| Fateh Industries Limited |
|
|
|
|
|
|
|
| ANNUAL
REPORT 98 |
|
|
|
| Notice
of Annual Meeting |
|
|
| Notice
is hereby given that the 13th Annual General Meeting of the Shareholders of
FATEH |
|
| INDUSTRIES
LIMITED, will be held on Monday the 28th December, 1998 at 9.00 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 Meeting of the Company held on |
|
| December
29, 1997. |
|
|
| 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, 1998. |
|
|
| 3.
To appoint Auditors for the year 1998-99 and fix their remuneration. |
|
|
| 4.
Any other business with permission of the Chair. |
|
|
|
By order of the Board |
|
|
FATEH INDUSTRIES LIMITED |
|
| Hyderabad |
|
| 7th
December, 1998 |
|
Muhammad Iqbal Khan |
|
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed for 7 days from
22nd to |
|
| 28th
December, 1998 (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. |
|
|
|
| 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 Iqbal Khan |
|
|
| AUDITORS |
|
| M/s.
Moosa & Company |
|
| Chartered
Accountants, |
|
| Karachi. |
|
|
| BANKERS |
|
| United
Bank Limited |
|
|
| REGISTERED
OFFICE |
|
| Mirpurkhas
Road, |
|
| Hyderabad. |
|
|
| BRANCH
OFFICE |
|
| 9th
Floor Adamjee House, |
|
| I.
I. Chundrigar Road, |
|
| Karachi. |
|
|
| PLANT |
|
| Mirpurkhas
Road, |
|
| Hyderabad. |
|
|
|
| Directors'
Report to the Members |
|
|
| We
feel pleasure to welcome you on this occasion of 13th Annual General Meeting
of Fateh |
|
| Industries
Limited and present before you the audited annual accounts along with thc |
|
| Auditors'
report for the year ended June 30, 1998. |
|
|
| Operating
Results |
|
|
| The
Sales during the year under review were Rs. 22.685 million because the
European |
|
| markets
were slow in demand while in USA the competition from other sectors of the
world |
|
| remained
high and bulk demand for our goods remained under pressure. |
|
|
| The
pressure on Exports had adversely effected the profitability and first time
you company |
|
| had
faced a gross loss position despite of various measures for cutting costs
were taken to |
|
| balance
the bottom line. |
|
|
| Financial
results |
|
| Financial
results for the year 1997-98 were as follows; |
|
|
Rupees (000) |
|
| Operating
Loss |
|
(18,365) |
|
| Other Income |
|
68 |
|
|
---------- |
|
|
(18,297) |
|
| Financial
& Other Charges |
|
(8,595) |
|
|
---------- |
|
| Loss
before taxation |
|
(26,892) |
|
| Provision
for taxation |
|
(1,827) |
|
|
---------- |
|
|
(28,719) |
|
| Un-appropriated
loss brought forward |
|
(49,278) |
|
|
---------- |
|
| Loss
carried over to B/S |
|
(77,997) |
|
|
| As
regards the Auditors' note on providing gratuity and deferred taxation, our
company's |
|
| policy
is consistent to record actual gratuity on payment while taxation is provided
in the |
|
| accounts. |
|
|
| The
pattern of share holding required under sec. 236 of the Companies Ordinance,
1984 is |
|
| annexed. |
|
|
| The
retiring Auditors M/s. Moosa & Company, Chartered Accountants, being
eligible offer |
|
| themselves
for reappointment. |
|
|
| The
Board of Directors express its' appreciation on the services of Company's
employees and |
|
| co-operation
of the Bankers. |
|
|
|
SAEED ALAM |
|
|
CHAIRMAN |
|
| Dated:
30th November, 1998 |
|
BOARD OF DIRECTORS |
|
|
|
| Pattern
of Shareholding as at June 30, 1998 |
|
|
| NO. OF |
|
TOTAL SHARES |
|
| S
SHAREHOLDERS |
|
SHAREHOLDING |
|
HELD |
|
|
|
| 456 |
From |
1 |
To |
100 |
38,262 |
|
| 119 |
From |
101 |
To |
500 |
32,850 |
|
| 39 |
From |
501 |
To |
1000 |
26,625 |
|
| 5 |
From |
1001 |
TO |
5000 |
8,300 |
|
| 5 |
From |
5001 |
To |
10000 |
42,719 |
|
| 1 |
From |
10001 |
To |
15000 |
14,737 |
|
| 1 |
From |
15001 |
To |
20000 |
16,174 |
|
| 2 |
From |
30001 |
To |
35000 |
67,399 |
|
| 1 |
From |
35001 |
To |
40000 |
38,269 |
|
| 2 |
From |
40001 |
To |
45000 |
87,122 |
|
| 2 |
From |
50001 |
To |
55000 |
102,524 |
|
| 2 |
From |
55001 |
To |
60000 |
114,325 |
|
| 1 |
From |
60001 |
To |
65000 |
62,102 |
|
| 1 |
From |
70001 |
To |
75000 |
72,014 |
|
| 2 |
From |
95001 |
To |
100000 |
197,816 |
|
| 1 |
From |
100001 |
To |
105000 |
100,891 |
|
| 1 |
From |
110001 |
To |
115000 |
111,905 |
|
| 1 |
From |
115001 |
To |
120000 |
116,148 |
|
| 2 |
From |
120001 |
To |
125000 |
246,502 |
|
| 1 |
From |
140001 |
To |
145000 |
141,456 |
|
| 1 |
From |
165000 |
To |
170000 |
169,333 |
|
| 1 |
From |
190001 |
To |
195000 |
192,527 |
|
| --------- |
|
--------- |
|
| 647 |
|
2,000,000 |
|
| ========= |
|
========= |
|
|
|
|
|
| CATEGORIES
OF |
|
|
SHARES |
|
|
| SHAREHOLDERS |
|
NUMBERS |
HELD |
PERCENTAGE |
|
|
| Individuals |
|
643 |
1,946,917 |
97.35 % |
|
| Investment
Companies |
|
2 |
51,499 |
2.57% |
|
| Insurance
Companies |
|
0 |
0 |
0% |
|
| Joint
Stock Companies |
|
2 |
1,584 |
0.08% |
|
| Financial
Institutions |
|
0 |
0 |
0.00% |
|
| Modarba
Companies |
|
0 |
0 |
0.00% |
|
|
---------- |
---------- |
---------- |
|
|
647 |
2,000,000 |
100.00% |
|
|
========= |
========= |
========= |
|
|
|
|
| Auditors'
Report to the Members |
|
|
|
|
|
| We
have audited the annexed balance sheet of Fateh Industries Limited as at June
30, 1998 |
|
| 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 except as the notes given 2.2, 2.3 and 2.7 |
|
| with
which we 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 & 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,
1998 and |
|
| of
the loss and the changes in financial position for the year then ended[; and |
|
|
| (d)
in our opinion no zakat was deductible at source under the Zakat & Ushr
Ordinance, |
|
| 1980. |
|
|
|
MOOSA & COMPANY |
|
| Karachi:
30th November, 1998 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 1998 |
|
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
30-06-98 |
30-06-97 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
| 10,000,000
ordinary shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
========== |
========== |
|
| S
shareholders' Equity |
|
| Issued,
subscribed and paid up share capital |
3 |
20,000,000 |
20,000,000 |
|
| General
reserve |
|
4 |
30,000,000 |
30,000,000 |
|
| Unappropriated
loss |
|
|
(77,996,800) |
(49,277,612) |
|
|
|
--------- |
--------- |
|
|
|
(27,996,888) |
722,388 |
|
| LONG
TERM LOAN |
|
5 |
22,638,956 |
22,638,956 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term liabilities |
6 |
0 |
0 |
|
| Short
term running finances |
7 |
57,951,068 |
53,736,155 |
|
| Creditors,
accrued and other liabilities |
8 |
258,577,646 |
228,519,700 |
|
| Workers'
profit participation fund |
9 |
6,708,127 |
5,881,571 |
|
| Provision
for taxation |
|
10 |
200,000 |
500,000 |
|
|
--------- |
--------- |
|
|
323,436,841 |
288,637,426 |
|
|
--------- |
--------- |
|
|
318,078,997 |
311,998,770 |
|
|
========== |
========== |
|
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
11 |
97,949,417 |
99,446,107 |
|
|
|
|
|
| LONG
TERM INVESTMENTS |
|
12 |
17,566 |
17,566 |
|
| CURRENT
ASSETS |
|
|
|
|
| Stores,
spare parts and loose tools |
13 |
8,132,454 |
8,672,390 |
|
| Stock-in-trade |
|
14 |
83,327,463 |
82,931,830 |
|
| Trade debts |
|
15 |
56,523,898 |
51,172,725 |
|
| Advances,
deposits and prepayments |
16 |
8,515,305 |
7,601,867 |
|
| Other
receivables |
|
17 |
59,870,936 |
61,333,884 |
|
| Cash
and bank balances |
|
18 |
3,741,958 |
822,401 |
|
|
---------- |
---------- |
|
|
220,112,014 |
212,535,097 |
|
|
---------- |
---------- |
|
|
318,078,997 |
311,998,770 |
|
|
========== |
========== |
|
|
| NOTES: |
|
|
| 1.
The annexed notes form an integral part of these accounts. |
|
| 2.
Auditor's report is attached. |
|
|
| Date:
30th November, 1998 |
|
|
|
| SAEED ALAM |
|
RAUF ALAM |
MOOSA & COMPANY |
|
| Chief
Executive |
Director |
Chartered Accountants |
|
|
|
|
|
| Profit
& Loss Account for the ended June 30, 1998 |
|
|
|
NOTE |
30-06-98 |
30-06-97 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| Sales |
|
19 |
22,685,424 |
84,622,361 |
|
| Cost
of Sales |
|
20 |
29,810,947 |
64,964,401 |
|
|
---------- |
---------- |
|
| Gross Profit |
|
(7,125,523) |
19,657,960 |
|
|
| Administration
expenses |
|
21 |
6,860,226 |
6,709,973 |
|
| Selling
expenses |
|
22 |
4,379,656 |
3,584,726 |
|
|
---------- |
---------- |
|
|
11,239,882 |
10,294,699 |
|
|
---------- |
---------- |
|
| Operating
Profit/(Loss) |
|
(18,365,405) |
9,363,261 |
|
| Other income |
|
23 |
68,424 |
24,637 |
|
|
---------- |
---------- |
|
|
(18,296,981) |
9,387,898 |
|
|
| Financial
expenses |
|
24 |
8,552,706 |
14,389,421 |
|
| Other
charges |
|
25 |
41,930 |
161,390 |
|
|
---------- |
---------- |
|
|
8,594,636 |
14,550,811 |
|
|
---------- |
---------- |
|
| Loss
before taxation |
|
(26,891,617) |
(5,162,913) |
|
|
| Taxation |
|
| Current |
|
200,000 |
500,000 |
|
| Prior |
|
1,627,571 |
108,871 |
|
|
---------- |
---------- |
|
|
1,827,571 |
608,871 |
|
|
| Loss
after taxation |
|
(28,719,188) |
(5,771,784) |
|
| Unappropriated
loss brought forward |
|
(49,277,612) |
(43,505,828) |
|
|
---------- |
---------- |
|
| Unappropriated
loss carried to Balance Sheet |
|
(77,996,800) |
(49,277,612) |
|
|
========== |
========== |
|
| Note:
The annexed notes form an integral part of these accounts |
|
|
|
| Statement
of Charges in Financial Position for the year ended June 30, 1998 |
|
| (Cash
Flow Statement) |
|
|
|
|
NOTE |
30-06-98 |
30-06-97 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| NET
CASH INFLOW FROM |
|
| OPERATING
ACTIVITIES |
|
A |
8,900,229 |
18,563,375 |
|
|
---------- |
---------- |
|
| Return
on investment |
|
| and
servicing of finance: |
|
|
| Mark-up
/ interest paid |
|
(6,655,624) |
(33,086,588) |
|
| Dividend
received |
|
424 |
424 |
|
|
---------- |
---------- |
|
| Net
cash outflow from return on |
|
| investment
and servicing of finance |
|
(6,655,200) |
(33,086,164) |
|
|
| Taxation |
|
| Tax paid |
|
| (including
tax deducted at source) |
|
(1,370,653) |
(1,456,162) |
|
|
---------- |
---------- |
|
| Net
cash flow from taxation |
|
(1,370,653) |
(1,456,162) |
|
|
| Investing
activities |
|
| Fixed
capital expenditure |
|
(2,206,716) |
(4,009,809) |
|
| Sale
of fixed assets |
|
36,984 |
0 |
|
|
---------- |
---------- |
|
| Net
cash flow from investing activities |
|
(2,169,732) |
(4,009,809) |
|
|
---------- |
---------- |
|
| Net
cash flow before financing activities |
|
(1,295,356) |
(19,988,760) |
|
|
| Financing
activities |
|
| Increase/(Decrease)
in: |
|
| Long
term loans (due to restructuring) |
|
0 |
2,778,459 |
|
| Short
term borrowing |
|
|
4,214,913 |
16,736,155 |
|
|
|
---------- |
---------- |
|
| Net
cash flow from financing activities |
|
4,214,913 |
19,514,614 |
|
|
|
---------- |
---------- |
|
| Increase/(decrease) in cash
& cash |
|
| equivalent |
|
B |
2,919,557 |
(474,146) |
|
|
========== |
========== |
|
|
|
30-06-98 |
30-06-97 |
|
| NOTE: A |
|
RUPEES |
RUPEES |
|
| Reconciliation
of operating profit to |
|
| net
cash flow from operating activities: |
|
|
| Net
loss before taxation |
|
(26,891,617) |
(5,162,913) |
|
|
|
|
| Depreciation |
|
3,666,422 |
3,847,893 |
|
| Mark-up
/ interest expenses |
|
7,726,150 |
13,562,865 |
|
| Dividend
received |
|
(424) |
(424) |
|
| Gain
on disposal of fixed assets |
|
0 |
0 |
|
|
----------- |
----------- |
|
|
11,392,148 |
17,410,334 |
|
|
----------- |
----------- |
|
| Operating
profit before working capital change |
(15,499,469) |
12,247,421 |
|
|
----------- |
----------- |
|
| (Increase)/Decrease
in current assets |
|
|
|
| Stores,
spare & loose tools |
|
539,936 |
703,805 |
|
| Stock-in-trade |
|
(395,633) |
( 14,526,422) |
|
| Trade
debtors |
|
(5,351,173) |
(29,000,060) |
|
| Advances,
deposits & pre-payments |
|
(1,670,356) |
(1,409,627) |
|
| Other
receivables |
|
1,462,948 |
(14,347,536) |
|
|
|
|
| (Decrease)/Increase
in current liabilities |
|
|
|
|
|
|
| Creditors,
accrued & other liabilities |
|
28,987,420 |
64,069,238 |
|
| Workers'
Profit Participation Fund |
|
826,556 |
826,556 |
|
|
----------- |
----------- |
|
|
24,399,698 |
6,315,954 |
|
|
8,900,229 |
18,563,375 |
|
| NOTE: B |
|
=========== |
=========== |
|
| Analysis
of changes in cash and cash |
|
| equivalents
during the year: |
|
|
| Cash
and bank balances as at June 30, 1997 |
|
822,401 |
1,296,547 |
|
| Increase/(decrease)
in |
|
|
|
| cash
and cash equivalents |
|
2,919,557 |
(474,146) |
|
|
---------- |
---------- |
|
| Cash
and bank balances as at June 30, 1998 |
|
3,741,958 |
822,401 |
|
|
=========== |
=========== |
|
|
|
|
|
|
SAEED ALAM |
|
RAUF ALAM |
|
| Dated:
30th November, 1998 |
|
Chief Executive |
Director |
|
|
|
| Notes
to the Account for the year ended June 30, 1998 |
|
|
| 1.
THE COMPANY AND ITS OPERATIONS |
|
|
| Fateh
Industries Limited is incorporated in Pakistan as a public limited company
and is listed |
|
| on
the Karachi Stock Exchange. |
|
|
| The
company is engaged mainly in the manufacturing and sales of footwear of all
kinds. |
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
|
| The
accounts have been prepared under the historical cost convention. The company |
|
| has
not adopted any procedure to determine the impact on the accounts of
inflation or |
|
| changes
in the general level of prices. |
|
|
| 2.2
Fixed Assets |
|
|
| These
are stated at cost less accumulated depreciation except land which is stated
at |
|
| cost. |
|
|
| Depreciation
is calculated on the written down value of assets. Full year's depreciation |
|
| is
charged on additions, while no depreciation is charged on fixed assets
deleted during |
|
| the
year. Depreciation on Plant & Machinery and Tools & Equipments
however is |
|
| charged
on pro-rata basis for the period of use during the year. This change has been |
|
| made
for appropriate presentation of financial statements of the company. Had
there |
|
| been
no change, the depreciation and loss for the year would have been higher by |
|
| Rs.
6.191 million. |
|
|
| Maintenance
and normal repairs are charged to income as and when incurred. Major |
|
| renewals
and improvements are capitalized. Gain or losses on disposal of operating |
|
| fixed
assets is recognized in current year's income. |
|
|
| 2.3.
Taxation |
|
|
| Charge
for current taxation is based on taxable income at. current tax rates after |
|
| considering
the rebates and tax credits available, if any. |
|
|
| The
company does not account for or provide deferred tax liability. It is the
practice |
|
| of
the management for providing tax liability for current year's only. The
management |
|
| is
of the opinion that time difference tax liability will not materially reverse
in |
|
| foreseeable
future. |
|
|
| The
deferred taxation liability due to accelerated rate of depreciation allowance
at the |
|
| current
rate of taxation as at June 30, 1998 including for the current year amounts
to |
|
| approximately
Rs. 2.880 million. |
|
|
| 2.4.
Stores and spares |
|
|
| These
are valued at average cost except items in transit which are stated at
invoice |
|
| value
plus other charges incurred thereon. |
|
|
| 2.5.
Stock-in-Trade |
|
|
| These
are valued: |
|
| Raw
materials |
|
At cost plus expenses
incurred. |
|
| Goods
in process and packing material. |
At average cost. |
|
| Finished
goods |
|
Lower of the net
realisable value or |
|
|
cost. The net realisable
value signi- |
|
