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InterpretationsSales

The company has increased its sales by 13 %.the reason of this increase is theincrease in local sales and export of cloths but the major portion of this increase is due to

the export of cloth. The company has also increased its local sales of yarn and waste.

Cost of sales Cost of sales has increased by 17%. As the company has increased itssales so the cost of sales has also risen. The company is consuming more raw materialThe company has hired more workers and paying more wages and salaries then before.The company is paying more insurance. The company has bought fixed assets andcharging more depreciation on these assets.

Gross Profit Gross profit has decreased by 19%. It is mainly due to increase in cost of sales. The cost of sales has increased more than sales. And the increase in cost of sales ismainly due to the inflation.

Selling and Distribution Expenses Selling and distribution expenses have increased by 121%. It ismainly due to increase in freight chargers and export expenses and commissions toselling agents for exports.

Administrative Expenses Administrative expenses have increased by 9%. It is mainly due toincrease in salaries and wages and the company is paying more rent and taxes then

before. And the company has bought more fixed assets and is charging more depreciationon these assets.

Other Operating Expenses Other operating expenses have increased by 505%. It is mainly

because of the loss on sale and lease back transactions and loss on sale on fixed assets.

Other Operating IncomeIt has increased by 30%.it is mainly due to increase in rental

income, scrap sales, research and development and from miscellaneous sources.

Profit from Operations It has decreased by 56%. It is mainly due to the increase in the cost of sales, selling and distribution expenses and increase in the administrative expenses.

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Financial and other chargesIt has increased by 40%. It is mainly due to increase in finance

leases, short term borrowings and workers profit participation fund. Other chargesincreased due to the increase in bank charges

Profit/Loss before taxationIt has decreased by 171%.it is due to the decrease in gross profit and the

company has increased the expenses. The company has also increased its finance costs.These are the major reasons for the decrease in the profit before taxation.

Provision for taxationIt has increased by 677%. It is mainly due to the deferred tax and

current tax.

Profit After tax It has decreased by 233%. Because the profit before taxation is lessthe n previous year and provisions for taxation has increased as compared to the previousyear