MIRA INFORM REPORT

Report Date :

09.01.2014

IDENTIFICATION DETAILS

Name :	GUL AHMED TEXTILE MILLS LIMITED

Registered Office :	Plot No. 82, Main National Highway, Landhi, Karachi,

Country :	Pakistan

Date of Incorporation :	1953

Com. Reg. No.:	0000586

Legal Form :	Public Limited Company

Line of Business :	Manufacture and sale of textile products

No. of Employees :	1,500-2,000

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No complaints
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

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

Pakistan

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
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 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

Source : CIA

company name

GUL AHMED TEXTILE MILLS LIMITED

Address

Registered Address

Plot No. 82, Main National Highway, Landhi, Karachi, Pakistan

Tel #	92 (21) 111-485-485, 35082626, 35015702
Fax #	92 (21) 35082625
Email	gulahmed@gulahmed.com

Mills Location

H-7, Landhi Industrial Area,

Karachi, Pakistan

Short Description Of Business

a.	Nature of Business	Engaged in the manufacture and sale of textile products
b.	Year Established	1953
c.	Registration #	0000586

Auditors

Hyder Bhimji & Co.

(Chartered Accountants)

Legal Status

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

Details of Chief Executive / Directors

Names

Designation

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

Categories of Shareholders

Names

Shareholding (%)

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

Associated Companies

(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.

Products

Engaged in the manufacture and sale of textile products

Number of Employees

1,500 – 2,000

Capacity And Production

2012 2011

Capacity Production Capacity Production

Cloth (In Sq meters 50 picks

Converted 124,136 81,096 124,136 85,067

Yarn (Kgs 20 Counts converted) 48,227 36,525 48,227 38,716

Shifts 3 shifts 3 shifts

Production is lower due to variation in production mix and various technical factors.

Customers

Various Local

Bankers

(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.

Financial Position

Sound

Future Outlook

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.

Memberships

All Pakistan Textile Mills Association.(APTMA)

Federation Pakistan Chamber of Commerce & Industry.(FPCCI)

Karachi Chamber of Commerce & Industry.(KCCI)

Foreign Exchange Rates

Currency	Unit	Pakistani Rupee
US Dollar	1	Rs. 106.60
UK Pound	1	Rs. 173.80
Euro	1	Rs. 144.30

Comments

Subject Company is well known and all 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.62.24
UK Pound	1	Rs.102.17
Euro	1	Rs.84.82

INFORMATION DETAILS

Report Prepared by :

NIS

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%)

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