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Report Date : |
11.02.2014 |
IDENTIFICATION DETAILS
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Name : |
GUL AHMED TEXTILE MILLS LIMITED |
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Registered Office : |
Plot No. 82, |
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Country : |
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Financials (as on) : |
30.06.2013 |
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Date of Incorporation : |
1953 |
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Com. Reg. No.: |
0000586 |
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Legal Form : |
Public Limited
Company |
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Line of Business : |
Subject is engaged in the manufacture and
sale of textile products |
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No. of Employees : |
More than 5,000 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No complaints |
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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 – September 30, 2013
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Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
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Pakistan |
B2 |
B2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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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 under 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 almost 12% for 2011, before declining to 10% in 2012. 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 fiscal year 2012, 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 about 3% per year from 2008 to 2012. 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 and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.
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Source
: CIA |
GUL AHMED TEXTILE MILLS LIMITED
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Registered
Address |
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Plot No. 82, Main National Highway, Landhi,
Karachi, Pakistan |
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Tel # |
92 (21) 111-485-485, 35082626, 35015702 |
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Fax # |
92 (21) 35082625 |
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Email |
H-7, Landhi Industrial Area,
Karachi, Pakistan
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a. |
Nature of Business |
Engaged in the manufacture and sale of textile
products |
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b. |
Year Established |
1953 |
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c. |
Registration # |
0000586 |
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Hyder Bhimji & Co. (Chartered Accountants) |
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Gul Ahmed
Textile Mills Limited is a public limited Company incorporated in Pakistan, with its shares
quoted on the Karachi & Lahore Stock Exchanges of Pakistan |
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Names |
Designation |
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Mr. Mohomed
Bashir Mr. Zain Bashir
Mr. Ziad Bashir
Mr. Mohammed
Zaki Bashir Mr. Abdul Aziz
Yousuf Mr. S.M. Nadim
Shafiqullah Mr. Abdul Razak
Bramchari Dr. Amjad
Waheed Mr. Adnan
Afridi |
Chairman & Chief Executive Director Director Director Director Director Director Director Director |
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Names |
Shareholding (%) |
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Individuals Investment Companies & Mutual Funds Insurance Companies Joint Stock Companies Modaraba Companies Financial Institutions Foreign Investors Charitable Institutions Government Departments |
73.45 2.63 3.96 0.09 0.02 --- 19.79 0.05 0.01 |
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(1) Gul Ahmed International Limited ( FZC),
UAE (2) GTM (Europe) Limited, U.K. (3) Gul Ahmed Textile Limited, Pakistan. (4) Pakola Products Limited, Pakistan. (5) Safe Mix Concrete Products Limited,
Pakistan. (6) Excel Insurance Company Limited,
Pakistan. (7) Gul Ahmed Holdings (Pvt) Limited,
Pakistan. (8) Globe Management (Pvt) Limited,
Pakistan. (9) Metro Power Company, Pakistan. (10) GML Capital (Pvt) Limited, Pakistan. (11) Pakistan Beverages Limited, Pakistan. (12) Fun Product Pakistan (Pvt) Limited,
Pakistan. (13) Yassir Fruit Juices (Pvt) Limited,
Pakistan. (14) Yassir Industries (Pvt) Limited,
Pakistan. (15) Yassir Distributors (Pvt) Limited,
Pakistan. (16) GML Technologies (Pvt) Limited,
Pakistan. (17) Globe Garments (Pvt) Limited,
Pakistan. |
Engaged in the manufacture and sale of
textile products
More than 5,000
2013 2012
Capacity Production Capacity
Production
Cloth (In
Sq meters 50 picks
Converted 136,745 83,819 124,136 81,096
Yarn (Kgs 20 Counts converted) 49,055 37,501 48,227 36,525
Shifts 3
shifts 3 shifts
Production is lower due to variation in
production mix and various technical factors.
Various Local
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(1) Allied Bank Limited, Pakistan. (2) Bank Al Habib Limited, Pakistan. (3) Citibank, N.A., Pakistan. (4) Habib Bank Limited, Pakistan. (5) Habib Metropolitan Bank Limited,
Pakistan. (6) HSBC Bank Middle East Limited,
Pakistan. (7) Meezan Bank Limited, Pakistan. (8) National Bank Of Pakistan, Pakistan. (9) NIB Bank Limited, Pakistan. (10) Standard Chartered Bank (Pakistan)
Ltd, Pakistan. (11) The Royal Bank Of Scotland Limited,
Pakistan. (12) United Bank Limited, Pakistan. (13) Bank Islami Pakistan Limited,
Pakistan. (14) Faysal Bank Limited, Pakistan. (15) Dubai Islamic Bank, Pakistan. (16) Burj Bank Limited, Pakistan. |
Sound
Despite all the
challenges mentioned above in the economic environment, we are optimistic for FY
2012-13. We anticipate improvement in export demand from January 2013. looking
ahead, the Company’s business piorities and areas of focus will continue to be
shaped by enhancement of Company’s value by achieving higher production and
financial efficiencies, maintaining optimum quality, product diversification
and exploring new markets. The recent reduction in discount rate by state bank
of Pakistan and consequent decrease in export refinance rates will result in
lower financial charges. Company focuses to develop and strengthen exports by
exploring new customers across the globe to improve its top line.
All Pakistan Textile Mills Association.(APTMA)
Federation Pakistan Chamber of Commerce &
Industry.(FPCCI)
Karachi Chamber of Commerce & Industry.(KCCI)
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Currency |
Unit |
Pakistani Rupee |
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US Dollar |
1 |
Rs. 106.00 |
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UK Pound |
1 |
Rs. 173.25 |
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Euro |
1 |
Rs. 144.00 |
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.
ECONOMIC & INDUSTRIAL REVIEW
The year 2013
ended on a mixed note for the economy of Pakistan. Positive indicators included
sharp appreciation in real-estate and capital markets, increase in industrial
activity and Government’s commitment to the program of IMF. Local business
sentiment also showed positive signs though increase in private sector credit
off-take. However, challenges of energy shortage, law and order, rising
inflation, lower tax to GDP ratio continue to be major obstacles to sustainable
growth. Overall commitment and fiscal restructuring is needed to keep economy
on the track. Overall agricultural sector posted 3.3% against the target of 4%
due to slowdown in the major crops except sugarcane. Cotton arrival todate in
the current FY 2014 is 12.9 million bales as compared 13.1 million bales in the
whole of FY 2013. Growth in manufacturing sector is 4.4% which is highest in
last five years. Low foreign exchange reserves are exerting pressure on rupee
and increase in discount rate to 10% by State Bank of Pakistan (SBP) has
increased the financial cost. The CPI inflation in December 2013 was recorded
at 9.2% (YoY basis) whereas it was 7.9% (YoY basis) in December 2012.
Substantial increase in gas prices has further increased the cost of production
of textile industry adversely impacting its global competitiveness. As per the
Annual Report 2013 of State Bank of Pakistan, exports of the country has grown
by 3.5% in FY 2013 as compared to the decline of 4.4% in last year, which was
largely due to the waiver of duty on 75 products of mainly textile items to
European Union (EU) market and increased demand of yarn and fabric to China and
Hong Kong.Only textile exportshavegrown by 5.9% as compared to the decline of
10.6% in FY 2012. We welcome the granting of GSP plus Status to Pakistan by EU.
These trade concessions will benefit the country’s exports including textile
madeups by enabling its products to compete with other countries who have
similar concessions.
FINANCIAL PERFORMANCE
Your Company has
produced encouraging results which are represented by growth in sales by 19%
over the corresponding period. A significant growth was noted in gross
profitwhich is 47% over the corresponding period, amounting to Rs.
2,923million. The Company has earned profit before tax of Rs. 672 million
versus profit before tax of Rs. 230 million in the same period of 2012. Profit
after tax for the period is Rs.570 million as compared to profit after tax of
Rs. 171 million in the previous period.Earnings per share is Rs. 3.12 as
compared to Rs. 0.94 in the corresponding period.
December December
2013 2012
Rupees
in millions
Sales 15,613 13,173
Gross profit 2,923 1,992
Profit before tax
after providing
depreciation /
amortization of Rs 407 million
(2012: Rs. 371
million) 672 230
Profit after tax 570 171
FUTURE PROSPECTS
We expect a
steady improvement in the macroeconomic indicators in the long term based on
inflows from International Financial Institutions, privatization of non
performing public entities, determination to cut subsidies. Exports are also
expected to perform better due to GSP plus status granted to Pakistan. SBP has
forecasted 6% increase in exports in the remaining FY 2014 due to the GSP plus
status and Government’s decision to divert gas to industrial sector to reap
benefits of said status. Company is optimistic to find avenues for growth
focusing to avail benefits under the GSP plus scheme. Not limited to this we
strictly follow our strategy to expand and gain a competitive edge over our
competitors. Your Company aims to execute through best possible initiatives
targeted towards key motivators and customers, through new business development
and through effective cost and margin management.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.19 |
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1 |
Rs.102.14 |
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Euro |
1 |
Rs.84.74 |
INFORMATION DETAILS
|
Report Prepared
by : |
NNA |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NB |
New Business |
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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.