Textile Spinning: GULISTAN SPINNING MILLS LIMITED - Half Year Ended March 31 2005
The principal activity of the company is manufacturing and sale of yarn. Gulistan Spinning Mills Limited is a public limited company and was incorporated in 1987 in the province of Sindh having its registered office located at 2nd Floor Finlay House I.I. Chundrigar Road Karachi which is the hub of commercial and banking activities of Karachi.
The manufacturing facilities of the company is located at Jumber Khurd Tehsil Chunian which is famous for being one of the largest textile manufacturing centres of Punjab. In order to monitor its business activities in Punjab the company has its regional office with the provincial capital at 58km Main Gulberg Lahore.
The company is listed on all stock exchanges of Pakistan. On 15th June 2004, the market price of its share closed at Rs 9.70 per share at 3% discount. During the last one year the market value of the share peaked at Rs 19.45 per share increasing from Rs 8.0 per share.
The present quotation at below par value of the share can be attributed to recent crash of the share market otherwise the company would have remained stable at much above the par value. This observation is based on its financial back bone which is quite robust as is evident from its solvency and liquidity rates as can be seen from the performance statistics appended below.
During the half year ended 31 March 2005 (HY 2004-05), the period under review, the company generated sales in the sum of Rs 353.14 million as against Rs 307.20 million posted in the same period last year (SPLY) sales growth of the company was modest at 14.95% but the gross profit shot up by 41.86%. The increase rate of gross profit is impressive and the contributory factors for the same appear to be increase in volume of sale coupled with increase in the gross margin.
Operating expenses were identical to the SPLY but financial charges increased by Rs 7.04 million. This can be prolonged feature as the interest charges are unlikely to reduce. The other observation is that the prices of yarn both in the local and foreign markets are volatile. Luckily, prices were stable upto March 2005 but by May 2005 were declining. However the half year under review witnessed strong performance in profitability.
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Performance Statistics (Million Rupees)
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Balance Sheet As At March 31 September 30
2005 2004
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Share Capital-Paid-up: 100.00 100.00
Reserves & Profit: 121.81 114.81
Shareholders Equity 221.81 214.81
L.T Debts: 195.42 137.81
Deferred Liabilities: 7.60 7.60
Current Liabilities: 713.83 518.62
Fixed Assets: 396.79 341.56
L.T Investments 10.41 9.94
L.T Deposits: 2.69 2.85
Deferred Taxation: 0.60 0.60
Current Assets 721.17 523.89
Total Assets 1,138.66 878.84
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Profit & Loss A/c For
The Half Year Ended March 31 2005 2004
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Sales-Net: 353.14 307.20
Gross Profit: 44.80 31.58
Operating Profit: 35.21 22.55
Other Income: 0.16 0.09
Financial (Charges)-Net: (25.02) 17.98
Profit Before Taxation: 10.18 4.28
Profit After Taxation: 6.99 2.14
Earnings Per Share (Rs): 0.70 0.21
Share Price (Rs) on 15/06/05: 9.70 -
Price/Earning Ratio: 13.86 -
Book Value of Share (Rs): 22.18 21.48
Debt Equity Ratio: 47:53 39:61
Current Ratio: 1.01 1.01
Gross Profit Margin (%): 12.69 10.28
Net Profit Margin (%): 1.98 0.70
R O A (%): 0.61 0.24
R O E (%): 3.15 0.99
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COMPANY INFORMATION: Chairman: Abdul Shakoor; Chief Executive: Tanveer Ahmed; Director: Mohammad Abdullah; Chief Financial Officer: Mohammad Shahid; Company Secretary: Zameer Q. Siddiqui; Registered Office: 2nd Floor, Finlay House; Web Address: Not Reported; Factories: Jumber Khurd, Tehsil Chunian (Punjab).
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