MIRA
INFORM REPORT
|
Report Date : |
02.05.2007 |
IDENTIFICATION DETAILS
|
Name : |
GATRON (INDUSTRIES) LIMITED |
|
|
|
|
Registered Office : |
Room No. 32, 1st
Floor, Ahmed Complex, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
30.06.2006 |
|
|
|
|
Date of Incorporation : |
May 28, 1980 |
|
|
|
|
Com. Reg. No.: |
Q-21-1980/19800504 |
|
|
|
|
Legal Form : |
Public Limited Company |
|
|
|
|
Line of Business : |
Manufacturing of Polyester
Polymer and its various downstream products |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
Business Name
GATRON (INDUSTRIES) LIMITED
Full Address
|
Registered Address |
Plant Location |
|
Room No. 32, 1st
Floor, Ahmed Complex, Jinnah Road Quetta - Pakistan. |
Plot No. M-2, Sec.
M, H.I.T.E. Main R.C.D. Highway, Hub Chowki, Lasbela Distt. Baluchistan -
Pakistan. |
|
Tel |
92 (202)
32437, 32337 |
|
Fax |
92 (202)
32600 |
|
Website |
|
|
|
Short Description Of
Business
|
Nature of Business |
Manufacturing of Polyester Polymer and its various downstream products viz. Filament / Texturised Polyester Yarn, Polyester Chips Bottle Grade (P.E.T. Resin) and Polyester P.E.T. Preforms. |
|
Year Established |
May 28, 1980 |
|
Registration # |
Q-21-1980/19800504 |
Liaison /
Correspondence Office
|
Address |
8th Floor, Textile Plaza, M.A. Jinnah / Dunolly Road, Karachi - 74000, Pakistan. |
|
Tel # |
92 (21) 2417171 (3
Lines) |
|
Fax # |
92 (21) 2416532 |
|
U.A.N. |
92 (21) 111-71-71-71 |
Auditors
M/s. Hyder Bhimji & Co.
(Chartered
Accountants)
Legal Status
The Company is a Public Limited Company and its shares are
quoted on all the Stock Exchanges in
Details of Directors
|
Names |
Designation |
|
Mr. Haji Haroon Bilwani Mr. Peer Mohammad Diwan Mr. Abdul Razzak Diwan Mr. Zakaria Bilwani Mr. Usman Bilwani Mr. Iqbal Bilwani Mr. Mohammad Arif Bilwani Mr. Shabbir Diwan |
Chairman Chief Executive Director Director Director Director Director Director |
Categories of
Shareholders
|
Shareholder’s
Categories |
Percentage (%) |
|
Individuals Joint Stock Companies Financial Institutions Insurance Companies Investment Companies Modaraba Companies |
65.79 11.12 0.02 0.75 22.30 0.02 |
Associates
Subsidiary
(1) Gatro Power (Private) Limited (Wholly owned subsidiary company).
Associated Companies
Novatex Limited.
Ghani & Tayub (Private) Limited.
Lafayette Industries Limited.
Products
Principally engaged in the manufacturing of Polyester Polymer and its various downstream products viz. Filament / Texturised Polyester Yarn, Polyester Chips Bottle Grade (P.E.T. Resin) and Polyester P.E.T. Preform.
Number of Employees
1,325
Annual Sales Turnover
(Last 2 Years)
|
Years |
In Pak Rupees |
|
2005 2006 |
5,042,665,000/- 4,711,067,000/- |
Plant Capacity &
Actual Production
2006 2005
(Metric Tons)
Polyester Filament
Yarn
Annual capacity (Based
on denier 75 & filament 24) 24,191 24,191
Actual production
(Various deniers) 33,260 31,215
Polyester P.E.T.
Preforms (Pieces in Thousands)
Annual capacity
(Based on 39 Gms) 566,352
344,736
Actual production
(Various grammages) 348,586 262,344
Suppliers (Foreign)
Zimmer AG,
Barmag AG,
Rieter Scragg Limited,
Atlas
Trade Supplies
Local sale 100% to
textile sectors in
Bankers
ABN AMRO Bank N.V.
Bank Alfalah Limited.
Bank Al Habib Limited.
Citibank N.A.
Credit Agricole Indosuez.
Faysal Bank Limited.
Habib Bank Limited.
Meezan Bank Limited.
Metropolitan Bank Limited.
National Bank of
Standard Chartered Bank Limited.
The Hongkong and Shanghai Banking Corporation Limited.
United Bank Limited.
Overview
The adverse situation in the Filament Yarn Industry continues to affect, with greater intensity, the profitability results of the Company. The support provided by low financial charges in the previous two years is also no longer there, with markup rates going further up and financial charges increased significantly to Rs. 126.354 millions compared to Rs. 50.353 millions last year. The low profit is mainly a reflection of these major factors. The Federal Government had reduced the duty on major raw materials and product of the Company in June 2005. The duty reduction translated into decline in rupee sales, on account of reduction in prices of the products. The profitability was also affected by some inventory losses, on this account. The benefit of reduction in duties of raw material in the Finance Bill 2005, was eclipsed by swelling prices of raw material viz PTA and MEG, in the international market. Thus, the PTA and MEG cost in the last quarter of the year under report, were similar to July-Sept 2004 prices, despite elimination of the 15% and 10% duty on PTA and MEG respectively. The Filament Yarn Market, however, was less responsive and did not go up in full measure, to cover the increase in these raw material costs.
Contribution to
National Exchequer
During the current year, Gatron (Industries) Limited contributed an amount of Rs. 219.558 millions to the national exchequer in respect of payments towards sales tax, income tax, import duties and other statutory levies, not including, the significant amounts of withholding tax deducted by the company from employees, suppliers and contractors and deposited into the treasury.
Future Outlook
The Gas prices have been further increased to Rs. 9.60 from Rs.
6.92 per m3, effective July 2006. Two years in the past, the gas price was Rs.
5.96. This raise will augment the power and energy costs, constituting roughly
35% of the total conversion costs. The aforesaid increases in conversions costs
transform in not only rupee per kilo but also dollar per kilo cost raise as
well since rupee / dollar exchange rate remains more or less the same. The
delta over raw materials in the prices of Filament Yarn being supplied by
Contribution to
National Exchequer
During the year, the company’s contribution to the national exchequer amounted to Rs. 962.497 million in respect of payments towards sales tax, income tax, import duties and other statutory levies.
Foreign Exchange
Rates
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 60.65 |
|
|
1 |
Rs. 121.10 |
|
Euro |
1 |
Rs. 82.60 |
Comments
The conduct of the company is correct and the mode of payment prompt no complaints have been heard regarding payments to local suppliers and banks. MAXIMUM CREDIT LIMIT PKR 20,000,000/-.
|
GATRON (INDUSTRIES) LIMITED |
|
|
||||
|
PROFIT AND LOSS ACCOUNT |
|
|
|
|||
|
FOR THE YEAR ENDED JUNE 30, 2006 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Rupees in
Thousands) |
||
|
|
|
|
|
2006 |
|
2005 |
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
4,711,067 |
|
5,042,665 |
|
Cost of sales |
|
|
4,359,225 |
|
4,642,472 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
351,842 |
|
400,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution cost |
|
|
46,322 |
|
75,320 |
|
|
|
|
|
|
|
|
|
|
Administrative expenses |
|
68,006 |
|
65,252 |
||
|
|
|
|
|
|
|
|
|
Other operating income |
|
18,947 |
|
23,440 |
||
|
|
|
|
|
133,275 |
|
164,012 |
|
|
|
|
|
218,567 |
|
236,181 |
|
|
|
|
|
|
|
|
|
Other operating income |
|
37,641 |
|
28,588 |
||
|
Operating profit |
|
|
256,208 |
|
264,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance cost |
|
|
126,359 |
|
50,353 |
|
|
|
|
|
|
|
|
|
|
Profit before taxation |
|
|
129,849 |
|
214,416 |
|
|
|
|
|
|
|
|
|
|
Taxation |
|
|
|
20,807 |
|
61,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
109,042 |
|
152,707 |
|
|
|
|
|
|
|
|
|
Earnings per share - Basic and diluted (Rupees) |
2.84 |
|
3.98 |
|||
|
GATRON (INDUSTRIES) LIMITED |
|
|
||||
|
BALANCE SHEET |
|
|
|
|
||
|
AS AT JUNE 30, 2006 |
|
|
|
|
||
|
|
|
|
|
(Rupees in Thousands) |
||
|
|
|
|
|
2006 |
|
2005 |
|
EQUITY AND LIABILITIES |
|
|
|
|
||
|
SHAREHOLDERS' EQUITY |
|
|
|
|
||
|
Authorised capital |
|
|
|
|
|
|
|
44,000,000 Ordinary
shares of Rs. 10/- each |
440,000 |
|
440,000 |
|||
|
|
|
|
|
|
|
|
|
Issued, subscribed and
paid up capital |
383,645 |
|
383,645 |
|||
|
Capital reserves |
|
|
457,536 |
|
457,536 |
|
|
General reserves |
|
|
1,080,000 |
|
1,080,000 |
|
|
Unappropriated profit |
|
167,823 |
|
173,874 |
||
|
|
|
|
|
2,089,004 |
|
2,095,055 |
|
|
|
|
|
|
|
|
|
NON CURRENT LIABILITIES |
|
|
|
|
||
|
Long term financing |
|
460,500 |
|
412,500 |
||
|
Liability against asset
subject to finance lease |
513 |
|
677 |
|||
|
Deferred liabilities |
|
|
404,289 |
|
407,586 |
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Trade and other payables |
|
1,413,382 |
|
655,733 |
||
|
Accrued mark up |
|
|
13,244 |
|
11,648 |
|
|
Short term borrowings |
|
|
693,746 |
|
1,218,511 |
|
|
Current portion of : |
|
|
|
|
|
|
|
Long term financing |
|
|
152,000 |
|
79,500 |
|
|
Liability against asset subject
to finance lease |
164 |
|
151 |
|||
|
Provision for tax less payments |
|
- |
|
10,658 |
||
|
|
|
|
|
2,272,536 |
|
1,976,201 |
|
CONTINGENCIES AND COMMITMENTS |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
5,226,842 |
|
4,892,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
NON CURRENT ASSETS |
|
|
|
|
||
|
FIXED ASSETS |
|
|
|
|
|
|
|
Property, plant and
equipment |
|
2,487,650 |
|
2,297,678 |
||
|
|
|
|
|
|
|
|
|
LONG TERM ASSETS |
|
|
|
|
||
|
Investments |
|
|
300,500 |
|
300,500 |
|
|
Loans |
|
|
|
277 |
|
460 |
|
Security deposits |
|
|
1,176 |
|
1,334 |
|
|
|
|
|
|
301,953 |
|
302,294 |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores, spare parts and
loose tools |
242,667 |
|
257,291 |
|||
|
Stock in trade |
|
|
1,662,434 |
|
1,426,895 |
|
|
Trade debts |
|
|
331,347 |
|
488,900 |
|
|
Loans and advances |
|
10,901 |
|
56,435 |
||
|
Advance tax less provision |
|
20,299 |
|
- |
||
|
Trade deposits and short
term prepayments |
14,732 |
|
2,671 |
|||
|
Other receivables |
|
|
139,354 |
|
35,735 |
|
|
Short term investment |
|
1,704 |
|
9,650 |
||
|
Cash and bank balances |
|
13,801 |
|
14,470 |
||
|
|
|
|
|
2,437,239 |
|
2,292,047 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
5,226,842 |
|
4,892,019 |
|
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)