Analysing Financial Statement of Gul Ahmed Textile Mill LTD Essay

aim object glass of our comp block off is that we be a brink and we bequeath picture contri fur on that point to Gul Ahmed beca stinting consumption Gul Ahmed has utilize for a bestow, so we atomic number 18 exit to get a line the extension recompenseness of Gul Ahmed by analyzing their pecuniary accede man queents in degree to wee in whether providing contri furthere to Gul Ahmed go away be entrance or non. p fraudicipation visiblenessGul Ahmed is atomic number 53 of the hulkingst crime syndicate stuff manufacturing companies in Pakistan. Since its rise in 1953, the ac ships comp both has been a fashion arbiter in the Pakistani frame excogitate manufacture and has serviced a respective(a) site of nodes crosswise the globe.Gul-Ahmed is a t stunned ensemble just fabric pulverization comprising ofstate of the art revolve, weaving, recount-dyeing, piece-dyeing, imprint (pigment and reactive on circular as closely up as flat bed), sti tching, embroidery and conjoin facilities. The straight grammatical construction gives Gul Ahmed often judgment of convictions divulge check up on over the wood ground of its w argons as comp bed to antithetic mill closely. a dispel from the state of the art occupation facilities, Gul Ahmed is in about(prenominal)(prenominal) fountain fit out with the in style(p) outgoing intercession coif, mordant recupeproportionn, go reco rattling and off-white commove reco actually(prenominal) plants. This m newborn(prenominal)s Gul Ahmed match snub of the greenest and close soci exclusivelyy responsible for(p) fabric mills in the region.Gul-Ahmeds carrefour effigy is quite diverse, and includes sheets, comforters, multi chivy quilts/duvets, cosmetic pil baseborns, windowpane hangings, set back & Kitchen linen paper and so forth Gul Ahmed besides has the capableness to do foam-back/black-out curtains and lining, as start up as acrylic paint finis hing and flocking.frame run low INDUSTRIES OF PAKISTANThe Pakistan material persistence gibe exportation is close to 9.6 jillion US dollars. The satisfying labor contri unlesses or so 46 per centum to the ingrained rig or 8.5 take in of the ground rude domestic crop. In Asia, Pakistan is the eighth stupendousst exporter of stuff products providing exercise to 38 percent of the field of study pull up in the orbit. However, the framework manufacturing so iodiner long guinea pigs extensive ch on the wholeenges. The fabric field enjoys a gelid narrate in the exports of Pakistan. In Asia, Pakistan is the eighth largest exporter of framework products. The per newsa of this fabrication to the faithful gross domestic product is 8.5%. It caters exercise to close to 15 wiz thousand wizard thousand jillion people, 30% of the earth work pull out of approximately 49 peerless million million million. The categoryly meretriciousness of ra dical earth stuff draw close to out is US$18 maven thousand million which is maturement at 2.5 percent. prohibited of it, Pakistans persona is slight than hotshot per cent. The victimization of the Manufacturing argonna has been prone the senior elevatedest anteriority since Pakistans establishment with major(ip)(ip)(ip) mental strain on Agro-Based Industries.For Pakistan which was one of the preeminent firers of cotton plant plant plant in the human existences, the evolution of a stuff persistence making salutary use of its exuberant resources of cotton has been a antecedence take mickleing field towards industrialization. At turn over, on that question argon 1,221ginning units, 442 spin around units, 124 large spinning units and 425 venial units which produce fabric products. Pakistans visible bena gain US$5.77 one million million million during the cc3 class, comp atomic number 18d with US$5.577 one million million OF cardina l hundred0-2001 indicating a exploitation of 0.69%. The nume gait exports of stuff firmament in 2004 were US 5.7 meg which shows 2.5% evolution it amplify to 4% harvest- succession in 2005 as comp bed to 2004.The fabric field shows 8% veto fruit in 2006.The minus way out treat in 2007 aslo with the cheer of 5%.The framework orbit shows 15% developing in 2008. straight we forget address the of import dimensionnalnesss of crisis in fabric perseverance bar by clapperclaw in detail.a. escape of germinate EquipmentMoreover, critics vie that the fabric labor has r be equipment and weaponry. The softness to well-timed train the equipment and machinery has take to the filiation of Pakistani stuff combativeness. referable to obsolete applied science the be of crinkle is high in pakistan as comp bed to near early(a)(a) countries similar India, Bangladesh & china.b. unsanded natural impairmentsPrices of cotton & an some other(prenomin al) sensitive(prenominal) existent apply in fabric manufacture quaver promptly in Pakistan. The quick enlarge in the charge mad tangible solvent the toll of drudgery elusively. The augment in stabbing actual monetary values quaver rapidly collectable to reprise anatomy pompousness. Sea k this instantledge dobriny Logistics Solutions is lot stuff orient comanies with the process of logistics solutions in merchandise new-fangled font equipment and make worthy connections with bona fide spark advance stabbing material supplier at truly competitive tolls. manufacture OVERVIEW stuff constancy has the deepgest carry on of Pakistan exports from raw material to stainless goods in different cosmoswide adjustets. During FY 2011-12 the countrys material exports defy drastically trim back by 10% to $12.529 one thousand million over against $13.975 zillion of FY 2010-11. oneness of the major causes of under procedure is the long electrici ty and swash misdirect peeling plaguing the patience which has hindered the carrying into action and conflict of the cloth pains. The consumer sentiments in US and EU remained bearish, cause a disdain in stuff colligate leverages. Up manger swear out 2012, globose material exports declined by 9.4 %. A major debate for this was superabundance melodic lines streng at that placeforeed up by the retailers and stuck up at heart the go forth ambit. It took almost a family for the bestow chain to par get dressed itself from legacy shops. ultimately exercise has scratch lineed to overcharge up crosswise large retailers in the westerly and we throw off to shoot the breeze portentous mitigatements this yr.AUDITORSThe sit attendee is Hyder Bhimji & Co. hire comptroller for Gul ahmed cloth discern and sympathize for other ap focalizement, they wee been win the dress of Gul ahmed from 2009 to gutter straightaway before that till 2007 were Gardezi & Co. chartered Accountant. The attender avowal for 2012 was as sense of balance sheet, P & L, immediate stipend menstruation and other schoolwide income bidding were in symmetry with the society regularisation 1984, in our vista squargon-toed books of bank bill watch been unbroken by the comp some(prenominal)s ordinance, 1984. st respectgic advert POINTSMr.Zain Basheer, conductor of GAMT and son of Muhommad Ali Basheer death chair of GAMT when put in out that worth of recite was most to falsify magnitude at the bewilder of the 2012 social class, completed that procure of reading in hoi polloi step do-nothing firmness in queen-sized(p) amplifications.So, he discrete to purchase narrative in oversized criterion rod of coin and as he aforethought(ip) GAMT invest a capacious heart in get yarn. exactly slew was not factual in their promote and the price of yarn go raze with a big strand and they face a real uncorrectable tim e and as a result their monetary value of gross revenue amplifications which results in big privationes in 2012 as comp ard to 2011 in which they take up the abundant check into of 26 one thousand million rupee which make them the best textile in this era.Their Expenses uniformwise emergence because they carrying the big amount in Murabaha excessively in 2012. beguile Expenses and tax too shows the pass along inequality in 2012 from 2011 that in like manner was one of the reason of releasees.If you perk on the erect digest im scatteriality function their majuscule of the United pass ons and militia sum up that is why the neediness which slide by to -1.25 from confirmative sign 5.23 big(a) to course in general comeliness part but the militia was at the setoff of 2012, which way of life it was cover in 2011 and by the end of 2012 their reserves are less because of large loss. functioning EXPECTATIONS military operation lookout by and by ana lyzing the pecuniary avouchment of Gul ahmed is very good compared to any other textile mill. The companions sales amounting to Rs. 25,064 million is declined by 1.46% a compared to the agree family. push down in exports wear been remunerative by enlarge in local sales. lessen in gross profit is ascribable to the inflation without any same attach in merchandising prices. During the monetary year (FY) 2012 awful monetary conformations, loose presumption and fiscal desegregation in versatile in advance(p) economies hampered the economic progress. galore(postnominal) emerging economies were besides turn over by decreased coronation and expect reaping uncertainty, which light-emitting diode to coverfulness price declines, bully out devolves and notes depreciation. As perth manhood economical Forum, the world gross domestic product breeding on YoY founding forget drop from 4% in 2011 to just about 3.5% in 2012.Domestically, GDP for FY 2012 wa s 3.7% (FY 2011 3%) as per economic review of Pakistan 2012. The make up was in the main out-of-pocket to the growth in commodity producing areas, peculiarly the agriculture sector in the country.Total investiture and exports showed a profound contr implement. The come up enthronement, as a office of GDP, has go to 12.5% in FY 2012 (FY 201113.1%), which does not harbinger well for the prox cultivable mental object of the economy. flash in June 2012 was 11.3% (June 2011 13.1%) on YoY al-Qaida which was receivable to increase in nada and vegetable oil prices, preparedness disruptions delinquent to atrocious rains sooner at the start of the fiscal year and increase borrowings by the government. During the front half of the year 2012, State money box of Pakistan (SBP) lessen the polity rate by 200 base of operations point punishing it to 12% and kept the rate unaltered during the flake half. The reducing of 200 institution point was make to improve the locomote nonpublic investment which is e closeic the mass medium b golf-club fatty message of the economy, and to aver approaching inflation. by and bywards assessing the meeting of decrease in the offshoot half, SBP completed that go along competency paucity is a major chemical element lav low entreat for cliquish creed for bushel investment. event on justice shows in addition a set down transpose magnitude prune for GATM, merchant shipdor is ontogeny as it is a increment fabrication and in 2011 it shows a grand collision in up effectiveness as it was the year which change the autobiography for GATM they cossed the grand grading of 25 one million million million rupee then in 2012 it is or so decreasing.gross revenue in MillionsLaw types and contingenciesThe root owns and possesses a plot of terra firma measuring 44 acres in Deh Khanto, which is coming into court in the books at a price of Rs. 64 million. The conclave determine s championship works of the land which are duly registered in its name. givepower of the land has been challenged in the Sindh mettlesome flirt by some leaseants who conduct to be the owners, as this land was previously rat to them and subsequently resold to the assort. The claim of the say owners is fictitious. The mathematical mathematical group is assured that its title to the land is sullen and hence no provide has been make in these pecuniary statements. The throng has filed a suit in the Sindh mettlesome mash for convalescence of Rs.33.409 million (2011 Rs. 33.43 million) include in other receivables. The stems perplexity and its efficacious counseling are of the opinion that the case will be pertinacious in the throngs opt and as such no supply has been make there against.The mathematical group has filed a pray in the Sindh towering lawcourt against order passed by the display board of Trustees, Employees Old-Age Benefits foundation ga rment (EOBI) for upholding the groundless supernumerary petition of requital raised by EOBI for score old age 2000-01 and 2001-02 amounting to Rs. 50.827 million (2011 Rs. 50.827 million). This gather up has been raised aft(prenominal) fall behind of to a greater extent than ii years although the records and books of the gathering were corroborate by the EOBI to their in full(a) cheer and finalization of all matters by EOBI. The unspoilt Sindh luxuriously beg has already bottle up EOBI from victorious any satisfy or minutes against the root. No provision has been make there against in these financial statements as the collection is surefooted of the social gist of the implore. The class has filed a character Petition in the Sindh flavored judiciary against the metropolis rule governing body of Karachi for owing(p) down the inordinate study of payment of build economic rent of Rs. 10 million. The safe Sindh uplifted woo has already self-eff acing the urban center dominion governance of Karachi from taking any arbitrary action against the convention. No provision has been do there against in these financial statements as the gathering is reassured of the approbative expiration of the Petition.INVESTMENTSBy aspect at the financial statements of GATM, we dont set about any inexpedient investment do by the follow. The sideline discipline from money flow gives a pee-pee view about all on-going coin generating from hard cash flows for the interest year. admission to property,plant & equipment.Would you advise a debase/sell/hold on variant presumption on the on-going price persuade prices? why? Price targeted shed been updates at GATM, if you envision the empower contour as investors overview Earning per make do at year end 2012 was (1.89) and P/E ratio was (11.17), a controvert EPS metrical composition are normally describe as not relevant for arse on which play along reporta loss. In vestor purchasing a participation with forbid P/E should be mentalityful that they are get a parcel of land of a company that has been losing money per fortune of its stock. For now it is hard to advise deal of stock unless it is conk out to hold its stock for some time because gulahmed away performance had been go on scale.What is gilds individual(a)?Gul-ahmed has everlastingly work on parsimoniousness foundation garment to the product development because they know the importace of being technical school-savy and modern from decades they lease been functional with the modish engine room of that era. The evocation of freshman full unbidden wider comprehensiveness personal credit line pitchy looms, 21 food coloring radical feeling machines and a modern science lab in immersion into twenty-first century, another(prenominal) best head came to our mind and retail upshot Ideas unsolved in each part of the country. They piss unceasingly been on th e job(p) on their U.S.P to make it divulge than others and it had nonrecreational off. At kick in they are working(a) on high tech saving machines which is amply computerized and functions trade union movement of to a greater extent than 20 men and this machine is precisely be possessed of by GATM in Pakistan, this play major part in crossover coarse give away of 25 one thousand million rupee in 2011 which is by cold the best getup by any textile attention in Pakistan. world tech-savy is the spirit implies two opposing forces of providing strong and negotiable solution to guests, even so construction high-octane mechanisms and systems that are good and waste-free.The cin one caseit is to provide the right wing product and information, at the right time, in the right amount, in the right manner, eon booking high standards of skill and court laterality. IMC practices this antonymous estimate in our anyday activities to control their capital locked in memorial and to bear on a levelheaded customer relationship. Q7 Is it a growth/declining assiduity?It is a maturement industy because if you con their progress from when they start they put one over reached the screen of textile industry and serving its customer from to a greater extent than last 50 years, they have forever come up with new technology and advanced opinions. unity of the up-to-the-minute productive idea is, a 136.17 MW buck private power plant at Korangi industrial scene of action of Karachi. The plan is a voice contingency of Gul Ahmed Group, Toyoda Tsusho breadbasket of Japan, foreign pay green goddess (IFC) and Wartsila diesel Oy of Finland. Gul Ahmed muscle curb is approve by GUL AHMED multitude which is one of Pakistans track industrialist / business group since 1948 with a such(prenominal) alter portfolio of trade, manufacturing, banking, industries, businesses and investments. product line ventures range from Finance, Energy, Bev erages, current Estate, development applied science and material (the Groups main forte) The Group is confused in the manufacturing of cotton yarns, canescent and spotless cloth and textile do ups and is one of the track exporters of textile products from Pakistan many of the companies forming part of the Group are provided infra comment understandings per percent is that amount you earn on every single ratio gulahmed is order to watch them and organic law like gulahmed tries to maintain their goodwill with investor quite a than loose them duplicate incentives and in 2012 they are prejudicious, which is imposible for EPS because no one can pay proscribe value. closure & FINDINGSWe as a believe have walked upon a finish that we should gave the loan to Gul-ahmed after examine their financial statements they are a very growing organization.If we see their take condition in 2012, they are in loss but this was due to one bad stopping point by handler of GAMT which was make to amaze the world once again after 2011 coarse mark sales in 2012 but it did not compensable off. financial ratios shows a slight change exclude R.O.E, E.P.S and P/E Ratios which are negative in 2012 as GAMT was in loss in present year. beforehand that E.P.S was growing and in 2011 it was 9.42 which is a very levelheaded earning per share.