CHAPTER: 01

INTRODUCTION AND HISTORY OF THE COMPANY

THIS CHAPTER COVERS

1. Mission Statement Of the Company

2. Vision Statement Of the Company

3. Introduction of the Azgard Nine

4. History of Azgard Nine

5. History in a graph

6. Corporate Affairs

7. Company Information

8. Registered Offices

9. BUSINESS STRATEGY

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 MISSION

TEXTILE & APPAREL

TO RETAIN A LEADERSHIP

POSITION AS THE LARGEST VALUE ADDED

DENIM PRODUCTS COMPANY IN

PAKISTAN

FERTILIZERS

TO BECOME A DIVERSIFIED

MANUFACTURER OF BOTH NITROGENOUS

AND PHOSPHAIC CONTRIBUTING TO THE

DEVELOPMENT OF THE AGRICULTURE

SECTOR IN PAKISTAN

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 VISION

TEXTILE & APPAREL

TO BECOME A MAJOR

GLOBAL FASHION APPAREL

COMPANY

FERTILIZERS

TO BECOME A MAJOR

REGIONAL DIVERSIFIED

FERTILIZER COMPANY

AZGARD NINE

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 The Origins and the inception

In the ancient legend “AZGARD” was one of none worlds in Norse

Mythology- it was protected by “Heimdall” the son of nine different

Mothers each attributing him with a particular skill and power – and thus

He would protect Azgard from the powers that be.

The significance of Nine for our company is not just based on this

Mythology but also connected with the auspicious nature of this number

Throughout many different elements in and out of the world today that

Be an auspicious and important number in Indian, Chinese, Japanese and

Greek cultures for various different reasons.

In Chinese culture the number Nine represents ‘Change’ and

‘Transformation’, as in the case with Azgard Nine which is changing and

Transforming itself into an entity with new goals, aspirations and targets.

Nine in much of ancient Greek methodology also has represented gestation

And fulfillment of creation as it does for us at Azgard Nine. The ‘fulfillment

Of creation’ for us being the forming of this global entity by nine members

on the ninth day of February sowing the seeds for an auspicious and

rewarding future.

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 The Azgard Nine Limited Group was started as a family business over four
generations ago. The Sheikh family, Now in its Forth generation, in one of the
oldest business families in the sub continent with experience in many different
sectors and having a proven track record of successful leadership in four
continents. The gamily began its first operations in 1886 in shamkot, in the Asian
sub continent.

Although, now, A Public company the family still remains behind the company
in everyway, supporting and nurturing its growth into the future and beyond.

The current specialized yarn operation was set up in 1972 with the open end
spinning and denim weaving operations following in 1995. The final frontier was
the garments operation, which cane in to being in 1997.

The concept behind the group’s textile ambitions was to be a fully vertical
apparel solution provider based in a country that would be able to maintain its
competitive advantage in this field for the yards to come (Pakistan is the fourth
largest denim producer in the world with an annual production of 200,000,000
meters). This has now been achieved and Azgard in able to offer these services as
a single source supplier for all denim and specialized yarn customers.

The future is squeezing the brand customers toward a sourcing solution that
stems from as small a global map as will allow. We believe it is feasible, in order
to not be spread too thin’, to consolidate a position in as few regions as possible in
the quest of r practical and economical global sourcing – Azgard Nine limited is
that perfect vehicle which can accommodate and achieve this position, therefore
realizing the vision that was incepted so many years ago by the guardians of the
Azgard group bring the resultant advantages to you the customer.

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6/89
 CORPORATE INFORMATION

BOARD OF DIRECTORS
 Mr. Mueen Afzal
Chairman
 Mr. Ahmed H. Shaikh
Chief Executive
Chief Justice (Retd.) Mian Mahboob Ahmad
 Mr. Aehsun M.H. Shaikh
 Mr. Ali Jehangir Siddiqui
 Mr. Khalid A.H. Al-Sagar
 Mr. Mohammed Khaishgi

COMPANY SECRETARY
 Mr. Muhammad Ijaz Haider

CHIEF FINANCIAL OFFICER

 Mr. Abid Amin

AUDIT COMMITTEE
 Chief Justice (Retd.) Mian Mahboob Ahmad
 Chairman
 Mr. Mueen Afzal
MANAGEMENT TEAM
 Mr. Ahmed H. Shaikh
 Mr. Tariq Mohammad Khan
 Mr. Abid Amin
 Mr. Irfan Nazir
 Mr. Tahir Munir
 Mr. Atif Farooqi
 Mr. Usman Rasheed
FINANCE COMMITTEE
 Mr. Ahmed H. Shaikh
 Mr. Ali Jehangir Siddiqui
 Mr. Tariq Mohammad Khan
 HUMAN RESOURSE COMMITTEE
 Mr. Ahmed H. Shaikh
 Mr. Tariq Mohammad Khan
 Mr. Salim Khan

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BANKERS

 JS Bank Limited
 MCB Bank Limited
 Citibank N.A.
 ABN Amro Bank
 Faysal Bank Limited
 Habib Bank Limited
 Saudi Pak Industrial & Agricultural
 Investment Company (Private) Limited
 The Hong Kong and Shanghai
 Banking Corporation
 United Bank Limited
 Standard Chartered Bank Pakistan Limited
 NIB Bank Limited
 National Bank of Pakistan
 Allied Bank Limited
 My Bank Limited
 KASB Bank Limited
 Pak Oman Investment Company
 Saudi Pak Commercial Bank

LEGAL ADVISORS

 Hamid Law Associates

AUDITORS

 Rahman Sarfaraz Rahim Iqbal Rafiq

 Chartered Accountants
 TAX ADVISORS
 Faruq Ali & Co.
 Chartered Accountants

REGISTERED OFFICE

 Ismail Aiwan-e-Science
 Off Shahrah-e-Roomi
 Lahore, 54600
 Ph: +92 (0)42 111-786-645
 Fax: +92 (0)42 5761791
  PROJECT LOCATION

Unit I

 2.5 KM off Manga, Raiwind Road,

 District Kasur.
 Ph: +92 (0)42 5384081
 Fax: +92 (0)42 5384093

Unit II

 Alipur Road, Muzaffargarh.

 Ph: +92 (0)661 422503, 422651
 Fax: +92 (0)661 422652

Unit III

 20 KM off Ferozepur Road,

 6 KM Badian Road on Ruhi Nala
 Der Khurd, Lahore.
 Ph: +92 (0)42 8460333, 8488862
FINANCIAL ANALYSIS OF THE COMPANY

THIS CHAPTER COVERS: -

1. PURPOSE OF FINANCIAL ANALYSIS

2. FINANCIAL REPORTING POLICIES
3. RATIO ANALYSIS
4. ADVANTAGES OF RATIO ANALYSIS
5. LIMITATION OF RATIO ANALYSIS
6. TYPES OF RATIO ANALYSIS
1) LIQUIDITY RATIO
2) TURNOVER RATIO
3) PROFITABILITY RATIO
4) LEVERAGE RATIO
7. HORIZONTAL ANALYSIS OF PROFIT & LOSS ACCOUNT
8. HORIZONTAL ANALYSIS OF BALANCE SHEET
9. VERTICAL ANALYSIS OF PROFIT & LOSS ACCOUNT
10. VERTICAL ANALYSIS OF BALANCE SHEET
 PURPOSE OF FINANCIAL ANALYSIS

1) In our course of financial management we are required to make a financial

analysis of any manufacturing company. The main purpose of these analyses is
that we are the business graduate and it is very necessary for us to apply our
knowledge in the practical way. For example if in future we are the manager of
any bank and a company wants to obtain a loan from our bank then we make
analysis of the company’s financial statement to access the capacity of paying us
interest on time as well as the principle which we lend that company through
analyzing the different ratio analyses, and to know that what is capital structure
of the company.

2) Then through the cash flow statement we are able to know that how much
cash is available with the company because profitability does not mean that the
company has the equal amount of cash. We also able to know that how much
cash is generated by the company from its operating activities, and how much
amount of cash is investing in the asset through which we can access the future
performance of the company.

3) Being as an investor if we are able to make an analysis of financial

statement then we can invest in that venture which is the best in terms of our
purpose.

4) Being as an investor before investing in any company we can analyze the

performance of the company through the vertical analyses and horizontal
analyses with the current and previous year or we can also comparison of the
company with the other company of the same age (Competitors) and applying the
same accounting techniques.
 Financial Reporting Policies

Company policies with reference to accounting, finance

and corporate matters are governed by relevant corporate

regulations, Companies Ordinance 1984, and the code of

corporate Government

It is company resolved to comply with International

Accounting Standards for the preparation of financial statements

with any departure there from being adequately disclosed.

Company is in the process of establishing and efficient

Internal Audit Department to enhance the scope of internal control

and data generated by the company, it also help in building the

confidence of our creditors, financial institutions and other

interested organization
RATIO ANALYSIS

The term "accounting ratios" is used to describe significant relationship between

figures shown on a balance sheet, in a profit and loss account, in a budgetary control
system or in any other part of accounting organization. Accounting ratios thus shows the
relationship between accounting data.

Ratio analysis is very important while measuring the performance of the business.
These ratios are carried out from the Income statement and balance sheet. Many parties
including management, investors and Government are interested in these ratios. The
purpose of analysis is to measure the performance of the company and financial health of
the organization.

Advantages of Ratios Analysis

Ratio analysis is an important and age-old technique of financial analysis. The

following are some of the advantages of ratio analysis:

Simplifies financial statements:

It simplifies the comprehension of financial statements. Ratios tell the whole story of
changes in the financial condition of the business

Facilitates inter-firm comparison:

It provides data for inter-firm comparison. Ratios highlight the factors associated
with successful and unsuccessful firm. They also reveal strong firms and weak firms,
overvalued and undervalued firms.
Helps in planning:

It helps in planning and forecasting. Ratios can assist management, in its basic
functions of forecasting for Planning, co-ordination, control and communications.

Makes inter-firm comparison possible:

Ratios analysis also makes possible comparison of the performance of different

divisions of the firm. The ratios are helpful in deciding about their efficiency or
otherwise in the past and likely performance in the future.

Help in investment decisions:

It helps in investment decisions in the case of investors and lending decisions in the
case of bankers etc.

Limitations of Ratios Analysis

The ratios analysis is one of the most powerful tools of financial management.
Though ratios are simple to calculate and easy to understand, they suffer from serious
limitations.

Limitations of financial statements: Ratios are based only on the information which
has been recorded in the financial statements. Financial statements themselves are
subject to several limitations. Thus ratios derived, there from, are also subject to those
limitations. For example; non-financial changes though important for the business are
not relevant by the financial statements. Financial statements are affected to a very great
extent by accounting conventions and concepts. Personal judgment plays a great part in
determining the figures for financial statements.

Comparative study required: Ratios are useful in judging the efficiency of the
business only when they are compared with past results of the business. However, such a
comparison only provide glimpse of the past performance and forecasts for future may
not prove correct since several other factors like market conditions, management
policies, etc. may affect the future operations.

Ratios alone are not adequate. Ratios are only indicators, they cannot be taken as
final regarding good or bad financial position of the business. Other things have also to
be seen.

Problems of price level changes: A change in price level can affect the validity of
ratios are calculated for different time periods. In such a case the ratio analysis may not
clearly indicate the trend in solvency and profitability of the company. The financial
statements, therefore, be adjusted keeping in view the price level changes if a meaningful
comparison is to be made through accounting ratios.

Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There
are no well accepted standards or rule of thumb for all ratios which can be accepted as
norm. It renders interpretation of the ratios difficult.

Limited use of single ratios: A single ratio, usually, does not convey much of a sense.
To make a better interpretation, a number of ratios have to be calculated which is likely
to confuse the analyst than help him in making any good decision.

Personal bias: Ratios are only means of financial analysis and not an end in itself.
Ratios have to interpret and different people may interpret the same ratio in different
way.

Incomparable: Not only industries differ in their nature, but also the firms of the
similar business widely differ in their size and accounting procedures etc. It makes
comparison of ratios difficult and misleading.
Ratio Analysis

Ratio analysis involves the methods of calculating and interpreting financial ratios to
access the firm’s performance and status. The basic inputs to ratio analysis and firm’s
income statement and balance sheet for the periods to be examined.

TYPES OF RATIO ANALYSIS

Two types of Ratio Analysis are generally carried out,

1.Cross Sectional Approach, in this approach, the effectiveness of business is

compared with the competitors business of the same period.
2.Most companies use the Time Series Analysis in which the performance of
company over a period is measured.

Ratio Analysis categories:

A) Liquidity

B) Turnover

C) Profitability

D) Leverage

LIQUIDITY RATIOS:

Liquidity ratios are the ratios for testing short term solvency or financial position of a
business. These are designed to test the ability of the business to meet its short term
obligation promptly. A class of financial metrics that is used to determine a company's
ability to pay off its short-terms debts obligations. Generally, the higher the value of the
ratio, the larger the margin of safety that the company possesses to cover short-term
debts.

Current Ratio:

Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio is also known as "working capital ratio". It is a measure of general
liquidity and is most widely used to make the analysis for short term financial position or
liquidity of a firm. It is calculated by dividing the total of the current assets by total of
the current liabilities.

Components:

The two basic components of this ratio are current assets and current liabilities.
Current assets include cash and those assets which can be easily converted into cash
within a short period of time, generally, one year, such as marketable securities or readily
realizable investments, bills receivables, sundry debtors, (excluding bad debts or
provisions), inventories, work in progress, etc. Prepaid paid expenses should also be
included in current assets because they represent payments made in advance which will
not have to be paid in near future. Current liabilities are those obligations which are
payable within a short period of tie generally one year and include outstanding expenses,
bills payable, sundry creditors, bank overdraft, accrued expenses, short term advances,
income tax payable, dividend payable, etc. However, some times a controversy arises
that whether overdraft should be regarded as current liability or not. Often an
arrangement with a bank may be regarded as permanent and therefore, it may be treated
as long term liability. At the same time the fact remains that the overdraft facility may be
cancelled at any time. Accordingly, because of this reason and the need for conversion in
interpreting a situation, it seems advisable to include overdrafts in current liabilities.

Limitations of Current Ratio:

This ratio is measure of liquidity and should be used very carefully because it suffers
from many limitations. It is, therefore, suggested that it should not be used as the sole
index of short term solvency

1. It is crude ratio because it measures only the quantity and not the quality of the
current assets.
2. Even if the ratio is favorable, the firm may be in financial trouble, because of
more stock and work in process which is not easily convertible into cash, and,
therefore firm may have less cash to pay off current liabilities.
3. Valuation of current assets and window dressing is another problem. This ratio
can be very easily manipulated by overvaluing the current assets. An equal
increase in both current assets and current liabilities would decrease the ratio and
similarly equal decrease in current assets and current liabilities would increase
current ratio.
 Significance

This ratio is a general and quick measure of liquidity of a firm. It represents the
margin of safety or cushion available to the creditors. It is an index of the firm’s financial
stability. It is also an index of technical solvency and an index of the strength of working
capital.

A relatively high current ratio is an indication that the firm is liquid and has the
ability to pay its current obligations in time and when they become due. On the other
hand, a relatively low current ratio represents that the liquidity position of the firm is not
good and the firm shall not be able to pay its current liabilities in time without facing
difficulties. An increase in the current ratio represents improvement in the liquidity
position of the firm while a decrease in the current ratio represents that there has been
deterioration in the liquidity position of the firm. A ratio equal to or near 2: 1 is
considered as a standard or normal or satisfactory. The idea of having doubled the
current assets as compared to current liabilities is to provide for the delays and losses in
the realization of current assets. However, the rule of 2:1 should not be blindly used
while making interpretation of the ratio. Firms having less than 2 : 1 ratio may be having
a better liquidity than even firms having more than 2 : 1 ratio. This is because of the
reason that current ratio measures the quantity of the current assets and not the quality of
the current assets. If a firm's current assets include debtors which are not recoverable or
stocks which are slow-moving or obsolete, the current ratio may be high but it does not
represent a good liquidity position.

current ratio current assets/current liabilities

year 2008 2007 2006 2005 2004
Azgard 9 1.08 1.51 1.14 1.09 1.25
Sapphire 1.28 1.66 1.21 1.21 1.31
Nishat 1.19 1.74 1.38 1.24 0.37
 Comments:

Current Ratio clears the extent to which the claim of short term creditors can be met
by assets that are to become cash within a year. The best standard ratio is 2:1 so, the
Azgard Nine has current ratio below standard. There is a mixed trend from 2004 to 2008.
Current Ratio of Sapphire is also like Azgard Nine and Nishat.

Current ratio shows that how many times current assets are available to meet its
current liabilities. Azgard Nine current ratio shows mixed trend and it has grater than 1:1
but only in 2007 it is higher than other years. Sapphire also shows mixed trend in current
ratio. Nishat current ratio shows increasing trend in 2004, 2005 and in 2006 and in 2007
but decreases 2008 which shows that it has less current assets or current liabilities
increases.

Liquidity or Acid Test or Quick Ratio:

Liquid ratio is also termed as "Liquidity Ratio”,” Acid Test Ratio" or "Quick Ratio".
It is the ratio of liquid assets to current liabilities. The true liquidity refers to the ability
of a firm to pay its short term obligations as and when they become due

Components:

The two components of liquid ratio (acid test ratio or quick ratio) are liquid assets
and liquid liabilities. Liquid assets normally include cash, bank, sundry debtors, bills
receivable and marketable securities or temporary investments. In other words they are
current assets minus inventories (stock) and prepaid expenses. Inventories cannot be
termed as liquid assets because it cannot be converted into cash immediately without a
loss of value. In the same manner, prepaid expenses are also excluded from the list of
liquid assets because they are not expected to be converted into cash. Similarly, Liquid
liabilities means current liabilities i.e., sundry creditors, bills payable, outstanding
expenses, short term advances, income tax payable, dividends payable, and bank
overdraft (only if payable on demand). Some time bank overdraft is not included in
current liabilities, on the argument that bank overdraft is generally permanent way of
financing and is not subject to be called on demand. In such cases overdraft will be
excluded from current liabilities.

Significance:

The quick ratio/acid test ratio is very useful in measuring the liquidity position of a
firm. It measures the firm's capacity to pay off current obligations immediately and is
more rigorous test of liquidity than the current ratio. It is used as a complementary ratio
to the current ratio. Liquid ratio is more rigorous test of liquidity than the current ratio
because it eliminates inventories and prepaid expenses as a part of current assets. Usually
high liquid ratios and indication that the firm is liquid and has the ability to meet its
current or liquid liabilities in time and on the other hand a low liquidity ratio represents
that the firm's liquidity position is not good. As a convention, generally, a quick ratio of
"one to one" (1:1) is considered to be satisfactory.

Although liquidity ratio is more rigorous test of liquidity than the current ratio, yet it
should be used cautiously and 1:1 standard should not be used blindly. A liquid ratio of
1:1 does not necessarily mean satisfactory liquidity position of the firm if all the debtors
cannot be realized and cash is needed immediately to meet the current obligations. In the
same manner, a low liquid ratio does not necessarily mean a bad liquidity position as
inventories are not absolutely non-liquid. Hence, a firm having a high liquidity ratio may
not have a satisfactory liquidity position if it has slow-paying debtors. On the other hand,
a firm having a low liquid ratio may have a good liquidity position if it has fast moving
inventories. Though this ratio is definitely an improvement over current ratio, the
interpretation of this ratio also suffers from the same limitations as of current ratio

quick ratio (current assets-stock)/current liabilities

2
year
008 2007 2006 2005 2004
1. 0. 0. 0.7
Azgard 9
0.69 15 88 64 1
1. 0. 0. 0.7
Sapphire
0.72 17 73 59 6
1. 0. 0. 0.3
Nishat
0.84 33 96 78 7
 Comments:

The acid test ratio is also below standard due to heavy short term borrowings. Azgard
Nine acid test ratio decreased in year 2005 and in 2008. The quick ratio of Sapphire
shows that there is no sufficient liquid asset is available to discharge and settle its current
obligation except in year 2007. The rise in current liabilities is due to the expansion of
project and short and long term financing. Azgard Nine liquidity is less than standard
except in year 2007. Sapphire and Nishat liquidity is not on considerable point. Azgard
Nine liquid ratio is more than Sapphire and Nishat which shows that it has more
liquidity. Nishat liquidity position is not considerable because it is near to 1 in year 2006
and 2007 which shows that it has liquid assets to meet its current liabilities. Azgard Nine
position is not at considerable point. It shows decreasing trend in 2005 and in 2008 and
less than 1:1. But it has increasing position in 2004, 2006 and in 2007.

Turnover/ Activity ratios:

Activity ratios are measures of how well assets are used. Activity ratios -- which are,
for the most part, turnover ratios -- can be used to evaluate the benefits produced by
specific assets, such as inventory or accounts receivable. Or they can be use to evaluate
the benefits produced by all a company's assets collectively.

These measures help us gauge how effectively the company is at putting its
investment to work. A company will invest in assets – e.g., inventory or plant and
equipment – and then use these assets to generate revenues. The greater the turnover, the
more effectively the company is at producing a benefit from its investment in assets
Inventory days.

The number of day’s inventory is also known as average inventory period and
inventory holding period. A high number of days inventory indicates that their is a lack
of demand for the product being sold. A low days inventory ratio (inventory holding
period) may indicate that the company is not keeping enough stock on hand to meet
demands. The number of day’s inventory and inventory turnover ratios are included in
the financial statement ratio analysis spreadsheets highlighted in the left column, which
provide formulas, definitions, calculation, charts and explanations of each ratio.

Inventory Days Inventory Days = Inventory / Cost of Sales*365

year 2008 2007 2006 2005 2004
221. 177.4 199.3 208.5
Azgard 9 225.76
08 2 4 7
138. 89.3 96.7 143.4 64.3
Sapphire
85 6 4 6 2
91. 79.1 80.0 114.4
Nishat
90 0 0 6 -

Comments:

Azgard Nine inventory days increased in 2005 as compare to 2004 and decreased in
2006 and in 2007 and show increasing in 2008 which shows that management is not
efficient for managing inventory period.

The above diagram shows that in 2004 and 2005 Sapphire has high inventory days
required converting stock in sale which shows that Sapphire management is not efficient
but it decreases with the passage of times and increase in year 2008 and Nishat trend is
equal to Sapphire. They were show increase in 2005 and low in 2006 and in 2007 and it
increases in 2008.

Debtors Turnover Ratio or Receivables Turnover Ratio:

Debtor’s turnover ratio indicates the velocity of debt collection of a firm. In simple
words it indicates the number of times average debtors (receivable) are turned over
during a year.

Significance of the Ratio:

This ratio indicates the number of times the debtors are turned over a year. The
higher the value of debtor’s turnover the more efficient is the management of debtors or
more liquid the debtors are. Similarly, low debtors turnover ratio implies inefficient
management of debtors or less liquid debtors. It is the reliable measure of the time of
cash flow from credit sales. There is no rule of thumb which may be used as a norm to
interpret the ratio as it may be different from firm to firm.

Debtor's day Trade debtors/Credit sales*365

year 2008 2007 2006 2005 2004
Azgard 9 91 85 84 109
64
Sapphire 51 54 67 56
42
Nishat 18 23 28 56
25

Comments:
 Graph shows that Azgard Nine has not a good debtor management to receive the debt
or collect the receivables and shows positive trend and debtor’s collection period is
grater than creditor’s period. Sapphire position is also considerable but Nishat
management has more efficient to collect their receivables whish shows efficient debtor
management and in 2004 it is at highest point which indicates unfavorable situation
regarding to debtor collection period.

Creditors / Accounts Payable Turnover Ratio:

This ratio is similar to the debtor’s turnover ratio. It compares creditors with the total
credit purchases. It signifies the credit period enjoyed by the firm in paying creditors.
Accounts payable include both sundry creditors and bills payable. Same as debtor’s
turnover ratio, creditor’s turnover ratio can be calculated in two forms, creditors’
turnover ratio and average payment period.

Significance of the Ratio:

The average payment period ratio represents the number of days by the firm to pay
its creditors. A high creditor’s turnover ratio or a lower credit period ratio signifies that
the creditors are being paid promptly. This situation enhances the credit worthiness of the
company. However a very favorable ratio to this effect also shows that the business is not
taking the full advantage of credit facilities allowed by the creditors.

Creditors days Trade Creditors/Credit Sales*365

year 2008 2007 2006 2005 2004
Azgard 9 49 57 93 65 80
Sapphire 18 15 31 39 25
Nishat 22 20 21 26 45

Comments:
 Azgard Nine creditor’s days increase in 2004 to 2006 and decrease in 2005 to 2007
and in 2007 and 2008. Azgard Nine credit management is better than Nishat and
Sapphire it has 93 days for payment which shows it efficiency in 2006. If we compare
creditor’s days to debtors day than we can see that Azgard Nine and Nishat is going
better to manage its resources

Total Assets Turnover Ratio.

The total assets turnover ratio measures the use of all assets in terms of sales, by
comparing sales with net total assets. This interactive tutorial walks you through the
calculations as well as where on the financial statements to find the numbers.

Formula Sales/ Total Assets

year 2008 2007 2006 2005 2004
0. 0. 0. 0.
Azgard 9
0.37 28 21 42 50
0. 0. 0. 1.
Sapphire
0.79 82 86 73 29
0. 0. 0. 1.
Nishat
0.51 43 53 52 40

Comments:

In the above graph we can see that total asset turnover ratio of Azgard Nine Company
showing mix trend in the year 2004 to year 2008. Total asset turnover ratio is at highest
level in year 2004 and as it compare it with Nishat and Sapphire it is not good even in the
last two year 2007, 2008 so we can say it is not using its assets for generating the
revenue in a better way than Sapphire and Nishat cement in 2004 to 2008 and 2004
Sapphire total asset turnover ratio at top so they use much of it for generating revenue.

But Azgard Nine overall situation regarding to total asset turnover ratio is bad than
other two competitor.

Fixed Assets Turnover Ratio:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio
measures the efficiency and profit earning capacity of the concern. Higher the ratio,
greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of
fixed assets

Formula Cost of sales / Fixed Assets

year 2008 2007 2006 2005 2004
0 0 0. 1. 0.
Azgard 9
.86 .60 49 06 86
2 2 1. 1. 2.
Sapphire
.19 .10 94 52 92
1 1 1. 1. 2.
Nishat
.53 .35 29 01 92

Comments:

It shows the utilization of fixed assets, Azgard Nine decreasing the utilization of its
fixed assets but it has lower times than Sapphire which has more utilization of fixed
assets and at highest level in 2004. Nishat shows the decreasing trend in year 2005 and
after it increasing trend still 2008. Nishat has less utilization than Sapphire and high
utilization then Azgard Nine.

Profitability Ratios:

Profitability ratios (also referred to as profit margin ratios) compare components of

income with sales. They give us an idea of what makes up a company's income and are
usually expressed as a portion of each dollar of sales. The profit margin ratios we discuss
here differ only by the numerator. It's in the numerator that we reflect and thus evaluate
performance for different aspects of the business: The gross profit margin is the ratio of
gross income or profit to sales. This ratio indicates how much of every dollar of sales is
left after costs of goods sold.

Gross Profit (GP) Ratio:

Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a
percentage. It expresses the relationship between gross profit and sales.

Components:

The basic components of the calculation of gross profit ratio are gross profit and net
sales. Net sales mean those sales minus sales returns. Gross profit would be the
difference between net sales and cost of goods sold. Cost of goods sold in the case of a
trading concern would be equal to opening stock plus purchases, minus closing stock
plus all direct expenses relating to purchases. In the case of manufacturing concern, it
would be equal to the sum of the cost of raw materials, wages, direct expenses and all
manufacturing expenses. In other words, generally the expenses charged to profit and
loss account or operating expenses are excluded from the calculation of cost of goods
sold.

Significance:

Gross profit ratio may be indicated to what extent the selling prices of goods per unit
may be reduced without incurring losses on operations. It reflects efficiency with which a
firm produces its products. As the gross profit is found by deducting cost of goods sold
from net sales, higher the gross profit better it is. There is no standard GP ratio for
evaluation. It may vary from business to business. However, the gross profit earned
should be sufficient to recover all operating expenses and to build up reserves after
paying all fixed interest charges and dividends.

Formula Gross profit/Sales*100

 year 2008 2007 2006 2005 2004
3 30 24. 25. 22.
Azgard 9
4.15 .28 26 63 66
1 13 9. 11. 4.
Sapphire
1.57 .02 60 32 96
1 16 16. 18. 4.
Nishat
5.41 .56 54 77 96

Comments:

Gross profit of Azgard Nine Company increasing in 2004 to 2005 and also in year
2007 and 2008 but decrease in 2006, Due to inflation and economic instability in
Pakistan and irregular power supply of WAPDA in 2007 and 2008. Gross Profit ratio of
three competitors show increasing trend in 2004 to 2005 due to good economic and
financial situation of world and good market situation in Pakistan. Sapphire position is
more considerable up to 2005 but shows decreasing trend in 2006, 2007 and 2008, and
Nishat situation for increase year 2007 but it decrease in all other years.

Operating Profit Ratio:

Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales.
It is generally expressed in percentage. It measures the cost of operations per dollar of
sales. This is closely related to the ratio of operating profit to net sales.

Components:

The two basic components for the calculation of operating ratio are operating cost
(cost of goods sold plus operating expenses) and net sales. Operating expenses normally
include (a) administrative and office expenses and (b) selling and distribution expenses.
Financial charges such as interest, provision for taxation etc. are generally excluded from
operating expenses.

Significance:

Operating ratio shows the operational efficiency of the business. Lower operating
ratio shows higher operating profit and vice versa. An operating ratio ranging between
75% and 80% is generally considered as standard for manufacturing concerns. This ratio
is considered to be a yardstick of operating efficiency but it should be used cautiously
because it may be affected by a number of uncontrollable factors beyond the control of
the firm. Moreover, in some firms, non-operating expenses from a substantial part of the
total expenses and in such cases operating ratio may give misleading results

Formula Operating Profit Margin = Operating profit /Sale*100

year 2008 2007 2006 2005 2004
Azgard 9 28.18 23.72 16.26 18.38 16.79
Sapphire 14.42 8.60 8.68 10.43 5.35
Nishat 37.91 12.66 12.10 17.58 7.56

Comments:

Azgard Nine company operating profit increasing in 2004 to 2005 and 2007 to 2008
and decreasing in 2006. Operating profit of all three organization show increasing trend
in 2004, 2005 and 2007 to 2008 but decreases in 2006 due to increase in operating
expenses.

Net Profit/ (Loss) Before Tax:

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage
 Significance:

NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not
be able to achieve a satisfactory return on its investment.

This ratio also indicates the firm's capacity to face adverse economic conditions such
as price competition, low demand, etc. Obviously, higher the ratio the better is the
profitability. But while interpreting the ratio it should be kept in minds that the
performance of profits also is seen in relation to investments or capital of the firm and
not only in relation to sales.

Formula Net profit before tax/Sales*100

year 2008 2007 2006 2005 2004
Azgard 9 9.88 17.37 25.77 17.91 12.52
Sapphire 6.88 3.49 3.31 7.15 3.45
Nishat 33.20 7.89 10.71 17.88 9.45

Comments:

The Net Profit margin tells us the ability of a company to generate the earning after
meeting all costs of business. There is an increase in net profit in 2006 as compare to
2004 to 2006. In year 2008 company suffered a minimum net profit. The ratio has
decreased as compare to previous year due to increase in cost and expansion of project
and finance cost. Sapphire shows the increasing trend in 2005 and in year 2007 to 2008 it
decrease in year 2006. Nishat top net profit is in year 2008.

Net Profit/ (Loss) after Tax:

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage
 Significance:

NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not
be able to achieve a satisfactory return on its investment. This ratio also indicates the
firm's capacity to face adverse economic conditions such as price competition, low
demand, etc. Obviously, higher the ratio the better is the profitability. But while
interpreting the ratio it should be kept in mind that the performance of profits also be
seen in relation to investments or capital of the firm and not only in relation to sales.

Components of net profit ratio:

The two basic components of the net profit ratio are the net profit and sales. The net
profits are obtained after deducting income-tax and, generally, non-operating expenses
and incomes are excluded from the net profits for calculating this ratio. Thus, incomes
such as interest on investments outside the business, profit on sales of fixed assets and
losses on sales of fixed assets, etc are excluded.

Formula Net profit after tax/Sales*365

year 2008 2007 2006 2005 2004
Azgard 8.8 16.2 23.4 16.7 11.8
9 7 9 1 6 9
Sapphir 6.3 2.3 1.6 5.4 2.3
e 4 6 9 1 1
31.8 7.0 9.9 16.4 10.5
Nishat
6 5 5 2 9

Comments:

The Net Profit margin tells us the ability of a company to generate the earning after
meeting all costs of business. There is an increase in net profit in 2006 and in 2005 as
compare to 2005 and 2004 respectively. In year 2008 company earned a minimum net
profit in last five years. The ratio has decreased as compare to previous year due to
increase in sale and expansion of project and finance cost. The other organization has
mix trend.

Return on Assets:

Where asset turnover tells an investor the total sales for each $1 of assets, return on
assets [or ROA for short] tells an investor how much profit a company generated for each
$1 in assets. The return on assets figure is also a sure-fire way to gauge the asset intensity
of a business. Companies such as telecommunication providers, car manufacturers, and
railroads are very asset-intensive, meaning they require big, expensive machinery or
equipment to generate a profit. Advertising agencies and software companies, on the
other hand, are generally very asset-light (in the case of a software companies, once a
program has been developed, employees simply copy it to a five-cent disk, throw an
instruction manual in the box, and mail it out to stores).

Formula Net Income / Total Assets*100

year 2008 2007 2006 2005 2004
Azgard 9 3.28 4.57 4.94 7.03 5.96
Sapphire 5.01 1.94 1.46 3.95 2.97
Nishat 16.19 3.06 5.24 8.52 14.81

Comments:

This ratio measures the return of total investment of the business. Azgard Nine
company show mix trend and in 2005 it is at maximum point than others. Decreasing
trend from year 2006 to year 2008. Nishat company return on asset is much better than
Azgard Nine and Sapphire. It decreases in 2005 to 2007 and than increase in 2008, it is at
highest point in 2008, Sapphire also increases in 2004 to 2005 and than it little decrease
in 2006 and at goes down in 2007 and becomes increase in 2008.

Return on Capital Employed (ROCE) Ratio:

Capital employed and operating profits are the main items. Capital employed may be
defined in a number of ways. However, two widely accepted definitions are "gross
capital employed" and "net capital employed". Gross capital employed usually means the
total assets, fixed as well as current, used in business, while net capital employed refers
to total assets minus liabilities. On the other hand, it refers to total of capital, capital
reserves, revenue reserves (including profit and loss account balance), debentures and
long term loans.

Formula Profit before interest and taxation / Capital Employed *100

2
year
2008 2007 2006 005 2004
Azgard 9 5.87 6.60 8.27 13.00 10.73
Sapphire 10.41 4.46 5.07 8.85 7.25
Nishat 24.42 4.25 7.29 12.98 (30.48)

Comments:

Azgard Nine return on capital employed is high 2004 and it increase in 2005 but it
has decreased in 2006 to 2008. Sapphire return on capital employed increase in 2004 to
2005 and decreases in 2006 and in 2007 and then it go for increase in 2008. Nishat has
less return on capital employed is less than its competitors from 2004 to 2007. And at
begging Nishat is going to negative its return of capital employed. In 2008 due to
economic crises Sapphire and Azgard Nine return on equity becomes higher then its
competitors.

RETURN ON EQUITY CAPITAL (ROE) RATIO:

In real sense, ordinarily shareholders are the real owners of the company. They
assume the highest risk in the company. (Preference share holders have a preference over
ordinary shareholders in the payment of dividend as well as capital. Preference share
holders get a fixed rate of dividend irrespective of the quantum of profits of the
company). The rate of dividends varies with the availability of profits in case of ordinary
shares only. Thus ordinary shareholders are more interested in the profitability of a
company and the performance of a company should be judged on the basis of return on
equity capital of the company. Return on equity capital which is the relationship between
profits of a company and its equity, can be calculated as follows.

Equity share capital should be the total called-up value of equity shares. As the profit
used for the calculations are the final profits available to equity shareholders as dividend,
therefore the preference dividend and taxes are deducted in order to arrive at such profits.

Significance:

This ratio is more meaningful to the equity shareholders who are interested to know
profits earned by the company and those profits which can be made available to pay
dividends to them. Interpretation of the ratio is similar to the interpretation of return on
shareholder's investments and higher the ratio better is.

Formula [(Net profit after tax − Preference dividend) / Equity share capital] × 100
YEARS 2008 2007 2006 2005 2004
Azgard 9 8.86 11.11 12.48 23.97 14.95
Sapphire 11.08 3.59 3.45 10.32 7.40
Nishat 24.41 4.02 7.73 14.58 2.62
 Comments:

In 2005 Azgard Nine Company return on equity ratio is at highest point and better, in
2006 to 2008 it decreases. Sapphire Company also shows mixed trend. It is going higher
in 2005 and than decrease in 2006 to 2007 and it becomes higher in 2008. Nishat
company return on equity ratio has mix trend. In 2004 it is at lower side and than it
increase in 2005 and it decrease in 2006 and it goes down and become more down in
2007 and go to highest point in 2008. It is the highest point then competitors.

LEVERAGES RATIOS:

A company can finance its assets either with equity or debt. Financing through debt
involves risk because debt legally obligates the company to pay interest and to repay the
principal as promised. Equity financing does not obligate the company to pay anything --
dividends are paid at the discretion of the board of directors. There is always some risk,
which we refer to as business risk, inherent in any operating segment of a business. But
how a company chooses to finance its operations -- the particular mix of debt and equity
-- may add financial risk on top of business risk financial risk is the extent that debt
financing is used relative to equity. Financial leverage ratios are used to assess how much
financial risk the company has taken on. There are two types of financial leverage ratios:
component percentages and coverage ratios. Component percentages compare a
company's debt with either its total capital (debt plus equity) or its equity capital.
Coverage ratios reflect a company's ability to satisfy fixed obligations, such as interest,
principal repayment, or lease payments.

DEBT TO EQUITY RATIO:

 Debt-to-Equity ratio indicates the relationship between the external equities or
outsiders funds and the internal equities or shareholders funds. It is also known as
external internal equity ratio. It is determined to ascertain soundness of the long term
financial policies of the company.

Debt to Equity Ratio Short Term Debt + Long Term Debt

Total Shareholders Equity

YEAR 2008 2007 2006 2005 2004

Azgard 9 2.42 1.79 2.51 2.01 1.29
Sapphire 26.86 19.14 17.66 15.54 12.35
Fiber 22.06 14.34 12.62 12.21 10.99

Comments:

Azgard Nine debt to equity ratio is lowest point in 2004 and after that it has decrease
its situation in next coming years and increases the ratio, but Sapphire and Nishat shows
increasing trend from 2004 to 2008 which shows that they increasing there debts for
expansion of project and their short and long term debts increased.

It shows that Azgard nine position in debt to equity is better then its competitors.

DEBT SERVICE RATIO OR INTEREST COVERAGE RATIO:

 Interest coverage ratio is also known as debt service ratio or debt service coverage
ratio. This ratio relates the fixed interest charges to the income earned by the business. It
indicates whether the business has earned sufficient profits to pay periodically the
interest charges.

Significance of debt service ratio:

The interest coverage ratio is very important from the lender's point of view. It
indicates the number of times interest is covered by the profits available to pay interest
charges.

Interest Coverage Ratio

Formula Net Profit Before Interest and Tax / Fixed Interest Charges
YEAR 2008 2007 2006 2005 2004
Azgard
0.40 1.08 1.92 2.43 2.73
9
Sapphir
0.84 0.46 0.31 1.65 1.35
e
Nishat 7.05 1.66 2.33 4.99 5.54

Comments:
 Interest Cover Ratio shows that how many times interest is earned by the company.
Azgard Nine Company shows decreasing trend from 2004 to 2008 which indicates
negative sign for the company and it has unavailability the funds to pay interest expense.
Sapphire company is in equal position to Azgard Nine, in 2006 and 2007 Interest cover
ration of all the company is not very healthy and it shows that the financial costs are very
high and earnings are very low. Management must look into the matter and should
improve this ratio. In year 2008 Nishat Company earned 7.05 times interest which is
higher among all year and easy to pay the interest expense.

INVESTMENTS / SHARE HOLDER RATIOS:

Relationship of gains from investments (including realized capital gains) resulting

from insurance operations to earned premiums.

EARNINGS PER SHARE (EPS) RATIO:

Earnings per share ratio (EPS Ratio) are a small variation of return on equity capital
ratio and are calculated by dividing the net profit after taxes less preference dividend by
the total number of equity shares.

Significance:

The earnings per share are a good measure of profitability and when compared with
EPS of similar companies, it gives a view of the comparative earnings or earnings power
of the firm. EPS ratio calculated for a number of years indicates whether or not the
earning power of the company has increased.

Formula Profit after tax/No. of shares

YEAR 2008 2007 2006 2005 2004
Azgard 9 2.65 3.26 4.97 7.42 4.31
Sapphire 30.76 10.77 6.70 14.37 8.58
Nishat 38.42 7.58 10.22 12.86 5.17
 Comments:

The earning per share of three companies shown mixed trend in above diagram,
earning per share of Azgard Nine company increase in 2005 as compare it to 2004 and it
is at highest point in this year and than it decrease in 2006, and it goes more down in
2007 and 2008 which mean there is no earning and it going down. Sapphire and Nishat
has also same trends but Nishat has better earning per share ratio as compare it to
Sapphire and Azgard Nine. It is at highest point in 2008. The earning per share has
increased as compared to the previous year. These companies should better mange its
financial position and improve its performance to get out this fall in earning per share.

EARNINGS YIELD

The earnings per share for the most recent 12-month period divided by the current
market price per share. The earnings yield (which is the inverse of the P/E ratio) shows
the percentage of each dollar invested in the stock that was earned by the company.

Formula Earning Per Share / Market Price Per Share * 100

YEARS 2008 2007 2006 2005 2004
Azgard 9 4.30 6.26 22.54 23.19 19.16
Sapphire 42.46 11.64 9.57 15.97 12.26
Nishat 44.69 5.87 9.75 16.92 9.79
 Comments:

Earning Yield of Azgard Nine, Nishat and Sapphire was at lowest point in 2007 due
to economic crises. But it has very good condition in 2004 to 2006.Azgard Nine is at
lowest point in 2008 due to economic and financial crises and purchase a project of
fertilizers. Return on investment of Sapphire and Nishat were very high in 2008.of all
these competitors but Sapphire shows a good trend but Azgard nine is less than Sapphire
and Nishat.

MARKET VALUE OF SHARE

YEARS 2008 2007 2006 2005 2004
61.5
Azgard 9 52.10 22.05 32.00 22.50
6
72.4
Sapphire 92.50 70.00 90.00 70.00
5
85.9
Nishat 129.20 104.80 76.00 52.80
7
 Comments:

Graph shows that market value of share of Nishat Company is high in 2006 to 2007
as compare to Azgard nine and Sapphire. In 2007 it is at highest point, market value of
Azgard Nine and Sapphire show mixed trend and Azgard Nine market value of share at
high point in 2008 and Sapphire high market value in 2007.

PRICE EARNING RATIO (P/E RATIO):

Price earning ratio (P/E ratio) is the ratio between market price per equity share and
earning per share. The ratio is calculated to make an estimate of appreciation in the value
of a share of a company and is widely used by investors to decide whether or not to buy
shares in a particular company

Significance of Price Earning Ratio:

Price earnings ratio helps the investor in deciding whether to buy or not to buy the
shares of a particular company at a particular market price

Generally, higher the price earning ratio the better it is. If the P/E ratio falls, the
management should look into the causes that have resulted into the fall of this ratio.

Formula Market price per equity share / Earnings per share

YEARS 2008 2007 2006 2005 2004
Azgard 9 23.23 15.98 4.44 4.31 5.22
Sapphire 2.36 8.59 10.45 6.26 8.16
Nishat 2.24 17.04 10.25 5.91 10.21
 Comments:

Price earning ratio of Azgard Nine decreasing from 2004 to 2006 which is not
beneficial for the company also unfavorable for the investor and encourage the investors
to invest but increase in 2007 and 2008 and at very good position in 2007 and then
become better in 2008, Sapphire and Nishat shows mixed trend, Sapphire company
maximum price earning ratio in 2006 and lowest in 2008 and Nishat price earning ratio
never goes negative and it is at high point in 2007 which encourage the investor, it shows
that there is increase in market value of share and decrease in value of earning per share.
 HORIZONTAL AND VERTICAL ANALYSIS

Common
Stateme
nts
Analysis

Common Common
Size Base Year
Analysis Analysis

Horizont
Vertical
al
Analysis
Analysis
HORIZONTAL ANALYSIS

"In the base statement of previous year every item is given 100% and is subsequent
years these are changed to the related percentages as per base years.”

Importance

Comparative statement can be prepared for several years in a columnar form. The
changes from period to period can be reflected by establishing a base year and making it
100%. Thereafter all such changes are reflected in percentages. This analysis is
invaluable to management and other analysts because the absolute large data are
condensed into percentages. The purpose of horizontal analysis is to highlight the
changes.

Balance Sheet

The purpose o balance sheet is to reflect financial position of an entity on a particular

date. The balance sheet consists of assets, which are the property of the entity, the
liabilities, which are the debts payable to outside investors or suppliers of goods and
services, and the shareholder’s equity, which represents owners’ interest in the entity. At
any given date, assets must be equal to the contributions of the creditors and owners.

Profit And Loss Account

Profit and loss account is also named income statement or income statement or
income and expenditure account or statement of operations and encompasses all sources
of revenue, gain and losses and expenses for a particular period, grouped into various
headings as per charts of accounts of a company. In other words, it summarizes the
results of operations for an accounting period. The net income is closed by transfer to
balance sheet after paying the dividends and appropriations. Sometimes an appropriation
is made to general reserve and still some portion is left as retained earning. The
procedure of horizontal analysis of profit and loss account is same as of balance sheet.
AZGARD NINE PVT
LIMITED
BALANCE
SHEET
AS AT 31 DECEMBER
2008
2008 2007 2006 2008 2007
EQUITY AND
Rs. Rs. Rs. Rs. Rs.
LIABILITIES
SHARE CAPITAL
AND RESERVES
ISSUED, SUBSCRIBED 3,827 3,788 3,788,8
1% 0%
AND PAID UP CAPITAL ,118,540 ,822,900 38,900
3,532 3,530 3,57
RESERVES 0% -1%
,469,002 ,626,122 8,262,182
2,764 2,400 1,80 15
Inappropriate Profit 33%
,494,959 ,605,174 7,067,052 %
10,124 9,720 9,17
4% 6%
,082,501 ,054,196 4,168,134
Surplus on
revaluation of 21 23 25
-8% -7%
property, Plant and 9,356,257 9,073,077 7,360,867
equipment
Non current liabilities
Redeemable capital 3,962 4,491 2,26 -
98%
Secured ,461,561 ,185,372 8,598,953 12%
Long term finance 2,686 2,973 3,51 - -
secured ,842,500 ,551,252 9,216,988 10% 16%
Liabilities against
2 1 76
assets subject to 49%
5,210,944 4,357,005 9,622,618 %
finance lease
6,674 7,479 5,79 -
29%
,515,005 ,093,629 7,438,559 11%
Current Liabilities
Current Portion of non 1,470 98 45 50 1
current liabilities ,921,493 1,049,256 0,047,125 % 18%
Short term 6,574 3,820 6,00 72 -
Borrowings ,080,304 ,688,516 6,117,630 % 36%
derivative financial 5 3 3 47
7%
liabilities 0,536,909 4,369,582 2,021,607 %
Trade and other 1,350 1,030 1,24 31 -
payables ,500,115 ,875,769 3,588,067 % 17%
Due to related 42
- -
parties- unsecured 6,768,193 - -
Markup accrued on 46 31 19 47
63%
borrowings 6,226,443 7,690,929 5,249,017 %
Unclaimed dividend 1 2 51 -
 4,686,046 9,694,014 2,312,061 % 57%
10,353 6,194 7,94 67 -
,719,503 ,368,066 9,335,507 % 22%
Contingencies and # #
commitments - - - DIV/0! DIV/0!
27,371 23,632 23,17 16
2%
,673,266 ,588,968 8,303,067 %

ASSETS 2008
2,007 2,006
Non-current assets Rs. Rs. Rs.
Property, Plant and 7,734 7,643 7,60
1% 1%
equipment ,950,547 ,649,558 1,895,866
Capital work in 91 16 15 4
12%
progress 8,670,893 7,987,854 0,650,477 47%
3 5 6 - -
intangible assets
3,536,216 1,142,669 0,544,809 34% 16%
Long term 7,521 6,391 6,30 18
1%
investments ,644,051 ,905,201 3,488,906 %
1 2 1
Long term deposits -2% 2%
9,777,502 0,239,502 9,906,757
16,228 14,274 14,13 14
1%
,579,209 ,924,784 6,486,815 %
Current assets
Stores spares and 20 12 10 61
23%
loose tools 1,693,270 5,468,877 1,762,486 %
4,034 2,246 2,02 80
Stock in trade 11%
,103,119 ,132,173 2,510,924 %
1,777 1,657 1,13
Trade receivable 7% 46%
,232,612 ,196,735 4,897,149
Derivative financial 17 38 55 - -
assets 5,673,993 8,993,278 5,680,244 55% 30%
Advances, deposits,
78 1,004 85 -
prepayments and 17%
9,515,062 ,944,292 7,744,304 21%
other receivables
6 5 25
Current Taxation 0%
3,948,605 1,050,683 - %
Short Term 4,018 3,838 3,78
5% 1%
investment ,853,586 ,444,830 8,315,521
Cash and Bank 8 4 58 81 -
Balances 2,073,810 5,433,316 0,905,624 % 92%
11,143 9,357 9,04 19
3%
,094,057 ,664,184 1,816,252 %
27,371 23,632 23,17
,673,266 ,588,968 8,303,067
 Non-Current Assets

As we can see from the horizontal balance sheet analysis of two years, the total non-
current assets have shown increasing trend. In 2007 it increases 1% from 2006 and it
increases in 2008 by 14% as compare to 2007. This shows heavy investment in fixed
assets by the management.

Operating fixed assets showed decreasing trend in 2007 by 6.53% and it decreases
8.02% in 2008. Capital work in process increased by 430.94% in year 2007, increased by
18.06% in year 2008 respectively. Lon-term loans and advances has shown an increasing
trend in 2007 by 1682.45%in 2007 and decreased by 16.60%. Its long term deposits
decreased in 2007 by 76.08% and increases in 2008 by 14.18%.

Current Assets

Store, spare and tools has shown Increased in 2007 as compare to 2006 by 23% and
increased in 2008 by 61%, which shows that company is in good position as liquidity
point of view. Stock in trade shows increasing trend and increased in 2007 by 11% and in
2008 increased by 80%. This average stock of inventory is indication of good inventory
management. Trade debts has shown increasing trend in 2007 as compare to 2006 by
46% and it increased by 7% in 2008.Receivable management is efficient in 2008 by
showing decreasing trend. Loans and advances showed an increasing trend it increased in
2007 by 17% and in 2008 it decreases 21%. Cash and cash in bank have also shown
decreasing trend in 2007 and increasing trend in 2008.

Equity and Liabilities

Share capital show a changing trend in 2007 by 0% and 1% increasing trend in 2008.
Reserves have decreased in year 2007 by 1% and no change in 2008, which shows that
company, has utilized all its reserves for expansion of project. Accumulated profit
increased in 2007 by 33% and increased in 2008 by 15%.

Non-Current Liabilities

Non-current liabilities have also shown an increasing trend in 2007 and decrease
trend in 2008. There is a sharp increase year 2007 and a decrease in year 2008. Long
term security deposits and retention money also decreases in 2007 by 16% and decreased
in 2008 by 10% as compare to 2006 and 2007 respectively. Liabilities against assets
increases in2007 by 49% and decreased in 2008 by 76% as compare to 2006 and 2008
respectively.

Current Liabilities

Total current liabilities have also shown a decreasing trend in 2007 and an increasing
trend in 2008. This is also inline with decrease and increase in current assets of the
company. Short term financing is taken to meet the working capital requirements.
Company is not meeting its obligation on regular basis which is evident from an increase
in the current portion of long term debts under current liabilities head of the balance
sheet.

Trade payables decreased in 2007 but increased in 2008 by 31%. Markup on secured
loans also increased in 2007 by 63% in 2007and 47% in 2008 respectively. Short term
borrowing also decreased by 36% in 2007 and an increased by 72% in 2008 as compare
to 2006 and 2007 respectively.

Finally, size of the company has increased during the last five years. More
investment is made in capital assets. Company is in expansion phase since the base year.
Investment in new expansion project and technology is being made in order to keep pace
with changing business environment.
AZGARD NINE PVT
LIMITED
Profit and Loss
Account
for the year ended
31-12-208
2 20
2008 2007 2006
008 07
Rs. Rs. Rs.
10,113, 6,628, 4,889
Sales - Net 53% 36%
499,351 341,926 ,681,966
(6,660, (4,620, (3,703
Cost of Sales 44% 25%
223,767) 988,950) ,361,406)
3,453, 2,007, 1,186
Gross Profit 72% 69%
275,584 352,976 ,320,560
Administrative
(603 (435 (39
and selling 39% 11%
,529,743) ,185,073) 1,290,338)
expenses
2,849, 1,572, 79
Operating Profit 81% 98%
745,841 167,903 5,030,222
Other income - 620 641 1,122
-3% -43%
Net ,148,589 ,224,883 ,601,656
(2,470, (1,061, (65
Finance cost 133% 61%
391,655) 933,212) 7,548,074)
Profit before 999 1,151, 1,260
-13% -9%
Taxation ,502,775 459,574 ,083,804
(102 (72 (11
taxation 42% -38%
,218,852) ,007,073) 5,569,082)
Profit after 897 1,079, 1,144
-17% -6%
Taxation ,283,923 452,501 ,514,722
 ANALYTICAL REVIEW OF PROFIT & LOSS ACCOUNT

Sales of the Company has shown a increasing trend and has increased up to 36% in
2007 and 53% in 2008 as compare to 2006 and 2007 respectively.

Cost of sales has also shown an increasing trend. In last two years the cost has
increased, it has increased in 2007 by 25% and in 2008 44% as compare to 2006 and
2007 respectively. This increase is not more than the increase in sales which is good for
the company.

Gross profit of the company has also shown an increasing trend during the last two
years, because company cost of sale decreases and sale increase, in 2007 gross profit
increases 69% and it was 72% in 2008.Selling and distribution expenses also increases in
2007 and 2008 as 11% and 39% in 2007 and 2008 respectively. But increased in year
2008 which is 28% than the last year. This increase in gross profit was due to the
decrease in cost of goods sold.

Finance cot increased in 2007 as 61% and increased in 2008 as 133% which used for
expansion of new plants of fertilizers. There is a great increase in 2008 which cause the
advertisement of the company. Profit before tax show decreasing trend in last two years.
It had decreased in 2007 as 9% and in 2008 it was 13% it was due to the payment of new
plant of fertilizers. Profit after tax decreased in 2007 by 6% and it was decrease by 17%
in 2008.

Company management tries to expand its operations so it needs more finds that were
got from short and long term financing. Due to economic crises, and purchase the 100%
acquisition of PAFL, company faces losses. Company is good for long term benefits. It
had a great capacity to produce fertilizers and improve the quantity and quality of jeans
and denim products and they are improving technology. They had implemented
Enterprise Resource Planning software to increase the efficiency and for better
management planning.
 VERTICAL ANALYSIS

“An analysis of percentage financial statements where all balance sheet items are
divided by total assets and all income statement items are divided by net sales or
revenue”

The expression of individual financial statement item as percentages of total helps

the analyst spot trends with respect to the relative importance of these items over time.

Balance Sheet

Vertical analysis is also called common size analysis. The common size balance sheet
is also called 100% balance sheet. The total of assets is the base figures representing
100%. Every item of the balance sheet is related vertically to reflect the vertical mix
against the total. The analysis represents internal composition of assets and liabilities.
The common size balance sheet analysis reveals the sources of capital and all other
sources and the application of sources to assets of the company.

Profit And Loss Account

Similar method as applied for balance sheet is also applicable to profit and loss
account. The various items of profit and loss account are related as percentage to sales.
For example, items like, cost of goods sold. Operating expenses, gross profit, taxation
etc. are reduced to percentages by treating the sales as 100 %. These ratios are also called
vertical ratios and mix percentages.

AZGARD NINE PVT

LIMITED
Profit and Loss
Account
for the year ended
31-12-208
2 2 2
2008 2007 2006
008 007 006
Rs. Rs. Rs. Rs. Rs. Rs.
10,113, 6,628, 4,889, 1127 6 4
Sales - Net
499,351 341,926 681,966 % 14% 27%
(6,660, (4,620, (3,703, -742 -428 -324
Cost of Sales
223,767) 988,950) 361,406) % % %
3,453, 2,007, 1,186, 1 1
Gross Profit 385%
275,584 352,976 320,560 86% 04%
Administrativ
(603, (435 (391,
e and selling -67% -40% -34%
529,743) ,185,073) 290,338)
expenses
Operating 2,849, 1,572, 795, 1
318% 69%
Profit 745,841 167,903 030,222 46%
Other income 620, 641 1,122,
69% 59% 98%
- Net 148,589 ,224,883 601,656
(2,470, (1,061, (657, -275
Finance cost -98% -57%
391,655) 933,212) 548,074) %
Profit before 999, 1,151, 1,260, 1 1
111%
Taxation 502,775 459,574 083,804 07% 10%
(102, (72 (115,
taxation -11% -7% -10%
218,852) ,007,073) 569,082)
Profit after 897, 1,079, 1,144, 1 1
100%
Taxation 283,923 452,501 514,722 00% 00%
 ANALYTICAL REVIEW OF VERTICLE PROFIT & LOSS ACCOUNT

As we can see from the vertical profit and loss account the sales revenue increased in
2007 by 614% and in 2008 Increased by 1127%. Cost of sales also decreased in 2007 by
428% and it decreased by 742% in 2008, gross profit increased in 2008 by 385% as
compared to 2007 and in 2007 it had increased by 186% as compared to 2006.

Selling and distribution expenses had decreased in 2008 by 67% and decreased in
2007 as compared to 2006 which was 40%. Financial charges showed decreasing trend in
relation to sales with a decreased in 2008 as compare to 2007 and 2006 Other operating
income had increased in 2007 and also increased in 2008 which is Greater then increase
in 2007.Profit before taxation has increased in year 2006 and year 2007 and also in year
2008. In year 2008 the profit/loss before taxation was 111% and in 2007 the profit
increase by 107% higher then year 2006 and in year 2006 the profit increase 110%.

Finally the company is improving with the passage of time. Although the profits are
not very adequate but the management is very confident that they are working hard and
the company will prosper in coming years as most of the capital work has been
completed.

AZGARD NINE PVT

LIMITED
BALANCE
SHEET
AS AT 31 DECEMBER
2008
2008 2007 2006 2008 2007 2006
EQUITY AND
Rs. Rs. Rs. Rs. Rs. Rs.
LIABILITIES
SHARE CAPITAL
AND RESERVES
ISSUED,
3,827, 3,788 3,788,
SUBSCRIBED AND 14% 16% 16%
118,540 ,822,900 838,900
PAID UP CAPITAL
3,532, 3,530 3,578,
RESERVES 13% 15% 15%
469,002 ,626,122 262,182
2,764, 2,400 1,807,
Inappropriate Profit 10% 10% 8%
494,959 ,605,174 067,052
10,124, 9,720 9,174,
37% 41% 40%
082,501 ,054,196 168,134
Surplus on
revaluation of 219,35 239 257
1% 1% 1%
property, Plant and 6,257 ,073,077 ,360,867
equipment
Non current
liabilities
Redeemable capital 3,962, 4,491 2,268,
14% 19% 10%
Secured 461,561 ,185,372 598,953
Long term finance 2,686, 2,973 3,519,
10% 13% 15%
secured 842,500 ,551,252 216,988
Liabilities against
25 1
assets subject to 0% 0% 0%
,210,944 4,357,005 9,622,618
finance lease
6,674, 7,479 5,797,
24% 32% 25%
515,005 ,093,629 438,559
Current
Liabilities
Current Portion of
1,470, 981 450
non current 5% 4% 2%
921,493 ,049,256 ,047,125
liabilities
Short term 6,574, 3,820 6,006,
24% 16% 26%
Borrowings 080,304 ,688,516 117,630
derivative financial 50 3 32
0% 0% 0%
liabilities ,536,909 4,369,582 ,021,607
Trade and other 1,350, 1,030 1,243,
5% 4% 5%
payables 500,115 ,875,769 588,067
Due to related 426
2% 0% 0%
parties- unsecured ,768,193 - -
Markup accrued on 466 317 195
2% 1% 1%
borrowings ,226,443 ,690,929 ,249,017
 14 22
Unclaimed dividend 0% 0% 0%
,686,046 9,694,014 ,312,061
10,353, 6,194 7,949,
38% 26% 34%
719,503 ,368,066 335,507
Contingencies and
0% 0% 0%
commitments - - -
27,371, 23,632, 23,178,
100% 100% 100%
673,266 588,968 303,067
ASSETS
Non-current
assets
Property, Plant and 7,734, 7,643 7,601,
28% 32% 33%
equipment 950,547 ,649,558 895,866
Capital work in 918 167 150
3% 1% 1%
progress ,670,893 ,987,854 ,650,477
33 5 60
intangible assets 0% 0% 0%
,536,216 1,142,669 ,544,809
Long term 7,521, 6,391 6,303,
27% 27% 27%
investments 644,051 ,905,201 488,906
19 2 19
Long term deposits 0% 0% 0%
,777,502 0,239,502 ,906,757
16,228, 14,274, 14,136,
59% 60% 61%
579,209 924,784 486,815
Current assets
Stores spares and 201 125 101
1% 1% 0%
loose tools ,693,270 ,468,877 ,762,486
4,034, 2,246 2,022,
Stock in trade 15% 10% 9%
103,119 ,132,173 510,924
1,777, 1,657 1,134,
Trade receivable 6% 7% 5%
232,612 ,196,735 897,149
Derivative financial 175 388 555
1% 2% 2%
assets ,673,993 ,993,278 ,680,244
Advances, deposits,
789 1,004 857
prepayments and 3% 4% 4%
,515,062 ,944,292 ,744,304
other receivables
63 5
Current Taxation 0% 0% 0%
,948,605 1,050,683 -
Short Term 4,018, 3,838 3,788,
15% 16% 16%
investment 853,586 ,444,830 315,521
Cash and Bank 82 4 580
0% 0% 3%
Balances ,073,810 5,433,316 ,905,624
11,143, 9,357 9,041,
41% 40% 39%
094,057 ,664,184 816,252
27,371, 23,632, 23,178,
100% 100% 100%
673,266 588,968 303,067
ANALYTICAL REVIEW OF VERTICLE ANALYSIS OF BALANCE SHEET

ASSETS

Non-Current Assets

As we can see from the vertical balance sheet of the company total fixed assets are
constant in relation to total assets with little variations. The management is more
focusing on working capital management than on fixed asset in last three years as shown
by the vertical balance sheet.

Property, plant and equipment have shown a mix trend with improvement in year
2006 which was 33% and then a increase in 2007 which was 32% and after that
improvement in last year 2008 that was 28% Capital work in progress was increased in
2006 as compare to 2007, Store spare held for capital expenditures increase in 2007 and
2008. Long-term deposits increased by 0.09% in 2006 and 0.06% and 0.03% increased in
2007 and 2008.

Current Assets

Total current assets have shown an increasing trend over the last three year period.
Stores and spares declined in year 2007 after that it has shown an increasing trend. In
2006 it increased by 7.97%, n 20073.02% and in 2008 it was 5.40%.

Stock in trade has shown an increasing trend while in the last year it shows a little
decline. Stock in trade is about 2.93% of the total current assets in 2006 and it was
2.03% of total assets in 2007 and 1.34% in 32008. Stores and spares have the largest
portion among all current assets. Receivable had 3.09% o total assets in 2006 and they
were 1.90% in 2007 and 3.13% in 2008. Trade debtors were 0.70% in 2006, 0.35% in
2007 and 0.12% in 2008. Cash and cash equivalent were 21.34% in 2006, 2.15% in 2007
and 0.29% n 2008. This trend shows that more funds are tied in receivable, inventories
and in stores & spares.

EQUITY AND LIABILITIES

Share capital and reserves have shown decreasing trend. Un-appropriated profit has
shown decreasing trend and company had beard loss in 2008. The company is now
focused on its expansion of projects to increase its capacity of production and improving
since year 2005. Currently company is not paying dividends to shareholders. Issued,
subscribed and paid up capital was 30.05% of total liabilities in 2006 but reduced up to
16.54% in 207 and it was 15.35% in 2008. Reserves were also decreased due to bonus
issue they were 12.65%, 6.44% and 3.09% in 2006, 2007 and 2008 respectively.

Non-Current Liabilities
 Total long-term liabilities of the company have shown increasing trend in relation to
total liabilities except marginally increase in year 2008. The company is focusing on
equity financing than debts due to the higher financing costs. Liabilities against assets
have shown a mix trend over the last three year period.

Long term financing was 7.71% in 2006, 43.93% in 2007 and 39.11% in 2008 to all
of its liabilities.

Current Liabilities

Short term liabilities have shown an increasing trend during the last three years as
shown in the vertical balance sheet of the company. Trade and other payables have
shown an increasing trend with a marginal increase in last year. Trade payables deceased
in 2007 and 2008; in 2006 they were 7.38%, 2.91%in 2007 and 3.21% in 2008. Sort
term financing increased, it was 1.86% in 2006, 2.38% in 2007 and 14.387% in 2008.
CHAPTER # 03

1) Company Analysis

2) Company Life Cycle

3) Company award of the year 2008

 COMPANY ANALYSIS:

Azgard nine limited fulfills all its targets of supplies in the market and also expands
its production with the needs of market. In these days company is in its growth stage.
Now the company has three production units including two units for textile produce and
one for Fertilizers. The growth in demand of garments in Asia, India and Middle East,
particularly supply deficit in Europe and USA has geared up export opportunities for
garment Industry of Pakistan. Supply deficit in Europe has resulted in significant demand
for Pakistani garment due to Europe’s geography. European’s import authority standards
have approved Azgard nine for import to Europe. This demand will also be supported by
closing down of some garment units in Europe due to their strict laws governing
pollution control and other environment hazards. Being one of the big garment units of
Pakistan and due to its high quality Azgard Nine is the prime of choice of the
International buyers all over the world. Azgard Nine is committed to provide high quality
garment to its international customers and is being exported to Germany, India, Middle
East, Europe and Africa. Azgard Nine conveniently meets all the International standards
including American, British, Indian and European standards. Azgard Nine is an ISO
9001-2000 and ISO 14001-2004 certified company and follows all rules and regulations
of the government. Company’s social performance is also good. It has good cooperation
with community and the environment. It is only one company of Pakistan that has install
water filtration plant in its production units in MANGA MANDI. Company has a good
relation with their workers and also trying for their welfare.
 Company Life Cycle

Last Five Years Sales of the Company

Comments:

In the above graph you can see in the year 2008 sale of the company at highest point
and it is showing increasing trend from 2004 so company sale is at increasing side in the
year of 2004 to 2008 there is no much difference between the sale this increasing trend
due to expansion of plant and due to the consumption and the demand in the market so
we can say that Azgard nine’s product’s demand is increasing in the local market and
international market.
CHAPTER # 04

1. Five Years Review

2. Recommendation

3. Conclusion

4. Bibliography
 FIVE YEARS REVIEW

Explanation:

In the above chat we can see the profit position of the company during the year 2004
to 2008 in these five years company profitability position is better in 2006 as compare it
with other years, so we can say that company was in much better position in 2006.
 Review

For last five year review,

In 2004, the profitability of the Company has increased considerably in year 2004
due to stability in the prices of Products and increase in capacity utilization. Company
has earned after tax profit of Rs. 375.262 million after accounting for all charges.

To meet the increasing demand for the product of Azgard Nine and maintain its
shares in the market, company has planned to purchase a new Garment plant within the
premises of Kasur. Company has started work on this new plant and its give help to
meeting the demand to local and international markets.

In 2005, sale revenue was Rs. 4422.472 million reflecting a growth of 40% over last
year. The cost of sales has increased by 35% during the year, which is mainly due to
persistent Prices hike in coal and furnace oil. The company has earned after tax profit of
Rs 741.293 million. The profitability of the company has increased considerably in the
current year due to stability in the prices of products and increase in capacity utilization.

In 2006, sales revenue is Rs. 4889.68 million reflecting a growth of 11% over last
year. The company has earned after tax profit of Rs. 1144.51 million. The profitability of
the company has increased considerably in the current year due to better retention prices
and new plant capacity utilization.

In 2007, sales revenue for 2007 was Rs.6628.34 million reflecting increase of 36%
from last year. The company has earned after tax profit of Rs. 1079.45 million. The
profitability of the company has increased considerably in the current year due to better
demand.

In 2008, sales revenue was 10113.49 million reflecting an increase of 53% from
previous year. The company has earned after tax profit of Rs. 897.28 million. Down fall
in the profitability of the company is mainly attributable to increase in cost of input
prices of coal and diesel etc.
RECOMMENDATIONS

 The most important thing for improvement is that Company should Re-arrange
the responsibilities and authorities of all the major departments. Along with this
there should be a proper check and balance system in order avoid from any sort
of departmental overlapping.
 The location of Head office is very critical for Company. It should near to
Factory in order to handle all the operations in better way.
 Company should remove unionized employees which are providing problems to
management. For this purpose they should use Golden Hand Shake or other
options.
 The selection criteria should also be improved. The company should select the
educated and experienced employees and along with there should be a proper
training system for them.
 The Company should be maintain and established the internal audit and
accounting system according to the standard and requirement of the company
ordinance 1984.

The implementations of all these points can lead the company towards more productive
way and after this its market growth and market share will enhance.
CONCLUSION

The textile & apparel sector is amongst the largest and most significant in Pakistan’s
economy, accounting for over 60% of total merchandise exports and providing
employment to 38% of large scale manufacturing sector workforce.

There is an abundant supply of local raw material as Pakistan is the 4th largest
producer in the world. There is also an abundance of local labor available at a
competitive cost when benchmarked against regional competitors.

Against this backdrop the industry remains largely fragmented with few large scale
integrated players. Worldwide denim production capacity is over 6 billion linear meters.
Denim is the world’s largest cotton textile product with estimated per annum global sales
of 4 billion units.

Azgard Nine is Pakistan’s largest denim products business by sales with a fully
vertically integrated Manufacturing chain. From cotton to retail ready apparel products.
In house capability for spinning. Weaving, Design, finishing and stitching enables
control over the entire value chain and provides a significant competitive advantage in
facilitating faster speed to market and control over product quality.

With Longstanding relationship with global retailers and brands, and an ability to
rapidly build up manufacturing capacity, Azgard nine is well poised to cater to an
expected increase in global demand for denim products.

The year 2008 proved very challenging due to a globally recessionary climate
affecting all facets of the business. While the business remained under pressure, Azgard
Nine was able to protect its value added services to its products portfolio. The key focus
remained on meeting and indeed finding ways to exceed customer expectations.

In addition to Azgard Nine’s vertical manufacturing capabilities which were already

providing customers solution concepts was added. The company now offers the client a
choice of full product development, product design and a complete logistics solution.
Traditionally the customer has been sourcing supply of the product only. Now the client
has the option to source a full supply chain solution directly from the Company. This
value enhancement helped Azgard Nine to grow with its existing customers and add new
customers as well during a difficult period.

Urea industry in 2008 remained structurally short despite a 5% increase in production

over 2007 (reaching 4.98 Million Tomes). Late arrival of imports further compounded
the shortage across all the provinces. Total imports by the Trading Corporation of
Pakistan (TCP) during 2008 aggregated 450000 tons. The shortage was managed by
collaboration between the federal & provincial Governments and Fertilizer industry by
systematically rationing the available stocks. The government of Pakistan, in an effort to
counter shortages utilized the network of national fertilizer marketing limited (NFML) &
Utility Stores Corporation of Pakistan for selling 50% of local production during Nov-
Dec 2008. Pak American fertilizers ltd. played an active role in coordination with the
relevant Government departments to ensure availability of fertilizer in various districts of
Punjab and NWFP.

Industry Urea sales in 2008 saw an increase of 11% over 2007 and reached 5.5
million tons. This increase is attributed to demand switch by farmers from phosphates to
urea due to the unprecedented price increase of phosphate in the international market.

The fertilizer industry supported the farmers in passing on various subsidies received.
The fertilizer industry also contributed an additional subsidy of Rs. 20.7 billion given by
the Government of Pakistan (GOP) in shape of lower gas prices to the fertilizer industry
in 2008. The GOP also provided additional subsidy of Rs. 14.5 Billion on account of
subsidy on import urea. Thus local Urea prices during 2008 averaged US$ 165.7 per tom,
significantly lower than the average international urea price of US$ 550 per ton in 2008
BIBLIOGRAPHY

REFERENCE & SOURCES USED

1) http://www.nishatmillsltd.com/nishat/invest.html

2) http://www.nonprofitsassistancefund.org/files/MNAF/ToolsTemplates/NonprofitFi
nancialRatios.pdf

3) http://www.azgard9.com/html/financial-info/2008/Security%20Analys_g%20-
%20Q1.pdf

4) http://www.azgard9.com/html/financial-info/2008/Consolidated%20ANL.pdf

5) http://www.azgard9.com/html/financial-
info/2008/Azgard%209%20AR07%20Consolidati%20(2).pdf

6) http://www.azgard9.com/html/financial-info/2007/ANNUAL%20REPORT-
2006%20PAGE%2021%20TO%20110.pdf

7) http://www.azgard9.com/html/financial-information.htm

8) http://www.sapphire.com.pk/cstmaccounts.htm

9) http://www.sapphire.com.pk/home.htm

10) http://www.kse.com.pk/market-data/history_by_date1.php?id=1&sid=1.20

11) Financial Management by (BPB)

12) Financial Reporting by (BPB)

13)www.investopedia.com

14)www.accountingformanagment.com

References

Special Thanks to

Mr. Muhammad Irfan

CHAPTER # 05

Annexure:

1) Five Years Balance Sheet of Azgard Nine Pvt limited Company

2) Five Years Profit and Loss account of Azgard Nine Pvt limited Company

3) Five Years Balance Sheet of Sapphire Mills limited Company

4) Five Years Profit and Loss account of Sapphire Mills limited Company

5) Five Years Balance Sheet of Nishat Mills limited Company

6) Five Years Profit and Loss account of Nishat Mills limited Company

7) Ratio Working of Azgard Nine, Sapphire and Nishat Company

AZGARD NINE PVT
LIMITED
BALANCE
SHEET
AS AT 31 DECEMBER
2008
2 2 2 2
2007
008 006 005 004
EQUITY AND
Rs. Rs. Rs. Rs. Rs.
LIABILITIES
SHARE CAPITAL
AND RESERVES
ISSUED,
3,78
SUBSCRIBED AND 3,827,118,54
8,822,900
3,788,838,9 1,737,308,6 1,737,308,6
0 00 80 80
PAID UP CAPITAL
3,53
RESERVES 3,532,469,00
0,626,122
3,578,262,1 403,331,46
362,142,241
2 82 9
Inappropriate 2,764,494,95
2,40
1,807,067,0 952,462,49
Profit 0,605,174 410,657,982
9 52 0
10 9,72
9,174,168,1 3,093,102,6 2,510,108,9
,124,082,501 0,054,196
34 39 03
Surplus on
revaluation of 2
257,360,86 278,943,67
property, Plant 219,356,257 39,073,077
7 1
306,564,511
and equipment
Non current
liabilities
Redeemable 3,962,461,56
4,49
2,268,598,9 2,333,220,1
capital Secured 1,185,372 1,147,729
1 53 75
Long term 2,686,842,50
2,97
3,519,216,9 347,920,00
finance secured 3,551,252 750,000,000
0 88 0
Liabilities against
assets subject to 25,210,944 14,357,005 9,622,618 40,173,972 116,503,819
finance lease
7,47
6,674,515,00 5,797,438,5 2,721,314,1
9,093,629 867,651,548
5 59 47
Current
Liabilities
Current Portion of
9
non current 1,470,921,49
81,049,256
450,047,12 433,780,77
363,081,881
3 5 4
liabilities
Short term 6,574,080,30
3,82
6,006,117,6 3,142,402,3 1,492,909,8
Borrowings 0,688,516
4 30 24 92
derivative
financial liabilities 50,536,909 34,369,582 32,021,607 - -

Trade and other 1,350,500,11

1,03
1,243,588,0 791,641,17
payables 0,875,769 691,981,192
5 67 2
 Due to related
parties- 426,768,193 - - - -
unsecured
Markup accrued 3
195,249,01
on borrowings 466,226,443 17,690,929
7
79,679,935 64,824,871

Unclaimed
dividend 14,686,046 9,694,014 22,312,061 362,062 95,414

10 6,19
7,949,335,5 4,447,866,2 2,612,893,2
,353,719,503 4,368,066
07 67 50
Contingencies
and commitments - - - - -

27 23,632
23,178,303, 10,541,226, 6,297,218,2
,371,673,266 ,588,968
067 724 12

2
ASSETS
008 2,007 2,006 2,005 2,004
Non-current
Rs. Rs. Rs. Rs. Rs.
assets
Property, Plant 7,734,950,54
7,64
7,601,895,8 3,113,043,0 2,847,936,4
and equipment 7
3,649,558
66 32 02
Capital work in 1
150,650,47 2,459,655,9
progress 918,670,893 67,987,854
7 06
84,292,338

intangible assets 33,536,216 51,142,669 60,544,809 73,937,276 88,375,589

Long term 7,521,644,05

6,39
6,303,488,9
investments 1,905,201 4,670,138 2,666,296
1 06
Long term
deposits 19,777,502 20,239,502 19,906,757 29,745,135 18,517,830

16 14,274
14,136,486, 5,681,051,4 3,041,788,4
,228,579,209 ,924,784
815 87 55

Current assets
Stores spares 1
101,762,48
and loose tools 201,693,270 25,468,877
6
87,790,355 72,608,693

2,24
Stock in trade 4,034,103,11
6,132,173
2,022,510,9 2,034,180,5 1,394,729,3
9 24 50 30
1,65
Trade receivable 1,777,232,61
7,196,735
1,134,897,1 1,013,883,5
945,111,856
2 49 84
Derivative 3
555,680,24
financial assets 175,673,993 88,993,278
4
13,458,916 -

Advances,
deposits, 1,00
857,744,30 895,807,87
prepayments and 789,515,062 4,944,292 712,923,170
4 9
other receivables
Current Taxation 63,948,605 51,050,683 - - -

Short Term 4,018,853,58

3,83
3,788,315,5 769,411,59
investment 8,444,830 109,148,931
6 21 5
Cash and Bank
82,073,810 45,433,316 580,905,62 45,642,358 20,907,777
Balances
 4

11 9,35
9,041,816,2 4,860,175,2 3,255,429,7
,143,094,057 7,664,184
52 37 57

27 23,632
23,178,303, 10,541,226, 6,297,218,2
,371,673,266 ,588,968
067 724 12

Profit and Loss

Account
for the year
ended 31-12-208
2
008 2,007 2,006 2,005 2,004
Rs. Rs. Rs. Rs. Rs.

1
4, 4,
Sales - Net 0,113,499,3 6,628,341,9
889,681,966 422,472,357
3,155,912,4
51 26 27
(3, (3,2
Cost of Sales (6,660,223, (4,620,988,
703,361,406) 88,786,063)
(2,440,779,
767) 950) 273)
1, 1,
Gross Profit 3,453,275,5 2,007,352,9
186,320,560 133,686,294 715,133,154
84 76
Administrative
(
and selling (603,529,74 (435,185,07
(391,290,338) 320,622,883)
(185,112,54
3) 3) 8)
expenses
Operating 2,849,745,8 1,572,167,9
Profit 795,030,222 813,063,411 530,020,606
41 03
Other income 1,
- Net 620,148,589 641,224,883 122,601,656 305,447,731 9,864,791

(
Finance cost (2,470,391, (1,061,933,
(657,548,074) 326,374,206)
(144,623,06
655) 212) 2)
Profit before 1,151,459,5
1,
Taxation 999,502,775 260,083,804 792,136,936 395,262,335
74

taxation (102,218,85 (72,007,073

(115,569,082) (50,843,271)
(20,000,000
2) ) )
Profit after 1,079,452,5
1,
Taxation 897,283,923 144,514,722 741,293,665 375,262,335
01

Earning Per
Share - Basic 2.65 3.26 4.97 7.42 4.31

Earning Per
Share - diluted 2.65 3.25 4.67 6.47 4.30
NISHAT PVT. LIMITED
BALANCE SHEET
FOR THE YEAR ENDED 2008
2008 2007 2006 2005 2004
EQUITY AND LIABILITIES

CAPITAL AND RESERVES

1,59 1,59 1,452 1,45 1,59
Share Capital 7,857,000 7,857,000 ,597,000 2,597,000 7,857,000
23,549 28,56 19,659, 11,35 28,566
Reserves ,323,000 6,041,000 812,000 3,517,000 ,041,000

Accumulated profit - - - - -
25,147,1 30,163,8 21,112,40 12,806,1 30,163,8
Total Equity 80,000 98,000 9,000 14,000 98,000
SHAREHOLDERS EQUITY
NON CURRENT LIABILITIES
1,04 1,77 2,982 2,79 1,77
Loan term finances 7,794,000 3,820,000 ,353,000 6,512,000 3,820,000
liabilities against
assets subject to 33,03 61,6
finance lease - - 1,000 43,000 -
1,047,7 1,773,8 3,015,38 2,858,1 1,773,8
94,000 20,000 4,000 55,000 20,000

CURRENT LIABILITIES
Trade and other 1,14 9 96 8 92
payables 1,227,000 26,593,000 0,436,000 12,216,000 6,593,000
Interest/ mark up on 20 1 15 13
loans 1,847,000 31,744,000 1,236,000 88,449,000 1,744,000
9,17 5,01 4,315 4,28 5,01
short term borrowings 5,518,000 8,664,000 ,708,000 4,815,000 8,664,000
Current portion of 92 1,34 1,342 7 1,34
long term liabilities 6,025,000 1,565,000 ,771,000 11,164,000 1,565,000
Provision for income 27 2 28 3 23
tax 6,988,000 30,807,000 1,382,000 56,689,000 0,807,000
11,721,6 7,649,3 7,051,53 6,253,3 7,649,3
05,000 73,000 3,000 33,000 73,000
CONTIGENCY AND
COMMETMENTS - - - - -

TOTAL EQUITY 37,916,5 39,587,0 31,179,32 21,917,6 39,587,0

AND LIABILITIES 79,000 91,000 6,000 02,000 91,000

ASSETS 2008 2007 2006 2005 2004

NON-CURRENT ASSETS
Property, Plant and 10,647,3
10,000 10,58 10,611, 9,15 2,42
Equipment 6,159,000 353,000 1,096,000 9,954,944
Capital Work in 13,321,0
88,000 15,67 10,793, 5,00
progress 2,980,000 026,000 3,177,000 57,608,750
Loan term loans-
secured and deposits 8,122,000 9,523,000 6,377,000 4,890,000
Loan term loans- 1
secured and deposits 10,541,000 9,342,000 0,130,000 12,022,000 23,820,007
23,987,0 26,278,0 21,420,88 14,171,1 2,511,3
61,000 04,000 6,000 85,000 83,701
CURRENT ASSETS
stores, spares parts and 49 4 47 4 1,24
loose tools 0,229,000 22,428,000 1,520,000 24,827,000 9,572,742
4,10 3,10 3,003 2,89
stock in trade 3,648,000 6,436,000 ,174,000 7,392,000
1,32 8 1,026 8 1,15
Trade Debts 9,027,000 31,653,000 ,884,000 77,358,000 0,579,738
Short term 7,12 8,11 4,350 2,17 10
investments 9,154,000 8,459,000 ,146,000 3,530,000 9,138,820
40 4 41 4 24
loans and advances 3,295,000 11,270,000 8,794,000 24,533,000 5,255,091
Short term deposit and 3
prepayments 30,400,000 26,395,000 0,525,000 39,180,000 13,497,444
37 3 40 3
others receivables 0,013,000 22,839,000 7,147,000 88,598,000 -
Cash and bank 5 5
balances 73,752,000 69,607,000 0,250,000 20,999,000 56,528,131
13,929,5 13,309,0 9,758,44 7,746,4 2,824,5
18,000 87,000 0,000 17,000 71,966

37,916,5 39,587,0 31,179,32 21,917,6 5,335,9

TOTAL ASSETS 79,000 91,000 6,000 02,000 55,667

NISHAT PVT. LIMITED

PROFIT & LOSS A/C
FOR THE YEAR ENDED 2008
2008 2007 2006 2005 2004
SALES
19,26 17,18     16,417,3   11,374,6 7,46
COST OF SALES 7,633,000 0,192,000 58,000  30,000  1,055,757
(16,29 (14,33   (13,701,6   (9,239,7 7,09
8,857,000) 5,254,000) 26,000) 31,000) 1,114,328
GROSS PROFIT
2,9 2,84 2,7 2,1 14,55
68,776,000 4,938,000 15,732,000 34,899,000 2,170,085
DISTRIBUTION COST
ADMINISTRATIVE (9 (9        (663,      (510,2
EXPENSES 61,711,000) 28,778,000) 671,000) 46,000) -
(3 (3        (264,      (175,0
OTHER OPERATING 98,757,000) 20,202,000) 807,000) 40,000) 54,689,456
OTHER OPERATING (1 (          (78,        (70,9
INCOME 10,781,000) 91,758,000) 689,000) 78,000) 27,986,950
5,8 6          277,        621,5 11
06,873,000 71,275,000 961,000  69,000  1,644,873
4,335, (669,4 (729, (134,6 194,3
624,000 63,000) 206,000) 95,000) 21,279
OPERATING PROFIT
7,3 2,17 1,9 2,0 14,74
04,400,000 5,475,000 86,526,000 00,204,000 6,491,364
FINANCE COST
share of profit in (9 (8        (755,      (407,6 12
associated companies 07,432,000) 19,267,000) 054,000) 96,000) 7,260,241
         527,        440,
- - 394,000  846,000  13,544,903
(9 (8 ( 14
07,432,000) 19,267,000) 227,660,000) 33,150,000 0,805,144
PROFIT BEFORE TAXATION
6,396, 1,356,2 1,758, 2,033, 14,887,2
968,000 08,000 866,000 354,000 96,508
TAXATION
(2 (1 ( (1
58,000,000) 45,000,000) 126,000,000) 66,000,000) 85,046,149
PROFIT AFTER
TAXATION
6,138, 1,211,2 1,632, 1,867, 14,972,3
968,000 08,000 866,000 354,000 42,657

SHAPPHIRE (PVT).
LIMITED
BALANCE SHEET
FOR THE YEAR ENDED
2008
ASSETS 2008 2007 2006 2005 2004

NON-CURRENT ASSETS

Property, Plant and 3,936,

3,793,62 3,721,36 3,124,15 2,429,95
357,164
Equipment 1,479 8,562 2,756 4,944

136, 309,35 202,11 166,67 57,60

Capital Work in progress 665,017 7,308 9,669 4,519 8,750

1, 1,86 2,69 3,51

Intangible Assets 035,155 3,283 1,411 9,539

140, 333,58
Investment Property 660,297 - - - 1,557

550, 400,08 404,68 359,68

Long term Investment 455,739 7,567 7,567 7,567 -

Loan term loans- 18, 27,88 24,22 26,17 23,82

secured and deposits 609,945 6,920 4,793 9,194 0,007

4,78 4,532,8 4,355,0 3,680,2 2,844,96

3,783,317 16,557 92,002 13,575 5,258

CURRENT ASSETS
3,278, 1,949,14 1,908,73 1,860,86 1,249,57
Inventories 652,891 6,494 4,607 3,775 2,742

1,129, 1,280,85 1,181,49 976,38 1,150,57

Trade Debts 634,217 2,424 1,096 2,566 9,738

61, 115,67 41,51 31,16 109,13

Loan and advances 803,031 7,608 6,776 5,687 8,820

245,25
Investments - - - - 5,091

Advance/ refundable 96, 36,98 51,61 176,04 131,02

income tax 288,064 5,119 3,256 1,185 1,514

Trade deposits and short 7, 5,25 3,30 1,22

term prepayments 173,454 3,941 0,053 8,857 -

78, 119,31 121,59 47,12 13,49

Other receivables 562,147 6,598 8,423 5,900 7,444

2,821, 3,032,18 1,521,73 503,64

Short term investments 493,005 0,857 2,569 4,001 -

66, 53,77 33,31 41,25 56,52

Cash and bank balances 874,980 4,469 2,085 6,301 8,131
 7,54 6,593,1 4,863,2 3,637,7 2,955,59
0,481,789 87,510 98,865 08,272 3,480

12,32 11,126,0 9,218,3 7,317,9 5,800,55

TOTAL ASSETS 4,265,106 04,067 90,867 21,847 8,738

EQUITY AND
LIABILITIES

CAPITAL AND
RESERVES
200, 200,83 200,83 200,83 200,83
Share Capital 831,400 1,400 1,400 1,400 1,400

4,758, 5,601,77 3,558,56 2,307,51 1,954,79

Reserves 930,127 4,092 1,976 0,163 5,027

617, 216,26 134,53 288,77 172,30

Accumulated profit 730,082 2,838 5,088 3,074 7,002

5,57 6,018,8 3,893,9 2,797,1 2,327,93

Total Equity 7,491,609 68,330 28,464 14,637 3,429

SHAREHOLDERS
EQUITY

NON CURRENT
LIABILITIES

Redeemable Capital - - - - -

469, 734,94 934,38 1,188,01 940,30

Loan term finances 501,210 6,877 0,957 7,068 4,765

18 18 18 18
Custom duty payable - 8,878 8,878 8,878 8,878

39 407,3 366,27 326,71 279,46

Deferred liabilities 6,649,544 55,062 8,699 0,352 2,992

86 1,142,4 1,300,8 1,514,9 1,219,95

6,150,754 90,817 48,534 16,298 6,635

CURRENT LIABILITIES
490, 371,95 667,34 575,33 505,96
Trade and other payables 810,513 2,583 9,055 0,266 1,833

Interest/ mark up on 82, 71,19 58,95 45,08

loans 211,756 6,500 4,600 1,569 -

4,923, 3,109,23 2,611,40 1,933,61 1,540,81

short term borrowings 882,728 2,345 2,600 0,996 9,433

Current portion of long 322, 347,06 603,23 352,34 147,89

term liabilities 903,996 3,492 6,109 3,252 6,239

Current portion of 24,07

gratuity fund - - 8,287 - -
 60, 65,20 58,27 99,13 57,62
Provision for income tax 813,750 0,000 9,967 3,295 9,936

31 39 36
Dividend payable - - 3,251 1,534 1,233

CONTIGENCY AND 5,88 3,964,6 4,023,6 3,005,8 2,252,66

COMMETMENTS 0,622,743 44,920 13,869 90,912 8,674

TOTAL EQUITY AND 12,32 11,126,0 9,218,3 7,317,9 5,800,55

LIABILITIES 4,265,106 04,067 90,867 21,847 8,738

SHAPPHIRE (PVT). LIMITED

PROFIT & LOSS A/C
FOR THE YEAR ENDED 2008

2008 2007 2006 2005 2004

9,746, 9,152, 7,966, 5,338, 7,461,05
SALES 607,946 455,933 281,051 810,168 5,757
8,618, 7,961, 7,201, 4,734, 7,091,11
COST OF SALES 580,605 253,425 536,030 528,479 4,328
1,128, 1,191, 764, 604, 369,94
GROSS PROFIT 027,341 202,508 745,021 281,689 1,429

442, 391, 41, 29,

DISTRIBUTION COST 316,060 366,747 676,645 575,561 -
ADMINISTRATIVE 115,0 91, 77, 49, 54,68
EXPENSES 86,239 860,697 811,031 747,754 9,456
16, 13, 20, 27,98
OTHER OPERATING 500,000 367,023 866,302 088,074 6,950
OTHER OPERATING 835, 95, 59, 51, 111,64
INCOME 158,563 620,045 902,250 726,587 4,873
277, 403, 73, 47, 28,96
256,264 974,422 451,728 684,802 8,467

1,405, 787, 691, 556, 398,90

OPERATING PROFIT 283,605 228,086 293,293 596,887 9,896

RE-MEASUREMENT OF
HELD FOR TRADING 75
INVESTMENTS - - - - 1,601
734, 467, 427, 174, 127,26
FINANCE COST 683,187 520,225 833,551 923,488 0,241
13,54
OTHER CHARGES - - - - 4,903
734, 467, 427, 174, 141,55
683,187 520,225 833,551 923,488 6,745

PROFIT BEFORE 670, 319, 263, 381, 257,35

TAXATION 600,418 707,861 459,742 673,399 3,151

52, 103, 128, 92, 85,04

TAXATION 870,336 445,023 924,654 900,325 6,149

PROFIT AFTER 617, 216, 134, 288, 172,30

TAXATION 730,082 262,838 535,088 773,074 7,002
Ratio analysis
current assets/current
current ratio liabilities
year 2008 2007 2006 2005 2004
(935766418 (486017523 (325542975
(11143094057 (9041816252
Azgard 9 4/61943680 7/44478662 7/26128932
/10353719503) /7949335507)
66) 67) 50)
(659318751 (363770827 (295559348
(7540481789 (4863298865
Sapphire 0/39646449 2/30058909 0/22526686
/5880622743) /4023613869)
20) 12) 74)
(1392951800 133090870 (774641700 (282457196
(9758440000
Nishat 0/1172160500 00/7649373 0)/62533330 6)/76493730
)/7051533000
0) 000 00 00

quick ratio
quick ratio (current assets-stock)/current liabilities
year 2008 2007 2006 2005 2004
(935766418 (486017523 (325542975
(1114309405 (9041816252
4- 7- 7-
7- -
Azgard 9 2246132173 2034180550 1394729330
4034103119)/ 2022510924)/
)/61943680 )/444786626 )/261289325
10353719503 7949335507
66 7 0
(659318751 (363770827 (295559348
(7540481789 (4863298865
0- 2- 0-
- -
Sapphire 1949146494 1860863775 1249572742
3278652891)/ 1908734607)/
)/39646449 )/300589091 )/225266867
5880622743 4023613869
20 2 4
(133090870 (774641700
(1392951800 (9758440000 (282457196
00- 0-
0- - 6-
Nishat 3106436000 2897392000
4103648000)/ 3003174000)/ 0)/76493730
)/76493730 )/625333300
11721605000 7051533000 00
00 0

inventory day
Inventory Days Inventory Days = Inventory / Cost of Sales*365
year 2008 2007 2006 2005 2004

(4034103119/ (224613217 (2022510924 (203418055 (139472933

Azgard 9 6660223767)* 3/46209889 /3703361406) 0/32887860 0/24407792
365 50)*365 *365 63)*365 73)*365

(3278652891 (194914649 (1908734607 (186086377 (124957274

Sapphire /8618580605) 4/79612534 /7201536030) 5/47345284 2/709111432
*365 25)*365 *365 79)*365 8)*365

(4103648000 (310643600 (3003174000 (289739200

(0/7091114
Nishat /16298857000 0/14335254 /13701626000 0/92397310
328)*365
)*365 000)*365 )*365 00)*365

Debtor's day
Debtor's day Trade debtors/Credit sales*365
year 2008 2007 2006 2005 2004

(1777232612 (165719673 (1134897149 (101388358 (945111856

Azgard 9 /10113499351 5/66283419 /4889681966) 4/44224723 /315591242
)*365 26)*365 *365 57)*365 7)*365

(1129634217/ (128085242 (1181491096 (976382566 (115057973

Sapphire 9746607946)* 4/91524559 /7966281051) /533881016 8/74610557
365 33)*365 *365 8)*365 57)*365

(1329027000 (831653000 (1026884000 (877358000 (115057973

Nishat /19267633000 /171801920 /16417358000 /113746300 8/74610557
)*365 00)*365 )*365 00)*365 57)*365

Creditors days
Creditors days Trade Creditors/Credit Sales*365
 year 2008 2007 2006 2005 2004

(1350500115/ (103087576 (1243588067 (791641172 (691981192

Azgard 9 10113499351) 9/66283419 /4889681966) /442247235 /315591242
*365 26)*365 *365 7)*365 7)*365

(490810513/ (371952583 (667349055/ (575330266 (505961833

Sapphire 9746607946)* /915245593 7966281051) /533881016 /746105575
365 3)*365 *365 8)*365 7)*365

(1141227000/ (926593000 (960436000/ (812216000 (926593000

Nishat 19267633000) /171801920 16417358000 /113746300 /746105575
*365 00)*365 )*365 00)*365 7)*365

Total Asset Turnover

Formula Sales/ Total Assets
year 2008 2007 2006 2005 2004

(1011349935 (662834192 (4889681966 (442247235 (315591242

Azgard 9 1/2737167326 6/23632588 /23178303067 7/10541226 7/62972182
6) 968) ) 724) 12)

(9746607946 (915245593 (533881016 (746105575

(7966281051
Sapphire /12324265106 3/11126004 8/73179218 7/58005587
/9218390867)
) 067) 47) 38)

(1926763300 (171801920 (1641735800 (113746300 (746105575

Nishat 0/3791657900 00/3958709 0/3117932600 00/2191760 7/53359556
0) 1000) 0) 2000) 67)

Fixed Asset Turnover Ratio

Formula Cost of sales / Fixed Assets

year 2008 2007 2006 2005 2004
 (462098895 (328878606 (244077927
(6660223767 (3703361406
Azgard 9 0/76436495 3/31130430 3/28479364
/7734950547) /7601895866)
58) 32) 02)

(796125342 (473452847 (709111432

(8618580605 (7201536030
Sapphire 5/37936214 9/31241527 8/24299549
/3936357164) /3721368562)
79) 56) 44)

(1629885700 (143352540 (1370162600 (923973100 (709111432

Nishat 0/1064731000 00/1058615 0/1061135300 0/91510960 8/24299549
0) 9000) 0) 00) 44)

Gross profit to Sales

Formula Gross profit/Sales*100

year 2008 2007 2006 2005 2004

(3453275584 (200735297 (1186320560 (113368629 (715133154

Azgard 9 /10113499351 6/66283419 /4889681966) 4/44224723 /315591242
)*100 26)*100 *100 57)*100 7)*100

(1128027341/ (119120250 (764745021/ (604281689 (369941429

Sapphire 9746607946)* 8/91524559 7966281051) /533881016 /746105575
100 33)*100 *100 8)*100 7)*100

(2968776000 (284493800 (2715732000 (213489900 (369941429

Nishat /19267633000 0/17180192 /16417358000 0/11374630 /746105575
)*100 000)*100 )*100 000)*100 7)*100
Operating Profit Margin

Formula Operating Profit Margin = Operating profit /Sale*100

year 2008 2007 2006 2005 2004

(2849745841 (157216790 (795030222/ (813063411 (530020606

Azgard 9 /10113499351 3/66283419 4889681966) /442247235 /315591242
)*100 26)*100 *100 7)*100 7)*100

(1405283605 (787228086 (691293293/ (556596887 (398909896

Sapphire /9746607946) /915245593 7966281051) /533881016 /746105575
*100 3)*100 *100 8)*100 7)*100

(7304400000 (217547500 (1986526000 (200020400 (564262708

Nishat /19267633000 0/17180192 /16417358000 0/11374630 /746105575
)*100 000)*100 )*100 000)*100 7)*100

Net Profit/ (Loss) Before Tax

Formula Net profit before tax/Sales*100

year 2008 2007 2006 2005 2004

(999502775/ (115145957 (1260083804 (792136936 (395262335

Azgard 9 10113499351) 4/66283419 /4889681966) /442247235 /315591242
*100 26)*100 *100 7)*100 7)*100

(670600418/ (319707861 (263459742/ (381673399 (257353151

Sapphire 9746607946)* /915245593 7966281051) /533881016 /746105575
100 3)*100 *100 8)*100 7)*100

(6396968000 (135620800 (1758866000 (203335400 (705067852

Nishat /19267633000 0/17180192 /16417358000 0/11374630 /746105575
)*100 000)*100 )*100 000)*100 7)*100
Net Profit/ (Loss) after interest and Tax
Formula Net profit after tax/Sales*365
year 2008 2007 2006 2005 2004

(897283923/ (107945250 (1144514722 (741293665 (375262335

Azgard 9 10113499351) 1/66283419 /4889681966) /442247235 /315591242
*100 26)*100 *100 7)*100 7)*100

(617730082/ (216262838 (134535088/ (288773074 (172307002

Sapphire 9746607946)* /915245593 7966281051) /533881016 /746105575
100 3)*100 *100 8)*100 7)*100

(6138968000 (121120800 (1632866000 (186735400 (790114001

Nishat /19267633000 0/17180192 /16417358000 0/11374630 /746105575
)*100 000)*100 )*100 000)*100 7)*100

Return on Assets
Formula Net Income / Total Assets*100
year 2008 2007 2006 2005 2004

(897283923/ (107945250 (1144514722 (741293665 (375262335

Azgard 9 27371673266) 1/23632588 /23178303067 /105412267 /629721821
*100 968)*100 )*100 24)*100 2)*100

(617730082/ (216262838 (134535088/ (288773074 (172307002

Sapphire 12324265106) /111260040 9218390867) /731792184 /580055873
*100 67)*100 *100 7)*100 8)*100

(6138968000 (121120800 (1632866000 (186735400 (790114001

Nishat /37916579000 0/39587091 /31179326000 0/21917602 /533595566
)*100 000)*100 )*100 000)*100 7)*100
Return on Capital employed
Formula Profit before interest and taxation / Capital Employed *100
year 2008 2007 2006 2005 2004

(999502775/ (115145957 (1260083804 (792136936 (395262335

Azgard 9 17017953763) 4/17438220 /15228967560 /609336045 /368432496
*100 902)*100 )*100 7)*100 2)*100

(670600418/ (319707861 (263459742/ (381673399 (257353151

Sapphire 6443642363)* /716135914 5194776998) /431203093 /354789006
100 7)*100 *100 5)*100 4)*100

(705067852
(6396968000 (135620800 (1758866000 (203335400
/-
Nishat /26194974000 0/31937718 /24127793000 0/15664269
2313417333
)*100 000)*100 )*100 000)*100
)*100

Return on equity Ratio (ROE)

Formula [(Net profit after tax − Preference dividend) / Equity share capital] × 100
2008 2007 2006 2005 2004
((10794525 ((1144514722 ((74129366 ((375262335
((897283923-
01- - 5- -
Azgard 9 0)/101240825
0)/9720054 0)/917416813 0)/30931026 0)/25101089
01)*100
196)*100 4)*100 39)*100 03)*100
((21626283 ((28877307 ((172307002
((617730082- ((134535088-
8- 4- -
Sapphire 0)/557749160 0)/389392846
0)/6018868 0)/27971146 0)/23279334
9)*100 4)*100
330)*100 37)*100 29)*100
((6138968000 ((12112080 ((1632866000 ((18673540 ((790114001
- 00- - 00- -
Nishat
0)/251471800 0)/3016389 0)/211124090 0)/12806114 0)/30163898
00)*100 8000)*100 00)*100 000)*100 000)*100

Debt to Equity Ratio

Formula Total Long Term Debts / Shareholders Funds
2008 2007 2006 2005 2004
 (747909362 (272131414 (867651548/
(6674515005/ (5797438559/
Azgard 9 9/73194490 7/21406401 2099450921
7359587542) 7367101082)
22) 49) )
(734946877 (118801706 (940304765/
(469501210/4 (934380957/3
Sapphire /580260549 8/25083415 2155626427
959761527) 759393376)
2) 63) )
(177382000 (285815500 (177382000
(1047794000/ (3015384000/
Nishat 0/30163898 0/12806114 0/30163898
25147180000) 21112409000)
000) 000) 000)

Interest Coverage Ratio

Formula Net Profit Before Interest and Tax / Fixed Interest Charges]
2008 2007 2006 2005 2004
(115145957
(999502775/2 (1260083804/ (792136936/ (395262335/
Azgard 9 4/10619332
470391655) 657548074) 326374206) 144623062)
12)
(216262838
(617730082/7 (134535088/4 (288773074/ (172307002/
Sapphire /467520225
34683187) 27833551) 174923488) 127260241)
)
(135620800 (203335400
(6396968000/ (1758866000/ (705067852/
Nishat 0/81926700 0/40769600
907432000) 755054000) 127260241)
0) 0)

Earning Per Share

Formula Profit after tax/No. of shares
2008 2007 2006 2005 2004
(107945250
(897283923/3 (1144514722/ (741293665/ (375262335/
Azgard 9 1/33112039
38597707) 230284652) 99904807) 87067827)
9)
(617730082/2 (216262838 (134535088/2 (288773074/ (172307002/
Sapphire
0082252) /20080115) 0079864) 20095551) 20082401)
(121120800 (186735400
(6138968000/ (1632866000/ (790114001/
Nishat 0/15978997 0/14520637
159785736) 159771625) 152826693)
4) 6)

Earning Yield
Formula Earning Per Share / Market Price Per Share * 100
2008 2007 2006 2005 2004
(2.65/61.56)* (3.26/52.1)* (4.97/22.05)* (7.42/32)*1 (4.31/22.5)*
Azgard 9
100 100 100 00 100
 (30.76/72.45) (10.77/92.5) (14.37/90)* (8.58/70)*10
Sapphire (6.7/70)*100
*100 *100 100 0
(38.42/85.97) (7.58/129.2) (10.22/104.8) (12.86/76)* (5.17/52.8)*
Nishat
*100 *100 *100 100 100

Market Value of Share

2008 2007 2006 2005 2004
Azgard 9 61.56 52.1 22.05 32 22.5
Sapphire 72.45 92.5 70 90 70
Nishat 85.97 129.2 104.8 76 52.8

Price Earning Ratio

Formula Market price per equity share / Earnings per share
2008 2007 2006 2005 2004
Azgard 9 (61.56/2.65) (52.1/3.26) (22.05/4.97) (32/7.42) (22.5/4.31)
Sapphire (72.45/30.76) (92.5/10.77) (70/6.7) (90/14.37) (70/8.58)
Nishat (85.97/38.42) (129.2/7.58) (104.8/10.22) (76/12.86) (52.8/5.17)