| FATEH SPORTS WEAR LIMITED |
|
|
|
|
|
|
|
| ANNUAL
REPORT 1997 |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the 14th Annual General Meeting of the shareholders of
FATEH SPORTS |
|
| WEAR
LIMITED, will be held on Monday the 29th December, 1997 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 Annual General Meeting of the Company held
on December 30, |
|
| 1996. |
|
|
|
| 2.
To receive and adopt the Directors' Report and Audited Balance Sheet together
with the Profit & |
|
| 'Loss
Account of the Company for the year ended 30th June, 1997. And to declare
cash dividend |
|
| @
1.5 per share (15%) as recommended by the Board of Directors. |
|
|
|
| 3.
To appoint Auditors for the year 1997-98 and fix their remuneration. |
|
|
| 4.
Any other business with the permission of the chair. |
|
|
| By
order of the Board |
|
|
|
| NOTICES: |
|
|
| 1.
The share Transfer Books of the Company will remain closed for 7 days from
23rd to 29th |
|
| December,
1997 (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
Profile |
|
|
| BOARD: |
|
| CHAIRMAN/CHIEF
EXECUTIVE |
|
| Mr.
Rauf Alam |
|
|
| DIRECTORS |
|
| Mr.
Aftab Alam |
|
| Mr.
Saeed Alam |
|
| Mr.
Muhammad Mohsin |
|
| Mr.
Muhammad Naveed |
|
| Mrs.
Jamila Alam |
|
| Mrs.
Najma Roshan |
|
|
| SECRETARY |
|
| Mr.
Muhammad Iqbal Khan |
|
|
| AUDITORS |
|
| M/s.
Moosa & Company |
|
| Chartered
Accountants, |
|
| Karachi. |
|
|
| BANKERS |
|
| Muslim
Commercial Bank Limited |
|
| United
Bank Limited |
|
| Askari
Commercial Bank Limited |
|
| Allied
Bank of Pakistan Limited |
|
|
| REGISTERED
OFFICE |
|
| Mirpurkhas
Road, |
|
| Hyderabad. |
|
|
| BRANCH
OFFICE |
|
| 9th
Floor, Adamjee House, |
|
| I.I.
Chundrigar Road, |
|
| Karachi. |
|
|
| PLANT |
|
| Kali Mori, |
|
| Hyderabad. |
|
|
|
|
| Directors'
Report to the Members |
|
|
| We
feel great pleasure in welcoming you to the 14th Annual General Meeting of
your Company and in |
|
| presenting
the Audited Accounts for the year ended June 30, 1997 together with the
Auditors' and |
|
| Directors'
Report. The results are summarized heretrader. |
|
|
| Operating
Results |
|
| During
the year under review your Company have achieved sales up to Rs. 330.427
million i.e. 14.6'/( |
|
| higher
than the previous year which is quit satisfactory. |
|
|
| The
Profit before taxation comes to Rs. 14.661 million which is 1.4% lower than
the previous year |
|
| because
of a sharp rise in financial expenses. |
|
|
| Due
to some unforeseen delays in payments of foreign receivables your Company has
to bear 45 % higher |
|
| financial
cost in comparison with the last year figures. |
|
|
| Appropriations |
|
| Your
Directors have recommended following appropriations of profit · |
|
|
|
|
|
Rupees (ooo) |
|
|
| Pretax
Profit |
|
|
14,666 |
|
| Provision
for Taxation |
|
|
1,563 |
|
|
|
|
|
------------ |
|
| Profit
after Taxation |
|
|
13,103 |
|
| Unappropriated
profit brought forward |
|
853 |
|
|
|
|
|
------------ |
|
| Profit
available for appropriation |
|
13,956 |
|
|
|
|
|
|
| Appropriations:- |
|
|
|
| Cash
Dividend @ 15% |
|
|
3,000 |
|
| Transfer
to General Reserve |
|
10,000 |
|
|
|
|
|
------------ |
|
|
|
|
|
13,000 |
|
|
|
|
|
------------ |
|
| Balance
carried over to B/S |
|
956 |
|
|
|
========= |
|
| Appointment
of Auditors |
|
|
|
| The
retiring auditors M/s. Moosa & Company, Chartered Accountants, being
eligible offer themselves |
|
| for
reappointment. |
|
|
| Pattern
of Share holding |
|
| The
pattern of share holdings required under Sec. 236 of the Companies Ordinance.
1984 is annexed. |
|
|
| Staff-Management
Relations |
|
| The
board of Directors is also pleased in expressing its appreciation on the
efforts of Company's |
|
| employees,
we had cordial relations and have achieved all production targets. Our
commendations are |
|
| also
extended to the Company's Bankers for their continued support |
|
|
|
| Pattern
of holdings of the shares held |
|
| by
the shareholders of Fateh Sports wear Ltd. |
|
| as
at 30th June, 1997 |
|
|
| NO. OF |
|
SHAREHOLDING |
|
TOTAL SHARES |
|
| SHAREHOLDERS |
|
|
|
|
HELD |
|
|
| 140 |
|
From |
1 |
To |
100 |
13,283 |
|
| 91 |
|
From |
101 |
To |
500 |
26,797 |
|
| 61 |
|
From |
501 |
To |
1000 |
43,815 |
|
| 41 |
|
From |
1001 |
To |
5000 |
59,962 |
|
| 6 |
|
From |
5001 |
To |
10000 |
41,365 |
|
| 1 |
|
From |
15001 |
To |
20000 |
18,700 |
|
| 1 |
|
From |
20001 |
To |
25000 |
22,695 |
|
| 1 |
|
From |
25001 |
To |
30000 |
25,431 |
|
| 1 |
|
From |
30001 |
To |
35000 |
34,825 |
|
| 2 |
|
From |
45001 |
To |
50000 |
98,079 |
|
| 1 |
|
From |
50001 |
To |
55000 |
53,270 |
|
| 2 |
|
From |
0.55 |
To |
60000 |
114,510 |
|
| 3 |
|
From |
60001 |
To |
65000 |
190,525 |
|
| 1 |
|
From |
70001 |
To |
75000 |
72,750 |
|
| 1 |
|
From |
80001 |
To |
85000 |
82,815 |
|
| 1 |
|
From |
95001 |
To |
100000 |
96,385 |
|
| 2 |
|
From |
100001 |
To |
105000 |
203,040 |
|
| 3 |
|
From |
105001 |
To |
110000 |
324,820 |
|
| 1 |
|
From |
130001 |
To |
135000 |
134,146 |
|
| 1 |
|
From |
150001 |
To |
155000 |
151,047 |
|
| 1 |
|
From |
190001 |
To |
195000 |
191,740 |
|
| ----------- |
|
----------- |
|
| 362 |
|
2,000,000 |
|
| ========= |
|
========= |
|
|
|
|
|
| CATEGORIES
OF |
NUMBERS |
SHARES |
PERCENTAGE |
|
| SHAREHOLDERS |
|
HELD |
|
|
|
|
| Individuals |
|
358 |
1,898,385 |
94.92% |
|
| Investment
Companies |
2 |
100,980 |
5.05% |
|
| Insurance
Companies |
0 |
0 |
0.00% |
|
| Joint
Stock Companies |
1 |
550 |
0.03% |
|
| Financial
Institutions |
0 |
0 |
0.00% |
|
| Modaraba
Companies |
0 |
0 |
0.00% |
|
| Abandoned
Properties |
1 |
85 |
0% |
|
| Organisation |
|
|
----------- |
----------- |
----------- |
|
|
362 |
2,000,000 |
100.00% |
|
|
========= |
========= |
========= |
|
|
|
|
|
|
|
| Auditors'
Report to the Members |
|
|
|
|
| We
have audited the annexed balance sheet of Fateh Sports wear Limited as at
June 30, 1997 and the |
|
| related
profit & loss account and statement of changes in financial position,
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 |
|
| and,
after due verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been kept by the company as
required by the |
|
| Companies
Ordinance, 1984: |
|
|
| (b)
in our opinion: |
|
|
| (i)
the balance sheet and profit & 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 the accounting policies
consistently applied.: |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; |
|
| and |
|
|
|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were |
|
| in
accordance with the objects of the company; |
|
|
|
| (c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet, profit & loss account and the statement of changes in financial
position, together |
|
| with
the notes forming part thereof, give the information required by the
Companies Ordinance, |
|
| 1984,
in the manner so required and respectively give a true and fair view of the
state of the |
|
| company's
affairs as at June 30, 1997 and of the profit and the changes in financial
position for the |
|
| year
ended; and |
|
|
| (d)
in our opinion, Zakat deductable at source under the Zakat & Ushr
Ordinance, 1980 was deducted |
|
| by
the company and deposited in the Central Zakat Fund established under section
7 of that |
|
| Ordinance. |
|
|
|
| MOOSA
& CO. |
|
| Chartered
Accountants |
|
|
| Karachi:
I st December, 1997 |
|
|
|
| Balance
Sheet as at June 30, 1997 |
|
|
| CAPITAL
& LIABILITIES |
|
NOTE |
30-06-1997 |
30-06- 1996 |
|
|
|
NO. |
RUPEES |
RUPEES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
| 5,000,000
ordinary shares of Rs. 10/- each |
|
5,000,000,000 |
50,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid up share capital |
3 |
20,000,000 |
20,000,000 |
|
| General
reserve |
|
4 |
48,000,000 |
38,000,000 |
|
| Unappropriated
profit |
|
|
956,220 |
852,715 |
|
|
----------- |
----------- |
|
|
|
|
68,956,220 |
58,852,715 |
|
| DEFERRED
LIABILITIES |
|
| Provision
for gratuity |
|
|
3,250,312 |
2,762,623 |
|
|
| CURRENT
LIABILITIES |
|
|
| Short
term running finances |
|
5 |
96,783,848 |
108,247,127 |
|
| Creditors,
accrued and other liabilities |
|
6 |
223,365,847 |
191,964,138 |
|
| Workers'
profit participation fund |
|
7 |
4,418,319 |
3,246,478 |
|
| Provision
for taxation |
|
8 |
1,800,000 |
2,000,000 |
|
| Proposed
final dividend |
|
|
3,000,000 |
3,000,000 |
|
|
----------- |
----------- |
|
|
|
329,368,014 |
308,457,743 |
|
|
|
----------- |
----------- |
|
|
|
401,574,546 |
370,073,081 |
|
|
========== |
========== |
|
| Notes: |
|
| 1.
The annexed notes form an integral part of these accounts. |
|
| 2.
Auditor's report is attached |
|
|
| PROPERTY
& ASSETS |
|
NOTE |
30-06-1997 |
30-06-1996 |
|
|
|
NO. |
RUPEES |
RUPEES |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
9 |
47,251,658 |
43,936,496 |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spare parts and loose tools |
|
10 |
6,922,243 |
5,642,122 |
|
| Stock-in-trade |
|
11 |
160,120,294 |
137,137,644 |
|
| Trade debts |
|
|
12 |
48,668,729 |
105,885,387 |
|
| Advances,
deposits and prepayment |
|
13 |
78,903,356 |
26,570,747 |
|
| Other
receivables |
|
14 |
57,897,996 |
49,344,982 |
|
| Cash
and bank balances |
|
15 |
1,810,270 |
1,555,703 |
|
|
|
----------- |
----------- |
|
|
|
354,322,888 |
326,136,585 |
|
|
---------- |
---------- |
|
|
|
401,574,546 |
370.073,081 |
|
|
========== |
========== |
|
|
|
|
|
| Profit
and Loss Account |
|
| For
the year ended June 30, 1997 |
|
|
NOTE |
30-06-1997 |
30-06-1996 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| Sales |
|
16 |
330,427,611 |
288,199,992 |
|
| Cost
of Sales |
|
17 |
245,802,718 |
218,412,495 |
|
|
|
|
---------- |
---------- |
|
| Gross
Profit |
|
|
84,624,893 |
69,787,497 |
|
|
|
|
|
| Administration
expenses |
|
18 |
21,889,830 |
20,653,390 |
|
| Selling
expenses |
|
19 |
18,866,953 |
13,802,629 |
|
|
|
|
---------- |
---------- |
|
|
|
|
40,756,783 |
34,456,019 |
|
|
|
|
|
| Operating
Profit |
|
|
43,868,110 |
35,331,478 |
|
| Other
Income |
|
20 |
30,599 |
96,275 |
|
|
---------- |
---------- |
|
|
|
43,898,709 |
35,427,753 |
|
|
| Financial
expenses |
|
21 |
28,230,746 |
19,433,895 |
|
| Other
charges |
|
22 |
1,001,480 |
1,123,705 |
|
|
|
|
--------- |
--------- |
|
|
|
|
29,232,226 |
20.557,600 |
|
|
|
|
--------- |
--------- |
|
| Profit
before taxation |
|
|
14,666,483 |
14,870,153 |
|
| Taxation |
|
| Current |
|
|
1,800,000 |
2,000,000 |
|
| Prior |
|
|
(237,022) |
(261.590) |
|
|
--------- |
--------- |
|
|
|
|
1,562,978 |
1,738,410 |
|
|
--------- |
--------- |
|
| Profit
after taxation |
|
|
13,103,505 |
13, 131,743 |
|
| Unappropriated
Profit brought forward |
|
|
852,715 |
720,972 |
|
|
|
|
--------- |
--------- |
|
| Profit
available for appropriation |
|
|
13,956,220 |
13,852.72 |
|
|
| Appropriations |
|
| General
Reserve |
|
|
10,000,000 |
10,000,000 |
|
| Proposed
final dividend |
|
|
| @ 15% (1995-96- 15%) |
|
|
30,000,110 |
3,000,000 |
|
|
--------- |
--------- |
|
|
|
|
13,000,000 |
13,000,000 |
|
|
|
|
--------- |
--------- |
|
| Unappropriated
Profit carried to Balance Sheet |
9,562,220 |
852,715 |
|
|
|
|
|
========= |
========= |
|
| Note:
The annexed notes form an integral part of these accounts |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| for
the year ended June 30, 1997 |
|
|
|
NOTE |
30-06-1997 |
30-06-1996 |
|
|
|
NO. |
RUPEES |
RUPEES |
|
|
| NET
CASH INFLOW FROM |
|
| OPERATING
ACTIVITIES |
|
A |
54,652,730 |
60,944,637 |
|
|
| Return
on investment |
|
| and
servicing of finance: |
|
|
| Markup
/ interest paid |
|
|
(30,417,638) |
(22,174,582) |
|
| Dividend
paid |
|
|
(3,01)0,000) |
0 |
|
|
| Net
Cash outflow from return on |
|
| investment
and servicing of finance |
|
|
(33,417,638) |
(22,174,582) |
|
|
| Taxation |
|
| Tax Paid |
|
|
| (including
tax deducted at source) |
|
(1,516,369) |
(3,695,383) |
|
|
|
|
|
|
| Net
cash flow from taxation |
|
(1,516,369) |
(3,695,383) |
|
|
----------- |
----------- |
|
| Investing
activities |
|
| Fixed
capital expenditure |
|
|
(8,000,877) |
(18,170,421) |
|
|
----------- |
----------- |
|
| Net
cash flow from investing activities |
|
(8,000,877) |
(18,170,421) |
|
|
|
----------- |
----------- |
|
| Net
cash flow before financing activities |
|
11,717,846 |
16,904,251 |
|
| Financing
activities |
|
| Increase/(Decrease)
in short term borrowing |
|
(11,463,279) |
( 19,502,918) |
|
|
|
|
|
----------- |
----------- |
|
| Net
cash flow from financing activities |
|
(11,463,279) |
( 19,502,918) |
|
|
|
----------- |
----------- |
|
| Increase/(decrease)
in cash & cash equivalent |
B |
254,567 |
(2,598,667) |
|
|
========== |
========== |
|
|
|
30-06-1997 |
30-06-1996 |
|
|
RUPEES |
RUPEES |
|
| NOTE: A |
|
| Reconciliation
of operating profit to |
|
| net
cash flow from operating activities: |
|
|
| Net
profit before taxation |
|
|
14,666,483 |
14,870,153 |
|
|
| Depreciation |
|
|
4,685,715 |
4,276,909 |
|
| Mark-up
/ interest expenses |
|
|
27,833,405 |
19,176,108 |
|
| Provision
for gratuity |
|
|
487,689 |
2,762,623 |
|
|
------------ |
------------ |
|
|
|
|
33,006,809 |
26,215,640 |
|
|
|
|
------------ |
------------ |
|
| Operating
profit before working capital changes |
|
47,673,292 |
41,085,793 |
|
| (Increase)/Decrease
in current assets |
|
| Stores,
spares & loose tools |
|
|
(1,280,121) |
(346,219) |
|
| Stock-in-trade |
|
|
(22,982,650) |
(55,103,233) |
|
| Trade
debtors - |
|
|
57,216,658 |
145,037,231 |
|
| Advances,
deposits & pre-payments |
|
|
(52,579,218) |
(19,952,088) |
|
| Other
receivables |
|
|
(8,553,014) |
8,845,346 |
|
|
| (Decrease)/lncrease
in current liabilities |
|
|
| Creditors,
accrued & other liabilities |
|
|
33,985,942 |
(60,720,264) |
|
| Workers'
Profit Participation Fund |
|
|
1,171,841 |
2,098,071 |
|
|
----------- |
----------- |
|
|
|
|
6,979,438 |
19,858,844 |
|
|
|
|
----------- |
----------- |
|
|
|
|
54,652,730 |
60,944,637 |
|
|
========== |
========== |
|
| NOTE: B |
|
| Analysis
of changes in cash and cash |
|
| equivalents
during the year: |
|
|
| Cash
and bank balances as at June 30, 1996 |
|
1,555,703 |
4,154,370 |
|
| Increase/(decrease)
in |
|
|
|
|
| cash
and cash equivalents |
|
254,567 |
(2,598,667) |
|
|
---------- |
---------- |
|
| Cash
and bank balances as at June 30, 1997 |
|
1,810,270 |
1,555,703 |
|
|
========== |
========== |
|
|
|
|
| Notes
to the Accounts |
|
| For
the year ended June 30, 1997 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| Fateh
Sports wear Limited is incorporated in Pakistan as a public limited company
and is listed on |
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| the
Karachi Stock Exchange. |
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| The
principal activity of the Company is the manufacture of ready made garments
and selling them |
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| locally
as well as doing exports. |
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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 accounts of inflation or changes
in the |
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| general
level of prices. |
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| 2.2
Fixed Assets |
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| These
are stated at cost less accumulated depreciation except land which is stated
at cost. |
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|
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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 sold/deleted
during |
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| the year. |
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|
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| Maintenance
and normal repairs are charged to income as and when incurred. Major |
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| renewals
and improvements are capitalised. Gain or loss on disposal of operating fixed
assets |
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| is
recognised in current year's income. |
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| 2.3
Taxation |
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|
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| Charge
for current taxation is based on taxable income at current tax rates after
considering |
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| the
rebates and tax credits available, if any. |
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|
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| The
company does not account for or provide deferred tax liability. It is the
practice of the |
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| management
for providing tax liability for current year's only. The Management is of the |
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| opinion
that time difference tax liability will not materially reverse in foreseeable
future. |
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|
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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 June 30, 1997 including for the current year amounts to
approximately |
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| Rs.
1.225 million. (1996: Rs. 1.450 Million) |
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| 2.4
Stores and spares |
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| These
are valued at average cost. |
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| 2.5
Stock-in-Trade |
