| AGRIAUTO INDUSTRIES LIMITED |
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| Annual Report 2002 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Six Years at a Glance |
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| Statement
of Compliance with Code of Corporate Governance |
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| and
Auditor's Review Report thereon |
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| Auditors' Report to the
Members |
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| Balance
Sheet |
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| Profit and Loss Account |
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| Cash
Flow Statement |
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| Statement of Changes in Equity |
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| Notes to the Financial
Statements |
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| Pattern
of Shareholdings |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
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| R.D. Minwalla |
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Chairman |
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| Sohail P. Ahmed |
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Vice Chairman |
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| Syed Ikram Haider |
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Chief Executive |
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| Tayyeb Afzal |
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| MansoorG. Habib |
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| Owais ul Mustafa |
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| Rais Ahmed |
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| AUDIT COMMITTEE |
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| Sohail P. Ahmed |
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Chairman |
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| Tayyeb
Afzal |
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Member |
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| Owais
ul Mustafa |
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Member |
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| COMPANY
SECRETARY Fahim Kapadia |
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| AUDITORS |
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| Ford, Rhodes, Robson, Morrow |
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| Chartered Accountants |
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| REGISTRARS |
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| Noble
Computer Services (Pvt.) Ltd. |
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| 14-Banglore
Town Housing Society |
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| Shahrah-e-Faisal,
Karachi 75350 |
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| Pakistan. |
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| Ph:4546978,4520121 |
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| REGISTERED OFFICE |
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| 5th Floor House of Habib, |
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| Main Shahrah-e-Faisal, |
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| Karachi
75350 |
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| Pakistan |
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| FACTORY |
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| Mouza Baroot, Hub chowki |
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| Distt.
Lasbella, Balochistan. |
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| NOTICE OF MEETING |
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| NOTICE
is hereby given that the twenty-first Annual General Meeting of the Company
will be held |
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| at
Finance & Trade Center Auditorium, Main Shahrah-e-Faisal, Karachi on
October 26,2002 at 2:30 p.m. |
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| to
transact the following business: 1. To receive and adop |
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| (i) Mr. R. D. Minwalla |
(ii) Mr.SohailP.Ahmed |
(iii) Syed Ikram Haider |
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| (iv) Mr.TayyebAfzal |
(v) Mr. Owaisul Mustafa |
(vi) Mr.MansoorG.Habib |
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| (vii)Mr. RaisAhmed |
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| By order of the Board. |
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| FAHIM KAPADIA |
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| Company Secretary |
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| Karachi:
September 28,2002 |
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| NOTES: |
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| 1 The Share transfer books of the company
will remain closed from October 18,2002 to October 26, 2002 (Both days |
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| inclusive) |
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| 2 Any person who seeks to contest an
election to the office of Director shall, whether he is a retiring Director
or |
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| otherwise,
file with the Company at its Registered office not later than fourteen days
before the date of the meeting, |
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| a
notice to offer himself for election as a Director. |
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| 3 A member entitled to attend and vote at
this meeting may appoint another member as his/her proxy to attend the |
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| meeting
and vote for him/her proxies. In order to be effective, instrument of
appointing proxy must be received at the |
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| registered
office of the company duly stamped and signed not less than 48 hours before
the time of holding the |
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| meeting. |
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| 4 Members are requested to promptly
communicate any change in their addresses to Company's Share Registrar, |
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| M/s
Noble Computer Services (Pvt.) Ltd. 14 Banglore Town Housing Society, Main
Shahreh-e-Faisal, Karachi. |
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| 5 CDC shareholders desiring to attend the
meeting are requested to bring their original National Identity Card, |
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| Account
and Participant's ID numbers, for identification purpose and in case of
Proxy, to enclose an attested copy of |
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| his/her
National Identity Card. |
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| DIRECTOR'S REPORT TO THE
SHAREHOLDERS |
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| FOR
THE YEAR ENDED JUNE 30, 2002 |
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| Dear Shareholders, |
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| The
Directors ofAgriauto Industries Ltd. are pleased to place before you the
Company's Annual Report on the operations |
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| and
the audited accounts for the year ended June 30th, 2002. The Board of
Directors are pleased to recommend a cash |
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| dividend
of 7.5% for the year. Since the inception of the company, this is the second
year, in succession, that a cash dividend |
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| is
being declared. We are thankful to Allah for his blessing & guidance. The
company at present is financially sound, |
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| possesses
adequate managerial skills, technical competencies and the right culture
required for sustained growth of the |
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| company.
We acknowledge the support of all the stakeholders in the Company, during
difficult times. |
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| 1.
FINANCIAL RESULTS |
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| Financial
results of the company for the year under review are summarized as under |
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Rs. '000' |
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2002 |
2001 |
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| Turnover |
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382,571 |
342,922 |
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| Gross Profit |
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60,644 |
63,228 |
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| Profit before tax |
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25,810 |
29,311 |
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| Taxation |
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(8,991) |
(5,329) |
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| Net Profit after tax |
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16,891 |
23,982 |
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| Accumulated
profit/(loss) brought forward |
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1,480 |
(16,502) |
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| Profit
available for appropriation |
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18,299 |
7,480 |
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| APPROPRIATION |
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| Dividend
@ 7.5% (2001- 5%) |
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(9,000) |
(6,000) |
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9,299 |
1,480 |
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| Earning Per Share |
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1 |
1 |
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| 2. SALES |
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| The
company achieved its highest ever, sales revenue of Rs.382 million, showing
an increase of 11.5% over previous |
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| years'
Rs.343 million, primarily due to increased range of supplies to Indus Motors,
Pak. Suzuki and the after market, |
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| albeit at lower margin. |
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| 3. COST OF SALES |
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| The
Company earned a Gross Profit of 15.8% in the current year compared with a
G.P of 18.4% for the previous year. |
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| The
reason for lower GP is due to a change in the product mix and upward revision
of rate of depreciation w.e.f. July |
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| 2001
after studying the remaining useful life of the assets and changes due to
Technological Obsolescence. |
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| 4.
OPERATING EXPENSES |
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| By
practicing austerity, the Company has maintained the Administrative Expenses
to Rs. 13.943 million against the |
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| previous
year expense of Rs. 13.243 million. Selling & Distribution Expenses have
declined from Rs. 13.064 to Rs. |
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| 10.978 million. |
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| The
Company will continue its drive in controlling the overhead costs despite the
fact that the Petroleum products and |
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| Utilities
are increasing at a very fast pace. |
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| 5.
THE ECONOMY AND AUTOMOTIVE ENGINEERING SECTOR |
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| The
Government is a biggest earner from the Company. During the year under
review, we contributed Rs. 101.589 |
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| million
to the National Exchequer. |
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| The
Automotive OEM sector has grown, driven by leasing and a plethora of new
models. The after-market, which |
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| is
estimated at Rs. 35 billion, however remains largely unavailable to the
industry. |
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| We
appeal to the Government to restrict / curtail the activities of the
unscrupulous traders, which has stunted the |
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| growth
of the auto parts industry through unethical practices of under invoicing,
mis-declaration and smuggling. If |
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| such
practices could be reduced by even 25%, it would lead to increase in
Government revenue by over 100% and |
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| give
an opportunity to the local industry to expand and invest more. |
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| The
acceptance of our products by world-renowned assemblers in the country, such
as Toyota, Suzuki, Honda, |
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| Hyundai,
Hino, Massey Ferguson and Fiat, after thorough testing and critical
inspection is sufficient proof that |
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| technical
capabilities exist in the country. All we need is the attitude 'Pakistan
First & Pakistan Always". |
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| 6. FUTURE OUTLOOK |
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| The
Vehicle market seems to have lifted up and unless foreign exchange rates
become adverse, we are optimistic |
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| about
the ensuing year, being the sole manufacturer of Shock Absorbers & Struts
in Pakistan. We have also |
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| added
Hard Chrome Sleeves for Mazda vehicles to our repertoire as well and have
begun mass production of |
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| Pipe
Fork for Honda Motorcycles. These products will add to the top and bottom
line in the coming year. |
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| |
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| We
are also studying possibility of adding to our range of automotive products
as well as increasing our range of |
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| Shocks and Struts. |
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| 6.
STATEMENT OF DIRECTORS OVER FINANCIAL STATEMENTS |
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| In
accordance with the listing regulation # 37, clause, the Directors' hereby
declare that the following has been |
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| complied
with in the preparation of Financial statements for the year ended June
30,2002: |
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| •
The financial statements prepared by the Management of the company, present
fairly its state of affairs, the |
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| result
of its operations, cash flows and changes in equity. |
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| •
Proper books of Accounts of the company have been maintained. |
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| •
Appropriate accounting policies have been consistently applied in preparation
of financial statements and |
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| accounting
estimates are based on reasonable and prudent judgment. |
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| •
International Accounting standards, as applicable in Pakistan, have been
followed in preparation of financial |
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| statements
and any departure there from has been adequately disclosed. |
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| "
The system of internal control is sound in design and has been effectively
implemented and monitored. |
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| •
There are no significant doubts upon the company's ability to continue as a
going concern. |
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| •
There has been no material departure from the best practices of corporate
governance, as detailed in the |
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| listing regulations. |
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| 8.
STATEMENT AS TO VALUE OF INVESTMENTS |
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| The
value of investments made by the Provident fund based on audited accounts for
the year |
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| ended
June 30,2001 amounts to Rs. 15.383 million |
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| NUMBER OF BOARD MEETINGS |
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| Name |
Designation |
Attended/Held |
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| Mr. R. D. Minwalla |
Chairman |
2/3 |
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| Mr. Sohail P. Ahmed |
Vice Chairman |
3/3 |
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| Syed Ikram Haider |
Chief Executive |
3/3 |
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| Mr.TayyebAfzal |
Director |
3/3 |
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| Mr. MansoorG. Habib |
Director |
3/3 |
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| Mr. Owaisul Mustafa |
Director |
3/3 |
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| Mr. Rais Ahmed |
Director |
2/3 |
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| 10.
PATTERN OF SHAREHOLDING |
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| The
pattern of Shareholding as on June 30,2002, is annexed. |
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| 11. AUDITORS |
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| The
Auditors of the Company M/s. Ford, Rhodes, Robson, Morrow (Chartered
Accountants) retire and being |
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| eligible
offer themselves for re-appointment for the year 2002-2003. |
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| 12.
ACKNOWLEDGEMENT |
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| On
behalf of the Board of Directors, I would like to place on record our
appreciation to all our Patrons, Customers, |
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| Dealers
and Suppliers for their valuable help, support and contribution given to the
Company. I am also grateful to |
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| all
our Bankers for their continued support. We also wish to record thanks to our
overseas Technical |
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| collaborators,
M/s Gabriel Ride Control Products. Inc. USA (for Shock Absorbers) and M/s
Kayaba Industry Co. |
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| Ltd.,
Japan (for Gas Charged Shock Absorbers and Struts) for their technical help
and advice. |
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| The
Board of Directors also acknowledges the contribution of all our Executives
Staff and Workers who worked |
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| hard
together as a committed team in achieving the Company's objectives. |
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| On
behalf of the |
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| Board of Directors |
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| R.D.
Minwalla |
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| Chairman |
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| KARACHI |
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| September 04, 2002 |
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| |
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| SIX
YEARS AT A GLANCE |
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2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
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| Operatina Results |
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| Net Sales |
|
382,571 |
342,922 |
296,114 |
300,998 |
237,756 |
198,938 |
230,766 |
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| Gross Profit |
|
60,644 |
63,193 |
60,358 |
62,743 |
51,674 |
39,445 |
4,385 |
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| Profit/(Loss)
Before Tax |
25,810 |
29,311 |
8,243 |
7,741 |
4,102 |
(13,946) |
(47,769) |
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| ProfiV(Loss) After Tax |
|
16,819 |
23,982 |
6,744 |
6,230 |
2,892 |
(14,942) |
(48,961) |
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| Financial Position |
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| Current Ratio |
|
1.73 :
1 |
1.52:
1 |
1,26:
1 |
1.09:
1 |
1.02:
1 |
0.79 :
1 |
0.84 :
1 |
|
| Paid up share capital |
|
120,000 |
120,000 |
120,000 |
120,000 |
120,000 |
120,000 |
120,000 |
|
| Res.
& unappropriated profitless) |
21,897 |
14,078 |
(3,904) |
(10,648) |
(16,878) |
(19,770) |
(4,828) |
|
| Shareholders' equity |
|
141,897 |
134,078 |
116,096 |
109,352 |
103,122 |
100,230 |
115,172 |
|
| Breakup
value per share |
5.91 |
5.59 |
4.84 |
4.56 |
4.3 |
4.18 |
4.8 |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| |
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| We
have audited the annexed balance sheet ofAGRIAUTO INDUSTRIES LIMITED as at
June 30, 2002 and the related |
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| profit
and loss account, cash flow statement and statement of changes in equity
together with the notes forming part thereof, |
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| for
the year then ended and we state that we have obtained all the information
and explanations which, to the best of our |
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| knowledge
and belief, were necessary for the purposes of our audit. |
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| |
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| It
is the responsibility of the company's management to establish and maintain a
system of internal control, and prepare and |
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| present
the above said statements in conformity with the approved accounting
standards and the requirements of the |
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| Companies
Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit. |
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| |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards require that |
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| we
plan and perform the audit to obtain reasonable assurance about whether the
above said statements are free of any |
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| material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in |
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| the
above said statements. An audit also includes assessing the accounting
policies and significant estimates made by |
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| management,
as well, as evaluating the overall presentation of the above said statements.
We believe that our audit |
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| provides
a reasonable basis for our opinion and, after due verification, we report
that: |
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| |
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| (a) in our opinion, proper books of accounts
have been kept by the company as required by the Companies Ordinance, |
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| 1984; |
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| |
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| (b) in our opinion: |
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| |
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| (i) the balance sheet and profit and loss
account together with the notes thereon have been drawn up in |
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| conformity
with the Companies Ordinance, 1984, and are in agreement with the books of
account and are |
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| further
in accordance with accounting policies consistently applied; |
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| |
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| (ii) the expenditure incurred during the
yearwas for the purpose of the company's business; and |
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| |
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| (iii) the business conducted, investments made
and the expenditure incurred during the year were in |
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| accordance
with the objects of the company; |
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| |
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| (c) in our opinion and to the best of our
information and according to the explanations given to us, the balance
sheet, |
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| profit
and loss account, cash flow statement and statement of changes in equity
together with the notes forming part |
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| thereof
conform with the approved accounting standards as applicable in Pakistan, and
give the information |
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| required
by the Companies Ordinance, 1984, in the manner so required and respectively
give a true and fair view of |
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| the
state of the company's affairs as at June 30, 2002 and of the profit, its
cash flows and changes in equity for the |
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| yearthen ended; and |
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| |
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| (d) in our opinion Zakat deductible at
source under the Zakat and Ushr Ordinance, 1980 (XVI 11 of 1980), was
deducted |
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| by
the company and deposited in the Central Zakat Fund established under Section
7 of that Ordinance. |
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| |
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| KARACHI |
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| September 04, 2002 |
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| |
|
| Ford, Rhodes, Robson, Morrow |
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| Chartered
Accountants |
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| |
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| a |
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| |
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| BALANCE
SHEET |
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| AS AT JUNE 30, 2002 |
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| |
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| |
Note |
Rs. In '000' |
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| ASSETS |
|
2002 |
2001 |
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| NON-CURRENT
ASSETS |
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| Operating fixed assets |
|
3 |
88,827 |
95,905 |
|
| Capital
work-in-progress |
|
4 |
3,008 |
- |
|
| Long term deposits |
|
1,940 |
1,936 |
|
| Deferred cost |
|
5 |
- |
972 |
|
| CURRENT ASSETS |
|
|
|
| Stores,
spares and loose tools |
|
6 |
8,759 |
9,121 |
|
| Stock-in-trade |
|
7 |
82,617 |
60,464 |
|
| Trade debts |
|
8 |
62,295 |
68,269 |
|
| Loans,
advances, deposits, prepayments and other receivables |
9 |
23,221 |
23,922 |
|
| Cash
and bank balances |
|
10 |
2 |
269 |
|
| |
178,571 |
162,045 |
|
| |
|
|
| TOTAL ASSETS |
|
272,346 |
260,858 |
|
| EQUITY
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
| |
|
|
| Authorised capital |
|
|
|
| 40,000,000
(2001: 40,000,000) ordinary shares of Rs.5 each |
|
200,000 |
200,000 |
|
| |
|
|
| Issued,
subscribed and paid-up capital |
|
11 |
120,000 |
120,000 |
|
| Capital reserve |
|
12 |
12,598 |
12,598 |
|
| Accumulated profit |
|
9,299 |
1,480 |
|
| SHAREHOLDERS'
EQUITY |
|
141,897 |
134,078 |
|
| NON-CURRENT
LIABILITIES |
|
|
|
| Long term loans |
|
13 |
21,984 |
15,988 |
|
| Obligations
under finance lease |
|
14 |
372 |
926 |
|
| DEFERRED
TAXATION |
|
15 |
5,002 |
3,172 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term loans |
|
13 |
11,337 |
8,004 |
|
| Current
portion of obligations under finance lease |
14 |
554 |
510 |
|
| Short term finances |
|
16 |
27,021 |
33,395 |
|
| Advances from others |
|
17 |
3,450 |
4,086 |
|
| Creditors,
accrued and other liabilities |
|
18 |
41,345 |
49,943 |
|
| Provision for taxation |
|
10,384 |
4,756 |
&n |
