ANNUAL REPORT 2007

Atlas Honda

Atlas Honda Limited

Vision Mission
Vision
Market leader in the motorcycle industry as a global competitive centre of production and exports.

Mission
A dynamic growth oriented company through market leadership, excellent in quality and service and maximizing export, ensuring attractive returns to equity holders, rewarding associates according to their ability and performance, fostering a network of engineers and researchers ensuing unique contribution to the development of the industry, customer satisfaction and protection of the environment by producing emission friendly green products as a good corporate citizen fulfilling its social responsibilities in all respects.

Atlas Honda

to maintain a high standard of ethics in all operations and to act as a responsible member of the community.Strategic Goals Customers Our customers are the reason and the source of our business. Employees To enhance and continuously up-date each member’s capabilities and education and to provide an environment which encourages practical expression of the individual potential in goal directed team efforts and compensate them attractively according to their abilities and performance. Technology To develop and maintain distinct business advantages through continuous induction of improved hard and soft technologies. Atlas Honda . Payment of regular satisfactory dividends and adding value to the shares. Corporate Citizen To comply with all Government laws and regulations. Shareholders To ensure health and viability of business and thus safeguarding shareholders interest by maximizing profit. Quality To ensure that our products and services meet the set standards of excellence. It is our joint aim with our dealers to ensure that our customers enjoy the highest level of satisfaction from use of Honda Motorcycles. Local Manufacturing To be the industry leader in indigenization of motorcycle parts.

structure. integrity and openness. compulsory or child labor. • AHL conducts its operations in accordance with principles of good corporate governance. and with respect for human rights and interests of the employees. • AHL is committed to establish mutually beneficial relations with its suppliers.Code of Ethics (Summary) • Atlas Honda Limited (AHL) conducts its operations with honesty. employs and promotes employees on the sole basis of the qualifications and abilities needed for the work to be performed. regular and reliable information of its activities. It works in Atlas Honda . AHL is an equal opportunity employer which recruits. • AHL is committed to make continuous improvements in the management of environmental impact. as an integral part of society. financial situation and performance to all the shareholders. • AHL 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. fulfills its responsibilities to the societies and communities in which it operates. advertised and communicated. AHL is committed to comply with the laws and regulations of Pakistan. which consistently offer value in terms of price and quality. It provides timely. customers and business partners. AHL is committed to safe and healthy working conditions for all employees. AHL does not use any form of forced. AHL is committed to provide branded products and services. It respects the legitimate interests of all those with whom it has relationships. Products and services will be accurately and properly labeled. • AHL strives to be a trusted corporate citizen and.

Assurance (Summary) of compliance is given and monitored each year. It works on the basis of sound research. applying high quality standards. AHL and employees conduct their operations in accordance with the principles of fair competition and all applicable regulations. The Board of Directors of AHL is responsible for ensuring that these principles are communicated to.Code of Ethics partnership with others to promote environmental care. and understood and observed by. The Board of AHL expects employees to bring to their attention. or to that of senior management. Atlas Honda . It respects the concerns of consumers and of society. • AHL make innovations to meet consumer needs. increase understanding of environmental issues and disseminate good practice. all employees. Compliance with the Code is subject to review by the Board supported by Audit Committee of the Board. • Compliance with business principles is an essential element. any breach or suspected breach of these principles. • AHL believes in fair competition and supports development of appropriate competition laws.

• Market leadership and prosperity for all. • Right work in first attempt and on time.Quality Policy • Commitment to provide high quality motorcycles and parts. • Maintain and continuously improve quality. clean and healthy environment. • Training of manpower and acquisition of latest technology. Atlas Honda . • Safe.

The Company is committed to meeting the needs of our consumers in an environmentally sound and sustainable manner by preventing pollution. Environmental Policy Atlas Honda . continual performance improvement and compliance with all legislation and Honda's policy guidelines on green factory concept.

Super econo power 4-stroke engine. Speedometer. Strong and scalable side core. Atlas Honda . utility box. pleasant fuel tank graphics. Non-asbestos breaks.

Atlas Honda .

Commencement of the commercial production of ‘Alternate Current Generator (ACG)’ at Karachi plant. Atlas Honda .Year under Review Commissioning of Effluent Treatment Plant and inauguration of 3 MW Gas Power Plant at Sheikhupura factory. Successful implementation of ERP 'Systems Applications and Products (SAP)’. Regional convention of 'New Honda Circle (NHC)’ of Asia-Oceania Bloc was held in Pakistan. Free check up camps and safety riding campaigns were conducted at Atlas Honda dealers. Expansion of dealers’ network by opening 'Smart Point of Sale (SPS)'.

Table of Contents Company Information Notice of 43rd Annual General Meeting Shareholders' Information Ten Years at a Glance Graphical Presentation Statement of Value Addition and its Distribution Chairman’s Review Directors' Report Statement of Compliance with The Code of Corporate Governance and Transfer Pricing Balance Sheet Composition Auditors’ Review Report to the Members on Statement of Compliance with best practices of Code of Corporate Governance Auditors’ Report to the Members Balance Sheet Profit & Loss Accounts Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements Pattern of Shareholding Atlas Group Companies Proxy Application 02 04 06 08 10 11 12 17 21 23 24 25 26 27 28 29 30 60 64 - Atlas Honda .

AUDITORS LEGAL ADVISORS TAX ADVISOR Atlas Honda 02 .COMPANY INFORMATION BOARD OF DIRECTORS Chairman Directors Yusuf H. Shirazi Masahiro Takedagawa Nurul Hoda Osamu Ishikawa Sanaullah Qureshi Sherali Mundrawala Takatoshi Akiyoshi Saquib H. Col. Amir Awan Takatoshi Akiyoshi Raffat Iqbal Mushtaq Alam Javed Afghani Amir Ali Bawa Hameed Chaudhri & Co. Mohsin Tayebaly & Co. Agha Faisal .Barrister at Law Ford Rhodes Sidat Hyder & Co. Shirazi Nurul Hoda Osamu Ishikawa Suhail Ahmed Col (R) Khalid Aziz Lt. Shirazi Zaryab Tarique Chief Executive Officer Company Secretary AUDIT COMMITTEE Chairman Members Head of Internal Audit Secretary Sanaullah Qureshi Sherali Mundrawala Nurul Hoda Zaheer Ul Haq Naveed Rabbani MANAGEMENT COMMITTEE Chief Executive Officer Vice President Marketing Vice President Technical Chief Financial Officer & General Manager Supply Chain General Manager Plants General Manager Quality Assurance General Manager Engineering & Projects General Manager Development General Manager Human Resources General Manager Information Technology General Manager Marketing General Manager Planning & Commercial Saquib H. (R) Sultan Ahmed M.

I.com.com. Karachi-75730 Tel : (92-21) 2576690 7-Pak Chambers.T. 7233515-17 Fax : (92-42) 7233518.com. S. Lahore Tel : (92-42) 6375360. Multan Tel : (92-61) 4540028 Atlas Honda 03 . 6305262 Azmat Wasti Road.pk Website: www.E. 4540028. Multan Tel : (92-61) 4540054.T.pk 26-27 KM.atlashonda.E. Karachi Tel : (92-21) 2310142 28 Mozang Road..COMPANY INFORMATION BANKERS Atlas Bank Limited Bank Al-Habib Limited Deutsche Bank AG Habib Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Standard Chartered Bank (Pakistan) Limited The Bank of Tokyo-Mitsubishi UFJ Limited United Bank Limited Habib Bank Limited MCB Bank Limited National Bank of Pakistan The Bank of Tokyo-Mitsubishi UFJ Limited 1-McLeod Road. Preedy Street. Rawalpindi Tel : (92-51) 5120494-6. 4571989 Fax : (92-61) 4541690 60-Bank Road.. Lahore-Sheikhupura Road. Saddar. West Wharf Road. Estate Avenue.pk F-36. 7351119 E-mail : ahl@atlas. Saddar. 2727607 D-181/A. S. Karachi-75730 Tel : (92-21) 2575561-65 Fax : (92-21) 2563758 E-mail : ahl@atlas. Sheikhupura-39321 Tel : (92-56) 3406501-8 Fax : (92-56) 3406009 E-mail : ahl@atlas. Karachi Tel : (92-21) 2720833. Lahore-54000 Tel : (92-42) 7225015-17.com. Fax : (92-51) 5120497 SHOW ROOM SPARE PARTS DIVISION WARRANTY & TRAINING CENTRES West View Building.I.pk LENDING INSTITUTIONS REGISTERED OFFICE FACTORIES BRANCH OFFICES Azmat Wasti Road.

NOTICE OF 43rd ANNUAL GENERAL MEETING Notice is hereby given that the forty third Annual General Meeting of the members of Atlas Honda Limited will be held on September 29. 2006. retire and being eligible.each as bonus shares to be allotted to those shareholders whose names stand in the register of members at the close of the business on September 21. 60% for the year ended June 30. 2008.. at 10:30 a. To transact any other business as may be placed before the meeting with the permission of the Chair. The present auditors M/s. 61. SPECIAL BUSINESS 5. 2007 together with the Directors' and Auditors' Reports thereon. to transact the following businesses after recitation from the Holy Quran: ORDINARY BUSINESS 1.0 per share i. 3.363 fully paid ordinary shares of Rs. 2007. Lahore.169. 2007 as recommended by the Board of Directors.m. The said shares shall rank pari passu with the existing shares of the Company as regard future dividend and all other respects. Chartered Accountants. consider and adopt the Audited Financial Statements of the Company for the year ended June 30. By Order of the Board Karachi: September 08. 1984 pertaining to the Special Business referred to above is annexed to this Notice of Meeting." (ii) A statement under section 160(1) (b) of the Companies Ordinance." FURTHER RESOLVED "that all the fractional Bonus Shares shall be combined and the Directors be and are hereby authorized to combine and sell the fractional shares so combined in the Stock Market and pay the proceeds of sales thereof when realized to a charitable institution approved under the Income Tax Ordinance.693. to pass with or without modification the following resolutions as Ordinary Resolutions: (i) RESOLVED "that a sum of Rs.630/. To consider and. To consider and approve the cash dividend of Rs. 6. OTHER BUSINESS 6. 4.of Company's profit be capitalized for issuing 6. 10/.e. To receive. 2007 in the proportion of three bonus shares for every twenty shares held by a member. 2007 as recommended by the Board of Directors. To consider and approve the bonus shares issue @ 15% (three bonus shares for every twenty shares held) for the year ended June 30. To appoint auditors and fix their remuneration for the year ending June 30. To confirm Minutes of the Annual General Meeting held on September 29.. 2. if thought fit. 2001. at 1-McLeod Road. offer themselves for reappointment. 2007 Zaryab Tarique Company Secretary Atlas Honda 04 . Hameed Chaudhri & Co.

2007 will be treated in time for the purpose of payment of final cash dividend and issue of bonus shares. signed and witnessed not later than 48 hours before the meeting. iii) iv) v) vi) vii) viii) STATEMENT UNDER SECTION 160(1) (b) OF THE COMPANIES ORDINANCE. 2007 (both days inclusive). ii) A member entitled to attend and vote at this meeting may appoint another person as his proxy to attend and vote on his / her behalf.630/-. Atlas Honda 05 . Transfers received in order at the Company’s registered office by the close of business on Friday September 21. The instrument appointing a Proxy and the power of attorney or other authority under which it is signed or a notarized / certified copy of the power of attorney must be received at the registered office of the Company duly stamped. photocopy of their CNIC or Passport. (unless it has been provided earlier) to enable the Company comply with the relevant laws. 2007 to September 29. Directors are interested in the business only to the extent of their entitlement of bonus shares as shareholders.693. the Board of Directors' resolution / power of attorney with specimen signatures of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting. 1984 This statement is annexed to the Notice of the Forty Third Annual General Meeting of Atlas Honda Limited to be held on September 29. if foreigner.NOTES: i) The register of members of the Company will remain closed from September 22. In case of corporate entity. 61. The purpose of this statement is to set forth the material facts concerning such special business. Members are requested to notify any change in their registered addresses immediately. Shareholders whose shares are deposited with Central Depository Company (CDC) are requested to bring their Computerized National Identity Card (CNIC) along with their CDC account number for verification. For the convenience of the shareholders a Proxy Application Format is attached with this report. 2007 and thereby capitalize a sum of Rs. No person shall act as proxy unless he/she is member of the Company. Appropriate revenue stamp should be affixed on the Proxy Application. 5 OF THE AGENDA The Board of Directors has recommended to the members of the Company to declare dividend by way of issue of fully paid bonus shares @ 15% for the year ended June 30. if approved by the shareholders. 2007 at which certain special business is to be transacted. Members are requested to provide by mail or fax. ITEM NO. Signature of the shareholder on Proxy Application must agree with the specimen signature registered with the Company.

2007 (both days inclusive). 2006 was cash dividend Rs. subject to approval by the shareholders of the Company at the annual general meeting. Dates of Book Closure The register of members and shares transfer books of the Company will remain closed from September 22. 6. 2007. Atlas Honda 06 . three bonus shares for every twenty shares held. 2007 Time: 10:30 a.SHAREHOLDERS’ INFORMATION Registered Office 1-McLeod Road Lahore Tel: 92-42-7225015-17 92-42-7233515-17 Fax: 92-42-7233518. the Securities and Exchange Commission of Pakistan (SECP) Regulations and the listing requirements. Venue: Registered Office at 1-Mcleod Road Lahore Financial Calendar Audited annual results for year ended June 30. 1984 and allied rules.e. bonus shares and bonus fractions within 24 hours after approval from the shareholders at the annual general meeting. Last year your company dispatched the cash dividend. 2007.0 per share (60%) and Bonus shares issue at 15% i. will be made on or after September 29.m. filed all returns/forms and furnished all relevant particulars as required under the Companies Ordinance. Date of Dividend Payment The payment of dividend and issue of bonus shares.0 per share (60 %) and bonus shares @ 15 % (three bonus shares for every twenty shares held) for the financial year ended June 30. 92-42-7351119 Listing on Stock Exchanges Atlas Honda Limited is listed on Karachi and Lahore Stock Exchanges Listing Fees The annual listing fees for the financial year 200708 have been paid to the Karachi and Lahore Stock Exchanges and Central Depository Company within the prescribed time limit. 6. Stock Code The stock code for dealing in equity shares of Atlas Honda Limited at KSE and LSE is ATLH Statutory Compliance During the year your company has complied with all applicable provisions. Dividend paid for the previous year ended June 30. Annual General Meeting Date: September 29. 2007 First half of September Mailing of annual reports First half of September Annual General Meeting End of September Unaudited first quarter financial results Second half of October Unaudited second quarter financial results Second half of February Unaudited third quarter financial results Second half of April Dividend Announcement The board of directors of the Company has proposed a cash dividend of Rs. 2007 to September 29. upon declaration by the shareholders at the forthcoming annual general meeting.

00 145.00 177.25 248.00 158.00 123. Proxies Pursuant to Section 161 of the Companies Ordinance.05 Lahore Stock Exchange High 236.00 130.25 122. The website contains the financial results of the company together with company's profile.00 123. Sarfraz Mufti Tel: 92-42-7225015-17 92-42-7233515-17 Fax: 92-42-7233518.00 115.00 123.85 225.00 137.05 Low 221.15 158.00 108. the Atlas group philosophy and products of the company.50 111. Market Price Data The following table shows the month-wise share price of the company in the Karachi and Lahore Stock Exchanges: Karachi Stock Exchange Months July 06 August 06 September 06 October 06 November06 December 06 January 07 February 07 March 07 April 07 May 07 June 07 High 236.50 111.80 138.00 121.15 118. Website of the Company Your company is operating website www.80 138. every shareholder of the company who is entitled to attend and vote at a general meeting of the company can appoint another person as his/her proxy to attend and vote instead of him/her.00 108.85 225.10 120.com.00 115. The notice of such meeting is sent to all shareholders at least 21 days before the meeting and also advertised in at least one English and Urdu newspaper having circulation in the province in which the Karachi and Lahore Stock Exchanges are situated. who ought to be a member of the company.05 Low 225. 92-42-7351119 Atlas Honda 07 .00 145.00 130.15 118.atlashonda. The instrument appointing a proxy (duly signed by the shareholder appointing that proxy) should be deposited at the office of the company not less than forty eight hours before the meeting.00 222.15 158.00 158. 1984.30 158.10 120. Every shareholder has a right to attend the General Meeting. General Meeting Pursuant to section 158 of the Companies Ordinance. provided the documents are complete in all respects.30 158.00 177.00 222.05 Change of Address All registered shareholders should send information on changes of addresses at the Registered Office of the Company mentioned above. Share Transfer System Share transfers received by the company are registered within 30 days from the date of receipt.25 113.Payment of Dividend Cash dividends are paid through dividend warrants addressed to the shareholders whose names appear in the register of members at the date of book closure. Shareholders are requested to deposit those warrants into their bank accounts.25 248.00 123.00 137. Contact person: Mr.00 121. Company holds a General Meeting of shareholders at least once a year.00 121.25 113.pk containing updated information regarding the company. 1984 and according to the Memorandum and Articles of Association of the Company. Every notice calling a general meeting of the company contains a statement that a shareholder entitled to attend and vote is entitled to appoint a proxy.00 121.25 122.

047.8 1.713.0 1.5 1.1 1.630.027.4 587.776.657.487.8 580.2 564.7 22.790.7 190.1 566.8 1.3 57.538.6 1.5 1.6 17.1 179.9 1.4 237.8 1.9 650.907.8 366.234.668.0 2007 2006 2005 2004 2003 2002 2001 2000 (Rupees in million) 1999 1998 366.429.7 536.3 494.6 476.8 217.831.2 507.6 1.1 410.0 31.704.8 204.044.8 544.7 528.101.5 591.0 424.2 676.977.8 146.6 59.6 2.5 597.0 439.9 3.225.3 285.6 569.6 3.4 647.4 5.9 65.2 6.3 125.828.988.5 252.0 1.564.3 584.6 308.8 255.397.3 146.111.822.091.TEN YEARS AT A GLANCE YEARS Condensed Balance Sheet Assets Non Current Assets Property.2 2.2 6.0 370.6 1.0 153.1 101.7 202.0 418.7 1.5 12.3 2.419.1 9.419.7 3.3 406.423.3 533.2 898.5 735.5 450.2 1.1 175.9 250.5 803.2 519.7 1.949.1 8.8 15.111.9 85.2 379.7 6.487.6 15.120.8 16.2 360.8 3.563.8 28.2 172.6 394.7 358.9 8.0 1.9 553.5 2.405.4 5.1 2.1 445.0 667.6 529.1 4.3 2.009. plant & equipment Other non current assets Current Assets Inventory Investments & bank balances Other current assets Total Assets Equity & Liabilities Share capital Reserves Non current liabilities Current Liabilities Creditors & provisions Other current liabilities Total Equity & Liabilities Condensed profit & loss Account Sales Cost of sales Gross profit Operating expenses Operating profit Other charges (net of other income) Profit before tax Taxation Profit after tax 16.3 54.0 408.5 4.344.0 208.788.4 1.4 1.948.225.4 21.8 2.0 7.0 270.6 751.5 1.6 441.4 156.8 146.9 199.3 3.629.0 1.794.608.1 117.1 312.8 41.0 336.3 204.591.9 650.1 204.251.0 201.3 36.2 1.6 Atlas Honda 08 .3 16.5 842.1 1.5 322.5 124.0 159.0 179.1 1.6 1.9 113.009.2 242.420.1 2.0 186.7 60.036.1 1.1 458.630.5 510.7 20.5 297.091.2 1.1 500.5 427.2 443.2 2.7 357.021.4 872.538.831.6 1.369.9 990.2 80.1 146.999.2 874.027.044.0 7.124.036.0 181.8 983.6 1.8 397.4 217.424.0 160.9 223.1 15.441.478.0 4.317.6 490.1 591.9 (6.6 1.2 394.5 173.0 498.7) 905.0 4.6 123.9 52.2 14.8 220.4 209.1 8.4 3.5 352.524.0 22.784.4 413.5 4.6 17.246.3 1.570.657.8 360.8 2.4 15.5 249.0 404.3 3.0 334.0 231.0 335.627.5 18.7 190.842.7 1.1 18.3 411.

8 3.1 31.after tax Price Earning Ratio Market Price (June 30) Break up value per share Dividend Cash dividend Stock dividend Dividend yield Dividend pay out Asset Utilization Total assets turnover Fixed assets turnover Inventory turnover Debtor turnover Capital employed turnover Working Capital Cycle Inventory holding period Trade debtors period Creditors period Working capital cycle (%) (%) (%) (%) (Times) 9.43 0.9 1.4 4.1 7.5 109.3 1.7 18.2 9.1 1.2 33.2 7.8 34.3 42.3 4.0 15.7 2.3 6.7 4.9 3.5 3.5 8.9 7.3 4.7 62.1 9.9 4.0 42.6 17.1 19.5 7.7 16.4 1.1 2.4 6.4 6.3 1.4 1.3 2.9 1.4 48.6 26.2 13.6 5.2 9.1 72.8 7.1 1.0 25.1 140.7 16.0 31.3 20.3 7.0 1.7 1.2 1.5 6.2 Atlas Honda 09 .3 9.31 0.1 141.8 80.7 55.8 2.2 10.3 1.48 0.1 4.5 4.47 0.6 12.9 32.4 122.0 3.1 (Times) (Times) (Times) (Times) (Times) 2.1 6.4 60.4 8.6 33.3 2.3 1.6 28.5 39.5 2.1 53.7 221.TEN YEARS AT A GLANCE YEARS Profitability Ratios Gross Profit Profit before tax Profit after tax Return on capital employed Interest cover ratio Return to Shareholders ROE .1 2.6 5.1 4.2 17.1 101.29 0.7 85.4 7.6 3.before tax ROE .8 2.8 40.0 58.0 6.7 39.0 216.3 2.0 10.0 18.2 175.3 7.0 2.6 5.3 8.1 1.0 3.0 3.0 8.1 4.1 14.8 9.5 6.1 25.44 0.1 51.3 4.6 3.after tax EPS .5 11.5 5.9 24.1 49.4 25.8 33.7 39.9 44.7 4.32 0.3 305.0 1.1 4.4 8.64 0.4 7.1 (Days) (Days) (Days) (Days) 48 6 (66) (11) 54 4 (54) 4 51 3 (55) (1) 60 2 (49) 13 40 6 (47) (1) 38 7 (41) 4 49 3 (36) 16 53 4 (43) 14 49 2 (52) (1) 60 2 (58) 4 Liquidity/ Leverage Current Ratio (Times) Long Term debts to Equity (Times) Total Liabilities to Equity (Times) 1.6 3.4 6.2 30.6 7.7 9.5 38.3 3.6 13.1 30.9 43.2 2.6 6.4 4.6 20.0 99.9 7.8 6.8 4.6 58.0 64.0 45.6 1.3 2.1 21.3 29.9 18.4 39.7 3.0 4.9 12.3 9.5 11.5 9.3 4.4 5.5 4.2 1.0 10.0 32.5 16.4 6.9 (Rs) (Rs) (%) (%) 6.0 2007 2006 2005 2004 2003 2002 2001 2000 (Rupees in million) 1999 1998 11.9 11.1 10.5 1.3 28.8 8.6 5.0 19.2 2.38 0.3 7.0 7.7 158.0 4.8 6.7 23.0 18.8 2.5 3.6 10.2 12.2 41.5 18.5 18.0 1.3 22.6 (%) (%) (Rs) (Times) (Rs) (Rs) 27.3 21.9 6.8 1.4 3.7 6.4 1.1 4.4 40.46 0.3 2.4 10.5 5.7 3.7 22.0 72.

in Million) Times 20 Days .000 500 1.500 3.500 2.20 2007 - - Current Assets S.000 3.GRAPHICAL PRESENTATION Asset Management 70 60 50 40 14 12 70 60 Debt Management 40 30 25 Percentage 10 8 50 40 30 20 10 2002 2003 2004 2005 2006 2007 Times 30 20 10 2002 2003 2004 2005 2006 2007 6 4 2 0 15 10 5 0 Inventory turnover Debtors turnover Property.47 Exchange Rates (Rs .50 0.500 1.000 500 2002 2003 2004 2005 2006 Current Ratio Shareholders Equity and Breakup Value Per Share 2.500 4. Plant & Equipment Turnover Total debt to total assets Long term debt to equity Interest Coverge Liquidity 5.51 0. Capital Reserve Breakup value Exchange Rates (JPN Yen .000 4.53 0.USD) 124 123 122 121 120 119 118 117 116 115 114 113 112 0.000 1.JPN Yen) Ju l-0 6 Au g- 06 Se p- O 06 ct -0 6 No v- 06 De c- 06 Ja n- 07 Fe b- M 07 ar -0 Ap 7 r-0 M 7 ay -0 Ju 7 n- Ju 07 l-0 6 Au g- 06 Se p- O 06 ct -0 6 No v- 06 De c- 06 Ja n- 07 Fe b- M 07 ar -0 Ap 7 r-0 M 7 ay -0 Ju 7 n- 07 Dividend Payout & Earnings Per Share 300 25 20 15 10 5 0 2002 2003 Stock Dividend Dividend Payout in Millions 250 200 150 100 50 2004 Cash Dividend 2005 2006 Earnings Per Share 2007 Atlas Honda 10 Earnings Per Share in Rupees Breakup Value in Rupees Current Ratio (Times) Shareholders Equity (Rs.500 3.49 0.500 2.500 1.000 2.000 1.40 3.48 0.000 80 70 60 50 40 30 20 10 2002 2003 2004 2005 2006 2007 - Current Assets in Million 2.52 0.

2007 8% 5% 7.034.384.384.454 Application in % To Government To Employees To Providers of Capital Retained with the business (%) 67 13 7 13 100 399.454 Wealth Distributed 13% 20.556 (%) 71 11 6 12 100 11% 71% To Government To Employees To Shareholders To Lenders Depreciation Retained profit Atlas Honda 11 .162 67% 815.234 131.175 470.070 408.294.188 803.675.159 6.Gross Material and services 19.STATEMENT OF VALUE ADDITION AND ITS DISTRIBUTION 2007 2006 (Rupees in ‘000) WEALTH GENERATED Total revenue .630.782) 6.873.385 (13.044. 2006 6% 6% Retained with the business Depreciation Retained profit 465.258.384 4% 2% June 30. benefits and related cost To Providers of Capital Dividend / Bonus to Shareholders Markup on borrowed funds To Government To Lenders Depreciation Retained profit To Employees To Shareholders 4. Import Duty & Workers Welfare Fund To Employees Salaries.154 339.598 807.668 7.236 (12.556 3% To Government Sales Tax.829) 4% June 30.761 268.005 804.342 214.586 256.346 5.044. Income Tax.150 399.

rate. turning a blind eye to tax evasion in the name of consumer interest is short sighted and harmful for sustained competitiveness. again reducing demand. The increase in interest rates followed. The sub sectors of banking and insurance witnessed particularly strong growth.0 percent. The acceleration in growth during 2006-07 was driven by the continued momentum in the agriculture.6 percent last year and 7. which curbed the off take of credit sales in the urban areas. After double digit growth every year for the last seven years. low inflation and stronger domestic demand. During the first quarter. the floods in Sindh reduced the motorcycle market demand by 25%. Overall manufacturing recorded an impressive and broad based growth of 8. A sustained level of high economic growth over the year has increased the levels of income which has resulted in a surge in domestic demand. contributing nearly three-fifth of the real GDP growth of 7. Auto Industry The year 2006-07 was a period of consolidation for the industry in general. inflicting a great loss to the Government exchequer and the organized industry. on the back of highest ever production of wheat and impressive increase in sugarcane production. stable exchange Atlas Honda 12 .0 percent. the demand eased during the last 12 months.6 percent. The overall industrial production continued its growth momentum during the year under review. in the process. In the two wheeler sector. Pakistan economy has exhibited a higher trend of inflation during the last three years. A strong private sector development strategy is needed to enhance the competitiveness of the private sector. Agriculture registered a sharp recovery with a growth of 5. Selling sub-standard products at tax evaded prices is actually giving the CHAIRMAN’S REVIEW It is my pleasure to present to you the 43rd Annual Report of the performance of the company for the year ended June 30.9 percent. 2007.45 percent. The robust performance of the industrial sector was largely led by higher levels of liquidity in the banking system. The strategy should focus on enforcing regulatory measures.0 percent in 2006-07 as against the revised estimates of 6. against last year's growth of 9. The pass through effect of the unprecedented increase in international oil and food prices is forcing the upward inflationary pressure.0 percent target for the year. However. which was partially offset by the unprecedented rise in metal and oil prices. the most important factor remained the un-organized sector's manipulation of the Government policy to its maximum benefit and. the Government policy basically is designed to promote an industry that fulfills the need of the common man. The Economy The Economy witnessed robust growth during 200607. removing irritants to the private sector growth and improving the country's physical & social infrastructure. Although some sectors within the industry managed to perform better. the cumulative growth was negligible. The GDP growth accelerated to 7. The key driver was the timely winter rains in the rabbi season and higher availability of agriculture credit. manufacturing and services sectors. During 2006-07.0 percent as compared to last corresponding period of 9. The service sector continued to be the key driver of economic activity in the country. However. the growth in the service sector was 8.

is determined to lobby in the government circles whilst at the same time compete in the market to maintain its share. The company takes the need for safety training seriously. In the revamped organization. The results for the year do not adequately reflect the effort which led to a substantial price reduction. The new concept dealerships will help expand the total sale network from 267 to 300. the Institutional Sales department has matured into a major support centre for the company. SPS (Smart Point of Sale) is the company's response to the challenge of expanding its distribution network in a timely manner. Sales through credit cards have just been introduced and present a huge growth potential. The network will be expanded and their promotion will become a special part of the company's strategy.000. With the enforcement of laws recently formulated to check under-invoicing and misdeclaration. The customer care department's foreign trained experts impart training to the sales persons at the dealerships to act as safety instructors for the new customers. however. During 2006-07. Depending on the financial strength and quality of management. New display points in Karachi have been created. with more than 60% of the customer problems resolved within 24 hours. it gave the company the opportunity to re-visit the marketing mix. staffing requirement and renew its focus on Sales. create value for the customer through better service. a 68% increase in target! The new team structure brought together the sales.industry a bad name globally and hurting the industry's growth. next year's Spare Parts sale target has been earmarked at Rs. Safe driving habits improve road safety and mitigate injury risk. The company is looking forward to the potential this segment offers. After a period of sustained growth. an 8% decline year on year. It is hoped that the government announcement in this regard will be made within a month or so. the teams have been brought together at the regional operational level to create synergy amongst all areas of marketing and. Hitherto all three functions had worked independently at the operational level. During the year. During the year. The targeted growth for 2007-08 is envisaged at over 25%. By the last quarter. Your company. as a result. If all the favourable factors come together during the year. service and spare parts teams into a single entity. as demand slowed. Marketing During the year. The new SPS will add to the strength of the 5'S' dealers. it is hoped that 1000 units exports per month is a realistic target for 2007-08. The response to market claims improved. even though they coordinated at the higher management and policy level. As a result. With a capability to produce Atlas Honda 13 . The first three quarters of the year witnessed weak demand. Service and Spare Parts. sales growth picked up once again. Currently. these SPS can be sale. where snatching has been a big menace. The SPS have been created to penetrate un-serviced areas. spare parts or all three. the performance of Service and Spare Parts also improved substantially.1 billion. With a unique market niche. They also train existing customers with improved riding skills. the company thus spent a great deal of effort on re-aligning its supplier base.000 units in an environment where the Government regulations have little consideration for quality and favour low priced products. it offers opportunities for expansion beyond the reach of the regular sales force. A special focus is being made to rejuvenate the company's sales in Karachi. Ironically. the company's future sales momentum looks very positive. announced only in the last week of the year. The strong rise in sales in the 2 months of 2007-08 is an indication of a more competitive positioning of your company's motorcycle. The customer care department is a manifestation of the company's resolve to play an active role in the realm of social responsibility. Whilst the sales for the year were around 332. the company is in the final stage of removing the anomalies at the taxation level to make exports more attractive. the prospects for next year are bright. the company needed to re-structure its marketing department to better present the product to the customer. The Spare Parts sales also showed a marked improvement. the marketing encountered several challenges. the department recorded sales of around 40. They will cover small villages and towns. however. During the year under review. further localizing components and optimizing its internal manufacturing processes. service. Next year's target is 70%. Exports is also a future avenue for growth.

The above activities produced savings and reduced transit damage and cost. both production and industrial peace were maintained and the savings achieved in time for the June Price re-alignment. The response to the price alignment has been tremendous and augurs well for the coming year. Financial Results For the last seven years. the Quality department had to be re-structured to meet the challenges of 500K production. since the announcement. This price reduction has received an enthusiastic response which is reflected in a big surge in sales. an effluent treatment plant with a capacity of 1000 cubic meter a day was commissioned at Sheikhupura plant.990 from the previous Rs. The company is resolved to restructure its supply chain during the year to bring it in line with the global level. Linked with this was the transfer of the engine machining line.000 units. Environment In line with Honda's policy guidelines on the green factory concept and commitment for fully integrated environmental protection. some major changes in the production strategy were resorted to during the year. With production constraints successfully tackled. Through further restructuring. In the year under review. The fuel tank welding line in Karachi was substantially downsized whilst the Sheikhupura line witnessed expansion. giving an opportunity to once again pass on the savings to the customers.990. without any loss of production. which resulted in consolidating the machining facility at one plant thereby cutting down on overheads and ensuring uniform quality. vendor and inventory. who earlier were getting tempted by low quality. Quality upgradation of all models has led to good feed back from users. For this. the year 2006-07 was a year of consolidation and re-structuring for the company. this area will contribute significantly to improved margin and control. Quality premium with affordable pricing has put the company's competitive advantage on a strong footing.990. concerted effort was made to ensure consistency in Quality parts from the vendors and just-in-time in-house manufacturing. are only a temporary setback. However. the price of the market defining model CD-70 was reduced from Rs. Quality Management System of the company is now in conformance with the global practices. 69. From the vast improvement in the store area to the re-alignment of procurement. The price of CG-125 is now Rs. Production The market driven production target of 331.621 units was met by the production shops in an efficient manner.000 to Rs. 75. requiring re-location of shops from one factory to the other. The company shifted the crankcase & cover line shops to Sheikhupura. 54. 64. and quality further improved.50 million a year. In order to meet the above target. the economies of scale are beginning to work in the company's favour. To achieve the target and enhance operational efficiency. The major thrust was the consolidation of the production facilities at the two plants in Karachi & Sheikhupura into a more efficient base. Quality of CG-125 Deluxe at its launch was especially appreciated by the market. The lower results. Though the process was painful.990 down from Rs. In addition to the Government policy of reducing cost of inputs for the manufacturing sector.600. To safeguard individual mobility in a sustainable manner by using natural resources sparingly and further reduce our product's fuel consumption with the commissioning of the 3 MW Natural Gas power plant at Sheikhupura plant.000. low price alternatives. Similarly CD-100 is now priced at Rs. the company sales had grown at an average of 25 percent annually. demonstrated by our expenditure. the results are a source of inspiration. where teething production issues were ironed out after last year's expansion. the results reflect lower sales. 59. 49. therefore. the company is undertaking aggressive marketing efforts. Atlas Honda 14 . the company is now geared to meet any realistic surge in demand.000. 71. The re-structuring is now complete. The total fuel tank demand is now being met in Sheikhupura as against the previous practice of manufacturing in Karachi for use at Sheikhupura. The company feels very confident that the quality is now a well recognized advantage for its' products which will convert many first time users. Similarly the newly commissioned 500K synchronous plant took on the responsibility of frame body welding for the total welding load of the company. The supply chain department has gone through a revolution. The CG-125 Deluxe is available at Rs. This has not only added to the company's initiative on an improved environment in terms of emission control but also reduced the energy bill with an expected cost saving of Rs. In June 2007.

200 1. As far as the financial results are concerned. income tax and custom duties as against Rs.962) 682 Cash flow from investing activities 2006 Cash & cash equivalents June 30 1. on the other hand.34 million as against Rs.1. Gross Profit 1.377. the company has started using effective hedging mechanism in the form of swaps and derivatives.772. The Company's contribution to the national economy by way of value addition this year amounts to Rs. On the back of lower sales. The selling. Gross profit percentage improved despite lower sales.184 4.553.294 1.76 times the net after tax earnings.215. For the coming year. Rs.676. The positive cash flow during the year was deployed for capital expenditure (Rs.151.564 1. higher depreciation and financial expenses.112.420 16. Contribution to National Exchequer 25. Payment of these taxes was more than 7.29 billion on account of sales tax.86 million during 2006.200 900 600 300 Cash & cash equivalents July 1 Cash flow from operating activities 2007 Cash flow from financing activities 682 1. The gross profit margin of the period increased to 9.60 billion as against Rs. this improvement in cash flow is a very good sign.034 4. As a result.83 million. The profit after tax was Rs. the SGA expenses increased to Rs.42 billion of the last corresponding period.524 6. unfavorable currency exchange rate and the unprecedented rise in raw material.16.514 5.47 million).000 5. The increase in interest rates and additional borrowing for capacity expansion led to the increase in financial cost of Rs. 6.580. These instruments have assisted in reducing the volatility of earnings and minimizing interest rate and foreign exchange risk. the financial cost will be once reduced as all the short term borrowings have been adjusted.06 million last year.58 million) and dividends (Rs.269.During the year 2006-07 the Company's revenue was recorded at Rs.38 billion 67. The cash flow position.800 1.6 million to the net profit.700 2. which contributed Rs. process optimization and cost down activities.800 1.600 1.12 million). The cash flow generated through the operating activities was Rs. For this.000 10.2 percent of net receipts from operations.000 17. The treasury function is also responsible for risk management of the Company.36 percent of the corresponding period.543.803.400 2. in million 1.963 3.61 million of last corresponding year.42 percent from 9.32 million of corresponding period.047. 4. the company earned a lower profit before tax of Rs.59 million as compared to Rs. Surplus funds during the year were invested in high yielding deposits and mutual funds.1. The use of derivatives is strictly to manage the Company's risks and in no way is used for speculation.454. debt repayment (Rs.100 1.000 20.500 1. 5. in million 14. general and administrative (SGA) expenses were purposefully not reduced in order to keep the marketing competitiveness for future years.000 800 600 400 200 2002 2003 2004 2005 735 1. Your Company paid taxes to the national exchequer amounting to Rs.977 1.17.432 544 (915) 1. was much improved.51 million as against Rs.03 billion contributed last year.400 Rs. The Treasury function played a positive role in reducing financial risk and ensuring sufficient liquidity for the company.608 1.000 0 9.234 1.120 15.508 2002 2003 2004 2005 2006 Sales 2007 Govt. The company views these expenses as an investment for the future.028 This development was due to a decrease in working capital.630 Net Change in Cash & Cash Equivalents 2.83 million against Rs. Taxes Atlas Honda 15 . especially with lower inventory levels and capital expenditure.344 2006 2007 The unfavourable costs were offset by internal efficiency.528.772 668 (619) 920 (1.15 million in 2007 as compared with Rs.948 5.

China. Osamu Ishikawa who replaced the outgoing director. as an integral part of society. Corporate Affairs and Mr. General Manager. make frequent visits to grasp knowledge of state of the art plants of your Company. Shirazi Atlas Honda 16 . Indonesia. Karachi: August 29. Supply Chain have been elevated to the position of CEO of Alas Power Limited and Atlas Battery Limited respectively. the company is now well positioned to grow the market and its share. Dignitaries from nine countries . Your company also proudly hosted the 15th New Honda Circle (NHC) Asia-Oceania Bloc Convention this year. Atlas strives to be a trusted corporate citizen and. As a result of the initiative. NIPA Administrative Staff College. Vendors. Japan for their continued support in implementing the expansion project and cooperation in maintaining high standards of excellence. Basraa. The convention was held in Pakistan for the first time. despite all the industry malpractices and adversity: (Let us continue to add value. the director who resigned from the Board during the year. Regular in-house trainings were also arranged. One of the group performance criteria is how much a group entity contributes to the Government exchequer . Thailand and Vietnam participated in the convention. Your company is well positioned to maintain its market leadership position. the company is benefiting from improved management information systems.6 billion which is almost 1. 1041 associates have attended these courses. Talha Saad.38 percent of the government total revenues.. there is renewed confidence in the ability of the associates. General Manager. 11. This year.. Shirazi. the CEO Mr. With the arrival of the banking sector as a financing partner for the motorcycle consumer. Information Technology Atlas Honda is constantly improving its infrastructure and has now successfully implemented the SAP application package as an ERP solution to facilitate business processes. day in and day out!) Acknowledgement I would like to thank Honda Motor Company Ltd. paid taxes of over Rs. Mr. Malaysia. Board of Directors. your company arranged external development training courses for 165 employees from various institutes whilst 9 employees were sent abroad for training. Punjab University. the market will soon cross the 1 million barrier. Since the inception of the in-house training courses Atlas Fundamental Course (AFC-1) for non-management and Junior Management Course (J-Course) for middle management associates.all staff and associates for their initiative. Dealers. Philippines. Jawaid Iqbal Ahmed. an 18 months residence course conducted by LUMS. Future Outlook With improved competitiveness of Atlas Honda's product line.as a social responsibility. your company provided internship to 44 students of Engineering and Business Administration from various Universities. At the floor level. cost control and process efficiencies. Taiwan. your company produced two CEOs for other Group Companies. We are convinced that their ability. I also thank our Bankers. Shirazi and his team . On behalf of the Board. UET. fulfill its responsibility to the society and community in which it operates. outstanding performances by the associates were regularly acknowledged in the form of ALA MAYAR awards and educational trips abroad. Saquib H. 2007 Yusuf H. Group President. commitment and achievements. India. and welcome Mr. PAF Naval College. Shareholders. to the mother earth. enthusiasm and energy will secure a successful future of your company in order to serve our valued customers better. Korea. Mr. Karachi University etc. During the year under review. I would like to acknowledge the constructive cooperation made by Mr.The Group of which Atlas Honda is a constituent member. Aamir H. Maqsood A. the product and the production capability to deliver quantity and quality at affordable prices. Mr. Students of prestigious institutions like LUMS. Toshitsugu Kaneko. This year 13 executives received Atlas-LUMS Diploma in Business Management. After a year of restructuring. the Group Director Engineering. Human Resource To follow the Group slogan "Organization Development through Self Development".

000 246. Mr.168 395. The directors endorse the contents of the review. Mr. 2007 and future prospects. Osamu Ishikawa was appointed by the Board.935 553.515 98.047.228 676. 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 30.233 1.924 Profit after taxation Subsequent appropriations The directors have recommended a final cash dividend of Rs.057 665. 13. 1984 and clause (xix) of the Code of Corporate Governance.591 1.694 554.000 214.014 11. Board of Directors The Board comprises of five Executive and three Non-Executive directors.647 663.0 (2006: Rs.529 249. Accordingly the following appropriations have been made: 2007 2006 (Rupees in ‘000) Profit available for appropriation Appropriation: Transfer to General Reserve Cash Dividend 60 % (2006: 60%) Bonus shares 15 % (2006: 15%) 555.000 19. During the year. prepared under section 236 of the Companies Ordinance.0) per share along with a 15 % (2006: 15%) bonus issue.395 132.665 370.832 Atlas Honda 17 . will be put forward to the members at the Forty third Annual General Meeting of the company to be held on September 29. 2007. Operating Results The operating results of your company for the year ended June 30. 6.469 Un-appropriated profit carried forward Earning per Share The Basic and Diluted earnings per share after tax is Rs. 2007 under review are summarized as follows: 2007 2006 (Rupees in ‘000) Profit before taxation Taxation: Current Prior Years Deferred 803. 2007.Directors’ Report The directors of your company take pleasure in presenting their report together with the company's audited financial statements for the year ended June 30.526 246. Toshitsugu Kaneko resigned from the board effective October 31. The directors’ report. 6.549 220.775 61.46 (2006: Rs.060 138. 1. 16. in his place. All the non-executive directors are independent from management. 2006.586 53.46).

Nurul Hoda Mr. Toshitsugu Kaneko) Mr. 8. Saquib H. Sherali Mundrawala Mr. Shirazi Mr. half yearly Name of Directors Mr.5 million and Rs. and the three directors at Rs. It also proposes the appointment of external Auditors to the shareholders and is directly responsible for their remuneration and oversight of their work. bonus and other benefits like free transportation. Audit and Environment Safety and Health. No. Masahiro Takedagawa Attendance 5 5 4 4 4 2 1 1 1 Number of directorships in listed companies. 2006) Mr. The Audit committee receives reports from external auditors on any accounting matters that might be regarded as critical. retire and being eligible. The following is the summary of the Role and Terms of reference of each committee. Sanaullah Qureshi Mr. offer themselves for re-appointment. The attendance of the directors and the number of their directorships in listed companies. Our Corporate Governance Principles The Board of Directors of Atlas Honda Limited is committed to the principles of Good Corporate Governance. Osamu Ishikawa (Appointed in place of Mr. Rs.11. inclusive of utilities will also be provided to two Directors. The Audit committee reviewed the quarterly. The detailed Charter of the Audit Committee developed in accordance with the Code of Corporate Governance contained in the listing regulations of the stock exchanges. The Audit Committee of the company has recommended their re-appointment as auditors of the Company for the year 2007-08. Toshitsugu Kaneko (Resigned effective October 31. medical expenses etc. CEO. During the year.0 million. five Board meetings were held. Takatoshi Akiyoshi Mr. Majority of members including Chairman of the Committee are nonexecutive directors. compliance with laws and regulations and proper financial reporting in accordance with International Financial Reporting Standards. including Atlas Honda Limited (AHL) is as follows: S. CEO and one director. The Audit Committee met four times in the year 2007. telephone facility. Audit Committee This is the committee of the Board that reviews the financial and internal reporting process. Yusuf H. As part of the Group Corporate strategy the Company has a number of committees at the Group level that guide the Executive Management in various key areas of the company's operations ranging from Human resource..The Board approved the remuneration of the Chairman. management of risks and the internal and external audit processes. Shirazi Mr. including AHL 7 3 1 3 1 1 1 1 Atlas Honda 18 . Information technology. The committee consists of three members. 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.0 million respectively. 7. 1 2 3 4 5 6 7 8 9 Auditors The present Auditors M/s Hameed Chaudhri & Co. Furnished accommodation. An independent Internal Audit function reports to the committee regarding Risks and Internal controls across the organization. the system of internal controls. The Company also makes contributions to the gratuity and provident funds for the Chairman. safeguarding of assets of the company. are as per company's policy for the year 2007-2008.

identifying opportunities. The committee consists of three members and its importance can be gauged from the fact that is headed by the Chairman of the company. Sanaullah Qureshi. The primary responsibility for assuring the Company's compliance with applicable environmental. The objective of the Committee is to introduce leading edge technology and IT initiative to automate information delivery and accessibility of data for enhancement of time and cost efficiency. Material changes There have been no material changes since June 30. Group Systems & Technology Committee An accurate and timely provision of information is the key to enhancing performance of the organization. The Committee has also the responsibility to create and maintain a conducive work environment that instills trust and ensures respect. besides the internal audit plan. monitoring group business strategies and plans. their succession planning and compensation. The committee reviews the organization's overall financial and operational performance and provides its guidelines in the achievement of organizations objectives. health. The committee is organized on a functional basis and meets monthly to review the performance of each function of the company against its targets set at the beginning of the year. 3 4 3 Atlas Honda 19 . Health and Safety. During the year. material audit findings and recommendations of the Internal auditor. Atlas Honda Limited recognizes its responsibility to protect and maintain the quality of the environment and the health and safety of its employees and the public. and developing its group members as leaders in their respective fields. Member Group Executive Committee The Group Executive Committee is responsible for setting overall corporate objectives and strategies. The Group Executive committee consists of six members who meet at least five times a year.and annual financial statements. The Group System and Technology Committee consist of three members who are responsible to provide an insight towards the various technological aspects of information systems. fair treatment. This committee has three members which meet at regular intervals to discuss emerging IT issues and their impact on the company's business. development opportunities and grooming and makes succession plan for all employees. Chairman Mr. four Audit Committee meetings were held and attended as follows: Mr. customers. Group Human Resource Committee The Group Human Resource Committee determines the compensation package for the management staff in accordance with the current market practices. The Committee has responsibility for reviewing and forwarding long-term plans. The management believes that the Company must continuously earn the trust and confidence of its employees. Management Committee The Management Committee acts at the operating level in an advisory capacity to the CEO. Environment. The committee is also responsible for maintaining healthy environment within and outside the company through its environment friendly products. shareholders and neighboring communities and other stakeholders in its EHS&S performance. 2007 to date of the report and the company has not entered into any commitment during this period. Nurul Hoda. safety and security ("EHS&S") laws and regulations is vested in the operating management of the Company. It meets four times a year and discusses potential candidates for grooming into future managers of the company. Health and Safety Committee The Company maintain its commitment to higher standards of Environment. Sherali Mundrawala. providing recommendations relating to the business and other corporate affairs. capital and expense budget development and stewardship of business plans. Member Mr. which would have an adverse impact on the financial position of the company.

which contains up to date information of the company's activities.Pattern of Shareholding The pattern of shareholding of the company is annexed. 2007) Rs. 337.38 million (as at June 30. fairly present its state of affairs.pk). Information about taxes and levies is given in notes to the accounts. 2007) Rs. There has been no material departure from the best practices of corporate governance.90 million (as at June 30. as detailed in the listing regulations. Communication Communication with the shareholders is given a high priority.84 million (as at June 30. Annual. A summary of key operating and financial data of the company is annexed. 70. 1984. prepared by the management of the company. The Company operates a contributory provident fund scheme for all employees and Defined benefit gratuity fund scheme for its management/non-management employees. 26. International Financial Reporting Standards. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. Shirazi Chief Executive Officer Atlas Honda 20 . half yearly and quarterly reports are distributed to them within the time specified in the Companies Ordinance. have been followed in preparation of financial statements.atlashonda. Corporate and Financial reporting framework The directors confirm under clause (xix) of the Code of Corporate Governance that: The financial statements. The system of internal control is sound in design and has been effectively implemented and monitored. 2007 Saquib H. The process of monitoring internal controls will continue as an ongoing process with the objective to further strengthen the controls and bring improvements in the system. The company also has a web site (www. cash flows and changes in equity. as applicable in Pakistan. The company has maintained proper books of account. The value of investments based on their respective accounts are as follows: Provident Fund Gratuity Fund Management Staff Non-Management Staff Rs. There is no doubt about the company's ability to continue as a going concern. 2007) On behalf of the Board of Directors Karachi: August 29.com. the results of its operations.

The directors. 6. 8. The financial statements of the company were duly endorsed by CEO and CFO before approval of the Board. Written notices of the Board meetings. The Board members have attended orientation courses on changes in International Financial Reporting Framework and other regulatory changes during the year. including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer (CEO) and other executive directors. The minutes of the meetings were appropriately recorded and circulated.STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE & TRANSFER PRICING A. 2007 has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. CFO. 12. 7. has been declared as a defaulter by that stock exchange. The company has prepared a 'Statement of Ethics and Business Practices' which has been signed by all the directors and employees of the company. 9. Company Secretary and their spouse and minor children have not made transactions of the Company's shares during the year. The Board has developed a vision statement. overall corporate strategy and significant policies of the company. 2007 and was filled up by the Directors within 30 days thereof. 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. have been taken by the Board. Directors. 2006 to June 30. 11. 5. The company has applied the principles contained in the Code in the following manner: 1. One casual vacancy occurred in the Board of Directors from July 01. The directors' report for the year ended June 30. The directors have confirmed that none of them is serving as a director in more than ten listed companies. 14. . being a member of stock exchange. along with agenda and working papers. including this company. Atlas Honda 21 . 2. Statement of Compliance with the Code of Corporate Governance This statement is being presented to comply with the Code of Corporate Governance in the listing regulations of Karachi. were circulated at least seven days before the meetings. CEO and executive do not hold any interest in the shares of the company other than that disclosed in the pattern of shareholding. CEO. 4. The company encourages the representation of independent non-executive directors on its Board of Directors. 15. At present the Board includes three non-executive directors. Executive directors of the Company are not in excess of 75% of total number of directors. 3. Lahore & Islamabad Stock Exchanges for the purpose of establishing a framework of good governance. The meetings of the Board were presided over by the Chairman and the Board met at least once in every quarter. The company has complied with all the corporate and financial reporting requirements of the Code. All the powers of the Board have been duly exercised and decisions on material transactions. A complete record of particulars of significant policies along with the date on which they were approved or amended has been maintained. whereby a listed company is managed in compliance with the best practices of corporate governance. 10. 13. a DFI or an NBFI or.

2007 Saquib H.16. 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. On behalf of the Board of Directors Karachi: August 29. We confirm that all other material principles contained in the Code have been complied with. 21. 17. 18. 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 Institute of Chartered Accountants of Pakistan. Shirazi Chief Executive Officer Atlas Honda 22 . The Board has already formed an Audit Committee in its meeting on June 07. B. 19. It comprises of three members. The statutory auditors of the company have confirmed that they have been given satisfactory rating under the quality control review program of the Institute of Chartered Accountants of Pakistan. The meetings of the Audit Committee were held at least once every quarter prior to the approval of interim and final results of the Company and as required by the Code. 2002. The Board has set up an effective internal audit function manned by suitably qualified and experienced personnel who are conversant with the policies and procedures of the company and are involved in the internal audit function on a full time basis. 20. of whom two are non-executive directors including the Chairman of the Committee. that they or any of the partners of the firm. Statement of Compliance with the Best Practices on Transfer Pricing The Company has fully complied with the Best Practices of Transfer Pricing as contained in the Listing Regulation of the Stock Exchanges.

2006 5% 48% 25% 1% 30% Property. Plant & Equipment Stocks Bank Balances & Investments Other Non Current Assets Trade Debts Other Current Assets EQUITY & LIABILITIES June 30. Profit & Reserves Other current liabilities Trade and other Payables Atlas Honda 23 . 2007 22% 4% 44% 4% 4% 13% June 30. 2006 8% 5% 30% 21% 26% Share Capital Non Current Liabilities Unapp.BALANCE SHEET COMPOSITION ASSETS June 30. 2007 8% 34% 5% 32% 31% June 30.

37 (Chapter XI) of the Karachi Stock Exchange and clause 40 (Chapter XIII) of the Lahore Stock Exchange where the Company is listed. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code.REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Atlas Honda Limited to comply with the Listing Regulation No. Our responsibility is to review. CHARTERED ACCOUNTANTS Atlas Honda 24 . to the extent where such compliance can be objectively verified. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers all controls and the effectiveness of such internal controls. Karachi: August 29. 2007 HAMEED CHAUDHRI & CO. in all material respects. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company's compliance. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. 2007. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended June 30. whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Code of Corporate Governance and report if it does not. Based on our review.

as well as. we report that: (a) in our opinion. 2007 and of the profit. and (d) in our opinion zakat deductible at source under Zakat and Ushr Ordinance. 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. (i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance. 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. An audit includes examining. after due verification. 2007 and the related profit and loss account. 1984. 1984. on a test basis. the balance sheet. cash flow statement and statement of changes in equity together with the notes forming part thereof. and are in agreement with the books of account and are further in accordance with accounting policies consistently applied. investments made and the expenditure incurred during the year were in accordance with the objects of the company. for the year then ended and we state that we have obtained all the information and explanations which. proper books of account have been kept by the company as required by the Companies Ordinance. It is the responsibility of the company's management to establish and maintain a system of internal control. to the best of our knowledge and belief. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance.AUDITORS' REPORT TO THE MEMBERS We have audited the annexed Balance Sheet of ATLAS HONDA LIMITED as at June 30. CHARTERED ACCOUNTANTS Atlas Honda 25 . 1980 (XVIII of 1980). its cash flows and changes in equity for the year then ended. were necessary for the purposes of our audit. 1984. and give the information required by the Companies Ordinance. 2007 HAMEED CHAUDHRI & CO. evidence supporting the amounts and disclosures in the above said statements. 1984. Karachi: August 29. profit and loss account. evaluating the overall presentation of the above said statements. and (b) in our opinion: (ii) (iii) the business conducted. Our responsibility is to express an opinion on these statements based on our audit. the expenditure incurred during the year was for the purpose of the company's business. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. was deducted by the company and deposited in the Central Zakat Fund established under Section 7 of that Ordinance. (c) in our opinion and to the best of our information and according to the explanations given to us. We believe that our audit provides a reasonable basis for our opinion and. 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. An audit also includes assessing the accounting policies and significant estimates made by management.

2007 ASSETS NON CURRENT ASSETS Property.821 NON CURRENT LIABILITIES Long term liabilities Deferred liabilities CURRENT LIABILITIES Trade and other payables Accrued mark-up / interest Short term borrowings Current portion of long term liabilities Provision for taxation 24 25 26 27 28 2.689 357. Shirazi Chairman Saquib H.255 51.364.822 17.975. plant and equipment Intangible assets Investments .943 15.360 2.317 543 312.009.410 682.070 CONTINGENCIES & COMMITMENTS 29 8.036.097 11.998 327.291 2.553 5.590.240 3.380 1.730 1.035 465.BALANCE SHEET AS AT JUNE 30.165 EQUITY AND LIABILITIES Share capital & reserves Share capital Reserves Unappropriated profit 20 21 411.900 3.324 3.263 368.075 864.552 919.409.168 2.088 3.448 51.786 8.732 29.591.097 419.487 1.770.267 559.011.630.566.675 280.027 11 12 13 14 15 16 17 18 19 407.090 3.586.118 665.088 18.928 145.630.165 2.526 2.Available for sale Long term loans and advances Long term deposits and prepayments CURRENT ASSETS Stores.109.930 Yusuf H.645 379.249 20.209 69.989 90 283.449 22 23 1. Shirazi Chief Executive Officer Sherali Mundrawala Director Atlas Honda 26 .974.608.961 3. spares and loose tools Stock in trade Trade debts Loans and advances Trade deposits and prepayments Investments at fair value through profit and loss Accrued mark-up / interest Other receivables Cash and bank balances Note 2007 (Rupees in ‘000) 2006 6 7 8 9 10 3.931 24.966 57.392.925 282.004 555.645 The annexed notes 1 to 44 form an integral part of the financial statements 7.219 7.644 1.036.598.623 4.829 98.937.627.761 12.580.

671 (151.591 38 13.060 (370.629.420.762) 1. Shirazi Chairman Saquib H.228) 676.773 17.924) 553.515 37 (249.772) 1.681 (60. Shirazi Chief Executive Officer Sherali Mundrawala Director Atlas Honda 27 .640) 1.790.546) 1.852 36 (269.569) (209.608.413 (15.198. 2007 Note 30 31 2007 (Rupees in ‘000) 2006 Net sales Cost of sales Gross profit Distribution cost Administrative expenses Other operating income Other operating expenses Profit from operations Finance cost Profit before tax Taxation Profit after tax Earnings per share .46 The annexed notes 1 to 44 form an integral part of the financial statements Yusuf H.261) 150.46 32 33 34 35 (371.232) 173.044.PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30.035 (75.087) (185.047.072.337) 803.717 (343.563.611) 1.Basic & Diluted 16.263 (15.832 16.

862) (415.415 (9.955 (20.363 682.623 (231.149 543.470) (619.000 18.507 8.CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30.088 919.540 12.336) 856. 2007 CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure Investments acquired Sale proceeds of fixed assets Sale proceeds of investments Dividend received Markup / interest received on deposits Software development / acquisition cost Cash used in investing activities Net cash flow before financing activities FINANCING ACTIVITIES Repayment of long term loan Long term loans received Payment of lease rentals Assets sold under sale and lease back agreement (Repayment) / acquisition of short term borrowings Dividend paid Net cash generated from financing activities Increase/(decrease) in cash & cash equivalent Cash and cash equivalent as at July 1 Cash and cash equivalent as at June 30 Note 39 2007 (Rupees in ‘000) 2006 1. Shirazi Chairman Saquib H.908 95 43.962.124) (1.510) 668.088 The annexed notes 1 to 44 form an integral part of the financial statements Yusuf H.310) 40.275) 1.193) (915.772.263) (215.263 (152.968 915. Shirazi Chief Executive Officer Sherali Mundrawala Director Atlas Honda 28 .737) (377.432.869 (454.413.966) (18.418.662 545.923) (1.462 (750.125.535 682.813 (2.278) 237.579) (7.606) (1.000 (5.000.449) 24.441) 9.981) 1.

078.000 1.975.000 618.141 2. 2006 Profit for the year Final dividend (2006) @Rs 6 per share Issue of bonus shares Transfer to general reserve Unrealized gain on remeasurement of hedging instruments Unrealized gain on remeasurement of investments Balance as at June 30.953 39.460 102.591 (214. Shirazi Chairman Saquib H.000 395.on available on hedging priated for sale instruments Profit investments cash flow hedge Balance as at June 30.832 (153.233 676.586) 26.761 (7.125 2.184) (375.168 553.796 676.000) 665. Shirazi Chief Executive Officer Sherali Mundrawala Director Atlas Honda 29 .586) (53.761 1.000) 555.276) 7.184 357.000 1.291 39.761 2.647) (395. 2005 Profit for the year Final dividend (2005) @Rs 6 per share Issue of bonus shares Transfer to general reserve Net loss removed from equity and reported in net profit for the period Balance as at June 30.608.526 1.171.930 553.276) (102.647 411.000 375.941. 2007 255.832 (153. 2007 (Rupees in ‘000) Capital Reserves Share Capital Gain on Share Sale of Premium Land Revenue Reserves General Reserve Unrealized gain/(loss) Total Unappro.125 26.141 26.821 The annexed notes 1 to 44 form an integral part of the financial statements Yusuf H.125 1.644 53.STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30.546.953 39.591 (214.953 165 165 165 1.141) 7.

Standards.Reassessment of Embedded Derivatives. IFRIC 8 . IFRS 5 . 2. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) as notified under the provisions of the Companies Ordinance. 1962 and its shares are listed on Karachi and Lahore Stock Exchanges in Pakistan.Non Current Assets Held for Sale and Discontinued Operations.2 Atlas Honda 30 .1 These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies Ordinance. amendments and interpretations of approved accounting standards are only effective for accounting periods beginning on or after July 1.Customer Loyalty Programmes.Exploration for and Evaluation of Mineral Resources. 2006. the requirements of Companies Ordinance. The company does not intend to adopt the alternative approach for recognition of actuarial gain and losses. is mandatory for the company's accounting periods beginning on or after January 01.1 Measurement These financial statements have been prepared under the historical cost convention. The Company is principally engaged in progressive manufacturing and marketing of motorcycles and auto parts. CORPORATE INFORMATION Atlas Honda Limited (the Company) was incorporated as a public limited company on October 16. IFRIC 11. New accounting standards and IFRIC interpretations that are not yet effective The following standards.Service Concession Arrangements.3 to the financial statements. It also adds new disclosure requirements. 1984. IFRIC 12 . 3. 2.Share Based Payments. IFRIC 10 . the requirements of the Companies Ordinance. IFRIC 9 . 1984. IFRIC 13 . Lahore. It introduces the option of an alternative recognition approach for actuarial gains and losses.Interim Financial Reporting and Impairment. STATEMENT OF COMPLIANCE 2.Agriculture. Multan.Amendments relating to Capital Disclosures.Presentation of Financial Statements . Wherever. Lahore and Rawalpindi.Group and Treasury Shares Transactions. The registered office is located at 1-Mcleod Road. with branches / warranty and training centers at Karachi. 2007 1. 2007 and are either not relevant to the company's operations or are not expected to have a significant impact on the company's financial statements other than certain increased disclosures in the certain cases: IAS 1 . IFRS 6 .Business Combinations. 1984 or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards.Scope of IFRS 2 Share Bases Payments. except for revaluation of certain financial instruments at fair value and recognition of certain employee retirement benefits at present value. 1984 or the requirements of the said directives take the precedence. BASIS OF PREPARATION 3. Adoption of this amendment only impacts the format and extent of disclosures as presented in note 24.NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. IAS 41. IFRS 2 .Employee Benefits. IFRS 3 . The manufacturing / assembly facilities of the Company are located at Karachi and Sheikhupura. interpretations and amendments to published approved accounting standards Amendments to published standards effective in 2006 IAS 19 (Amendment) .

3 Functional and presentation currency These financial statements are presented in Pak Rupees which is the company's functional currency. The valuation of both schemes was carried out on June 30. The amount recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized transitional liability and as reduced by the fair value of the plan assets. recognized provident fund scheme) for its employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. These policies have been consistently applied to all the years presented unless otherwise stated. Equal monthly contributions at the rate of 11 per cent of the basic salary are made to the fund both by the Company and employees. All financial information presented in Pak Rupees has been rounded off to the nearest thousand. 5.1 Employee Benefits Defined Benefit Plan The Company has established funded gratuity scheme for its management and non management staff. 2007. The assets of the fund are held separately under the control of trustees.e. The areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are significant to the financial statements are as follows: a) b) c) d) e) Retirement benefit obligations Provision for taxation Accrued liabilities Useful life of depreciable assets Provision for doubtful receivables and slow moving inventories 3. SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies adopted in the preparation of these financial statements are set out below. including expectations of future events that are believed to be reasonable under the circumstances. Defined Contribution Plan The Company operates defined contribution plan (i. Cumulative net unrecognized actuarial gain and loss at the end of the previous year which exceed 10% of the greater of present value of the Company's obligation and fair value of plan assets are amortized over the remaining service of employees expected to receive benefits. 4. Contributions under the schemes are made on the basis of actuarial valuation and are charged to Profit and Loss account. 2007 using the "Projected Unit Credit Method". APPROVAL OF FINANCIAL STATEMENTS These financial statements were approved by the Board of Directors and authorized for issue on August 29. It also requires management to exercise its judgment in the process of applying the companies accounting policies. Employee Compensated Absences Employee's entitlement to annual leave is recognized when they accrue to employees. Estimates and judgments are continually evaluated and are based on historical experience and other factors.2 Significant accounting judgements and estimates The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. Atlas Honda 31 .3. 5.

Deferred tax Deferred tax is provided using the balance sheet liability method on all temporary differences arising from differences between tax bases of assets and liabilities and their carrying amount for financial statements reporting purpose. plant & equipment. leasehold land. except in the case of items credited or charged to equity in which case it is included in equity. 5. This comprises of Plant & machinery amounting to Rs 385. Capital work in progress is stated at cost accumulated up to the balance sheet date. Items of fixed assets costing Rs 25.187 thousands in respect of 500K plant. 5. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences. factory equipment amounting to Rs 33.000 or less are not capitalized and charged off in the year of purchase.4 Property.2 Trade and other payables Trade and other payables are stated at their cost. without considering extra shift workings.185 thousands. or the minimum tax liability at the rate of 0.073 thousands. plant & equipment Owned and leased assets The company has adopted the cost model for its Property. Depreciation on plant & machinery. building on leasehold land and building on freehold land is charged to income on the basis of reducing balance method.402 thousands and electric & gas fittings amounting to Rs 73. Any change is accounted for as Atlas Honda 32 . Property. building on leasehold land and building on freehold land.5. Depreciation Depreciation is charged to income on straight line method except plant & machinery. vehicles. plant and equipment except freehold land are stated at cost less accumulated depreciation and any identified impairment loss. vehicles. The depreciation method and useful lives of items of property. if any. based on the tax rates that have been enacted or substantially enacted at the balance sheet date. Deferred tax liabilities are generally recognized for all taxable temporary differences.3 Taxation Current year Provision for current year's taxation is based on taxable income at the current rates of taxation after taking into account tax credits and tax rebates available. unused tax losses and tax credits can be utilized.5% of turnover. Property. jigs amounting to Rs 103.527 thousands. Depreciation on additions is charged from the month the asset is available for use while no depreciation is charged in the month in which the asset is disposed off. Additions to plant & machinery includes total additions of Rs 595. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realized or the liability is settled. plant & equipment are reviewed periodically and altered if circumstances or expectations have changed significantly. plant & equipment acquired by way of finance lease are stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at the inception of the lease less accumulated depreciation and impairment losses. Freehold land is stated at cost less any identified impairment loss. Deferred tax is charged or credited in the income statement.

Normal repairs and maintenance are charged to expenses as and when incurred. 5. 500K plant is considered having a useful life of more than twenty years therefore depreciated at the rate applicable to Plant & Machinery. The investments. being the fair value of consideration given. All investments are initially recognized at cost. Cost of purchase excludes transaction cost. Gains or losses on disposal or retirement of Property. the recoverable amount is estimated in order to determine the extent of the impairment loss. investments which are classified as available for sale are remeasured at fair value.6 Leases Assets held under finance leases are stated at cost less accumulated depreciation. Impairment losses are recognized as expense. All purchases and sales of investments are recognized on the trade date which is the date that the company commits to purchase or sell the investment. Where the carrying amount of an asset is greater than its estimated recoverable amount. ERP (SAP) implementation cost is amortised using the straight line method over the period of five years from the month ERP is available for use or from the month the extended support cost is incurred. Payments made under operating lease are charged to profit on straight line basis over the lease term. Cost associated with developing or maintaining computer software programs are recognized as an expense. if any. these investments are remeasured at fair value (quoted market price). are recognized as Intangible assets. At each reporting date. The outstanding obligation under the finance lease less financial charges allocated to the future periods are shown as liability.a change in accounting estimate by changing the depreciation charge for the current and future periods. Whereas. 5. 5. costs of the software development team and an appropriate portion of relevant overheads. A reversal of the impairment loss is recognized in income. the carrying amount of the investment is increased to the revised recoverable amount but limited to the extent of initial cost of the investment. 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. Where an impairment loss subsequently reverses. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognized as a capital improvement and added to the original cost of the software. Unrealized Atlas Honda 33 . the company reviews the carrying amounts of the investments to assess whether there is any indication that such investments have suffered an impairment loss. for which a quoted market price is not available. Software licenses are amortised using the straight line method over the period of two years from the month the license is acquired. Major renewals and replacements are capitalized. it is written down immediately to its recoverable amount.5 Intangible Assets Intangible assets are stated at cost less accumulated amortization and identified impairment loss. Realised and unrealised gains and losses arising from changes in fair value are included in the net profit or loss for the period in which they arise. At subsequent reporting dates. are measured at cost as it is not possible to apply any other valuation methodology. Direct costs include staff cost.7 Investments Investments at fair value through profit or loss are initially measured at cost. being the fair value of the consideration given. unless fair value cannot be reliably measured. If any such indication exists. financial assets at fair value through profit and loss or loan and advances are classified as available for sale investments. After initial recognition. Financial charge is calculated at the interest rate implicit in the lease and is charged directly against income. plant & equipment are determined as the difference between the sales proceeds and the carrying amount of asset and are included in the profit and loss account. Investments which are not classified as held to maturity investments.

on available for sale investments. An estimate is made for doubtful receivables when collection of the amount is no longer probable. which are assets that necessarily take a substantial period of time to get ready for their intended use are added to the cost of those assets. 5. construction or production of qualifying assets.12 Revenue Recognition Sales of motorcycles and spare parts are recognized as revenue when goods are despatched and invoiced to customers. Atlas Honda 34 . 5. Debts considered irrecoverable are written off.13 Borrowing Cost Borrowing costs directly attributable to the acquisition. All exchange differences are charged to profit & loss account. Cost of raw materials and components represent invoice values plus other charges paid thereon. at which time the cumulative gain or loss previously reported in equity is included in income.10 Trade debts and other receivables These are originated by the company and are stated at cost less provisions for any uncollectible amount. are recognized in equity until the investment is sold or otherwise disposed off.15 Warranty The Company recognizes the estimated liability to repair or replace damaged part of products still under warranty at the balance sheet date. 5.8 Stores. Net realizable value signifies the estimated selling price in the ordinary course of business less costs necessary to be incurred in order to make the sale. 5. spares and tools are stated at lower of cost and net realizable value. spares and loose tools Stores. In order to hedge its exposure to foreign exchange risks. Interest income is accrued on a time basis. The cost of inventory is based on weighted average cost.9 Stock in trade These are valued at lower of weighted average cost and net realizable value.gain and losses. Dividend income is recognized when the Company's right to receive dividend has been established. Goods in transit are valued at cost accumulated up to the balance sheet date. Items in transit are stated at cost accumulated to balance sheet date. until such time as the assets are substantially ready for their intended use. The provision is based on the ratio of warranty claims during the year to previous year's sales. 5.14 Provisions Provisions are recognized when the company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation. or until the investment is determined to be impaired. 5. Monetary assets and liabilities denominated in foreign currencies are retranslated into pak rupees at the exchange rates prevailing on the balance sheet date. 5.11 Foreign currency transactions Transactions in foreign currencies are initially recorded at the rates of exchange ruling on the dates of the transactions. by reference to the principal outstanding and the interest rate applicable. wages and appropriate manufacturing overheads. Such transactions are translated at contracted rates. All other borrowing costs are charge to income in the period in which they are incurred. the company enters into forward exchange contracts. 5. and a reliable estimate can be made of the amount of obligation. Cost in relation to work in process and finished goods represent direct cost of raw materials.

5. Company also uses forward foreign exchange contracts and currency options to hedge its risk associated primarily with foreign currency fluctuations relating to purchases of raw materials and fixed assets from overseas suppliers. These financial assets and liabilities are subsequently measured at fair value. 5. any gain or loss from remeasuring the hedging instrument at fair value is recognised immediately in the profit and loss account. 5.16 Dividend Dividend is recognized as liability in the period in which it is approved by the shareholders. The fair values of forward foreign exchange contracts are calculated by reference to current forward foreign exchange rates with similar maturity profiles. Impairment losses are recognized in the profit and loss account. In relation to cash flow hedges. which meet the conditions for special hedge accounting. These contracts (except those having immaterial financial impact or which do not meet criteria for hedge accounting) are included in the balance sheet at fair value and any resultant gain or loss is recognized in the statement of changes in equity and subsequently adjusted against the value of raw materials and fixed assets.20 Impairment An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. 5. Any gain or loss on the hedged item attributable to the hedged risk is adjusted against the carrying amount of the hedged item and recognised in the profit and loss account. net of direct issue costs.18 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. The fair value of cross currency interest rate swap is the estimated amount that the company would receive or pay to sell the swap at the balance sheet date and taking into account the current interest rates.17 Financial assets and liabilities All financial assets and liabilities are initially measured at cost. cash and cash equivalents comprise of notice deposits and cash & bank balances.19 Interest / Mark-up bearing loans and borrowings Loans and borrowings are recorded at the proceeds received. Such derivative financial instruments are stated at fair value. In relation to fair value hedges. which meet the conditions for special hedge accounting. 5.22 Derivative Financial Instruments The company uses cross currency interest rate swaps to hedge its risks associated with interest rate fluctuations on its long term loans. For the purpose of cash flow statement. Atlas Honda 35 . The fair values of forward foreign exchange contracts are included in "Other receivables" in case of favorable contracts and "Trade and other payables" in case of unfavorable contracts. 5. 5. the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity through the statement of changes in equity and the ineffective portion is recognised in the profit and loss account. Finance charges are accounted for on an accrual basis. which is the fair value of the consideration given and received respectively. if any. amortised cost or cost as the case may be.21 Related Party Transactions All transactions with related parties are carried out by the Company at arm's length prices.

119 11.550.640 18.989 1.699 78.078 27 459.106 44.000 4.392 48.715 2.154 6.631 52.645.256 2. 2006 For the Year Disposals Owned Assets Freehold Land 5.389 3.503 63.045 14.2 Allocation of depreciation Note 2007 (Rupees in ‘000) 2006 Depreciation has been allocated as follows: Cost of goods manufactured Administrative expenses 31.467 Plant & machinery 3.141 Furniture & fixtures 11.328 112.203 1.466 15.231 15. PROPERTY. 36. Automotive plastics and Allwin Engineering Industries Limited (Associated company) for production of components to be supplied to the Company.1 33 436.228 Office equipment 15.000 20 5.132 344.144 4.607 Service equipment 389 Total owned assets 4.017 51.514 2.833.154 399.086.255 335 510 27.202.779 50.937 thousand) are held with Electro Polymers (Private) Limited.190 730 535 1.202.046 42.832 3. June 30.1 6.000 20. 2007 3.517 5.132 Building on freehold land 292.699 1.859 3.282 1. Zahoor Die Casting Company.236 30.208 18 19.981.79 10 10 10 50 20 20 25 20 20 20 20 20 5.659 63.576 70.070 Certain dies and moulds having book value of Rs.237 22. 2006 Additions Disposals As at June 30.769 1.300 133.115 14.566.011.112 Leasehold Land 34.530. Atlas Honda 36 .649.873 764.605.112 6. 2007 W.3 383.282 18 69.649.154 4.394 880.232 23.036 31.000 465.444 34.767 550 432 868 22.989 5. Sigma Industries (Private) Limited.832 3.237 5.V.436 29.861 3.255 274.136 Computers & accessories 66.523.440 10.112 34.769 1.084.290 163.6 2007 (Rupees in ‘000) 2006 Operating fixed assets Capital work in progress 6. 65.017 1.089 62.300 Electric & gas fittings 104.003 42. Pakistan Machine Tool Factory (Private) Limited.971 50.763 72.669 28.484 110.520 573.937 1.209 804.839 399.815 Dies & jigs 630.676 106.017 2.192 23.819 362 27 2.897 286.732 (Rupees in ‘000) As at June 30.000 6.556 27.453.800.500 78.728 1. Syed Bhais (Private) Limited.883 7.550.144 Assets held under finance lease Electric & gas fittings Total-2007 Total-2006 30.931 Depreciation 2.483. 2007 Rate % As at July 01.755 1.886.920 12.974 3.928 50. Auvitronics Limited.873 6.483.802 36.264 51.817 357 5.849 29.697 636.335 52.302 Fixture & equipment 1.937 15.231 9.956 11.816 Factory equipment 85.635.000 4.074.1 Operating Fixed Assets Cost Particulars As at July 01.866 30.6.994 3.937 1.D.788 27.485 465.858 2.833.466 5.604 113.303 389 6.953 743.779 Building on lease hold land 66.164 thousand (2006: Rs.504 6.598.070 29.475 1.371 3.793 Vehicles 127.265.144 2. Pak Polymer (Private) Limited. PLANT AND EQUIPMENT Note 6.

15th Mile National Highway. Karachi (Associated Co. Karachi Atlas Asset Management Ltd. Employee Javaid Iqbal Afghani . Employee Afaq Ahmad. F-133/2. 5. R-458. Sales Depreciation Proceeds 4.5 Disposal of Fixed Assets Particulars of operating fixed assets having written down value (WDV) exceeding Rs 50. House No. Bahawalpur Atlas Insurance Company.M. Sunehri Mosque. Main Clifton. Mehersons Estate 1st Floor. Employee Arshad Ali Abid.6. Shahra-e Firdousi. Rashid Rasheed. Talpur Road. Employee M. House No. Employee Samina Naz. Ather. House No. Karachi (Associated Co. Amir Awan. House No.022 828 512 504 832 1. Area. Hydri North Nazimabad. House No. 4. 7-C. Saeed Anwar. Federation House. Employee M. Employee Salman Khan. Hussaini Society.4 Addition to plant and machinery includes Rs 16. 27.) Shoaib Saleem. Block-3. F. F-47/1. F. Block 1. Employee Muhammad Asif. Karachi (Associated Co. Employee Syed Imran Hussain. Employee Raffat Iqbal. Shahra-e-Firdousi. House No. 33. House No.V. Clifton Scheme No. Karachi M. Block-8. Model Town B. Employee Nisar Zaman Khan. Employee Inayatullah. Employee Syed Hasan Ahmed. Karachi Khaled Nadeem. Extension DHA. Employee Zia Ul Hassan. Block-5. Colony.297 1.B. Asif. Martin Quarter P. Alamgir Road. Block 4-E. Employee Atif Ali.D.I. House No.) Amir Ali Bawa. Landhi.9 million) borrowing cost capitalised during the year. Sunset Lane No. Zafar Iqbal.018 1.B.000 each disposed off during the year are as follows: (Rupees in ‘000) Assets Plant & machinery Single Purpose Machines Vehicles Honda Civic Honda Civic Honda Civic Honda Civic Honda Civic Honda City Suzuki Alto Suzuki Alto Honda City Honda Civic Honda City Honda City Suzuki Alto Honda City Honda City Honda Civic Honda City Suzuki Cultus Suzuki Alto Suzuki Cultus Suzuki Mehran Honda Civic Suzuki Mehran Honda Civic Suzuki Mehran Suzuki Mehran Suzuki Mehran Suzuki Mehran Suzuki Mehran Honda City Honda City Honda City Suzuki Mehran Honda City Honda City Suzuki Alto Suzuki Alto Honda Civic Suzuki Alto Honda City Daihatsu Coure Honda City Suzuki Cultus Daihatsu Coure Daihatsu Coure Daihatsu Coure Daihatsu Coure Daihatsu Coure Honda Civic Daihatsu Coure Daihatsu Coure Cost 4.223 795 1.018 1.243 828 828 504 832 832 991 832 615 511 610 398 975 395 975 398 397 395 395 403 808 808 808 395 812 812 502 502 931 496 808 459 781 390 439 439 434 439 439 872 428 399 Accumulated W. Employee M. 183/A.8 million (2006: Rupees 32. Khalid Aziz. Employee First Prudential Modarba. Karachi Shakil Ahmed. Block-1. Karachi M. Employee Mubashar Hassan Rana. Employee Shafiq Ahmed. D-162. Employee Mohammad Akram. 8-8-A. Employee Manzoor Qadir. Azizabad. Employee Maqsood Ur Rehman Rehmani. Karachi Syed Shabih Ahmed. Employee Jawaid Iqbal Ahmed. R-723. Employee Wazir Ali. Employee Muhammad Imran Khan. Karachi Zia Ul Islam. Co-Operative Society. Employee Muhammad Zaman. Employee Zaheer Ul Haq. Employee Jamil A. Employee Shamim Habib Bharmal. Block-F. Karachi Riaz Ahmad Butt. Rabia Garden.265 479 175 464 464 488 307 17 25 379 801 404 407 131 413 420 585 427 221 120 220 13 596 20 602 27 26 33 33 47 477 477 477 66 485 490 181 231 626 194 510 170 525 140 218 218 215 244 244 689 253 238 32 744 620 554 554 534 521 495 479 453 442 424 421 373 419 412 406 405 394 391 390 385 379 375 373 371 371 362 362 356 331 331 331 329 327 322 321 271 305 302 298 289 256 250 221 221 219 195 195 183 175 161 146 756 620 623 554 634 586 495 479 471 515 512 433 391 471 498 406 455 410 402 407 398 403 375 404 371 371 362 362 356 331 331 331 329 347 335 348 289 381 314 335 307 320 270 239 225 237 276 276 357 175 164 Profit/ (Loss) 114 12 69 100 65 18 73 88 12 18 52 86 50 16 11 17 13 24 31 20 13 27 18 76 12 37 18 64 20 18 4 18 81 81 174 3 Mode of disposal Negotiation Negotiation Negotiation Company Policy Company Policy Company Policy Company Policy Company Policy Negotiation Company Policy Company Policy Company Policy Company Policy Company Policy Negotiation Company Policy Company Policy Negotiation Company Policy Company Policy Company Policy Company Policy Negotiation Insurance Claim Company Policy Company Policy Company Policy Negotiation Company Policy Company Policy Company Policy Company Policy Company Policy Negotiation Company Policy Negotiation Company Policy Company Policy Company Policy Negotiation Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Negotiation Company Policy Company Policy Company Policy Company Policy Negotiation Particulars of Buyers Allwin Engineering Ltd. Employee Jaffar Hussain Naqvi. Federation House. Employee Maqsood Basra. Ground Floor.) Col. Nazimababd. Karachi Atlas Honda 37 .Khan. Area. Employee Iqbal Ahmad.B. 6. Employee Tahir Nazir. Sharifabad. Phase-2. Employee Khawaja Shujauddin. Employee Razi Ur Rehman. Employee Talha Saad. Karachi Waqar Matloob. Employee S. Employee Sarfraz Mufti. House No.

Ltd.946 247 9.408 764.858 14.846 3. 2006 Additions 2007 (Rupees in ‘000) W.681 7.603 9.558 19.H.) Waqas Masood .791 57. Area.110 3. Lahore (Associated Co. Westridge-1 Rawalpindi Atlas Insurance Company. Employee M.236 Accumulated W. Employee Ghulam Mustafa . 22/2. Main Clifton. Federation House.891 21.544 48. Karachi (Associated Co. D. 2006 Year 2007 June 30.V.216 15. 32 Street Phase-5. Attock 5 Office equipments Photo Copier Cannon Furniture & fixtures Office Furniture Aggregate values of items where WDV is less than Rs.D.237 22.466 15.922 19.734 6. The Mall Road Lahore.B.734 12.994 548.159 24.644 13. Employee Imran Idrees. Employee Shirazi Trading Co.955 (146) 1.122 23. June 30.Ahsan Mir . (Associated Co.190 35.) Syed Sabihuddin.D. 50.590 104.811 8. Employee Adeel Hanif Zaidi.455 16.315 31.000 2007 2006 (132) (60) 1.V. Ls-54. Amortization As at As at July 01.. Block 16.268 3.440 158 131 94 68 66 65 65 62 61 58 54 51 51 177 100 165 420 390 68 63 65 65 62 66 58 54 51 51 45 40 Profit/ (Loss) 7 289 296 (3) - Mode of disposal Negotiation Negotiation Negotiation Insurance Claim Insurance Claim Company Policy Insurance Claim Company Company Company Company Company Company Policy Policy Policy Policy Policy Policy Particulars of Buyers Muhammad Hassan Salam. F. Employee Atlas Insurance Company. Federation House. Karachi Qaiser Nawaz Janjoa.090 6. Employee Zeeshan Mehdi.644 Atlas Honda 38 . Kamra Road.(Pvt) Ltd.809 2.652 6. Karachi Atlas Insurance Co. 2007 Software licenses SAP implementation cost 2007 2006 13. For the June 30.959 33.823 1.101 18. House No.662 Note 6.260 64.734 27.136 35.796 9. Main Clifton. 25-Nagy Road.927 48.732 29.086 10. Karachi Ather Gulzar Khichi.(Rupees in ‘000) Assets Daihatsu Coure Honda Civic Honda Civic Honda CG 125 DLX Honda CG 125 Honda CG 125 DLX Honda CG 125 DLX Honda Honda Honda Honda Honda Honda CG CG CG CG CG CG 125 125 DLX 125 125 125 125 Cost 399 835 901 73 68 73 73 68 73 68 67 67 68 695 490 42.6 Capital work in progress Plant and machinery Building Dies & jigs Factory equipment Electric & gas fittings Vehicles Advances to contractors / suppliers 2007 (Rupees in ‘000) 2006 6.923 22.625 7.A.859 7. Sales Depreciation Proceeds 241 704 807 5 2 8 8 6 12 10 13 16 17 518 390 22. INTANGIBLE ASSETS Cost Particulars As at As at July 01. The Mall Road.866 Negotiation Negotiation 19.968 6.634 9.612 50.324 29. Shahra-e Firdousi.193 20.382 286 6.) Al-Jannat Hospital. Shahra-e-Firdousi.869 24.821 12.

285 2. Less: Impairment in the value of investment Automotive Testing & Training Centre (Private) Limited 50. 10 each.Note 8. 500 each 2007 (Rupees in ‘000) 2006 2.000 500 500 - 8.371 7.000 2.408 17.811 10.426 20.000 (2006: 200.761 51.699 23.AVAILABLE FOR SALE Unquoted Arabian Sea Country Club Limited 200.385 27.426 885 2.097 9.125 2. Atlas Honda 39 . 9.182 12. These units can be transfered subject to the condition that they will not be redeemed during the remaining period of two years.120 25.761 2. LONG TERM LOANS AND ADVANCES Considered Good Due from: Executives Non executives Less: Installments recoverable within twelve months Executives Non executives 2.1 Reconciliation of loans and advances to executives Balance at beginning of the year Add: Disbursement Less: Recovered during the year 2.048 2.000 (2006: 50.614 8.000) ordinary shares of Rs.794 10.711 3. Motorcycles loans are secured against motorcycles which are registered in the name of the Company.000 2. INVESTMENTS .1 The company as a core invester has agreed to hold the investment for a minimum period of two years from the date of issue of such units.000 units (2006: NIL) of Rs.120 3.1 51.943 9. 10 each Less: Impairment in the value of investment Atlas Islamic Fund (Related party) 100.2 These loans have been provided to executives and employees for personal use and for purchase of motorcycles.933 813 2.505 1.120 2. Personal loans are repayable in eighteen monthly installments whereas motorcycles loans are repayable in equal monthly installments within a maximum period of four years.000) ordinary shares of Rs.591 5.000 500 500 8.

246.580.730 12.120 thousand) and due from associated companies at the end of any month was NIL (2006: NIL).087 100.426 thousand (2006: Rs.378 44.802 56.380 Less: Provision for slow moving stores 1.437 1.621 215.275.301 69.190 389.712 289. LONG TERM DEPOSITS AND PREPAYMENTS Considered Good Deposits Prepayments 2006 13.739 90.956 1. Note 2007 (Rupees in ‘000) 10.3 Maximum amount due from executives at the end of any month was Rs.577 9.847 407. 2.800 Work in Process Finished Goods Motorcycles Spare parts 6.040 15.227 9.860 2.900 11. SPARES & LOOSE TOOLS Consumables stores Maintenance spares Loose tools 70.340 27.379 417. Atlas Honda 40 . STORES.608.324.416 106.529 million (2006: Rs.675 Goods in transit 225. 1. 2.219 233.2.897 1.925 Less: Provision for slow moving stocks 12.263 77.184.415 1.937.411 111.617 1.176 1.292 21.558 104.027 11.780.027 11.1 Stock in trade and trade debtors upto a maximum amount of Rs.9.561 1.2 million) are under hypothecation as security for the Company’s short term finances (Note 26).640 242.847 379. STOCK-IN-TRADE Raw materials & components In hand With third parties 67.889 42.959.

secured Local .317 1.002 261.433.unsecured Advances to suppliers. 100 million (2006: Rs. 13.247 282.403 76. directors. LOANS AND ADVANCES Considered good Loan and advances to other employees Advances to employees for expenses .723.784 36.1 Advances to employees for expenses include amount due from executives Rs.360 2007 (Rupees in ‘000) 2006 14.722 34.831 1.283 1.876 783.989 211.2 Amount due from related parties.335 280.075 16.182 20.264 2. contractors and others .646 314 6.327 61. TRADE DEPOSITS AND PREPAYMENTS Trade deposits Prepayments 2.043 8. Note 14.249 37.050 9. 62 thousand (2006: NIL).338. Chief Executive and executives were NIL (2006:NIL).337 10.740 8.778.811 5.007 1. 15.Note 13.710 864.2 Amount due from related parties. directors and Chief Executive were NIL (2006: NIL).553 2. 14.unsecured Current portion of loans and advances 9 14.1 The bank has lien on export bills / contracts upto a maximum of Rs.050 8.408 51.117 Related Parties Atlas Stock Market Fund Atlas Income Fund Atlas Fund of Funds 4.1 3.998 Atlas Honda 41 . INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS No of Units 2007 2006 7.299 81.113 243.unsecured 2007 (Rupees in ‘000) 2006 21.411 10.715 2.296 327.448 13. TRADE DEBTS Considered Good Export .338. 30 million) against foreign currency financing (Note 12.1 & Note 26).100 323.

OTHER RECEIVABLES Receivable from Government: .056 442. CASH AND BANK BALANCES In current account In savings deposit accounts Term deposits Cheques in hand 393.552 18.2 33.623 320.452 919.419 1. the company has entered into with United Bank Limited and Standard Chartered Bank (Pakistan) Limited at the aggregate notional amount of Rs.552 615 284.088 Atlas Honda 42 .590 238.05% on USD notional amount. 26. 850 million (equivalent to USD 14.9 million).1 234.Note 2007 (Rupees in ‘000) 2006 17. the company is entitled to receive 6 months KIBOR on notional amounts and is required to pay 6 months LIBOR plus spread ranging from 1.852 thousand (2006: Rs.Considered doubtful Provision for doubtful receivable This represents the fair value of three separate Cross Currency Interest Rate Swap agreements.167 615 283.900 11.887 682. Other receivables include Rs.025 615 312.115 60.853 45.643 283. In addition to this the company is required to pay exchange difference arising due to fluctuation in USD/PKR rates between reset and the settlement dates.215 32. Under the terms of the swap agreements. These transactions have been remeasured to fair value at the end of the year resulted in a gain of Rs.125 million which has been classified under equity.048 357.000 24. at each reset date.2 (Rupees in ‘000) 19.009 18. ACCRUED INTEREST Interest accrued on savings deposit accounts 18.Sales Tax 236. 23.Income tax deducted at source / paid in advance .153 4. 9. 2007 2006 18.05% to 3.362 280.1 18.410 90 543 Unrealised gain on remeasurement of interest rate swap to fair value Other receivable Other receivable.366 thousand) duty draw back receivable from Collector of Customs.195 312.410 615 313.

000.656 1.590.352. Note 21.766 (2006: 19.428 As at June 30 Issued ordinary shares of Rs 10 each as fully paid bonus shares 357. SHARE CAPITAL 2007 2006 (No.460 102.3 On September 29.000. LONG TERM LIABILITIES Long term financing -Secured Liabilities against assets subject to finance lease 22.570.000 100.647 thousands (2006: Rs 102.267 1.000 2007 Authorised Capital Ordinary shares of Rs.593 411.000.129.118 1. 10 each issued as fully paid bonus shares Ordinary shares of Rs.020 10.593 357. 20.586.1 Movement in share capital during the year 35.118 1. 2006 issuance of three bonus shares for every twenty shares held resulted in an increase in issued capital by Rs.644 20.419 12.291 255.044 259.each were held by associated companies at the year end.647 411.352.441 19. 20.380 259. 53.408 35.2 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.764.644 20. 10/.517.528 291.300 41.109. subscribed and paid up capital (Rupees in ‘000) 2006 1.000 1.941.764.000 26.184 357.528 345.000 1.092 6.000.748 34.537) ordinary shares of Rs.170 2. 10 each fully paid-up in cash Ordinary shares of Rs.125 1.1 22.428 Ordinary shares of Rs. RESERVES Capital Reserves General Reserve Unrealized gain on remeasurement of hedging instruments Unrealized gain on remeasurement of investments 40. 10 each issued against consideration other than cash 63.152.291 63.300 35.104.764.546.000 6. 10 each Issued.092 25.4 22.009.848 1.546.004 22. of Shares) 100.664 41.428 5.523 2.097 40.221.20.761 2.096. All shares rank equally with regard to company's residual assets.644 53.118 2007 (Rupees in ‘000) 2006 Atlas Honda 43 .2 1.184 thousands).748 29.129.218.364.

419 1. Atlas Honda 44 .5% over 6 months KIBOR 1.000 273.5% over 6 months KIBOR 0.000 368.151 10 Half yearly 30-09-06 225.000 387.000 National Bank of Pakistan (Loan IV) 250.5% over 6 months KIBOR 0.933.019 National Bank of Pakistan (Loan I) 250.153 10 Half yearly 08-10-04 100.000 Bank of Tokyo-Mitsubishi UFJ Ltd (Loan II) 500.151 10 Half yearly 02-01-07 200.000 Habib Bank Limited 250.(Note 27) 1.555.333 10 Half yearly 04-01-03 10.000 No.343 10 Half yearly 28-06-04 75.22.000 National Bank of Pakistan (Loan II) 250.5% over 6 months KIBOR 0. of installments Purchase and date of price commencement 353.000 327.5% over 6 months Kibor 1.5% over 6 months Kibor 0.000 125.000 150.896 10 Half yearly 27-09-05 170.75% over 6 months T-Bill 2007 2006 (Rupees in '000) 175.973 10 Half yearly 05-01-07 450.570.000 200.096.440 213.000 MCB Bank Limited 250.000 500.767 10 Half yearly 05-04-06 Rate of markup 0.000 Less: Current maturity shown under current liabilities .019 362.000 744.000 368.000 133.000 250.000 National Bank of Pakistan (Loan III) 250.440 459.25% over 6 months T-bill 0.021 1.000 225.000 250.000 20.578 1.123 10 Half yearly 30-09-05 150.000 Standard Chartered Bank (Pakistan) Limited 100. first pari passu charge by way of hypothecation of fixed assets of the company and demand promissory note.000 360.441 These loans are secured against first equitable mortgage charge ranking pari passu on immovable properties of the company.25% over 6 months T-Bill 0.1 LONG TERM FINANCING-SECURED Name of Banks Bank of Tokyo-Mitsubishi UFJ Ltd (Loan I) Sale price 250.

655 29.718) 516.2 2007 (Rupees in ‘000) 2006 42.299 5.2 Deferred taxation The liability for deferred taxation comprises of timing differences relating to: Deferred credit arising in respect of accelerated tax depreciation & amortisation Deferred debit arising in respect of various provisions 550. 2010 Total minimum lease payments Less: Financial charges allocated to future periods Present value of minimum lease payments Current maturity shown under current liabilities-Note 27 The above represents finance lease entered into with Atlas Bank Limited.689 27.994 559.028 (26. 2007 Year ended June 30.224 Atlas Honda 45 .932 19.897 42.808 12.350 19.1 Compensated leave absences Balance at beginning Add: Provision for the year Less : Payments during the year 23.712 (33.808 7.656 6.656 21.808 7.224 384.588 1.994 411.549 19.350 6.656 6.848 6.553 3.988 9.808 12.547 26.493 516.22.656 Year ended June 30.493 35.465 23.268 35.224 10. an associated undertaking for generators.966 5.848 7. 2008 Year ended June 30.006 26.492 2.390 2.299 5.504 37.563) 384.1 23.966 7.966 5. Note 23.656 6. Monthly lease payments include finance charge of 7% per annum which is used as a discounting factor.350 19.006 6.166 45.465 419.2 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE 2007 2006 2007 2006 (Rupees in '000) Present value of Minimum lease payments Minimum lease payments 7.549 26.966 7. 2009 Year ended June 30.656 19. The balance of liability is payable by October 2009 in monthly installments.487 35.006 6. DEFERRED LIABILITIES Compensated leave absences Deferred taxation 23.966 7.

783) 220.700 Atlas Honda 46 .086 56.an associated company.685 3.086 6.072 52.465 139. TRADE AND OTHER PAYABLES Trade creditors Accrued liabilities Provision for warranty Customers advances & credit balances Federal Excise Duty payable Retention money Withholding tax payable Sales tax payable Workers' Profit Participation Fund Provision for gratuity Workers' Welfare Fund Unclaimed dividend Other liabilities 900.266 4. Limited.665 384.000 9.155) 132. 24.597 138.200 10.465 24.153 6.433 2.2 Workers' Profit Participation Fund Balance as at beginning Add : Return on funds utilised by the company Less : Payment made during the year 56.770. 462.700 9.209 24.161 9.272 39.529 516.492 21.800 229.700 1.846 9. Japan .384 43.10 Accrued liabilities include Rs. 500.086 9.Note 23.272 9.086 1.700 100 9.3 Movement of deferred tax liability Opening balance Increase in deferred tax liabilities Decrease in deferred tax assets Charge for the year 2007 (Rupees in ‘000) 2006 384.3 24.277 8.1 24.505 52.776 37.272 8.505 56.313 9.500 1.171 Contributions for the year 35 43.8 24.062.216 25.1 Provision for Warranty Balance at beginning Add: Provided during the year Less: Paid / reversed during the year 9.296 2.684 (7.137 thousands (2006: Rs.286 thousands) due to Honda Motor Co.153 43.9 24.600 802.711 8.459 2.153 50.448 (8.2 24.085 57.482 56.409.966 1.700 505.600 24.597 677.171 57.262 786.994 163.

625 4.069 103.695 5.323) 6.695) (13.069 (25.175) 6. 2007 61.137 (3.312 6.118 3.730 6.776 24.704 27.036) 25.250 2.993 (605) 806 (361) 24.005) (2.379 (4.069 856 1.366 6.366 (6.384) 2.492 6.175 4.222 4.128 8.384 52.487) 119.4 The amount included in the balance sheet arising from the Company's obligation in respect of its defined benefit retirement benefit plan is as follows: Funded Management 2007 2006 95.126) 95.134 (2.695 25.492 6.658 81.731 6.24.294) 26.935 (3.804 6.585 (2.492 (4.658 7.696 (4.193 4.963 2.187) (1.691 8.323 317 (605) (1.193 (61.758 22.704) 361 1.963) 4.848 (2.126 (20.225 (70.606) 6.983 96.247 22.935) 6.3 Provision for gratuity Note 2007 (Rupees in ‘000) 2006 4.492 11.732) 35 97.492 Balance at beginning Add: Provision for the year Less : Payments during the year 24.926 4.042 (2.323) 22.963 87.329 70.492 Note Present value of defined benefit obligation (actuarial liability) Fair value of plan assets Payable/(receivable) to associated companies in respect of transferees Unrecognized actuarial gain / (loss) Balance at end Net Liability at the beginning of the year Charge for the year Contributions Net Liability at the end of the year 119.128) 9.758 (26.012) 87.983 (97.635 6.492 6.088 80.404 350 (1.268 6.088) 2.995 410 317 410 (317) 410 22.175 6.776 (6.776 Movement in the present value of defined benefit obligation is as follows Present value of defined benefit obligation Current service cost Interest cost Benefit paid Actuarial (gain) / loss Receivable/ (payable) to associated companies in respect of transferees Present value of defined benefit obligation Movement in the fair value of plan assets is as follows Fair value of plan assets as at June 30.776 13.381 6.730 6.133) (3.585) 6.272 6.601) 6.175 Funded Non-management 2007 2006 24.316 Atlas Honda 47 .4 6.211 317 350 317 (350) 317 (Rupees in ‘000) 2007 Total 2006 103.776 6.225 74.972 (4.487 (18.175 (4.128) (681) 81.658) (9.262 (87.733) 9.492) 6.262 5.182) 2.024 61.746 4.004) 103.492 4.965 (4.176 6.366 81.127) 1.342 4.112) 6.003 (1.507 887 2.005) (3. 2006 Expected return on plan assets Contributions Benefits paid Actuarial gain / (loss) Fair value of plan assets as at June 30.

379 Funded Non-management 2007 2006 410 410 317 317 24.747) 1.667 35.227 6.302 47.181 48.004) 1.741 765 3.364 775 3.700 383 26.326 73.6 The expense is recognized in the following line items in the income statement (Rupees in ‘000) 2007 2.500 850 25.568 34.298 (16.895) 9.963 60.749 672 97.658 (15.088 (22.046 20.704 (763) 2003 72.774 775 3.156 1.Funded Management 2007 2006 Plan assets comprises: Debt Equity Cash 50.604) (3.613 14.2 33.242 (782) 2004 83.695 Funded Non-management 2007 2006 (Rupees in ‘000) 2007 Total 2006 10.983 97.683 87.424 765 3.2 2.794 1.190 6.848 (35) 2006 103.7 Principal actuarial assumptions at the balance sheet date for: Discount rate Future salary increases Return on investment 10% 9% 10% 9% 8% 9% 10% 9% 10% 9% 8% 9% Atlas Honda 48 .818) 2.088 37. the fair value of plan assets and the surplus or deficit of gratuity fund for five years is as follows: 2007 Present value of defined benefit obligation Fair value of plan assets Surplus / (deficit) Experience adjustment on obligation (gain)/loss Experience adjustment on plan assets (gain)/loss 119.327) 7.262 87.012 2005 96.049 289 70.625 80.190 6.776 Total 2006 2.294 833 61.704 10.366 2.508 (9.658 24.384 26.227 6.555 (24.5 Comparison of present value of defined benefit obligation.4 32.696 Funded Management 2007 2006 Cost of sales Distribution cost Administrative expenses 31.407 24.621 15.

398 37. These facilities are expiring on various dates by March 31.747 21.088 (Rupees in ‘000) 2006 The Company has facilities for short term running finance under mark-up arrangements amounting to Rs. 1. 1.035 26.279 2.747) 18. three bonus shares for every twenty shares held).469 million (2006: Rs. These facilities are secured against joint hypothecation charge on stocks in trade and trade debts amounting to Rs.960 million) of which the amount remaining unutilized at the year end was Rs.161 The board of directors have proposed a final dividend for the year ended June 30.3244 (2006: Re 0.313 Balance at beginning Less: Paid during the year 21.313 Add: Charge for the current year (Adjustment) / prior year 35 16. 1.226 57.711 24.9 Unclaimed dividend Dividends Bonus fractions 8. 6.e.939 69. 2. SHORT TERM FINANCES Balances with banks 18. Atlas Honda 49 . 1.277 9. 2007 25.2764 to Re 0.e three bonus shares for every twenty shares held (2006: 15% i. 2007 of Rs.267 10 8.809 7.268.149 12.598 thousands). 2007 amounted to Rs. amounting to Rs.192 thousands (2006: 3. 2007 for approval of the members at the Annual General Meeting to be held on September 29.10 Other liabilities include vehicle deposits under company vehicle policy amounting to Rs. These financial statements do not reflect this dividend payable as explained above. The facilities carry mark-up at the rate of Re 0.026 16.313 21.151 10 9.835 million (2006: Rs. 24.0 (2006: Rs. 1.0) per share and bonus shares issue at 15 % i.193.2945) per thousand per day on daily product basis. 2.566 21. The facility for opening letters of credit and guarantees as at 30 June. 6.398 16. 3. 2007.24.233 million) at their meeting held on August 29. ACCRUED MARK-UP/INTEREST Long term financing Short term borrowing 49.313 (2.263 56.225 million (2006: Rs.2630 to Re 0. 2.8 Workers' Welfare Fund Note 2007 (Rupees in ‘000) 2006 19.040 million). 308.06 million (2006: Rs. The markup on running finance facilities is payable on quarterly basis.050 million).800 million (2006: Rs.782. 2008.2 million).

060 366.9% -0.721) (1.752) 98.000 19.2 459.078) (3.392) 138. The Company has facility for foreign currency finance amounting to Rs.1 22.928 Atlas Honda 50 .578 6.230 1.116 98.350 368.628) 176 361 (12.563 290.961 98.3% -0.829 28.1% -0.085 138.687 145.597) (2.1% -1. PROVISION FOR TAXATION Balance at beginning Add: Provision made during the year Current year Prior year 145.1% -17.014 11.656) (15.1 The charge for the year can be reconciled to the profit as per the income statement as follows: Profit before tax Tax at the applicable income tax rate Tax effect of expenses that are not deductible in determining taxable profit as under: Gratuity Leave Encashment Depreciation & amortisation Gain on disposal of fixed assets Other Gain on sale of investments Gain on remeasurement of investments Unrealized gain on remeasurement of derivatives Effect of difference in tax rates under normal assessment and presumptive tax regime Effect of difference in tax rates under normal assessment and tax on dividend for companies 0.0% -0.395 Less: Payment during the year 165.240 28.515 281.0% -0.This facility is secured against lien on export bills / contracts. 30 million) which is secured against lien on export bills / contracts.2% 99 (782) (141.961 362.1% -2.021 6.549 149.000 (3. 120 million (2006: Rs.071 (209.7% 0.047.188) (3.020) 1. CURRENT PORTION OF LONG TERM LIABILITIES Current portion of long term loans Current Portion of liability against assets subject to finance lease 22.395 117.808 465.014 35% 803. Note 2007 2006 (Rupees in ‘000) 27.896) 137 (874) (16.471 287.947) (1.5% 12.

10.1 Contingencies Cases have been filed against the Company by some former employees for reinstatement of service.104 15.786.2 Guarantees are issued to Collector of Customs and Government institutions and shall be released on delivery of motorcycles.832 The operating lease arrangement with associated undertaking is extendible after six months.506 thousand) is included in trade discount.535 2.790.712 14.082.167 16.1 111.1 19. 4.1 20.608.044. COST OF SALES Stock at beginning Cost of goods manufactured Purchases 31.609.963 5. These are issued under normal operations. Commitment of operating lease rentals in respect of electric and gas fittings is as follows: Due within six months 30. 29.413 146.817 Stocks at end 12 15. 31. These cases are pending in different courts.547.Subsequent to the balance sheet date the Income Tax department has initiated proceeding under section 122(9) of the Income Tax Ordinance.033.237 697.413 30. CONTINGENCIES & COMMITMENTS 29.248 44. The issues involved relate to claim of certain expenses and allocation of profit & loss against exempt capital gains earned by the company.422 15.640 115.145.898 3. 2001 for amendment of assessment under section 122 (5A) for the tax years 2005 and 2006.546 Atlas Honda 51 .341.396 Commission to associated company on export sales amounting to Rs. 29.115 52.777 thousand (2006: Rs. The proceedings are in progress.3 Commitments Confirmed letters of credit relating to raw materials Plant and equipment Forward foreign exchange contracts 581.902.420.601.712) 15.590 444.889) 15.263 5.087 17.056 657.258 (111.529 (100.836 15. NET SALES Motorcycles & spare parts Less: Trade discount & commission Sales Tax 30.832 15. Note 2007 2006 (Rupees in ‘000) Guarantees Issued by bank 142.940.850 7. The management is confident that the outcome of these cases will be in the Company's favor.063 90.713 424.246 29.

489 4.678 10.1 31.521 1.2 Raw materials & components consumed Stock at beginning Purchases 1.2 233.298 34.687 922.028 7.2 31.938 357 15.136 13.219 11.569 25.948.324.594 170.626 647 217.5 Atlas Honda 52 .Note 31.863 Stock at end 12 (1.324.341.688.800) 15.575.590 Work in process at end 12 (6.959 5. heat & water Insurance Rent.378) 14.312 3.673. conveyance and entertainment Postage & telephone Printing & Stationery Vehicle running Depreciation Canteen Newspapers.049 12.970 3.274 4.232 436.447 124.798 16. wages & benefits Stores consumed Light.552 29.899 383.712 54.361 122.443 12.669 25.012.042 338.482 174.090.713 31.609.141 31.219) 12.855 834.644 12.257 7.055 233.275.390 (233.3 42.637 1.687 328.584 36.995 5.558 24.872 7.992 319.4 6.009 11.148 45.716 21.171 16.360 (1. rates & taxes Operating lease rentals Repair & maintenance Royalty Federal Excise Duty on royalty Technical assistance Traveling.673.688.231 26.461 894.024 24.019 338 14.125 13.091 194.849 7. magazines & subscription Staff training Intangible assets amortized Provision for slow moving stocks Marking fee Other manufacturing expenses 2007 (Rupees in ‘000) 2006 31.235 14.176) 11.800 11.1 Cost of goods manufactured Work in process at beginning Raw materials & components consumed Direct labour Technical director's remuneration Salaries.624.141 332.3 & 31.616.

031 1.334 (4.1 32.361 4. DISTRIBUTION COST Directors remuneration Salaries & benefits Traveling.228 2. 2.504 4.254 2. conveyance.724 24. entertainment & vehicle running Rent. 31.102) 129 2.386 (4.454 62.087 32.331 2.2 15.720 thousand (2006: Rs.648 1.4 The following amounts have been charged to cost of sales during the year in respect of gratuity: Note Current service cost Interest costs Expected return on plan assets Amortization of loss 2007 (Rupees in ‘000) 2006 2. 32.569 14. 9.33.055 thousand).524 thousand (2006: Rs.178 79. 10.021 454 977 343.054) 128 2. 4.457 33.093 67.547 1.873 11. magazines & subscription Others 42.774 31.089 22.687 1. 32.842 110.199 thousand) in respect of provident fund contributions.1 & 32.741 2.333 4.046 9.3 Direct labour and salaries & benefits include Rs. rates & taxes Advertisement & publicity Repairs & maintenance Gas & electricity Freight & forwarding Printing & stationery Postage & telephone Sales promotion Service charges Insurance Newspapers.643 30.650 thousand) in respect of provident fund contributions.762 6.423 33.5 Purchases include custom duty rebates netted-off aggregating Rs 16.296 63.486 100.31.1 Salaries and benefits include Rs.903 5.454 4.585 thousand (2006: Rs.439 390 422 371.2 The following amounts have been charged to distribution cost during the year in respect of gratuity: Current service cost Interest costs Expected return on plan assets Amortization of loss 462 745 (527) 95 775 456 736 (521) 94 765 Atlas Honda 53 .

773 1.765 537 15.902 3.962 12.1 42.2 The following amounts have been charged to administration expenses during the year in respect of gratuity: Current service cost Interest costs Expected return on plan assets Amortization of loss 1.462 42. Yusuf H. 34.190 33.3 6. ADMINISTRATIVE EXPENSES Directors' remuneration Directors' meeting fee Salaries & benefits Traveling.045 7. conveyance & entertainment Rent.681 32.589 44.302 10.485 10.764 95 43.485 367 209.585 thousand (2006: Rs.843 4.940 4.809 150. Chief Executive Officer are on the Board of the Foundation.682 1.265 11.307 7.866 173.278 239 31 35.224 thousand) in respect of provident fund contributions.227 1.611 71 111.490 1.879 3.197) 396 3. Saquib H.261 6.694 80 117.889 5.104 (2.3 Donations include Rs.2 33.917 6.976 13.129 1. Shirazi.035 Atlas Honda 54 .470 thousand (2006: 9.233 1.009 11. 33.328 4.564 7.232 33.505 987 28.187 6.1 Salaries and benefits include Rs 4.171) 392 3.717 36.839 9.110 1.520 2.823 164 26.400 thousand) paid to Atlas Foundation.780 2.719 4.Note 33.1 & 33. Chairman and Mr.770 1. 10.507 47.2 2007 (Rupees in ‘000) 2006 6.199 1.460 1.924 3. OTHER OPERATING INCOME Income from financial assets Interest on Deposits: Associated Company Others Dividend Income Income from reverse repurchase transactions Gain on sale of investments Gain on re-measurement of investments Unrealised gain on remeasurement of derivative financial instruments at fair value Exchange gain Income from non financial assets Other income Scrap Sales Gain on sale of fixed assets 1.905 2. 5. rates & taxes Insurance Repairs & maintenance Legal & professional charges Gas & electricity Fees & subscription Postage & telephone Printing & stationery Vehicle running Training expense Depreciation Donation Others 42.405 282 185.2 33.295 3. Mr.067 (2. Shirazi.

Weighted average number of ordinary shares for the previous periods have been restated accordingly.762 35. OTHER OPERATING EXPENSES Auditors' remuneration Workers' Profit Participation Fund Workers' Welfare Fund 35.1 2007 (Rupees in ‘000) 2006 1.10 each were issued on September 29. EARNINGS PER SHARE Basic and diluted earnings per share Earnings for purposes of basic earnings per share (net profit for the year) Weighted average number of outstanding ordinary shares for the purposes of basic earnings per share Basic and diluted earnings per share .153 16.228 39.664 (2006: 10.316 16.771 151. FINANCE COST Interest / mark-up / return on: Short term loans Long term loans Workers' Profit Participation Fund Finance charge on finance lease Other financial charges Exchange risk fee 85.110 56.Rupees 138.398 60.46 676.772 1.218.408) bonus shares of Rs.924 38.591 41.665 370.086 18.000 19.395 132.129.102 169.110 24.014 11.072 1.085 1.092 16. 2006.302 2.46 5.618 1. TAXATION Current year Prior years' Deferred 98.457 1.077 269.221 36.566 75.Note 35.221 43.1 Auditor's Remuneration Audit fee Provident Fund /Workers' Profit Participation Fund audit and certifications Out of pocket expenses 446 704 71 1.337 37.092 13.2 553.364.129.616 12.832 41.529 249.532 90.611 405 640 65 1.549 220. Atlas Honda 55 .

873) 1.268) (4.432.869 Increase in current liabilities: Trade and other payables Cash generated from operations Interest paid Income taxes paid (including tax deducted at source) Compensated absences paid Long term loans and advances Long term deposits and prepayments Cash flow from operating activities 362.209.840) (394.807 (2.682) (2.772.324 413.897) 4.504 (2.641 2.850 (78.612) (166.064) 3.171 1.316) (140.764) 129.747) (14.027) (342.925) (5.804 83.059 (266.558 1.589) (7.507) 13.047.316 9.038) 63.077) 64.952 (1. CASH FLOWS FROM OPERATING ACTIVITIES Net Profit before taxation Adjustment for: Depreciation Unrealised (gain)/loss on remeasurement of investments Gain on sale of investments Interest income Interest expense Dividend income Amortization Finance cost on finance leased assets Provision for employee compensated absences Gain on sale of fixed assets Unrealised gain on remeasurement of derivative financial instruments at fair value Provision for slow moving stocks Operating profit before working capital changes Working capital changes: (Increase)/decrease in current assets: Stores.350) 350.643 976.834 (95) 10.166 (1.962) 254.773) 5.245 (28.154 (44.563 2006 1.528.866) 24.060 399.559 (12.125 (615.616 10.801) 30.809) (7.959 1.265) (42.2007 (Rupees in ‘000) 39.278) (36.515 465.798 1. spares & tools Stock in trade Trade debtors Loans and advances Trade deposits and prepayments Other receivables 803.564) (47.070 (11.518) (2.149 Atlas Honda 56 .243) 543.154 (4.855 (152.

803 26.555.019 26.171 2.115 502.034.553 2.249 20.148 thousand (2006: Rs 1.543 90 864.221 (1.221 (980.408.264 45. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (Rupees in ‘000) Interest bearing Maturity Maturity upto one after one Sub-total year year Financial assets Long term loans and advances Long term deposits Trade debtors Loans and advances Trade deposits Other receivables Accrued mark-up / interest Investments Bank balances 502.808 465.2 Concentration of credit risks Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Significant receivable balances relate to the balances due from the Government of Pakistan and other government departments.70 to 11 2 to 5 (%) 2007 Total 2006 Total 23.543 90 864.056 1.569.182 282.494) 27.10 7 9. The company believes that it is not exposed to any specific credit risk in respect of these balances.553 2.626.283 32.461 19.264 45.409 thousand).056 1.729 2.926 2.147.11 to 11.186 57.656 2.295) 12.035 2.803 23.1 Effective interest rate Assets Short term investments Cash at bank Liabilities Long term loan Liability against assets subject to finance lease 40.088 4.543 90 864.943 13.660.117 (1.967.249 20.264 45.186 57.527 (2.288) 502.249 20.414 69.989 393.860 282.201 1.989 895.860 282.656 2. 10.014.195 543 327.568.829 On-balance sheet gap 36.569.645.035 4.376. The company's credit risk is primarily attributable to its receivables.014.125 13.989 393.505 11.115 502.002) Non-Interest bearing Maturity Maturity upto one after one Sub-total year year 10.568.360 1.115 Financial liabilities Long term loan Liability under finance lease Trade and other payables Accrued mark-up / interest 459.879 1.288 (1.448 51. 2.626.125 13.348.286 1.569.035 2.933.618.844 2.461 19.440 12.115 2.007. Aggregate amount of financial assets subject to credit risk are Rs.40.553 2.027 280.492) 2007 40. Major part of the sales of the company is against advance payments.860 26.848 1.04 to 10.186 57.006 2.532.16 7 7 to 10 2 to 5 9. Credit risk for balances at banks is limited by dealing with various banks with reasonably high credit rating.317 677.512.338 (2.021 6.648) 2006 (%) Atlas Honda 57 .

023 94. 40. staff retirement funds.143 19. trade deposits and other receivables which are stated at cost / amortised cost.719 131. Amount due from and to related parties. where necessary.994 9.3 Foreign exchange risk management Foreign currency risk arises mainly where payables exist due to imports of goods.821 9.339 103.5 Interest / Markup rate risk The company has long term Rupee based loans at variable rates. 41.010 19.399 10. Rates on short term finances are effectively fixed. if any.174 8.6 Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash.470 25.611 5. The company has also entered into cross currency and interest rate swap agreements with commercial banks to mitigate against the adverse movement of interest rates. RELATED PARTY TRANSACTIONS Related parties comprise of associated companies.506 55.4 Fair value of the financial assets and liabilities The carrying values of all the financial assets and liabilities reflected in the financial statements approximates their fair values. 40.000 849.326 2.400 30. loans to employees. directors and key management personnel. All transactions with related parties have been carried out on commercial terms and conditions.079 881.420 179. to hedge its foreign currency exposure in various currencies primarily with respect to Japanese yen.936 21.40. 42. except for long term loans. shown under receivables and payables and remuneration of key management personnel is disclosed in the note no.875 7.593 65.200 706.111 3. Other significant transactions with related parties are as follows: 2007 (Rupees in ‘000) Sales Sale of fixed assets Purchases Fixed assets purchased Sale and lease back of fixed assets Royalty Export commission Technical Fees Interest on deposits Lease rentals paid Brokerage fees Rent paid Insurance premium Insurance claim Actual reimbursement of expenses .986.286 949 2.261 2006 Atlas Honda 58 . 40.007 32.372 16.533 4.621 40. The company obtains forwards exchange cover.300 3.119 10.497 17.777 18.676. The company in the normal course of business carries out transactions with various related parties.net Dividend paid Donation paid Contribution to staff retirement funds 14. The company treasury aims at maintaining flexibility in funding by keeping committed credit lines available.302 5. marketable securities and the availability of funding to an adequate amount of committed credit facilities.

197 1.640 2. 43.1 The aggregate amounts charged in the accounts for remuneration including certain benefits to the Chairman.375 1.918 106. Chief Executive Officer.197 1.803 1 3.387 1.365 56 35.660 1.009 441 524 9.411 1.626 3 2.42.236 23.332 255 40 6.006 221 5.004 3. Two directors and two expatriate executives are also provided with furnished accommodation. DIRECTORS' AND EXECUTIVES' REMUNERATION 42.364 5.5 thousand). the Chief Executive.886 1 4.505 10.611 1 4. three directors and two expatriate executives are provided with free use of company maintained cars and telephones at residences.189 2. There were no major reclassifications or rearrangements for the year.109 293 710 360 6. Shirazi Chairman Saquib H.578 11. PLANT CAPACITY The production capacity of the plant cannot be determined as this depends upon relative proportion of various types of motorcycles and motorcycle components produced. Yusuf H.330 1 2.198 39 The Chairman.849 604 73. 44.661 1. CORRESPONDING FIGURES Previous figures have been rearranged and reclassified wherever necessary for better presentation in the financial statements.624 1.2 Remuneration to other directors Aggregate amount charged in the accounts for the year for fees to two directors was Rs.331 293 769 360 6.808 477 224 9. 42.905 36. working Directors and other Executives of the company were as follows: (Rupees in ‘000) Chairman Chief Executive Officer Directors Executives 2007 2006 2007 2006 2007 2006 2007 2006 Remuneration Rent and Utilities Bonus Provident Fund & gratuity Medical and others Reimbursement of expenses Total Number of Persons 2.298 3 50. Shirazi Chief Executive Officer Sherali Mundrawala Director Atlas Honda 59 . 80 thousand (2006: Rs 70.600 1.661 1.990 2.

000 25.315.221 235.000 45.000 1.183 41.000 1.310.001 70.001 20.000 5.092 Percentage 32. 1.001 90.543.001 125.00 Note : Included in Associated Companies * Atlas Insurance Ltd.766 225.21 0.540.531 41.789.001 6.395.809 1 93.001 220.000 280.843 1.618 106.512 14.000 20.269 6.400.00 0.000 Total shares held 16.418 85.249. Shirazi Investments (Pvt) Ltd.001 15.545.001 135.000 15.PATTERN OF SHAREHOLDING AS AT JUNE 30.701 22.432 306.129.34 3. CEO.756 138. undertakings and related parties NIT and ICP Banks.129.001 30.75 0. 2007 No. Development Finance Institutions.183 shares.865 388 17.001 180.402 90.071 shares ** Honda Motor Company Ltd.001 10.000 225.00 0.000 30.001 3.459 595.539 251.380.001 25.000 50.336 187.395.001 1.935 111.23 0.001 5.001 85.001 45.888 187.001 1.53 53.166.04 0.270 3.000 65.001 to to to to to to to to to to to to to to to to to to to to to to to to to to to to 100 500 1.395.000 90.071 1.124 278.001 60.217 70.000 410.512 shares Atlas Honda 60 .166 224.000 130.000 35.044 138.378.092 Categories of Shareholders Directors.000 10.100 81.000 3.170 181.000 75.375.001 35.381.000 185. 14. of shareholders 412 326 139 253 74 20 18 1 3 4 3 2 4 3 1 1 1 2 1 1 1 1 1 1 1 4 1 1 1280 From From From From From From From From From From From From From From From From From From From From From From From From From From From From Shareholdings 1 101 501 1. minor children and associates ** Associated Companies.001 14.418 22.165.104. Non-Banking Finance Institutions * Insurance Companies Modarabas and Mutual Funds ** Shareholders holding 10% General Public Local Foreign Others Security & Exchange Commission of Pakistan (SECP) Joint Stock Companies Cooperative Society Trust Habib Bank AG Zurich (SWT) JP Morgan (Suisse) SA Shares held 13.001 40.000 140.55 9.749 88.338 85.832 125.170. 6.543.001 275. their spouses.000 95.000 14.318 516.000 6.000 40.964 408.531 13.000 1.001 405.378.35 100.166.

418 Executives Public Sector Companies and Corporations Banks.91 35.125 462 683 225.395.00 0. of Shares held Shareholders Category Associated Companies.PATTERN OF SHAREHOLDING ADDITIONAL INFORMATION AS AT JUNE 30. Insurance Companies.024 3.05 0. their spouses.00 32. Undertakings and related Parties: Atlas Insurance Limited Shirazi Investments (Pvt) Limited Honda Motor Company Limited Percentage 1. Shirazi (CEO) Sanaullah Qureshi Sherali Mundrawala Masahiro Takedagawa 10.395.00 0. Development Finance Institutions.00 0.84 15.543.063. Yusuf H.916 1 13. Mr.96 100. Mr.01 0.809 1.183 22.91 35.270 Directors. CEO.316 161 5.104.512 14. Non-Banking Finance Institutions. of Shares Purchased Nil Date of Purchase Nil Price per Share Nil 6.512 14.55 3.092 9.53 0.166.071 6. 2007 No.129.766 2. minor children and associates Mr. Modaraba and Mutual Funds Individuals Others Total Shareholders holding 10% or more voting interest Shirazi Investments (Pvt) Limited Honda Motor Company Limited Details of Trading in the shares by Directors Name Nil No.183 15.627.Shirazi & Associates Saquib H.00 24.381.47 8.55 0.00 Atlas Honda 61 .21 3.75 NIT and ICP: National Bank Of Pakistan Trustee Department Investment Corporation of Pakistan IDBP (ICP Unit) 224.543. Mr.789.00 53.829 41.312. Mr.

Powerful 125 CC 4-stroke engine. Eye-catching graphics with color coded speedometer. Bright crystal headlight and bigger tail light. Comfortable seat with rear grip.

Atlas Honda

Attractive sporty design. 4-stroke OHV power-up engine. Wider wheel base for balance. Non-asbestos brake for better performance.

Atlas Honda

2007

Atlas Honda

64

The Secretary Atlas Honda Limited. 2007 at 10:30 a. Lahore. . must be received at the company’s Registered Office not less than 48 hours before the meeting and must be duly stamped. Lahore. As witness my/our hand this ______________________ day of ____________________________________2007 signed by the Said ___________________________________________________________ in the presence of (Witness) Affix Revenue Stamp Signature (Signature must agree with the specimen signature registered with the Company) NOTE: Proxies. act and vote for me/us and on my/our behalf at the 43rd Annual General Meeting of the company to be held at the Registered Office of the Company at 1-Mcleod Road. on Saturday. September 29.m. signed and witnessed. in order to be effective. and at every adjournment thereof. 1-Mcleod Road. PROXY FORM I/We _________________________________________________________________________________________ of ___________________________________________________________________________________________ being member(s) of Atlas Honda Limited and holder(s) of ____________________________________________ Ordinary Shares as per Register Folio No. ________________________________________________ hereby appoint ____________________________________________________________________________________________ of ___________________________________________________________________________________________ or failing him __________________________________________________________________________________ of ___________________________________________________________________________________________ as my/our Proxy to attend.

Lahore – 54000 Fold Here Fold Here Fold Here Fold Here .AFFIX POSTAGE The Secretary Atlas Honda Limited 1 .McLeod Road.

Lahore-54000 Ph : (92-42) 7225015-17.com.com.pk Atlas Honda Limited . 7233515-17 Fax : (92-42) 7233518. 7351119 E-mail : ahl@atlas.atlashonda.pk Website: www.1-McLeod Road.