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MIRA INFORM REPORT
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Report No. : |
486661 |
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Report Date : |
19.01.2018 |
IDENTIFICATION DETAILS
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Name : |
ITTEFAQ IRON INDUSTRIES LIMITED |
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Formerly Known As : |
ITTEFAQ SONS (PVT) LIMITED |
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Registered Office : |
40-B II, Gulberg III,
Lahore |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2016 |
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Date of Incorporation : |
20.02.2004 |
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Com. Reg. No.: |
0046874 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
One of the biggest steel
section manufacturing unit of Pakistan. This Smart unit is capable of
producing heavy steel Section for residential and industrial purposes like I-beams,
H-beams, Angles, Channels. |
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No. of Employees : |
170 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow & Delayed |
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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
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Country Name |
Previous Rating (30.06.2017) |
Current Rating (30.09.2017) |
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Pakistan |
B1 |
B1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
PAKISTAN - ECONOMIC OVERVIEW
Decades of internal political disputes and low levels of foreign
investment have led to slow growth and underdevelopment in Pakistan. Pakistan
has a large English-speaking population. Nevertheless, a challenging security
environment, electricity shortages, and a burdensome investment climate have
deterred investors. Agriculture accounts for one-fifth of output and two-fifths
of employment. Textiles and apparel account for most of Pakistan's export
earnings; Pakistan's failure to diversify its exports has left the country
vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually
increased since 2012. Official unemployment was 6.1% in 2016, but this fails to
capture the true picture, because much of the economy is informal and
underemployment remains high. Human development continues to lag behind most of
the region.
In 2013, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility,
which focused on reducing energy shortages, stabilizing public finances,
increasing revenue collection, and improving its balance of payments position.
The program concluded in September 2016. Although Pakistan missed several
structural reform criteria, it restored macroeconomic stability, improved its
credit rating, and boosted growth. The Pakistani rupee, after heavy
depreciation in 2013, remained relatively stable against the US dollar in 2016.
Low global oil prices in 2016 contributed to a narrowing current account
deficit and lower inflation. Remittances from overseas workers continued to be
a key revenue source, also mitigating the impact of the lack of foreign
investment and a growing trade deficit on the country’s current account.
Pakistan must continue to address several longstanding issues, including
expanding investment in education and healthcare, adapting to the effects of
climate change and natural disasters, improving the country’s business
environment, reducing dependence on foreign donors, and widening the country’s
tax base. Given demographic challenges, Pakistan’s leadership will be pressed to
implement economic reforms, promote further development of the energy sector,
and attract foreign investment to support sufficient economic growth necessary
to employ its growing and rapidly urbanizing population, much of which is under
the age of 25.
In an effort to boost development, Pakistan and China are implementing
the “China-Pakistan Economic Corridor,” a $46 billion investment program
targeted towards the energy sector and other infrastructure projects that
Islamabad and Beijing had agreed on in early 2013.
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Source
: CIA |
Business
Name
ITTEFAQ IRON INDUSTRIES LIMITED
(FORMERLY: ITTEFAQ SONS (PVT) LIMITED)
Full
Address
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Registered Address |
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40-B II, Gulberg III,
Lahore, Pakistan |
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Tel # |
92 (42) 35765021-25
(6 Lines) |
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Fax # |
92 (42) 35765026 |
Short
Description Of Business
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a. |
Nature of Business |
One of the biggest steel
section manufacturing unit of Pakistan. This Smart unit is capable of
producing heavy steel Section for residential and industrial purposes like I-beams,
H-beams, Angles, Channels. |
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b. |
Year Established |
20th
February, 2004 |
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c. |
Registration # |
0046874 |
Factories
Location
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8 K.M., Manga Raiwind Road, Lahore, Pakistan |
Auditors
Kaleem & Co.
(Chartered Accountants)
Legal
Status
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Subject Company was established as a Private
Limited Company on 20th February, 2004. In June, 2017 its legal
status was converted to Public Limited Company |
Details
of Directors
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Names |
Occupation |
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Mr. Usman Javed Mr. Mian Muhammad Pervaiz Shafi Mr. Javed Sadiq Mr. Khalid Mustafa Mrs. Khalida Pervaiz Mrs. Ayesha Fahid Mrs. Sumbleen Usman |
Chief Executive Director Director Director Director Director Director |
Categories
of Shareholders
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Names |
Shareholding
(%) |
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List of Shareholders are attached in separate
file in PDF format |
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Associated
Companies
Kashmir Sugar Mills Ltd., Pakistan.
Kashmir Feeds Ltd, Pakistan.
Ittefaq Iron Industries Limited, Pakistan.
Ittefaq Bio Tech (Pvt.) Ltd, Pakistan.
Kashmir Poultry Breeders (Pvt.) Ltd, Pakistan.
Ittefaq Power Ltd, Pakistan.
Kashmir Power (Pvt.) Ltd, Pakistan.
Business
Activities
One of the biggest steel section manufacturing unit of Pakistan. This Smart unit is capable of producing heavy steel Section for residential and industrial purposes like I-beams, H-beams, Angles, Channels.
Number
of Employees
170
Plant
Capacity & Actual Production
Capacity of the Company remained underutilized over the past years due to shortage of working capital and power, however, based on strong market penetration, quality and established brand worth of the Company, the management is strongly hopeful to supply to various mega construction projects disclosed in section 5.4. If the Company is provided with required working capital and power, it will be able to enhance its utilization significantly in the next years. Capacity utilization for the Company for producing re-bars over the previous five years is given below:
Melting FY 12 FY 13
FY 14 FY 15 FY 16
Installed Capacity (MT) 120,000 120,000 120,000 120,000
120,000
Production (MT) 45,060 42,723
51,563 26,031 13,698
Utilization Based on Installed
Capacity
(%) 37.6 35.6 43.0 21.7 11.4
Utilization Based on Attainable Capacity (%) - - - - 18.3**
Rolling FY
12 FY 13 FY 14
FY 15 FY 16
Installed Capacity (MT) 120,000 120,000 120,000
120,000 120,000
Production (MT) 40,605 36,600
51,700 49,258 52,879
Utilization Based on
Installed Capacity (%) 33.8 30.5 43.1 41.0
44.1
Utilization Based on Attainable Capacity
(%) - - - - 53.0**
Trade
Suppliers (Foreign)
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Subject import globally from Companies belongs
to European Countries, Korea, China, Taiwan, Japan, Hong Kong, Malaysia &
U.A.E. Its global trade suppliers are Companies related to Machineries, Steel
Raw Materials |
Annual
Sales Turnover
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Year |
In Pak Rupees |
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2016 |
3,917,451,919/- |
Customers
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Major customers are Traders, Dealers, Government Enterprises, Private
Companies, Construction Companies deal with cash term basis |
Bankers
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(1) Bank Alfalah Limited, Pakistan. (2) Faysal Bank Limited, Pakistan. (3) Habib Bank Limited, Pakistan. (4) Habib Metropolitan Bank Limited, Pakistan. (5) MCB Bank Limited, Pakistan. (6) Meezan Bank Limited, Pakistan. (7) Silk Bank Limited, Pakistan. (8) Soneri Bank Limited, Pakistan. (9) Summit Bank Limited, Pakistan. (10 United Bank Limited, Pakistan. |
Corporate
Profile
Alshafi Group of Companies carries its legacy from Ittefaq Foundries;
established by Mian Muhammad Sharif in early 1940s, from a small foundry to a
group of companies having several sugar, textile, paper and steel mills. During
early 1990s, Alshafi group was separated from Ittefaq Foundaries and inherited
Ittefaq Sugar (Pvt) Ltd and Brother Steel (Pvt) Ltd. Afterwards, Kashmir Sugar
Mills Ltd, Kashmir Feeds Ltd, Alshafi steel (Pvt.) Ltd, Ittefaq sons (Pvt.)
Ltd, Ittefaq Bio Tech (Pvt.) Ltd and Kashmir Poultry Breeders (Pvt.) Ltd and
hatchery farms were established during the period from 1990 to date. Currently
the group is also working to unveil its power generation projects with both of
its sugar units. Further, being the trustee of Ittefaq Hospital Trust, the
group has taken multiple initiatives for contributing towards the health sector
of the country; one of them was the establishment of Ittefaq Institute of
Nursing and Ittefaq Paramedical Institute in 2013, which are affiliated with
Sharif Medical and Dental College, Raiwand. Ittefaq Hospital Trust has a remarkable
history of helping the under privileged class through its charity ventures.
Memberships
·
Lahore Chamber of
Commerce & Industry.(LCCI)
·
Federation
Pakistan Chamber of Commerce & Industry.(FPCCI)
Comments
Subject Company was
established in 20th February,
2004 and is one of the biggest steel section manufacturing unit of
Pakistan. This Smart unit is capable of producing heavy steel Section for
residential and industrial purposes like I-beams, H-beams, Angles, Channels. Market reputation is good. Directors are
reported as qualified & experienced businessmen. In view of current disturbed economic and
political situation, we would advise to deal with all the business in Pakistan
with some caution.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 63.84 |
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1 |
INR 88.28 |
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Euro |
1 |
INR 77.88 |
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PKR |
1 |
INR 0.58 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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PRA |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low risk
of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably on
secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the business
is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
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Payment
record
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Litigation
against the subject
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Industry
scenario / competitor analysis
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Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.