| Atlas Battery Limited |
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| Annual
Report 2000 |
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| MISSION
STATEMENT |
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To achieve market leadership through |
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technological edge, distinguished by |
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quality, service and customers' satisfaction, |
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emphasis on employees long term welfare |
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and ensure adequate return to shareholders. |
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Be a good corporate citizen. Contributing |
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to development of the society and the |
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country through harmonised endeavour. |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Ten
Years Growth at a Glance |
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| Directors'
Report |
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| Chairman's
Review |
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| Auditors'
Report |
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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 Shareholders' Equity |
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| Notes
to the Accounts |
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| Pattern
of Shareholding |
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| Atlas
Group Companies |
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| COMPANY
INFORMATION |
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BOARD OF DIRECTORS |
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| Chairman |
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Yusuf H. Shirazi |
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| Chief Executive |
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Vazeer Ali |
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| Directors |
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Aitzaz Shahbaz |
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M. Habib-ur-Rahman |
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Iftikhar H. Shirazi |
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M. Iwai |
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Shahid Anwar |
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| Company
Secretary |
Shahabuddin Ahmad
Siddiqui |
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GROUP EXECUTIVE COMMITTEE |
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| Chairman |
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Yusuf H. Shirazi |
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| Members |
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Jawaid Iqbal Ahmed |
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Frahim Ali Khan |
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Iftikhar H. Shirazi |
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Aamir H. Shirazi |
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Saquib H. Shirazi |
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| Secretary |
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Amjad Hussain |
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GROUP PERSONNEL COMMITTEE |
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| Chairman |
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Yusuf H. Shirazi |
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GROUP AUDIT COMMITTEE |
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| Chairman |
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Sanaullah Qureshi |
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MANAGEMENT COMMITTEE |
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| Chief Executive |
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Vazeer Ali |
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| General
Manager Technical |
M. Khalid Jilani |
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| General
Manager Administration |
M. Hussain Tabassum |
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| General
Manager Finance |
Shahabuddin Ahmad
Siddiqui |
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| General
Manager Marketing |
Arshad Gulraiz Butt |
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| COMPANY
INFORMATION |
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| Auditors |
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Hameed Chaudhri & Co. |
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Chartered Accountants |
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| Bankers |
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Habib Bank Limited |
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Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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The Bank of
Tokyo-Mitsubishi Limited |
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| Registered
Office/Factory |
D/181, Central Avenue,
S.I.T.E, Karachi-75730 |
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Tel: 2567990-4 Fax:
2564703 |
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| Zonal
Office Karachi: |
PPI Building, Near Sindh
Secretariat Building, |
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Shahrah-e-Kamal Ataturk,
Karachi-74200 |
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Tel: 2636057 - 2626478 |
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| Lahore Office: |
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Salam Chambers, 21, Link
Mcleod Road, Lahore-54000 |
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Tel: 7227075-7354245 Fax:
7352724 |
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| Multan Office: |
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Azmat Wasti Road, Chowk
Dera Adda, Multan-60000. |
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Tel: 548017 |
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| Rawalpindi
Office: |
312-A, Kashmir Road, R.A.
Bazar, Rawalpindi-65847 |
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Tel: 567423 |
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| Faisalabad
Office |
54-Chenab Market, Madina
Town, Faisalabad, |
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Tel: 713127 Fax: 726628 |
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| Sahiwal Office: |
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647-V-7, Al-Hilal
Building, Nishter Road, Sahiwal-57000 |
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Tel: 61539 |
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| Sukkur Office: |
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1738/D, Husaini Road,
Sukkur, |
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Tel: 612532 |
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| NOTICE
OF ANNUAL GENERAL MEETING |
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| Notice
is hereby given that the Annual General Meeting of the Shareholders of the
Company will be held at 08:30 a.m. on |
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| Tuesday,
December 19, 2000 at Adamjee House, 8th Floor, I.I. Chundrigar Road, Karachi
to transact the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To confirm Minutes of Annual General Meeting held on December 21, 1999. |
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| 2.
To consider and adopt the audited accounts of the company for the year ended
June 30,2000 together with the |
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| Directors'
and Auditors' Report thereon. |
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| 3.
To consider and approve the recommendation of Directors for payment of
dividend at the rate of 25% (Rs. 2.50 per |
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| share)
for the year ended June 30, 2000. |
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| 4.
To consider and if thought fit pass with or without modification the
following as Ordinary Resolution. |
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| 4.1
"Resolved that a sum of Rs. 2,472,500 out of the free reserves of the
company be capitalised for issuing |
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| 247,250
fully paid ordinary shares of Rs. 10/- each as bonus shares to be allotted to
those shareholders whose |
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| names
stand in the register of members at the close of business on December 08,
2000 @ 10% in the proportion |
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| of
One Ordinary Share for every ten shares held. The said shares shall rank pari
passu with the existing shares |
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| of
the company as regards future dividend, and in all other respects." |
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| 4.2
"Resolved further that the bonus shares entitlement in fractions be
consolidated and sold by the Directors on the |
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| Stock
Exchange and proceeds thereof, be distributed to the respective shareholders
according to their |
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| entitlement." |
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| 5.
To appoint Auditors for the year 2000-2001 and fix their remuneration. |
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| 6.
To transact any other business with the permission of the Chair. |
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| SPECIAL
BUSINESS |
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| 7.
To approve the remuneration of the Chief Executive and the working Director. |
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| A
statement under section 160 of the Companies Ordinance, 1984 pertaining to
the Special Business referred to above |
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| is
annexed to this Notice of Meeting. |
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By Order of the Board |
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| Karachi:
November 14, 2000 |
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Company Secretary |
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| Notes: |
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| i)
The Share Transfer Books of the Company will remain closed from December 09,
2000 to December 19, 2000 (both |
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| days
inclusive). Transfers received in order at the registered office of the
company by December 08, 2000 will be in |
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| time
for the purpose of entitlement for payment of the dividend to the transferee. |
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| ii.
A member entitled to attend and vote at the General 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 effective must be received
at the Registered Office of the |
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| Company
not less than 48 hours before the time appointed for meeting. |
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| iii.
The members are requested to please communicate to the company any change in
their mailing address immediately. |
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| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE 1984 REGARDING |
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| SPECIAL
BUSINESS AS GIVEN IN THE NOTICE OF MEETING: |
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| This
statement is annexed to the notice of the 34th Annual General Meeting of the
Shareholders of Atlas Battery Limited |
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| to
be held on December 19, 2000 and sets out the material facts concerning the
following Special Business to be transacted |
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| at
the meeting for approval of shareholders. |
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| REMUNERATION
OF CHIEF EXECUTIVE AND THE WORKING DIRECTOR |
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| A
total amount of Rs. 9.0 million will be proposed as the aggregate
remuneration of the Chief Executive and the Working |
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| Director
of the Company, in the form of following resolution. |
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| "RESOLVED
that the Company hereby authorises the holding of offices of profit and
payment as remuneration to Mr. |
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| Vazeer
Ali, Chief Executive and Mr. Iftikar H. Shirazi, Working Director, not
exceeding in the aggregate Rs. 9.0 million per |
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| annum
for the year ending June 30,2001 together with other benefits as per Company
policy." |
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| The
Chief Executive and the Working Director are interested in the remuneration
payable to them. |
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| TEN
YEARS GROWTH AT A GLANCE |
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(Rs. in
Million) |
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| Years |
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2000 |
1999 |
1998 |
1997 |
1996 |
1995 |
1994 |
1993 |
1992 |
1991 |
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6 Months |
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| Sales |
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480.81 |
499.32 |
443.41 |
366.10 |
339.58 |
121.97 |
260.41 |
206.35 |
175.14 |
127.99 |
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| Gross Profit |
|
91.14 |
107.67 |
93.32 |
73.89 |
76.79 |
29.31 |
66.84 |
64.75 |
50.63 |
21.77 |
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| Profit
Before Tax |
15.82 |
36.21 |
31.46 |
18.18 |
27.22 |
8.57 |
23.89 |
23.11 |
18.43 |
0.03 |
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| Profit After Tax |
|
14.13 |
24.39 |
21.09 |
10.64 |
18.33 |
5.22 |
15.84 |
7.65 |
16.67 |
0.03 |
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| Share Capital |
|
24.73 |
24.73 |
24.73 |
23.00 |
23.00 |
23.00 |
23.00 |
20.00 |
20.00 |
20.00 |
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| Share
Holders' Equity |
99.63 |
91.68 |
77.17 |
63.50 |
55.73 |
43.15 |
41.38 |
30.14 |
25.50 |
9.82 |
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| Fixed
Assets - Net |
10,379 |
83.57 |
65.33 |
56.12 |
49.93 |
45.44 |
43.19 |
40.18 |
39.23 |
37.80 |
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| Total Assets |
|
278.65 |
260.26 |
213.92 |
199.52 |
198.29 |
162.79 |
134.07 |
119.13 |
96.77 |
85.46 |
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| Dividend |
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| Cash |
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25% |
40% |
30% |
12.50% |
25% |
15% |
20% |
15% |
0% |
0% |
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| Stock |
|
10% |
0% |
0% |
7.50% |
0% |
0% |
0% |
15% |
0% |
0% |
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| Ratios: |
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| Gross Profit |
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18.96% |
21.56% |
21.04% |
20.18% |
22.61% |
24.03% |
25.67% |
31.38% |
28.91% |
17.01% |
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| Profit
Before Tax |
3.29% |
7.25% |
7.17% |
4.97% |
8.01% |
7.03% |
9.17% |
11.20% |
10.52% |
0.02% |
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| Profit After Tax |
|
2.94% |
4.89% |
4.81% |
2.91% |
5.40% |
4.28% |
6.08% |
3.71% |
9.52% |
0.02% |
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| Return
To Shareholders |
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| R.O.E.-Before Tax |
15.88% |
39.50% |
40.76% |
28.63% |
48.84% |
19.88% |
57.73% |
76.68% |
72.27% |
0.27% |
|
| R.O.E-After Tax |
|
14.18% |
26.61% |
27.33% |
16.76% |
32.89% |
12.10% |
38.28% |
25.37% |
65.39% |
0.27% |
|
| E.P.S.-Before
Tax (Rs.) |
6.40 |
14.64 |
12.72 |
7.90 |
11.83 |
3.73 |
10.38 |
11.55 |
9.21 |
0.01 |
|
| E.P.S.-After
Tax (Rs.) |
5.71 |
9.87 |
8.53 |
4.63 |
7.97 |
2.27 |
6.89 |
382 |
8.34 |
0.01 |
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| Activity |
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| Sales To Total Assets |
1.73 |
1.92 |
2.05 |
1.83 |
1.71 |
0.75 |
1.94 |
1.73 |
1.81 |
1.50 |
|
| Sales To Fixed Assets |
4.63 |
5.98 |
6.71 |
6.52 |
6.80 |
2.68 |
6.03 |
5.14 |
4.46 |
3.39 |
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| Liquidity/Leverage |
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| Current Ratio |
|
1.35:1 |
1.28:1 |
1.21:1 |
1.17:1 |
1.17:1 |
1.24:1 |
1.27:1 |
1.16:1 |
1.08:1 |
0.87:1 |
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| Break up value |
|
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| per share |
|
40.29 |
37.08 |
31.21 |
27.61 |
24.23 |
18.76 |
17.99 |
15.07 |
12.75 |
4.91 |
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| Long
Term Debts To |
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| Equity (Times) |
|
0.53 |
0.38 |
0.24 |
0.29 |
0.35 |
0.51 |
0.52 |
0.71 |
0.70 |
2.17 |
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| Total Liabilities |
|
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| To
Equity (Times) |
1.80 |
1.84 |
1.77 |
2.14 |
2.56 |
2.77 |
2.24 |
2.95 |
2.80 |
7.70 |
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| DIRECTORS'
REPORT |
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| The
Directors have pleasure in presenting 34th Annual Report together with the
Audited Accounts and Auditors |
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| Report
thereon for the year ended June 30, 2000. |
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(Rupees in
000) |
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2000 |
1999 |
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| Financial
results are as follows: |
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| Profit
before taxation |
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15,824 |
36,208 |
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| Provision
for taxation |
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| Current year |
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|
2,825 |
9,500 |
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| Prior Years |
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(3,777) |
351 |
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| Deferred |
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2,646 |
1,964 |
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------------------ |
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1,694 |
11,815 |
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| Profit after tax |
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|
14,130 |
24,393 |
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| Unappropriated
profit brought forward |
|
952 |
449 |
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------------------ |
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15,082 |
24,842 |
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| Appropriations: |
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| Transfer
to General Reserve |
|
6,000 |
14,000 |
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| Transfer
to reserve for issue of bonus shares |
|
2,473 |
-- |
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| Proposed
Cash Dividend @25% (1999: 40%) |
|
6,181 |
9,890 |
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14,654 |
23,890 |
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| Unappropriated
profit carried to Balance Sheet |
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428 |
952 |
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========== |
========== |
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| DIVIDEND
AND BONUS ISSUE |
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| The
Directors are pleased to recommend a cash dividend of 25% and a bonus issue
of 10% in the ratio of one |
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| ordinary
shares of Rs 10/- each for every ten ordinary shares of Rs. 10/- each on the
paid - up capital of |
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| Rs.
24,725,000 as on June 30,2000. |
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| CHAIRMAN'S
REVIEW |
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| The
Directors endorse the contents of the Chairman's Review, included in this
report highlighting the activities |
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| of
the company for the year under review. |
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| PATTERN
OF SHAREHOLDING |
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| The
pattern of shareholding as at June 30, 2000 is annexed to this report. |
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| AUDITORS |
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| The
present auditors, Messrs. Hameed Chaudhri & Co., Chartered Accountants
retired and being |
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| eligible
offer themselves for reappointment. |
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|
AITZAZ SHAHBAZ |
|
VAZEER ALI |
|
YUSUF H. SHIRAZl |
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|
DIRECTOR |
|
CHIEF EXECUTIVE |
|
CHAIRMAN |
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| Karachi:
November 14, 2000 |
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| CHAIRMAN'S
REVIEW |
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| It
is my pleasure to present to you the 34th Annual |
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| Report
and review of performance of your company |
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| for
the year ended June 30, 2000. |
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| THE
ECONOMY |
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| The
year ending June 30, 2000 remained under the |
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| shadow
of the international and domestic political and |
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| economic
situation prevailing in the year 1999. Nuclear |
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| detonation,
Kargil issue and ultimately army take over |
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| have
had its impact on the political, economic and |
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| social
fabric of the country. Good cotton, rice and |
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| wheat
crops, however did help in raising the GDP |
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| growth
but inept pricing and other policy measures |
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| could
not yield the desired socio-economic benefits |
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| at
the grass roots so as to uplift the economy on the |
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| whole.
It was against this background that the National |
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| Budget
for the year 2000-2001 was presented as a |
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| part
of 3 years Perspective Plan aimed at achieving |
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| a
6% GDP growth and budgetary deficit below 5% |
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| by
the year ending 2003. |
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| The
GDP growth for the year 1999-2000 was 4.8%, |
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| agriculture
being highest at 7.2%, manufacturing the |
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| lowest
at 1.1% and service sector at 4:5%. Inflation |
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| was
claimed to be 3.6% which was the lowest in the |
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| past
decade. The GDP growth target set for the year |
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| 2000-2001
vis-a-vis 1999-2000 is at 5%, up 0.2% |
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| from
the previous year. Agriculture growth is projected |
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| at
3.9%, services at 5.2%, and the manufacturing at |
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| 5.9%.
The target growth rates are an encouraging |
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| sign.
The inflation for the year 2000-2001 is estimated |
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| at
4.5%, 0.9% higher than last year. Despite |
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| government's
emphasis on agriculture sector, a |
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| projection
of lower growth as compared to last year |
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| seems
reasonably cautious keeping in view the current |
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| water
shortage and vagaries of the weather. In the |
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| present
circumstances, the growth in manufacturing |
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| at
5.9% seems to be optimistic but achievable! |
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| Similar[y,
the budgetary deficit target set at 4.6% of |
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| (3DP
vis-a-vis 6.5% of last year and 6.6% average |
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| of
the last 4 years seems to be somewhat realistic |
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| though
with a lot of focus on the rough edges of the |
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| economy.
The revenue target hinges on collection of |
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| an
extra Rs.100 bn. It is essential that all these targets |
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| are
met in the wake of prevailing economic situation |
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| particularly
the IMF conditionalities and the overall |
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| external
pressures, which are becoming increasingly |
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| arduous
for the borrowing nations with Pakistan the |
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| most
hard hit at the present time. |
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| On
the other hand, in July 2000 the State Bank of |
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| Pakistan
chose to remove the restrictions on the inter |
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| bank
market and freed the rupee-dollar parity which |
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| caused
the rupee to fall from Rs.52.36 to Rs.59.30 a |
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| dollar
in early October 2000, 13.3% devaluation within |
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| a
period of 10 weeks. In the kerb market, the rupee |
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| went
as low as Rs.63 to a dollar - resulting in cost- |
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| push
pressures in the long run. This was stated to |
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| meet
one of the IMF conditionalities - before any |
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| settlement
with them in sight. There is thus no |
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| alternative
but to come out of the vicious circle of ever |
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| rising
debts, falling rupee, debt servicing and costlier |
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| imports,
consequently rendering exports incompetitive |
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| due
to rising internal costs. This can only be done |
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| by
a better business environment, which promotes |
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| greater
investment and savings. The devaluation has |
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| indeed
made everything costlier without a |
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| corresponding
increase in investment and production- |
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| productivity,
value addition and volume growth. Full |
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| utilization
of capacity needs to be the focus, which |
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| alone
will bring the cost down and result in export |
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| competitiveness. |
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| In
order to revive the economy, the world |
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| financing
agencies prescription may be just |
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| marginal.
It has hardly helped any developing |
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| country
so far. A recommendation in this |
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| connection
to phase out seven main industries |
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| in
Pakistan - steel, fertiliser, sugar, oil refineries, |
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| chemicals,
pharmaceuticals and automobile, |
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| constituting over
50% of the economy, being not |
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| competitive by world
standards, will further |
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| damage the economy as
a whole. What will then |
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| remain for achieving
self-reliance, a view the |
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| Government does espouse.
Unemployment is |
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| becoming
a bigger concern and challenge day |
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| by day. Similarly, a
report that localization |
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| programmes will be
done away will only discourage |
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| investment.
Equally important is the competitive |
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| advantage
of the local industry being eroded |
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| without
which localization is effected. Imagine the |
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| rate
of custom duty is being reduced from 35% to |
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| 25%,
without a corresponding reduction in raw |
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| material
duty which remains at 10%. Since the |
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| automobile
engineering industry clearly does not |
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| come
under the world financing institutions and |
|
| other
regulatory agencies - WTO - there is no |
|
| reason to succumb
to any pressure from any other |
|
| international
agency. Otherwise such policies will |
|
| suspend investment,
production and export - and |
|
| above all, any
entrepreneurial initiatives in these |
|
| industries, to
say the least, unless the situation is |
|
| rectified
or clarified in bold letters: |
|
|
|
|
|
| (The
state secrets are the preservatives of the statesmen) |
|
|
|
| THE
INDUSTRY |
|
|
| The organised sector
of the industry showed a |
|
| negative growth of 3.7%
during the year as |
|
| compared to 12.2% growth
in the preceding |
|
| year. The multiple
higher taxes, such as, custom |
|
| duty at 10% on raw
materials, 10% excise duty |
|
| on retail price of
finished product, 15% and |
|
| 16.5% sales tax on value of
supplies for |
|
| registered and
un-registered dealers respectively |
|
| as well as income tax
and other provincial and |
|
| federal taxes on the
organised sector continued |
|
| to encourage influx
of batteries through Afghan |
|
| transit trade - a
trading source of irregular |
|
| imports, other organized
smuggling, under- |
|
| invoiced imports and
replating were the main |
|
| reasons of negative
growth in the organised |
|
| sector. The
un-organised sector does not come |
|
| under the ambit of tax laws
and thus is |
|
| traditionally
competitive in the market. This has |
|
| been
causing a great deal of loss not only to |
|
| the
industry, but also causing loss of revenue |
|
| to
the Government. This is a chronic problem, |
|
| which
if not abated, will continue to have adverse |
|
| impact
on the organised sector and the revenue |
|
| of
the Government. |
|
|
| The
vehicle population in Pakistan relevant to the |
|
| industry
is given below:- |
|
|
| VEHICLE
POPULATION (Nos. in '000) |
|
|
| YEAR |
TOTAL |
CARS |
JEEPS |
STN WAGONS |
TRACTORS |
BUSES |
TAXIS |
VANS |
TRUCKS |
OTHERS |
|
|
| 1994 |
1329 |
548 |
44 |
102 |
374 |
61 |
50 |
77 |
8 |
65 |
|
| 1995 |
1422 |
578 |
47 |
111 |
403 |
66 |
55 |
82 |
14 |
68 |
|
| 1996 |
1517 |
605 |
50 |
119 |
434 |
70 |
60 |
87 |
21 |
71 |
|
| 1997 |
1622 |
636 |
54 |
129 |
468 |
78 |
65 |
92 |
28 |
74 |
|
| 1995 |
1789 |
681 |
57 |
141 |
539 |
80 |
71 |
103 |
34 |
83 |
|
| 1995 |
1912 |
742 |
61 |
149 |
556 |
85 |
76 |
100 |
36 |
