| Atlas Honda Ltd - 2003 |
============================================================================================= BALANCE SHEET AS AT JUNE 30, 2003 ============================================================================================= 2003 2002 Note (Rupees in 000's) ============================================================================================= ASSETS NON CURRENT ASSETS Operating fixed assets - tangible 5 563,322 535,411 Intangible 6 1,788 2,766 Capital work-in-progress 7 2,770 552 Investments 8 - 3,559 Long term loans, deposits, prepayments & other receivable 9 13,874 16,130 CURRENT ASSETS Stores, spares & tools 10 92,867 38,065 Stock-in-trade 11 557,280 462,254 Trade debtors 12 49,619 166,335 Advances, deposits, prepayments, loans & other receivable 13 354,378 199,702 Cash & bank balances 14 1,021,226 406,881 2,075,370 1,273,237 TOTAL ASSETS 2,657,124 1,831,655 EQUITY AND LIABILITIES Capital and Reserves Authorised Capital 40,000,000 ordinary shares of Rs. 10/- each 400,000 400,000 Issued, subscribed & paid-up capital 15 204,368 204,368 Reserves & unappropriated profit Reserves 16 871,118 586,418 Unappropriated profit 1,126 1,481 872,244 587,899 1,076,612 792,267 Shareholders' Equity NON CURRENT LIABILITIES Redeemable capital 17 - - Long Term loans 18 115,092 40,182 Obligation under finance lease 19 252 253 Deferred Liabilities Provision for gratuity 20 23,948 58,620 Deferred taxation 21 33,000 15,000 56,948 73,620 CURRENT LIABILITIES Short term finances 22 - - Current maturity of long term liabilities 23 50,093 46,021 Creditors, provisions, accrued charges & other liabilities 24 989,977 591,002 Provision for taxation 25 220,000 162,000 Dividend payable 26 148,150 126,310 1,408,220 925,333 CONTINGENT LIABILITIES & COMMITMENTS 27 TOTAL EQUITY AND LIABILITIES 2,657,124 1,831,655 ============================================================================================= ============================================================================================= PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2003 ============================================================================================= NOTE 2003 2002 Note (Rupees in 000's) ============================================================================================= SALES - NET 28 6,977,439 5,523,951 COST OF SALES 29 5,949,644 4,788,509 GROSS PROFIT 1,027,795 735,442 OPERATING EXPENSES Administrative expenses 30 128,959 150,923 Selling & distribution expenses 31 231,085 171,448 360,044 322,371 OPERATING PROFIT 667,751 413,071 MISCELLANEOUS REVENUE 32 58,435 38,209 726,186 451,280 OTHER CHARGES Financial expenses 33 26,430 26,572 Provision for diminution in value of investment 8 - 571 Workers' profit participation fund 24.4 34,988 21,210 Workers' welfare fund 24.5 13,841 8,354 75,259 56,707 PROFIT BEFORE TAX 650,927 394,573 TAXATION 34 Current year 25 220,000 160,000 Prior years 25 (14,476) (1,925) Deferred 21.1 18,000 (34,000) 223,524 124,075 PROFIT AFTER TAX 427,403 270,498 UNAPPROPRIATED PROFIT BROUGHT FORWARD 1,481 1,604 428,884 272,102 APPROPRIATION: Transfer to general reserve 284,700 148,000 Proposed dividend 70% (2002: 60 %) Rs.7 per share (2002: 6 per share) 143,058 122,621 427,758 270,621 UNAPPROPRIATED PROFIT CARRIED FORWARD 1,126 1,481 BASIC EARNINGS PER SHARE - Rs. 35 20.91 13.24 ============================================================================================= ============================================================================================= CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2003 ============================================================================================= 2003 2002 Note (Rupees in 000's) ============================================================================================= CASH FLOWS FROM OPERATING ACTIVITIES Net Profit before taxation 650,927 394,573 Adjustment for: Depreciation 89,645 83,433 Foreign exchange (gain) /loss (128) 849 Gain on sale of investment (11,053) - Interest income (38,304) (32,600) Interest expense 20,410 22,567 Divided income (166) (248) Amortization 2,067 2,127 Gratuity provision 14,192 37,330 Finance charges on leased assets 77 149 Diminution in value of investment - 571 Loss on sale of fixed assets 5,829 5,383 Operating profit before working capital changes 733,496 514,134 Working capital changes: (Increase) / decrease in current assets Stores, spares & tolls (54,802) (5,023) Stock-in-trade (95,026) 73,777 Trade debtors 116,716 (123,554) Advances, deposits & prepayments (22,707) (3,105) (55,819) (57,905) Increase in current liabilities Creditors, provisions, accrued charges & other liabilities 400,848 118,850 Cash generated form operations 1,078,525 575,079 Interest paid (22,140) (27,699) Gratuity paid (48,864) (1,382) Income taxes paid (286,675) (28,138) Long term loans and deposits 3,353 1,477 Net cash generated from operations 724,199 519,337 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (134,227) (178,425) Investment in mutual fund units (100,000) - Sale proceeds of fixed asset 8,674 6,805 Sale proceeds of investment 13,880 - Sale proceed of investment in mutual fund units 100,732 - Interest received 44,389 24,923 Dividend received 166 248 Software development / acquisition cost (1,089) (3,590) (67,525) (150,039) 656,674 369,298 Net cash flow before financing activities FINANCING ACTIVITIES Repayment of long term loans (45,090) (20,092) Acquisition of long term loans 150,000 - Repayments of redeemable capital (24,788) (21,454) Repayment of supplier's credit - (20,931) Repayment of obligation under finance lease (1,233) (1,260) Dividend paid (121,218) (58,005) Net cash (used in) financing activities (42,329) (121,742) Increase in cash & cash equivalents 36 614,345 247,556 ============================================================================================= =============================================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2003
=============================================================================================================
(Rupees in thousand)
Capital Reserves General Reserves
Share Share Gain on Reserve for General Unappro- Total
Capital Premium Sale of Issue of Reserve priated
Land Bonus Share Profit
=============================================================================================================
Year ended June 30, 2002
Balance as at July 1, 2001 145,977 39,953 165 58,391 398,300 1,604 644,390
Profit for the year - - - - - 270,498 270,498
Dividend - - - - - (122,621) (122,621)
Transfer to General Reserve - - - - 148,000 (148,000) -
Reserve for issue of
bonus shares 58,391 - - (58,391) - - -
Balance as at June 30, 2002 204,368 39,953 165 - 546,300 1,481 792,267
Year ended June 30, 2003
Balance as at July 1, 2002 204,368 39,953 165 - 546,300 1,481 792,267
Profit for the year - - - - - 427,403 427,403
Proposed Dividend - - - - - (143,058) (143,058)
Transfer to General Reserve - - - - 284,700 (284,700) -
Balance as at June 30, 2003 204,368 39,953 165 - 831,000 1,126 1,076,612
=============================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 20031. CORPORATE INFORMATION Atlas Honda Limited (the Company) was incorporated as a public limited company on October 16, 1962 and its shares are listed on Karachi and Lahore Stock Exchanges in Pakistan. Its registered office is located at 1-Mcleod Road, Lahore. The manufacturing / assembly facilities of the Company are located at Karachi and Sheikhupura, with branches / warranty and training centres at Karachi, Multan, Lahore and Rawalpindi. The company is principally engaged in progressive manufacture and sales of motorcycles and auto parts. The Company employed 785 persons during the year (2002: 785). 2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take the precedence. 3. BASIS OF PREPARATION The financial statements are presented in Rupees, rounded to nearest thousand. The financial statements have been prepared on historical cost basis except for capitalisation of exchange gain or loss on foreign currency loans utilised for acquisition of plant and machinery and measurement of available-for-sale investments at fair value. The principal accounting policies adopted are set out below: 4. SIGNIFICANT ACCOUNTING POLICES 4.1. EMPLOYEE BENEFITS Defined Benefit Plan The company established unfunded gratuity scheme for its management staff with effect from July 1, 2002, which was approved by the Commissioner of Income Tax in November 2002. The gratuity fund was merged into Atlas Group of Companies Gratuity Fund, which was approved by the Commissioner of Income Tax in May 2003. The merger of individual funds was approved for the purposes of investment, administrative convenience, consistency and uniformity of policies only. The company also operates an unfunded gratuity scheme for its non-management staff and workers. The last actuarial valuation was conducted as on June 30, 2003 on the basis of Projected Unit Credit Method. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight line basis over the average period until the amended benefits become vested. The amount recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost, if any. DEFINED CONTRIBUTION PLAN The Company operates defined contribution plan (i.e. recognized provident fund scheme) for its employees. Equal monthly contributions at the rate of 11 percent of the basic salary are made to the fund both by the Company and employees. The assets of the fund are held separately under the control of trustees. EMPLOYEE COMPENSATED ABSENCES Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. 4.2. TAXATION Income tax expense represents the sum of current tax payable, adjustments, if any, to provision for tax made in previous years arising from assessments framed during the year for such years and deferred tax. Deferred tax is provided using the liability method on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amount for financial statements reporting purposes. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date. 4.3. FIXED ASSETS AND DEPRECIATION OWNED AND LEASED ASSETS Operating fixed assets are stated at cost less accumulated depreciation and impairment losses. Capital work in progress is stated at cost. Fixed assets acquired by way of finance lease are stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at the inception of the lease less accumulated depreciation and impairment losses. DEPRECIATION ON OWNED AND LEASE ASSETS Depreciation is charged to income on the reducing balance basis except Computers and Accessories and Dies and Jigs without considering extra shift workings. Depreciation on Computer and Accessories and Dies and Jigs is charged to income on a straight line basis. Full year's depreciation is charged on additions during the year while no depreciation is charged in the year of disposal. The depreciation method and useful lives of items of fixed assets are reviewed periodically and altered if circumstances or expectations have changed significantly. Any change is accounted for as a change in accounting estimate by changing the depreciation charge for the current and future periods. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Normal repairs and maintenance are charged to expenses as and when incurred. Major renewal and replacements are capitalized. Gains or losses on disposal or retirement of fixed assets are determined as the difference between the sales proceeds and the carrying amount of asset and are included in the profit and loss account. 4.4. INTANGIBLE ASSETS Cost associated with developing or maintaining computer software programmes are recognized as an expense as incurred. Costs that are directly associated with identifiable and unique software products controlled by the Company and will probably generate economic benefits exceeding costs beyond one year, are recognized as Intangible Assets. Direct costs include staff cost, costs of the software development team and an appropriate portion of relevant overheads. Expenditure, which enhances or extends the performance of computer software programmes beyond their original specifications is recognised as a capital improvement added to the original cost of the software. Computer software development costs recognised as assets are amortised using the straight-line method over a period of two years. 4.5. LEASES Finance leases, which transfer to the company, substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. 4.6. INVESTMENTS Investment including investment in associates held by the company are classified as being available for sale and are stated at fair value. All purchases and sales are recognized on the trade dates. Realized and unrealized gains and losses arising from changes in the fair value of available-for-sale investments are included in the profit and loss account in the period in which they arise. 4.7. STORES, SPARES AND TOOLS Stores, spares and tools are stated at the lower of cost and net realizable value. The cost of inventory is based on weighted average cost. items in transit are stated at cost accumulated to balance sheet date. 4.8. STOCK-IN-TRADE These are valued at lower of cost and net realisable value. Cost is determined using the weighted average cost method. Cost comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. Goods in transit are valued at cost accumulated to the balance sheet date. 4.9. FOREIGN CURRENCY TRANSLATION Transaction in foreign currencies are initially recorded at the rates of exchange ruling on the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into rupees at the exchange rates prevailing on the balance sheet date. In order to hedge its exposure to foreign exchange risks, the company enters into forward exchange contracts. Such transactions are translated at contracted rates. Exchange gains or losses on translation of foreign currency loans utilized for the acquisition of plant and machinery are included in the cost of plant and machinery. All other exchange differences are included in the income. 4.10. REVENUE RECOGNITION Sales of goods are recorded when goods are delivered and title has passed on to the customers. Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable. Dividend income from investments is recognised when the Company's right to receive dividend has been established. 4.11. BORROWING COST Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are dealt with income in the period in which they are incurred. 4.12. PROVISIONS Provisions are recognised when the company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of obligation. 4.13. WARRANTY The Company recognizes the estimated liability to repair or replace damaged part of products still under warranty at the balance sheet date. The provision is based on the ratio of warranty claims during the year to previous year's sales. 4.14. FINANCIAL INSTRUMENTS FINANCIAL ASSETS The company's principal financial assets are cash & bank balances, trade debtors, advances, loans and available-for-sale investments. Trade debtors are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. FINANCIAL LIABILITIES Financial liabilities are classified according to the substance of the contractual arrangements entered into. Significant financial liabilities include long term loans, finance lease obligation, short term loans, creditors & other liabilities and dividend payable. These are stated at nominal value. 4.15. SHARE CAPITAL Ordinary Shares are classified as equity. Dividend on ordinary shares are recognized in equity in the period in which they are declared. 4.16. CASH AND CASH EQUIVALENTS Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise of cash and bank balances. 4.17. INTEREST / MARK-UP BEARING LOANS AND BORROWINGS Loans and borrowings are recorded at the proceeds received, net of direct issue costs, if any. Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the periods in which they arise. 4.18. IMPAIRMENT An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in the profit and loss account. 5. OPERATING FIXED ASSETS - TANGIBLE ===========================================================================================================================
Cost Depreciation
===========================================================================================================================
Particulars As at Additions Disposals* As at As at For the Disposals* As at W.D.V. Rate
01-07-02 30-06-03 01-07-02 Year 30-06-03 30-06-03 %
Rupees in thousand
===========================================================================================================================
Owned Assets
Free hold Land 5,112 - - 5,112 - - - - 5,112 -
Lease hold Land 11,187 22,023 - 33,210 3,317 747 - 4,064 29,146 2.5
Building on freehold land 30,519 7,084 - 37,603 15,664 2,194 - 17,858 19,745 10
Building on lease hold lan 28,282 1,782 - 30,064 22,800 727 - 23,527 6,537 10
Plant & Machinery 672,963 52,187 4,146 721,004 311,349 41,264 2,984 349,629 371,375 10
Dies & Jigs 172,269 14,427 21,861 164,835 119,150 24,248 17,597 125,801 39,034 25
Factory equipment 16,627 2,704 278 19,053 5,932 1,335 231 7,036 12,017 10
Office equipment 10,681 1,299 890 11,090 4,555 702 484 4,773 6,317 10
Computers & accessories 20,190 5,322 1,680 23,832 10,570 5,174 1,171 14,573 9,259 25
Furniture & fixture 5,510 40 1,046 4,504 2,879 244 818 2,305 2,199 10
Fixture & equipment 1,300 - - 1,300 1,197 10 - 1,207 93 10
Electric & gas fittings 40,520 1,026 234 41,312 20,675 2,083 191 22,567 18,745 10
Vehicles 66,775 24,165 15,526 75,414 30,612 10,500 7,699 33,413 42,001 20
Service equipment 448 - 59 389 288 14 42 260 129 10
Sub-total 1,082,383 132,059 45,720 1,168,722 548,988 89,242 31,217 607,013 561,709
Leased Assets
Vehicles 2,520 - - 2,520 504 403 - 907 1,613 20
Sub-total 2,520 - - 2,520 504 403 - 907 1,613
TOTAL - 2003 1,084,903 132,059 45,720 1,171,242 549,492 89,645 31,217 607,920 563,322
2002 942,722 181,380 39,199 1,084,903 493,070 83,433 27,011 549,492 535,411
===========================================================================================================================* Includes assets written off5.1. LEASE IN RESPECT OF TWO PLOTS IN UNDER EXECUTION 5.2. Depreciation of the year has been allocated as follows. =============================================================================================
Note 2003 2002
(Rupees in 000's)
=============================================================================================
Cost of goods manufactured 29.1 80,966 73,720
Administrative expenses 30 8,679 9,713
89,645 83,433
=============================================================================================5.3. Certain dies and moulds costing Rs. 32,445 thousand (2002: Rs. 14,947 thousand) are held with Ali Machine Tools Company, G.I. Enterprises, Electro Polymers (Private) Limited, Pak Polymer (Private) Limited, Sigma Industries (Private) Limited, Syed Bhais (Private) Limited, Zahoor Die Casting Company and Pakistan Machine Tool Factory (Private) Limited for production of components to be supplied to the Company.5.4. DISPOSAL OF FIXED ASSETS ===========================================================================================================================
(Rupees in 000's)
===========================================================================================================================
Accumulated Sales Profit/ Mode of
Assets Cost Depreciation W.D.V. Proceeds (Loss) disposal Particulars of Purchasers
===========================================================================================================================
Plant & Machinery
De-Ionizing Plant with Tanks 462 125 337 157 (180) Auction Aqua Regia-Water Treatment
Suit # 19 Land Mark
Plaza Jail Road Lahore
Buffing Machine 1,099 788 311 34 (277) Auction Muhammad Afzal Kabaria
Shahdra Lahore
Dust Collector 33 24 9 - (9) Auction -Do-
Spot Welding 350G 50 43 7 - (7) Write-off
Stamping Machine 90 69 21 - (21) Write-off
Air bottle 57 16 41 - (41) Write-off
Ultrasonic cleaner-2 164 115 49 - (49) Write-off
Ultrasonic cleaner-3 113 87 26 - (26) Write-off
Rear cross plate 650 501 149 - (149) Write-off
Metal Machine 110 85 25 - (25) Write-off
Test bench panel 46 39 7 - (7) Write-off
Test bench 125 110 15 - (15) Write-off
Oil Separator Dryer 40 27 13 - (13) Write-off
Heat Exchanger 117 105 12 - (12) Write-off
Items with written down value not
exceeding Rs. 5,000 each 990 850 140 - (140) Write-off
Sub Total 4,146 2,984 1,162 191 (971)
Dies & Jigs
Dies & Jigs 1,334 1,235 99 - (99) Write-off
F.Tank Panel R/L Draw CD70 625 575 50 - (50) Write-off
F.T Panel R/L Trim & Side CD70 729 671 58 - (58) Write-off
R/Fender Panel Draw CD70 521 480 41 - (41) Write-off
Patch Rear Blank form CD70 156 144 12 - (12) Write-off
Front Fender Draw Die CD70 850 468 382 - (382) Write-off
Frame Body Blank Die Lower CD70 258 173 85 - (85) Write-off
F/Body Box Battery Tray Jig CD70 21 19 2 - (2) Write-off
Upper R/Fender Die Model CD70 57 14 43 - (43) Write-off
Blank Holder R/Fender Model CD70 57 14 43 - (43) Write-off
Right Crank Case Die CD70 1,643 1,371 272 - (272) Write-off
Mould Fix Dies and Sleeves 3,642 2,815 827 - (827) Write-off
Crank case cover R cavity CD70 1,375 1,122 253 - (253) Write-off
Die For Crank Case Left CD70 1,992 1,752 240 - (240) Write-off
Die For Crank Case Cover R/H CD7 1,840 1,618 222 - (222) Write-off
Die Sleeves Cylinder CG125 442 243 199 - (199) Write-off
Cover Crank Case R/Die CD70 2,965 2,291 674 - (674) Write-off
Cover Crank Case L/Die CD70 3,354 2,592 762 - (762) Write-off
Sub Total 21,861 17,597 4,264 - (4,264)
Computers & Accessories
Compaq Note Book Lte Elite 4/40C 112 79 33 1 (32) Auction NDS Technologies (Pvt) Ltd
49 D-1 Gulberg III Lahore
Compaq PC Deskpro 2000 167 112 55 1 (54) Auction -Do-
Compaq PC Prolinea 4/66 215 151 64 1 (63) Auction -Do-
Compaq PC Prolinea 575E 75 53 22 1 (21) Auction -Do-
Epson DFX-5000 Printer 90 63 27 1 (26) Auction -Do-
Miscellaneous Computer 1,021 713 308 1 (307) Auction Falcon Int 536 CMA
and Accessories
Joher Town Lahore
Sub Total 1,680 1,171 509 6 (503)
Factory Equipment
Items with written down value
not exceeding Rs. 5,000 each 278 231 47 - (47) Write-off
Office Equipment
Photo Copier Machine NP-6150 654 307 347 80 (267) Negotiation Shirazi Trading Co (Pvt) Ltd
2nd Floor Nadir House
II Chundrigar Road
Karachi (Associated Company)
Items with written down value not
exceeding Rs. 5,000 each. 236 177 59 - (59) Write-off
Sub Total 890 484 406 80 (326)
Furniture & Fixture
Miscellaneous Furniture & Fixtur 49 26 23 5 (18) Auction Chaudhry Mohd Zulfiqar
Sunny Plaza Chandri Chowk
Rawalpindi
Miscellaneous Furniture & Fixtur 75 63 12 11 (1) Auction Arif Ahmed Scrap contractor
Street 28 Krishna Nagar
Gujranwala
Items with written down value
not exceeding Rs. 5,000 each 922 729 193 - (193) Write-off
Sub Total 1,046 818 228 16 (212)
Electric & Gas Fitting
Items with written down value
not exceeding Rs. 5,000 each 234 191 43 - (43) Write-off
Service Equipment
Items with written down value
not exceeding Rs. 5,000 each 59 42 17 - (17) Write-off
Vehicles
Honda CD70 54 32 22 25 3 Company Policy (Employee) Abdul Razzaq
Honda CD70 57 38 19 23 4 Company Policy (Employee) M Naim Khan
Honda CD70 54 32 22 24 2 Company Policy (Employee) Abdul Majeed
Honda CD70 57 39 18 24 6 Company Policy (Employee)
Mohammad Shahid
Honda CD70 54 32 22 24 2 Company Policy (Employee) Nazar Hussain
Honda CD70 54 32 22 24 2 Company Policy (Employee)
Mushtaq Hussain
Honda CD70 54 32 22 24 2 Company Policy (Employee)
Ehtesham-ul-Islam
Honda CD70 54 32 22 25 3 Company Policy (Employee)
Mohammad Sultan Khan
Honda CD70 54 32 22 25 3 Company Policy (Employee)
Abdul Majeed Khan
Honda CD70 66 23 43 47 4 Company Policy (Employee)
Mmubashir H Rana
Honda CD70 54 32 22 22 - Company Policy (Employee)
Mujahid ul Mulk Butt
Honda CD70 65 - 65 59 (6) Company Policy (Ex-employee)
Mohammad Naeem Khan
Honda CD70 54 32 22 29 7 Negotiation Atlas Battery Ltd D-181
Central Avenue SITE Karachi
(Associated Company)
Honda CD70 54 32 22 28 6 Insurance Claim Muslim Insurance Co Ltd
3-Bank Square Shahrah-e-
Quaid-e-Azam Lahore
(Associated Company)
Honda CD70 64 31 33 30 (3) Insurance Claim -Do-
Honda CD70 65 13 52 52 - Insurance Claim -Do-
Honda CD70 65 13 52 51 (1) Insurance Claim -Do-
Honda CD70 64 23 41 37 (4) Insurance Claim -Do-
Honda CD70 65 - 65 65 - Insurance Claim -Do-
Honda CD70 62 30 32 32 - Insurance Claim -Do-
Honda CD70 66 24 42 35 (7) Insurance Claim -Do-
Honda CD70 66 24 42 41 (1) Insurance Claim -Do-
Honda CD70 66 24 42 46 4 Insurance Claim -Do-
Honda CG125 75 27 48 57 9 Company Policy (Ex-Employee)
Muhammad Saleem
M Akhter
Honda CG125 63 31 32 28 (4) Company Policy (Ex-Employee)
Aslam Shehzad
Honda CG125 63 37 26 26 - Company Policy (Employee)
Mohammad Younis
Honda CG125 66 44 22 27 5 Company Policy (Employee)
Shahid Hussain
Honda CG125 63 37 26 28 2 Company Policy (Employee) Mansur-ul-Haq
Honda CG125 63 37 26 29 3 Company Policy (Employee)
Majid Badar Siddiqui
Honda CG125 63 37 26 26 - Company Policy (Employee)
SJavaid Haider Aqeel
Honda CG125 63 37 26 26 - Company Policy (Employee) Shah Faisal
Honda CG125 63 37 26 26 - Company Policy Abdullah Khalid Qureshi
(Employee)
Honda CG125 74 15 59 59 - Insuance Claim Muslim Insurance Co Ltd
3-Bank Square Shahrah-e-
Quaid-e-Azam Lahore
(Associated Company)
Honda CG 125 74 - 74 59 (15) Insurance Claim -Do-
Honda CG 125 74 - 74 67 (7) Insurance Claim -Do-
Honda CG 125 75 27 48 51 3 Insurance Claim -Do-
Honda CG 125 74 15 59 47 (12) Insurance Claim -Do-
Honda CG 125 74 15 59 48 (11) Insurance Claim -Do-
Honda CG 125 69 34 35 30 (5) Auction Honda Center Motorcycle
Motorcycles 430 - 430 155 (275) Negotiation Market Mcleod Road Lahore
8555 Japan
Honda City 593 350 243 351 108 Company Policy (Employee)
Honda Civic 1,098 395 703 711 8 Company Policy (Ex-Employee)
Hafiz M Hanif
Honda Civic 738 496 242 239 (3) Company Policy (Ex-Employee)
Sardar Abid Ali
Honda Civic 801 473 328 337 9 Company Policy (Employee) M Amir Awan
Honda Civic 970 573 397 401 4 Negotiation Mohammad Amir Haroon
1/1-J Block 6 PECHS Karachi
Honda Civic 787 465 322 325 3 Negotiation Zahid Ahmed 7/10 F-11
Nazimabad No 2 Karachi
Honda Civic 787 465 322 325 3 Negotiation Manzoor Ahmed Khan
D-26 Officers Colony
Garden West, Karachi
APT C-106 Shalimar Estates
Honda Civic 1,067 630 437 442 5 Negotiation 129 Clifton Mobina Rizwan
Road Karachi
Honda Civic 370 74 296 296 - Negotiation Shirazi Trading Co (Pvt) Ltd
2nd Floor Nadir-House
II Chundrigar Road Karachi
(Associated Company)
Honda Civic 930 186 744 744 - Negotiation -Do-
Suzuki Khyber 340 201 139 163 24 Company Policy (Employee)
Khawaja Shujauddin
Suzuki Khyber 368 247 121 151 30 Company Policy (Employee)
Maqsood Rehmani
Suzuki Khyber 241 87 154 174 20 Company Policy (Employee)
Razi-ur-Rehman
Suzuki Khyber 419 196 223 222 (1) Company Policy (Employee) Zia-ul-Islam
Suzuki Khyber 368 217 151 188 37 Negotiation Farhet Jehan
HNo 5-H/6 PECHS Karachi
Suzuki Khyber 368 217 151 195 44 Negotiation Ghulam Hussain
HNo R/453 Sector 15-A-2
Buffer Zone Karachi
Suzuki Khyber 340 201 139 163 24 Negotiation Mukarram Hussain HNo C-69
North Nazimabad Karachi
Suzuki Khyber 220 44 176 165 (11) Negotiation Junaid Akhter Khan 11-C 12
Commercial Street Phase II
DHA Karachi
Suzuki Mehran 298 176 122 122 - Company Policy (Employee) Iqbal Ahmed
Suzuki Mehran 307 181 126 127 1 Negotiation Azhar Iqbal HNo B 196
Qasim Pura Lahore
Daihatsu Coure 439 158 281 317 36 Insurance Claim Muslim Insurance Co Ltd
3-Bank Square Shahrahe-
Quaid-e-Azam Lahore
(Associated Company)
Toyota Corolla 337 199 138 139 1 Negotiation S Mohammad Ashraf Ali
HNo 590 Lal Para Mirpur Khas
Fork Lifter 273 265 8 229 221 Auction Aqua Regia-Water Treatment
Suit # 19 Land Mark Plaza
Jail Road Lahore
Fork Lifter 173 171 2 274 272 Auction -Do-
Sub Total 15,526 7,699 7,827 8,381 554
===========================================================================================================================6. INTANGIBLE ASSETS=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Software development / acquisition cost 2,766 1,303
Addition 1,089 3,590
Amortized during the year (2,067) (2,127)
1,788 2,766
=============================================================================================7. CAPITAL WORK-IN-PROGRESS=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Building 125 -
Plant and Machinery 2,206 448
Factory Equipment 439 104
2,770 552
=============================================================================================8. INVESTMENTS=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Available-for-sale investments
Listed
Atlas Battery Limited - Associated undertaking
NIL (2002: 165,550 Ordinary shares of Rs. 10
each includes bonus shares 25,550) - 9,548
Less: Provision for diminution in value of investment - 5,989
- 3,559
Unlisted
Arabian Sea Country Club (Private) Limited 2,000 2,000
200,000 ordinary shares of Rs. 10 each
(Name of Chief Executive: Mr. Javed Burki)
Break-up value on the basis of audited
accounts for the year ended June 30, 2002
Rs. 6.25 (2002: Rs. Nil) per share
Less: Provision for diminution in value of investment 2,000 2,000
- -
Automotive Testing & Training Center (Private) Limited
187,500 ordinary shares of Rs. 10 each 1,875 1,875
(Name of Chairman : Dr. M.Akram Sheikh)
Break-up value on the basis of audited
accounts for the year ended June 30, 2001
Rs. 5.75 (2002: Rs. 5.75) per share
Less: Provision for diminution in value of investment 1,875 1,875
- -
- 3,559
=============================================================================================9. LONG TERM LOANS, DEPOSITS, PREPAYMENTS & OTHER RECEIVABLE=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Considered Good
Cars/Motorcycles loans to employees - (Secured) 9.1 9,290 12,896
Deposits 9.2 4,104 3,159
Prepayment 480 -
Other receivable (Unsecured) - 75
13,874 16,130
=============================================================================================9.1. CARS/MOTORCYCLES LOANS TO EMPLOYEES=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Due from:
- Executives 3,302 3,744
- Employees 12,351 16,612
15,653 20,356
Less: Recoverable within one year
- Executives 1,252 1,581
- Employees 5,111 5,879
6,363 7,460
9,290 12,896
=============================================================================================Car / Motorcycle loans given to executives and employees are in accordance with the Company's policy. Such loans are interest free and are repayable in equal monthly installments with a maximum period of four years. Such loans are secured against car / motorcycles which are registered in name of the Company.Car / Motorcycle loans outstanding for more than 3 years amounting to Rs. 1,402 thousand (2002: Rs. 421 thousand). The maximum amount due from executives at the end of any month was Rs. 3,198 thousand (2002: Rs. 3,824 thousand). 9.2. Deposits include Rs. 252 thousand lease deposit with Atlas Investment Bank Limited, an associated company. 10. STORES, SPARES & TOOLS =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Consumables stores 15,954 10,588
Maintenance spare 22,896 11,858
Tools 54,921 19,155
Stores-in-transit 3,321 285
97,092 41,886
Less: Provision for slow moving stores 4,225 3,821
92,867 38,065
=============================================================================================11. STOCK-IN-TRADE=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Raw materials & components
In hand 222,813 270,142
With third party 21,973 4,079
In transit (inter factories: Karachi/Sheikhupura) 46,191 3,804
290,977 278,025
Work in Process 80,942 38,391
Finished Goods
Motorcycles 3,836 69,004
Spare parts 54,476 27,682
58,312 96,686
Goods in transit (at accumulated cost) 127,049 49,152
557,280 462,254
=============================================================================================11.1. Cost has been arrived at as follows.(a) In case of raw materials and components, finished stocks and spare parts, at weighted average cost. (b) In case of work in process, cost includes direct materials, direct labour and manufacturing overheads. 11.2. Stock-in-trade and trade debtors upto a maximum amount of Rs. 1,255 million (2002: Rs. 1,182 million) are under hypothecation as security for the Company's short term finances. 11.3. Finished Goods (motorcycles) include stock held for capitalization amounting to NIL (2002: Rs. 75 thousand). 12. TRADE DEBTORS CONSIDERED GOOD =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Export - Secured 13,777 13,328
Local - Unsecured 35,842 153,007
49,619 166,335
=============================================================================================12.1. Trade debtors comprise amounts receivable from the sale of goods. The management consider that the carrying amount of trade debts approximates their fair value.13. ADVANCES, DEPOSITS, PREPAYMENTS, LOANS & OTHER RECEIVABLE =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Unsecured - Considered Good
Loans to employees 13.1 4,990 5,504
Advances to:
Executives for expenses 13.2 1,434 273
Suppliers & contractors 13.3 2,098 8,343
Income tax deducted at source / Paid in advance 249,584 110,433
Advance Sale Tax - Motorcycles 62,137 27,992
- Raw Materials 5,634 11,274
Trade deposits 816 2,734
Prepayments 13.4 2,356 1,403
Interest accrued on deposits 2,134 8,219
Other receivable 13.5 16,832 16,067
Secured - Considered Good
Current portion of Car/Motorcycle
loans to employees 9.1 6,363 7,460
354,378 199,702
Unsecured - Considered doubtful
Other receivable 619 535
354,997 200,237
Provision for doubtful receivable 619 535
354,378 199,702
=============================================================================================13.1. Loans to employees include loans of Rs. 4,516 thousand (2002: Rs. 5,504 thousand) granted to executives. The maximum amount due from executives at the end of any month was Rs. 5,505 thousand (2002: Rs. 5,504 thousand).13.2. Executive advances for expenses include due from executives Rs. 1,434 thousand (2002: Rs. 273 thousand). The maximum amount due from executives at the end of any month was Rs. 6,256 thousand (2002: Rs. 5,053 thousand). 13.3. Advance to suppliers & contractors include NIL (2002: Rs. 6,128 thousand) receivable from associated company, Allwin Engineering Industries Limited. Maximum amounts due from the associated companies at the end of any month during the year was Rs. 6,141 thousand (2002: Rs. 16,922 thousand). 13.4. Prepayments include insurance premium NIL (2002: Rs. 141 thousand) to associated company, Muslim Insurance Company Limited. 13.5. Other receivables include Rs. 15,232 thousand (2002: Rs. 13,166 thousand) duty draw back receivable from Collector of Customs. This also includes insurance claim receivable Rs. 208 thousand (2002: Rs. 58 thousand) due from associated company, Muslim Insurance Company Limited. 14. CASH & BANK BALANCES =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Cash in hand - 18
Cash with banks:
In current account - Local currency 109,026 69,479
Foreign currency - 3,049
In saving accounts 912,200 161,768
In deposit account - Local currency - 150,000
Cheques-in-hand - 22,567
1,021,226 406,881
=============================================================================================14.1. Bank balances and cash comprise cash and short term deposits held by the company treasury function. The carrying amount of these assets approximates their fair value.15. ISSUED, SUBSCRIBED & PAID-UP SHARE CAPITAL =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Ordinary shares of Rs. 10 each
6,352,748 Fully paid-up in cash 63,528 63,528
13,824,768 Issued as fully paid bonus shares 138,247 138,247
259,300 Issued for consideration other than cash 2,593 2,593
20,436,816 204,368 204,368
=============================================================================================15.1. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to company's residual assets.15.2. 9,114,537 (2002: Rs. 9,114,537) Ordinary Shares of Rs. 10/- each were held by associated companies at the year end. 16. RESERVES =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Capital Reserves 16.1 40,118 40,118
General Reserve 16.2 831,000 546,300
871,118 586,418
=============================================================================================16.1. CAPITAL RESERVES=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Share Premium
Balance at beginning and end 39,953 39,953
Gain on Sale of Land
Balance at beginning and end 165 165
Reserve for issue of bonus shares
Balance at the beginning - 58,391
Utilized for issue of fully paid bonus shares - 58,391
Balance at the end - -
40,118 40,118
=============================================================================================6.2. GENERAL RESERVE=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at the beginning 546,300 398,300
Transfer from profit and loss account 284,700 148,000
Balance at the end 831,000 546,300
=============================================================================================17. REDEEMABLE CAPITAL=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Saudi Pak Industrial & Agricultural Investment
Company (Private) Limited 17.01 -
Atlas Investment Bank Limited 17.02 -
- -
=============================================================================================17.1. SAUDI PAK INDUSTRIAL & AGRICULTURAL INVESTMENT COMPANY (PRIVATE) LIMITED=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 19,788 36,242
Less: Repaid during the year 19,788 16,454
- 19,788
Less: Installments due within the following
twelve months - 19,788
Balance at the end - -
=============================================================================================The long term finance facility from Saudi Pak Industrial & Agricultural Investment Company (Private) Limited has been repaid during the year.17.2. ATLAS INVESTMENT BANK LIMITED =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 5,000 10,000
Less: Repaid during the year 5,000 5,000
- 5,000
Less: Installments due within the following
twelve months - 5,000
Balance at end - -
=============================================================================================The long term finance facility from Atlas Investment Bank Limited (an associated company) has been repaid during the year.18. LONG TERM LOAN =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Muslim Commercial Bank Limited 18.1 20,092 40,182
Union Bank Limited 18.2 60,000 -
Credit Agricole Indosuez 18.3 35,000 -
115,092 40,182
=============================================================================================18.1. MUSLIM COMMERCIAL BANK LIMITED=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 60,274 80,366
Less: Repaid during the year 20,090 20,092
40,184 60,274
Less: Installments due within the following
twelve months 20,092 20,092
Balance at end 20,092 40,182
============================================================================================= (a) The Company has arranged Demand Finance amounting to Rs. 100.458 million from Muslim Commercial Bank Limited for import of machinery.(b) The Demand Finance is repayable in 10 half yearly installments commencing on September 22,2000 and ending on March 22, 2005. (c) The Demand Finance carries mark up at the rate of 3 percent over Treasury Bills to be fixed on six monthly basis, presently 6.5 percent (2002: 13.001 percent), subject to a floor of 6.5 percent and a ceiling of 16 percent per annum. (d) The Demand Finance is secured against first pari passu equitable mortgage on Company's immovable properties and a demand promissory note. 18.2. UNION BANK LIMITED =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Disbursed during the year 100,000 -
Less: Repaid during the year 20,000 -
80,000 -
Less: Installments due within the following
twelve months 20,000 -
Balance at end 60,000 -
============================================================================================= (a) The Company has arranged Demand Finance amounting to Rs. 100 million from Union Bank Limited for import of machinery.(b) The Demand Finance is repayable in 10 half yearly installments commencing on January 04, 2003 and ending on June 25, 2007. (c) The Demand Finance carries mark up at the rate of 1.75 percent over Treasury Bills to be fixed on six monthly basis, presently 3.41 percent. (d) The finance facility is secured against a first mortgage charge ranking pari passu on immovable properties of the company, a first ranking pari passu chare by way of hypothecation of all fixed assets of the company and a demand promissory note. 18.3. CREDIT AGRICOLE INDOSUEZ =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Disbursed during the year 50,000 -
Less: Repaid during the year 5,000 -
45,000 -
Less: Installments due within the following
twelve months 10,000 -
Balance at end 35,000 -
============================================================================================= (a) The Company has arranged Demand Finance amounting to Rs. 50 million from Credit Agricole Indosuez for import of machinery.(b) The Demand Finance is repayable in 10 half yearly installments commencing on March 17, 2003 and ending on September 17, 2007. (c) The Demand Finance carries mark up at the rate of 1.5 percent over SBP discount rate to be fixed on six monthly basis, presently 9 percent. (d) The finance facility is secured against a first mortgage charge ranking pari passu on immovable properties of the company, a first ranking pari passu charge by way of hypothecation of all fixed assets of the company and a demand promissory note. 19. OBLIGATION UNDER FINANCE LEASE =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 1,394 -
Lease assets obtained during the year - 2,520
1,394 2,520
Less: Repaid during the year 1,141 1,126
253 1,394
Less: Installments due within the following twelve months 1 1,141
Balance at end 252 253
=============================================================================================
==========================================================================================
2003 2002 2003 2002 2003 2002
Minimum lease payment Financial charges Present value of minimum lease
Rupees in thousand payments
==========================================================================================
Year ending to 30 June
2003 - 1,233 - 92 - 1,141
2004 1 1 - 1 1
2005 252 252 - - 252 252
253 1,489 - 92 253 1,394
==========================================================================================The Company has entered into finance lease / sale and lease back agreement with Atlas Investment Bank Limited (associated company) for motor vehicles.The lease rentals which include finance charges at the rate of 16% per annum are payable in 12 quarterly installments commencing from November, 2001. The lease agreement contain purchase option which the Company may exercise at the end of lease term. 20. PROVISION FOR GRATUITY =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Balance at beginning 58,620 22,672
Add: Provision for the year 20.2 14,192 37,330
72,812 60,002
Less: Payments during the year 48,864 1,382
Balance at end 20.1 23,948 58,620
=============================================================================================20.1. The amount included in the balance sheet arising from the Company's obligation in respect of its defined benefit retirement benefit plan is as follows:============================================================================================
Management Non-management & Worker TOTAL
2003 2002 2003 2002 2003 2002
Funded Unfunded
Rupees in thousand
============================================================================================
Present value of defined benefit
obligation (actuarial liabilit 49,650 41,684 25,348 17,769 74,998 59,453
Fair value of plan assets (47,555) - - - (47,555) -
Unrecognized actuarial
gain / (loss) (3,888) - 393 (833) (3,495) (833)
Balance at end (1,793) 41,684 25,741 16,936 23,948 58,620
Net Liability at the beginning
of the year 41,684 - 16,936 22,672 58,620 22,672
Gratuity cost for the year ended
June 30, 2003 5,387 42,108 8,805 (4,778) 14,192 37,330
Contributions (47,555) - - - (47,555) -
Payment to outgoing employees (1,309) (424) - (958) (1,309) (1,382)
Net Liability at the end of th (1,793) 41,684 25,741 16,936 23,948 58,620
============================================================================================20.2. The expense is recognised in the following line items in the income statement.=========================================================================================
Note
=========================================================================================
Cost of sales 29.04 1,752 13,985 8,805 (4,778) 10,557 9,207
Administrative expense 30.02 2,919 22,591 - - 2,919 22,591
Selling expenses 31.02 716 5,532 - - 716 5,532
5,387 42,108 8,805 (4,778) 14,192 37,330
=========================================================================================Principal actuarial assumptions at the balance sheet date for:===================================================================== Discount rate 6% 11% 6% 11% Future salary increases 5% 9% 5% 11% Return on investment 6% 11% 6% 11% =====================================================================21. DEFERRED TAXATION =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
The liability for deferred taxation comprises of timing differences relating to:
Deferred credit arising in respect of
Accelerated tax depreciation allowance 54,000 50,016
Lease rentals - 218
54,000 50,234
Deferred debit arising in respect of
Various provisions (21,000) (35,234)
33,000 15,000
=============================================================================================21.1. The movement for the year in the Company's net deferred tax position was as follows:=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 15,000 49,000
Increase / (Decrease) in deferred tax liabilities 4,000 (6,701)
Decrease / (Increase) in deferred tax assets 14,000 (27,299)
(Reversal) / Charge to income for the year 18,000 (34,000)
Balance at end 33,000 15,000
=============================================================================================22. SHORT TERM FINANCES=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning and end - -
=============================================================================================The Company has facilities for short-term running finance under mark-up arrangements amounting to Rs. 655 million (2002: Rs. 665 million). The facilities carry mark-up at the rate of Re. 0.1233 to Re. 0.1370 (2002: Re. 0.2465 to Re. 0.3014) per thousand per day on daily product basis.These facilities are secured against joint hypothecation charge on stocks-in-trade and trade debts amounting to Rs. 1,255 million (2002: Rs. 1,182 million). These facilities are expiring on various dates by Marach 31, 2004. The facility for opening letter of credit and guarantees as at June 30, 2003 amounted to Rs. 885 million (2202: Rs. 885 million) of which the amount remaining unutilized at the year-end was Rs. 574 million (2002: Rs. 526 million). The facility for post shipment export refinance as at June 30, 2003 amounted to Rs. 43.9 million (2002: Rs. 45.5 million). This facility is secured against lien on export bills / contract. 23. CURRENT MATURITY OF LONG TERM LIABILITIES =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Redeemable Capital - 24,788
Long term loan 50,092 20,092
Obligation under finance lease 1 1,141
50,093 46,021
=============================================================================================24. CREDITORS, PROVISIONS, ACCRUED CHARGES AND OTHER LIABILITIES=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Trade Creditors 24.1 247,424 165,751
Accrued expenses 162,582 144,894
Provision for warranty 24.2 7,000 7,000
Customers Advance & Credit Balances 498,503 230,363
Mark-up on Redeemable Capital 2,030 1,655
Interest / Mark-up on Bank Loans - Secured 24.3 32 2,265
Finance charges on leased assets - 15
2,062 3,935
Retention money - 960
Sales tax payable 20,422 -
Withholding tax payable - 14
Workers' Profit Participation Fund 24.4 35,324 21,537
Workers' Welfare Fund 24.5 13,295 8,061
Other liabilities 3,365 8,487
989,977 591,002
=============================================================================================24.1. Trade Creditors include Rs. 216 thousand (2002: Rs. 90 thousand) payable to associated company BOC Pakistan Limited.24.2. PROVISION FOR WARRANTY =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 7,000 7,000
Provided during the year 8,800 9,692
15,800 16,692
Paid / reversed during the year 8,800 9,692
Balance at end 7,000 7,000
=============================================================================================24.3. Interest / Mark-up payable on secured loan includes NIL (2002: Rs. 443 thousand) payable to associated company.24.4. WORKERS' PROFIT PARTICIPATION FUND =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance as at beginning 21,537 11,155
Add: Interest credited 2,531 453
24,068 11,608
Less: Payment made during the year 23,732 11,281
336 327
Contributions for the year @ 5% 34,988 21,210
Balance at end 35,324 21,537
=============================================================================================The Company retains the allocation to this fund for its business operation till the amount is paid to the fund together with interest at the prescribed rates under the Act.24.5. WORKERS' WELFARE FUND =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning 8,061 5,176
Paid during the year 8,607 5,469
(546) (293)
Charge for the current year 13,295 8,060
Prior year / (adjustment) 546 294
13,841 8,354
Balance at end 13,295 8,061
=============================================================================================25. PROVISION FOR TAXATION=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Balance at beginning
Corporate Asset Tax 2,000 2,000
Income Tax 160,000 83,500
162,000 85,500
Add: Provision made during the year
Current year 220,000 160,000
Prior year (14,476) (1,925)
205,524 158,075
Less: Payment during the year 145,204 81,575
Adjustment-Corporate Assets Tax 2,320 -
Balance at end 220,000 162,000
=============================================================================================25.1. The charge for the year can be reconciled to the profit as per the profit and lost account as follows:=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Profit before tax 650,927 394,573
Tax at the applicable income tax rate 35.00% 227,824 138,101
Tax effect of expenses that are not deductible in determining taxable profit as under:
Gratuity -1.86% (12,135) 12,582
Leave Encashment 0.16% 1,057 7,072
Depreciation 0.82% 5,317 (4,890)
Loss on Disposal of fixed assets -0.07% (452) -
WWF 0.06% 399 (223)
Other -0.09% (614) 6,053
Lease Rentals -0.06% (372) (394)
Effect of difference in tax rates under normal
assessment and presumptive tax regime -0.15% (974) 1,773
Effect of difference in tax rates under normal
assessment and tax on dividend for companies -0.01% (50) (74)
Tax expenses and effective tax rate for the curren 33.80% 220,000 160,000
=============================================================================================26. DIVIDEND PAYABLE=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Unclaimed dividends 5,042 3,639
Unclaimed bonus fractions 50 50
Proposed dividend 143,058 122,621
148,150 126,310
=============================================================================================27. CONTINGENT LIABILITIES & COMMITMENTSCONTINGENCIES 27.1. Cases have been filed against the Company by some former employees claiming approximately Rs. 2.0 million in aggregate. These cases are pending in the High Court of Sindh, the Sindh Labour courts and the Sindh Labour Appellate Tribunal. The management is confident that the outcome of these cases will be in the Company's favour. 27.2. GUARANTEES =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Issued by bank 42,177 17,208
Commitments
Confirmed letters of credit relating to raw materials 308,482 342,181
Plant and Equipment 9,291 3,000
=============================================================================================28. SALES-NET=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Motorcycles & spare parts 6,977,439 5,523,951
=============================================================================================Sales have been recorded at dealer's net prices after deducting sales tax Rs. 1,030.491 million (2002: Rs. 820.059 million) and discount / allowances Rs. 56.136 million (2002: Rs. 16.442 million). Commission paid to associated company on export sales amounting to Rs. 2,504 thousand (2002: Rs. 4,274 thousand) is included in discount / allowances.29. COST OF SALES =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Stock at beginning 96,686 94,621
Cost of goods manufactured 29.1 5,676,671 4,613,496
Purchases 234,599 177,078
5,911,270 4,790,574
6,007,956 4,885,195
Stocks at end 11 58,312 96,686
5,949,644 4,788,509
=============================================================================================29.1. COST OF GOODS MANUFACTURED=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Work in process at beginning 38,391 36,371
Raw materials & Components consumed 29.2 5,076,668 4,091,084
Direct labour 29.3 89,058 70,007
Technical Director's Remuneration 604 652
Salaries, wages & benefits 29.4 95,832 81,822
Employees severance cost 161 2,602
Stores consumed 75,262 69,571
Light, heat & water 47,677 36,627
Insurance 17,456 16,296
Rent, rates & taxes 3,029 2,982
Repair & maintenance 20,123 26,398
Royalty 162,851 111,511
Technical assistance 20,050 4,530
Traveling, conveyance and entertainment 11,841 10,584
Postage & telephone 3,863 3,689
Printing & Stationery 1,669 1,760
Vehicle running Depreciation 2,720 2,629
Depreciation 5.2 80,966 73,720
Canteen 6,529 6,410
Newspapers, Magazines & Subscription 543 383
Staff training 623 195
Intangible assets amortized 1,383 1,441
Others manufacturing expenses 314 623
5,757,613 4,651,887
Work in Process at end 11 80,942 38,391
5,676,671 4,613,496
=============================================================================================29.2. RAW MATERIAL & COMPONENTS CONSUMED=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Stock at beginning 278,025 200,408
Purchases 29.5 5,089,620 4,168,701
5,367,645 4,369,109
Stock at end 11 290,977 278,025
5,076,668 4,091,084
=============================================================================================29.3. Direct labour and salaries & benefits include Rs. 13,957 thousand (2002: Rs. 15,529 thousand) in respect of staff retirement benefits.29.4. The following amounts have been charged to cost of sales during the year in respect of gratuity schemes: =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Current service cost 1,600 7,487
Interest costs 4,088 1,720
Past service cost-vested benefits 5,326 -
Expected return on Plan Assets (457) -
10,557 9,207
=============================================================================================29.5. Purchase include custom duty rebates netted-off aggregating Rs. 23,501 thousand (2002: Rs. 11,536 thousand).30. ADMINISTRATIVE EXPENSES =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Directors' remuneration 39.1 5,888 5,875
Directors' meeting fee 39.4 6 6
Salaries & benefits 30.1 74,691 95,906
Travelling, conveyance & entertainment 11,376 12,204
Rent, rates & taxes 2,982 2,442
Insurance 1,939 1,468
Repairs & maintenance 4,542 3,999
Legal & professional charges 3,021 2,030
Auditors' remuneration 30.3 800 522
Gas & electricity 1,131 1,161
Fees & subscription 617 1,189
Postage & telephone 2,260 3,324
Printing & stationery 1,392 1,248
Vehicle running 2,026 2,525
Training expense 224 328
Depreciation 5.2 8,679 9,713
Donation 30.4 56 165
Intangible assets amortised 684 686
Others 816 749
Loss on sale of fixed assets 5.04 5,829
128,959 150,923
=============================================================================================30.1. Salaries and benefits include Rs. 6,019 thousand (2002: Rs. 25,844 thousand) in respect of staff retirement benefits.30.2. The following amounts have been charged to administration expenses during the year in respect of gratuity schemes: =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Current service cost 1,232 22,591
Interest costs 2,450 -
Expected return on Plan Assets (763) -
2,919 22,591
=============================================================================================30.3. AUDITOR'S REMUNERATION=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Audit fee 305 275
Provident Fund / Workers' Profit Participation Fund
audit and certification 444 212
Out of pocket expenses 51 35
800 522
=============================================================================================30.4. Recipients of donations do not include any one, in whom a director or his spouse have any interest.31. SELLING & DISTRIBUTION EXPENSES =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Directors remuneration 39.2 6,602 5,158
Salaries & benefits 31.1 36,401 38,723
Traveling, conveyance, entertainment
& vehicle running 17,188 14,642
Rent, rates & taxes 3,360 2,980
Advertisement & publicity 86,853 53,163
Repairs & maintenance 727 604
Gas & electricity 966 853
Freight & forwarding 46,623 32,614
Printing & stationery 1,256 838
Postage & telephone 5,213 4,628
Sales Promotion 18,957 11,890
Services charges 4,967 3,972
Insurance 1,438 901
Newspaper, Magazines & Subscription 306 421
Others 228 61
231,085 171,448
=============================================================================================31.1. Salaries and benefits include Rs. 2,452 thousand (2002: Rs. 7,381 thousand) in respect of staff retirement benefits.31.2. The following amounts have been charged to selling & distribution during the year in respect of gratuity schemes: =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Current service cost 302 5,532
Interest costs 601 -
Expected return on Plan Assets (187) -
716 5,532
=============================================================================================32. MISCELLANEOUS REVENUE=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Scrap Sales 8,912 5,353
Interest on Deposits:
Associated company 18,011 19,728
Others 20,293 12,872
Other income - 8
Dividend Income
(Atlas Battery Limited, associated company) 166 248
Gain on Sale of Investments 11,053 -
58,435 38,209
=============================================================================================33. FINANCIAL EXPENSES=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Interest / mark-up on:
Short term loans 468 3,672
Long term loan 18,011 8,861
Redeemable capital 1,931 6,366
Supplier's credit - 865
Workers' profit participation fund 24.4 2,531 453
Finance charges on leased assets 77 149
Other financial charges 3,540 2,554
Exchange risk fee - 2,678
Exchange (gain) / loss (128) 849
Zakat - 125
26,430 26,572
=============================================================================================34. TAXATIONThe income tax assessments of the Company have been finalised up to and including Tax Year 2002 (income year ending June 30, 2002). 35. EARNINGS PER SHARE =============================================================================================
2003 2002
=============================================================================================
Earnings for purposes of basic earnings per share
(net profit for the year) (Rupees) 427,403 270,498
Weighted average number of ordinary shares
for the purposes of basic earnings per share 20,436,816 20,436,816
Basic Earnings per share 20.91 13.24
=============================================================================================There is no dilutive effect on basic earning per share of the company.36. ANALYSIS OF CHANGES IN CASH & CASH EQUIVALENTS =============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Balance at beginning 406,881 159,325
Increase in cash & cash equivalents 614,345 247,556
Balance at end 14 1,021,226 406,881
=============================================================================================37. NON-CASH TRANSACTION=============================================================================================
2003 2002
Note (Rupees in 000's)
=============================================================================================
Assets acquired on obligation under finance lease 19 - 2,520
=============================================================================================38. RELATED PARTY TRANSACTIONS=================================================================================
Name of Related Party Nature of Transaction Transaction Transaction
and Value Value
Nature of relationship
=================================================================================
Associated Companies
Shirazi Investments Sale of Motorcycles 132 -
(Private) Limited
(Common Directorship) Rent of premises 1,392 1,220
Actual reimbursement 1,788 1,091
of expenses
Atlas Battery Limited Sale of Motorcycles 1,458 1,710
(Common Directorship) Sale of Fixed assets 29 -
Purchase of batteries 42,433 25,200
Purchase of fixed assets - 1,299
Reimbursement of (393) 3,212
actual expenses
Dividend received 166 248
Allwin Engineering Industries Ltd Sale of Motorcycles 770 503
(Common Directorship) Scrap Sales 2,708 3,244
Purchase of parts 137,841 125,116
Reimbursement (74) (62)
of actual expenses
Atlas Investment Bank Limited Sale of Motorcycles 834 5,885
(Common Directorship) Lease rental paid 1,233 1,275
Loan repaid 5,000 5,000
Interest expense 673 1,152
Interest income on deposit 18,011 19,727
Sale of Investment through 13,880 -
Brokerage fees 26 -
Purchase of fixed assets - 4,162
Actual reimbursement 424 694
of expenses
Muslim Insurance Company Limited Sale of Motorcycles - 65
(Common Directorship) Insurance claim 1,065 -
Insurance premium 40,956 35,535
Actual reimbursement (60) (285)
of expenses
Shirazi Trading Company Sale of Motorcycles 1,094 846
(Private) Limited
(Common Directorship) Sale of Fixed assets 1,120 57
Purchase of fixed assets 3,830 1,043
Purchase of consumable it 1,419 253
Rent of premises 110 -
Actual reimbursement 321 (250)
of expenses
Honda Motor Company Purchase of CKD 1,472,386 1,264,468
Limited - Japan
(Investment in Equity) Purchase of fixed assets - 84,431
Royalty 162,851 101,217
Technical fees 20,050 2,248
Export Commission 2,504 4,274
Honda Atlas Cars (Pakistan) Ltd Sale of Auto parts 611 579
(Common Directorship) Sale of Motorcycles - 456
Purchase of fixed assets 17,671 7,071
Actual reimbursement - (103)
of expenses
BOC Pakistan Limited Purchase of welding gases 1,925 1,421
(Common Directorship)
Sui Southern Gas Company Limited Purchase of Natural gas 2,873 2,387
(Common Directorship)
Associated companies with which no
transactions were carried
during the year
Atlas Asset Management
Company Limited
(Common Directorship)
Gillette Pakistan Limited
(Common Directorship)
Faysal Bank Limited
(Common Directorship)
MYK Associates (Private) Limited
(Common Directorship)
National Refinery Limited
(Common Directorship)
NBP Capital Limited
(Formerly National Discounting
Services Limited)
(Common Directorship)
Relatives of Directors / Chairman
Mrs. Khawar S. Shirazi Rent of Premises 569 -
(Spouse of Chairman)
Enterprise over which any person
described in (a) above is able
to exercise significant influence
Total Atlas Lubricants Pakistan Purchase of oils 68,514 -
(Private) Limited
Honda Atlas Power Products - -
(Private) Limited
Shirazi Foundation Rent of premises 3,454 -
Batool Benefit Trust Rent of Premises 894 -
=================================================================================All these transactions were carried out on commercial terms and conditions and were valued at arm's length price. Reimbursement of expenses were on actual basis.39. DIRECTORS' AND EXECUTIVES' REMUNERATION 39.1. CHAIRMAN =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Remuneration 3,326 3,326
Rent & utilities 1,198 1,198
Bonus 665 665
Provident fund 293 293
Medical & others 46 33
Reimbursement of expenses 360 360
5,888 5,875
Number of person 1 1
=============================================================================================39.2. CHIEF EXECUTIVE OFFICER=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Remuneration 3,998 3,090
Rent & utilities 1,439 1,112
Bonus 800 618
Provident fund & gratuity 352 272
Medical expenses 13 66
6,602 5,158
Number of person 1 1
=============================================================================================39.3. DIRECTORS=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Remuneration 946 442
Utilities 861 210
1,807 652
Number of persons 3 1
=============================================================================================39.4. MEETING FEES=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
6 6
Number of persons 2 5
=============================================================================================39.5. EXECUTIVES=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Remuneration 89,890 84,164
Rent & utilities 32,620 30,120
Provident fund & gratuity 7,890 49,045
Medical 4,908 4,060
Bonus 15,302 12,217
150,610 179,606
Number of persons 251 245
=============================================================================================The Chairman, the Chief Executive, three directors and two expatriate executives are provided with free use of company maintained cars and telephones at residences. One director and two expatriate executives are also provided with furnished accommodation.40. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES 40.1. The Company's income and operating cash flows are substantially independent of changes in market interest rates. The Company presently has no significant interest-bearing assets. The Company's exposure to interest rate risk and the effective rates on its financial assets and liabilities as of June 30, 2003 are summarised as follows. =======================================================================================================
(Rupees in 000's)
2003 2002
=======================================================================================================
Interest bearing Non-Interest bearing
Maturity Maturity Maturity Maturity
upto one after one Sub-total upto one after one Sub-total Total Total
year year year year
=======================================================================================================
Financial assets
Investments - - - - - - - 3,559
Long term loans, deposits
and other receivable - - - 4,104 9,290 13,394 13,394 16,055
Trade Debtors - - - 49,619 - 49,619 49,619 166,335
Advances, deposits, loans
and other receivable - - - 34,667 - 34,667 34,667 48,600
Cash & Bank balances 912,200 - 912,200 109,026 - 109,026 1,021,226 384,314
912,200 - 912,200 197,416 9,290 206,706 1,118,906 618,863
Financial liabilities
Redeemable capital - - - - - - - 19,788
Long term loan 50,092 115,092 165,184 - - - 165,184 60,274
Obligation under finance l 1 252 253 - - - 253 1,394
Short term finance - - - - - - - -
Creditors, accrued expenses,
other liabilities - - - 969,555 - 969,555 969,555 591,002
Dividend payable - - - 148,150 - 148,150 148,150 126,310
50,093 115,344 165,437 1,117,705 - 1,117,705 1,283,142 798,768
On-balance sheet gap 862,107 (115,344) 746,763 (920,289) 9,290 (910,999) (164,236) (179,905)
=======================================================================================================40.2. EFFECTIVE INTEREST RATE=============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
Assets
Cash at bank
- Local Currency 1.85% to 3.5% 6.22% to 8.5%
Liabilities
Redeemable Capital - 18% to 19.33%
Long term loan 3.41% to 9% 13.001%
Supplier's credit - 17.86%
Obligation under finance leases 16% 16%
=============================================================================================40.3. CONCENTRATION OF CREDIT RISKSThe Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed to perform as contracted. Out of the total financial assets, following amount of financial assets are subject to credit risk: =============================================================================================
2003 2002
(Rupees in 000's)
=============================================================================================
1,118,907 618,863
=============================================================================================The company believes that it is not exposed to major concentration of credit risk. To manage exposure to credit risk, the company applies credit limits to its customers.40.4. FOREIGN RISK MANAGEMENT The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Japanese Yen. The Company use forward exchange contracts, to hedge their exposure to foreign currency risk in the local reporting currency. 40.5. FAIR VALUE OF THE FINANCIAL INSTRUMENTS The carrying value of all the financial instruments reflected in the financial statements approximates their fair values. 41. PLANT CAPACITY The production capacity of the plant cannot be determined as this depends upon relative proportion of various types of motorcycles and motorcycle components produced. 42. APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the board of directors and authorised for issue on August 30, 2003. |