|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TREET CORPORATION LIMITED |
|
|
(Annual
Report for the period 18 months ended June 30, 1996 |
|
|
|
Contents |
|
| BOARD
OF DIRECTORS |
|
|
2 |
|
| NOTICE OF MEETING |
|
|
3 |
|
| REPORT
OF DIRECTORS |
|
|
4 |
|
| AUDITORS' REPORT |
|
|
6 |
|
| BALANCE
SHEET |
|
|
7 |
|
| PROFIT
AND LOSS ACCOUNT |
|
|
8 |
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
9 |
|
| NOTES
TO THE ACCOUNTS |
|
11 |
|
| FORM - 34 |
|
28 |
|
|
|
|
|
|
|
| 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 |
|
| KANDAWALA
BUILDING |
|
| M.A.
JINNAH ROAD |
|
| KARACHI-74400 |
|
|
| BANKERS |
|
| ANZ
GRINDLAYS BANK p.l.c. - KARACHI |
|
| NATIONAL
BANK OF PAKISTAN - KARACHI |
|
|
| LEGAL
ADVISOR |
|
| HUSSAIN
AND HAlDER - KARACHI |
|
|
| FACTORIES |
|
| HALl
ROAD, HYDERABAD-71900 |
|
| 72-B,
KOT LAKHPAT INDUSTRIAL AREA, |
|
| LAHORE |
|
|
|
|
|
Notice of Meeting |
|
| NOTICE
IS HEREBY GIVEN that the Nineteenth Annual General Meeting of Treet |
|
| Corporation
Limited will be held at Hotel Holiday Inn, Crowne Plaza, Shahrah-e-Faisal, |
|
| Karachi,
on Saturday 21st December 1996'at 2.00 p.m. to transact the following
business. |
|
|
| ORDINARY
BUSINESS: |
|
|
| 1.
To confirm the minutes of the Extraordinary General Meeting held on 30th June |
|
| 1996. |
|
|
|
| 2.
To receive and consider the statement of accounts for the period of 18 months |
|
| ended
30,th June 1996, the repeal of Auditors and Directors thereon. |
|
|
|
|
| 2.
(a) declare a dividend. |
|
|
| 3.
To appoint Auditors and fix their remuneration. |
|
|
| 4.
To transact any other business with the permission of the Chair. |
|
|
| NOTES: |
|
| i)
The Share Transfer Books of the Company will remain closed from 12th December |
|
| 1996
to 21st December 1996 (both days inclusive). |
|
|
| ii)
A member entitled to attend and vote at the Annual General Meeting is also
entitled |
|
| to
appoint another member as proxy to attend and vote instead of him. |
|
|
| iii)
The instrument appointing proxy must be received at the Registered Office of
the |
|
| Company
not less than forty eight hours before the time appointed for the meeting. |
|
|
|
|
|
Report of Directors to
the Members |
|
| The
Board of Directors of your Company feel pleasure in presenting the Accounts
for |
|
| Eighteen
Months period ended 30 June 1996. |
|
|
| The
Directors are greatly satisfied to have achieved record earnings. Sales
reached 595 |
|
| Million
Rupees for an averaged out year of 12 months, more than 189 million rupees |
|
| higher
than the record set last year. Gross earnings increased to 18.8% from 14.9%. |
|
| This
is especially commendable keeping in view the continued sliding in foreign
currency |
|
| exchange
rates and increase in cost of utilities coupled with inflationary pressures. |
|
| These
factors together adversely contributed to the increase in cost of almost all
inputs |
|
| of
Company's products. Rupee declined by 14% against US Dollar during 18 month |
|
| period.
Regulatory duty on imports at the rate of 10% was imposed in the year 1995. |
|
|
| To
combat the situation, the Company besides consolidating its acquisitions
resorted to |
|
| relentlessly
cutting costs and achieving higher standards of production efficiency. |
|
|
| Fighting
and instability in Afghanistan casually and temporarily obstructed smuggled |
|
| goods
trade into Pakistan and provided an opportunity to the Company to fill in the
gap |
|
| and
modestly stabilise its selling prices in the market. |
|
|
| Inevitably,
the advertising expenditure and Travelling cost of sales staff remained high |
|
| and
was incurred to achieve higher sales. |
|
|
| Looking
ahead, the Company has excellent growth potentials in the categories of |
|
| disposable
shaving systems and Double Edge Stainless Blades. This is precisely the |
|
| area
where we are also trying to grow overseas with particular reference to
emerging |
|
| markets. |
|
|
| The
Employee-Management relations remained cordial as usual which made it
possible |
|
| to
present these results to you inspite of odds as mentioned above. The Board of |
|
| Directors
record its appreciation for valuable contribution made by Mr. Shabbir A. |
|
| Ferozpurwalla
and Mr. Attaul Haque Ansari during their tenure as Directors of the |
|
| Company
and extend warm welcome to Mr. N. Z. Mama on the Board. |
|
|
| The
profit and appropriation for the year are as follows: |
|
|
|
(Rupees in '000) |
|
|
|
|
| Operational
Profit for the year |
|
|
43,166 |
|
| Add:
Other Income |
|
|
9,722 |
|
|
|
--------- |
|
| Profit
before Tax |
|
|
52,888 |
|
| Less:
Provision for Taxation |
|
|
20,078 |
|
|
|
--------- |
|
| Profit
After Taxation |
|
|
32,810 |
|
| Less:
Loss brought forward |
|
|
(810) |
|
|
|
--------- |
|
|
|
|
| Available
for Appropriation |
|
|
32,000 |
|
| Less:
Proposed Cash Dividend 15% |
6,273 |
|
|
| Transfer to General Reserve |
25,000 |
|
31,273 |
|
|
|
--------- |
|
--------- |
|
| Un-appropriated
profit |
|
|
|
| Carried
forward |
|
727 |
|
|
|
========= |
|
|
| 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,
1996 is |
|
| attached. |
|
|
|
|
Auditor's Report to the
Members |
|
| We
have audited the annexed balance sheet of Treet Corporation Limited as at 30
June 1996 and |
|
| the
related profit and loss account and statement of changes in financial
position, together with the |
|
| notes
forming part thereof for the eighteen months period 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 period was for the purpose of the
company's |
|
| business;
and |
|
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| period
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 1996 and of the profit and the changes in
financial position |
|
| for
the period then ended; and |
|
|
|
| (d)
in our opinion, no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
|
Balance Sheet |
|
|
|
|
As at 30 June 1996 |
|
|
|
|
|
|
30 June |
31 December |
|
|
Note |
1996 |
1994 |
|
|
|
|
(Rupees in '000) |
|
|
| FIXED
CAPITAL EXPENDITURE |
|
3 |
94,408 |
93,634 |
|
| LONG
TERM INVESTMENTS - at cost |
|
4 |
31,571 |
31,571 |
|
| TRADE
MARK - at cost Rs. 240 (1994: Rs. 240) |
|
|
|
| LONG
TERM ADVANCES, DEPOSITS |
|
|
|
| AND
PREPAYMENTS |
|
5 |
1,781 |
3,400 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
| Stores
and spares |
|
6 |
35,089 |
40,370 |
|
| Stock
and stores-in-transit - At cost |
|
|
13,795 |
13,163 |
|
| Stock-in-trade |
|
7 |
74,102 |
43,558 |
|
| Due
from subsidiary company |
|
8 |
19,069 |
6,616 |
|
| Trade
debtors - Unsecured considered good |
|
7,537 |
5,719 |
|
| Advances,
deposits, prepayments and other receivables 9 |
22,584 |
10,900 |
|
|
|
|
|
|
| Cash
and Bank Balances |
|
10 |
10,950 |
6,644 |
|
|
|
--------- |
--------- |
|
|
|
183,126 |
126,970 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity |
|
11 |
12,844 |
34,368 |
|
| Finance
under mark-up arrangements - secured |
12 |
73,477 |
80,196 |
|
| Morabaha
finance - secured |
|
13 |
9,484 |
3,500 |
|
| Loan
from director - unsecured |
|
14 |
4,000 |
6,000 |
|
| Creditors,
accrued expenses and other liabilities |
15 |
59,289 |
40,546 |
|
| Provision
for taxation |
|
16 |
13,300 |
3,756 |
|
| Unclaimed
dividend |
|
372 |
372 |
|
| Dividend
payable |
|
6,273 |
- |
|
|
--------- |
--------- |
|
|
|
179,039 |
168,738 |
|
|
|
--------- |
--------- |
|
| NET
CURRENT ASSETS/(LIABILITIES) |
|
4,087 |
(41,768) |
|
|
|
--------- |
--------- |
|
| NET ASSETS |
|
|
131,847 |
86,837 |
|
|
|
========== |
========== |
|
| FINANCED
BY: |
|
|
|
| SHARE
CAPITAL |
|
17 |
41,822 |
27,882 |
|
| RESERVES |
|
|
18 |
51,349 |
19,379 |
|
| UNAPPROPRIATED
PROFIT/(LOSS) |
|
727 |
(810) |
|
|
--------- |
--------- |
|
| SHARE
HOLDERS' EQUITY |
|
93,898 |
46,451 |
|
| LIABILITIES
AGAINST ASSET SUBJECT TO |
|
|
|
| FINANCE
LEASE |
|
19 |
9,092 |
19,232 |
|
| DEFERRED
LIABILITY FOR STAFF GRATUITY |
|
28,857 |
21,154 |
|
| COMMITMENTS |
|
20 |
--------- |
--------- |
|
|
|
131,847 |
86,837 |
|
|
|
========== |
========== |
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
| Profit
and Loss Account |
|
| For
the eighteen months period ended 30 June 1996 |
|
|
(Rupees in '000) (Rupees in '000) |
|
|
|
|
Note |
Six |
Twelve |
Eighteen |
Year |
|
|
|
months |
months |
months |
ended 31 |
|
|
|
|
period |
period |
period 30 |
December |
|
|
|
|
ended 30 |
ended 30 |
Jun-96 |
1994 |
|
|
|
|
Jun-95 |
Jun-96 |
|
|
|
|
|
|
|
| Sales - Net |
|
21 |
274,141 |
616,668 |
890,809 |
404,958 |
|
|
| Cost
of Goods Sold |
|
22 |
222,071 |
501,372 |
723,443 |
344,762 |
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
| Gross
profit |
|
52,070 |
115,296 |
167,366 |
60,196 |
|
|
|
|
|
|
|
| Administrative expenses |
23 |
5,452 |
12,234 |
17,686 |
8,027 |
|
|
| Selling and distribution
expenses |
24 |
18,304 |
42,453 |
60,757 |
25,080 |
|
|
| Financial
expenses |
|
25 |
15,571 |
26,276 |
41,847 |
31,515 |
|
|
| Workers'
profit participation fund |
|
791 |
2,053 |
2,844 |
432 |
|
|
| Workers'
Welfare Fund |
|
353 |
713 |
1,066 |
135 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
|
|
40,471 |
83,729 |
124,200 |
65,189 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
| Operating
profit/(loss) |
|
11,599 |
31,567 |
43,166 |
(4,993) |
|
|
| Other
income |
|
26 |
3,080 |
6,642 |
9,722 |
13,068 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
| Profit
before taxation |
|
14,679 |
38,209 |
52,888 |
8,075 |
|
|
|
|
|
|
|
|
| Taxation |
|
|
|
|
|
| Current |
|
6,860 |
13,300 |
20,160 |
2,800 |
|
|
| Prior year's |
|
|
- |
(82) |
(82) |
1,244 |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
|
-6,860 |
-13,218 |
(20,078) |
(4,044) |
|
|
|
|
--------- |
--------- |
--------- |
--------- |
|
|
| Profit
after taxation |
|
7,819 |
24,991 |
32,810 |
4,031 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| Accumulated
(loss)/unappropriated |
|
|
|
| profit
brought forward |
|
|
(810) |
(4,841) |
|
|
|
|
--------- |
--------- |
|
|
| Profit
available for appropriation |
|
32,000 |
(810) |
|
|
|
|
|
|
|
| Appropriation |
|
|
|
|
|
| Proposed
Cash dividend @ |
|
|
6,273 |
- |
|
|
| 15%
(1994 nil) |
|
|
|
| Transferred
to general reserve |
|
25,000 |
- |
|
|
|
|
|
--------- |
--------- |
|
|
|
|
|
|
31,273 |
- |
|
|
| Unappropriated
profit/ |
|
|
|
--------- |
--------- |
|
|
| accumulated
(loss) |
|
|
|
727 |
-810 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| These
accounts should be read in conjunction with the attached notes. |
|
|
|
|
|
Statement of Changes in
Financial Position |
|
|
For the eighteen months
period ended 30 June 1996 |
|
|
|
|
Eighteen |
Year ended |
|
|
|
Months period |
31-Dec |
|
|
|
ended 30 |
1994 |
|
|
|
June 1996 |
|
|
|
|
(Rupees in '000) |
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
before taxation |
|
52,888 |
8,075 |
|
|
|
|
| Adjustments
for: |
|
|
|
|
| Depreciation |
|
33,216 |
23,584 |
|
| Provision
for gratuity |
|
9,425 |
4,397 |
|
| Gain
on sale of fixed assets |
|
(1,068) |
(531) |
|
| Gain
on sale of long term investments |
|
- |
(9,549) |
|
|
--------- |
--------- |
|
|
|
41,573 |
17,901 |
|
|
|
--------- |
--------- |
|
|
| Operating
profit before working capital changes |
|
94,461 |
25,976 |
|
|
|
|
|
|
|
| (Increase)/decrease
in operating assets |
|
|
|
|
|
| Stores and spares |
|
5,281 |
(1,603) |
|
|
| Stock in trade |
|
(30,544) |
2,643 |
|
|
| Stock
and stores in transit |
|
(632) |
1,657 |
|
|
| Due
from subsidiary company |
|
(12,453) |
6,814 |
|
|
| Trade
debtors |
|
(1,818) |
1,895 |
|
|
| Advances,
deposits, prepayments and other receivables |
(1,300) |
1,004 |
|
|
|
--------- |
--------- |
|
|
|
|
(41,466 |
12,410 |
|
|
| Increase/(decrease)
in operating liabilities |
|
|
|
|
| Export refinance loan |
|
- |
-3,500 |
|
|
| Morabaha finance |
|
5,984 |
(15,500) |
|
|
| Creditors,
accrued expenses and other liabilities |
|
18,743 |
(711) |
|
|
| Loan
from Director |
|
|
-2,000 |
6,000 |
|
|
|
--------- |
--------- |
|
|
|
|
22,727 |
(13,711) |
|
|
|
|
--------- |
--------- |
|
|
| Cash
generated from operations |
|
75,722 |
24,675 |
|
|
|
|
|
|
|
| Taxes paid |
|
(19,300) |
(4,829) |
|
|
| Gratuity
paid |
|
(1,722) |
(727) |
|
|
| Dividend
paid |
|
- |
(422) |
|
|
|
|
--------- |
--------- |
|
|
|
(21,022) |
(5,978) |
|
|
|
--------- |
--------- |
|
|
| Net
cash from operating activities |
|
54,700 |
18,697 |
|
|
| Cash
Flows From Investing Activities |
|
|
|
|
|
|
|
|
|
| Capital
expenditure incurred |
|
(19,490) |
(24,812) |
|
|
| Proceeds
from sale of fixed assets |
|
1,607 |
695 |
|
|
| Proceeds
from sale of long term investments |
|
- |
19,134 |
|
| Investments
acquired |
|
- |
(2,945) |
|
|
--------- |
--------- |
|
| Net
cash from investing activities |
|
(17,883) |
(7,928) |
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
| Repayment
of redeemable capital |
|
(12,195) |
(7,007) |
|
| Repayment
of long term loan |
|
(5,554) |
(4,992) |
|
| Payment
of lease obligation |
|
(27,108) |
(12,542) |
|
| Repayment
of liability for investment in associated |
|
|
|
| undertaking |
|
(1,847) |
(2,542) |
|
| Proceeds
from sale and lease back of fixed assets |
|
- |
22,720 |
|
| Proceed
from issue of right share |
|
20,912 |
- |
|
|
--------- |
--------- |
|
| Net
cash from financing activities |
|
(25,792) |
(4,363) |
|
|
--------- |
--------- |
|
| Net
increase in cash and cash equivalents |
|
11,025 |
6,406 |
|
|
|
|
| Cash
and cash equivalents at the beginning of the |
|
|
|
| period/year |
|
(73,552) |
(79,958) |
|
|
--------- |
--------- |
|
| Cash
and cash equivalents at end of the period/year |
|
(62,527) |
(73,552) |
|
|
========== |
========== |
|
| Note: |
|
|
|
|
|
|
| Cash
and cash equivalents |
|
|
|
|
|
|
| Cash
and bank balances |
|
10,950 |
6,644 |
|
| Finance
under mark-up arrangements |
|
(73,477) |
(80,196) |
|
|
--------- |
--------- |
|
|
(62,527) |
(73,552) |
|
|
|
========== |
========== |
|
|
|
|
|
Notes to the Accounts |
|
| For
the eighteen months period ended 30 June 1996 |
|
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
| The
company was incorporated on 22 January 1977 as a public limited company and
its shares |
|
| are
listed on Karachi and Lahore Stock Exchanges. The principal activity of the
company is the |
|
| manufacturing
and sale of razors and razor blades. |
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under historical cost convention |
|
|
| 2.2
Staff retirement benefits |
|
|
| (a)
Staff gratuity |
|
| The
company operates an unfunded gratuity scheme and provision is made |
|
| annually
to cover the obligations under the scheme |
|
|
| (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)
Retirement benefits |
|
|
| Retirement
benefits are calculated with reference to last drawn-salary and |
|
| prescribed
qualifying periods of services of the employees. Amounts are charged |
|
| to
profit and loss account as and when paid. |
|
|
| 2.3
Taxation |
|
|
| (a) Current |
|
|
| The
charge for current taxation is based on taxable income at the current rates
of |
|
| taxation
after taking into account applicable tax credits and tax rebates. |
|
|
| (b)
Deferred |
|
|
| Deferred
taxation is provided using the liability method on all major timing |
|
| differences.
However, deferred tax debits are not accounted for. |
|
|
| 2.4
Fixed assets and depreciation |
|
|
| Owned |
|
|
| Fixed
assets including all additions are carried at cost less accumulated
depreciation. |
|
| On
disposal or scrapping, the cost of the assets and the corresponding
depreciation |
|
| is
adjusted from both the accounts and the resultant gain or loss is dealt with
through |
|
| the
profit and loss account. |
|
|
| A
full year's depreciation is charged on all fixed assets capitalised during
the year |
|
| while
no depreciation is charged in the year fixed assets are disposed or sc |
