| Exide Pakistan Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| EXIDE
PAKISTAN LTD |
|
| CORPORATE
PROFILE |
|
| NOTICE
OF MEETING |
|
| CHAIRMAN'S
REVIEW |
|
| REPORT
OF THE DIRECTORS |
|
| PERFORMANCE
HIGHLIGHTS |
|
| GRAPHIC
ILLUSTRATION |
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| PATTERN
OF SHAREHOLDING |
|
| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
|
| 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 ACCOUNTS |
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| STATEMENT
UNDER SECTION 237 OF |
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| THE
COMPANIES ORDINANCE, 1984 |
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|
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| AUTOMOTIVE
BATTERY COMPANY LTD |
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| CORPORATE
PROFILE |
|
| CHAIRMAN'S
REVIEW |
|
| REPORT
OF THE DIRECTORS |
|
| PATTERN
OF SHAREHOLDING |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| CASH
FLOW STATEMENT |
|
| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNT |
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| FIVE
YEARS AT A GLANCE |
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| CHLORIDE
PAKISTAN (PRIVATE) LTD |
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| CORPORATE
PROFILE |
|
| REPORT
OF THE DIRECTORS |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| BALANCE
SHEET |
|
| CASH
FLOW STATEMENT |
|
| STATEMENT
OF CHANGES IN EQUITY |
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| NOTES
TO THE ACCOUNT |
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| CONSOLIDATED
ACCOUNTS |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| CONSOLIDATED
BALANCE SHEET |
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| CONSOLIDATED
PROFIT AND LOSS ACCOUNT |
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| CONSOLIDATED
CASH FLOW STATEMENT |
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| CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY |
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| CONSOLIDATED
NOTES TO THE ACCOUNTS |
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| CORPORATE
PROFILE |
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|
| BOARD
OF DIRECTORS |
|
| Arif Hashwani |
|
- Chairman |
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| S.H.M. Zaidi |
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- Managing Director/Chief
Executive |
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| Vazir
Ali F. Mohammad |
|
| Rajabali
Panjwani |
|
| Altaf Hashwani |
|
| Hussain
Hashwani |
|
| Muhammad
Asif |
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| COMPANY
SECRETARY |
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| S. Haider Mehdi |
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| BANKERS |
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| Emirates
Bank International PJSC. |
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| The
Hongkong and Shanghai Banking Corporation Ltd. |
|
| Habib Bank Ltd. |
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| Muslim
Commercial Bank Ltd. |
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| PICIC
Commercial Bank Limited |
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| (Formerly
Gulf Commercial Bank Ltd) |
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| National
Bank of Pakistan |
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| American
Express Bank Ltd. |
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| Standard
Chartered Grindlays 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
Sharae 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-Eighth Annual General Meeting |
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| of
the shareholders of Exide Pakistan Limited will be held on |
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| Thursday,
September 27, 2001 at 10.30 Hours at Senator Room, |
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| Karachi
Marriott Hotel, Abdullah Haroon Road, Karachi to transact |
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| the
following business: |
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| A.
ORDINARY BUSINESS: |
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| 1.
To read and confirm minutes of the Forty-Seventh Annual General |
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| Meeting
of the shareholders of the Company held on Thursday, |
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| September 14, 2000. |
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| 2.
To receive and adopt the Audited Statements of Accounts for |
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| the
year ended March 31, 2001 together with the Directors' and |
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| Auditors
reports thereon. |
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| 3.
To appoint auditors for the year 2001-2002 and fix their |
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| remuneration. |
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| B.
SPECIAL BUSINESS: |
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| 4.
To approve remuneration of the Chief Executive and other |
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| Working
Directors of the Company for a period of one year |
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| commencing
from April 01, 2001. |
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| A
statement under section 160 of the Companies Ordinance, 1984 |
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| pertaining
to the Special Business is being sent to the members |
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| with this notice. |
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|
By order of the Board |
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|
S. HAIDER MEHDI |
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| Karachi:
July 26, 2001 |
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Company Secretary |
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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 20, 2001 to September 27, 2001, 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 at the Registered Office at 40-K, Block-6, |
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| Dr.
Mehmood Hussain Road, Off Sharae Faisal, P.E,C.H.S., |
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| Karachi-75400. |
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| STATEM.ENT
UNDER SECTION 160 OF THE COMPANIES |
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| ORDINANCE,
1984 |
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| This
statement is annexed to the notice of the Forty-Eighth Annual |
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| General
Meeting of the shareholders of Exide Pakistan Limited to |
|
| be
held on 27th September 2001 and sets out the material facts |
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| concerning
the following Special Business to be transacted at the |
|
| Meeting
for approval of Shareholders. |
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|
| REMUNERATION
OF THE CHIEF EXECUTIVE AND THE OTHER |
|
| WORKING
DIRECTORS OF THE COMPANY |
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| A
total amount Rs. 4.299 million will be proposed as the aggregate |
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| remuneration
of the Chief Executive and the other Working Directors |
|
| of
the Company for a period of one year effective from April 01, |
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| 2001
to March 31, 2002 in the form of following Resolution: |
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|
| "RESOLVED
that an aggregate sum of Rs. 4.299 million |
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| (Rupees
four million two hundred ninety nine thousand only) |
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| be
and is hereby approved as the Remuneration of the |
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| Managing
Director/Chief Executive and the other Working |
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| Directors
of the Company for a period of one year |
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| effective
from April 01, 2001 to March 31, 2002, (both |
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| days
inclusive), covering their managerial remuneration, |
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| housing,
utilities, bonus, provident fund and gratuity in addition |
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| to
their entitlement to chauffeur driven company maintained |
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| cars,
medical and hospitalisation expenses, residential utilities, |
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| telephone
and security expenses, leave fare assistance and |
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| other
fringe benefits as per rules of the Company." |
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| Messrs.
Arif Hashwani, S.H.M. Zaidi, Altaf Hashwani and Hussain |
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| Hashwani
are interested in this business to the extent of their |
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| respective
remuneration. |
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|
| CHAIRMAN'S
REVIEW |
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| IN
THE NAME OF ALLAH |
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| THE
MOST BENEFICENT |
|
| AND
MERCIFUL |
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| I
feel privileged in welcoming you all to this 48th Annual General |
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| Meeting
of the Company and presenting to you the Audited Statements |
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| of
Accounts for the year ended March 31, 2001 and expressing my |
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| views
on the performance of your company during the year |
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| 2000-2001. |
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| Overall
automotive battery industry in organized sector remained |
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| disturbed
on account of multiple taxes and persisting economic |
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| recession.
In addition to customs duty on raw materials (which has |
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| now
been reduced to 5% in the Federal Budget 2001) the battery |
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| industry
also pays central excise duty at the rate of 10% on retail |
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| price
of batteries, 15% general sales tax on the value of supply to |
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| registered
persons and 3% further tax on sales to unregistered |
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| persons.
The burden of multiple taxes put the industry on a more |
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| disadvantageous
footing in relation to the unorganized sector, which |
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| comprises
mainly of replating and under invoiced imports. The |
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| market
share of the unorganized sector has expanded from 41% |
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| in
1996 to 48% during the year 2000 and as such the growth of |
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| organized
sector in Replacement Segment was very negligible. The |
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| sharp
increase in market share of unorganized sector also deprived |
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| the
national exchequer of significant revenue. Battery manufacturers |
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| approached
the National Tariff Commission and the Central Board |
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| of
Revenue for withdrawal of central excise duty as battery is only |
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| a
component of automobile which is subject to excise duty. However, |
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| despite
recommendation of the National Tariff Commission, no |
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| remedial
action has been taken in the national budget 2001-2002. |
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| The
GDP for the year 2000-2001 grew by 2.6% but due to drought |
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| spell,
agriculture sector witnessed negative GDP growth which in |
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| turn
also reduced the demand for automotive battery. On the other |
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| hand
State Bank of Pakistan deregulated the inter-bank rupee-dollar |
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| parity
in July 2000, which resulted in value of Pak Rupee depreciating |
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| by
approximately 17% till March 31, 2001. This in turn pushed up |
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| the
direct production cost. |
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| Despite
uncongenial operating environment during the year under |
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| report,
your Company maintained its lead in the market. The operating |
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| performance
improved over the last year but on account of provision |
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| for
diminution in the value of investment in its subsidiary, Automotive |
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| Battery
Company Limited, the year under report resulted in loss |
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| (before
tax) amounting to Rs. 0.2m as against profit before tax of |
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| Rs.
30.5m achieved during the preceding year. |
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| The
Chemical Plant of your Company continued to perform satisfactorily. |
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| Your
Company's subsidiary, Automotive Battery Company Limited |
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| registered
pre-tax profit of Rs. 5.0m as compared to Rs. 4.3m |
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| achieved
during the previous year. I hope its performance during |
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| the
coming years will further improve. |
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| SALES: |
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| Net
sales revenue augmented to Rs. 857.2m from Rs. 813.9m |
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| booked
in 1999-2000. In view of decline in volume in the Original |
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| Equipment
segment and less than the anticipated growth in the |
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| Replacement
Sector, overall volume of Automotive Battery Market |
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| grew
marginally. Sales of Industrial Cells and Diesel Engine Starting |
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| Batteries
improved over the previous year. In view of decline in |
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| demand
from Replacement Segment, the management of. your |
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| Company
has started tapping the export market. I am pleased to |
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| inform
you that the first consignment of automotive batteries was |
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| shipped
in May 2001 to Sultanate of Oman and it is hoped that the |
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| export
will grow in the years ahead. |
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|
| MANUFACTURING: |
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| The
production activities of your Company were effectively monitored |
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| and
planned throughout the year 2000-2001 with a view to provide |
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| full
support to the marketing by catering to their requirement both |
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| in
terms of quality and quantity despite disruptions caused by |
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| frequent
load shedding of electricity and other infrastructure constraints. |
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| Your
management instituted additional measures with greater vigour |
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| for
further improvement of quality standards as a result of which |
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| expenses
on account of warranty claims remained under control. |
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|
| PROFITABILITY: |
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| Gross
Profit improved from Rs. 132.9m to Rs. 140.3m. Severe |
|
| market
competition with the unorganized sector necessitated additional |
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| discounts
and incentives to the trade. The factors such as devaluation |
|
| of
Pak Rupee, increase in the inflation related overheads and utility |
|
| cost
and additional sales tax on lead oxide pushed up the manufacturing |
|
| cost
by 5%, from Rs 680.9m in 1999-2000 to Rs. 716.8m in 2000- |
|
| 2001.
Administration and Selling expenses increased by 4% only. |
|
| Financial
charges reduced from Rs. 23.6m to Rs. 20.1m, which was |
|
| made
possible because of strict control on overheads, inventories |
|
| and
trade receivables. |
|
|
| Primarily
due to provision for diminution in the value of investment |
|
| in
subsidiary, total assets and capital employed of your Company |
|
| reduced
from Rs. 527,7m to Rs. 507.4m and from Rs. 340.1m to |
|
| Rs.
318.5m respectively. The average inventory turnover rate almost |
|
| remained
at par with that of the previous year. However, average |
|
| collection
period slightly improved from 35 to 33 days. The current |
|
| ratio
stood at 1:1.7. |
|
|
| FUTURE
OUTLOOK: |
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| The
automotive battery industry will continue to be competitive on |
|
| account
of economic recession coupled with activities of replators |
|
| and
under invoiced imports. The erosion in value of Pak-Rupee, |
|
| upward
adjustments of energy costs will increase the manufacturing |
|
| costs.
However, relief on account of reduction in import duty on raw |
|
| materials
from 10% to 5% will partially absorb cost escalation. The |
|
| Chemical
Plant is expected to contribute positively to the overall |
|
| performance
of your Company. Nevertheless, your management will |
|
| exert
all efforts to ensure the leadership of your Company in the |
|
| automotive
battery industry. |
|
|
| ACKNOWLEDGMENT: |
|
| On
my behalf and on behalf of the Board of Directors of your |
|
| Company,
I take this opportunity of acknowledging the devoted |
|
| services
and sincere efforts of employees of all cadres of the |
|
| Company
towards its operating performance during the year under |
|
| review.
I am also grateful to the main dealers, the retailers and |
|
| valued
customers in the Original Equipment and Government Segments |
|
| of
the market and the bankers of the Company for their valuable |
|
| support
and cooperation. |
|
|
|
|
ARIF HASHWANI |
|
| Karachi:
July 26, 2001 |
|
Chairman |
|
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| Your
Directors are pleased to present their report together |
|
| with
the Audited Statements of Accounts and the Auditors' |
|
| Report
thereon for the year ended March 31, 2001. |
|
|
| FINANCIAL
HIGHLIGHTS |
|
|
|
|
Rs. (000) |
|
|
| Loss
before Taxation |
|
(202) |
|
| Less Taxation |
|
|
(16,038) |
|
|
|
|
------------------ |
|
| Loss
after Taxation |
|
(16,240) |
|
| Un-appropriated
Profit Brought Forward |
|
3,955 |
|
|
------------------ |
|
| Un-appropriated
Loss Carried Forward |
|
(12,285) |
|
|
|
|
========== |
|
| Loss per share |
|
|
Rs. (3.00) |
|
|
|
|
========== |
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|
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|
|
|
| The
Chairman's Review dealing with the performance of |
|
| the
Company during the year ended March 31,2001, future |
|
| prospects
and other matters of concern to the Company |
|
| forms
part of this report. |
|
|
| Pattern
of shareholding as at March 31, 2001 is annexed |
|
| to this report. |
|
|
| The
present auditors, Messrs: A. F. Ferguson & Co.; Chartered |
|
| Accountants,
retire and being eligible, offer themselves for |
|
| re-appointment. |
|
|
|
|
ARIF HASHWANI |
|
| Karachi:
July 26, 2001 |
|
Chairman |
|
|
|
| PERFORMANCE
HIGHLIGHTS |
|
|
|
|
(Rs. '000) |
|
|
|
|
|
|
1997 |
1998 |
1999 |
2000 |
2001 |
|
|
|
|
| Net Sales |
|
743,457 |
660,155 |
733,341 |
813,937 |
857,160 |
|
| Operating Profit |
|
58,383 |
47,442 |
62,453 |
56,500 |
60,716 |
|
| (Loss)/Profit
Before Tax |
34,802 |
35,332 |
43,429 |
30,543 |
(202) |
|
| (Loss)/Profit
After Tax |
22,832 |
23,832 |
35,929 |
19,685 |
(16,240) |
|
| Cash Dividend |
|
-- |
-- |
6,487 |
16,218 |
-- |
|
|
|
-- |
-- |
12% |
30% |
-- |
|
|
|
|
|
| Stock Dividend |
|
6,131 |
7,051 |
-- |
-- |
-- |
|
|
|
15% |
15% |
-- |
-- |
-- |
|
|
|
|
| Paid-up
Share Capital |
40,875 |
47,006 |
54,057 |
54,057 |
54,057 |
|
| Reserves
Unappropriated Profit |
160,546 |
178,247 |
200,638 |
204,105 |
187,865 |
|
| Shareholders'
Equity |
201,421 |
225,253 |
254,695 |
258,162 |
241,922 |
|
| Surplus
on Revaluation of |
|
| Fixed Assets |
|
6,446 |
43,465 |
43,465 |
43,465 |
43,465 |
|
|
|
|
| Tangible
Fixed Assets |
27,509 |
80,456 |
165,218 |
160,265 |
155,447 |
|
| Net
Current Assets |
107,222 |
125,104 |
99,334 |
108,846 |
134,167 |
|
| Net
Assets Employed |
207,867 |
268,718 |
298,160 |
301,627 |
285,387 |
|
|
|
|
|
|
|
|
Rupees |
|
|
|
|
| (Loss)/Earnings
Per Share Before Tax |
9 |
8 |
8 |
6 |
(0.04) |
|
| (Loss)/Earnings
Per Share After Tax |
6 |
5 |
7 |
4 |
(3.00) |
|
| Share
Break-up Value |
49 |
48 |
47 |
48 |
45 |
|
|
|
|
| Ratio of: |
|
|
Percent |
|
|
|
|
| Operating
Profit to Sales |
8% |
7% |
9% |
7% |
7% |
|
| (Loss)/Profit
Before Tax to Sales |
5% |
5% |
6% |
4% |
-- |
|
| (Loss)/Profit
After Tax to Sales |
3% |
4% |
5% |
2% |
(2%) |
|
| Return
on Equity |
11% |
11% |
14% |
8% |
(7%) |
|
| Return
on Net Assets Employed |
11% |
9% |
12% |
6% |
(6%) |
|
|
|
| PATTERN
OF SHAREHOLDINGS AS |
|
| AT
MARCH 31, 2001 |
|
|
| NUMBER OF |
RANGE OF
SHAREHOLDING |
TOTAL |
|
| SHARE |
FROM |
TO |
SHARES HELD |
|
|
|
| HOLDERS |
|
|
|
|
|
| 270 |
1 |
100 |
9,821 |
|
|
| 360 |
101 |
500 |
96,429 |
|
|
| 95 |
501 |
1000 |
69,005 |
|
|
| 77 |
1001 |
5000 |
157,308 |
|
|
| 3 |
5001 |
10000 |
22,602 |
|
|
| 2 |
10001 |
15000 |
25,487 |
|
|
| 1 |
30001 |
35000 |
33,604 |
|
|
| 1 |
35001 |
40000 |
39,662 |
|
|
| 3 |
95001 |
100000 |
298,651 |
|
|
| 1 |
140001 |
145000 |
144,544 |
|
|
| 1 |
195001 |
200000 |
200,000 |
|
|
| 1 |
310001 |
315000 |
310,909 |
|
|
| 1 |
720001 |
725000 |
723,020 |
|
|
| 1 |
905001 |
910000 |
906,528 |
|
|
| 1 |
1025001 |
1030000 |
1,027,587 |
|
|
| 1 |
1340001 |
1345000 |
1,342,080 |
|
|
| ------------------ |
|
------------------ |
|
|
| 819 |
|
5,405,737 |
|
|
| ========== |
|
========== |
|
|
|
| CATEGORIES |
|
|
SHARES |
PERCENTAGE |
|
| OF
SHAREHOLDERS |
|
NUMBER |
HELD |
OF TOTAL |
|
|
|
|
| Individuals |
|
802 |
4,152,384 |
76.81% |
|
| Joint
Stock Companies |
|
6 |
12,044 |
0.22% |
|
| Investment
Companies |
|
6 |
736,949 |
13.63% |
|
| Insurance
Companies |
|
5 |
503,903 |
9.32% |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
819 |
5,405,737 |
100.00% |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of Exide Pakistan
Limited as at March 31, 2001 |
|
| and
the related profit and loss account, cash flow statement and statement of
changes in equity |
|
| 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. |
|
|
| It
is the responsibility of the company's management to establish and maintain a
system of |
|
| internal
control, and prepare and present the above said statements in conformity with
the |
|
| approved
accounting standards and the requirements of the Companies Ordinance, 1984.
Our |
|
| responsibility
is to express an opinion on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. |
|
| These
standards require that we plan and perform the audit to obtain reasonable
assurance |
|
| about
whether the above said statements are free of any material misstatement. An
audit includes |
|
| examining,
on a test basis, evidence supporting the amounts and disclosures in the above
said |
|
| statements.
An audit also includes assessing the accounting policies and significant
estimates |
|
| made
by management, as well as, evaluating the overall presentation of the above
said |
|
| statements.
We believe that our audit provides a reasonable basis for our opinion and,
after |
|
| due
verification, we report that: |
|
|
| (a)
in our opinion, proper books of accounts 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, cash flow statement and
statement of |
|
| changes
in equity together with the notes forming part thereof conform with approved |
|
| accounting
standards as applicable in Pakistan, and 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, 2001 and of the
loss, its |
|
| cash
flows and changes in equity for the year then ended; and |
|
|
| (d)
in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance,
1980 (XVIII |
|
| of
1980), was deducted by the company and deposited in the Central Zakat Fund
established |
|
| under
Section 7 of that Ordinance. |
|
|
|
|
|
A. F. FERGUSON & CO. |
|
| Karachi:
July 26, 2001 |
|
Chartered Accountants |
|
|
|
|
