MIRA INFORM REPORT

 

 

Report No. :

510991

Report Date :

28.05.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

FAISAL SPINNING MILLS LIMITED

 

 

Registered Office :

Umer House, 23/1, Sector 23, S.M. Farooq Road, Korangi Industrial Area, Karachi

 

 

Country :

Pakistan

 

 

Financials (as on) :

30.06.2017

 

 

Date of Incorporation :

1985

 

 

Com. Reg. No.:

0012667  

 

 

Legal Form :

Public Limited Company

 

 

Line of Business :

Subject is engaged in manufacture & sale of yarn & fabric

 

 

No. of Employees :

1,123

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A

 

Credit Rating

Explanation

Rating Comments

A

Acceptable Risk

Business dealings permissible with moderate risk of default

 

Status :

Good

 

 

Payment Behaviour :

Slow and delayed

 

 

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

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Pakistan

B1

B1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

Very High Risk

 

D

 

 

PAKISTAN - ECONOMIC OVERVIEW

 

Decades of internal political disputes and low levels of foreign investment have led to underdevelopment in Pakistan. Pakistan has a large English-speaking population. 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 more than half 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% in 2017, 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 2015-17. Balance of payments concerns have reemerged, however, as a result of increased imports and declining remittances.

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,” with $60 billion in investments targeted towards energy and other infrastructure projects. Pakistan believes CPEC investments will enable growth rates of over 6% of GDP by laying the groundwork for increased exports. CPEC-related obligations, however, have raised IMF concern that capital outflows that will begin to increase in 2020.

 

Source : CIA

 

Company name

                                   

Business Name

FAISAL SPINNING MILLS LIMITED

 

 

Full Address       

 

Registered Address

Umer House, 23/1, Sector 23, S.M. Farooq Road, Korangi Industrial Area, Karachi, Pakistan

                       

Tel #

92 (21) 35115177 - 80 (4 Lines)

Fax #

92 (21) 35063002, 35063003

Email

khioff@umergroup.com

 

 

Short Description Of Business

 

Nature of Business      

Engaged in manufacture & sale of yarn & fabric

Year Established

1985

Registration No.

0012667  

 

 

Liaison / Correspondence Office

           

Address

9th Floor, City Tower, 6-K, Main Boulevard, Gulberg II, Lahore, Pakistan

Tel No.

92 (42) 111-130-130

Fax No.

92 (42) 35770015

           

 

Mills Location

 

(1) A-150, S.I.T.E., Nooriabad, Karachi, Pakistan.

 

(2) 18-KM, Sheikhupura Faisalabad, Road, Feroz Watwan, Sheikhupura, Punjab, Pakistan.

 

 

Legal Status

 

The Company was incorporated in Pakistan as a public limited company and is listed at Stock Exchange of Pakistan

 

 

Auditors

           

Mushtaq & Company

(Chartered Accountants)

 

 

Details of Chief Executive / Directors

 

Names

Designation

Mr. Mohammad Salim

 

Mr. Bilal Sharif

 

Mr. Khurram Salim

 

Mr. Mohammad Amin

 

Mr. Adil Shakeel

 

Mr. Mohammad Sharif

 

Mr. Mohammad Shakeel

 

Mr. Iqbal Mehboob

 

Mr. Mohammad Shaheen

Chairman

 

Chief Executive

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

Director

 

 

Shareholders                

           

Categories

Shareholding (%)

Directors, Chief Executive Officer their spouse and minor children

 

Associated Companies, Undertakings and related parties

 

NIT / ICP

 

Bank / Financial Institutions

 

Insurance Companies

 

Modarbas & Mutual Funds

 

General Public / Individuals

 

Other Companies

 

Joint Stock Companies

 

47.02

 

 

42.15

 

0.01

 

0.04

 

2.22

 

0.00

 

8.50

 

0.04

 

0.02

 

 

Associates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

 

A.         Subsidiary

 

             None                                   

           

B.         Associated Companies

 

Bhanero Textile Mills Limited, Pakistan.

Firhaj Footwear (Pvt) Limited, Pakistan.

Blessed Textile Limited, Pakistan.

Bhanero Energy Limited, Pakistan.

Bhanero Textile Power Generation, Pakistan.

Faisal Spinning Power Generation, Pakistan.

City Towers, Pakistan.

S.M. Saeed Goreja, Pakistan.

 

 

Business Activities

 

Engaged in manufacture & sale of yarn & fabric

 

 

Number of Employees

 

1,123

 

 

Plant Capacity & Production

 

                                                                                                            2017                             2016                            

Spinning

Number of spindles installed                                                                  38,208                          38,208

Number of spindles worked                                                                               38,208                          38,208

Number of working days                                                                                    364                               364

Number of Shifts per day                                                                      3                                  3

 

Installed capacity in Kilograms, after conversion into 20/s count

(based on actual number of working days)                                             19,921,801                                19,921,801

 

Actual production of yarn in Kilograms, after conversion into

20/s count (based on actual number of working days)                             19,910,812                    19,511,917  

 

 

Weaving

Number of looms installed                                                                                 265)                              265)

Number of looms worked                                                                                  265)                              265)

Number of shifts per day                                                                                   364)                              364

Number of Shifts per day                                                                      3                                  3

 

Capacity after conversion into 50 picks - square yards                            41,780,006)                   41,550,746)

Actual production after conversion into 50 picks - square yards                           38,862,180                    35,797,770)

 

It is difficult to precisely describe production capacity and the resultant production in the textile industry since it fluctuates widely depending on various factors such as count of yarn spun, raw material used, spindle speed, twist etc. in case of spinning. In case of weaving fluctuation depends on factors such as loom width, width of fabric produced, type of yarn used etc. It would vary accordingly to the pattern of production adopted in a particular year.               

 

 

Bankers

           

(1) Bank Al-Habib Limited, Pakistan.

(2) Bank Alfalah Limited, Pakistan.

(3) Barclays Bank PLC, Pakistan.

(4) Dubai Islamic Bank Pakistan Limited.

(5) Habib Bank Limited, Pakistan.

(6) Meezan Bank Limited, Pakistan.

(7) Samba Bank Limited, Pakistan.

(8) Soneri Bank Limited, Pakistan.

(9) Standard Chartered Bank, Pakistan.

(10) United Bank Limited, Pakistan.

 

 

Customers

 

Various local & international

 

Exports

 

Mainly to European, Far East & Gulf Countries

 

 

Financial Position

 

Sound

 

 

Future Outlook

 

Current cotton prices shows that it is now end of long bearish spell of cotton trading. The buying of cotton by China is driver for surge in cotton prices. The higher cotton prices are expected in the year 2016-17. In  order  to  boost  export  of  spinning  sector,  export  refinance  facility  should  be  extended  to  spinning  sector  as  well. It is difficult to predict the results of the subsequent quarter of the next fiscal year, however the profitability will depend on the demand and prices of cotton and yarn.           

 

 

Memberships

 

·         APTMA

·         FPCCI

·         KCCI

 

 

Comments

 

Subject Company was established in 1985 and is engaged in manufacture & sale of Yarn & Fabric. Directors of the Company are reported as qualified, experienced and resourceful 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

 

Currency
Unit

Indian Rupees

US Dollar

1

INR 68.26

UK Pound

1

INR 91.22

Euro

1

INR 79.88

PKR

1

INR 0.58

 

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

SYL

                                                


 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

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

·         Payment record

·         Litigation against the subject

·         Industry scenario / competitor analysis

·         Supplier / Customer / Banker review (wherever available)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.