| TREET CORPORATION LIMITED |
|
|
|
|
|
|
|
| Annual
Report 1997 |
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|
|
| Contents |
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| BOARD OF DIRECTORS |
|
| NOTICE OF MEETING |
|
| REPORT
OF DIRECTORS |
|
| AUDITORS' REPORT |
|
| BALANCE SHEET |
|
| PROFIT AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES TO THE ACCOUNTS |
|
|
|
| Board
of Directors |
|
|
| SYED
WAJID ALl |
|
Chairman |
|
| SYED
ASAD ALl |
|
Vice Chairman |
|
| SYED
SHAHID ALl |
|
Managing Director |
|
| BEHRAM
HASAN |
|
| S.
QAMAR ALl ZAIDI |
|
| MUSHTAQ
H. KHWAJA |
|
| N.Z.
MAMA |
|
|
| COMPANY
SECRETARY |
|
| MUHAMMAD
RASHEED |
|
|
| AUDITORS |
|
| TASEER
HADI KHALID & CO. |
|
| CHARTERED-ACCOUNTANTS |
|
| KARACHI |
|
|
| REGISTERED
OFFICE |
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| KANDAWALA
BUILDING |
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| M.A.JINNAH
ROAD |
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| KARACHI-74400 |
|
|
| BANKERS |
|
| ANZ
GRINDLAYS BANK p.l.c. - LAHORE |
|
| NATIONAL
BANK OF PAKISTAN - KARACHI |
|
|
| LEGAL
ADVISOR |
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| HUSSAIN
AND HAlDER-KARACHI |
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|
| FACTORIES |
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| HALl
ROAD, HYDERABAD-71900 |
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| 72-B,
KOT LAKHPAT INDUSTRIAL AREA, |
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| LAHORE |
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|
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| Notice
of Meeting |
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|
| NOTICE
IS HEREBY GIVEN that the Twentieth Annual General Meeting of Treet
Corporation |
|
| Limited
will be held at Beach Luxury Hotel, Moulvi Tameezuddin Khan Road, Karachi on |
|
| Friday,
27 March 1998 at 4:30 p.m. to transact the following business: |
|
|
| Ordinary
Business |
|
|
| 1.
To confirm the minutes of the last General Meeting held on 21st December
1996. |
|
|
| 2.
To receive and consider the Annual Audited Accounts of the Company for the
year ended |
|
| 30th
June 1997, together with the Auditor's and Director's Report there on. |
|
|
| 3.
To approve and declare dividend @ 15% as recommended by the Board of
Directors. |
|
|
| 4.
To appoint the Auditors of the Company for the period ended 30 June 1998, and
to fix their |
|
| remuneration.
The retiring auditors M/s. Taseer Hadi Khalid & Co., Chartered
Accountants |
|
| offer
themselves for re-appointment. |
|
|
| 5.
To transact the following special business. |
|
|
| Special
Business |
|
|
| a)
To consider the dis-investment of the company's entire shareholding in
Zulfeqar Industries |
|
| Limited
and if approved, to pass the following resolution as Special Resolution: |
|
|
| "Resolved
that the dis-investment of the company's entire shareholding consisting of |
|
| 1,040,678
ordinary shares of Rs. 10/- each, book value Rs. 7,849,000, in Zulfeqar |
|
| Industries
Limited by sale thereof to the family members of Syed Asad All subject to the |
|
| condition
that the consideration of such shares shall not be less than Rs. 12/- per
share, |
|
| be
and is hereby approved." |
|
|
| "Resolved
further that Syed Shahid All, Chief Executive and Mr. Muhammad Rasheed, |
|
| Company
Secretary be and are hereby authorised to complete all corporate formalities
in |
|
| this
respect". |
|
|
| b)
To pass with or without modifications the following Special Resolution: |
|
|
| "Resolved
further that the Registered Trade Marks of Capri, Sandaleen and Fantasy in
the |
|
| name
of the Company be and are hereby approved to be transferred to Zulfeqar
Industries |
|
| Limited
for a consideration of Rupees One Hundred Thousand Only (Rs. 100,000/-) in |
|
| addition
to Rs. 19.574 million already paid by Zulfeqar Industries Limited as Royalty
from |
|
| April
1981 to June 1996". |
|
|
| "Resolved
further that Syed Shahid All, Chief Executive and Mr. Muhammad Rasheed, |
|
| Company
Secretary are hereby authorised to complete all the corporate and legal |
|
| formalities
for the said transaction". |
|
|
| c)
To consider and pass the following Special Resolution under Section 208 of
the |
|
| Companies
Ordinance, 1984. |
|
|
| "Resolved
that the approval of the Company be and is hereby accorded to invest upto |
|
| Rs.
5,8.90,500/- towards subscription of 589,050 Right Shares of Rs. 10/- each,
at par, of |
|
| Wazir
All Industries Limited, an associated company". |
|
|
| "Resolved
further that Syed Shahid All Chief Executive of the Company be and is hereby |
|
| authorised
to sign all documents and take such steps on behalf of the Company as may |
|
| be
necessary and expedient in this respect." |
|
|
| d)
To consider the shifting of the Registered office of the Company from the
Province of Sind |
|
| to
the Province of Punjab and the alteration of the Situation clause of the
Memorandum of |
|
| Association
of Company, subject to the approval of the Corporate Law Authority, under the |
|
| provisions
of Section 21 of the Companies Ordinance, 1984, and to pass the following |
|
| Special
Resolution: |
|
|
| "Resolved
that the Registered Office of the Company be and is hereby approved to be |
|
| shifted
from the Province of Sind to the Province of Punjab subject to the approval
of the |
|
| Corporate
Law Authority and to effect the same, the situation clause of the Memorandum |
|
| of
Association of the company be altered so as to replace the words
"Province of Sind" as |
|
| appearing
at the end of clause H of the Memorandum of Association of the Company by |
|
| the
words "Province of Punjab". |
|
|
| "Further
Resolved that Syed Shahid All, Chief Executive of the Company be and is
hereby |
|
| authorised
to file petition under section 21 of the Companies Ordinance, 1984 with the |
|
| Corporate
Law Authority, for seeking confirmation to the alteration of the situation
clause |
|
| of
the Memorandum of Association of the Company and to do all such pertinent
acts, |
|
| deeds
and things as may be expedient to carry out the purpose and comply with all |
|
| Corporate
formalities in this respect". |
|
|
| 6.
To transact any other business with the permission of the Chair. |
|
|
| NOTES: |
|
|
| (i)
The Share Transfer Books of the Company for the purpose of Annual General
Meeting |
|
| will
be closed from 21 March 1998 to 27 March 1998 (both days inclusive).
Transfers |
|
| received
in order at the Registered Office of the Company upto 20 March 1998 will be |
|
| considered
in time for the entitlement of cash dividend. |
|
|
| (ii)
A member entitled to attend and vote at the Annual General Meeting is
entitled to appoint |
|
| another
member as a proxy to attend and vote instead of him. |
|
|
| (iii)
The valid instrument appointing proxy must be received at the Registered
office of the |
|
| Company
not later than 48 hours before the appointed time for the meeting. |
|
|
| (iv)
Members are requested to notify the Company promptly of any change in their
address. |
|
|
| (v)
Statement under Section 160 of Companies Ordinance, 1984 in respect of above |
|
| mentioned
special business is being sent to the members alongwith the notice of this |
|
| meeting. |
|
|
| Statement
under Section 160 of Company's Ordinance 1984 regarding the Special Business. |
|
|
| Material
facts concerning the Special Business to be transacted at the Annual General |
|
| Meeting
are given below:- |
|
|
| 1.
DIS-INVESTMENT OF COMPANY'S ENTIRE SHAREHOLDING IN ZULFEQAR |
|
| INDUSTRIES
LIMITED. ITEM 5(a) OF AGENDA. |
|
|
| Your
Company holds 1,040,678 Shares of Rs. 10/- each at a cost of Rs. 7,849,000/=
in |
|
| Zulfeqar
Industries Limited. The percentage of holding is 52.03%. The Company is |
|
| desirous
of dis-investing the entire Shareholding of t,040,678 Shares at par value of |
|
| Rs.
10/- each by selling them to the family members of Syed Asad All at a price
of Rs. 12/- |
|
| per
share for which approval of shareholders is solicited. The present market
value of |
|
| Zulfeqar
Industries Limited shares is Rs. 11/20 per share of Rs. 10/- each. Syed Asad
All |
|
| is
Vice Chairman of the Company and also Managing Director of Zulfeqar
Industries |
|
| Limited
and is therefore interested in the business. |
|
|
| 2.
SALE OF REGISTERED TRADE MARKS- ITEM 5(b) OF AGENDA. |
|
|
| The
Registered Trade Marks of Capri, Sandaleen and Fantasy which were transferred
by |
|
| Wazir
All Industries Limited to your Company at a nominal cost in March 1980 were |
|
| integral
part of Soap Operations. The Soap Unit of Wazir All Industries was separated
in |
|
| February
1981 and returned to your Company on behalf of previous shareholders. Your |
|
| Company
transferred the Soap Unit to Zulfeqar Industries Limited on acquisition cost. |
|
| However,
the Trade Marks of Capri, Sandaleen and Fantasy were not transferred to |
|
| Zulfeqar
Industries Limited and were retained at Book Value. Your Company charged |
|
| Royalty
on these Trade Marks from April 1981 to June 1996 in aggregate of Rs. 19.574 |
|
| million
which has already been paid for over 16 years, the overall consideration for
brand. |
|
| Syed
Wajid All, Syed Asad All, Syed Shahid All, Mr. Behram Hasan and Mr. S. Qamar
All |
|
| Zaidi,
Directors of your Company are also Directors in Zulfeqar Industries Limited
and are |
|
| therefore
interested in the business. |
|
|
| 3.
INVESTMENT IN ASSOCIATED COMPANY ITEM 5(c) OF AGENDA. |
|
| Pursuant
to Section 208 of the Company Ordinance 1984 any investment in Associated |
|
| Companies
should be made under the Authority of a Special Resolution passed by 3/4th |
|
| majority
of the members entitled to vote as are present in person or by proxy in the |
|
| General
Meeting of the Company. |
|
|
| Your
Company already holds 589,050 shares at a value of Rs. 23,454,000/- in Wazir
Ali |
|
| Industries
Limited and the Company is desirous of subscribing 589,050 Shares at par |
|
| value
of Rs. 10/- per share at a total cost of Rs. 5,890,500/- as Right Shares for
which the |
|
| approval
of Shareholders is solicited. Syed Wajid Ali, Syed Asad Ali, Mr. Mushtaq H. |
|
| Khwaja,
Mr. Bahram Hasan, Directors of your Company are also Directors in Wazir All |
|
| Industries
Limited and they are interested in this business. |
|
|
| Information
in respect of Equity Investment in Associated Companies U/S 208 of the |
|
| Companies
Ordinance 1984 as per the SRO 634(1 )/96 dated 30 July 1996. |
|
|
| i.
Name of Investee Company or |
|
Wazir Ali Industries
Limited. The Principal |
|
| Associated
undertaking. |
|
activity is the
manufacture and sale of |
|
|
Vanaspati Ghee and
Cooking Oils. |
|
| ii.
Nature, amount and extent of |
|
Subscription towards 100%
Right Issue |
|
| Investment. |
|
amounting to Rs.
5,890,500/- being 15% of |
|
|
Equity. |
|
| iii.
Price at which shares to be purchased. |
|
At par value of Rs. 10/-
each. |
|
| iv.
Source of Funds from where shares will |
|
From own Funds. |
|
| be
purchased. |
|
|
| v.
Period for which Investment will be |
|
Long Term Investment. |
|
| made. |
|
|
| vi.
Purpose of Investment: |
|
Subscription to the Right
Issue to gain on |
|
|
market capitalization of
its shares. |
|
|
| vii. Benefits likely
to accrue to the Company |
|
To maintain its
shareholding in the Company |
|
| and to the Shareholders from
the |
|
and to prevent dilution
of interest. |
|
| Proposed
Investment. |
|
|
| 4.
CHANGE OF REGISTERED OFFICE FROM PROVINCE OF SIND TO PROVINCE OF |
|
| PUNJAB
ITEM 5(d) OF AGENDA. |
|
| The
major production and marketing facilities are situated in the province of
Punjab. It has |
|
| been
found that for the purpose of efficient, better control and economy in
administration, |
|
| the
Registered Office be transferred from Province of Sind to Province of Punjab. |
|
|
| None
of the directors have any interest in this special business except in the
capacity of |
|
| Directors
of the company. |
|
|
|
| Report
of Directors to the Shareholders |
|
|
| The
Directors are pleased to present their Annual Report and the Audited Accounts
of the |
|
| Company
for the year ended 30th, June, 1997. |
|
|
| The
Profit & (Loss) and appropriation(s) for the year are as follows: |
|
|
|
(Rupee in '000) |
|
| Operational
Profit for the year |
|
32,797 |
|
| Add:
Other Income |
|
7,635 |
|
| Profit
before Taxation |
|
40,432 |
|
| Provision
for Taxation |
|
10,892 |
|
| Profit
after Taxation |
|
29,540 |
|
|
| Unappropriated
Profit |
|
| Brought
Forward |
|
727 |
|
| Available
for appropriation |
|
30,267 |
|
| Less: |
|
| Proposed
cash dividend at 15% |
|
6,273 |
|
| Transfer
to General Reserves |
|
23,000 |
|
29,273 |
|
|
--------- |
|
| Un-appropriated
Profit |
|
--------- |
|
| Carried
Forward |
|
994 |
|
|
========= |
|
| The
belated presentation of Annual Accounts, prompted by unforeseen and
unavoidable |
|
| circumstances
is regretted while 3 months extension in holding the Annual General Body |
|
| meeting
has been obtained. |
|
|
| In
a depressed economic scenario-characterized by inflation, mean growth in
various sectors |
|
| of
the economy and dearth of funds with the trading community - your company has
given |
|
| commendable
account of itself by being able to maintain the level of turnover of past
years |
|
| and
bring about improvement in the margin of profit of past years. |
|
|
| Cost-cutting
measures and enhanced organizational efficiency in good measure contributed
to |
|
| results
achieved. |
|
|
| The
Company with a view to diversifying its activities, developed and launched a
Bath Soap |
|
| being
manufactured on contractual basis which venture has shown heartening results. |
|
| The
future outlook of the Company must be viewed with a cautious approach in the
present |
|
| economic
situation. |
|
|
| Disinvestment
of your Company's Shareholding in Zulfeqar Industries Ltd. by way of selling
it |
|
| to
Syed Asad Ali and his family members is being proposed. You have also to
consider the |
|
| transfer
of Registered Trade Marks of Capri, Sandaleen and Fantasy to Zulfeqar
Industries |
|
| Ltd.
at a nominal price of Rupees one lac in addition to Rs. 19.574 million
already received |
|
| from
them as royalty from 1-4-81 to 30-6-96. Joint Selling arrangements with
Zulfeqar |
|
| industries
Ltd. were discontinued on their request with effect from 1st August, 1997.
Your |
|
| company
proposes an investment of Rs. 5.89 million by way of subscription in the
Right Issue |
|
| of
Wazir Ali Industries Ltd. |
|
|
| The
shifting of Registered Office of your company from the Province of Sind to
the Province of |
|
| Punjab
has been suggested. Consequently the situation clause of Memorandum of |
|
| Association
will be altered with your permission and with the approval of Corporate Law |
|
| Authority. |
|
|
| The
Directors are pleased to record their appreciation for the sincere efforts
and dedication of |
|
| all
employees of the Company which enabled us to run efficiently and grow. |
|
|
| The
present auditors, Taseer Hadi Khalid & Co. Chartered Accountants retire
and being |
|
| eligible
offer themselves for re-appointment as auditors of the Company on a
remuneration to |
|
| be
fixed by you. |
|
|
| A
statement showing the pattern of Shareholding in the Company as at June 30,
1997 is |
|
| presented
on Page 33. |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Treet Corporation Limited as at 30
June |
|
| 1997
and the related profit and 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 and 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 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 and 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 30 June 1997
and of |
|
| the
profit and the changes in financial position for the year then ended; and |
|
|
| (d)
in our opinion, zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 |
|
| was
deducted by the company and deposited in the Central Zakat Fund established |
|
| under
Section 7 of that Ordinance. |
|
|
| Lahore: |
|
|
Taseer Hadi Khalid &
Co. |
|
| February
20th, 1998 |
|
Chartered Accountants |
|
|
| Balance
Sheet |
|
| As
at June 30, 1997 |
|
|
|
|
Note |
1997 |
1996 |
|
|
|
|
(Rupees in '000) |
|
|
| FIXED
CAPITAL EXPENDITURE |
3 |
104,881 |
94,408 |
|
| LONG
TERM INVESTMENTS- at cost |
4 |
37,461 |
31,571 |
|
| LONG
TERM DEPOSITS |
|
5 |
2,892 |
1,781 |
|
| CURRENT
ASSETS |
|
|
|
|
|
| Stores
and spares |
|
|
6 |
32,756 |
35,089 |
|
| Stock
and stores-in-transit - At cost |
|
|
29,981 |
13,795 |
|
| Stock-in-trade |
|
|
7 |
74,466 |
74,102 |
|
| Due
from subsidiary company |
|
8 |
19,731 |
19,069 |
|
| Trade
debtors - Unsecured considered good |
|
9,965 |
7,537 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
|
9 |
29,785 |
22,584 |
|
| Cash
& Bank balances |
|
|
10 |
29,802 |
10,950 |
|
| -- |
|
|
, |
---------- |
---------- |
|
|
|
|
|
226,486 |
183,126 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
maturity |
|
|
18 |
11,057 |
12,844 |
|
| Finance
under mark-up-arrangements - secured |
11 |
70,138 |
73,477 |
|
| Morababa
finance - secured |
|
12 |
-- |
9,484 |
|
| Loan
from director - unsecured |
|
13 |
13,300 |
4,000 |
|
| Creditors,
accrued expenses and other liabilities |
14 |
95,091 |
59,289 |
|
| Provision
for taxation |
|
|
15 |
10,500 |
13,300 |
|
| Unclaimed
dividend |
|
|
75 |
372 |
|
| Dividend
payable |
|
|
6,273 |
6,273 |
|
|
|
|
---------- |
---------- |
|
|
|
|
206,434 |
179,039 |
|
|
|
|
---------- |
---------- |
|
| NET
CURRENT ASSETS |
|
20,052 |
4,087 |
|
|
|
|
|
---------- |
---------- |
|
| NET
ASSETS |
|
|
165,286 |
131,847 |
|
|
======== |
======== |
|
| FINANCED
BY: |
|
| SHARE
CAPITAL |
|
|
16 |
41,822 |
41,822 |
|
| RESERVES |
|
|
17 |
74,349 |
51,349 |
|
| UNAPPROPRIATED
PROFIT |
|
994 |
727 |
|
|
|
|
---------- |
---------- |
|
| SHARE
HOLDERS' EQUITY |
|
117,165 |
93,898 |
|
| LONG
TERM DEPOSITS |
|
60 |
-- |
|
| LIABILITIES
AGAINST ASSETS |
|
| SUBJECT
TO FINANCE LEASE |
|
18 |
16,351 |
9,092 |
|
| DEFERRED
LIABILITIES FOR STAFF GRATUITY |
31,710 |
28,857 |
|
| CONTINGENCIES
AND COMMITMENTS |
19 |
-- |
-- |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
165,286 |
131,847 |
|
|
========= |
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| Profit
and Loss Account |
|
| For
the year ended June 30, 1997 |
|
|
|
|
|
18 months |
19 months |
20 months |
|
|
|
Note |
period ended |
period ended |
period ended |
|
|
|
|
30 June |
30 June |
30 June |
|
|
|
1997 |
1996 |
1996 |
|
|
|
|
(Rupees in '000) |
|
|
20 |
586,091 |
600,907 |
890,809 |
|
| Cost
of Goods Sold |
|
21 |
474,923 |
485,255 |
723,443 |
|
|
----------- |
----------- |
----------- |
|
| Gross
profit/(Ioss) from soap operations |
22 |
3,385 |
(356) |
-- |
|
|
|
----------- |
----------- |
----------- |
|
| Gross profit |
|
|
114,553 |
115,296 |
167,366 |
|
|
| Administrative
expenses |
|
|
23 |
13,771 |
12,234 |
17,686 |
|
| Selling
and distribution expenses |
|
24 |
39,073 |
42,453 |
60,757 |
|
| Financial expenses |
' |
|
|
25 |
26,151 |
26,276 |
41,847 |
|
| Workers'
profit participation fund |
|
|
2,159 |
2,053 |
2,844 |
|
| Workers'
Welfare Fund |
|
|
602 |
713 |
1,066 |
|
|
----------- |
----------- |
----------- |
|
|
|
81,756 |
83,729 |
124.2 |
|
|
|
|
| Operating
profit |
|
|
32,797 |
31,567 |
43,166 |
|
| Other
income |
|
|
26 |
7,635 |
6,642 |
9,722 |
|
|
----------- |
----------- |
----------- |
|
| Profit
before taxation |
|
|
40,432 |
38,209 |
52,888 |
|
|
| Taxation |
|
| Current |
|
10,500 |
13,300 |
20,160 |
|
| Prior year's |
|
392 |
(82) |
(82) |
|
|
|
10,892 |
13,218 |
20,078 |
|
|
|
----------- |
----------- |
----------- |
|
| Profit
after taxation |
|
29,540 |
24,991 |
32,810 |
|
|
========= |
|
| Unappropriated
profit/Accumulated (loss) |
|
| brought
forward |
|
727 |
|
(810) |
|
|
|
|
----------- |
|
----------- |
|
| Profit
available for appropriation |
|
30,267 |
|
32,000 |
|
|
|
|
| Proposed
cash dividend @ 15% |
|
6,273 |
|
6,273 |
|
| Transferred
to General reserve |
|
23,000 |
|
25,000 |
|
|
|
|
----------- |
|
----------- |
|
|
29,273 |
|
31,273 |
|
| Unappropriated
profit carried forward |
|
994 |
|
727 |
|
|
========= |
|
========= |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| Statement
of Changes in Financial Position |
|
| For
the year ended June 30, 1997 |
|
|
|
|
1997 |
1996 |
|
|
(Rupees in '000) |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
40,432 |
52,888 |
|
|
| Adjustments
for: |
|
| Depreciation |
|
17,494 |
33,216 |
|
| Provision
for gratuity |
|
5,738 |
9,425 |
|
| Gain
on sale of fixed assets |
|
(1,755) |
(1,068) |
|
| Gain
on sale of long term investments |
|
-- |
-- |
|
|
21,477 |
41,573 |
|
| Operating
profit before working capital changes |
|
61,909 |
94,461 |
|
|
| Increase/(decrease)
in operating assets |
|
