| Treet Corporation Limited |
|
|
|
|
|
|
|
|
| Annual
Report 1998 |
|
|
|
| Contents |
|
|
| COMPANY
INFORMATION |
|
| NOTICE
OF MEETING |
|
| DIRECTORS
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| NOTES
TO THE ACCOUNTS |
|
| FORM - 34 |
|
|
|
|
| Company
Information |
|
|
| BOARD
OF DIRECTORS |
|
| SYED
WAJID ALl |
|
Chairman |
|
| SYED
ASAD ALl |
|
Vice Chairman |
|
| SYED
SHAHID ALl |
|
Managing Director |
|
| BEHRAM HASAN |
|
| WUSOOQ
KHALEELI |
|
| MUSHTAQ
H. KHWAJA |
|
| BASIT
H. SYED |
|
|
| COMPANY
SECRETARY |
|
| MUHAMMAD
RASHEED |
|
|
| AUDITORS |
|
| TASEER
HADI KHALID & CO. |
|
| CHARTERED
ACCOUNTANTS |
|
| LAHORE |
|
|
| REGISTERED
OFFICE |
|
| 72-B,
KOT LAKHPAT INDUSTRIAL AREA, |
|
| LAHORE |
|
|
| BANKERS |
|
| ANZ
GRINDLAYS BANK p.l.c. - LAHORE |
|
| ASKARI
COMMERCIAL BANK LIMITED - LAHORE |
|
|
| LEGAL
ADVISOR |
|
| SALIM
& BAIG - LAHORE |
|
|
| FACTORIES |
|
| ·
HALl ROAD, HYDERABAD-71900 |
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| ·
72-B, KOT LAKHPAT INDUSTRIAL AREA, |
|
| LAHORE |
|
|
|
| Notice
of Meeting |
|
|
| NOTICE
IS HEREBY GIVEN that the Twenty first Annual General Meeting of Treet
Corporation |
|
| Limited
will be held at Ambassador Hotel, 7-Davis Road, Lahore on Saturday, 30th
January |
|
| 1999
at 11 a.m. to transact the following business: |
|
|
| Ordinary
Business |
|
|
| 1.
To confirm the minutes of the Annual General Meeting held on 27th March 1998. |
|
|
| 2.
To receive and consider the statement of accounts for the year ended 30th
June 1998, |
|
| the
report of Auditors and Directors thereon. |
|
|
| 3.
To appoint Auditors of the Company for the period ended 30 June 1999, and to
fix their |
|
| remuneration.
The retiring Auditors M/S Taseer Hadi Khalid & Co., Chartered Accountants |
|
| offer
themselves for re-appointment. |
|
|
| 4.
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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|
|
|
|
|
|
|
|
Muhammad Rasheed |
|
| Lahore:
January 2, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| (i)
The Share Transfer Books of the Company for the purpose of Annual General
Meeting |
|
| will
be closed from 24 January 1999 to 30 January 1999 (both days inclusive).
Transfers |
|
| received
in order at the registered office of the company upto 22 January 1999 will be |
|
| considered
in time. |
|
|
| (ii)
A member entitled to attend and vote at the Annual General Meeting is also
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 forty eight hours before the appointed time for the meeting. |
|
|
| (iv)
Members are requested to notify the company promptly of any change in their
address. |
|
|
|
| Directors
Report to Shareholders |
|
|
| The
Directors are pleased to present the Annual Report together with the audited
accounts |
|
| of
the Company for the year ended June 30th, 1998. |
|
|
|
|
| The
financial results of the company are as under |
|
|
|
|
|
(Rupee in '000) |
|
|
|
|
year ended June 30, |
|
|
|
|
1998 |
1997 |
|
|
|
|
| Profit
before Taxation |
|
53,390 |
40,432 |
|
| Less:
Provision for Taxation - Current year |
|
(26,900) |
(10,500) |
|
|
|
- Previous years |
|
- |
(392) |
|
|
|
|
|
---------- |
---------- |
|
| Profit
after Taxation |
|
26,490 |
29,540 |
|
| Add:
Unappropriated Profit brought forward |
|
994 |
727 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
27,484 |
30,267 |
|
|
|
|
| APPROPRIATION |
|
|
|
| Cash
Dividend |
|
|
|
Nil |
6,273 |
|
| Transfer
to General Reserves |
|
|
27,000 |
23,000 |
|
|
|
|
|
---------- |
---------- |
|
| Un-appropriated
Profit carried forward |
|
484 |
994 |
|
|
|
---------- |
---------- |
|
|
|
|
| The
Directors do not recommend payment of any dividend. |
|
|
| Despite
sagging market conditions and inflationary trends adversely affecting the
cost of |
|
| production,
your company has been able to achieve sustainable business growth. Sales in |
|
| terms
of value increased by over 13% and the company posted a pre-tax profit of Rs.
53 |
|
| million
as against Rs. 40 million last year. Major factors attributable to the better
results |
|
| achieved
than last year were the Government decision to rationalize Import Duty Tariff
on |
|
| Raw
Materials with effect from March 1997, Higher turnover achieved by the
company in |
|
| terms
of volume of Stainless Double Edge Blades and Bonded Systems both in the
Local |
|
| and
Export Market, continued efforts of the management to reduce cost of
production and |
|
| quality
assurance and reducing the Financial Expenses of the company. |
|
|
| The
company has endeavored to enlarge its business more from Distributors and
Trade's |
|
| point
of view. The Red & Washing soaps markets being ferociously competitive,
the going |
|
| has
been modest but steady. While the soaps operations present a break even
picture, the |
|
| unquantifiable
distributional benefits have been substantive. |
|
|
| To
give a flip to the efforts, an excellent quality Beauty Toilet Soap in most
popular segment |
|
| has
been launched. The product launched in May, 1998 has been well received and
appears |
|
| to
have a promising future. |
|
|
| The
company made a provision in the accounts for a liability for Staff Retirement
Scheme, |
|
| not
provided earlier, for Rs. 29.495 million and for diminution in market value
of investments |
|
| for
Rs. 13.442 million |
|
|
| The
company after having demonstrated its quality assurance capability has been
able to |
|
| receive
ISO-9002 Certification for its Lahore Factory. The operations now meet the
World |
|
| standards.
Under the prevailing economic conditions, the company is concentrating its
efforts |
|
| to
remain cost effective and competitive. However, your Company is viewing the
future with |
|
| caution. |
|
|
| The
company and its subsidiary company have made necessary arrangements to cope
with |
|
| any
threat of millennium bug by mitigating the potential disaster Year 2000.
Necessary |
|
| modification
for the conversion to new system has already been completed at the end of
last |
|
| year. |
|
|
| The
Board wishes to record its deep sorrow and grief on the sad demise of Mr. N.
Z. Mama, |
|
| a
Director of the Company. Late Mr. Mama made invaluable contributions to the
development |
|
| of
the Company. Mr. Basit H. Syed filled the vacancy created by the passing away
of Mr. N. |
|
| Z.
Mama. In place of Mr. S. Qamar Ali Zaidi, who earlier resigned from the
Board, Mr. Wusoog |
|
| Khaleeli
was co-opted as Director of the company. The Board wishes to place on record
its |
|
| appreciation
of the services rendered by Mr. S. Qamar All Zaidi during his tenure as
Director |
|
| of
the company. |
|
|
| The
Board appreciated the efforts and dedication of all employees of the company
which |
|
| enabled
us to run the Company efficiently. |
|
|
| The
present Auditors M/s. Taseer Hadi Khalid & Company, 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 30th June
1998 is |
|
| presented
on Page 29. |
|
|
| LAHORE |
|
Basit H. Syed |
|
|
Syed Shahid Ali |
|
| January
2, 1999 |
Director |
|
|
Managing Director |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Treet Corporation Limited as at 30
June |
|
| 1998
and the related profit and loss account and cash flow statement, 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 except for the changes as stated in Note-2.2(c) 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 and loss account and the cash flow statement,
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 1998 and of the profit and the
cash flow |
|
| 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. |
|
| January
2, 1999 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet |
|
| As
At June 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in '000) |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
3 |
124,038 |
104,881 |
|
| LONG
TERM INVESTMENTS |
|
4 |
24,019 |
37,461 |
|
| LONG
TERM DEPOSITS |
|
5 |
4,069 |
2,892 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
6 |
33,858 |
32,756 |
|
| Stock
and stores-in-transit - at cost |
|
6,305 |
29,981 |
|
| Stock-in-trade |
|
7 |
87,300 |
74,466 |
|
| Due
from subsidiary company |
|
8 |
18,425 |
19,731 |
|
| Trade
debtors - Unsecured considered good |
|
18,030 |
9,965 |
|
| Advances,
deposits, prepayments and other receivables |
9 |
53,531 |
29,785 |
|
| Cash
and Bank balances |
|
10 |
35,491 |
29,802 |
|
|
|
|
---------- |
---------- |
|
|
|
|
252,940 |
226,486 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of liabilities |
|
|
| against
assets subject to finance lease |
17 |
11,156 |
11,057 |
|
| Finance
under mark-up arrangements - secured |
11 |
39,392 |
70,138 |
|
| Loan
from director- unsecured |
|
12 |
13,300 |
13,300 |
|
| Creditors,
accrued expenses and other liabilities |
13 |
80,269 |
95,091 |
|
| Provision
for taxation |
|
14 |
37,400 |
10,500 |
|
| Unclaimed
dividend |
|
|
516 |
75 |
|
| Dividend
payable |
|
|
- |
6,273 |
|
|
|
|
---------- |
---------- |
|
|
|
|
182,033 |
206,434 |
|
|
|
|
---------- |
---------- |
|
| NET
CURRENT ASSETS |
|
70,907 |
20,052 |
|
|
|
|
---------- |
---------- |
|
| NET ASSETS |
|
|
223,033 |
165,286 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| FINANCED BY: |
|
|
|
| SHARE
CAPITAL |
|
15 |
41,822 |
41,822 |
|
| RESERVES |
|
16 |
101,349 |
74,349 |
|
| UNAPPROPRIATED
PROFIT |
|
|
484 |
994 |
|
|
|
|
---------- |
---------- |
|
| SHARE
HOLDERS' EQUITY |
|
|
143,655 |
117,165 |
|
| LONG
TERM DEPOSIT |
|
|
60 |
60 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO FINANCE LEASE |
17 |
16,008 |
16,351 |
|
| DEFERRED
LIABILITY FOR STAFF RETIREMENT BENEFITS |
18 |
63,310 |
31,710 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
19 |
- |
- |
|
|
|
|
---------- |
---------- |
|
|
|
|
223,033 |
165,286 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
| LAHORE |
|
Syed Shahid Ali |
|
|
Basit H. Syed |
|
| January
2, 1999 |
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| Profit
And Loss Account |
|
| For
The Year Ended June 30, 1998 |
|
|
|
Note |
1998 |
1997 |
|
|
|
|
|
(Rupees in '000) |
|
|
|
|
| Sales - Net |
|
20 |
668,070 |
588,113 |
|
| Cost
of Goods Sold |
|
21 |
484,318 |
474,923 |
|
|
|
|
---------- |
---------- |
|
|
|
|
183,752 |
113,190 |
|
| Gross
profit from soap operations |
|
22 |
520 |
1,363 |
|
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
184,272 |
114,553 |
|
|
|
|
| Administrative
expenses |
|
23 |
13,540 |
13,771 |
|
| Selling
and distribution expenses |
|
24 |
53,162 |
39,073 |
|
| Financial
expenses |
|
25 |
20,233 |
26,151 |
|
| Workers'
profit participation fund |
|
|
3,602 |
2,159 |
|
| Workers'
welfare fund |
|
|
1,622 |
602 |
|
|
|
|
---------- |
---------- |
|
|
|
|
92,159 |
81,756 |
|
|
|
|
---------- |
---------- |
|
| Operating
profit |
|
|
92,113 |
32,797 |
|
| Other income |
|
26 |
4,214 |
7,635 |
|
| Provision
for staff retirement scheme |
2.2(c) |
29,495 |
- |
|
| Provision
for diminution in market value of investments |
13,442 |
- |
|
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
53,390 |
40,432 |
|
|
|
|
| Taxation |
|
|
|
| Current year |
|
|
26,900 |
10,500 |
|
| Prior year |
|
|
- |
392 |
|
|
|
---------- |
---------- |
|
|
|
26,900 |
10,892 |
|
| Profit
after taxation |
|
26,490 |
29,540 |
|
| Unappropriated
profit brought forward |
|
994 |
727 |
|
|
|
---------- |
---------- |
|
| Profit
available for appropriation |
|
27,484 |
30,267 |
|
|
|
|
| APPROPRIATION |
|
|
|
|
|
|
| Proposed
cash dividend Nil (1997 @15%) |
|
- |
6,273 |
|
| Transferred
to General reserve |
|
27,000 |
23,000 |
|
|
|
---------- |
---------- |
|
|
|
27,000 |
29,273 |
|
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
484 |
994 |
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
| LAHORE |
|
Syed Shahid Ali |
|
|
Basit H. Syed |
|
| January
2, 1999 |
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended June 30, 1998 |
|
|
|
|
|
|
1998 |
1997 |
|
|
|
|
(Rupees in '000) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Profit
before taxation |
|
|
|
53,390 |
40,432 |
|
| Adjustments
for: |
|
|
|
|
|
| Financial
charges for the year |
|
|
20,233 |
26,151 |
|
| Depreciation |
|
|
|
20,079 |
17,494 |
|
| Provision
for gratuity |
|
|
|
5,920 |
5,738 |
|
| Provision
for staff retirement scheme |
|
29,495 |
- |
|
| Gain
on sale of fixed assets |
|
|
(493) |
(1,755) |
|
| Provision
for diminution in market value of investments |
13,442 |
- |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
88,676 |
47,628 |
|
|
|
|
|
---------- |
---------- |
|
| Operating
profit before working capital changes |
|
142,066 |
88,060 |
|
|
|
|
| Increase/(decrease)
in operating assets |
|
|
| Stores
and spares |
|
|
|
(1,102) |
2,333 |
|
| Stock
in trade |
|
|
|
(12,834) |
(364) |
|
| Stock
and stores in transit |
|
|
23,676 |
(16,186) |
|
| Due
from subsidiary company |
|
|
1,306 |
(662) |
|
| Trade
debtors |
|
|
|
(8,065) |
(2,428) |
|
| Advances,
deposits, prepayments and other receivables |
|
(5,272) |
(5,620) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(2,291) |
(22,927) |
|
| Increase/(decrease)
in operating liabilities |
|
|
| Creditors,
accured expenses and other liabilities |
|
(20,283) |
35,608 |
|
| Loan
from Director |
|
|
|
- |
9,300 |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(20,283) |
44,908 |
|
|
|
---------- |
---------- |
|
| Cash
generated from operations |
|
|
119,492 |
110,041 |
|
|
|
|
| Financial
charges paid |
|
|
|
(21,016) |
(25,827) |
|
| Taxes paid |
|
|
|
(18,474) |
(15,273) |
|
| Gratuity
paid |
|
|
|
(3,815) |
(3,015) |
|
| Dividend
paid |
|
|
|
(5,832) |
(6,570) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(49,137) |
(50,685) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from operating activities |
|
|
70,355 |
59,356 |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
| Advance
received against sale of subsidiary shares |
|
6,244 |
- |
|
| Capital
expenditure incurred |
|
|
(39,674) |
(29,175) |
|
| Proceeds
from sale of fixed assets |
|
|
931 |
2,963 |
|
| Long
term deposits |
|
|
|
(1,177) |
(1,111) |
|
| Investments
acquired |
|
|
|
- |
(5,890) |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash outflow from investing activities |
|
(33,676) |
(33,213) |
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
| Repayment
of morabaha financing |
|
|
- |
(9,484) |
|
| Obligations
under finance lease |
|
|
13,341 |
19,451 |
|
| Payment
of lease obligation |
|
|
(13,585) |
(13,979) |
|
| Long
term deposits |
|
|
|
- |
60 |
|
|
|
|
|
---------- |
---------- |
|
| Net
cash from financing activities |
|
|
(244) |
(3,952) |
|
|
|
|
|
---------- |
---------- |
|
| Net
increase in cash and cash equivalents |
|
36,435 |
22,191 |
|
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at the beginning of the year |
(40,336) |
(62,527) |
|
|
|
|
|
---------- |
---------- |
|
| Cash
and cash equivalents at end of the year |
|
(3,901) |
(40,336) |
|
|
|
|
|
========== |
========== |
|
| NOTE: |
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
|
|
| Cash
and bank balances |
|
|
|
35,491 |
29,802 |
|
| Finance
under mark-up arrangements |
|
|
(39,392) |
(70,138) |
|
|
|
|
|
---------- |
---------- |
|
|
|
|
|
(3,901) |
(40,336) |
|
|
|
========== |
========== |
|
|
|
|
| LAHORE |
|
Syed Shahid Ali |
|
|
Basit H. Syed |
|
| January
2, 1999 |
CHIEF EXECUTIVE |
|
|
DIRECTOR |
|
|
|
|
|
|
|
|
| Notes
to the Accounts |
|
| For
the year ended June 30, 1998 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
company was incorporated in Pakistan on 22 January 1977 as a public limited |
|
| company
its shares are listed on Karachi and Lahore Stock Exchanges. The principal |
|
| activity
of the company is manufacturing and sale of razors and razor blades. The |
|
| company
is also engaged in the business of bath soap. These soaps are manufactured |
|
| by
Khatoon Soap Industries (Private) Limited for the company. The company has
entered |
|
| into
a joint venture with Khatoon Soap Industries (Private) Limited for
manufacture and |
|
| sale
of laundry and perfumed soap. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under historical cost convention |
|
|
|
|
| 2.2
Staff retirement schemes |
|
|
|
|
| a)
Staff gratuity |
|
|
|
| The
company operates an unfunded gratuity scheme and provision is made |
|
| annually
to cover the obligations under the scheme. These benefits are |
|
| calculated
with reference to last drawn salary and prescribed qualifying periods |
|
| of
services of the employees. |
|
|
|
| b)
Provident fund |
|
| A
recognised provident fund scheme is in operation which covers all permanent |
|
| employees
who have completed three months service and have been issued |
|
| confirmation
letters. Equal contributions are made monthly both by the company |
|
| and
the employees in accordance with the rule of the scheme at 10% of basic |
|
| pay. |
|
|
| c)
Staff retirement scheme |
|
|
| The
company has a retirement scheme for all its permanent employees who |
|
| attain
the age of 60 and have at least 10 years of service with the company. |
|
| The
company has changed its policy with respect to accounting for the staff |
|
| retirement
scheme from the current year. Upto the previous year, the company |
|
| was
charging amounts under this scheme to the profit and loss account as |
|
| and
wh |
