Dadu in the province of Sindh and Feroze Wattwan, District Sheikhupura in the province of Punjab.
2 Basis of Preparation
2.1 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
- International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as
notified under the Companies Act 2017;
- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified
under the Companies Act, 2017; and
- Provision of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and directives
issued under the Companies Act, 2017 have been followed.
2.2 Basis of measurement

These financial statements have been prepared on the historical cost convention except for certain financial instruments at fair
value and employees retirement benefits at present value. In these financial statements, except for cash flow statements , all
transactions have been accounted for on accrual basis.
2.3 Functional and presentation currency

These financial statements are presented in Pakistan Rupees which is also the company's functional currency. All financial
information presented in Pakistan Rupees has been rounded to the nearest Rupee.
2.4 Use of estimates and judgments

The preparation of financial statements in conformity with approved accounting standards, as applicable in Pakistan, requires
management to make judgments, estimates and assumptions that affect the application of policies and the reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
Judgments made by the management in the application of approved accounting standards, as applicable in Pakistan, that have
significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are
discussed in note 45 to these financial statements.
2.5 Standards, interpretations and amendments to published approved accounting standards
2.5.1 Standards, interpretations and amendments to published approved accounting standards that are effective in the current
year :
Following standards, amendments and interpretations are effective for the year begining on or after July 01, 2018. These
standards, interpretations and the amendments are either not relevant to the Company's operations or are not expected to have
significant impact on the Company's financial statements other than certain additional disclosures.

¤ IFRS 9 ‘Financial instruments’ – This standard replaces the provisions of IAS 39 that relate to the recognition, classification and
measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and
hedge accounting. It also includes an expected credit losses model that replaces IAS 39 incurred loss impairment model.
¤ IFRS 15 ‘Revenue from contracts with customers’ – This standard introduces a single five-step model for revenue recognition with a
comprehensive framework based on core principle that an entity should recognise revenue representing the transfer of promised
goods or services under separate performance obligations under the contract to customer at an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. IFRS 15 replaces the previous
revenue standards: lAS 18 Revenue, lAS 11 Construction Contracts, and the related interpretations on revenue recognition.
'The changes laid down by these standards do not have any significant impact on these financial statements of the Company.
However, related changes to the accounting policies have been made in these financial statements.
The other new standards, amendments to approved accounting standards and interpretations that are mandatory for the financial
year beginning on January 1, 2018 are considered not to be relevant or to have any significant effect on the Company's financial
reporting and operations.
2.5.2 Standards, amendments to approved accounting standards and interpretations that are not yet effective and have not been
early adopted by the company
¤ The following International Financial Reporting Standards (IFRS Standards) as notified under the Companies Act, 2017 and the
amendments and interpretations thereto will be effective for accounting periods beginning on or after 01 July 2019:
¤ IFRS 16, ‘Leases’ is applicable to accounting periods beginning on or after January 1, 2019. IFRS 16 will affect primarily the
accounting by lessees and will result in the recognition of almost all the leases on the balance sheet date. This standard removes
the current distinction between operating and finance leases and requires recognition of an asset (the right to use the leased item)
and a financial liability to pay rentals for virtually all lease contracts. An optional exemption exists for short-term and low-value
leases. The accounting by lessor will not significantly change. Some differences may arise as a result of the new guidance on the
definition of lease. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. The Company has yet to assess the impact of this standard on its
financial statements.
¤ IFRIC 23, ‘Uncertainty over income tax treatments’: (effective for periods beginning on or after January 01, 2019). This IFRIC
clarifies how the recognition and measurement requirements of IAS 12 ‘Income taxes’, are applied where there is uncertainty over
income tax treatments. The IFRIC explains how to recognise and measure deferred and current income tax assets and liabilities
where there is uncertainty over a tax treatment. An uncertain tax treatment is any tax treatment applied by an entity where there is
uncertainty over whether that treatment will be accepted by the tax authority. The IFRIC applies to all aspects of income tax
accounting where there is an uncertainty regarding the treatment of an item, including taxable profit or loss, the tax bases of assets
and liabilities, tax losses and credits and tax rates. The Company is yet to assess the full impact of the interpretation.
¤ There are a number of other minor amendments and interpretations to other approved accounting standards that are not yet
effective and are also not relevant to the company and therefore have not been presented here.
3 Summary of Significant Accounting Policies
3.1 Borrowings
Mark-up bearing borrowings are recognized initially at cost, less attributable transaction cost. Subsequent to initial recognition, mark-
up bearing borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in the
income statement over the period of the borrowings on an effective interest basis.
3.2 Employee benefits

Short term employees benefits
The company recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services rendered by
employees as a liability after deducting amount already paid and as an expense in profit or loss unless it is included in the cost of
inventories or property, plant and equipment as permitted or required by the approved accounting standards. If the amount paid
exceeds the undiscounted amount of benefits, the excess is recognized as an asset to the extent that the prepayment would lead to
a reduction in future payments or cash refund.

The Company provides for compensated absences of its employees on unavailed balance of leaves in the period in which the
leaves are earned.
Post retirement benefits

Defined benefit plans
The Company operates an unfunded gratuity scheme (defined benefit plan) for all its permanent employees who have completed
minimum qualifying period of service as defined under the respective scheme. Liability is adjusted annually to cover the obligation
and the adjustment is charged to profit or loss. The determination of the Company's obligation under the scheme requires
assumptions to be made of future outcomes, the principal ones being in respect of increases in remuneration, expected average
remaining working lives of employees and discount rate used to derive present value of defined benefit obligation.
Amounts recognized in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognized
actuarial gains and losses and unrecognized past service cost.
Actuarial gains and losses are recognized in comprehensive income for the period in which these arise.
3.3 Taxation
Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the extent
that it relates to items recognized directly in equity, in which case it is recognized in equity.
Current
Current tax is the amount of tax payable on taxable income for the year, using tax rates enacted or substantively enacted by the
reporting date, and any adjustment to the tax payable in respect of previous years. Provision for current tax is based on higher of the
taxable income at current rates of taxation in Pakistan after taking into account tax credits, rebates and exemptions available, if any,
or minimum of turnover. However, for income covered under final tax regime, taxation is based on applicable tax rates under such
regime. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any excess paid over
what is due in respect of the current or prior periods is recognized as an asset.
Deferred
Deferred tax is accounted for using the balance sheet liability method providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. In this regard, the effects
on deferred taxation of the portion of income that is subject to final tax regime is also considered in accordance with the requirement
of "Technical Release - 27" of the Institute of Chartered Accountants of Pakistan. Deferred tax is measured at rates that are
expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or substantively
enacted by the reporting date. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is
recognized for deductible temporary differences to the extent that future taxable profits will be available against which temporary
differences can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
Deferred tax is not recognized for timing differences that are not expected to reverse and for the temporary differences arising from
the initial recognition of goodwill and initial recognition of assets and liabilities in a transaction that is not a business combination
and that at the time of transaction affects neither the accounting nor the taxable profit.
3.4 Provisions
A provision is recognized in the balance sheet when the company has a legal or constructive obligation as a result of past events,
and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of
the amount of the obligation.
3.5 Trade and other payables

Liabilities for trade and other amounts payable are recognized and carried at cost, which is the fair value of the consideration to be
paid in the future for goods and services received, whether or not invoices to the company.
3.6 Dividend
Dividend is recognized as a liability in the period in which it is approved by shareholders.
3.7 Property, plant and equipment and depreciation

Owned assets
Property, plant and equipment, except freehold land and capital work-in-progress are stated at cost less accumulated depreciation
and impairment losses, if any. Freehold land and capital work-in-progress are stated at cost.

Subsequent cost
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably.
The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment
are recognized in profit or loss as incurred.
Depreciation
Depreciation is charged to income on reducing balance method over its estimated useful life at the rates specified in property, plant
and equipment note except for equipment and other assets. Equipment and other assets are depreciated over the period of three
years. Depreciation on additions to property, plant and equipment is charged from the month in which an item is acquired or
capitalized while no depreciation is charged for the month in which the item is disposed off.
The assets’ residual values and useful lives are reviewed at each financial year end and adjusted if impact on depreciation is
material.
The gain or loss on disposal of an asset represented by the difference between the sale proceeds and the carrying amount of the
asset is recognized as an income or expense.
Impairment
Where the carrying amount of asset exceeds its estimated recoverable amount it is written down immediately to its recoverable
amount.
3.8 Capital work in process

Capital work in progress and stores held for capital expenditure are stated at cost and represents expenditure incurred on property,
plant and equipment during construction and installation. Cost includes borrowing cost as referred in accounting policy of borrowing
cost. Transfers are made to relevant property, plant and equipment category as and when assets are available for use.
3.9 Investments in associate - Equity Method
Entities in which the Company has significant influence but not control and which are neither its subsidiaries nor joint ventures are
associates and are accounted for by using the equity method of accounting. These investments are initially recognized at cost,
thereafter the carrying amount is increased or decreased to recognize the company's share of profit or loss of associates. Share of
post acquisition profit and loss of associates is accounted for in the company's profit and loss account. Distribution received from
investee, reduces the carrying amount of investment. The changes in the associate's equity which are not recognized in the
associates' profit and loss account, are recognized directly in the equity of the Company.
3.10 Financial assets and liabilities
Financial assets
The Company classifies its financial assets at amortised cost, fair value through other comprehensive incomeor fair value through
profit or loss on the basis of the Company’s business model for managing the financial assets and the contractual cash flow
characteristics of the financial asset.
Amortised Cost
Assets that are held for collection of contractual cash flows where those cash flow represents solely payments of principal and
interest are measured at amortised cost. Interest income from these financial assets, impairment losses, foreign exchange gains
and losses, and gain or loss arising on derecognition are recognised directly in profit or loss.

Fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Fair value through profit or loss

Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income or assets that are
designated at fair value through profit or loss using fair value option, are measured at fair value through profit or loss. A gain or loss
on debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss in the period in
which it arises.
Equity instrument financial assets are measured at fair value and subsequent to initial recognition changes in fair value of these
financial assets are normally recognised in profit or loss. Dividends from such investments continue to be recognised in profit or loss
when the Company’s right to receive payment is established. Where an election is made to present fair value gains and losses on
equity instruments in other comprehensive income there is no subsequent reclassification of fair value gains and losses to profit or
loss following the derecognition of the investment.
Financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received
respectively. These financial assets and liabilities are subsequently remeasured to fair value, amortized cost or cost as the case
may be. Any gain or loss on the recognition and de-recognition of the financial assets and liabilities is included in the profit or loss
for the period in which it arises.
Derecognition
Financial assets are derecognized when the Company loses control of the contractual rights that comprise the financial asset.
Assets or liabilities that are not contractual in nature and that are created as a result of statutory requirements imposed by the
Government are not the financial instruments of the Company.
Financial Liabilities
Financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities at amortised cost are initially measured at fair value less transaction costs. Financial liabilities at fair value
through profit or loss are initially recognised at fair value and transaction costs are expensed on profit or loss.
Financial liabilities, other than those at fair value through profit or loss, are subsequently measured at amortised cost using the
effective yield method.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. Where an existing
financial liability is replaced by another from the same lender or substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange and modification is treated as a derecognition of the original liability and the recognition of
a new liability, and the difference in respective carrying amounts is recognised in profit or loss.
3.11 Impairment
Financial Assets
The Company assesses on a forward looking basis the expected credit losses associated with its financial assets. The Company
applies the simplified approach to recognise lifetime expected credit losses for trade debts, due from customers and contract
assets. The Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment.

The Company considers a financial asset to be in default when internal or external information indicates that the Company is
unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the
Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Non-Financial Assets
The carrying amounts of non-financial assets are assessed at each reporting date to ascertain whether there is any indication of
impairment. If such an indication exists, the asset’s recoverable amount is estimated to determine the extent of impairment loss, if
any. An impairment loss is recognized as an expense in the profit or loss. The recoverable amount is the higher of an asset’s fair
value less cost of disposal and value-in-use. Value-in-use is ascertained through discounting of the estimated future cash flows
using a discount rate that reflects current market assessments of the time value of money and the risk specific to the assets. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units). An impairment loss is reversed if there is a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
3.12 Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are set off and only the net amount is reported in the balance sheet when there is a legally
enforceable right to set off the recognized amount and the company intends to either settle on a net basis, or to realize the asset
and settle the liability simultaneously.
3.13 Stores and spares

Stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis. Items in
transit are valued at cost comprising invoice value plus other charges incurred thereon.
3.14 Stock-in-trade
Stock-in-trade is stated at the lower of cost and net realizable value except waste which is valued at net realizable value. Cost is
determined as follows.
Raw material At weighted average cost or replacement cost whichever is lower

Work in progress At average manufacturing cost
Finished goods At average manufacturing cost or net realizable value whichever is lower
Waste Net realizable value
Raw material in transit is stated at invoice price plus other charges paid thereon upto the balance sheet date.
Average manufacturing cost in relation to work in process and finished goods, consist of direct material and proportion of
manufacturing overheads based on normal capacity.
Net realizable value is the estimated selling price in the ordinary course of business less costs of completion and selling expenses.
3.15 Trade debts and other receivables

Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortized cost less loss
allowance, if any. The Company always measures the loss allowance for trade debts at amount equal to lifetime expected credit losses
(ECL). The expected credit losses on trade debts are estimated using a provision matrix by reference to past default experience of the
debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an assessment of both the current as well forecast direction of conditions at
their reporting date.
There has been change in the estimation techniques or significant assumptions made during the current reporting period.
Trade debts and other receivable considered irrecoverable are written off.
3.16 Cash and cash equivalents

Cash and cash equivalents comprise cash balances, cash in transit and balances with bank for the purpose of cash flow statement.

3.17 Revenue recognition

Revenue from sale of goods is recognised when control of goods is transferred to customers.
Interest income is recognized on the basis of constant periodic rate of return.
Dividend income is recognized when the right to receive dividend is established i.e. the book closure date of the investee company
declaring the dividend.
Unrealised gains / (losses) arising on revaluation of securities classified as ‘fair value through other comprehensive income’ are
included in other comprehensive income in the period in which they arise.
Unrealised gains / (losses) arising on revaluation of securities classified as ‘fair value through profit or loss’ are included in profit or
loss in the period in which they arise.
3.18 Borrowing costs

Borrowing costs incurred on long term finances directly attributable for the construction / acquisition of qualifying assets are
capitalized up to the date, the respective assets are available for the intended use. All other mark-up, interest and other related
charges are taken to the profit and loss account currently.
3.19 Foreign currency translation

Foreign currency transactions are translated into Pak Rupees at exchange rates prevailing on the date of transaction. Monetary
assets and liabilities in foreign currencies are retranslated into Pak Rupees at the rates of exchange prevailing at the balance sheet
date.
Exchange differences, if any, are taken to profit and loss account.
3.20 Transactions with related party

Transactions with related parties are priced at comparable uncontrolled market price. All transactions involving related parties
arising in the normal course business are conducted at arm’s length using valuation modes, as admissible. Parties are said to be
related when they meet the definition as provided in the Companies Act, 2017.
3.21 Segment reporting

Segment reporting is based on the operating (business) segments of the company. An operating segment is a component of the
company that engages in a business activities from which it may earn revenues and incur expenses, including revenues and
expenses that relates to transactions with any of the company's other components. An operating segment's operating results are
reviewed by the CEO to make decision about resources to be allocated to the segment and assess its performance and for which
discrete financial information is available.
Segment results that are reported to the CEO includes items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprises mainly corporate assets, income tax assets, liabilities and related
income and expenditure. Segment capital expenditure is the total cost incurred during the period to acquire property , plant and
equipment.
The business segments are engaged in providing products and services which are subject to risks and rewards which differ from the
risk and reward of other segment Segments reported are Spinning, Weaving and Power Generation, Which also reflects the
management structure of company.
4 Capital Management
The company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The board of directors monitors the return on capital and level of dividends to ordinary
shareholders. The company seeks to keep a balance between the higher return that might be possible with higher level of
borrowings and the advantages and security afforded by a sound capital position. There were no changes in the company's
approach to capital management during the year. Further the company is not subject to externally imposed capital requirements.

30-Jun-19 30-Jun-18
5 ISSUED, SUBSCRIBED AND PAID UP CAPITAL Rupees Rupees
30-Jun-19 30-Jun-18
Number of shares
1,762,500 1,762,500 Ordinary shares of PKR 10 each allotted 17,625,000 17,625,000

for consideration'- fully paid in cash
Ordinary shares of Rs 10 each allotted
1,237,500 1,237,500 as bonus shares 12,375,000 12,375,000
3,000,000 3,000,000 30,000,000 30,000,000
5.1 Associated company holds 500,600 (2018: 500,600) ordinary shares of Rs. 10 each in the company.
30-Jun-19 30-Jun-18
Rupees Rupees
6 RESERVES
General reserve - Revenue reserve 4,700,000,000 4,000,000,000
4,700,000,000 4,000,000,000

7 LONG TERM FINANCING - SECURED
From Financial Institutions

LTFF Loans Non - LTFF Loans 30-Jun-19 30-Jun-18
Note
Rupees Rupees Rupees Rupees
7.01 15,093,750 - 15,093,750 16,100,000

7.02 11,140,625 - 11,140,625 11,500,000
Bank Al Habib Limited - Term Finance 7.03 78,662,500 - 78,662,500 81,200,000
Bank Al Habib Limited - Term Finance 7.04 10,970,000 - 10,970,000 10,970,000
MCB Bank Limited - Term Finance 7.05 20,621,000 - 20,621,000 20,621,000
MCB Bank Limited - Term Finance 7.06 - 17,247,000 17,247,000 17,247,000
Meezan Bank Limited - Term Finance 7.09 - 39,195,312 39,195,312 54,873,440
Meezan Bank Limited - Term Finance 7.10 - 97,871,154 97,871,154 137,019,618
Meezan Bank Limited - Term Finance 7.11 98,316,000 - 98,316,000 98,316,000
Meezan Bank Limited - Term Finance 7.12 72,138,000 - 72,138,000 72,138,000
MCB Bank Limited - Term Finance 7.20 118,655,000 - 118,655,000
MCB Bank Limited - Term Finance 7.21 100,267,000 100,267,000
MCB Bank Limited - Term Finance -
Bank Al Habib Limited - Term Finance 1,030,446,875 231,451,845 1,261,898,720 966,600,793
7.01 2,012,500 - 2,012,500 1,006,250

Less: current maturity
7.02 1,437,500 - 1,437,500 359,375
Bank Al Habib Limited - Term Finance
7.03 10,150,000 - 10,150,000 2,537,500
Bank Al Habib Limited - Term Finance
7.04 1,371,248 1,371,248
MCB Bank Limited - Term Finance
7.05 2,577,624 2,577,624
7.06 - 2,155,880 2,155,880 -
7.07 - 20,434,668 20,434,668 20,434,668
7.08 - 2,202,688 2,202,688 2,202,688
Meezan Bank Limited - Term Finance
7.09 - 15,678,128 15,678,128 15,678,128
7.10 39,148,464 39,148,464 39,148,464
7.11 9,217,125 - 9,217,125 -
7.12 6,762,939 - 6,762,939 -
7.13 9,895,125 - 9,895,125 -
7.14 395,907 - 395,907
7.15 - 437,343 437,343
7.16 772,689 772,689
7.17 716,064 716,064
7.18 14,553,000 - 14,553,000
7.19 263,812 263,812
- -
58,636,780 81,545,924 140,182,704 81,367,073
971,810,095 149,905,921 1,121,716,016 885,233,720

Security Repayment Markup Rates on NON- LTF

` Markup on LTFF
7.01 Hypothecation charge on plant and machinery of PKR Repayable in thirty two quarterly installments,
267.0 million of unit III located at Ferrozwatton, commencing from February 22, 2019.
Sheikhupura-Faisalabad Road, Sheikhupura. 2.4% (2018: 2.4%) -
7.02 Covered under securities for term finance 7.01 Repayable in thirty two quarterly installments,
commencing from April 20, 2019.
2.4% (2018: 2.4%) -
7.03 Hypothecation charge on plant and machinery of PKR Repayable in thirty two quarterly installments,
1,734 million of unit II located at Ferrozwatton, commencing from April 30, 2019.
Sheikhupura-Faisalabad Road, Sheikhupura. 2.4% (2018: 2.4%) -
commencing from July 07, 2019. 2.4% (2018: 2.4%) -
commencing from July 26, 2019. 2.4% (2018: 2.4%) -
commencing from August 31, 2019. 3 Months KIBOR + 0.4% (2018: 3 Months KIBOR +
-
0.4%)
7.07 Hypothecation charge on plant and machinery of PKR Repayable in twenty four quarterly installments,
666.7 million of unit II located at Ferrozwatton, commencing from January 15, 2016. 3 Months KIBOR + 0.65% (2018: 3 Months KIBOR +
Sheikhupura-Faisalabad Road, Sheikhupura. -
0.65%)
7.08 Covered under securities for term finance 7.07 Repayable in twenty four quarterly installments, 3 Months KIBOR + 0.65% (2018: 3 Months KIBOR +
commencing from January 15, 2016. - 0.65%)
7.11 Covered under securities for term finance 7.03 Repayable in Thirty two quarterly installments,
commencing from October 14, 2019.
2.4% (2018: 2.4%)
commencing from November 17, 2019.
2.4% (2018: 2.4%)
commencing from December 11, 2019.
2.4% (2018: 2.4%)
commencing from December 27, 2019.
2.4% (2018: 2.4%)
7.15 Covered under securities for term finance 7.03 Repayable in Thirty two quarterly installments, 3 Months KIBOR + 0.4% (2018: 3 Months KIBOR +
commencing from October 28, 2019. 0.4%)

Security Repayment Markup Rates on NON- LTF

` Markup on LTFF
commencing from November 2, 2019. 0.4%)
commencing from November 9, 2019. 0.4%)
commencing from January 06, 2020.
2.4% (2018: 2.4%)
2.4% (2018: 2.4%)
commencing from May 07, 2021.
2.4% (2018: Nil)
2.4% (2018: Nil)
2.4% (2018: Nil)
2.4% (2018: Nil)
7.24 Hypothecation charge on plant and machinery of PKR Repayable in Thirty two quarterly installments,
267 million of unit lII located at Ferrozwatton, commencing from July 22, 2021.
Sheikhupura-Faisalabad Road, Sheikhupura. 3.5% (2018: Nil)

8 DEFERRED LIABILITIES Note Rupees Rupees
Staff retirement benefits - gratuity 8.1 148,844,904 149,566,641

Deferred taxation 8.2 146,588,213 111,301,359
Infrastructure fee payable - ETO 8.3 101,436,900 80,971,084
Infrastructure fee payable - Gas 8.4 76,700,934 66,327,118
473,570,951 408,166,202
8.1 Staff retirement benefits - gratuity
8.1.1 Movement in net liability recognized in the balance sheet
Present value of defined benefits obligation - at the beginning of the year 149,566,641 131,861,347
Charged to profit and loss account and comprehensive income 8.1.2 32,980,717 47,833,259
Benefits paid during the year (33,702,454) (30,127,965)
Present value of defined benefits obligation - at the end of the year 148,844,904 149,566,641
8.1.2 Amount charged to profit and loss account / other comprehensive income
Current service cost 31,879,874 42,932,314

Interest cost 14,588,636 10,803,756
Remeasurement charged to other comprehensive income (13,487,793) (5,902,811)
32,980,717 47,833,259
8.1.3 The company operates an unfunded gratuity scheme (defined benefit plan) for all its permanent employees who have completed
minimum qualifying period of service as defined under the respective scheme. Provisions are made annually to cover the obligation
under the scheme on the basis of actuarial valuation and are charged to income. Actuarial valuation has been carried out by
independent valuer as at June 30, 2019 using the projected unit credit method assuming a discount rate of 14.25% (2018: 10%) per
annum and expected rate of increase in salaries at 12% (2018: 10%) per annum.
8.1.4 There is no unrecognized actuarial loss / gain.
8.1.5 Historical information

2019 2018 2017 2016 2015
Rupees Rupees Rupees Rupees Rupees
Present value of defined benefits obligation 148,844,904 149,566,641 131,861,347 114,569,919 132,185,864
Experience adjustments on plan liabilities (13,487,793) (5,902,811) (1,254,616) (25,991,525) 9,931,102
8.1.6 Sensitivity analysis of actuarial assumptions

The calculation of defined benefit obligation is sensitive to assumptions given above. The below information summarizes how the
defined benefit obligation at the end of the reporting period would have increased / (decreased) as a result of change in respective
assumptions by 100 basis point.
Increase in Decrease in
assumption assumption
Discount rate (4,545,488) 4,924,390

Expected rate of increase in future salary 4,978,577 (2,328,338)
8.1.7 The expected gratuity expense comprising of service cost and net interest for the year ending 30th June 2020 works out to PKR 58.85
million.
8.1.8 The average duration of defined benefit obligation is 6 years.

30-Jun-19 30-Jun-18
8.2 Deferred taxation Rupees Rupees
Deferred tax liability / (assets) arising in respect of:
Taxable temporary differences

Accelerated tax depreciation on owned assets 192,811,379 153,042,901
Deductible temporary differences
Provision for employee benefit (28,881,746) (27,988,087)
Provision for doubtful debts and advances (17,341,420) (13,753,455)
(46,223,166) (41,741,542)
146,588,213 111,301,359
8.2.1 Deferred taxation has been recognized as follows

Recognized in profit and loss account 32,669,693 29,150,541
Recognized through OCI 2,617,161 1,104,580
35,286,854 30,255,121
8.2.2 Revenue from export sales of the Company is subject to taxation under the final tax regime, while the remaining portion of revenue
attracts assessment under normal provisions of the Ordinance. Deferred tax is provided for only that portion of timing differences that
represent income taxable under normal provisions of the Ordinance. These differences are calculated at that proportion of total timing
differences that the local sales, other than the indirect exports taxable under section 154 (3) of the Ordinance, bear to the total sales
revenue based on historical and future trends. Deferred tax has been calculated at 28% of the timing differences so determined based
on tax rates notified by the Government of Pakistan for future tax years.
8.3 This represents amount payable to Excise and Taxation Department, Government of Sindh in respect of infrastructure fee levied
through fifth version of law (i.e. Sindh Finance (Amendment) Ordinance 2006). The Supreme Court in his judgment dated 17th May
2011 has decided that fifth version of law (i.e. Sindh Finance (Amendment) Ordinance 2006) is valid and hence the levy imposed and
collected from the effective date of the fifth version i.e. 28th December 2006 is valid and all imposition and collection before 28th
December 2006 are declared to be invalid. The company has now filed petition in Sindh High Court, challenging fifth version of law
(i.e. Sindh Finance (Amendment) Ordinance 2006 regarding levy of infrastructure fee from the 28th December 2006. During the
pendency of decision on fifth version of law, Sindh High Court has directed on 31st May 2011 to pay 50% of liability to Excise and
Taxation Department, Government of Sindh, and provide bank guarantee of the remaining amount as calculated in accordance
8.4 This represents the Gas Infrastructure Development Cess (GIDC) levied by the Sui Northern Gas Pipelines Limited (SNGPL). This
Company and others have filed Suits before the Lahore High Court (LHC) challenging the said undue levy. The LHC have granted the
Stay Orders, in favour of the Company and have directed the SNGPL, in the respective cases, not to demand the said Cess. The
liability thus represents the amount of GIDC, payable, against which the Company has got the Stay orders, in its favour.
30-Jun-19 30-Jun-18
9 TRADE AND OTHER PAYABLES Note Rupees Rupees
Creditors 9.1 264,744,087 224,378,515

Advance from customers & others 9.2 112,376,167 285,729,728
Accrued liabilities 228,896,503 170,251,169
Workers' Profit Participation Fund 9.3 51,043,799 29,007,844
Workers Welfare Fund 65,098,416 57,361,801
Others 3,817,753 4,965,534
725,976,725 771,694,591
9.1 No balance with associated undertaking is outstanding at year end.

9.2 Advance received from customer is recognised as revenue when the performance obligation in accordance with the policy is
satisfied. Revenue for an amount of Rs. 4,250,978 thousand has been recognised in current year against advances from customers
at the beginning of period.

30-Jun-19 30-Jun-18
9.3 Workers' profit participation fund Note Rupees Rupees
Opening balance 29,007,844 19,773,556

Interest on funds utilized in the Company's business 9.3.1 5,212,878 5,289,478
34,220,722 25,063,034
Paid to the fund (34,220,722) (25,063,034)
- -
Allocation for the year 32 51,043,799 29,007,844
51,043,799 29,007,844
9.3.1 Interest on workers' profit participation fund has been provided @ 482.25% (2018: 276%) per annum.
30-Jun-19 30-Jun-18
Note Rupees Rupees
10 UNCLAIMED DIVIDEND
Unclaimed dividend 1,105,177 758,605
1,105,177 758,605
11 ACCRUED MARKUP / INTEREST
Mark-up accrued on secured:

- long-term financing 18,850,343 8,616,863
- short-term borrowings 18,751,471 6,560,958
37,601,814 15,177,821
12 SHORT TERM BORROWINGS - SECURED
From banking companies

Short term loan/Running finance 12.2 992,656,991 220,457,778
992,656,991 220,457,778
12.1 The aggregate approved short term borrowing facilities amounting to PKR 6.390 billion (2018: PKR 5.115 billion).
12.2 These facilities are subject to mark-up ranging from 1 to 3 month KIBOR + spread between 0.1% to 2% (2018: 1 to 3 month KIBOR +
spreads between 0.05% to 2%) per annum payable quarterly. These are secured against joint hypothecation charge on stocks and
receivables.
30-Jun-19 30-Jun-18
13 CURRENT PORTION OF LONG TERM BORROWINGS Note Rupees Rupees
Long-term financing 7 140,182,704 81,367,073
140,182,704 81,367,073
14 CONTINGENCIES AND COMMITMENTS

Contingencies
14.1 The Company has issued post dated cheques amounting to PKR 436,516,075 (2018: PKR 341,896,954) in favor of Collector of
Customs in lieu of custom levies against various statutory notifications. The post dated cheques furnished by the company are likely
to be released after the fulfillment of term of related SROs.
14.2 Bank guarantee issued to Sui Northern Gas Pipeline Company Limited amounting to PKR 230.168 Million (2018: PKR 121.168
million) and Pakistan State Oil PKR 2.25 million (2018: PKR 2.25 million).
14.3 Bills discounted 542,488,682 410,782,583
Commitments
Letter of credit (for store, raw material and machinery) 74,255,406 490,829,539

15 PROPERTY, PLANT AND EQUIPMENT

COST DEPRECIATION
Book value as at
As at July 01, Additions / As at June 30, As at July 01, Transfers / As at June 30,
PARTICULARS Transfers For the year June 30, 2019 Rate
2018 (disposals) 2019 2018 (disposal) 2019
Rupees
Company owned
Leasehold land 433,414 - - 433,414 - - - 433,414 -

Freehold land 513,824,445 74,898,316 - 523,024,537 - - - 523,024,537 -
(65,698,224)
Building on leasehold land 151,313,955 23,037,775 - 174,351,730 100,783,899 5,090,784 - 105,874,683 68,477,047 10%
Building on freehold land 374,002,329 84,234,457 - 458,236,786 234,682,123 14,764,537 - 249,446,660 208,790,126 10%
- -
Office premises on leasehold land 29,894,675 - - 29,894,675 17,017,301 643,869 - 17,661,170 12,233,505 5%
Office premises on freehold land 111,279,691 - - 84,248,571 42,776,209 3,099,956 - 43,886,844 40,361,727 5%
(27,031,120) - (1,989,321)
Plant and machinery 3,808,683,053 495,408,278 - 4,275,687,938 1,932,226,735 195,424,358 - 2,105,969,747 2,169,718,191 10%
(28,403,393) - - (21,681,346)
Equipments and other assets 109,221,148 7,811,602 - 117,032,750 80,812,092 13,553,225 - 94,365,317 22,667,433 Three years
Electric Installation 74,503,775 4,002,700 - 78,506,475 32,092,374 4,200,693 - 36,293,067 42,213,408 10%
Gas Line & Pipe 7,180,289 - - 7,180,289 5,179,888 200,040 - 5,379,928 1,800,361 10%
Cooling towers 5,223,570 - - 5,223,570 3,718,520 150,505 - 3,869,025 1,354,545 10%
Ventilation system 1,461,897 633,015 - 2,094,912 1,029,899 48,475 - 1,078,374 1,016,538 10%
Boiler 18,244,925 5,788,000 - 24,032,925 12,859,810 586,746 - 13,446,556 10,586,369 10%
Factory equipments 13,757,029 - - 13,757,029 12,427,375 130,370 - 12,557,745 1,199,284 10%
Furniture and fixtures - Factory 5,727,018 731,658 - 6,458,676 4,522,000 161,129 - 4,683,129 1,775,547 10%
Office equipments 23,370,986 5,217,730 - 28,588,716 17,421,954 986,233 - 18,408,187 10,180,529 10%
Furniture and fixtures - Office 2,657,972 - - 2,657,972 862,912 179,506 - 1,042,418 1,615,554 10%
Vehicles 106,685,556 22,237,385 - 110,681,906 64,181,921 10,950,573 - 59,643,824 51,038,082 20%
(18,241,035) - (15,488,670)
June 30, 2019 5,357,465,727 724,000,916 - 5,942,092,871 2,562,595,012 250,170,999 2,773,606,674 3,168,486,197
- (139,373,772) - - - - (39,159,337) - -
Year Ended June 30, 2018

PROPERTY, PLANT AND EQUIPMENT
COST DEPRECIATION
Book value as at
As at July 01, Additions / As at June 30, As at July 01, Transfers / As at June 30,
PARTICULARS Transfers For the year June 30, 2018 Rate
2017 (disposals) 2018 2017 (disposal) 2018
Rupees
Company owned
Leasehold land 433,414 - - 433,414 - - - - 433,414 -

Freehold land 306,812,467 235,887,464 - 513,824,445 - - - - 513,824,445 -
(28,875,486)
Building on leasehold land 142,689,749 8,624,206 - 151,313,955 96,139,323 4,644,576 - 100,783,899 50,530,056 10%
Building on freehold land 320,707,695 53,294,634 - 374,002,329 224,202,726 10,479,397 - 234,682,123 139,320,206 10%
Office premises on leasehold land 29,894,675 15,553,784 (15,553,784) 29,894,675 16,339,544 677,757 - 17,017,301 12,877,374 5%
Office premises on freehold land 84,248,571 27,031,120 - 111,279,691 39,526,435 3,249,774 - 42,776,209 68,503,482 5%
- - - -
Plant and machinery 3,204,974,995 635,765,387 15,553,784 3,808,683,053 1,793,323,710 179,859,382 - 1,932,226,735 1,876,456,318 10%
- (47,611,113) - - - (40,956,357) -
Equipments and other assets 80,305,235 28,915,913 - 109,221,148 70,851,837 9,960,255 - 80,812,092 28,409,056 Three years
Electric Installation 74,503,775 - - 74,503,775 27,462,000 4,630,374 - 32,092,374 42,411,401 10%
Gas line and pipe 7,180,289 - - 7,180,289 4,957,621 222,267 - 5,179,888 2,000,401 10%
Cooling towers 5,223,570 - - 5,223,570 3,551,292 167,228 - 3,718,520 1,505,050 10%
Ventilation system 1,461,897 - - 1,461,897 981,899 48,000 - 1,029,899 431,998 10%
Boiler 18,244,925 - - 18,244,925 12,261,464 598,346 - 12,859,810 5,385,115 10%
Factory equipment 13,757,029 - - 13,757,029 12,282,518 144,857 - 12,427,375 1,329,654 10%
Furniture and fixtures - Factory 5,318,108 408,910 - 5,727,018 4,388,109 133,891 - 4,522,000 1,205,018 10%
Office equipments 23,308,336 62,650 - 23,370,986 16,766,172 655,782 - 17,421,954 5,949,032 10%
Furniture and fixtures - Office 872,972 1,785,000 - 2,657,972 729,572 133,340 - 862,912 1,795,060 10%
Vehicles 98,799,550 18,565,850 - 106,685,556 65,033,498 7,846,913 - 64,181,921 42,503,635 20%
- (10,679,844) - - - (8,698,490) -
June 30, 2018 4,418,737,252 938,728,475 - 5,357,465,727 2,388,797,720 223,452,139 - 2,562,595,012 2,794,870,715
- - - - - - (49,654,847) - -
15.1 Equipment and other assets includes assets amounting to PKR 15,710,241 (2018: PKR 15,710,241) which has been fully
depreciated.
June 30, 2019 June 30, 2018

15.2 The depreciation charge for the year has been allocated as follows: Note Rupees Rupees
Cost of sales 28 238,073,064 214,815,553

Administrative expenses 31 12,097,935 8,636,586
250,170,999 223,452,139
15.3 Freehold lands of the Company are located at Feroze Wattoan Sheikhupura with an area of 864 Kanal 8 Marla (2018: 785 Kanal 18
Marla), at Gajumata Kasur 48 Kanal (2018: 48 Kanal), at Raiwind Kasur 298 Kanal 2 Marla (2018: 766 Kanal) and Leashold land are
located at Kotri with an area of 104 Kanal (2018: 104 Kanal).

15.4 DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT

-
Year Ended June 30, 2019
Proceeds from Gain / (loss) on
Accumulated Written down disposal of disposal of
Cost Mode of
Description depreciation value property, plant property, plant Particulars of buyer
disposal
and equipment and equipment
Rupees
Land 34,534,042 - 34,534,042 147,739,000 113,204,958 Negotiation AM Dairy & Ca le Farm (Pvt) Ltd. H#69/3, Green Villas, Mara b Ali Road Lahore
Land 31,164,182 - 31,164,182 133,323,500 102,159,318 Negotiation AM Steel Industries (Pvt) Ltd. H#69/3, Green Villas, Mara b Ali Road Lahore
65,698,224 - 65,698,224 281,062,500 215,364,276
Building
Non factory building - House 27,031,120 1,989,321 25,041,799 30,000,000 4,958,201 Negotiation Mrs. Ghazala Zahid, H # 153, Ahmed Block, New Garden Town Lahore
27,031,120 1,989,321 25,041,799 30,000,000 4,958,201

Machinery
Carding machinery 6,066,751 5,341,748 725,003 818,125 93,122 Negotiation Abdul Hafeez, H#583, Street#5, Sarfraz Colony, Faisalabad
Waukesha Gen Set 22,336,642 16,339,598 5,997,044 4,900,000 (1,097,044) Negotiation Tariq Glass Industries Limited, 128 J , Model Town, Lahore
28,403,393 21,681,346 6,722,047 5,718,125 (1,003,922)

Vehicles
Toyota Corolla LEF-9450 1,968,800 1,738,975 229,825 300,000 70,175 Negotiation Nadeem Akhtar Bhu a, H#104, Samanabad Lahore
Toyota Corolla LEF-9453 1,967,440 1,738,070 229,370 300,000 70,630 Negotiation Nadeem Akhtar Bhu a, H#104, Samanabad Lahore
Honda Civic LEF-9745 1,921,800 1,697,751 224,049 300,000 75,951 Negotiation Nadeem Akhtar Bhu a, H#104, Samanabad Lahore
Honda Civic LEF-9743 1,921,800 1,697,751 224,049 300,000 75,951 Negotiation Nadeem Akhtar Bhu a, H#104, Samanabad Lahore
Honda Civic LEA-5236 1,482,710 1,373,955 108,755 200,000 91,245 Negotiation Rehan Athar, H#133, Pak Block, Iqbal Town Lahore
Toyota ISIS BBL-605 2,053,467 1,281,057 772,410 800,000 27,590 Negotiation Muhammad Sabir Hussain, H#604A, Sector 11-A, North Karachi
Tractor SAA-4894 357,803 324,825 32,978 75,000 42,022 Negotiation Saleem Sarwar, Sheikhupura
Honda Civic LEF-9744 1,921,800 1,705,346 216,454 300,000 83,546 Negotiation Irfan Parvez, H#199D, PHASE-1,Sui Northern Housing Society,Lahore Can
Toyota Corolla LEA-6681 1,516,240 1,229,265 286,975 300,000 13,025 Negotiation H#468-B, Peoples Colony Faisalabad
Toyota Altis AUQ-105 1,875,765 1,557,240 318,525 400,000 81,475 Negotiation Mansha, H#8169/70, Labour Colony, Landhi Sector F2, Karachi
Toyota Corolla APV-820 1,253,410 1,144,435 108,975 200,000 91,025 Negotiation Abdul Jabbar, Yaqoob Choro P.O Tana Boola Khan, Karachi
18,241,035 15,488,670 2,752,365 3,475,000 722,635
30-Jun-19 139,373,772 39,159,337 100,214,435 320,255,625 220,041,190
Year ended June 30, 2018
Proceeds from Gain / (loss) on

Accumulated Written down disposal of disposal of
Cost Mode of
Description depreciation value property, plant property, plant Particulars of buyer
disposal
and equipment and equipment
Rupees
Office premises on lease hold land
Sales office shop 28,875,486 - 28,875,486 134,925,000 106,049,514 Negotiation Mr. Arif, Flat no. A-20, Mehran Heights, Block 8, Cli on, Karachi.
28,875,486 - 28,875,486 134,925,000 106,049,514

Machinery
Autoconer 4,558,775 3,404,202 1,154,573 1,200,000 45,427 Negotiation Mr. Zain ul Asif, Faisalabad
Simplex 7,550,372 7,000,635 549,737 600,000 50,263 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Drawing 1,232,202 1,138,187 94,015 180,000 85,985 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Drawing 2,464,404 2,276,374 188,030 400,000 211,970 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Bale Breaker 1,108,395 808,395 300,000 350,000 50,000 Negotiation Blessed Tex les Limited, 23/1, Sector 23, Korangi Industrial Area Karachi
Plucker 523,589 485,154 38,435 41,008 2,573 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Sketcher 3,937,640 2,871,872 1,065,768 1,300,000 234,232 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Comber 1,053,097 958,951 94,146 100,000 5,854 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Comber 4,250,000 3,365,645 884,355 1,000,000 115,645 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Simplex 1,574,700 1,214,738 359,962 400,000 40,038 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
Carding 8,750,536 7,938,677 811,859 900,000 88,141 Negotiation Mr. Abdul Hafeez, House No 538, Street 5, Sarfraz Colony, Faisalabad
47,611,113 40,956,357 6,654,756 7,696,008 1,041,252
Vehicles
Vehicle LED 10 - 7109 1,184,347 914,670 269,677 400,000 130,323 Negotiation Mr. Imran Arif, House No. 49, Farooq Street, Ichra Lahore
Vehicle LED - 1995 2,062,167 1,536,599 525,568 610,000 84,432 Negotiation Mr. Mohsin Bhu a, House No 62-D1, Nespak Colony, Lahore
Vehicle LEA - 8698 958,580 876,753 81,827 150,000 68,173 Negotiation Mr. Irfan Parvez, House No. 199D, Sui Northern Housing Society, Lahore.
Vehicle VEH - 7648 2,012,010 1,594,456 417,554 475,000 57,446 Negotiation Mr. Nadeem Akhter; House No. 104, Main Road Samanabad, Lahore.
Vehicle VEH - 9456 1,967,440 1,724,463 242,977 300,000 57,023 Negotiation Mr. Nadeem Akhter; House No. 104, Main Road Samanabad, Lahore.
Vehicle ANB - 992 633,420 577,422 55,998 100,000 44,002 Negotiation Mr. Manshad; House No 8169/70, Labour Colony, Landhi, Karachi
Vehicle AUX - 681 1,861,880 1,474,127 387,753 450,000 62,247 Negotiation Mr. Muhammad Fahad; House No B-272, Block L, North Nazimabad, Karachi
10,679,844 8,698,490 1,981,354 2,485,000 503,646
30-Jun-18 87,166,443 49,654,847 37,511,596 145,106,008 107,594,412

30-Jun-19 30-Jun-18
16 CAPITAL WORK IN PROGRESS Note Rupees Rupees
Building and other civil work 24,632,107 30,884,577

Machinery 290,600 570,116
24,922,707 31,454,693
17 LONG TERM DEPOSITS
Electricity 28,107,540 28,107,540

Telephone 33,600 33,600
Others 17.1 391,676 391,676
28,532,816 28,532,816
17.1 It includes security deposit amounting to Rs. 20,000 (June 2018: 20,000) given to Admiral (Private) Limited, an associated company,
against rent of building.
18 STORES, SPARES AND LOOSE TOOLS
Stores and spares 100,648,705 62,814,534

Packing material 11,020,134 5,199,234
111,668,839 68,013,768
18.1 No item of stores, spares and loose tools is pledged as security as at reporting date.
19 STOCK IN TRADE
Raw material 19.1 2,993,788,566 1,860,317,250

Raw material in transit - 124,107,142
Work in process 167,175,804 137,316,094
Finished goods 406,737,270 223,726,333
Waste 1,316,844 1,740,764
3,569,018,484 2,347,207,583
19.1 Raw material stock cost PKR 448,322,102 (2018: PKR 275,063,931) have been valued at PKR 224,161,050 (2018: PKR
137,531,965) being the replacement cost of raw material. The amount charge to profit and loss in respect of raw material written down
to net realizable value is Rs. 86,629,085 (2018: PKR 137,531,965).
19.2 No item of stock in trade is pledged as security as at reporting date.
30-Jun-19 30-Jun-18
20 TRADE DEBTS Note Rupees Rupees
Foreign - secured against letter of credit 80,333,375 332,611,912

Local - unsecured - considered good 677,828,096 508,881,930
Local - unsecured - considered doubtful 84,316,009 68,336,616
842,477,480 909,830,458
Allowance for ECL on trade debts 20.1 (84,316,009) (68,336,616)
758,161,471 841,493,842
20.1 Particulars of allowance for ECL on trade debts
Balance at beginning of the year 68,336,616 68,336,616
Charge during the year 16,004,393 -
Allowance no longer required/ recovered (25,000) -
Balance at the ended of the year 84,316,009 68,336,616

20.2 Total export sales to closing trade debts

2019 2018
Region Contract Letter of credit Contract Letter of credit
Rupees Rupees Rupees Rupees
America - - 38,079,558 12,320,141

Asia 6,300,000 631,203,655 70,744,204 508,472,248
Europe 101,699,887 717,912,951 572,390,500
Total 6,300,000 732,903,542 826,736,713 1,093,182,889
21 LOANS AND ADVANCES
Advances to :
Suppliers - Unsecured (considered good) 21.1 62,114,206 23,304,793
Suppliers - Unsecured (considered doubtful) 202,681 309,001
Employees - Secured (considered good) 6,244,597 5,394,834
Employees - Un-secured (considered doubtful) 1,165,000 1,165,000
69,726,484 30,173,628
Allowance for ECL on advances 21.3 (1,367,681) (1,474,001)
68,358,803 28,699,627
21.1 These includes an amount of Rs. 38,550,000 (June 2018: Rs. Nil ) given to Bhanero Energy Limited in the normal course of business.
These advance are less than 30 days past due.
21.2 Aggregate maximum outstanding balance of advance to suppliers given to Bhanero Energy Limited at the end of any month during
the year was Rs 38,550,000 (2018: Nil ).
21.3 Particulars of allowance for ECL on advances

Balance at beginning of the year 1,474,001 1,474,001
Charge during the year - -
Allowance no longer required/ recovered (106,320) -
Balance at the ended of the year 1,367,681 1,474,001
22 TRADE DEPOSITS AND SHORT TERM PREPAYMENTS
Deposits against infrastructure fees 22.1 104,772,103 81,750,126

Prepaid expenses 4,401,204 1,710,209
109,173,307 83,460,335
22.1 Effective mark up rate on these deposits range from 4.5% to 10.25% (June 30, 2018: 4.5% to 6%) per annum.
30-Jun-19 30-Jun-18
Rupees Rupees
23 OTHER RECEIVABLES - UNSECURED
KMC refundable - Considered doubtful 680,624 680,624

Letter of credits 267,276 2,559,866
Other receivables - Considered good 13,839,225 14,887,408
14,787,125 18,127,898
Provision for doubtful receivables (680,624) (680,624)
14,106,501 17,447,274

30-Jun-19 30-Jun-18
Note Rupees Rupees
24 INCOME TAX REFUNDABLE
Income tax refundable / adjustable 330,710,871 237,079,056
Provision for taxation - Current year (91,837,659) (27,378,416)

Provision for taxation - Prior years 34,512 (3,594,287)
(91,803,147) (30,972,703)
238,907,724 206,106,353
25 SALES TAX REFUNDABLE
Sales tax and federal excise duty refundable 170,868,560 130,039,795
Federal excise duty and 1% Special excise duty refundable - considered doubtful 3,006,390 3,006,390
Provision for non refundable (3,006,390) (3,006,390)
- -
170,868,560 130,039,795
26 BANK BALANCES
Balances with banks on:
Current accounts 140,546,846 65,741,401
Foreign currency account - current 3,175,615 2,524,622
143,722,461 68,266,023
27 SALES - NET
Export
Yarn 964,932,941 924,426,890
Fabric 2,142,375,439 1,912,191,474
3,107,308,380 2,836,618,364
Export Rebate 59,779,138 44,407,434
3,167,087,518 2,881,025,798
Local
Yarn 4,965,655,386 4,116,939,372
Fabric 1,057,732,218 845,370,928
Cotton and polyester 44,460,346 163,545,164
Scrap 2,121,146 1,901,049
Waste and others 111,375,914 65,390,950
6,181,345,010 5,193,147,463
9,348,432,528 8,074,173,261
Discount (272,664) -
Sales tax (387,000) (327,850)
(659,664) (327,850)
9,347,772,864 8,073,845,411

30-Jun-19 30-Jun-18
Note Rupees Rupees
28 COST OF SALES
Raw material consumed 28.1 5,853,408,960 4,656,993,230

Packing material consumed 77,325,062 79,352,982
Stores, spares and loose tools 178,483,612 167,319,915
Salaries, wages and benefits 28.2 683,018,800 709,577,567
Fees and subscription 621,021 364,966
Fuel .power and water 1,133,109,765 988,909,791
Insurance 22,302,841 13,691,904
Vehicle running and maintenance 9,780,843 9,165,858
Rent, rate and taxes 742,677 632,673
Repairs and maintenance 12,080,050 10,258,430
Communication 852,381 773,416
Traveling and conveyance 2,062,132 2,070,922
Depreciation 15.2 238,073,064 214,815,553
Others 3,327,763 2,869,391
8,215,188,971 6,856,796,598
Work in process
Opening stock 137,316,094 121,132,743
Stock burnt / lost during process (5,482,000) -
Closing stock (167,175,804) (137,316,094)
(35,341,710) (16,183,351)
Cost of goods manufactured 8,179,847,261 6,840,613,247
Cost of raw material sold 28.3 44,468,269 163,986,242
Finished stocks
Opening stock 225,467,097 407,352,695
Finished goods purchases 12,372,270 18,964,352
Closing stock (408,054,114) (225,467,097)
(170,214,747) 200,849,950
8,054,100,783 7,205,449,439
28.1 Raw material consumed

Opening stock 1,984,424,392 2,184,922,836
Purchases - net 6,904,456,758 4,625,219,798
8,888,881,150 6,810,142,634
Cost of raw material sold (41,683,624) (162,665,051)
Raw material theft - (6,059,961)
Closing stock (2,993,788,566) (1,984,424,392)
5,853,408,960 4,656,993,230
28.2 Salaries, wages and benefits includes employees benefits amounting to PKR 40,016,772 (June 30, 2018: PKR 48,419,005).

30-Jun-19 30-Jun-18
Rupees Rupees
28.3 Cost of cotton sold
Cost of purchases 40,673,096 157,003,307

Direct expenses 3,795,173 6,982,935
44,468,269 163,986,242
29 OTHER INCOME
Income from financial assets

Interest income 6,173,027 3,346,048
Exchange gain on foreign currency accounts 842,645 364,425
Bad debts recovered 131,320 -
7,146,992 3,710,473
Income from other than financial assets
Gain on disposal of property, plant and equipment 220,041,190 107,594,412
Rental income 637,463 681,779
220,678,653 108,276,191
227,825,645 111,986,664
30 DISTRIBUTION COST
Export
Freight on export sales 45,066,626 54,872,130
Commission on export sales 27,540,015 44,754,978
Export development surcharge 24,929,008 7,037,074
Sales Promotion Expenses 491,001 3,475,943
Others 3,185,212 1,951,633
101,211,862 112,091,758
Local
Salaries and wages 748,098 778,427
Freight on local sales 15,059,779 15,038,569
Commission on local sales 60,148,050 54,572,621
Quality claim 87,894 1,345,741
Others 894,992 827,479
76,938,813 72,562,837
178,150,675 184,654,595

30-Jun-19 30-Jun-18
Note Rupees Rupees
31 ADMINISTRATIVE EXPENSES
Directors' remuneration 37 15,600,000 15,600,000

Staff salaries and benefits 31.1 78,290,678 67,459,624
Traveling, conveyance and entertainment 12,376,834 8,854,108
Printing and stationery 3,070,592 2,579,499
Communication 1,723,800 1,904,586
Vehicles running and maintenance 8,434,130 8,279,312
Legal and professional 882,681 1,818,500
Auditors' remuneration 31.2 1,611,000 1,611,000
Fee and subscription 4,459,535 3,936,736
Repair and maintenance 1,488,553 1,427,754
Depreciation 15.2 12,097,935 8,636,586
Rent, rates and utilities 1,471,137 1,372,162
Donation 31.3 576,500 500,000
Software license renewal and maintenance fee - 482,400
Others 3,273,679 2,427,030
145,357,054 126,889,297
31.1 Salaries, wages and benefits includes employees benefits amounting to PKR 6,451,639 (June 30, 2018: PKR 5,317,065).
31.2 Auditors' remuneration
Annual statutory audit 1,390,000 1,390,000

Half yearly review 181,000 181,000
Code of Corporate Governance review 40,000 40,000
1,611,000 1,611,000
31.3 No director or his spouse had any interest in the donee.
32 OTHER OPERATING EXPENSES
Workers' Profit Participation Fund 9.3 51,043,799 29,007,844

Workers' Welfare Fund 7,736,615 3,699,784
Allowance for ECL on trade debts 20.1 16,004,393 -
74,784,807 32,707,628
33 FINANCE COST
Mark-up on:
- long-term financing 48,198,987 33,801,367
- short-term borrowings 85,905,984 36,678,536
- workers' profit participation fund 9.3 5,212,871 5,289,478
139,317,842 75,769,381
Bank charges and commission 3,106,656 3,117,486
Letter of credits discounting 23,898,026 15,084,496
166,322,524 93,971,363

30-Jun-19 30-Jun-18
34 PROVISION FOR TAXATION Note Rupees Rupees
Current
- for the year 34.1 91,837,659 27,378,416
- for prior years (34,512) 3,594,287
91,803,147 30,972,703
Deferred - current year 8.2 32,669,693 29,150,541
124,472,840 60,123,244
34.1 Provision for current tax for the year has been made in accordance with section 18 and section 154 of the Income Tax Ordinance
2001. Income tax assessment of company has been finalized upto tax year 2018.
30-Jun-19 30-Jun-18
34.2 Numerical reconciliation between the average tax rate and the applicable tax rate
% %
Applicable tax rate 29.00 30.00
Tax effect of amounts that are:
adjustment of the prior years (0) 0.66

income chargeable to tax at different rate (14.16) (13.24)
deferred tax 3.41 5.35
tax credit (5.24) (11.68)
(15.99) (18.91)
Effective tax rate 13.01 11.09
30-Jun-19 30-Jun-18
Rupees Rupees
35 EARNINGS PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earning per share of the company which is based on; 277.47 160.68
Earnings
Earnings for the purpose of basic earnings per share 832,409,826 482,036,509
(net profit after tax for the year)
Number of shares 30-Jun-19 30-Jun-18
Weighted average number of ordinary shares for the purpose of basic earnings per share 3,000,000 3,000,000
Basic earnings per share have been computed by dividing earnings as stated above with weighted average number of ordinary shares.
Basic earnings per share Rupees 277.47 160.68
No figure for diluted earnings per share has been presented as the Company has not issued any instruments carrying options which would
have an impact on earnings per share when exercised.

36 NON ADJUSTING EVENTS AFTER BALANCE SHEET DATE

In respect of current period, the board of directors in their meeting held on 26 September, 2019 has proposed to pay cash dividend of @ 558%
i.e. PKR 55.80 per ordinary share of PKR 10 each. This dividend is subject to approval by the shareholders at the forthcoming annual
general meeting.
37 REMUNERATION OF CHIEF EXECUTIVE AND DIRECTOR
Chief Executive Director Executives Chief Executive Director Executives

2019 2019 2019 2018 2018 2018
Rupees Rupees Rupees Rupees Rupees Rupees
Remuneration 7,800,000 7,800,000 12,720,817 7,800,000 7,800,000 11,175,867

Perquisites - - 2,398,791 - - 2,067,412
Post employment benefits 1,062,000 - - 1,531,625
7,800,000 7,800,000 16,181,608 7,800,000 7,800,000 14,774,904
Number of persons 1 1 6 1 1 6
37.1 In addition the Chief Executive, directors are provided with free use of Company maintained cars and telephone for business use.
37.2 No remuneration to non executive directors has been paid.
38 Segment Analysis
th
The segment information for the reportable segments for the year ended 30 June 2018 is as follows:
38.1 Operating Results
Note Spinning Weaving Total

30-Jun-19 30-Jun-18 30-Jun-19 30-Jun-18 30-Jun-19 30-Jun-18
Sales
Export sales 964,932,941 924,426,890 2,142,375,439 1,912,191,474 3,107,308,380 2,836,618,364
Local sales 5,113,589,896 4,334,861,007 1,067,755,114 858,286,456 6,181,345,010 5,193,147,463
Custom rebate 22,537,862 11,137,704 37,241,276 33,269,730 59,779,138 44,407,434
Inter-segment sales 332,469,980 317,085,684 - - 332,469,980 317,085,684
6,433,530,679 5,587,511,285 3,247,371,829 2,803,747,660 9,680,902,508 8,391,258,945
Discount and sales tax

Regularity Duty - - - - -
Discount (230,543) - (42,121) - (272,664) -
Sales tax (359,142) (289,062) (27,858) (38,788) (387,000) (327,850)
(589,685) (289,062) (69,979) (38,788) (659,664) (327,850)
Net sales 6,432,940,994 5,587,222,223 3,247,301,850 2,803,708,872 9,680,242,844 8,390,931,095
Cost of sales 5,406,811,556 4,905,957,098 2,979,759,207 2,616,578,025 8,386,570,763 7,522,535,123

Gross profit 1,026,129,438 681,265,125 267,542,643 187,130,847 1,293,672,081 868,395,972
Other operating income/(expense) 228,080,044 111,325,692 (254,399) 660,972 227,825,645 111,986,664

1,254,209,482 792,590,817 267,288,244 187,791,819 1,521,497,726 980,382,636
Distribution cost 110,735,950 108,385,590 67,414,725 76,269,005 178,150,675 184,654,595

Administrative cost 112,823,767 100,076,018 32,533,287 26,813,279 145,357,054 126,889,297
223,559,717 208,461,608 99,948,012 103,082,284 323,507,729 311,543,892
Operating result 1,030,649,765 584,129,209 167,340,232 84,709,535 1,197,989,997 668,838,744
38.2 Segment assets 6,440,249,611 5,008,303,435 1,418,195,852 1,189,150,090 7,858,445,463 6,197,453,525

Unallocated assets 547,482,407 448,139,299
8,405,927,870 6,645,592,824
38.3 Segment liabilities 2,582,097,898 1,866,394,887 661,582,190 323,429,855 3,243,680,088 2,189,824,742

Unallocated liabilities 249,130,290 193,031,048
3,492,810,378 2,382,855,790

38.4 Inter-segment pricing

Transactions among the business segments are recorded at arm's length prices using admissible valuation methods.
There were no major customer of company which formed 10 percent or more of the company's revenue.
39 Reconciliation of reportable segment turnover, cost of sales, assets and liabilities
2019 2018
Rupees Rupees
39.1 Turnover
Total turnover for reportable segments 9,680,242,844 8,390,931,095
Elimination of inter-segment turnover (332,469,980) (317,085,684)
Total turnover 9,347,772,864 8,073,845,411
39.2 Cost of sales

Total cost of sales for reportable segments 8,386,570,763 7,522,535,123
Elimination of inter-segment revenue (332,469,980) (317,085,684)
Total cost of sales 8,054,100,783 7,205,449,439
39.3 Assets
Total assets for reportable segments 7,858,445,463 6,197,453,525
Taxation recoverable 238,907,724 206,106,353
Sales tax refundable 170,868,560 130,039,795
Trade deposits 109,173,307 83,460,335
Long term deposit 28,532,816 28,532,816
Total assets 8,405,927,870 6,645,592,824
39.4 Liabilities
Total liabilities for reportable segments 3,243,680,088 2,189,824,742
Unclaimed dividends 1,105,177 758,605
Infrastructure fee 101,436,900 80,971,084
Deferred taxation 146,588,213 111,301,359
Total liabilities 3,492,810,378 2,382,855,790


40 Cost of sales
Raw material consumed 40.1 3,835,874,056 2,945,374,755 2,350,004,884 2,028,704,159 6,185,878,940 4,974,078,914
Packing material consumed 70,877,429 71,925,338 6,447,633 7,427,644 77,325,062 79,352,982
Stores and spare parts 112,141,851 116,184,856 66,341,761 51,135,059 178,483,612 167,319,915
Salaries, wages and benefits 530,225,284 538,748,443 152,793,516 170,829,124 683,018,800 709,577,567
Fees and subscription 382,420 339,915 238,601 25,051 621,021 364,966
Fuel, power and water
Inter-segment - - - - - -
Others 759,601,918 704,081,880 373,507,847 284,827,911 1,133,109,765 988,909,791
759,601,918 704,081,880 373,507,847 284,827,911 1,133,109,765 988,909,791
Insurance 15,526,770 9,222,291 6,776,071 4,469,613 22,302,841 13,691,904
Vehicle running and maintenance 7,050,055 6,755,716 2,730,788 2,410,142 9,780,843 9,165,858
Rent, rates and taxes 685,177 598,173 57,500 34,500 742,677 632,673
Repair and maintenance 7,034,478 7,308,758 5,045,572 2,949,672 12,080,050 10,258,430
Communication 556,550 485,946 295,831 287,470 852,381 773,416
Travelling and conveyance and entertainment 1,620,883 1,498,381 441,249 572,541 2,062,132 2,070,922
Depreciation 166,877,819 146,964,398 71,195,245 67,851,155 238,073,064 214,815,553
Others 1,938,695 1,359,203 1,389,068 1,510,188 3,327,763 2,869,391
5,510,393,385 4,550,848,053 3,037,265,566 2,623,034,229 8,547,658,951 7,173,882,282
Work in process
Opening stock 57,241,040 47,115,994 80,075,054 74,016,749 137,316,094 121,132,743
Work in process lost / brunt (5,482,000) - - - (5,482,000) -
Closing stock (64,544,578) (57,241,040) (102,631,226) (80,075,054) (167,175,804) (137,316,094)
(12,785,538) (10,125,046) (22,556,172) (6,058,305) (35,341,710) (16,183,351)
Cost of goods manufactured 5,497,607,847 4,540,723,007 3,014,709,394 2,616,975,924 8,512,317,241 7,157,698,931
Cost of raw material sold 44,468,269 163,986,242 1,010,528 5,661,744 45,478,797 169,647,986
Finished stocks
Opening stock 125,130,586 314,303,035 100,336,511 93,049,660 225,467,097 407,352,695
Finished goods purchased 3,640,154 12,075,400 7,721,588 1,227,208 11,361,742 13,302,608
Closing stock (264,035,300) (125,130,586) (144,018,814) (100,336,511) (408,054,114) (225,467,097)
(135,264,560) 201,247,849 (35,960,715) (6,059,643) (171,225,275) 195,188,206
5,406,811,556 4,905,957,098 2,979,759,207 2,616,578,025 8,386,570,763 7,522,535,123

40.1 Raw material consumed

Opening stock 1,898,852,677 2,034,271,730 85,571,715 150,651,106 1,984,424,392 2,184,922,836
Purchases
Inter-segment - - 332,469,980 317,085,684 332,469,980 317,085,684
Others 4,811,817,934 2,973,018,970 2,092,638,824 1,652,200,828 6,904,456,758 4,625,219,798
4,811,817,934 2,973,018,970 2,425,108,804 1,969,286,512 7,236,926,738 4,942,305,482
Raw material sold - cotton (40,673,096) (157,003,307) - - (40,673,096) (157,003,307)
Raw material impaired - (6,059,961) - - - (6,059,961)
Raw material sold - yarn - - (1,010,528) (5,661,744) (1,010,528) (5,661,744)
Closing stock (2,834,123,459) (1,898,852,677) (159,665,107) (85,571,715) (2,993,788,566) (1,984,424,392)
3,835,874,056 2,945,374,755 2,350,004,884 2,028,704,159 6,185,878,940 4,974,078,914
-
40.2 Cost of raw material sold
Cost of purchase 40,673,096 157,003,307 1,010,528 5,661,744 41,683,624 162,665,051
Salaries, wages and other benefits 2,054,977 1,000,773 - - 2,054,977 1,000,773
Loading and unloading 737,357 54,836 - - 737,357 54,836
Insurance 81,764 1,226,735 - - 81,764 1,226,735
Commission - 105,447 - - - 105,447
Finance cost 921,075 4,595,144 - - 921,075 4,595,144
44,468,269 163,986,242 1,010,528 5,661,744 45,478,797 169,647,986

41 Distribution cost
Export
Ocean freight and forwarding 18,288,707 22,022,189 26,777,919 32,849,941 45,066,626 54,872,130
Commission 22,073,886 17,988,781 5,466,129 26,766,197 27,540,015 44,754,978
Export development surcharge 2,380,723 2,293,669 22,548,285 4,743,405 24,929,008 7,037,074
Sales Promotion Expenses 491,001 838,443 - 2,637,500 491,001 3,475,943
Others 441,474 - 2,743,738 1,951,633 3,185,212 1,951,633
43,675,791 43,143,082 57,536,071 68,948,676 101,211,862 112,091,758
Local
Salaries and wages 748,098 778,427 - - 748,098 778,427
Inland transportation 14,604,129 14,689,969 455,650 348,600 15,059,779 15,038,569
Commission 50,816,140 47,455,959 9,331,910 7,116,662 60,148,050 54,572,621
Quality claim - 1,490,674 87,894 (144,933) 87,894 1,345,741
Others 891,792 827,479 3,200 - 894,992 827,479
67,060,159 65,242,508 9,878,654 7,320,329 76,938,813 72,562,837
110,735,950 108,385,590 67,414,725 76,269,005 178,150,675 184,654,595

42 Administrative cost
Directors' remuneration 15,600,000 15,600,000 - - 15,600,000 15,600,000
Staff salaries and benefits 59,562,718 50,004,772 18,727,960 17,454,852 78,290,678 67,459,624
Traveling, conveyance and entertainment 6,601,124 6,141,961 5,775,710 2,712,147 12,376,834 8,854,108
Printing and stationery 2,137,800 2,197,366 932,792 382,133 3,070,592 2,579,499
Communication 1,584,942 1,838,779 138,858 65,807 1,723,800 1,904,586
Vehicles running and maintenance 6,485,253 6,696,105 1,948,877 1,583,207 8,434,130 8,279,312
Legal and professional 404,070 1,151,500 478,611 667,000 882,681 1,818,500
Auditors' remuneration 1,074,000 1,074,000 537,000 537,000 1,611,000 1,611,000
Fee and subscription 4,121,332 3,520,224 338,203 416,512 4,459,535 3,936,736
Repair and maintenance 1,488,553 1,427,754 - - 1,488,553 1,427,754
Depreciation 9,845,565 6,982,770 2,252,370 1,653,816 12,097,935 8,636,586
Rent, rates and utilities 1,471,137 1,372,162 - - 1,471,137 1,372,162
Donation 500,000 250,000 76,500 250,000 576,500 500,000
Bad Debts - - - - - -
Inadmissible input 508,723 515,375 - - 508,723 515,375
Software license renewal and maintenance fee - - - 482,400 - 482,400
Others 1,438,550 1,303,250 1,326,406 608,405 2,764,956 1,911,655
112,823,767 100,076,018 32,533,287 26,813,279 145,357,054 126,889,297
43 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

Fair value of financial instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arms length
transaction. As at June 30, 2019 the net fair value of all financial instruments has been based on the valuation methodology outlined below:-
Long-term deposits
Long term deposits does not carry any rate of return. The fair value of it has been taken at book value as it is not considered materially different
and readily exchangeable.
Non-current liabilities
For all non-current liabilities the fair values have been taken at book values as these are not considered materially different based on the
current market rates of return and reprising profiles of similar non-current liabilities.
Other financial instruments
The fair values of all other financial instruments are considered to approximate their book values as they are short term in nature.

The analysis of yield / mark-up rate risk is as under:

2019
Interest / Markup bearing Non Interest / Markup bearing
Maturity Maturity Maturity Maturity Effective
Upto After Subtotal Upto After Subtotal Total Interest
One year One year One year One year Rate
Rupees Rupees Rupees Rupees Rupees Rupees Rupees %
Financial assets
Trade debts - - - 758,161,471 - 758,161,471 758,161,471
Loans and advances - - - 7,409,597 - 7,409,597 7,409,597
Trade deposits 104,772,103 - 104,772,103 - - - 104,772,103 4.5 to 10.25
Other receivables - - - 14,106,501 - 14,106,501 14,106,501
Cash and bank balances - - - 143,722,461 - 143,722,461 143,722,461
Long term deposits - - - - 28,532,816 28,532,816 28,532,816
104,772,103 - 104,772,103 923,400,030 28,532,816 951,932,846 1,056,704,949
Financial liabilities
2.4 to 3.5 and KIBOR +
Long-term financing 140,182,704 1,121,716,016 1,261,898,720 - - - 1,261,898,720 0.40 to .75
Trade and other payables 51,043,799 - 51,043,799 674,932,926 - 674,932,926 725,976,725
Accrued markup / interest - - - 37,601,814 - 37,601,814 37,601,814
Short-term borrowings 992,656,991 - 992,656,991 - - 992,656,991 KIBOR + 0.1 to 2
1,183,883,494 1,121,716,016 2,305,599,510 712,534,740 - 712,534,740 3,018,134,250
On balance sheet gap (1,079,111,391) (1,121,716,016) (2,200,827,407) 210,865,290 28,532,816 239,398,106 (1,961,429,301)
Contingencies and commitments

Post dated cheques 436,516,075
Bill discounted 542,488,682
Guarantees (Note 8.3 and Note 14.2) 335,453,078
Letters of credit 74,255,406
2018
Interest / Markup bearing Non Interest / Markup bearing
Maturity Maturity Maturity Maturity Effective
Upto After Subtotal Upto After Subtotal Total Interest
One year One year One year One year Rate
Rupees Rupees Rupees Rupees Rupees Rupees Rupees %
Financial assets
Trade debts - - - 841,493,842 - 841,493,842 841,493,842

Loans and advances - - - 6,559,834 - 6,559,834 6,559,834
Trade deposits 81,750,126 - 81,750,126 - - - 81,750,126 4.5 to 6
Other receivables - - - 17,447,274 - 17,447,274 17,447,274
Bank balances - - - 68,266,023 - 68,266,023 68,266,023
Long-term deposits - - - - 28,532,816 28,532,816 28,532,816
81,750,126 - 81,750,126 933,766,973 28,532,816 962,299,789 1,044,049,915
Financial liabilities
2.40 and KIBOR +

Long-term financing 81,367,073 885,233,720 966,600,793 - - - 966,600,793 0.40 to .65
Trade and other payables 29,007,844 - 29,007,844 742,686,747 - 742,686,747 771,694,591
Mark-up accrued on loans - - - 15,177,821 - 15,177,821 15,177,821
Short-term borrowings 220,457,778 - 220,457,778 - - - 220,457,778 KIBOR + 0.05 to 2
330,832,695 885,233,720 1,216,066,415 757,864,568 - 757,864,568 1,973,930,983
On balance sheet gap (249,082,569) (885,233,720) (1,134,316,289) 175,902,405 28,532,816 204,435,221 (929,881,068)
Contingencies and commitments

Post dated cheques 341,896,954
Bill discounted 410,782,583
Guarantees (Note 8.3 and Note 14.2) 209,143,962
Letters of credit 490,829,539
43.1 Interest rate risk management

Interest rate risk arises from the possibility that changes in interest rates will affect the value of financial instruments. Changes in
interest rates can affect the rates charged on interest bearing liabilities. This can result in an increase in interest expense relative to
financial borrowings or vice versa. The Company manages its risk by interest rate swapping, maintaining a fair balance between
interest rates and financial assets and financial liabilities. The effective interest rates for the monetary financial assets and liabilities
are mentioned in respective notes to the financial statements.
43.2 Credit risk and concentration of credit risk
Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail to perform as
contracted. Out of the total financial assets of PKR 1,056,684,999 (June 30, 2018: PKR 1,044,049,915), unsecured local trade
debts, advances to suppliers, and other receivables amounting in aggregate to PKR 779,657,619 (June 30, 2018: PKR 865,500,950)
are subject to credit risk. The Company manages its credit risk by; limiting significant exposure to any individual customers and
obtaining advance against sales.

43.3 Liquidity risk

Liquidity risk reflects the Company's inability in raising funds to meet commitments. The management closely monitors the
Company's liquidity and cash flow position. This includes maintenance of balance sheet liquidity ratios, debtors and creditors
concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual customer.
43.4 Foreign exchange risk management
Foreign currency risk arises mainly where receivables and payables exist due to transactions in foreign currencies. As at June 30,
2019, the total foreign currency risk exposure was PKR 83,508,990 (June 30, 2018: PKR 335,136,534) in respect of foreign trade
debts.
43.5 Credit risk
43.5.1 Maximum credit exposure
The carrying amount of financial assets, excluding cash in hand, represents maximum credit exposure. The maximum exposure to
credit risk as at the reporting date is:
Note June 30, 2019 June 30, 2018
Rupees Rupees
Long term deposits 28,532,816 28,532,816

Trade debts 758,161,471 841,493,842
Loan and advances 5,079,597 4,229,834
Refundable trade deposits 104,772,103 81,750,126
Other receivables 14,106,501 17,447,274
Cash at banks 143,722,461 68,266,023
1,054,374,949 1,041,719,915
43.5.2 Concentration of credit risk
Maximum exposure to credit risk by geographical region as at the reporting date is:
Domestic 762,144,105 577,218,546

Europe 16,786,833 155,553,378
United States of America - 19,010,972
Asia and Middle East 63,546,542 158,047,562
842,477,480 909,830,458
Impairment (84,316,009) (68,336,616)
758,161,471 841,493,842
43.5.3 Aging and movement in Impairment losses
The aging of receivables as at the reporting date is as follows:
Not past due 407,667,374 661,265,657

Past due less than one year 367,578,036 180,107,584
Past due more than one year but less than three years 9,183,448 120,601
Past due more than three years 58,048,622 68,336,616
842,477,480 909,830,458
Impairment (84,316,009) (68,336,616)
758,161,471 841,493,842
The movement in allowance for impairment in respect of receivables during the year is as follows:
As at beginning of the year 68,336,616 68,336,616

Impairment loss recognized 16,004,393 -
Impairment loss reversed (25,000) -
As at end of the year 84,316,009 68,336,616

Credit quality of counter parties is assessed based on historical default rates. All loans and receivables not past due are considered
good. The management believes that allowance for impairment of loans and receivables past due is not necessary, as these
comprise amounts due from old customers, which have been re-negotiated from time to time and are also considered good.
43.5.4 Collateral held
The Company does not hold collateral to secure its loans and receivables. However, foreign trade receivables of the Company are
secured through letters of credits and exposure to credit risk in respect of these is minimal.
43.6 Liquidity risk
Following are the contractual maturities of financial liabilities, including estimated interest payments
As at June 30, 2019

Carrying Contractual One year One to More than
amount cash flows or less five years five years
Long term financing 1,261,898,720 1,435,251,743 190,921,529 714,665,396 529,664,818

Short term borrowings 992,656,991 713,147,918 713,147,918 - -
Accrued markup / interest 37,601,814 37,601,814 37,601,814 - -
Trade creditors 264,744,087 264,744,087 264,744,087 - -
Accrued liabilities 228,896,503 228,896,503 228,896,503 - -
Unclaimed dividend 1,105,177 1,105,177 1,105,177 - -
Other payables 54,861,552 54,861,552 54,861,552 - -
2,841,764,844 2,735,608,794 1,491,278,580 714,665,396 529,664,818
As at June 30, 2018

Carrying Contractual One year One to More than
amount cash flows or less five years five years
Long term financing 966,600,793 1,127,401,466 116,612,889 406,459,154 720,942,312

Short term borrowings 220,457,778 220,740,079 220,740,079 - -
Accrued markup / interest 15,177,821 15,177,821 15,177,821 - -
Trade creditors 224,378,515 224,378,515 224,378,515 - -
Accrued liabilities 170,251,169 170,251,169 170,251,169 - -
Unclaimed dividend 758,605 758,605 758,605 - -
Other payables 33,973,378 33,973,378 33,973,378 - -
1,631,598,059 1,792,681,033 781,892,456 406,459,154 720,942,312
June 30, 2019 June 30, 2018

43.7 Market risk Rupees Rupees
43.7.1 Currency risk
The Company's exposure to currency risk as at the reporting date is as follows:
Trade receivables 80,333,375 332,611,912

Cash and cash equivalents 3,175,615 2,524,622
Total exposure 83,508,990 335,136,534
All foreign currency balances are denominated in USD. Average exchange rate used during the year and spot exchange rate applied
at the reporting date was PKR 164.00 / USD (2018: PKR 121.40 / USD ).
A ten percent appreciation in Rupee would have decreased profit or loss by PKR 8,350,899 (2018: PKR 33,513,653). A ten percent
depreciation would have had the equal but opposite effect on profit or loss. This sensitivity analysis based on assumption that all
variables, with the exception of foreign exchange rates, remain unchanged.

June 30, 2019 June 30, 2018

43.7.2 Interest rate risk Rupees Rupees
The interest rate profile the Company's interest bearing financial instruments as at the reporting date is as follows:
Fixed rate instruments
Financial assets 104,772,103 81,750,126

Financial liabilities 1,030,446,875 657,685,000
Variable rate instruments
Financial assets
Financial liabilities 1,224,108,836 529,373,571
The Company is not exposed to interest rate risk in respect of its fixed rate instruments. A 100 basis points increase in variable interest
rates would have decreased profit or loss by PKR 12,241,088 (2018: PKR 5,293,735). A 100 basis points increase in variable interest
rate would have had an equal but opposite impact on profit or loss.
43.8 Fair values
Fair value is a price that would be received to sell an asset or paid to transfer a liability in orderly transaction between market
participants at the measurement date.
44 TRANSACTIONS WITH RELATED PARTIES
The associated undertaking and related parties comprise associated companies, directors and key management personnel. Names, basis of
relationship and transaction with associated undertakings and related parties, other than remuneration and benefits to key management
personnel under the term of their employment as disclosed in note 9.1 and 36 are as follow:
Name of the Company Basis of relationship Percentage of shareholding
Faisal Spinning Mills Limited Common directorship N/A

Blessed Textiles Limited Common directorship N/A
Bhanero Energy Limited Common directorship N/A
Admiral (Private) Limited Directorship of close family relative N/A
30-Jun-19 30-Jun-18
Rupees Rupees
Nature of relationship Nature of transactions
Associated undertaking Sales of fabric 3,559,668 17,415,271
Sales of Cotton 43,267,548 142,455,718
Sales of yarn 547,957,137 577,600,615
Purchase of yarn 114,990,899 195,348,387
Purchase of stores 2,340,000 -
Purchase of fabrics 7,721,587 1,227,205
Services rendered 637,463 681,779
Services received 309,000 309,000
Electricity purchased 333,131,263 743,252,518
Retirement benefits Provision for gratuity 32,980,717 47,833,259
Key management Remuneration 15,600,000 15,600,000

45 Accounting Estimates and Judgments

45.1 Income taxes
In making the estimates for income taxes currently payable by the Company, the management looks at the current income tax law and
the decisions of appellate authorities on certain issues in the past.
45.2 Investment stated at fair value
Management has determined fair value of certain investments by using quotations from active market conditions and information
about the financial instruments. These estimates are subjective in nature and involve some uncertainties and matters of judgment
(e.g. valuation, interest rate, etc.) and therefore, cannot be determined with precision.
45.3 Property, plant and equipment
The Company reviews the rate of depreciation, useful life, residual value and value of assets for possible impairment on an annual
basis. Any change in the estimates in future years might affect the carrying amounts of the respective items of property, plant and
equipment with a corresponding affect on the depreciation charge and impairment.
45.4 Stock-in-trade and stores and spares
The Company reviews the net realizable value of stock-in-trade and stores and spares to assess any diminution in the respective
carrying values. Any change in the estimates in future years might affect the carrying amounts of stock-in-trade and stores and spares
with a corresponding affect on the amortization charge and impairment. Net realizable value is determined with respect to estimated
selling price less estimated expenditures to make the sales.
45.5 Interest rate and cross currency swap
The Company has entered into various interest rates and cross currency swap over the last year. The calculation involves use of
estimates with regard to interest and foreign currency rates which fluctuate with the market forces.
46 PLANT CAPACITY AND ACTUAL PRODUCTION 30-Jun-19 30-Jun-18
Spinning & Weaving

Number of spindles installed 80,112 80,112
Number of looms installed 162 160
Number of spindles worked 80,112 80,112
Number of looms worked 162 160
Number of working days 364 364
Number of shifts per day 3 3
Installed capacity of yarn (Kgs.) 14,810,385 14,810,385
Actual production of yarn (Kgs.) 12,363,406 11,392,697
Installed capacity of fabric based on 50 picks- meters 26,566,890 21,534,566
Actual production of fabric - meters 15,864,187 15,952,617
It is difficult to precisely describe production capacity and the resultant production converted into base count in the textile industry since it
fluctuates widely depending on various factors such as count of yarn spun, raw materials used, spindles speed and twist etc. It would also vary
accordingly to pattern of production adopted in a particular year.
47 NUMBER OF EMPLOYEES 30-Jun-19 30-Jun-18
As at the reporting date

Head office 62 65
Mills 1,354 1,317
1,416 1,382
Average for the year
Head office 63 64
Mills 1,336 1,315
1,399 1,379

48 DATE OF AUTHORIZATION FOR ISSUE
These financial statements have been approved by the Board of Directors of the Company and authorized for issue on 26th September 2019.
49 CORRESPONDING FIGURES
49.1 Figures have been rounded off to the nearest rupee. Corresponding figures have been re-arranged where necessary to facilitate
comparison. However, no significant reclassification has been made.
50 GENERAL
The figures have been rounded off to the nearest Rupee.


CATEGORIES OF SHAREHOLDERS
AS AT JUNE 30, 2019
SR NUMBERS OF SHARES PERCENTAG

CATEGORIES OF SHAREHOLDERS
# SHAREHOLDE HELD E%
1 Directors Chief Executive Officer and their 19 1,567,913 52.26

Spouses and Minor Children's
2 Associated Companies, Undertaking 11 1,280,087 42.67

and Related Parties
3 NIT & ICP - - -
4 Insurance Company 1 70,500 2.35
5 General Public / Individuals 335 74,894 2.50
6 Other Companies 3 6,606 0.22
369 3,000,000 100.00

List of Shareholders As At 30 June 2019
Sr # Shareholder Category Percentage No. of Shares
1 ASSOCIATED COMPANIES UNDERTAKINGS AND RELATED PARTIES
ADMIRAL (PVT) LTD 16.69 500,600

MR. MUHAMMAD SHARIF 0.02 500
MR. MOHAMMAD SHAKEEL 0.74 22,055
MR. FARRUKH SALEEM 2.02 60,600
MR. SAQIB SALEEM 1.68 50,490
MR. MUHAMMAD QASIM 5.28 158,400
MR. FAISAL SHAKEEL 4.92 147,676
MR. ABDULLAH BILAL 1.96 58,787
MRS. NAZLI BEGUM 4.19 125,579
MRS. SABA SAQIB 2.76 82,900
MRS. SADAF FARRUKH 2.42 72,500
2 CEO, DIRECTORS AND THEIR SPOUSES AND MINOR CHILDREN
MR. MUHAMMAD SALEEM 0.73 21,929

MR. MUHAMMAD SHAHEEN 1.43 42,780
MR. HAMZA SHAKEEL 4.92 147,594
MR. KHURRAM SALEEM 2.02 60,500
MR. YOUSUF SALEEM 1.69 50,674
MR. BILAL SHARIF 2.48 74,500
MR. MUHAMMAD AMIN 5.32 159,500
MR. ADIL SHAKEEL 4.92 147,634
MR. IQBAL MEHBOOB VOHRA 0.02 500
MRS. YASMIN BEGUM 1.01 30,372
MRS. SEEMA BEGUM 1.78 53,292
MRS. AMNA KHURRAM 2.45 73,400
MRS. SAMIA BILAL 11.14 334,283
MRS. FATIMA AMIN 5.68 170,400
MRS. SABA YOUSUF 2.76 82,700
MRS. MARIUM ADIL 0.02 500
MASTER AZAAN BILAL 1.96 58,678
MASTER ALI BILAL 1.96 58,677
3 BANKS, DEVELOPMENT FINANCIAL INSTITUTIONS, NON BANKING

FINANCE INSTITUTIONS AND INSURANCE COMPANIES
STATE LIFE INSURANCE CORPORATION OF PAKISTAN 2.35 70,500
4 INDIVIDUAL SHAREHOLDERS 2.50 74,894
5 OTHER COMPANIES 0.22 6,606
TOTAL 100.00 3,000,000

List of Shareholders As At 30 June 2019
6 DETAIL OF TRADING IN THE SHARES BY THE DIRECTORS, CEO
COMPANY SECRETARY AND THEIR SPOUSES AND MINOR CHILDREN
MR. ADIL SHAKEEL AND FAISAL SHAKEEL SHARES GIFTED TO HIS MOTHER
AND BROTHER
MRS. NAZLI BEGUM 2.50 75,097

MR. HAMZA SHAKEEL 4.90 147,094
7 SHAREHOLDERS HOLDING 05% OR MORE
MR. MUHAMMAD QASIM 5.28 158,400

MR. MUHAMMAD AMIN 5.32 159,500
MRS. SAMIA BILAL 11.14 334,283
MRS. FATIMA AMIN 5.68 170,400
ADMIRAL (PVT) LTD 16.69 500,600

PATTERN OF SHAREHOLDING
AS AT JUNE 30, 2019
NUMBERS OF SHARE HOLDING TOTAL SHARES
SHAREHOLDERS FROM TO HELD
293 1 100 8,453

32 101 500 10,402
6 501 1000 5,600
8 1001 5000 22,294
2 5001 10000 16,551

3 20001 25000 64,184
1 25001 30000 29,872
1 40001 45000 42,780
3 50001 55000 154,456
3 55001 60000 176,142
2 60001 65000 121,100
4 70001 75000 290,900

2 80001 85000 165,600
1 125001 130000 125,579
3 145001 150000 442,904
2 155001 160000 317,900
1 170001 175000 170,400
1 330001 335000 334,283
1 500001 505000 500,600
369 3,000,000
* Note: The slabs representing nil holding have been omitted.

Year-Wise Operating Data
2019 2018 2017 2016 2015 2014
Spinning Unit
Spindle installed 80,112 80,112 69,312 69,312 69,312 69,312

Spindles worked 80,112 80,112 69,312 69,312 69,312 69,312
Installed capacity after conversion into 20/s count - Kg 14,810,385 14,810,385 13,954,119 13,954,119 13,954,119 13,954,119
Actual production - Kg 12,363,406 11,392,698 10,621,496 10,008,485 9,832,682 10,138,381
Weaving Unit
Air jet looms installed 162 160 160 160 160 140
Air jet looms worked 162 160 160 160 160 140
Installed capacity after conversion into 50 picks - Meter 26,566,890 21,534,566 21,534,566 21,534,566 21,534,566 20,206,406
Actual production - Meter 15,864,187 15,952,617 15,100,469 15,992,288 19,272,241 18,362,454
Year-Wise Financial Data

2019 2018 2017 2016 2015 2014
Rupees in Thousands
Profit and loass account

Turnover (Net) 9,347,773 8,073,845 6,837,254 6,637,411 7,350,098 8,060,772
Gross profit 1,293,672 868,396 754,284 684,364 641,534 966,937
Operating profit 1,123,205 636,131 456,308 391,023 351,971 597,040
Financial expenses 166,323 93,971 87,063 69,828 115,128 126,836
Profit before tax 956,883 542,160 369,245 321,195 236,843 470,204
Profit after tax 832,410 482,037 275,737 220,349 207,410 408,263
Cash dividend 167,400 192,900 110,400 30,000 30,000 60,000
Balance Sheet
Share Capital 30,000 30,000 30,000 30,000 30,000 30,000
Reserves 4,700,000 4,000,000 3,700,000 3,300,000 3,150,000 3,150,000
Shareholder equity 4,913,117 4,262,737 3,886,302 3,639,552 3,427,026 3,288,488
Long term liabilities 1,121,716 885,234 428,762 348,588 583,099 620,241
Short term loan 992,657 220,458 676,558 - - 802,212
Current liabilities 1,897,523 1,089,456 1,256,655 493,105 497,897 1,250,451
Current portion of long term loans 140,183 81,367 77,464 77,464 67,141 -
Fixed assets 3,168,486 2,794,871 2,029,940 1,957,647 2,080,122 1,540,975
Current assets 5,183,986 3,790,735 3,784,088 2,720,643 2,597,798 3,039,511
Ratios
Performance
Sales growth percentage - Year to Year basis 15.78% 18.09% 3.01% -9.70% -8.82% 15.20%
Gross profit (%) 13.84% 10.76% 11.03% 10.31% 8.73% 12.00%
Profit before tax (%) 10.24% 6.72% 5.40% 4.84% 3.22% 5.83%
Profit after tax (%) 8.90% 5.97% 4.03% 3.32% 2.82% 5.06%
Breakup value per share - Rupees per share 1,637.71 1,420.91 1,295.43 1,213.18 1,142.34 1,096.16
Market value of share - at the year end - Rupees per share 800.00 807.49 900.00 680.00 474.00 525.55
Earnings per share - Rupees per share 277.47 160.68 91.91 73.45 69.14 136.09
Price earning ratio 2.88 5.03 9.79 9.26 6.86 3.86
Leverage
Gearing ratio 0.46 0.28 0.30 0.12 0.19 0.43
Debt to equity (%) 22.83% 20.77% 11.03% 9.58% 17.01% 18.86%
Interest covering ratio 6.75 6.77 5.24 5.60 3.06 4.71
Liquidity ratio
Current ratio 2.73 3.48 3.01 5.52 5.22 2.43












proxy to act on my/our behalf at the 40th Annual General Meeting of the Company to be held on
Saturday 26th October 2019 at 09:30 at Umer House, 23/1, Sector 23, S.M. Farooq Road, Korangi
Industrial Area, Karachi. and/or at any adjournment thereof.
2019
If a member is unable to attend the meeting, they may complete and sign this form and sent it to the
Company Secretary, Bhanero Textile Mills Limited, Umer House, 23/1, Sector 23, S.M. Farooq Road,
Korangi Industrial Area, Karachi. so as to reach not less than 48 hours before the time scheduled for
holding the meeting.
(i) The Proxy form shall be witnessed by a person whose name, address and CNIC/Passport number
should be stated on the form.
(ii) Attested copy of CNIC or the Passport of the beneficial owner alongwith the Proxy form should also
be submitted.
(iii) The Proxy nominee shall produce his / her original CNIC or original Passport at the time of the
meeting.
(iv) In case of a Corporate entity, the Board of Directors Resolution/Power of Attorney with specimen
signature should be submitted (unless it has been provided earlier) along with Proxy form to the
Company.

2019 26
2019

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of Companies

UMER GROUP OF COMPANIES

BHANERO TEXTILE MILLS LIMITED

Notice of the Annual General Meeting 2-4

Chairman's Review Report 5

Directors' Report 6-12

Statement of Compliance with the Best Practice 13-14

Review Report to the Members 15

Auditors' Report to the Members 16-18

Statement of Financial Position 19-20

Statement of Proﬁt or Loss 21

Statement of Comprehensive Income 22

Statement of Changes in Equity 23

Statement of Cash Flows 24

Notes to the Financial Statements 25-57

List of Shareholders 59-60

Year wise Operating Data 62

Directors' Report (Urdu) 63-73

Proxy Form (Urdu) 75

Chief Financial Oﬃcer Asim Mirza, ACMA, CPA(Aust), MBA

Audit Committee Mr. Iqbal Mehboob Chairman

Human Resource and Mr. Iqbal Mehboob Chairman

Auditors M/s Mushatq and Company

Legal Advisor Mr. Shahid Pervaiz Jami

Hameed Majeed Associated (Private) Limited

Umer House, 23/1, Sector 23, S. M. Farooq Road,

Mills At: Unit I is situated at:

ANNUAL REPORT 2019 1

(By the order of the Board)

ANNUAL REPORT 2019 2

ANNUAL REPORT 2019 3

ANNUAL REPORT 2019 4

Karachi: Mohammad Shaheen

ANNUAL REPORT 2019 5

Sales 9,347,772,864 8,073,845,411

Proﬁt after taxation 832,409,826 482,036,509

Dividends & Reserves Appropriation

ANNUAL REPORT 2019 6

Working Capital Management

Balancing, Modernization and Replacement

ANNUAL REPORT 2019 7

Overview of Agriculture Sector in Pakistan

ANNUAL REPORT 2019 8

The following beneﬁts can be reaped by implementation of sustainable cotton program;

- Avoiding the negative impact on both human health and biodiversity.

Compliance with Code of Corporate Governance

The Statement of Compliance with the Code of Corporate Governance is annexed.

Statement on Corporate and Financial Reporting Framework:

• Proper books of account of the company have been maintained.

ANNUAL REPORT 2019 9

• Statement of pattern of shareholding has been given separately.

ANNUAL REPORT 2019 10

Mr. Muhammad Salim 5 5 - - - -

Mr. Muhammad Sharif 3 3 - - - -

Mr. Khurrum Salim 5 5 - - - -

Mr. Bilal Sharif 5 5 6 6 - -

Mr. Muhammad Amin 5 5 - - 2 2

Mr. Adil Shakeel 5 5 - - - -

Mr. Hamza Shakeel 5 5 6 6 2 2