2.

Productions
PEL's production department is the foundation of its operations, creating high-quality electrical
equipment and appliances to meet a wide range of customer demands. PEL has long been
recognized as a pioneer in Pakistan's electrical manufacturing business, with a strong emphasis
on innovation, quality, and customer satisfaction. Pel’s manufacturing path has been defined by
significant technological cooperation with famous worldwide partners like AEG Germany,
Fujitsu Japan, GANZ Hungary, and Schweitzer Engineering Laboratories (SEL) USA. These
agreements have permitted the transfer of technology, experience, and best practices, allowing
PEL to continuously develop and offer cutting-edge goods to the market. PEL primarily focused
on the development of power equipment such as transformers and switch gears before carefully
diversifying its product line to include residential appliances in 1981. This diversification not
only increased PEL's market reach, but also corresponded with changing consumer lifestyle
patterns in Pakistan. PEL maintains strict quality control requirements throughout the production
process. The firm has invested in cutting-edge testing facilities to ensure that its goods fulfill
international quality standards and provide consistent performance to clients. Upgrading testing
facilities demonstrates PEL's dedication to product excellence and customer satisfaction. Despite
hurdles such as fluctuating consumer demand and financial dynamics, PEL's manufacturing
department stays adaptable to shifting market conditions. To capitalize on growth prospects and
preserve a competitive advantage, the organization constantly studies industry developments,
customer preferences, and regulatory requirements. Looking into the future, PEL's
manufacturing department is well-positioned to benefit on the increasing demand for electrical
equipment and appliances, which is being driven by factors like as urbanization, industrial
growth, and infrastructural development. The company's emphasis on research and development
will allow it to fulfill local demand while also exploring prospects in foreign markets, therefore
contributing to long-term growth and sustainability.

Procurement

As a result of Pakistan's power sector reorganization and an increase in economic, commercial,

and industrial activity, there is a greater demand for high-value packaged solutions customized to
transmission networks and business electrification requirements. Recognizing this demand, PEL
(Pakistan Electrical Limited) has formed an Engineering Procurement and Construction (EPC)
section to address the changing demands of its broad customers. PEL's EPC business has a team
of experienced specialists with vast expertise in both local and worldwide markets. This team has
the competence to provide custom-designed and built solutions in a variety of essential
infrastructure development sectors. The division focuses on delivering procurement services that
facilitate the timely and efficient acquisition of goods, equipment, and resources required for
project execution. PEL enables the procurement of high-quality components that satisfy the
specifications and standards of each project by forming strategic alliances with credible suppliers
and manufacturers. Pel’s procurement approach is distinguished by precise planning, extensive
market research, and rigorous quality control standards. PEL maximizes value for its clients by
identifying the most cost-effective and dependable procurement choices using its industry
experience and market insights. In addition to typical procurement methods, PEL investigates
novel ways such as strategic sourcing and global supply chain management to improve efficiency
and shorten lead times. These solutions allow PEL to manage risks connected with supply chain
interruptions and market volatility, ensuring project execution remains flawless. PEL's
procurement services also include contract negotiation, supplier management, and coordination,
in addition to material and equipment purchase. PEL promotes collaboration and alignment
throughout the procurement process through excellent supplier relationships and open
communication, reducing delays and enhancing project success. Overall, PEL's EPC business
provides comprehensive procurement solutions tailored to each project's specific needs while
assuring quality standards, cost effectiveness, and on-time delivery. PEL's status as a valued
partner in pushing infrastructure development and propelling Pakistan's prosperity is
strengthened by its emphasis on quality in procurement standards.

Supply Chain
PEL has a robust supply chain throughout its home appliances and power divisions, ensuring that
its goods are produced and distributed efficiently. Compressors, condensers, coolants, motors,
copper, pipes, isocyanate, evaporators, and insulating materials are all purchased from different
vendors. These materials are converted and manufactured within PEL's facilities, requiring
personnel and incurring factory overhead costs. Refrigerators, deep freezers, air conditioners,
microwave ovens, water dispensers, and LED televisions are among the completed goods. PEL's
client base is wide, including the general public, merchants, distributors, and private/corporate
customers. Copper coils, silicon steel sheets, transformer oil, magnets, cables, and CRGO
laminations are all sourced from reputable vendors in the power division. Manufacturing
procedures turn these materials into power transformers, distribution transformers, energy
meters, switch gears, and grid stations. Power equipment is assembled and tested by skilled
technicians and engineers, with manufacturing overheads covering operational expenditures.
PEL's power business provides reliable power solutions to WAPDA DISCOs (Distribution
Companies) and private/corporate clients. PEL unifies supply chain management across both
divisions to maximize efficiency, reduce costs, and assure product delivery on time. This entails
building good connections with suppliers, using modern logistics and inventory management
systems, and constantly monitoring and upgrading supply chain procedures. This allows PEL to
efficiently satisfy market needs and customer expectations while producing high-quality goods.
In addition to employing its own resources, PEL keeps a well-managed supply chain of
internationally renowned manufacturers and service providers to complete the project scope. As
such, the end product is a reliable, high quality and pricewise most optimum solution. PEL's
supply chain is critical to its operations, allowing materials, components, and completed products
to move seamlessly through its business processes. PEL has created a strong supply chain
strategy to serve its diversified portfolio in the electrical and power sectors, with an emphasis on
efficiency, reliability, and sustainability. PEL sources supplies, components, and equipment from
reputable vendors both locally and abroad. PEL guarantees that its suppliers fulfill strong quality
requirements as well as ethical and sustainable practices through stringent vendor review and
selection procedures. PEL's strategic ties with suppliers allow it to get competitive pricing,
shorten lead times, and ensure uniform quality across its product line. PEL's innovative
production facilities use modern technology and automation to create a diverse variety of
electrical goods. PEL prioritizes efficiency, quality, and safety in its production procedures for
transformers, switchgear, energy meters, and other electrical equipment. Continuous
improvement activities enable innovation and optimization in manufacturing procedures,
allowing PEL to address changing client expectations while maintaining high levels of product
perfection. Effective inventory management is critical to PEL's supply chain operations because
it ensures proper stock levels while reducing carrying costs and the possibility of stockouts. PEL
optimizes inventory levels and replenishment cycles by using advanced inventory management
systems and demand forecasting methodologies. Strategic stockpiling of vital components and
completed items allows PEL to fulfill client requests quickly and effectively, thereby boosting
Customer Satisfaction. PEL has a well-organized distribution network that includes warehouses
and coordination hubs strategically situated throughout Pakistan. This network allows for more
effective product storage, handling, and distribution to clients all around the country. PEL
optimizes transportation routes, decreases transit times, and lowers transportation costs through
agreements with trustworthy coordination suppliers. Real-time tracking systems and modern
coordination technology improve visibility and control of the distribution process, ensuring that
items are delivered to clients on time and accurately. PEL is dedicated to fostering environmental
and social responsibility across its supply chain activities. Ethical sourcing, environmental
sustainability, and adherence to applicable norms and standards are all priorities for the
organization. PEL collaborates with its suppliers and partners to decrease waste and promote
responsible resource management. Furthermore, PEL regularly participates in projects to benefit
local communities and promote economic growth through its supply chain operations.

Distribution
PEL's distribution transformers are precisely developed to meet the diversified needs of
Pakistan's expanding power sector. These transformers are critical in the effective distribution of
power from the grid to industrial, commercial, and residential customers. Oil-Immersed Core
Type Transformers are strong and dependable, making them ideal for use in distribution
networks. They maintain excellent performance even under variable load situations thanks to
their effective cooling systems. PEL's dry type transformers are insulated using superior VP
(Vacuum Pressure) technology, which increases safety and dependability. These transformers are
suited for applications requiring high environmental standards, such as fire safety.
Autotransformers are well-known for their efficiency and compactness. PEL autotransformers
are designed to satisfy particular voltage needs, providing a low-cost option for voltage control
and distribution. PEL's distribution transformers are not only technologically innovative, but also
meet high quality requirements, assuring long-term dependability and performance. PEL
continues to set the standard for offering cutting-edge solutions for Pakistan's power distribution
needs, with an emphasis on innovation and customer satisfaction.

Sales and Marketing

PEL's principal priority in 2023 was to meticulously maintain market share and equity, which
yielded impressive achievements. Extensive research and analysis show that PEL not only kept
but substantially extended its equity in key market categories. This accomplishment
demonstrates PEL's constant dedication to providing great quality and unique designs that
engage strongly with customers. PEL Refrigerators, in particular, became a distinctive product,
acknowledged by astute customers as the pinnacle of great design and utility. For over a half-
decade, the unique Blaze design, a trademark of PEL's inventiveness, has grabbed customers'
imaginations, establishing itself as a timeless emblem of quality in the domain of household
appliances. PEL consciously changed its emphasis to digital media procurement, motivated by a
strong desire to adopt data-driven decision-making methods. This was a watershed point in PEL's
marketing strategy, as traditional media channels were phased out in favor of a more complete
and integrated approach to media procurement. Embracing the well-known marketing Rule of 7,
which states that consumers generally require seven contact points before making a purchase,
PEL methodically designed a sequence of encounters across many digital channels. This
initiative-taking strategy not only secured greater customer involvement, but also increased
brand awareness and resonance, cementing PEL's market position as a forward-thinking and
consumer-focused business. "Jeeto PEL Se" embodies PEL's commitment to awarding
achievement and spreading pleasure in the community. This project, which spanned seven cities
and had two kiosks in each, not only recognized the efforts of Field Sales Managers (FSMs) with
motorcycle prizes, but also conveyed genuine blessings to consumers through Umrah Tickets. It
is more than a chance draw; it reflects PEL's dedication to providing meaningful experiences.
PEL believes in creating pleasure and spiritual satisfaction, and "Jeeto PEL se" is a great
example of that idea put into action. This exercise put a smile on many people's faces and
enhanced the company's link of trust and gratitude with its stakeholders. As PEL moves forward,
the firm is committed to initiatives that not only drive success but also meaningfully impact the
lives of individuals serviced. "Jeeto PEL se" is more than simply a prize; it represents PEL's
ideals in action. Despite a turbulent year, PEL remained resilient, stubbornly retaining its brand
integrity in difficult circumstances. The marketing department's unrelenting devotion and
strategic intelligence were critical in not just surviving, but also innovating throughout these
turbulent times. PEL managed the complexity of the market situation with agility and insight,
demonstrating an impressive capacity to adapt and prosper in the face of adversity. This
resistance not only protected the brand's reputation, but also established PEL as an industry
beacon of innovation and resilience. The ongoing pursuit of innovation demonstrated PEL's
everlasting commitment to excellence, ensuring that even in rough circumstances, the firm
remained at the forefront of providing value and innovation to its clients.

Human Resources and Management Structure

PEL's Human Resources Department is responsible for managing and cultivating the company's
most precious asset: its employees. It focuses on providing a positive work environment,
encouraging talent development, and aligning HR strategies with company goals. PEL's human
resources department is in charge of acquiring and choosing excellent individuals to satisfy the
company's increasing demands. When new workers join PEL, they go through a full onboarding
and orientation process guided by the HR department. This process helps new employees
become acquainted with the company's rules, processes, and culture, facilitating a smooth
transfer into their responsibilities. PEL's human resources department prioritizes employee
engagement. Employee surveys, feedback systems, and recognition programs are just a few of
the activities that make employees feel appreciated, engaged, and invested in the company's
success. Furthermore, talent development activities, like training programs and leadership
development courses, enable people to realize their full potential. PEL's human resources
department controls the performance management process to ensure that employee performance
is in line with the organization's aims and objectives. Regular performance reviews, goal setting,
and feedback methods give employees constructive feedback to help them improve their
performance and professional development. Maintaining strong staff relations and well-being is
critical at PEL. The HR department acts as a liaison between management and employees,
managing grievances, resolving issues, and encouraging open communication lines. Complying
with labor rules and regulations protects employees' rights and well-being

Research and Development

PEL emerged as a beacon of resilience, adaptation, and unshakable dedication to excellence.
PEL's Research and Development (R&D) department, which drives the company's innovation
and technological advancement activities, is fundamental to its success. PEL's R&D team is
made up of brilliant engineers, designers, scientists, and technicians that work together to
uncover new ideas, improve existing products, and develop novel solutions across several
product categories. The R&D department, which focuses on innovation, efficiency, and
sustainability, is critical to maintaining the company's competitive advantage in the market.
PEL's consistent commitment to recognizing and meeting client demands is critical to its success.
The R&D team uses market research, customer insights, and trend analysis to forecast market
trends and consumer wants, directing the development of new products and solutions. PEL
guarantees that its innovations meet customers' expectations by using a consumer-driven product
development strategy. PEL's consistency in understanding and satisfying client expectations is
crucial to its success. The R&D team forecasts market trends and consumer desires through
market research, customer insights, and trend analysis, which guides the creation of new goods
and solutions. PEL ensures that its products fulfill client expectations by employing a consumer-
driven product development strategy. In addition to innovation, PEL's R&D department is
committed to sustainability and environmental stewardship. By delivering eco-friendly solutions
and technologies, the team hopes to decrease the company's environmental effect while
enhancing energy efficiency and resource use. Initiatives like green product design, waste
reduction, and renewable energy integration help PEL achieve its overall sustainability goals.

Current planning
PEL's current strategy is to connect its operations with strategic objectives focused on value
generation and acceptable business practices in the home appliance and electrical capital goods
industries. The corporation focuses on projects aimed at increasing shareholder wealth through
strategic expansion and value maximization. Pel’s strategy is centered on the constant pursuit of
product innovation and development. The firm makes major investments in research and
development to create innovative solutions that address changing customer requirements and
industry trends. PEL intends to maintain a competitive advantage and grasp market possibilities
by being on the forefront of technical breakthroughs. In addition, PEL relies on planned and
coordinated marketing strategies to efficiently promote its goods and broaden its market reach.
The company's focused marketing initiatives are intended to increase brand exposure, recruit
new consumers, and build client loyalty. PEL aims to raise awareness and increase demand for
its products among a wide range of customer categories by utilizing a variety of marketing
channels and methods. Furthermore, PEL values appropriate business practices throughout its
activities. The firm is devoted to sustainability, ethical behavior, and corporate social
responsibility. PEL seeks to reduce its environmental impact, maintain workplace safety, and
give back to the communities it serves. By incorporating responsible practices into its business
model, PEL hopes to increase stakeholder trust and improve its reputation as a socially
responsible corporation. Overall, PEL's current strategy focuses on innovation, marketing
excellence, and ethical business practices. By aligning its operations with strategic objectives and
market dynamics, PEL hopes to accelerate development, maximize value generation, and
eventually increase shareholder wealth in the home appliances and electrical capital goods
business.
Strategy and Resource allocations

PEL's approach is on fostering a culture of giving back to the community while also emphasizing
effective resource allocation across several capitals. The firm is dedicated to becoming a socially
responsible corporate organization that aligns its operations with stakeholder expectations. PEL
carefully manages resource allocation to ensure that value is created for all stakeholders. Long-
term debt is used to fund capital expenditures, whereas short-term borrowings are used to meet
working capital requirements. The company's equity basis remains robust, allowing for long-
term corporate growth. PEL places a strong priority on human resources, investing heavily in the
acquisition of top personnel and extensive staff development initiatives. Priority is given to
training and development programs in order to provide a healthy and safe work environment and
ensure that staff have the appropriate skills and knowledge. Manufacturing capital gets
significant investment for product innovation, development, and diversification. PEL focuses on
expanding current product lines, performing market research, and investigating diversification
options inside and outside of the appliance and electrical capital goods industries. Marketing
initiatives, as well as a countrywide sales/service network, are used to preserve industry
leadership and market presence. Investments in product design, market research, management
information systems, and research and development help to build intellectual capital. PEL aspires
to be a technology leader by investing in intellectual capital to create efficiencies and economies
of scale. PEL prioritizes quality, safety, and health, which are driven by a sophisticated Integrated
Management System (IMS). The firm is certified for a variety of international and national
standards, providing high-quality goods and services that satisfy regulatory requirements. Strong
ties with consumers, vendors, and the general public generate social and relationship capital.
PEL invests a large budget in activities that meet stakeholder expectations and give back to the
community through charity contributions, foundation funding, and volunteerism. PEL
understands the value of efficient natural resource usage and has launched measures to improve
environmental sustainability. An Energy Information System aids in the identification of energy
losses, whilst the "PEL se Zindagi" project increases awareness about the need for clean water.
PEL also uses eco-friendly "Green Gases" to help safeguard the environment.
3. Financial Statements

Income Statements

2023 2022
2021 2020
Horizontal Analysis of Income Statements

Net Revenue
In 2023, the company's net sales reached Rs. 38.68 billion, representing a 36% increase over the
previous year. From 2018 to 2022, the company's revenue reached a high of Rs. 52.38 billion.
Revenue decreased compared to 2022 because to import restrictions, general elections, and
inflation affecting purchases of household appliances and electricity items, respectively. COVID-
19 led to a significant fall in net revenue between 2019 and 2020.

Cost of Sales
The fall in net revenues resulted in a 34% decrease in cost of sales compared to 2022. The cost of
Sales of Rs. 42 billion in 2022 were the highest reported value throughout this time period. The
cost of sales as a proportion of net revenue fluctuated between 71% (2023) and 80% (2022). The
Company has reduced manufacturing costs by implementing cost-saving initiatives, improving
operational efficiencies, and reducing factory overhead.
Gross Profit
Over the previous four years, the company has consistently improved its gross profitability,
leading to an increase.The gross profit increased from Rs. 6.44 billion in 2020 to Rs. 11.1 billion
by 2023. The company's pricing strategy, process simplification, and cost-saving efforts resulted
in a 59% rise over 2018.

Operating Profit
PEL's operating profit rose to Rs. 6.9 billion from Rs. 2.5 billion in 2020. Effective cost
management measures, including minimizing overhead expenditures, improving resource
allocation, and negotiating better supplier terms, result in lower operating costs and improved
profit margins.

Finance Cost
Finance charges climbed from Rs. 2.2 billion in 2020 to Rs. 3.6 billion in the last four years. The
rise in 2023 is 73%. This is mostly owing to the country's high interest rates. However, the
company has decreased its indebtedness.

Taxation
The Company adheres to current tax legislation. Over the last six years, the country has
experienced significant growth. Despite this, PEL's cumulative deferred tax has risen over time.
In 2020, taxes was Rs. 132 million, and is expected to rise to Rs. 1.97 billion by 2023.

Net Profit
In the financial year 2023, PEL has achieved a significant milestone by
posting a net profit of Rs. 1.32 billion.This achievement is attributed to improvements in
operating profit margins, reduced operating expenses and pricing strategy by company.
Contrasting this, the company incurred a profit of Rs 2.24 billion.
Balance Sheets
2023 2022
2021 2020
Horizontal Analysis of Statement of Financial Positions

Share Capital and Reserves

From 2020 to 2023, share capital and reserves increased significantly, particularly from Rs.
31.71 billion–41.42 billion. The issue of right shares at a premium in 2022 was the primary
reason for this rise. During this time, the Company's retained earnings increased from Rs. 16
billion to Rs. 21 billion, reflecting its profitability.

Non-current Liabilities
From 2020 to 2023, non-current liabilities reduced to Rs. 6.7 billion owing to long-term loan
repayments.

Current Liabilities
Current liabilities grew gradually from Rs. 14.76 billion in 2020 to Rs. 21.42 billion. In 2022, the
amount was Rs. billion, but decreased to Rs. 18.16 billion by 2023. In 2023, the rise was mostly
due to loan markups caused by higher policy rates and longer payment cycles to overseas
suppliers for imports. Short-term borrowings reached a high of Rs. 15 billion in 2022 due to
rising working capital needs but have since decreased due to dependence on cash earned from
operations.

Non-current Assets
Significant expenditures were made in plant capacity improvement, product innovation, and
product. Adoption and diversity of new technologies. Non-current assets grew steadily from Rs.
23.08 billion in 2020 to Rs. 29.74 billion in 2023, peaking in the same year. The steady
increasing trend shows a large growth in non-current assets over the study period, including
revaluation adjustments in 2018 and 2023.

Current Assets
The value of shops and spare components remained steady, while stock-in-trade climbed from Rs
9.499 billion in 2020, rising to Rs. 11.68 billion by 2023. Trade debts varied, peaking in 2021 at
Rs. 13.96 billion. CWIP decreased compared to 2018, suggesting timely completion of ongoing
projects.
In 2023, advances, deposits, prepayments, and other receivables increased steadily and reached
Rs. 5.06 billion. Tax refunds from the government reached Rs. 3.22 billion in 2023. Short-term
investments were Rs. 0.032 billion, showing strategic investment decisions. Cash and bank
holdings climbed to Rs. 0.784 billion in 2023, demonstrating better cash flow and liquidity
management.

Statement of Cashflows
2023 2022
2021 2020
Cash flow from operating activities

In 2023, the Company generated significant cashflows from operations, largely from pre-tax
earnings of Rs. 3,304 million. The adjusted number includes non-cash costs of Rs. 4,974 million
and positive working capital movements of Rs. 5,130 million. Inventories and trade debts
decreased, but trade and other payables increased. The Company produced Rs. 13,408 million in
operating cash flow. However, payments for income tax and interest/markup/profit totaled Rs.
4,421 million, resulting in net cash created from operational operations of Rs. 8,987 million. This
strong achievement highlights the Company's improved operating capabilities. The government
has allotted Rs. 1,500 million for Sukuk redemption and Rs. 2,121 million for long-term debt
repayment. Lease liabilities were satisfied for Rs. 95 million. Short-term borrowings were
decreased by Rs. 3,234 million. Combined, these operations cost Rs. 6,949 million in finance. In
2021, After paying interest/mark-up of Rs. 1,622 million and income tax of Rs. 863 million, the
net cash utilized in operational operations was Rs. 457 million. After paying interest/mark-up of
Rs. 2,136 million and income tax payments of Rs. 575 million, net cash utilized for operational
operations was Rs. 446 million.

Cashflows from Investing Activities

In fiscal year 2023, the company spent Rs. 2,065 million and Rs. 1.3 million on acquisitions.
Property, plant, and equipment are classified as physical and intangible assets. The company
made Rs. 31 million in advances to suppliers of property, plant, and equipment. This resulted in a
total outflow of Rs. 2,098 million from investment operations. The disposal of property, plant,
and equipment resulted in Rs. 49.1 million in revenues, resulting in a net cash usage of Rs. 2,049
million for investment operations in 2023. In 2021, Net cash utilized in investment operations
amounted to Rs. 2,688 million, which comprised payments for Capital expenditure of Rs. 1,088
million and long-term advances of Rs. 1,884 million were largely offset by Rs. 308 million in
profits from property, plant, and equipment disposals. Net cash utilized in investment operations
was Rs. 3,230 million, which included Rs. 2,089 million in capital expenditure payments and Rs.
1,070 million in long-term advances, which were partially offset by Rs. 33 million in profits
from the sale of property, plant, and equipment.

Cashflows from Financing Activities

The Company allotted Rs. 1,500 million for Sukuk redemption and Rs. 2,121 million for Long-
term finances were repaid, and leasing commitments were fulfilled with a payment of Rs 95
million. Short-term borrowings were lowered by Rs 3,234 million. Overall, these efforts cost Rs.
6,949 million in finance. The net cash generated from financing activities was Rs. 3,171 million,
which included Rs. 1,492 million in long-term debt and Rs. 1,790 million in share deposit
money. This was partially offset by dividend payments of Rs. 4 million and short-term finance
payments totaling Rs.107 million. Net cash utilized in financing activities was Rs. 2,779 million,
which included a net receipt of Rs. 3,299 million in long-term debt, partially offset by a total
payment of Rs. 519 million in short-term financing.

Cash and Cash Equivalents

The company had Rs. 796 million in cash reserves at the start of the financial year. Efficient
operational management resulted in cash generation of Rs. 8,987 million. However, the money
was used for investments and finance, amounting to Rs. 2,049 million and Rs. 6,949 million,
respectively. The Company's cash balance at the end of fiscal year 2023 was Rs. 784 million. The
Company's ability to generate cash from operations to fund capital investments and meet
financial obligations strengthens stakeholder confidence in its financial stability and operational
prowess.

Key Financial Ratios

1. Profitability

Profitability Ratios
2023 2022 2021 2020
Gross Profit Ratio % 28.70 19.66 21.14 22.23
Net Profit to Sales % 3.43 2.04 3.71 0.78
EBITDA Margin to Sales % 21.27 13.25 12.20 12.63
 Operating Leverage Times (0.87) 2.10 1.37 (22.30)
Return on Equity
- Without revaluation % 3.71 3.12 5.36 0.86
reserves
- With revaluation % 3.20 2.74 4.54 0.71
reserves
Return on capital employed % 2.94 2.31 3.57 0.56
Shareholders’ funds Rs in millions 41,425 38,958 35,027 31,715
Return on shareholders’ % 3.20 2.74 4.54 0.71
funds
Total shareholders’ return % 74.36 (42.50) (43.88) 48.25

Profitability Ratios Analysis

The Company's financial performance in 2023 demonstrated a noteworthy improvement, as seen
by the increased net profit and gross profit margins to 3.43% and 28.70%, respectively, from
2.04% and 19.66% in the previous year. The significant increase equated to a higher return on
equity, which went from 2.74% to 3.20%. At the same time, there was a noteworthy increase in
the return on capital employed, which went from 2.31% to 2.94%, highlighting the company's
improved financial standing. These actions were the result of deliberate efforts rather than being
random.
In 2022, with a greater cost of production, the gross profit ratio has decreased by 1.48% from the
prior year 2021. poorer PKR. Additionally, the net profit to sales ratio declined by 1.67% from
2021 to 2022, following the same pattern. The major causes of this were increased debt-to-
income ratios and higher expenses when compared to the previous year. In light of this, return on
equity and capital employed decreased by 2.24% and 1.19%, respectively, in comparison to the
prior year.
The gross profit ratio decreased by 1.09% in 2020 compared to the prior year, mostly as a result
of increased manufacturing costs with a decreased PKR. The net profit to sales ratio rose sharply
from 2020 to 2021—a gain of 2.93%. This was mostly caused by the weighted average cost of
debt being lower than it was the previous year and stricter cost control. As a result, compared to
the prior year, return on equity and capital employed both increased by 4.50% and 2.55%.
In 2018, Compared to the prior year 2019, the gross profit ratio has dropped by 5.65%. This is
mostly because of an increase in input costs as a result of devaluation of the Pakistan Rupee and
inflation. In comparison to 2019, the net profit to sales ratio had a significant decline of 75.32%.
In contrast to the tax relief obtained the previous year, this was primarily caused by increasing
operational expenses and a normalization of the tax levied. As a result, compared to the prior
year, return on equity and capital utilized decreased by 75.82% and 75.23%, respectively.

2. Liquidity Ratios

Liquidity Ratios
2023 2022 2021 2020

Current Times 2.02 1.87 2.27 1.98

Ratios
Quick/Acid Times 1.32 1.18 1.52 1.28
Test Ratio
Cash to Times 0.04 0.04 0.04 0.04
Current
Liabilities
Cash Flow Times 0.23 (0.05) (0.06) (0.03)
from
Operations
to Sales
Cashflow to Times 4.35 (0.93) (2.17) (0.35)
CAPEX
Cash Flow Times 2.46 (0.38) (0.25) (0.09)
Coverage

Liquidity Ratios Analysis

In 2023, A strengthened financial condition was shown by the period's liquidity ratios, as seen by
the increase in between 1.87 and 2.02 times for the current ratio and 1.18 and 1.32 times for the
quick ratio, respectively. These advancements highlight the Company's increased ability to fulfill
immediate responsibilities.
The current ratio decreased by 0.18% at year's end in 2022 compared to the previous year in
2021, continuing the decreasing trend. Owing to a notable surge in inventory held in order to
meet the anticipated rise in demand in the next year. Another indicator of liquidity that was more
straightforward to use, the quick ratio, showed a similar pattern.
By year's end in 2021, the current ratio had increased by 14.45% from the previous year in 2020,
continuing the upward trend. because of a considerable rise in debtors brought on by increased
sales. Quick ratio, a more direct indicator of liquidity, showed the same pattern.
The current ratio witnessed a noteworthy improvement of 12.50% at the end of 2020 compared
with the last year of 2019 due to efficient liquidity management. The same trend was also evident
in quick ratio, a more direct measure of liquidity.

3. Activity/Turnover Ratios

Activity /Turnover Ratios

2023 2022 2021 2020
Inventory Times 2.16 3.47 3.39 2.59
Turnover
ratio
No of days Days 169 105 108 141
in inventory
Debtor Times 3.22 4.45 4.54 3.85
turnover
ratio
No of days Days 113 82 80 95
in
receivables
Creditor Times 13.56 32.02 25.32 19.11
turnover
ratio
No. of Days Days 27 11 14 19
in Payables
Total Assets Times 0.58 0.78 0.72 0.53
turnover
ratio
Fixed Assets Times 1.36 2.03 1.78 1.18
turnover
ratio
Operating Days 255 176 174 217
Cycle

Activity/Turnover Ratios Analysis

Although the company made great progress in a number of areas, the inventory turnover saw a
decrease to 2.16 times in 2023, mainly because of decreased sales volume, better inventory
control procedures, and market circumstances that affect consumer demand for the product. The
decrease in inventory turnover was further made worse by longer lead times brought on by
import restrictions. Comparably, the debtor turnover ratio dropped to 3.22 times, mostly as a
result of a downturn in the economy and a decline in dealer orders. The Company prolonged loan
durations in an effort to increase sales volume, which negatively impacted the turnover of the
debtors even more. Furthermore, the reduction in the number of creditors by 13.56 times resulted
in an extension of the operating cycle to 255 days. This was mainly because payments to
international suppliers were made via Usance LC, which allowed them to get longer credit
periods under import restrictions. The fall in sales has a direct impact on the drop in both total
assets turnover and fixed assets turnover. In 2022, in comparison to the same period previous
year, receivable days and inventory days decreased by three days in the concluded year. it
indicated an increase of two days. On the other hand, the company's whole operational cycle has
grown by two days in comparison to 2021. In 2021, When comparing the current year to the
previous, inventory days decreased by 33 days, and receivable days decreased by shown a 15-
day drop as a result of the larger discounts given. As a result, in comparison to the previous year
2020, the Company's entire operating cycle has dropped by 43 days. In 2020, When compared to
the same period previous year, inventory days decreased by 18 days, while receivable days
increased over this same period. Stayed at 95 days consistently. There has been a little increase
of three days in payable days. Thus, compared to the prior year 2019, the Company's entire
operating cycle has shrunk by 21 days, indicating improvement.

4. Investment/Market Ratios
Investment/Market Ratios
2023 2022 2021 2020
Earnings per Share - Basic Rupees 1.50 1.33 2.89 0.34
Earnings per Share - Rupees 1.50 1.33 2.89 0.34
Diluted

Price Earnings ratio Times 15.07 9.73 7.79 118.71

Price to Book ratio Times 0.49 0.30 0.35 0.69

Dividend Yield ratio % - - - -

Dividend Payout ratio % - - - -
Dividend Cover ratio Times - - - -
Cash Dividend per Share Rupees - - - -
Stock Dividend per Share % - - - -
Market Value per Share
year end Rupees 22.58 12.95 22.52 40.13
high during the year Rupees 26.60 24.06 42.38 40.37
 low during the year Rupees 8.75 11.90 19.29 16.62

Break-up Value per Share

without revaluation Rupees 39.61 37.93 54.68 47.90
reserves
with revaluation reserves Rupees 45.98 43.24 64.55 58.45

Market capitalization Rs. in 19,329 11,085 11,208 19,972

millions

Investment/Market Ratios Analysis

In 2023, With the price-to-book ratio rising , the investment/market ratios showed a favorable
trend. A higher net asset value and increased investor confidence are shown by the increase in the
break-up value per share from Rs. 43.24 to Rs. 45.98 and the increase in the ratio of 0.30 to 0.49.
The Company's earnings per share increased to Rs. 1.50, owing to increased net profits as a
consequence of effective cost management and operational efficiency. Such improved financial
health translated into an improved market perception of the Company's shares, propelling the
market value per share from Rs. 12.95 at the end of 2022 to Rs. 22.58 by 31 December 2023,
resulting in a higher market capitalization of Rs. 19,329 million compared to Rs. 11,085 million
at the end of 2022. These numbers highlight the increased investor confidence and market
sentiment. In 2022, All the downward trends translated into lower earnings in the current year
and so did the EPS which clocked in at 1.33 as compared to 2.89 in the previous year. Also, the
Company's share price took a dive during the year. Closing share price stood at 12.95 at end of
2022 in comparison with Rs. 22.52 at the close of 2021. Price to earnings ratio, a prime metric
for assessing fundamentals, increased to 9.73 in 2022 as compared to 7.79 in the year 2021 due
to lower reported earnings in the current year. In 2021, All the positive trends translated into
higher earnings in the current year and so did the EPS which clocked in at 3.11 as compared to
0.36 in the previous year. However, the Company's share price took a dive during the year.
Closing share price stood at 22.52 at end of 2021 in comparison with Rs. 40.13 at the close of
2020. Price to earnings ratio, a prime metric for assessing fundamentals, trimmed down to 7.24
in 2021 as compared to 110.26 in the year 2020 due to higher reported earnings and lower
market value per share in the current year. In 2020, Due to the tough situation faced by the
Company in times of Covid crisis, the EPS clocked in at 0.36 as compared to 1.68 in the
previous year. Irrespective of the economic and political uncertainty, the Company's share price
took a steady upward trajectory throughout the year. A closing share price of 40.13 at the end of
2020 shows revived investor confidence in comparison with Rs. 27.07 at the close of 2019. A
prime metric for assessing fundamentals is the price earnings ratio which shot up to 110.26 in
2020 as compared to 16.12 in the year 2019.
 5. Capital Structure Ratios
Capital Structure Ratios
2023 2022 2021 2020

Financial Times 0.39 0.59 0.57 0.59

Leverage
ratio
Weighted % 18.06 13.71 9.40 11.75
Average Cost
of Debt
Debt Equity % 8.92 16.84 21.79 20.80
ratio
Interest Cover Times 1.99 1.92 2.22 1.24
ratio
Net assets per Rupees 45.98 43.24 64.55 58.45
share

Capital Structure Ratios Analysis

In 2023, The Company's financial leverage decreased significantly from 0.59 to 0.39. Improved
debt-equity ratios indicate less debt risk and a more balanced financial profile. Although loan
costs grew from 13.71% to 18.06% due to higher policy rates, the interest cover ratio improved
from 1.92 to 1.99 times in 2023. The growth in operational income outpaced the rise in finance
costs, indicating a better financial situation. The company's net assets per share increased from
Rs. 43.24 to Rs. 45.98, indicating a stronger financial condition. In 2022, Financial leverage
decreased by 2.93% to 0.59 times. In 2021, the ratio was 0.61 times due to the corporation
repaying long-term debt and raising capital through the issuance of ordinary shares to sustain
growth and demand. Due to weaker profits throughout the year, interest cover decreased to 1.97
times from 2.45 times at the end of 2021. In the current year, financial leverage increased slightly
to 0.61 times. In 2021, The ratio increased to 3.07% from 0.59 times the previous year. This was
due to the company raising redeemable capital to meet growing demand. Interest cover improved
to 2.45 times from 1.33 times at the end of 2020, owing to higher profits. The debt-to-equity
ratio increased to 0.59 times, indicating a negative trend in financial leverage this year. In 2020,
The ratio increased to 15.45% from 0.51 times in 2019 owing to increased long-term financing
during the Covid-19 crisis to sustain the firm. Interest cover increased from 1.52 times at the end
of 2019 to 1.33 times in the year under consideration due to lower profits.