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PROFESSIONAL PROJECT

INDUS MOTOR COMPANY LIMITED

Mansoor Humayun
Student No. 623/ BBA-Hons 8th Semester (Evening) 2006-2010

Submitted to the
Department Of Management Sciences
UNIVERSITY OF EDUCATION, LAHORE
OKARA CAMPUS
Indus Motor Company Ltd (Financial Analysis)

Project Supervisor: Mr. Rai Imtiaz Hussain

Submitted by: Mansoor Humayun


623-E
BBA(Hons) 8th Semester
2006-2010

02/03/2010
In the Name of Allah the Most Gracious, the
Most Beneficent and the Most Merciful

Read (O Prophet,) in the name of yours Rub,


Who created. Created man from a clot of
congealed blood. Read; and your Lord is Most
Generous, Who taught knowledge by the pen;
taught man what he did not know.
(Al-Alaq, Surah # 96, Ayats 1-4, Para # 30)
DEDICATION

I would like to dedicate my work,

“As a little token of gratitude for my Loving Parents.

The wisdom and love of my parents enables me to strive towards a

legacy of honor. Without their knowledge, wisdom and guidance,

I would not have the goals, I have to strive and be the best to reach my

dreams!

To my Siblings for their gentle encouragement and valuable support.

To my little and lovely Nephew.”

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ACKNOWLEDGEMENT

I find no words at my command to express my deepest sense of gratitude

to the Almighty ALLAH, the most Gracious, the most Merciful and the

most Beneficent, who gives me the talent to complete this task

successfully, He is the one who gave me courage to do this.

I am much obliged to my loving Parents whose prayers have enabled me

to reach this stage. At this occasion I can’t forget my parents for their

guidance at the crucial moments of my life.

Next I owe my bottomless thanks to our esteemed resource person Mr. Rai

Imtiaz Hussain who directed me well and was always available to clear

my doubts and misunderstandings through out this project.

It is also a matter of immense pleasure for me to express my gratitude to

the Faculty of Department of Management Sciences and professional

project’s evaluation Committee of the University of Education for giving

us their precious time and tried their best as helpful as possible.

I wish to thanks all my Friends and Classmates who really helped me by

giving suggestions and critical review of the manuscript.

Obviously this achievement was not possible without all of you.

Mansoor Humayun

iv
FORWARDING SHEET

This professional project of Mansoor Humayun (Student No 623)

entitled “Indus Motor Company Limited (Financial Analysis)” has been

completed under by the guidance and supervision for the fulfillment

of requirement for the 8th Semester of BBA (Hons) degree program of

University of Education Lahore, Okara campus.

Dated: _______________ __________________

Supervisor

v
DISCLAIMER

The purpose of the project is to introduce the subject matters and

provide a general idea and financial information about the Indus

Motors Company Limited. All the material included in this document

is based on data/information gathered from various sources and is

based on certain assumptions. Although, due care, diligence and

reasonable efforts has been taken to compile this project, the

contained information may vary due to any change in any of

concerned factors and the actual results may differ substantially

from the presented information.

Project does not assume any liability for any financial or other loss

resulting from this document in consequence of undertaking this

activity. Therefore the content of this document should not be relied

upon for making any decision, investment or otherwise. The content of

the information does not bind “PROJECT MAKER” in any legal or other

form.

Project does not also assume any rectifications, errors, omission and

misprinting between the electronic and printed version of document.

Financial Analysis of IMC doest not accept any responsibility for the

validity and correctness of the information published on its project.

vi
Table of Contents
Page No

EXECUTIVE SUMMARY 1

CHAPTER NO 1 INTRODUCTION 4
1.1 REASON FOR CHOOSING THE ORGANIZATION 5
1.2 AIMS AND OBJECTIVES OF THE PROJECT 5
1.3 AUTOMOBILE INDUSTRY IN PAKISTAN 6
1.4 CURRENT SITUTATION OF CAR INDUSTRY 7

CHAPTER NO 2 INDUS MOTOR COMPANY LIMITED 9


2.1 HISTORY 10
2.2 PRODUCT LINE 11
2.2.1 COROLLA 11
2.2.2 CUORE 12
2.2.3 HILUX 12
2.3 COMPANY’S PROFILE 12
2.3.1 NAME OF COMPANY 12
2.3.2 INDUSTRY TYPE 12
2.3.3 MAJOR INVESTORS 13
2.3.4 SLOGAN 13
2.3.5 VISION 13
2.3.6 MISSION 13
2.3.7 CORE VALUES 14
2.3.8 STRATEGIC OBJECTIVES 15
2.4 COMPANY’S INFORMATION 16
2.4.1 BOARD OF DIRECTORS 16
2.4.2 BANKERS 16
2.4.3 AUDITORS 17
2.4.4 LEGAL ADVISORS 17
2.4.5 REGISTRAR 17
2.4.6 FACTORY/REGISTERED OFFICE 18

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Page No

2.4.7 CHIEF FINANCIAL OFFICER 18


2.4.8 COMPANY SECRETARY 18
2.4.9 AUDIT COMMITTEE MEMBERS 18

CHAPTER NO 3 COMPANY’S ANALYSIS 19


3.1 SWOT ANALYSIS 20
3.1.1 STRENGTHS 20
3.1.2 WEAKNESSES 22
3.1.3 OPPORTUNITIES 23
3.1.4 THREATS 23
3.2 PEST ANALYSIS 24
3.2.1 POLITICAL FACTORS 25
3.2.2 ECONOMICAL FACTORS 25
3.2.3 SOCIAL FACTORS 26
3.2.4 TECHNOLOGICAL FACTORS 26
3.3 BOSTON CONSULTING GROUP MATRIX 27
3.3.1 STARS 28
3.3.2 CASH COWS 28
3.3.3 QUESTION MARK 29
3.3.4 DOGS 29
3.4 TOYOTA COROLLA BCG MATRIX 29

CHAPTER NO 4 INCOME STATEMENT ANALYSIS 31


4.1 CONDENSED INCOME STATEMENT 32
4.2 NET SALES 33
4.3 COST OF GOODS SOLD 34
4.4 GROSS PROFIT 35
4.5 OPERATING EXPENSES 36
4.6 OPERTAING PROFIT 37
4.7 OTHER OPERATING EXPENSES 38
4.8 OTHER OPERATING INCOME 39

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4.9 PROFIT BEFORE INTEREST AND TAX 40


4.10 FINANCE COST 41
4.11 PROFIT BEFORE TAXATION 42
4.12 TAXATION 43
4.13 PROFIT AFTER TAXATION 44

CHAPTER NO 5 BALANCE SHEET ANALYSIS 45


5.1 CONDENSED BALANCE SHEET 46
5.2 CURRENT ASSETS 47
5.3 CURRENT LIABLITIES 48
5.4 TOTAL FIXED ASSETS 49
5.5 TOTAL ASSETS 50
5.6 LONG TERM DEBT 51
5.7 TOTAL LIABILITIES AND EQUITY 52

CHAPTER NO 6 RATIO ANALYSIS 53


6.1 SHORT TERM DEBT PAYING ABILITY 54
6.1.1 NET WORKING CAPITAL 54
6.1.2 CURRENT RATIO 55
6.1.3 ACID TEST RATIO 56
6.1.4 CASH RATIO 57
6.1.5 CASH FLOW FROM OPERATIONS RATIO 58
6.2 LONG TERM DEBT PAYING ABILITY 59
6.2.1 TIME INTEREST EARNED RATIO 59
6.2.2 FIXED CHARGED COVERAGE RATIO 60
6.2.3 DEBT RATIO 61
6.2.4 DEBT EQUITY RATIO 62
6.2.5 DEBT TO TANGIBLE NETWORTH 63
6.3 SHORT TERM LIQUIDITY 64
6.3.1 DAY’S SALES IN A/R 64
6.3.2 ACCOUNTS RECEIVABLE TURNOVER 65

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6.3.3 DAY’S SALES IN INVENTORY 66


6.3.4 INVENTORY TURNOVER 67
6.4 PROFITABILITY INDEX 68
6.4.1 NET PROFIT MARGIN 68
6.4.2 TOTAL ASSETS TURNOVER 69
6.4.3 RETURN ON ASSETS 70
6.4.4 OPERATING INCOME MARGIN 71
6.4.5 OPERATING ASSETS TURNOVER 72
6.4.6 RETURN ON OPERATIN ASSETS 73
6.4.7 SALES TO FIXED ASSETS 74
6.4.8 RETURN ON EQUITY 75
6.4.9 GROSS PROFIT MARGIN 76
6.5 INVESTOR’S ANALYSIS 77
6.5.1 EARNING PER SHARE 77
6.5.2 PRICE EARNING RATIO 78
6.5.3 DIVIDEND PAYOUT RATIO 79
6.5.4 DIVIDEND YIELD RATIO 80

CONCLUSION 81

REFRENCES 83

ANNEXURES 85

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Table of Annexure
Page No

I. SUMMARIZED INCOME STATEMENT 87


I.I COMPARATIVE CHAIN BASE
INCOME STAEMENT 89
I.II PERCENATGE COMPARATIVE CHAIN BASE
INCOME STATEMENT 91
I.III PERCENTAGE COMPARATIVE 2005 BASE
INCOME STATEMENT 93
I.IV VERTICAL COMMON SIZE
INCOME STATEMENT 95

II. SUMMARIZED BALANCE SHEET 98


II.I COMPARATIVE CHAIN BASE
BALANCE SHEET 101
II.II PERCENTAGE COMPARATIVE CHAIN BASE
BALANCE SHEET 104
II.III PERCENTAGE COMPARATIVE 2005 BASE
BALANCE SHEET 106
II.IV VERTICAL COMMON SIZE
BALANCE SHEET 108

III. SHORT TERM DEBT PAYING ABILITY 110

IV. LONG TERM DEBT PAYING ABILITY 112

V. SHORT TERM LIQUIDITY 114

VI. PROFITABILITY INDEX 116

VII. INVESTOR’S ANALYSIS 119

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Executive Summary

Indus Motor Company is one of the Automobile Companies which formed

with the help of house of Habib, Toyota Motor Corporation, Toyota Tsusho

Corporation. It manufactures and imports cars and enjoys a healthy share

in the market. It is competing with the Honda, Nissan, Suzuki and

Mitsubishi. To sustain its lead IMC must maintain strategic competitive

advantage which is its production strength, ability to produce quality cars

with respect to low cost and research and development in hybrid and bio

fuel cars. But recently company is in stabilization mode trying to improve its

functional area, consolidation of resources and maintaining SCA. In my

Opinion it is the best move made by IMC to survive the financial holocaust.

Operating Highlights:

For the Year ended June 30, 2009

Vehicle Sales: down 30.6% to 35,276 units

Vehicle Production: down 28.9% to 34,298 units

Net Revenues: down 8.6% to Rs. 37.9 billion

Profit after tax: down 39.5% to Rs.1.4 billion

Earning per share: down 39.5% to Rs. 17.6

Manpower: down 6.7% to 1,893 employees

Total assets: up 50.5% to Rs. 20.69 billion

Share holders' equity: up 9.1% to Rs. 10.3 billion


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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

1) Short Term Debt


Paying Ability 2005 2006 2007 2008 2009
a) Net Working Capital Rs (bn) 3.51 4.65 6.15 5.89 6.83
b) Current Ratio Times 1.46 1.49 1.83 2.56 1.69
c) Acid Test Ratio Times 1.05 1.07 1.44 1.86 1.28
d) Cash Ratio Times 0.88 0.79 1.15 1.16 0.98
e) Cash Flow from
Operations Ratio Times 0.12 0.28 0.38 (0.21) 0.66

2) Long Term Debt


Paying Ability
a) Times Interest Earned Times 25.48 33.08 187.44 1284.23 78.09
b) Fixed Charged Coverage Times 22.60 32.10 187.40 1284.23 78.09
c) Debt Ratio % 63.30 60.45 48.65 31.36 50.22
d) Debt Equity Ratio % 0.00 0.00 0.00 0.00 0.00
e) Debt to Tangible Net worth % 172.86 152.99 94.78 45.71 100.93

3) Short term Liquidity


a) Day’s Sales in
Accounts Receivable Days 13.09 24.89 15.86 18.90 26.02
b) Accounts Receivable
Turnover Times 27.89 14.66 23.01 19.32 14.03
c) Day’s Sales in Inventory Days 11.80 15.55 5.57 10.92 14.20
d) Inventory Turnover Times 42.20 29.20 37.38 45.49 28.36

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4) Profitability Ratio 2005 2006 2007 2008 2009


a) Net Profit Margin % 5.38 7.52 7.03 5.53 3.66
b) Total Assets Turnover Times 2.26 2.23 2.49 3.01 1.83
c) Return on Assets % 12.17 16.74 17.53 16.66 6.70
d) Operating Income Margin % 7.73 9.93 9.38 7.40 3.97
e) Operating Assets
Turnover Times 30.63 25.02 20.53 11.53 9.71
f) Return on Operating
Assets % 164.77 188.06 144.29 63.73 35.51
g) Sales to Fixed Assets Times 27.63 20.53 18.66 10.27 9.62
h) Return on Equity % 33.17 42.32 34.13 24.28 13.45
i) Gross Profit Margin % 9.80 11.77 11.37 9.29 6.14

5) Investor’s Analysis
a) Earning Per Share Rs 18.89 33.70 34.93 29.15 17.62
b) Price Earning Ratio Times 4.76 5.67 8.75 6.86 6.11
c) Dividend Payout Ratio % 52.94 35.61 37.22 36.02 56.75
d) Dividend Yield Ratio % 11.11 6.28 4.26 5.25 9.28

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

1.1 REASON FOR CHOOSING THE ORGANIZATION:

When I was informed that I would have to do the financial analysis of last five years of any

listed company than the primary challenge for me was to choose the organization on which I

can start my working. It was bit difficult and confusing for me to select the organization. I

started brainstorming and came up with many well known organizations having large

operations, both in Pakistan and Worldwide. After gathering data and relevant information I

ended with three business sectors, Automobile industry, Textile industry and Tobacco

industry. I choose best companies in their respective class, but after applying hindsight I

decided to go with Automobile industry and the organization I selected was “Indus Motor

Company Limited”.

1.2 AIMS AND OBJECTIVES OF THE PROJECT:

The main objectives and aims of this project are to analyze and evaluate the overall

performance of the company by applying different conceptual models and discuss the

liquidity, cash flow situation and produce informative report usable by the users of the

statements assessing the financial position, performance and adaptability of the organization.

The performance evaluation is based on historic and current available data about the

operations of the company. Under the constantly increasing competition in the business

market, these analyses portray a very clear and informative picture to the investors,

shareholders, regulators and other players in the stock market.

Finally the project draws conclusions based on my analysis about the current situation and the

prospects of the Indus Motor Company Limited .

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

1.3 AUTOMOBILE INDUSTRY IN PAKISTAN:

Auto market is one of the largest segments in world trade. Changing models, improving fuel

efficiency, cutting costs and enhancing user comfort without compromising quality are the

most important challenges of the auto industry in a fast globalizing world.

The automotive assembling in Pakistan started in 1950 when National Motors Limited, a

public limited company and the pioneer in the industry, came into existence, established by

General Motors of USA. National Motors assembled passenger cars as well as commercial

vehicles which carried “General Motors” brands such as Bedford, Vauxhall, Chevrolet.

The indigenized parts in these vehicles did not exceed 20% with only exception of Bed Ford

trucks with a deletion level of 80%. By the end of 70s practically all automobile assembling

in Pakistan ceased.

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

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

which targeted the middle-income group (constituting the larger segment of the market) by

providing an affordable car.

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

manufacture Toyota vehicles in Pakistan. Soon after Honda Atlas came with the Civic and

Gandhara Nissan entered the market with Sunny.

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

vehicles in Pakistan. Since then the market has changed all together. After struggling through

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

nineties, a decade full of uncertainties and frequent policy the Pakistani Auto Industry has

been able to achieve double digit growth consistently since the last 4 years. The industry

operates under franchise and technical cooperation agreements with Japanese, European and

Korean manufacturers.

Lately Few new market players entered the market such as Gandhara Nissan again with now

the imported Nissan range of vehicles, Dewan Mushtaq Motors with imported Mitsubishi

range of vehicles, Nexus Automotive with Chevrolet imported vehicles and others imported

Chinese vehicles such as Karakoram Motors, Roma Automobiles and Foton by Dewan

Innovations Limited along with Pak Cherry Automobiles. Sigma Motors made its mark with

Rover recently.

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

as BMW , Mini & Rolls Royce by Dewan Motors, Porsche, Mercedes and Audi have also

launched their brands in Pakistan catering to the very upper niche.

1.4 CURRENT SITUTAION OF CAR INDUSTRY:

Locally produced cars have taken an unexpected drastic downturn to the extent of frustrating

all future growth prospects and projections. According to the current figures, in due

comparison with the figures of year 2007 for September to December period, the sales of cars

has gone down by 15 percent. As a result the production has also gone down culminating

with its impact on supply schedule; both import and local. This downturn has come at a

crucial time as most of the manufacturing had just increased their investment in the expansion

projects and vending industry had made equally huge investment to complement the capacity

expansion exercise. The local vendors have now to face the curtailed orders, which may most

hit the smaller ones with closures. All this obviously has also adversely impacted the

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

government revenues in substantial terms. The government has suffered a revenue loss of Rs.

One billion (9%) when September to December data is compared with last year.

In the budget 2007-08, government announced a withholding @ 5 percent on purchase of cars

which was reduced to 2.5 percent and imposed from 1st September 2007. The intension was

obviously to enhance government revenue. The current situation however, has proved a

reversal in collection of the revenue.

Last year, the ECC approved the five years policy (AIDP) for auto sector prior to

announcement of budget. Levy of such tax is a deviation from the spirit of preannounced

policy thus causing anxiety to thee auto manufactures.

The uplift in the car market is also suffering due to stringent regulations announced by State

Bank of Pakistan recently for car financing. Moreover, the cost of financing has also

increased interest rates from nearly 8 to 15 percent.

With low custom duty rates for CBUs and unprecedented import of used cars, the local

industry is putting utmost effort to survive and looking at the government not to deviate from

the pre-announced policy and ensure strict compliance of rules on import of used from cars

and stop further release of smuggled vehicles.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

2.1 HISTORY:

Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota Motor

Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC) for assembling,

progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990.

IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles

in Pakistan through its dealership network. It manufactures and Imports Cars and enjoys a

healthy share in the market.

The company was incorporated in Pakistan as a public limited company in December 1989

and started commercial production in May 1993. The shares of company are quoted on the

stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have

25 % stake in the company equity. The majority shareholder is the House of Habib.

IMC is competing with the Honda, Nissan, Suzuki and Mitsubishi. To sustain its lead IMC

must maintain Strategic Competitive Advantage which is its Production Strength, ability to

produce quality cars with respect to low cost and Research and Development in Hybrid and

Bio Fuel Cars. But recently Company is in Stabilization mode trying to improve its functional

area, consolidation of resources and maintaining SCA.

Indus Motor is the country's second largest auto manufacturer, after the Pak Suzuki Motors.

IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an

area measuring over 105 acres, having an assembling capacity of 55,000 units per annum.

Indus Motor Company’s plant is the only manufacturing site in the world where both Toyota

and Daihatsu brands are being manufactured. Its core business is to manufacture and market

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

cars. In addition, the company also sells auto parts and accessories. Heavy investment was

made to build its production facilities based on state of art technologies. To ensure highest

level of productivity world-renowned Toyota Production Systems are implemented.

Its product line includes 6 variants of newly introduced Toyota Corolla, Toyota Hilux and 3

variants of Daihatsu Cuore. The company also offers six different imported vehicles namely

Toyota Camry, Prado, Land Cruiser, RAV, Hilux and Hiace. Major contributor to the revenue

is Corolla, having a contribution of 66.5% in company's sales.

2.2 PRODUCT LINE:

2.2.1 COROLLA:

Corolla includes six variants of cars which are:

1) XLi

2) GLi

3) Corolla Altis M/T

4) Corolla Altis A/T

5) 2.0D

6) 2.0D Saloon

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

2.2.2 CUORE:

Cuore consist of 3 variants of cars that are as under:

1) CX

2) CX CNG

3) CX A/T

2.2.3 HILUX:

Hilux consist of following car.

1) 4 x 2 S/Cab

2.3 COMPANY’S PROFILE:

2.3.1 NAME OF COMPANY:

 Indus Motor Company Limited.

2.3.2 INDUSTRY TYPE:

 Automobile Industry (Cyclical)

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

2.3.3 MAJOR INVESTORS:

a) House of Habib.

b) Toyota Motor Corporation Japan. (TMC)

c) Toyota Tsusho Corporation Japan. (TTC)

2.3.4 SLOGAN:

2.3.5 VISION:

To be the most respected and successful


enterprise, delighting customers with a wide
range of products and solutions in the
automobile industry with the best people and
the best technology.

2.3.6 MISSION:

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

IMC’s mission is reflected in


Company’s Slogan.

ACT#1
Action, Commitment and Teamwork to
become #1 in Pakistan.

The Indus Team is committed to ACT


so that it achieves the #1 position in
the Auto Industry in:

 Respect & Corporate image.


 Customer Satisfaction.
 Profitability.
 Quality & Safety.
 Production & Sales.
 Best Employer.

2.3.7 CORE VALUES:

 Customer Satisfaction.

 Team Work.

 Ethics and Practices.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

2.3.8 STRATEGIC OBJECTIVES:

1. Achieving Market Leadership by Delivering Value to Customers:

a) Following our “Customer First” philosophy in manufacturing and

providing high quality vehicles and services that meet the needs of

Pakistani customers.

b) Enhancing the quality and reach of our 3S Dealership Network.

c) Employing customer insight and feedback for continuous corporate

renewal, including product development, improving service and customer

care.

2. Bringing Toyota Quality to Pakistan

a) Maximizing QRD (Quality, Reliability and Durability) by built-in

engineering.

b) Transferring technology and promoting indigenization at IMC and

Vendors.

c) Raising the bar in all support functions to meet Toyota Global Standards.

3. Optimizing Cost by Kaizen

a) Fostering a Kaizen culture and mindset at IMC, its Dealers and Vendors.

b) Implementing Toyota Production System.

c) Removing waste in all areas and operating in the lowest cost quartile of the

industry.

4. Respecting our People

a) Treating employees as the most important sustainable competitive

resource.

b) Providing a continuous learning environment that promotes individual

creativity and teamwork.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

c) Supporting equal employment opportunities, diversity and inclusion

without discrimination.

d) Building competitive value through mutual trust and mutual responsibility

between the Indus Team and the Company.

5. Becoming a Good Corporate Citizen

a) Following ethical business practices and the laws of the land.

b) Engaging in philanthropic and social activities that contribute to the

enrichment of Pakistani society, especially in areas that are strategic to

both societal and business needs e.g. Road Safety, Technical Education,

Environment Protection, etc.

c) Enhancing corporate value and respect while achieving a stable and long-

term growth for the benefit of our shareholders.

2.4 COMPANY’S INFORMATION:

2.4.1 BOARD OF DIRECTORS:

1) Mr. Ali S. Habib (Chairman)

2) Mr. Koji Hyodo (Vice Chairman)

3) Mr. Yutaka Arae

4) Mr. Parvez Ghias (Chief Executive Officer)

5) Mr. Farhad Zulficar

6) Mr. Mohamedali R. Habib

7) Mr. M. Ilyas Suri

8) Mr. Mitsuhiro Sonoda

9) Mr. Yosuki Tsubaki


2.4.2 BANKERS:

 Askari Bank Limited.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

 Bank Alfalah Limited.

 Barclays Bank PLC.

 Bank Al-Habib Limited.

 Citibank N.A.

 Habib Bank Limited.

 Habib Metropolitan Bank Limited.

 HSBC Bank Middle East Limited.

 MCB Bank Limited.

 National Bank of Pakistan.

 NIB Bank Limited.

 Soneri Bank Limited.

 Standard Chartered Bank (Pakistan) Limited.

 The Royal Bank of Scotland Limited.

 The Bank of Tokyo-Mitsubishi UFJ Limited.

 United Bank Limited.

2.4.3 AUDITORS:

F. Ferguson & Co.

Chartered Accountants,

State Life Building 1-C Chundrigar Road, Karachi

2.4.4 LEGAL ADVISORS:

 K. Brohi & Company

 Mansoor Ahmed Khan & Co.

 Mahmud & Co.

 Sayeed & Sayeed Co.

2.4.5 REGISTRAR:
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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Noble Computer Services (Private) Limited,

Mezzanine Floor, House of Habib Building (Siddiqsons Tower),

3-Jinnah C. H. Society, Main Shahrah-e-Faisal, Karachi - 75350.

2.4.6 FACTORY/REGISTERED OFFICE:

Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi.

Phones (PABX) (92-21) 34720041-48

(UAN) (92-21) 111-TOYOTA (869-682)

Fax (92-21) 34720056

www.toyota-indus.com

2.4.7 CHIEF FINANCIAL OFFICER:

 Muhammad Faisal

2.4.8 COMPANY SECRETARY:

 Mustafa Hasan Lakhani

2.4.9 AUDIT COMMITTEE MEMBERS:

 Mohamedali R. Habib (Committee Chairman)

 Farhad Zulficar

 Yutaka Arae

 Mitsuhiro Sonoda

 Ahson Tariq (Secretary)

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

3.1 SWOT ANALYSIS:

In formulating sound strategic plans, an organization must assess its internal strengths

and weaknesses in relation to the external opportunities and threats it faces. An

effective strategy will take advantage of an organizations strengths and opportunities at

the same time it minimizes or overcomes weaknesses and threats. Regular assessment

and SWOT analysis is thus given importance.

3.1.1 STRENGTHS:

Strengths are the core competencies of any organization & as far as Indus Motor

Company Limited is concerned the core competencies of this organization are:

 Toyota has become the generic name in the Pakistan market.

Whenever the company launches the new car in the market it has

always the great support of the already market orientation so the car

introduced by it easily covers the introduction stage. People have a lot

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

of trust for their name and this is why Toyota is the leader in

automobile industry.

 Toyota has a great strength for its 2.OD car, Toyota is the hot selling

diesel engine car in Pakistan and is the only company offering the

diesel engine in this category of cars.

 The important edge over the company editors are the ample

availability of the spare parts in the markets. The price of spare parts

is comparatively low and availability all over the country has proved

to be beneficial for the company.

 Toyota is a financially strong company. This can be seen by analysis

of the financial reports of the previous years.

 Toyota vehicles have got a much stronger resale value than other car

in Pakistan. This is why people prefer to buy a Toyota.

 Toyota vehicles are made according to the Pakistani environment. No

doubt the other cars are available but Toyota has an edge because it

has learnt various conditions of the Pakistan environment and people.

So new additions and changes are proving to be successful.

 Toyota has an edge over others because it is the only automobile

company in Pakistan, while offers many variants of its vehicles. Also

Toyota offered many variants of colors.

 Toyota is proud to have a successful team of competent managers and

skilled workers. Extensive training has enabled the employees to

perform outstandingly.

 Toyota is the only company having the most sophisticated network of

dealerships where customers are treated by professional dealers. There

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

are twenty five dealers in Pakistan where sales, service and spare parts

are offered, leading to convenience for the customers.

3.1.2 WEAKNESSES:

Weaknesses are the lacking points which every organization must avoid in order to

make its operational effectiveness.

 There is some weakness in the case of ergonomic interior of Toyota

corolla as well. The power steering is not speed sensitive and the air

conditioning system in severe heat is in-effective. Interior dimensions

are less and heavy body and small engine sometimes create problems

in hilly areas.

 There are some weaknesses in the dealership network. The dealers

sometimes tend to deviate from the recommended course of action and

principles of Toyota. This results in customers complaints sometimes.

 The company is besieged with internal operating problems which are

not very serious. Because of dependency on Toyota’s principles

delivery of cars is done after 4-6 months. This is because CKD kits are

ordered four months before and once they arrive from Japan, assembly

and delivery takes some more time.

 A lot of effort is pull into the sales forecasting because of the

changing political and economic scenarios. For this reasons inventory

has to be kept low.

 The company feels that one weakness is the changing policies of the

government and also the 30% cash L/C margin. This has lead to an

adverse environment.

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3.1.3 OPPORTUNITIES:

In fact, when we study all our weaknesses critically & deeply than we come to know

that we can convert our weaknesses into strengths. So basically these are our

opportunities. The opportunities for IMC are:

 Export is a major opportunity for Toyota Indus Motors. Vehicles were

exported to Bangladesh just once in order to prove the plant capacity

and efficiency of the company. This should be started again.

 The contract with the government departments e.g. Motorway Police,

Shaheen Force and the dignitaries where corolla has an opportunity to

deal with the business markets along with dealing in consumer

markets.

 Toyota can do better by focusing on segments much more than

presently being done.

 Toyota should also try to lower its price of Corolla in the segment

where Honda city has penetrated.

 It can offer discounts to Government departments and large

organizations on purchase of its vehicles in more quantities.

 Success of the manufacturing of Daihatsu cuore is a major opportunity

for Toyota to excel further careful planning and the right time to

launch the new car can prove to be a success.

3.1.4 THREATS:

Though Indus Motor Company Limited has a strong footing and maintain a good

number of loyal customer, still bank has threats in various sectors. When we see the

possible threats for IMC, the threats are prevailing such as:

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

 Even though Toyota enjoys the position of being the no.1 automobile

company, still it faces some threat from competitors especially Honda.

Honda has adopted aggressive strategies for capturing the market.

 Even though Toyota keeps a careful eye on the changing trends, still

the changing customer needs and trends can prove to be a threat.

 A major threat is the changing political and economic scenarios of

Pakistan. Changing government policies affect the company’s

performance. Devaluation of rupee adverse shifts in foreign exchange

rates, trade policies of government’s is a threat. Moreover the

company is threatened by the ongoing rate of 30% cash L/C margin.

 Import of re-conditioned cars is also considered as a threat for the

company.

 The planned car manufacturing plants of Hyundai and Daewoo can

prove to be tough competition for Toyota if they are successful.

3.2 PEST ANALYSIS:

PEST analysis is the analysis which we tend to perform in order to analyze the external as

well as the internal environment in which organization is currently working. PEST analysis

revolves around the four things.

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3.2.1 POLITICAL FACTORS:

Government at all levels is an important component of the general environment. No

organization or industry is immune from the various decisions made by the

government. The Pakistan Government’s inconsistent policies, frequent change in

duty tariff and smuggling are main reasons of unstable market conduction. Like other

motor companies Toyota is also affected by the current changing policies of the

government.

Previously the automobile industry had to cope with more than 77000 yellow cabs

that were imported during the yellow cabs scheme and was later turned lose to the

market after a change of government and the policy scrapped.

In 1995, all the previous taxes and duties were rolled into one import duty of 30

percent on CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was

increased cost to 18 percent. In 1997 the ministry of industries and production

recommended that duty on CKD be reduced form 40 percent to 35 percent while the

car sales should be exempted from CVT and the deletion program should be

accelerated.

Just a half year back the general sales tax has been increased to 16 percent

promoting more price like. So there is going to be a Rs. 80,000 to Rs. 1,00,000

increase in vehicles.

3.2.2 ECONOMICAL FACTORS:

Government economic policies at the federal level clearly influence the ability of the

industries to survive and progress. Inflation is a major economic factor which has

affected the Pakistan’s Automobile industry including Toyota. The current inflation

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rate is 21% to 23% annually prices in the auto market were deregulated in 2000 and

grew almost 20 percent to 30 percent per annum to allow Toyota to bring their prices

to profitable levels. After three years of “Still Market”, the market picked up.

The recent increase of 16 percent sale tax is however, going to result in a price

increase.

3.2.3 SOCIAL FACTORS:

Society holds a global or summary belief that an organization is proper and worthy of

support. Toyota takes pride in being the most trusted name all over Pakistan. Its

vehicles are regarded as a status symbol. It is the guiding principles of Toyota which

has strongly developed trust in the people.

Toyota respects the culture and customs of every nation and community and

contributes to the economic and social development through corporate activities in the

communities. Toyota believes in honoring the language and spirit of the law of every

nation and undertakes open and fair corporate activities to be a good corporate citizen

of the world. This is the reason that Toyota is proud of the fact that Pakistani society

considers Toyota vehicles to be a symbol of reliability, comfort, luxury and a have to

be trusted.

3.2.4 TECHNOLOGICAL FACTORS:

Technology is of particular importance because it has been and continues to be the

main source of increases in productivity. Despite changes in the means used to

motivate people and the variety of incentives that have been offered to stimulated

production, the resulting increase has been negligible when compared to that of

created by technology.

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The locally produced Toyota Corolla introduced in May 1993 is now in its 17 th

year. Its excellent quality, low maintenance cost and high resale value has won it

the support and loyalty of its customers. Product diversification and a wide range

of colors has allowed customers to exercise greater options and has sustained this

threat. The total company’s product range comprises of 8 variants of Corolla and

5 variants of Hilux. As a result of the “Safety First” commitment; for the first

time in Pakistan SRS “Secondary Restrain System” Airbags have been

introduced in the GLI Automatic and GLI manual models, side impact bars

which protect vehicles for side collisions have however been routinely fitted in

all Corolla variants since inception. The process of making a car more durable

includes “Pitospaate Primer”, total immersion in a catholic Electro-deposit

primer, which assures long term anti corrosion and an extra thick color coat that

is better than all others, ensuring that “New Car” look “New” for years to come.

3.3 BOSTON CONSULTING GROUP MATRIX:

The BCG matrix measures market attractiveness by market growth rate and it assesses the

firm’s ability to compete by its relative market share. The BCG matrix assumes the causal

relationship between market share and profitability. BCG matrix consists of four factors

which are:

 Stars.

 Question mark.

 Cash cows.

 Dogs.

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3.3.1 STARS:

Toyota Corolla of IMC falls into the category of Stars. It generates large amount of

cash because of its strong relative market share, but also consume large amounts of

cash because of its high growth rate; therefore the cash in each direction

approximately nets out. However companies usually invest in star units as they are

feeling that the future of their company depends on the success or failure of that

particular unit or product.

3.3.2 CASH COWS:

If IMC’s Toyota Corolla could maintain its large market share, it will become a Cash

Cow when the market growth rate would decline. The portfolio of a diversified

company always should have stars that will become the next cash cows and ensure

future cash generation. Typically needs this cash to support its rapid and significant

growth. It generates large amounts of cash for the organization and usually segments

in which management can make additional investments and earn attractive returns. In
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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

case of Indus Motor Company Limited, the Hilux is a cash cow for the company

which earns a lot of cash for the company and company utilize this cash to run its

future units like Toyota Corolla.

3.3.3 QUESTION MARK:

According to Boston consulting group matrix, a question mark is such a business unit

about which you are not about the success or failure. The unit can be very successful

in the market or it can be simply being ruined of. In case of IMC the question mark is

actually the Cuore. It is due to the large competition of in this category of cars. As the

Suzuki Aulto, Mehran, Santro and some imported vehicles like Vitz are already

present in the market.

3.3.4 DOGS:

This category of BCG matrix includes the product that has no market share as well as

consuming the large amount of cash instead of generating the cash. The company

wants to dissolve that product.

3.4 TOYOTA COROLLA BCG MATRIX:

If we analyze the position of Toyota Corolla by using the Boston consulting group matrix in a

market than it will show the following result.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

STAR CASH COWS


2.0D SE Saloon
2.0D Saloon GLi

QUESTION MARK DOGS


Xli 1.3

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4.1 CONDENSED INCOME STATEMENT:

Indus Motor Company Limited


Condensed Income Statement
For The Year Ended June 30,

2005 2006 2007 2008 2009


(Rupees in '000)
Net Sales 27,601,034 35,236,535 39,061,226 41,423,843 37,864,604
Gross Profit 2,706,178 4,147,629 4,440,594 3,848,487 2,324,186
Operating Profit 2,134,221 3,500,256 3,665,306 3,063,830 1,501,952
Profit before Taxation 2,302,957 4,072,777 4,229,481 3,541,711 2,046,013
Net Profit 1,484,646 2,648,464 2,745,701 2,290,845 1,385,102

It is clearly seen that net sales of the company is showing an increasing trend in all the years

except that of FY 2009 which was caused due to the low productions of cars. The reason

behind low production is the instable environment of Pakistan in last year.

The gross profit is also showing the same trend up to FY 2007 but there is a massive decrease

in gross profit in FY 2008 which was due to the increase in cost of goods sold. Than gross

profit again decrease in FY 2009. It is due to the low sales of the company.

The details and trends are all discussed below in the item wise analysis of summarized

income statement of the company and the annexed notes form an integral part of this income

statement.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.2 NET SALES:

2005 2006 2007 2008 2009


(Rupees in '000)

Net Sales 27,601,034 35,236,535 39,061,226 41,423,843 37,864,604

Comparative
Chain Base 7,635,501 3,824,691 2,362,617 (3,559,239)

Percentage Comparative
Chain Base 27.66% 10.85% 6.05% -8.59%

Percentage Comparative
2005 Base 127.66% 141.52% 150.08% 137.19%

Vertical Common Size 100.00% 100.00% 100.00% 100.00% 100.00%

In comparison with FY 2005, sales of FY 2006 have been increased by 7.63 billions.

Similarly in FY 2007 and FY 2008 there is an increasing trend by 3.82 billions and 2.36

billions while there is decrease in sales of 3.55 billions in FY 2009 with respect to the

preceding years.

In the term of percentage sales have increased by 27.66% in FY 2006 as compared to FY

2005. In FY 2007, as compared to FY 2006, sales increased by 10.85% whereas the increase

was 6.05% in FY 2008, as compared to FY 2007, while there is a decrease of 8.59% in sales

in FY 2009 as compared to the FY 2008. The sales have increased 41.52%, 50.08% and

37.19% in FY 2007, FY 2008 and FY 2009 as compare to FY 2005.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.3 COST OF GOODS SOLD:

2005 2006 2007 2008 2009


(Rupees in '000)

C.G.S 24,894,856 31,088,906 34,620,632 37,575,356 35,540,418

Comparative
Chain Base 6,194,050 3,531,726 2,954,724 (2,034,938)

Percentage Comparative
Chain Base 24.88% 11.36% 8.53% -5.42%

Percentage Comparative
2005 Base 124.88% 139.07% 150.94% 142.76%

Vertical Common size 90.20% 88.23% 88.63% 90.71% 93.86%

In FY 2006, FY 2007 and FY 2008 increase in C.G.S has been recorded with 6.19 billions,

3.53 billions and 2.95 billions with respect to the preceding year. In FY 2009 C.G.S has been

decreased by 2.03 billions as compared to FY 2008 due to the low production.

An increasing trend was recorded by 24.88%, 11.36% and 8.53% in FY 2006, FY 2007 and

FY 2008 respectively as compare to the preceding years. While C.G.S decreased by 5.42% in

FY 2009 with respect to FY 2008. As compared to FY 2005 C.G.S increased by 39.07%,

50.94% and 42.76% in FY 2007, FY 2008 and FY 2009 respectively.

There is a deceasing trend in C.G.S as a part of sales. C.G.S has decreased by 9.80%,

11.77%, 11.37%, 9.29% and 6.14% in FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009

respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.4 GROSS PROFIT:

2005 2006 2007 2008 2009


(Rupees in '000)

Gross Profit 2,706,178 4,147,629 4,440,594 3,848,487 2,324,186

Comparative
Chain Base 1,441,451 292,965 (592,107) (1,524,301)

Percentage Comparative
Chain Base 53.27% 7.06% -13.33% -39.61%

Percentage Comparative
2005 Base 153.27% 164.09% 142.21% 85.88%

Vertical Common Size 9.80% 11.77% 11.37% 9.29% 6.14%

G.P of FY 2006 and FY 2007 increased by 1.44 billions and 292 millions as compared to the

FY 2005 and FY 2006 respectively. In FY 2008 and FY 2009 there was a decrease of 592

millions and 1.52 billions in G.P as compared to FY 2007 and FY 2008 respectively.

G.P has been increased by 53.27% and 7.06% in FY 2006 and FY 2007 as compared to the

FY 2005 and FY 2006 respectively. While GP of FY 2008 and FY 2009 decreased by

13.33% and 39.61% with respect to preceding years respectively. As compared to FY 2005

G.P has been increased by 64.09% and 42.21%, in FY 2007 and FY 2008 respectively while

in FY 2009 the decrease of 14.12% as compared to FY 2005 was recorded.

As compared to sales, G.P has been decreased by 90.02%, 88.23%, 88.63%, 90.71% and

93.86% in FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.5 OPERATING EXPENSES:

2005 2006 2007 2008 2009


(Rupees in '000)

Operating Expenses 571,957 647,373 775,288 784,657 822,234

Comparative
Chain Base 75,416 127,915 9,369 37,577

Percentage Comparative
Chain Base 13.19% 19.76% 1.21% 4.79%

Percentage Comparative
2005 Base 113.19% 135.55% 137.19% 143.76%

Vertical Common Size 2.07% 1.84% 1.98% 1.89% 2.17%

Operating expenses have been increased by 75.1 millions, 127 millions, 9.3 millions and 37.5

millions in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in comparison with the

preceding years.

In terms of percentage, operating expenses have been increased by 13.19%, 19.76%, 1.21%

and 4.79% in FY 2006, FY 2007, FY 2008 and FY 2009 respectively in comparison with the

preceding years. As compared to FY 2005 increase of 35.55%, 37.19%, 43.76% was recorded

in FY 2007, FY 2008 and FY 2009 respectively.

As compare to sales, there is a significant decrease in operating expenses by 97.93%,

98.16%, 98.02%, 98.11% and 97.83% in FY 2005, FY 2006, FY2007, FY 2008 and FY 2009

respectively.

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4.6 OPERATING PROFIT:

2005 2006 2007 2008 2009


(Rupees in '000)

Operating Profit 2,134,221 3,500,256 3,665,306 3,063,830 1,501,952

Comparative
Chain Base 1,366,035 165,050 (601,476) (1,561,878)

Percentage Comparative
Chain Base 64.01% 4.72% -16.41% -50.98%

Percentage Comparative
2005 Base 164.01% 171.74% 143.56% 70.37%

Vertical Common Size 7.73% 9.93% 9.38% 7.40% 3.97%

Operating profit is increasing from FY 2006 to FY 2007 by 1.36 billions and 165 millions in

comparison with the FY 2005 and FY 2006 respectively. While it decreased in FY 2008 and

FY 2009 by 601 millions and 1.56 billions respectively with respect to the previous years.

In FY 2006 and FY 2007 operating profit increased by 64.01% and 4.72 % respectively as

compared to FY 2005 and FY 2006. Then it decreased by 16.41% and 50.98% in FY 2008

and FY 2009 respectively as compared to FY 2007 and FY 2008. In FY 2007 and FY 2008

increase of 71.74% and 43.56 was recorded as compared to the FY 2005, while the decrease

of 29.63% was recorded on FY 2009 as compared to FY 2005.

Operating profit is 7.73% and 9.93 % of sales in FY 2005 and FY 2006 then it decreased to

9.38%, 7.40% and 3.97 % in FY 2007, FY 2008 and FY 2009 respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.7 OTHER OPERATING EXPENSES:

2005 2006 2007 2008 2009


(Rupees in '000)

Other Operating
Expenses 186,614 321,746 348,430 306,193 156,479

Comparative
Chain Base 135,132 26,684 (42,237) (149,714)

Percentage Comparative
Chain Base 72.41% 8.29% -12.12% -48.90%

Percentage Comparative
2005 Base 172.41% 186.71% 164.08% 83.85%

Vertical Common Size 0.68% 0.91% 0.89% 0.74% 0.41%

In FY 2006 and FY 2007 other operating expenses increased by 135 millions and 26 millions

respectively as compared to the preceding years. While the decrease of 42 millions and 149

millions was recorded in FY 2008 and FY 2009 respectively as compared to preceding years.

In terms of percentage as compared to the preceding years, in FY 2006 and FY 2007 other

operating expenses increased by 72.41% and 8.89% respectively while decreased by 12.12%

and 48.90% in FY 2008 and FY 2009 respectively. As compared to FY 2005 the other

operating expenses increased by 86.71% and 64.08% in FY 2007 and FY 2008 respectively,

while decreased by 16.15% in FY 2009.

Other operating expenses are recorded as less than 1% of the sales in all the years.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.8 OTHER OPERATING INCOME:

2005 2006 2007 2008 2009


(Rupees in '000)

Other Operating
Income 449,443 1,021,212 935,290 786,834 727,080

Comparative
Chain Base 571,769 (85,922) (148,456) (59,754)

Percentage Comparative
Chain Base 127.22% -8.41% -15.87% -7.59%

Percentage Comparative
2005 Base 227.22% 208.10% 175.07% 161.77%

Vertical Common Size 1.63% 2.90% 2.39% 1.90% 1.92%

In FY 2006 increase of 571 millions was recorded in other operating income as compared to

the FY 2005 while the decrease by 85 millions, 148 millions and 59 millions was recorded in

and FY 2007, FY 2008 and FY2009 respectively with respect to the preceding years.

In terms of percentage other operating income has increased by 127.22% in FY 2006 as

compared to the FY 2005, while the massive decrease of 8.41%, 15.87 % and 7.59% was

recorded in FY 2007, FY 2008 and FY 2009 respectively with respect to the preceding years.

As compared to FY 2005 the other operating income increased by 108.10%, 75.07% and

61.77% in FY 2007, FY 2008 and FY 2009 respectively.

Other operating income as compared to sales was 1.63% in FY 2005 than it increased to

2.90% in FY 2006 than it decreased to 2.39% and 1.90% in FY 2007 and FY 2008

respectively. While in FY 2009 it decreased to 1.92%.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.9 PROFIT BEFORE INTERST AND TAX:

2005 2006 2007 2008 2009


(Rupees in '000)

Profit before
Interest and Tax 2,397,050 4,199,722 4,252,166 3,544,471 2,072,553

Comparative
Chain Base 1,802,672 52,444 (707,695) (1,471,918)

Percentage Comparative
Chain Base 75.20% 1.25% -16.64% -41.53%

Percentage Comparative
2005 Base 175.20% 177.39% 147.87% 86.46%

Vertical Common Size 8.68% 11.92% 10.89% 8.56% 5.47%

In chain base comparison, EBIT was increased by 1.80 billions and 52 millions in FY 2006

and FY 2007 as compared to preceding years. It decreased by 707 millions and 1.47 billions

in FY 2008 and FY 2009 respectively with respect to the preceding years.

In terms of percentage, the profit increased by 75.20% and 1.25% in FY 2006 and FY 2007

respectively with respect to the preceding years. But massive decrease of 16.64% and 41.53%

was recorded in FY 2008 and FY 2009 respectively as compared to the preceding years. As

compared to FY 2005 the profit increased by 77.39% and 47.87% in FY 2007 and FY 2008

respectively, while profit decreased up to 13.54% in FY 2009.

As a part of sales, EBIT is 8.68 % in FY 2005, 11.92% in FY 2006, 10.89% in FY 2007,

8.56% in FY 2008, and 5.47% in FY 2009.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.10 FINANCE COST:

2005 2006 2007 2008 2009


(Rupees in '000)

Finance Costs 94,093 126,945 22,685 2,760 26,540

Comparative
Chain Base 32,852 (104,260) (19,925) 23,780

Percentage Comparative
Chain Base 34.91% -82.13% -87.83% 861.59%

Percentage Comparative
2005 Base 134.91% 24.11% 2.93% 28.21%

Vertical Common Size 0.34% 0.36% 0.06% 0.01% 0.07%

Finance cost has increased by 32 millions in FY 2006 as compared to the FY 2005 while it

decreased by 104 millions and 19 millions in FY 2007 and FY 2008 respectively as compared

to the preceding years. While it increased by 23 millions in FY 2009 as compared to the FY

2008.

In comparison with the previous years it increased by 34.91% in FY 2006, while it decreased

by 82.13% and 87.83% in FY 2007 and FY 2008 respectively. Than massive increase of

861.59% was recorded in FY 2009. As compared to the FY 2005 finance cost decreased by

75.89%, 97.07% and 71.79% in FY 2007, FY 2008 and FY 2009 respectively.

Finance cost is recorded as less than 1% of the sales in all the years.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.11 PROFIT BEFORE TAXATION:

2005 2006 2007 2008 2009


(Rupees in '000)

Profit before
Taxation 2,302,957 4,072,777 4,229,481 3,541,711 2,046,013

Comparative
Chain Base 1,769,820 156,704 (687,770) (1,495,698)

Percentage Comparative
Chain Base 76.85% 3.85% -16.26% -42.23%

Percentage Comparative
2005 Base 176.85% 183.65% 153.79% 88.84%

Vertical Common Size 8.34% 11.56% 10.83% 8.55% 5.40%

In FY 2006 and FY 2007 profit before taxation increased by 1.76 billions and 156 millions as

compared to FY 2005 and FY 2006. Then it decreased by 687 millions and 1.49 billions in

comparison with the preceding years.

Profit before tax has increased by 76.85% and 3.85% in FY 2006 and FY 2007 in comparison

with the preceding years while it decreased by 16.26% and 42.23% in FY 2008 and FY 2009

as compared to the preceding years. It increased by 83.65% and 53.79% in FY 2007 and FY

2008 respectively while it decreased by 11.16% in FY 2009 in comparison with the FY 2005.

Profit before taxation is 8.34% of sales in FY 2005. It increased to 11.56% in FY 2006, and

then it decreased to 10.83%, 8.55% and 5.40% in FY 2007, FY 2008 and FY 2009

respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.12 TAXATION:

2005 2006 2007 2008 2009


(Rupees in '000)

Taxation 818,311 1,424,313 1,483,780 1,250,866 660,911

Comparative
Chain Base 606,002 59,467 (232,914) (589,955)

Percentage Comparative
Chain Base 74.06% 4.18% -15.70% -47.16%

Percentage Comparative
2005 Base 174.06% 181.32% 152.86% 80.77%

Vertical Common Size 2.96% 4.04% 3.80% 3.02% 1.75%

Tax revenues have increased by 606 millions 59 millions in FY 2006 and FY 2007

respectively in comparison with the previous years. While it decreased by 232 millions and

589 millions in FY 2008 and FY 2009 respectively as compared to the preceding years.

In terms of percentage, it increased by 74.06% and 4.18% in FY 2006 and FY 2007 in

comparison with the preceding years, while it decreased by 15.70% and 47.16% in FY 2008

and FY 2009 respectively as compared to previous years. As compared to FY 2005 tax

revenues increased by 81.32% and 52.86% in FY 2007 and FY 2008 respectively, while it

decreased by 19.23% in FY 2009.

Taxation is 2.96% in FY 2005, 4.04% in FY 2006, 3.80% in FY 2007, 3.02% in FY 2008 and

1.75% in FY 2009 of sales.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

4.13 PROFIT AFTER TAXATION:

2005 2006 2007 2008 2009


(Rupees in '000)

Profit After
Taxation 1,484,646 2,648,464 2,745,701 2,290,845 1,385,102

Comparative
Chain Base 1,163,818 97,237 (454,856) (905,743)

Percentage Comparative
Chain Base 78.39% 3.67% -16.57% -39.54%

Percentage Comparative
2005 Base 178.39% 184.94% 154.30% 93.30%

Vertical Common Size 5.38% 7.52% 7.03% 5.53% 3.66%

As compared to the previous years, net income of the company increased by 1.16 billions and

97 millions in FY 2006 and FY 2007 respectively, while it increased by 454 millions and 905

millions in FY 2008 and FY 2009 respectively.

In terms of percentage, in comparison with the preceding years the income of company

increased by 78.39% and 3.67% in FY 2006 and FY 2007 respectively, but it decreased

massively by 16.57 and 39.54% in FY 2008 and FY 2009 respectively. As compared to the

FY 2005 the increased of 84.94% and 54.30% was recorded in net income in FY 2007 and

FY 2008, while it decreased by 6.70% in FY 2009.

As a part of sales, profit was 5.38%, 7.52%, 7.03% 5.53% and 3.66% in FY2005, FY 2006,

FY 2007, FY 2008 and FY 2009 respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.1 CONDENSED BALANCE SHEET:

Indus Motor Company Limited


Condensed Balance Sheet
As on June 30,

2005 2006 2007 2008 2009


(Rupees in '000)

Current Assets 11,177,940 14,095,657 13,560,329 9,664,784 16,715,319


Less: Current Liabilities 7,664,062 9,444,554 7,410,926 3,779,631 9,884,850
Net Working Capital 3,513,878 4,651,103 6,149,403 5,885,153 6,830,469
Net Fixed Assets 901,035 1,408,314 1,902,912 3,592,271 3,900,977
Capital Work-in-progress 87,307 302,153 187,372 438,696 29,524
Intangible Assets 10,545 6,123 3,568 2,795 3,972
Other Non Current Assets 17,690 10,221 10,869 49,563 35,731
Net Assets Position 4,530,455 6,377,914 8,254,124 9,968,478 10,800,673

Non-Current Liabilities 54,650 120,035 210,149 532,138 503,700


Long Term Debt - - - - -
Equity 4,475,805 6,257,879 8,043,975 9,436,340 10,296,973
Net Liability and Equity Position 4,530,455 6,377,914 8,254,124 9,968,478 10,800,673

The condensed balance sheet of FY 2005, FY 2006, FY 2007, FY 2008 and FY 2009 is
giving a clear look at the company’s resources and claims of outsiders.

Net assets of the company are showing an increasing trend from FY 2005 to FY 2009.

The long term debt position of the company is obvious and seems that company has a real

strong background. There was no claim of outsiders on the company’s resources.

The detail of trends of balance sheet is discussed below item wise and the annexed notes are

also at the end of the report which forms an integral part of the above sheet.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.2 CURRENT ASSETS:

2005 2006 2007 2008 2009


(Rupees in '000)

Current Assets 11,177,940 14,095,657 13,560,329 9,664,784 16,715,319

Comparative Chain Base 2,917,717 (535,328) (3,895,545) 7,050,535

Percentage Comparative Chain Base 26.10% -3.80% -28.73% 72.95%

Percentage Comparative 2005 Base 126.10% 121.31% 86.46% 149.54%

Vertical Common Size 91.66% 89.09% 86.56% 70.30% 80.81%

In comparison to the preceding years, the current assets increased in FY 2006 by 2.91 billions

and than decreased by 535 millions and 3.89 billions in FY 2007 and FY 2008 respectively,

while again increase of 7.05 billions was recorded in FY 2009.

In terms of percentage, with respect to the preceding years the increase of 26.10% was

recorded in FY 2006, while current assets decreased by 3.80% and 28.73% in FY 2007 and

FY 2008 respectively, than it increased by 72.95% in FY 2009. As compared to FY 2005,

increase of 21.31% was recorded in FY 2007, than it decreased by 13.54% in FY 2008 and

again it increased by 49.54% in FY 2009.

Current assets were 91.66% of total assets in FY 2005, 89.09% in FY 2006, 86.56% in FY

2007, 70.30% in FY 2008 and 80.81% in FY 2009.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.3 CURRENT LIABILITIES:

2005 2006 2007 2008 2009


(Rupees in '000)

Current Liabilities 7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

Comparative Chain Base 1,780,492 (2,033,628) (3,631,295) 6,105,219

Percentage Comparative Chain Base 23.23% -21.53% -49.00% 161.53%

Percentage Comparative 2005 Base 123.23% 96.70% 49.32% 128.98%

Vertical Common Size 62.85% 59.69% 47.31% 27.49% 47.79%

As compared to the previous years, the current liabilities increased in FY 2006 by 1.78

billions and than decreased by 2.03 billions and 3.63 billions in FY 2007 and FY 2008

respectively. It again increased by 6.10 billions in FY 2009.

The percentage change was increase of 23.23% in FY 2006 than decrease of 21.53% and

49.00% in FY 2007 and FY 2008 respectively, and increase of 161.53% in FY 2009 as

compared to the preceding years. In comparison with FY 2005 the decrease of 3.30% and

50.68% was recorded in FY 2007 and FY 2008 respectively, while it increased by 28.98% in

FY 2009.

As a part of total liabilities and shareholder’s equity, total currents liabilities were 62.85%,
59.69%, 47.31%, 27.49% and 47.79% in FY2005, FY2006, FY 2007, FY 2008 and FY 2009
respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.4 TOTAL FIXED ASSETS:

2005 2006 2007 2008 2009


(Rupees in '000)

Total Fixed Assets 998,887 1,716,590 2,093,852 4,033,762 3,934,473

Comparative Chain Base 717,703 377,262 1,939,910 (99,289)

Percentage Comparative Chain Base 71.85% 21.98% 92.65% -2.46%

Percentage Comparative 2005 Base 171.85% 209.62% 403.83% 393.89%

Vertical Common Size 8.19% 10.85% 13.37% 29.34% 19.02%

Total fixed assets were increased by 717 millions, 377 millions and 1.93 billions in FY 2006,

FY 2007 and FY 2008 as compared with FY 2005, FY 2006 and FY 2007 respectively, while

the decrease of 99 millions was recorded in FY 2009 as compared to FY 2008.

There was increase of 71.85%, 21.98% and 92.65% in FY 2006, FY 2007 and FY 2008

respectively as compared to the previous years, while the decrease of 2.46% was recorded in

FY 2009 in comparison with FY 2008. The increase of 109.62% in FY 2007, 303.83% in FY

2008 and 293.89% in FY 2009 was observed in total fixed assets as compare to the FY 2005.

In terms of total assets, total fixed assets were 8.19% in FY 2005, 10.85%in FY 2006,

13.37% in FY 2007, 29.34% in FY 2008 and 19.02 in FY 2009.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.5 TOTAL ASSETS:

2005 2006 2007 2008 2009


(Rupees in '000)

Total Assets 12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

Comparative Chain Base 3,627,951 (157,418) (1,916,941) 6,937,414

Percentage Comparative Chain Base 29.75% -0.99% -12.24% 50.46%

Percentage Comparative 2005 Base 129.75% 128.46% 112.74% 169.63%

Vertical Common Size 100.00% 100.00% 100.00% 100.00% 100.00%

Total assets were increased by 3.62 billions in FY 2006 as compared to the FY 2005, while

decreasing trend of 157 millions and 1.91 billions was observed in FY 2007 and FY 2008

respectively as compared to the preceding years. It again increased by 6.93 billions in FY

2009 as compared to the FY 2008.

In percentage change an increase of 29.75% was recorded in FY 2006 as compared with

previous year, while it decreased by 0.99% and 12.24% in FY 2007 and FY 2008 respectively

as compared to the previous years. It gain increased by 50.46% in FY 2009 in comparison

with FY 2008. As compared to the FY 2005 total assets increased by 28.46%, 12.74% and

69.63% in FY 2007, FY 2008 and FY 2009 respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.6 LONG TERM DEBT:

2005 2006 2007 2008 2009


(Rupees in '000)

Long Term Debt - - - - -

Comparative Chain Base - - - -

Percentage Comparative Chain Base - - - -

Percentage Comparative 2005 Base - - - -

Vertical Common Size - - - - -

There is no long term debt of the company so there is no change in percentage also.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

5.7 TOTAL LIABILITIES AND EQUITY:

2005 2006 2007 2008 2009


(Rupees in '000)

Total Liabilities
and Equity 12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

Comparative Chain Base 3,627,951 (157,418) (1,916,941) 6,937,414

Percentage Comparative Chain Base 29.75% -0.99% -12.24% 50.46%

Percentage Comparative 2005 Base 129.75% 128.46% 112.74% 169.63%

Vertical Common Size 100.00% 100.00% 100.00% 100.00% 100.00%

Total liabilities and share holder’s equity were increased by 3.62 billions in FY 2006 as

compared to the FY 2005, while decreasing trend of 157 millions and 1.91 billions was

observed in FY 2007 and FY 2008 respectively as compared to the preceding years. It again

increased by 6.93 billions in FY 2009 as compared to the FY 2008.

In percentage change an increase of 29.75% was recorded in total liabilities and share

holder’s equity in FY 2006 as compared with previous year, while it decreased by 0.99% and

12.24% in FY 2007 and FY 2008 respectively as compared to the previous years. It gain

increased by 50.46% in FY 2009 in comparison with FY 2008. In comparison with the FY

2005 total liabilities and share holder’s equity increased by 28.46%, 12.74% and 69.63% in

FY 2007, FY 2008 and FY 2009 respectively.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.1 SHORT TERM DEBT PAYING ABILITY:

6.1.1 NET WORKING CAPITAL:

Net working capital is a financial metric which represents operating

liquidity available to a business. Along with fixed assets such as plant and equipment,

working capital is considered a part of operating capital. It is calculated by following

formula:

Current Assets - Current Liabilities

2005 2006 2007 2008 2009


3,513,878 4,651,103 6,149,403 5,885,153 6,830,469

Interpretation:

Working capital of the company has always been maintained very high up to

FY 2007. The company then reduced it in FY 2008 to avoid excessive working

capital but in FY 2009 it again increased which shows company has sufficient

capital to pay its liabilities.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.1.2 CURRENT RATIO:

The current ratio is a financial ratio that measures whether or not a firm has enough

resources to pay its debts over the next 12 months. It compares a firm's current

assets to its current liabilities. It is expressed as follows:

Current Assets
Current Liabilities

2005 2006 2007 2008 2009


1.46 : 1 1.49 : 1 1.83 : 1 2.56 : 1 1.69 : 1

Interpretation:
Current Ratio of the company has a increasing trend up to FY 2008. It was minimum

in FY 2005. As the graph shows that current ratio remains positive in last five years

so the company has the ability to pay its current liabilities with its current assets.

Current ratio was maximum in FY 2008 than once again it decreased in FY 2009 due

to increase in liabilities

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.1.3 ACID TEST RATIO:

A stringent test that indicates whether a firm has enough short-term assets to cover its

immediate liabilities without selling inventory. The acid-test ratio is far more

strenuous than the working capital ratio, primarily because the working capital ratio

allows for the inclusion of inventory assets.

Current Assets - Inventory


Current Liabilities

2005 2006 2007 2008 2009


1.05 : 1 1.07 : 1 1.44 : 1 1.86 : 1 1.28 : 1

Interpretation:
Quick ratio of the company has an increasing trend up to FY 2008 showing the

adequacy in paying off the current liabilities. Then it decreased slightly in FY 2009.

But as a whole the graph shows that company has a tendency that the most liquid

assets of the company are in a position to payoff the current liabilities.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.1.4 CASH RATIO:

The cash ratio is a formula for measuring the liquidity of the company by calculating

the ratio between all cash and cash equivalent assets and all the current liabilities. The

formula for calculating the cash ratio is as under:

Marketable Securities + Cash


Current Liabilities

2005 2006 2007 2008 2009


0.88 : 1 0.79 : 1 1.15 : 1 1.16 : 1 0.98 : 1

Interpretation:
Cash ratio of the company was quite good in FY 2005 and FY 2006, than it increased

in FY 2007 and FY 2008 showing that company in not using cash to its best

advantage. In FY 2009 the decrease in cash ratio shows that company has now started

using the cash up to its maximum advantage.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.1.5 CASH FLOW FROM OPERATIONS RATIO:

Cash flow from operations or operating cash flow ratio measure of how well current

liabilities are covered by the cash flow generated from a company's operations. The

formula for calculating the ratio is:

Cash from Operations


Current Liabilities

2005 2006 2007 2008 2009


0.12 : 1 0.28 : 1 0.38 : 1 (0.21) : 1 0.66 : 1

Interpretation:
Cash flow from operations ratio of the company was low in FY 2005 showing that the

operating profit of the company was not meeting the need of short term liabilities

well. Ratio increased in FY 2006 and FY 2007. But the company was facing the

problems in FY 2008 of meeting the need of current liabilities from its operating

profit due to the negative cash flow. In FY 2009 the ratio again increased and now the

company is in a position to meet its short term cash needs well in time.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.2 LONG TERM DEBT PAYING ABILITY:

6.2.1 TIME INTEREST EARNED RATIO:

The times interest earned ratio is an Indicator of a company’s ability to meet the

interest payments on its debt. The times interest earned calculation is a corporation’s

income before interest and income tax expense, divided by interest expense. The

calculating method is:

Earning before Interest and Tax


Interest Expense

2005 2006 2007 2008 2009


25.48 33.08 187.44 1,284.23 78.09

Interpretation:
The times interest earned ratio of the company was very low in FY 2005 and FY

2006. This is due to the high interest expense of the company. In FY 2007 and FY

2008 a increasing trend is shown in the ratio which shows that company has reduced

its interest expenses. But in FY 2009, after a massive decrease, company is still able

to generate 78 times the expense of interest from its operations.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.2.2 FIXED CHARGED COVERAGE RATIO:

A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as

interest and leases. A ratio calculated by dividing profits before payment of interest

and income taxes by interest paid on bonds and other long-term debt. It is calculated

as the following:

Earning before Interest and Tax


Interest + Lease Payment + Principal Payment

2005 2006 2007 2008 2009


22.60 32.10 187.44 1,284.23 78.09

Interpretation:
Fixed charged coverage ratio of the company is mostly same as time interest earned

ratio. It shows that company has no long term finances on which company has to pay

interest. Company has the liability against leased assets in FY 2005 and FY 2006.

Figure shows the increasing trend from FY 2005 to FY 2008 which means that

company has better position to pay its debt expenses. Than it decreased in FY 2009

but still company is in good position.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.2.3 DEBT RATIO:

The ratio gives an idea to the leverage of the company along with the potential risks

the company faces in terms of its debt-load. A low percentage means that the

company is less dependent on leverage. The lower the percentage, the less leverage a

company is using and the stronger its equity position. In general, the higher the ratio,

the more risk that company is considered to have taken on. The formula for

calculating the debt ratio is:

Total Liabilities
( Total Assets
)100

2005 2006 2007 2008 2009


63.30% 60.45% 48.65% 31.36% 50.22%

Interpretation:
Debt ratio of the company is significantly decreasing from FY 2005 to FY 2008. It

reached to its lowest of 31.36% in FY 2008 but than there was increase in FY 2009.

The decreasing trend of the debt ratio is due to the decrease in total liabilities. That is

beneficial for company. But in FY 2009 the liabilities of the company increased but

the assets of the company also increased.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.2.4 DEBT EQUITY RATIO:

This ratio indicates how much the company is in debt by comparing what is owed to

what is owned. A high debt to equity ratio could indicate that the company may be

over-leveraged, and should look for ways to reduce its debt.

Long Term Debt


( Share Holder's Equity
)100

2005 2006 2007 2008 2009


0.00% 0.00% 0.00% 0.00% 0.00%

Interpretation:
The figure shows that company had enough equity to serve over period of time. The

graph shows the strategy of the company that company is totally based on equity.

Debt is not taken to run the operations of the company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.2.5 DEBT TO TANGIBLE NETWORTH:

Debt to tangible net worth ratio measures the degree of protection that exists for

creditors. The lower the ratio the better is for company. The value is computed by

dividing total liabilities by total equity minus intangible assets. The formula is:

Total Liabilities
( Owner's Equity - Intangible Assets
)100

2005 2006 2007 2008 2009


172.86% 152.99% 94.78% 45.71% 100.93%

Interpretation:
Debt to tangible net worth ratios shows the decreasing trend from FY 2005 to FY

2008 which is very good for the company. The decrease in the ratio is due to the

decrease in the intangible assets of the company. The ratios increased once again FY

2009 due to increase in intangible assets of the company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.3 SHORT TERM LIQUIDITY:

6.3.1 DAY’S SALES IN A/R:

The ratios measure of the average number of days that a company takes to collect

revenue after a sale has been made. The formula of the ratio is:

Gross A/R
Net Sales / 365 days

2005 2006 2007 2008 2009


13.09 24.89 15.86 18.90 26.02

Interpretation:
Accounts receivable turnover in days is 13 days in FY 2005 and then it increased in

FY 2006 up to 25 days but then it decreased to 16 days in FY 2007. After this it

showed an increasing trend up to FY 2009. This shows that receivables management

of the company is not improving as compared to the previous years and 7 days have

been increased in this manner in FY 2009 as compared to the FY 2008.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.3.2 ACCOUNTS RECEIVABLE TURNOVER:

Measures the number of times accounts receivable are collected during the year. This

ratio measures the efficiency of credit and collection policies and the quality of

outstanding average accounts receivable. The formula of the ratio is:

Net Sales
Gross A/R

2005 2006 2007 2008 2009


27.89 14.66 23.01 19.32 14.03

Interpretation:
Accounts receivable turnover of the company was maximum in FY 2005 i.e. 27.89

times. Than it decreased to 14.66 times in FY 2006. Once again increase was recorded

in FY 2007 of 23.01 times. Than decreasing trend was recorded in FY 2008 and FY

2009. This shows that company in not managing its receivable in better ways as

compared to the previous years. Company is collecting receivable only 14.03 times in

FY 2009 in comparison with the previous years. This is all due to the decrease in the

volume of sales and increase in trade receivable.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.3.3 DAY’S SALES IN INVENTORY:

A financial measure of a company's performance that gives investors an idea of how

long it takes a company to turn its inventory into sales. Generally, the lower (shorter)

the day’s sale in inventory is the better. It can be calculated by following formula:

Ending Inventory
Cost of Goods Sold / 365 days

2005 2006 2007 2008 2009


11.80 15.55 5.57 10.92 14.20

Interpretation:
Day’s sales in inventory shows and increasing trend of 4 day in FY 2007 as compared

to the previous year. Than it decreased to 5.57 days in FY 2007. After this increase is

recorded in FY 2007 and FY 2008. Company is taking 14.20 days to convert its

inventory into sales in FY 2009, while company was taking 10.92 days in FY 2008.

The inventory management was best in FY 2007 in which company was taking 5.57

days.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.3.4 INVENTORY TURNOVER:

The inventory turnover is an equation that measures the number of times inventory is

sold or used over in a period such as a year. The formula is expressed as follow:

Cost of Goods Sold


Average Inventory

2005 2006 2007 2008 2009


42.20 29.20 37.38 45.49 28.36

Interpretation:
In FY 2005, inventory turnover was 42.20 times but then it decreased in FY 2006. In

FY 2007 and FY 2008 it increased. In FY 2009, there was a decrease in inventory

turnover and it reached to 28.36 times. The reason behind a low turnover is the

increase in cost of sales. The cost of sales showed a massive increase because of

increased cost of raw material.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4 PROFITABILITY INDEX:

6.4.1 NET PROFIT MARGIN:

A ratio of profitability calculated as net profits divided by net sales. It measures

how much out of every dollar of sales a company actually keeps in earnings. The

formula to calculate the net profit margin is:

Net Income
( Net Sales
)100

2005 2006 2007 2008 2009


5.38% 7.52% 7.03% 5.53% 3.66%

Interpretation:
Net profit of the company shows an increasing trend in up to FY 2006. Than from FY

2007 to FY 2009 it shows the decrease in the net profit. Net profit is minimum in FY

2009 i.e.3.66% as compared to the previous years.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.2 TOTAL ASSETS TURNOVER:

A financial ratio that indicates the effectiveness with which a firm's management uses

its assets to generate sales. A relatively high ratio tends to reflect intensive use of

assets. The formula for calculating the ratio is:

Net Sales
Total Assets

2005 2006 2007 2008 2009


2.26 2.23 2.49 3.01 1.83

Interpretation:
The ratio has decreased to 2.23 in FY 2006 from 2.26 in FY 2005. Then it showed a

very good increase in FY 2007 and FY 2008 and reached to 2.49 and 3.01

respectively. But once again ratio decreased to 1.83 in FY 2009. The reason behind

this decrease is the decrease in volume of sales.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.3 RETURN ON ASSETS:

An indicator of how profitable a company is relative to its total assets. ROA gives an

idea as to how efficient management is at using its assets to generate earnings. The

formula for calculating the ratio is:

Net Income
( Total Assets
)100

2005 2006 2007 2008 2009


12.17% 16.74% 17.53% 16.66% 6.70%

Interpretation:
The ratio has a increasing trend up to FY 2007. This increase is due to the increase in

total assets. And then it showed the decreasing trend in FY 2008 and FY 2009. The

decrease in the ratio is FY 2007 was due to the decrease in total assets as compared to

the previous years while the reason of decrease in the FY 2009 is the decrease in the

net income of the company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.4 OPERATING INCOME MARGIN:

A ratio used to measure a company's pricing strategy and operating efficiency.

Operating margin is a measurement of what proportion of a company's revenue is left

over after paying for variable costs of production such as wages, raw materials, etc.

The formula for calculating the ratio is:

Operating Income
( Net Sales
)100

2005 2006 2007 2008 2009


7.73% 9.93% 9.38% 7.40% 3.97%

Interpretation:
The operating income margin of the company has an increasing trend up to FY 2006. But

then it decreased slightly in FY 2007 to 9.38% from 9.93% in FY 2006. The trend remains

decreasing in FY 2008 and FY 2009. The decrease in last two years is due to the decrease in

operating profit of the company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.5 OPERATING ASSETS TURNOVER:

A financial ratio that indicates the effectiveness with which a firm's management uses

its operating assets to generate sales. The calculation technique for the ratio is:

Net Sales
Operating Assets

2005 2006 2007 2008 2009


30.63 25.02 20.53 11.53 9.71

Interpretation:

The turnover is showing a decreasing trend up to FY 2009. The reason behind the

trend is the increase in operating assets.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.6 RETURN ON OPERATING ASSETS:

An indicator of how profitable a company is relative to its operating assets. Return on

operating assets gives an idea as to how efficient management is at using its operating

assets to generate earnings. The ratio is calculated as follow:

Net Income
( Operating Assets
)100

2005 2006 2007 2008 2009


164.77% 188.06% 144.29% 63.77% 35.51%

Interpretation:
The ratio has a increasing trend up to FY 2006. This increase is due to the increase in

operating assets. And then it showed the decreasing trend in FY 2007, FY 2008 and

FY 2009. The reason behind the decrease in the ratio is decrease in the net income of

the company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.7 SALES TO FIXED ASSETS:

Sales to fixed assets ratio measures a company's ability to generate net sales from

fixed asset investments specifically property, plant and equipment. A higher the ratio

shows that the company has been more effective in using the investment in fixed

assets to generate revenues. The ratio is calculated by following formula:

Net Sales
Fixed Assets

2005 2006 2007 2008 2009


27.63 20.53 18.66 10.27 9.62

Interpretation:
The ratio has shown a decreasing trend from FY 2005 to FY 2009. The ratio was

highest in FY 2005 i.e. 27.63 and lowest in FY 2009 i.e. 9.62. It is all because of the

greater increase in fixed assets as compared to the increase in sales volume of the

company. This all shows that company is not making productive use of its fixed assets

by generating good volume of sales.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.8 RETURN ON EQUITY:

The amount of net income returned as a percentage of shareholders equity. Return on

equity measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested. The formula for the ratio is:

Net Income
( Total Equity
)100

2005 2006 2007 2008 2009


33.17% 42.32% 34.13% 24.28% 13.45%

Interpretation:
Return on equity of the company shows an increasing trend in FY 2006 as compared

to the FY 2005. The increase was due to the increase in total equity of the company.

Than it shows a decreasing trend from FY 2007 to FY 2009. Here total equity is still

increasing but the decreasing trend is due to the decrease in net income of the

company.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.4.9 GROSS PROFIT MARGIN:

A financial metric used to assess a firm's financial health by revealing the proportion

of money left over from revenues after accounting for the cost of goods sold. Gross

profit margin serves as the source for paying additional expenses and future savings.

It can be calculated as follow:

Gross Profit
( Net Sales
)100

2005 2006 2007 2008 2009


9.80% 11.77% 11.37% 9.29% 6.14%

Interpretation:
The gross shows an increasing trend up to FY 2006. Than there is a decrease in gross

profit in FY 2007 and trend remains same in FY 2008 and FY 2009. The decrease in

FY 2008 was due to the increase in cost of goods sold. While the decrease in FY 2009

is due to the low sales of the company.

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6.5 INVESTOR’S ANALYSIS:

6.5.1 EARNING PER SHARE:

The portion of a company's profit allocated to each outstanding share of common

stock. Earnings per share serve as an indicator of a company's profitability. It is

calculated as follow:

Net Income
No. of Equity Shares

2005 2006 2007 2008 2009


18.89 33.70 34.93 29.15 17.62

Interpretation:
EPS of the company has increasing trend from FY 2005 to FY 2007. It is due to the

high income earned by the company. Than suddenly EPS decreased in FY2008 and

FY 2009 rapidly. This decrease in EPS shows that company has low earnings in last

two years as compared to the previous years.

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INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6.5.2 PRICE EARNING RATIO:

The price earning ratio is a way to show how a company’s earning relate to a stock

price. The higher the price earning the more earnings growth investors are expecting

and the higher premium they are willing to pay for that anticipated growth. The

formula for the ratio is:

Market Price Per Share


Earning Per Share

2005 2006 2007 2008 2009


4.76 5.67 8.75 6.86 6.11

Interpretation:
The price earning ratios shows an increasing trend from FY 2005 to FY 2009. This

increase is due to the increase in EPS. Than ratio decreased in FY 2008 and FY 2009.

The decrease in the price earning ratio is due to decrease in EPS. But the decrease in

market price of share is also recorded.

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6.5.3 DIVIDEND PAYOUT RATIO:

The dividend payout ratio measures what a company’s payout to investors in the form

of dividend. The ratio can be calculated by the following formula:

Dividend Per Share


( Earning Per Share
)100

2005 2006 2007 2008 2009


52.94% 35.61% 37.22% 36.02% 56.75%

Interpretation:
The dividend payout ratio of the company is high in the FY 2005 due to the low EPS.

Than it remains stable in FY 2006, FY 2007 and FY 2008 because of almost same

dividend per share of the company in these years. In FY 2009 the ratio decrease due

to the decrease in EPS of the company in that year.

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6.5.4 DIVIDEND YIELD RATIO:

The dividend yield ratio allows investors to compare the latest dividend they received

with the current market value of the share as an indictor of the return they are earning

on their shares. The formula for calculating the ratio is:

Dividend Per Common Share


( Market Price Per Share
)100

2005 2006 2007 2008 2009


11.11% 6.28% 4.26% 5.25% 9.28%

Interpretation:
The trend is negative in this ratio up to FY 2007 because of the increase in the prices

of the shares up to FY 2007. In FY 2008 and FY 2009 ratio shows increasing trend.

This increase is due to the decrease in the market price of share in those years.

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CONCLUSION

Indus Motor Company, with support from Toyota Motor Corporation has worked closely

with its 62 local vendors for increased localization and technology transfer. The company has

expanded its dealership network across Pakistan to 29 dealerships and this will increase

further in the coming years.

IMC’s products, renowned for their quality, durability, safety, fuel economy and resale value,

are appreciated by customers in Pakistan. There has been high demand for the Corolla which

is the market leader in this segment. Pakistan is the highest producer of Corolla in Asia.

 IMC expect 2009/10 to be a better year but a critical one for sustainable growth and

development of Pakistan’s economy.

 Profit margins are still under pressure due to foreign currency fluctuations.

 IMC is working on definitive plans to expand dealer network and launch new

CKD/CBU products.

 IMC will do utmost to optimize costs without compromising on quality and delivery.

 IMC has improved its market share in a declining market but will continue to remain

aggressive, focused and innovative in their marketing activities coupled with

dealership improvements.

It is essential for the government to effectively address the following challenges concerning

consolidation of macroeconomic stability:

 Mitigating the effects of the global economic crisis, in particular on manufacturing

and exports.
UNIVERSITY OF EDUCATION OKARA CAMPUS 81
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 Implementing tax policy and administration reforms and managing the security issues

engulfing the nation;

 Make a concrete plan to revisit the AIDP and achieve implementation recognizing the

recommendations made by OEMs and the Pakistan Automobile Manufacturers

Association.

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REFRENCES

1. Indus Motor Company Limited Annual Report 2005

2. Indus Motor Company Limited Annual Report 2006

3. Indus Motor Company Limited Annual Report 2007

4. Indus Motor Company Limited Annual Report 2008

5. Indus Motor Company Limited Annual Report 2009

6. James C. Van Horn, John M. Wachowicz, Jr (1992) Fundaments of Financial

Management, “12th Edition”

7. http://www.accaglobal.com

8. http://www.toyota-indus.com

9. http://economicpakistan.wordpress.com/2009/02/01/automobile-industry/

10. http://www.wisegeek.com/what-is-trend-analysis.htm

11. http://www.finpipe.com/equity/finratan.htm

12. http://www.zenwealth.com/BusinessFinanceOnline/RA/RatioAnalysis.html

13. http://www.quickmba.com/strategy/swot/

14. http://www.netmba.com/finance/financial/ratios/

15. http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page26.htm

16. http://www.financialmodelingguide.com/financial-ratios/financial-ratio-limitations/

17. http://www.companypartners.com/content/resource/understanding-financial-ratios#q7

18. http://www.stocktrades.ca/stock-picking/limitations-of-financial-ratios/

19. http://www.referenceforbusiness.com/management/Pr-Sa/SWOT-Analysis.html

20. http://fmaccounting.com/basic-understanding-of-the-swot-%20analysis/

21. http://www.pama.org.pk/historicaldata.htm

22. http://www.businessplans.org/ratios.html

23. http://dictionary.reference.com/browse/acid-test+ratio?jss=1

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24. http://www.opfblog.com/8447/inflation-and-its-impact-on-the-pakistan-economy/

25. http://fingad.duedee.com/2008/7/26/Indus-Motors-Company-Limited------

Review/37451/

26. http://www.kitchaloo.com/definitions/investing-definitions/define-net-profit-ratio

27. http://www.valuebasedmanagement.net/methods_roce.html

28. http://financial-dictionary.thefreedictionary.com/Return+on+equity

29. http://www.vitalentusa.com/learn/turnover.php

30. http://www.investopedia.com/terms/g/gearingratio.asp

31. http://www.investopedia.com/terms/e/eps.asp

32. http://moneyterms.co.uk/interest_cover/

33. http://www.egmcartech.com/2009/01/21/toyota-beats-gm-to-become-the-worlds-

largest-automaker/

34. http://www.toyota-indus.com/company/history.asp

35. http://www.toyota-indus.com/concern/environment.asp

36. http://www.toyota-indus.com/concern/default.asp

37. http://www.brecorder.com/index.php?id=948832&currPageNo=1&query=&search=&

term=&supDate

38. http://findarticles.com/p/articles/mi_hb092/is_n9_v28/ai_n28693653/

39. http://www.mindbranch.com/listing/product/R302-1104.html

40. http://www.thenews.com.pk/daily_detail.asp?id=134844

41. http://www.pakistaneconomist.com/issue2000/issue19&20/i&e7.html

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Annexure I

Indus Motor Company Limited


Summarized Income Statement
For The Year Ended June 30,

2005 2006 2007 2008 2009


(Rupees in '000)

Sales 27,601,034 35,236,535 39,061,226 41,423,843 37,864,604

Raw material consumed 21561543 26,677,026 27,846,974 29,654,126 29,789,139

Stores and spares consumed 475,117 607,661 643,887 578,773 523,311


Salaries, wages and other
benefits 149,174 215,007 229,973 290,297 310,377

Rent, rate and taxes 1,760 1,732 1,833 10,114 3,137

Repairs and maintenance 64,519 86,301 84,910 98,800 63,221

Depreciation 260,030 346,626 321,653 410,968 732,376

Legal and professional 592 334 797 406 383

Travelling 11,741 16,021 17,294 11,714 10,555

Transportation 2,289 3,033 1,913 2,154 1,063

Insurance 9,272 15,766 19,168 19,423 26,841

Vehicle running 4,533 5,068 4,812 5,932 10,109

Communication 2,684 4,128 4,410 6,675 5,895


Printing, stationery and office
supplies 3,079 3,211 3,006 3,819 2,084

Subscription 90 53 288 119 75

Fuel and power 88,491 88,024 125,738 107,121 121,542

Running royalty 184,203 220,920 246,314 278,566 485,092

Technical fee 39,008 29,863 15,968 21,552 20,547

Parts development 4,572 3,058 1,836 2,211 -


Staff catering, transport and -
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uniforms 82,812 104,726 105,501 102,413

Staff training 17 3,314 16,737 21,225 11,638

Opening work-in-process 104,553 106,130 95,520 64,533 71,959

Closing work-in-process (106,130) (95,520) (64,533) (71,959) (95,076)

Cost of goods manufactured 22,862,256 28,425,858 29,740,106 31,629,503 32,200,995

Opening stock 374,806 805,061 1,324,142 528,333 1,123,784

Purchases 2,462,855 3,182,129 4,084,717 6,541,304 3,597,898

Closing stock (805,061) (1,324,142) (528,333) (1,123,784) (1,382,259)

Cost of Goods Sold 24,894,856 31,088,906 34,620,632 37,575,356 35,540,418

Gross Profit 2,706,178 4,147,629 4,440,594 3,848,487 2,324,186

Distribution Expenses 294,304 404,917 509,986 487,373 469,985

Administration Expenses 277,653 242,456 265,302 297,284 352,249


Operating Expenses
571,957 647,373 775,288 784,657 822,234
Operating Profit
2,134,221 3,500,256 3,665,306 3,063,830 1,501,952

Other Operating Expenses 186,614 321,746 348,430 306,193 156,479

1,947,607 3,178,510 3,316,876 2,757,637 1,345,473

Other Operating Income 449,443 1,021,212 935,290 786,834 727,080


Profit before Interest and
Tax 2,397,050 4,199,722 4,252,166 3,544,471 2,072,553

Finance Costs 94,093 126,945 22,685 2,760 26,540

Profit before Taxation 2,302,957 4,072,777 4,229,481 3,541,711 2,046,013


Taxation
818,311 1,424,313 1,483,780 1,250,866 660,911

Profit After Taxation 1,484,646 2,648,464 2,745,701 2,290,845 1,385,102

Earning Per Share 18.89 33.70 34.93 29.15 17.62

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Annexure I.I
Indus Motor Company Limited
Comparative Chain Base Income Statement
For The Year Ended June 30,

2006 2007 2008 2009


(Rupees in '000)
Sales 7,635,501 3,824,691 2,362,617 (3,559,239)

Raw material consumed 5,115,483 1,169,948 1,807,152 135,013


Stores and spares consumed 132,544 36,226 (65,114) (55,462)
Salaries, wages and other benefits 65,833 14,966 60,324 20,080

Rent, rate and taxes (28) 101 8,281 (6,977)

Repairs and maintenance 21,782 (1,391) 13,890 (35,579)

Depreciation 86,596 (24,973) 89,315 321,408

Legal and professional (258) 463 (391) (23)


Travelling 4,280 1,273 (5,580) (1,159)

Transportation 744 (1,120) 241 (1,091)


Insurance 6,494 3,402 255 7,418

Vehicle running 535 (256) 1,120 4,177


Communication 1,444 282 2,265 (780)
Printing, stationery and office
supplies 132 (205) 813 (1,735)

Subscription (37) 235 (169) (44)

Fuel and power (467) 37,714 (18,617) 14,421


Running royalty 36,717 25,394 32,252 206,526

Technical fee (9,145) (13,895) 5,584 (1,005)

Parts development (1,514) (1,222) 375 (2,211)


Staff catering, transport and uniforms 82,812 21,914 775 (3,088)
Staff training 3,297 13,423 4,488 (9,587)
Others 4,171 11,592 (9,449) (3,119)

Opening work-in-process 1,577 (10,610) (30,987) 7,426


Closing work-in-process 10,610 30,987 (7,426) (23,117)
Cost of goods manufactured 5,563,602 1,314,248 1,889,397 571,492

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Opening stock 430,255 519,081 (795,809) 595,451


Purchases 719,274 902,588 2,456,587 (2,943,406)

Closing stock (519,081) 795,809 (595,451) (258,475)

Cost of Goods Sold 6,194,050 3,531,726 2,954,724 (2,034,938)

Gross Profit 1,441,451 292,965 (592,107) (1,524,301)


Distribution Expenses 110,613 105,069 (22,613) (17,388)

Administration Expenses (35,197) 22,846 31,982 54,965


Operating Expenses 75,416 127,915 9,369 37,577

Operating Profit 1,366,035 165,050 (601,476) (1,561,878)


Other Operating Expenses 135,132 26,684 (42,237) (149,714)
1,230,903 138,366 (559,239) (1,412,164)

Other Operating Income 571,769 (85,922) (148,456) (59,754)

Profit before Interest and Tax 1,802,672 52,444 (707,695) (1,471,918)

Finance Costs 32,852 (104,260) (19,925) 23,780

Profit before Taxation 1,769,820 156,704 (687,770) (1,495,698)


Taxation 606,002 59,467 (232,914) (589,955)

Profit After Taxation 1,163,818 97,237 (454,856) (905,743)

Earning Per Share 15 1 (6) (12)

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Annexure I.II
Indus Motor Company Limited
Percentage Comparative Chain Base Income Statement
For The Year Ended June 30,

2006 2007 2008 2009


(Rupees in '000)
Sales 27.66% 10.85% 6.05% -8.59%

Raw material consumed 23.73% 4.39% 6.49% 0.46%


Stores and spares consumed 27.90% 5.96% -10.11% -9.58%
Salaries, wages and other benefits 44.13% 6.96% 26.23% 6.92%
Rent, rate and taxes -1.59% 5.83% 451.77% -68.98%
Repairs and maintenance 33.76% -1.61% 16.36% -36.01%
Depreciation 33.30% -7.20% 27.77% 78.21%
Legal and professional -43.58% 138.62% -49.06% -5.67%
Travelling 36.45% 7.95% -32.27% -9.89%
Transportation 32.50% -36.93% 12.60% -50.65%
Insurance 70.04% 21.58% 1.33% 38.19%
Vehicle running 11.80% -5.05% 23.28% 70.41%
Communication 53.80% 6.83% 51.36% -11.69%
Printing, stationery and office supplies 4.29% -6.38% 27.05% -45.43%
Subscription -41.11% 443.40% -58.68% -36.97%
Fuel and power -0.53% 42.85% -14.81% 13.46%
Running royalty 19.93% 11.49% 13.09% 74.14%
Technical fee -23.44% -46.53% 34.97% -4.66%
Parts development -33.11% -39.96% 20.42% -100.00%
Staff catering, transport and uniforms #DIV/0! 26.46% 0.74% -2.93%
Staff training 19394.12% 405.04% 26.81% -45.17%
Others 372.74% 219.13% -55.97% -41.96%
Opening work-in-process 1.51% -10.00% -32.44% 11.51%
Closing work-in-process -10.00% -32.44% 11.51% 32.13%
Cost of goods manufactured 24.34% 4.62% 6.35% 1.81%
Opening stock 114.79% 64.48% -60.10% 112.70%
Purchases 29.20% 28.36% 60.14% -45.00%
Closing stock 64.48% -60.10% 112.70% 23.00%
Cost of Goods Sold 24.88% 11.36% 8.53% -5.42%
Gross Profit 53.27% 7.06% -13.33% -39.61%
Distribution Expenses 37.58% 25.95% -4.43% -3.57%
Administration Expenses -12.68% 9.42% 12.05% 18.49%
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Operating Expenses 13.19% 19.76% 1.21% 4.79%


Operating Profit 64.01% 4.72% -16.41% -50.98%
Other Operating Expenses 72.41% 8.29% -12.12% -48.90%
63.20% 4.35% -16.86% -51.21%
Other Operating Income 127.22% -8.41% -15.87% -7.59%
Profit before Interest and Tax 75.20% 1.25% -16.64% -41.53%
Finance Costs 34.91% -82.13% -87.83% 861.59%
Profit before Taxation 76.85% 3.85% -16.26% -42.23%
Taxation 74.06% 4.18% -15.70% -47.16%

Profit After Taxation 78.39% 3.67% -16.57% -39.54%

Earning Per Share 78.40% 3.65% -16.55% -39.55%

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Annexure I.III
Indus Motor Company Limited
Percentage Comparative 2005 Base Income Statement
For The Year Ended June 30,

2006 2007 2008 2009


(Rupees in '000)
Sales 127.66% 141.52% 150.08% 137.19%

Raw material consumed 123.73% 129.15% 137.53% 138.16%


Stores and spares consumed 127.90% 135.52% 121.82% 110.14%
Salaries, wages and other benefits 144.13% 154.16% 194.60% 208.06%
Rent, rate and taxes 98.41% 104.15% 574.66% 178.24%
Repairs and maintenance 133.76% 131.60% 153.13% 97.99%
Depreciation 133.30% 123.70% 158.05% 281.65%
Legal and professional 56.42% 134.63% 68.58% 64.70%
Travelling 136.45% 147.30% 99.77% 89.90%
Transportation 132.50% 83.57% 94.10% 46.44%
Insurance 170.04% 206.73% 209.48% 289.48%
Vehicle running 111.80% 106.15% 130.86% 223.01%
Communication 153.80% 164.31% 248.70% 219.63%
Printing, stationery and office
supplies 104.29% 97.63% 124.03% 67.68%
Subscription 58.89% 320.00% 132.22% 83.33%
Fuel and power 99.47% 142.09% 121.05% 137.35%
Running royalty 119.93% 133.72% 151.23% 263.35%
Technical fee 76.56% 40.94% 55.25% 52.67%
Parts development 66.89% 40.16% 48.36% 0.00%
Staff catering, transport and uniforms #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Staff training 19494.12% 98452.94% 124852.94% 68458.82%
Others 472.74% 1508.67% 664.25% 385.52%
Opening work-in-process 101.51% 91.36% 61.72% 68.83%
Closing work-in-process 90.00% 60.81% 67.80% 89.58%
Cost of goods manufactured 124.34% 130.08% 138.35% 140.85%
Opening stock 214.79% 353.29% 140.96% 299.83%
Purchases 129.20% 165.85% 265.60% 146.09%
Closing stock 164.48% 65.63% 139.59% 171.70%
Cost of Goods Sold 124.88% 139.07% 150.94% 142.76%
Gross Profit 153.27% 164.09% 142.21% 85.88%
Distribution Expenses 137.58% 173.29% 165.60% 159.69%

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Administration Expenses 87.32% 95.55% 107.07% 126.87%


Operating Expenses 113.19% 135.55% 137.19% 143.76%
Operating Profit 164.01% 171.74% 143.56% 70.37%
Other Operating Expenses 172.41% 186.71% 164.08% 83.85%
163.20% 170.31% 141.59% 69.08%
Other Operating Income 227.22% 208.10% 175.07% 161.77%
Profit before Interest and Tax 175.20% 177.39% 147.87% 86.46%
Finance Costs 134.91% 24.11% 2.93% 28.21%
Profit before Taxation 176.85% 183.65% 153.79% 88.84%
Taxation 174.06% 181.32% 152.86% 80.77%

Profit After Taxation 178.39% 184.94% 154.30% 93.30%

Earning Per Share 178.40% 184.91% 154.31% 93.28%

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Annexure
I.IV
Indus Motor Company Limited
Comparative Vertical Common Size Income Statement
For The Year Ended June 30,

2005 2006 2007 2008 2009


(Rupees in '000)
Sales 100.00% 100.00% 100.00% 100.00% 100.00%

Raw material consumed 78.12% 75.71% 71.29% 71.59% 78.67%


Stores and spares consumed 1.72% 1.72% 1.65% 1.40% 1.38%
Salaries, wages and other benefits 0.54% 0.61% 0.59% 0.70% 0.82%
Rent, rate and taxes 0.01% 0.00% 0.00% 0.02% 0.01%
Repairs and maintenance 0.23% 0.24% 0.22% 0.24% 0.17%
Depreciation 0.94% 0.98% 0.82% 0.99% 1.93%
Legal and professional 0.00% 0.00% 0.00% 0.00% 0.00%
Travelling 0.04% 0.05% 0.04% 0.03% 0.03%
Transportation 0.01% 0.01% 0.00% 0.01% 0.00%
Insurance 0.03% 0.04% 0.05% 0.05% 0.07%
Vehicle running 0.02% 0.01% 0.01% 0.01% 0.03%
Communication 0.01% 0.01% 0.01% 0.02% 0.02%
Printing, stationery and office
supplies 0.01% 0.01% 0.01% 0.01% 0.01%
Subscription 0.00% 0.00% 0.00% 0.00% 0.00%
Fuel and power 0.32% 0.25% 0.32% 0.26% 0.32%
Running royalty 0.67% 0.63% 0.63% 0.67% 1.28%
Technical fee 0.14% 0.08% 0.04% 0.05% 0.05%
Parts development 0.02% 0.01% 0.00% 0.01% 0.00%
Staff catering, transport and
uniforms 0.00% 0.24% 0.27% 0.25% 0.27%
Staff training 0.00% 0.01% 0.04% 0.05% 0.03%
Others 0.00% 0.02% 0.04% 0.02% 0.01%
Opening work-in-process 0.38% 0.30% 0.24% 0.16% 0.19%
Closing work-in-process -0.38% -0.27% -0.17% -0.17% -0.25%
Cost of goods manufactured 82.83% 80.67% 76.14% 76.36% 85.04%
Opening stock 1.36% 2.28% 3.39% 1.28% 2.97%
Purchases 8.92% 9.03% 10.46% 15.79% 9.50%
Closing stock -2.92% -3.76% -1.35% -2.71% -3.65%
Cost of Goods Sold 90.20% 88.23% 88.63% 90.71% 93.86%
Gross Profit 9.80% 11.77% 11.37% 9.29% 6.14%
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Distribution Expenses 1.07% 1.15% 1.31% 1.18% 1.24%


Administration Expenses 1.01% 0.69% 0.68% 0.72% 0.93%
Operating Expenses 2.07% 1.84% 1.98% 1.89% 2.17%
Operating Profit 7.73% 9.93% 9.38% 7.40% 3.97%
Other Operating Expenses 0.68% 0.91% 0.89% 0.74% 0.41%
7.06% 9.02% 8.49% 6.66% 3.55%
Other Operating Income 1.63% 2.90% 2.39% 1.90% 1.92%
Profit before Interest and Tax 8.68% 11.92% 10.89% 8.56% 5.47%
Finance Costs 0.34% 0.36% 0.06% 0.01% 0.07%
Profit before Taxation 8.34% 11.56% 10.83% 8.55% 5.40%
Taxation 2.96% 4.04% 3.80% 3.02% 1.75%

Profit After Taxation 5.38% 7.52% 7.03% 5.53% 3.66%

Earning Per Share 1889.00% 1989.00% 2089.00% 2189.00% 2289.00%

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Annexure II

Indus Motor Company Limited


Summarized Balance Sheet
As on June 30,

ASSETS 2005 2006 2007 2008 2009


(Rupees in '000)
Current Assets

Stores and Spares 137,028 226,169 227,191 232,142 128,483

Raw material and components 1,380,676 1,627,463 1,108,149 917,921 1,384,179

Work in process 106,130 95,520 64,533 71,959 95,076

Finished goods 214,482 744,469 59,162 277,233 613,117

Vehicles 436,479 413,268 283,400 601,065 498,823

Spare parts 153,755 165,027 185,549 279,052 356,487


Special service tools and
publications 345 1,378 222 851 2,846

Provision for slow moving stock - - - (43,308) (128,752)

In transit 876,988 912,191 1,158,936 532,856 1,267,082

Stock-in-trade 3,168,855 3,959,316 2,859,951 2,637,629 4,088,858

Trade debts 384,511 738,281 665,647 1,332,832 1,736,631

Current maturity of finance 29,259 5,811 3,710 - -


under musharika arrangements

Loans and advances 302,888 414,338 426,165 737,372 894,459

Short-term prepayments 4,371 9,134 47,523 23,148 16,876

Accrued mark-up 46,543 76,211 132,634 35,012 50,944

Other receivables 302,171 1,250,217 605,725 74,360 67,902


Investments 54,171 -

Taxation-net 82,315 - 48,520 209,533 -

Cash and bank balances 6,719,999 7,416,180 8,543,263 4,328,585 9,731,166

UNIVERSITY OF EDUCATION OKARA CAMPUS 98


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

TOTAL CURRENT ASSETS 11,177,940 14,095,657 13,560,329 9,664,784 16,715,319

Non-Current Assets

Long-term loans 388 1,019 4,240 42,341 28,509

Long-term deposits 5,149 5,181 6,629 7,222 7,222


Finance under musharika
arrangements 12,153 4,021 - - -
TOTAL NON-CURRENT
ASSETS 17,690 10,221 10,869 49,563 35,731

Fixed Assets

Property, plant and equipment 901,035 1,408,314 1,902,912 3,592,271 3,900,977

Capital work-in-progress 87,307 302,153 187,372 438,696 29,524

Intangible Assets 10,545 6,123 3,568 2,795 3,972

TOTAL FIXED ASSETS 998,887 1,716,590 2,093,852 4,033,762 3,934,473

TOTAL ASSETS 12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

LIABILITIES AND 2005 2006 2007 2008 2009


SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities

Trade and other payables 2,022,227 2,599,911 2,892,017 2,793,554 3,942,988


Advances from customers and
dealers 5,603,342 6,620,869 4,514,480 985,972 5,926,529

Accrued mark-up 10,568 22,250 715 105 673


Short-term running finances - - - - -
Current portion of liabilities
against assets subject to finance 27,925 5,735 3,714 - -
lease
Taxation - net - 195,789 - - 14,660

TOTAL CURRENT
LIABILITIES 7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

UNIVERSITY OF EDUCATION OKARA CAMPUS 99


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Non-current Liabilities

Liabilities against assets subject 11,957 3,871 - - -


to finance lease

Deferred taxation 42,693 116,164 210,149 532,138 503,700


TOTAL NON-CURRENT
LIABILITIES 54,650 120,035 210,149 532,138 503,700

TOTAL LIABILITIES 7,718,712 9,564,589 7,621,075 4,311,769 10,388,550

Shareholder's Equity

Paid up capital 786,000 786,000 786,000 786,000 786,000

Reserves 3,689,805 5,471,879 7,257,975 8,650,340 9,510,973

TOTAL EQUITY 4,475,805 6,257,879 8,043,975 9,436,340 10,296,973

TOTAL LIABILITIES AND


SHAREHOLDER'S EQUITY 12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

UNIVERSITY OF EDUCATION OKARA CAMPUS 100


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure II.I
Indus Motor Company Limited
Comparative Chain Base Balance Sheet
As on June 30,

ASSETS 2006 2007 2008 2009


(Rupees in '000)
Current Assets
Stores and Spares 89,141 1,022 4,951 (103,659)

Raw material and components 246,787 (519,314) (190,228) 466,258

Work in process (10,610) (30,987) 7,426 23,117

Finished goods 529,987 (685,307) 218,071 335,884

Vehicles (23,211) (129,868) 317,665 (102,242)


Spare parts 11,272 20,522 93,503 77,435

Special service tools and publications 1,033 (1,156) 629 1,995

Provision for slow moving stock - - (43,308) (85,444)

In transit 35,203 246,745 (626,080) 734,226

Stock-in-trade 790,461 (1,099,365) (222,322) 1,451,229

Trade debts 353,770 (72,634) 667,185 403,799

Current maturity of finance under (23,448) (2,101) (3,710) -


musharika arrangements
Loans and advances 111,450 11,827 311,207 157,087

Short-term prepayments 4,763 38,389 (24,375) (6,272)

Accrued mark-up 29,668 56,423 (97,622) 15,932

Other receivables 948,046 (644,492) (531,365) (6,458)


Investments - - 54,171 (54,171)
Taxation-net (82,315) 48,520 161,013 (209,533)

Cash and bank balances 696,181 1,127,083 (4,214,678) 5,402,581

TOTAL CURRENT ASSETS 2,917,717 (535,328) (3,895,545) 7,050,535

UNIVERSITY OF EDUCATION OKARA CAMPUS 101


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Non-Current Assets
Long-term loans 631 3,221 38,101 (13,832)
Long-term deposits 32 1,448 593 -
Finance under musharika
arrangements (8,132) (4,021) - -
TOTAL NON-CURRENT ASSETS (7,469) 648 38,694 (13,832)

Fixed Assets
Property, plant and equipment 507,279 494,598 1,689,359 308,706

Capital work-in-progress 214,846 (114,781) 251,324 (409,172)

Intangible Assets (4,422) (2,555) (773) 1,177


TOTAL FIXED ASSETS 717,703 377,262 1,939,910 (99,289)

TOTAL ASSETS 3,627,951 (157,418) (1,916,941) 6,937,414

LIABILITIES AND 2006 2007 2008 2009


SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities

Trade and other payables 577,684 292,106 (98,463) 1,149,434


Advances from customers and
dealers 1,017,527 (2,106,389) (3,528,508) 4,940,557

Accrued mark-up 11,682 (21,535) (610) 568


Short-term running finances - - - -

Current portion of liabilities against (22,190) (2,021) (3,714) -


assets subject to finance lease

Taxation - net 195,789 (195,789) - 14,660

TOTAL CURRENT LIABILITIES 1,780,492 (2,033,628) (3,631,295) 6,105,219

Non-current Liabilities

Liabilities against assets subject to (8,086) (3,871) - -


finance lease
Deferred taxation 73,471 93,985 321,989 (28,438)

UNIVERSITY OF EDUCATION OKARA CAMPUS 102


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

TOTAL NON-CURRENT
LIABILITIES 65,385 90,114 321,989 (28,438)

TOTAL LIABILITIES 1,845,877 (1,943,514) (3,309,306) 6,076,781

Shareholder's Equity
Paid up capital - - - -
Reserves 1,782,074 1,786,096 1,392,365 860,633
TOTAL EQUITY 1,782,074 1,786,096 1,392,365 860,633

TOTAL LIABILITIES AND


SHAREHOLDER'S EQUITY 3,627,951 (157,418) (1,916,941) 6,937,414

UNIVERSITY OF EDUCATION OKARA CAMPUS 103


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure II.II
Indus Motor Company Limited
Percentage Comparative Chain Base Balance Sheet
As on June 30,

ASSETS 2006 2007 2008 2009


(Rupees in '000)
Current Assets
Stores and Spares 65.05% 0.45% 2.18% -44.65%
Raw material and components 17.87% -31.91% -17.17% 50.80%
Work in process -10.00% -32.44% 11.51% 32.13%
Finished goods 247.10% -92.05% 368.60% 121.16%
Vehicles -5.32% -31.42% 112.09% -17.01%
Spare parts 7.33% 12.44% 50.39% 27.75%
Special service tools and publications 299.42% -83.89% 283.33% 234.43%
Provision for slow moving stock #DIV/0! #DIV/0! #DIV/0! 197.29%
In transit 4.01% 27.05% -54.02% 137.79%
Stock-in-trade 24.94% -27.77% -7.77% 55.02%
Trade debts 92.01% -9.84% 100.23% 30.30%
Current maturity of finance under -80.14% -36.16% -100.00% #DIV/0!
musharika arrangements
Loans and advances 36.80% 2.85% 73.03% 21.30%
Short-term prepayments 108.97% 420.29% -51.29% -27.10%
Accrued mark-up 63.74% 74.04% -73.60% 45.50%
Other receivables 313.74% -51.55% -87.72% -8.68%
Investments #DIV/0! #DIV/0! #DIV/0! -100.00%
Taxation-net -100.00% #DIV/0! 331.85% -100.00%
Cash and bank balances 10.36% 15.20% -49.33% 124.81%
TOTAL CURRENT ASSETS 26.10% -3.80% -28.73% 72.95%

Non-Current Assets
Long-term loans 162.63% 316.09% 898.61% -32.67%
Long-term deposits 0.62% 27.95% 8.95% 0.00%
Finance under musharika arrangements -66.91% -100.00% #DIV/0! #DIV/0!
TOTAL NON-CURRENT ASSETS -42.22% 6.34% 356.00% -27.91%

Fixed Assets
Property, plant and equipment 56.30% 35.12% 88.78% 8.59%
Capital work-in-progress 246.08% -37.99% 134.13% -93.27%

UNIVERSITY OF EDUCATION OKARA CAMPUS 104


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Intangible Assets -41.93% -41.73% -21.66% 42.11%


TOTAL FIXED ASSETS 71.85% 21.98% 92.65% -2.46%

TOTAL ASSETS 29.75% -0.99% -12.24% 50.46%

LIABILITIES AND 2006 2007 2008 2009


SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities
Trade and other payables 28.57% 11.24% -3.40% 41.15%
Advances from customers and dealers 18.16% -31.81% -78.16% 501.08%
Accrued mark-up 110.54% -96.79% -85.31% 540.95%
Short-term running finances #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Current portion of liabilities against -79.46% -35.24% -100.00% #DIV/0!
assets subject to finance lease
Taxation - net #DIV/0! -100.00% #DIV/0! #DIV/0!

TOTAL CURRENT LIABILITIES 23.23% -21.53% -49.00% 161.53%

Non-current Liabilities
Liabilities against assets subject to -67.63% -100.00% #DIV/0! #DIV/0!
finance lease
Deferred taxation 172.09% 80.91% 153.22% -5.34%
TOTAL NON-CURRENT LIABILITIES 119.64% 75.07% 153.22% -5.34%

TOTAL LIABILITIES 23.91% -20.32% -43.42% 140.93%

Shareholder's Equity
Paid up capital 0.00% 0.00% 0.00% 0.00%
Reserves 48.30% 32.64% 19.18% 9.95%
TOTAL EQUITY 39.82% 28.54% 17.31% 9.12%

TOTAL LIABILITIES AND


SHAREHOLDER'S EQUITY 29.75% -0.99% -12.24% 50.46%

UNIVERSITY OF EDUCATION OKARA CAMPUS 105


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure II.III
Indus Motor Company Limited
Percentage Comparative 2005 Base Balance Sheet
As on June 30,

ASSETS 2006 2007 2008 2009


(Rupees in '000)
Current Assets
Stores and Spares 165.05% 165.80% 169.41% 93.76%
Raw material and components 117.87% 80.26% 66.48% 100.25%
Work in process 90.00% 60.81% 67.80% 89.58%
Finished goods 347.10% 27.58% 129.26% 285.86%
Vehicles 94.68% 64.93% 137.71% 114.28%
Spare parts 107.33% 120.68% 181.49% 231.85%
Special service tools and publications 399.42% 64.35% 246.67% 824.93%
Provision for slow moving stock #DIV/0! #DIV/0! #DIV/0! #DIV/0!
In transit 104.01% 132.15% 60.76% 144.48%
Stock-in-trade 124.94% 90.25% 83.24% 129.03%
Trade debts 192.01% 173.12% 346.63% 451.65%
Current maturity of finance under 19.86% 12.68% 0.00% 0.00%
musharika arrangements
Loans and advances 136.80% 140.70% 243.45% 295.31%
Short-term prepayments 208.97% 1087.23% 529.58% 386.09%
Accrued mark-up 163.74% 284.97% 75.23% 109.46%
Other receivables 413.74% 200.46% 24.61% 22.47%
Investments #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Taxation-net 0.00% 58.94% 254.55% 0.00%
Cash and bank balances 110.36% 127.13% 64.41% 144.81%
TOTAL CURRENT ASSETS 126.10% 121.31% 86.46% 149.54%

Non-Current Assets
Long-term loans 262.63% 1092.78% 10912.63% 7347.68%
Long-term deposits 100.62% 128.74% 140.26% 140.26%
Finance under musharika arrangements 33.09% 0.00% 0.00% 0.00%
TOTAL NON-CURRENT ASSETS 57.78% 61.44% 280.18% 201.98%

Fixed Assets
Property, plant and equipment 156.30% 211.19% 398.68% 432.94%
Capital work-in-progress 346.08% 214.61% 502.48% 33.82%

UNIVERSITY OF EDUCATION OKARA CAMPUS 106


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Intangible Assets 58.07% 33.84% 26.51% 37.67%


TOTAL FIXED ASSETS 171.85% 209.62% 403.83% 393.89%

TOTAL ASSETS 129.75% 128.46% 112.74% 169.63%

LIABILITIES AND 2006 2007 2008 2009


SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities
Trade and other payables 128.57% 143.01% 138.14% 194.98%
Advances from customers and dealers 118.16% 80.57% 17.60% 105.77%
Accrued mark-up 210.54% 6.77% 0.99% 6.37%
Short-term running finances #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Current portion of liabilities against 20.54% 13.30% 0.00% 0.00%
assets subject to finance lease
Taxation - net #DIV/0! #DIV/0! #DIV/0! #DIV/0!

TOTAL CURRENT LIABILITIES 123.23% 96.70% 49.32% 128.98%

Non-current Liabilities
Liabilities against assets subject to 32.37% 0.00% 0.00% 0.00%
finance lease
Deferred taxation 272.09% 492.23% 1246.43% 1179.82%
TOTAL NON-CURRENT LIABILITIES 219.64% 384.54% 973.72% 921.68%

TOTAL LIABILITIES 123.91% 98.74% 55.86% 134.59%

Shareholder's Equity
Paid up capital 100.00% 100.00% 100.00% 100.00%
Reserves 148.30% 196.70% 234.44% 257.76%
TOTAL EQUITY 139.82% 179.72% 210.83% 230.06%

TOTAL LIABILITIES AND


SHAREHOLDER'S EQUITY 129.75% 128.46% 112.74% 169.63%

UNIVERSITY OF EDUCATION OKARA CAMPUS 107


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure
II.IV
Indus Motor Company Limited
Comparative Vertical Common size Balance Sheet
As on June 30,

ASSETS 2005 2006 2007 2008 2009


(Rupees in '000)
Current Assets
Stores and Spares 1.12% 1.43% 1.45% 1.69% 0.62%
Raw material and components 11.32% 10.29% 7.07% 6.68% 6.69%
Work in process 0.87% 0.60% 0.41% 0.52% 0.46%
Finished goods 1.76% 4.71% 0.38% 2.02% 2.96%
Vehicles 3.58% 2.61% 1.81% 4.37% 2.41%
Spare parts 1.26% 1.04% 1.18% 2.03% 1.72%
Special service tools and
publications 0.00% 0.01% 0.00% 0.01% 0.01%
Provision for slow moving stock 0.00% 0.00% 0.00% -0.32% -0.62%
In transit 7.19% 5.77% 7.40% 3.88% 6.13%
Stock-in-trade 25.99% 25.02% 18.26% 19.19% 19.77%
Trade debts 3.15% 4.67% 4.25% 9.69% 8.40%
Current maturity of finance under 0.24% 0.04% 0.02% 0.00% 0.00%
musharika arrangements
Loans and advances 2.48% 2.62% 2.72% 5.36% 4.32%
Short-term prepayments 0.04% 0.06% 0.30% 0.17% 0.08%
Accrued mark-up 0.38% 0.48% 0.85% 0.25% 0.25%
Other receivables 2.48% 7.90% 3.87% 0.54% 0.33%
Investments 0.00% 0.00% 0.00% 0.39% 0.00%
Taxation-net 0.68% 0.00% 0.31% 1.52% 0.00%
Cash and bank balances 55.11% 46.87% 54.54% 31.48% 47.04%
TOTAL CURRENT ASSETS 91.66% 89.09% 86.56% 70.30% 80.81%

Non-Current Assets
Long-term loans 0.00% 0.01% 0.03% 0.31% 0.14%
Long-term deposits 0.04% 0.03% 0.04% 0.05% 0.03%
Finance under musharika
arrangements 0.10% 0.03% 0.00% 0.00% 0.00%
TOTAL NON-CURRENT ASSETS 0.15% 0.06% 0.07% 0.36% 0.17%

Fixed Assets

UNIVERSITY OF EDUCATION OKARA CAMPUS 108


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Property, plant and equipment 7.39% 8.90% 12.15% 26.13% 18.86%


Capital work-in-progress 0.72% 1.91% 1.20% 3.19% 0.14%
Intangible Assets 0.09% 0.04% 0.02% 0.02% 0.02%
TOTAL FIXED ASSETS 8.19% 10.85% 13.37% 29.34% 19.02%

TOTAL ASSETS 100.00% 100.00% 100.00% 100.00% 100.00%

LIABILITIES AND 2005 2006 2007 2008 2009


SHAREHOLDER'S EQUITY
(Rupees in '000)
LIABILITIES
Current Liabilities
Trade and other payables 16.58% 16.43% 18.46% 20.32% 19.06%
Advances from customers and
dealers 45.95% 41.84% 28.82% 7.17% 28.65%
Accrued mark-up 0.09% 0.14% 0.00% 0.00% 0.00%
Short-term running finances 0.00% 0.00% 0.00% 0.00% 0.00%
Current portion of liabilities against 0.23% 0.04% 0.02% 0.00% 0.00%
assets subject to finance lease
Taxation - net 0.00% 1.24% 0.00% 0.00% 0.07%

TOTAL CURRENT LIABILITIES 62.85% 59.69% 47.31% 27.49% 47.79%

Non-current Liabilities
Liabilities against assets subject to 0.10% 0.02% 0.00% 0.00% 0.00%
finance lease
Deferred taxation 0.35% 0.73% 1.34% 3.87% 2.44%
TOTAL NON-CURRENT
LIABILITIES 0.45% 0.76% 1.34% 3.87% 2.44%

TOTAL LIABILITIES 63.30% 60.45% 48.65% 31.36% 50.22%

Shareholder's Equity
Paid up capital 6.45% 4.97% 5.02% 5.72% 3.80%
Reserves 30.26% 34.58% 46.33% 62.92% 45.98%
TOTAL EQUITY 36.70% 39.55% 51.35% 68.64% 49.78%

TOTAL LIABILITIES AND


SHAREHOLDER'S EQUITY 100.00% 100.00% 100.00% 100.00% 100.00%

UNIVERSITY OF EDUCATION OKARA CAMPUS 109


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure III

2005 2006 2007 2008 2009

Current Assets - Current Liabilities


1. Net Working Capital
11,177,940 14,095,657 13,560,329 9,664,784 16,715,319
-7,664,062 -9,444,554 -7,410,926 -3,779,631 -9,884,850

3,513,878 4,651,103 6,149,403 5,885,153 6,830,469

Current Assets
2. Current Ratio
Current Liabilities

11,177,940 14,095,657 13,560,329 9,664,784 16,715,319


7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

1.46 : 1 1.49 : 1 1.83 : 1 2.56 : 1 1.69 : 1

Current Assets - Inventory


3. Acid Test Ratio
Current Liabilities

8,009,085 10,136,341 10,700,378 7,027,155 12,626,461


7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

1.05 : 1 1.07 : 1 1.44 : 1 1.86 : 1 1.28 : 1

Marketable Securities + Cash


4. Cash Ratio
Current Liabilities

6,719,999 7,416,180 8,543,263 4,382,756 9,731,166


7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

0.88 : 1 0.79 : 1 1.15 : 1 1.16 : 1 0.98 : 1

5. Cash Flow from Cash from Operations


Operations Ratio Current Liabilities

884,945 2,675,847 2,823,727 (811,077) 6,536,529


7,664,062 9,444,554 7,410,926 3,779,631 9,884,850

0.12 : 1 0.28 : 1 0.38 : 1 (0.21) : 1 0.66 : 1

UNIVERSITY OF EDUCATION OKARA CAMPUS 111


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure IV

2005 2006 2007 2008 2009

1. Time Interest Earning before Interest and Tax


Earned Ratio Interest Expense

2,397,050 4,199,722 4,252,166 3,544,471 2,072,553


94,093 126,945 22,685 2,760 26,540

25.48 33.08 187.44 1,284.23 78.09

2. Fixed Earning before Interest and Tax


Charged
Coverage Ratio Interest + Lease Payment + Principal Payment

2,397,050 4,199,722 4,252,166 3,544,471 2,072,553


106,050 130,816 22,685 2,760 26,540

22.60 32.10 187.44 1,284.23 78.09

Total Liabilities
3. Debt Ratio ( Total Assets
)100
7,718,712 9,564,589 7,621,075 4,311,769 10,388,550
12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

63.30% 60.45% 48.65% 31.36% 50.22%

4. Debt Equity Long Term Debt


Ratio ( Share Holder's Equity
)100
- - - - -
4,475,805 6,257,879 8,043,975 9,436,340 10,296,973

0.00% 0.00% 0.00% 0.00% 0.00%

5. Debt to Total Liabilities


Tangible Net ( Owner's Equity - Intangible Assets )100
worth

7,718,712 9,564,589 7,621,075 4,311,769 10,388,550


4,465,260 6,251,756 8,040,407 9,433,545 10,293,001

172.86% 152.99% 94.78% 45.71% 100.93%

UNIVERSITY OF EDUCATION OKARA CAMPUS 113


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure V

2005 2006 2007 2008 2009

1. Day's Sales in Gross A/R


A/R Net Sales / 365 days

989,570 2,402,836 1,697,537 2,144,564 2,698,992


75,619.27 96,538.45 107,017.06 113,489.98 103,738.64

13.09 24.89 15.86 18.90 26.02

2. Accounts Net Sales


Receivable
Turnover Gross A/R

27,601,034 35,236,535 39,061,226 41,423,843 37,864,604


989,570 2,402,836 1,697,537 2,144,564 2,698,992

27.89 14.66 23.01 19.32 14.03

3. Day's Sales in Ending Inventory


Inventory Cost of Goods Sold / 365 days

805,061 1,324,142 528,333 1,123,784 1,382,259


68,205 85,175 94,851 102,946 97,371

11.80 15.55 5.57 10.92 14.20

4. Inventory Cost of Goods Sold


Turnover Average Inventory

24,894,856 31,088,906 34,620,632 37,575,356 35,540,418


589,933.50 1,064,601.50 926,237.50 826,058.50 1,253,021.50

42.20 29.20 37.38 45.49 28.36

UNIVERSITY OF EDUCATION OKARA CAMPUS 115


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure VI

2005 2006 2007 2008 2009

1. Net Profit Net Income


Margin ( Net Sales
)100
1,484,646 2,648,464 2,745,701 2,290,845 1,385,102
27,601,034 35,236,535 39,061,226 41,423,843 37,864,604

5.38% 7.52% 7.03% 5.53% 3.66%

2. Total Asset Net Sales


Turnover Total Assets

27,601,034 35,236,535 39,061,226 41,423,843 37,864,604


12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

2.26 2.23 2.49 3.01 1.83

3. Return on Net Income


Assets ( Total Assets
)100
1,484,646 2,648,464 2,745,701 2,290,845 1,385,102
12,194,517 15,822,468 15,665,050 13,748,109 20,685,523

12.17% 16.74% 17.53% 16.66% 6.70%

4. Operating Operating Income


Income Margin ( Net Sales
)100
2,134,221 3,500,256 3,665,306 3,063,830 1,501,952
27,601,034 35,236,535 39,061,226 41,423,843 37,864,604

7.73% 9.93% 9.38% 7.40% 3.97%

5. Operating Net Sales


Assets Turnover Operating Assets

27,601,034 35,236,535 39,061,226 41,423,843 37,864,604


901,035 1,408,314 1,902,912 3,592,271 3,900,977

30.63 25.02 20.53 11.53 9.71

UNIVERSITY OF EDUCATION OKARA CAMPUS 117


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

6. Return on Net Income


Operating Assets ( Operating Assets )100
1,484,646 2,648,464 2,745,701 2,290,845 1,385,102
901,035 1,408,314 1,902,912 3,592,271 3,900,977

164.77% 188.06% 144.29% 63.77% 35.51%

7. Sales to Fixed Net Sales


Assets Fixed Assets

27,601,034 35,236,535 39,061,226 41,423,843 37,864,604


998,887 1,716,590 2,093,852 4,033,762 3,934,473

27.63 20.53 18.66 10.27 9.62

8. Return on Net Income


Equity ( Total Equity
)100
1,484,646 2,648,464 2,745,701 2,290,845 1,385,102
4,475,805 6,257,879 8,043,975 9,436,340 10,296,973

33.17% 42.32% 34.13% 24.28% 13.45%

9. Gross Profit Gross Profit


Margin ( Net Sales
)100
2,706,178 4,147,629 4,440,594 3,848,487 2,324,186
27,601,034 35,236,535 39,061,226 41,423,843 37,864,604

9.80% 11.77% 11.37% 9.29% 6.14%

UNIVERSITY OF EDUCATION OKARA CAMPUS 118


INDUS MOTOR COMPANY LIMITED PROFESSIONAL PROJECT

Annexure VII

2005 2006 2007 2008 2009

1. Earning Per Net Income


Share No. of Equity Shares

1,484,646 2,648,464 2,745,701 2,290,845 1,385,102


78,600 78,600 78,600 78,600 78,600

18.89 33.70 34.93 29.15 17.62

2. Price Earning Market Price Per Share


Ratio Earning Per Share

90.00 191.00 305.50 200.05 107.72


18.89 33.70 34.93 29.15 17.62

4.76 5.67 8.75 6.86 6.11

3. Dividend Dividend Per Share


Payout Ratio ( Earning Per Share
)100
10.00 12.00 13.00 10.50 10.00
18.89 33.70 34.93 29.15 17.62

52.94% 35.61% 37.22% 36.02% 56.75%

4. Dividend Yield Dividend Per Common Share


Ratio ( Market Price Per Share
)100
10.00 12.00 13.00 10.50 10.00
90.00 191.00 305.50 200.05 107.72

11.11% 6.28% 4.26% 5.25% 9.28%

UNIVERSITY OF EDUCATION OKARA CAMPUS 120