A financial report for Metro Hi-Tech

Category: Accounting

Metro Hi-Tech is a private limited company incorporated in Pakistan under the Companies Ordinance 1984, previously which was "YUNAS" Group of Industries (PVT) Ltd. Vide certificate of incorporation dated 7th of October 1985. Gujrat as a leading Industry, determined unbreakable to precede Technological Environment of Pakistan through continuous accomplishments in edifice brands of Metro Motorcycle, Electrical Fans, Tube lights, Washing Machines, Geysers and other household appliances.

Message of President:

On behalf of METRO Group of Companies formally Known as Yunas Industries (Pvt.) Ltd. We have the great pleasure in presenting ourselves as the pioneers in Group of Companies, State-of-Art & leading Industrial State of Motorbikes, Electrical Fans, Washing Machines, Geysers, Tube Lights Fittings and many other house-hold appliances Manufacturer in Asia. Our goal is to provide you useful information about our company that we hope makes it easier for you to do business with us.

Being the pioneers of this business here, established over 29 years ago with the prime objective to offer a comfortable and reliable products to all our highly valued clients. We are proud to say that the key to our success is an unfailingly kept promise to our clientele by providing excellent customer service, competitive pricing plus total customer satisfaction by our highly trained staff who shares a genuine commitment to professionalism.

Mohammad Imtiaz Ahmed

President

Metro Group of Companies

Vision:

"To be a leading industry manufacturing contemporary, high quality, durable products, making life truly pleasant".

Mission:

"To build better relations with all stakeholders especially with customers and tailor sophisticated products at affordable price to serve local and global markets".

Main Goals:

Achieving international standards in production.

Innovating new products and improving present products.

Make all employees Develop more customer-focused approach.

Adopting highest level of customer services.

Objectives:

Ensuring availability of genuine parts to customers.

Providing congenial and safe working environment.

Developing human resource to inculcate workmanship.

Taking part in humanitarian activities, sports and educational programs.

Continuous improvement in plant to ensure better quality.

Training of technicians and developing authorized workshops network.

Countrywide efficient dealership network for prompt delivery of products.

Resources of Metro:

The Industry operates from 25 Acres facility incorporating Factory, Stores, Offices and Display Centre.

Workforce = 600

Office Staff = 60

International Marketing Coordinators =77

International Dealers =41

Board of Directors =5

Distributors in Pakistan =110

Fixed Assets Value = US $ 5 m

Stock Value = US $ 4 m

Nature of the Organization:

The Company is a Private limited Company with in the meaning of Section 2(1) (28) of the Ordinance, and accordingly:-

No invitation shall issue to the public to subscribe for any shares of the Company.

The number of the members of the Company (exclusive of persons in the employment of the Company) shall be limited to fifty, provided that purpose of this provision, where two or more persons hold one or more shares in the Company jointly, they shall be treated as a single member; and the right to transfer the shares of the Company is restricted in mannered to the extent herein appearing. Metro Quality Products have been awarded Certification ISO- 9002:1Certified NO. Q-SC-5755 DT 5/ 4/ 2000 by DET Norske VERITAS (DNV).

The right to transfer the shares of the Company is restricted in manner and to the extent herein appearing.

The initial capital of the Company is Rs.4, 500,000/ 45,000 ordinary shares of Rs.100 each.

The shares shall be under the control of the Directors who may allot or otherwise dispose of the same to such persons, on such terms and conditions, and at such times, as the Directors think fit.

To buy, sell, manufacture let on hire, repair, service, overhaul alter any machinery, component parts, accessories, equipment and fittings of all electrical and other mechanical equipment.

To invite investment from local and foreign sources and to promote the establishment of new industries in Pakistan or any part of the world.

Once at least in every year the account of the Company shall be examined and the correctness of the profit and loss account and balance sheet ascertained by Auditors and the provisions of the Ordinance in regard to audit and the appointment and qualification of auditors shall be observed.

Group Systems & Technology Committee

The Group System and Technology Committee are responsible to provide an insight towards the various technological aspects of information systems. The objective of the Committee is to introduce leading edge technology and IT initiative to automate information delivery and accessibility of data for enhancement of time and cost efficiency.

Management Committee

The Management Committee acts at the operating level in an advisory capacity to the CEO, providing recommendations relating to the business and other corporate affairs. The Committee has responsibility for reviewing and forwarding long-term plans, capital and expense Budget development and stewardship of business plans. The committee is also responsible for maintaining healthy environment within and outside the company through its environment friendly products.

k) Code of Corporate Governance

The financial statements, prepared by the management of the company, fairly present its state of affairs, the results of its operations, cash flows and changes in equity. The company has maintained proper books of account. Appropriate accounting policies have been consistently applied, except for change as explained in note to the accounts, in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. International Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements. The system of internal control is sound in design and has been effectively implemented and monitored. The process of monitoring internal controls will continue as an ongoing process with the objective to further strengthen the controls and bring improvements in the system. There is no doubt about the company's ability to continue as a going concern.

There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations. A summary of key operating and financial data of the company is annexed.

Information about taxes and levies is given in notes to the accounts.

The Company operates a contributory provident fund scheme for all employees and defined benefit gratuity fund scheme for its management/non-management employees on behalf of the Board of Directors.

Business Volume:

The Business Volume of Metro Hi Tech (PVT) Ltd was 643,635,962 Rupees for the year (09-10-2010).

With the geographical development of marketing network, company has extended its business to a large number of cities, all over the Pakistan. Today it has more than 230 Agency Holders strategically in every province.

Reward honors:

Certifications:

Pakistan Standard and Quality Control Authority, Standard Development Centre (PSI-1).

METRO Quality Products have been awarded Certification ISO-9001:2000 by DET Norske VERITAS (DNV).

The first Pakistani fan which is registered with the Government of Kuwait.

Saudi Arabian Standard Organization (SASO) under International Conformity Programme by Intertek Testing Services (Singapore) Pte Ltd.

Also Registered with E in C's Branch, General Headquarters, Rawalpindi (M.E.S.)

Enlisted as Manufacturers/Exporters in Engineering Development Board (E.D.B.) Ministry of Industry, Government of Pakistan.

The opportunity for the employee to "draw" a gift from a box. Gifts range from fast food restaurant gift certificates and substantial cash rewards. The employee draws the reward, so no supervisory interference is perceived. A duplicate of the thank you note goes into a periodic drawing for even more substantial reward and recognition opportunities.

Success stories:

Firstly employees are leaving and employee turnover was very high and after introduced a reward system as in Sales & Marketing Department Achieve target to give a bike as a reward and turn over is now control.

Product Lines:

Product's Name Range*

Motorcycles MR 70, MR 125

Ceiling Fans 36", 48", 56"

Bracket Fan 14",16"

Louver Pedestal Fan 14"

Pedestal Fans 24"

Circumatic Fans 16",18"

Exhaust Fans 8", 10", 12", 20", 24"

Tube Light Fittings econo single and double, executive single and double

Street/ Road Lights MRD, MIL2, MSL, MOL 240,

Washing Machine single/double metal body and Plastic body.

Geysers Electric and Gas geysers

Auto Motive Parts MR 70, MR 125

PESTL Analysis:

POLITICAL SITUATIONS

Political instability is not a good sign for Metro Hi Tech. With continuous changing in the politics the government strategies will be changed. When new man comes to power he will make the changes according to his view points he will make the changes in the budget and other trade polices he can make indifferent laws about import and export of the electric parts. So, political conflicts may cause the Metro Hi Tech bad performance. For instance: Metro Hi Tech make the dealing with some foreign enterprises a new reign comes and they change the policies that electric fans industries have to pay these duties on this kind of imports. There is a lot of problems which can be arise with the continuous political problems, And no doubt in the Pakistani political position always affect the Metro Hi Tech because no Government is able to complete the time of their reign. People continuously changes in the higher level and their policies as well which disturb the Metro Hi Tech to carry on the successful journey.

ECONOMICAL SITUATIONS

The economic position of the electrical fans and automobile market is worse the prices of the raw material is disturbing the whole economic chart of the Metro Hi Tech. The price of the essential raw materials, used in production, fluctuates.

In the reign of Ex-Prime Minister Nawaz sharif Industries grows a lot because he was also an industrialist he know the problems of industry and other hurdles. He really supported the industry. He gave great importance to this sector because no doubt in this sector Metro Hi Tech is the great representative of Pakistan in the international market.

After that things were going in the favor of banking only because of Prime Minister Shoukat Aziz ex banker. He was giving attentions to Banking instead of Industry of Fans or other Industries. Material price raised and fluctuated in the daily routine of production so how a cost could have been managed. For instance: a copper, which is use in the fan manufacturing goes up to hundred present, As compare to pervious rate. Economic instability may cause the Metro Hi Tech to go back because Metro Hi Tech is a big representative of Pakistan, if economic problems will occur then definitely it will make problem for fans industry.

And now things are worse. Inflation is swelling day by day. There is recession every where in world. Prices of things are reaching at highest level. So things are getting difficult as time is progressing.

SOCIAL ENVIRONMENT

The cultures of the different areas may affect the Metro Hi Tech products and sales. In Europe the cultures are different they mostly use the fancy type of fans which through a low air and should give nice look when they are installed in the room that is because of their cold weather. But in some areas like Bangladesh, Dubai, Saudi Arabia & Africa etc. They need the products with high speed and better quality. At some places people only likes to install the split units instead of electric fans because they need cooling instead of fans air. So, the cultures and the environment will definitely affect the sale and service of the Metro Hi Tech but they cannot change them but only in one way where they can make change they have to make their products which fulfils the demand of that specific culture.

TECHNOLOGY

New technology is a threat for Metro Hi Tech and for every one because technology is changing rapidly day by day and getting expensive as well. Products are based on the technology if some industries introduce new technology for Fans then Metro Hi Tech also have to purchase that kind of technology to meet the demands of their buyers and to maintain their position in competitive environment. A new technology can be very useful for them because improvement in the technology enhances quality of the products and cost will decreases. So, Technology plays very important role in the success of the industry. If Metro Hi Tech uses the technology that other firms do not have then definitely their demand will increase. Metro Hi Tech using the high technology Fans manufacturing machinery. To produce excellent quality products Metro Hi Tech uses the most modern/high tech machinery like Capstan & Turret Lathes, Progressing Stamping presses, Die Casting Machines, Injection Molding Machines, Automatic Armature Winding Machines, CNC Wire Cut Machines, Spark Erosion Machines and Ovens Containing Conveyers for drying Stove Paint. With all this latest machinery Metro Hi Tech decided to increase its' product line by manufacturing premium quality Electric and Gas geysers..

Contributionn of organization toward economic development:

This is a contribution towards economic development that company is manufacturing quality products and on reasonable price.

5.3 Organizational structure:

Organizational Hirarchy chart:

Number of Employees:

The Total number of employees working in Metro Hi- Tech (Pvt) Ltd. Gujrat on 09 October 2010 is 270 including managers, executives & subordinates.

Main offices:

Regional Offices:

Metro has five regional offices which are followings

Lahore

Rawalpindi

Karachi

Multan

AJK

Introduction of all departments:

There are 7 departments are working in Metro Hi Tech.

Finance department.

Export department.

Account department.

Purchase department.

Sales & marketing.

Quality Assurance.

Human resource department.

Finance Department:

This is major department of the company. It prepares different kinds of financial reports and gives information to management for decision-making purposes.

Finance department prepares the Income statements, balance Sheet, Trail Balance, Cash flows, Production report for the whole month, stock taking report yield comparison report etc. These all reports are helpful for the management to make production plan, financing decisions and other important matters.

Export department:

The export department is situated within the finance department.

Objectives:

Following are objectives of export department:

To survive in the world market

To earn foreign exchange for the development of the country

Increase export for the growth of the company and the country.

To increase exports for the sake to obtain incentives and privileges of excise and taxation

Increase exports for obtaining the optimum reputation in the foreign markets.

To get the self-reliance and prosperity level of the company.

Account Department:

The main function of account department is to keep proper record of transaction and maintain the accounts. Firstly the account department makes the recording of transaction by different type of vouchers according to the nature of transaction. The vouchers provide the evidence of transaction. As books of Metro are computerized and ledgers are being prepared in computer, so vouchers are sent to computer operator for posting.

Purchase Department:

The main purpose of department is to maintain the desirable level of purchase, so that ideal funds are not stuck up in the shape of heavy purchase or a position not arise that factory stop due to non-availability of raw material or store and spares. In addition to this purchase department is also responsible for checking of following.

Checking quantity of purchased goods.

Checking rates of purchased goods.

Checking quality of purchased goods.

Marketing Department:

Marketing strategy and marketing plan:

The plan is developed on yearly basis and goals are achieved thereon which includes sales etc.

Advertisement strategy:

Advertisements are part of marketing so metro also have their own advertising strategy and they use different sources as TV, news papers, cable operators and magazines etc according to their marketing strategy and advertising budget.

Target market:

The target market of metro is young generation especially as their product and its features are especially designed for young guys' age 18 to 35 years.

Marketing Budget:

Marketing budget is fixed at the start of financial year and according the budget marketing plan is developed and marketing expenses are made. Usually 4 to 6 percent of total financial budget is fixed for marketing in metro Hi Tec Pvt. Ltd.

Total Quality Department:

To achieve the No.1 customer satisfaction, Metro is dedicated to supplying the prestigious products of its highest quality through its smart team work defined by the regulatory parameters & continually improving its strategies and goals for better performance.

Environmental policy:

Metro Hi- Tech (Pvt.) Ltd Gujrat (Pakistan), being responsible member of the society considers the preservation of the global environment as a crucial concern. Metro's environmental philosophy is firmly based on the following guidelines:

Recognize the impacts of the significant aspects on the environment resulting from activities, products and services;

Formulate objectives and targets to control the effects of activities on local environment as for as technically feasible;

Operate in compliance with relevant environmental laws, regulations and other requirements that apply to its activities;

Create environment friendly attitude among associates;