| TREET CORPORATION LIMITED. |
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| Annual
Reports 2002 |
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| BOARD
OF DIRECTORS |
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Sycd Wajid Ali Chairman |
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Syed Shahid Ali Chief
Executive Officer |
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Dr, Mrs. Niloufer Mahdi |
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Syeda Feriel Rifaat Ali |
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Mr. Basil H. Syed
(Nominee International Genera] Insurance Company of Pakistan Limited) |
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Mr. Asit'Jameel (Nominee
National Investment Trust Limited) |
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Syed Sheharyar Ali |
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Mr. Muhammad Shafique
Anjum |
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| BOARD
AUDIT COMMITTEE |
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Mr. Basil H. Syed
Chairman |
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Mr. AsifJameel Member |
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Syed Sheharyar Ali Member |
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| COMPANY
SECRETARY |
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| &
CHIEF FINANCIAL OFFICER |
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AnwarKhalil Sheikh |
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| EXTERNAL
A UDITORS |
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TaseerHadiKhalid&Co. |
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Chartered Accountants |
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Lahore. |
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| INCOME
TAX CONSULTANTS |
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Gardezi & Co. |
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Chartered Accountants |
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Lahore. |
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| LEGAL ADVISORS |
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Salim & Baig,
Advocates - Lahore. |
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| BANKERS |
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Standard Chartered Bank
Limited Bank Al-Habib Limited |
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Askari Commercial Bank
Limited Habib Bank Limited |
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Mashreq Bank psc.
National Bank of Pakistan |
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United Bank Limited Habib
Bank A.G. Zurich |
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PICIC Commercial Bank
Limited |
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| REGISTERED
OFFICE |
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| &
SHARE DEPARTMENT |
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72-B, Kot Lakhpat
Industrial Area, Lahore. |
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Phones: 042-5830881,
5156567 & 5122296 |
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Fax: 042-5836770 E-mail:
treet@nexlinx.net.pk & treet@tele.net.pk |
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| FACTORIES |
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| Hali
Road, P.O. Box No. 308, Hyderabad. |
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| Phones
:0221-880846,883058 & 883174 |
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| Fax : 0221-880172 |
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| E-mail
: treet@hyd.netasia.com.pk |
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| 72-B,
Kot Lakhpat Industrial Area, Lahore. |
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| Phones
: 042-5830881.5865907,5865947,5865951 : 042-5156567.5156568, 5156572, 5156577
Fax : 042-5836770 |
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| E-mail
: treet@nexlinx.net.pk & treet@tele.net.pk |
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| NATIONAL
SALES OFFICE |
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| 56,
Shahrah-e-Quaid-e-Azam, Lahore. |
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| Phones
: 042-6303680,6303501,6303502 |
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| Fax : 042-6303681 |
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| E-mail
: treet @brain.net.pk |
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| KARACHI OFFICE |
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| 17-Abdullah
Haroon Road, Karachi. Phone : 021-5681576 |
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| Fax
: 021-5681575 |
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| E-mail : treet@cyber.net.pk |
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| Company's History |
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| The
Ali family of Pakistan commenced its business activities in South East Asia
about a century |
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| ago
under the dynamic leadership of Late Sir Syed Muratib Ali, a nationally
respected an honored |
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| pioneer.
His unremitting efforts and devotion to the highest standard of integrity and
honest dealings |
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| contributed
in no small measure to the success of his ventures in the highly competitive
environment |
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| of
pre-independence days in subcontinent. It is a legacy that has been
maintained to the present. |
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| |
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| From
1947 onward, the family diversified from the main business of agriculture
& trading into the |
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| fledgling
industries of soaps, vegetable oil and razor blades in 1954 & 1956. The
enterprises were |
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| consolidated
in to a Public Limited Company, quoted on Pakistan Stock Exchange in 1959.
Later, |
|
| in
1977, the razor blade and soap operations were managed under the rubric of
new company, the |
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| Treet
Corporation, also a Public Limited Company, Quoted on the Stock Exchanges. |
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| |
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| In
1984, Treet set up a second factory, the machinery and technology was
imported from American |
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| Safety
Razor Company Staunton USA to manufacture super quality, double edge
stainless steel |
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| blades
& bounded shaving system. In 1997 Treet obtained ISO-9002 Certification
from BSI, UK. |
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| |
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| The
Manufacturing Operations of blades are located in Hyderabad and Lahore and
that of Soaps in |
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| Gujranwala
and the marketing of all brands produced through these locations are managed
from |
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| marketing
and sales offices situated in Lahore. |
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| |
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| Treet's
distribution network covers more than 350 cities in Pakistan, 35,000
retailers directly and |
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| indirectly.
Through the extensive distribution network Treet enjoys 75% Share of the
Pakistan |
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| domestic
market'in double edge blades category and 60% share of exports of total razor
blades |
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| from Pakistan. |
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| |
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| Treet
Corporation Limited, the leading manufacturer of top quality shaving products
for the past |
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| 45
years, received ISO-9002 certification in 1997 from BSI, U.K., one of the
initial |
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| recipients
of certificate in pakistan. |
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| |
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| Treet
practices and closely monitors quality through Total Quality Management.
Quality products |
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| for
the satisfaction of its customer is the main objective of the company. Hence
ISO-9002 is an |
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| assurance
that Treet meets the world quality standards and its products can compete in
the world |
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| market on quality. |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| |
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| Notice
is hereby given that the Twenty Fifth Annual General Meeting of Treet
Corporation Limited will be held at |
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| Ambassador
Hotel, 07-Davis Road, Lahore on Tuesday October 22, 2002 at 10.00 A.M. to
transact the following Ordinary |
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| and
Special Business: |
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| |
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| A. ORDINARY BUSINESS |
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| |
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| 1 To confirm the minutes of previous
Extraordinary General Meeting of the shareholders held on June 13, 2002. |
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| 2 To receive, consider and adopt the
statement of audited accounts for the year ended June 30, 2002 alongwith |
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| the
reports of Auditor and Directors thereon. |
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| |
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| 3 To approve and declare a dividend @ 133%
(Rs. 13.30 per share) as recommended by the Board of Directors. |
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| |
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| 4 To appoint Auditors of the Company for
the year ending June 30, 2003 and to fix their remuneration. The
retiring |
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| Auditors
M/S. Taseer Hadi Khalid & Co., Chartered Accountants offer themselves for
re-appointment. |
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| |
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| B. SPECIAL BUSINESS |
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| |
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| 5 To consider and pass the following
ordinary resolution as recommended by the Board: |
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| "RESOLVED
that consent be and is hereby given for the payment, as remuneration to Syed
Shahid Ali |
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| Chief
Executive Officer/Managing Director, of the sum not exceeding Rs. 3,600,000=/
per annum |
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| effective
from July 01, 2002 and for the provision to him of housing, transport,
medical and leave fare |
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| facilities
and other benefits or relating to his office in accordance with the Company's
rules from time |
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| to time enforced." |
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| |
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| 6 To transact any other business with the
permission of the Chair. |
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| |
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| By
order of the Board |
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| Lahore:
September 20, 2002 |
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| |
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| (ANWAR KHALIL SHEIKH) |
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| Company Secretary |
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| |
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| STATEMENT
U/S 160 (1) (b) OF THE COMPANIES ORDINANCE 1984. |
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| Item
No. 5 of the Agenda - Remuneration of Chief Executive Officer |
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| The
remuneration of Syed Shahid Ali holding the position of Chief Executive
Officer/Managing Director and drawing |
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| Rs.l,380,000/=per
annum from July 1, 2000 is being revised with effect from July I, 2002 as
recommended by the Board |
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| of Directors |
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| |
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| Syed
Shahid Ali is interested in this business to the extent of his
remuneration. |
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| Notes: |
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| |
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| 1 The share transfer Books of the Company
will remain closed from October 16, 2002 to October 22, |
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| 2002
(both days inclusive). |
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| |
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| 2 Any member of the Company entitled to
attend and vote may appoint another member as his/her proxy |
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| to
attend and vote instead of him/her. Proxies must be received at the
Registered Office of the Company |
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| not
less than 48 hours before the time of holding the Meeting. |
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| |
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| 3 The shareholders having shares
deposited with the Central Depository Company (CDC) are requested |
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| to
bring their original National Identity Card or passport and CDC account
number for verification. |
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| |
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| 4 Members are requested to promptly
notify the Company of any change in their addresses. |
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| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
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| |
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| The
directors of your company take pleasure in presenting their Annual Report
together with your |
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| company's
Annual Audited Financial Statements for the year ended June 30, 2002. |
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| ECONOMIC
CONDITIONS |
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| |
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| Pakistan
economy came under immense pressures following the September 11, 2001
terrorist attacks |
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| on
United States of America and its aftermath and global concern for war against
terrorism, which |
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| led
to attacks on Afghanistan. This inexorable situation acted as a whirlpool of
economic difficulties, |
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| by
not only disrupting the trading activities, but also increasing the cost of
international trade owing |
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| to
escalation in freight and war risk insurance charges. This disruption has
caused an obvious decline |
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| in
exports and imports. Furthermore, the overall investment is also on the wane. |
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| |
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| Nevertheless,
there have been some positive developments also and the worst economic
conditions |
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| have
been neutralized by removal of economic sanctions, foreign aid, rescheduling
of loans, grants |
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| and
assistance to set off the budgetary gap as well as support to the balance of
payments. |
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| COMPANY
OPERATIONS |
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| Despite
harsh economic environment, the financial results of your Company for the
year 2002 |
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| epitomizes
and incessant growth. By the grace of Almighty Allah and the excellent
efforts of all our |
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| colleagues,
the sales revenue of your Company has increased by 16.16% over last year.
Segment |
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| wise
analysis portray an increase of 23.44% in local razor blade sales and 7.72%
in razor blade |
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| exports,
however the sales revenue from soaps has been reduced by 5.64% as compared to
last year. |
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| This
decline in soap sales is mainly due to relentless economic drought, coupled
with the stiff |
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| competition
given by major competitors. Your Company has also achieved an increase of
9.35% in |
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| the
production of razor blades over last year. |
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| |
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| The
company posted profit after tax at Rs. 138.577 million which is up by 174.44%
against Rs. |
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| 50.494
million in previous year. Net profit as a percentage of sales has also
increased to 15.90% |
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| as
compared to 6.73% of last year. The earning per share comes to Rs 33.13 as
compared to Rs. |
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| 12.07
of corresponding year. The elements contributing towards the increase in the
Company Profits |
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| are
substantial Growth in Sales revenue, reduction in costs due to effective and
timely application |
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| of
controls at each activity level and efficiently managed cash flow. |
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| |
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| The
financial results of your company are as follows:- |
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| |
2002 |
2001 |
|
| |
(Rupees in thousands) |
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| |
| Profit before taxation |
|
197,385 |
94,376 |
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| Less:
provision for taxation |
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| - Current |
|
58,808 |
43,262 |
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| - Prior |
|
- |
620 |
|
| |
58,808 |
43,882 |
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| Profit after taxation |
|
138,577 |
50,494 |
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| Add
: Un-appropriated profit brought forward |
|
86 |
103 |
|
| Effect
of change in accounting policy |
|
6,364 |
- |
|
| |
7,579 |
- |
|
| |
14,029 |
103 |
|
| Profit
available for appropriation |
|
152,606 |
50,597 |
|
| Appropriation: |
|
|
|
| Proposed
cash dividend |
|
55,623 |
20,911 |
|
| Transfer
to general reserve |
|
96,900 |
29,600 |
|
| |
83 |
86 |
|
| Earnings per share |
|
33.13 |
12.07 |
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| |
|
| The
Directors of your company has recommended a cash dividend ofRs. 13.30 per
share i.e. @ 133 %. |
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| CODE
OF CORPORATE GOVERNANCE |
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| |
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| While
the world has witnessed a major stride forward and a growing interest for
good corporate governance, |
|
| the
need to have a Code responsive to our objective circumstances was being
increasingly felt. Therefore, the |
|
| need
to have a frame work of good corporate governance has never been as impelling
as it is today. To cater |
|
| these
needs the Securities and Exchange Commission of Pakistan (SECP) has issued a
Code of Corporate |
|
| Governance
and directed to all stock exchanges to insert its clauses in their respective
listing regulations. The |
|
| management
of your company welcomes this act of SECP for implementation of good
governance in corporate |
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| sector
and is pleased to incorporate and implement its requirements in your Company. |
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| |
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| Statements
in Compliance of Code |
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| |
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| In
compliance to the Code, the Board of Directors of your Company states that: |
|
| |
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| • The financial statements, prepared by
the management of your company, present fairly its state |
|
| of
affairs, the result of its operations, cash flows and changes in equity. |
|
| |
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| • Proper books of account have been
maintained by your company. |
|
| |
|
| •
Appropriate accounting policies are consistently applied by your Company in
the preparation |
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| of
financial statements, and accounting estimates are based on reasonable and
prudent judgment. |
|
| |
|
| •
International Accounting Standards, as applicable in Pakistan, have been
followed in the |
|
| preparation
of these financial statements and any departure therefrom, if any, has
adequately |
|
| been disclosed. |
|
| |
|
| •
The System of Internal Control, being implemented in your Company is sound
and has been |
|
| effectively
persisted throughout the year. |
|
| |
|
| •
Keeping in view of the financial position of your Company, we do not have any
significant |
|
| doubt
upon its continuance as a going concern. |
|
| |
|
| •
There also has not been any material departure from the best practices of
corporate governance, |
|
| as
detailed in the listing regulations, during the year under review. |
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| |
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| Employee
Benefit Funds |
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| |
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| The
audit of the financial statements ofTreet Corporation Limited Employees
Provident Fund, Treet Corporation |
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| Limited
Employees Gratuity Fund and Treet Corporation Limited Staff Retirement
Benefit Fund for the year |
|
| 2002
has not yet been completed, hence, the values of their respective investments
cannot be determined with |
|
| certainty. |
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| |
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| Audit Committee |
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| |
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| In
compliance with the Code, the Board of Directors of your Company has
established an Audit Committee |
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| comprising
of the following directors as its members. |
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| |
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| 1. Mr. BasitH.Syed |
|
(Chairman) |
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| 2. Mr. Asif Jameel |
|
(Member) |
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| 3.
Syed Sheharyar Ali |
|
(Member) |
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| |
|
| Internal Audit |
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| |
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| In
compliance with the Code, the Board of Directors of your Company has also
established an Internal Audit |
|
| Function
to monitor and review the adequacy and implementation of Internal Control at
each level of your |
|
| Company. |
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| |
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| Key
Operating and Financial Data |
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| |
|
| Following
is the key operating and financial data of your Company for the last six
years:- |
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| |
|
| |
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
|
| |
| Sales |
|
871,577 |
750,293 |
634,736 |
667,674 |
774,267 |
689,502 |
|
| Gross profit |
|
282,452 |
181,808 |
137,221 |
168,214 |
184,272 |
114,553 |
|
| Profit before taxation |
|
197,385 |
94,376 |
51,641 |
78,887 |
53,390 |
40,432 |
|
| Profit after taxation |
|
138,577 |
50,494 |
29,590 |
50,568 |
26,490 |
29,540 |
|
| Shareholders' equity |
|
317,254 |
220,357 |
190,774 |
173,312 |
143,655 |
117,165 |
|
| Fixed assets-net |
|
118,690 |
127,876 |
143,551 |
138,741 |
124,038 |
104,881 |
|
| Total assets |
|
706,308 |
539,545 |
471,086 |
475,363 |
405,066 |
371,720 |
|
| Total liabilities |
|
389,054 |
319,188 |
280,312 |
302,051 |
261,411 |
254,555 |
|
| Current assets |
|
571,422 |
397,760 |
309,516 |
313,499 |
252,940 |
226,486 |
|
| Current liabilities |
|
380,163 |
224,899 |
193,552 |
216,422 |
182,033 |
206,434 |
|
| Dividend |
|
133% |
50% |
29% |
50% |
- |
15% |
|
| Important Ratios |
|
| Profitability |
|
| Gross profit |
|
32.41 |
24.23 |
21.62 |
25.19 |
23.8 |
16.61 |
|
| Profit before taxation |
|
22.65 |
12.58 |
8.14 |
11.82 |
6.9 |
5.86 |
|
| Profit after taxation |
|
15.9 |
6.73 |
4.66 |
7.57 |
3.42 |
4.28 |
|
| Return
to Shareholders |
|
| Return
on equity before taxation |
62.22 |
42.83 |
27.07 |
45.52 |
37.17 |
34.51 |
|
| Return
on equity after taxation |
43.68 |
22.91 |
15.51 |
29.18 |
18.44 |
25.21 |
|
| Earnings per share |
|
33.13 |
12.07 |
7.08 |
12.09 |
6.33 |
7.06 |
|
| Liquidity / Leverage |
|
| Current ratio |
|
1.5 |
1.77 |
1.6 |
1.45 |
1.39 |
1.1 |
|
| Breakup
value per share |
75.86 |
52.69 |
45.62 |
41.44 |
34.35 |
28.01 |
|
| Total
liabilities to equity (Times) |
0.82 |
0.69 |
0.68 |
0.57 |
0.55 |
0.46 |
|
| |
|
| Meetings
of the Board of Directors |
|
| |
|
| During
the year, the Board of Directors of your company has met three times and the
attendance at each of these |
|
| meetings
is as follows:- |
|
| |
|
| Name of Directors |
|
Meetings of the Board
During the Year 2002 Held on |
|
| |
| |
November 29,2001 |
January 28,2002 |
April 18,2002 |
|
| |
| Syed Wajid Ali |
|
Present |
Present |
Present |
|
| Syed Shahid Ali |
|
Present |
Present |
Leave of Absence |
|
| Dr.
Mrs. Niloufer Mahdi |
Present |
Leave of Absence |
Present |
|
| Ms.
S. Feriel Rifaat Ali |
Leave of Absence |
Leave of Absence |
Present |
|
| Mr. Basit H. Syed |
|
Present |
Leave of Absence |
Present |
|
| Mr. AsifJameel |
|
Present |
Present |
Leave of Absence |
|
| Mr.
Abdul LatifUqaili |
Present |
Present |
N.A |
|
| (Resigned
on April 18,2002) |
|
| Syed Sheharyar Ali |
|
N.A |
N.A |
Present |
|
| (Appointed
on April 18,2002) |
|
| |
|
| Pattern
of Shareholding |
|
| |
|
| The
pattern of shareholding of your Company as on June 30,2002 is annexed with
this report. This statement |
|
| is
in accordance with the ammendments made through the Code. |
|
| |
|
| FUTURE
OUTLOOK |
|
| |
|
| Your
company has consistently been performing well in recent years, despite of the
economic drought which |
|
| continues
to affect badly the overall economy in the country. Having journeyed
successfully through yet another |
|
| thorny
year, it is encouraging to see that your company has achieved a stupendous
growth rate and looks forward |
|
| to
the future outlook with a greater optimism. Our over all dedication is to
focus on the amplification of your |
|
| Company
to achieve superior returns for you through a growth in the sales by
improving our sales strategy, |
|
| keeping
a vigil in further curbing the costs and investing in lucrative ventures. |
|
| |
|
| INVESTMENTS |
|
| |
|
| The
management of your Company is pleased to inform you that, acting upon the
approval given by you in the |
|
| Extraordinary
General Meeting held on June 13,2002, for the investment in the equity
instruments of Packages |
|
| Limited,
an associated company, the management of your company has purchased 298,500
equity shares for |
|
| an
amount ofRs. 20.032 million. We are confident that this investment will prove
to be a good addition in the |
|
| prosperity
of your Company. |
|
| |
|
| CHANGES
IN THE BOARD OF DIRECTORS |
|
| |
|
| Mr.
Abdul LatifUqaili the nominee of Investment Corporation of Pakistan (ICP)
resigned from the Board of |
|
| Directors
on April 18,2002. The Board wishes to place on record its appreciation for
the valuable services |
|
| rendered
by him for the betterment of your Company. |
|
| |
|
| The
directors of your company welcome Syed Sheharyar Ali who had been appointed
at the meeting of the |
|
| Board
of Directors held on April 18,2002 to fill in the casual vacancy arising out
of Mr. Abdul LatifUqaili's |
|
| resignation
and who was subsequently duly elected for a further term of three years at
the Extraordinary General |
|
| Meeting
held on June 13,2002. We expect your company to benefit from his induction in
the Board. |
|
| |
|
| AUDITORS |
|
| |
|
| The
Audit Committee of your company has recommended that, the present auditors,
Messrs. Taseer Hadi Khalid |
|
| &
Company Chartered Accountants due to retire and being eligible, are offering
themselves for reappointment, |
|
| may
be appointed as auditors of your Company for another term. |
|
| |
|
| ACKNOWLEDGEMENTS |
|
| |
|
