The company registered record highest sales revenue but higher prices of input and depressed market for yarn adversely impacted its profitability. Fortunately cotton crop for the forthcoming financial year is satisfactory and pursuant to that yarn prices have also come down. Even then the future scenario is based on optimism. The company posted pre-tax profit of Rs 5.25 million as against Rs 13.17 million booked in the preceding year registering 60% decline.
At the bottom line the enterprise could not escape from going into the red but by nominal loss after taxation amount of Rs 0.91 million. In the meantime its BMR/Expansion plan continued wherever necessitated to balance its spinning capacity for the production of quality yarn. The financial health of the company remained robust as evidenced from solvency and liquidity ratios.
Gulistan Spinning Mills Ltd is a public limited company. It was incorporated on February 25, 1987 in the province of Sindh. It is a textile spinning unit located in Jamber Khurd Tehsil Chunian in the province of Punjab. Its manufacturing facilities include 19,200 spindles and its annual production capacity has been rated at 6.370 million kgs of yarn after conversion into 20/s count.
The organisation is one of the constituent members of Gulistan Group of companies which started operation with the establishment of Gulistan Textile Mills in 1966. The Group has expanded substantially to become one of the largest textile groups in Pakistan with over 10,000 employees and annual turnover of US$175 million. The group comprises 10 spinning mills, two woven fabric mills, three power generation plants.
All manufacturing facilities of Gulistan Group have already been certified by Lloyd's Register Quality Assurance for ISO 9002 Quality Management System.
The Group's spinning mills combined spindles add upto 180,000 spindles, manufacturing high quality yarns is the Group's major area of expertise and spinning activity is contributing over 78% of the Group's total sales. The Group's total production of yarn exceeds 63,679 tonnes annually with a wide range of yarns produced for all market segments.
The Group's weaving facility is equipped with 255 Airjet and shuttle-less looms. Its monthly production of fabrics has been recorded at 2.8 million meters.
It has strategic partnership for the manufacture of high quality knitted dyed/finished fabric, bed linen and apparel.
The Group claims self-sufficiency in electricity generation which provides enabling capability to better fulfil the commitments by reducing dependency on external factors.
Pervez Industrial Corporation is also its constituent company which manufactures and markets the world famous Kiwi shoe care and household products in Pakistan, in collaboration with Sara Lee Corporation of USA. During October-September 2003-04, the year under review, the company produced 6.248 million kgs of yarn after converted into 20/s count as compared to 6.397 million kgs of yarn showing marginal decline by 2.3% but attaining high capacity utilisation of 93%.
It generated sales in terms of value at Rs 791.01 million (FY 2002-03: Rs 701.12 million) showing 12.8% growth over the preceding year's. Sales figure is the record highest but gross profit amount is the lowest since the last six years. Gross profit margin remained under pressure. The directors reasoned that the price of input (cotton) jumped to Rs 3500 per maund from Rs 2450 per maund showing an increase of 45 percent. The price increase resulted in decrease of gross profit from Rs 78.5 million in the previous year to Rs 56 million during the year under review. The company had imported cotton to meet the requirement for producing fine quality yarn. But the yarn market remained depressed both inside the country and outside. But financial charges were reduced.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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September 30
2004 2003
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Share Capital Paid-up: 100.00 100.00
Reserves & Surplus: 114.81 115.72
Shareholders Equity: 214.81 215.72
L T Debts: 137.81 173.94
Deferred Liabilities: 7.60 7.12
Current Liabilities: 518.62 212.87
Fixed Assets: 341.56 289.80
Investments: 9.94 8.90
L T Deposits: 2.85 4.28
Deferred Taxation: 0.60 0.56
Current Assets: 523.89 306.11
Total Assets: 878.84 609.65
Sales, Profit & Pay Out
Sales-Net: 791.01 701.12
Gross Profit: 55.95 78.49
Operating Profit: 38.45 59.64
Other Income/(Loss): 0.19 (0.15)
Financial (Charges): (32.99) (44.61)
(Depreciation): (28.07) (27.69)
Profit Before Taxation: 5.25 13.17
(Loss)/Profit After Taxation: (0.91) 5.71
(Loss)/Earnings Per Share (Rs): (0.09) 0.57
Share Price (Rs) 16-3-2005: 13.25 -
Financial Ratios
Price/Earning Ratio: (-) -
Book Value Per Share: 21.48 21.57
Price/Book Value Ratio: 0.61 -
Debt/Equity Ratio: 39:61 45:55
Current Ratio: 1.01 1.44
Asset Turnover Ratio: 0.90 1.15
Days Receivables: 38 26
Days Inventory: 147 45
Gross Profit Margin (%): 7.07 11.19
Net Profit Margin (%): (0.11) 0.81
R O A (%): (0.10) 0.94
R O C E (%): 0.25 1.46
Plant Capacity & Production
A) Million Kgs Yarn after conversion into 20/s Counts)
Installed Capacity: 6.730 6.730
Production: 6.248 6.397
Capacity Utilisation (%): 92.84 95.05
B) Actual Production of All Counts: 6.096 6.017
C) Number of Spindles Installed: 19,200 19,200
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