AUTOMOTIVE BATTERY CO. LIMITED

Annual Reports 2003.

CONTENTS

CORPORATE PROFILE

NOTICE OF MEETING

CHAIRMAN'S REVIEW

REPORT OF THE DIRECTORS

CORPORATE GOVERNANCE

DECADE AT A GLANCE

GRAPHIC ILLUSTRATION

PATTERN OF SHAREHOLDINGS

REVIEW REPORT

AUDITORS' REPORT

BALANCE SHEET

PROFIT AND LOSS ACCOUNT

CASH FLOW STATEMENT

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE ACCOUNTS

VISION

Automotive Battery Company Limited is committed to provide

customer's quality product as per international standard and best

suited to local environments at affordable price.

MISSION STATEMENT

1.      To make concentrated efforts for improvement in productivity

and elimination of wastages by Total Quality Control.

2.       To exercise maximum care to manufacture quality product by

employing a team of highly skilled technicians and

professional managers.

3.       To redress customers complaints promptly.

4.       To develop new market locally and aboard for optimum

utilization of production capacity.

5.       To utilize optimum resources through good corporate

governance for better servicing the  interests of all

stakeholders.

CORPORATE PROFILE

BOARD OF DIRECTORS

Arif Hashwani                   -   Chairman

Arshad Shahzada             -   Chief Executive

S. 1. Ahmed

Altaf Hashwani

Hussain Hashwani

S. Raza Abbas Jaffery      (NIT NOMINEE)

S. Yamagami                     (FB-JAPAN)

S. Haider Mehdi

AUDIT COMMITTEE

Arif Hashwani                   -   Chairman

Altaf Hashwani                 -   Member

S. 1. Ahmed                      -   Member

Abdul Qayum Memon       -   Secretary

CHIEF FINANCIAL OFFICER & COMPANY SECRETARY

S. Haider Mehdi

AUDITORS & SHARE REGISTRAR

Shakir & Co.

Chartered Accountants

4th Floor, Jubilee Insurance House,

1. 1. Chundrigar Road, Karachi.

SOLICITORS

Farrukh Zia Shaikh & Co.

BANKERS

Habib Bank Ltd.

Muslim Commercial Bank Ltd.

Bank of Tokyo - Mitsubishi, Ltd.

PICIC Commercial Bank Ltd.

Union Bank Ltd.

United Bank Ltd.

REGISTERED OFFICE

40-K, Block-6,P.E.C.H.S.,

Dr. Mahmood Hussain Road

Off. Sharae Faisal,

Karachi - 75400

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Nineteenth Annual General Meeting of the Shareholders

of Automotive Battery Company Limited will be held on Wednesday, 30th July, 2003 at

11:30 hours at Karachi Marriott Hotel, Abdullah Haroon Road, Karachi to transact the

following business:

A. ORDINARY BUSINESS :

1.        To read and confirm the minutes of the Eighteenth Annual General Meeting of the

Shareholders held on June 17, 2002.

2.        To receive and adopt the Audited Statements of Accounts for the year ended

March 31, 2003 together with the Directors' and Auditors' Reports thereon.

3.        To appoint Auditors for the Year 2003-2004 and fix their remuneration.

4.        To consider any other business with  the  permission  of the  Chair.

B.       SPECIAL BUSINESS :

5.        To consider and approve remunerations of the Chief Executive and other Working

Directors of the Company for a period of three-years commencing from April 24,

2003

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

Karachi : June 23, 2003                                                Director & Company Secretary

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 July 22, 2003 to

July 30, 2003 (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 nineteenth Annual General Meeting of

the shareholders of Automotive Battery Company Limited, to be held on July 30, 2003

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 AND A WORKING DIRECTOR

OF THE COMPANY

A total amount of Rs. 8.460 million (Rupees Eight Million Four Hundred Sixty Thousand

only) will be proposed as the aggregate remuneration of the Chief Executive and a

Working Director of the Company for a period of three-year commencing from April 24,

2003 in the form of the following Resolution.

"RESOLVED that an aggregate sum of Rs. 8.460 Million (Rupees Eight Million Four

Hundred Sixty Thousand only) be and is hereby approved as remuneration of the Chief

Executive and a Working Director of the Company for a three-year term from April

24, 2003 to April 23, 2006 (both days inclusive), covering their managerial remunerations,

housing, utilities, bonus, provident fund and gratuity in addition to their entitlement to

chauffeur driven company maintained cars, medical and hospitalization expenses,

utilities, telephone, security, leave fare assistance and other fringe benefits as per rules

of the Company."

Mr. Arshad Shahzada, Chief Executive and Mr. Hussain Hashwani a Director of the

Company are interested in this business to the extent of their remuneration.

CHAIRMAN'S REVIEW

IN THE NAME OF ALLAH

THE MOST BENEFICENT

AND MERCIFUL

Dear Shareholders,

It is my privilege to welcome you on behalf of the Board to the 19th Annual General Meeting

and presenting the Audited Statements of Accounts and my review on the performance of your

company for the year 2002-2003.

THE ECONOMY

Despite global slowdown, Pakistan economy showed sign of improvement during the year under

review and recorded a growth of 5.1%. This performance which is the best since 1995-96, signals

the termination of low growth phase in which the country was locked for the last many years. The

inflation rate was below 4% due to adequate supplies of both agriculture and industrial goods.

Foreign exchange reserve of the country crossed unprecedented mark of $ 10 billion due to

combined effect of good exports, increased flow of remittances and supports from creditors.

THE INDUSTRY

The organized battery industry sector capacity utilization improved significantly during the year

on account of improved economy, better crops and positive impact of reduction in battery prices

since July 2002 consequent to the withdrawal of excise duty in the Federal Budget 2002-2003.

SALES

Sales revenue for the year under review went up by 2.6% to Rs. 243.3 million from Rs. 237.0

million. The volume growth is 13.7% and the same is not reflected in sale revenue due to effect

of Central Excise Duty withdrawal from July 2002. The sale grew in all segments, but original

equipment sector growth was unprecedented being more than 40%.

EXPORT

Your Company's efforts for better utilization of capacity by entering into export business have

materialized and were able to export two consignments to Afghanistan during the year under

review.

MANUFACTURING

Production activities were effectively planned and monitored throughout the year to cater market

requirement both in terms of quality and quantity. Production during the year improved by 18% on

account of increased demand. Your Management took additional measures to improve product

quality substantially, which has resulted drastic reduction in warranty claims.

PROFITABILITY

Gross profit for the year increased from Rs. 26.8 million to Rs. 32.0 million up 19.7%. The same

was due to increase in sale volume and reduction in imported raw material cost as a result of

strengthening of rupee against US dollar. Operating profit for the year increased 40% from

Rs. 8.4 million to Rs. 11.8 million as compared to last year. Better working capital management

and reduction in mark up rates contained financial charges during the year to Rs. 5.7 million as

compared to Rs. 8.4 million in the last year.

The net profit before tax for the year was Rs. 5.9 million as compared to Rs. 0.1 million in the

preceding year. The after tax profit stood at Rs. 4.6 million as compared to loss of Rs. 0.7 million

in the corresponding period.

Earning per share after tax worked out to be Rs. 0.88 as compared to loss of Rs. 0.14 in the last

year.

FUTURE PROSPECTS

It is hoped that indigenous organized battery industry will continue to perform satisfactorily in the

coming year. Your management is determined to avail full use of the opportunities by continued

focus on quality, productivity, cost controls and after sale service.

BOARD ROOM CHANGES

Mr. S. Haroon Rashid (NIT Nominee) resigned from directorship effective from January 21,