| Fateh Industries Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
| Notice
of Annual General Meeting |
|
|
| Notice
is hereby given that the 14th Annual General Meeting of the Shareholders of
FATEH |
|
| INDUSTRIES
LIMITED, will be held on Monday the 27th December, 1999 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 Extra Ordinary General Meeting of the Company
held on |
|
| June
28, 1999. |
|
|
| 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, 1999. |
|
|
| 3.
To appoint Auditors for the year 1999-2000 and fix their remuneration. |
|
|
| 4.
Any other business with permission of the Chair. |
|
|
|
By order of the Board |
|
|
FATEH INDUSTRIES LIMITED |
|
| Hyderabad |
|
| 6th
December, 1999 |
|
Muhammad Iqbal Khan |
|
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed for 7 days from 21
st to |
|
| 27th
December, 1999 (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 |
|
|
| 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 |
|
|
|
| I,
on behalf of the Board of directors welcome you on 14th Annual General
Meeting of your company |
|
| M/s.
Fateh Industries Ltd., and present before you the Audited Accounts and the
Auditors' Report |
|
| for
the year ended on June 30, 1999. The activities of the Company are summarized
as follows. |
|
|
| Operating
Results |
|
| Sales
during the year 1998-99 1.75% higher than the previous year but continuity in
the Sales Orders |
|
| was
not observed and most of the sales were made out of the stock. Therefore the
Management |
|
| had
to take a bitter pill by deciding temporary close down of production
activities and lay off remaining |
|
| workers
with effect from January l st 1999. The Management is however, considering
different |
|
| aspects
of manoeuvring activities of your company in order to vitalize the business. |
|
|
| During
the year under review the Company has earned an operating profit of Rs. 1.9
million which |
|
| was
eaten away by the heavy load of financial cost. However the net loss went
down to Rs. 11.2 |
|
| million
from Rs. 26.89 million of last years. |
|
|
| Financial
results |
|
| Financial
results for the year 1998-99 were as follows; |
|
|
Rupees (000) |
|
| Operating
Profit |
|
1,873 |
|
| Other
Income |
|
66 |
|
|
---------- |
|
|
1,939 |
|
| Financial
& Other Charges |
|
13,152 |
|
|
---------- |
|
| Loss
before taxation |
|
11,213 |
|
| Provision
for taxation |
|
141 |
|
|
---------- |
|
|
11,354 |
|
| Un-appropriated
loss brought forward |
|
77,997 |
|
|
---------- |
|
| Loss
carried over to Balance Sheet |
|
89,351 |
|
|
========== |
|
| Auditors'
Observation |
|
| The
Auditors of the Company while qualifying their report under review have
observed that |
|
| accounts
have been prepared on going concern basis the validity of which depends on
the |
|
| support
of Directors towards providing working capital and other finance to the
Company. |
|
| Your
Directors fully endorse the view point of the Auditors of the Company. |
|
|
| As
regards the Auditor's 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. |
|
|
| Pattern
of Shareholding |
|
| The
pattern of shareholding required under section 236 of the Companies Ordinance
1984 is annexed. |
|
|
| Appointment
of Auditors |
|
| The
retiring auditors M/s. Moosa & Company, Chartered Accountant, being
eligible offer |
|
| themselves
for appointment. |
|
|
| Staff
and Management Relations |
|
| The
Board of directors places on record its sincere appreciations on the services
rendered by the |
|
| company's
employees and the co-operation received from the Bankers. |
|
|
|
SAEED ALAM |
|
|
Chairman |
|
| Dated:
29th November, 1999 |
|
Board of Directors |
|
|
|
| Pattern
of Shareholdings as at June 30, 1999 |
|
|
| NO. OF |
|
TOTAL SHARES |
|
| SHAREHOLDERS |
|
SHAREHOLDING |
HELD |
|
|
| 453 |
From |
1 |
To |
100 |
38,133 |
|
| 120 |
From |
101 |
To |
500 |
32,979 |
|
| 39 |
From |
501 |
To |
1000 |
26,625 |
|
| 6 |
From |
1001 |
T0 |
5000 |
12,600 |
|
| 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 |
|
| 1 |
From |
45001 |
To |
50000 |
46,853 |
|
| 1 |
From |
50001 |
To |
55000 |
51,371 |
|
| 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 |
1000130 |
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 |
141.46 |
|
| 1 |
From |
165000 |
To |
170000 |
169,333 |
|
| 1 |
From |
190001 |
To |
195000 |
192,527 |
|
| ---------- |
|
---------- |
|
| 646 |
|
Total |
|
2,000,000 |
|
| ========== |
|
========== |
|
|
|
|
|
| CATEGORIES
OF |
|
|
SHARES |
|
|
| SHAREHOLDERS |
|
NUMBERS |
HELD |
PERCENTAGE |
|
|
| Individuals |
|
641 |
1,946,917 |
97.35 % |
|
| Investment
Companies |
|
3 |
51,499 |
2.57% |
|
| Insurance
Companies |
|
0 |
0 |
0.00% |
|
| Joint
Stock Companies |
|
2 |
1,584 |
0.08% |
|
| Financial
Institutions |
|
0 |
0 |
0.00% |
|
| Modaraba
Companies others |
|
0 |
0 |
0.00% |
|
|
---------- |
---------- |
---------- |
|
| Total |
|
646 |
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, 1999 and |
|
| the
related profit & loss account and statement of changes in financial
position (cash flow statement) |
|
| together
with the notes forming part thereof for the year then ended. |
|
|
| The
accounts have been prepared on a going concern basis the validity of which
depends on |
|
| the
support from the Directors of the Company towards providing working capital
and other |
|
| finances
in the absence of which the basis would not be valid and adjustment would
have to |
|
| be
made for any gain or loss arising on realization of the Company's assets. |
|
|
| Subject
to the above, we state that we have obtained all the information and
explanations which |
|
| to
the best of our knowledge and belief were necessary for the purpose 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 |
|
| d.
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, 1999 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: 29th November, 1999 |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 1999 |
|
|
| CAPITAL
AND LIABILITIES |
|
NOTE |
30-06-99 |
30-06-98 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
| Authorised
Capital |
|
| 10,000,000
ordinary shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
| 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 |
|
|
(89,351,249) |
(77,996,800) |
|
|
|
---------- |
---------- |
|
|
|
(39,351,249) |
(27,996,800) |
|
| 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 |
246,374,022 |
57,951,068 |
|
| Creditors,
accrued and other liabilities |
|
8 |
75,125,099 |
258,577,646 |
|
| Workers'
profit participation fund |
|
9 |
0 |
6,708,127 |
|
| Provision
for taxation |
|
10 |
200,000 |
200,000 |
|
|
---------- |
---------- |
|
|
321,699,121 |
323,436,841 |
|
|
---------- |
---------- |
|
|
304,986,828 |
318,078,997 |
|
|
========== |
========== |
|
| PROPERTY
AND ASSETS |
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
11 |
98,153,312 |
97,949,417 |
|
|
|
|
| LONG
TERM INVESTMENTS |
|
12 |
17,566 |
17,566 |
|
|
| CURRENT
ASSETS |
|
| Stores,
spare parts and loose tools |
|
13 |
8,158,130 |
8,132,454 |
|
| Stock-in-trade |
|
14 |
74,133,629 |
83,327,463 |
|
| Trade debts |
|
15 |
60,011,410 |
56,523,898 |
|
| Advances,
deposits and prepayments |
|
16 |
14,663,879 |
8,515,305 |
|
| Other
receivables |
|
17 |
49,721,015 |
59,870,936 |
|
| Cash
and bank balances |
|
18 |
127,887 |
3,741,958 |
|
|
|
---------- |
---------- |
|
|
304,986,828 |
318,078,997 |
|
|
=========== |
=========== |
|
| NOTES: |
|
|
| 1.
The annexed notes form an integral part of these accounts. |
|
| 2.
Auditor's report is attached. |
|
|
| Date:
29th November, 1999 |
|
|
| SAEED
ALAM |
|
RAUF ALAM |
MOOSA & COMPANY |
|
| Chief
Executive |
|
Director |
|
Chartered Accountants |
|
|
|
| Profit
& Loss Account for the year ended June 30, 1999 |
|
|
|
NOTE |
30-06-99 |
30-06-98 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
|
| Sales |
|
19 |
23,085,795 |
22,685,424 |
|
| Cost of Sales |
|
20 |
15,532,826 |
29,810,947 |
|
|
---------- |
---------- |
|
| Gross
Profit/(Loss) |
|
7,552,969 |
(7,125,523) |
|
|
| Administration
expenses |
|
21 |
4,305,788 |
6,860,226 |
|
| Selling
expenses |
|
22 |
1,374,071 |
4,379,656 |
|
|
---------- |
---------- |
|
|
5,679,859 |
11,239,882 |
|
|
| Operating
Profit/(Loss) |
|
1,873,110 |
(18,365,405) |
|
| Other
income |
|
23 |
66,000 |
68,424 |
|
|
---------- |
---------- |
|
|
1,939,110 |
(18,296,981) |
|
|
| Financial
expenses |
|
24 |
13,132,353 |
8,552,706 |
|
| Other
charges |
|
25 |
19,590 |
41,930 |
|
|
---------- |
---------- |
|
|
13,151,943 |
8,594,636 |
|
|
---------- |
---------- |
|
| Loss
before taxation |
|
(11,212,833) |
(26,891,617) |
|
|
| Taxation |
|
| Current |
|
200,000 |
200,000 |
|
| Prior |
|
(58,384) |
1,627,571 |
|
|
---------- |
---------- |
|
|
141,616 |
1,827,571 |
|
|
---------- |
---------- |
|
| Loss
after taxation |
|
(11,354,449) |
(28,719,18'8) |
|
| Unappropriated
loss brought forward |
|
(77,996,800) |
(49,277,612) |
|
|
---------- |
---------- |
|
| Unappropriated
loss carried to Balance Sheet |
|
(89,351,249) |
(77,996,800) |
|
|
=========== |
=========== |
|
| Note:
The annexed notes form an integral part of these accounts. |
|
|
|
SAEED ALAM |
RAUF ALAM |
|
MOOSA & COMPANY |
| Dated:
29th November, 1999 |
|
Chief Executive |
Director |
|
Chartered Accountants |
|
|
| Statement
of Changes in Financial Position for the year ended June 30,1999 |
|
| (Cash
Flow Statement) |
|
|
NOTE |
30-06-99 |
30-06-98 |
|
|
NO. |
RUPEES |
RUPEES |
|
|
| NET
CASH INFLOW FROM |
|
| OPERATING ACTIVITIES |
A |
|
(180,504,053) |
8,900,229 |
|
|
---------- |
---------- |
|
| Return
on investment |
|
| and
servicing of finance: |
|
|
| Mark-up
/ interest paid |
|
(10,432,353) |
(6,655,624) |
|
| Dividend
received |
|
0 |
424 |
|
|
---------- |
---------- |
|
| Net
cash outflow from return on |
|
| investment
and servicing of finance |
|
(10,432,353) |
(6,655,200) |
|
|
| Taxation |
|
| Tax paid |
|
| (including
tax deducted at source) |
|
(48,198) |
(1,370,653) |
|
|
---------- |
---------- |
|
| Net
cash flow from taxation |
|
(48,198) |
(1,370,653) |
|
|
| Investing
activities |
|
| Fixed
capital expenditure |
|
(1,098,226) |
(2,206,716) |
|
| Sale
of fixed assets |
|
45,805 |
36,984 |
|
|
---------- |
---------- |
|
| Net
cash flow from investing activities |
|
(1,052,421) |
(2,169,732) |
|
|
---------- |
---------- |
|
| Net
cash flow before financing activities |
|
(192,037,025) |
(1,295,356) |
|
|
| Financing
activities |
|
| Increase/(Decrease)
in: |
|
| Short
term borrowing |
|
188,422,954 |
4,214,913 |
|
|
---------- |
---------- |
|
| Net
cash flow from financing activities |
|
188,422,954 |
4,214,913 |
|
|
---------- |
---------- |
|
| Increase/(decrease)
in cash & cash equivalent |
|
B |
(3,614,071) |
2,919,557 |
|
|
========== |
========== |
|
|
| NOTE: A |
|
| Reconciliation
of operating profit to |
|
| net
cash flow from operating activities: |
|
|
| Net
loss before taxation |
|
(112,12,833) |
(26,891,617) |
|
|
| Depreciation |
|
848,526 |
3,666,422 |
|
| Mark-up/interest
expenses |
|
13,132,353 |
7,726,150 |
|
| Dividend
received |
|
0 |
(424) |
|
|
---------- |
---------- |
|
|
13,980,879 |
11,392,148 |
|
|
---------- |
---------- |
|
| Operating
profit before working capital change |
|
2,768,046 |
(15,499,469) |
|
| (Increase)/Decrease
in current assets |
|
| Stores,
spare & loose tools |
|
(25,676) |
539,936 |
|
| Stock-in-trade |
|
9,193,834 |
(395,633) |
|
| Trade
debtors |
|
(3,487,512) |
(5,351,173) |
|
| Advances,
deposits & pre-payments |
|
(6,241,992) |
(1,670,356) |
|
| Other
receivables |
|
10,149,921 |
1,462,948 |
|
|
| (Decrease)/Increase
in current liabilities |
|
|
| Creditors,
accrued & other liabilities |
|
(186,152,547) |
28,987,420 |
|
| Workers'
Profit Participation Fund |
|
(6,008,127) |
826,556 |
|
|
---------- |
---------- |
|
|
(183,272,099) |
24,399,698 |
|
|
---------- |
---------- |
|
|
(180,504,053) |
8,900,229 |
|
|
=========== |
=========== |
|
| NOTE: B |
|
| Analysis
of changes in cash and cash |
|
| equivalent
during the year: |
|
|
| Cash
and bank balances as at June 30, 1998 |
|
3,041,958 |
822,401 |
|
| Increase/(decrease)
in |
|
|
|
| cash
and cash equivalents |
|
(3,614,071) |
2,919,557 |
|
|
---------- |
---------- |
|
| Cash
and bank balances as at June 30, 1999 |
|
127,887 |
3,741,958 |
|
|
=========== |
=========== |
|
|
SAEED ALAM |
RAUF ALAM |
|
| Dated
· 29th November, 1999 |
|
Chief Executive |
Director |
|
|
|
| Notes
to the Accounts for the year ended June 30, 1999 |
|
|
| 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 fixed assets 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. 8.737 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 |
