THE ANALYSIS OF FINANCIAL REPORTS AUTOMOBILE ASSEMBLER

INDUSTRY IN PAKISTAN

Credit Assignment
By
KANWAL LOHANO
MUHAMMAD AWAIS
MUHAMMAD SHAHZAIB
USAMA NASEER

Business Administration (Financial Management)

Under the supervision of

SIR MUHIBULLAH NOHRIO

SBBU Business Administration

SHAHEED BENAZIR BHUTTO UNIVERSITY, SANGHAR CAMPUS

Date of the submission

07– NOV - 2019

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Contents
Reason for selection of the industry: ....................................................................................................... 4
Objectives of Financial Statement Analysis .............................................................................................. 5
Statutory requirements ........................................................................................................................... 5
RULES OF IFRS APPLICABLE .................................................................................................................. 6
How are Financials prepared in the given industry, their structure & components? ............................. 7
Components of Financial statement .................................................................................................... 8
Comparison within the industry, comparing the structure and components ............................................ 8
Detailed introduction of Four Chosen companies .................................................................................. 13
Al Ghazi Tractors limited. ................................................................................................................... 13
Atlas Honda private Limited ............................................................................................................... 17
Pak Suzuki Motor company Limited ................................................................................................... 20
HinoPak Motors limited ..................................................................................................................... 23
Auditor’s Reports .................................................................................................................................. 25
Auditor’s Report Al-Ghazi Tractors limited ......................................................................................... 25
Auditor’s Report Atlas Honda limited ................................................................................................. 26
Auditor’s Report Pak Suzuki Motors limited ....................................................................................... 27
Auditor’s Report HinoPak Motors Limited .......................................................................................... 28
Horizontal Analysis ................................................................................................................................ 29
Horizontal Analysis of Al-Ghazi Tractor’s Balance Sheet (s) ................................................................ 29
Horizontal Analysis of Al-Ghazi Tractor’s Profit & Loss Statement (s) .................................................. 30
Horizontal Analysis of Atlas Honda’s Balance Sheet (s) ....................................................................... 32
Horizontal Analysis of Atlas Honda’s Profit & loss Statement(s) ......................................................... 34
Horizontal Analysis of Pak Suzuki Motor’s Balance Sheet(s) ............................................................... 35
Horizontal Analysis of Pak Suzuki Motor’s Profit & Loss Statement(s) ................................................ 37
Horizontal Analysis of Hino Pak Motors Limited’s Balance Sheet(s) .................................................... 38
Horizontal Analysis of HinoPak Motors Limited’s Profit & Loss Statement(s) ...................................... 39
Vertical Analysis .................................................................................................................................... 40
Vertical Analysis of Al-Ghazi Tractors Limited’s Balance Sheet(s) ........................................................ 40
Vertical Analysis of Al-Ghazi Tractors Limited’s Profit & Loss Statement(s) ......................................... 41
Vertical Analysis of Atlas Honda’s Balance Sheet(s) ............................................................................ 43
Vertical Analysis of Atlas Honda’s Profit & Loss Statement(s) ............................................................. 45
Vertical Analysis of Pak Suzuki Motors’ Balance Sheet(s).................................................................... 46

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 Vertical Analysis of Pak Suzuki Motors’ Income Statement(s) ............................................................. 48
Vertical Analysis of Hino Pak Motors’ Balance Sheet(s) ...................................................................... 49
Vertical Analysis of HinoPak Motors’ Profit & Loss Statement ............................................................ 50
Comments on Horizontal and Vertical Analysis of Four selected Companies .......................................... 50
Al-Ghazi Tractors’ Profit and Loss Statement ..................................................................................... 50
Al-Ghazi Tractor’s Balance Sheet........................................................................................................ 51
Atlas Honda’s Income Statement ....................................................................................................... 52
Atlas Honda Balance Sheet ................................................................................................................ 52
Pak Suzuki Motors’ Income Statement ............................................................................................... 53
Pak Suzuki Motors Balance Sheet ...................................................................................................... 53
Hino Pak Motors Profit & Loss Statement .......................................................................................... 53
Hino Pak Motors Balance Sheet ......................................................................................................... 54
Ratio Analysis ........................................................................................................................................ 54
Conclusive Summary ............................................................................................................................. 55

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Reason for selection of the industry:
Automobile industry is most important & valuable industry in the Pak economy. Its role in
transportation and industrial purpose has increased. The automobile sector plays pivotal role in
the development of a country in terms of revenue generation, foreign exchange, employment
creation, and technology transfer. The share of Auto Sector to GDP is around $ 3.6 Billion. The
automobile sector of Pakistan was deregulated in the early 90s after which major foreign
automakers, through Joint ventures with local partners, made
investments in Pakistan. Currently the major automakers in Pakistan include:
1. Pak Suzuki Motor Company Ltd.
2. Indus Motor Company Ltd.
3. Honda Atlas Cars (Pakistan) Ltd.
4. Dewan Farooque Motors Ltd.
5. Sigma Motors (Pvt) Ltd.
6. Hinopak Motors Ltd.
7. Ghandhara Nissan Ltd
Employing workforce of 1.8 million people. There are 3200 automobile manufacturing and
assembling plants in Pakistan. There is an investment of 92 Billion (USD 870 Million as of 2017)
in automotive industry. It helps in production of 1.8 million motorcycles and 200000 vehicles
annually. Automobile sector employs 3.5 million people and create exchange of 50 billion or
USD 470 (as of 2017). German company automobile Volkswagen is planning to invest US$135
million. & 15 new companies to invest US $1169 in Pakistan. It indicates that auto companies are
profitable in Pakistan. In November 2018 auto sector, which was in its growth phase hit a
roadblock as sales dropped significantly. Overall, automobile sales dipped 17% year-on-year to
17,442 units, whereas sales dropped 30% to 17,442 units on a month-on-month basis against
24,850 units in October. In terms of earnings, profit recorded by the company (Toyota) witnessed
a decline of 3% in the quarter ended September 2018 compared to the previous year. However, the
company had witnessed a surge of 19% for the same period in 2017. That is why, it has stopped
manufacturing for a short time. (WIKI)

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Industry forecast suggests. Auto industry had forecasted to increase its sales to 0.3 million by 2021
and half a million units by 2022; however, changes in the policy, new taxes with increasing input
cost and unpredictable surge in rupee-dollar parity resulted in jacking up car prices, which
ultimately cut down sales. It is based on these factors pointing to 40 percent cut in present level of
manufacturing that industry representatives on condition of anonymity point to 100,000 to 150,000
job losses within a year Main reason to select this industry is to analyze different type of indicators
(including, profits/loss, earning per share, tax payment, dividend payout ratio on the basis of
selected companies.

Objectives of Financial Statement Analysis

• To understand financial reporting and to analysis financial statement.
• To learn practically and critically analyze financial statements and comment on it.
• To evaluate the financial performance & position of company
• Financial statement analysis helps in decision making to shareholders whether to invest in
company or not to banks whether to grant big loans to company or not,
• To evaluates the going concern assumptions through auditor’s report.
• To evaluates management performance and their controls effectiveness. (Not Decided).

Statutory requirements
We analyzed the financial statements of Four automobiles assembler companies and found that
statuary requirements are same for all insurance companies. We analyzed the reports of:

1. Pak Suzuki Motors

2. Atlas Honda
3. Hino Pak
4. Al-Ghazi Tractors/any other
Requirements are:
• There financials are prepared in accordance with the rules defined by SECP and Companies
Ordinance 1984 under section 230-51 and subsections. Copy attached.
• The industry has complied with all applicable provisions, filed all returns / forms and
furnished all relevant particulars / information as required under the Companies Act 2017,
Companies Ordinance 1984 (now repealed) and allied rules, the listing requirements and

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 any other relevant laws, rules and regulations prescribed by the Securities and Exchange
Commission of Pakistan (SECP).
• These statements of automobile assembler companies are being presented to comply with
the Code of Corporate Governance.
• The Code Contained in the listing regulations of the Karachi, Lahore and Islamabad Stock
Exchange for the Purpose of establishing a framework of good governance by a listed
Company and additional Frameworks by a listed Automobile assembler company, whereby
a listed company is managed in compliance with the best practice of corporate governance.
• Most automobile companies have advisory committees of A.F. Ferguson & Co., Chartered
Accountants as external auditors. The statutory auditors of the Company have Confirmed
that they have been given a satisfactory Rating under the Quality Control Review Program
of the Institute of Chartered Accountants of Pakistan,

RULES OF IFRS APPLICABLE

Domestic companies whose securities trade in a public market, financial institutions, public
utilities, and large-sized companies are required to use IFRS Standards as adopted in Pakistan.
Some important Standards have not been adopted for companies asserting compliance with IFRS
Standards as adopted in Pakistan. And Pakistan has not applied IFRS 1 First-time Adoption of
IFRS.

Standards, interpretations and amendments to published approved

accounting standards that are not yet effective but relevant

Following new amendment to published standard is effective for accounting periods beginning on
or after January 1, 2017 and is relevant for Company’s financial statements.
SECP has made IFRS 9 accounting standard mandatory for all listed companies for reporting
periods ending on or after June 30, 2019.
(IAS-39) “Financial Instruments: Recognition and Measurement” in respect of valuation of
'available-for-sale investments'.
IFRS 2, 7, 9, 10, 13, 14 and IAS 1, 7, 18, 19, 27, 28, & 32, 33 are mandatory for preparing
financials.
IFRS-2 Share-based Payment

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IFRS 7 Financial Instruments: Disclosures
IFRS 9 Financial Instruments
IFRS 10 Consolidated Financial Statements
IFRS 13 Fair Value Measurement
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from contracts with customers
IFRS 16 Leases
IAS 1 Presentation of Financial Statements
IAS 7 Statement of Cash Flows
IAS 12 Income tax
IAS 16 Property, plant and equipment and intangible assets
IAS 18 Revenue (From Sale of Goods, The rendering of services, interest)
IAS 19 Employee Benefits (IAS 19 prescribes the accounting for all types of
employee benefits except share-based payment, to which IFRS 2
applies).
IAS 27 Separate Financial Statements
IAS 32 Financial Instruments: Presentation
IAS 33 Earnings per Share
IAS 34 Interim Financial Reporting
IAS 38
IAS 39 Financial Instruments: Recognition and Measurement (Replaced with
IFRS 9).

How are Financials prepared in the given industry, their structure & components?

The accounting and reporting standards applicable in Pakistan comprise of International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as
notified under the Companies Act, 2017 and provisions of and directives issued under the

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Companies Act, 2017. Where provisions of and directives issued under the Companies Act, 2017
differ from the IFRS, the provisions of and directives issued under the Companies Act, 2017 have
been followed.

The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of
applying the Company’s accounting policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed in note 5.

Components of Financial statement

• Auditors’ Report to the Members
• Balance Sheet
• Profit and Loss Account
• Cashflow statement
• Statement of value addition & its distribution
• Statement of change in equity
• Statement of comprehensive income
• Statement of Expenses
• Statement of Investment Income
• Notes to the Financial Statements

Comparison within the industry, comparing the structure and components

Report 2018 Rupee (.000)

No Components Al Ghazi Atlas Honda Pak Hino Pak
Tractors Suzuki Motors
Motors
1. Company Management, BODs, BODs, Audit Bankers,
information Auditors, Management, committee, Auditors, legal
legal Advisor, Auditors HR, Legal advisor.
Tax Advisor, committee, HR

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 Bankers, & Advisor,
Plants & remuneration, Bankers.
Marketing Bankers &
Centers. Factories,
Brach office,
Customer care
center &
Showrooms.
2. Organizational Published Published N/A N/A
Structure
3. Notice of Annual Annual General Annual Annual General
Meeting General Meeting General Meeting
Meetings Meeting
4. Directors’ Profit after Profit After Tax Profit After Profit after tax
Report to the tax Rs. Rs. 4,663,635 Tax Rs. 1149 million
Members 2,452,514 EPS Rs. 45.10 Rs. 1,298,108 EPS Rs. 92.69
EPS Rs. 15.77
Rs 42.32
5. CSR National Environment, Education, Donation to
cause Education & Health & hospital &
donation, training, health, environment- support centers,
Investment in paid -al Care. Merit Based
education, internships, Scholarships.
development SOS training,
of local Shab-Hunar,
talent, Communal
community initiative,
investment, & Donation,
rural Women On
development Wheel, Women
program, in business and

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 leadership,
Paint Work at
Waghah
Border,
Promoting
Sports.
6. Horizontal Amount Amount Amount Amount
Analysis NP 10.17% NP 24.3% NP 66.1% NP 2.59%
Sale 13.9% Sale 20.1% Sale 17.7% Sale 18.41%
Gross P. Gross P. 22.3% Gross P. 27% Gross P. 0.5%
24.08%
7. Statement of Net sale Net sale Net sale Net sale 98.9%
Value Addition 100% 99.03% 100% Other income
Other income Other income 1.1%
0.3% 0.97%
Cherty 1%
Employees
remuneration
3%
8. Pattern of No of No of No of No of
Shareholdings shareholders. shareholders. shareholders shareholders
2602, 1544 6,485 1505
Total share: Total share: Total Shares Total shares
57,964,201 103,406,613 82,299,851 held 12,400,560
9. Statement of Follow code Follow code of Follow code Follow code of
Compliance of corporate corporate of corporate corporate
governance governance governance governance
10. Auditors’ Report Unqualified Unqualified unqualified Unqualified
to the Members

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11. Balance Sheet T. Assets T. Assets T. Assets T. Assets
6,785,457 31,827,339 61,509,849 14469.53
Equity: Equity: Equity: million
1,369,397 16,000,721 29,232,865 Equity:
Liabilities Liabilities Liabilities & Liabilities
5,415,060 15,826,618 32,276,984 14469.53
million
12. Profit and Loss Sale Sale Sale Sale 26,615
Account 19,372,522 77,478,845 119,853,898 million
Cost of sale Cost of sale Cost of sale Cost of sale
14,707,038 69,188,101 112,809,033 23,580 million
Net profit Net profit Net profit Net profit
2,452,514 4,663,635 1,298,108 1149 million
13. Cash Flow Cash and Cash and cash Cash and Cash and cash
Statement cash equ: at equ: at end of cash equ: at equ: at end of
end of year year end of year year
3,679,296 (9,981,615) 9,794,334 1967 million
14. Statement of Balance at Balance at end Balance at
Changes in end 289,821 1,034,066 end
Equity 27,934,757
15. Notes to the Follow Follow Follow Follow
Financial accounting accounting accounting accounting
Statements standards as standards as standards as standards as
applicable in applicable in applicable in applicable in
Pakistan. Pakistan. Pakistan. Pakistan.
16. Proxy Form ✓ ✓ ✓ ✓
17. Products NH- Motor cycle ALTO Kazay (Hino
DABUNG Model CB-150 WAGONR JO8E-UF)
(85Hp). F CULTUS
Motor Cycle VXL/VXR
Model CD-70

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NH-70-56 Motor Cycle SWIFT & Hino Starliner -
4WD (85Hp) Model CD-70 VITARA Hino JO8E-UH
Dream CIAZ (EURO-II).
NH- Motor Cycle
644(75Hp) Model Prider Hino Superliner
Motor Cycle -Hino JO8E-UH
NH-Ghazi Model CG-125 (EURO-II). Etc.
(65Hp) Motor Cycle
Model Deluxe
NH-580 Genuine parts
(55Hp)

New Holland
TD-95

Vester NH-
TC5.30

New Holland
BC 5060

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Detailed introduction of Four Chosen companies
Al Ghazi Tractors limited.

Incorporated in June 1983, privatized in December 1991, Al-Ghazi Tractors Limited, the
subsidiary company of Al-Futtaim group of Dubai, is a story of rollicking success. With consistent
corporate achievements, the company is recognized for corporate excellence and “Best Corporate
Performance”. With its head office in Karachi, the AGTL plant at Dera Ghazi Khan, some 700
kms away from Karachi, manufactures New Holland (Fiat) tractors in technical collaboration with
CNHI - Case New Holland, the Number One manufacturer of agricultural tractors in the world.
The AGTL plant, an icon of engineering dynamics operates on high efficiency. With Quality
Control and Quality Assurance, quality improvement systems exist at every level. One of our
mission statements reads: “Our most enduring competitive edge is the quality of tractors”. Robust
and sturdy, the company’s products of 55, 65, 75 and 85 HP, carry a local content of 92% - the
highest in the country. Monitoring the efficiency and effectiveness of each production process is
the key to our success. Effort is made to make each process efficient to drive down the cost per
tractor. Competent material and plant utilization have resulted in the company’s core strategy of
being the lowest cost producer of quality products. AGTL’s produced tractors in all hp ranges are

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therefore the cheapest quality tractors in the whole world. Documentation of the entire
manufacturing process and improved quality measurement being our priority.
Al-Ghazi was the first automobile company in Pakistan to earn the ISO-9000 certification. With
yearly audits the company is now registered for ISO-9001:2015 up to September 15, 2021. AGTL
products being a household name with the farmer community, our product profile reflects
consumer needs. Price and convenience being the customer’s priority the company’s objectives
include: focus on all target markets and focus on customers. As many dealers in every nook and
cranny of the country, and over 3000 mechanical workshops dot the country to work as customer
care centers. AGTL name is synonymous with stability, brand strength, customer loyalty and
profitability. The Top Stock of the automobile industry of Pakistan with market capitalization of
over hundred times, dividends tell our real story. To the shareholders we give returns which are
almost un-matched in Pakistan’s corporate world. At AGTL we believe that effective individuals
make a difference; effective teams make a business. Of all the things that we have built the most
admired is our teamwork. AGTL’s human talent does not depreciate with time. AGTL workers are
happy workers. AGTL values the stake holders, customers, employees and the investors. The
management works to ensure that all supply chain associates, dealers, shareholders and employees
share in the company’s growth and prosperity.
Al-Futtaim’s flagship in Pakistan with over 93% foreign shareholding, Al-Ghazi Tractors Limited
is a text book example of good corporate governance, conforming to all of the Corporate
Governance Reforms promulgated by the government. AGTL’s long list of accolades received
year after year include Top Companies Award of the Karachi Stock Exchange, Corporate
Excellence Award of the Management Association of Pakistan, Best Presented Annual Report
Awards of ICAP, Best Calendar Awards of NCCA, Excellence Award on Human Resources and
Industrial Relations and Excellence Award in Productivity from the Employer’s Federation of
Pakistan. AGTL’s Vision Statement is categoric: “To make AGTL a symbol of success.” This sets
the direction as well as the destination in sight and each of the employee lives to achieve the
company’s Mission.

Product portfolio
Tractors
Nh-DABUNG(85Hp)

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NH-70-56 4wd(85 hp) 4x4 lift-O-matic hydrostatic power steering
NH-640 (75 hp) power steering
Nh-ghazi (65 hp) power steering
NH-480(55HP)
NEW HOLLAND TD95
AGRICULTURE MACHINE
VESTER NH TC 5.30
NEW HOLLAND BC 5060
Organizational Chart of Al-Ghazi Tractors limited

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16
Atlas Honda private Limited

A journey began five decades ago which revolutionized the two – wheeler industry in Pakistan. It
was the beginning of a ride to glory aiming to transform the people’s lives by providing simplistic
mobility solutions. It embraced the aspiration to define the quality and set the benchmark of
performance for others to follow. That spirit drove the chronicles of the nation’s largest motorcycle
manufacturing company, showcasing the “Power of Dreams, Generation after Generation.”

Starting with an initial capital of Rs. 500,000 and 2 associates by his side, Mr. Yusuf H. Shirazi,
the Chairman Atlas Honda, set up an investment company in 1962 by the name of “Shirazi
Investments (Private) Limited”. This event laid the foundation of the Atlas Group. Utilizing the
funds generated by Shirazi
Investments (Private) Limited, Mr. Yusuf H. Shirazi signed a technical collaboration agreement
with Honda Motor Company Limited (HMC) in 1963 for the production and sales of Honda
motorcycles in Pakistan. The company that was formed as a result of this joint venture was called
“Atlas Autos Limited” with its manufacturing facility located in Karachi.

To expand the reach to new markets, Atlas Epak Limited was formed in 1968 with manufacturing facilities

based in East Pakistan. However, calamity struck in 1971 as the war in East Pakistan resulted in loss of
the sister concern. Despite this massive financial impediment, Atlas Autos remained steadfast and
recovered. Later in 1979, another new motorcycle manufacturing plant at Sheikhupura, namely
“Panjdarya Limited” was established. To enhance the technological and production capabilities, a
joint venture agreement was entered into in 1988 with HMC. Both Atlas Autos Limited and
Panjdarya Limited operated separately until the two were merged in 1991 and “Atlas Honda
Limited” (the Company) came into being.

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Over the years, the Company has enjoyed tremendous success. With products of highest quality,
state of the art manufacturing facilities, largest dealership network and impeccable after sale
service, the Company today is considered the flag bearer of the motorcycle industry in Pakistan
and is steadily leaping ahead.

In its endeavor towards enriching journeys, the Company aims to fulfill the demand of high-
performing motorcycles by continuing to be the top choice of consumers. The Company remains
focused towards enhancing its capacity for manufacturing excellence through sustainable profits,
localization of operations, stronger dealer network, support from vendors and enhanced customer
engagement. The Company aims to build upon its competencies by investing in its scale of
operations and generating greater customer value while envisioning and carving out a better future.

Key Products
Motor cycle Model CB-150 F
✓ Motor Cycle Model CD-70
✓ Motor Cycle Model CD-70 Dream
✓ Motor Cycle Model Prider
✓ Motor Cycle Model CG-125
✓ Motor Cycle Model Deluxe
✓ Genuine parts

18
Organizational Chart of Atlas Honda

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Pak Suzuki Motor company Limited

Pak Suzuki Motor Company Limited (PSMCL) is a public limited company with its shares quoted
on Pakistan Stock Exchange. The Company was formed in August 1983 in accordance with the
terms of a joint venture agreement between Pakistan Automobile Corporation Limited
(representing Government of Pakistan) and Suzuki Motor Corporation (SMC) Japan. The
Company started commercial production in January 1984 with the primary objective of
progressive manufacturing, assembling and marketing of Cars, Pickups, Vans and 4x4 vehicles in
Pakistan. The Company’s long term plans inter-alia include tapping of export markets.
The foundation stone laying ceremony of the Company’s existing plant located at Bin Qasim was
performed in early 1989 by the Prime Minister then in office. By early 1990, on completion of first
phase of this plant, in-house assembly of all the Suzuki engines started. In 1992, the plant was
completed, and production of the Margalla Car commenced.
Under the Government’s privatization policy, the Company was privatized and placed under the
Japanese management in September 1992. At the time of privatization, SMC increased its equity
from 25% to 40%. Subsequently, SMC progressively increased its equity to 73.09% by purchasing
remaining shares from PACO. The Suzuki Management immediately after privatization started
expansion of the existing plant to increase its installed capacity to 50,000 per annum. The
expansion was completed in July 1994.
However, the capacity remained substantially underutilized until 2002 because of economic
recession. Thereafter realizing growth in demand, the Company increased capacity in phases. The
first phase was completed in January 2005 when capacity was enhanced to 80,000 vehicles. The

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second phase was completed in January 2006 and capacity was raised to 120,000. The third phase
was completed when on 6th February 2007, Prime Minister of Pakistan, Mr. Shaukat Aziz
inaugurated 150,000 vehicles capacity expansion facilities.
On 25th April 2007, the Board of Directors of Pak Suzuki Motor Company Limited (PSMCL) and
Suzuki Motorcycles Pakistan Limited (SMPL) approved Scheme of Arrangement (The Scheme)
to amalgamate SMPL into PSMCL with effect from 1st January 2007. The scheme was approved
by the shareholders of the respective Companies at the Extra - Ordinary General Meeting held on
30th June 2007. The scheme was sanctioned by the Honourable High Court of Sindh (the court)
on 17th September 2007. The certified copy of the Order of the Court sanctioning the scheme was
filed with the Registrar Companies Karachi on 1st October 2007, from which date the scheme
became operative
PSMCL and Suzuki Motor Corporation (SMC) Japan held 41% and 43% shares in SMPL
respectively. Pak Suzuki issued and allotted 1,233,300 ordinary shares of Rs.10/- each to the
qualifying shareholders of SMPL @ one ordinary share in Pak Suzuki for every twenty one shares
held by SMPL shareholders as on the date of final book closure i.e. 29th October 2007. The trading
in shares of SMPL on Karachi and Lahore Stock Exchanges ceased from the same date.
The Company setup a new plant for motorcycles at Bin Qasim. All the operations of motorcycles
have been shifted to the new plant effective from July 2011.
The Company continues to be in the fore-front of automobile industry of Pakistan. Over a period
of time, the Company has developed an effective and comprehensive network of sales, service and
spare parts dealers who cater to the needs of customers and render effective after-sale service
country wide.
Joint Venture Agreement was signed between Pak Suzuki Motor Company Limited and Tecno
Pack Telecom (Private) Limited to set up Tecno Auto Glass Limited (“TAG”). TAG’s main area
of operations will be manufacturing, development and designing of Auto Glass products to cater
local as well as international market
Products Portfolio
Automobiles
• Suzuki Alto
• Suzuki Jimny
• Suzuki Wagonr
• Suzuki Cultus

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 • Suzuki Swift
• Suzuki Vitara
• Suzuki Ciaz
• Suzuki APV
• Suzuki Bolan
• Suzuki Cargo van
• Suzuki Ravi pickup
• Suzuki Mega Carry
Heavy bikes
• Suzuki Inazuma Aegis
• Suzuki GXR-R 600
Motorcycles
• Suzuki GS 150 SE
• Suzuki GS 150
• Suzuki GR 150
• Suzuki Gixxer
Outboard Motors
• Suzuki 2-Stroke outboard
• Suzuki 4-Stroke Outboad

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HinoPak Motors limited

Hinopak Motors Limited was established in 1986 by UAE-based Al-Futtaim group and PACO
Pakistan through a collaboration of two Japanese companies Hino Motors and Toyota Tsusho
Corporation (TTC). Later in 1998, PACO Pakistan and Al-Futtaim disinvested in the company
leaving the two Japanese companies to take over control. Hinopak is most famous for its Hino
trucks-it is in the business of assembling, manufacturing and selling medium and heavy duty trucks
and buses across Pakistan. Its bus line, trucks and prime movers include multiple models. Hino's
special purpose vehicles are engaged in hauling a variety of supplies, such as food, equipment and
machinery.
The company has the biggest market share in the trucking industry today for trucks and prime
movers. The company runs a vast dealership network for after sales services support. It also exports
its business to Middle Eastern and African countries. The company is owned by Hino Motors Japan
and Toyota Tsusho Corporation who together hold 89 percent of the company's shares. Hinopak
is a Toyota Group Company, subsidiary of Hino Motors Ltd, Japan, while Toyota Motors
Corporation is the ultimate parent of the group. The company's board of directors is consisted of
mostly names from the parent company with few locals at senior positions. When books closed for
the company's financial year ending March 2016, 59 percent of shares were held by Hino Motors
while 30 percent were held by TTC. Almost 5 percent shares are held by the public.

Products line
Buses

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 ✓ The largest manufacturer of buses in Pakistan, Hinopak is fully-equipped to design and
manufacture a wide range of bus chassis and all types of bus bodies for comfort, durability
and safety.
✓ Hinopak’s bus line up includes Kazay rear engine luxury bus, Starliner front engine luxury
bus, Superliner standard buses and Skyliner coaches.
✓ Hinopak also supplies its renowned AK and RN bus models in bare chassis form to allow
our customers to customize the buses as per their requirement.
✓ All buses assembled / manufactured at Hinopak comply with Euro2 emission standards
✓ Kazay
✓ Starliner
✓ Superliner
✓ Skyliner
✓ RN8JSKA Bus Chassis
✓ AK8J Bus Chassis
Trucks and Prime Movers
Hino 500 Series
The 500 series consist of vehicles that are in line with global Euro 2 emission standards making
Hinopak the first Pakistani commercial vehicle manufacturer to introduce a complete range of
environment friendly vehicles. It has been especially developed and designed keeping in mind the
rugged terrain in order to meet the requirements of the diverse Pakistani automobile market.
✓ 500 Series FG8J 4x2
✓ 500 Series FL8J 6x2
✓ 500 Series FM8J 6x4
✓ Prime Movers FG8J 4x2
✓ Prime Movers FM8J 6x4
✓ Prime Movers FM2P 6x4
Hino 300 Series
DUTRO-Light Duty Truck
Dutro is Hino’s globally renowned light duty truck with high-performance direct-
injection engine that delivers power with high-fuel economy and lower and cleaner
emissions for minimum impact on the environment. The Euro1 emission standards are

24
 adhered to through employment of electronically controlled common rail fuel injection
device.
✓ Hino Dutro WU 640 4x2 Truck
✓ Hino Dutro WU 720 4x2 Truc

Auditor’s Reports
Auditor’s Report Al-Ghazi Tractors limited

CONTENTS 2015 2016 2017 2018

Auditor A.F.F. A.F.F. Ferguson A.F.F. Ferguson A.F.F. Ferguson

Ferguson & & Co. & Co. & Co.
Co.
Chairman Audit Committee M. Ali M. Ali Qaiyum M. Ali Qaiyum M. Ali Qaiyum
Qaiyum
Opinion of audit Unqualified Unqualified Unqualified Unqualified

Conformity with the Yes yes Yes Yes

Companies Ordinance, 1984,
Accounting standards Yes yes Yes Yes
followed?
Presentation of Balance Sheet True & Fair True & Fair True & Fair True & Fair

Profit and Loss account True & Fair True & Fair True & Fair True & Fair
Statement of comprehensive True & Fair True & Fair True & Fair True & Fair
income
Cash flow Statement True & Fair True & Fair True & Fair True & Fair
Statement of changes in equity True & Fair True & Fair True & Fair True & Fair
Purpose of expenditure Company’s Company’s Company’s Company’s
business business business business
Investment According According to According to According to
to Company’s Company’s Company’s
Company’s objectives objectives objectives
objectives
Zakat deductible at source No No No No
under Zakat and Ushr
Ordinance, 1980 (XVIII of
1980)
Profit Yes Yes Yes Yes

25
 Auditor’s Report Atlas Honda limited

CONTENTS 2015 2016 2017 2018

Auditor Shinewing Shinewing Shinewing Shinewing

Hameed Hameed Hameed Hameed Chaudhri
Chaudhri & Chaudhri & Co Chaudhri & Co & Co
Co
Engagement Partner: Muhammad Muhammad Ali Raheel Ahmed Raheel Ahmed
Ali
Opinion of audit Unqualified Unqualified Unqualified Unqualified

Conformity with the Yes yes Yes Yes

Companies Ordinance, 1984,
Accounting standards Yes yes Yes Yes
followed?
Presentation of Balance Sheet True & Fair True & Fair True & Fair True & Fair

Profit and Loss account True & Fair True & Fair True & Fair True & Fair
Statement of comprehensive True & Fair True & Fair True & Fair True & Fair
income
Cash flow Statement True & Fair True & Fair True & Fair True & Fair
Statement of changes in equity True & Fair True & Fair True & Fair True & Fair
Purpose of expenditure Company’s Company’s Company’s Company’s
business business business business
Investment According According to According to According to
to Company’s Company’s Company’s
Company’s objectives objectives objectives
objectives
Zakat deductible at source No No No No
under Zakat and Ushr
Ordinance, 1980 (XVIII of
1980)
Profit Yes Yes Yes Yes

26
 Auditor’s Report Pak Suzuki Motors limited
CONTENTS 2015 2016 2017 2018

Auditor Ernst young Ernst young ford KPMG Taseer KPMG Taseer Hadi
ford Rhodes Rhodes sidat Hyder Hadi & Co. & Co. Chartered
sidat Hyder Chartered Chartered Accountants
Chartered Accountants Accountants
Accountants
Engagement Partner: Khurram Khuram Jameel Not Defined Raheel Ahmed
Jameel (CA) (CA)
Opinion of audit Unqualified Unqualified Unqualified Unqualified

Conformity with the Yes Yes Yes Yes

Companies Ordinance, 1984,
Accounting standards Yes Yes Yes Yes
followed?
Presentation of Balance Sheet True & Fair True & Fair True & Fair True & Fair

Profit and Loss account True & Fair True & Fair True & Fair True & Fair
Statement of comprehensive True & Fair True & Fair True & Fair True & Fair
income
Cash flow Statement True & Fair True & Fair True & Fair True & Fair
Statement of changes in equity True & Fair True & Fair True & Fair True & Fair

Purpose of expenditure Company’s Company’s Company’s Company’s

business business business business
Investment According According to According to According to
to Company’s Company’s Company’s
Company’s objectives objectives objectives
objectives
Zakat deductible at source No No No No
under Zakat and Ushr
Ordinance, 1980 (XVIII of
1980)
Profit Yes Yes Yes Yes

27
 Auditor’s Report HinoPak Motors Limited
CONTENTS 2015 2016 2017 2018

Auditor A.F.F. A.F.F. Ferguson A.F.F. Ferguson A.F.F. Ferguson

Ferguson & & Co. Chartered & Co. & Co. Chartered
Co. Accountants Chartered Accountants
Chartered Accountants
Accountants
Engagement Partner: Not Defined Not Defined Not Defined Not Defined

Opinion of audit Unqualified Unqualified Unqualified Unqualified

Conformity with the Yes yes Yes Yes

Companies Ordinance, 1984,
Accounting standards Yes yes Yes Yes
followed?
Presentation of Balance Sheet True & Fair True & Fair True & Fair True & Fair

Profit and Loss account True & Fair True & Fair True & Fair True & Fair
Statement of comprehensive True & Fair True & Fair True & Fair True & Fair
income
Cash flow Statement True & Fair True & Fair True & Fair True & Fair
Statement of changes in equity True & Fair True & Fair True & Fair True & Fair
Purpose of expenditure Company’s Company’s Company’s Company’s
business business business business
Investment According to According to According to According to
Company’s Company’s Company’s Company’s
objectives objectives objectives objectives
Zakat deductible at source No No No No
under Zakat and Ushr
Ordinance, 1980 (XVIII of
1980)
Profit Yes Yes Yes Yes

28
Horizontal Analysis
Horizontal Analysis of Al-Ghazi Tractor’s Balance Sheet (s)

Al-Ghazi Tractor limited

Horizontal Analysis
Balance Sheet 2018 % 2017 %
Fixed Assets 828,804 15.97 714,632 9.96
Long-term loans & Deposits 4,696 0.77 4,660 (19.9)
Inventories 3,507,588 51.11 2,321,164 62.6
Trade receivables 56,606 370.81 12,023 (95.7)
Loans and advances 132,337 (34.38) 201,688 114.46
Trade Deposits & Shorts term
prepayments 43,305 264.79 11,871 94.002
Interest occurred 1 (99.89) 947 (78.01)
Other receivables 12,964 8.28 11,972 (70.70)
Taxation Payments less provision 108,040 169.59 40,075
Refunds due from the government 1,797,206 47.1 1,221,688 49.14
Other financial assets
Cash and bank Balance 293,910 (78.07) 1,340,511 1.8
Total Assets 6,785,457 15.37 5,881,331 26.63
Current Liabilities 5,299,961 44.40 3,670,255 205.26
Non-Current liabilities 116,099 36.17 85,260 3.32
Total Liabilities 5,416,060 44.21 3,755,515 192.29
Share capital 289,821 0 289,821 0
Reserves 1,079,576 (41.19) 1,835,995 (40.18)
Capital employed 1,369,397 (35.58) 2,125,816 (36.72)

Al-Ghazi Tractor limited

Horizontal Analysis
Balance Sheet 2016 % 2015 %
Fixed Assets 649,897 6.15 612,208 33.09
Long-term loans & Deposits 5,818 99.72 2,913 36.69
Inventories 1,427,617 -33.57 2,149,374 -2.13

Trade receivables 279,759 907.81 27,759 101.21

Loans and advances 94,042 51.56 62,048 -21.25
Trade Deposits & Shorts term
prepayments 6,119 -10.29 6,821 -78.82
Interest occurred 4,307 -92.95 61,114 79.82
Other receivables 40,849 6.34 38,411 524.6

29
 Taxation Payments less provision 70,828
Refunds due from the government 819,138 -19.53 1,017,953 -20.53
Other financial assets 25,000 -98.69
Cash and bank Balance 1,316,770 -43.49 2,330,238 -40.62
Total Assets 4,644,316 -27.48 6,404,667 -35.22
Current Liabilities 1,202,327 118.9 549,079 -59.30
Non-Current liabilities 82,520 23.14 67,008 -23.77
Total Liabilities 1,284,847 108.54 616,087 -57.13
Share capital 289,821 0 289,821 0
Reserves 3,069,648 -94.41 5,498,759 -33.44
Capital employed 3,359,469 -41.96 5,788,580 -32.30

Horizontal Analysis of Al-Ghazi Tractor’s Profit & Loss Statement (s)

Al-Ghazi Tractors Limited
Horizontal Analysis
Profit & Loss Account 2018 % 2017 %
Revenue 19,372,522 2.65 18,871,448 55.97
Cost of sales 14,707,038 8.04 13,611,710 55.56
Gross profit 4,665,484 (25.46) 6,259,738 86.92
Distribution Expenses 276,950 14.99 240,830 48.57
Administrative expenses 305,425 28.43 237,798 (5.008)
4,083,109 (14.59) 4,781,110 62.82
Other income 61,902 (57.03) 144,076 (6.40)
Other operating expenses 284,608 (16.10) 339,244 60.24
3,860,403 (15.82) 4,585,942 59.31
Finance Cost 125,568 134.16 929 (8.74)
Profit before taxation 3,734,835 (18.54) 4,585,013 59.33
Income tax expenses 1,282,321 (12.28) 1,461,893 53.77
Profit for the year 2,452,514 (21.47) 3,123,120 62.08

Al-Ghazi Tractors Limited

Horizontal Analysis
Profit & Loss Account 2016 % 2015 %
Revenue 12,098,828 25.55 9,636,109 9.74
Cost of sales 8,750,087 22.60 7,136,631 9.58
Gross profit 3,348,741 33.97 2,499,478 10.19
Distribution Expenses 162,088 44.84 111,907 10.29
Administrative expenses 250,336 (15.76) 297,194 45.92
2,936,317 40.46 2,090,377 6.48
Other income 153,929 (67.93) 480,052 4.99
Other operating expenses 211,703 19.41 177,283 6.22

30
 2,878,543 20.28 2,393,146 6.20
Finance Cost 1,018 (7.45) 1,100 (19.64)
Profit before taxation 2,877,525 20.29 2,392,046 6.22
Income tax expenses 950,641 18.86 799,763 18.09
Profit for the year 1,926,884 21.01 1,592,283 1.11

31
Horizontal Analysis of Atlas Honda’s Balance Sheet (s)
Atlas Honda Horizontal
Analysis
Balance Sheet 2018 % 2017 %

Property, plant & equipment 7,976,101 15 6,961,919 20

Intangible asset 44,905 1212,65 37 (99)
Long term investments 324,899 11 292,342 19
Long term loans and advances 31,481 5 30,108 7
Long term deposits 22,573 30 17,339 16
Total non-current assets 8,399,959 15 7,301,745 19
Current Assets
Stores, spares and loose tools 650,160 21 539,104 10
Stock in trade 2,599,530 22 2,123,831 14
Trade debts 861,224 3 623,331 2
Loans and advances 40,107 3 38,921 8
Trade deposits and prepayments 137,663 14 120,562 86
Short term investments 8,400,246 19 7,080,669 20
Accrued mark-up/interest 15,557 (28) 21,470 27
Other receivables 15,528 134 6,627 35
Taxation-net 725,750 (1) 732,706 35
Bank balances 9,981,615 42 7,053,784 48
Total current assets 23,427,380 28 18,341,005 29
Total assets 31,827,339 24 25,642,750 26
Equity and Liabilities
Equity
Share Capital 1,034,066 - 1,034,066 -
Reserves 14,966,654 22 12,223,467 23
Total Equity 16,000,720 21 13,257,533 20
Non-Current Liabilities
Compensated absences 16,000,720 6 228,443 6
Deferred taxation 698,042 4 670,968 18
Total non-current liabilities 939,723 4 899,411 15
Current Liabilities
Trade and other payables 14,886,896 30 11,485,806 34
Taxation Net - -
Total Current Liabilities 14,886,896 30 11,485,806 34
Total Equity and Liabilities 31,827,339 24 25,642,750 26

32
Atlas Honda Horizontal
Analysis
Balance Sheet 2016 % 2015 %
Non-Current Assets
Property, plant & equipment 5,817,700 17 4,982,552 9
Intangible asset 5,379 (58) 12,774 167
Long term investments 245,508 14 216,283 100
Long term loans and advances 28,027 3 27,198 3
Long term deposits 14,937 15 12,986 35
Total non-current assets 6,111,551 16 5,251,793 14
Current Assets
Stores, spares and loose tools 489,415 16 421,339 5
Stock in trade 1,863,482 12 1,660,529 (19)
Trade debts 608,420 (14) 704,597 35
Loans and advances 35,877 (13) 41,235 17
Trade deposits and prepayments 64,770 9 59,568 18
Short term investments 5,876,554 43 4,119,696 12
Accrued mark-up/interest 16,842 55 10,857 (2)
Other receivables 4,910 34 3,674 (21)
Taxation-net 542,121 447 99,185 100
Bank balances 4,755,020 39 3,409,200 20
Total current assets 14,257,411 35 10,529,880 10
Total assets 20,368,962 29 15,781,673 10
Equity and Liabilities
Equity
Share Capital 1,034,066 - 1,034,066 -
Reserves 9,968,057 21 8,204,479 19
Total Equity 11,002,123 19 9,238,545 17
Non-Current Liabilities
Compensated absences 214,620 10 195,145 2
Deferred taxation 566,749 (2) 578,249 (9)
Total non-current liabilities 781,369 1 773,394 7
Current Liabilities
Trade and other payables 8,585,470 49 5,769,734 3
Taxation Net - - - (100)
Total Current Liabilities 8,585,470 49 5,769,734 3
Total Equity and Liabilities 20,368,962 29 15,781,673 10

33
Horizontal Analysis of Atlas Honda’s Profit & loss Statement(s)
Atlas Honda
Horizontal Analysis
Profit & Loss Statement 2018 % 2017 %
Sales 77,478,845 20.1 64,534,021 17.3
Cost of sales (69,188,101) 19.8 (57,754,987) 17.0
Gross Profit 8,290,744 22.3 6,779,034 20.1
Sales and marketing expenses 1,852,057 13.6 (1,630,773) 20.5
Administrative expenses 634,594 5.4 (602,343) 43.8
Other income 877,908 (4.2) 916,333 33
Other operating expenses (445,037) 10.0 (404,740) 30.3
Share of profit of an Associated
Company - net of tax 50,607 (17.2) 61,084 40.5
Profit from operations 6,287,571 22.8 5,118,595 26.1
Finance cost (22,725) (12.1) (25,853) 69.2
Profit before taxation 6,264,846 23.0 5,092,742 25.9
Taxation (1,601,211) 19.5 (1,340,263) 28.5
Profit after taxation 4,663,635 24.3 3,752,479 25.0

Atlas Honda
Horizontal Analysis
Profit & Loss Statement 2016 % 2015 %
Sales 55,022,415 20.2 45,772,177 2.9
Cost of sales (49,376,506) 20.1 (41,098,571) 2.1
Gross Profit 5,645,909 20.8 4,673,606 10.6
Sales and marketing expenses (1,456,152) 10.8 (1,314,231) 1.6
Administrative expenses (499,915) 15.6 (432,622) 0.6
Other income 637,074 17.1 543,924 29.3
Other operating expenses (310,682) 26.7 (245,132) 9.4
Share of profit of an Associated
Company - net of tax 43,475 65.4 26,283 100.0
Profit from operations 4,059,709 24.8 3,251,828 20.6
Finance cost (15,280) 86.6 (8,190) 1.9
Profit before taxation 4,044,429 24.7 3,243,638 20.6
Taxation (1,042,630) 16.8 (892,747) 29.8
Profit after taxation 3,001,799 27.7 2,350,891 17.5

34
Horizontal Analysis of Pak Suzuki Motor’s Balance Sheet(s)
Pak Suzuki Motors Horizontal Analysis
Balance Sheet 2018 % 2017 %
Fixed assets 15,768 75.5 8,985 33.2
Long-term investments 329 58.2 208 -
Long-term loans 4 100.0 2 (99.1)
Long-term deposits, prepayments
and other receivables 456 19.4 382 1217.2
Long-term instalment sales
Receivables 118 (18.6) 145 51.0
Deferred taxation 1,152 386.1 237 1.3
Stores, spares and loose tools 147 27.8 115 3.6
Stock-in-trade 29,397 22.8 23,946 47.0
Trade debts 238 12.8 211 (82.5)
Current portion of long-term
instalment sales receivables 551 71.3 321 10.3
Loans and advances 41 10.8 37 (81.6)
Trade deposits and short term
Prepayments 1,357 40.5 966 1154.5
Accrued profit on bank deposits 269 827.6 29 (76.0)
Other receivables 0 (100) 93 (27.9)
Sales tax and excise duty adjustable 4,370 282.0 1,144 (30.7)
Taxation – net 5,798 18.3 4,900 158.7
Cash and bank balances 1,515 (83.5) 9,189 7.5
Total assets 61,510.0 20.8 50,910.0 34.5
Share capital 823 - 823 -
Reserves 28410 (1.1) 28726 13.1
Total Equity 29233 (1.1) 29,546 12.7
Trade and other payable 14410 26.5 11,378 80.6
Advances 2276 (57.3) 5,332 228.1
Accrued mark up - - - -
Short term finance 11,311 100 - -
Security deposits 4,222 (8.2) 4,601 25.3
Unclaimed dividend 22 57.1 14 -
Provision for custom duties and sales
tax 36 - 36 -
Total equity and liabilities 61,510.0 20.8 50,910.0 34.5

35
Pak Suzuki Motors Horizontal Analysis
Balance Sheet 2016 % 2015 %
Fixed assets 6,745 46.8 4,594 (8.0)
Long-term investments - - 0 -
Long-term loans 231 2,210.0 10 -
Long-term deposits, prepayments
and other receivables 29 16.0 25 8.7
Long-term instalment sales
Receivables 96 (15.8) 114 (29.6)
Deferred taxation 234 20.0 195 248.2
Stores, spares and loose tools 111 12.1 99 20.7
Stock-in-trade 16,289 24.5 13,082 (12.6)
Trade debts 1,205 (22.9) 1,562 15.5
Current portion of long-term
instalment sales receivables 291 (16.4) 348 (10.3)
Loans and advances 201 1.5 198 (61.6)
Trade deposits and short term
Prepayments 77 8.5 71 34.0
Accrued profit on bank deposits 121 (37.3) 193 1,106.3
Other receivables 129 48.3 87 (35.1)
Sales tax and excise duty adjustable 1,651 493.9 278 (72.3)
Taxation – net 1,894 19.1 1,590 (42.1)
Cash and bank balances 8,548 (43.0) 15,006 715.1
Total assets 37,852 20.8 37,452 32.1
Share capital 823 - 823 -
Reserves 25,394 6.4 23,856 29.6
Total Equity 26,217 6.2 24,679 28.3
Trade and other payable 6,300 (2.2) 6,442 30.3
Advances 1,625 (61.5) 4,226 95.7
Accrued mark up 0 - 0 (100.0)
Short term finance 0 - 0 -
Security deposits 1,625 77.6 2,069 7.9
Unclaimed dividend 0 - 0 -
Provision for custom duties and sales
tax 36 - 36 (58.1)
Total equity and liabilities 61,510.0 20.8 50,910.0 32.1

36
Horizontal Analysis of Pak Suzuki Motor’s Profit & Loss Statement(s)
Pak Suzuki Motors
Profit & Loss Statement 2018 % 2017 %
Sales 119,854 17.7 101,812 33.1
Cost of sales (112,809) 22.4 (92,159) 33.2
Gross profit 7,045 (27) 9,653 31.4
Distribution and selling cost (2,707) (3.5) (2,804) 39.9
Administrative expenses (2,301) 43.8 (1,600) 3.9
Other expenses (154) 62.8 (414) 24.0
Other income 566 34.56 865 (16.8)
Operating profit 2,449 (57) 5,700 26.3
Share of loss of equity accounted
Investee (3) (75) (12) -
Finance cost (363) 526 (69) (29.2)
Profit before taxation 2,083 (62.9) 5,619 27.3
Taxation (785) (56.2) (1,793) 9.1
Profit after taxation 1,298 (66.1) 3,826 38.0

Pak Suzuki Motors Horizontal

Analysis
Profit & Loss Statement 2016 % 2015 %
Sales 76,516 (9.5) 84,549 57.5
Cost of sales (69,167) (5.3) (73,061) 47.7
Gross profit 7,349 (36.0) 11,488 174.5
Distribution and selling cost (2,004) 3.0 (1,946) 160.9
Administrative expenses (1,540) 25.1 (1,231) 11.7
Other expenses (334) (48.9) (653) 233.2
Other income 1,040 (1.7) 1,058 107.5
Operating profit 4,511 (48.2) 8,716 228.9
Share of loss of equity accounted
Investee 0 - 0 -
Finance cost (96) 209.7 (31) 14.8
Profit before taxation 4,415 (49.2) 8,685 231.1
Taxation (1,642) (42.2) (2,843) 305.0
Profit after taxation 2,773 (52.5) 5,842 204.0

37
Horizontal Analysis of Hino Pak Motors Limited’s Balance Sheet(s)
HinoPak Motors Limited
Balance Sheet 2017-18 % 2016-17 %
Property, plant & equipment 3,096.03 9.63 2,823.97 29.10
Other non-current assets 13.34 (24.80) 17.73 (12.96)
Long term investments 0.07 0.00 0.07 0.00
Long term deposits 7.77 12.27 6.92 5.81
Long term loans and advances 21.45 (9.33) 23.66 69.25
Staff retirement benefit – prepayment - 100.005 1.97 0.00
Current assets (excluding investments) 11,330.87 57.63 7,188.42 (3.33)
Total assets 14,469.53 43.79 10,062.74 4.12
Shareholders' equity 5,292.10 11.00 3,108.50 0.64
Deferred taxation 123.44 (2.24) 126.27 31.79
Other non-current liabilities 168.38 8.69 154.92 6.17
Other current liabilities (trade, interest
and tax) 8,885.62 77.22 5,013.91 (2.35)
Total equity and liabilities 14,469.53 43.79 10,062.74 4.12

HinoPak Motors Limited Horizontal

Analysis
Balance Sheet 2015-16 % 2014-15 %
Property, plant & equipment 2,187.35 9.61 1,995.54 1.56
Other non-current assets 20.37 91.27 10.65 117.10
Long term investments 0.07 (83.33) 0.42 (81.33)
Long term deposits 6.54 (4.11) 6.82 0.93
Long term loans and advances 13.98 (1.76) 14.23 (0.62)
Staff retirement benefit – prepayment - (100.00) 12.54 0.00
Current assets (excluding investments) 7,436.02 20.29 6,181.54 11.51
Total assets 9,664.33 17.55 8,221.74 9.09
Shareholders' equity 3,088.74 11.51 2,769.93 29.73
Deferred taxation 95.81 25.90 76.10 27.72
Other non-current liabilities 145.91 38.58 105.29 9.41
Surplus on revaluation of fixed assets 1,199.56 (1.36) 1,216.15 (2.67)
Other current liabilities (trade, interest
and tax) 5,134.31 26.64 4,054.27 1.46
Total equity and liabilities 9,664.33 17.55 8,221.74 9.09

38
Horizontal Analysis of HinoPak Motors Limited’s Profit & Loss Statement(s)
HinoPak Motors Limited
Profit & loss Statements 2017-18 % 2016-17 %
Sales 26,615.07 18.41 22,477.50 24.28
Cost of sales 23,580.63 17.84 20,011.40 30.58
Gross profit 3,034.44 23.05 2,466.10 (10.72)
Distribution cost 440.15 3.01 427.30 7.37
Administration Expense 420.59 9.06 385.65 (2.08)
Other income 300.79 18.19 254.51 32.10
Other expense 155.95 (3.65) 130.72 (0.36)
Profit from operation 2,348.55 32.17 1,776.93 (12,54)
Finance Cost (Income) 679.00 746.38 80.22 (73.67)
Profit before taxation 1,669.55 (1.60) 1,696.71 (1,76)
Taxation 520.17 (9.82) 576.81 (6.01)
Profit after taxation 1,149.38 2.63 1,119.90 0.59

HinoPak Motors Limited Horizontal

Analysis
Profit & loss Statements 2015-16 % 2014-15 %
Sales 18,086.85 43.13 12,636.29 37.23
Cost of sales 15,324.77 43.72 10,662.91 35.37
Gross profit 2,762.08 39.97 1,973.38 48.21
Distribution cost 397.96 31.24 303.23 (0.94)
Administration Expense 393.84 9.68 359.07 40.82
Other income 192.66 (26.20) 261.04 58.91
Other expense 131.19 (4.73) 137.70 71.89
Profit from operation 2.031.75 41.64 1,434.42 67.86
Finance Cost (Income) 1,727.04 357.85 (118.17) (46.90)
Profit before taxation 1,113.38 11.24 1,552.59 66.05)
Taxation 613.67 28.02 579.37 54.11
Profit after taxation 1,113.38 3.74 1,073.22 72.01

39
Vertical Analysis

Vertical Analysis of Al-Ghazi Tractors Limited’s Balance Sheet(s)

Al-Ghazi Tractor limited
Balance Sheet 2018 % 2017 %
Fixed Assets 828,804 12.21 714,632 12.15
Long-term loans & Deposits 4,696 0.06 4,660 0.08
Inventories 3,507,588 51.69 2,321,164 39.46
Trade receivables 56,606 0.83 12,023 0.20
Loans and advances 132,337 1.95 201,688 3.42
Trade Deposits & Shorts term
prepayments 43,305 0.63 11,871 0.20
Interest occurred 1 1.47 947 0.016
Other receivables 12,964 0.19 11,972 0.20
Taxation Payments less provision 108,040 1.59 40,075 0.68
Refunds due from the government 1,797,206 26.48 1,221,688 20.77
Other financial assets
Cash and bank Balance 293,910 4.33 1,340,511 22.79
Total Assets 6,785,457 100 5,881,331 100
Current Liabilities 5,299,961 97.85 3,670,255 97.72
Non-Current liabilities 116,099 2.14 85,260 2.27
Total Liabilities 5,416,060 100 3,755,515 100
Share capital 289,821 21.16 289,821 13.63
Reserves 1,079,576 78.83 1,835,995 86.36
Capital employed 1,369,397 100 2,125,816 100

40
Al-Ghazi Tractor limited
Vertical Analysis
Balance Sheet 2016 % 2015 %
Fixed Assets 649,897 13.99 612,208 9.55
Long-term loans & Deposits 5,818 0.12 2,913 0.04
Inventories 1,427,617 30.73 2,149,374 33.55
Trade receivables 279,759 6.02 27,759 0.43
Loans and advances 94,042 2.02 62,048 0.96
Trade Deposits & Shorts term
prepayments 6,119 0.13 6,821 0.10
Interest occurred 4,307 0.09 61,114 0.95
Other receivables 40,849 0.87 38,411 0.59
Taxation Payments less provision 70,828 1.10
Refunds due from the government 819,138 17.63 1,017,953 15.89
Other financial assets 25,000 0.39
Cash and bank Balance 1,316,770 28.35 2,330,238 36.38
Total Assets 4,644,316 100 6,404,667 100
Current Liabilities 1,202,327 93.5 549,079 89.12
Non-Current liabilities 82,520 6.42 67,008 10.87
Total Liabilities 1,284,847 100 616,087 100
Share capital 289,821 8.62 289,821 5.00
Reserves 3,069,648 91.37 5,498,759 95.00
Capital employed 3,359,469 100 5,788,580 100

Vertical Analysis of Al-Ghazi Tractors Limited’s Profit & Loss Statement(s)

Al-Ghazi Tractors Limited
Profit & Loss Account 2018 % 2017 %
Revenue 19,372,522 100.00 18,871,448 100.00
Cost of sales 14,707,038 75.92 13,611,710 72.13
Gross profit 4,665,484 24.08 6,259,738 27.87
Distribution Expenses 276,950 1.43 240,830 1.28
Administrative expenses 305,425 1.58 237,798 1.26
4,083,109 21.08 4,781,110 25.34
Other income 61,902 0.32 144,076 0.76
Other operating expenses 284,608 1.47 339,244 1.80
3,860,403 19.93 4,585,942 24.30
Finance Cost 125,568 0.65 929 0.00
Profit before taxation 3,734,835 19.28 4,585,013 24.30
Income tax expenses 1,282,321 6.62 1,461,893 7.75
Profit for the year 2,452,514 12.66 3,123,120 16.55

41
Al-Ghazi Tractors Limited
Vertical Analysis
Profit & Loss Account 2016 % 2015 %
Revenue 12,098,828 100.00 9,636,109 100.00
Cost of sales 8,750,087 72.32 7,136,631 74.06
Gross profit 3,348,741 27.68 2,499,478 25.94
Distribution Expenses 162,088 1.34 111,907 1.16
Administrative expenses 250,336 2.07 297,194 3.08
2,936,317 24.27 2,090,377 21.69
Other income 153,929 1.27 480,052 4.98
Other operating expenses 211,703 1.75 177,283 1.84
2,878,543 23.79 2,393,146 24.84
Finance Cost 1,018 0.01 1,100 0.01
Profit before taxation 2,877,525 23.78 2,392,046 24.82
Income tax expenses 950,641 7.86 799,763 7.72
Profit for the year 1,926,884 15.93 1,592,283 16.52

42
Vertical Analysis of Atlas Honda’s Balance Sheet(s)
Atlas Honda Limited
Balance Sheet 2018 % 2017 %
Non-Current Assets
Property, plant & equipment 7,976,101 25 6,961,919 27
Intangible asset 44,905 0 37 0
Long term investments 324,899 1 292,342 1
Long term loans and advances 31,481 0 30,108 0
Long term deposits 22,573 0 17,339 0
Total non-current assets 8,399,959 26 7,301,745 28
Current Assets
Stores, spares and loose tools 650,160 2 539,104 2
Stock in trade 2,599,530 8 2,123,831 8
Trade debts 861,224 3 623,331 2
Loans and advances 40,107 0 38,921 0
Trade deposits and prepayments 137,663 0 120,562 0
Short term investments 8,400,246 26 7,080,669 28
Accrued mark-up/interest 15,557 0 21,470 0
Other receivables 15,528 0 6,627 0
Taxation-net 725,750 2 732,706 3
Bank balances 9,981,615 31 7,053,784 28
Total current assets 23,427,380 74 18,341,005 72
Total assets 31,827,339 100 25,642,750 100
Equity and Liabilities
Equity
Share Capital 1,034,066 3 1,034,066 4
Reserves 14,966,654 47 12,223,467 48
Total Equity 16,000,720 50 13,257,533 52
Non-Current Liabilities
Compensated absences 16,000,720 1 228,443 1
Deferred taxation 698,042 2 670,968 3
Total non-current liabilities 939,723 3 899,411 4
Current Liabilities
Trade and other payables 14,886,896 47 11,485,806 45
Taxation Net - -
Total Current Liabilities 14,886,896 47 11,485,806 45
Total Equity and Liabilities 31,827,339 100 25,642,750 100

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Atlas Honda Vertical Analysis
Balance Sheet
2016 % 2015 %
Non-Current Assets 32
Property, plant & equipment 5,817,700 29 4,982,552 0
Intangible asset 5,379 0 12,774 1
Long term investments 245,508 1 216,283 0
Long term loans and advances 28,027 0 27,198 0
Long term deposits 14,937 0 12,986
Total non-current assets 6,111,551 30 5,251,793 33
Current Assets
Stores, spares and loose tools 489,415 2 421,339 3
Stock in trade 1,863,482 9 1,660,529 11
Trade debts 608,420 3 704,597 4
Loans and advances 35,877 0 41,235 0
Trade deposits and prepayments 64,770 0 59,568 0
Short term investments 5,876,554 29 4,119,696 26
Accrued mark-up/interest 16,842 0 10,857 0
Other receivables 4,910 0 3,674 0
Taxation-net 542,121 3 99,185 1
Bank balances 4,755,020 23 3,409,200 22
Total current assets 14,257,411 70 10,529,880 67
Total assets 20,368,962 100 15,781,673 100
Equity and Liabilities
Equity
Share Capital 1,034,066 5 1,034,066 7
Reserves 9,968,057 49 8,204,479 52
Total Equity 11,002,123 54 9,238,545 59
Non-Current Liabilities
Compensated absences 214,620 1 195,145 1
Deferred taxation 566,749 3 578,249 4
Total non-current liabilities 781,369 4 773,394 5
Current Liabilities
Trade and other payables 8,585,470 42 5,769,734 37
Taxation Net - -
Total Current Liabilities 8,585,470 42 5,769,734 37
Total Equity and Liabilities 20,368,962 100 15,781,673 100

44
Vertical Analysis of Atlas Honda’s Profit & Loss Statement(s)
Atlas Honda
Profit & Loss Statement 2018 % 2017 %
Sales 77,478,845 100.0 64,534,021 100.0
Cost of sales (69,188,101) (89.3) (57,754,987) (89.5)
Gross Profit 8,290,744 10.7 6,779,034 10.5
Sales and marketing expenses 1,852,057 (2.4) (1,630,773) (2.5)
Administrative expenses 634,594 (0.8) (602,343) (0.9)
Other income 877,908 1.1 916,333 1.4
Other operating expenses (445,037) (0.6) (404,740) (0.6)
Share of profit of an Associated
Company - net of tax 50,607 0.1 61,084 0.1
Profit from operations 6,287,571 8.1 5,118,595 7.9
Finance cost (22,725) (0.03) (25,853) (0.04)
Profit before taxation 6,264,846 8.1 5,092,742 7.9
Taxation (1,601,211) (2.1) (1,340,263) (2.1)
Profit after taxation 4,663,635 6.0 3,752,479 5.8

Atlas Honda
Vertical Analysis
Profit & Loss Statement 2016 % 2015 %
Sales 55,022,415 100.0 45,772,177 100.0
Cost of sales (49,376,506) (89.7) (41,098,571) (89.8)
Gross Profit 5,645,909 10.3 4,673,606 10.2
Sales and marketing expenses (1,456,152) (2.6) (1,314,231) (2.9)
Administrative expenses (499,915) (0.9) (432,622) (0.9)
Other income 637,074 1.2 543,924 1.1
Other operating expenses (310,682) (0.6) (245,132) (0.5)
Share of profit of an Associated
Company - net of tax 43,475 0.1 26,283 0.1
Profit from operations 4,059,709 7.4 3,251,828 7.1
Finance cost (15,280) (0.03) (8,190) (0.02)
Profit before taxation 4,044,429 7.4 3,243,638 7.1
Taxation (1,042,630) (1.9) (892,747) (2.0)
Profit after taxation 3,001,799 5.5 2,350,891 5.1

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Vertical Analysis of Pak Suzuki Motors’ Balance Sheet(s)
Pak Suzuki Motors
Balance Sheet 2018 % 2017 %
Fixed assets 15,768 25.6 8,985 17.6
Long-term investments 329 0.5 208 0.4
Long-term loans 4 0.0 2 00
Long-term deposits, prepayments
and other receivables 456 0.9 382 0.8
Long-term instalment sales
Receivables 118 0.2 145 0.3
Deferred taxation 1,152 1.9 237 0.5
Stores, spares and loose tools 147 0.2 115 0.2
Stock-in-trade 29,397 47.8 23,946 47.0
Trade debts 238 0.4 211 0.4
Current portion of long-term
instalment sales receivables 551 0.9 321 0.6
Loans and advances 41 0.1 37 0.1
Trade deposits and short term
Prepayments 1,357 2.2 966 1.9
Accrued profit on bank deposits 269 0.0 29 0.1
Other receivables 0 0.3 93 0.2
Sales tax and excise duty adjustable 4,370 7.1 1,144 2.2
Taxation – net 5,798 9.4 4,900 9.6
Cash and bank balances 1,515 2.5 9,189 18.1
Total assets 61,510.0 100.0 50,910.0 100.0
Share capital 823 1.3 823 1.6
Reserves 28410 46.2 28726 56.4
Total Equity 29233 47.5 29,546 58.0
Trade and other payable 14410 23.4 11,378 22.3
Advances 2276 3.7 5,332 10.5
Accrued mark up - 0.0 - 00
Short term finance 11,311 18.4 - 0.0
Security deposits 4,222 6.9 4,601 9.0
Unclaimed dividend 22 0.04 14 0.03
Provision for custom duties and sales
tax 36 0.1 36 0.1
Total equity and liabilities 61,510.0 100 50,910.0 100.0

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Pak Suzuki Motors Vertical Analysis
Balance Sheet 2016 % 2015 %
Fixed assets 6,745 17.8 4,594 12.3
Long-term investments - 0.0 0 0.0
Long-term loans 231 0.6 10 0.0
Long-term deposits, prepayments
and other receivables 29 0.1 25 0.1
Long-term instalment sales
Receivables 96 0.3 114 0.3
Deferred taxation 234 0.6 195 0.5
Stores, spares and loose tools 111 0.3 99 0.3
Stock-in-trade 16,289 43.0 13,082 34.9
Trade debts 1,205 3.2 1,562 4.2
Current portion of long-term
instalment sales receivables 291 0.8 348 0.9
Loans and advances 201 0.5 198 0.5
Trade deposits and short term
Prepayments 77 0.2 71 0.2
Accrued profit on bank deposits 121 0.3 193 0.5
Other receivables 129 0.3 87 0.2
Sales tax and excise duty adjustable 1,651 4.4 278 0.7
Taxation – net 1,894 5.0 1,590 4.2
Cash and bank balances 8,548 22.6 15,006 40.1
Total assets 37,852 100.0 37,452 100
Share capital 823 2.2 823 2.2
Reserves 25,394 67.1 23,856 63.7
Total Equity 26,217 69.3 24,679 65.9
Trade and other payable 6,300 16.6 6,442 17.2
Advances 1,625 4.3 4,226 11.3
Accrued mark up 0 0.0 0 0.0
Short term finance 0 0.0 0 0.0
Security deposits 1,625 9.7 2,069 5.5
Unclaimed dividend 0 0.0 0 0.0
Provision for custom duties and sales
tax 36 0.1 36 0.1
Total equity and liabilities 61,510.0 100.0 50,910.0 100

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Vertical Analysis of Pak Suzuki Motors’ Income Statement(s)
Rupee in ‘000
Profit & Loss Statement 2018 % 2017 %
Sales 119,854 100 101,812 100
Cost of sales (112,809) (94.12) (92,159) (90.52)
Gross profit 7,045 5.88 9,653 9.48
Distribution and selling cost (2,707) (2.26) (2,804) (2.75)
Administrative expenses (2,301) (1.92) (1,600) (1.57)
Other expenses (154) (0.13) (414) (0.41)
Other income 566 (0.13) 865 0.85
Operating profit 2,449 2.04 5,700 5.6
Share of loss of equity accounted
Investee (3) (0.00) (12) (0.01)
Finance cost (363) (0.30) (69) (0.07)
Profit before taxation 2,083 1.74 5,619 5.52
Taxation (785) (0.65) (1,793) (1.76)
Profit after taxation 1,298 1.08 3,826 3.76

Pak Suzuki Motors Vertical Analysis

Profit & Loss Statement 2016 % 2015 %
Sales 76,516 100 84,549 100
Cost of sales (69,167) (90.40) (73,061) (86.41)
Gross profit 7,349 9.60 11,488 13.59
Distribution and selling cost (2,004) (2.62) (1,946) (2.30)
Administrative expenses (1,540) (2.01) (1,231) (1.46)
Other expenses (334) (0.44) (653) (0.77)
Other income 1,040 1.36 1,058 1.25
Operating profit 4,511 5.9 8,716 10.31
Share of loss of equity accounted
Investee 0 - 0 -
Finance cost (96) 0.13 (31) (0.04)
Profit before taxation 4,415 5.77 8,685 10.27
Taxation (1,642) (2.15) (2,843) (3.36)
Profit after taxation 2,773 3.62 5,842 6.91

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Vertical Analysis of Hino Pak Motors’ Balance Sheet(s)
HinoPak Motors Limited
Balance Sheet 2017-18 % 2016-17 %
Property, plant & equipment 3,096.03 21.40 2,823.97 28.06
Other non-current assets 13.34 0.09 17.73 0.18
Long term investments 0.07 0.00 0.07 0.00
Long term deposits 7.77 0.05 6.92 0.07
Long term loans and advances 21.45 0.15 23.66 0.24
Staff retirement benefit – prepayment - 0.00 1.97 0.01
Current assets (excluding investments) 11,330.87 78.31 7,188.42 71.44
Total assets 14,469.53 100.00 10,062.74 100.00
Shareholders' equity 5,292.10 36.57 3,108.50 47.38
Deferred taxation 123.44 0.85 126.27 1.25
Other non-current liabilities 168.38 1.16 154.92 1.54
Other current liabilities (trade, interest
and tax) 8,885.62 61.41 5,013.91 49.83
Total equity and liabilities 14,469.53 100.00 10,062.74 100.00

HinoPak Motors Limited vertical

Analysis

Balance Sheet 2015-16 % 2014-15 %

Property, plant & equipment 2,187.35 22.63 1,995.54 24.27
Other non-current assets 20.37 0.21 10.65 0.13
Long term investments 0.07 0.00 0.42 0.01
Long term deposits 6.54 0.07 6.82 0.08
Long term loans and advances 13.98 0.15 14.23 0.17
Staff retirement benefit – prepayment - 0.00 12.54 0.15
Current assets (excluding investments) 7,436.02 76.94 6,181.54 75.19
Total assets 9,664.33 100.00 8,221.74 100.00
Shareholders' equity 3,088.74 44.37 2,769.93 33.69
Deferred taxation 95.81 0.99 76.10 0.93
Other non-current liabilities 145.91 1.51 105.29 1.28
Surplus on revaluation of fixed assets 1,216.15 14.79
Other current liabilities (trade, interest
and tax) 5,134.31 53.13 4,054.27 49.31
Total equity and liabilities 9,664.33 100.00 8,221.74 100.00

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 Vertical Analysis of HinoPak Motors’ Profit & Loss Statement
HinoPak Motors Limited
Profit & loss Statements 2017-18 % 2016-17 %
Sales 26,615.07 [Link] 22,477.50 100.00
Cost of sales 23,580.63 88.60 20,011.40 89.03
Gross profit 3,034.44 11.40 2,466.10 10.97
Distribution cost 440.15 1.56 427.30 1.90
Administration Expense 420.59 1.58 385.65 1.72
Other income 300.79 1.13 254.51 1.13
Other expense 155.95 0.46 130.72 0.57
Profit from operation 2,348.55 8.82 1,776.93 7.91
Finanace Cost (Income) 679.00 2.55 80.22 0.36
Profit before taxation 1,669.55 6.27 1,696.71 7.55
Taxation 520.17 1.95 576.81 2.57
Profit after taxation 1,149.38 4.32 1,119.90 4.98

HinoPak Motors Limited vertical

Analysis
Profit & loss Statements 2015-16 % 2014-15 %
Sales 18,086.85 100.00 12,636.29 100.00
Cost of sales 15,324.77 84.73 10,662.91 84.38
Gross profit 2,762.08 15.29 1,973.38 15.62
Distribution cost 397.96 2.20 303.23 2.40
Administration Expense 393.84 2,18 359.07 2.84
Other income 192.66 1.07 261.04 2.07
Other expense 131.19 0.73 137.70 1.10
Profit from operation 2.031.75 11.23 1,434.42 11.35
Finanace Cost (Income) 1,727.04 1.68 (118.17) (0.94)
Profit before taxation 1,113.38 9.55 1,552.59 12.29
Taxation 613.67 3.39 579.37 3.79
Profit after taxation 1,113.38 6.16 1,073.22 8.50

Comments on Horizontal and Vertical Analysis of Four selected Companies

Al-Ghazi Tractors’ Profit and Loss Statement
Sales Revenue
Significant increase in Sales Revenue of CAGR 13.9% was noted from 2015 to 2018 mainly due
to sale of increased volume of 23,933 units as compared to 14,071 units in 2015. Increase in Sales
Revenue is a result of differentiated marketing strategies, improved farmer’s economic health,
recognition of Company’s quality initiatives and Company’s strategy of engaging with its
customers.

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Gross Profit
Lean management and rigorous cost discipline assisted in achieving an implausible Gross Profit
over the years with a CAGR of 12.66% from 2015 to 2018. Although a plausible growth in Gross
profit is observed during the year, a slight pressure in GP was noted during the year as the GP%
of the Company showed a decline of 3.79% as compared to last year mainly due to rise of
component price resulting from rupee devaluation. GP% of the company stands at 24.08% as
compared to 27.87% last year.
Overheads
The Company strongly believes in cost saving initiatives and effective controls over expenditures
to curtail its expenses. Compound annual growth of overheads, from 2015 to 2018, exhibited an
increase of 11.82%, which is attributable to various marketing initiatives taken to enhance sales.
Finance Cost Finance cost increase significantly during the year as a result of short term borrowing
facility from bank.
Other Income
Other income mainly represents income from investments. A declining trend in other income is
mainly due to payment of extra ordinary dividends from the year 2015 onwards. This ultimately
resulted in reduced investments in the financial market. Profitability A consistent growth in
company’s profitability was observed from 2015 to 2018. Net Profit CAGR from 2015 to 2018
amounted to 10.17%. The profit after tax stood at Rs.2.54 billion as compared to Rs.3.1 billion in
2017 i.e. a decrease of 21% was noted as compared to last year as a result of decrease in gross
margin and increased finance cost during the year.
Al-Ghazi Tractor’s Balance Sheet

Equity and Reserves

Equity and reserves have decreased over the years, though the company continue to make notable
profits thus increasing equity, the decrease is mainly attributable to extra ordinary dividend
payouts to shareholders. Fixed Assets Fixed assets of the Company grew over past four years from
Rs.404 million in 2015 to Rs.828 million in 2018. The increase is mainly attributable to
capitalization of new Head office building in 2015 and various machinery and equipment used in
production at Plant.
Stock in trade
The Company makes all efforts to maintain raw material and components inventory at safety stock
levels to minimize production disruptions due to supply chain issues of auto sector. Higher
inventory as at December 2018 is due to increase in forecasted sale of tractors in 2019.
Refunds due from the Government
This represents sales tax refunds arising due to difference in the rate of input tax @ 17% and the
output tax @ 5%. Significant amount of sales tax refund remained outstanding from the

51
Government at year end 2018. Refund claims totaled Rs.1.79 billion which represents a significant
increase of 47% as compared to last year.
Cash and bank balances
High dividend payouts from year 2015 onwards have resulted in availization of short-term finances
from bank during the year to cater the working capital requirement. Cash in bank amounted to
Rs.293 million while short term borrowing from bank amounted to Rs.3.9 billion thus a negative
net cash balance of Rs.3.6 billion existed at the year end.
Atlas Honda’s Income Statement
Sales & Cost of sales
The Company remained focused towards delivering objective of sustainable growth through value
creation. The momentum of increasing sales continued over the period of four year on account of
positive market demand. It resulted in achievement of cumulative average growth rate of 13% over
four years period. Further, cost of sales recorded an cumulative average growth rate of 12% since
2015, on account of volume growth. Resultantly, Gross Profit margin improved from 8.7% to
10.7%.
Selling General and Administrative Expenses
Selling general and administrative expenses remained under control and as a percentage of sales
decreased from 3.8% to 3.2% since 2015. However, in terms of absolute numbers, increase by
56% over the period of four years mainly on account of inflation and sales related expense.
Other Operating Expenses
Other operating expenses increased from Rs. 190 million in 2015 to Rs. 445 million in 2018 over
the period of four years with cumulative average growth rate of 19 %. These mainly comprises of
provision for workers' welfare funds and workers' profit participation funds that were directly
related to profits. Other Operating Income Other operating income increased from Rs. 323 million
in 2015 to Rs. 929 million in 2018 over the
period of four years with cumulative average growth rate of 22 %. This is on account of investment
of surplus funds in TDRs, mutual funds and income from associate. Taxation The taxation charge
decreased due to reduction in corporate income tax rates by the federal government.
Atlas Honda Balance Sheet
ASSETS
Non current assets
Non-current assets mainly include property, plant and equipment and long term investments.
Property, plant and equipment registered an increase of Rs. 3.6 billion since 2013 due to expansion
of production facilities and balancing, modernization and replacement of existing manufacturing
facilities and other routine capex requirements. Further, the Company has made an acquisition of
29.23% in Atlas Hitec (Private) Limited at a cost of Rs. 0.2 billion. Consequently the long term
investment stand at Rs. 0.3 billion at the end of 2018, with an increase of 50% 0.2 billion in 2015.

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Current assets
Current Assets mainly constitute of stores and spares, stock in trade, trade debts, other receivables,
short term investments and cash & bank balances. Variation in current assets balances was mainly
due to the increase in short term investments and cash & bank balances owing to better cash
availability on account of increase in customer advances and profit retention for reinvestment and
future growth. Stocks increased by Rs. 0.7 billion due to production requirements. However,
inventory holding period reduced from 24 days to 17 days on account of better inventory
management.
EQUITY & LIABILITIES
Equity
Issuance of 25% bonus share in 2013 resulted in a share of capital of Rs. 1.034 billion at the end
of year 2014. Reserves increased at cumulative average growth rate of around 20% since 2013
primarily on account of profit retention for re-investment and future growth. Resultantly,
shareholders' equity comprising of share capital and reserves rose to Rs. 16.0 billion at the end of
the year 2018 around 246% higher than Rs. 6.5 billion recorded in 2013.
Non current liabilities
Non current liabilities, comprising of deferred taxation and compensated leave absences at Rs. 0.9
billion is in line with historical trend of past four years primarily due to accumulation of leave
absences.
Current liabilities
Current liabilities increased from Rs.4.6 billion in 2013 to Rs. 14.9 billion in 2018 primarily due
to increase in customer advances and trade related payables, which are in line with the increasing
sales and production trend respectively.
Pak Suzuki Motors’ Income Statement
Sales volume increased by 17.7% in year 2018 as compared to 2017 but gross profit declined by
27% that equaled to 7042 Million. Profit after tax payed also decreased 66.1%

Pak Suzuki Motors Balance Sheet

Total assets increased by 20% in 2018 as compared to 2017. In which fixed assets also increased
with 75% amounting rupee 15768 million with highest increases in the assets.
In 2018, Equity reserves decreased by 1.1% as compared to 2017 but liabilities showed a massive
decrease of 58% in trade and other payables advances. Overall equity and liabilities increased by
20.9% in 2018 as compared to previous year.
Hino Pak Motors Profit & Loss Statement
In 2018, Total sales volume increased by 18.41% & profit from operation increased by 32.17% after
deducting all expenses and costs we found that profit for the year increased 2.7% as compared to 2017

53
 Hino Pak Motors Balance Sheet
In 2018, Total assets increased by 43.8% as compared to 2017. In with current assets showed a massive
increase of 57% as compared to last year.

Shareholders Equity also increased by 11% in 2018. And current liabilities also increased by 78%. Total
equity and liabilities also increased 43%.

Ratio Analysis

SR Al-Ghazi Tractors Limited

No
Ratio (Type) 2018 2017 2016 2015
1 Gross profit ratio 24.08% 27.87% 27.68% 25.94%
2 Pre-tax profit ratio 19.28% 24.30% 23.78% 24.82%
3 Net profit to Sales 12.66% 16.55% 15.93% 16.52%
4 Return on asset 36.14% 53.10% 41.49% 24.86%
5 Return on Equity / Capital employed 179.09% 146.91% 57.36% 27.51%
6 Current Ratio 1.12 1.41 3.32 10.54
7 Quick Ratio 0.46 0.78 2.15 6.61
8 Cash to current liabilities 0.06 0.37 1.10 4.24
9 Fixed assets turnover ratio 23.37 26.40 18.62 15.74
10 Total assets turnover ratio 2.86 3.21 2.61 1.50

Profitability Ratio
The Company’s sound business performance is depicted through favorable profitability ratios over
the years. The performance of the Company enhanced in FY 2016. FY 2017 witnessed giant leap
forward with respect to profitability of the Company. In the year 2017, Company made historic
achievements in profitability and posted ever highest profits and better profitability ratios. In the
year 2018, the Company profitability decreased due to decrease in gross margins in line with
challenging socio-economic conditions, increased imported raw material prices and foreign
currency exchange rates.
Liquidity and Turnover Ratios
By devising strong cash and working capital management policies over the years, liquidity of the
company is still in good position despite the utilization of short-term borrowing facility from bank.
Although a decline is observed as compared to last year, still the current and quick ratios of the
Company shows stable position of the liquidity as the Company still has Rs.1.12 assets for each
Re.1 liability.

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SR Hino Pak Motors
No
Ratio (Type) 2014-15 2015-16 2016-17 2017-18
1 Gross profit ratio 15.62% 15.27% 10.97% 11.4%
2 Net Profit Margin 8.5% 6.16% 4.98% 4.32%
3 Return on Assets 13.05% 11.5% 11.2% 7.9%
4 Return on equity 26.92% 25.96% 23.5% 21.7%
5 Debt equity Ratio 0.05 0.06 0.06 0.06
6 Current Ratio 1.52 1.45 1.43 1.28
7 Quick Ratio 1.07 0.91 0.78 0,72

Conclusive Summary
We have analyzed the financial reports of all four companies using Horizontal analysis, vertical
analysis & ratio analysis techniques to see financial position of each company. after analyzing all
four companies we reach to conclusion that HinoPak Motors have competitive advantage over
other three companies for earning per share that was Rs 92.68 while other including Pak Suzuki
earned per share Rs. 15.7, Atlas Honda Rs 45 & Al-Ghazi Tractors EPS equaled to Rs 42. Hence,
we reach to conclusion that HinoPak motors have been earning highest profit as compared to other
three companies and is best to invest in. because it pays highest dividend as compared to other
companies the reason is EPS that is highest held by HinoPak.

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