1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

(Rupees in thousand)
Capital 144,000.00 403,200.00 403,200.00 403,200.00 443,520.00 443,520.00 683,644.00 752,008.00 752,008.00 752,008.00
Reserves 194,792.00 192,289.00 340,409.00 742,888.00 919,106.00 1,444,303.00 1,992,547.00 2,036,835.00 1,934,191.00 1,848,186.00
Net Worth 338,792.00 595,489.00 743,609.00 1,146,088.00 1,362,626.00 1,886,823.00 2,676,191.00 2,788,843.00 2,686,199.00 2,600,194.00

Long Term Liabilities 280,856.00 567,030.00 476,321.00 865,539.00 589,642.00 1,116,667.00 2,780,833.00 3,413,020.00 2,984,127.00 2,591,030.00
Current Liabilities 1,015,989.00 619,802.00 1,130,202.00 773,885.00 1,110,277.00 1,355,126.00 2,790,559.00 3,263,315.00 4,083,538.00 5,646,893.00
Total Equity & Liabilities 1,635,637.00 1,782,321.00 2,350,132.00 2,785,812.00 3,062,545.00 4,358,616.00 8,247,583.00 9,465,178.00 9,753,863.00 10,838,116.00

Fixed Assets 956,365.00 1,202,614.00 1,537,288.00 1,829,775.00 1,954,757.00 2,837,084.00 5,778,293.00 6,903,335.00 6,544,227.00 6,259,570.00
Long Term Deposits & Advances 227.00 527.00 545.00 545.00 426.00 386.00 1,800.00 4,828.00 7,829.00 9,026.00
Current Assets 679,045.00 579,180.00 812,299.00 955,192.00 1,107,352.00 1,521,146.00 2,467,490.00 2,557,015.00 3,201,807.00 4,357,788.00
Total Assets 1,635,637.00 1,782,321.00 2,350,132.00 2,785,512.00 3,062,545.00 4,358,616.00 8,247,583.00 9,465,178.00 9,753,863.00 10,626,384.00

Sales 2,094,958.00 2,367,018.00 3,066,830.00 4,054,099.00 4,226,715.00 6,516,226.00 5,454,231.00 6,550,782.00 7,677,539.00 9,138,298.00
Gross Profit 362,475.00 628,457.00 684,287.00 966,745.00 742,242.00 968,808.00 1,225,206.00 1,168,532.00 957,209.00 1,040,880.00
Operating Profit plus Other Income 290,531.00 533,773.00 523,634.00 781,787.00 519,004.00 796,705.00 947,262.00 834,845.00 759,303.00 782,001.00
Financial & Other charges 185,936.00 155,772.00 237,811.00 218,099.00 143,589.00 111,014.00 187,899.00 494,045.00 648,146.00 705,822.00
Taxation 13,000.00 20,504.00 36,903.00 60,409.00 48,000.00 50,614.00 37,542.00 90,000.00 101,000.00 58,000.00
Net Profit 91,595.00 357,497.00 248,920.00 503,279.00 327,418.00 635,077.00 721,822.00 250,800.00 10,157.00 18,180.00

Gross Margin (%) 17.30 26.60 22.30 18.90 17.60 14.90 22.50 17.80 12.47 11.39
Net Margin (%) 4.40 15.10 8.10 12.40 7.70 9.70 13.20 3.80 0.13 0.20
Current Ratio 0.67 93.00 0.72 1.23 1.00 1.12 0.88 0.78 0.78 0.77
Leverage (Total Liab./Net Worth 3.83 1.99 2.16 1.43 1.25 1.31 2.08 2.39 2.63 3.17
Long Term Debt: Equity 45;55 49;51 39:61 43;57 30:70 37:63 51;49 55;45 53;47 50;5
EPS 1.22 4.75 3.31 6.69 4.35 8.45 9.60 3.34 0.14 0.24

1
 Nishat (Chunian) Ltd.
Profit and Loss Account
For the year ended 30 June 2004 to 2008
2004 2005 2006 2007 2008
Rs. Rs. Rs. Rs. Rs.

Sales Revenue 6,516,226,312 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052

Less: Cost of Goods Sold 5,547,418,807 4,229,025,833 5,382,250,261 6,720,329,731 8,097,418,309

Gross Profits 968,807,505 1,225,205,574 1,168,531,782 957,208,905 1,040,879,743

Less: Operating Expenses:

Selling Expense 109,442,914 175,781,628 198,057,039 178,811,548 224,932,148

General / Admin. Exp. 58,863,523 65,529,018 82,014,340 70,814,441 71,539,247

Other Operating Expense 39,473,677 49,065,522 76,044,679 24,270,370 6,489,259

Depreciation Expense 9,928,981 8,940,829 11,770,642 12,684,096 12,436,344

Total Operating Expenses 217,709,095 299,316,997 367,886,700 286,580,455 315,396,998

Operating Profits 757,231,343 947,262,651 834,845,015 759,302,633 782,001,265

Less: Interest Expense 71,540,677 187,898,821 494,044,750 648,145,746 705,821,520

Net Profits Before Taxes 685,690,666 759,363,830 340,800,265 111,156,887 76,179,745

Less: Taxes 50,614,013 37,542,199 90,000,000 101,000,000 58,000,000

Net Profit After Taxes 635,076,653 721,821,631 250,800,265 10,156,887 18,179,745

Nishat (Chunian) Ltd.

Balance Sheet
As at 30 June 2004 to 2008
2004 2005 2006 2007 2008
Rs. Rs. Rs. Rs. Rs.

Current Assets:

Cash 20,402,828 37,366,416 10,940,262 60,670,456 18,245,854

Marketable Securities 368,663,386 881,345,408 430,370,082 500,718,014 580,740,751

Accounts Receivable 443,334,644 335,844,386 542,877,601 842,112,885 1,311,338,154

Inventories 688,744,637 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949

Total Current Assets 1,521,145,495 2,467,489,648 2,557,015,331 3,203,403,716 4,357,787,708

Gross Fixed Assets (at cost):

Fixed Assets 2,837,084,380 5,778,293,685 6,903,334,952 6,544,226,817 6,259,570,155

Investment in subsidiary-at cost 0 0 0 0 211,732,800

Long term loans 0 1,179,042 4,099,271 6,933,229 8,129,672

Long term security deposits 385,750 620,942 728,945 718,942 895,942

Other (Inc. Fin. Leases) 0 0 0 0 0

Total Gross Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569

Less: Accumulated Depreciation 0 0 0 0

Net Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569

Other Assets 0 0 0 0 0

Total Assets 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277

Current Liabilities: 2004 2005 2006 2007 2008

Trade and other payables 364,899,902 310,456,901 302,126,632 322,773,709 378,616,664

Accrued mark-up 12,123,810 54,204,616 105,126,233 103,767,328 119,822,439

Short term borrowings 765,602,724 2,202,981,307 2,274,882,896 2,623,592,501 3,190,716,138

Current portion of non-current liab 212,500,002 222,916,667 581,179,605 1,034,823,810 1,957,737,473

Other Current Liabilities 0 0 0 0 0

Total Current Liabilities 1,355,126,438 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714

Long Term Debt 1,116,666,665 2,780,833,333 3,413,020,396 2,984,126,989 2,591,029,533

Total Liabilities 2,471,793,103 5,571,392,824 6,676,335,762 7,069,084,337 8,237,922,247

Preferred Stock 0 0 0 0 0

Common Stock 443,520,000 683,643,980 752,008,380 752,008,380 752,008,380

Paid-In Capital In Excess of Par 0 0 0 0 0

Retained Earnings 1,443,302,522 1,992,546,513 2,036,834,357 1,934,189,987 1,848,185,650

Total Stockholders' Equity 1,886,822,522 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030

Total Liabs. & Stockhldrs' Equity 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Reconciliation TA & TL/SE 0 0 0 0 0

Number of Common Shares 44,352,000 68,364,398 75,200,838 75,200,838 75,200,838

End-of-Year Stock Price 10 33 40 44 38

1
 Nishat (Chunian) Ltd.
Profit and Loss Account
For the year ended 30 June 2004 to 2008
2004 2005 2006 2007 2008 Common-Size/Vertical Analysis (%)
INCOME STATEMENT Rs. Rs. Rs. Rs. Rs. 2004 2005 2006 2007 2008
Sales Revenue 6,516,226,312 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052 100.00 100.00 100.00 100.00 100.00
Less: Cost of Goods Sold 5,547,418,807 4,229,025,833 5,382,250,261 6,720,329,731 8,097,418,309 85.13 77.54 82.16 87.53 88.61

Gross Profits 968,807,505 1,225,205,574 1,168,531,782 957,208,905 1,040,879,743 14.87 22.46 17.84 12.47 11.39
Less: Operating Expenses:

Selling Expense 109,442,914 175,781,628 198,057,039 178,811,548 224,932,148 1.68 3.22 3.02 2.33 2.46
General / Admin. Exp. 58,863,523 65,529,018 82,014,340 70,814,441 71,539,247 0.90 1.20 1.25 0.92 0.78
Other Operating Expense 39,473,677 49,065,522 76,044,679 24,270,370 6,489,259 0.61 0.90 1.16 0.32 0.07
Depreciation Expense 9,928,981 8,940,829 11,770,642 12,684,096 12,436,344 0.15 0.16 0.18 0.17 0.14
Total Operating Expenses 217,709,095 299,316,997 367,886,700 286,580,455 315,396,998 3.34 5.49 5.62 3.73 3.45

Operating Profits 757,231,343 947,262,651 834,845,015 759,302,633 782,001,265 11.62 17.37 12.74 9.89 8.56
Less: Interest Expense 71,540,677 187,898,821 494,044,750 648,145,746 705,821,520 1.10 3.45 7.54 8.44 7.72

Net Profits Before Taxes 685,690,666 759,363,830 340,800,265 111,156,887 76,179,745 10.52 13.92 5.20 1.45 0.83
Less: Taxes 50,614,013 37,542,199 90,000,000 101,000,000 58,000,000 0.78 0.69 1.37 1.32 0.63
Net Profit After Taxes 635,076,653 721,821,631 250,800,265 10,156,887 18,179,745 9.75 13.23 3.83 0.13 0.20

Less: Pref. Stock Divds. 0 0 0 0 0

Earnings Available for Common Stockholders 635,076,653 721,821,631 250,800,265 10,156,887 18,179,745 9.75 13.23 3.83 0.13 0.20

Nishat (Chunian) Ltd.

Balance Sheet
As at 30 June 2004 to 2008
2004 2005 2006 2007 2008 Common-Size/Vertical Analysis (%)
BALANCE SHEET Rs. Rs. Rs. Rs. Rs. 2004 2005 2006 2007 2008
Current Assets:

Cash 20,402,828 37,366,416 10,940,262 60,670,456 18,245,854 0.47 0.45 0.12 0.62 0.17
Marketable Securities 368,663,386 881,345,408 430,370,082 500,718,014 580,740,751 8.46 10.69 4.55 5.13 5.36
Accounts Receivable 443,334,644 335,844,386 542,877,601 842,112,885 1,311,338,154 10.17 4.07 5.74 8.63 12.10
Inventories 688,744,637 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949 15.80 14.71 16.62 18.45 22.58

Total Current Assets 1,521,145,495 2,467,489,648 2,557,015,331 3,203,403,716 4,357,787,708 34.90 29.92 27.01 32.84 40.21
Gross Fixed Assets (at cost):

Fixed Assets 2,837,084,380 5,778,293,685 6,903,334,952 6,544,226,817 6,259,570,155 65.09 70.06 72.93 67.08 57.76
Investment in subsidiary-at cost 0 0 0 0 211,732,800 - - - - 1.95
Long term loans 0 1,179,042 4,099,271 6,933,229 8,129,672 - 0.01 0.04 0.07 0.08
Long term security deposits 385,750 620,942 728,945 718,942 895,942 0.01 0.01 0.01 0.01 0.01
Other (Inc. Fin. Leases) 0 0 0 0 0 - - - - -
Total Gross Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569 65.10 70.08 72.99 67.16 59.79
Less: Accumulated Depreciation 0 0 0 0 - - - - -

Net Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569 65.10 70.08 72.99 67.16 59.79
Other Assets 0 0 0 0 0 - - - - -
Total Assets 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277 100.00 100.00 100.00 100.00 100.00

Current Liabilities: 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Trade and other payables 364,899,902 310,456,901 302,126,632 322,773,709 378,616,664 8.37 3.76 3.19 3.31 3.49
Accrued mark-up 12,123,810 54,204,616 105,126,233 103,767,328 119,822,439 0.28 0.66 1.11 1.06 1.11
Short term borrowings 765,602,724 2,202,981,307 2,274,882,896 2,623,592,501 3,190,716,138 17.57 26.71 24.03 26.89 29.44
Current portion of non-current liab 212,500,002 222,916,667 581,179,605 1,034,823,810 1,957,737,473 4.88 2.70 6.14 10.61 18.06
Other Current Liabilities 0 0 0 0 0 - - - - -
Total Current Liabilities 1,355,126,438 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714 31.09 33.83 34.48 41.87 52.10
L / T Debt (Inc. Financial Leases) 1,116,666,665 2,780,833,333 3,413,020,396 2,984,126,989 2,591,029,533 25.62 33.72 36.06 30.59 23.91
Total Liabilities 2,471,793,103 5,571,392,824 6,676,335,762 7,069,084,337 8,237,922,247 56.71 67.55 70.54 72.46 76.01

Preferred Stock 0 0 0 0 0 - - - - -
Common Stock 443,520,000 683,643,980 752,008,380 752,008,380 752,008,380 10.18 8.29 7.94 7.71 6.94
Paid-In Capital In Excess of Par 0 0 0 0 0 - - - - -
Retained Earnings 1,443,302,522 1,992,546,513 2,036,834,357 1,934,189,987 1,848,185,650 33.11 24.16 21.52 19.83 17.05

Total Stockholders' Equity 1,886,822,522 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030 43.29 32.45 29.46 27.54 23.99
Total Liabs. & Stockhldrs' Equity 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277 100.00 100.00 100.00 100.00 100.00
Reconciliation TA & TL/SE 0 0 0 0 0

Number of Common Shares 44,352,000 68,364,398 75,200,838 75,200,838 75,200,838

End-of-Year Stock Price 10 10 10 10 10

1
 Index Analysis

Nishat (Chunian) Ltd.

Profit and Loss Account
For the year ended 30 June 2004 to 2008
2004 2005 2006 2007 2008 Indexed/Horizonal Analysis (%)
INCOME STATEMENT Rs. Rs. Rs. Rs. Rs. 2004 2005 2006 2007 2008

Sales Revenue 6,516,226,312 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052 100.00 83.70 100.53 117.82 140.24
Less: Cost of Goods Sold 5,547,418,807 4,229,025,833 5,382,250,261 6,720,329,731 8,097,418,309 100.00 76.23 97.02 121.14 145.97

Gross Profits 968,807,505 1,225,205,574 1,168,531,782 957,208,905 1,040,879,743 100.00 126.47 120.62 98.80 107.44
Less: Operating Expenses:
Selling Expense 109,442,914 175,781,628 198,057,039 178,811,548 224,932,148 100.00 160.61 180.97 163.38 205.52
General / Admin. Exp. 58,863,523 65,529,018 82,014,340 70,814,441 71,539,247 100.00 111.32 139.33 120.30 121.53
Other Operating Expense 39,473,677 49,065,522 76,044,679 24,270,370 6,489,259 100.00 124.30 192.65 61.48 16.44
Depreciation Expense 9,928,981 8,940,829 11,770,642 12,684,096 12,436,344 100.00 90.05 118.55 127.75 125.25
Total Operating Expenses 217,709,095 299,316,997 367,886,700 286,580,455 315,396,998 100.00 137.48 168.98 131.63 144.87

Operating Profits 757,231,343 947,262,651 834,845,015 759,302,633 782,001,265 100.00 125.10 110.25 100.27 103.27
Less: Interest Expense 71,540,677 187,898,821 494,044,750 648,145,746 705,821,520 100.00 262.65 690.58 905.98 986.60

Net Profits Before Taxes 685,690,666 759,363,830 340,800,265 111,156,887 76,179,745 100.00 110.74 49.70 16.21 11.11
Less: Taxes 50,614,013 37,542,199 90,000,000 101,000,000 58,000,000 100.00 74.17 177.82 199.55 114.59
Net Profit After Taxes 635,076,653 721,821,631 250,800,265 10,156,887 18,179,745 100.00 113.66 39.49 1.60 2.86

Less: Pref. Stock Divds. 0 0 0 0 0 - - - -

Earnings Available for Common Stockholders 635,076,653 721,821,631 250,800,265 10,156,887 18,179,745 100.00 113.66 39.49 1.60 2.86

Nishat (Chunian) Ltd.

Balance Sheet
As at 30 June 2004 to 2008
2004 2005 2006 2007 2008 Indexed/Horizonal Analysis (%)
BALANCE SHEET Rs. Rs. Rs. Rs. 2008 2004 2005 2006 2007 2008
Current Assets:
Cash 20,402,828 37,366,416 10,940,262 60,670,456 18,245,854 100.00 183.14 53.62 297.36 89.43
Marketable Securities 368,663,386 881,345,408 430,370,082 500,718,014 580,740,751 100.00 239.07 116.74 135.82 157.53
Accounts Receivable 443,334,644 335,844,386 542,877,601 842,112,885 1,311,338,154 100.00 75.75 122.45 189.95 295.79
Inventories 688,744,637 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949 100.00 176.11 228.36 261.33 355.35

Total Current Assets 1,521,145,495 2,467,489,648 2,557,015,331 3,203,403,716 4,357,787,708 100.00 162.21 168.10 210.59 286.48
Gross Fixed Assets (at cost):
Fixed Assets 2,837,084,380 5,778,293,685 6,903,334,952 6,544,226,817 6,259,570,155 100.00 203.67 243.32 230.67 220.63
Investment in subsidiary-at cost 0 0 0 0 211,732,800 100.00 - - -
Long term loans 0 1,179,042 4,099,271 6,933,229 8,129,672 100.00 - - - -
Long term security deposits 385,750 620,942 728,945 718,942 895,942 100.00 160.97 188.97 186.38 232.26
Other (Inc. Fin. Leases) 0 0 0 0 0 100.00 - - - -

Total Gross Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569 100.00 203.71 243.46 230.91 228.38
Less: Accumulated Depreciation 0 0 0 0 100.00 - - - -

Net Fixed Assets 2,837,470,130 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569 100.00 203.71 243.46 230.91 228.38
Other Assets 0 0 0 0 0 100.00 - - - -
Total Assets 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277 100.00 189.22 217.16 223.82 248.66

Current Liabilities: 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Trade and other payables 364,899,902 310,456,901 302,126,632 322,773,709 378,616,664 100.00 85.08 82.80 88.46 103.76
Accrued mark-up 12,123,810 54,204,616 105,126,233 103,767,328 119,822,439 100.00 447.09 867.11 855.90 988.32
Short term borrowings 765,602,724 2,202,981,307 2,274,882,896 2,623,592,501 3,190,716,138 100.00 287.74 297.14 342.68 416.76
Current portion of non-current liab 212,500,002 222,916,667 581,179,605 1,034,823,810 1,957,737,473 100.00 104.90 273.50 486.98 921.29
Other Current Liabilities 0 0 0 0 0 100.00 - - -

Total Current Liabilities 1,355,126,438 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714 100.00 205.93 240.81 301.44 416.71
L / T Debt (Inc. Financial Leases) 1,116,666,665 2,780,833,333 3,413,020,396 2,984,126,989 2,591,029,533 100.00 249.03 305.64 267.24 232.03
Total Liabilities 2,471,793,103 5,571,392,824 6,676,335,762 7,069,084,337 8,237,922,247 100.00 225.40 270.10 285.99 333.28

Preferred Stock 0 0 0 0 0 100.00 - - - -

Common Stock 443,520,000 683,643,980 752,008,380 752,008,380 752,008,380 100.00 154.14 169.55 169.55 169.55
Paid-In Capital In Excess of Par 0 0 0 0 0 100.00 - - - -
Retained Earnings 1,443,302,522 1,992,546,513 2,036,834,357 1,934,189,987 1,848,185,650 100.00 138.05 141.12 134.01 128.05
Total Stockholders' Equity 1,886,822,522 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030 100.00 141.84 147.81 142.37 137.81
Total Liabs. & Stockhldrs' Equity 4,358,615,625 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277 100.00 189.22 217.16 223.82 248.66
Reconciliation TA & TL/SE 0 0 0 0 0

Number of Common Shares 44,352,000 68,364,398 75,200,838 75,200,838 75,200,838

End-of-Year Stock Price 10 10 10 10 10

1
Nishat (Chunian) Ltd.
Ratio Analysis

Liquidity Ratios 2005 2006 2007 2008

Definition:

Current Ratio = Current Assets 0.88 = 2,467,489,648 0.78 = 2,557,015,331 0.78 = 3,203,403,716 0.77 = 4,357,787,708
Current Liabilities 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714
Industry Average 1.18 1.18 1.18 1.18
Variance (0.30) (0.40) (0.40) (0.41)
Quarterly Growth/Decline 0.88 (0.10) 0.00 (0.01)

Quick Ratio = Current Assets – Inventory 0.45 = 2,467,489,648 - 1,212,933,438 0.30 = 2,557,015,331 - 1,572,827,386 0.34 = 3,203,403,716 - 1,799,902,361 0.34 = 4,357,787,708 - 2,447,462,949
Current Liabilities 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714
Industry Average 0.77 0.77 0.77 0.77
Variance (0.32) (0.47) (0.43) (0.43)
Quarterly Growth/Decline (0.15) 0.04 (0.01)

Net Working Capital = Current Assets – Current Liabilities (0.04) = 2,467,489,648 - 2,790,559,491 (0.07) = 2,557,015,331 - 3,263,315,366 (0.09) = 3,203,403,716 - 4,084,957,348 (0.12) = 4,357,787,708 - 5,646,892,714
Ratio Total Assets 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277

Industry Average 2.00 2.00 2.00 2.00

Variance (2.04) (2.07) (2.09) (2.12)
Quarterly Growth/Decline (0.04) (0.02) (0.03)

Current Liabilities to = Current Liabilities 2.30 = 2,790,559,491 2.07 = 3,263,315,366 2.27 = 4,084,957,348 2.31 = 5,646,892,714
Inventory Ratio Inventory 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949

Industry Average 2.00 2.00 2.00 2.00

Variance 0.30 0.07 0.27 0.31
Quarterly Growth/Decline (0.23) 0.19 0.04

Cash Ratio = Cash and Cash Equivalents 0.00 = 15,000 0.00 = 18,000 0.00 = 16,500 0.00 = 14,350
Current Liabilities 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714
Industry Average 2.00 2.00 2.00 2.00
Variance (2.00) (2.00) (2.00) (2.00)
Quarterly Growth/Decline 0.00 (0.00) (0.00)

Operating Ratio = Operating Expenses 0.32 = 299,316,997 0.44 = 367,886,700 0.38 = 286,580,455 0.40 = 315,396,998
Operating Income 947,262,651 834,845,015 759,302,633 782,001,265
Industry Average 2.00 2.00 2.00 2.00
Variance (1.68) (1.56) (1.62) (1.60)
Quarterly Growth/Decline 0.12 (0.06) 0.03

The following calculations can be used for any expense line item or grouping of expense line items:

Advertising Expense = Advertising Expense 0.00 = 0 0.00 = 0 0.00 = 0 0.00 = 0

to Sales Ratio Total Sales 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052

Industry Average 2.00 2.00 2.00 2.00

Variance (2.00) (2.00) (2.00) (2.00)
Quarterly Growth/Decline 0.00 0.00 0.00

Marketing Expense = Marketing Expense 0.03 = 175,781,628 0.03 = 198,057,039 0.02 = 178,811,548 0.02 = 224,932,148
to Sales Ratio Total Sales 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052

Industry Average 2.00 2.00 2.00 2.00

Variance (1.97) (1.97) (1.98) (1.98)
Quarterly Growth/Decline (0.00) (0.01) 0.00

1
Nishat (Chunian) Ltd.
Ratio Analysis

Asset Ratios 2005 2006 2007 2008

Definition:

Inventory Turnover Ratio = Total Sales 8.99 = 5,454,231,407 8.33 = 6,550,782,043 8.53 = 7,677,538,636 7.47 = 9,138,298,052
Inventory 606,466,719 786,413,693 899,951,181 1,223,731,475

Industry Average 6.00 6.00 6.00 6.00

Variance 2.99 2.33 2.53 1.47
Quarter Growth/Decline (0.66) 0.20 (1.06)

Fixed Assets Turnover = Total Sales 0.94 = 5,454,231,407 0.95 = 6,550,782,043 1.17 = 7,677,538,636 1.41 = 9,138,298,052
Ratio Fixed Assets 5,780,093,669 6,908,163,168 6,551,878,988 6,480,328,569

Industry Average 2.00 2.00 2.00 2.00

Variance (1.06) (1.05) (0.83) (0.59)
Quarter Growth/Decline 0.00 0.22 0.24

Total Assets Ratio = Total Sales 0.66 = 5,454,231,407 0.69 = 6,550,782,043 0.79 = 7,677,538,636 0.84 = 9,138,298,052
Total Assets 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Industry Average 0.44 0.44 0.44 0.44
Variance 0.22 0.25 0.35 0.40
Quarter Growth/Decline 0.03 0.09 0.06

Asset to Equity Ratio = Total Assets 4.37 = 8,247,583,317 3.54 = 9,465,178,499 3.50 = 9,755,282,704 4.03 = 10,838,116,277
Owners' Equity 1,886,822,522 2,676,190,493 2,788,842,737 2,686,198,367
Industry Average 2.00 2.00 2.00 2.00
Variance 2.37 1.54 1.50 2.03
Quarter Growth/Decline (0.83) (0.04) 0.54

1
Nishat (Chunian) Ltd.
Ratio Analysis

Profitability Ratios 2005 2006 2007 2008

Definition:

Return on Assets Ratio = Net Income 0.09 = 721,821,631 0.03 = 250,800,265 0.00 = 10,156,887 0.00 = 18,179,745
Total Assets 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Industry Average 0.44 0.44 0.44 0.44
Variance (0.35) (0.41) (0.44) (0.44)
Quarter Growth/Decline (0.06) (0.03) 0.00

Return on Equity Ratio = Net Income 0.27 = 721,821,631 0.09 = 250,800,265 0.00 = 10,156,887 0.01 = 18,179,745
Owners' Equity 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030
Industry Average 2.00 2.00 2.00 2.00
Variance (1.73) (1.91) (2.00) (1.99)
Quarter Growth/Decline (0.18) (0.09) 0.00

Profit Margin Ratio = Net Income 0.13 = 721,821,631 0.04 = 250,800,265 0.00 = 10,156,887 0.00 = 18,179,745
Total Sales 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052
Industry Average 2.00 2.00 2.00 2.00
Variance (1.87) (1.96) (2.00) (2.00)
Quarter Growth/Decline (0.09) (0.04) 0.00

Basic Earnings = Earnings Before Interest and Taxes 0.11 = 947,262,651 0.09 = 834,845,015 0.08 = 759,302,633 0.07 = 782,001,265
Power Ratio Total Assets 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277

Industry Average 2.00 2.00 2.00 2.00

Variance (1.89) (1.91) (1.92) (1.93)
Quarter Growth/Decline (0.03) (0.01) (0.01)

Earnings per Share Ratio = Net Income 10.56 = 721,821,631 3.34 = 250,800,265 0.14 = 10,156,887 0.24 = 18,179,745
Number of Common Shares 68,364,398 75,200,838 75,200,838 75,200,838
Industry Average 2.00 2.00 2.00 2.00
Variance 8.56 1.34 (1.86) (1.76)
Quarter Growth/Decline (7.22) (3.20) 0.11

1
Nishat (Chunian) Ltd.
Ratio Analysis

Debt Ratios 2005 2006 2007 2008

Definition:

Total Debt Ratio = Total Liabilities 0.68 = 5,571,392,824 0.71 = 6,676,335,762 0.72 = 7,069,084,337 0.76 = 8,237,922,247
Total Assets 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Industry Average 0.62 0.62 0.62 0.62
Variance 0.06 0.09 0.10 0.14
Quarter Growth/Decline 0.03 0.02 0.04

Interest Coverage Ratio = Earnings Before Interest and Taxes 5.04 = 947,262,651 1.69 = 834,845,015 1.17 = 759,302,633 1.11 = 782,001,265
Interest Expense 187,898,821 494,044,750 648,145,746 705,821,520

Industry Average 2.71 2.71 2.71 2.71

Variance 2.33 (1.02) (1.54) (1.60)
Quarter Growth/Decline (3.35) (0.52) (0.06)

Debt/Equity Ratio = Total Liabilities 2.08 = 5,571,392,824 2.39 = 6,676,335,762 2.63 = 7,069,084,337 3.17 = 8,237,922,247
Owners' Equity 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030
Industry Average 0.92 0.92 0.92 0.92
Variance 1.16 1.47 1.71 2.25
Quarter Growth/Decline 0.31 0.24 0.54

1
Nishat (Chunian) Ltd.
Ratio Analysis

Market Ratios 2005 2006 2007 2008

Definition:

Earnings per Share = Net Income 10.56 = 721,821,631 3.34 = 250,800,265.00 0.14 = 10,156,887 0.24 = 18,179,745.00
(EPS) Ratio Number of Common Shares 68,364,398 75,200,838 75,200,838 75,200,838

Industry Average 3.90 3.90 3.90 3.90

Variance 6.66 (0.56) (3.76) (3.66)
Quarter Growth/Decline (7.22) (3.20) 0.11

Price to Earnings Ratio = Market Price per Share 3.16 = 33.36 11.99 = 40.00 325.77 = 44.00 157.19 = 38.00
Earnings per Share 10.56 3.34 0.14 0.24
Industry Average 5.77 5.77 5.77 5.77
Variance (2.61) 6.22 320.00 151.42
Quarter Growth/Decline 8.83 313.78 (168.59)

Price to Cash Flow = Market Price per Share 3.34 = 33.36 2.00 = 40.00 1.33 = 44.00 1.36 = 38.00
Ratio Cash Flow per Share 10.00 20.00 33.00 28.00

Industry Average 2.00 2.00 2.00 2.00

Variance 1.34 0.00 (0.67) (0.64)
Quarter Growth/Decline (1.34) (0.67) 0.02

Payout Ratio = Dividends Paid 0.12 = 85,370,788.00 0.54 = 135,368,475.00 11.08 = 112,526,844.00 6.14 = 111,550,772.00
Net Income 721,821,631.00 250,800,265.00 10,156,887.00 18,179,745.00
Industry Average 2.00 2.00 2.00 2.00
Variance (1.88) (1.46) 9.08 4.14
Quarter Growth/Decline 0.42 10.54 (4.94)

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Profitability Ratios
Earnings Per Share (EPS) Ratio 2005 2006 2007 2008
Net income Rs. 759,363,830 250,800,265 10,156,887 18,179,745
Shares of common stock outstanding 68,364,398 75,200,838 75,200,838 75,200,838
EPS 11.11 3.34 0.14 0.24

Earnings Per Share (EPS)

Depending on your financial objectives, you might consider investing in a company to obtain a steady
return on your investment in the form of regular dividend payments, or to obtain a profit by owning the
stock as the market value of its shares increases. These two objectives might both be met, but in practice
they often are not. Companies frequently face a choice of distributing income in the form of dividends, or
retaining that income to invest in research, new products, and expanded operations. The hope, of course,
is that the retention of income to invest in the company will subsequently increase its income, thus
making the company more profitable and increasing the market value of its stock.

In either case, Earnings Per Share (EPS) is an important measure of the company's income. Its basic
formula is:

EPS = Income Available for Common Stock / Shares of Common Stock Outstanding

EPS is usually a poor candidate for vertical analysis, because different companies always have different
numbers of shares of stock outstanding. It may be a good candidate for horizontal analysis, if you have
access both to information about the company's income and shares outstanding. With both these items,
you can control for major fluctuations over time in shares outstanding. This sort of control is important: it is
not unusual for a company to purchase its own stock on the open market to reduce the number of
outstanding shares. So doing increases the value of the EPS ratio, perhaps making the stock appear a
more attractive investment.

Note that the EPS can decline steadily throughout the year. Because, the number of shares outstanding
is constant throughout the year, the EPS changes are due solely to changes in net income.

Many companies issue at least two different kinds of stock: common and preferred. Preferred stock is
issued under different conditions than common stock. Preferred stock is often callable at the company's
discretion, it pays dividends at a different (usually, higher) rate per share, it might not carry voting
privileges, and often has a higher priority than common stock as to the distribution of liquidated assets if
the company goes out of business.

Calculating EPS for a company that has issued preferred stock introduces a slight complication. Because
the company pays dividends on preferred stock before any distribution to shareholders of common stock,
it is necessary to subtract these dividends from net income:

EPS (Net Income - Preferred Dividends) / Shares of Common Stock Outstanding

1
Profitability Ratios
Gross Profit Margin 2005 2006 2007 2008
Sales Rs. 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052
Cost of sales Rs. 4,229,025,833 5,382,250,261 6,720,329,731 8,097,418,309
Gross profit margin 22.5% 17.8% 12.5% 11.4%

Gross Profit Margin

The gross profit margin is a basic ratio that measures the added value that the market places on a company's
non-manufacturing activities. Its formula is:

Gross profit margin = (Sales - Cost of Goods Sold) / Sales

The cost of goods sold is, clearly, an important component of the gross profit margin. It is usually calculated as
the sum of the cost of materials the company purchases plus any labor involved in the manufacture of finished
goods, plus associated overhead.

The gross profit margin depends heavily on the type of business in which a company is engaged. A service
business, such as a financial services institution or a laundry, typically has little or no cost of goods sold. A
manufacturing, wholesaling, or retailing company typically has a large cost of goods sold, with a gross profit
margin that varies from 20 percent to 40 percent.

The gross profit margin measures the amount that customers are willing to pay for a company's product, over
and above the company's cost for that product. As mentioned previously, this is the value that the company adds
to that of the products it obtains from its suppliers. This margin can depend on the attractiveness of additional
services, such as warranties, that the company provides. The gross profit margin also depends heavily on the
ability of the sales force to persuade its customers of the value added by the company.

This added value is, of course, created by other costs such as operating expenses. In turn, these costs must be
met largely by the gross profit on sales. If customers do not place sufficient value on whatever the company adds
to its products, there will not be enough gross profit to pay for the associated costs. Therefore, the calculation of
the gross profit margin helps to highlight the effectiveness of the company's sales strategies and sales
management.

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Profitability Ratios
Net Profit Margin 2005 2006 2007 2008
Net Income Rs. 721,821,631 250,800,265 10,156,887 18,179,745
Sales Rs. 5,454,231,407 6,550,782,043 7,677,538,636 9,138,298,052
Net profit margin 13.2% 3.8% 0.1% 0.2%

Net Profit Margin

The net profit margin narrows the focus on profitability, and highlights not just the company's sales efforts, but
also its ability to keep operating costs down, relative to sales. The formula generally used to determine the net
profit margin is:

Net Profit Margin = Earnings After Taxes / Sales

When net profit margin falls dramatically from the first to the fourth quarters, a principal culprit is cost of sales.

Another place to look when you see a discrepancy between gross profit margin and net profit margin is operating
expenses. When the two margins covary closely, it suggests that management is doing a good job of reducing
expenses when sales fall, and increasing expenses when necessary to support production and sales in better
times.

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Profitability Ratios
Return on Assets 2005 2006 2007 2008
EBITDA Rs. 947,262,651 834,845,015 759,302,633 782,001,265
Total assets Rs. 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Return on assets 11.5% 8.8% 7.8% 7.2%

Return on Assets
One of management's most important responsibilities is to bring about a profit by effective use of the resources
it has at hand. One ratio that speaks to this question is return on assets. There are several ways to measure
this return; one useful method is:

Return on Assets = (Gross Profit - Operating Expense) / Total Assets

This formula will return the percentage earnings for a company in terms of its total assets. The better the job
that management does in managing its assets-the resources available to it-to bring about profits, the greater
this percentage will be.

It's normal to calculate the return on total assets on an annual basis, rather than on a quarterly basis.

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Profitability Ratios
Return on Equity 2005 2006 2007 2008
Earnings after taxes Rs. 721,821,631 250,800,265 10,156,887 18,179,745
Stockholder's equity Rs. 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030
Return on equity 27.0% 9.0% 0.4% 0.7%

Return on Equity
Another related profitability measure to Return on Assets is the Return on Equity. Again, there are several ways
to calculate this ratio; here, it is measured according to this formula:

Return on Equity = Net Income / Stockholder's Equity

You can compare return on equity with return on assets to infer how a company obtains the funds used to
acquire assets.

The principal difference between the formula for return on assets and for return on equity is the use of
equity rather than total assets in the denominator, and it is here that the technique of comparing ratios
comes into play. By examining the difference between Return on Assets and Return on Equity, you can
largely determine how the company is funding its operations.

Assets are acquired through two major sources: creditors (through borrowing) and stockholders (through
retained earnings and capital contributions). Collectively, the retained earnings and capital contributions
constitute the company's equity. When the value of the company's assets exceeds the value of its equity, you
can expect that some form of financial leverage makes up the difference: i.e., debt financing.

Therefore, if the Return on Equity ratio is much larger than the Return on Assets ratio, you can infer that the
company has funded some portion of its operations through borrowing.

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Liquidity Ratios
Current ratio 2005 2006 2007 2008
Current assets Rs. 2,467,489,648 2,557,015,331 3,203,403,716 4,357,787,708
Current liabilities Rs. 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714
Current ratio 0.88 0.78 0.78 0.77

Current Ratio
The current ratio compares a company's current assets (those that can be converted to cash during the current
accounting period) to its current liabilities (those liabilities coming due during the same period). The usual formula
is:

Current Ratio = Current Assets / Current Liabilities

The current ratio measures the company's ability to repay the principal amounts of its liabilities.

The current ratio is closely related to the concept of working capital. Working capital is the difference between
current assets and current liabilities.

Is a high current ratio good or bad? Certainly, from the creditor's standpoint, a high current ratio means that the
company is well-placed to pay back its loans. Consider, though, the nature of the current assets: they consist
mainly of cash and cash equivalents. Funds invested in these types of assets do not contribute strongly and
actively to the creation of income. Therefore, from the standpoint of stockholders and management, a current
ratio that is very high means that the company's assets are not being used to best advantage.

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Liquidity Ratios
Quick ratio 2005 2006 2007 2008
Current assets Rs. 2,467,489,648 2,557,015,331 3,203,403,716 4,357,787,708
Inventory Rs. 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949
Current liabilities Rs. 2,790,559,491 3,263,315,366 4,084,957,348 5,646,892,714
Quick ratio 0.45 0.30 0.3 0.34

Quick Ratio
The quick ratio is a variant of the current ratio. It takes into account the fact that inventory, while it is a current
asset, is not as liquid as cash or accounts receivable. Cash is completely liquid; accounts receivable can
normally be converted to cash fairly quickly, by pressing for collection from the customer. But inventory cannot be
converted to cash except by selling it. The quick ratio determines the relationship between quickly accessible
current assets and current liabilities:

Quick Ratio = (Current Assets - Inventory) / Current Liabilities

The quick ratio shows whether a company can meet its liabilities from quickly-accessible assets.

In practice, a quick ratio of 1.0 is normally considered adequate, with this caveat: the credit periods that the
company offers its customers and those granted to the company by its creditor must be roughly equal. If
revenues will stay in accounts receivable for as long as 90 days, but accounts payable are due within 30 days, a
quick ratio of 1.0 will mean that accounts receivable cannot be converted to cash quickly enough to meet
accounts payable.

It is possible for a company to manipulate the values of its current and quick ratios by taking certain actions
toward the end of an accounting period such as a fiscal year. It might wait until the start of the next period to
make purchases to its inventory, for example. Or, if its business is seasonal, it might choose a fiscal year that
ends after its busy season, when inventories are usually low. As a potential creditor, you might want to examine
the company’s current and quick ratios on, for example, a quarterly basis.

Both a current and a quick ratio can also mislead you if the inventory figure does not represent the current
replacement cost of the materials in inventory. There are various methods of valuing inventory. The LIFO
method, in particular, can result in an inventory valuation that is much different from the inventory's current
replacement value; this is because it assumes that the most recently acquired inventory is also the most recently
sold.

If your actual costs to purchase materials are falling, for example, the LIFO method could result in an over-
valuation of the existing inventory. This would tend to inflate the value of the current ratio, and to underestimate
the value of the quick ratio if you calculate it by subtracting inventory from current assets, rather than summing
cash and cash equivalents.

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Activity Ratios
Inventory Turnover Ratio 2005 2006 2007 2008
Cost of Goods Sold Rs. 4,229,025,833 5,382,250,261 6,720,329,731 8,097,418,309
Inventory Rs. 1,212,933,438 1,572,827,386 1,799,902,361 2,447,462,949
Inventory Turnover 3.5 3.4 3.7 3.3

Inventory Turnover Ratio

No company wants to have too large an inventory (the sales force excepted: salespeople prefer to be able to tell
their customers that they can obtain their purchase this afternoon). Goods that remain in inventory too long tie up
the company's assets in idle stock, often incur carrying charges for the storage of the goods, and can become
obsolete while awaiting sale.

Just-in-Time inventory procedures attempt to ensure that the company obtains its inventory no sooner than
absolutely required in order to support its sales efforts. That is, of course, an unrealistic ideal, but by calculating
the inventory turnover rate you can estimate how well a company is approaching the ideal.

The formula for the Inventory Turnover Ratio is:

Inventory Turnover = Cost of Goods Sold / Average Inventory

where the Average Inventory figure refers to the value of the inventory on any given day during the period during
which the Cost of Goods Sold is calculated. The higher an inventory turnover rate, the more closely a company
conforms to just-in-time procedures.

The figures for cost of goods sold and average inventory are taken directly from the Income Statement's cost of
sales and the Balance Sheet's inventory levels. In a situation where you know only the beginning and ending
inventory-for example, at the beginning and the ending of a period-you would use the average of the two levels:
hence the term "average inventory."

An acceptable inventory turnover rate can be determined only by knowledge of a company's business sector. If
you are in the business of wholesaling fresh produce, for example, you would probably require an annual
turnover rate in the 50s: a much lower rate would mean that you were losing too much inventory to spoilage. But
if you sell computing equipment, you could probably afford an annual turnover rate of around 3 or 4, because
hardware does not spoil, nor does it become technologically obsolete more frequently than every few months.

1
Leverage Ratios
Debt ratio 2005 2006 2007 2008
Total Liabilities Rs. 5,571,392,824 6,676,335,762 7,069,084,337 8,237,922,247
Total Assets Rs. 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Debt ratio 67.6% 70.5% 72.5% 76.0%

Debt Ratio
The debt ratio is defined by this formula:

Debt ratio = Total debt / Total assets

It is a healthy sign when a company's debt ratio is falls, although both stockholders and potential creditors would
prefer to see the rate of decline in the debt ratio more closely match the decline in return on assets. As the return
on assets falls, the net income available to make payments on debt also falls. This company should probably take
action to retire some of its short-term debt, and the current portion of its long-term debt, as soon as possible.

1
Leverage Ratios
Equity ratio 2005 2006 2007 2008
Total Equity Rs. 2,676,190,493 2,788,842,737 2,686,198,367 2,600,194,030
Total Assets Rs. 8,247,583,317 9,465,178,499 9,755,282,704 10,838,116,277
Equity ratio 32.4% 29.5% 27.5% 24.0%

Equity Ratio
The equity ratio is the opposite of the debt ratio. It is that portion of the company's assets financed by stockholders:

Equity Ratio = Total Equity / Total assets

It is usually easier to acquire assets through debt than to acquire them through equity. There are certain obvious
considerations: for example, you might need to acquire investment capital from many investors; whereas you might
be able to borrow the required funds from just one creditor. Less obvious is the issue of priority.

By law, if a firm ceases operations, its creditors have the first claim on its assets to help repay the borrowed funds.
Therefore, an investor's risk is somewhat higher than that of a creditor, and the effect is that stockholders tend to
demand a greater return on their investment than a creditor does on its loan. The stockholder's demand for a return
can take the form of dividend requirements or return on assets, each of which tend to increase the market value of
their stock.

But there is no "always" in financial planning. Because investors usually require a higher return on their investment
than do creditors, it might seem that debt is the preferred method of raising funds to acquire assets. Potential
creditors, though, look at ratios such as the return on assets and the debt ratio. A high debt ratio (or, conversely, a
low equity ratio) means that existing creditors have supplied a large portion of the company's assets, and that there
is relatively little stockholder's equity to help absorb the risk.

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Leverage Ratios
Times Interest Earned Ratio 2005 2006 2007 2008
EBIT Rs. 947,262,651 834,845,015 759,302,633 782,001,265
Interest charges Rs. 187,898,821 494,044,750 648,145,746 705,821,520
Times interest earned 5.0 1.7 1.2 1.1

Times interest Earned Ratio

One measure frequently used by creditors to evaluate the risk involved in loaning money to a firm is the
Times Interest Earned ratio. This is the number of times in a given period that a company earns enough
income to cover its interest payments. A ratio of 5, for example, would mean that the amount of interest
payments is earned 5 times over during that period.

The usual formula is:

Times Interest Earned = *EBIT / Total Interest Payments

*EBIT stands for Earnings Before Interest and Taxes.

The Times Interest Earned ratio, in reality, seldom exceeds 10. A value of 44.1 is very high, although
certainly not unheard of during a particularly good quarter. A value of 5.1 would usually be considered
strong but within the normal range.

Notice that this is a measure of how deeply interest charges cut into a company's income. A ratio of 1, for
example, would mean that the company earns enough income (after covering such costs as operating
expenses and costs of sales) to cover only its interest charges. There would be no income remaining to pay
income taxes (of course, in this case it's likely that there would be no income tax liability), to meet dividend
requirements or to retain earnings for future investments.