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In addition to all of these and other businesses that are housed within the company (they
have not even described the company’s foray into higher education), Treet also acts as a
venture capital investor, and has invested in several promising startups.
In early 2017, Treet Corporation invested $150,000 (Rs16.5 million) in Car Chabi, a
Lahore-based startup which provides a digital key to cars using smartphones.
Later in the same year, he invested in two more startups. The first of these was Grocer app,
an ecommerce company that seeks to make grocery shopping in Pakistan migrate online.
Sheharyar invested Rs.10 million for 17% of the equity, which valued the company at just
under Rs. 60 million, or 2.5 times their sales.
The second startup was Data spine, a company that dabbles in the intersection between
cloud computing and artificial intelligence, and is building a platform that can be deployed
as a service on any cloud or on-premises enabling data science and engineering teams to
seamlessly build, deploy, monitor and scale their models and production pipelines using
their existing tools and workflows without the in-house technical debt and operations
overhead. Mr. Sheharyar (Executive Director) teamed up with a friend to invest Rs10
million in Data spine, in exchange for a safe note.
Other Businesses
Other than aforementioned businesses Treet company has also established a business under
the name of GCL( Global Arts Limited) in order to promote educational institutions,
college of arts, research, sciences, information technology and business administration and
other high schools.
Then there is society of cultural education registered under societies registration Act XXI
of 1860.
Treet Corporating has invested Rs, 1.6 billion in educational projects which went
operational in September 2018
Future Projects
1. To establish a medical complex that will provide state of the art health care facilities
that meet the best international standards.
2. Initiating specialized pharmacy chain.
3. Building a multi- purpose commercial complex.
4. Expansion is expected in near future at following sites (i.e.) 12 kanals at Multan road
lahore, (18 kanal) at Raiwind road Lahore and (15 acres) of land at Faisalabad industrial
estates.
Share Holding
SWOT Analysis
Strengths Weaknesses
Diversity of business. Negative profit margins.
Goodwill of the Group High cost of imported steel used for
Experienced Senior Management blades.
Significant Export business Un operational projects (i.e.) university
Own Grid Station from past 4 years.
Implementation of ERP system. Slow production pace.
High utility cost due to increasing cost
of diesel, electricity.
High salaries and wages.
Opportunities Threats
Exploring opportunities to increase Currency devaluation
export. Loss making new projects (i.e.) batteries
Coming up with innovation in bikes and and bikes.
batteries. Reducing profit margins of Soap,
Increasing the product mix of blades and blades, corrugation due to competition.
razor by focusing on increasing demand Increasing financial charges.
of trimmers.
Financial Analysis
Income statement
Sales
During FY 2018 revenues are heading toward positive trajectory be generating the sales of
Rs. 9.410 billon comparing to Rs. 8.418 billion of FY 2017. These sales are majorly
increased as the sales of blades and razors have gone up export of blades have increased
by Rs. 182.8 million whereas the local sales are escalated to Rs. 3.719 billion as compare
to Rs. 3.178 billion. This increase in sales is attributed to better distribution network and
outperforming the imported blades, mainly their prime buyers are saloons who are very
satisfied by the quality of blade.
Cost of Sales
Cost of sales have increased by 19.5 % as compared to previous FY 17. During FY 18
company has reported CGS of Rs. 7.653 billion, this figure is showing that cost of goods
to sales ratio has also increased from 76% in FY 17 to 81.32% in FY18, this increase is
subjected to the high cost of imported steel that is used in the manufacturing of Blades and
Razors which has grown by Rs. 223 million primarily due to fluctuating exchange rate and
devaluation of Pakistani Rupee whereas the salaries and wages expense is also increased
by Rs. 241.3 million as the bonuses and benefits are given to employees under employee
benefit scheme and defined contribution scheme. The cost of sales is primarily effected
due to the first time incurred raw material cost of Batteries which is Rs. 563.638 million,
as the production level is very low and distribution of the newly produced battery is not
started yet so the company has to bear the fixed cost, but as the distribution will be started
this cost will be reduced as the number of units will be increased.
Cost Analysis of manufacturing Batteries
Operating Profit/(loss)
The company has booked a loss of Rs. 93.357 million (FY 18) contrary to the profit of Rs. 512
million (FY 17). They major impact is due to aforementioned reasons, whereas the
administration and distribution cost is also increased slightly due to increase in salaries of
distributers to compensate them in order to achieve higher sales next year and advertisement cost
as the batteries are in their introductory phase and advertisement is required to pool the audience
attention.
Net Loss
Treet Corporation has registered a loss and the figure is negative by Rs. 631 million as other
than the reason of battery plant, there is an increase of 95 million in financial cost on account of
the high markup rate paid over short term borrowings and taxes have increased by Rs. 63
million.
Fixed Liabilities
Fixed liabilities have decreased by Rs. 150 million as the company has paid its long term
liability of Rs. 56.426 million and redeemable capital has reduced by Rs. 179 million, these are
the certificates that Holding Company has issued 41,822,250 (participation term certificate) at
Rs 30 and proceeds from these certificates were utilized to repay the bank borrowings. Besides
these reduction deferred liabilities and taxation have increased by Rs. 86 million on account of
employee gratuity and superannuation fund.
Owner’s Equity
Equity has reduced by Rs. 381 million majorly due to loss unappropriated profit has decreased
by Rs. 723 million whereas the capital reserves has increased by Rs. 172 million on account of
share premium at the rate of 49.14 which can be utilized only by the company under the
companies Act, 2017. Paid up capital has also increased by Rs. 179 million as ordinary shares
are issued on conversion of PTCs and ordinary shares are fully issued as bonus shared along with
ordinary shares issued against employee share option scheme.