| General Tyre and Rubber Company of Pakistan
Limited |
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
|
|
| 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 A1-Shamali |
|
| Chairman |
|
|
| Dr A.S. Mufti |
|
| Chief
Executive |
|
|
| Mr.
Irfan Siddiqui |
|
| Mr.
Zafar Aziz Osmani |
|
| Mr.
Tasnimul Haq Farooqui |
|
| Mr.
Istaqbal Mehdi |
|
| Mr. Nasim Beg |
|
| Lt.
Gen (Retd) All Kuli Khan Khattak |
|
| Mr.
Ahmed Kuli Khan Khattak |
|
| Mr.
Raza Kuli Khan Khattak |
|
| Mr.
Mushtaq Ahmed Khan |
|
| Mrs.
Shaheen Khalil Tariq |
|
|
| Mr.
Manuel Guerreiro |
|
|
| Secretary |
|
| Tasnimul
Haq Farooqui |
|
|
| 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 |
|
| National
Development Finance Corporation |
|
| Credit
Agricole Indosuez |
|
| Societe
Generale The French and International Bank |
|
| Bank
AI-Habib Limited |
|
| ANZ
Grindlays Bank |
|
| Askari
Commercial Bank Limited |
|
|
| Auditors |
|
| A.
F. Ferguson & Co. |
|
| Chartered
Accountants |
|
| Hameed
Chaudhri & Co. |
|
| Chartered
Accountants |
|
|
| Registered
Office & Factory |
|
| H-23/2,
Landhi Industrial Trading Estate, Landhi, |
|
| Karachi.
Phone: 5080172-82 |
|
|
| Head Office |
|
| P
& O Plaza, I.I. Chundrigar Road, Karachi. |
|
| Phone:
2417571-4 Fax: 2430662, 2418'/81 |
|
|
| Branch
Offices |
|
|
| Lahore: |
|
| Gardee
Trust Building, Thornton Road, Lahore. |
|
| Phone:
7352663, 7313852 Fax: 7235745 |
|
|
| Islamabad: |
|
| Plot
No. 176, 1 - 10/3 Kurang Road, Islamabad. |
|
| Phone:
449955-6 Fax: 417071 |
|
|
| Liaison Office |
|
| 6,
Agha Khan Road, F-6/4, Islamabad. |
|
| Phone
& Fax: 820829 |
|
|
|
| NOTICE
OF MEETING |
|
|
| Notice
is hereby given that the Thirty-sixth Annual General Meeting of The General
Tyre & Rubber Company of |
|
| Pakistan
Limited will be held at Beach Luxury Hotel, Karachi on Thursday, the 30th
December, 1999 at 2:30 p.m. to |
|
| transact
the following business: |
|
|
| 1.
To confirm the minutes of the Extraordinary General Meeting of the
Shareholders held on August 21, 1999. |
|
|
| 2.
To receive and consider the audited accounts for the year ended 30th June,
1999 together with Directors' and |
|
| Auditors'
reports thereon. |
|
|
|
| 3.
To approve payment of final cash dividend @ Rs. 1.50 per share i.e. 15% as
recommended by the Directors. |
|
|
| 4.
To appoint auditors for the year 1999 - 2000 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 matter with the permission of the
Chair. |
|
|
|
BY ORDER OF THE BOARD |
|
|
| Karachi |
|
TASNIMUL HAQ FAROOQUI |
|
| Dated:
November 18, 1999 |
Secretary |
|
|
| NOTES: |
|
|
| 1.
The share transfer books of the Company will remain closed from 18th
December, 1999 to 30th December, |
|
| 1999
(both days inclusive). Transfers received at the Company's Shares Department
located at Mezzanine |
|
| Floor,
Parker House, Aiwane Tijarat Road, Karachi at the close of business on 17th
December, 1999 will be |
|
| treated
'in time for the purpose of payment of dividend 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 not later than 48 hours
before the time for |
|
| holding
the meeting. |
|
|
| 3.
Members are requested to notify any change in their addresses immediately. |
|
|
|
| On
behalf of your Board of Directors, I am pleased to present to you the Annual
Report for the year ended June 30, 1999. |
|
|
| OPERATING
PERFORMANCE |
|
| The
Company's performance during the year under review has been most impressive.
It crossed Rs. 2.0 billion mark in sales |
|
| achievement,
thus recording the highest sales ever achieved. The Company produced 743,780
tyres and sold 744,185 tyres |
|
| during
the year as against 668,666 tyres and 639,595 tyres respectively last year.
The Gross Sales increased to Rs. 2,104.6 |
|
| Million
during the year under review, which was higher by 26% as compared to the last
year's Gross Sales of Rs. 1,666.2 Million. |
|
| The
increase in sales is attributable to higher purchases by Defence Services and
demand spurred by green tractor scheme. The |
|
| gross
profit increased to Rs. 389.9 Million representing 22 % of net sales as
compared to Rs. 285.4 Million, representing 20% of |
|
| net
sales last year. The pretax profit increased to Rs. 179.3 Million as against
Rs. 11 5.4 Million achieved last year due to higher |
|
| volume
sales and increase in other income resulting from gain on insurance claim of
Rs. 62.1 Million. |
|
|
| MANUFACTURING |
|
| Production
capacities were geared up to meet enhanced sales demand despite bottleneck in
the mixing area. Insurance claim |
|
| representing
assets damaged due to fire in the mixing department was settled by the
insurers. In order to rebuild the mixing room |
|
| capacity,
a consultant has been engaged to design/supervise civil work and list of
equipment is being finalized. The requirement |
|
| of
compounds is still being met from outside sources. |
|
|
| MARKET |
|
|
| Increased
purchases by Defence Services and higher demand for farm tyres emanating from
green tractor scheme provided |
|
| tremendous
boost to the sales during the year under review. However, we anticipate
difficult market conditions due to slow down |
|
| in
economic activity and reduced sales to Assembly Plants particularly Pak
Suzuki. |
|
|
| BOARD
OF DIRECTORS |
|
| As
a consequence of election to the Board of Directors held in the Extra
Ordinary General meeting on August 21, 1999, a new |
|
| Board
was elected. The Board Members place on record their appreciation for the
valuable services rendered by the outgoing |
|
| Directors
namely Brig. (Retd.) Mahmud Jan, Mr. Adnan Ahmed Ali, Mr. Humayaun S. Mufti,
Chaudhry Sher Mohammad, Mr. |
|
| Samir
Ahmed and Mr. David R. Johnson and welcome the new Directors on the Board |
|
|
| Y2K
COMPLIANCE |
|
| All
computer hardware, other automated equipment and software in use are Y2K
compliant. |
|
|
| FUTURE
OUT LOOK |
|
| The
economy is currently passing through a delicate transitionary phase amid
economic slow down and change of government. |
|
| In
addition, dumping of tyres from China, Indonesia, Korea and Taiwan continues
in large scale. Sustaining sales growth in the |
|
| current
financial year will be a challenge. |
|
|
| I
am pleased to report that trial production of Steel Belted Radial tyres has
been accomplished. Commercial production will be |
|
| taken
up after completion of field testing, which is in progress. |
|
|
| STAFF/LABOUR
RELATIONS |
|
|
| New
Collective Bargaining Agent ( CBA ) was elected in the elections held during
the year. The Management maintains cordial |
|
| relations
with the CBA resulting in improved efficiency at factory. |
|
|
| On
behalf of the Board, I wish to extend my appreciation for the dedicated
services rendered by all the employees of the |
|
| Company. |
|
|
Abdalazim Mohammad Ali
Al-Shamali |
|
|
Chairman |
|
|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
|
| Your
directors are pleased to present the thirty sixth annual report and audited
accounts of the company for the year ended |
|
| June 30, 1999. |
|
|
| Rupees
in thousand |
|
|
| Financial
Results |
|
| Profit
for the year after taxation |
|
102,139 |
|
| Unappropriated
profit brought forward |
|
533 |
|
|
---------- |
|
|
102,672 |
|
|
| Appropriations |
|
| Interim
dividend @ 20% |
|
34,155 |
|
| Proposed
final dividend @ 15% |
|
25,616 |
|
|
---------- |
|
|
59,771 |
|
|
---------- |
|
| Unappropriated
profit carried forward |
|
42,901 |
|
|
========== |
|
| Earning
per share |
|
Rs. 5.98 |
|
|
| 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, 1999 is
attached. |
|
|
| Technical
Assistance Agreement |
|
| General
Tire International Co. (GTIC) USA and Englewood Services Inc. (ESI) USA have
communicated their intention not |
|
| to
renew Technical Assistance Agreement and agreement to supply technical
personnel respectively. The Management is |
|
| currently
negotiating with GTIC and ESI on these issues. In case, discontinuation of
technical assistance by GTIC is |
|
| enforced,
the Company will not be able to use the brand name "General" for
its product and the corporate name "General |
|
| Tyre". |
|
|
| 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 |
|
|
Chief Executive |
|
| Karachi:
November 30, 1999 |
|
|
|
| FIVE
YEARS AT A GLANCE |
|
|
(Rupees in million) |
|
|
1999 |
1998 |
1997 |
1996* |
1994 |
|
|
| Operating
Results |
|
|
| Gross sales |
|
2,105 |
1,666 |
1,355 |
2,445 |
1,200 |
|
|
| Net sales |
|
1,788 |
1,404 |
1,089 |
1,974 |
990 |
|
|
| Gross profit |
|
390 |
286 |
137 |
252 |
162 |
|
|
| Profit
before tax |
|
179 |
115 |
2 |
29 |
28 |
|
|
| Profit after tax |
|
102 |
75 |
3 |
9 |
30 |
|
|
| Financial
Position |
|
|
| Gross assets |
|
2,245 |
1,716 |
1,771 |
1,727 |
1,581 |
|
| Paid
up share capital |
|
171 |
171 |
171 |
155 |
124 |
|
|
| Reserves
and unappropriated profit |
312 |
270 |
229 |
243 |
125 |
|
|
| Shareholders'
equity |
|
483 |
441 |
400 |
398 |
249 |
|
| Breakup
value per share |
|
28 |
26 |
23 |
26 |
20 |
|
|
| Contribution
to public exchequer |
|
375 |
315 |
374 |
448 |
332 |
|
|
| No.
of employees |
|
1,045 |
1,024 |
1,128 |
1,097 |
1,076 |
|
|
| *
1996 Accounts are of eighteen months January 1995 - June 1996 |
|
|
|
| AUDITORS'
REPORT TO THE MEMBER |
|
|
| We
have audited the annexed balance sheet of THE GENERAL TYRE AND RUBBER COMPANY
OF PAKISTAN |
|
| LIMITED
as at June 30, 1999 and the related profit and loss account, statement of
changes in equity, and case 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; |
|
|
| (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 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 June
30, 1999 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 C. company |
|
| and
deposited in the Central Zakat Fund established under section 7 of that
Ordinance. |
|
|
| Co. |
|
Hameed Chaudhri & Co. |
|
| Chartered
Accountants |
|
Chartered Accountants |
|
|
| Karachi,
December 2, 1999 |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
1999 |
1998 |
|
|
Note |
(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 |
|
|
42,901 |
533 |
|
|
|
---------- |
---------- |
|
|
|
312,326 |
269,958 |
|
|
|
---------- |
---------- |
|
|
|
483,101 |
440,733 |
|
| REDEEMABLE
CAPITAL |
|
6 |
38,004 |
55,317 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO |
|
7 |
45,703 |
30,348 |
|
| FINANCE
LEASES |
|
|
| DEFERRED
LIABILITIES |
|
| Staff
retirement gratuity |
|
54,168 |
57,599 |
|
| Deferred
taxation |
|
8 |
-- |
7,993 |
|
|
|
---------- |
---------- |
|
|
|
54,168 |
65,592 |
|
| LONG
TERM DEPOSITS FROM DEALERS |
|
9 |
6,850 |
6,600 |
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
maturity of redeemable capital |
|
6 |
17,313 |
14,506 |
|
| Current
maturity of long-term loan |
|
-- |
3,622 |
|
| Current
maturity of liabilities against assets |
|
|
|
| subject
to finance leases |
|
7 |
13,139 |
7,461 |
|
| Short-term
finances |
|
10 |
-- |
45,000 |
|
| Running
finance under mark-up arrangements |
|
11 |
48,984 |
90,133 |
|
| Creditors,
accured expenses and other liabilities |
|
12 |
628,582 |
295,149 |
|
| Taxation |
|
|
106,155 |
-- |
|
| Dividends' |
|
13 |
63,225 |
34,611 |
|
|
|
---------- |
---------- |
|
|
|
877,398 |
490,482 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
14 |
|
|
|
---------- |
---------- |
|
|
1,505,224 |
1,089,072 |
|
|
========== |
========== |
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
fixed assets |
|
15 |
362,214 |
282,705 |
|
| Capital
work-in-progress |
|
16 |
28,504 |
104,584 |
|
|
|
|
|
|
390,718 |
387,289 |
|
| LONG
TERM INVESTMENTS |
|
17 |
458 |
604 |
|
| LONG-TERM
LOANS AND ADVANCES |
|
18 |
2,439 |
2,015 |
|
| DEFERRED
TAXATION |
|
8 |
37,722 |
-- |
|
| LONG-TERM
DEPOSITS AND DEFERRED COSTS |
19 |
1,868 |
2,403 |
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
20 |
163,597 |
147,529 |
|
| Stocks |
|
21 |
408,466 |
334,386 |
|
| Trade debtors |
|
22 |
150,512 |
77,975 |
|
| Loans
and advances |
|
23 |
8,092 |
10,034 |
|
| Deposits,
prepayments and other receivables |
|
24 |
124,804 |
93,496 |
|
| Taxation |
|
|
-- |
1,128 |
|
| Cash
and bank balances |
|
25 |
216,548 |
32,213 |
|
|
|
1,072,019 |
696,761 |
|
|
|
---------- |
---------- |
|
|
1,505,224 |
1,089,072 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Abdalazim
Mohammad Ali Al-Shamali |
|
Dr. A.S. Mufti |
|
|
Chairman |
|
Chief Executive |
|
|
|
| PROFIT
& LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Note |
(Rupees in
thousand) |
|
|
| Net sales |
|
26 |
1,787,891 |
1,403,635 |
|
| Cost of sales |
|
27 |
1,397,920 |
1,118,198 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
389,971 |
285,437 |
|
| Administrative
expenses |
|
28 |
48,675 |
42,284 |
|
| Selling
and distribution expenses |
|
29 |
68,676 |
61,573 |
|
|
---------- |
---------- |
|
|
117,351 |
103,857 |
|
|
---------- |
---------- |
|
| Operating
profit |
|
272,620 |
181,580 |
|
| Other income |
|
30 |
80,919 |
11,134 |
|
|
---------- |
---------- |
|
|
353,539 |
192,714 |
|
| Financial
charges |
|
31 |
52,595 |
62,144 |
|
| Other charges |
|
32 |
121,620 |
15,121 |
|
|
---------- |
---------- |
|
|
174,215 |
77,265 |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
179,324 |
115,449 |
|
| Taxation |
|
33 |
77,185 |
40,802 |
|
|
|
|
---------- |
---------- |
|
| Profit
after taxation |
|
102,139 |
74,647 |
|
| Unappropriated
profit brought forward |
|
533 |
3,041 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
102,672 |
77,688 |
|
| Appropriations |
|
|
| Interim
dividend - 20% (1998: Nil) |
|
34,15 5 |
-- |
|
| Proposed
final dividend - 15% (1998: 20%) |
|
25,616 |
34,155 |
|
| Transfer
to general reserve |
|
-- |
43,000 |
|
|
---------- |
---------- |
|
|
59,771 |
77,155 |
|
|
---------- |
---------- |
|
| Unappropriated
profit carried forward |
|
42,901 |
533 |
|
|
========== |
========== |
|
| Basic
earnings per share |
|
34 |
Rs. 5.98 |
Rs. 4.37 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Abdalazim
Mohammad Ali AI-Shamali |
|
Dr. A.S. Mufti |
|
| Chairman |
|
Chief Executive |
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
Research |
|
|
|
Share |
Share |
General |
and |
Unappro- |
|
|
|
capital |
premium |
reserve |
develop- |
priated |
Total |
|
|
reserve |
account |
|
ment |
profit |
|
|
|
|
Rupees in thousand |
|
|
| Balance
as at June 30, 1997 |
170,775 |
108,675 |
105,000 |
12,750 |
3,041 |
400,241 |
|
| Net
profit for the year |
|
74,647 |
74,647 |
|
| Proposed
final dividend 20% |
|
(34,155) |
(34,155) |
|
| Transfer
to general reserve |
|
43,000 |
|
(43,000) |
-- |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Balance
as at June 30, 1998 |
170,775 |
108,675 |
148,000 |
12,750 |
533 |
440,733 |
|
| Net
profit for the year |
|
102,139 |
102,139 |
|
| Interim
dividend - 20% |
|
(34,155) |
(34,155) |
|
| Proposed
final dividend - 15% |
|
(25,616) |
(25,616) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| Balance
as at June 30, 1999 |
170,775 |
108,675 |
148,000 |
12,750 |
42,901 |
483,101 |
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Abdalazim
Mohammad Ali Al-Shamali |
|
Dr. A.S. Mufti |
|
| Chairman |
|
Chief Executive |
|
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
