| FATEH TEXTILE MILLS LTD |
|
|
|
|
|
|
|
|
| ANNUAL
REPORT 1996-97 |
|
|
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
| Notice
is hereby given that the 45th .Annual General Meeting of the Shareholders of
FATEH TEXTILE |
|
| MILLS
LIMITED will be held on Tuesday the 31st March, 1998 at 8.00 a.m. at the
Registered Off~ce of the |
|
| Company
at Hali Road, Hyderabad for the purpos~ of transacting the following
business:- |
|
|
| 1.
To confirm the minutes of the Extra Ordinary General Meeting of the Company
held on 9th February, |
|
| 1998. |
|
|
|
| 2.
To receive and adopt the Directors Report and Audited Balance Sheet together
with the Profit and |
|
| Loss
Account of the Company for the year ended 30th September, 1997. |
|
|
| 3.
To declare Final Cash Dividend @ 65% recommended by the Directors for the
year 1996-97. An |
|
| Interim
Cash Dividend @ 25% having already been paid to make the total cash dividend
at 90%. |
|
|
| 4.
To appoint Auditors for the year 1997-98 and to fix their remuneration. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed for 7 days from
25th to 31 st March, |
|
| 1998
(both days inclusive). |
|
|
|
|
| 2.
Any member eligible to attend and vote at this meeting may appoint another
member as his/her Proxy |
|
| to
attend and vote instead of him/her. |
|
|
|
|
| 3.
Proxies, in order to be effective must be received by the Company at the
Registered Off~ce not later |
|
| than
48 hours before the time for holding meeting. |
|
|
|
|
| 4.
Shareholders are requested to immediately notify the change of their address,
if any. |
|
|
|
|
|
| Board
of Directors |
|
|
|
| Chairman
& Chief Executive |
|
| Mr.
Inayat Ullah |
|
|
| Directors |
|
| Mr.
Gohar Ullah |
|
| Mr.
Asad Ullah Barkat |
|
| Mr.
Humayun Barkat |
|
| Mr.
Maqsood Ahmed Khan |
|
| Mr.
Tanwir Arif |
|
| Mr.
Iraran Azim (NIT) |
|
|
| Secretary |
|
| Mr.
Hasinuddin |
|
|
| Auditors |
|
| M/s.
Moosa &: Company |
|
| Chartered
Accountants |
|
| Karachi. |
|
|
| Bankers |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| Deutsche
Bank AG |
|
| Doha
Bank Limited |
|
| Mashreq
Bank psc |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| United
Bank Limited |
|
|
| Registered
Office |
|
| Hali
Road, Hyderabad - Sindh. |
|
|
| Branch
Office |
|
| 9th
Floor, Adamjee House, |
|
| I.
I. Chundrigar Road, Karachi. |
|
|
| Mills |
|
| Hali
Road, Hyderabad - Sindh, Pakistan. |
|
|
|
| Directors'
Annual Report to the Members |
|
|
| For
and on behalf of the Board of Directors, I am pleased to present my review on
the salient features |
|
| of
performance of your Company for the financial year ended September 30, 1997. |
|
|
| While
welcoming you to the 45th Annual General Meeting, I am pleased to inform that
your company |
|
| has
been able to maintain again this year an upward profitability and growth
position as is reflected from the |
|
| Audited
Accounts and Report placed before you for the year under review. |
|
|
| Despite
a tough competition and regulatory controls in the International Textile
Market and somewhat |
|
| tmfavourable
conditions in which Country's Textile Industry has been operating upon
throughout the year, |
|
| your
Company has been able to achieve a turnover of Rs. 3,002,960,410/- which is
4.14% higher to that of the |
|
| last year. |
|
|
| The
gross and operating profits realized are at Rs. 539,078,909/- and Rs.
342,115,909 respectively with |
|
| a
rise of 8.69% and 10.33% against last year's results. Your Company's profit
before tax has also been shot-up to |
|
| Rs.
100,337,361/- against last year's pretax profit of Rs. 79,229,301/-
registering an increase of 26.64%. After |
|
| making
a provision of Rs. 27,566,026/- both for current and prior year's taxation,
the net profit after tax arrives |
|
| at
Rs. 72,771,335/- which contributes an earning of Rs. 58.22 per share. |
|
|
| Your
Directors recommend the following appropriation of the profit:- |
|
|
| Profit
available |
|
|
Rs. 73,428,063 |
|
| Appropriations: |
|
|
|
|
| Transfer
to General Reserve |
|
Rs. 60,000,000 |
|
| Interim
Dividend paid @ 25% |
|
Rs. 3,125,000 |
|
| Proposed
Final Dividend @ 65% |
|
Rs. 8,125,000 |
|
|
|
|
---------- |
|
| Total
appropriations |
|
|
Rs. 71,250,000 |
|
|
|
|
---------- |
|
| Balance
Carried Forward |
|
Rs. 2,178,063 |
|
|
|
|
========== |
|
|
| Your
Directors are pleased to recommend payment of Cash Dividend @ 90% for the
year ended 30th |
|
| September,
1997 out of which an Interim Cash Dividend @ 25% has already been paid. A
Final Cash |
|
| Dividend
@ 65% is proposed to be paid to all such shareholders of the Company whose
names appear in the |
|
| Company's
Register as on 24th March, 1998. |
|
|
| The
present Auditors Messrs. Moosa & Company, Chartered Accountants, retire
and being eligible, |
|
| offer
themselves for re-appointment. |
|
|
| Your
Board of Directors places on record its appreciation for the dedicated
services rendered by the |
|
| employees
of the Company. The Board also views the harmonious relations between
management and the |
|
| employees
with satisfaction. Board's Commendation is also extended to the Company's
bankers and financial |
|
| institutions
for the valuable financial assistance and timely services rendered by them. |
|
|
|
| Pattern
of holding of the shares held |
|
| by
the shareholders of Fateh Textile Mills Ltd. |
|
| as
at 30th September, 1997. |
|
|
| NO. OF |
|
|
|
TOTAL SHARES |
|
| SHAREHOLDERS |
|
SHAREHOLDING |
|
HELD |
|
|
|
|
|
| 166 |
From |
1 |
To |
100 |
16,250 |
|
| 79 |
From |
101 |
To |
500 |
27,450 |
|
| 60 |
From |
501 |
To |
1000 |
49,750 |
|
| 49 |
From |
1001 |
To |
5000 |
97,213 |
|
| 3 |
From |
5001 |
To |
10000 |
20,350 |
|
| 1 |
From |
10001 |
To |
15000 |
10,500 |
|
| 1 |
From |
20001 |
To |
25000 |
24,400 |
|
| 3 |
From |
30001 |
To |
35000 |
99,900 |
|
| 2 |
From |
35001 |
To |
40000 |
75,900 |
|
| 3 |
From |
40001 |
To |
45000 |
129,000 |
|
| 1 |
From |
45001 |
To |
50000 |
47,800 |
|
| 1 |
From |
50001 |
To |
55000 |
52,300 |
|
| 2 |
From |
55001 |
To |
60000 |
117,237 |
|
| 2 |
From |
65001 |
To |
70000 |
136,800 |
|
| 2 |
From |
70001 |
To |
75000 |
147,800 |
|
| 1 |
From |
75001 |
To |
80000 |
79,350 |
|
| 1 |
From |
115001 |
To |
120000 |
118,000 |
|
| ---------- |
|
---------- |
|
| 377 |
|
1,250,000 |
|
| ========== |
|
========== |
|
|
| S. |
CATEGORIES OF |
|
|
SHARES |
PERCENTAGE |
|
| NO. |
SHAREHOLDERS |
|
NUMBERS |
HELD |
|
|
|
|
|
|
| 1. |
Individuals |
|
374 |
1,130,600 |
90.45 |
|
| 2. |
Investment Companies |
|
0 |
0 |
0.00 |
|
| 3. |
Insurance Companies |
|
0 |
0 |
0.00 |
|
| 4. |
Joint Stock Companies |
0 |
0 |
0.00 |
|
| 5. |
Financial Institutions |
2 |
119,300 |
9.54 |
|
| 6. |
Modaraba Companies |
|
0 |
0 |
0.00 |
|
| 7. |
Abandoned Properties |
|
|
|
Organization |
|
1 |
100 |
0.01 |
|
|
|
---------- |
---------- |
---------- |
|
|
|
377 |
1,250,000 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
| Balance
Sheet as at |
|
|
|
| September 30, 1997 |
|
|
|
|
|
| CAPITAL
& LIABIHTIES |
|
Note |
1996-97 |
1995-96 |
|
|
|
No. |
Rupees |
Rupees |
|
|
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
|
| Authorised
Capital |
|
|
|
| 2,000,000
ordinary shares of Rs. 10/- each |
|
20,000,000 |
20,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid up share capital |
3 |
12,500,000 |
12,500,000 |
|
| General
reserve |
|
4 |
465,000,000 |
405,000,000 |
|
| Unappropriated
profit |
|
2,178,063 |
656,728 |
|
|
|
|
|
|
---------- |
---------- |
|
|
|
|
479,678,063 |
418,156,728 |
|
|
|
|
| LONG
TERM LOANS |
|
5 |
273,567,149 |
304,801,014 |
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
6 |
50,992,993 |
54,511,312 |
|
|
|
|
| DEFERRED
LIABILITIES |
|
|
| Provision
for gratuity |
|
|
5,644,305 |
4,595,855 |
|
|
|
|
| CURRENT
LIABIHTIES |
|
|
|
| Current
portion of long term liabilities |
7 |
124,526,764 |
96,787,215 |
|
| Short
term running finances |
|
8 |
808,559,717 |
774,495,641 |
|
| Creditors,
accrued and other liabilities |
9 |
493,676,413 |
472,079,058 |
|
| Workers'
profit participation fund |
10 |
5,394,500 |
4,257,000 |
|
| Proposed
final divic[end |
|
|
8,125,000 |
7,500,000 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
1,440,282,394 |
1,355,118,914 |
|
| COMMITMENTS |
|
|
11 |
---------- |
---------- |
|
|
|
|
2,250,164,904 |
2,137,183,823 |
|
|
|
========== |
========== |
|
|
| NOTE: |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| PROPERTY
& ASSETS |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
|
|
| Operating
fixed assets |
|
12 |
771,923,454 |
770,527,299 |
|
| Capital
work in progress |
|
|
11,818,528 |
1,105,294 |
|
|
|
|
---------- |
---------- |
|
|
|
|
783,741,982 |
771,632,593 |
|
| LONG
TERM INVESTMENTS |
|
13 |
8,443,953 |
8,425,891 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
| Stores,
spare parts and loose tools |
14 |
39,899,686 |
36,255,583 |
|
| Stock-in-trade |
|
15 |
362,306,529 |
383,185,402 |
|
| Frade
debts |
|
16 |
547,805,563 |
461,450,536 |
|
| Advances,
deposits and prepayments |
17 |
357,220,892 |
289,075,368 |
|
| Other
receivables |
|
18 |
131,066,315 |
175,824,264 |
|
| Cash
and bank balances |
|
19 |
19,679,984 |
11,334,186 |
|
|
|
|
---------- |
---------- |
|
|
|
|
1,457,978,969 |
1,357,125,339 |
|
|
|
|
---------- |
---------- |
|
|
|
|
|
2,250,164,904 |
2,137,183,823 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Profit
& Loss Account |
|
| for
the year ended September 30, 1997 |
|
|
|
|
|
|
|
Note |
1996-97 |
1995-96 |
|
|
|
No. |
Rupees |
Rupees |
|
|
|
|
| Sales |
|
20 |
3,002,960,410 |
2,883,522,717 |
|
| Cost
of sales |
|
21 |
2,463,881,501 |
2,387,536,257 |
|
|
|
|
---------- |
---------- |
|
| Gross
profit |
|
|
539,078,909 |
495,986,460 |
|
|
|
|
|
| Administrative
selling and general expenses |
22 |
196,963,000 |
185,888,762 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
342,115,909 |
310,097,698 |
|
|
|
|
|
| Other
income |
|
23 |
3,413,655 |
9,209,785 |
|
|
|
|
---------- |
---------- |
|
|
|
|
345,529,564 |
319,307,483 |
|
|
|
|
---------- |
---------- |
|
| Financial
expenses |
|
24 |
233,562,577 |
229,072,371 |
|
| Other
charges |
|
25 |
11,629,626 |
11,005,811 |
|
|
|
|
---------- |
---------- |
|
|
|
|
245,192,203 |
240,078,182 |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
100,337,361 |
79,229,301 |
|
| Provision
for taxation |
|
|
---------- |
---------- |
|
| Current |
|
|
21,500,000 |
18,000,000 |
|
| Prior |
|
|
6,066,026 |
3,432,312 |
|
|
|
---------- |
---------- |
|
|
|
27,566,026 |
21,432,312 |
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
72,771,335 |
57,796,989 |
|
| Unappropriated
profit brought forward |
|
656,728 |
484,739 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
73,428,063 |
58,281,728 |
|
|
|
|
| APPROPRIATIONS |
|
|
| General
reserve |
|
60,000,000 |
47,000,000 |
|
| Interim
dividend @25%(1995-96 25%) |
|
312,500,000 |
3,125,000 |
|
| Proposed
final dividend @ 65% (1995-96 60%) |
|
8,125,000 |
7,500,000 |
|
|
|
|
---------- |
---------- |
|
|
|
71,250,000 |
57,625,000 |
|
| UNAPPROPRIATED
PROFIT |
|
---------- |
---------- |
|
| CARRIED
TO BALANCE SHEET |
|
2,178,063 |
656,728 |
|
|
|
|
========== |
========== |
|
| NOTE: |
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| for
the year ended September 30, 1997 |
|
|
|
Note |
1996-97 |
1995-96 |
|
|
No. |
Rupees |
Rupees |
|
|
|
|
| Net
cash inflow from operating activities |
A |
405,624,861 |
72,306,893 |
|
|
|
|
| Return
on investment and servicing of fmance |
|
|
|
|
| Mark-up
/ interest paid |
|
|
(257,715,108) |
(193,202,889) |
|
| Finance
charges on leased assets |
|
(17,457,772) |
(16,303,820) |
|
| Dividend
paid |
|
|
(10,625,000) |
(13,125,000) |
|
| Dividend
received |
|
|
5,908 |
4,807 |
|
| Gratuity
paid |
|
|
(1,974,166) |
(799,131) |
|
| Net
cash outflow from return on investment and |
---------- |
---------- |
|
| servicing
of finance |
|
|
(287,766,138) |
(223,426,033) |
|
|
|
|
| Taxation: |
|
|
|
| Tax
paid (including tax deducted at source) |
|
(37,922,974) |
(26,356,325) |
|
|
|
|
---------- |
---------- |
|
| Net
cash flow from taxation |
|
|
(37,922,974) |
(26,356,325) |
|
|
|
|
|
|
| Investing
activities: |
|
|
|
|
|
|
|
|
|
| Fixed
capital expenditures |
|
|
(98,623,3300) |
(103,725,724) |
|
| Sale
of fixed assets |
|
|
0 |
7,777,513 |
|
| Investment |
|
|
(18,0620) |
(4,722) |
|
| Refund
of custom duty on Spinning Ring Frames |
|
0 |
11,754,968 |
|
|
|
|
---------- |
---------- |
|
| Net
cash flow from investing activities |
|
(98,641,392) |
(84,197,965) |
|
|
|
|
---------- |
---------- |
|
| Net
cash flow before financing activities |
|
(18,705,643) |
(261,673,430) |
|
|
|
|
| Financing
activities: |
|
|
| Increase
in short term borrowing |
|
34,064,076 |
285,057,967 |
|
| Repayment
of long term loans |
|
(19,091,803) |
(77,038,892) |
|
| Liabilities
under finance lease |
i |
|
12,079,168 |
58,242,608 |
|
|
|
---------- |
---------- |
|
| Net
cash flow from financing activities |
|
27,051,441 |
266,261,683 |
|
|
|
---------- |
---------- |
|
| Increase
in cash & cash equivalent |
B |
8,345,798 |
4,588,253 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
1996-97 |
1995-96 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| A.
Reconciliation of operating profit to net cash flow |
|
| from
operating activities: |
|
|
|
|
|
|
| Net
profit before taxation |
|
|
100,337,361 |
79,229,301 |
|
| Depreciation |
|
|
|
86,513,941 |
86,303,715 |
|
| Mark-up
/ interest expenses |
|
|
215,905,257 |
212,396,571 |
|
| Finance
charges on leased assets |
|
17,457,772 |
16,303,820 |
|
| Dik4dend
received |
|
|
|
(5,908) |
(4,807) |
|
| Profit
on sales of fixed assets |
|
|
0 |
(784,264) |
|
| Depreciation
'~n Spinning Ring Frames w~'[tten back |
0 |
(3,759,858) |
|
| Provision
for Gratuity |
|
|
3,022,616 |
2,919,986 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
322,893,678 |
313,375,163 |
|
|
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
423,231,039 |
392,604,464 |
|
| (Increase)
in trade debtors, advances, deposits |
|
|
| and
other receivables |
|
|
(99,385,654) |
(126,504,698) |
|
| Decrease/(increase)
in stores and stocks |
|
17,234,770 |
(101,813,098) |
|
| Increase/(decrease)
in creditors, accrued and |
|
|
| other
liabilities |
|
|
|
64,544,706 |
(91,979,775) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
405,624,861 |
72,306,893 |
|
|
|
========== |
========== |
|
| B.
Analysis of changes in cash & cash |
|
|
| equivalents
during the year |
|
|
|
|
|
|
|
|
| Cash
& bank balances as at September 30, 1996 |
|
11,334,186 |
6,745,933 |
|
| Increase
in cash & cash equivalents |
|
8,345,798 |
4,588,253 |
|
|
|
---------- |
---------- |
|
| Cash
& bank balances as at September 30, 1997 |
|
19,679,984 |
11,334,186 |
|
|
|
========== |
========== |
|
|
|
| Notes
to the Accounts for |
|
| the
year ended September 30, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
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| Fateh
Textile Mills Limited is incorporated in Pakistan and is listed on the
Karachi Stock Exchange. |
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| The
Company is engaged in the business of textile manufacturing, bleaching,
dyeing, printing, buying, |
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| selling
and dealing in yarn, cloth and fabrics made from raw cotton and polyester
fibre. |
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| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| 2.1
Accounting convention |
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| The
accounts have been prepared under the historical cost convention. The company
has not |
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| adopted
any procedure to determine the impact on the accotrots of inflation or
changes in the |
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| general
level of prices. |
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| 2.2 Fixed Assets and Depreciation |
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| These
are stated at cost less accumulated depreciation except lease hold land. |
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| Depreciation
is calculated on the written down value of assets. Full year's depreciation
is |
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| charged
on additions, while no depreciation is charged on fixed assets deleted during
the year. |
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| Maintenance
and normal repairs are charged to income as and when incurred. Major renewals |
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| and
improvements are capitalised. Gain or loss on disposal of operating fixed
assets is recogniscd |
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| in
current year's income. |
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| 2.3
Assets Subject to Finance lease |
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| These
are stated at lower of present value of minimum lease payments under the
lease agreement |
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| and
the fair value of assets acquired on lease. Aggregate amount of obligation
relating to assets |
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| subject
to finance lease is accounted for at net present value of liabilities. In
view of purchase |
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| option
upon expiry of lease term, 'assets so acquired are amortized over their
expected useful |
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| life
at the rates mentioned in note 13 according to the company's fixed assets
policy. |
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| 2.4
Taxation |
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| Charge
for current taxation is based on taxable income at current tax rates after
considering tax |
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| rebates
if any, available to the Company. |
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| Deferred
tax liability has not been provided as per past practice of the Company. The |
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| management
is of the opinion that time difference tax liability will not materially
reverse in |
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| foreseeable
future. |
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| The
deferred taxation liability due to accelerated rate of depreciation allowance
at the current |
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| rate
of taxation as at September 30, 1997 including for the current year amounts
to |
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| approximately
Rs: 57.60 million. |
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| 2.5
Stores and spares |
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| These
are valued at average cost. |
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| 2.6
Stock-in-Trade |
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| These
are valued: |
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| Raw
Materials |
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At cost plus expenses
incurred. |
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| Goods
in process and |
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| packing
materials |
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At average cost. |
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| Finished
goods |
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Lower of the net
realisable value or cost. The net realisable |
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value signifies estimated
selling price in ordinary course of |
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|
business. |
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| Goods
in transit |
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At invoice value plus
charges and expenses incurred' thereon. |
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| 2.7
Trade debts |
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| Bad
debts are written off against the profit of the company during the year in
which it is |
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| incurred. |
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| 2.8
Provision for Gratuity |
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| The
company operates an unfunded gratuity scheme for its all eligible employees
and provision |
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| is
made annually to cover the obligations under the scheme. |
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