Atlas Battery LTD - AR 2017
Atlas Battery LTD - AR 2017
Atlas Battery LTD - AR 2017
OF EXCELLENCE
Annual Report
DRIVING FORCE
OF EXCELLENCE
Atlas Battery has achieved milestones of distinction, charged with
continuous self-improvement. The company’s performance rests
greatly on its attention towards safety to minimize incidents,
injuries or other hazards at the workplace. Atlas Battery consciously
ensure workers’ health, improving hygiene standards and
reducing environmental impact. All this has resulted in paving
our path towards excellence in quality, production and performance.
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the Shareholders of the Company will be held at 9:30 a.m. on Friday,
September 29, 2017 at 2nd Floor, Federation House, Sharae Firdousi, Clifton, Karachi, to transact the following business:
Ordinary Business:
2. To receive, consider and adopt the Audited Annual Financial Statements of the Company for the year ended June 30, 2017
together with the Directors' and Auditors' Reports, thereon.
3. To consider and approve the Cash dividend at the rate of 350% (Rs.35/- per share) for the year ended June 30, 2017
as recommended by the Board of Directors.
4. To appoint auditors and fix their remuneration for the year ending June 30, 2018. The present auditors M/s. ShineWing
Hameed Chaudhri & Co., Chartered Accountants, retire and being eligible, offer themselves for reappointment.
Other Business:
NOTES:
1. The Share Transfer Books of the Company will remain closed from September 15, 2017 to September 29, 2017 (both
days inclusive). Transfers received in order at the office of our Share Registrar M/s. Hameed Majeed Associates (Private)
Limited, Karachi Chambers, Hasrat Mohani Road, Karachi before the close of business on September 14, 2017 will be
considered in time for the purpose of entitlement for cash dividend.
2. A member entitled to attend and vote at the General Meeting is entitled to appoint another member as a proxy to attend
and vote on his / her behalf. Proxies in order to be effective must be received at the Registered Office of the Company
or at the office of our Share Registrar M/s. Hameed Majeed Associates (Private) Limited not less than 48 hours before
the time of the meeting.
3. The Company will provide the video link facility to those member(s) who hold minimum 10% shareholding of the total
paid-up capital and resident of city other than Karachi where Company's Annual General Meeting is to be placed, upon
request. Such member(s) should submit request in writing to the Company at least seven days before the date of the
meeting.
4. Any individual Beneficial Owner of the Central Depository Company (CDC), entitled to vote at this meeting must bring
his / her Computerized National Identity Card (CNIC) or passport (in case of foreigner) along with CDC account number
to prove his / her identity and in case of proxy must enclose an attested copy of his / her CNIC or passport. Representatives
of corporate members should bring the usual documents required for such purpose.
5. Members are requested to immediately inform the Company's Share Registrar of any change in their mailing address.
6. Members are requested to provide by mail or fax, photocopy of their CNIC or passport (in case of foreigner), unless it
has been provided earlier, enabling the Company to comply with relevant laws.
9" *
@>
#$%!&8$
&1!
D
*,=$%!!&
,
"#
$
@>
#$%!&'
*
>,
H&12 %!2$
*,@
A 3*A6
#70$
$ >
*A
,
H%!2 &12"
.5&9&$$"D"*"+"$)
5'1' !
*3!%&6 %1E'!58
#,3!%&6 %1E8'!
4 "(? 3@6A$
)
$(
0$)
"
*3!%&6 %8%89%E; %8&%'18
#,3!%&6 %8%89 1
*
. B
*, 3*6
$
*
0 "*
** $
$
B
$ "
,
$
B
@
-
3 6
$
/
0 $
,
"D 5
&8$%!&'$
B
,
"
#"4. *"
@
-
3 6
"
@ @
D" D"
3"
6 3"
6
D-181, Central Avenue, S.I.T.E., Karachi-75730 The Board of Directors of the Company has proposed
Tel: (021) 32567990-4 a Final Cash Dividend of Rs.35.00 each for the year
Fax: (021) 32564703 ended June 30, 2017, subject to the approval by the
shareholders of the Company at the Annual General
Share Registrar Meeting.
Tel: (021) 32424826 & 32412754 was, Cash Dividend of Rs.15.50 per share (155%).
The annual listing fee for the financial year 2016-17 has
Dividend declared and approved at the Annual General
been paid within the prescribed time limit.
Meeting will be paid within the statutory time limit of 30
days.
Stock Symbol
The stock symbol for dealing in equity shares of Atlas (i) For shares held in physical form
Battery Limited at PSX is 'ATBA'.
To shareholders whose names appear in the
Statutory Compliance members register of the Company after entertaining
all requests for transfer of shares lodged with the
During the year, the Company has complied with all
Company by September 14, 2017.
applicable provisions, filed all returns / forms and
furnished all the relevant particulars as required under
(ii) For shares held in electronic form
the Companies Ordinance, 1984 (now repealed) and
allied rules, the Securities and Exchange Commission
To shareholders whose names appear in the
of Pakistan (SECP) regulations and the listing
statement of beneficial ownership furnished by
requirements.
CDC at end of business on September 14, 2017.
Dividend Mandate (Compulsory) The instrument appointing a proxy (duly signed by the
shareholder appointing that proxy) should be submitted
As per Section 242 of Companies Act, 2017 enacting at the registered office of the Company not less then
from May 31, 2017, the payment of cash dividend forty eight hours before the meeting.
through electronic mode has become mandatory.
However, as per Circular No.18/2017 dated Website
August 01, 2017 the Securities and Exchange
Commission of Pakistan (SECP) has granted one time Updated information regarding the Company can be
relaxation till October 31, 2017 to comply with above accessed at www.atlasbattery.com.pk. The website
requirement. Therefore, all shareholders are advised to contains latest financial results of the Company together
provide their bank details (if it is not provided earlier) in with Company's profile and product range, etc.
The Company is involved in manufacturing and marketing of automotive, motorcycle and industrial batteries for domestic and
international market and falls in the category of automobiles parts and accessories industry.
Markets
The Company serves various segments including Original Equipment Manufacturers (OEMs), domestic appliances, industrial
equipment and second hand transportation market through a wide range of dealers' network. Major usage of batteries includes
vehicles, motorcycles, heavy vehicles including tractors, buses, UPS - Uninterrupted Power Supply units, Solar Panels and
Gensets etc.
Legal Framework
The Company is incorporated under the Companies Act, 2017 (formerly: Companies Ordinance, 1984). It is listed on Pakistan
Stock Exchange under the listing regulations. The Company adheres to all laws and regulations, as applicable in Pakistan.
The Company is specialized in manufacturing of automotive, motorcycle and industrial batteries. The Company's products are
mainly categorized in light, medium and heavy batteries for automotives, motorcycle batteries and distill water. The detailed
application of product types and their applications are enlisted in ÒOthersÓ section of this report.
International Certifications
Brands
- Atlas
- AGS
The Company is a subsidiary of Shirazi Investments (Private) Limited who hold 58.86% shareholding after merger of Shirazi
Capital (Private) Limited and Shirazi (Private) Limited with and into Shirazi Investments (Private) Limited. Another major shareholder
of the Company is GS Yuasa International Limited - Japan by having 15.00% shareholding.
Atlas Battery share reached at a record high of Rs.1,005 on January 27, 2017 at Pakistan Stock Exchange. The market
capitalization at that instant was Rs.17.49 billion.
The following table shows the monthly high, low and closing share prices of the Company and the volume of shares traded on
the Pakistan Stock Exchange during the financial year ended June 30, 2017.
Maket
Highest Lowest Closing No. of shares Capitalization
Months
(Rs.) (Rs.) (Rs.) traded in Value*
(Rs. in bln)
1,000
(Rupees)
900
800
700
600
500
400
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Year
Details of shares held by Directors / Sponsors / Executives are given in Pattern of Shareholding.
General Public
Local 1,261 2,609,957 15.00%
Foreign - - 0.00%
Others:
Joint Stock Companies 22 473,772 2.72%
Trustee of Iftikhar Shirazi Family Trust 1 1 0.00%
Trustees Al-Bader Welfare Trust 1 3,480 0.02%
1,318 17,399,769 100.00%
Note:
Mutual Funds
Annual Sales Conference 2015-16 was held on July 18 & 19, 2016 at Karachi.
August 2016
Board of Directors in its meeting held on August 22, 2016 approved the audited annual accounts for the year ended
June 30, 2016 and recommended a Final Cash Dividend @ 155% (Rs.15.50 per share) for the year ended June 30, 2016.
September 2016
Annual General Meeting was held on September 27, 2016 where audited annual financial statements and cash dividend for the
year ended June 30, 2016, were approved by the shareholders along with appointment of external auditors, M/s. ShineWing
Hameed Chaudhri & Co. for the year ending 2017.
October 2016
Meeting of Board of Directors was held on October 25, 2016 to consider and approve the quarterly accounts for the quarter ended
September 30, 2016.
Won Joint 4th position in Best Corporate Report Awards 2015, ICAP and ICMAP.
February 2017
Meeting of Board of Directors was held on February 22, 2017 to consider and approve the half yearly accounts for the half year
ended December 31, 2016.
Mr. Yusuf H. Shirazi, Chairman Atlas Group of Companies inaugurated the Electrical Utility Building and new Motorcycle Batteries
Assembly Shop.
March 2017
4th ABL Shaheen Circle Convention was held on March 25, 2017 where QCC themes related to quality, productivity and cost
saving were presented by employees & vendors of the Company.
April 2017
Meeting of Board of Directors was held on April 27, 2017 to consider and approve the quarterly accounts for the period ended
March 31, 2017.
May 2017
Extraordinary General Meeting of the shareholders held on May 19, 2017 to elect seven Directors, for a term of three years
commencing from May 21, 2017.
Mr. Shunichi Amada, First Secretary from Embassy of Japan, Islamabad visited ABL factory.
June 2017
Meeting of Board of Directors was held on June 21, 2017 to consider and approve the annual budget 2017-18.
TVC of Atlas Battery was launched and went on air on major TV channels.
Eid Mubarak greeting telope was aired on various TV channels nationwide during Eid.
AGS TVC was aired on Ten Sports and PTV Sports during the complete Pakistan vs England series and Pakistan vs West
Indies series as part of media sponsorship.
AGS radio advertisement was aired on 5 radio channels i.e. FM 89, FM 91, FM 103, FM 105 and FM 107.4.
Atlas Hybrid radio advertisement campaign continued in the month of August 2015 on top rated radio channels.
Sponsorship of a fund-raising event 'Anwar Maqsood aur Halat-e-Hazra' organized by Professional Education Foundation
(PEF) on September 24, 2016 at Marriott Hotel, Karachi.
Sponsored brand activation and free battery check-up campaign at Pakwheels Auto show in all major cities of the country.
Brand activation and free battery check-up activity conducted during road shows all across the county.
Participated in 3-days JETRO Exhibition 2016 from December 06 to 08, 2016 at PC Hotel, Karachi.
Event sponsorship of Pakistan Japan Cultural Festival held on February 10, 2017 at Royal Palm Golf & Country Club.
Event sponsorship of MAP's 32nd Corporate Excellence Awards 2017 held on February 28, 2017 at Marriott Hotel, Karachi.
Panel ads promoting Atlas Battery products were published on a weekly basis in leading newspapers.
Sparkistan articles published in leading newspapers and on famous blogging websites such as Dawn and Express Tribune.
During the year, the Company built 38 model shops throughout country with a view to standardize all dealer shops.
After Sales team carried out various training and preventive maintenance programs through out the year in all major regions
of the country. During the programs, numerous dealers, retailers, technicians of OEMs and end users were in attendance.
Sparkistan digital campaign launched on January 23, 2017 across all ABL digital platforms.
Financial Calendar
The Company's financial year starts on July 01 and ends on June 30 of subsequent year.
1st quarter ending September 30, 2017 Last week of October, 2017
Half year ending December 31, 2017 Last week of February, 2018
3rd quarter ending March 31, 2018 Last week of April, 2018
Good Governance
We are committed to act ethically and promote corporate culture from top to bottom for every associate. We encourage honesty
and professionalism in our acts to provide long-term benefits to all stakeholders as a group as well as individually.
We believe in strong customer relationships by ensuring quality of product, quality of management, quality of network, product
innovation and after sales service. Simplified claim settlement is also integral to the Company's vision to win and build long term
co-operation with customers.
Our major customers are companies and dealers within the transportation or genset industries. The reliability and productivity
of the products are important and in many cases crucial to the customers' business operations. An expansive and effective Sales
and Service network along with customers' education are of vital importance for the Company.
The ultimate goal of the Company is, to be regarded as number one in customer satisfaction, in terms of both quality products
and superior services.
The Company's vision is to become a leading innovative organization, manufacturing and marketing superior quality automotive,
motorcycle and industrial batteries for domestic and international markets. A deciding factor in fulfilling this vision is our associates'
knowledge and skills. The Company is committed to investing, training, educating and motivating people. Our support to
educational initiatives stems from the idea of strengthening individuals, families and ultimately society through better provision
of education.
The Company's aim is to offer challenging opportunities and unique company culture that helps us attract and retain the best
people. By engaging associates, who are willing to take an active part in the Company's development and future, the Company
will succeed in pursuing its strategies.
Succession Planning
The Company ensures implementation of succession planning. This is done by development of successors for all key positions
across the organization.
Developing talents
The Company has successfully implemented material resource planning (MRP) module of Oracle EBS. Developing a comprehensive
dashboard of management information system (MIS) comprising of operational and non-operational divisional reporting is in
progress.
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
To Employees
Salaries & other related costs 1,146,765 5.5 1,054,238 6.2
To Government
Taxes 4,050,609 19.4 3,479,537 20.5
Workers' Profit Participation Fund 110,424 0.5 100,332 0.6
Workers' Welfare Fund 32,853 0.2 38,126 0.2
4,193,886 20.1 3,617,995 21.3
To Providers of Capital
Dividend to Shareholders 608,992 2.9 269,696 1.6
Finance Cost 68,170 0.3 71,875 0.4
677,162 3.2 341,571 2.0
To Society
Donation 18,682 0.1 14,807 0.1
2017
Cost of Materials & Services (65.6%)
To Employees (5.5%)
To Government (20.1%)
To Providers of Capital (0.3%)
To Society (0.1%)
Depreciation & Amortization (1.3%)
Retained Profit (7.1%)
2016
Total non current assets 3,177,574 2,693,424 2,020,578 1,432,965 1,168,802 1,135,410
Current Assets
Stores, spares and loose tools 191,896 182,314 110,788 88,665 57,818 43,594
Stock-in-trade 1,706,859 1,889,810 1,608,783 2,551,256 1,477,258 811,490
Trade debts 364,642 119,477 131,810 142,345 79,987 112,423
Loans and advances 5,234 5,561 27,727 25,875 3,497 2,682
Deposits and prepayments 18,231 6,457 11,361 6,416 6,446 5,138
Investments 2,464,851 1,558,861 918,737 824,925 711,544 436,291
Other receivables 3,893 8,840 8,913 11,398 4,121 7,023
Taxation - net 349,166 196,036 481,100 237,060 94,615 29,481
Cash and bank balances 14,873 45,257 78,318 6,089 33,055 48,191
Surplus on revaluation of leasehold land 193,886 193,886 193,886 173,786 173,786 173,786
Trade and other payables 1,330,910 1,193,182 910,253 860,347 799,556 514,863
Sales tax payable - net 65,270 18,057 86,647 55,319 53,488 21,066
Accrued mark-up 4,623 4,392 8,384 19,729 11,110 7,810
Short term borrowings 882,770 735,989 709,763 1,622,491 616,691 415,209
Total Equity and Liabilities 8,297,219 6,706,037 5,398,115 5,326,994 3,637,143 2,631,723
Property, plant and equipment 38.1 39.9 37.0 26.6 31.8 42.9 18.2 34.0 40.8 22.6 2.5
Intangible assets - 0.1 0.2 - - - (70.0) (54.5) 861.8 (35.7) 100.0
Long term deposits 0.2 0.2 0.3 0.3 0.3 0.3 14.5 6.3 (1.0) 31.8 54.5
Long term loans - - - - - - 13.1 4.4 (10.1) 86.8 (8.6)
Total non current assets 38.3 40.2 37.5 26.9 32.1 43.2 18.0 33.3 41.0 22.6 2.9
Current Assets
Stores, spares and loose tools 2.3 2.7 2.1 1.7 1.6 1.7 5.3 64.6 25.0 53.4 32.6
Stock-in-trade 20.6 28.2 29.8 47.9 40.6 30.8 (9.7) 17.5 (36.9) 72.7 82.0
Trade debts 4.4 1.8 2.4 2.7 2.2 4.3 205.2 (9.4) (7.4) 78.0 (28.9)
Loans and advances 0.1 0.1 0.5 0.5 0.1 0.1 (5.9) (79.9) 7.2 639.9 30.4
Deposits and prepayments 0.2 0.1 0.2 0.1 0.2 0.2 182.3 (43.2) 77.1 (0.5) 25.5
Investments 29.7 23.2 17.0 15.5 19.6 16.6 58.1 69.7 11.4 15.9 63.1
Other receivables - 0.1 0.2 0.2 0.1 0.3 (56.0) (0.8) (21.8) 176.6 (41.3)
Taxation - net 4.2 2.9 8.9 4.5 2.6 1.1 78.1 (59.3) 102.9 150.6 220.9
Cash and bank balances 0.2 0.7 1.4 - 0.9 1.7 (67.1) (42.2) 1,186.2 (81.6) (31.4)
Total current assets 61.7 59.8 62.5 73.1 67.9 56.8 27.6 18.8 (13.3) 57.8 65.0
Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 23.7 24.2 1.3 46.5 38.2
Share capital 2.1 2.6 3.2 3.3 4.0 4.6 - - - 20.0 20.0
Reserves 46.1 42.2 37.6 27.7 29.3 27.6 35.4 39.5 37.2 38.4 46.7
Unappropriated profit 17.9 19.0 18.9 13.8 15.9 18.2 16.2 25.3 39.0 27.0 20.6
66.1 63.8 59.7 44.8 49.2 50.4 28.2 32.8 35.1 33.2 34.9
Surplus on revaluation of leasehold land 2.3 2.9 3.6 3.3 4.8 6.6 - - 11.6 - -
Staff retirement benefits 1.0 1.0 1.1 0.9 1.3 1.6 22.2 8.5 21.1 8.5 12.0
Deferred taxation 3.1 3.2 3.9 3.0 4.0 5.0 17.5 4.2 29.3 9.6 12.1
4.1 4.2 5.0 3.9 5.3 6.6 18.6 5.2 27.4 9.3 12.0
Current Liabilities
Trade and other payables 16.0 17.7 16.8 16.1 21.9 19.5 11.5 31.1 5.8 7.6 55.3
Sales tax payable - net 0.8 0.3 1.6 1.0 1.5 0.8 261.5 (79.2) 56.6 3.4 153.9
Accrued mark-up 0.1 0.1 0.2 0.4 0.3 0.3 5.3 (47.6) (57.5) 77.6 42.3
Short term borrowings 10.6 11.0 13.1 30.5 17.0 15.8 19.9 3.7 (56.3) 163.1 48.5
Total current liabilities 27.5 29.1 31.7 48.0 40.7 36.4 17.0 13.8 (33.0) 72.7 54.4
Total Equity and Liabilities 100.0 100.0 100.0 100.0 100.0 100.0 23.7 24.2 1.3 46.5 38.2
The increasing trend in property, plant and equipment over the years is mainly due to gradual capacity expansion to meet the
growing demand of the batteries.
Stock-in-trade
The increasing trend in stock-in-trade is in line with increase in cost of goods sold over the years. The decrease in inventory
levels over last year is due to better inventory management and just in time approach for selected stock items.
Investments
In line with strategic decision to invest excess cash flows with long term perspective to earn differential returns the investments
have increased over the years. The high rate of return and stability has lead to increase in investments in mutual funds.
Taxation
The contribution to national exchequer has sizeably increased over the years as a result of increase in sales. The current taxation
charge over the years has increased in line with increase in profits over last 6 years.
The increase in trade and other payables over last year mainly comprise of trade creditors and accrued liabilities which are part
of normal course of business.
Short term borrowings during last six years are in line with working capital requirement. Capacity expansion is backed mainly
through own funds generation.
Sales 100.0 100.0 100.0 100.0 100.0 100.0 22.5 (12.2) 30.4 37.9 23.0
Cost of sales (82.7) (80.4) (85.1) (86.8) (85.2) (83.8) 26.0 (17.0) 27.9 40.5 25.0
Gross profit 17.3 19.6 14.9 13.2 14.8 16.2 7.9 15.6 46.6 23.3 12.7
Distribution cost (3.5) (3.1) (2.8) (2.4) (2.7) (2.6) 38.4 (2.5) 53.7 24.3 26.2
Administrative expenses (1.8) (2.1) (1.5) (1.5) (2.1) (2.1) 6.1 16.8 29.9 (0.4) 25.8
Other operating income 1.5 0.7 0.6 0.9 1.0 0.5 166.1 4.4 (16.2) 26.5 133.0
Other operating expenses (1.0) (1.3) (0.9) (0.8) (1.0) (1.5) (1.8) 21.2 46.2 8.6 (14.3)
Profit from operations 12.5 13.8 10.3 9.4 10.0 10.5 10.0 19.2 41.7 30.0 16.4
Finance cost (0.4) (0.5) (0.9) (1.0) (0.7) (1.0) (5.2) (51.0) 16.4 110.2 (14.2)
Profit before tax 12.1 13.3 9.4 8.4 9.3 9.5 10.5 26.2 44.8 24.1 19.5
Taxation (3.4) (4.3) (2.9) (2.3) (2.7) (2.8) (1.5) 28.0 65.8 16.8 18.4
Profit after tax 8.7 9.0 6.5 6.1 6.6 6.7 16.2 25.3 36.8 27.2 19.9
Sales has witnessed cumulative average growth rate (CAGR) of 18.9% over last 6 years mainly on account of improved demand
in the replacement segment, both in locally manufactured and imported used vehicle categories, coupled with continued demand
for heavy and medium sized batteries used in Uninterruptible Power Supply (UPS) units and generators due to electricity shortage.
Cost of Sales
Cost of sales remained almost consistent over the years. The fluctuation in international commodity prices results in variation
of slight increase and decrease in cost of sales over the years. In previous year, a decreasing trend was observed in raw material
prices resulting in reduction of cost of sales to sales percentage.
Gross Profit
During last six years, gross profit margin remained above 13% reflecting sales volumes increase and measures to control costs.
Last year, the gross profit margin jumped up to 19.6 % due to the reduction in cost of sales backed by reduced rates of raw
materials whereas in the current year the margin reduced to 17.3% with the increase in raw material prices in the second half
of the fiscal year.
Distribution cost and administrative expenses remained under control and were consistent with the proportion to the sales in
last six years.
Finance Cost
Finance cost is directly correlated to short term borrowings. During the current year, finance cost has significantly decreased
due to reduction in KIBOR over the years combined with effective usage of funded facilities by exercising low rates money market
borrowings.
Company's profit after taxation (PAT) is at its record high in absolute value and has been consistently growing over the last 6
years. Increase in PAT by 16.2% was the lowest growth in last 6 years depicting the stiff competition along with increase in cost
of doing business.
3,000
2,500
2,000
1,500
1,000
500
-
Fixed assets Inventory Investments Trade debts Other assets
6,000
5,000
4,000
3,000
2,000
1,000
-
Equity Revaluation Non current Short term Other
surplus liabilities borrowings liabilities
18,000
13,000
8,000
3,000
2012 2013 2014 2015 2016 2017
Cash flow from operating activities 1,525,082 1,600,463 1,898,513 (473,489) 253,691 606,775
Cash flow from investing activities (1,437,598) (1,455,121) (742,731) (418,344) (352,630) (533,888)
Cash flow from financing activities (117,868) (178,403) (1,083,553) 864,867 83,803 (118,648)
Increase / (decrease) in
cash & cash equivalents 100.0 100.0 100.0 100.0 100.0 100.0 8.1 (145.8) 367.9 (78.2) 66.9
Net decrease in cash flow stood at Rs.30 million for the year ended June 30, 2017 as compared to net decrease of Rs.33 million
during last year. Brief analysis of cash flows for the year is presented below.
Operating activities
The net cash generated from operations stood at Rs.1.5 billion as against cash of Rs.1.6 billion generated during last year. This
amount is after adjustment of finance cost of Rs.68 million and income tax of Rs.703 million.
Investing activities
The cash flows used in investing activities was Rs.1,438 million as comparison to Rs.1,455 million of last year which includes
net investment in mutual funds of Rs.684 million.
The Company has no long term loans. Short term borrowings are increase by 19.9%.
Ratios
Cash flows from operations to sales ratio decreased from positive 11.4% to positive 8.9%. The financial leverage ratio at 0.2
times remained at par with last year whereas interest coverage ratio increased from 27.0 to 31.3 times.
The Company believes in financing through cash generation from operation rather than long term financing. The working capital
requirement is fulfilled through short term running finance from reputable banks.
Short term running finance stood at Rs.883 million at year end compared to prior year's Rs.736 million, whereas, letters of credit
lines upto Rs.2.5 billion are available against lien on shipping documents.
The treasury department comprises of skilled and experienced staff to handle day to day treasury function. The team is proficient
and fully capable of managing Company's needs of financing, working capital adequacy and investments portfolio. The brief
objectives of the team are:
Manage all aspects of in-house investment portfolios including recommending or benchmarking investment policies and
procedures.
Identify strategies to drive additional value from surplus cash.
Assist in identifying measures to evaluate credit quality and impact on finance costs, collateral requirements and market
liquidity.
Evaluate opportunities to manage or generate value from collections and analyze Company expenditure and spending
patterns.
Identify alternative funding sources.
Forecast daily cash requirements and execute daily financing decisions.
Prepare and monitor Company's various cash flow forecasts and perform financial modelling.
Utilize low cost financing line primarily and save finance cost, as much as possible.
As stated above, the Company has been generating funds through own operations. Further, the Company has short term running
finance arrangements upto Rs.3.15 billion in case of liquidity needs. Investment in mutual funds is also available to the Company
in case of dire need of funds.
Profitability Ratios
Gross profit (%) 17.3 19.6 14.9 13.2 14.8 16.2
Profit before tax (%) 12.1 13.3 9.4 8.4 9.3 9.5
Profit after tax (%) 8.7 9.0 6.5 6.1 6.6 6.7
Return on capital employed (%) 35.5 40.8 44.2 41.5 41.0 45.4
Earnings before interest, tax, depreciation
& amortization (EBITDA) (Rs. in million) 2,395.6 2,149.9 1,788.7 1,281.3 993.0 856.0
EBITDA Margin (%) 14.0 15.3 11.2 10.5 11.2 11.9
Operating leverage (%) 44.3 (157.9) 137.2 78.9 71.4 152.3
Return to Shareholders
Return on equity - before tax (%) 36.4 41.8 43.4 40.0 42.0 46.0
Return on equity - after tax (%) 26.0 28.4 29.7 29.0 29.7 32.4
Return on assets (%) 17.8 19.0 18.8 13.9 16.0 18.5
Earnings per share (basic) (Rs.) 84.9 73.04 58.27 42.60 40.15 40.22
Earnings per share (diluted) (Rs.) 84.9 73.04 58.27 42.60 33.50 33.52
Price earning ratio (Times) 10.6 8.0 12.1 10.6 8.4 5.0
Market price - at year end (Rs.) 900.0 581.8 703.5 450.0 338.0 201.7
Market price - during the period (High - Rs.) 1,005.0 839.0 965.0 479.0 355.0 241.5
Market price - during the period (Low - Rs.) 590.0 535.0 441.0 288.0 200.0 160.0
Break-up value per share without
surplus on revaluation (Rs.) 315.2 246.0 185.2 137.1 123.4 109.8
Break-up value per share with
surplus on revaluation (Rs.) 326.6 257.2 196.4 147.1 135.4 124.2
Dividend
32.1 3.0
29.7 29.7 2.7
29.0 28.4
26.0 2.4
2.3
2.1 2.1
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
703.5
581.8
450.0
338.0 5 5
4
201.7 3 3 3
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
45
120.0 120.0 120.0
100.0 36
29 29
26
23
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
147.1
125.3 135.4
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
The Company has posted highest gross profit in absolute terms. Gross profit as a percentage of revenue stands at 17.3% as
compare to 19.6%, last year. Decline in gross profit margin was mainly due to increased cost of raw materials, internationally
and locally. After tax profits by the Company grew by 16.2% to Rs.1,477 million from Rs.1,271 million, last year.
The earnings per share stood at Rs.84.86 per share as compared to Rs.73.04 per share last year. This increase was a result
of increase in net profits. The performance also was reflected in the Company's break-up value per share which stood at Rs.315.4
at year end as compared to Rs.246.0 of last year.
Dividend
Last year, Company distributed cash dividend @ 155% among its shareholders. This year, the Company has proposed 350%
cash dividend which has resulted in dividend payout of 41.2% and plough back ratio of 58.8% as compared to 21.2% and
78.8%, respectively of previous year.
Operating cycle
Liquidity / Leverage
The liquidity ratios this year are better than over any other period during the last 6 years. Financial leverage ratio and total liabilities
to equity ratio are also lowest in 6 years. This shows that the Company is very liquid and capable of paying off debts well within
time.
The Company's focus is on capacity expansion, realigning of old lines, automation, health, safety & environment and quality of
products is in line with its vision. For this purpose, continuous investments have been made with simultaneously curbing costs,
sustaining profits, stable return to shareholders, succession planning and satisfied employees. Another, main objective of the
Company is to satisfy its customers by providing after sales services at their doorsteps along with guidance / customer service
through various mediums which may include battery check-up and handling workshops, social media platforms, dedicated
helpline, etc.
Financial Measures
There are various controllable and uncontrollable factors on which Company's targets are dependent. These factors include
international price of raw materials, fluctuation in foreign currency rates, taxation regime, availability of skilled workforce and
resources, etc. The impact and sensitivity of their fluctuations is considered while setting targets and budgets.
The prices of raw material in international market are utilized for effective inventory management. The capacity expansion is a
continuous process and would be completed phase wise in the upcoming years. The planned capital expenditure is of
Rs.1.42 billion will be utilized on upgrading health, safety and environment upto international level and enhanced production
capacity to a competitive level in the industry.
The ongoing sustainability of profits will depend on mix of increased sales, reduced costs and good governance for which senior
management along with associates are committed to deliver.
Non-Financial Measures
Various non-financial measures and indicators are used in lieu of financial measures to gauge the performance of the Company
and set new targets and objectives. Few of the non-financial measures which the Company uses are described below:
The Board of Directors is responsible to formulize strategy and set direction for the Company and CEO and management are
responsible to implement those strategies in the Company and evaluate results there against.
There is no significant change in prospects and performance measures over prior period.
Key Sensitivities
The share price is positively correlated with Company's financial performance. The factors that influence the Company's
performance can also be reasonably expected to impact its share price. Following are the few factors prevailing in current
business environment that management considers to be sensitive to the Company's performance and which may affect its share
price.
Demand of automobiles
The country's economy is highly dependent on agriculture which is the backbone of our country and employs a significant portion
of the population. The agriculture based rural areas consumed a significant portion of motorcycle and heavy vehicles production
of the country thereby leading to high demand of batteries. Therefore, the Company's performance is strongly linked with the
performance of agriculture sector.
Also the industrial sector serves Pakistan's economy with a sizeable base. In turn, the demand of heavy machineries and vehicles
increases demand of batteries.
The ongoing crisis in electricity generation and distribution, despite some signs of improvement, has prevailed throughout the
country giving rise to alternative sources of electricity including generators, UPS, solar power panels, etc. This has lead to increase
usage of batteries.
Political stability
Unstable political climate coupled with the law and order situation disrupts business processes, transportation facilities and
supply chain of the Company.
Plant operations
Stable plant operations allow for higher production and lower per unit cost and wastage. Therefore, smooth operations will add
to profitability of the Company which can positively affect share price. Issues at production facilities negatively affect the financial
performance of the Company and therefore, may also affect the share price.
Exchange fluctuations
The Company is involved in imports of plant, machinery and raw materials. The Company's exposure in foreign currencies is
sensitive to fluctuations in exchange rates. The depreciation in Pak Rupee affects the performance of Company which is countered
by cost controls measures taken by the Company.
The consistent payout of dividends will reflect the expectations of investors and this affects share price.
Mutual funds
The Company's liquid investments are placed in open-ended mutual funds. These funds are invested in equity and money market
instruments. The fluctuating trends of stock market and interest rates determine the returns on these funds and as a result, also
affect the Company's financial performance and thereof the share price.
Economic trends
The events surrounding a specific industry or company make investors watch various economic indicators and general trends
that signal changes in the economy. International oil prices put significant impacts on commodities market, thus prices of raw
materials are correlated therewith.
Investor sentiment
Investor sentiment or confidence can cause the market to go up or down, which can cause stock prices to rise or fall. The
general direction that the stock market takes can affect the value of a stock:
bull market - a strong stock market where stock prices are rising and investor confidence is growing. It is often tied to
economic recovery or an economic boom, as well as investor optimism.
bear market - a weak market where stock prices are falling and investor confidence is fading. It often happens when an
economy is in recession and unemployment is high, with rising prices.
Sales 3,742,500 3,823,508 4,451,445 5,152,455 17,169,908 97% 126% 128% 143% 122%
Cost of sales (3,075,871) (3,174,318) (3,699,299) (4,255,948) (14,205,436) 94% 129% 133% 154% 126%
Gross profit 666,629 649,190 752,146 896,507 2,964,472 109% 112% 106% 106% 108%
Distribution cost (138,441) (145,329) (149,923) (172,530) (606,223) 116% 132% 141% 168% 138%
Administrative expenses (73,361) (83,947) (81,430) (66,692) (305,430) 112% 117% 131% 76% 106%
Other operating income 63,264 143,952 29,183 17,962 254,361 135% 3647% 1058% 43% 266%
Other operating expenses (39,936) (46,336) (38,106) (49,435) (173,813) 36% 296% 192% 170% 98%
Profit from operations 478,155 517,530 511,870 625,812 2,133,367 132% 133% 98% 94% 110%
Finance cost (11,145) (18,666) (29,744) (8,615) (68,170) 87% 72% 119% 105% 95%
Profit before tax 467,010 498,864 482,126 617,197 2,065,197 133% 138% 97% 94% 111%
Taxation (123,233) (113,491) (138,116) (213,731) (588,571) 125% 107% 84% 93% 99%
Profit after tax 343,777 385,373 344,010 403,466 1,476,626 137% 150% 103% 94% 116%
90% 26%
30% 30% 31% 30% 27%
35% 34%
80%
70%
24% 24%
60% 26% 26% 26% 23%
27% 26%
50%
40% 22%
22% 21% 24% 26%
22% 20%
30% 19%
20%
28%
10% 22% 22% 22% 23% 19% 23% 20%
0%
Sales Sales Gross Profit Gross Profit Profit before tax Profit before tax Profit before tax Profit before tax
2017 2016 2017 2016 2017 2016 2017 2016
I am pleased to present to you the 51st Annual Report of your Company for the year ended June 30, 2017 together with the
Auditors' Report.
Economy
The Pakistan economy has shown improvement during FY 2016-17 and achieved major economic targets. The macro-economy,
if now consolidated with structural reforms, is primed for sustainable growth in the future. During FY 2016-17 GDP grew at 5.3%,
which is the highest in last 10 years. The inflation rate on the back of reduced oil and commodity prices clocked in at CPI average
of 4.3% in FY 2016-17 as against 3.2% in FY 2015-16. The foreign exchange reserves hit an all time high of US$ 24.0 billion
during the year, however, with the current account deficit widening and not being fully offset by financial inflows reserves closed
at US$ 21.4 billion at the end of FY 2016-17 as compared with US$ 23.1 billion last year.
Exports during the current fiscal year were recorded at US$ 21.7 billion witnessing a decline of 1.4% from US$ 22.0 billion last
year, whereas imports showed an upward trend of 17.7% at US$ 48.5 billion as compared with US$ 41.3 billion last year.
Resultantly, the deficit in balance of trade was US$ 26.9 billion as against US$ 19.3 last year, up 39.4%. Workers' remittances
received during FY 2016-17 was US$ 19.3 billion as compare to US$ 19.9 billion last year, down by 3.1%.
The Pakistan Stock Exchange (PSX) has crossed all previous milestones and been declared the best performing market in Asia
and fifth best in the world. After Pakistan's reclassification in MSCI Emerging Market Index, the country rating by Moody's and
S&P have also improved from negative to stable and stable to positive, respectively.
Automotive sector has witnessed a growth trend in FY 2016-17 on the back of improving economic fundamentals. Stability in
major commodity prices, no significant change in inflation rate bank credit, expanding road network and low interest rate
environment have supported automotive sector's growth. Sale of locally manufactured cars witnessed a growth of 2.6% in
FY 2016-17 to 185,781 units as against 181,145 units sold in FY 2015-16. Tractors segment witnessed a substantial increase
of 61.8% to 54,992 units as against 33,986 units last year. Trucks and buses had growth of 31.4% over last year. Sales of
motorcycles and three wheelers (assemblers who are registered with PAMA) during FY 2016-17 significantly increased by 19.6%
with sales of 1,625,080 units as against 1,358,643 units during same period last year.
Battery Industry
The demand for batteries is correlated with growth in automotive sector and the prevailing power shortage in the country. The
power crisis has increased the usage of Uninterruptible Power Supply (UPS) units, Generators and Solar Panels. This trend has
enhanced the demand of heavy and medium sized batteries across the country as a back-up source for electricity. This situation,
despite government efforts to commission new power generation capacity, is likely to persist in coming years as well. Further,
locally assembled automobiles as well as imported batteries have also propelled demand of batteries in the replacement market.
AGS has a distinction in this segment and the consumers prefer to buy AGS brand on the backdrop of good quality and after
sales service. Atlas brand in the Hybrid segment diversifies our product line up and focuses on low maintenance, durability and
superior quality.
Battery industry in Pakistan is divided into two major segments; organized and un-organized sectors. The organized sector is
meeting about 90% of the market demand; rest is being met by the un-organized sector and imports. Your Company has a
significant market share and is determined to increase it further by not compromising on quality, introducing innovative products
and providing meaningful after sales service.
The year 2016-17 proved to be another successful year for the Company in terms of financial performance which bodes well
for growth in years to come. Highlighted below are the salient financial achievements for the year:
Your Company achieved sales of Rs.17.2 billion in FY 2016-17 compared to Rs.14.0 billion in FY 2015-16, up 22.5%. This
increase was due to higher demand of batteries in replacement market. Increase in raw materials prices reduced the gross profit
margin to 17.3% as against 19.6% in last year.
Operating expenses for the year increased by 25.6% to Rs.912 million from Rs.726 million of last year. Other income of your
Company increased to Rs.254 million as compared to Rs.96 million during last year thanks to investment in high performing
equity mutual funds. Resultantly, profit from operations of your Company increased to Rs.2,133 million, up 10.0% as compared
to last year. Finance cost during the year was Rs.68 million as against Rs.72 million of last year, lower by 5.2% mainly due to
efficient utilization of funds.
The profit before tax stood at Rs.2,065 million as compared to Rs.1,868 million of the corresponding year. After providing Rs.589
million for taxation, profit after tax stood at Rs.1,477 million during FY 2016-17, up 16.2% as against last year. Earnings improved
to Rs.84.86 per share as against Rs.73.04 per share, an increase of Rs.11.82 per share over FY 2015-16, thereby reflecting
your Company's adherence to sustainable growth year after year.
The Board of Directors of the Company complies with all relevant rules and regulations. The Board comprises of well known
business professionals who add real value to the Board through their expertise, experience and strong value systems. The Board
has laid down policies and procedures that ensure a professional corporate environment that promotes timely disclosure,
accountability, high ethical standards, compliance with applicable laws, regulations and corporate governance.
During the year under review, the Board has effectively discharged its responsibility towards the Company and participated in
all strategic affairs diligently. All quarterly, half yearly and annual financial results were thoroughly reviewed and Board extended
its guidance to the management on regular basis. The Board also played a key role in monitoring of management performance
and focus on major risk areas. Board members also reviewed and approved the Company's financial budget for the FY 2017-18
and capital expenditures requirement.
The Audit Committee and Human Resource & Remuneration Committee have also discharged their responsibilities as per relevant
laws throughout the year. The Board carefully monitors their performance on periodic basis.
Your Company contributed Rs.5.0 billion towards the National Exchequer on account of various government levies, taxes and
import duties during the year under review. Payment of these taxes is 3.4 times more than the net profit after tax of the Company
which shows the Company's positive attitude towards development of economy and fulfilling its responsibility as a good corporate
citizen. The total contribution to the exchequer by Atlas Group Companies including Atlas Battery is over Rs.50 billion. This
makes Atlas one of the highest taxpayers in the country constituting 1.5% of Government's total revenue.
During the year, the operations of your Company generated Rs.1,525 million as against Rs.1,600 million of last year. In order
to meet the growing market demand, your Company continued to invest in capacity expansion through self generation of funds.
Moreover, surplus cash was also invested in high yielding mutual funds.
Information Technology
Your Company is well equipped with state of the art information technology infrastructure. Your Company is committed to stay
up-to-date in technological advancements with vision to automate manufacturing processes for enhanced productivity and
quality. Your Company is taking full advantage of ERP data management and system. Your Company is focused on improving
business flow through development and implementation of following programs and processes:
Your Company always follow the Atlas Group motto / philosophy ÒOrganization Development through Self DevelopmentÓ and
made substantial investments for development of its associates to ensure that a continuous learning environment exist within
the Company.
Throughout the year, various initiatives were taken to ensure that associates' commitment to the organization is enhanced and
they actively contribute to the achievement of individual and business goals.
A corporate culture is maintained that encourages creativity, independence and strengthening of technical and leadership skills.
Your Company prepares selected young and potential associates by offering them the opportunity to attend the Atlas - IBA
Diploma in Business Management, specifically designed for Atlas Group. During the year, several in-house and external trainings
were conducted which covered areas of quality control, health and safety, customer service and their education, leadership skills,
core management skill development and marketing / brand related conferences. Altogether 735 personnel benefited from internal
trainings, while 69 personnel enhanced their skill set through external training programs / conferences / workshops, amounting
to a total of 797 man days spent on training during the year. Six employees (including CEO) were sent to international trainings
to countries like USA, Japan and Thailand.
Your Company has a consistent Performance Management Review Process that ensures employees' performance is fairly
recognized and improved career paths are developed for the talented employees. We have a zero tolerance policy for unethical
business practices or individual behavior.
Your Company is continuously investing substantial resources to improve working conditions for its associates to provide a
healthy, safe and comfortable working environment. Associates' training and awareness sessions have been regularly conducted
to achieve our ultimate goal of Òzero incidents and zero injuriesÓ. During the year, the Company conducted 2 ÒSafety WeekÓ
exercises to train and create awareness on fire fighting, personal hygiene, civil defense, first aid, lifter driving and 5S trainings
besides appropriate usage of personal protective equipments (PPEs).
The capacity expansion came on line as per schedule which enabled us to attain increased production leading to growth in sales
and profitability. The quality standards were maintained which led to decrease in market claims. Engineering and Development
was continually conducted to bring in innovations and a new variant of Hybrid battery was launched during the year.
Future Prospects
The battery industry based on recent growth momentum has shown good prospects on the basis of economic growth, increase
in demand of automobiles and prevailing electricity condition. The GDP growth rate for 2017-18 is targeted at 6.0%, an improved
forecast from year under review, fiscal deficit of 4.1% and inflation at below 6.0%. Re-entry into the MSCI Emerging Market
Index, on the back of some key structural reforms within the capital markets, bodes well for the long term viability of the stock
market.
Your Company has planned capex of Rs.1.42 billion in the upcoming year. The investment will not only cater for market demand
but improve the 5S and HSE of the Company. Considering the market needs for innovative products, your Company has
introduced several new products including Battery Tonic and Atlas Hybrid. Your Company will continue to innovate and remain
the market leader not only in quality but technological advancement.
The increasing trend of major raw material prices in the international and local market may impact the financial results of your
Company. Further, the depreciation of Pak Rupee against international currencies, hike in energy tariffs and political instability
may cause short term impacts. However, the Management is focused on managing costs, maintaining high quality of product
and services for improved market penetration by exploring new territories and export market as well. The improvement in human
resource capabilities and value addition for shareholders is also your Company's prime focus. I assure you that your Company
will continue to focus on productivity and efficiency while meeting customers' desire for superior quality by following the principles
of ÒThe Atlas WayÓ:
Acknowledgements
I would like to thank our JV Partners GS Yuasa International Limited; Japan, Board of Directors, shareholders, bankers, vendors
and customers for their continuous support and guidance. I also thank Mr. Ali H. Shirazi; President / Chief Executive of your
Company and the management team for their dedication and commitment to achieve sustained growth year after year.
Yusuf H. Shirazi
Karachi: August 28, 2017 Chairman
Operating Results
588,571 597,359
Subsequent Appropriations
The directors have recommended a cash dividend of Rs.35.00 (2016: Rs.15.50) per share. Accordingly the following appropriations have
been made:
Appropriations:
Transferred to General Reserve 870,000 1,000,000
Proposed Dividend @ 350% (2016: 155%) 608,992 269,696
1,478,992 1,269,696
The basic and diluted earnings per share after tax is Rs.84.86 (2016: Rs.73.04).
Chairman's Review
The Chairman's review included in the Annual Report deals inter alia with the performance of the Company for the year ended June 30, 2017
and future prospects. The Directors endorse the contents of the review.
Board of Directors
The Board comprises of one executive and six non-executive directors. All the Directors keenly take interest in the proper stewardship of
the Company's affairs. The non-executive directors are independent of the management of the Company.
Applicable Number of
Executive
Sr. No. Name of Directors No. of Attendance Directorship in
Director
Meetings listed companies
Leave of absence was granted to those Directors who could not attend some of the Board meetings.
On May 20, 2017, the existing Directors stood retired and offered themselves for re-election. The Directors were re-elected
through balloting in Extraordinary General Meeting held on May 19, 2017 for a period of next three years commencing from
May 21, 2017.
The orientation courses for directors as and when needed to apprise them of their duties and responsibilities are arranged by
the Board.
Five directors are certified Directors whereas two directors meet the criteria of exemption under clause 5.19.7 of the Code of
Corporate Governance contained in the Rule Book of Pakistan Stock Exchange and are accordingly exempted from directors'
training program.
The details of Directors' who have obtained certification under Directors' Training program are summarized below:
4. Mr. Bashir Makki Institute of Cost and Management Accountants of Pakistan 2014-2015
The strategic directions are defined and reviewed by the Board regularly and it sets overall objectives. In light of those objectives,
the Chief Executive sets annual plans and performance targets for business which are reviewed by the Board. The Board is
dedicated to maintain high standard of good corporate governance. The Company confirms compliance with the provisions set
out by the Securities and Exchange Commission of Pakistan and accordingly amended listing rules of the stock exchange.
(a) The financial statements, prepared by the management of the Company, present its state of affairs fairly, the results of its
operations, cash flows and changes in equity.
(c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting
estimates are based on reasonable and prudent judgment.
(d) International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial
statements.
(e) The system of internal control is sound in design and has been effectively implemented and monitored.
(f) There are no doubts upon the Company's ability to continue as going concern.
(g) There has been no material departure from the best practices of Corporate Governance, as detailed in the listing regulations.
The Board of Directors of the Company is committed to the principles of good corporate governance. This is promoted across
the Company through senior management. The stakeholders expect that the Company is managed and supervised responsibly
and proper internal controls and risk management policy and procedures are in place for efficient and effective operations of
the Company, safeguarding of assets, compliance with laws and regulations and proper financial reporting in accordance with
International Financial Reporting Standards.
Donation
The Company has a policy to donate 1% of its prior year's profit before tax to a charitable institution. During the year, Company
has donated Rs.18.7 million to Atlas Foundation. Further, the Company has also donated in kind to different non-profit organizations.
The Company contributed Rs.5.0 billion towards the National Exchequer on account of various government levies, taxes and
import duties in the year under review. Payment of these taxes is 3.4 times more than the net profit after tax of the Company
which shows Company's positive attitude towards economic development as a good responsible corporate citizen.
Code of Conduct
The Company's Code of Conduct promotes guidelines on various ethical standards including issues such as conflicts of interests,
employee rights, fraud, etc. The Code encourages honesty, integrity and openness in conduct of Company's operations. It strictly
abides all to follow the laws and regulations. The Code guides interactions with all stakeholders, including consumers, suppliers,
shareholders and partners.
The Code is reviewed annually and any changes therein are approved by the Board. The Code is communicated to all associates
and is available on the Company's website. The responsibility for day to day implementation and monitoring of Code is delegated
to the senior management.
Audit Committee assists the Board of Directors in discharging their responsibilities in accordance with the Corporate Governance
and Financial Reporting frame work. The Committee consists of three members all of which are non-executive directors. One
of the members of the Committee is independent director as well.
During the year, four Audit Committee meetings were held and attendance was as follows:
Executive Applicable
Sr. No. Name of Directors Attendance
Director No. of Meetings
As required by Code of Corporate Governance, Audit Committee also met with external auditors without Chief Financial Officer
and Head of Internal Audit. By invitation, Chief Executive Officer attended all the four meetings held during the year.
Human Resource and Remuneration Committee also assists the Board of Directors in discharging their responsibilities with
regard to devising and periodic reviews of human resource policies and practices within the Company. It also assists the Board
in selection, evaluation, compensation and succession planning of key management personnel. The Committee consists of three
members. Majority of members including the Chairman of the Committee are non-executive directors.
During the year, four Human Resource and Remuneration Committee meeting were held and attendance was as follows:
Executive Applicable
Sr. No. Name of Directors Attendance
Director No. of Meetings
Management Committee
The Management Committee comprises of senior management headed by Chief Executive, who ensures that a proper system
is developed and implemented across the Company that enable swift and appropriate decision making. It acts in an advisory
capacity to the Chief Executive at the operating level, providing recommendations relating to business and other corporate affairs.
It is responsible for reviewing and forwarding long-term plans, capital and expense budget development and stewardship of
business plans. The Committee is organized on a functional basis and meets monthly to review the performance of each function
against set targets. The Chief Executive also ensures that all decisions and directions given by the Board are properly communicated
and implemented.
The Company operates defined contribution plan for its permanent employees through either one of the following ways:
All the newly appointed employees are offered voluntary pension scheme only. However, those employees who are provident
fund trust members have the option to opt for either of two above mentioned defined contribution plans.
The Company also operates non-contributory gratuity fund scheme for its management employees.
Rupees in Million
Operating and financial data and key ratios of the Company for the last six years are annexed.
Safeguarding of Records
The Company places due emphasis for storage and safe custody of its financial records. The Company is using Oracle ERP
system for recording its financial information. Access to electronic documentation has been ensured through implementation
of a comprehensive password protected authorization matrix. A record retention policy is also in place for proper documentation
and their tracking.
Pattern of Shareholding
The Directors, executives and their spouse and minor children have made no transactions of the Company's shares during the
year, except those reported in pattern of shareholding.
Executives mean Chief Executive, Chief Financial Officer, Head of Internal Audit, Company Secretary and other executives (as
defined by the Board).
Material changes
There have been no material changes since June 30, 2017 to date of the report and the Company has not entered into any
commitment during this period, which would have an adverse impact on the financial position of the Company.
Sustainability Report
The 'Sustainability Report' forms part of this Annual Report and is included later in this Annual Report.
The ÒStatement of Value AdditionÓ and ÒRisk Opportunity ReportÓ are annexed to this report.
The present Auditors, M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants, retire and being eligible, offer themselves
for re-appointment. The Audit Committee of the Company has recommended their re-appointment as Auditors of the Company
for the year ending June 30, 2018.
Communication
Communication with the shareholders is given a high priority. Annual, half yearly and quarterly reports are distributed amongst
shareholders within the time specified in the Companies Ordinance, 1984 (now repealed). The Company also has a web site,
www.atlasbattery.com.pk containing up to date information on Company's activities, financial reports and notices / announcements.
Ali H. Shirazi
Karachi: August 28, 2017 President / Chief Executive
350%
Standard of Conduct
Atlas Battery Limited conducts its operations with honesty, integrity and openness, and with respect for human rights and
interests of the employees. It respects the legitimate interests of all those with whom it has relationships.
Atlas Battery Limited is committed to comply with the laws and regulations of Pakistan.
Human Capital
Atlas Battery Limited is committed to create the working environment where there is mutual trust and respect and where everyone
feels responsible for the performance and reputation of the Company.
It recruits, employs and promotes employees on the sole basis of the qualifications and abilities needed for the work to be
performed.
It is committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child
labour.
It is committed to working with employees to develop and enhance each individual's skills and capabilities.
It respects the dignity of the individual and the right of employees to freedom of association.
It will maintain good communications with employees through company based information and consultation procedures.
Atlas Battery Limited prohibits discrimination of employees and ensures equal opportunity for employment, compensation,
development and advancement for all individuals. It prohibits harassment based on categories of race, color, religion, sex, national
origin, age or disability.
It does not tolerate workplace violence including threats, threatening behaviour, harassment, intimidation, assaults or similar
conduct.
It has a zero tolerance policy with respect to personal and / or sexual harassment. Personal / sexual harassment in any form is
strictly prohibited and may become ground for immediate dismissal without notice or pay in lieu of notice.
Atlas Battery Limited does not allow any employee to carry firearms or other weapons, unless obtaining prior permission.
The employees must not distribute, possess or use illegal or unauthorized drugs or alcohol on any premises of Atlas Battery
Limited or in connection with its business.
Consumers
Atlas Battery Limited is committed to providing branded products and services, which consistently offer value in terms of price
and quality. Products and services will be accurately and properly labeled, advertised and communicated.
Shareholders
Atlas Battery Limited will conduct its operations in accordance with principles of good corporate governance. It will provide
timely, regular and reliable information on its activities, structure, financial situation and performance to all the shareholders.
Atlas Battery Limited discourages employees and their families from trading in shares of the Company or advise others in trading
of its shares. However, if any employee or his / her family intends to sell or buy or take any position in the shares of the Company,
then he / she should notify in writing to the Company Secretary.
Business Partners
Atlas Battery Limited is committed to establishing mutually beneficial relations with its suppliers, customers and business partners.
In its business dealings, it expects its partners to adhere to business principles consistent with its own.
Community Involvement
Atlas Battery Limited strives to be a trusted corporate citizen and, as an integral part of society, to fulfill its responsibilities to
the societies and communities in which it operates.
Public Activities
Atlas Battery Limited is encouraged to promote and defend its legitimate business interests.
It will co-operate with government and other organizations, both directly and through bodies such as trade associations, in the
development of proposed legislation and other regulations, which may affect legitimate business interests.
It neither supports political parties nor contributes to the funds of groups whose activities are to promote party interests.
The Environment
Atlas Battery Limited is committed to making continuous improvements in the management of environmental impact and to the
longer-term goal of developing a sustainable business. It will work in partnership with others to promote environmental care,
increase understanding of environmental issues and disseminate good practice.
Atlas Battery Limited strives to provide a safe, healthy and clean working environment. It also strives to prevent any wasteful
use of natural resources (including water) and is committed to help in improving the environment. It tries to reduce, replace,
recycle or regenerate articles consumed in its operations.
Innovation
Atlas Battery Limited makes innovations to meet consumer needs. It respects the concerns of consumers and of society. It works
on the basis of sound research, applying high quality standards.
Competition
Atlas Battery Limited believes in fair competition and supports development of appropriate competition laws. Atlas Battery Limited
and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.
Atlas Battery Limited does not give or receive, whether directly or indirectly, bribes or other improper advantages for business
or financial gain. No employee may offer, give or receive any gift or payment, which is, or may be construed as being, a bribe.
Any demand for, or offer of, a bribe must be rejected immediately and reported to management.
Its accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions.
No undisclosed or unrecorded account, fund or asset will be established or maintained.
Conflicts of Interests
All Atlas Battery Limited employees are expected to avoid personal activities and financial interests, which could conflict with
their responsibilities to the Company. They must not seek gain for themselves or others through misuse of their positions.
Company Resources
All the assets of Atlas Battery Limited (both tangible and intangible) shall be deployed for the purpose of conducting the business
for which they are duly authorized for. None of these should be misused or diverted for any personal use or benefit.
Atlas Battery Limited employees shall be alert and vigilant with respect to frauds, thefts or illegal activity committed within the
office. If any such activity comes to their attention, they must immediately report the same to the Head of Human Resource or
Head of Internal Audit.
It has set its priority not to become implicated, in any way, with individuals or firms involved in criminal and other associated
activities and employees are expected to exercise maximum caution in this regard.
Atlas Battery Limited employees must act in good faith, not to misrepresent material facts in books and records or in any internal
or external correspondence, memoranda or communication of any type, including telephone or electronic communications.
Its records should be maintained in such a way that they are in full compliance with all rules, laws and regulations. Adequate
precautions should be taken to protect them from falling into wrong hands, which could harm its business interests. Access to
electronic documentation has been ensured through implementation of a comprehensive password protected authorization
matrix.
Confidentiality
Atlas Battery Limited employees come across a number of confidential information which may take many forms. They must take
proper care of such information and ensure that it is not misused in any way which is detrimental to its business or used for
own commercial benefit. Employees must exercise care to avoid disclosing non-public, internal, secret or proprietary information
to unauthorized persons, either within or outside the Company during employment or afterwards.
Compliance with business principles is an essential element in business success. The Board of Directors of Atlas Battery Limited
is responsible for ensuring that these principles are communicated to, and understood and observed by, all employees.
Day-to-day responsibility is delegated to the senior management. They are responsible for implementing these principles, if
necessary, through more detailed guidance tailored to local needs.
Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported
by Audit Committee of the Board.
Any breach of the Code must be reported in accordance with the procedures specified by the management.
The Board of Atlas Battery Limited expects employees to bring to their attention, or to that of senior management, any breach
or suspected breach of these principles.
Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of
doing so.
The Company started to present Sustainability Report few years back and has evolved through a dynamic process. The preparation
of the Report has led us to identification of various areas of improvements and measures to be taken. The Report is based on
interviews and surveys conducted with various stakeholders and identification of issues that need to be addressed. The data
presented in this section is generated by various functional departments which is reviewed by the management and approved
by the Board of Directors.
The Report entails our approach to sustainability which is focused on the principles and fundamentals expressed in ATLAS
CULTURE and ATLAS SYSTEMS. The Report also covers measures taken by the Company towards corporate governance,
environment, financial sustainability, people, quality, health and safety, technology, customer, business ethics and corruption.
The manufacturing of quality products with minimum contamination in the environment is our aim which helps our customers
to get maximum utility of our product.
ÒA business that makes nothing but money is a poor business.Ó - Henry Ford
We believe that sustainability helps in managing social and environmental impacts whilst remaining a vital component of shareholder,
employee and stakeholder relations. To grow as a Company and corporate citizen of this country, the importance of CSR and
its activities should be realized and worked upon vigorously.
We are continuously working towards implementing CSR, sound governance, best management practices and high economic
and social practices in our day-to-day business activities.
Sustainability disclosure can serve as a differentiator in competitive industries and foster investor confidence, trust and employees
loyalty. Analysts often consider a company's sustainability disclosures in their assessment of management quality and efficiency,
and reporting may provide firms better access to capital.
The environmental shift has diminished quality of life which has implicated that the CSR is a long term initiative instead of short
term. We are committed on this as a long term objective keeping in view future generations to come. Through various activities
including donations, collaborated events with non-profit organizations and intense measures to improve environment, we have
gotten close to customers and associates, our surrounding communities, society and other stakeholders.
We work closely with our customers and partners specifically GS Yuasa, Japan to bring innovations, keep up with technological
advancements, foresee change and adapt accordingly. We welcome competition, face tough business challenges and grow
not only as a company but overall as an industry.
Thank you for taking the time to review this report. We are pleased to share and welcome your feedback and involvement.
Ali H. Shirazi
Karachi: August 28, 2017 President / Chief Executive
The Company's framework is a product of the Atlas Group's fundamental business doctrine, the 'ATLAS WAY'. It comprises of
the principles of ÒATLAS CULTUREÓ and ÒATLAS SYSTEMSÓ. These are a set of rules and procedures which have sustained
the test of time and proved to be at the heart of the Company's success.
The principles of the 'ATLAS WAY' cover all departments, operations, activities and aspects of our business and provide ideal
guidelines for their progressive development. It teaches us to pursue operational and financial results while maintaining environmental
quality, workplace safety and social responsibility.
Atlas Culture
Corporate Governance
Respect, recognition and reward (3Rs)
Recruitment and career advancement based on integrity, merit, experience and skills
Education and training of staff and descendants
Self reliance
Leading by example
Humility and excellence
Living within one's means, saving for the future and donating for good cause
To be happy and healthy
Atlas Systems
Environment
The Company's prime focus is to run operations in a way to reduce negative impacts of its business activities on the environment
by consuming less energy and fuel, produce less waste, recycling water, etc.
Material
The Company with its intense research and assistance of Japanese partner works
on procurement of raw materials and development of new formulae and applications
with the aim of low impact on environment. Materials having high impact on the
environment are monitored in pursuance of the Company's environmental policy.
Over the last few years, Company has introduced new products including Battery
Tonic and Atlas Hybrid battery which has opened up new opportunities. Battery
Tonic is distilled battery water with specific battery grade TDS to increase life of
battery. Atlas Hybrid, a hybrid battery which has been made with combination of
lead and calcium plates with plastic envelop protection giving battery long life and
protection from rust, etc. The successful launch of hybrid battery has now paved
way for introducing same technology in other variants of battery in coming years.
The Company installed 100 KW solar panels which reduced reliance on conventional electrical energy and resulted in cost savings
as well as contribution to improvement of environment.
The cost of fuel for generators was reduced by installation of dedicated electricity lines for uninterrupted supply of electricity
and also resulted in significant reduction of associated green house gas emissions from generators.
Our focus is to deliver the best quality batteries with high level of sustainability, efficient manufacturing process and high operating
efficiency. As we gain financial strength, we invest in future products, our people, our communities and society.
Human Capital
Atlas Culture emphasizes on recruitment and career development based on integrity, merit, experience and skills. We invest in
our associates, strengthen their technical capabilities, leadership skills and team work to make Company and society a better
place.
We show respect to our associates and treat them fairly by positively influencing their lives. We teach and encourage them to
serve the Country and Company in the most ethical ways. We believe that happy associates are the backbone of a sustainable
and competitive Company.
Succession Planning
The Company realizes that for long term business continuity, implementation of succession planning is of vital importance. For
this purpose, the Company develops successors for all key positions across the organization as part of succession planning.
Individual Development Plans (IDPs) are prepared to indicate existing and required competencies, learning and development
plans, performance expectation and career progression of each individual. This also contributes towards the retention of potential
employees within the Company.
Based on the importance of succession planning activity, the Company reviews the whole process annually to keep it aligned
with the ongoing changes in the business scenario.
Career Development
The Company has a career development program which is operated on the basis of Performance Management Review Process
that fairly recognizes employees' performance and helps develop improved career paths for the talented associates. A corporate
culture is promoted by encouraging creativity and independence among our associates. Through this program, the associates
are required to fill evaluation / performance forms and their supervisors evaluates them on the basis of actual performance
delivered and one-on-one interview with their managers. It leads to establishment of a vision for personal development and a
detailed training plan to achieve it, accompanied by setting their future objectives.
To reach out to talented students and dedicated professionals, the Company is using different social mediums including LinkedIn,
Rozee.pk platform, etc.
The Company has invested in an ERP system which has integrated and helped in various functions of Human Resources including
recruitment, trainings, career development, payroll processing etc. Currently implementation of Oracle HCM Cloud including
seven HR modules is in process through consultant to further update and strengthen the HRMS.
Trainings
The Atlas Culture specifically emphasizes upon the education and training of staff and descendants. The development of its
associates' abilities are achieved through various means such as on the job trainings including in-house and external trainings,
education program, financial support for career advancement, etc. Technical trainings as well as soft skills training have been
arranged during the year such as Production Management, Seven QC Tools, Reliability Centered Maintenance, Digital Marketing,
etc. to name a few. Apart from this, the Company is part of a comprehensive program with Institute of Business Administration
(IBA), through which the Diploma Program is conducted exclusively for Atlas Group associates which helps in preparing young
and potential leaders for the changing business environment / upcoming challenges.
The Company conducted various in-house trainings and nominated associates for external trainings covering the areas of
production, engineering, quality control, leadership, core management skill development and various specialized departmental
trainings including supply chain management, treasury, corporate affairs, taxation, etc. Altogether 735 personnel benefited from
internal trainings, while 69 personnel enhanced their skills set through external training programs, amounting to a total of 797
man days spent on trainings during the year.
For in-house trainings, the Company has a Training Centre with all associated services. A specially designed curriculum has been
developed based on the existing processes of the plant. These training sessions are conducted by a pool of internal trainers
as well as associates within the Company to enhance their presentation skills and to promote team work. After classroom training
associates, they are provided practical training sessions at the shop floor. Human Resource division plays an active role in the
skills enhancement program of associates and promotes a learning culture among them.
Human Resources division facilitates and records all such trainings to monitor skills enhancement at the shop floor with the
ultimate goal to enhance productivity and ensure quality production. Despite these formal trainings, associates are encouraged
to provide on ground training to subordinates on hand.
Employer Branding
In view of promoting employer branding, beside engineering students, the Company introduced a formal internship training
program for business management students in which five interns were placed in Supply Chain, Marketing, and IT divisions. All
interns worked on real time projects, hence contributing to their professional development.
Human Rights
We intend to remain an attractive employer of a diverse group of associates who feel sufficiently challenged to pursue their
personal development. By creating job opportunities, sourcing from local suppliers, and paying taxes and royalties, etc. we help
in building local economies. We plan to be a part of the community for decades to come with long term plan and vision.
We encourage our associates to strive for education and where possible we assist our associates to pursue for education at
all levels. The Company provides competitive remuneration packages and a good environment to work in to increase the quality
of work and satisfaction resulting in long-term employability and synergy effect to the Company's performance. There are 23
associates who are with the company for more than 25 years now and 65 associates for more than 10 years.
Employee Engagement
The Company encourages a working environment which promotes associates' to work without fear of intimidation, reprisal or
harassment. The associates' union rights are respected and they are allowed to join unions and engage in collective bargaining
as permitted by applicable laws in the country.
Hajj Facility
Every year, the Company sends one of its associates for Hajj through ballot and bears all expenses of pertaining to this religious
offering.
HSE Steering Committee, headed by Chief Executive provides guide lines for maintaining / improving HSE culture at the Company
and working committee ensures its implementation.
The focus and direction of the committee is mitigation of risk to the minimal levels by carrying out business and operational
activities in such a way to ensure the safety of its employees and other persons for whom it is responsible, and at the same
time the risk to the environment. The Company strives to provide a safe and healthy working environment for its employees and
acts positively to prevent injury, ill health, damage and loss arising from its operations.
Protect and strive for improvement of the safety, health and security
of our people at all times.
Ensure that all associates understand their specific HSE responsibilities,
implementing all the necessary measures for the prevention, protection
from hazards to associates and the property.
Minimize our impact on the environment through pollution prevention,
reduction of natural resource consumption and emissions, and the
reduction of waste.
Provide employees with the familiarization of Company's HSE policy
and practices.
During the year, various activities were conducted and initiatives taken
in relation to implementing and enduring workplace safety and to educate
associates about health and safety. These activities and initiatives included:
First aid training program was also organized for 84 participants at the
plant through Aman Foundation so that the capability of our people to
handle emergency during work could be improved and they can prevent
such situations from becoming worse. It was a half day training program
thus making 42 man days.
Administration
To ensure that our associates stay healthy, positive and contribute well
to the achievement of organization's objectives, the Company has spacious
canteen with all associated services. The dining hall of the canteen serves
around 460 people at a time that includes breakfast, lunch, dinner and
tea to all associates.
The Company has a dedicated resource to deal with associates' daily health care needs, and also for any emergency situation
occurring at the factory premises. An ambulance is also in service at factory premises to cater any emergency situation.
With the rapid change and advancement of technology, we realize the importance to keep ourselves align with the advancements
and continue to innovate and invest in technology. The focus is on process automation and paperless environment to not only
increase synergies but also as part of global environment protection and reduced cost while maintaining high quality.
The Company enjoys a state of the art information technology infrastructure to meet the growing needs of the business. This
includes innovations and improvements in core business processes (manufacturing and assembly lines) and non-core business
processes (supply chain, finance, etc.). We are also aligning business and IT to attain full advantage in a significant and persistent
way for data management through ERP and striving for a paperless environment. Further, we are focused on B2C (Business to
Customer), Business Continuity Plan (BCP), Business Process Reengineering (BPR) andB2B (Business to Business) systems.
The Company has successfully implemented material resource planning (MRP) module of Oracle EBS. Developing a comprehensive
dashboard of management information system (MIS) comprising of operational and non-operational divisional reporting is in
progress.
The Company has a comprehensive Disaster Recovery Plan to cater any disaster emergency situation. The Company also
engaged a professional firm for an independent review of its Disaster Recovery Planning & Business Continuity Plan and identified
the points of improvements.
Review of the Board of Disaster Recovery Planning & Business Continuity Plan
The Audit Committee reviewed the recommendation of the Disaster Recovery Planning & Business Continuity Plan. During the
year, the report of the external independent reviewer was also presented to the Audit Committee for its review and suggestions.
The Company is committed to the manufacturing of high quality Lead Acid and low maintenance Hybrid batteries. The system
has been designed, improved and aligned as per ISO 9001:2015 guidelines. The Quality Management System demonstrates
Company's ability to provide quality products, meet customer needs, improvement of the processes and continuous monitoring
on consistent basis.
The Company has an in-house laboratory equipped with latest measuring equipment for testing the performance of batteries
through chemical and electrical testing. Our laboratory is also capable of testing every product, from raw material to finished
batteries.
Customer
Customer Satisfaction
Customer satisfaction is always our top priority. During the years, the Company has took various initiatives in order to satisfy
customers' needs, which included developing a Service and Business Development division to meet the growing needs of our
customers, their training of battery handling and preventive maintenance, mobile van, free battery checkup service, etc. We
believe, customer service and service levels continues to be an area for improvement, which we will work on constantly. In
addition to this, the Company has also taken an initiative of free home battery check-up service activity.
Customer needs is our top priority and helps us in improving our products and services accordingly besides innovation of new
products with advance technology, accordingly to their utility and benefit.
All activities related to advertising and sales promotion are adhered to comply with the applicable laws as well as business ethics
and code of conduct which are monitored in-house. The marketing activities during the year are summarized in media section.
The Company not only believes in high quality products but also keenly focuses on after sales service and to build long term
relationship with the consumers. To attain confidence of its consumers, the Company's representative including Chief Executive
regularly visit to dealers' showroom and meet with customer at present. On the other hand dealers, retailers and OEMs technicians
training on battery specs and handling method are part of our business practices.
We believe in giving transparency of what we offer, fair treatment and effective complaint system to consumers. This year, the
Company has started to print number of plates on all variants of batteries with the aim to safe its customers from misleading
practice in the market. Further, we educate our consumers by giving them battery management tips, safety tips and tips to select
type of battery, etc. We also meet our dealers regularly to enable two way communication to obtain their suggestions, to have
feedback of market reputation of our products, to educate them with the use of technology which includes our B2C system, etc.
Tips for battery management and safety are provided in each battery pack and also available on Company's website.
Tips regarding how to select a battery and FAQs are also placed on our website for consumer guidance.
The Company is committed to the generally agreed ethical codes for marketing its products. When preparing marketing
communication and advertising material, the legislative and regulatory compliance of the content is always checked and confirmed
before publication. The Company ensures that advertisements must be clear and concise, portray business ethics and in simple
language which used at large in general public.
There have been no incidents of non-compliance with regulations and voluntary codes concerning marketing communications,
including advertising, promotion and sponsorship.
Market Share
Battery industry in Pakistan is divided into two major segments; organized and un-organized sectors. The organized sector is
meeting about 90% of the market demand; rest is being met by the un-organized sector and imports. Exact market share cannot
be determined / ascertained as there is no official association of battery industry through which data is compiled and published
publicly.
Dealers' Network
We continuously focus on expanding our dealer network and improve efficiency of existing dealers by conducting auto electrician
workshops, providing incentive schemes for improving their trade and B2C networking, etc.
July 2016
Dealers' meeting in Lahore on Friday, July 29, 2016 at PC Hotel, Lahore, and in Islamabad on Saturday, July 30, 2016 at
ABL Islamabad office.
August 2016
Rawalpindi and Peshawar dealers visited factory on August 29, 2016.
September 2016
October 2016
Central Zone's sales team and dealers' leisure activities at Dreamworld Resort, Karachi and visit of factory visit on October
27 & 28, 2016, respectively.
November 2016
Upper Sindh & Karachi dealers' factory visit with recreational activities at Dreamworld Resort, Karachi was arranged on
November 03 & 04, 2016.
Lahore, Faisalabad & Islamabad dealers' factory visit with recreational activities at Dreamworld Resort, Karachi was arranged
on November 18, 24 & 25, 2016, respectively.
After Sales team carried out training activities across Pakistan; 17 dealers' training programs and 15 refresher programs.
Brand activation and free battery check-up at the Peshawar Auto Show 2016.
December 2016
After Sales carried out 21 retailers' training along with 19 road shows and 1 Pak Wheel. Total number of customers served
during these activities were 2,450.
January 2017
CEO inaugurated new dealer shop - Mr. Bangash Battery, Safoorah Goth Karachi on January 19, 2017.
After Sales team carried out training activities across Pakistan, 17 dealer's training program, 15 refresher program along with
battery check up road show and participated in 2 Pak Wheels battery check up show. Attendance was over 2,900 users
during battery check up and Pak Wheels drive.
February 2017
Dealers' get together were held in Sahiwal on February 10, 2017 and in Karachi on February 03, 2017.
After Sales carried out 22 dealers' training program along with 22 road shows. No. of technician trained were 220 and No.
of customers attended through road shows were 1,950.
March 2017
After Sales carried out 33 training programs during the month, covering 11 training each at Quetta, Karachi and Sukkur.
April 2017
Karachi dealers get together on April 14, 2017.
May 2017
After Sales associates carried out 43 technician training in Lahore, Rawalpindi and Peshawar covered over 365 participants.
In commercial segment, ABL reached out to 21 retailers; trained 165 technicians. In OEM segment, 21 Toyota dealerships
were covered; trained 164 technicians. 4 sessions were held with HACPL; covered 15 dealerships having over 36 technicians
attended the session.
June 2017
After Sales carried out joint service camp with HACPL service team in Lahore (from June 5-10) and Karachi (from June
12-16) at Honda dealerships. Free battery check up was offered to Honda Civic and City customers, attended by over 55
customers. During the camp, dealership technicians were involved and provided them hands on training on preventive
maintenance.
The term ÒCorporate GovernanceÓ refers to a system of Company's management that focuses on responsibility, transparency and
sustainable value creation. It encompasses the management and monitoring system of the Company, including its organization, business
principles and guidelines, as well as internal and external control and monitoring mechanisms.
The governance and control of Atlas Battery Limited is carried out through number of corporate bodies. At the general meetings, the
shareholders can exercise their voting rights as mentioned in statutory laws.
The Board of Directors is ultimately responsible for organization and monitoring of the Company's operations. The duties of the Board
are partly exercised through Audit Committee and Human Resource and Remuneration Committee.
In addition, the Board is responsible to appoint the CEO of the Company. The CEO is in-charge of the daily management of the Company
in accordance with guidelines and instructions provided by the Board.
Division of responsibilities and duties between the shareholders, the Board and the CEO are regulated inter alia by the Companies
Ordinance, 1984, the Company's Articles of Association and the Code of Corporate Governance.
Shareholders
As on June 30, 2017, the Company had 1,318 shareholders according to the share register. The Company's share registrar is
Hameed Majeed Associates (Private) Limited.
The Company believes in protecting the interest of its investors. It acknowledges its responsibility to inform shareholders, analysts
and investors timely and fully about material developments that are relevant to the Company, its management, operations and
financial situation as well as its future prospects. The policy is devised to establish guidelines for communicating with shareholders,
analysts, investors and other stakeholders for their understanding of entity's business, governance, financial performance and
prospects. A well defined structure for governance and management which provides specific authority and responsibility for policy
implementation is in line with the policy.
Company Secretary has been designated as the person responsible for handling investor grievances and feedbacks. The mechanism
is summarized below:
A designated email address has been created namely abl@atlasbattery.com.pk to facilitate investors in submitting their
queries, grievances and feedbacks.
In addition to the aforementioned email address, complaints and suggestions can also be received in writing, duly addressed
to the Company Secretary.
All queries, grievances and feedbacks are resolved and communicated to the investors on timely basis after due verification
procedures.
Stakeholders' Engagement
The stakeholders' expectations are carefully understood by the Company and responded to as a responsible manufacturer, marketer,
employer and corporate citizen. The engagement serves the purpose to actively engage with stakeholders, know their expectations,
build a relationship with them and respond appropriately with the aim to win their loyalty with the Company.
Dealers and Provide innovative partnerships Site visits Product quality and safety
consumers for sustainable growth Questionnaires Business ethics
Provide quality products at good Dealers related events Human rights
value Sales conferences Renewable technology
Prompt after sales service Service and warranty centers Service at doorstep
Competitive prices Website Research
B2B
Customer satisfaction survey
Shareholders and Generate sustainable growth and Interim and annual reports Corporate governance
investors shareholders' return Meetings Business performance
Improve shareholders capital Website Corporate responsibility
Improve financial performance Timely reporting
Industry partners Improve business practices Active involvement in Long term industry
Build capacity within our organizations and associations challenges
organization and drive peer e.g. PSX, ICAP, MAP, etc. Human rights
approaches Health and safety
An Extraordinary General Meeting (EOGM) of Shareholders is convened wherein the Board of Directors considers any matter requiring
the approval of Company's shareholders in general meeting, or if the shareholders who control one tenth shareholding demand in
writing for the consideration of a certain issue.
During the year, an Extraordinary General Meeting was held for election of directors and seeking shareholders' consent to disseminate
annual audited accounts through CD / DVD / USB.
The Annual General Meeting (AGM) decides on, among other things, the adoption of the financial statements contained therein,
the distribution of profits and the discharge of the Members of Board and the CEO from liability. In addition, the AGM elects the
Members of the Board and the auditors, and decides on the remuneration paid to the auditors. The AGM, furthermore, may decide
on, amendments to the Articles of Association, share issues, etc. as required by laws and regulations prevailing in the country.
Atlas Battery Limited's Annual General Meeting 2016-17 was held on September 27, 2016 in Karachi. The shareholders adopted
inter alia the following resolutions:
Minutes of the Annual General Meeting held on September 28, 2015 be and are hereby confirmed and signed.
Annual Audited Accounts for the year ended June 30, 2016 along with the Directors' and Auditors' Reports thereon be and are
hereby adopted.
Cash dividend @ 155% (Rs.15.50 per share) be and is hereby approved for payment to those shareholders of the Company,
whose names shall appear in the register of members at the close of business on September 12, 2016.
Secretary of the Company or any one of the Directors be and is hereby authorized to give effect to the foregoing resolutions
and in this regard to do or cause to be done all acts, deeds and things that may be necessary or required.
Retiring Auditors M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants being eligible, be and are hereby re-appointed
as Company's Auditors for the year ending June 30, 2017 for an audit fee of Rs.1,200,000/-.
Article 81A added in the Articles of Association of the Company.
The overall performance of the Company including Company's growth, industry growth, capex incurred during the year, financial
costs, etc. was discussed by the shareholders.
2. Board of Directors
The Board of Directors is responsible for the appropriate arrangement of the Company's administration and operations. The Board
of Directors consists of minimum of seven members elected by a General Meeting of Shareholders. The Board of Directors elects
a Chairman among its members. The Board of Directors' tasks and responsibilities are determined primarily by the Companies
Ordinance, 1984, the Company's Articles of Association, the Code of Corporate Governance and other legislation and regulations
applicable to the Company. It is the responsibility of the Board of Directors to act in the interests of the Company and all of its
stakeholders.
devise overall corporate and business strategies and gives direction to the Company's management;
oversee the performance of the management periodically;
ensure that professional standards and corporate values are put in place in the form of Code of Conduct;
define and review vision and mission of the Company and evaluate performance there against;
ensure the system of corporate governance exist;
review the internal controls and risk management policies and approve its governance structure and code of conduct;
recommend the matters to be dealt with by a General Meeting and to ensure that the decisions made by a General Meeting
are appropriately implemented;
approve policies, large business agreements, investments decision and declaration of dividend; etc.'
directs and supervises the Company's executive management;
appoint and dismiss the CEO, decides CEO's remuneration and other benefits; and
monitoring the financial reporting process and the efficiency and strength of the Company's internal control, internal auditing
and risk management and compliance systems.
The General Meeting confirmed that the Board of Directors shall have seven members.
The personal information of Members of the Board is presented at the start of this report.
Directors' Qualification
The Board members have diversified experience and are qualified professional. They are well conversant of the laws and business
practices in Pakistan. They have ample experience from various sectors and brought in their expertise and knowledge to the
Company. They are also well aware of the importance of mandatory trainings and evaluation as per Code of Corporate Governance.
The Board determines its working procedures and reviews these procedures as required. The working procedures describe the
Chairman's specific role and tasks, as well as responsibilities delegated to the committees appointed by the Board. The Chairman's
role is primarily to guide long term strategic planning for the Company including:
Presiding over the Board and ensuring that all relevant information has been made available to the Board;
Defining the Company's philosophy and objectives;
Safeguarding shareholders' interest in the Company;
Responsible for building the Company's image nationally and internationally;
Ensuring the appropriate recording and circulation of the minutes of the Board to directors and officers entitled to attend Board
meetings;
Major spokesman of the Company, responsible for liaison with the senior most levels of Federal and Provincial Governments;
Overseeing the Company's macro approaches and public relations in the broadest sense, including its relations with public
organization and other companies; and
Commitments and de-commitment of strategic investments.
Conflicts of Interest
Directors have a duty to avoid a situation in which they have or can have a direct or indirect interest which conflicts, with the interests
of the Company. In this regard, the directors have undertaken that they will comply with the related provisions of the Companies
Ordinance, 1984, Code of Corporate Governance and rules and regulations of SECP and Stock Exchange and Company's Code
of Conduct.
The evaluation of Board's role of oversight and its effectiveness is a continual process which is appraised by the Board itself. A
detailed Board Evaluation Questionnaire has been formulated which circulates amongst directors for their feedback every year and
compiled results are presented in the Board meeting for review and appropriate action, thereon.
The remuneration of the Board members is approved by the Board itself. However, in accordance with Code of Corporate
Governance, it is ensured that no directors take part in deciding their own remuneration.
For information on remuneration of directors and CEO in 2016-17, please refer to the financial statements.
Every director upon joining is provided with an orientation presentation. CEO briefs new directors about the Company operation,
industry dynamics, organization structure and other significant matters.
Board meetings
There were five Board meetings held during the year. All of them were held inside Pakistan.
The CEO handles the operational management of the Company in accordance with direction set by the Board. He is responsible
to the Board of Directors for fulfilling the targets, plans and goals that the Board sets. The CEO is responsible for ensuring that the
Company's accounting is in compliance with the law and that financial management has been arranged in a reliable manner. The
CEO forms the Functional Committees and Management Teams and delegates to its members the necessary powers for carrying
out their responsibilities.
Marketing
Plant
Supply Chain
Quality Assurance
Engineering and Projects
Services and Business Development
Human Resource
Information Technology
Finance
The CEO is responsible for all matters pertaining to the operations of the Company. His responsibilities include:
To formulate Company's objectives in conjunction with the strategy approved by the Board;
To lead and oversee the implementation of the Company's long and short term plans in accordance with its strategy;
To build and maintain amicable relations with governmental departments, trade associations, regulatory bodies, customers,
suppliers and sales offices;
To ensure the achievement of agreed productivity and profitability targets;
To ensure that the chain of command is clear in the Company to facilitate the maintenance of discipline, ambit of all managers
is clearly defined to ensure accountability;
To prepare for the approval of the Board annual forecast of plans for productions, sales, profit, revenue and capital expenditure,
manpower which fit into the long term business objectives and the overall strategic direction of the Company;
To ensure that necessary coordination exists between various divisions of the Company to achieve smooth and effective operations;
Maintain a regular review of duties and functions of the staff to ensure that there is no duplication of efforts in office methods
and procedures and that all operations are carried out efficiently and economically;
To ensure that the Company's interest and assets are properly protected and maintained and all the required government
obligations are complied;
To chalk out human resource policies for achieving high professional standards, overall progress / betterment of the Company
as a whole;
To ensure that proper succession planning for all level of hierarchy exist in the Company and is constantly updated;
To pay all government dues, on or before due dates and obtain all refunds due form the government;
To prepare and present personally to the Board of Directors following reports / details:
- annual business plan, cash flow projections, forecasts and strategic plan;
- budgets including capital, manpower and overhead budgets, along with variance analyses;
- quarterly operating results of the Company as a whole and in terms of its operating divisions or business segments;
- promulgation or amendment to a law, rule or regulation, enforcement of an accounting standard and such other matters as
may affect the company;
The performance of the CEO is formally appraised through the evaluation system which is based on achieving quantitative and
qualitative targets, set at beginning of the year. It includes performance of the business, accomplishment of objectives with reference
to profits, organization building, succession planning and corporate success. The Human Resource and Remuneration Committee
appraise the performance of CEO along with the determination of remuneration which is then recommended to Board for their
approval, on annual basis.
To ensure objective control, the Board has established Audit Committee and Human Resource and Remuneration Committee to
oversee relevant areas of the Company's operations.
Audit Committee
This Committee reviews the financial and internal reporting process, the system of internal controls, management of risks and the
internal and external audit processes. An independent internal audit function reports to the Committee regarding risks and internal
controls across the organization. The Audit Committee receives reports from external auditors on any accounting matter that might
be regarded as critical. The detailed Charter of the Audit Committee developed in accordance with the Code of Corporate Governance
is contained in the listing regulations of the stock exchange which is summarize below:
The Audit Committee has reviewed the quarterly, half yearly and annual financial statements, besides the internal audit plan, material
audit findings and recommendations of the internal auditor.
Human Resource and Remuneration Committee was established by the Board to assist the Directors in discharging their responsibilities
with regard to selection, evaluation, compensation and succession planning of key management personnel. It is also involved in
recommending improvements in Company's human resource policies and procedures and their periodic review. The Committee
consists of three members. Majority of members including the Chairman of the Committee are non-executive directors.
5. Auditors
The Company's auditor is an auditing firm which fulfills general competency requirements and also complies with relevant legal
independence requirements guaranteeing the execution of an independent and reliable audit. They are also compliant with the Code
of Corporate Governance and other applicable laws and regulations. The performance, cost and independence of the external
auditor is reviewed by the Audit Committee and recommended to the Board. Annual General Meeting then elects the auditor to
audit the accounts for the financial year and the auditor's duties ceases at the close of the subsequent Annual General Meeting.
The auditor's duty is to audit financial statements and give reasonable assurance that the financial statements give a true and fair
view of the Company's operations and result as well as its financial position. The Company's auditor presents the audit report
required by law to the Company's shareholders in connection with the annual financial statements and reports regularly to the Board
of Directors.
All directors and associates are required to comply with all applicable laws and regulations.
Code of Conduct
The Code emphasizes on honesty, integrity and openness in conduct of Company's operations. It strictly abides all stakeholders
to follow the laws and regulations. It also promotes guidelines on various ethical standards including issues such as conflicts of
interests, employee rights and grievance, fraud, etc. The Code guides interactions with all stakeholders, including consumers,
employees, suppliers, shareholders and partners.
The Code is disseminated to all associates and is placed on Company's website. It is reviewed annually and any changes therein
are approved by the Board.
The Company investigates all alleged breaches of Code and applies appropriate measures when complaints turn out to be
substantiated. An open dialogue is promoted on integrity with a formal ÒWhistle Blowing PolicyÓ. The associates of the Company
are encouraged to report their views on bad processes and unethical practices through such policy. These mechanisms are part
of the complaints procedure and are described in our Code of Conduct. In 2016-17, no alleged breaches of the Code of Conduct
were reported.
IT Governance Policy of the Company is monitored and update periodically. The policy deals with the use of information and its
delegation and authority, security and modes and mediums of dissemination, etc. The Company's focus is on strong processes
and systems in order to protect the stakeholders' data and create awareness about the importance of data protection and privacy
through IT Governance Policy which is summarized below:
Members of Management Committee are responsible for required compliance in their respective functional areas, at all locations.
The General Manager IT is responsible for its implementation, maintaining compliance and for suggesting new areas as per
technology enhancement.
The Company is striving to become paperless in coming years, by getting all the records scanned and uploaded on servers for
later use and retrieval. The Company has an efficient Record Management System to safeguard records of the Company from the
time such records are conceived through to their eventual disposal.
A team known as Record Management Committee is made specifically for the purpose of implementation of record management
policy.
Having Centralized Record Room with proper shelves, fire resistant lockers, etc.
Full time dedicated record keeper who is responsible to maintain Centralized Record Room in proper manner.
Centralized electronics record facility.
Retention of electronic mail policy.
Compliance on Records Retention Policy.
Records retention period.
Mode of retention.
Records disposal.
The Company values an open dialog on integrity and responsibility with its associates. The Company is committed to provide a
fair environment to its employees. The Company investigates all alleged breaches of Code and applies appropriate measures when
complaints turn out to be substantiated. The associates of the Company are encouraged to report their views on processes and
practices to their manager. These reporting mechanisms are part of the complaints procedure and are described in our Code of
Conduct.
This policy applies to recruitment and selection, terms and conditions of employment including pay and benefits, communications,
training, promotion, transfer and every other aspect of employment.
Violations reported through the whistle blower procedure are investigated by internal audit function. Information regarding any
incident is reported to the Audit Committee. Reports include measures taken, details of the responsible Company function and
the status of any investigation. In 2016-17, no alleged breaches of the Code of Conduct were reported.
Our Code of Conduct states our principles for good business ethics with underlying values to conduct business operations with
honesty, integrity and openness, and with respect for human rights and interest of the associates. The Company's Code of Conduct
promotes guidelines on various ethical standards including issues such as conflicts of interests, employee rights, fraud, etc.
All forms of corruption whether directly or indirectly are discouraged that include but not limited to bribery, kick backs, payoff, etc.
The stern action is taken against personnel found in these mal-practices. It is the responsibility of all associates to ensure that none
of Company's associates engage in practices which infringe legal or regulatory requirements. Any associate engaging in business
practices which infringe legal or regulatory requirements are subjected to disciplinary action which may lead to dismissal and
personal criminal or civil liability.
The associates are encouraged to report any infringement of suspected infringement of legal or regulatory requirements involving
associates of the Company.
This report will cover Company's risk assessment; identified risks adopted mitigating factor and actions in place.
Objectives Risk Category Major Business Risks Sensitivity Mitigating factors /actions in place
Market
To be market leader Strategic Risk Continued inflation reducing Enhance internal efficiencies to
in battery industry. customer purchasing power. provide the right product at the right
price
Variation in raw materials and other
Commercial Risk
input costs led by oil prices causing
uncertainty.
Credit Risk
To be zero credit Financial Risk The financial loss to the Company The Company discourages credit
Company if a customer fails to meet their sales. However, in certain situations
contractual obligation arising from the Company extends credit after
trade receivables. due consideration of factors which
includes market sentiments, seasonal
effects, etc. A comprehensive credit
policy is already in place.
Investment
To maximize returns Financial Risk Adverse stock market The Company has investment in
on investments. developments may affect mutual funds and maintains diversified
revaluation of assets. portfolio to mitigate risk.
Internal Controls
To have strong Operational Risk The Company may be exposed Internal controls covering areas of
internal controls to financial irregularities resulting governance, management, policies
leading to sound in qualitative and quantitative and procedures, compliance with
and stable losses in the absence of effective laws and regulations, etc. are in place.
Company internal controls. Internal Audit department monitors
the compliance of internal controls.
Socio-political
situation
To operate in a Commercial Risk Compliance of new and existing A team of qualified and experienced
stable market with laws and regulations. professional in the management team
least volatility and ensures compliance with all laws,
low occurrence of Political uncertainty may affect rules and regulations.
unforeseen business volume.
variables.
Technology
To evolve Operational Risk Technology shift may render Constant process of balancing,
technologically in production process obsolete and modernization and up gradation of
order to cost inefficient. production facilities.
manufacture
products of high
quality.
Operations
To ensure continuity Operational Risk The severe on-going energy crisis. Company operations have an
of operations alternative energy source.
without disruptions. Vendors' operational / financial
Continuous assessment of all vendors
constraints and their deteriorating in terms of quality, operational and
quality standards. financial capacities.
Human Resource
Recruitment and Operational Risk Qualified and competent staff may Well structured procedures for
career advancement not be available in sufficient recruitment, training, compensation,
based on integrity, numbers. periodic appraisals and succession
merit, experience planning have been implemented to
and skills. Operations may be subject to ensure staff retention and continued
operation.
fraudulent activities.
Finance
To be financially Financial Risk Devaluation of Pak Rupee against Foreign currency exposure is
strong and perform foreign currencies may adversely monitored by the Treasury
up to the affect Company's financial department. Derivatives such as
expectations of all performance. forward covers and currency options
stakeholders. are used for hedging against currency
devaluation when considered
necessary, as and when deemed
feasible.
Strategic Risk: These risks are related to the business environment including the industry and are beyond Company's control.
Commercial Risks: These risks emanate from commercial substance of the organization and involve decisions which may affect
Company's position in the market.
Operational Risks: These risks are related to Company's internal operations, administrative procedures and daily affairs.
Financial Risks: These risks are related with financial matters including profitability, financing, liquidity and credit.
¥ Increasing commodities prices may impact raw materials and other input costs.
¥ Widening gap of trade balance and increase current account deficit.
¥ Inflation prevailing in the country and budgeted for the upcoming years.
¥ Pak Rupee parity against foreign currencies.
¥ Stock market fluctuations.
¥ Political uncertainty and law & order situation may affect business volume.
¥ Energy supply in country.
The management considers various factors including but not limited to all departments authority levels, best practices and all applicable
laws & regulations to mitigate the risks stated above.
The Audit Committee comprises of 3 non-executive directors. One of the members of the Committee is independent director. The Audit
Committee reports the following after an annual review of the Company's operations:
¥ Four meetings of the Audit Committee were held during the year 2016-17 and presided by the Chairman, attendance of which is
as follows:
As required by the Code of Corporate Governance, Audit Committee also met with external auditors without Chief Financial Officer
and Head of Internal Audit. By invitation, Chief Executive Officer attended all the four meetings held during the year.
¥ The Audit Committee appointed a secretary of the Committee who is Head of Internal Audit. The secretary circulated the minutes
of meetings of the Audit Committee to all members, directors, CEO and CFO prior to the next meeting of the Board.
¥ The Audit Committee reviewed quarterly, half yearly and annual financial statements of the Company and recommended for approval
of the Board of Directors.
¥ The Company's Code of Conduct has been disseminated and placed on Company's website.
¥ Appropriate accounting policies have been consistently applied. All core and other applicable International Accounting Standards
were followed in preparation of financial statements of the Company on a going concern basis, for the financial year ended
June 30, 2017, which present fairly the state of affairs, results of operations, cash flows and changes in equity of the Company.
¥ The CEO and the CFO have endorsed the financial statements of the Company. They acknowledge their responsibility for true
and fair presentation of the Company's financial condition and results, compliance with regulations and applicable accounting
standards and design and effectiveness of internal control system of the Company.
¥ Accounting estimates are based on reasonable and prudent judgment. Proper and adequate accounting records have been
maintained by the Company in accordance with the Companies Ordinance, 1984 and the external reporting is consistent with
management processes and adequate for shareholders' needs.
¥ The Audit Committee has reviewed the related party transactions and recommended for approval of the Board of Directors.
¥ The Company's system of internal controls is designed to mitigate and eliminate the risk of not achieving business objectives, and
can provide reasonable assurance against material misstatement or loss.
¥ Ascertained that the internal control systems including financial and operational controls, accounting systems for timely and
appropriate recording of purchases and sales, receipts and payments, assets and liabilities and the reporting structure are adequate
and effective.
Internal Audit
¥ The Board has effectively implemented the internal control framework through an in-house Internal Audit function, which is suitably
qualified and experienced for the purpose and are conversant with the policies and procedures of the Company.
¥ Internal Audit facilitate a risk assessment process in each key business area and support function to review the significant risks
facing its operations and to record the relevant controls and any actions in place to mitigate the risks. The materiality of the risk
is measured based on financial and non-financial criteria, and the probability of the risk arising is also mapped. The detailed
assessments are then consolidated to provide input into the Company's risk assessment. This process also enables Internal Audit
to engage with senior management throughout the business on risk monitoring and management.
¥ Audit Committee has reviewed the annual internal audit programme and the consideration of findings of internal audit and
management's response. Further, it approved the internal audit plan for 2016-17.
¥ Coordination between the external and internal auditors was facilitated to ensure efficiency and contribution to the Company's
objectives, including a reliable financial reporting system and compliance with laws and regulations.
External Audit
¥ The statutory auditors of the Company, M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants, have completed the
audit of financial statements of the Company for the year ended June 30, 2017 and review of the ÒStatement of Compliance with
the Code of Corporate GovernanceÓ for the year ended June 30, 2017.
¥ The Auditors have been allowed direct access to the Audit Committee and the effectiveness, independence and objectivity of the
Auditors has thereby been ensured.
¥ The Audit Committee has reviewed and discussed points of improvements highlighted by the external auditors.
¥ The Audit Committee has reviewed the Management Letter of 2015-16 which was issued within 30 days of the date of the Auditors'
Report on financial statements as required under the listing regulations and discussed with the external auditors and management.
¥ The Audit Committee reviewed performance, cost and independence of the external auditors, M/s. ShineWing Hameed Chaudhri
& Co., Chartered Accountants and has recommended to the Board their reappointment for the year ending June 30, 2018.
This statement is being presented to comply with the Code of Corporate Governance (the Code) contained in Regulation
No. 5.19 of the Rule Book of Pakistan Stock Exchange Limited for the purpose of establishing a framework of good governance,
whereby a listed company is managed in compliance with the best practices of corporate governance.
The Company has applied the principles contained in the Code in the following manner:
1. The Company encourages representation of independent non-executive directors and directors representing minority
interests on its Board. At present, the Board includes:
Category
Sr. No. Name of Directors Independent (2) Non-Executive (4) Executive (1)
The independent directors meet the criteria of independence under clause i (b) of the Code.
2. The directors have confirmed that none of them is serving as a director in more than seven listed companies, including
this Company.
3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any
loan to a banking company, a DFI or a NBFI or, being a member of a stock exchange, has been declared as a defaulter
by that stock exchange.
5. The Company has prepared a ÒCode of ConductÓ and has ensured that appropriate steps have been taken to disseminate
it throughout the Company along with its supporting policies and procedures.
6. The Board has developed a Vision and Mission statement, overall corporate strategy and significant policies of the Company.
A complete record of particulars of significant policies along with the dates on which they were approved or amended has
been maintained.
7. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and
determination of remuneration and terms and conditions of employment of the CEO, other executive and non-executive
directors have been taken by the Board.
8. The meetings of the Board were presided over by the Chairman and in his absence, by a director elected by the Board
for this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, along with agenda
and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately
recorded and circulated.
10. The Board has approved appointment of Chief Financial Officer, Company Secretary and Head of Internal Audit, including
their remuneration and terms and conditions of employment, as determined by the Chief Executive Officer.
11. The directors' report has been prepared in compliance with the requirements of the Code and fully describes the salient
matters required to be disclosed.
12. The financial statements of the Company were duly endorsed by Chief Executive Officer and Chief Financial Officer before
approval of the Board.
13. The directors, Chief Executive Officer and executives do not hold any interest in the shares of the Company other than
that disclosed in the pattern of shareholding.
14. The Company has complied with all the corporate and financial reporting requirements of the Code.
15. The Board has formed an Audit Committee. It comprises of three members who are non-executive directors including one
independent director.
16. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final results of
the Company as required by the Code. The terms of reference of the Committee have been formed and advised to the
Committee for compliance.
17. The Board has formed a Human Resource and Remuneration Committee. It comprises of three members, of whom two
are non-executive directors and the Chairman of the Committee is a non-executive director.
19. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality
control review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the
firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in
compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute
of Chartered Accountants of Pakistan.
20. The statutory auditors or the persons associated with them have not been appointed to provide other services except in
accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this
regard.
21. The 'closed period', prior to the announcement of interim / final results, and business decisions, which may materially affect
the market price of Company's securities, was determined and intimated to directors, employees and stock exchange.
22. Material / price sensitive information has been disseminated among all market participants at once through stock exchange.
23. The company has complied with requirements relating to maintenance of register of persons having access to inside
information by designated senior management officers in a timely manner and maintened proper record including basis
for inclusion or exclusion of names of persons from the said list.
24. We confirm that all other material principles enshrined in the Code have been complied with.
Ali H. Shirazi
Karachi: August 28, 2017 President / Chief Executive
,
.
;
.
#
$
#
$
)
#
$
$
A
0&$/&%5
=
>,/7$/&%5 )*+B-;+B?*,:--*,D*6+E(
-
8
>6
, *,6-6-,(DB,B)
It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare
and present the above said statements in conformity with the approved accounting standards and the requirements of
the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of
any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the above said statements. An audit also includes assessing the accounting policies and significant estimates made
by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit
provides a reasonable basis for our opinion and, after due verification, we report that:
(a) in our opinion, proper books of accounts have been kept by the Company as required by the Companies Ordinance,
1984;
(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity
with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in
accordance with accounting policies consistently applied;
(ii) the expenditure incurred during the year was for the purpose of the Company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance
with the objects of the Company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet,
profit and loss account, cash flow statement and statement of changes in equity together with the notes forming
part thereof conform with 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, 2017 and of the profit, its cash flows and changes in equity for the year
then ended; and
(d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted
by the Company and deposited in Central Zakat Fund established under section 7 of that Ordinance.
ASSETS
Non-current assets
3,177,574 2,693,424
Current assets
5,119,645 4,012,613
-*.
%
/0
1
*
234
%*
%
! %
##
##
5
6
2
#
'
#
#
Liabilities
$22
2 #
#
(
2
+
#
Current liabilities
'
*
#
#
$
+
!
-%%
&!
#
$*
7
##
'
#
'
#
#
'*
+
2
2*
2%
4
!"
# $%
&' $%
(
* +"
"
" ,
#
"
# ','%
5
% ,$ !
/#
!!
(
+
%
!
+3++!
+)! !
+5
!!#
+ %
!% %0"
+&' #
(
%!
23+%" # ! +
-" $
%!!,$! ! !
10%!
"%
! #
%!
5, "
+
5, "! %
+
(%( !+ !6!
Net cash generated from operating activities - brought forward 1,525,082 1,600,463
!"##""
!
""
!
$ %& !
'#
!
(
!)&! # * *
!"##""
!
""
+
!
$ %%& ! +++ +++
!
'#
!
*+++ *+++
(
!)&! # + +
!,"
*)#
&
! ##
)
%
Atlas Battery Limited (the Company) was incorporated as a public limited company on October 19, 1966 and its shares are
quoted on Pakistan Stock Exchange Limited. The Company is engaged in manufacturing and sale of automotive and motorcycle
batteries & allied products. The registered office and manufacturing facilities are located at D-181, Central Avenue, S.I.T.E.,
Karachi with branches at Karachi, Lahore, Multan, Islamabad, Faisalabad, Sahiwal, Peshawar and Sukkur.
The Honourable High Court of Sindh has sanctioned the merger of Shirazi Capital (Private) Limited and Shirazi (Private) Limited
with and into Shirazi Investments (Private) Limited. As a result, the Company became subsidiary company of Shirazi Investments
(Private) Limited, which holds 58.86% of issued, subscribed and paid-up capital of the Company as at June 30, 2017.
2. BASIS OF PREPARATION
The Companies Act, 2017 has been promulgated with effect from May 31, 2017, however the Securities and Exchange
Commission of Pakistan (SECP) through its Circular # 17 of 2017 dated July 20, 2017, has directed the companies whose
financial year ends on or before June 30, 2017 shall prepare their financial statements in accordance with the provisions of
the repealed Companies Ordinance, 1984. These financial statements have been prepared in accordance with approved
accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the repealed Companies
Ordinance, 1984, provisions of and directives issued under the repealed Companies Ordinance, 1984. In case requirements
differ, the provisions of and directives of the repealed Companies Ordinance, 1984 shall prevail.
These financial statements are presented in Pakistan Rupees which is the functional currency of the Company and figures are
rounded off to the nearest thousand of rupees unless otherwise specified.
New and amended standards mandatory for the first time for the financial year beginning July 1, 2016:
(a) Amendments to IAS 1, ÔPresentation of financial statementsÕ on the disclosure initiative are applicable to annual periods beginning
on or after January 1, 2016, The amendments are made in the context of the IASBÕs Disclosure Initiative, which explores how
financial statement disclosures can be improved. The amendments provide clarifications on a number of issues, including:
Materiality Ð an entity should not aggregate or disaggregate information in a manner that obscures useful information. Where
items are material, sufficient information must be provided to explain the impact on the financial position or performance. Notes
Ð confirmation that the notes do not need to be presented in a particular order. Other comprehensive income (OCI) arising from
investments accounted for under the equity method Ð the share of OCI arising from equity-accounted investments is grouped
based on whether the items will or will not subsequently be reclassified to profit or loss. According to the transitional provisions,
the disclosures in IAS 8 regarding the adoption of new standards / accounting policies are not required for these amendments.
These amendments only affects the disclosures in the CompanyÕs financial statements.
(b) Amendments to IAS 38 'Intangible assets' and IAS 16 'Property, plant and equipment' are applicable for annual periods beginning
on or after January 1, 2016 introduce severe restrictions on the use of revenue-based amortization for intangible assets and
explicitly state that revenue-base methods of depreciation cannot be used for property, plant and equipment. The rebuttable
presumption that use of revenue-based amortization methods for intangible assets is inappropriate can be overcome only when
revenue and the consumption of the economic benefits of the intangible assets are Ôhighly correlatedÕ, or when the intangible
asset is expressed as a measure of revenue. The amendments are not likely to have an impact on the CompanyÕs financial
statements.
(d) Amendments to IAS 34 'Interim Financial Reporting' clarifies what is meant by the reference in the standard to Ôinformation
disclosed elsewhere in the interim financial reportÕ; entities taking advantage of the relief must provide a cross-reference from
the interim financial statements to the location of that information and make the information available to users on the same
terms and at the same time as the interim financial statements. The amendments only effects disclosures in the Company's
financial statements.
The other new standards, amendments to approved accounting standards and interpretations that are mandatory for the
financial year beginning on July 1, 2016 are considered not to be relevant or to have any significant effect on the Company's
financial reporting and operations.
2.3.2 Standards, amendments to approved accounting standards and interpretations that are not yet effective and have
not been early adopted by the Company
The following new standards and amendments to approved accounting standards are not effective for the financial year beginning
on July 1, 2016 and have not been early adopted by the Company:
(a) IFRS 16, ÔLeases' is applicable on accounting periods beginning on or after January 1, 2019. IFRS 16 will affect primarily the
accounting by lessee and will result in the recognition of almost all leases on balance sheet. The standard removes the current
distinction between operating and financing leases and requires recognition of an asset (the right to use the leased item) and
a financial liability to pay rentals for virtually all lease contracts. An optional exemption exists for short-term and low-value leases.
The accounting by lessors will not significantly change. Some differences may arise as a result of the new guidance on the
definition of a lease. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration. This IFRS is under consideration of the relevant Committee
of the Institute of Chartered Accountants of Pakistan. The standard not likely to have material impact on the CompanyÕs financial
statements.
(b) Amendment to IAS 12, ÔIncome taxesÕ is applicable on annual periods beginning on or after January 1, 2017. The amendment
clarifies deferred tax treatment for debt instrument and also addresses questions regarding determination of future taxable profit
for the recognition test of deferred tax. The amendments are not likely to have material impact on the CompanyÕs financial
statements.
(c) IFRIC 22 'Foreign Currency Transactions and Advance Consideration' is applicable for annual periods beginning on or after
January 1, 2018. The interpretation clarifies which date should be used for translation when a foreign currency transaction
involves an advance payment or receipt. The related item is translated using the exchange rate on the date that the advance
foreign currency was paid or received and the prepayment or deferred income recognised. The amendments does not expect
to have a material impact on the Company's financial statements.
(d) IFRS 9, ÔFinancial instrumentsÕ is applicable on accounting periods beginning on or after July 1, 2018. IASB has published the
complete version of IFRS 9, ÔFinancial instrumentsÕ, which replaces the guidance in IAS 39.This final version includes requirements
on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that
replaces the incurred loss impairment model used today. The standard not likely to have material impact on the CompanyÕs
financial statements.
(e) IFRS 15, ÔRevenue from contracts with customersÕ is applicable on accounting periods beginning on or after July 1, 2018. The
IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts for goods and
services and IAS 11 which covers construction contracts. The new standard is based on the principle that revenue is recognised
when control of a good or service transfers to a customer Ð so the notion of control replaces the existing notion of risks and
rewards. The standard permits a modified retrospective approach for the adoption. Under this approach entities will recognise
transitional adjustments in retained earnings on the date of initial application (e.g. July 1, 2018), i.e. without restating the
comparative period. They will only need to apply the new rules to contracts that are not completed as of the date of initial
application. The Company has yet to assess the full impact of this standard on its financial statements.
(f) Amendments to IAS 7, ÔStatement of cash flowsÕ are applicable for annual periods beginning on or after January 1, 2017. The
amendment requires disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing
activities, including both changes arising from cash flow and non-cash changes. The amendments are not likely to have material
impact on the CompanyÕs financial statements.
3. BASIS OF MEASUREMENT
3.1 These financial statements have been prepared under the historical cost convention except for leasehold land which is stated
at the revalued amount, investments which are carried at fair value and certain employee retirement benefits which are measured
at present value of defined benefit obligation less fair value of plan assets.
3.2 The preparation of financial statements in conformity with approved accounting standards requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
The areas where various assumptions and estimates are significant to the Company's financial statements or where judgment
was exercised in application of accounting policies are as follows:
(i) Estimate of useful lives and residual values of property, plant & equipment and intangible assets [note 4.1 and 4.2]
(iii) Estimate of payables and receivables in respect of employees' retirement benefits [note 4.12]
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all the years presented unless otherwise stated.
Owned assets
Operating fixed assets except for leasehold land are stated at cost less accumulated depreciation and impairment loss, if any.
Leasehold land is stated at revalued amount. Capital work-in-progress is stated at cost. All expenditure connected with specific
assets incurred during installation and construction period are carried under capital work-in-progress. These are transferred
to specific assets as and when assets are available for use.
Subsequent costs
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably. Normal repairs and maintenance are charged to expenses as and when incurred.
Depreciation
Depreciation is charged to profit and loss account on the reducing balance basis except for computers and accessories.
Depreciation on computers and accessories is charged to profit and loss account on a straight-line basis. Depreciation is
charged at the rates stated in note 5.1. Depreciation on additions is charged from the month the assets are available for use
while no depreciation is charged in the month in which asset is disposed off.
The depreciation method and useful lives of items of operating 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
depreciation charge for the current and future periods.
Gains or losses on disposal or retirement of operating fixed assets are determined as the difference between the sale proceeds
and the carrying amount of assets and are included in the profit and loss account.
Revaluation of assets
Revaluation is carried out with sufficient regularity to ensure that the carrying amount of assets does not differ materially from
the fair value. Any surplus on revaluation of operating fixed assets is credited to the surplus on revaluation of fixed assets
account.
Leased assets
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 inception of the lease less accumulated depreciation and impairment losses, if any.
Impairment
The Company assesses at each reporting date whether there is any indication that property, plant and equipment may be
impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in
excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets are written down
to their recoverable amounts and the resulting impairment loss is taken to profit and loss account except for impairment loss
on revalued assets, which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed
the surplus on revaluation of that asset.
Intangible assets are stated at cost less accumulated amortisation and impairment loss, if any, and represent the cost of software
licenses and ERP implementation cost.
The costs associated with maintaining computer software programs are recognised 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 recognised as intangible assets. Direct costs include staff cost, costs
of the software development team and an appropriate portion of relevant overheads.
Subsequent expenditure
Expenditure which enhances or extends the performance of computer software programmes beyond their original specifications
is recognised as a capital improvement and added to the original cost of the software.
Amortisation
Intangible assets are amortised using the straight-line method over a period of two years.
The assets' useful lives are reviewed, at each reporting date, and adjusted if the impact on amortisation is significant.
4.3.1 Classification
The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables,
held to maturity and available-for-sale. The classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at the time of initial recognition.
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading
unless they are designated as hedges. Assets in this category are classified as current assets.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period,
in which case, these are classified as non-current assets.
Held to maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity with
a positive intention and ability to hold to maturity.
Available-for-sale financial assets are non-derivative that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless the investment matures or management intends to dispose-
off asset within 12 months of the end of the reporting date.
Regular purchases and sales of financial assets are recognised on the trade-date Ð the date on which the Company commits
to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at
fair value, and transaction costs are expensed in the profit and loss account. Financial assets are derecognised when the rights
to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially
all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables and held to maturity investments are subsequently carried at amortised
cost using the effective interest method.
Gains or losses arising from changes in fair value of the 'financial assets at fair value through profit or loss' category are presented
in the profit and loss account within 'Other income / other expenses' in the period in which they arise. Dividend income from
financial assets at fair value through profit or loss is recognised in the profit and loss account as part of 'Other income' when
the Company's right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in 'Other
comprehensive income'.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity
are included in the profit and loss account as 'Gains / losses from investment securities'.
Interest on available-for-sale securities and held to maturity investments is calculated using the effective interest method is
recognised in the profit and loss account as part of 'Other income'. Dividend income from available-for-sale equity instruments
is recognised in the profit and loss account as part of 'Other income' when the Company's right to receive payments is
established.
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group
of financial assets is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured
as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss - is removed from equity and recognised in profit or loss account. Impairment losses
recognised in profit and loss account on equity instruments are not reversed through the profit and loss account. Impairment
testing of other receivables is described in note 4.8.
Financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument.
All financial liabilities are recognised initially at fair value less directly attributable transactions costs, if any, and subsequently
measured at amortised cost using effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. Where an existing
financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
Stores, spares and loose tools are stated at the lower of cost and net realizable value. The cost of inventory is based on weighted
average cost less provision for obsolescence, if any. Items in transit are stated at cost comprising of invoice value plus other
charges thereon accumulated upto the reporting date.
4.7 Stock-in-trade
The cost in relation to raw materials in hand, packing materials and components has been calculated on a weighted average
basis and represents invoice values plus other charges paid thereon.
The cost in relation to work-in-process and finished goods represents direct cost of materials, wages and appropriate
manufacturing overheads.
Raw materials held in custom bonded warehouse and stock-in-transit are valued at cost comprising of invoice value plus other
charges accumulated upto the reporting date.
Net realizable value is the estimated selling price in the ordinary course of business less costs necessary to be incurred in order
to make the sale.
Trade debts are initially recognised at original invoice amount which is the fair value of the consideration to be received in future
and subsequently measured at cost less provision for doubtful debts. Carrying amounts of trade and other receivables are
assessed at each reporting date and a provision is made for doubtful receivables when a collection of the amount is no longer
probable. Debts considered irrecoverable are written off.
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 balances with banks and cheques in hand.
Ordinary shares are classified as equity and recognised at their face value.
Interest / mark-up bearing loans and borrowings are recorded at the proceeds received. Finance charges are accounted for
on accrual basis.
A defined contribution plan is a post-employment benefit under which an entity pays fixed contribution into a separate entity
and will have no legal or constructive obligation to pay further amounts. The obligation for contribution to a defined contribution
plan is recognised as an employee service benefit expense in the profit and loss account when it is due.
Ð voluntary pension schemes managed by Atlas Asset Management Limited, a related party, under the Voluntary Pension
System Rules, 2005, viz, Atlas Pension Fund and Atlas Pension Islamic Fund.
All the newly appointed employees are offered voluntary pension scheme only. However, those employees who are provident
fund trust members, have the option to opt for either of two above mentioned defined contribution plans.
Equal monthly contributions at the rate of 11% of the basic salary are made to the Fund / scheme, both by the Company and
the employees. The Fund is a separate legal entity and its assets are being held separately under the control of its trustees.
Defined benefit plan is a post-employment benefit plan other than the defined contribution plan. The Company's net obligation
in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return
for their services in current and prior periods that benefit is discounted to determine its present value.
The Company operates an approved funded gratuity scheme for its management staff and an unfunded gratuity scheme for
its non-management staff. The liability recognised in the balance sheet in respect of defined benefit plans is the present value
of defined benefit obligation at the end of reporting period less fair value of plan assets. Contributions under the schemes are
made on the basis of actuarial valuation. The valuations of both schemes are carried out annually by an independent expert,
using the "Projected Unit Credit Method" with the latest valuation being carried out as on June 30, 2017.
The amount arising as a result of re-measurements are recognised in the balance sheet immediately, with a charge or credit
to other comprehensive income in the periods in which they occur. Past service cost, if any, are recognised immediately in profit
and loss account.
Employees' entitlements to annual leaves 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 upto the reporting date.
Liabilities for trade and other payables are carried at their amortised cost, which approximates fair value of the consideration
to be paid in future for goods and services received, whether or not billed to the Company.
4.14 Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except to
the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date.
The charge for current tax also includes adjustments, where considered necessary, to provision for tax made in the previous
years arising from assessments framed during the year for such years.
Deferred
Deferred tax is recognised using the balance sheet method in respect of temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet
date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised only
to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the obligation can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best
estimate.
4.16 Warranty
The Company recognises the estimated liability to repair or replace products still under warranty at the reporting date. Provision
for warranty is calculated based on past experience / history of the level of repairs and replacements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the amount
of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and is
reduced for allowances such as taxes, duties, incentives, sales returns and trade discounts. Revenue from different sources
is recognised on the following basis:
Ð revenue from sale of goods is recognised when goods are dispatched and invoiced to customers;
Ð Interest income on deposits with banks and other financial assets is recognised on accrual basis and;
Ð dividend income from investments is recognised when the Company's right to receive payment has been established.
Borrowing costs are recognised as an expense in the period in which they are incurred except where such costs are directly
attributable to the acquisition, construction or production of a qualifying asset in which case such costs are capitalised as part
of the cost of that asset.
The foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of transactions. The closing balance of non-monetary items is included at the exchange rate prevailing on the date of the
transaction and monetary items are translated using the exchange rate prevailing on the reporting date. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in profit and loss account with other income / other
operating expenses.
The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during
the period.
Segment information is presented on the same basis as that used for internal reporting purposes by the Chief Operating Decision
Maker, who is responsible for allocating resources and assessing the performance of the operating segments. On the basis
of its internal reporting structure, the Company considers itself to be a single reportable segment.
Dividend and appropriation to reserves are recognised in the financial statements in the period in which these are approved.
Depreciation charge - 26,116 150,937 1,011 6,231 1,650 900 17,124 203,969
Closing net book value 516,440 418,119 1,542,569 9,398 11,327 21,994 9,458 73,506 2,602,811
At June 30, 2016
Revaluation / cost 516,440 522,970 2,269,176 11,923 42,340 26,570 13,129 112,714 3,515,262
Accumulated depreciation - 104,851 726,607 2,525 31,013 4,576 3,671 39,208 912,451
Net book value 516,440 418,119 1,542,569 9,398 11,327 21,994 9,458 73,506 2,602,811
Year ended June 30, 2017
Opening net book value 516,440 418,119 1,542,569 9,398 11,327 21,994 9,458 73,506 2,602,811
Additions - 199,432 499,339 2,151 7,507 14,784 5,190 67,287 795,690
Disposals
- cost - - 60,075 270 - - 205 35,548 96,098
- accumulated depreciation - - (28,741) (96) - - (95) (15,861) (44,793)
- - 31,334 174 - - 110 19,687 51,305
Depreciation charge - 46,061 178,136 1,034 6,453 2,801 1,271 21,436 257,192
Closing net book value 516,440 571,490 1,832,438 10,341 12,381 33,977 13,267 99,670 3,090,004
At June 30, 2017
Revaluation / cost 516,440 722,402 2,708,440 13,804 49,847 41,354 18,114 144,453 4,214,854
Accumulated depreciation - 150,912 876,002 3,463 37,466 7,377 4,847 44,783 1,124,850
Net book value 516,440 571,490 1,832,438 10,341 12,381 33,977 13,267 99,670 3,090,004
5.2 Had the leasehold land been recognised under the cost model, the carrying amount of leasehold land would have been
Rs.322,554 thousand (2016: Rs.322,554 thousand).
Note 2017 2016
------ (Rupees in Ô000) -----
5.3 Depreciation charge has been allocated as follows:
Cost of goods manufactured 27.1 235,951 186,137
Distribution cost 28 7,474 6,082
Administrative expenses 29 13,767 11,750
257,192 203,969
5.4 Plant and machinery includes certain dies and moulds having cost aggregating Rs.102,845 thousand (2016: Rs.88,824 thousand)
and net book value of Rs.65,229 thousand (2016: Rs.57,936 thousand) which are held by various vendors of the Company
as these dies and moulds are used by the vendors for producing certain parts for supply to the Company.
('
'
! '
(%( 3 /
5#
?'(
! '
(%( 3 2
'/#' ?'(
'
(%( 3 /2
C ('
'
! '
(%( 3 0#
/# ('
'
'
(%( 3"C
$2
' ?'(
'
(%( 3 0'
=B$
?'(
! '
(%( 3 32#
$ ?'(
! '
(%( 3 3/
?'(
! '
(1%( 3 0
"
$$ ?'(
'
(1%( 3 2&(
/ #
?'(
! ! '
(1%( 3 2(D
"&
?'(
'
(1%( 3 <& B
*
# ?'(
'
(1%( 3 /#
/$$
? ?'(
'
(1%( 3 3&#
''
/
?'(
'
(1%( 3 3&#
''
=$
#' ?'(
'
(1%( 3 =#
&=
' ?'(
'
(1%( 3 8
#
3 ;
?'(
=
&
%
' /
=
&
%>'
(
'
(1%( 3 3&#
''
/ ?'(
'
(1%( 3 )
"
? ?'(
'
(1%( 3 E'
/# ?'(
'
(1%( 3 <
'
& *#'
?'(
! ! '
(1%( 3 /' >
?'(
! ! '
(1%( 3 2##;
5
'
? ?'(
'
(1%( 3 3&
"
?'(
!! '
(1%( 3 <
;&
#@#
; ?'(
'
(1%( 3 *
8
# ?'(
=
&
%
' /
=
%>'
(
'
(1%( 3 //
' ? ?'(
! '
(1%( 3 5#
*
; ?'(
'
(1%( 3 2
' 2#
B
? ?'(
=
&
%
' /
=
&
%>'
(
! ! =
&
%
' /
=
&
%>'
(
! =
&
%
' /
=
&
%>'
(
! !! !! !! '
(1%( 3 3=B$
@
('
'
! ! '
(1%( 3 <
#
#&
? ?'(
! ! 0
3 /*
;
5
;'"&72E
2 7//
5
%#
! ! '
(1%( 3 /#'2#
# ? ?'(
!
/()
(
* ! !
!
!
5.7 Includes Rs.5,906 thousand (2016: Rs.4,657 thousand) advance payment made to Honda Atlas Cars (Pakistan) Limited - a
related party for purchase of vehicle.
ERP
Software implementation
license Total
cost
6. INTANGIBLE ASSETS
---------- (Rupees in Ô000) ----------
As at July 1, 2015
Cost 21,117 7,400 28,517
Accumulated amortisation (10,374) (7,400) (17,774)
Net book value 10,743 - 10,743
Year ended June 30, 2016
Opening net book value 10,743 - 10,743
Amortisation charge (5,860) - (5,860)
Closing net book value 4,883 - 4,883
At June 30, 2016
Cost 21,117 7,400 28,517
Accumulated amortisation (16,234) (7,400) (23,634)
Net book value 4,883 - 4,883
Year ended June 30, 2017
Opening net book value 4,883 - 4,883
Additions 1,600 - 1,600
Amortisation charge (5,016) - (5,016)
Closing net book value 1,467 - 1,467
At June 30, 2017
Cost 22,717 7,400 30,117
Accumulated amortisation (21,250) (7,400) (28,650)
Net book value 1,467 - 1,467
6.1 Intangible assets as at June 30, 2017 include items having an aggregate cost of Rs.28,517 thousand (2016: Rs.16,796 thousand)
that have been fully amortised and still in use of the Company.
2017 2016
------ (Rupees in Ô000) -----
7. INVESTMENTS
- -
8.1 These represent interest-free loans to executives and other employees as per terms of employment. These loans are provided
for the purchase of motorcycle and other specified reasons. Loans aggregating Rs.2,058 thousand (2016: Rs.1,767 thousand)
are provided for the purchase of motorcycles and are repayable in monthly instalments over a period of forty-eight months for
management staff and fifty-four months for non-management staff. Other loans are recoverable over a period of twelve to
eighteen months. These loans are secured by the registration of motorcycles in the name of the Company and employees
vested retirement benefits.
2017 2016
------ (Rupees in Ô000) -----
8.2 Reconciliation of the carrying amount of loans to executives
8.3 The maximum aggregate amount of loans due from executives at the end of any month during the year was Rs.672 thousand
(2016: Rs.698 thousand).
8.4 The carrying values of these loans are neither past due nor impaired. The credit quality of these financial assets can be assessed
with reference to no default in recent history.
2017 2016
------ (Rupees in Ô000) -----
9. LONG TERM DEPOSITS
Consumables stores
- in hand 91,775 88,935
- in transit 791 3,190
Maintenance spares 98,635 89,634
Loose tools 695 555
191,896 182,314
11.1 Includes raw materials amounting Rs.267,911 thousands (2016: Rs.Nil) held with Atlas Metals (Private) Limited - an Associated
Company for further processing into parts to be supplied to the Company.
11.2 Stock-in-trade and trade debts upto a maximum amount of Rs.4,201,487 thousand (2016: Rs.4,201,487 thousand) are under
hypothecation of commercial banks as security for short term borrowings (note 24).
Consider good
Associated Companies:
Atlas Honda Limited 57,994 54,951
Honda Atlas Cars (Pakistan) Limited 10,830 7,081
Indus Motor Company Limited 11,876 8,521
Atlas Metals (Private) Limited 202,371 -
Others 81,571 48,924
364,642 119,477
Consider doubtful
12.3 Trade debts which are past due beyond one year have been impaired and fully provided for.
13.1 These represent interest-free welfare loans and salary advance provided to employees in accordance with the Company's policy
and have maturities upto ten months.
2017 2016
------ (Rupees in Ô000) -----
14. DEPOSITS AND PREPAYMENTS
Considered good and unsecured
Deposits and margins - interest-free 6,318 4,119
Prepayments 11,913 2,338
18,231 6,457
2017 2016
----- (Number of units) ----- Related parties
15.1 893,378 units of HBL Islamic Money Market Fund valuing Rs.89,899 thousand (2016: 820,609 units of HBL Money Market
Fund valuing Rs.82,330 thousand) are under lien of a commercial bank against guarantees aggregating Rs.76,764 thousand
(2016: Rs.75,162 thousand) issued in favour of Sui Southern Gas Co. Ltd., Pakistan State Oil Co. Ltd. and Excise and Taxation
Department, Government of Sindh on behalf of the Company.
Note 2017 2016
------ (Rupees in Ô000) -----
16. OTHER RECEIVABLES
16.1 Represents claims due from Atlas Insurance Limited - an Associated Company. It is in the normal course of business and is
interest-free.
!!
"#
$
%
&
'
%# '
(%
$
((
#
(
#
%# ')
!
"
# $%
"
"
%
"&
!%
"
&
'
(
23
4 &%
50&6
*%
!
72
8
4
*%
9#
//
//
,
:
/
/
,
4
*%
23
50&6
*%
/!/
23
#
50&6
*%
!
/
/
,
#
&
(
%# ')
#(%
'
;<
2&
9
&
+
##
#
(
"
&
&
(
"
-
$
&
9'
'
;8=
,
50&6
*%
4 #
>
#
%
&
(
%
#
&
'
5&
(
(
&
'6
-
((
&
(
(
&
&
(
4:"2
%
-
&
+
#
(
"
&
&
(
"
%#'
%
(
!
(
#
%#
1
/
! 8#
*!
#
#!
"",*
%!2 *
"!-1
&3& !.
: ";*<+ =":/>
#",*
&
*!
#
#!
"
,"##"2?
#!",,-,"-#.
"
%!$"// ' ' ''
)
#!",&#
%!$"// ' $ $ '
0*
-#, " #
&
&*
",
, $ $
-#1
",1
'
1
-#232#" $ $
$ $
4
#
*
-..",1
' ' '' '
4,&
+! **" ' '
*"
0$
! ""-#.
" ' '
0*
-# *". &*",
, ' $ $ '
4
#
*
",1
' ' ''
4
#
*
-..",1
$ $
+" -!" $ $
4,&
$ $
*" ' $ $ '
0$
! ' $ $ '
("!
, "5, ""
. "!&*"&
$ $
4
#
*
",1
' $ $ '
"5.
., "*
.
,
*
#
!&"
73& *#"5.
'
" $
! ",&#
' $ $ '
6 $
! '
Balance at beginning of the year 13,360 12,536 1,568 1,560 14,928 14,096
Charge for the year 6,227 6,723 155 310 6,382 7,033
Contributions made during the year (13,361) (12,536) (280) (206) (13,641) (12,742)
Re-measurements recognised in
other comprehensive income 251 6,637 123 (96) 374 6,541
Recognised liability as at June 30 6,477 13,360 1,566 1,568 8,043 14,928
Payable within next twelve months (6,477) (13,360) - - (6,477) (13,360)
- - 1,566 1,568 1,566 1,568
20.1.10 Plan assets comprise of:
Management Non-Management
2017 2016 2017 2016
-------------------- (% per annum) --------------------
20.1.11 Actuarial assumptions used
The sensitivity of the defined benefit obligation to changes in principal assumptions is:
The sensitivity analysis are based on a change in an assumption while holding all other assumptions constants. In practice,
this is unlikely to occur, and change in some of the assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation
calculated with the projected unit credit method at the end of reporting period) has been applied as when calculating the
gratuity liability recognised within the balance sheet.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous
period.
20.1.13 The expected return on plan assets was determined by considering the expected returns available on the assets underlying
the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the
reporting date.
20.1.15 The weighted average duration of management and non management gratuity is 5.48 years and 5.29 years respectively.
Expected maturity analysis of undiscounted retirement benefit plans:
22.1 Accrued liabilities include Rs.219,096 thousand (2016: Rs.172,966 thousand) pertaining to related parties.
22.5 This represents provision against infrastructure fee levied by the Government of Sindh through Sindh Finance (Amendment)
Ordinance, 2001. The levy of infrastructure fee is disputed and various companies have filed appeals before the High Court of
Sindh (the Court) which are pending adjudication. During the pendency of these appeals, an interim arrangement has been
agreed whereby bank guarantees furnished for consignments cleared upto December 27, 2006 have been returned and bank
guarantees have been furnished for 50% of the levy for consignment released subsequent to December 27, 2006 while payment
is made against the balance amount.
The Company, during the year ended June 30, 2014, also filed an appeal in the Court and became a party to subject controversy
raised through various appeals. The Court, through its interim order, dated April 3, 2014 has granted the above-mentioned
interim relief to the Company and directed to take up the petition along with identical petitions on the next date of hearing. As
at June 30, 2017, the Company has provided bank guarantees amounting Rs.55,000 thousand (2016: Rs.55,000 thousand)
in favour of The Director Excise and Taxation, Government of Sindh for releasing the consignments imported from time to time
and for the purpose of carriage of such goods by road within the province of Sindh. The management believes that the chances
of success in the petition are in the Company's favour.
22.6 Other liabilities include vehicle deposits under Company's vehicle policy aggregating Rs.5,411 thousand (2016: Rs.4,261
thousand).
Includes mark-up amounting Rs.1,544 thousand (2016: Rs.1,468 thousand) due to Meezan Bank Limited - an Associated
Company.
24.2 Includes Rs.319,595 thousand (2016: Rs.33,872 thousand) payable to Meezan Bank Limited - an Associated Company.
24.3 Demand finance facilities aggregating Rs.3,000,000 thousand (2016: Rs.3,000,000 thousand) are also available to the Company
from various banks as sub-limits of above mentioned running finance / musharakah facilities. These facilities carry mark-up at
the rates ranging from 6.15% to 6.46% (2016: 6.53% to 7.11%) per annum.
24.4 FE-25 facilities aggregating Rs.2,690,000 thousand (2016: Rs.2,690,000 thousand) are available from various banks as sub-
limits of above mentioned running finance / musharakah facilities. The Company has not utilized there facility during the year.
24.5 The above-mentioned finance facilities are secured against joint pari passu hypothecation charge on stock-in-trade and trade
debts and are expiring on various dates upto December 31, 2017.
24.6 The facilities for opening letters of credit and guarantees as at June 30, 2017 aggregated to Rs.2,680,000 thousand
(2016: Rs.2,680,000 thousand) of which the amount remained unutilized at year end aggregated to Rs.2,324,220 thousand
(2016: Rs.2,284,417 thousand). These facilities are secured by joint pari passu hypothecation charge on stock-in-trade and
trade debts and lien on import documents.
25.1 Contingencies
25.1.1 The Company received notice from the Directorate of Intelligence and Investigation, FBR, Lahore in which it had been alleged
that the Company purchased goods from certain suppliers who were registered with Regional Tax Offices, but were fake and
issued sales tax invoices to the Company on the basis of which the Company claimed input tax adjustment amounting to
Rs.29.066 million which according to them was illegal / inadmissible. The name of the Company along with 135 companies
and other individuals had therefore been included as an accused person in the First Information Report (FIR) No.04/2011 dated
March 26, 2011 registered by the Additional Director, Intelligence and Investigation, FBR, Lahore. The Company has, therefore,
filed a Constitutional Petition in the Honourable Lahore High Court (the Court) and prayed to quash the FIR against the Company
and declare the notice illegal. The Court has granted stay order and advised the concerned authorities to restrain from further
proceeding with the matter. Further, the Court has quashed the criminal proceedings initiated against the Company as being
unconstitutional, violative of fundamental rights and ultra vires the Sales Tax Act, 1990 (the Act). The FBR against the orders
of the Court has filed an appeal in Honourable Supreme Court of Pakistan, which is pending for hearing.
25.1.2 The Deputy Commissioner Inland Revenue (DCIR), Large Taxpayers Unit, Karachi conducted sales tax audit for the tax year
2013 and passed an order with respect to (i) input claims against purchases from certain suppliers whose status were
subsequently found as blacklisted / suspended on FBR web portal, (ii) non-payment of federal excise duty on royalty, (iii) non-
deduction of sales tax as withholding agent on advertisement expense and (iv) tax credits not allowed on certain expenses.
DCIR, through abovementioned order raised an aggregate demand of Rs.11.819 million including default surcharge. The
Company filed appeal before Commissioner Inland Revenue Appeals CIR(A) against the above order under section 45B of the
Act and section 33 of Federal Excise Act, 2005. Pursuant to the appeal, the CIR(A), through his order dated April 28, 2015,
granted relief to the Company in respect of the demand raised in (i), (iii) and (iv) points mentioned above. However, demand of
federal excise duty on royalty payment was considered correct by CIR(A) in his order. Accordingly, the Company has filed an
appeal before Appellate Tribunal Inland Revenue (ATIR) against the order of levy of excise duty on royalty. Further, the Commissioner
Inland Revenue has also filed an appeal before ATIR against the abovementioned order of CIR(A) through which relief was
granted to the Company. The above appeals are pending for hearing.
25.1.3 Deputy Commissioner Inland Revenue (DCIR), Large Taxpayers Unit, Karachi, for the tax year 2013 passed an order under
section 161 / 205 of the Income Tax Ordinance, 2001 on account of non-deduction of tax on freight & forwarding charges and
discounts allowed to dealers. DCIR through this order created an aggregate demand of Rs.206.534 million including additional
tax. The Company paid the demand of Rs.0.1 million which pertains to a tax deduction on freight charges and filed a stay
application before Commissioner Inland Revenue (Appeals) [CIR(A)] against the recovery of balance of the demand. The stay
against recovery of demand was granted by the CIR(A) after partial payment of Rs.50 million. Further, an appeal was also filed
before the CIR(A) against the above order. Pursuant to this appeal, CIR(A), on March 31, 2015, passed an order under section
129 of the Ordinance and granted relief in respect of issue of non-deduction of tax amounting Rs.108.867 million on discounts
allowed on invoices. However, CIR(A) remanded back the issue of non-deduction of tax aggregating Rs.59.509 million on
additional trade discounts by directing the DCIR to re-examine the issue based on the nature of discount. The CIR has filed
an appeal against the abovementioned order of CIR(A) before the Appellate Tribunal Inland Revenue; which is pending for
hearing.
The Company against the abovementioned show cause notice filed a petition before the High Court of Sindh (the Court) on
the basis that PRA has no jurisdiction to issue such notice. The Company is engaged in manufacturing of automotive batteries
and owing to its technical assistance agreement with technology supplier it pays technical fees to them and in respect of such
technical services the Company is making regular payments of Sindh Sales Tax to the Sindh Revenue Board. Further, the
Company's factory premises as well as all production and entire operations are in province of Sindh, therefore PRA has no
jurisdiction to demand any sales tax on franchise fees on the basis of purported apportionment of the same. The Court, through
its interim order dated July 15, 2016 issued notices to concerned persons / representatives and suspended the operations of
abovementioned show cause notice.
25.1.5 The Deputy Commissioner Inland Revenue (DCIR), Large Taxpayers Unit, Karachi, for the tax year 2015 passed an order under
section 161 / 205 of the Income Tax Ordinance, 2001 (the Ordinance) on account of non-deduction of withholding tax on
various expenses and created a demand of Rs.56.449 million, including default surcharge and penalty. The Company filed a
rectification application against the aforesaid order pursuant to which the DCIR passed a rectified order under section 221 /
161 / 205 of the Ordinance. As a result of the rectified order, the total demand of Rs.56.449 million identified in the original
order was reduced to Rs.0.398 million inclusive of default surcharge and penalty.
While passing the rectified order, the DCIR created an additional demand of Rs.81.593 million including default surcharge and
penalty on account of non-deduction of tax on discounts allowed to dealers. The Company filed an appeal before the
Commissioner Inland Revenue (Appeals) [CIR(A)] against the rectified order and challenged the aggregate demand of Rs.81.991
million. Pursuant to this appeal, CIR(A) passed an order under section 129 of the Ordinance and granted relief to the Company
on aggregate demand of Rs.81.991 million. The Commissioner Inland Revenue (CIR) filed an appeal against the above mentioned
order of CIR(A) before the Appellate Tribunal Inland Revenue; which is pending for hearing.
Guarantees aggregating Rs.76,764 thousand (2016: Rs.75,162 thousand) are issued by a commercial bank on behalf of the
Company to Sui Southern Gas Co. Ltd., Pakistan State Oil Co. Ltd. and Excise and Taxation Department, Government of Sindh.
2017 2016
------ (Rupees in Ô000) ------
25.2 Commitments
25.2.2 Commitments outstanding for capital expenditure other than through letters of credit as at June 30, 2017 aggregated to
Rs.168,831 thousand (2016: Rs.52,650 thousand).
2017 2016
------ (Rupees in Ô000) ------
26. SALES - Net
Local sales
27.3 Salaries, wages and benefits include Rs.2,747 thousand (2016: Rs.2,761 thousand) and Rs.8,265 thousand (2016: Rs.6,720
thousand) in respect of staff retirement benefits gratuity and provident / pension funds respectively.
305,430 287,940
29.1 Salaries and benefits include Rs.2,665 thousand (2016: Rs.3,168 thousand) and Rs.6,526 thousand (2016: Rs.6,944 thousand)
in respect of staff retirement benefits gratuity and provident / pension funds respectively.
29.2 Donation of Rs.18,682 thousand (2016: Rs.14,807 thousand) charged in these financial statements is paid to Atlas Foundation,
2nd Floor, Federation House, Shara-e-Firdousi, Clifton, Karachi (the Foundation). Mr. Yusuf H. Shirazi, Chairman of the Company
and Frahim Ali Khan, Director of the Company are Directors of the Foundation.
254,361 95,577
" /
- ;5"
&
#
-
6
&
3 ; 8; /
!+
3 < /
+ 5
3 &$
,= /
5 !+
4>, 8
% 8; /
5 !
#"
3 .# ; /
5 !
4>, .# 8
% 8; /
! 5
+!
0&
+
?;) "
""
?;) -
! !
3) #
+
@2
$ 5
+
/ &
&#
& $ "
5 #"
+! +
5
&
!+
+
,
"
"
$
2 ! +!
+ ! +
" # $
#
"
) &
5 %
5
%% &- + +
5 &-
#"
- 6
6" <&
! !
5
#
-;) "
""
5
"%#
%% &
5
"; 2"
+
" "
2
$ ' $
$
&
%
8;5"
$ #;
%!
8;5"
5
$
5 #
++ !
!
.
-;) "
""
5
>
;
$ + +
!+ +!+
9/
6
/
,4
6
/
/
/
'
/
,4
6
1
6 !&!.#
!""!"
96
/
-:
;
-:< $!
&.#!"
96
6
6
!&#
&!#$
6
6
;&$!#<
;#!#-<
=
6
8
=
6
'
8
6
;$!&"-<
;&!$$<
=
,
;-!"<
!$$.
6
/
,
&!#-
&$!$&
>
6 -"!$
!##
!"# &""!&#
&.#!-&.
&
/
0
96
? !
6
/
#2&:
,
,
/
/
/
!
/
6
,
$:
'
/
/'/
/
/
/
6
/
/
6
,2
9/
+
>
/
'
/
'
"!
#
/
/
/
,
@
-!
#
;
$<
//
/
/
)
2
',!
6
/
'
/
/
,
@
-!
#2
$ %"#
A
/
, !$#!
!#!"#
&'
3'/
'
,
/
#!-..!#.
#!-..!#.
5'
/ "$2"
#-2$
$ (#
A
'
'
/
/
/
,
/
,
,'
//
/
'
/
/
6
2
Related parties comprise of the Holding Company, Associated Companies, directors of the Company, companies in which
directors are interested, key management personnel, post employment benefit plans and close members of the families of the
directors and key management personnel. The Company in the normal course of business carries out transactions with various
related parties. Detail of transactions with related parties, other than those which have been disclosed elsewhere in these
financial statements, are as follows:
2017 2016
------ (Rupees in Ô000) ------
Holding Company
Rent / service charges paid 111,326 157,840
Dividend paid 158,747 122,900
Reimbursement of expenses - 90
Associated companies
Sales of:
- goods 2,383,780 1,133,461
- operating fixed assets - 8,549
Purchases of:
- goods and services 10,547,426 7,900,864
- operating fixed assets 77,316 102,335
- intangible assets 1,824 -
Rent / service charges paid 6,634 36,775
Mark-up paid 19,841 28,484
Reimbursement of expenses 3,451 942
Expense charged - 335
Insurance premium 130,146 127,053
Insurance claims 11,554 18,955
Purchase of units in mutual funds 5,357,063 1,510,000
Sale of units in mutual funds 4,675,108 919,401
Dividend received 5,378 45,795
Dividend paid 50,115 38,800
Royalty and technical fee 169,594 144,866
Donation paid 18,682 14,807
Contribution to pension funds 9,932 8,896
The aggregate amounts charged during the year in respect of remuneration, including certain benefits, to the Chief Executive,
Directors and Executives of the Company are as follows:
Directors
Chief Executive Others Executives
2017 2016 2017 2016 2017 2016
------------------------------ (Rupees in Ô000) ------------------------------
Number of persons 1 1 2 2 79 66
36.1 The Chief Executive and certain Directors are provided with free use of the Company maintained cars and telephones at
residences. Certain executives are also provided with the Company's vehicles.
Aggregate amount charged in these financial statements for meeting fee to two (2016: two) non-executive directors was Rs.500
thousand (2016: Rs.290 thousand).
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including foreign
exchange risk, interest rate risk and price risk). The Company overall risk management program focuses on having cost effective
funding as well as to manage financial risk to minimize earnings volatility and provide maximum return to shareholders.
The Company's Board of Directors has overall responsibility for the establishment and oversight of the CompanyÕs risk
management framework. The Board is also responsible for developing and monitoring the Company's risk management policies.
Credit risk represents the risk of accounting loss being caused if counterparty fails to perform as contracted or discharge an
obligation. Credit risk arises from loans, trade deposits, trade debts, loans & advances, investments, other receivables and
deposits with banks & financial institutions.
The carrying amounts of financial assets represent the maximum credit exposure. The financial assets exposed to credit risk
aggregated to Rs.2,870,620 thousand (2016: Rs.1,751,710 thousand) as at June 30, 2017 and are as follows:
2017 2016
------ (Rupees in Ô000) ------
4
4
/
.>
.
4
!"
,
'
=
?
<
5
#
;
!$.$& $""" ".$( (!"'
0
%%."( )( %! $'. " % $$(
".)( &'!! !&.& !%(
! ("&"& ! !!'&%%
5
.
#++
4:
@0,0 0!A 000 &" $ $!(&
*#
+
4:
@0,0 0!A 00A $
*+
4:
9,3B;C 03!A 000 ! "" $&((
!&)%( ! "!%
5 4
5
The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark-up rates effective
as at June 30, 2017.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters while optimising the return.
Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument shall fluctuate because of
changes in foreign exchange rates.
The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United
States Dollar (U.S. Dollar). Currently, the Company's foreign exchange risk is restricted to the amounts payable to foreign entities.
The Company's exposure is as follows:
2017 2016
Rupees U.S. Rupees U.S.
in '000 Dollars in '000 Dollars
Balance sheet exposure
Trade and other payables 8,400 80,000 8,376 80,000
Exchange rate of 105.00 (2016: 104.70) for US Dollar to Rupee has been applied.
At June 30, 2017, if the Rupee had weakened / strengthened by 5% against U.S. Dollars with all other variables held constant,
the recalculated post-tax profit for the year would have been Rs.420 thousand (2016: Rs.419 thousand) higher / (lower), mainly
as a result of foreign exchange gain / (loss) on translation of U.S. Dollar denominated financial liabilities.
Interest rate risk represents the risk that the fair value or future cash flow of a financial instrument will fluctuate because of
change in market interest rates.
The Company's interest rate exposure arises from short term borrowings. Borrowings issued at variable rates expose the
Company to cash flow risk and borrowing issued at fixed rate expose the Company to fair value interest rate risk. At June 30,
2017, the Company's interest bearing borrowings aggregated to Rs.822,770 thousand (2016: Rs.735,989 thousand).
At June 30, 2017, if the interest rates on the Company's borrowings had been 1% higher / (lower) with all other variables held
constant, the calculated post-tax profit for the year would have been Rs.8,828 thousand (2016: Rs.7,360 thousand) lower /
higher mainly as a result of higher / (lower) interest expense on floating rate borrowings.
Price risk
Price risk represents the risk that the fair values or future cash flows of financial instruments will fluctuate because of changes
in market prices (other than those arising from foreign exchange risk or interest rate risk), whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded
in the market.
The Company is exposed to equity securities price risk because of investments in mutual fund securities amounting to
Rs.2,464,851 thousand (2016: Rs.1,558,861 thousand) and classified at fair value through profit or loss. The Company is not
exposed to commodity risk.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Underlying the definition of fair value is the presumption that the Company is
going concern and there is no intention or requirement to curtail materially the scale of its operation or to undertake a transaction
on adverse terms.
The carrying values of all financial assets and liabilities reflected in the financial statements are a reasonable approximation of
their fair values.
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities [Level 1].
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is,
as prices) or indirectly (that is, derived from prices) [Level 2].
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) [Level 3].
The Company's financial assets measured at fair value comprise only of level 1 financial assets amounting to Rs.2,464,851
thousand (2016: Rs.1,558,861 thousand).
There were no transfers amongst the levels during the current and preceding year. The CompanyÕs policy is to recognise transfer
into and transfers out of fair value hierarchy levels as at the end of the reporting periods.
$
%&
&
#
'#
() The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on
an armÕs length basis. These instruments are included in Level 1.
'#
!) The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in Level 2.
'# ) If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
"
*
-.!( As at June 30, 2016
#
At fair value
' &
Loans and through
+
Total
#*
& receivables profit and
loss
, -------------- Rupees in Ô000 --------------
"
*
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of
changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders and / or issue new shares. There was no change to the CompanyÕs approach to capital
management during the year.
The production capacity of the plant cannot be determined as this depends upon the relative proportion of various types of
automotive and motorcycle batteries produced.
These financial statements have been prepared on the basis of the single reportable segment.
Sales of battery and allied products represent 93.18% (2016: 96.92%) of the total revenue of the Company.
All non-current assets of the Company as at June 30, 2017 are located in Pakistan.
All of the Company's sales relate to customers in Pakistan other than export sales amounting to Rs.44,467 thousand made
to Afghanistan.
The Company's customer base is diverse with no single customer accounting for more than 10% of net revenue.
2017 2016
40. NUMBER OF EMPLOYEES
41.1 The following information is based on unaudited financial statements of the Fund for the year ended June 30, 2017:
2017 2016
------ (Rupees in Ô000) ------
!
#
#
+ + % %
9
##
+ + %
#)
*4
)#
7 )
#
"#
)##
*
#
*
&
#
: #
*
*
#
+
;
* 9#
#
#
#$
$ 0#2
)
*
* 6+
016+
2*
#
*#
$
)
0##2
*# #)#
*6+%+
016+%+%2
#$
6+
016+
2*
)
*
<
=
#$
!
+
*##
*
##
"#"#
*
#
*$
#
>#
##
*
#
*##
#$3
+
*##
"
#
*
#
$
;
*9#
*
&
+
CFO Chief Financial Officer NCCPL National Clearing Company Pakistan Limited
CIR (A) Commissioner Inland Revenue (Appeals I) OEM Original Equipment Manufacturer
EBITDA Earnings Before Interest, Tax, Depreciation PUC Projected Unit Cost
& Amortization
QCC Quality Control Circle
ERP Enterprise Resource Planning
UK United Kingdom
FBR Federal Board of Revenue
UPS Uninterruptible Power Supply
GDP Gross Domestic Product
USA United States of America
GIKEST Ghulam Ishaq Khan Institute of Engineering
WPPF Workers Profit Paticipant Fund
Sciences and Technology
IT Information Technology
Light Batteries
CGR30 7 PL CGR30 CNG Rickshaw
GR46 9 PL NS40SR Suzuki Van / Pick-up, Subaru Van / Pick-up (old models) (600cc to 800cc)
GL43 9 PL NS40SR Suzuki Car / Van / Pick-up, Jeep, Subaru Car / Van / Pick-up, Charade Petrol (800cc to 1000cc)
GL48 9 PL NS40ZL 9PL Suzuki Mehran, Daihatsu Cuore, Kia Classic, All CNG converted vehicles (800cc to 1000cc)
GL50 11 PL NS40ZL 11PL All types of vehicles (800cc to 1300cc)
CNG60 13 PL N40
GR65 13 PL NS60 Datsun 120Y, Mazda, Mitsubishi Lancer, Toyota, Honda Civic (1000cc to 1800cc)
GL65 13 PL NS60L
GR70 9 PL N50
80D26R 11 PL N50Z Honda Accord, Honda CRV, Toyota Mark II, Toyota Crown, Toyota Cressida, Mercedes Benz, Willys
GR85 13 PL N70 EXTRA Jeeps, MF375 Tractors, Hyundai, Daewoo (2000cc to 6000cc)
GL85 13 PL N70 EXTRA L
Medium Batteries
GR87 11 PL NS70
GR95 13 PL N70Z
GR100 15 PL N85P Toyota Hi-Ace, Mercedes Benz, Isuzu Bus JCR 520zz, Massey Ferguson Tractors, MF-210 Cruiser,
Toyota Hi-Lux, Nissan Diesel Pick-up, Ford 1910 Tractor (2000cc to 6000cc)
GL100 15 PL N85L
6FT120 15 PL 6FT15
Fiat Tractors 460 / 480, IMT 540 Tractors, Massey Ferguson Tractors 240 / 265, Ford Wagons,
N125 17 PL N100S
Land Rover, Toyota Land Cruiser (3000cc to 6000cc)
GX132 17 PL Isuzu Trucks, Mercedes Benz, Hino Truck ZH - 100, Fiat Tractors 640, Isuzu JCR 460R
GX135 19 PL N100 (3000cc to 6000cc)
Heavy Batteries
GX155 21 PL N120S Fiat Tractors 640, Hino Trucks and Busses, Hino Bowzer, Fiat Trucks, Ford Dumper, Isuzu Diesel
GX165 21 PL N120S Buses, Fiat Buses (3000cc to 12000cc)
GX175 23 PL N140
4DLT145 23 PL N130S Ford Tractor 3610 and 46
4DLT160 27 PL N150S
GL190 23 PL
195G51F 25 PL N150 Bedford Truck, Fiat Tractors 640, Mazda Coaster T-3000, Isuzu TD-72, Generator Sets,
GX200R 27 PL N175 Road Rollers and Belarus Tractors
GX200F 27 PL N190Z
210H52 31 PL N200P
Generator Sets, Road Roller, Bulldozer
245H52 33 PL N200
Atlas Hybrid - Automotive
HB46 9 PL NS40ZL All types of vehicles (800cc to 1300cc)
HB50 11 PL NS40ZL All types of vehicles (800cc to 1300cc)
HB65 13 PL NS60L All types of vehicles (1000cc to 1800cc)
HB65 (Thin Pole) 13 PL NS60L All types of vehicles (1000cc to 1800cc)
Motorcycle Battery
GM2.53C2 CLASSIC 3 PL Honda CD70, CG125, all Japanese and Chinese motorcycles
Distilled Water
Battery Tonic 1000 ML Distilled water for all types of batteries
It is to inform you that the Board has approved the remuneration for the following, for the year ending
June 30, 2018.
Bonus, retirement benefits and other facilities are provided in accordance with Company's rules.
Yours truly
For Atlas Battery Limited
Muhammad Irfan
Company Secretary
Atlas Battery
As per directions to all listed companies by Securities and Exchange Commission of Pakistan (SECP) vide
S.R.O. 779(1)/2011 dated August 18, 2011, the ÒDIVIDEND WARRANT(S)Ó should bear the Computerized
National Identity Card (CNIC) number of the registered member(s), except in the case of minor(s) and corporate
members, and dividend warrant(s) can not be issued without inserting the CNIC number of the member(s) or
its authorized person(s).
For this purpose, please provide us a copy of your CNIC (if not provided earlier) ON MOST URGENT BASIS
for compliance of the directions of SECP, failing which your future dividend warrant(s), if any, will be withheld
till the compliance of the above referred notification.
You must mention your folio number on the face of your CNIC copy for identification.
Copy of your CNIC may please be sent to our Registered Office at the following address:
Share Department
Atlas Battery Limited
D-181, Central Avenue
S.I.T.E.
Karachi-75730
Yours truly
For Atlas Battery Limited
Muhammad Irfan
Company Secretary
Copy of the Notification of Securities and Exchange Commission of Pakistan dated August 18, 2011.
S.R.O. 779(1)/2011. In exercise of the powers conferred by section 506B of the Companies Ordinance, 1984
(XLVII of 1984), the Securities and Exchange Commission of Pakistan is pleased to direct all the listed companies
to issue dividend warrant(s) only crossed as ÒA/C payee onlyÓ in the name of registered member or in the name
of authorized person where a registered member authorizes the company to pay dividend on his behalf to any
person. The dividend warrant(s) should also bear the Computerized National Identity Card Number of the
registered member or the authorized person, except in the case of minor(s) and corporate members.
It is to inform you that as per Section 242 of Companies Act, 2017 enacting from May 31, 2017, the payment
of cash dividend through electronic mode has become mandatory. However, as per Circular No.18/2017 dated
August 01, 2017, the Securities and Exchange Commission of Pakistan (SECP) has granted one time relaxation
till October 31, 2017 to comply with the above requirement. Therefore, all shareholders are advised to provide
their bank details in this Dividend Mandate Form, enable the Company to transfer your cash dividend into your
bank account. Shareholders maintaining shareholding under Central Depository System (CDS) are advised to
submit their bank mandate information directly to the relevant participant / CDC Investor Account Service.
Transferee Detail
Bank's Name
It is stated that the above mentioned information is correct, that I will intimate the changes in the above
mentioned information to the Company and the concerned Share Registrar as soon as these occur.
Folio No.
PROXY FORM
I / We ______________________________________________________________________________________
of _________________________________________________________________________________________
being member(s) of Atlas Battery Limited holding _______________________________ ordinary shares
as per Folio No. _______________ and / or CDC Account No. ________________________ hereby appoint
___________________________________________________________________________________________
of ______________________________________________________________________________________
Folio No. _______________ and / or CDC Account No. ______________________________ or failing him
/ her ________________________________________________________________________________________
of ________________________________________________________________________________________
Folio No. _______________ and / or CDC Account No. _______________________________ as my / our
proxy to attend, act and vote for me / us and on my / our behalf at the Annual General Meeting of the
Company to be held at 9:30 a.m. on Friday, September 29, 2017 at 2nd Floor, Federation House, Sharae
Firdousi, Clifton, Karachi and at every adjournment thereof.
Affix
Revenue
Witness: Stamp
Signature ____________________________________
Name _______________________________________ Signature of
CNIC or Passport No. _________________________ Member(s)
Note:
¥ A member entitled to attend and vote at the Annual General Meeting is entitled to appoint another
member as a proxy to attend, act and vote on his / her behalf. Proxies in order to be effective must
be received at the Registered Office of the Company or at the office of our Share Registrar
M/s. Hameed Majeed Associates (Private) Limited, Karachi Chambers, Hasrat Mohani Road, Karachi
not less than 48 hours before the time of the meeting.
¥ CDC shareholders and their proxies are requested to attach an attested photocopy of their Computerized
National Identity Card (CNIC) or Passport with this proxy form before submission to the Company.
AFFIX
POSTAGE
The Secretary
Atlas Battery Limited
D-181, Central Avenue,
S.I.T.E.,
Karachi-75730