Afs Final Report

ANALYSIS OF FINANCIAL STATEMENTS

LETTER OF TRANSMITTAL

I would like to thank all those who assisted us in compiling this report. In this report I tried to cover as many aspects of ANALYSIS OF FINANCIAL STATEMENTS along with the jargons that we learned in the course. Due to scarcity of time I was not able to put in as much efforts as we would have liked to, hence this report by no means is a comprehensive one. I would like to offer our gratitude to our teacher Mr. Maqbool Ur Rehman for giving us the opportunity to express myself both through this report and during lecture hours, the difference in teaching will always be memorable.

DEWAN MOTORS AND HONDA ATLAS MOTORS LTD


TABLE OF CONTENTS

EXECUTIVE SUMMARY.................................................................................................3Automobile Industry in Pakistan................................................................................4

Sector Overview..............................................................................................................5DEWAN FAROOQUE MOTOR COMPANY................................................................8

Introduction:....................................................................................................................8Mission Statement:..........................................................................................................9Corporate Philosophy....................................................................................................10Historical Perspective:...................................................................................................10Present Past and Future of DFML:................................................................................11

DEWAN FARROQ MOTORS.......................................................................................12FINANCIAL RATIOS......................................................................................................12INTERNAL ANALYSIS..................................................................................................13

Liquidity ratios...............................................................................................................13Efficiency Ratios...........................................................................................................14Profitability Ratios.........................................................................................................18Debt and leverage ratios................................................................................................20Equity Ratios.................................................................................................................22

External analysis...........................................................................................................25Liquidity ratio................................................................................................................25Efficiency ratios.............................................................................................................26Profitability Ratios.........................................................................................................27RETURN ON ASSET AND EQUITY..........................................................................28Equity ratios...................................................................................................................30Market measures............................................................................................................31

Creditor Guidelines......................................................................................................32Investors Guidelines....................................................................................................33Conclusions and Recommendations......................................................................34APPENDIX.......................................................................................................................35

Dewan motors ltd financial statements..........................................................................35Balance sheet 2006 &2005............................................................................................38Income statement 2006 & 2005.....................................................................................39Balance sheet 2007 & 2006...........................................................................................40Income statement 2007 & 2006.....................................................................................41

DEWAN MOTORS AND HONDA ATLAS MOTORS LTD 2


EXECUTIVE SUMMARY

Dewan motors and Honda atlas motors need to maintain their liquidity as it is going low from 1.0 in quick ratio and even in current ratio if this would be continuous dewan motors might face liquidity crunch Dewan motors need to focus on their inventories system and receivables because of this they are facing a lots of problems in other heads of balance sheet and income statements. Total asset turnover for both of the companies is quite efficient. Gross profit margins and returns are nominal should be maintained. The main problem can be seen in net profit margin due to the high interest expenses which led the companies into low profitability.Dewan motors need to utilize their asset more effectively in order to move away from the problem of finance cost. As I said above dewan motors interest coverage ratio is also very week the main reason is high finance cost the company is obtaining too much of debt in the last three years. Price to earning ratio was too weak in start but it stabilize gradually dewan motors company need to focus on improving their shareholders wealth Dividend seems to be quite optimum except last year due to low profits As far as creditors is concerned dewan motors is more credit worthy in year 2007 as compare to Honda as they have profit other wise Honda was going good from year 2003-2006.For investment point of view Honda atlas is much better company then dewan motors as they providing high return in the form of capital gain and higher dividends. Its share prices are also progressing even in the loss year of 2007



Automobile Industry in Pakistan

The automotive assembling in Pakistan started in 1950 when National Motors

Limited, a public limited company and the pioneer in the industry, came into

existence, established by General Motors of USA National Motors assembled

passenger cars as well as commercial vehicles which carried “General Motors”

brands such as Bedford, Vauxhall, Chevrolet.

A regular car industry started in the country in 1983, when Suzuki commenced

production eyeing the small and LCV car segment of 800cc-1000cc range, and

introduced Suzuki car which targeted the middle-income group (constituting the

larger segment of the market) by providing an affordable car.

Then there was a long gap until the early 90’s when Indus Motor Company was

established to manufacture Toyota vehicles in Pakistan. Soon after Honda Atlas

came with the Civic and Gandhara Nissan entered the market with Sunny.

In the late 90,s Dewan Farooque Motors set up a plant to manufacture Hyundai

and Kia vehicles in Pakistan. Since then the market has changed all together.

After struggling through nineties, a decade full of uncertainties and frequent

policy the Pakistani Auto Industry has been able to achieve double digit growth

consistently since the last 4 years. The industry operates under franchise and

technical cooperation agreements with Japanese, European and Korean

manufacturers.

Lately Few new market players entered the market such as Gandhara Nissan

again with now the imported Nissan range of vehicles, Dewan Mushtaq Motors

with imported Mitsubishi range of vehicles, Nexus Automotive with Chevrolet

imported vehicles and others imported Chinese vehicles such as Karakoram



Motors, Roma Automobiles and Foton by Dewan Innovations Limited along with

Pak Cherry Automobiles. Sigma Motors made its mark with Rover recently.

Apart from these the big brands of the auto industry also entered the Pakistani

market such as BMW , Mini & Rolls Royce by Dewan Motors, Porsche, Mercedes

and Audi have also launched their brands in Pakistan catering to the very upper

niche.

Sector Overview

There are presently 82 vehicle assemblers in the industry producing passenger

cars, light commercial vehicles, trucks, buses, tractors and 2/3 wheelers. Besides

these there are over 400 players in the vendor industry. The total direct

employment in the sector is around 500,000. The auto industry has played a

significant role in the large scale manufacturing industry as it contributes

Contribution to GDP Rs. 153 billion to the economy besides import substitution

resulting in annual foreign exchange savings of over $ 1 billion. An investment of

over Rs. 100 billion as been done in the automobile sector giving Revenues of

above Rs. 50 billion that accounts for 8% of the total. There is still potential in the

auto industry for more investment. During the period July-April 2006-07

automobile industries recorded some what subdued growth in

assembling/manufacturing business.



Name of Companies Investment (Rs. in million)

2000-01 2001-02 2002-03 2003-04 2004-05

Pak Suzuki Motor Company

Ltd. 3,000 3,094 3,105 3,874 5,144

Indus Motor Company Ltd. 2,154 2,357 2,442 2,579

Honda Atlas Cars (Pakistan)

Ltd. 1,094 1,128 1,188 1,417 1,619

Sigma Motors (Pvt) Ltd. 3 13 34 115 160

Hinopak Motors Ltd. 20.8 42 44 139.6 133.4

Ghandhara Nissan Ltd. 710 708 709 1,093 1,119

Sind Engineering Ltd. 193.607 221.692 254.801 197.153 143.261

VPL Ltd.

Ghandhara Industries Ltd. ~ ~ 0.042 5.485 ~

Master Motor Corporation

Ltd. ~ ~ 161 208 155

Millat Tractors Ltd.

Al-Ghazi Tractors Ltd.



Atlas Honda Ltd. 42.15 181.38 132.06 1,056.59 2,000.00

Dawood Yamaha Ltd. 10.37 16.007 139.654 24.58 13.332

Suzuki Motorcycles Pakistan

Ltd. 208 260 270 358 430

Pakistan Cycle Industrial

Cooperative 33.15 33.57 35.64 38.73 40.63

Society Ltd.

Plum Qingqi Motors Ltd. 485.9 505.3 471.5 555.2 513.5

Fateh Motors Ltd.



DEWAN FAROOQUE MOTOR COMPANY

Introduction:

It was five years ago that Dewan Mushtaq Group diversified its business activities by entering into the automobile industry. Dewan Farooque Motors Limited signed Technical License Agreements with Hyundai Motor Company and Kia Motors Corporation in December 1998, as the progressive manufacturer and distributor of Hyundai and Kia vehicles in Pakistan.

Dewan Farooque Motors Limited acquired franchises of Hyundai Motor Company and Kia Motors Corporation to bring in Korean technology to the country to produce vehicles of high quality at reasonable prices, offering the highest value for money.

Over the past five years, Dewan Farooque Motors Limited (DFML) has earned national recognition in producing a diversified range of vehicles for people from different walks of life. The plant has state-of-the-art production facilities located at Sujawal, around 145 km from Karachi in southern Pakistan.



Mission Statement:

The mission of Dewan Mushtaq Group is to be the finest organization, and to conduct business responsibly and in a straightforward way.

Our basic aim is to benefit the customers, employees and shareholders, and to fulfill our commitment to the society.

Our hallmark is honesty, initiative and teamwork of our people, and our ability to respond effectively to change in all aspects of life including technology, culture and environment.

We will create a work environment, which motivates, recognizes, and rewards achievements at all levels of the organization, because in God we trust and in people we believe.

We will always conduct ourselves with integrity and strive to be the best.



Corporate Philosophy

The Group’s corporate philosophy is based on following principles laid down by its founders and predecessors:- Credibility, integrity and honesty - Straight forward business dealings- Work as a worship - Spirit of social service and human respect

By following the above philosophy, the Group enjoys an excellent corporate image amongst business community, banks, financial institutions, and governmental circles. The market price of Group companies’ shares is the most prominent reflection of this confidence.

Historical Perspective:

The Dewan family started business in 1916 at Patiyala State in the Punjab province of India when a small cottage industry was set up by Dewan Mohammad and his son Dewan Mushtaq Ahmed to manufacture garments. During 1918 another trading firms was established for importing clothing and other commodities, which were sold all over India.

In 1947 Dewan family migrated to Pakistan and settled in Karachi. They formed Dewan Mushtaq Sons and started trading in commodities like tea, sugar, garments, and fabrics. By the late fifties the firm’s turnover had risen to around US$ 7 million. In 1968 the Dewan family, under leadership of Dep[wan Mohammad Umar Farooque, ably supported by his younger brother Dewan Mohammad Salman Farooqui, and decided to enter the industrial Arena. They first ventured into Textile yarn spinning and thereafter diversified into sugar and Polyester Staple Fibre.

The fourth generation of Dewan family is now aggressively expanding and diversifying in the fields of Acrylic Fibre, Automobiles & Motorcycles and Technology development.Dewan Zia-ur-Rehman Farooqui, the present group Chairman took over the group in 1992. He provides strategic direction and made the group a business conglomerate in last 13 years. Dewan Mohammad Yousuf Farooqui is the group Managing Director, who is ambitious and has drive to implement and run new projects successfully.



Present Past and Future of DFML:

Dewan Mushtaq Group is one of the most prominent and reputed industrial groups in Pakistan. Dewan enjoys the absolute confidence of the general public, local and foreign capital markets, financial institutions and the Government.

The history of Dewan Mushtaq Group goes way back to the year 1916.In 1968; Dewan entered the industrial arena and set up the first industrial unit in 1970 in the name of Dewan Textile Mills Limited. Thereafter, the group diversified into sugar and Polyester Staple Fibre. Dewan Zia-ur-Rehman Farooqui, the present group Chairman took the helm in 1992. His strategic direction and vision has helped to turn the group into a business conglomerate in the last thirteen years.

Dewan Mohammad Yousuf Farooqui, the group Managing Director, is an entrepreneur par excellence and has a gift to conceive, implement and run new projects successfully. At present, Dewan Mushtaq Group deals in cotton textile, polyester fibre, acrylic fibre, sugar, automobile, cement and oil & gas exploration



DEWAN FARROQ MOTORSFINANCIAL RATIOS

Ratios 2003 2004 2005 2006 2007

Liquidity Ratios

Current ratio 0.75 0.83 1.04 1.05 1.03

Quick Ratio 0.36 0.32 0.45 0.9 0.67

Working capital 1,730,866 3,271,664 4,402,1595,631,08

04,561,447

Efficiency ratios

Inventory Turnover 4.98 3.04 4.21 3.13 4.06

Average Collection Period 13.54 13.23 10 30.23 47.57

Cash cycle 86.83 133.29 96.7 146.84 137.47

Total Asset Turnover 1.35 1.129 1.39 1.16 1.05

Profitability Ratios

Gross Profit Margin 13.47% 10.70% 11.94% 12.22% 11.98%

Net profit Margin 2.97% 3.39% 3.48% 2.13% 0.84%

Return on Total Assets 12.04% 8.30% 10.70% 8.18% 6.60%

Return on Equity 16.53% 20.92% 23.52% 13.94% 4.49%

Debt or Leverage Ratio

Debt Ratio 0.75 0.8 0.612 0.79 0.75

Times Interest Earned Ratio 2.1 5.54 4.92 2.16 1.27

Equity Ratios

Price to Earnings Ratio 47.97 9.96 4.84 7.37 8.89

Dividend Payout 52.53% 32.50% 37.70% 40.00% 0.00%

Dividend Yield 0.03 0.06 0.05 0.06 0.00

MARKET /BOOK VALUE 3.29 1.70 1.13 1.06 0.77

EPS 0.79 2.49 3.97 3.04 1.90

INTERNAL ANALYSIS



Liquidity ratios

ANALYSIS:

The current ratio of the company is been progressing since five years but I think the company is facing a lots of problems facing related to liquidity this could be the reason behind is the inventory problems or a company might be facing problems in receiving their credits, but still the company progress in current ratio is quite nominal it had increased after 2004 but it is stable since last 3 years. So it is been observed that company might have highlighted their problems and trying to resolve them The past five year performance of the company related to the quick ratio is telling us that the company is highly involved in inventory problems and the reason behind this that they are taking to much time in converting their inventory into sales thus in such a way the company liquidity is below 1.0 this could be a most dangerous sign for the company .this problems may lead company towards liquidity crunch. The another reason could be that company is taking too much time in receiving their credits



Efficiency Ratios

INVENTRY TURNOVER

ANALYSIS

The inventory turnover of the company is been observed that it is fluctuating since past five years. as I said above that the company is facing liquidity crisis thus these problems are leading towards liquidity problems in such a way we can say that since past five year the company can convert maximum 5 times in last year of 2003 and then its keep on fluctuating although it has touched lowest figure in 2006 to 3 times , so thus the sales of the company are sounds like changing at a higher rate and keep on fluctuating .



AVERAGE COLLECTION PERIOD

Analysis

As we can see that the company is taking too much time in receiving their credits and we can see that by this trend since past 5 year in 2003 and 2004 the company was quite efficient in collecting their receivables but after year 2005 the company is facing hell lot of collection problems this problem could lead the company towards inappropriate growth rate a company should have a nominal collection period in order to get their payments back and reinvest those amount



CASH CYCLE

Analysis

This ratio basically shows that the how much a company is taking to convert their inventories into sales and then into cash. In the beginning the company was quite efficient in converting their inventories into cash. But later on this period of time increase drastically the main reason could be the problems in inventories and in receivables a company needs to improve their cash cycle in order to improve their liquidity position


CASH CYCLES

020406080

100120140160

2003 2004 2005 2006 2007

YEAR

DA

YS

Series1

16


TOTAL ASSET TURNOVER

Analysis

This ratio of a company is basically telling us about that efficiency of the company and how company is utilizing their asset this ratio is been consistent in the past 5 years as we can see that its been stable but it achieved its highest in the year 2005 but it decreased in in the year 2006 and 2007The company should utilize their asset and properly use it. From the beginning the company we have seen problems in receivables and inventory so company should resolve this probe as soon as possible



Profitability Ratios

Gross profit and net profit margin

Analysis

The company gross profitability is been quite consistent and from five years its been stable only slight changes have been occurred but we have seen a decreased in Np margin in last 2 years it seems that the company is highly debt finance and the interest expense of the company is hurting company’s profitability the main reason could be that company is taking high loans thus leads to high interest expenses



RETURN ON ASSET AND EQUITY

ANALYSIS

The company return in the beginning was quite nominal and going very good in fact till 2005 it was progressing and increasing smoothly but after 2005 the company’s return on asset and on equity suddenly decreased drastically and in such a ways the company start loosing their investor the main reason could be high financing cost, and the problems in inventories the company should utilize their assets and work on sales



Debt and leverage ratios

DEBT RATIO

Analysis

The company debt ratio is been quite consistent through out the period in just 2005 it was decreased the it came back to it certain level this is harming company in financing cost but it could be resolve if the company would focus on other factors.



TIMES INTREST EARNED

Analysis

The company was capable enough with covering their finance cost till 2005 but after this the company profitability starts declining thus in such a way company was unable to cope with their interest expenses and in such a ways the efficiency of recovering loans has been decreased



Equity Ratios

DIVIDEND PAYOUT

Analysis

The company price and earning has been performing very significantly in till the year 2005 but after that it start decline like other ratios of the company this is a reflection of low profitability and and thus it creates an impact on the price and earnings of the company this will lead the company toward low volume and away from investors


EPS

0.00

1.00

2.00

3.00

4.00

5.00

2003 2004 2005 2006 2007

YEAR

RS

22


DIVIDEND YIELD AND PAYOUT

ANALYSIS:

The dividend payment of the company was quite good in the entire period from 2003 till 2006; in 2007 the company was unable to pay dividend in the last year due to a very low profitability and in such a way company was unable to pay dividend to their shareholders . The dividend yield remains quite consistent with past year except 2007. So it is hopeful the next year would be good for a company.



MARKET/BOOK VALUE

Analysis

the market to book value tells us the phenomenon between the market value and book value of the firm this ratio was performing very efficiently in the beginning but it start declining due to various factors such as liquidity and profitability part these two factors made the price down for dewan motors and in such a ways the difference b/w the market and book value start concision and even lesser



External analysis

Honda atlas Pakistan has been taken as a comparing company because size of the company is more less is same.

Liquidity ratio

Current ratio

0.75 0.83 1.04 1.05 1.03 Dewan Motor

s

1.9 1.2 1.1 1.1 0.9Honda AtlasQuick

Ratio0.36 0.32 0.45 0.9 0.67 1.2 0.9 0.7 0.4 0.2

Analysis

As far as the liquidity concerned of the two companies.

Honda atlas is far better than dewan motors the main reason could be that they have maintained their inventories and receivables in such a way that have better liquidity as compare to dewan motors but in the last year.

Honda atlas also faced problem in their liquidity and that’s why they are suffering.



Efficiency ratios

Inventory Turnover

4.98 3.04 4.21 3.13 4.06 Dewan Motor

s

4.6 6.5 6.7 6.7 4.9Honda AtlasTotal Asset

Turnover1.35 1.129 1.39 1.16 1.05 2.57 1.4

1.33

1.64

2.1

Analysis

In efficiency ratio the dewan motors is also behind Honda atlas because Honda atlas Is quite efficient in converting their in inventory into sales and thus with utilization of asset as we can see that though out five years.

Honda atlas is performing well in inventory turnover and utilization of asset. Thus in regard of efficiency ratios we can say that the Honda atlas is better than dewan motors



Profitability RatiosGross Profit

Margin13.47%

10.70%

11.94%

12.22%

11.98%Dewan Motors

11.60%

8.10%

1.70%

4.60%

0.60%Honda AtlasNet

profit Margin

2.97% 3.39% 3.48% 2.13% 0.84% 7.10%4.40

%1.00

%2.80

%-

1.60%

Analysis

In profitability dewan motors is performing well as compare to Honda atlas but we can see that in np margin

Honda is doing well the main reason is that dewan motors has a higher financing cost that’s leading is to low profitability in such a ways we can say that Honda is not taking up so much loans as compare to dewan motors. and the expenses of dewan motors are much higher than Honda atlas this will lead to low np margin so in such a way Honda Is better that dewan in margin .

But dewan motors has the potential to compete with Honda.



RETURN ON ASSET AND EQUITY

Return on

ASSET

12.04%

8.30% 10.70% 8.18% 6.60%Dewan Motors

11.59%

5.80% 1.30% 7.60%-

3.10% Hond

a AtlasReturn

on Equity

16.53%

20.92%

23.52%13.94

%4.49%

21.60%

0.23% 0.08% 30.00%-

10.30%

ANALYSIS

As we can see that the return of dewan motors is much higher than the Honda atlas. And in the last year Honda has a negative return because they have incurred a major loss in 2007

So in such a ways dewan motor is providing higher return consistently form past five year in fact more than Honda. And Honda has also incurred a major loss in last year so the next year it would be expected that they would recover their loss only so the return would ultimately lower than dewan motors.



Debt or Leverage Ratio

Debt Ratio 0.75 0.8 0.612 0.79 0.75Dewan Motors

0.43 0.72 0.82 0.7 0.7Honda AtlasTimes

Interest Earned Ratio

2.1 5.54 4.92 2.16 1.27 686.1 179.5 28.2 16.2 0.1

Analysis

In debt ratio we can see that both the companies have a very slight difference, dewan motor is bit higher than Honda atlas and that’s why it is incurring high financing cost

Interest coverage ratio is basically tell u about how much operating profit is higher than the interest expense in dewan motor we can see that they have higher profit but its no optimum Honda atlas was performing well in this regard but in last year they also failed to compete with the interest expense the major reason would be low sales.



Equity ratios

Dividend Payout

52.53%32.50

%37.70

%40.00

%0.00%

Dewan Motors

42.5 43.7 58.3 41.7 0Honda AtlasDividend

Yield2.60% 6.04% 5.20% 5.90% 0.00%

8.40%

4.80%

3.10%

6.25%

0.00%

Analysis

In equity’s dewan motors Is performing well as well as Honda atlas both companies are providing average 40% of dividend pay out ,

in such a ways both companies’ dividend policies seems to be quite similar in case of dividends but in last year they failed to provide dividends to their shareholders because of low profitability .

As far as dividend yield is concerned Honda is doing better in some years but both the companies are more or less have some opportunities on an average



Market measures

Price to Earnings

Ratio47.97 9.96 4.84 7.37 8.89

Dewan Motors

6.7 9.1 19.2 6.7 -15.7Honda AtlasMARKET

/BOOK VALUE

3.29 1.70 1.13 1.06 0.77 1.34 1.93 1.48 1.75 1.7

Analysis

Dewan motor in starting wasn’t performing well in starting but gradually it started to improve their p/e ratio as far as Honda is concerned it also more or less same but in last year it fall down to negative the main reason could be net loss for the year of 2007 so it would be hopeful that Honda will recover the loss next year and perform well as it has a image in the market

Market to book value basically depends on the open market trading phenomenon dewan motors is not doing much well as compare to Honda atlas .Honda atlas is performing well through out years and also in the condition of loss it shows that investors has expectation from Honda and trust on its name



Creditor Guidelines

As far as credit is concerned we observed financial ratios and I would conclude that ratios are not good enough for providing credit to dewan motors.

But if we see Honda atlas motors they seems to be quite efficient in controlling their operating activities

dewan motors is taking too much time in converting its inventories into sales and then receivables into cash

so those people are planning to provide credit to dewan motors should once take a sight of its efficiency ratios

Honda atlas motors is highly eligible for providing credit because they are too quick in converting their inventories in to sales and then into cash except the last year

If we see only year 2007 dewan motors is more credit worthy then Honda atlas as Honda have incurred a loss so they would not be able to fulfill payments this year very soon



Investors Guidelines

For the investors it is quite confusing to determine that which company is better from dewan motors and Honda atlas

From the past five year dewan and Honda both were providing valuable dividends except the last year as there were very low profitably in automobile industry

As we can see that both companies dividend pay out is more or less is same and dividend yield is slightly different but this is a fact that Honda is slightly a bigger company then dewan motors

But from stock market point of view Honda atlas is much better then dewan motors this can be said by the P/E ratio of both the company

Dewan motors has a very high P/E ratio which can led investors to move away from dewan motors shares

Eps of Honda atlas is higher then dewan motors except the last year due lost incurred by the company

Market to book value share is suggesting that Honda atlas has the potential to come back in a industry because its share prices are still stable in face progressing even In case of loss

From my point of view I would be recommending Honda atlas shares for investment point of view



Conclusions and Recommendations

Both the companies need to maintain their liquidity as it is going low from 1.0 in quick ratio and even in current ratio if this would be continuous dewan motors might face liquidity crunch

Dewan motors need to focus on their inventories system and receivables because of this they are facing a lots of problems in other heads of balance sheet and income statements.

Total asset turnover for both of the companies is quite efficient. Gross profit margins and returns are nominal should be maintained.

The main problem can be seen in net profit margin due to the high interest expenses which led the companies into low profitability.

Dewan motors need to utilize their asset more effectively in order to move away from the problem of finance cost.

As I said above dewan motors interest coverage ratio is also very week the main reason is high finance cost the company is obtaining too much of debt in the last three years.

Price to earning ratio was too weak in start but it stabilize gradually dewan motors company need to focus on improving their shareholders wealth Dividend seems to be quite optimum except last year due to low profits

As far as creditors is concerned dewan motors is more credit worthy in year 2007 as compare to Honda as they have profit other wise Honda was going good from year 2003-2006.

For investment point of view Honda atlas is much better company then dewan motors as they providing high return in the form of capital gain and higher dividends. Its share prices are also progressing even in the loss year of 2007.



APPENDIX

Dewan motors ltd financial statements




ASSETS

BALANCE SHEET AS AT JUNE 30, 2004

Note June 30, June 30,2004 2003

(Rs. in '000)NON-CURRENT ASSETS

Tangible fixed assets

Operating fixed assets at cost less accumulated depreciation 3 1,831,134 1,746,875Capital work-in-progress 4 122,219 138,290

1,953,353 1,885,165

Long-term investment 5 - -Deferred cost 6 - 2,922

CURRENT ASSETS

Stores and spares 7 57,492 47,648Stock-in-trade 8 1,930,805 815,501

Trade debts 238,781 150,756Advances, deposits, prepayments and other receivables 9 770,415 405,620

Cash and bank balances 10 151,952 170,1293,149,445 1,589,654

TOTAL ASSETS 5,102,798 3,477,741

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Share Capital Authorized

80,000,000 (2003: 80,000,000) Ordinary shares of Rs.10 each

Issued, subscribed and paid-up Reserve for issue of Bonus shares Inappropriate profit

NON-CURRENT LIABILITIESLong term loans-securedLiability against assets subject to finance lease Long term depositsDeferred Liabilities

CURRENT LIABILITIESCurrent maturity of long term loansCurrent maturity of liability against assets subject to finance lease Short term finances-securedCreditors, accrued and other liabilitiesTaxationUnclaimed dividendProposed dividend

COMMITMENTS

TOTAL EQUITY AND LIABILITIES

The annexed notes from 1 to 33 form an integral part of these accounts.

Dewan Mohammad Yousuf Farooqui President / Chief Executive

800,000 800,000

11 734,031 734,03136,702 -

223,989.487 110,655

994,722 844,686

12 150,000 430,00013 - -40,000 41,61614 130,030 54,943

363,333 295,000- 202,711

15 1,595,552 376,29016 1,698,923 1,135,61217 56,416 23,480

419 -73,403 73,403

3,788,046 2,106,496

18

5,102,798 3,477,741

Dewan Abdullah Ahmed Deputy Managing Director

36



PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2004

Note

GROSS SALES 19Sales taxCommission and discounts

19

NET SALES

Cost of sales 19

GROSS PROFIT

Amortization of deferred cost 6

Administration and selling expenses 20

OPERATING PROFIT

OTHER INCOME 21

Financial charges 22Workers profit participation fund

PROFIT BEFORE TAXATION

TAXATION 23

NET PROFIT FOR THE YEAR

UNAPPROPRIATED PROFIT BROUGHT FORWARD

PROFIT AVAILABLE FOR APPROPRIATION

APPROPRIATIONSProposed dividend 10% (2003: 10%) (Re. 1 per share) Issue of Bonus Shares @ 5% (2003: NIL)

UNAPPROPRIATED PROFIT CARRIED FORWARD

BASIC EARNINGS PER SHARE (Rupees.) 24

June 30, June 30,2004 2003

(Rs in '000)

7,685,778 5,534,746(949,959) (717,538)(148,531) (121,215)

(1,098,490) (838,753)

6,587,288 4,695,993

5,881,534 4,063,378

705,754 632,615

2,922 2,922

279,278 210,710

423,554 418,983

1,133 1,457424,687 420,440

76,550 200,37417,407 11,00393,957 211,377

330,730 209,063

107,291 69,354

223,439.399 139,709

110,655 44,349

334,094 184,058

73,403 73,40336,702

110,105 73,403

223,989 110,655

3.04 1.90

The annexed notes from 1 to 33 form an integral part of these accounts.

Dewan Mohammad Yousuf Farooqui Dewan Abdullah AhmedPresident / Chief Executive Deputy Managing Director

37


Balance sheet 2006 &2005



Income statement 2006 & 2005



Balance sheet 2007 & 2006



Income statement 2007 & 2006


Afs Final Report

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