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FATEH INDUSTRIES LIMITED
Annual Reports 2002
Notiee of Annual Genera! Meeting
Notice is hereby given that the 17th Annual General Meeting of the Shareholders of FATEH
INDUSTRIES LIMITED, will be held on Monday the 14th October, 2002 at 8.30 a.m. at the
registered office of the Company at Mirpurkhas Road, Hyderabad for the purpose of transacting
the following business:-
1. To confirm the minutes of the last Extraordinary General Meeting of the Company
held on 24th June, 2002
2. To receive, consider and adopt the Audited Accounts for the year ended 30th June, 2002
together with Directors and Auditors Reports thereon.
3. To appoint Auditors for the year 2002-2003 and fix their remuneration.
4. Any other business with the permission of the chair.
By order of the Board			Muhammad Nisar
FATEH INDUSTRIES LIMITED			Company Secretary
Hyderabad
23rd September, 2002
NOTES:
1. The Share transfer books of the Company will remain closed for 7 days from 8th to 14th
October, 2002 (both days inclusive).
2. Any member of the Company who is entitled to attend and vote may appoint any
other member of the Company as his/her Proxy to attend and vote in his / her stead.
3. Proxies in order to be effective must be received by the Company at the Registered
Office not later than 48 hours before the time of holding the meeting.
4. Shareholders are required to notify the change of their address, if any, immediately.
Company Information
MANAGING DIRECTOR & CHIEF EXECUTIVE
Mr. Saeed Alam
DIRECTORS
Mr. Rauf Alam
Mr. Aftab Alam
Mr. Muhammad Mohsin
Mr. Muhammad Naveed
Mrs. Jamila Alam
Mrs. Najma Roshan
SECRETARY
Mr. Muhammad Nisar
CHIEF FINANCIAL OFFICER
Mr. Muhammad Ishaque Essani
AUDIT COMMITTEE
Mr. Rauf Alam (Chairman)
Mr. Muhammad Mohsin (Member)
Mr. Muhammad Naveed (Member)
AUDITORS
M/s. Shahid Hussain & Co.
Chartered Accountants,
Karachi.
BANKERS
United Bank Limited.
REGISTERED OFFICE
Mirpurkhas Road,
Hyderabad.
BRANCH OFFICE
7th Floor, Suit #. 706,
Business & Finance Centre,
I.I. Chundrigar Road,
Karachi.
PLANT
Mirpurkhas Road,
Hyderabad.
Director's Report To The Members
On behalf of the Board of Directors I welcome you on the 17th Annual General Meeting of your Company
M/S. FATEH INDUSTRIES LIMITED, and present before you the audited accounts and Auditors' Report
for the year ended on June 30, 2002.
Key operating figures are set out below
		1996-97	1997-98	1998-99	1999-00	2000-01	2001-02
Sales		84,622	22,685	23,086	-	-	-
Gross Profit / (Loss)		19,658	(7,126)	7,553	-	-	-
Selling & Administration Expenses		10,295	11,240	5,680	34,553	31,966	0
Profit / (loss) before Taxation		(5,163)	(26,892)	(11,213)	(41,048)	(31,980)	(0)
The operational activities remained suspended due to lack of working capital. There are no expenses accrued
during the current year except for Rs. 0.160 million on account of taxes, fee, legal / professional charges.
The Company has realized net profit of Rs. 1.456 million due to reversal of tax provisions after finalization of
past assessments. ^
Accumulated loss ofRs. 131 million has been transferred to Balance Sheet.
AUDITORS OBSERVATION
We would also like to mentioned that the depreciation, for the year not charged due to suspension of
production. The Interest charges on loans not accounted for. The management of the Company is negotiating
with the bank for compromise settlement. Once the settlements of loans reached, appropriate provision of
markup will be made.
Deferred Tax liability is not accounted for as the difference of W.D.V. due to accelerated tax depreciation is
unlikely to reverse.
The management of the Company prepared these accounts on a going concern basis and will financially
support the company.
The Pattern of Shareholding required under section 236 of the Companies Ordinance, 1984 is annexed.
The retiring Auditors M/s. Shahid Hussain & Company, Chartered Accountants, being eligible offer
themselves for reappointment.
During the year. Company has held four (04) Board of Director's Meetings.
We give below statements on corporate and financial reporting frame work.
• The financial statements presents fairly its state of affairs.
• The Company maintain proper books of accounts and accounting policies constantly
applied except policy of depreciation due to non production. The management of the
Company also not accounted for deferred taxation as the income of the company covered
under presumption tax regime.
• The International Accounting Standards, as applicable in Pakistan, have been followed in
preparation of Financial Statements and any departure therefrom has been adequately
disclosed.
• The System of Internal Control which was in place, is being continuously reviewed by
internal audit and other such procedures. The process of review will continue with the
objective to further improve.
• There are no significant doubts upon the company's ability to continue as a going concern
due to Financial support from the Directors..
• There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
Dated: 16th September, 2002			SAEED ALAM
			CHAIRMAN
			BOARD OF DIRECTORS
Auditors's Report To The Members.
We have audited the annexed balance sheet of M/s. Fateh Industries Limited as at 30th
June, 2002 and the related profit and loss account, cash flow statement and statement of
changes in equity together with the notes forming part thereof, for the year then ended and
we state that we have obtained all the information and explanations which, to the best of
our knowledge and belief, were necessary for the purposes of our audit.
It is responsibility of the company's management to establish and maintain a system of
internal control, and prepare and present the above said statements in conformity with the
approved accounting standards and requirements of the Companies Ordinance, 1984. Our
responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan.
These standards require that we plan and perform the audit to obtain reasonable assurance
about whether the above said statements are free of any material misstatement. An audit
includes examining, on a test basis, evidence supporting the accounting policies and
significant estimates made by management, as well as, evaluating the overall presentation
of the above said statements. We believe that our audit provides a reasonable basis for our
opinion and after due verification, we report that:
1. The company has incurred income Rs. 1.456 million due to reversal of tax provision
necessary after finalization of tax assessments. The accumulated loss upto June 30,
2002 is Rs. 131.066 million which has resulted in net capital deficiency ofRs. 111.066
million. The current liabilities exceeded current assets by Rs. 190.342 million. The
accounts have been prepared this year also on a going concern basis validity of which
depends on the support from directors of the company towards providing working
capital and other Finance in the absence of which the basis would not be valid and
adjustment would have to be made for any gain of loss arising on realisation of
company's assets.
2. That the charge of depreciation for the year has not been provided as mentioned in note
2.2 to the accounts. Had the depreciation been charged on the generally accepted
accounting principles, loss for the year would have been Rs. 8.067 million and
accumulated loss would have been Rs. 140.588 million.
3. That the company does not account for deferred tax liability as mentioned in not 2.3,
however, had it been accounted for an amount of Rs. 2.810 million would be charge in
the income.
4. The company has not accrued financial charges which is against the generally accepted
accounting policies.
a) In our opinion, proper books of account have been kept by the company as required
by the companies Ordinance, 1984:
b) in our opinion:
i) the balance sheet and profit and loss account together with the notes thereon
have been drawn up in conformity with the Companies Ordinance, 1984, and
are in agreement with the books of account and are further in accordance with
accounting policies, expect for the change as stated in note 2.2, and 2.3 to the
accounts and para 4 above with which we do not concur:
ii) the expenditure incurred during the year was for the purpose of the
Company's business; and
iii) the business conducted, investments made and the expenditure incurred
during the year were in accordance with the objects of the company;
c) in our opinion and to the best of our information and according to the
explanations given to us, the balance sheet, profit and loss account, cash flow
statements and statements of changes in equity together with the notes forming part
thereof conform with approved accounting standards as applicable in Pakistan, and,
give the information required by the Companies Ordinance, 1984, in the manner so
required, because of the significance of the matters referred to in para 1 to 4 above
we do not express an opinion on the state of the Company's affairs as at 30th June,
2002 and of the profit, its cash flows and changes in equity for the year than ended;
and
in our opinion, no Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII of 1980)
Dated : September 16, 2002			SHAHID HUSSAIN & CO.
			Chartered Accountant
STATEMENT OF COMPANLIANCE WITH
BESTS PRACTICES OF CORPORATE GOVERNANCE.
The Company is in process of implementing all facets of the Code of Corporate
Governance issued by the Karachi Stock Exchange and the Board feel pleasure in stating
that provisions of the Code, relevant for the year ended June 30. 2002, have been duly
complied with.
REVIEW REPORT TO THE MEMBERS ON
STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF
CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the
Code of Corporate Governance as applicable to the company for the year ended June 30,
2002 prepared by the Board of Directors of Fateh Industries Limited, to comply with the
relevant listing Regulations of the Karachi Stock Exchange where the Company is listed.
The responsibility for compliance with Code of Corporate Governance is that of the
Board of Directors of the Company. Our responsibility is to review to the extent where
such compliance can be objectively verified, whether the Statement of compliance
reflects the status of the Company's compliance with the provisions of the Code of
Corporate Governance and report if it does not. A review is limited primarily to inquiries
of the Company personnel and review of various documents prepared by the Company to
comply with the Code.
As part of our audit of 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's statement
on internal control covers all risks and controls or to form and opinion on the
effectiveness of such internal controls the Company's corporate governance procedures
and risks.
Based on our review, the company has so far appointed Chief Financial Officer,
Company Secretary and formed Audit Committee with the best practices contained in the
Code of Corporate Governance.
Dated : September 16,2002			SHAHID HUSSAIN & CO.
			Chartered Accountants
Balance Sheet As At June 30 , 2002
			NOTE	30-06-2002	30-06-2001
CAPITAL & LIABILITIES				RUPEES	RUPEES
SHARE CAPITAL AND RESERVES
Authorized Capital
10,000,000 ordinary Shares ofRs. 10/- each				100,000,000	100,000,000
Issued, subscribed and paid up share capital			3	20,000,000	20,000,000
General reserve			4	-	-
Unappropriated loss				(131,065,671)	(132,521,776)
				(111,065,671)	(112,521,776)
LONG TERM LOAN			5	19,138,956	19,138,956
CURRENT LIABILITIES
Current portion of long term liabilities			6	-	-
Short term running finances			7	277,021,151	245,319,772
Creditors, accrued and other liabilities			8	41,939,093	74,075,978
Provision for taxation			9	-	200,000
				318,960,244	319,595,750
CONTINGENCIES AND COMMITMENTS			10
				227,033,529	226,212,930
Notes:
1. The annexed notes form an integral part of these accounts.
2. Auditor's report is attached
SAEED ALAM
Dated: 16th September, 2002 Chief Executive
			NOTE	30-06-2002	30-06-2001
PROPERTY & ASSETS				RUPEES	RUPEES
TANGIBLE FIXED ASSETS
Operating fixed assets			11	98,398,115	98,398,115
LONG TERM INVETMENTS			12	17,566	17,566
CURRENT ASSETS
Stores, spare parts and loose tools			13	8,158,130	8,158,130
Stock-in-trade			14	9,172,038	9,172,038
Trade debts			15	57,992,049	58,120,352
Advances, deposits and prepayments			16	10,163,555	9,210,517
Other receivables			17	43,045,828	43,045,828
Cash and bank balances			18	86,248	90,384
				128,617,848	127,797,249
				227,033,529	226,212,930
RAUFALAM			SHAHID HUSSAIN & CO.
Director			Chartered Accountant
Profit & Loss Account For The Year Ended June 30 , 2002
			NOTE	30-06-2002	30-06-2001
Sales				RUPEES 0	RUPEES 0
Cost of Sales			20	-	-
Gross Profit				-	-
Administration Expense			21	145,636	31,965,828
Selling Expense			22	-	-
				145,636	31,965,828
Operating Loss				(145,636)	(31,965,828)
Other Income			23	665	610
				(144,971)	(31,965,218)
Financial Expenses			24	100	-
Other Charges			25	15,000	15,000
				15,100	15,000
Prior Period Adjustment
Loss before Taxation				(160,071)	(31,980,218)
Taxation
Current				-	-
Prior				1,616,176	-
				1,616,176	-
Profit / (Loss) after Taxation				1,456,105	(31,980,218)
Unappropriated (Loss) brought forward				(132,521,776)	(130,541,558)
(Loss) Available for appropriations				(131,065,671)	(162,521,776)
Appropriations
Transfer f General Reserve				-	30,000,000
Unappropriated Loss carried to Balance Sheet				(131,065,671)	(132,521,776)
Note: The annexed notes form an integral part of these accounts.
SAEEDALAM		RAUFALAM		SHAHDO HUSSAIN & CO.
Chief Executive		Director		Chartered Accountants