| Agriauto Industries Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Annual General Meeting |
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| Directors'
Report |
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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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| Statement
of Changes in Financial Position |
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| Statement
of Changes in Equity |
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|
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| Notes
to the Accounts |
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| Pattern
of Shareholdings |
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| COMPANY
INFORMATION |
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| BOARD
OF DIRECTORS |
|
| R.D. Minwalla |
|
Chairman |
|
| Sohail P. Ahmed |
|
Vice Chairman |
|
| S. Ikram Haider |
|
Chief Executive |
|
| Rais Ahmed |
|
|
| Mansoor
G. Habib |
|
| Tayyeb Afzal |
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|
| Owaisul
Mustafa |
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| COMPANY
SECRETARY |
Fahim Kapadia |
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| AUDITORS |
|
Ford, Rhodes, Robson,
Morrow |
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|
Chartered Accountants |
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| SHARE
REGISTRAR |
Noble Computer Services
(Pvt) Ltd., |
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|
|
14, Banglore Town Housing
Society |
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|
Main Shahrah-e-Faisal, |
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|
Karachi-75350 Pakistan. |
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|
Te1:4546978-4520121 |
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| REGISTERED
OFFICE |
Agriauto Industries Ltd. |
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|
5th Floor, House of Habib |
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Main Shahrah-e-Faisal, |
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Karachi-75350 |
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Pakistan. |
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| FACTORY |
|
Mouza Baroot, |
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|
Hub Chowki, Distt,
Lasbella, |
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|
Balochistan. |
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| NOTICE
OF MEETING |
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| Notice
is hereby given that the twentieth Annual General Meeting of the company will
be held at Finance |
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| &
Trade Centre Auditorium, main Shahrah-e-Faisal, Karachi on Tuesday December
11, 2001 at 2:30 p.m |
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| to
transact the following business: |
|
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| 1.
To receive and adopt the Audited Accounts for the year ended June 30, 2001
together with the |
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| Reports
of the Directors and Auditors thereon. |
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|
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| 2.
To approve the payment of cash dividend @ 5% i.e. Re 0.25 per share as
recommended by the |
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| Board
of Directors. |
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|
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| 3.
To appoint Auditors for the year 2001-2002 and to fix their remuneration. The
present auditors |
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| M/s.
Ford, Rhodes, Robson, Morrow (Chartered Accountants) being eligible offer
themselves for |
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| re-appointment |
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|
By order of the Board. |
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|
FAHIM KAPADIA |
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| Karachi:
November 19, 2001 |
|
Company Secretary |
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| Notes: |
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| 1.
The share transfer books of the company will remain closed from December 4,
2001 to December 11, 2001. |
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| (Both
days inclusive) |
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|
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| 2.
A member entitled to attend and vote at this meeting may appoint another
member as his/her proxy to |
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| attend
the meeting and vote for him/her. Proxies in order to be effective must be
received at the registered |
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| office
of the company duly stamped and signed not less than 48 hours before the time
of holding the |
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| meeting.
A Proxy must be a member of the Company. |
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|
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| 3.
Members are requested to promptly communicate any change in their addresses
to our Company's Share |
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| Registrar,
M/s Noble Computer Services (Pvt) Ltd. 14 Banglore Town Housing Society, Main
Shahrah-e- |
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| Faisal, Karachi. |
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|
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| 4.
CDC shareholders desiring to attend the meeting are requested to bring their
original National Identity Card, |
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| Account
and Participant's ID numbers, for identification purpose and in case of
Proxy, to enclose an attested |
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| copy
of his/her National Identity Card. |
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|
|
| DIRECTORS'
REPORT TO THE SHAREHOLDERS |
|
| For
the year ended June 30th 2001 |
|
|
| It
is my pleasure to welcome you to the 20th Annual General meeting of Agriauto
Industries |
|
| Ltd.
and present the Annual Report on the performance of the company for the year
ended |
|
| June
30th, 2001 along with the auditors' report. The Directors are pleased to
recommend a |
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| cash
dividend of 5% for the year, after allocating part of the profit to wipe off
all the |
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| cumulative
losses brought forward from the previous years and part of it to the company |
|
| reserve.
Your Company's management is grateful to Allah for crowning efforts of many |
|
| years
and is motivated to deliver even better results in the future. |
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|
| Financial
Results |
|
| The
financial result of the company for the year under review is summarized as
under: |
|
|
|
|
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|
Rs. '000 |
|
|
2000-2001 |
1999-2000 |
|
|
| Sales Revenue |
|
342,922 |
296,114 |
|
| Gross Profit |
|
|
63,193 |
60,358 |
|
|
|
|
|
|
| Profit
before taxation |
|
29,311 |
8,243 |
|
| Taxation |
|
5,329 |
(1,499) |
|
|
------------------ |
------------------ |
|
| Net
Profit after taxation |
|
23,982 |
6,744 |
|
| Accumulated
loss brought forward |
|
(16,502) |
(23,246) |
|
|
------------------ |
------------------ |
|
| Accumulated
profit/(loss) |
|
7,480 |
(16,502) |
|
|
|
|
|
========== |
========== |
|
| Appropriations: |
|
|
|
|
|
| Proposed
Cash Dividend @ 5% i.e. |
|
|
|
| Re.
0.25 per share (2000 - NIL) |
|
|
6,000 |
0 |
|
|
|
|
|
------------------ |
------------------ |
|
| Un-appropriated
Profit/(loss) c/f |
|
|
1,480 |
(16,502) |
|
|
========== |
========== |
|
|
| Earning
Per Share: |
|
| Earning
per share for the year ended June 30th, 2001 comes to Rs.1.00 as compared to
Rs. |
|
| 0.28
in the preceding year. |
|
|
| Pakistan
Economy in the Global Outlook |
|
| The
World economy slowed down due to a depression in the big league player's |
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| economies,
but our economy which had been depressed for so long, started to show signs |
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| of
recovery, as the Government's efforts on the economic front earned applaud
from the |
|
| donors
and a restrained nod from the local investors. |
|
|
| Automotive
Engineer Sector |
|
| The
automotive sector made a good recovery, after reducing in the last fiscal
year. The |
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| assemblers
were busy in cannibalizing each other's market share either by reducing the |
|
| price
or increasing the accessories. Assemblers have also changed their marketing |
|
| strategies.
They are now depending on the partner leasing companies to finance their |
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| customers.
The leasing companies this year have attained 40% share of overall sales in
the |
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| passenger
car segment. This is good for the industry and is in line with the world
trend. Car |
|
| sale
was up 22%, light commercial vehicle sales up by 5.5% and sale of buses &
trucks |
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| declined
by 5.7%. The sale of Tractors, however reduced by 8.4% but even then was a |
|
| good
high figure. |
|
|
| The
overall business in after market remains heavily influenced by unethical
practices. By |
|
| one
estimate the spare parts business is about Rs. 35 billion of which only 10%
is from the |
|
| local industry. |
|
|
| Your
company's business profile now shows a more even distribution amongst various |
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| automotive
segments, tractors have grown from 12.8% to 26.5%, autos have reduced from |
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| 63.5%
to 49.2%, trucks & buses from 2.1% to 1.2% and after-market sales has
grown from |
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| 21.5%
to 23%. This will make the company robust. |
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|
| Future Outlook |
|
| After
the horrific terrorist attack on WTC of September 11, 2001 the global
politico - |
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| economic
scenario has changed. Pakistan being a front line country with war on
terrorism |
|
| has
emerged as strategically very important for the western world. For Pakistan
this new |
|
| situation
can be very rewarding if the Government follows the policies it has opted for
now. |
|
|
| The
car sales are likely to drop in the next fiscal year due to prevailing
uncertainty, but |
|
| smuggling
is likely to reduce, which will give a fillip to our after-market sales. |
|
|
| Pattern
of Shareholdings |
|
| The
pattern of shareholding is provided on page 23. |
|
|
| Auditors: |
|
| Messrs.
Ford, Rhodes, Robson, Morrow, Chartered Accountants retire and being eligible |
|
| offer
themselves for reappointment as the Auditors of the company for the year
ended June |
|
| 30th, 2002. |
|
|
| Acknowledgment |
|
| The
Board of Directors would like to place on record their appreciation to all
our Patrons, |
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| Customers,
Dealers and Suppliers for their valuable help, support and contribution given
to |
|
| our
Company. We are also grateful to our Bankers for their continued support. We
also |
|
| wish
to record our thanks to our overseas technical collaborators, M/s. Gabriel
Ride Control |
|
| Products,
Inc. USA and M/s. Kayaba Industry Company, Japan for their technical help and |
|
| advice. |
|
|
| The
Board of Directors also acknowledges the contribution of all the Executives,
Staff and |
|
| Workers
who worked hard together as a team in achieving the Company's objective. |
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|
|
|
On behalf of the |
|
|
|
Board of Directors |
|
|
|
|
|
| KARACHI |
|
R. D. Minwalla |
|
| DATED:
OCTOBER 16, 2001 |
|
Chairman |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of AGRIAUTO
INDUSTRIES LIMITED as at June 30, 2001 and |
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| 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 our 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 the 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 the 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
June 30, 2001 and of the profit, its cash flows and changes in equity for the
year then ended, |
|
|
| (d)
in our opinion no zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980 (XVIII of |
|
| 1980). |
|
|
|
|
| Karachi |
|
Ford, Rhodes, Robson, Morrow |
|
| Dated:
October 24, 2001 |
|
(Chartered Accountants) |
|
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
|
(Rs. in
'000') |
|
|
|
| ASSETS |
|
|
|
| NON-CURRENT
ASSETS |
|
|
|
| Operating
fixed assets |
|
3 |
95,905 |
105,548 |
|
| Long
term deposits |
|
|
1,936 |
1,539 |
|
| Deferred cost |
|
4 |
972 |
1,945 |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
5 |
9,121 |
10,878 |
|
| Stock-in-trade |
|
6 |
60,464 |
58,124 |
|
| Trade debts |
|
7 |
68,269 |
53,477 |
|
| Loans,
advances, deposits, prepayments and other receivables |
8 |
23,922 |
25,063 |
|
| Cash
and bank balances |
|
9 |
269 |
1,454 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
162,045 |
148,996 |
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
ASSETS |
|
|
260,858 |
258,028 |
|
|
|
========== |
========== |
|
|
|
| EQUITY
AND LIABILITIES |
|
|
|
| SHARE
CAPITAL AND RESERVES |
|
| Authorised
capital |
|
| 40,000,000
(2000: 40,000,000) ordinary shares of Rs.5 each |
200,000 |
200,000 |
|
|
========== |
========== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
10 |
120,000 |
120,000 |
|
| Capital reserve |
|
|
|
12,598 |
12,598 |
|
| Accumulated
profit/(loss) |
|
|
1,480 |
(16,502) |
|
|
|
|
------------------ |
------------------ |
|
| SHAREHOLDERS'
EQUITY |
|
|
134,078 |
116,096 |
|
|
|
|
|
| NON-CURRENT
LIABILITIES |
|
|
|
| Deferred
taxation |
|
11 |
3,172 |
-- |
|
| Long term loans |
|
|
12 |
15,988 |
23,441 |
|
| Obligations
under finance lease |
|
13 |
969 |
-- |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Current
portion of long term loans |
|
12 |
8,119 |
9,391 |
|
| Current
portion of obligations under finance lease |
13 |
467 |
-- |
|
| Short
term finances |
|
14 |
33,395 |
42,959 |
|
| Advances
from others |
|
15 |
4,086 |
20,017 |
|
| Creditors,
accrued and other liabilities |
16 |
49,828 |
41,924 |
|
| Provision
for taxation |
|
|
4,756 |
4,200 |
|
| Proposed
dividend |
|
|
6,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
106,651 |
118,491 |
|
| CONTINGENCIES
AND COMMITMENTS |
17 |
|
|
|
|
|
------------------ |
------------------ |
|
| TOTAL
EQUITY AND LIABILITIES |
|
260,858 |
266,028 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
|
R.D. MINWALLA |
|
|
SYED IKRAM HAIDER |
|
|
Chairman |
|
|
Chief Executive |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOE
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2001 |
2000 |
|
|
|
(Rs. in
'000') |
|
|
| TURNOVER |
|
|
18 |
342,922 |
296,114 |
|
| Less:
Cost of goods sold |
|
19 |
279,729 |
235,756 |
|
|
|
|
------------------ |
------------------ |
|
| GROSS
PROFIT |
|
|
63,193 |
60,358 |
|
|
|
|
| Other income |
|
|
20 |
5,140 |
3,892 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
68,333 |
64,250 |
|
|
|
|
|
| Less:
Administrative expenses |
|
21 |
13,103 |
14,483 |
|
| Selling
and distribution expenses |
|
22 |
13,064 |
11,109 |
|
| Other charges |
|
24 |
1,675 |
398 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
27,842 |
25,990 |
|
|
|
------------------ |
------------------ |
|
| OPERATING
PROFIT |
|
|
40,491 |
38,260 |
|
| Less:
Financial charges |
|
25 |
11,180 |
17,325 |
|
| Impairment
of closed plants |
|
|
-- |
12,692 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
29,311 |
8,243 |
|
| PROFIT
BEFORE TAXATION |
|
|
|
|
| Less: Taxation |
|
|
|
| - current |
|
|
26 |
1,746 |
1,499 |
|
| - prior |
|
|
|
411 |
-- |
|
| - deferred |
|
|
|
3,172 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,329 |
1,499 |
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
23,982 |
6,744 |
|
| Accumulated
loss brought forward |
|
(16,502) |
(23,246) |
|
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit/(loss) carried forward |
|
7,480 |
(16,502) |
|
| LESS:
APPROPRIATION |
|
|
|
|
| Proposed
dividend 5% (2000: Nil) |
|
|
6,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Accumulated
profit/(loss) carried forward |
|
1,480 |
(16,502) |
|
|
|
|
|
========== |
========== |
|
| Basic
earnings per share |
|
27 |
1.00 |
0.28 |
|
|
|
========== |
========== |
|
|
|
|
| The
annexed notes form an integral part of these accounts. |
|
|
|
R.D. MINWALLA |
|
SYED IKRAM HAIDER |
|
|
Chairman |
|
Chief Executive |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
Note |
2001 |
2000 |
|
|
|
(Rs. in
'000') |
|
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Cash
generated from operations |
|
28 |
31,966 |
20,849 |
|
| Financial
charges paid |
|
|
(11,903) |
(18,589) |
|
| Income tax paid |
|
|
(4,144) |
4,597 |
|
| Long
term deposits |
|
|
(397) |
19 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from operating activities |
|
15,522 |
6,876 |
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Fixed
capital expenditures |
|
|
(3,222) |
(6,686) |
|
| Proceeds
from sale of fixed assets |
|
|
3,368 |
1,396 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from investing activities |
|
146 |
(5,290) |
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of long term loan |
|
(8,725) |
(9,275) |
|
| Obligations
under finance lease |
|
1,436 |
-- |
|
|
|
------------------ |
------------------ |
|
| Net
cash flow from financing activities |
|
(7,289) |
(9,275) |
|
|
| NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
8,379 |
(7,689) |
|
| CASH
AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
(41,505) |
(33,816) |
|
|
|
|
------------------ |
------------------ |
|
| CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR |
29 |
(33,126) |
(41,505) |
|
|
|
|
========== |
========== |
|
|
|
R.D. MINWALLA |
|
SYED IKRAM HAIDER |
|
|
Chairman |
|
Chief Executive |
|
|
|
|
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Issued, subscribed |
|
|
|
|
|
& paid up |
|
Unappropriated |
|
|
|
capital |
Capital reserve |
(loss)/profit |
Total |
|
|
(Rs. In '000) |
(Rs. In '000) |
(Rs. In '000) |
(Rs. In '000) |
|
|
| Balance
as at June 30, 1999 |
120,000 |
12,598 |
(23,246) |
109,352 |
|
| Profit
after taxation |
-- |
-- |
6,744 |
6,744 |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2000 |
120,000 |
12,598 |
(16,502) |
116,096 |
|
| Profit
after taxation |
-- |
-- |
23,982 |
23,982 |
|
| Proposed
dividend |
-- |
-- |
(6,000) |
(6,000) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
| Balance
as at June 30, 2001 |
120,000 |
12,598 |
1,480 |
134,078 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
R.D. MINWALLA |
|
SYED IKRAM HAIDER |
|
|
|
Chairman |
|
Chief Executive |
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
| 1.
COMPANY BACKGROUND, OPERATION AND LEGAL STATUS |
|
| Agriauto
Industries Limited, a public limited company was incorporated in Pakistan on
June 25, 1981 and listed on |
|
| the
Stock Exchanges in June 1984. The company manufactures components for
automotive vehicles, motor cycles |
|
| and
agricultural tractors. |
|
|
|
| 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the historical cost convention. |
|
|
|
| 2.2
Staff retirement benefit |
|
| The
company operates an approved provident fund scheme for all its employees.
Contributions in respect |
|
| thereof
are made in accordance with the terms of the scheme. |
|
|
|
|
| 2.3 Taxation |
|
|
|
|
|
|
|
| 2.3.1 Current |
|
|
|
| Provision
for current taxation is based on taxable income at the current rates of
taxation after taking into |
|
| account
applicable tax credits and rebates or at the rate of 0.5% of turnover,
whichever is higher. |
|
|
|
|
| 2.3.2 Deferred |
|
|
|
| The
company accounts for deferred taxation using liability method on all
significant temporary differences, |
|
