| Automotive Battery Company Limited |
|
|
|
|
|
|
| Annual
Report 2000 |
|
|
|
| CONTENTS |
|
|
| CORPORATE
PROFILE |
|
| NOTICE
OF MEETING |
|
| CHAIRMAN'S
REVIEW |
|
| REPORT
OF THE DIRECTORS |
|
| FIVE
YEARS AT A GLANCE |
|
| GRAPHIC
ILLUSTRATION |
|
| PATTERN
OF SHAREHOLDING OF SHARES |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNTS |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| CASH
FLOW STATEMENT |
|
| NOTES
TO THE ACCOUNTS |
|
|
|
| CORPORATE
PROFILE |
|
|
| BOARD
OF DIRECTORS |
|
| Arif Hashwani |
|
- Chairman |
|
| Arshad
Shahzada |
- Chief Executive |
|
| S.H.M. Zaidi |
|
| Altaf
Hashwani |
|
| Hussain
Hashwani |
|
| Jaweed Niaz |
|
(NIT NOMINEE) |
|
| S. Yamagami |
|
(FB-JAPAN) |
|
| S.
Haider Mehdi |
|
|
| COMPANY
SECRETARY |
|
| S.
Haider Mehdi |
|
|
| AUDITORS
& SHARE REGISTRAR |
|
| Shakir & Co. |
|
| Chartered
Accountants |
|
| 4th
Floor, Jubilee Insurance House, |
|
| I.
I. Chundrigar Road, Karachi. |
|
|
| SOLICITORS |
|
| Farrukh
Zia Shaikh |
|
|
| BANKERS |
|
| Habib
Bank Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
| Bank
of Tokyo Mitsubishi Limited |
|
| Gulf
Commercial Bank Ltd. |
|
| (Former/y
Schon Bank Ltd.) |
|
| Doha
Bank Limited |
|
| Emirates
Bank International PJSC |
|
| ORIX
Investment Bank Pakistan Limited |
|
| American
Express Bank Ltd. |
|
|
| REGISTERED
OFFICE |
|
| 40-K, Block 6 |
|
| Dr.
Mahmood Hussain Road |
|
| Off
Sharae Faisal, P.E.C.H.S., |
|
| Karachi-75400 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| Notice
is hereby given that the Sixteenth Annual General Meeting |
|
| of
the Shareholders of Automotive Battery Company Limited will |
|
| be
held on Thursday September 14, 2000 at 11.30 hours at Karachi |
|
| Merrier
Hotel, Abdullah Haroon Road, Karachi to transact the following |
|
| business: |
|
|
| A.
ORDINARY BUSINESS: |
|
| 1.
To read and confirm minutes of the Fifteenth Annual General |
|
| Meeting
of the Shareholders held on June 16, 1999. |
|
|
| 2.
To receive and adopt the Audited Statements of Accounts for |
|
| the
Year ended March 31,2000 together with the Directors' and |
|
| Auditors'
reports thereon. |
|
|
| 3.
To appoint Auditors for the year 2000-2001 and fix their |
|
| remuneration. |
|
|
| 4.
To consider any other business with the permission of the Chair. |
|
|
| B.
SPECIAL BUSINESS: |
|
| 5.
To consider and approve remuneration of the Chief Executive |
|
| of
the Company for a period of three years commencing from |
|
| April 24, 2000. |
|
|
| A
statement under Section 160 of the Companies Ordinance, |
|
| 1984
pertaining to special business is annexed to this notice. |
|
|
| By
order of the Board |
|
|
| S.
HAIDER MEHDI |
|
| Director
& Company Secretary |
|
|
| Karachi:
July 20, 2000 |
|
|
| Notes: |
|
|
| 1.
A member entitled to attend and vote at the Annual General |
|
| meeting
is entitled to appoint a proxy to attend instead of his/ |
|
| her behalf. |
|
|
| 2.
Proxies must be deposited with the Company not later than 48 |
|
| hours
before the time of holding the meeting. |
|
|
| 3. Share Transfer Books of the Company will
remain closed from |
|
| September
06, 2000 to September 14, 2000 (both days inclusive). |
|
|
| 4.
Shareholders are requested to notify any change in their address |
|
| to
the Registrar's Office; Shakir & Company, 4th Floor, Jubilee |
|
| Insurance
House, I. I. Chundrigar Road, Karachi, |
|
|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES |
|
| ORDINANCE,
1984 |
|
|
| This
statement is annexed to the notice of the Sixteenth Annual |
|
| General
Meeting of the shareholders of Automotive Battery |
|
| Company
Ltd., to be held on September 14, 2000 and sets out |
|
| the
material facts concerning the following special business to |
|
| be
transacted at the meeting for approval of shareholders. |
|
|
| REMUNERATION
OF THE CHIEF EXECUTIVE OF THE COMPANY |
|
| A
total amount of Rs. 4.99 million will be proposed as the |
|
| aggregate
remuneration of the Chief Executive of the Company |
|
| for
a period of three-year commencing from April 24, 2000 |
|
| in
the form of following Resolution. |
|
|
| "RESOLVED:
that an aggregate sum of Rs. 4.99 Million (Rupees |
|
| Four
Million nine hundred ninety thousand) be and is hereby |
|
| approved
as remuneration of the Chief Executive of the Company |
|
| for
a three-year term from April 24, 2000 to April 23, 2003, |
|
| (both
days inclusive), covering his managerial remuneration, |
|
| housing,
utilities, bonus, provident fund and gratuity in addition |
|
| to
his entitlement to chauffeur driven company maintained car, |
|
| medical
and hospitalisation expenses, utilities, telephone, leave |
|
| fare
assistance and other fringe benefits as per rules of the |
|
| Company" |
|
|
| Mr.
Arshad Shahzada, the Chief Executive of the Company is |
|
| interested
in this business to the extent of his remuneration. |
|
|
|
| CHAIRMAN'S
REVIEW |
|
|
| IN
THE NAME OF ALLAH |
|
| THE
MOST BENEFICENT |
|
| AND
MERCIFUL |
|
|
| Dear
Shareholders |
|
|
| I
feel honoured in welcoming you to the 16th Annual General Meeting |
|
| and
presenting the Audited Statements of Accounts and my review |
|
| on
the performance of your Company for the year 1999-2000. |
|
|
| The
performance of the indigenous automotive battery industry |
|
| during
the year under review remained highly disturbed on account |
|
| of
higher taxation in the form of 10% Central Excise Duty on |
|
| Separators
as well as on finished Batteries in addition to 15% Sales |
|
| tax
on registered and 18% Sales tax on un-registered dealers. The |
|
| Organized
Sector manufacturers were confronted with tough |
|
| competition
by high influx of smuggled batteries, imports at under |
|
| invoiced
value and tax evasion by replaters. The same resulted |
|
| negative
growth in Organized Sector market despite national GDP |
|
| growth
of 4.5%. However, despite the adverse operating environment, |
|
| your
Company recorded a pro-tax profit of Rs. 4.34 million as |
|
| compared
to Rs, 5,77 million for the preceding year. |
|
|
| SALES : |
|
| Sales
revenue decreased to Rs. 249.2 million during the year under |
|
| review
as against Rs. 278.4 million .of the preceding year. This was |
|
| due
to cut throat competition both from Organized and Unorganized |
|
| Sectors.
In order to meet the severe market competition, the management |
|
| of
your Company changed the arrangement of distribution of its |
|
| products
through exclusive distributor to various authorized dealers |
|
| during
the period under report. This change of distribution arrangement |
|
| also
affected sales during the year under review as the inventory |
|
| of
finished batteries with the exclusive distributor; M/s. Forbes |
|
| Forbes
Campbell & Co (Private) Limited were brought to nil before |
|
| supplies
made by your Company to the authorized dealers. |
|
|
| MANUFACTURING
: |
|
| Production
during the year under review declined by 6% as compared |
|
| to
last year, due to reduced market demand especially in the second |
|
| half
which is generally considered to be the better period for the |
|
| sale
of batteries. Infra structural constraint, particularly water also |
|
| affected
manufacturing and cost of production. Your management |
|
| effectively
planned production to cater the market demand both in |
|
| terms
of quality and quantity. The management effectively implemented |
|
| internal
cost controls which resulted reduction in cost of manufacturing |
|
| despite
inflationary pressures and no increase in selling prices |
|
| during
the year. |
|
|
| PROFITABILITY; |
|
| Pro-tax
profit for the year amounted to Rs. 4.34m as compared to |
|
| Rs.
5.77 m during the previous year. The decline in profitability is |
|
| due
to reduced sales, cost increases and payment of Rs. 3.19 m |
|
| in
amnesty on account of sales tax arrears for supplies to Original |
|
| Equipment
Sector during the period May 1990 to November 1995. |
|
| The
payment of arrears is being contested at the tribunal level, Due |
|
| to
strict monitoring on Overheads, Administration and Marketing, |
|
| expenses
remained almost at par with that of last year. Financial |
|
| charges
reduced from Rs. 15.08 m to Rs. 12.63 m owing to perpetual |
|
| re-payment
of long term loans and negotiation of working capital |
|
| finance
facility on competitive rates. |
|
|
| TAXATION : |
|
| The
Company continued to provide current taxation at the rate of |
|
| 0.5%
of turnover under Section 80-D of the Income Tax Ordinance, |
|
| 1979
in view of the brought forward losses. |
|
|
| FUTURE
OUTLOOK : |
|
| The
future of industry as well as your Company will depend on revival |
|
| of
economic activities in the country, prudent taxation policies and |
|
| affordable
cost of utilities. Abolishment of Central Excise duty on |
|
| separators
in the national budget 2000/2001 is .welcome sign for |
|
| the
industry but continuation of Central Excise Duty on finished |
|
| batteries
and increase in the cost of diesel and gas will have adverse |
|
| impact
on production cost. The gap between supply and demand |
|
| will
exert more pressure on pricing, discounts and in turn necessitates |
|
| operational
efficiencies. Your Management is quite aware of the |
|
| future
challenges and is exercising control on costs and quality |
|
| standards
in order to combat the competition effectively. |
|
|
| PERSONNEL: |
|
| Relations between the Workers and the Management
remained cordial. |
|
| Previous
agreement with the CBA expired on July 31, 1999 and |
|
| through
mutual understanding and negotiations, fresh agreement was |
|
| concluded
for a period of two years effective from August 1, 1999. |
|
|
| ACKNOWLEDGMENT: |
|
| I
wish to place on record the Board's appreciation of the dedicated |
|
| efforts
and valuable support of all members of the Company, the |
|
| dealers,
customers, banks, financial institutions and our joint venture |
|
| partners
M/s Furukawa Battery Company Ltd. |
|
|
|
ARIF HASHWANI |
|
| Karachi:
July 20, 2000 |
|
Chairman |
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| The
Directors have pleasure in submitting their Report and |
|
| the
Audited Statements of Accounts of your Company for |
|
| the
Year ended March 31,2000, The profit after providing |
|
| for
the minimum tax on turnover under Section 80-D of the |
|
| Income
Tax Ordinance, 1979 amounting to Rs 0.906m has |
|
| been
utilised to reduce the carried forward losses and as |
|
| such
your directors do not recommend any dividend for the |
|
| year
under review. |
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
Rs. (000) |
|
|
| Profit
before Taxation |
|
4,345 |
|
| Less Taxation |
|
906 |
|
|
----------- |
|
| Profit
after Taxation |
|
3,439 |
|
| Accumulated
Losses Brought Forward |
25,925 |
|
|
----------- |
|
| Loss
Carried Forward |
|
22,488 |
|
|
========== |
|
| Earning
per share |
|
Rs. 0.65 |
|
|
| The
Chairman's' Review dealing with the performance of |
|
| the
Company during the Year ended March 31,2000, future |
|
| prospects
and other matters of concern to the Company |
|
| forms
part of this report. |
|
|
| Pattern
of shareholding as at March 31, 2000 is annexed |
|
| to this report. |
|
|
| The
present. auditors, Messrs. Shakir & Co., Chartered |
|
| Accountants,
retire and being eligible, offer themselves for |
|
| re-appointment. |
|
|
| By
order of the Board |
|
|
| ARSHAD
SHAHZADA |
|
| Chief
Executive |
|
|
| Karachi:
July 20, 2000 |
|
|
|
| FIVE
YEARS AT A GLANCE |
|
|
Rs. Million |
|
|
1996 |
1997 |
1998 |
1999 |
2000 |
|
| Sales |
|
247.84 |
263.61 |
268.79 |
278.40 |
249.20 |
|
| Gross Profit |
|
41.59 |
32.04 |
34.05 |
36.10 |
31.14 |
|
| Profit
before tax |
11.33 |
0.02 |
2.80 |
5.77 |
4.36 |
|
| profit(loss)
after tax |
10.43 |
(0.95) |
1.75 |
4.70 |
3.44 |
|
| Paid
up share capital |
52.65 |
52.65 |
52.65 |
52.65 |
52.65 |
|
| Accumulated
Losses |
(31.42) |
(32.37) |
(30.62) |
(25.92) |
(22.49) |
|
| Shareholders'
equity |
21.23 |
35.28 |
37.04 |
41.73 |
45.17 |
|
| Long-term
debt |
69.98 |
63.06 |
55.13 |
45.95 |
35.33 |
|
|
|
| PATTERN
OF SHAREHOLDINGS AS AT MARCH 31, 2000 |
|
|
|
|
| NO. OF |
|
SHAREHOLDING |
|
TOTAL SHARES |
|
| SHAREHOLDERS |
|
|
|
HELD |
|
|
|
|
|
|
|
| 641 |
FROM |
1 |
TO |
100 |
SHARES |
63,805 |
|
| 164 |
FROM |
101 |
TO |
500 |
SHARES |
52,700 |
|
| 74 |
FROM |
501 |
TO |
1000 |
SHARES |
65,400 |
|
| 84 |
FROM |
1001 |
TO |
5001 |
SHARES |
214,500 |
|
| 12 |
FROM |
5001 |
TO |
10000 |
SHARES |
68,800 |
|
| 3 |
FROM |
10001 |
TO |
15000 |
SHARES |
32,000 |
|
| 5 |
FROM |
15001 |
TO |
20000 |
SHARES |
86,700 |
|
| 3 |
FROM |
25001 |
TO |
30000 |
SHARES |
69,000 |
|
| 1 |
FROM |
35001 |
TO |
40000 |
SHARES |
39,800 |
|
| 1 |
FROM |
55001 |
TO |
60000 |
SHARES |
54,800 |
|
| 1 |
FROM |
95001 |
TO |
100000 |
SHARES |
100,000 |
|
| 1 |
FROM |
595001 |
TO |
600000 |
SHARES |
600,000 |
|
| 1 |
FROM |
745001 |
TO |
750000 |
SHARES |
750,000 |
|
| 1 |
FROM |
3065001 |
TO |
3070000 |
SHARES |
3,067,390 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| 992 |
|
5,264,895 |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|
|
|
PERCENTAGE |
|
| NO. OF |
CATEGORIES OF |
|
SHARES |
OF |
|
| SHAREHOLDERS |
SHAREHOLDERS |
|
HELD |
TOTAL |
|
| 985 |
Individuals |
|
758,305 |
14.40% |
|
| 1 |
Investment Company |
|
10,500 |
0.20% |
|
| 3 |
Joint Stock-Companies |
|
3,091,790 |
58.72% |
|
| 1 |
Financial Institution |
|
600,000 |
11.40% |
|
| 1 |
Modaraba Company |
|
54,300 |
1.03% |
|
| 1 |
0thers - Foreign Company- |
|
|
Furukawa Battery Company
Ltd. Japan |
750,000 |
14.25% |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
| 992 |
|
5,264,895 |
100.00% |
|
| ---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of |
|
| AUTOMOTIVE
BATTERY COMPANY LIMITED as at |
|
| March
31, 2000 and the related Profit and Loss Account, |
|
| Statement
of Changes in Equity 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 purpose |
|
| 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, Statement of Changes |
|
| in
Equity 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 31,2000 |
|
| and
of the profit, changes in equity and the cash flow |
|
| for
the year then ended; and |
|
|
| (d)
in our opinion no Zakat was deductible at source under |
|
| the
Zakat & Ushr Ordinance, 1980. |
|
|
|
SHAKIR & CO. |
|
| Karachi: July 20, 2000 |
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT MARCH 31, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
| SHARE
CAPITAL |
|
|
| AUTHORISED
CAPITAL |
|
| 8,000,000
Ordinary Shares of Rs 10 each |
|
80,000,000 |
80,000,000 |
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up capital |
|
3 |
52,648,950 |
52,648,950 |
|
| Accumulated
loss |
|
(22,485,728) |
(25,924,467) |
|
|
------------ |
------------ |
|
|
30,163,222 |
26,724,483 |
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
15,006,479 |
15,006,479 |
|
|
|
| LONG
TERM LOANS |
|
4 |
33,935,580 |
43,057,580 |
|
|
|
|
|
| OBLIGATION
UNDER FINANCE LEASE |
|
5 |
1,393,815 |
2,897,370 |
|
|
|
|
|
| DEFERRED
LIABILITIES |
|
6 |
2,323,193 |
2,293,762 |
|
|
|
|
|
| CURRENT
LIABILITIES; |
|
|
|
| Short
term financing |
|
7 |
50,464,349 |
37,968,431 |
|
|
|
|
| Current
portion of long term liabilities |
|
8 |
10,867,555 |
9,416,852 |
|
|
| Creditors,
Accrued and other liabilities |
|
9 |
28,725,909 |
30,813,782 |
|
|
------------ |
------------ |
|
|
90,057,813 |
78,199,065 |
|
| CONTINGENT
LIABILITIES AND COMMITMENTS |
10 |
-- |
-- |
|
|
------------ |
------------ |
|
|
172,880,102 |
168,178,739 |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
|
| Operating
Assets |
|
11 |
69,170,321 |
75,142,932 |
|
|
|
|
| LONG
TERM DEPOSITS |
|
12 |
1,555,700 |
1,585,200 |
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
|
|
| Stores
and Spares |
|
13 |
5,067,089 |
5,356,750 |
|
| Stock-in-Trade |
|
14 |
50,779,188 |
34,534,652 |
|
|
|
|
| Trade
Debts (Unsecured considered good) |
|
15 |
29,038,476 |
31,716,625 |
|
|
| Loans,
Advances, Short Term Prepayment |
|
| &
Other Receivables |
|
16 |
5,006,719 |
5,858,878 |
|
|
|
|
| Trade
& Other Deposits |
|
17 |
2,324,521 |
1,438,648 |
|
| Cash
and Bank Balances |
|
18 |
9,938,088 |
12,545,054 |
|
|
----------- |
----------- |
|
|
102,154,081 |
91,450,607 |
|
|
----------- |
----------- |
|
|
172,880,102 |
168,178,739 |
|
|
========== |
========== |
|
| The
annexed notes form an integral part of these accounts. |
|
| The
Auditors' Report is annexed hereto. |
|
|
|
ARSHAD SHAHZADA |
|
HUSSAIN HASHWANI |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2000 |
|
|
|
Note |
2000 |
1999 |
|
|
|
Rupees |
Rupees |
|
|
| Net Sales |
|
19 |
249,202,778 |
278,404,872 |
|
| Cost of Sales |
|
20 |
218,062,224 |
242,296,078 |
|
|
|
----------- |
----------- |
|
|
|
31,140,554 |
36,108,794 |
|
| Administrative
and Marketing Expenses |
|
21 |
14,151,528 |
14,043,948 |
|
|
|
----------- |
----------- |
|
| Operating
profit |
|
|
16,989,026 |
22,064,846 |
|
| Other income |
|
22 |
309,300 |
184,012 |
|
|
|
|
----------- |
----------- |
|
|
|
17,298,326 |
22,248,858 |
|
| Financial
Charges |
|
23 |
12,631,673 |
15,076,458 |
|
| Workers'
Profit Participation Fund |
|
|
