| Fateh Textile Mills Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the 46th Annual General Meeting of the Shareholders of
FATEH TEXTILE MILLS LIMITED will be held |
|
| on
Sunday the 28th February, 1999 at 10.00 a.m. at the Registered Office of the
Company at Hall Road, Hyderabad for the purpose |
|
| of
transacting the following business:- |
|
|
| 1.
To confirm the minutes of the last Annual General Meeting of the Company. |
|
|
| 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, 1998. |
|
|
| 3.
To declare Final Cash Dividend @ 65% recommended by the Directors for the
year 1997-98. An Interim Cash Dividend @ |
|
| 25%
having already been paid to make the total Cash Dividend at 90%. |
|
|
| 4.
To elect Directors for a period of three years in accordance with the
provisions of the Companies Ordinance, 1984 and in this |
|
| respect; |
|
|
| a)
The number of Directors to be elected at the meeting will be 6 (six); |
|
| b)
The retiring Directors are: Mr. Inayat Ullah, Mr. Gohar Ullah, Mr. Asad Ullah
Barkat, Mr. Humayun Barkat, |
|
| Mr.
Maqsood Ahmed Khan and Mr. Tanwir Arif; |
|
| c)
Mr. Muhammad Shafi, the Director nominated by National Investment Trust
Limited, Karachi is not subject to retirement |
|
| as
provided under section 183 of the Companies Ordinance, 1984; and |
|
| d)
Any person who seeks to contest the election to the office of Directors
shall, whether he is a retiring Director or otherwise, |
|
| file
with the Company, not later than fourteen days before the date of the Meeting
a notice of his intention to offer |
|
| himself
for election of Director together with his consent to act as a Director of
the Company. |
|
|
| 5.
To appoint Auditors for the year 1998-99 and to fix their remuneration. |
|
|
| 6.
To transact any other business with the permission of the Chair. |
|
|
| By
Order of the Board |
|
| for
FATEH TEXTILE MILLS LIMITED |
|
|
|
|
HASINUDDIN |
|
| HYDERABAD:
7th February, 1999 |
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share Transfer Books of the Company will remain closed for 7 days from
22nd to 28th February, 1999 (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 Office 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. |
|
|
|
| Company
Information |
|
|
| Board
of Directors |
|
|
| Mr.
Inayat Ullah |
|
Chairman & |
|
|
Chief Executive |
|
|
| Mr.
Gohar Ullah |
|
Director |
|
| Mr.
Asad Ullah Barkat |
|
Director |
|
| Mr.
Humayun Barkat |
|
Director |
|
| Mr.
Maqsood Ahmed Khan |
|
Director |
|
| Mr.
Tanwir Arif |
|
Director |
|
| Mr.
Muhammad Shaft (NIT) |
|
Director |
|
|
| Secretary |
|
| Mr.
Hasinuddin |
|
|
| Auditors |
|
| M/s.
Moosa & Company |
|
| Chartered
Accountants |
|
| Karachi. |
|
|
| Bankers |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| Doha
Bank Limited |
|
| Mashreq
Bank psc |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| Societe
Generale The French and International Bank |
|
| United
Bank Limited |
|
|
| Registered
Office |
|
| Hali
Road, Hyderabad - Sindh. |
|
|
| Brach Office |
|
| 9th
Floor, Adamjee House, |
|
| I.I.
Chundrigar Road, Karachi. |
|
|
| Mills |
|
| Hall
Road, Hyderabad - Sindh, Pakistan. |
|
|
|
| Directors'
Annual Report to the Members |
|
|
| For
and on behalf of your Board of Directors, I feel privileged in welcoming you
all to this |
|
| 46th
Annual General Meeting of the Company and presenting to you the Audited
Statements of Account |
|
| for
the financial year ended September 30, 1998 and expressing my views on the
performance of your |
|
| Company
during the year 1997-98. |
|
|
| Dear
Members you will be delighted to know that your Company's performance has
been |
|
| satisfactory
again this year. There are appreciable improvements in production, sales and
the profit. This |
|
| year,
your Company has achieved a turnover of Rs. 4,011,305,538 recording an
increase of 33.58% |
|
| over
last year's sale. The gross and operating profits are realized at Rs.
733,291,086 and Rs. 453,038,483 |
|
| respectively
with a rise of 36.03% and 32.42% against last year's results. Your Company's
profit before |
|
| tax
has also been increased to Rs. 167,201,536 against last year's pretax profit
of Rs. 100,337,361 |
|
| registering
a growth of 66.64%. After making a provision of Rs. 38,883,884 both for
current and prior |
|
| year's
taxation, the net profit after tax arrives at Rs. 128,317,652 which
contributes an earning of |
|
| Rs.
102.65 per share. |
|
|
| Your
Board of Directors keeping in view the tradition of the Company, feel
pleasure to |
|
| recommend
Cash Dividend @ 90% which is in line with its policy of giving equitable
returns to the |
|
| shareholders.
An Interim Cash Dividend @ 25% has already been paid and the 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 21 st February, 1999. |
|
|
| Your
Directors, therefore, recommend the following appropriation of the profit:- |
|
|
| Profit
available |
|
Rs. 130,495,715 |
|
| Appropriations: |
|
| Transfer
to General Reserve |
|
Rs. 115,000,000 |
|
| Interim
Dividend paid (25%) |
|
Rs. 3,125,000 |
|
| Proposed
Final Dividend (65%) |
|
Rs. 8,125,000 |
|
| Total
appropriations |
|
Rs. 126,250,000 |
|
| Balance
carried forward |
|
Rs. 4,245,715 |
|
|
| Your
Company's textile products enjoy a worldwide reputation for quality and
comfort. Your |
|
| Directors
having been vigilant of the tough competition in the International Textile
Market and with |
|
| a
disciplined focus on all the management activities of the Company as well as
considering the quality |
|
| being
our most enduring competitive edge, have come up to the aspiration of our
valued customers and |
|
| shareholders
by acquiring the ISO-9002 certification. |
|
|
| The
NIT nominee Director Mr. Imran Azim has tendered his resignation and in his
place |
|
| Mr.
Muhammad Shaft another NIT nominee, was co-opted as a Director to fill the
casual vacancy. |
|
|
| The
present Auditors Messrs Moosa & Company, Chartered Accountants, retire
and being |
|
| eligible,
offer themselves for reappointment. |
|
|
| The
pattern of shareholding of the Company as required by section 236 of the
Companies |
|
| Ordinance,
1984 is annexed to this report as appearing on page no. 6. |
|
|
| 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 extended by them to |
|
| the Company. |
|
|
| INAYAT ULLAH |
|
| Chairman |
|
|
| Hyderabad:
4th February, 1999 |
|
|
|
| Pattern
of holding of the shares held |
|
| by
the shareholders of Fateh Textile Mills Ltd. |
|
| as
at 30th September, 1998 |
|
|
| NO. OF |
|
SHAREHOLDING |
|
TOTAL SHARES |
|
| SHAREHOLDERS |
|
HELD |
|
|
| 165 |
From |
1 |
To |
100 |
16,150 |
|
| 77 |
From |
101 |
To |
500 |
26,350 |
|
| 56 |
From |
501 |
To |
1000 |
46,700 |
|
| 49 |
From |
1001 |
To |
5000 |
97,213 |
|
| 2 |
From |
5001 |
To |
10000 |
11,900 |
|
| 2 |
From |
10001 |
To |
15000 |
20,750 |
|
| 1 |
From |
20001 |
To |
25000 |
24,400 |
|
| 3 |
From |
30001 |
To |
35000 |
102,100 |
|
| 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 |
117,487 |
|
| 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 |
|
| ---------- |
|
---------- |
|
| 370 |
|
1,250,000 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF |
|
|
SHARES |
PERCENTAGE |
|
| SHAREHOLDERS |
|
NUMBERS |
HELD |
|
|
|
| Individuals |
|
367 |
1,130,600 |
90.45% |
|
| Investment
Companies |
|
0 |
0 |
0.00% |
|
| Insurance
Companies |
|
0 |
0 |
0.00% |
|
| Joint
Stock Companies |
|
0 |
0 |
0.00% |
|
| Financial
Institutions |
|
2 |
119,300 |
9.54% |
|
| Modaraba
Companies |
|
0 |
0 |
0.00% |
|
| Abandoned
Properties |
|
1 |
100 |
0.01% |
|
| Organisation |
|
---------- |
---------- |
---------- |
|
|
370 |
1,250,000 |
100.00% |
|
|
========== |
========== |
========== |
|
|
| Balance
Sheet as at September 30, 1998 |
|
|
|
|
Note |
1997-98 |
1996-97 |
|
|
|
No. |
Rupees |
Rupees |
|
| CAPITAL
& LIABILITIES |
|
|
|
|
|
| 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 |
580,000,000 |
465,000,000 |
|
| Unappropriated
profit |
|
|
4,245,715 |
2,178,063 |
|
|
|
---------- |
---------- |
|
|
|
596,745,715 |
479,678,063 |
|
|
|
|
| LONG
TERM LOANS |
|
5 |
126,365,025 |
273,567,149 |
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
| TO
FINANCE LEASE |
|
6 |
111,967,286 |
50,992,993 |
|
|
| DEFERRED
LIABILITIES |
|
6,755,144 |
5,644,305 |
|
| Provision
for gratuity |
|
|
| CURRENT
LIABILITIES |
|
| Current
portion of long term liabilities |
7 |
96,812,866 |
124,526,764 |
|
| Short
term running finances |
8 |
1,166,133,800 |
808,559,717 |
|
| Creditors,
accrued and other liabilities |
9 |
674,383,121 |
493,676,413 |
|
| Workers'
profit participation fund |
10 |
8,976,500 |
5,394,500 |
|
| Proposed
final dividend |
|
8,125,000 |
8,125,000 |
|
|
---------- |
---------- |
|
|
1,954,431,287 |
1,440,282,394 |
|
| COMMITMENTS |
|
11 |
|
|
|
|
---------- |
---------- |
|
|
2,796,264,457 |
2,250,164,904 |
|
|
========== |
========== |
|
| PROPERTY
& ASSETS |
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
Fixed assets |
|
12 |
829,848,768 |
771,923,454 |
|
| Capital
work in progress |
|
|
2,486,512 |
11,818,528 |
|
|
|
---------- |
---------- |
|
|
|
832,335,280 |
783,741,982 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
13 |
8,445,534 |
8,443,953 |
|
|
| CURRENT
ASSETS |
|
|
| Stores,
spare parts and loose tools |
14 |
47,548,748 |
39,899,686 |
|
| Stock-in-trade |
|
15 |
672,459,374 |
362,306,529 |
|
| Trade debts |
|
16 |
604,903,163 |
547,805,563 |
|
| Advances,
deposits and prepayments |
17 |
428,101,714 |
357,220,892 |
|
| Other
receivables |
|
18 |
180,909,965 |
131,066,315 |
|
| Cash
and bank balances |
|
19 |
21,560,679 |
19,679,984 |
|
|
---------- |
---------- |
|
|
1,955,483,643 |
1,457,978,969 |
|
|
---------- |
---------- |
|
|
2,796,264,457 |
2,250,164,904 |
|
|
=========== |
=========== |
|
| NOTE: |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Karachi:
February 04, 1999 |
INAYAT ULLAH |
|
GOHAR ULLAH |
|
|
|
Chief Executive |
Director |
|
|
|
|
|
|
|
|
| Profit
& Loss Account |
|
| for
the year ended September 30, 1998 |
|
|
|
Note |
1996-98 |
1996-97 |
|
|
No. |
Rupees |
Rupees |
|
|
---------- |
---------- |
|
| Sales |
|
20 |
4,011,305,538 |
3,002,960,410 |
|
| Cost
of sales |
|
21 |
3,278,014,452 |
2,463,881,501 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
733,291,086 |
539,078,909 |
|
|
| Administrative, selling and
general |
|
| expenses |
|
22 |
280,252,603 |
196,963,000 |
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
453,038,483 |
342,115,909 |
|
|
|
|
|
|
|
| Other income |
|
23 |
4,201,865 |
3,413,655 |
|
|
457,240,348 |
345,529,564 |
|
| Financial
expenses |
|
24 |
272,299,009 |
233,562,577 |
|
| Other
charges |
|
25 |
17,739,803 |
11,629,626 |
|
|
---------- |
---------- |
|
|
290,038,812 |
245,192,203 |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
167,201,536 |
100,337,361 |
|
| Provision
for taxation |
|
|
|
| Current |
|
25,000,000 |
21,500,000 |
|
| Prior |
|
13,883,884 |
6,066,026 |
|
|
---------- |
---------- |
|
|
38,883,884 |
27,566,026 |
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
128,317,652 |
72,771,335 |
|
| Unappropriated
profit brought forward |
|
2,178,063 |
656,728 |
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
130,495,715 |
73,428,063 |
|
|
|
|
| APPROPRIATIONS |
|
|
|
| General
reserve |
|
115,000,000 |
60,000,000 |
|
| Interim
dividend @ 25% (1996-97 25%) |
|
3,125,000 |
3,125,000 |
|
| Proposed
final dividend @ 65% (1996-97 65%) |
8,125,000 |
8,125,000 |
|
|
---------- |
---------- |
|
|
126,250,000 |
71,250,000 |
|
| UNAPPROPRIATED
PROFIT |
|
---------- |
---------- |
|
| CARR~ED
TO BALANCE SHEET |
|
4,245,715 |
2,178,063 |
|
|
========== |
========== |
|
| Note: |
|
| The
annexed form an integral part of these accounts. |
|
|
| INAYAT ULLAH |
|
GOHAR ULLAH |
|
| Chief
Executive |
|
Director |
|
|
|
| Statement
of Changes in Financial Position |
|
| (Cash
Flow Statement) |
|
| for
the year ended September 30, 1998 |
|
|
|
Note |
1997-98 |
1996-97 |
|
|
No. |
Rupees |
Rupees |
|
|
| Net
cash inflow from operating activities |
A |
217,485,605 |
405,624,861 |
|
|
| Return
on investment and servicing of finance |
|
|
| Mark-up
/ interest paid |
|
(244,701,664) |
(257,715,108) |
|
| Finance
charges on leased assets |
|
(22,124,786) |
(17,457,772) |
|
| Dividend
paid |
|
(11,250,000) |
(10,625,000 ) |
|
| Dividend
received |
|
2,377 |
5,908 |
|
|
| Gratuity
paid |
|
(1,958,938) |
(1,974,166) |
|
| Net
cash outflow from return on investment and |
---------- |
---------- |
|
| servicing
of finance |
|
(280,033,011) |
(287,766,138) |
|
|
---------- |
---------- |
|
| Taxation: |
|
| Tax
paid (including tax deducted at source) |
(36,354,308) |
(37,922,974) |
|
|
---------- |
---------- |
|
| Net
cash flow from taxation |
|
(36,354,308) |
(37,922,974) |
|
|
| Investing
activities: |
|
|
| Fixed
capital expenditures |
|
(311,328,364) |
(98,623,330) |
|
| Sale
of fixed assets |
|
168,480,000 |
0 |
|
| Investment |
|
(1,581) |
(18,062) |
|
|
---------- |
---------- |
|
| Net
cash flow from investing activities |
|
(142,849,945) |
(98,641,392) |
|
|
---------- |
---------- |
|
| Net
cash flow before financing activities |
(241,751,659) |
(18,705,643) |
|
| Financing
activities: |
|
| Increase
in short term borrowing |
|
357,574,083 |
34,064,076 |
|
| Repayment
of long term loans |
|
(168,152,161) |
(19,091,803) |
|
| Liabilities
under finance lease |
|
54,210,432 |
12,079,168 |
|
|
---------- |
---------- |
|
| Net
cash flow from financing activities |
|
243,632,354 |
27,051,441 |
|
|
---------- |
---------- |
|
| Increase
in cash & cash equivalents |
B |
1,880,695 |
8,345,798 |
|
|
========== |
========== |
|
|
|
1997-98 |
1996-97 |
|
|
Rupees |
Rupees |
|
|
| A.
Reconciliation of operating profit to net cash flow |
|
| from
operating activities: |
|
|
| Net
profit before taxation |
|
167,201,536 |
100,337,361 |
|
|
|
|
| Depreciation |
|
94,255,066 |
86,513,941 |
|
| Mark-up
/ interest expenses |
|
249,893,258 |
215,905,257 |
|
| Finance
charges on leased assets |
|
22,124,786 |
17,457,772 |
|
| Dividend
received |
|
(2,377) |
(5,908) |
|
| Provision
for Gratuity |
|
3,069,777 |
3,022,616 |
|
|
---------- |
---------- |
|
|
369,340,510 |
322,893,678 |
|
| Operating
profit before working capital changes |
536,542,046 |
423,231,039 |
|
| (Increase)
in trade debtors, advances, deposits |
|
|
| and
other receivables |
|
(180,351,649) |
(99,385,654) |
|
| Decrease/(increase)
in stores and stocks |
|
(317,801,907) |
17,234,770 |
|
| Increase
in creditors, accrued and |
|
|
|
| other
liabilities |
|
179,097,115 |
64,544,706 |
|
|
---------- |
---------- |
|
|
217,485,605 |
405,624,861 |
|
|
========== |
========== |
|
| B.
Analysis of changes in cash & cash |
|
| equivalents
during the year |
|
|
| Cash
& bank balances as at September 30, 1997 |
19,679,984 |
11,334,186 |
|
| Increase
in cash & cash equivalents |
|
1,880,695 |
8,345,798 |
|
|
---------- |
---------- |
|
| Cash
& bank balances as at September 30, 1998 |
21,560,679 |
19,679,984 |
|
|
========== |
========== |
|
| INAYAT ULLAH |
|
GOHAR ULLAH |
|
| Chief
Executive |
|
Director |
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|
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| Notes
to the Accounts for |
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| the
year ended September 30, 1998 |
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| 1.
THE COMPANY AND ITS OPERATIONS |
|
| Fateh
Textile Mills Limited is incorporated in Pakistan and is listed on the
Karachi Stock Exchange. The |
|
| Company
is engaged in the business of textile manufacturing, bleaching, dyeing,
printing, buying, selling |
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| 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 adopted |
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| any
procedure to determine the impact on the accounts of inflation or changes in
the general level |
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| 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.
Depreciation's calculated |
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| on
the written down value of assets. Full year's depreciation is charged on
additions, while no |
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| depreciation
is charged on fixed assets deleted during the year. Maintenance and normal
repairs are |
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| charged
to income as and when incurred. Major renewals and improvements are
capitalised. Gain |
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| or
loss on disposal of operating fixed assets is recognised 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 subject |
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| to
finance lease is accounted for at net present value of liabilities. In view
of purchase option upon |
|
| expiry
of lease term, assets so acquired are amortized over their expected useful
life at the rates |
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| mentioned
in note 12 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
management |
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| is
of the opinion that time difference tax liability will not materially reverse
in foreseeable future. |
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| The
deferred taxation liability due to accelerated rate of depreciation allowance
at the current rate |
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| of
taxation as at September 30, 1998 including for the current year amounts to
approximately |
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| Rs.67.642
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 |
At cost |
