| EXIDE PAKISTAN LTD |
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| 44TH
ANNUAL REPORT 1997 |
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| CONTENTS |
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| EXIDE
PAKISTAN LTD |
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| CORPORATE
PROFILE |
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| NOTICE
OF MEETING |
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| CHAIRMAN'S
REVIEW |
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| REPORT
OF THE DIRECTORS |
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| PERFORMANCE
HIGHLIGHTS |
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| GRAPHIC
ILLUSTRATION |
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| PATTERN
OF SHAREHOLDING |
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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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| NOTES
TO THE ACCOUNTS |
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| STATEMENT
UNDER SECTION 237 OF |
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| THE
COMPANIES ORDINANCE, 1984 |
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| FORM
OF PROXY |
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| AUTOMOTIVE
BATTERY COMPANY LTD |
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| CORPORATE
PROFILE |
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| CHAIRMAN'S
REVIEW |
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| REPORT
OF THE DIRECTORS |
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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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| NOTES
TO THE ACCOUNT |
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| PATTERN
OF SHAREHOLDING |
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| FIVE
YEARS AT A GLANCE |
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| CHLORIDE
PAKISTAN (PRIVATE) LTD |
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| CORPORATE
PROFILE |
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| REPORT
OF THE DIRECTORS |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| STATEMENT
OF CHANGES IN |
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| FINANCIAL
POSITION |
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| NOTES
TO THE ACCOUNT |
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| CORPORATE
PROFILE |
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| BOARD
OF DIRECTORS |
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| Arif
Hashwani |
- Chairman & Chief
Executive |
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| Muhammad
Munawar |
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| Vazir
Ali F. Mohammad |
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| Rajabali
Panjwani |
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| Sana
Hashwani |
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| Altaf
Hashwani |
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| Hussain
Hashwani |
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| COMPANY
SECRETARY |
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| S.
Haider Mehdi |
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| BANKERS |
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| American
Express Bank Ltd |
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| ANZ
Grindlays Bank plc |
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| Standard
Chartered Bank |
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| Emirates
Bank International Ltd |
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| National
Bank of Pakistan |
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| Soneri
Bank Ltd |
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| Schon
Bank Ltd |
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| Muslim
Commercial Bank Ltd |
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| AUDITORS |
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| A.F.
Ferguson & Co. |
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| SOLICITORS |
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| Orr,
Dignam & Co. |
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| REGISTERED
OFFICE |
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| 40-K,
Block 6 |
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| Dr.
Mahmood Hussain Road |
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| Off
Sharea Faisal |
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| P.E.C.H.S., |
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| Karachi-75400 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Forty-Fourth Annual General Meeting |
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| of
the shareholders of Exide Pakistan Limited will be held on |
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| Wednesday
the September 10, 1997, at 10.30 hours at Karachi |
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| Marriott
Hotel to transact the following business: |
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| A.
ORDINARY BUSINESS: |
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| 1.
To read and confirm minutes of the Forty-Third Annual |
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| General
Meeting of the shareholders of the Company held |
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| on
June 16, 1996. |
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| 2.
To receive and adopt the Audited Statements of Accounts for |
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| the
year ended March 31, 1997 together with the Directors' and |
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| Auditors'
reports thereon. |
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| 3.
To appoint auditors for the year 1997-98 and fix their remuneration. |
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| B.
SPECIAL BUSINESS: |
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| 4.
Issue of Bonus Shares |
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| To
consider and approve the following resolutions: |
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| "RESOLVED
that a sum of Rs. 6,131,271 (Rupees six million |
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| one
hundred and thirty one thousand two hundred seventy one |
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| only)
out of Company's Reserve for the issue of Bonus Shares |
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| be
capitalised and applied for the issue of 613,127 fully paid |
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| ordinary
shares of Rs. 10/- each and allotted as bonus shares |
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| to
the members of the Company whose names appear in the |
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| Register
of Members on September 10, 1997 in the ratio of 15 |
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| (Fifteen)
shares for every 100 (Hundred) shares held and that |
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| these
shares shall be treated for all purposes as an increase |
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| in
the paid-up capital of the Company and shall rank pari-passu |
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| as
regards future dividends and in all other respects with the |
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| existing
ordinary shares of the Company. |
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| FURTHER
RESOLVED that for aggregate sum of the fractional |
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| shares
of Rs. 10/- each arising on such allotment, the Directors |
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| be
and are hereby authorised to consolidate and sell in the stock |
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| market
such fractional entitlements and to pay the proceeds of |
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| sale
when realised to a charitable institution approved under the |
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| Income-Tax
Ordinance, 1979. |
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| Statement
Under Section 160 of the Companies Ordinance, |
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| 1984
pertaining to the special business |
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| It
is proposed that a sum of Rs. 6,131,271 out of the Company's |
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| Reserve
be capitalised by issuing 613,127 fully paid bonus |
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| shares
of Rs. 10/- each. These shares shall be issued to those |
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| members
whose names appear in the register of members on |
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| September
10, 1997. The bonus shares shall be issued in |
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| proportion
of 15 (Fifteen) shares for every 100 (Hundred) shares |
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| held
by a member. After the issue of these bonus shares, the |
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| paid-up
capital of the Company would increase from Rs. 40,875,143 |
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| to
Rs. 47,006,414. |
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| NOTES: |
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| 1.
A member entitled to attend and vote at the Annual General |
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| Meeting
is. entitled to appoint another member as a proxy to |
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| attend
and vote on his/her behalf. Proxies in order to be valid |
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| must
be deposited with the Company not less than 48 hours |
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| before
the time appointed for the meeting. |
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| 2.
The Share Transfer Books of the Company will remain closed |
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| from
September 02, 1997 to September 10, 1997 (both days |
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| inclusive). |
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| 3.
Members are requested to notify the Company of any change |
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| in
their address. |
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| CHAIRMAN'S
REVIEW |
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| IN
THE NAME OF ALLAH |
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| THE
MOST BENEFICENT |
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| AND
MERCIFUL |
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| It
is my privilege to welcome you to the 44th Annual General Meeting |
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| of
the Company and present you my review on the performance |
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| of
your Company for the year ended March 31, 1997. |
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| OVERVIEW: |
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| The
operating environment during the year under review was |
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| affected
due to economic recession. The economic growth of |
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| manufacturing
sector was around 1.78% in the year 1996/97, at the |
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| same
time smuggling continued unabated. Consequently, the year |
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| under'
review came out to be most difficult year for the manufacturers |
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| of
automotive batteries in the country. However, despite the highly |
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| adverse
circumstances, your Company continued to forge ahead |
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| and
was able to retain its title as the market leader. |
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| The
uncertain economic conditions in the country badly impacted |
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| the
operating performance of your subsidiary, namely, Automotive |
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| Battery
Company, too. During the year under review, it almost |
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| operated
on break-even point. It is hoped that the performance |
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| during
the year in progress will improve as the national economy |
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| is
expected to recover due to various positive steps taken by the |
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| present
Government, |
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| Working
Capital remained under pressure owing to higher levels |
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| of
inventory and increase in trade debtors mainly arising from |
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| competitive
market situation which in turn increased the financial |
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| charges
during the year. |
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| SALES: |
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| Total
sales revenue increased to Rs. 743.5 m as compared to |
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| Rs.
650.5 m in 1996 due to better mix and prices. Sales volume |
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| recorded
negligible growth over the previous year due to lack of |
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| traditional
anticipated growth of 8 to 10 percent per annum in |
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| organized
sector of automotive battery industry. The abnormal trend |
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| is
attributed to uncertain economic conditions, unprecedented influx |
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| of
smuggled batteries, massive devaluation of Pak Rupee and |
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| increase
in the cost of basic inputs. These factors in turn encouraged |
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| the
unorganized sector of the industry which made the existing |
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| cut
throat competition more painful to the manufacturers in the |
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| organized
sector. |
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| PRODUCTION: |
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| During
the year some of the infrastructual constraint and adverse |
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| law
and order situation affected manufacturing activities but the |
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| production
was able to cater for the sales requirement, both in |
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| terms
of quantity and quality and had adequate stocks of full range |
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| of
batteries available for the market to meet the demand. |
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| In
the absence of anticipated market growth, production was |
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| adjusted
to ensure against excessive build up of stock inventories |
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| and
consequent further strain on financial resources. |
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| PROFITABILITY: |
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| The
Operating Profit for the year under review worked out to |
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| Rs.
58.4 m as compared to Rs. 60.6 m for the preceding year. |
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| The
Administration and selling overheads remained at par |
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| with
that of last year because of strict vigilance thereon. |
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| Continuous
increase in the input costs, massive devaluation of |
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| Pak
Rupee, introduction of additional incentives for the trade |
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| and
extended credit to the main dealers for thwarting |
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| competition
were the factors which pulled down the pre-tax |
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| profit
from Rs. 41.9 m to Rs. 34.8 m. |
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| Despite
the decline in margins during the year under review, the |
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| financial
status of your Company reflects healthy impact. The total |
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| assets
of your Company increased from Rs. 374.7 m to Rs. 397.5 m |
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| current
ratio improved from 1.43 to 1.56; stock turn over increased |
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| from
3.4 to 3.9 and the break-up value of shares expanded from |
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| Rs.
44/- to Rs. 49/- per share. |
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| FUTURE
PROSPECTS: |
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| The
automotive battery market continues to be in the grip of |
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| competition
and recession which is affecting its growth. The situation |
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| is
further aggravated by the influx of smuggled batteries and |
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| reactivation
of replaters coupled with increase in the prices of its |
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| basic
inputs internationally as well as due to erosion in the value |
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| of
Pak Rupee. |
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| Although
the present recessionary trend is not expected to last |
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| longer,
but it will take some time before the market is in a position |
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| to
revert to its normal growth. Nevertheless, your management is |
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| determined
to make all out efforts for ensuring your Company's |
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| leadership
in the market. |
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| In
view of stagnant growth in the market of automotive battery |
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| industry,
your management felt it necessary, to diversify the |
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| business
activities in order to improve the operating performance |
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| of
your Company. As a first step towards this direction, I am pleased |
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| to
inform you that FFC-Jordan Fertilizer Company Limited (FJFC), |
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| a
joint venture project of Fauji Foundation and Jordan Fertilizer |
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| Company
has signed a ten years buy back agreement with your |
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| Company
to buy 40 Metric Tons Sulphuric Acid per day from |
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| EXlDE
which will be used as an essential raw material item in |
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| production
of Di-Ammonium Phosphate. In this regard, your |
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| management
is setting-up a 50 Metric Tons Sulphuric Acid |
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| processing
plant at Port Qasim Industrial Area adjacent to the |
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| FJFC
plant. The Project Cost is estimated at Rs. 75.0 m which |
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| necessitated
us to retain the profit for the year under review to meet |
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| our
financial requirements. Commercial production of the plant |
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| will
commence in August, 1998 to coincide with that of FJFC's |
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| production
schedule. |
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| Acknowledgement |
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| On
my behalf and on behalf of the Board of Directors of the Company, |
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| I
take this opportunity of acknowledging the devoted services, |
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| sincere
efforts and contribution made by the employees of all cadres |
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| of
the Company towards it operating performance during the year |
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| under
review. I am also grateful to the main dealers, the retailers |
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| and
valued customers in the Government and Original Equipment |
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| Sectors
of the market and bankers of the Company for their valuable |
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| support
and cooperation. |
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|
| REPORT
OF THE DIRECTORS |
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| Your
Directors are pleased to present their report together |
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| with
the Audited Statements of Accounts and the Auditors' |
|
| Report
thereon for the year ended March 31, 1997. |
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|
| FINANCIAL
HIGHLIGHTS |
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|
|
|
Rs. (000) |
|
|
| Profit
before Taxation |
|
34,802 |
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| Less
Taxation |
|
11,970 |
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|
|
|
---------- |
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| Profit
after Taxation |
|
22,832 |
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| Unappropriated
Profit Brought Forward |
|
3,455 |
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|
|
|
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| Profit
available for Appropriation |
|
26,287 |
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|
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|
========== |
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| Appropriations: |
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| Transfer
to capital reserve for |
|
| issue
of bonus shares |
|
6,131 |
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|
|
|
|
|
| Transfer
to General Reserve |
|
15,000 |
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|
|
|
---------- |
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|
|
|
21,131 |
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|
|
|
---------- |
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| Unappropriated
Profit Carried Forward |
|
5,156 |
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|
|
|
========== |
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| Earning
Per Share |
|
Rs. 5.58 |
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|
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|
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|
| The
Chairman's Review dealing with the performance of |
|
| the
Company during the year ended March 31,1997, future |
|
| prospects
and other matters of concern to the Company |
|
| forms
part of this report. |
|
|
| Pattern
of shareholding as at March 31, 1997 is annexed |
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| to
this report. |
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|
| The
present auditors, Messrs: A. F. Ferguson & Co; |
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| Chartered
Accountants, retire and being eligible, offer |
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| themselves
for reappointment. |
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|
|
| PERFORMANCE
HIGHLIGHTS |
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|
(Rs. '000) |
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|
|
1993 |
1994 |
1995 |
1996 |
1997 |
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|
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| Net Sales |
|
488,740 |
513,088 |
599,485 |
650,453 |
743,457 |
|
| Operating
Profit |
|
69,043 |
70,538 |
55,344 |
60,645 |
58,383 |
|
| Profit
Before Tax |
|
53,405 |
52,940 |
42,623 |
41,896 |
34,802 |
|
| Profit
After Tax |
|
29,905 |
31,440 |
31,623 |
26,896 |
22,832 |
|
| Cash
Dividend |
|
5,574 |
14,306 |
8,175 |
10,219 |
0 |
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|
|
15% |
35% |
20% |
25% |
0 |
|
|
|
|
|
| Stock
Dividend |
|
3,716 |
- |
- |
- |
6,131 |
|
|
|
10% |
- |
- |
- |
15% |
|
|
|
|
|
| Paid-up
Share Capital |
|
37,159 |
40,875 |
40,875 |
40,875 |
40,875 |
|
| Reserves/Unappropriated
Profits |
84,171 |
97,589 |
121,037 |
137,714 |
154,156 |
|
| Shareholders'
Equity |
|
121,330 |
138,464 |
161,912 |
178,589 |
201,421 |
|
| Surplus
on Revaluation of |
|
| Fixed
Assets |
|
6,446 |
6,446 |
6,446 |
6,446 |
6,446 |
|
|
|
|
| Tangible
Fixed Assets |
|
37,376 |
37,583 |
30,628 |
33,545 |
27,509 |
|
| Net
Current Assets |
|
41,844 |
46,850 |
67,034 |
82,336 |
107,222 |
|
| Net
Assets Employed |
|
148,053 |
154,322 |
168,358 |
185,600 |
207,867 |
|
|
|
|
Rupees |
|
| Earning
Per Share Before Tax |
14 |
13 |
10 |
10 |
9 |
|
| Earning
Per Share After Tax |
8 |
8 |
8 |
7 |
6 |
|
| Share
Break-up Value |
|
33 |
34 |
40 |
44 |
49 |
|
|
|
|
| Ratio of: |
|
|
Per cent |
|
|
|
|
| Operating
Profit to Sales |
14% |
14% |
9% |
9% |
8% |
|
| Profit
Before Tax to Sales |
11% |
10% |
7% |
6% |
5% |
|
| Profit
After Tax to Sales |
6% |
6% |
5% |
4% |
3% |
|
| Return
on Equity |
|
25% |
23% |
20% |
15% |
11% |
|
| Return
on Net Assets Employed |
20% |
20% |
19% |
14% |
11% |
|
|
|
|
| PATTERN
OF SHAREHOLDINGS AS |
|
| AT
MARCH 31, 1997 |
|
|
| NUMBER OF |
RANGE OF SHAREHOLDING |
TOTAL SHARES |
|
|
| SHAREHOLDERS |
FROM |
TO |
HELD |
|
|
| 300 |
1 |
100 |
12,474 |
|
|
| 350 |
101 |
500 |
85,452 |
|
|
| 73 |
501 |
1000 |
52,928 |
|
|
| 50 |
1001 |
5000 |
99,994 |
|
|
| 5 |
5001 |
10000 |
42,648 |
|
|
| 1 |
10001 |
15000 |
14,985 |
|
|
| 2 |
15001 |
20000 |
35,569 |
|
|
| 1 |
25001 |
30000 |
25,410 |
|
|
| 1 |
60001 |
65000 |
64,400 |
|
|
| 1 |
75001 |
80000 |
75,331 |
|
|
| 1 |
90001 |
95000 |
91,921 |
|
|
| 1 |
105001 |
110000 |
109,297 |
|
|
| 1 |
110001 |
115000 |
113,600 |
|
|
| 1 |
115001 |
120000 |
118,346 |
|
|
| 1 |
235001 |
240000 |
235,093 |
|
|
| 1 |
370001 |
375000 |
374,185 |
|
|
| 1 |
530001 |
535000 |
531,124 |
|
|
| 1 |
2000001 |
2005000 |
2,004,757 |
|
|
| ---------- |
|
---------- |
|
|
| 792 |
|
4,087,514 |
|
|
| ========== |
|
========== |
|
|
|
|
|
|
| CATEGORIES |
|
|
|
PERCENTAGE |
|
| OF |
|
|
SHARES |
OF |
|
| SHAREHOLDERS |
|
NUMBER |
HELD |
TOTAL |
|
|
|
| Individuals |
|
768 |
462,845 |
11.32% |
|
| Joint
Stock Companies |
|
9 |
2,036,075 |
49.81% |
|
| Investment
Companies |
|
11 |
1,207,567 |
29.55% |
|
| Insurance
Companies |
|
4 |
381,027 |
9.32% |
|
|
|
---------- |
---------- |
---------- |
|
|
|
792 |
4,087,514 |
100.00% |
|
|
|
========== |
========== |
========== |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Exide |
|
| Pakistan
Limited as at March 31,1997 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 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 March 31, 1997 and of the |
|
| profit
and cash flows for the year then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the |
|
| Zakat
and Ushr Ordinance, 1980 was deducted by the |
|
| company
but was deposited subsequent to the year |
|
| end
in the. Central Zakat Fund established under |
|
| Section
7 of that Ordinance. |
|
|
| Without
qualifying our opinion we draw attention to note |
|
| 13.1
to the financial statements which states the reasons |
|
| for
not making any provision in respect of the diminution |
|
| in
the value of the company's investment in the shares of |
|
| Automotive
Battery Company Limited. |
|
|
|
| BALANCE
SHEET AS AT MARCH 31, 1997 |
|
|
|
Note |
1997 |
1996 |
|
|
|
|
|
(Rupees '000) |
|
| SHARE
CAPITAL & RESERVES |
|
|
|
|
|
| Authorised
capital |
|
|
|
| 10,000,000
ordinary shares of Rs 10 each |
|
100,000 |
100,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
3 |
40,875 |
40,875 |
|
|
|
|
| Capital
reserves |
|
|
6,390 |
259 |
|
| Revenue
reserves |
|
|
154,156 |
137,455 |
|
|
|
|
---------- |
---------- |
|
|
|
|
201,421 |
178,589 |
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
6,446 |
6,446 |
|
| DEFERRED
TAXATION |
|
|
- |
565 |
|
| CURRENT
LIABILITIES |
|
|
|
| Short-term
finances utilised under |
|
|
---------- |
---------- |
|
| mark-up
arrangements |
