| General Tyre & Rubber Company of Pakistan
Limited |
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| Company
Profile |
|
| Notice
of Meeting |
|
| Chairman's
Review |
|
| Directors'
Report to the Shareholders |
|
| Five
Years at a Glance |
|
| Graphic
Illustrations |
|
| Auditors'
Report to the Members |
|
| Balance Sheet |
|
| Profit
& Loss Account |
|
| Statement
of Changes in Equity |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Shareholding |
|
|
|
| COMPANY
PROFILE |
|
|
| Board
of Directors |
|
| Mr.
Abdalazim Mohammad Ali Al-Shamali |
|
| Chairman |
|
|
| Dr A.S. Mufti |
|
| Chief Executive |
|
|
| Mr.
Irfan Siddiqui |
|
| Mr.
Zafar Aziz Osmani |
|
| Mr.
Tasnimul Haq Farooqui |
|
| Mr.
Istaqbal Mehdi |
|
| Dr.
Amjad Waheed |
|
| Lt.
Gen (Retd) Ali Kuli Khan Khattak |
|
| Mr.
Ahmed Kuli Khan Khattak |
|
| Mr.
Raza Kuli Khan Khattak |
|
| Mr.
Mushtaq Ahmed Khan |
|
| Mrs.
Shaheen Khalil Tariq (Alternate Director Mr. Jamil A. Shah) |
|
| Mr.
Manuel Guerreiro (Alternate Director Dr. Pervez Hassan) |
|
|
| Secretary |
|
| Mr.
S. Ehtesham Taqi |
|
|
| Major Bankers |
|
| American
Express Bank Limited |
|
| Deutsche
Bank AG |
|
| Muslim
Commercial Bank Limited |
|
| National
Bank of Pakistan |
|
| Allied
Bank of Pakistan Limited |
|
| Faysal
Bank Limited |
|
| Societe
Generale The French and International Bank |
|
| Askari
Commercial Bank Limited |
|
|
| Auditors |
|
| A.
E Ferguson & Co. |
|
| Chartered
Accountants |
|
|
| Hameed
Chaudhri & Co. |
|
| Chartered
Acc6untants |
|
|
| Registered
Office & Factory |
|
| H-23/2,
Landhi Industrial Trading Estate, Landhi, |
|
| Karachi.
Phone: 5080172-81 Fax: 5081212, 5080171 |
|
|
| Head Office |
|
| P
& O Plaza, I.I. Chundrigar Road, Karachi. |
|
| Phone:
2417571-4 Fax: 2430662, 2418781 |
|
|
| Branch Offices |
|
|
| Lahore: |
|
| Gardee
Trust Building, Thornton Road, Lahore. |
|
| Phone:
7352663, 7313852 Fax: 7235745 |
|
|
| Islamabad: |
|
| Plot
No. 176, I - 10/3 Kurang Road, Islamabad. |
|
| Phone:
4449955-6 Fax: 4440916 |
|
|
| Liaison Office |
|
| 6,
Agha Khan Road, F-6/4, Islamabad. |
|
| Phone
& Fax: 820829 |
|
|
| Shares Office: |
|
| Parker House, |
|
| Mezzanine
Floor, |
|
| Aiwan-e-Tijarat
Road, Karachi. |
|
| Phone:
2401656, 2425985 |
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|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Thirty-Seventh Annual General Meeting of The General Tyre & Rubber Company of |
|
| Pakistan
Limited will be held at Beach Luxury Hotel, Karachi on
Thursday, 14th December, 2000 at 3:00 p.m. to |
|
| transact
the following business: |
|
|
| 1.
To confirm the minutes of the Thirty-sixth Annual General Meeting held on
December 30, 1999. |
|
|
| 2.
To receive and consider the audited accounts for the year ended 30th June,
2000 together with Directors' and |
|
| Auditors'
reports thereon. |
|
|
| 3.
To consider and approve payment of cash dividend @ 40% i.e. Rs. 4 per share
as recommended by the Directors. |
|
|
| 4.
To appoint auditors for the year. 2000 - 2001 and to fix their remuneration.
The retiring auditors, Messrs A.F. |
|
| Ferguson
& Co., Chartered Accountants and Hameed Chaudhri & Co., Chartered
Accountants, being eligible, offer |
|
| themselves
for reappointment. |
|
|
|
| 5.
Any other business with the permission of the Chair. |
|
|
|
|
BY ORDER OF THE BOARD |
|
|
|
|
|
|
| Karachi |
|
|
S. EHTESHAM TAQI |
|
| Dated:
14th November, 2000 |
|
Company Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from 6th December,
2000 to 14th December, |
|
| 2000
(both days inclusive). Transfers received in order by the Company at the
close of business on 5th |
|
| December,
2000 will be treated in time for entitlement of dividend payment to the
transferees. |
|
|
| 2.
A member entitled to attend and vote at the Annual General Meeting is
entitled to cast his/her vote by proxy. |
|
| Proxies
must be deposited at the Company's Shares Department located at Parker House,
Aiwan-e-Tijarat |
|
| Road,
Karachi not later than 48 hours before the time for holding the meeting. |
|
|
| 3.
Individual beneficial owners of CDC entitled to attend and vote at this
meeting must bring his/her original NIC |
|
| or
passport to authenticate his/her identity. In case of corporate entity,
resolution of the Board of |
|
| Directors/power
of attorney with specimen signature of the nominee shall be produced (unless
provided |
|
| earlier)
at the time of meeting. |
|
|
| 4.
For appointing proxies, the individual beneficial owners of CDC shall submit
the proxy form as per above |
|
| requirement
along with attested copy of their NIC or the passport. The proxy form shall
be witnessed by two |
|
| persons
with their names, addresses and NIC numbers. The proxy shall produce his/her
original NIC or |
|
| passport
at the time of meeting. In case of corporate entity, resolution of the Board
of Directors/power of |
|
| attorney
with specimen signature shall be submitted (unless submitted earlier) along
with the proxy form. |
|
|
| 5.
Members are requested to notify change in their addresses, if any,
immediately. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| On
behalf of your Board of Directors, I am pleased to present to you the Annual
Report for the year ended June 30, 2000. |
|
|
| OPERATING
PERFORMANCE |
|
| In
spite of general recession in the market, by the grace of Almighty Allah, the
year under review, has been most successful. The |
|
| Company
produced 761,595 tyres and sold 748,024 tyres during the year as against
743,780 tyres and 744,185 tyres |
|
| respectively
last year. The gross sales increased to 2,281.9 million during the year under
review which was 8% higher than the last |
|
| year's
gross sales of Rs. 2,104.7 million. The increase in sales is attributable to
higher sales to Government Departments and |
|
| increased
sales of tractor tyres. The gross profit increased to Rs. 505.0 million
representing 27% of net sales as against Rs. 390.0 |
|
| million,
representing 22% of net sales last year. The pretax profit increased to Rs.
326.4 million as against Rs. 179.3 million |
|
| achieved
last year. This is the highest profit ever achieved by the Company and was
earned through better sales mix and improved |
|
| efficiency
in the operations of the Company. |
|
|
| MANUFACTURING |
|
| In
spite of outside mixing of raw materials, the required production level was
achieved through improved efficiency / logistics and |
|
| better
utilization of manpower resources. The damaged building of mixing area was
demolished during the year and technical |
|
| details
of the proposed mixing plant are being finalized. I am pleased to report that
your Company was selected by Employer's |
|
| Federation
of Pakistan among the top 10 companies for two awards in the fields of
"Productivity" and "Environment, Health and |
|
| Safety". |
|
|
| MARKETING |
|
| Increased
purchases by Government Departments and higher sales of tractor tyres to
assembly plants and commercial market |
|
| were
instrumental in achieving the highest sales ever recorded by the Company.
However, the Management expects difficult |
|
| marketing
conditions ahead due to stronger competition from low priced and of much
improved quality Chinese tyres, both radial |
|
| and
bias unlike in the past. |
|
|
| FUTURE
OUTLOOK |
|
| The
profit margin is likely to be eroded due to consistent increase in input
cost, weakening of Pak rupee which is making raw |
|
| material
and spare parts more expensive and inability to increase selling prices
beyond a certain level as a result of competitive |
|
| environment.
In addition, consistent dumping of tyres from India, China and other
countries at cheaper rates continues unabated. |
|
|
| I
am pleased to report that field testing of Steel Belted Radial tyres has been
achieved with excellent results. Commercial |
|
| production
will commence shortly. These tyres will meet requirement of our Assembly
Plant customers engaged in passenger car |
|
| production. |
|
|
| STAFF/LABOUR
RELATIONS |
|
| The
Company relations with staff / workers remained cordial. The last agreement
with the employees union, which expired in |
|
| December
31, 1999 was renegotiated and an agreement for a further period of two years
has been reached in the spirit of |
|
| harmony
and understanding. |
|
|
| On
behalf of the Board, I wish to acknowledge and appreciate the hard work of
our employees, the continued support of our |
|
| bankers
and loyalty of our customers. |
|
|
|
|
Abdalazim Mohammad Ali Al-Shamali |
|
|
|
Chairman |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Your
Directors have pleasure in presenting Annual Report and Audited Accounts of
the Company for the year ended |
|
| June
30, 2000. |
|
|
|
|
|
Rupees in thousand |
|
|
| Financial
Results |
|
| Profit
for the year after taxation |
|
199,984 |
|
| Unappropriated
profit brought forward |
|
42,901 |
|
|
|
|
------------------ |
|
|
|
|
242,885 |
|
| Appropriations |
|
| Interim
dividend @ 20% |
|
|
34,155 |
|
| Proposed
final dividend @ 40% |
|
|
68,310 |
|
|
|
|
|
------------------ |
|
|
|
|
|
102,465 |
|
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
|
140,420 |
|
|
|
|
|
========== |
|
| Earning
per share |
|
|
Rs. 11.71 |
|
|
| Chairman's
Review |
|
| The
Directors of the Company endorse the contents of the Chairman's Review
dealing with the activities of the Company. |
|
|
| Pattern
of Shareholding |
|
| A
statement showing the pattern of holding of shares as at June 30, 2000 is
attached. |
|
|
| Technical
Assistance Agreement |
|
| Subsequent
to the expiry of the extended period of Technical Assistance Agreement with
General Tire International Co. |
|
| (GTIC)
on October 31, 1999, the Company was allowed to use the trade marks i.e.
"General" and "General Tire" up to |
|
| August
31, 2000. GTIC has shown its willingness to extend this arrangement further
in pursuance of a new Technical |
|
| Assistance
arrangement. |
|
|
| Auditors |
|
| The
present Auditors, Messers A.F. Ferguson & Co. Chartered Accountants and
Hameed Chaudhri & Co. Chartered |
|
| Accountants
retire and being eligible, offer themselves for reappointment. |
|
|
|
|
For and on behalf of the Board of Directors |
|
|
|
|
|
|
|
Dr. A.S. Mufti |
|
| Karachi:
November 14, 2000 |
|
Chief Executive |
|
|
|
|
| FIVE
YEARS AT A GLANCE |
|
|
|
|
(Rupees in million) |
|
|
|
|
|
2000 |
1999 |
1998 |
1997 |
1996* |
|
|
|
|
| Operating
Results |
|
| Gross sales |
|
2,282 |
2,105 |
1,666 |
1,355 |
2,445 |
|
| Net sales |
|
1,902 |
1,788 |
1,404 |
1,089 |
1,974 |
|
| Gross profit |
|
505 |
390 |
286 |
137 |
252 |
|
| Profit before tax |
|
326 |
179 |
115 |
2 |
29 |
|
| Profit after tax |
|
200 |
102 |
75 |
3 |
9 |
|
| Dividend - cash |
|
60% |
35% |
20% |
-- |
-- |
|
|
|
|
| Financial
Position |
|
| Fixed
assets |
|
352 |
362 |
283 |
287 |
241 |
|
| Share capital |
|
171 |
171 |
171 |
171 |
155 |
|
| Reserves
and unappropriated profit |
410 |
312 |
270 |
229 |
243 |
|
| Shareholders'
equity |
581 |
483 |
441 |
400 |
398 |
|
| Long-term
loans |
49 |
84 |
86 |
123 |
65 |
|
| Contribution
to public exchequer |
547 |
375 |
315 |
374 |
448 |
|
| Breakup
value per share - rupees |
34 |
28 |
26 |
23 |
26 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| No.
of employees |
1,011 |
1,045 |
1,024 |
1,128 |
1,097 |
|
|
| *
1996 Accounts are of eighteen months January 1995 - June 1996 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of THE GENERAL TYRE
AND RUBBER COMPANY OF PAKISTAN |
|
| LIMITED as at June 30, 2000 and the related profit and loss account,
statement of changes in equity, 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and prepare and |
|
| present
the above said statements in conformity with the approved accounting
standards and the requirements of the |
|
| Companies
Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards require that |
|
| we
plan and perform the audit to obtain reasonable assurance about whether the
above said statements are free of any |
|
| material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the |
|
| above
said statements. An audit also includes assessing the accounting policies and
significant estimates made by |
|
| management,
as well as, evaluating the overall presentation of the above said statements.
We believe that our audit |
|
| provides
a reasonable basis for our opinion and, after due verification, 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 Company's
business; and |
|
|
| (iii)
the business conducted, investments made and 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, statement of changes in equity and cash flow statement
together with the notes forming part |
|
| thereof
conform with approved accounting standards as applicable in Pakistan, and
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, 2000 and of the profit, the changes in
equity and cash flows 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. |
|
|
|
A.F. Ferguson & Co. |
|
|
Hameed Chaudhri & Co. |
|
|
Chartered Accountants |
|
|
Chartered Accountants |
|
|
|
|
| Karachi:
November 22, 2000 |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
|
(Rupees in
thousand) |
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Share capital |
|
| Authorised |
|
| 30,000,000
ordinary shares of Rs. 10 each |
|
300,000 |
300,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
170,775 |
170,775 |
|
|
| Reserves |
|
|
|
|
| Capital |
|
4 |
108,675 |
108,675 |
|
| Revenue |
|
|
5 |
160,750 |
160,750 |
|
| Unappropriated
profit |
|
|
140,420 |
42,901 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
409,845 |
312,326 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
580,620 |
483,101 |
|
| REDEEMABLE
CAPITAL |
|
6 |
17,339 |
38,004 |
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
|
| FINANCE
LEASES |
|
7 |
31,457 |
45,703 |
|
|
|
|
|
| STAFF
RETIREMENT GRATUITY |
8 |
57,532 |
48,404 |
|
| LONG
TERM DEPOSITS FROM DEALERS |
9 |
6,810 |
6,850 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of redeemable capital |
6 |
20,665 |
17,313 |
|
| Current
maturity of liabilities against assets |
|
|
| subject
to finance leases |
|
7 |
15,859 |
13,139 |
|
| Running
finance under mark-up arrangements |
11 |
16,956 |
48,984 |
|
| Creditors,
accured expenses and other liabilities |
12 |
545,866 |
634,346 |
|
| Taxation |
|
|
|
124,534 |
106,155 |
|
| Dividends |
|
|
13 |
93,996 |
63,225 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
817,876 |
883,162 |
|
| CONTINGENCIES
AND COMMITMENTS |
14 |
------------------ |
------------------ |
|
|
|
|
1,511,634 |
1,505,224 |
|
|
|
========== |
========== |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
assets |
|
15 |
351,820 |
362,214 |
|
| Capital
work-in-progress |
|
16 |
43,943 |
28,504 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
395,763 |
390,718 |
|
| LONG
TERM INVESTMENTS |
|
17 |
428 |
458 |
|
| LONG-TERM
LOANS AND ADVANCES |
18 |
1,983 |
2,439 |
|
| DEFERRED
TAXATION |
|
19 |
29,752 |
37,722 |
|
| LONG-TERM
DEPOSITS, PREPAYMENTS |
|
|
| AND
DEFERRED COSTS |
|
20 |
2,011 |
1,868 |
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
21 |
190,871 |
163,597 |
|
| Stocks |
|
22 |
457,230 |
408,466 |
|
| Trade debtors |
|
23 |
164,370 |
150,512 |
|
| Loans
and advances |
|
24 |
7,599 |
8,092 |
|
| Deposits,
prepayments and other receivables |
25 |
86,382 |
124,804 |
|
| Cash
and bank balances |
|
26 |
175,245 |
216,548 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,081,697 |
1,072,019 |
|
|
------------------ |
------------------ |
|
|
|
1,511,634 |
1,505,224 |
|
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
Dr. A.S. Mufti |
|
Raza Kuli Khan Khattak |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
|
Note |
2000 |
1999 |
|
|
|
(Rupees in
thousand) |
|
|
| Net sales |
|
27 |
1,902,260 |
1,787,891 |
|
| Cost of sales |
|
28 |
1,397,556 |
1,397,920 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
504,704 |
389,971 |
|
|
|
|
------------------ |
------------------ |
|
| Administrative
expenses |
|
29 |
64,830 |
48,675 |
|
| Selling
and distribution expenses |
|
30 |
78,333 |
68,676 |
|
|
------------------ |
------------------ |
|
|
|
|
143,163 |
117,351 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
361,541 |
272,620 |
|
| Other income |
|
31 |
33,357 |
80,919 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
394,898 |
353,539 |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
32 |
38,317 |
52,595 |
|
| Other charges |
|
33 |
30,127 |
121,620 |
|
|
------------------ |
------------------ |
|
|
|
|
68,444 |
174,215 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
326,454 |
179,324 |
|
| Taxation |
|
34 |
126,470 |
77,185 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
199,984 |
102,139 |
|
| Unappropriated
profit brought forward |
|
42,901 |
533 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
242,885 |
102,672 |
|
|
|
|
|
|
| Appropriations |
|
|
| Interim
dividend -20% (1999: 20%) |
|
341,551 |
34,155 |
|
| Proposed
final dividend - 40% (1999: 15%) |
|
68,310 |
25,616 |
|
|
------------------ |
------------------ |
|
|
|
|
102,465 |
59,771 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
140,420 |
42,901 |
|
|
|
|
========== |
========== |
|
| Basic
earnings per share |
|
35 |
Rs. 11.71 |
Rs. 5.98 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
Dr. A.S. Mufti |
|
Raza Kuli Khan Khattak |
|
|
Chief Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2000 |
|
|
|
Share |
Share |
General |
Research and |
Unappro- |
|
|
|
capital |
premium |
reserve |
development |
priated |
Total |
|
|
|
account |
|
reserve |
profit |
|
|
|
|
|
|
|
|
|
Rupees in
thousand |
|
|
|
| Balance
as at June 30, 1998 |
170,775 |
108,675 |
148,000 |
12,750 |
533 |
440,733 |
|
| Net
profit for the year ended |
|
|
|
| June 30, 1999 |
|
|
102,139 |
102,139 |
|
| Interim
dividend - 20% |
|
(34,155) |
(34,155) |
|
