EXIDE BATTERIES

EXIDE Pakistan Limited, was incorporated in 1953 as a private limited company in association with Chloride Group Plc of United
Kingdom. Chloride had its associates in 35 countries of the world and was supported by chloride Technical.
EXIDE ultimately got listed on the Karachi Stock Exchange in 1982 and received the top 25 Companies Award 8 times. Sound
professional management was also recognized by the Management Association of Pakistan who awarded Corporate Excellence
Award three times.
EXIDE Pakistan Limited, the largest manufacturers of Lead Acid Electric Storage Batteries in Pakistan. A wide range of Exide
Batteries is produced for many applications from batteries for Cars, Tractors, Trucks and Buses to Earth Moving Equipment and off-
the-road Vehicles. EXIDE Pakistan also manufactures special application Industrial Batteries for Stand-by Power, locomotive engine
starting and for TRAIN lighting system.
The name of EXIDE batteries in the Automotive Industry is very much well known. They are by far the best Automotive Batteries
available across the whole region. The name of EXIDE is itself the name of Reliability and Performance.
EXIDE batteries are available in different ranges according to the usage and performance. From Cars, Trucks, Planes, Heavy trailers
or anything you name it we have it ! is what our slogan is. For more in depth details visit our related sections and see what suits Best
for your automotive needs.
VISION

To remain leader in automotive battery industry by supplying quality product to the customers at affordable price and to satisfy their
needs by providing reliable products as per international standard and best suited to local environment.

MISSION

1. Continuous improvement in workmanship, process, productivity and elimination of wastage by effective implementation of total
quality control.
2. To be honest and fair with all partners namely, shareholders, employees, suppliers, financial institutions, government and the
customer.
3. To train and motivate employees for building up dedicated and loyal team.

4. To be good citizen and contribute effectively in betterment and prosperity of our country.

EXIDE PAKISTAN LIMITED

BALANCE SHEET
AS AT MARCH 31, 2005

2005 2004(Restated)(Rupees ‘000)

SHARE CAPITAL & RESERVES
Authorised capital 10,000,000 ordinary shares of Rs 10 each 100,000 100,000
Issued, subscribed and paid-up capital 54,057 54,057
Capital reserves 259 259
Revenue reserves 250,491 209,491
Inappropriate profit 59,441 62,455

364,249 326,262
SURPLUS ON REVALUATION OF PROPERTY,
PLANT AND EQUPMENT –net of tax 3 1,955 32,223

NONCURRENT LIABALITIES
Long term financing 64,000 80,000
Deferred taxation 18,699 3,137

CURRENT LIABILITIES
Trade and other payables 124,596 72,672
Current portion of long-term financing 16000 -
Interest and mark-up accrued on loans 3,241 1,306
Short-term borrowings 242,165 232,047

386,002 757,647

864,904 757,647

2005 2004
(Rupees ‘000)

FIXED ASSETS
Property plant and equipment 298,662 304,466
Long term investments 25,531 25,531
Long term loans and advances unsecured 981 923
Long term deposits 11,104 9,969

CURRENT ASSETS
Spares 17,743 14,987
Stock in trade 353,669 231,991
Trade debts 90,448 70,698
Loans and advances 4,098 1,477
Trade deposits and short term prepayments
and other receivables 4,001 3,457
Taxation recoverable 4,641 18,253
Cash and bank balance 54,026 75,895

528,626 416,758
864,904 757,647

EXIDE PAKISTAN LIMITED

PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED MARCH 31, 2005

2005 2004
(Rupees ‘000)

Net sales 1,288,628 994,882

Cost of sales 1,063,010 793,799

Gross profit 225,618 201,083

Selling and distribution expenses 86,084 74,006
Administration and general expenses 31,573 29,390

Operating profit 107,981 97,687

Other income 3,969 14,084

111,950 111,771

Finance cost 17,951 12,967

Other charges 6,448 8,266

24,399 21,233

Profit before taxation 87,551 90,538

Taxation 33,616 33,415

Profit after taxation 53,935 57,123

Rupees
Earnings per share-basic and diluted 9.98 10.57

Appropriations have been reflected in the statement of changes in equity

Purpose of financial Analysis.

The key purpose of financial analysis is to assess the health of the business. Because different parties are interested in the
organization. These analyses provide different type of information to interested parties. These analysis can be conducted in the
context of different parties.
• Analysis of financial statements in context of owner.
• Analysis of financial statements in context of investor.
• Analysis of financial statements in context of employee.
These analyses are also helpful for the future planning. We can say that these analysis provide a sound base for making future
planning. For example these financial analyses can be used for:
• Innovation of new products.
• Determines the interest rates at which money should be borrowed.
• Reducing the continue losses by making effective planning.
• Determines the strength of the firm to pay it’s debt as well as it’s fix cost.
• Gives the information about the wealth of owner.
However these analyses should be in relation of some structural framework. Otherwise, the analyses are likely to be loose and not
lend it to answering the questions for which these were intended.

Ratio Analyses.

1 : Liquidity Ratios :

• Current Ratio = Current Assets

Current Liabilities

416758 = 1.31
316025

528626 = 1.36
386002

• Quick Ratio = Current Assets-Inventory

Current Liabilities

= 416758 – 231991 = 0.58

316025

= 528626 – 353669 = .453

386002

• Cash to Current Liabilities Ratio = Cash + C.E

CL

= 75895 = 0.24
3160251

= 54026 = .139
386002

• Cash to Total Assets Ratio = Cash + C.E

TA

75895 = .10017
757647

54026 = .0624
864904

• N.W.C to Sales Ratio = CA – CL

Sales

416758-316025 * 100 = 10.125

994882

528626-386002 *100 = 11.06

1288628

2 : Activity Ratios :

• Inventory turnover ratio = Cost of goods sold .

Ending Stock Inventory

793799 = 3.42 times

231991

1063010 = 3.0 times

353669

• Average age of Inventory = No. of Working days

Inventory turnover
360 = 105.26 days
3.42

360 = 120 days

3

• Average collection Period = Accounts Receivable .

Average credit Sales per day

70698 = 70698 = 25.58 days

994882 / 360 2763.5

90448 . = 90448 = 25.26 days

1288628 / 360 3579.52

• Average Payment Period = Accounts Payable .

Average Credit Purchase per day

82672 = 82672 = 44.49

668993 / 360 1858

124593 = 124596 = 45.94

976320 / 360 2712

• Fixed Assets turn over ratios = Sales .

Fixed Assets

994882 = 3.26
304466

1288628 = 4.31
298662

• Total Assets turn over = Sales .

Total Assets

994882 = 1.313
757647

1288628 = 1.489
864904
• Net worth turn over = Sales.
Net worth

994882 = 3.04
326262

1288628 = 3.53
364248

3 : Leverage Ratios :

• Debt ratio = Total Liabilities

Total Assets

399162 * 100 = 52.68%

757647

468661 * 100 = 54.18%

396243

• Debt Equity Ratio = Total Debt .

Stock holders Equity

399162 * 100 = 111.34 %

358485

468661 * 100 = 118.27 %

3962431
• Equity Multiplier = Total Assets .
Stock holders Equity

757647 = 2.11
358485

864904 = 2.18

4 : Coverage Ratio :

• Time earning ratio = EBIT.

Interest

111771 = 8.61
12967
111950 = 6.23
17951

5 : Profitability Ratios :

• Gross profit ratio = Gross Profit * 100

Sales

201083 * 100 = 20.21%

994882

225618 * 100 = 17.50%

1288628

• Operating Profit Ratio = Operating profit * 100

Sales

97687 * 100 = 9.87%

994882

107981 * 100 = 8.37%

1288628

• Net Profit ratio = NPAT * 100

Sales

57123 * 100 = 5.74%

994882

53935 * 100 = 4.18%

1288628

• Return on Assets = NPAT . * 100

Total Assets

57123 * 100 = 753

757647
53935 * 100 = 6.23
864904

• Return on Equity = NPAT * 100

S.H.E

57123 * 100 = 15.93%

358485

53935 * 100 = 13.61%

396243

6 : Marketability Ratios :

• Earning Per Share = NPAT – Dividend on P.S.

Outstanding common stock

57123000 = 10.56
5405737

53935000 = 9.97
5405737

• Dividend per share = Dividend Paid .

Outstanding common stock

10784000 = 1.994
5405737

10949000 = 2.025
5405737

• Dividend payout ratio = Dividend per share

Earning per share

10784000 * 100 = 18.87%

57123000

10947000 * 100 = 20.2%

53935000
• Retention Ratio = (1 – Dividend payout) * 100

1 - 18.87% = 81.13%

1 - 20.2% = 79.8%

• Dividend Yield = Dividend per share * 100

Current Market Price

1.994 = 2.53 %
78.51

2.025 = 2.75 %
78.51

• Breakup value per share = S.H.E .

Outstanding Stock

358485000 = 66.31
5405737

396243000 = 78.84
5025595

• Price Earning Ratio = Market Price of stock

Earning per Share

78.51 = 7.43
10.56

78.51 = 7.87
9.97

• Market to Book Ratio = Market price

Book Value

78.51 = 1.18
66.31
78.51 = 0.99
78.84

Common Statement Analyses.

PROFIT AND LOSS STATEMENT

VERTICAL ANALYSIS

Details 2005 rupees in thousands 2004 rupees in thousands

Net sales 1,288,628 100% 994,882 100%
Cost of sales 1,063,010 82.49 793,799 79.79
Gross profit 225,618 17.5 201,083 20.21
Selling and distribution expenses 86,084 6.67 74,006 7.44
Administration and general expenses 31,573 2.45 29,390 2.95
Operating profit 107,981 8.37 97,687 9.82
Other income 3,969 .308 14,084 1.42
Finance cost 17,951 1.39 12,967 1.3
Other charges 6,448 .5 8,266 .83
Profit before taxation 87,551 6.79 90,538 9.1
Taxation 33,616 2.61 33,415 3.66
Profit after taxation 53,935 4.19 57,123 5.74

HORIZONTAL ANALYSIS
PROFIT AND LOSS STATEMENT

Details 2005 2004 % change

Net sales 1,288,628 994,882 29.52
Cost of sales 1,063,010 793,799 33.91
Gross profit 225,618 201,083 12.2
Selling and distribution expenses 86,084 74,006 16.29
Administration and general expenses 31,573 29,390 7.43
Operating profit 107,981 97,687 10.54
Other income 3,969 14,084 -17.82
Finance cost 17,951 12,967 38.44
Other charges 6,448 8,266 -21.99
Profit before taxation 87,551 90,538 -3.3
Taxation 33,616 33,415 .601
Profit after taxation 53,935 57,123 -5.58

BALANCE SHEET
VERTICAL ANALYSIS

Details 2005 2004

Property plant and equipment 298,662 34.53% 304,466 40.19%
Long term investments 25,531 2.95% 25,531 3.37%
Long term loans 981 0.11% 923 0.12%
Long term deposits 11,104 1.28% 9,969 1.32%
Net fixed assets 336,278 38.88% 340,889 44.99%
Spares 17,743 2.05% 14,987 1.98%
Stock in trade 353,669 40.89% 231,991 30.62%
Trade debts 90,448 10.46% 70,698 9.33%
Loans and advances 4,098 0.47% 1,477 0.19%
other receivables 4,001 0.46% 3,457 0.46%
Taxation recoverable 4,641 0.54% 18,253 2.41%
Cash and bank balance 54,026 6.25% 75,895 10.02%
Total current assets 528,626 61.12% 416,758 55.01%
Equity 364,249 42.11% 326,262 43.06%
Surplus on revaluation 3 1,955 3.69% 32,223 4.25%
Long term financing 64,000 7.40% 80,000 10.56%
Deferred taxation 18,699 2.16% 3,137 0.41%
Trade and other payables 124,596 14.41% 72,672 9.59%
Current portion of long-term 16000 1.85% - 0.00%
Interest and mark-up 3,241 0.37% 1,306 0.17%
Short-term borrowings 242,165 28.00% 232,047 30.63%
Net current liabilities 386,002 44.63% 316025 41.71%
Total liabilities 468661 5.28% 399162 52.68%
Total assets 8864904 100% 757649 40.19%

HORIZONTAL ANALYSIS

Details 2005 2004 % change

Property plant and equipment 298,662 304,466 -1.91%
Long term investments 25,531 25,531
Long term loans 981 923 6.28%
Long term deposits 11,104 9,969 11.39%
Net fixed assets 336,278 340,889 -1.35%
Spares 17,743 14,987 18.39%
Stock in trade 353,669 231,991 52.45%
Trade debts 90,448 70,698 27.94%
Loans and advances 4,098 1,477 177.45%
other receivables 4,001 3,457 15.74%
Taxation recoverable 4,641 18,253 -74.57%
Cash and bank balance 54,026 75,895 -28.81%
Total assets 528,626 416,758 26.84%
Equity 364,249 326,262 11.64%
Surplus on revaluation 3 1,955 32,223 -0.83%
Long term financing 64,000 80,000 -20.00%
Deferred taxation 18,699 3,137 496.08%
Trade and other payables 124,596 72,672 71.45%
Current portion of long-term 16000
Interest and mark-up 3,241 1,306 148.16%
Short-term borrowings 242,165 232,047 4.36%
Net current liabilities 386,002 757647 -49.05%
Total liabilities 864904 399162 116.68%
EXIDE PAKISTAN LIMITED
Cash flow statement
AS AT MARCH 31, 2005

NPAT 53935
Depreciation 24453
Change in All currant assets (except cash)
Increase in spares (2756)
Increase in stock in trade (121678)
Increase in trade debts (19750)
Increase in loan & advances (2621)
Increase in trade deposits (544)
Decrease taxation recoverable 13612
Change in Currant liabilities
Increase in trade & other payables 41924
Increase in currant portion & long term financing 16000
Increase in interest and mark up accrued on loans 1935
Increase in short term borrowings 10118
Cash provided by operating activity 14628
Cash flow from investment activity
Decrease in property plant and equipment 5804
Increase in long term loans and advances 58
Increase in long term deposits 1135
Cash provided by investment activity 6997
Cash flow from financing activity
Decrease in long term financing (16000)
Increase in differed taxation 15562
Cash used in financing activity (438)
Net cash flow 21187
Opening balance of cash 75895
Ending balance of cash 97082

Interpretation of Ratios.

Liquidity means the¬ conversion of assets into cash. From the ratio analysis of EXIDE batteries, we come to know that from 2004 to
2005, the firm is not much liquid because its current assets are little high than current liabilities. Here in 2005 the NWC of the firm is
positive so long term funding is used to finance the fix assets.
The activity means at what speed accounts are converted either into¬ cash or sales. Form the analysis the average age of inventory
has been increased in 2005 as compare to 2004 but average collection period is decreased and average payment period has been
increased by in 2005. So, in 2005 the firm’s cash conversion cycle has been reduced from. So the activity of the firm is better in 2005
as compare to previous year.

The firm is not in better¬ financial position in terms of leverage of gearing ratio. The firm is using approx. 54.18% external debt,
which is very high ratio and has a negative impact on the profitability. The external debt ratio is also increased as compare to 2004.
The debt equity ratio is also increased from 111.34 to 118.27. On the other hand the Equity multiplier is also increased from 2.11 to
2.18, which is good sign for the company.

The covering ratio means the ability of¬ firm to cover it’s fixed financial cost. As the firm’s Time interest earning ratio is decreased
from 8.61 to 6.23. The higher the ratio the higher the ability to pay it’s fixed cost. It’s means the firm is in better position in 2005 as
relation to covering ratio.

By analyzing the profitability of¬ the firm, we see that gross profit margin, net profit margin, operating profit margin, return on assets,
return on equity has decreased in the 2004. Net profit has decreased from 5.74% to 4.18% in 2005. In the year 2004.

By¬ analyzing the marketability ratio we come to know that EPS is declined in 2004 due to decline in net profit. But the book value of
the share has been increased from 66.31 to 78.84.

Interpretation of cash flow statement

The cash flow statement is used to check out the inflow or outflow OR the sources and used of cash during the accounting period. It’s
basic purpose is to check out the ability of cash to pay it’s fixed financial cost, location of opportunities with the help of availability of
cash and to check out the inflow or outflow from operating activities.

In 2005 the cash is generated by the operating activities. And the same in invested in fixed assets. So, the investment in fixed asset
is more than the cash generated by it’s operating activities that’s why there in increase in long term debt. In coming year the firm will
have to pay higher fixed cost due to increase in long term debts in 2004 which can negatively effect on the profitability of firm in 2005.
It is predicted that if firm in unable generate any operating cash in 2005 the firm will unable to pay it’s fixed financial cost and it can be
declared as technical insolvent in 2005.

Interpretation of common statement analyses. Vertical Analyses.

If we vertically analyze the income statement CGS ratio is 82.49 and GP ratio is 17.5%. The CGS ratio is little bit high that’s why the
GP ratio is less. The selling expenses are more than the administrative expenses. The operating profit ratio is 8.37%. The other
income ratio is very low which is .308% that’s why the EBIT is also low to 6.79%. The EAT is 4.19%.
If we analyze the asset side the fixed asset ratio is38.88% of total assets. The fixed assets are more productive as compare to
current assets but long-term debt ratio is 18%. It’s means the firm is violating the maturity matching principle. The current assets ratio
is 44% and the current liabilities are 66%, which is more than current asset ratio.

Horizontal analyses.

If we analyze the income statement with the 2004 as a base year we come to know that there in an increase in the sales but the CGS
is also increased by 33.91%. That’s why there is decline in the GP by 12.2%. The selling expenses has been increase but the
administrative expenses have also been increased. The operating profit has also been reduced due to high CGS and Administrative
expenses but there is a great change in the other income. At the same time the company has also to pay higher tax that’s why the
EAT is decreased.
In balance sheet the SHE is increased in 2005. The LTL have also been decreased in 2005 as compare to 2004 that’s mean the firm
will have to pay higher fixed cost in 2005 and future coming years. On asset side the fixed asset have also been increased due to
investment activities in 2004 and the current assets are also increased. The overall business of the firm is increased in 2004.