I am pleased to present on behalf of the Board of Directors, the Un- audited Statements of Acounts of your Company for the third quater ended December 31,2005

THE ECONOMY

Pakistan economy improved significantly during the fiscal year 2004-2005 achieving a 8.4% GDP growth due to continuity of sound macro-economic policies, financial discipline, political and regional stability. GDP growth has been projected 7.0% for the year 2005-2006. It is expected that the growth would be around 6.5% due to adverse impact of the devastating October 8 earthquake. During the first three months of the fiscal year, the current account deficit of the country widened to over US$ 1.4 billion as against last full year deficit of around US$ 1.5 billion. The same is attributed to high prices of crude oil coupled with accelerated pressure on the import of machinery and raw material on account of higher growth last year. Foreign exchange reserves of the country reduced from US$ 13.0 billion to US$ 11.7 billion in November 2005. Inflation rose to 8.55% as against full year target of 8.0%.

THE INDUSTRY

The capacity utilization of battery industry in the organized sector improved considerably on account of improved economy and 24% growth in automobile sector. Locally assembled Cars sales improved significantly during the last six months despite rising imports of new and used cars after the budget 2005-06 continued to show their passion for locally assembled cars which registered a growth of 25%.

OPERATING RESULTS

Net sales revenue of your Company for the quarter under review was Rs. 466.7 million against Rs. 370.8 million booked for the same period of the last year. Cumulative sale for the nine month ended on December 31, 2005 augmented by 18% to Rs. 1, 148.2 million from Rs.967.5 million registered during the corresponding period of the last year, on account of volume and price increase.

Gross profit for the quarter increased from Rs. 60.2 million to Rs. 77.7 million despite increase in raw material prices. Operating profit went up to Rs. 34 million from rs. 27.9 million Achieved in third quarter of the last year. In view of increase in working capital requirement and mark-up rate, financial charged from Rs. 4.1 million to Rs. 6.4 million.

Pre tax profit for the nine months ended on December 31 2005 decreased from Rs. 66.6 million achieved during the same period of the previous year to Rs. 59.7 million.

FUTURE PROSPECTS

It is hoped that indigenous organized battery industry will continue to perform satisfactorily, but the profitability will remain under pressure on account of increase in raw material prices, mark up rates and market competition. Your management is determined to avail full use of the opportunities by continued focus on quality, productivity, cost control and after sale service to improve its competitiveness.

ARIF HASHWANI
Chairman

Karachi : January 25, 2006