| Automotive Battery Company Limited |
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|
| Annual
Report 2001 |
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| CONTENTS |
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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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|
| FIVE
YEARS AT A GLANCE |
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|
| GRAPHIC
ILLUSTRATION |
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|
| PATTERN
OF SHAREHOLDING OF SHARES |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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|
| PROFIT
AND LOSS ACCOUNTS |
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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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| CORPORATE
PROFILE |
|
|
| BOARD
OF DIRECTORS |
|
| Arif Hashwani |
|
- Chairman |
|
| Arshad
Shahzada |
- Chief Executive |
|
| S.H.M. Zaidi |
|
|
| Altaf Hashwani |
|
|
| Hussain
Hashwani |
|
| S. Haroon Rashid |
(NIT NOMINEE) |
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| S. Yamagami |
|
(FB-JAPAN) |
|
| S. Haider Mehdi |
|
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| COMPANY
SECRETARY |
|
| S. Haider Mehdi |
|
|
| AUDITORS
& SHARE REGISTRAR |
|
| Shakir & Co. |
|
| Chartered
Accountants |
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| 4th
Floor, Jubilee Insurance House, |
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| I.
I. Chundrigar Road, Karachi. |
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| SOLICITORS |
|
| Farrukh
Zia Shaikh |
|
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| BANKERS |
|
| Habib Bank Ltd. |
|
| Muslim
Commercial Bank Ltd. |
|
| Bank
of Tokyo-Mitsubishi, Limited |
|
| PICIC
Commercial Bank Ltd. |
|
| (Formerly
Gulf Commercial Bank Ltd.) |
|
| Doha
Bank Limited |
|
| Emirates
Bank International PJSC |
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| ORIX
Investment Bank Pakistan Limited |
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| American
Express Bank Ltd. |
|
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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, 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 Seventeenth Annual General Meeting |
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| of
the Shareholders of Automotive Battery Company Limited will |
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| be
held on Thursday, September 27, 2001 at 11.30 hours at Senator |
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| Room,
Karachi Marriott Hotel, Abdullah Haroon Road, Karachi |
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| to
transact the following business: |
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| A.
ORDINARY BUSINESS : |
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| 1.
To read and confirm minutes of the Sixteenth Annual General |
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| Meeting
of the Shareholders held on 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 Director's 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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| 4.
To consider any other business with the permission of the Chair. |
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| B.
SPECIAL BUSINESS: |
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| 5.
To consider and approve remunerations of the Chief Executive |
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| and
Working Directors of the Company for a period of two-years |
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| commencing
from April 24, 2001. |
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|
| A
statement under Section 160 of the Companies Ordinance, |
|
| 1984
pertaining to special business is annexed to 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 |
|
Director & 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 a proxy to attend instead of his/ |
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| her behalf. |
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|
| 2.
Proxies must be deposited with the Company not later than 48 |
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| hours
before the time of holding the meeting. |
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|
| 3.
Share Transfer Books of the Company will remain closed from |
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| September
20, 2001 to September 27, 2001 (both days inclusive). |
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| 4.
Shareholders are requested to notify any change in their address |
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| to
the Registrar's Office: Shakir & Company, 4th Floor, Jubilee |
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| Insurance
House, I. I. Chundrigar Road, Karachi. |
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|
| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 |
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| This
statement is annexed to the notice of the Seventeenth |
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| Annual
General Meeting of the shareholders of Automotive |
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| Battery
Company Ltd., to be held on September 27, 2001 |
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| and
sets out the material facts concerning the following |
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| special
business to be transacted at the meeting for approval |
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| of shareholders. |
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| REMUNERATION
OF THE CHIEF EXECUTIVE AND WORKING |
|
| DIRECTORS
OF THE COMPANY |
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| A
total amount of Rs. 4.84 million (Rupees Four Million Eight |
|
| Hundred
Forty Thousand only) will be proposed as the aggregate |
|
| remuneration
of the Chief Executive and Working Directors of |
|
| the
Company for a period of two-year commencing from |
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| April
24, 2001 in the form of the following Resolution. |
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|
| "RESOLVED:
that an aggregate sum of Rs. 4.84 Million |
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| (Rupees
Four Million Eight Hundred Forty Thousand) be and |
|
| is
hereby approved as remuneration of the Chief Executive |
|
| and
Working Directors of the Company for a two-year term |
|
| from
April 24, 2001 to April 23, 2003 (both days inclusive), |
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| covering
their managerial remunerations, housing, utilities, |
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| bonus,
provident fund and gratuity in addition to their entitlement |
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| 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 and Mr. Hussain |
|
| Hashwani,
a Director of the Company are interested in this |
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| business
to the extent of their remuneration. |
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| CHAIRMAN'S
REVIEW |
|
|
| IN
THE NAME OF ALLAH |
|
| THE
MOST BENEFICENT |
|
| AND
MERCIFUL |
|
|
|
| Dear
Shareholders |
|
|
| It
gives me pleasure in welcoming you to the 17th Annual General |
|
| Meeting
of your Company and presenting to you the Audited |
|
| Statements
of Accounts and my review on the performance of your |
|
| Company
for the year 2000-2001. |
|
|
| The
operating environment during the year under review became |
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| more
challenging due to higher taxes, economic recession and costs |
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| escalation.
The industry pays general sales tax at the rate of 15% |
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| on
supply to registered persons and 3% further tax on sales to |
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| unregistered
persons, in addition to 10% central excise duty on the |
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| retail
price of the battery. The custom duty has been reduced from |
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| 10%
to 5% on raw materials through Finance Ordinance, 2001. |
|
| Since
the entire unorganized sector is undocumented and does not |
|
| come
under the tax net, the organized sector of the battery industry |
|
| has
therefore, to compete severely with the unorganized sector. The |
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| battery
manufacturers made presentations to the National Tariff |
|
| Commission
and the Central Board of Revenue for withdrawal of |
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| central
excise duty on batteries but unfortunately our request has |
|
| not
been acceded to. The drought adversely impacted GDP growth |
|
| of
the agriculture sector as a result of which demand for automotive |
|
| batteries
also reduced during the period under report. |
|
|
| Despite
highly adverse operating environment, the performance of |
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| your
Company achieved growth and recorded pre-tax profit of |
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| Rs.
5.0m as compared to Rs. 4.3m achieved in the previous year. |
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|
| SALES: |
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| Sales
revenue for the year under report went up by 3.7%; to |
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| Rs.
258.4m from Rs.249.2m in 1999-2000. In order to face the |
|
| severe
market competition, the management of your Company made |
|
| changes
in distribution network of Replacement Segment in the |
|
| previous
year which in turn resulted growth during the year under |
|
| report.
However, in view of decline in volume of original equipment |
|
| and
government segments, the overall growth of the automotive |
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| battery
market was insignificant. |
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| MANUFACTURING: |
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| Despite
some infrastructure constraints, power failures and shortage |
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| of
water in Hub Industrial Estate, production activities were effectively |
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| planned
to meet the market requirement both in terms of quality |
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| and
quantity. The production schedules were adjusted after taking |
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| into
account the stocks-in-hand. The constraint on market growth |
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| due
to persisting economic recession was also a limiting factor on |
|
| production. |
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| PROFITABILITY: |
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| The
State Bank of Pakistan deregulated rupee-dollar parity in |
|
| July
2000 as a result of which inter-bank value of Pak Rupee |
|
| depreciated
by around 17% till March 31, 2001. With a view to meet |
|
| the
cut-throat competition with the unorganized sector, discounts |
|
| and
incentives have been increased over the previous year. In view |
|
| of
devaluation of Pak Rupee, rise in utility and manpower costs, |
|
| the
cost of sales increased to Rs. 225.9m from Rs. 218.1m. The |
|
| reorganisation
of distribution network increased Selling and Distribution |
|
| costs
as the result of which, Administration and Marketing Expenses |
|
| increased
from Rs. 14.2m to Rs 17.0m during the period under |
|
| review
and in turn operating profit went down from Rs. 16.9m in |
|
| 1999-2000
to Rs. 15.4m during the period under report. However, |
|
| as
a result of strict vigilance on stocks and trade receivables, |
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| financial
charges reduced from Rs. 12.6m to Rs. 10.0m. It is hope |
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| that
the volume in Replacement Sector will increase in the coming |
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| years
owing to adjustments made in distribution network. |
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|
| TAXATION: |
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| The
liability on account of income tax has been provided at current |
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| rate
of 0.5% on turnover under Section 80-D of the Income Tax |
|
| Ordinance,
1979 due to brought forward losses of the tax holiday |
|
| period. |
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|
| FUTURE
OUTLOOK: |
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| The
persisting economic recession and severe market competition |
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| with
the unorganized sector will continue to have adverse impact |
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| on
the operating environment for the organized sector in future as |
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| well.
The continuous depreciation of Pak Rupee and upsurge in |
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| energy
costs would escalate the basic input costs substantially. |
|
| However,
reduction of custom duty on imported raw materials from |
|
| 10%
to 5% will partially absorb the inflation related cost increases. |
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|
| ACKNOWLEDGEMENT: |
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| On
my behalf and on behalf of the Board of Directors of your |
|
| company,
I take this opportunity of acknowledging the devoted |
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| services
and the sincere efforts of employees of all cadres of the |
|
| Company
towards its operating performance during the year under |
|
| review.
I am also thankful to main dealers, the valued customers, |
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| the
bankers, and M/s. Furukawa Battery Company Limited, Japan, |
|
| for
their sustained support. |
|
|
|
|
ARIF HASHWANI |
|
| Karachi:
July 26, 2001 |
|
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, 2001. The Profit after providing |
|
| for
the minimum tax on turnover under Section 80-D of the |
|
| Income
Tax Ordinance, 1979 amounting to Rs. 0.947 m |
|
| has
been utilized 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 |
|
5,044 |
|
| Less Taxation |
|
|
947 |
|
|
|
|
------------------ |
|
| Profit
After Taxation |
|
4,097 |
|
| Accumulated
Losses Brought Forward |
|
22,485 |
|
|
|
|
------------------ |
|
| Loss
Carried Forward |
|
18,388 |
|
|
|
|
========== |
|
| Earning
per share |
|
Rs. 0.78 |
|
|
|
|
========== |
|
|
| 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. Shakir & Company, |
|
| Chartered
Accountants, retire and being eligible, offer |
|
| themselves
for re-appointment. |
|
|
|
|
By order of the Board |
|
|
|
|
|
|
|
ARSHAD SHAHZADA |
|
| Karachi:
July 26, 2001 |
|
Chief Executive |
|
|
|
|
| FIVE
YEARS AT A GLANCE |
|
|
|
|
|
|
|
Rs. Million |
|
|
|
1997 |
1998 |
1999 |
2000 |
2001 |
|
|
|
|
|
| Sales |
|
263.61 |
268.79 |
278.40 |
249.20 |
258.38 |
|
| Gross Profit |
|
32.04 |
34.05 |
36.10 |
31.14 |
32.45 |
|
| Profit before tax |
|
0.02 |
2.80 |
5.77 |
4.36 |
5.04 |
|
| Profit/(loss)
after tax |
(0.95) |
1.75 |
4.70 |
3.44 |
4.10 |
|
| Paid-up
share capital |
52.65 |
52.65 |
52.65 |
52.65 |
52.65 |
|
| Accumulated
losses |
(32.37) |
(30.62) |
(25.92) |
(22.49) |
(18.39) |
|
| Shareholders'
equity |
35.28 |
37.04 |
41.73 |
45.17 |
49.27 |
|
| Long-term debt |
|
63.06 |
55.13 |
45.95 |
35.33 |
24.12 |
|
|
|
| PATTERN
OF SHAREHOLDINGS AS AT MARCH 31, 2001 |
|
|
| NO. OF |
|
SHAREHOLDING |
|
|
TOTAL |
|
| SHARE |
|
|
SHARES |
|
| HODLERS |
|
|
HELD |
|
|
|
|
| 634 |
FROM |
1 |
TO |
100 |
SHARES |
62,605 |
|
| 163 |
FROM |
101 |
TO |
500 |
SHARES |
52,800 |
|
| 73 |
FROM |
501 |
TO |
1000 |
SHARES |
65,100 |
|
| 85 |
FROM |
1001 |
TO |
5000 |
SHARES |
201,000 |
|
| 11 |
FROM |
5001 |
TO |
10000 |
SHARES |
73,600 |
|
| 5 |
FROM |
10001 |
TO |
15000 |
SHARES |
55,500 |
|
| 4 |
FROM |
15001 |
TO |
20000 |
SHARES |
70,500 |
|
| 2 |
FROM |
20001 |
TO |
25000 |
SHARES |
43,500 |
|
| 1 |
FROM |
25001 |
TO |
35000 |
SHARES |
28,800 |
|
| 1 |
FROM |
35001 |
TO |
55000 |
SHARES |
39,800 |
|
| 1 |
FROM |
55001 |
TO |
95000 |
SHARES |
54,300 |
|
| 1 |
FROM |
95001 |
TO |
595000 |
SHARES |
100,000 |
|
| 1 |
FROM |
595001 |
TO |
745000 |
SHARES |
600,000 |
|
| 1 |
FROM |
745001 |
TO |
3065000 |
SHARES |
750,000 |
|
| 1 |
FROM |
3065001 |
TO |
3067090 |
SHARES |
3,067,390 |
|
| ------------------ |
|
|
------------------ |
|
| 984 |
|
|
|
5,264,895 |
|
| ========== |
|
|
|
========== |
|
|
| NO. OF |
|
|
|
|
PERCENTAGE |
|
| SHARE |
CATEGORIES OF |
|
SHARES |
OF |
|
| HOLDERS |
SHAREHOLDERS |
|
HELD |
TOTAL |
|
|
|
|
|
| 978 |
Individuals |
|
758,305 |
14.40% |
|
| 1 |
Investment Company |
|
10,500 |
0.20% |
|
| 2 |
Joint Stock-Companies |
|
3,091,790 |
58.72% |
|
| 1 |
Financial Institution |
|
600,000 |
11.40% |
|
| 1 |
Modaraba Company |
|
54,300 |
1.03% |
|
| 1 |
Others - Foreign Company- |
|
|
|
Furukawa Battery Company
Ltd. Japan |
750,000 |
14.25% |
|
| ------------------ |
|
|
------------------ |
------------------ |
|
| 984 |
|
|
|
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, 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 purpose 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 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, Cash Flow Statement and
Statement |
|
| of
Changes in Equity together with notes forming part thereof confirm with
approved |
|
| accounting
standards as applicable in Pakistan, and give the information required by the |
|
| Companies
Ordinance, 1984, in 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 profit,
its cash |
|
| flows
and changes in equity 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 26, 2001 |
|
Chartered Accountants |
|
|
|
|
| BALANCE
SHEET AS AT MARCH 31, 2001 |
|
|
|
|
Note |
2001 |
2000 |
|
|
|
|
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 |
|
|
(18,388,446) |
(22,485,728) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,260,504 |
30,163,222 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
15,006,479 |
15,006,479 |
|
| LONG-TERM
LOANS |
|
4 |
23,493,000 |
33,935,580 |
|
| OBLIGATION
UNDER FINANCE LEASE |
5 |
634,000 |
1,393,815 |
|
| DEFERRED
LIABILITIES |
|
6 |
2,712,147 |
2,323,193 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short-term
financing |
|
7 |
35,853,709 |
50,464,349 |
|
| Current
portion of long-term liabilities |
8 |
11,444,395 |
10,867,555 |
|
| Creditors,
accrued and other liabilities |
9 |
29,708,499 |
28,725,909 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
77,006,603 |
90,057,813 |
|
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
10 |
-- |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
153,112,733 |
172,880,102 |
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
| The
Auditors' Report is annexed hereto. |
|
|
| TANGIBLE
FIXED ASSETS |
|
|
|
| Operating
Assets |
|
11 |
64,760,775 |
69,170,321 |
|
|
|
|
|
| LONG-TERM
DEPOSITS |
|
12 |
943,300 |
1,555,700 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
13 |
5,453,408 |
5,067,089 |
|
| Stock-in-trade |
|
14 |
38,376,930 |
50,779,188 |
|
| Trade
debts (unsecured considered good) |
15 |
28,129,929 |
29,038,476 |
|
| Loans,
advances, short term prepayments |
|
|
| &
other receivables |
|
16 |
4,088,980 |
5,006,719 |
|
| Trade
& other deposits |
|
17 |
2,697,421 |
2,324,521 |
|
| Cash
and bank balances |
|
18 |
8,661,990 |
9,938,088 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
87,408,658 |
102,154,081 |
|
|
|
|
------------------ |
------------------ |
|
|
153,112,733 |
172,880,102 |
|
|
|
========== |
========== |
|
|
|
ARSHAD SHAHZADA |
|
|
HUSSAIN HASHWANI |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Net sales |
|
19 |
258,380,770 |
249,202,778 |
|
| Cost of sales |
|
20 |
225,931,378 |
218,062,224 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,449,392 |
31,140,554 |
|
| Administrative
and marketing expenses |
21 |
17,013,465 |
14,151,528 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
15,435,927 |
16,989,026 |
|
| Other income |
|
22 |
-- |
309,300 |
|
|
|
|
------------------ |
------------------ |
