| EXIDE PAKISTAN LTD |
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| Annual
Report 1998 |
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| CONTENTS |
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| EXlDE
PAKISTAN LTD |
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| CORPORATE
PROFILE |
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| NOTICE
OF MEETING |
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| CHAIRMAN'S
REVIEW |
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| REPORT
OF THE DIRECTORS |
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| PERFORMANCE
HIGHLIGHTS |
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| GRAPHIC
ILLUSTRATION |
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| PATTERN
OF SHAREHOLDING |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNTS |
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| STATEMENT
UNDER SECTION 237 OF |
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| THE
COMPANIES ORDINANCE, 1984 |
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| AUTOMOTIVE
BATTERY COMPANY LTD |
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| CORPORATE
PROFILE |
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| CHAIRMAN'S
REVIEW |
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|
| REPORT
OF THE DIRECTORS |
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| PATTERN
OF SHAREHOLDING |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| CASH
FLOW STATEMENT |
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| NOTES
TO THE ACCOUNT |
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| FIVE
YEARS AT A GLANCE |
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| CHLORIDE
PAKISTAN (PRIVATE) LTD |
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| CORPORATE
PROFILE |
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| REPORT
OF THE DIRECTORS |
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| AUDITORS'
REPORT TO THE MEMBERS |
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| BALANCE
SHEET |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
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| NOTES
TO THE ACCOUNT |
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| CORPORATE
PROFILE |
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| BOARD OF DIRECTORS |
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| Arif Hashwani |
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- 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 |
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| Rajabali
Panjwani |
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| Sana
Hashwani |
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| Altaf
Hashwani |
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| Hussain
Hashwani |
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| COMPANY
SECRETARY |
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| S.
Haider Mehdi |
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| BANKERS |
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| American
Express Bank Ltd |
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| ANZ
Grindlays Bank plc |
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| Standard
Chartered Bank |
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| Emirates
Bank International Ltd |
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| National
Bank of Pakistan |
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| Soneri
Bank Ltd |
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| Gulf
Commercial Bank Ltd. |
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| (Formerly
Schon Bank Ltd.) |
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| Muslim
Commercial Bank Ltd |
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| AUDITORS |
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| A.F.
Ferguson & Co. |
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| SOLICITORS |
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| Orr,
Dignam & Co. |
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| REGISTERED
OFFICE |
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| 40-K, Block 6 |
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| Dr.
Mahmood Hussain Road |
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| Off
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-Fifth Annual General Meeting of the |
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| shareholders
of Exide Pakistan Limited will be held on Monday, September |
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| 14,
1998 at 10.30 hours at Ambassador Room, Karachi Marriott Hotel, |
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| Abdullah
Haroon Road, Karachi to transact the following business: |
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| A.
ORDINARY BUSINESS : |
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| 1.
To read and confirm minutes of the forty-fourth Annual General |
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| Meeting
of the shareholders of the Company held on September |
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| 10, 1997. |
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| 2.
To receive and adopt the Audited Statements of Accounts for the |
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| year
ended March 31,1998 together with the Directors' and Auditors' |
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| reports
thereon. |
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| 3.
To appoint auditors for the year 1998-99 and fix their remuneration. |
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| B.
SPECIAL BUSINESS : |
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| 4.
Issue of Bonus Shares |
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| To
consider and approve the following resolutions: |
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| "RESOLVED
that a sum of Rs. 7,050,962 (Rupees seven million |
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| fifty
thousand nine hundred sixty two only) out of Company's |
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| Reserve
for the issue of Bonus Shares be capitalised and |
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| applied
for the issue of 705,096 fully paid ordinary shares of |
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| Rs.
10/- each and allotted as bonus shares to the members of |
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| the
Company whose names appear in the Register of Members |
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| on
September 14, 1998 in the ratio of 15 (Fifteen) shares for |
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| every
100 (Hundred) shares held and that these shares shall |
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| be
treated for all purposes as an increase in the paid-up capital |
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| of
the Company and shall rank pari-passu as regards future |
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| dividends
and in all other respects with the existing ordinary |
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| shares
of the Company". |
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| "FURTHER
RESOLVED that for aggregate sum of the fractional |
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| shares
of Rs 10/- each arising on such allotment, the Directors |
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| be
and are hereby authorised to consolidate and sell in the stock |
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| market
such fractional entitlements and to pay the proceeds of |
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| sale
when realised to the shareholders according to their entitlements |
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| in
the form of Revenue Stamps". |
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| 5.
To approve remuneration of the Chief Executive and other Working |
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| Directors
of the Company for the period from March 01, 1998 to |
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| March
31, 1999. |
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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 with |
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| this notice. |
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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 from |
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| September
05, 1998 to September 14, 1998, both days inclusive. |
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| 3.
Members are requested to notify the Company of any change in |
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| the
address at the Registered Office at 40-K,Block-6, Dr. Mahmood |
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| Hussain
Road, Off Sharae Faisal, P.E.C.H.S., Karachi-75400. |
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| STATEMENT
UNDER SECTION 160 OF THE COMPANIES |
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| ORDINANCE,
1984 PERTAINING TO THE SPECIAL BUSINESS |
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| This
statement is annexed to the notice of the forty-fifth Annual |
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| General
Meeting of the shareholders of Exide Pakistan Limited to |
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| be
held on September 14, 1998 and sets out the material facts |
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| concerning
the following Special Business to be transacted at the |
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| Meeting
for approval of shareholders. |
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| 1.
Issue of Bonus Shares |
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| It
is proposed that a sum of Rs. 7,050,962 (Rupees seven million |
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| fifty
thousand nine hundred sixty two only) out of the Company's |
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| Reserve
be capitalised by issuing 705,096 fully paid bonus |
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| shares
of Rs. 10/- each. These shares shall be issued to those |
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| members
whose names appear in the register of members on |
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| September
14, 1998. The bonus shares shall be issued in |
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| proportion
of 15 (Fifteen) shares for every 100 (Hundred) shares |
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| held
by a member. After the issue of these bonus shares, the |
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| paid-up
capital of the Company would increase from Rs. 47,006,414 |
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| to
Rs. 54,057,376. |
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| 2.
Remuneration of Chief Executive and the other working Directors |
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| A
total amount of Rs. 2.739 million will be proposed as the |
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| aggregate
remuneration of the Chief Executive and the other |
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| Working
Directors of the Company for the period from March |
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| 01,
1998 to March 31, 1999 in the form of following resolution. |
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|
| "RESOLVED
that an aggregate sum of Rs. 2.739 million (Rupees |
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| two
million seven hundred thirty nine thousand only) be and is |
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| hereby
approved as the remuneration of the Chief Executive and |
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| the
other Working Directors of the Company for the period from |
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| March
01, 1998 to March 31, 1999, covering their managerial |
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| remuneration,
housing, utilities, bonus, provident fund and gratuity |
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| in
addition to their entitlement to chauffeur driven company |
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| maintained
cars, medical and hospitalisation expenses, residential |
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| utilities,
telephone and security expenses and leave fare assistance |
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| and
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 |
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| AND
MERCIFUL |
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| I
feel privileged in welcoming you all to this 45th Annual General |
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| Meeting
of the Company and presenting to you the Audited |
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| Statements
of Accounts for the year ended March 31, 1998 and |
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| expressing
my view on the performance of your company during |
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| the
year 1997-98. |
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| OVERVIEW: |
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| The
operating performance of automotive battery industry was badly |
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| affected
due to persisting economic recession in the country. The |
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| situation
was aggravated after devaluation of Pak rupee which |
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| effected
the cost of production. The influx of smuggled batteries |
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| continued
unabated and the replators also remained active. These |
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| factors
made the competitive environment more detrimental to the |
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| manufacturers
of automotive batteries in the organized sector. |
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| However,
as a result of our efforts, the Company continued to be |
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| the
market leader and that the year under review booked pre-tax |
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| profit
of Rs. 35.3 million. This was achieved, as a result of strict |
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| check
on inventories, trade receivable and the reduction in the |
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| financial
charges which were reduced by Rs. 5.8 million. |
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| Operating
performance of your subsidiary Company, Automotive |
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| Battery
Company Limited came out with much improved results, for |
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| the
year ended March 31, 1998 by recording a pre-tax profit of Rs. |
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| 2.9
million. I hope its performance during the coming years will |
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| improve
further as soon as the market will revert to normaIcy. |
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| The
fabrication of sulphuric acid manufacturing plant is in progress. |
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| The
commercial production of the plant is scheduled in October |
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| 1998,
which in turn will further improve the operating performance |
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| of
your Company. |
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| SALES: |
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| In
order to cope with the highly competitive situation, your Company |
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| had
to resort to reducing the prices. Consequently, the sales revenue |
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| during
the period under review declined to Rs. 660.2 million as |
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| compared
to Rs. 743.5 million in 1997. The sales volume in Re- |
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| placement
Sector however recorded an improved growth over the |
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| last
year, but remained lower than the traditional anticipated growth |
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| rate
of 9 to 11 per cent per annum. In Government and Original |
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| Equipment
Sectors, sales volume were lower than the last year |
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| because
of decrease in demand from customers due to economic |
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| recession. |
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| PRODUCTION: |
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| Despite
infrastructural constraints and frequent power failures, production |
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| activities
were effectively planned and adjusted by your manage- |
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| ment
to cater to market demand both in terms of quality and quantity |
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| keeping
in view the stocks in hand. The affective planning on |
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| production
and inventory controls came out with significant saving |
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| in
financial cost to the Company. |
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| PROFITABILITY: |
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| The
operating profit for the period under review worked out to Rs. |
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| 47.4
million as compared to Rs 58.4 million for the preceding year. |
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| The
uncertain economic conditions and unabated influx of smuggled |
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| batteries
necessitated downward revision of the prices of your |
|
| Company's
products. Furthermore, devaluation of Pak Rupee, ad |
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| hoc
relief by the government in wages of the workers and increase |
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| in
fuel and electricity charges substantially effected the cost of |
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| production.
These factors, in turn pulled down the operating profit |
|
| of
your Company. However, as a result of strict vigilance on |
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| administrative
and selling overheads and effective working capital |
|
| management,
Profit after Tax increased to Rs. 29 m from last years |
|
| Rs. 26.3 m. |
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|
| Despite
the highly adverse economic environments, operational |
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| activities
during the year ended March 31,1998 had a healthy impact |
|
| on
financial status of your Company. The total assets of your |
|
| Company
increased from 397.5 m to 435.4 m; current ratio improved |
|
| from
1.57 to 1.79, inventory declined from Rs.157.2 m to 142.6m, |
|
| while
trade receivable declined from Rs. 78.8m to 70.9m. |
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|
| FUTURE
PROSPECTS: |
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|
| The
organized sector of automotive battery industry will continue |
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| to
face stiff competition on account of economic recession and influx |
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| of
smuggled batteries coupled with activities of battery replators. |
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| The
prices of basic inputs are expected to increase further due to |
|
| continuous
erosion in the value of Pak Rupee which in turn will |
|
| increase
the production cost to the Company. These factors will |
|
| influence
the operating performance of automotive battery division |
|
| of
your Company, however, the operation of chemical division viz; |
|
| sulphuric
acid plant is expected to yield margins which in turn will |
|
| improve
the overall performance of your Company. Needless to |
|
| mention
that your management is determined to ensure your Company's |
|
| leadership
in the market and to grow as per the market demand |
|
| which
is likely to rise as a result of government policy of improving |
|
| agricultural
output and the modernization of road transport system. |
|
|
| BOARD
ROOM CHANGES |
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|
| Mr.
Muhammad Munawar, a director of your Company resigned on |
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| March
09, 1998. The board wishes to thank him for his services |
|
| to
the Company. Mr. S.H.M. Zaidi who was associated with the |
|
| Company
in the past as its Chairman and Chief Executive, was co- |
|
| opted
to fill in the casual vacancy in the Board. In view of my heavy |
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| business
commitments in other diversified business activities of your |
|
| Company,
I relinquished the charge of the Managing Director/Chief |
|
| Executive
of your Company. The Board appointed Mr. S.H.M. Zaidi |
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| as
Managing Director/Chief Executive of the Company for the rest |
|
| of
the tenure of my appointment. I hope that your Company will be |
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| benefited
from his rich experience. |
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|
| Acknowledgement |
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| On
my behalf and on behalf of the Board of Directors of the Company, |
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| I
wish to express my thanks to all shareholders of the Company; |
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| the
executives, the staff and the workers for their sincere efforts. |
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| The
CBA of the Company concluded a two-year agreement effective |
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| July
01,1 997. I also take this opportunity to thank our main-dealers, |
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| the
retailers and the valued customers in the Government and |
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| Original
Equipment Sectors of the market. Bankers of the Company |
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| as
usual provided their valuable support and cooperation throughout |
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| the year. |
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|
|
| REPORT
OF THE DIRECTORS |
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| Your
Directors are pleased to present their report together |
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| with
the Audited Statements of Accounts and the Auditors' |
|
| Report
thereon for the year ended March 31, 1998 |
|
|
| FINANCIAL
HIGHLIGHTS |
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|
|
|
Rs. (000) |
|
| Profit
before Taxation |
|
35,332 |
|
| Less Taxation |
|
|
11,500 |
|
|
|
|
--------------- |
|
| Profit
after Taxation |
|
23,832 |
|
| Unappropriated
Profit Brought Forward |
|
5,156 |
|
|
|
|
--------------- |
|
| Profit
available for Appropriation |
|
28,988 |
|
|
========== |
|
| Appropriations: |
|
|
| Transfer
to capital reserve for |
|
| issue
of bonus shares |
|
7,051 |
|
|
|
|
| Transfer
to General Reserve |
|
17,000 |
|
|
--------------- |
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|
|
24,051 |
|
|
--------------- |
|
| Unappropriated
Profit Carried Forward |
|
4,937 |
|
|
|
|
========== |
|
| Earning
Per Share |
|
Rs. |
5.07 |
|
|
--------------- |
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|
| The
Chairman's Review dealing with the performance of |
|
| the
Company during the year ended March 31,1998, future |
|
| prospects
and other matters of concern to the Company |
|
| forms
part of this report. |
|
|
| Pattern
of shareholding as at March 31, 1998 is annexed |
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| to this report. |
|
|
| The
present auditors, Messrs : A. F. Ferguson & Co.; |
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| Chartered
Accountants, retire and being eligible, offer |
|
| themselves
for re-appointment. |
|
|
|
| PERFORMANCE
HIGHLIGHTS |
|
|
|
|
|
|
(Rs. '000) |
|
|
1994 |
1995 |
1996 |
1997 |
1998 |
|
|
| Net Sales |
|
513,088 |
599,485 |
650,453 |
743,457 |
660,155 |
|
| Operating
Profit |
|
70,538 |
55,344 |
60,645 |
58,383 |
47,442 |
|
| Profit
Before Tax |
|
52,940 |
42,623 |
41,896 |
34,802 |
35,332 |
|
| Profit
After Tax |
|
31,440 |
31,623 |
26,896 |
22,832 |
23,832 |
|
| Cash Dividend |
|
14,306 |
8,175 |
10,219 |
0 |
0 |
|
|
|
35% |
20% |
25% |
0 |
0 |
|
|
|
|
| Stock Dividend |
|
|
-- |
-- |
-- |
6,131 |
7,051 |
|
|
|
|
-- |
-- |
-- |
15% |
15% |
|
|
|
|
| Paid-up
Share Capital |
|
40,875 |
40,875 |
40,875 |
40,875 |
47,006 |
|
| Reserves/Unappropriated
Profits |
97,589 |
121,037 |
137,714 |
160,546 |
178,247 |
|
| Shareholders'
Equity |
|
138,464 |
161,912 |
178,589 |
201,421 |
225,253 |
|
| Surplus
on Revaluation of |
|
|
| Fixed Assets |
|
|
6,446 |
6,446 |
6,446 |
6,446 |
43,465 |
|
|
|
|
| Tangible
Fixed Assets |
|
37,583 |
30,628 |
33,545 |
27,509 |
80,456 |
|
| Net Current Assets |
|
46,850 |
67,034 |
82,336 |
107,222 |
125,104 |
|
| Net
Assets Employed |
|
154,322 |
168,358 |
185,600 |
207,867 |
268,718 |
|
|
|
|
|
|
|
|
|
Rupees |
|
| Earning
Per Share Before Tax |
|
13 |
10 |
10 |
9 |
8 |
|
| Earning
Per Share After Tax |
|
8 |
8 |
7 |
6 |
5 |
|
| Share
Break-up Value |
|
34 |
40 |
44 |
49 |
48 |
|
|
|
|
| Ratio of: |
|
|
|
Per cent |
|
|
|
|
| Operating
Profit to Sales |
|
14% |
9% |
9% |
8% |
7% |
|
| Profit
Before Tax to Sales |
|
10% |
7% |
6% |
5% |
5% |
|
| Profit
After Tax to Sales |
|
6% |
5% |
4% |
3% |
4% |
|
| Return
on Equity |
|
23% |
20% |
15% |
11% |
11% |
|
| Return
on Net Assets Employed |
20% |
19% |
14% |
11% |
11% |
|
|
|
|
| PATTERN
OF SHAREHOLDINGS AS |
|
| AT
MARCH 31, 1998 |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
| NUMBER
OF |
RANGE OF SHAREHOLDING |
TOTAL SHARES |
|
| SHAREHOLDERS |
FROM |
TO |
|
HELD |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
| 259 |
|
1 |
100 |
|
9,322 |
|
| 376 |
|
101 |
500 |
|
93,151 |
|
| 77 |
|
501 |
1000 |
|
54,546 |
|
| 66 |
|
1001 |
5000 |
|
123,716 |
|
| 4 |
|
5001 |
10000 |
|
32,788 |
|
| 1 |
|
10001 |
15000 |
|
10,185 |
|
| 2 |
|
15001 |
20000 |
|
36,976 |
|
| 1 |
|
20001 |
25000 |
|
21,160 |
|
| 1 |
|
25001 |
30000 |
|
29,221 |
|
| 1 |
|
70001 |
75000 |
|
74,060 |
|
| 1 |
|
85001 |
90000 |
|
86,630 |
|
| 1 |
|
105001 |
110000 |
|
105,709 |
|
| 1 |
|
125001 |
130000 |
|
125,691 |
|
| 1 |
|
130001 |
135000 |
|
130,640 |
|
| 1 |
|
135001 |
140000 |
|
137,097 |
|
| 1 |
|
270001 |
275000 |
|
270,356 |
|
| 1 |
|
430001 |
435000 |
|
430,312 |
|
| 1 |
|
620001 |
625000 |
|
622,675 |
|
| 1 |
|
2305001 |
2310000 |
|
2,306,406 |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
| 797 |
|
|
|
4,700,641 |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
|
|
|
|
PERCENTAGE |
|
| CATEGORIES |
|
|
SHARES |
OF |
|
| OF
SHAREHOLDERS |
|
NUMBER |
HELD |
TOTAL |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
| Individuals |
|
773 |
530,998 |
11.30% |
|
| Joint
Stock Companies |
|
9 |
2,341,042 |
49.80% |
|
| Investment
Companies |
|
10 |
1,390,423 |
29.58% |
|
| Insurance
Companies |
|
5 |
438,178 |
9.32% |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
|
|
797 |
4,700,641 |
100.00% |
|
| ----------------------------------------------------------------------------------------------------------------- |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed Balance Sheet of Exide |
|
| Pakistan
Limited as at March 31, 1998 and the related |
|
| Profit
and Loss Account and Cash Flow Statement, together |
|
| with
the notes forming part thereof, for the year then ended |
|
| and we
state that we have obtained all the information and |
|
| explanations
which to the best of our knowledge and belief |
|
| were
necessary for the purposes of our audit and, after |
|
| due
verification thereof, we report that: |
|
|
| (a)
in our opinion, proper books of account have been |
|
