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Report Date : |
27.11.2012 |
IDENTIFICATION DETAILS
|
Correct Name : |
SHAKARGANJ MILLS LTD |
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|
|
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Registered Office : |
10th
Floor, BOP Tower, 10-B, Block E 2, Gulberg III, Lahore |
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|
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Country : |
Pakistan |
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|
|
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Financials (as on) : |
30.09.2011 |
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Year of Establishment : |
1968 |
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Com. Reg. No.: |
0002673 |
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Legal Form : |
Public Limited Company |
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|
|
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Line of Business : |
manufacture,
purchase and sale of sugar, ethanol, building material, yarn and engaged in
generation and sale of electricity |
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|
|
|
No. of Employees : |
800 employees |
RATING & COMMENTS
|
MIRA’s Rating : |
Ca |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Moderate |
|
Payment Behaviour : |
Slow |
|
Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
pakistan - ECONOMIC OVERVIEW
Decades of
internal political disputes and low levels of foreign investment have led to
slow growth and underdevelopment in Pakistan. Agriculture accounts for more
than one-fifth of output and two-fifths of employment. Textiles account for
most of Pakistan's export earnings, and Pakistan's failure to expand a viable
export base for other manufactures has left the country vulnerable to shifts in
world demand. Official unemployment is 6%, but this fails to capture the true
picture, because much of the economy is informal and underemployment remains
high. Over the past few years, low growth and high inflation, led by a spurt in
food prices, have increased the amount of poverty - the UN Human Development
Report estimated poverty in 2011 at almost 50% of the population. Inflation has
worsened the situation, climbing from 7.7% in 2007 to more than 13% for 2011,
before declining to 9.3% at year-end. As a result of political and economic
instability, the Pakistani rupee has depreciated more than 40% since 2007. The
government agreed to an International Monetary Fund Standby Arrangement in
November 2008 in response to a balance of payments crisis. Although the economy
has stabilized since the crisis, it has failed to recover. Foreign investment
has not returned, due to investor concerns related to governance, energy,
security, and a slow-down in the global economy. Remittances from overseas
workers, averaging about $1 billion a month since March 2011, remain a bright
spot for Pakistan. However, after a small current account surplus in fiscal
year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit
in the second half of 2011, spurred by higher prices for imported oil and lower
prices for exported cotton. Pakistan remains stuck in a low-income, low-growth
trap, with growth averaging 2.9% per year from 2008 to 2011. Pakistan must
address long standing issues related to government revenues and energy
production in order to spur the amount of economic growth that will be
necessary to employ its growing population. Other long term challenges include
expanding investment in education and healthcare, and reducing dependence on
foreign donors.
|
Source : CIA |
|
Registered &
Principal Office |
|
10th
Floor, |
|
Tel # |
92 (21) 35783801 -
06 (6 Lines) |
|
Fax # |
92 (21) 35783811 |
(1) 12th Floor,
(2) Nishatabad, New Lahore Road, Faisalabad, Pakistan.
l Toba Road, Jhang, Pakistan.
l 63 K.M., Jhang-Sarghoda Road, Bhone, Pakistan.
|
a. |
Nature of Business |
It
is principally engaged in manufacture, purchase and sale of sugar, ethanol,
building material, yarn and engaged in generation and sale of electricity. |
|
b. |
Year Established |
1968 |
|
c. |
Registration # |
0002673 |
A.F. Ferguson & Co.
(Chartered Accountants)
Shakarganj Mills Limited is a public limited Company incorporated in
|
Names |
Designation |
|
Mr. Mazhar Karim Mr. Ahsan M. Saleem Mr. Ali Altaf Saleem Mr. Khalid Bashir Mr. Muhammad Anwar Mr. Muhammad Arshad Mr. Rubina Rizvi |
Chairman Chief Executive Director Director Director Director Director |
|
Categories |
Percentage |
|
Directors, CEO, their spouses and minor children Associated Companies, undertakings & Related Parties NIT & ICP Banks, DFI’s, NBFI’s Insurance Companies Modarabas & Mutual Funds Other Companies Non-Resident General Public |
1.80 41.40 10.61 8.91 --- 0.74 8.03 --- 28.51 |
(1) Shakarganj Food Products Limited, Pakistan.
(2) Shakarganj Research, Pakistan.
(3) Shakarganj Foundation, Pakistan.
It is principally engaged in manufacture, purchase and sale of sugar, ethanol, building material, yarn and engaged in generation and sale of electricity.
800
2011 2010
Sugar
Rated crushing capacity -
On the basis of 136 days (2010: 109 days)
M.Tons 2,176,000
2,016,000
Actual cane crushed 1,567,361 913,272
The
low crushing was due to shortage of sugarcane and liquidity crunch. In the
comparative figure of sugar, capacity includes 344,000 metric tonnes and actual
crushing of 130,477 metric tonnes relating to Dargai Shah sugar unit sold
during the current year.
Ethanol
On the basis of 295 days (2010: 109 days) Liters 75,400,000 37,900,000
Actual production Liters
68,860,824 22,669,768
The actual production is 91% of the capacity
which is within normal working standards.
Building Materials
On the basis of 201 days (2010: 116 days)
Working
Cubic Meter 6,030 3,480
Actual production
Cubic Meter 5,920 3,562
The actual production is 98% of the available
capacity which is written within normal working standards.
Textile
Capacity (converted in 20s counts) Kgs. 7,599,022 7,557,169
Actual production (converted in 20s
counts) Kgs 4,130,728 7,320,414
The plant remained closed for five months due
to very high cotton prices and comparatively low sale price of yarn.
Power
On the basis of 365 days (2010: 365 days) Kwh 39,312,000 61,320,000
Actual generation Kwh 21,825,500 27,291,550
The low production was due to closure of plant and shortage of raw material.
Various Local
l Allied
Bank Limited, Pakistan.
l MCB Bank Limited, Pakistan.
l National
Bank of Pakistan.
l The
Bank of Punjab, Pakistan.
l United
Bank Limited, Pakistan.
l Standard
Chartered Bank, Pakistan.
l Silk
Bank Limited, Pakistan.
l Bank
Alfalah Limited, Pakistan.
l Faysal
Bank Limited, Pakistan.
The Company has been in a tight liquidity position for the previous few
years. Our current ratio has been adversely affected due to reclassification of
various long term obligations as short term borrowings. This has led to the
current liabilities of the Company exceeding its current assets by Rs. 5,291
million. The management has taken a number of steps to overcome these issues
including restructuring of loans and repayment of overdue markup, with
cooperation from its existing lenders. As a part of the restructuring process,
the Company has successfully disposed off several assets such as the Dargai
Shah Sugar & Power Units, partial divestment of investments in Safeway
Mutual Fund Limited, Asian Stocks Fund Limited and some agricultural lands. The
Company has successfully negotiated with many of its lenders on bilateral terms
and obtained various short term finance facilities to help overcome the
liquidity crunch and increase capacity utilisation. The management is also
confident that through the restructuring of borrowings and utilisation of
improved liquidity in higher operational levels of sugarcane crushing and
ethanol manufacturing and generation of adequate liquidity, the Company will be
able to continue its operations in future. Shakarganj has always had a positive
forward looking approach in its operations and hopes for positive future
outlook for all its business segments. We expect to achieve economies in our
overall operations by De-layering and simplifying our organizational layout,
reducing costs company-wide, and economies of scale. Company operations for
coming year would also improve as a result of various steps taken by the
company especially our core businesses of sugar & ethanol.
l All Pakistan Sugar Mills Association.(APSMA)
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 96.40 |
|
UK Pound |
1 |
Rs. 151.90 |
|
Euro |
1 |
Rs. 122.00 |
Subject Company is well known and the directors are resourceful and experienced businessmen. Trade relations are reported as fair. Payments to creditors etc are reported as normal. Subject can be considered for normal business dealings at usual trade terms and conditions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.55.69 |
|
UK Pound |
1 |
Rs.89.20 |
|
Euro |
1 |
Rs.72.10 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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 |
Capability to overcome financial difficulties seems comparatively
below average. |
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 |
|
---- |
NB |
New Business |
---- |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.