| Treet Corporation Limited |
|
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|
| Annual
Report 1999 |
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| Contents |
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| 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 |
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| Company
Information |
|
|
| BOARD
OF DIRECTORS |
|
| SYED
WAJID ALl |
|
Chairman |
|
| SYED
SHAHID ALl |
|
Managing Director |
|
| DR.
MRS. NILOUFER MAHDI |
|
| MISS
S. FERIEL RIFAAT ALl |
|
| BEHRAM
HASAN |
|
| DR.
AMJAD WAHEED |
|
| 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 |
|
| THE
HONG KONG AND SHANGHI BANKING CORPORATION LIMITED - LAHORE |
|
| MASHREQ
BANK psc - LAHORE |
|
|
| LEGAL
ADVISOR |
|
| SALIM
& BAIG - LAHORE |
|
|
| 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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|
|
| Notice
of Meeting |
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|
| NOTICE
IS HEREBY GIVEN that the Twenty Second Annual General Meeting of Treet |
|
| Corporation
Limited will be held at Ambassador Hotel, 07-Davis Road, Lahore on Monday
20th |
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| December
1999 at 11 A.M. to transact the following business: |
|
|
| Ordinary
Business |
|
|
| 1.
To confirm the minutes of the Extra Ordinary General Meeting held on 14th
June 1999. |
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|
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| 2.
To receive and consider the statement of accounts for the year ended 30th
June 1999, the |
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| report
of Auditors and Directors thereon. |
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|
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| 3.
To approve and declare dividend @ 50% as recommended by the Board of
Directors. |
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|
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| 4.
To appoint Auditors of the Company for the period ended 30 June 2000, and to
fix their |
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| remuneration.
The retiring Auditors M/S. Taseer Hadi Khalid & Co., Chartered
Accountants |
|
| offer
themselves for reappointment. |
|
|
| 5.
To transact any other business with the permission of the Chair. |
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|
By Order of the Board |
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|
Muhammad Rasheed |
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| Lahore:
November 08, 1999 |
|
Company Secretary |
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| NOTES: |
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| (i)
The Share. Transfer Books of the Company for the purpose of Annual General
Meeting will |
|
| be
closed from 14 December 1999 to 20 December 1999 (both days inclusive)
Transfers |
|
| received
in order at the Registered Office of the Company upto 13 December 1999 will
be |
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| considered
in time for the entitlement of cash dividend. |
|
|
| (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. |
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|
| 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 30th June 1999. |
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| The
financial results of the Company are as under |
|
|
|
|
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|
(Rupee in
'000) |
|
|
|
|
|
year ended
June 30, |
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|
|
|
|
1999 |
1998 |
|
|
|
|
| Profit
before Taxation |
|
|
78,887 |
53,390 |
|
| Less
Provision for Taxation |
|
|
28,319 |
26,900 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after Taxation |
|
|
50,568 |
26,490 |
|
| Add:
Un-appropriated Profit brought forward |
|
|
484 |
994 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
51,052 |
27,484 |
|
|
|
|
|
|
| APPROPRIATION: |
|
|
|
|
| Proposed
cash Dividend |
|
|
20,911 |
NIL |
|
| Transfer
to General Reserves |
|
|
30,000 |
27,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
50,911 |
27,000 |
|
|
|
|
------------------ |
------------------ |
|
| Un-appropriated
Profit carried forward |
|
|
141 |
484 |
|
|
|
|
|
|
|
| The
Directors recommend payment of Dividend @ 50% i.e. Rs. 5/- Per Share of Rs.
10 each. |
|
|
| The
year under review stands characterized by disconcerting features-Local Sales
of Razors |
|
| blades
declined by 9% over last year with 15% increase in exports. |
|
|
| The
decline in sales, preponderantly accounted for Carbon Blades, is ascribable
to plethoric |
|
| availability
of smuggled blades nationally at ridiculously low prices. |
|
|
| In
view of lower sales and production as against preceding year, the operating
profit is 23% |
|
| lower,
which has also been in some measures, contributed to by unusual promotional
expenditure |
|
| made
to combat resistance in achieving sales. |
|
|
| The
year under review also saw an increase in financial expenditure over last
year as volume |
|
| of
borrowing went upto meet 30% L/C margin and working capital requirements of
Toilet Soap |
|
| and
unusually high tie up in inventories of Razor Blades. |
|
|
| In
addition to ensuring efficiency and effectiveness in the logistic system of
Company's products |
|
| and
with a view to improve the overall business, a beauty soap was launched in
the current |
|
| year.
In terms of sales and gross profit, Soap business has not done impressively. |
|
|
| It
is now imperative for the Company to lay emphasis locally and in foreign
markets on promoting |
|
| the
sale of bonded systems (all variants) and good value for money, Double Edged
Stainless |
|
| Blades
domestically as the phenomenon of switching to better quality blades seems to
be |
|
| escalating
which trend is likely to persist. Doing so will necessitate acquisition of
requisite |
|
| wherewithal
and innovative marketing to extricate the company from the impending
difficult |
|
| situation.
The Company therefore will have to raise appropriate resources to be able to
carry |
|
| out
the pre-requisite and quite expeditiously at that. The Company is viewing the
future with |
|
| caution |
|
|
| Necessary
arrangements have been made to meet any potential threat that may arise due |
|
| to
millennium bug. All software and hardware that were not Y2K compliant have
been modified |
|
| to
ensure that software and hardware are year 2000 compliant |
|
|
| The
Board wishes to record its deep sorrow and grief on the sad demise of Syed
Asad Ali, Vice |
|
| Chairman
and Ex-Chief Executive of the Company who made invaluable contribution to the |
|
| development
of the Company. May Allah rest his soul in peace. The vacancy created by him |
|
| was
filled in by Miss S. Feriel Rifaat Ali D/o late Syed Asad Ali. Dr. Amjad
Waheed and Dr. Mrs. |
|
| Niloufer
Mahdi joined the Board to replace Messrs. Wusooq Khaleeli and
Mushtaq-H-Khwaja. |
|
| The
Board congratulates them on their election and places on record its
appreciation of the |
|
| valuable
services rendered by Messrs. Wusooq Khaleeli and Mushtaq-H-Khwaja. |
|
|
| The
Board appreciates the efforts and dedication of all employees of the Company,
which |
|
| enabled
us to run the Company efficiently. |
|
|
| The
present Auditors Messrs. 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,
1999 is |
|
| presented
on page 30. |
|
|
| LAHORE |
|
Basit H. Syed |
|
Syed Shahid Ali |
|
| November
08, 1999 |
Director |
|
Managing Director |
|
|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of Treet Corporation
Limited as at 30 June 1999 |
|
| 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; |
|
|
|
| (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 1999 and of the profit and the
cash flow |
|
| for
the year then ended; and |
|
|
|
| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, |
|
| 1980. |
|
|
|
| LAHORE |
|
|
TASEER HADI KHALID & CO. |
|
| November
08, 1999 |
|
|
Chartered Accountants |
|
|
|
| Balance
Sheet |
|
| As
At June 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
3 |
138,741 |
124,038 |
|
| LONG
TERM INVESTMENTS |
|
4 |
21,588 |
24,019 |
|
| LONG
TERM DEPOSITS |
|
5 |
1,535 |
4,069 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
6 |
40,297 |
33,858 |
|
| Stock
and stores-in-transit - at cost |
|
|
13,531 |
6,305 |
|
| Stock-in-trade |
|
7 |
126,198 |
87,300 |
|
| Due
from Associated company |
|
8 |
15,297 |
18,425 |
|
| Trade
debtors - Unsecured considered good |
|
|
23,983 |
18,030 |
|
| Advances,
deposits, prepayments and other receivables |
9 |
44,953 |
53,531 |
|
| Cash
and Bank balances |
|
10 |
49,240 |
35,491 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
313,499 |
252,940 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of liabilities |
|
|
|
| against
assets subject to finance lease |
|
17 |
13,640 |
11,156 |
|
| Finance
under mark-up arrangements - secured |
|
11 |
53,419 |
39,392 |
|
| Loan
from director- unsecured |
|
12 |
13,300 |
13,300 |
|
| Creditors,
accrued expenses and other liabilities |
|
13 |
95,357 |
80,269 |
|
| Provision
for taxation |
|
14 |
24,000 |
37,400 |
|
| Unclaimed
dividend |
|
|
511 |
516 |
|
| Dividend
payable |
|
|
20,911 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
221,138 |
182,033 |
|
|
|
|
------------------ |
------------------ |
|
| NET
CURRENT ASSETS |
|
|
92,361 |
70,907 |
|
|
|
|
------------------ |
------------------ |
|
| NET ASSETS |
|
|
254,225 |
223,033 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| FINANCED BY: |
|
|
|
| SHARE
CAPITAL |
|
15 |
41,822 |
41,822 |
|
| RESERVES |
|
16 |
131,349 |
101,349 |
|
| UNAPPROPRIATED
PROFIT |
|
|
141 |
484 |
|
|
|
|
------------------ |
------------------ |
|
| SHARE
HOLDERS' EQUITY |
|
|
173,312 |
143,655 |
|
| LONG
TERM DEPOSIT |
|
|
60 |
60 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO FINANCE LEASE |
17 |
13,383 |
16,008 |
|
| DEFERRED-LIABILITY
FOR STAFF RETIREMENT BENEFITS |
18 |
67,470 |
63,310 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
19 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
254,225 |
223,033 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
| LAHORE |
|
Syed Shahid Ali |
|
Basit H. Syed |
|
| November
08, 1999 |
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Profit
And Loss Account |
|
| For
The Year Ended June 30, 1999 |
|
|
|
Note |
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
| Sales - Net |
|
20 |
538,960 |
595,100 |
|
| Cost
of Goods Sold |
|
21 |
387,516 |
411,348 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
151,444 |
183,752 |
|
| Gross
profit from soap operations |
|
22 |
16,770 |
520 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
168,214 |
184,272 |
|
|
|
|
|
|
| Administrative
expenses |
|
23 |
10,943 |
13,540 |
|
| Selling
and distribution expenses |
|
24 |
56,276 |
53,162 |
|
| Financial
expenses |
|
25 |
23,459 |
20,233 |
|
| Workers'
profit participation fund |
|
|
4,400 |
3,602 |
|
| Workers'
welfare fund |
|
|
1,988 |
1,622 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
97,066 |
92,159 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
71,148 |
92,113 |
|
| Other income |
|
26 |
7,739 |
4,214 |
|
| Provision
for staff retirement scheme |
|
2.2(c) |
-- |
29,495 |
|
| Provision
for diminution in market value of investments |
|
-- |
13,442 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
78,887 |
53,390 |
|
|
|
|
| Taxation |
|
|
|
| Current year |
|
|
24,000 |
26,900 |
|
| Prior year's |
|
|
4,319 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
28,319 |
26,900 |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
50,568 |
26,490 |
|
| Unappropriated
profit brought forward |
|
484 |
994 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
51,052 |
27,484 |
|
|
|
|
| APPROPRIATION |
|
|
|
| Proposed
cash dividend @ 50 % (1998: Nil) |
|
20,911 |
-- |
|
| Transferred
to General reserve |
|
30,000 |
27,000 |
|
|
|
------------------ |
------------------ |
|
|
|
50,911 |
27,000 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
141 |
484 |
|
|
|
|
========== |
========== |
|
|
| These
accounts should be read in conjunction with the annexed notes. |
|
|
| LAHORE |
|
Syed Shahid Ali |
|
Basit H. Syed |
|
| November
08, 1999 |
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Cash
Flow Statement |
|
| For
the year ended June 30, 1999 |
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
before taxation |
|
|
78,887 |
53,390 |
|
| Adjustments
for: |
|
|
|
|
| Financial
charges for the year |
|
|
23,459 |
20,233 |
|
| Depreciation |
|
|
23,185 |
20,079 |
|
| Provision
for gratuity |
|
|
5,041 |
5,920 |
|
| Provision
for staff retirement scheme |
|
|
6,364 |
29,495 |
|
| Gain
on sale of fixed assets |
|
|
(1,114) |
(493) |
|
| Gain
on sale of long term investment |
|
|
(2,404) |
-- |
|
| Provision
for WPPF and WWF |
|
|
6,388 |
-- |
|
| Interest
on advance to associated company |
|
|
(1,034) |
-- |
|
| Dividend
Income |
|
|
(600) |
-- |
|
| Provision
for diminution in market value of investments |
|
-- |
13,442 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
59,285 |
88,676 |
|
|
|
|
------------------ |
------------------ |
|
| Operating
profit before working capital changes |
|
|
138,172 |
142,066 |
|
|
|
|
| Increase/(decrease)
in operating assets |
|
|
| Stores
and spares |
|
|
(6,439) |
(1,102) |
|
| Stock in trade |
|
|
(38,898) |
(12,834) |
|
| Stock
and stores-in-transit |
|
|
(7,226) |
23,676 |
|
| Due
from associated company |
|
|
4,167 |
1,306 |
|
| Trade debtors |
|
|
(5,953) |
(8,065) |
|
| WPPF
and WWF paid |
|
|
(6,012) |
-- |
|
| Advances,
deposits, prepayments and other receivables |
|
(9,302) |
(5,272) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(69,663) |
(2,291) |
|
| Increase/(decrease)
in operating liabilities |
|
|
|
|
| Creditors,
accrued expenses and other liabilities |
|
|
17,785 |
(20,283) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
17,785 |
(20,283) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
86,294 |
119,492 |
|
|
|
|
| Financial
charges paid |
|
|
(20,287) |
(21,016) |
|
| Taxes paid. |
|
|
(23,837) |
(18,474) |
|
| Gratuity paid |
|
|
(2,767) |
(3,815) |
|
| Dividend paid |
|
|
(4) |
(5,832 |
|
| Retirement
benefits paid |
|
|
(4,479) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(51,374) |
(49,137) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from operating activities |
|
|
34,920 |
70,355 |
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
(Rupees in
'000) |
|
|
|
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
| Advance
received against sale of subsidiary shares |
|
|
(6,240) |
6,244 |
|
| Capital
expenditure incurred |
|
|
(38,192) |
(39,674) |
|
| Proceeds
from sale of fixed assets |
|
|
1,406 |
931 |
|
| Long
term deposits |
|
|
2,534 |
(1,177) |
|
| Dividend
Received |
|
|
600 |
-- |
|
| Proceeds
from sale of long term investment |
|
|
4,835 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash outflow from investing activities |
|
|
(35,057) |
(33,676) |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Obligations
under finance lease |
|
|
12,040 |
13,341 |
|
| Payment
of lease obligation |
|
|
(12,181) |
(13,585) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing activities |
|
|
(141) |
(244) |
|
|
|
|
------------------ |
------------------ |
|
| Net
increase in cash and cash equivalents |
|
|
(278) |
36,435 |
|
| Cash
and cash equivalents at the beginning of the year |
|
(3,901) |
(40,336) |
|
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalents at end of the year |
|
|
(4,179) |
(3,901) |
|
|
|
|
========== |
========== |
|
|
|
|
| NOTE: |
|
|
|
|
|
|
|
| CASH
AND CASH EQUIVALENTS |
|
|
|
|
|
| Cash
and bank balances |
|
|
49,240 |
35,491 |
|
| Finance
under mark-up arrangements |
|
|
(53,419) |
(39,392) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(4,179) |
(3,901) |
|
|
|
|
========== |
========== |
|
|
| LAHORE |
|
Syed Shahid Ali |
|
Basit H. Syed |
|
| November
08, 1999 |
CHIEF EXECUTIVE |
|
DIRECTOR |
|
|
|
| Notes
to the Accounts |
|
| For
the year ended June 30, 1999 |
|
|
| 1.
STATUS AND NATURE OF B |
