Kohi Noor Industries by MNA

Kohinoor Industries Limited
INTRODUCTION
Kohinoor Industries Limited - Faisalabad, the largest in the country,

was established in 1950 with only 25,000 spindles. Through a rapid
process of consolidation and expansion, colossus of 147,000 spindles.
The mills have the best-equipped laboratory in the country for
complete testing of raw materials, other inputs and yarn. It runs a
sophisticated system of quality control for its products covering in-
process surveillance and rigid finished product testing. It has technical
collaboration with world renowned Japanese Textile Group KANEBO.
Since the very beginning, Kohinoor has been a trendsetter, setting the
pace and direction for Pakistan’s textile industry. It has always been a
leader in yarn products and its “Telephone” brand yarn is always
leading the yarn market.
Kohinoor Industries Limited – Faisalabad is not only a gaint of an

industrial unit, it is an institution in itself recognized as an ideal in the
textile industry. Its management systems, technical and professional
training systems, employees welfare set-up, shopping and schooling
centers, make it a complete the Industry. The Sponsors of the
company belong to a renowned Group called “SAIGOL GROUP”. They
have grown with the country. They have grown to fill the vacuum that
existed setting up one Industry after another.
UNIVERSITY OF AGRICULTURE FAISALABD

Group Profile
Saigols started business activities in Pakistan in 1948 by setting up the

country’s first textile mill- Kohinoor Industries Limited in Lyallpur.
With the passage of time and continuing efforts of Saigols, Naseem
Saigol Group becomes one of the major industrial groups in Pakistan
comprising the following:
• Kohinoor Industries Limited

• Azam Textile Mills Limited
• Sari tow Spinning Mills Limited
• Pak Electron Limited
• PEL appliances Limited
• PEL Daewoo Electronics Limited
• Kohinoor Power Company Limited
• Kohinoor Energy Limited
• Sari tow Pakistan Limited
• Saigols Computers (Pvt) Limited

HISTORY
1948 – The First raindrop!
This is 1948, Pakistan, just a few months old, has yet to see a
cultivator of its parched industrial scene. Saigols having inherited the
business tradition from their forefathers an erstwhile family of trades
in Calcutta, have chosen Lyallpur (Later named Faisalabad) as their
base. Taking the initiative, they are setting up under the umbrella of
Kohinoor Industries Limited, the country’ first major textile mill –
Kohinoor Textile Mills in Lyallpur.
Let’s come to 1950, KTM, with a unique edge of location in the heart of
cotton growing area of Pakistan, has started its production with a
humble capacity of 25,000 spindles. But through a rapid process of
consolidation and expansion extending over a few years it grew into a
prestigious giant of 147,000 spindles and 2,300 Auto power Looms,
with Latest facility for bleaching, mercerizing, continuous dyeing, and
roller printing, finishing including Eva set and a large make up
department to handle its production.
It was a very strong group and enjoyed leadership up till 1965 and
after it began to become financially weak. In 1971 nationalization
started by Bhuto and this industry took a lot of

loan from the government and ran only on loans, this was the reason
government did not nationalization it.
In 1984, the top management decided to produce only yarn in order to
meet expenses. However during 80s it was given many loans and once
again it becomes profitable for owners, but in 90s owners took no
interests.
Due to shift of resources from textile sector to electronics, processing

and weaving units were closed in 1987, and 1982 respectively.
From the very beginning, Kohinoor has been a trendsetter, setting the
pace and direction for Pakistan’s textile Industry; it has always been a
leader in yarn and some of their brands like TREVIRA, FABRON,
BOSKI, have been fully recognized in the country.
They have also been first to introduce blended fabrics in Pakistan.

PRESENT STATUS
At present Kohinoor industries limited is running with 93,000 spindles.

Now at this time Kohinoor Industries Ltd. (KIL) is producing only yarn.
It has three units now out of which Units No.3,are completely on
expert and other produce yarn for local market. The mill have best
equipped laboratory in the country for complete testing of raw
materials and finished products.
KOHINOOR POWER COMPANY
Kohinoor Power Company is a captive power-generating unit of KIL

and is a subsidiary of KIL.
The Kohinoor power company limited, formed in 1991 is the first

captive unit to commission in Pakistan. KPC started its production with
two nigatta engine was added in 1993. Now successfully operating 15
MW power plants at 80% capacity, the plant is meeting entire power
requirements of Kohinoor Industries limited.
COMPANY INFORMATION

BOARD OF DIRECTORS
Mr. M. Naseem Saigol, Chairman.
Mr. M. Azam Saigol, Chief Executive.
Mrs. Sehyr Saigol.
Mrs. Razia Begum.
Mr. Shahid Sethi.
Mr. Imran Iqbal.
Mr. Shahid Nasim.
COMPANY SECRETARY
Sheikh Muhammad Shakeel.
AUDITORS

M/s Manzoor Hassain Mir & Co. Chartered Accountants.
BANKERS
Allied Bank of Pakistan Limited.
Askari Commercial Bank Limited.
Emirates Bank International Limited.
Faisal Bank of Pakistan.
Habib Bank Limited.
National Bank of Pakistan.
Union Bank Limited.
Slandered Chartered Bank.
United Bank Limited.
REGISTERED OFFICE
06-Egerton Road, Lahore.
Tel.6306133
RAW MATERIAL.

Main raw materials are cotton, viscose and polyester and

different types of yarn are produced e.g. PV, 100% CPC.
Cotton
100% Carded Cotton Ring Spun 3/1 - 24/1

100% Carded Cotton Open End 5/1 - 34/1
100% Carded Cotton slub Ring Spun 5/1 - 10/1
100% Carded Cotton slub Open End 6/1 - 30/1
Polyester / Cotton Blends
40% Polyester/ 60% Carded Cotton 12/ - 26/1

50% Polyester / 50% Carded Cotton Open End 14/1 - 26/1
50% Dacron 40A / 50% Carded Cotton MJS 14/1 - 40/1
50% Polyester / 50% Carded Cotton MJS 14/1 - 40/1
65% Polyester / 35% Carded Cotton MJS 14/1 - 40/1

Acrylic / Cotton Blends
50% Acrilan / 50% Carded Cotton Open End 5.5/1 - 14/1
Heathers
99% Carded Cotton / 1% Black Poly Open End 6/1 - 30/1
Product line
AT Present KIL is engaged in producing variety of yarn (combed,

carded)
COMBED YARN
20/1 CMD
72/1 CMD
52/1 CMD
80/1 CMD

CARDED YARN
20/1 CD
32/1 CD
24PC CD
30PC CD
40PC CD
Countries to which yarn is exported.
KIL, s yarn is exported to Japan, USA & EEC countries.
LOCAL CITIES.
KIL, s yarn is sent to its agents in Faisalabad, Karachi, Multan and

Qassur.
Potential market
By aggressive marketing efforts they can cover the markets of

Germany, Vietnam, and rest of the Europe.

COMPETITOR
LOCAL MARKETS
In local market every yarn producer is the competitive of the Kohinoor

Industries Ltd.
FOREIGN MARKETS
 Bangla Deish
 India
 China
COMPARISON WITH OTHER UNITS IN THE SAME INDUSTRY
Competitor Analysis
Kohinoor Industries Limited operates in the Yarn spinning mills sector.

This analysis compares Kohinoor Industries Limited with three other
companies in this sector in Pakistan: Dewan Textile Mills Limited (2001
sales of 2.60 billion Pakistan Rupees
[US$44.43 million] of which 105% was Division 1), Bhanero Textile
Mills Limited (1.44 billion Pakistan Rupees [US$24.55 million] of which
100% was Cotton yarn), and Apollo Textile Mills Limited (1.10 billion
Pakistan Rupees [US$18.73 million] ).

Sales Analysis
Kohinoor Industries Limited reported sales of 1.94 billion Pakistan

Rupees (US$33.04 million) for the fiscal year ending September of
2001. This represents a very small increase of 1.1% versus 2000,
when the company's sales were 1.92 billion Pakistan Rupees. Despite
this increase, sales are still well below the level achieved in 1999,
when Kohinoor Industries Limited reported sales of 2.38 billion
Pakistan Rupees.
Sales of Kohinoor Industries Limited

3.31 2.38 1.94
3.15 3.01 1.92

1996 1997 1998 1999 2000 2001
(Figures in Billions of Pakistan Rupees)
Although sales at this company increased, they increased at a slower

rate than the three comparable companies in 2001. The sales increase
of 1.1% was less than those at Dewan Textile Mills Limited (up
14.3%), Bhanero Textile Mills Limited (10.0%), and Apollo Textile Mills
Limited (13.3%).
Sales Comparisons (Fiscal Year ending 2001)

Sales/
Sales Sales Emp Largest
Company (blns) Growth (US$) Region
Kohinoor Industries
1.937 1.1% N/A N/A
Limited
Dewan Textile Mills
2.604 14.3% 18,031 N/A
Limited
Bhanero Textile Mills
1.439 10.0% 18,239 N/A
Limited
Apollo Textile Mills
1.098 13.3% 18,729 N/A
Limited
Stock Performance
In recent years, this stock has performed terribly. In fiscal year 1996,
the stock traded as high as 15.75 Pakistan Rupees, versus 1.80
Pakistan Rupees on 11/15/02. (In 1996, the stock retreated
significantly from its high, and by the end of the year was at 3.75
Pakistan Rupees).
The current (11/15/02) price of this stock is 1.80 Pakistan Rupees.

During the past 13 weeks, the stock has fallen 9.1%.

During the 12 months ending 12/31/01, the company has experienced

losses totalling 3.84 Pakistan Rupees per share. These 12-month
earnings are lower than the earnings per share achieved during the
last fiscal year of the company, which ended in September of 2001,
when the company reported earnings of -3.20 per share. Note that the
earnings number Includes 1.93 pre-tax charge in fiscal year 2001.
This company is currently trading at 0.03 times sales. This is at a

lower ratio than all three comparable companies, which are trading
between 0.04 and 0.20 times their annual sales. This company has
negative book value (and thus a price to book value would not make
any sense).
Summary of company valuations
Company Date P/E Price/ Price/ 52

Wk
Pr
Book Sales Chg
Kohinoor
Industries 11/15/02 N/A N/A 0.03 N/A
Limited
Dewan
Textile Mills 9/10/02 23.8 0.75 0.20 N/A
Limited
Bhanero
Textile Mills 10/30/02 4.7 0.57 0.15 N/A
Limited
Apollo Textile
10/21/02 14.3 0.19 0.04 N/A
Mills Limited
The market capitalization of this company is 57.72 million Pakistan

Rupees (US$984.69 thousand).
Dividend Analysis
This company has paid no dividends during the last 12 months. The
company also reported losses during the previous 12 months.
Kohinoor Industries Limited last paid a dividend during fiscal year
2000, when it paid dividends of 0.60 per share.

Profitability Analysis
In 2001, earnings before extraordinary items at Kohinoor Industries

Limited were -92.27 million Pakistan Rupees, or -4.8% of sales. This
profit margin is lower than the level the company achieved in 2000,
when the profit margin was 10.6% of sales.
The company's return on equity in 2001 was -5.5%. This was

significantly worse than the 13.6% return the company achieved in
2000. (Extraordinary items have been excluded).
Financial Position
At the end of 2001, Kohinoor Industries Limited had negative working

capital, as current liabilities were 2.36 billion Pakistan Rupees while
total current assets were only 874.65 million Pakistan Rupees. The fact
that the company has negative working capital could indicate that the
company will have problems in expanding. However, negative working
capital in and of itself is not necessarily bad, and could indicate that
the company is very efficient at turning over inventory, or that the
company has large financial subsidiaries.
At the end of 2001, the company had negative common shareholder's

equity of -705.66 million Pakistan Rupees. This means that at the
present time, the common shareholders have essentially no equity in
the company. Although the common equity is negative, Kohinoor
Industries Limited does have a net positive equity position (as its
preferred stock, minority interest, etc. are positive).

As of September 2001, the company's long term debt was 381.54

million Pakistan Rupees and total liabilities (i.e., all monies owed) were
2.81 billion Pakistan Rupees. The long-term debt to equity ratio of the
company is 0.25.
As of September 2001, the accounts receivable for the company were

359.72 million Pakistan Rupees, which is equivalent to 68 days of
sales. This is an improvement over the end of 2000, when Kohinoor
Industries Limited had 108 days of sales in accounts receivable.
Financial Positions
LT
Debt/ Days
Company Year Equity AR
Kohinoor Industries
2001 0.25 68
Limited
Dewan Textile Mills
2001 0.47 62
Limited
Bhanero Textile Mills
2001 0.19 47
Limited

Apollo Textile Mills

2001 0.80 72
Limited
LOCATION OF PLANT
The mill is located at a distance of 2.5 km South of the Faisalabad

Railway Station on Jaranwalla Road, Kohinoor Nagar, Faisalabad. Due
to its location along the road it has no transportation problem as well
as it is near a big commercial area. Availability of labour is easy.
It has an area of about 120 acres and has residence for employees and
other facilities for them within the mills.
OBJECTIVES OF THE COMPANY
Main objective of any business firm or company is to earn profit. While

the memorandum of association of Kohinoor Textile Mills is composed
of 31 objectives. However, the most important objectives are given as
under:
1. To carry on the business of jute, flax and hemp spinners,

cotton spinners, and doublers, linen and cloth manufacturers,
jute, flax, hemp, cotton and wool merchants, wool combers,

worsted spinners, woolen spinners, yarn merchants, worsted

stuff merchants, bleachers, dyers and manufacturers of
bleaching and dyeing materials in Pakistan and all over the
world.
2. To purchase, comb, prepare, spin, dye and deal in cotton,
jute, flax, hemp, wool, silk and any fibrous substances within
and outside Pakistan.
3. Throughout Pakistan and throughout the world, to weave and
otherwise manufacture, buy and sell and deal in all kinds of
cloth and other goods and fabrics, whether textile netted or
looped.
4. To carry on the business of manufacturers of and dealers in
waterproof materials and fabrics, paulines, American cloth,
floor cloth and all kinds of imitation leathers and rubbers.
5. To carry on the business of drappers and furnishers in all it’s
branches throughout Pakistan and anywhere else in the
world.
6. To carry on all or any of the businesses of silk mercers, silk
weavers, cotton spinners, cotton ginners, cloth
manufacturers, furriers, haberdashers, hosiers,
manufacturers, importers and wholesale and retail dealers of
and in textile fabrics of all kinds.
7. To carry on the business of mechanical engineers and
manufacturers of machinery and implements of all kinds and
to buy sell, repair, convert, alter, let on hire and deal in
machinery, implements, and hardware of all kinds.
8. To lease, let out on hire, mortgage, sell or otherwise dispose
of the whole of any part of the undertaking of the Company,
- or any lands, business, property rights or interest therein.

9. To make known or give publicity to the business and

productions of the company by means of advertisements.
10. To pay all or any costs, charges, brokerage, commission
and expenses preliminary and incidental to the promotion,
formation, establishment and registration of the company.
11. To take or otherwise acquire and hold shares in any other
company having objects altogether.
12. To draw, make, accept, endorse, discount, execute, and
issue cheques, promissory notes, hundies, bills of exchange
and other negotiable or transferable instruments.
13. To appoint agents and managers and constitute agencies
of the company all over the world and to discontinue the
same as per circumstances.
14. To grant pensions, allowances, gratuities and bonuses, to
extend benefits of provident fund or any other contributory
schemes on behalf of company, for employees.
15. To get the articles of trade in which the company is
authorized to deal, manufacture, or packed form other firms.
16. To procure the incorporation, registration or any other
recognition of the company in any country, state, or place
outside Pakistan’s.
17. To open and close accounts with banks or bankers, and to
deposit therein, and withdraw from, the funds of the
company.
18. To issue any share or security and indemnity to nay person
whom the Directors have agreed, or are bound to indemnify,
or in satisfaction of any liability.

19. To do all or any of the above things in any part of the

world, and either as principals, agents, contractors, trustees
or otherwise or either alone, or in conjunction with others.
20. To do all such other things as are incidental or as the
company may think conducive to the attainment of the above
objects or any of them.
MISSION STATEMENT
Kohinoor Industries has always adhered to high ethical standards and

strived to be the industry’s preeminent manufacturer. The company’s
Mission Statement encompasses four parts: Vision, Mission, Values,
and Principles.
Vision
To be achieved through our Mission, Kohinoor Industries’ Vision is "to

be a world-class company as defined by the customers we serve."
Mission
"We will exceed our customers’ expectations in quality, service, and

value; continually increase shareholder value; and provide growth
opportunities for our people."

The Mission is supported by our Values and Principles
Values
"Honesty, integrity, and hard work."
The company’s success, as well as the success of individual

employees, can be traced to embracing and practicing these values.
Flowing from the values of honesty, integrity, and hard work are a set
of principles that we believe in and use to govern our behavior as
Kohinoor Industries employees.
Principles
"People, relationships, customer, citizenship, innovation, and results."
People
Kohinoor’s philosophy is to attract, develop, and retain the best
people. We focus on growing and developing these people through
continued education, training, and work experience. The safety and
well-being of our employees are primary corporate objectives.
Relationships
We strive to establish and maintain honest relationships with all
stakeholders in the company. This is to include employees,
shareholders, customers, suppliers, and the communities in which we
live. These relationships are to be founded on mutual trust, mutual
respect, and mutual benefit.
Customer - We recognize that our customers and our ability to

exceed their expectations are critical to our total success. We will
listen to and seek to understand our customers’ needs. We will

interactively respond to those needs for the mutual benefit of the

relationship.
Citizenship
In the communities in which we live and the industry in which we
work, we will actively strive to contribute to a better environment for
everyone.
Innovation
In an ever-changing marketplace, new products, services, and
technologies are the lifeblood of our business. We recognize our
responsibility to be a leader in product, technology, and in the
marketplace. We will provide a culture that encourages, nurtures, and
recognizes innovation.
Results
We value the trust our shareholders have placed in us, and we

recognize our responsibility to maximize the return on their
investment. We will be every customer’s supplier of choice for all
markets in which we operate
FINANCIAL STATEMENT ANALYSIS
The tools used by both internal and external analysts are the same.
But the purpose for carrying out the analysis is different. The tools
used by the analysts are as follows.
 Ratio Analysis
 Trend Analysis
 Common Size Analysis

♠RATIO ANALYSIS♠
I) LIQUIDITY RATIOS
1= NET WORKING CAPITAL
SIGNIFICANCE: A measure of short –term debt-paying ability.
FORMULA: (Current Assets - Current Liabilities)
YEARS:
2001 = 874,650 - 2,356,576 = (1,481,926)
2000 = 969,756 – 2,321,818 = (1,352,062)
INDICATES:
This reveals there is no margin by which firm’s current assets cover its
short-term obligations (C. L) And firm is not able to pay its bills as
they come due. Negative Net Working Capital means, the risk of the
firm is very high but is does not mean that the firm is insolvent.
2 = CURRENT RATIO

SIGNIFICANCE: A measure of short – term debt paying ability.
FORMULA:
CURRENT ASSETS
CURRENT LIABILITIES
YEARS:
874,650
2001 = ------------ = 0. 37: 1
2,356,576
969,756
2000 = -------------- = 0. 42: 1
2,321,818
NOTE: A current ratio of (2. 0) is occasionally cited as acceptable

for a manufacturing firm.
INDICATES:
A relatively low current ratio in both years represents that the liquidity
position of the firm is not good and the firm is not able to pay its
current liabilities in time without facing difficulties. Because against the
liability of RS. 1 the company has less than 50% of current sources

and in the year 2001 the ratio further decreased by 0.05%. The overall
situation of regarding Current Ratio is very bad.
3 = QUICK ( ACID – TEST ) RATIO
SIGNIFICANCE: A measure of short – term debt – paying ability

without relying upon the sale of its inventories.
FORMULA:
QUICK ASSETS
CURRENT LIABILITIES
Quick Assets = Cash + Marketable Securities + Receivables
YEARS:
293,828
2001 = -------------- = 0. 12: 1
2,356,576
436,184
2000 = ------------- = 0. 19: 1
2,321,818

NOTE: A quick ratio of (1. 0) or greater is occasionally

recommended.
INDICATES:
This reveals a distinct weakness in the company’s liquid position. As 1:

1 is reckoned to be a ‘Safe’ ratio. The company appears to be in a
serious need of liquid funds.
4 = ABSOLUTE QUICK RATIO
SIGINIFICANCE: A measure of short – term debt – paying ability.
FORMULA:
ABSOLUTE QUICK ASSETS
CURRENT LIABILITIES
Absolute Quick Assets = Cash + Bank Balance
YEARS:
95,205

2001 = ------------- = 0 .04 : 1
2,356,576
132,783
2000 = ------------ = 0. 06 : 1
2,321,818
NOTE: A standard (0. 5: 1) Absolute Quick Ratio is considered an

acceptable.
INDICATES :
This ratio shows that the company has 0. 04-paisa worth of absolute
liquid assets for one rupee worth of current liabilities .The company is
needed to improve 0. 46% to cover the standards of 0. 5 : 1.
OVERALL FINDINGS
The liquidity ratios of the company shows the inability to pay the
current liabilities . As Quick Ratio , Current Ratio and Absolute Quick
Ratio are all below the standards.

II) PROFITABILITY RATIOS
1) PROFIT RATIOS
A = GROSS PROFIT RATIO
SIGNIFICANCE: A measure of the profitability of the company’s

products.
FORMULA:
SALES – COST OF GOODS SOLD
= -------------------------------------------- X 100
SALES
GROSS PROFIT
= --------------------- X 100

SALES
YEARS:
304,195
2001 = ------------- X 100 = 15. 71 %
1,936,795
323,170
2000 = ----------- X 100 = 16. 87 %
1,915,878
NOTE: For most merchandising companies Gross Profit rates usually

lie between 20 % and 50 % , depending on the types of products thy
sell .
INDICATES:
The lower gross profit margin shows that the firm has not controlled
over the cost of goods sold and higher the relative cost of merchandise
sold.
Significant low rate may provide investors with an early indication of

changing consumer demand for the company’s products.
In other words, the total margin available to cover operating expenses

is insufficient and yields a lower profit.

B = NET PROFIT RATIO
SIGNIFICANCE: An indicator of management’s ability to control

operating costs.
FORMULA:
NET PROFIT
------------------ X 100
SALE
(Due to Loss;
NET LOSS
--------------- X 100
SALES
YEARS:
( 92,272 )
2001 = -------------- X 100 = (4.76)
1,936,795

205,664
2000 = ------------- X 100 = 10.73 %
1,915,878
NOTE: A net profit equal to only 2% or 3 % of net sales is considered

to be sufficient.
INDICATES:
In 2000, Net Profit ratio provides an indication of management’s ability

to control expenses and to retain a reasonable portion of its revenue
as profit.
But in 2001, the negative ratio indicates that the management has low
efficiency in controlling operating expenses of the firm.
However, in both years the firm is not able to achieve a satisfactory

return on its investment. This ratio also indicates the firm’s capacity to
face adverse economic conditions such as price competition, low
demand etc.

C= OPERATING PROFIT RATIO
SIGNIFICANCE: Profitability without concern for taxes and interest.
FORMULA:
OPERATING PROFIT
---------------------------- X 100
SALES
YEARS:
130,926
2001 = ------------- X 100 = 6.76 %
1,936,795
150,520
2000 = ------------- X 100 = 7.86 %
1,915,878
ANOTHER WAY FOR CALCULATING OPERATING PROFIT

(100% - OPERATING RATIO)
YEARS:
2001 = 100%- 93% = 7%
2000 = 100%-92% =8%
NOTE: A higher Operating Profit Margin is preferred.
INDICATES:
We know that Operating Profits are” Pure” because they measure only
the profits earned on operations and ignore any financial and
government charges (Interest and Taxes).
SO, here operating profit is very low which shows that the firms other
expenses are too much higher excluding interest and taxes.
2) EXPENSES RATIOS
A= COST OF GOODS SOLD RATIO

SIGINIFICANCE: Actual costs of the units sold.
FORMULA:
COST OF GOODS SOLD
--------------------------------X 100
SALES
YEARS:
1,632,600
2001 = -------------- X 100 = 84.29%
1,936,795
1,592,708
2000 = ---------------X 100 =83.13%

1,915,878
INDICATES:
Both ratios are relatively high. It shows the selling cost of one unit is
above than 80% of selling price of one unit, so firm has not control
over the cost of units sold and it is the basic reason for lower profit.
B = OPERATING RATIO
SIGNIFICANCE: This ratio shows the operational efficiency of the

business.
FORMULA:
COST OF GOODS SOLD + OPERATING EXPENSE
-----------------------------------------------------------X 100
SALES
YEARS:

1,805,869
2001 = --------------X 100 = 93.2%
1,936,795
1,765,358
2000 = ---------------X 100 =92.1%
1,915,878
NOTE: An Operating Ratio ranging between 75% and 80% is

generally considered as standard for manufacturing concern.
INDICATES:
Above the standard and higher operating ratios shows the lower
operating profit and operational inefficiency of the business.
C = FINANCIAL EXPENSES RATIO
SIGNIFICANCE: Financial Expenses Ratio indicates the relationship of

Financial Expenses to Net Sales.

INDICATES:
The lower the ratio, the greater is the profitability and higher the ratio,
lower is the profitability.
Therefore, in 2000, due to lower ratio company gain some profit but in
2001, due to higher ratio company bears net loss in spite of profit.
3) PROFITABILITY RELATING TO INVESTMENT
A= RETURN ON EQUITY
SIGNIFICANCE: The rate of return earned on the stockholders equity

in the business.

FORMULA:
NET PROFIT AFTER TAX

-----------------------------------X 100
EQUITY
(Due to Loss;
NET LOSS AFTER TAX

--------------------------------X 100
EQUITY
YEARS:
(92,272)
2001 = ------------X 100 = (18.81%)
490,421
205,664
2000 = ------------X 100 = 41.94%
490,421

NOTE: For ROE, 14.04% is considered to be a medium return for an

industry.
INDICATES:
In 2000, a high return on equity reflects the firm’s acceptance of
strong investment opportunities and effective expense management.
But in 2001, negative figure due to net loss indicates the vice versa
situation.
B= RETURN ON INVESTMENT
SIGNIFICANCE: Measuring the overall efficiency of a firm.
FORMULA:
NET PROFIT AFTER TAX

-----------------------------------X100
TOTAL ASSETS
(Due to Loss;

NET LOSS AFTER TAX

-----------------------------X 100
TOTAL ASSETS
YEARS:
(92,272)
2001 = -------------X 100 = (2.14%)
4,317,410
205,664
2000 = -------------X 100 = 4.55%
4,515,314
NOTE: Higher the ratio, better are the results.
INDICATES:
This ratio has not great importance to the present and prospective
shareholders, because higher the firms return on investment, the
better.

C = EARNING PER SHARE
SIGNIFICANCE: The earning per share represent the number of

rupees earned on behalf of each outstanding share of common stock.
FORMULA:
EARNINGS AVAILABLE FOR COMMON STOCKHOLDERS

--------------------------------------------------------------
NO. OF SHARES OF COMMON STOCK OUTSTANDING
YEARS:
(92,272)
2001 = --------------X 100 = (8.09%)
1,140,434
205,664
2000 = -------------- X 100 = 18.03%
1,140,434

INDICATES:
Notice that earnings per share have decreased and become negative in
2001.We knows that common stockholders consider a decline in
earnings per share to be an unfavorable development.
A decline in earnings per share generally represents a decline in the
profitability of the company and creates doubt as to the company’s
prospects for future growth.
OVERALL FINDINGS
The profitability ratios indicate that:

The gross profit and net profit of the company is decreased in
year 2001 as compared to year 2000.It is due to increase in cost of
goods sold and operating expenses in year 2001.
Return on equity and return on investment is also decreased due
to decrease in net profits of the company in year 2001.Earning per
share has also decreased due to the same reason.

III) SOLVENCY RATIO / LEVERAGE RATIO
1= DEBT EQUITY RATIO
SIGNIFICANCE: The ratio indicates the proportionate claims of owners

and the outsiders against the firm’s assets.
FORMULA:
LONG TERM DEBTS

--------------------------------------
SHAREHOLDERS FUNDS (EQUITY)
YEARS:
356,919
2001 = ------------ = 1: 1
288,596

457,791
2000 = ------------ = 1: 1
288,596
NOTE: A ratio of 1: 1 may be usually considered to be a satisfactory

ratio.
INDICATES:
The ratio in this case is 1: 1 which means that all the shareholders
equity will be used up in paying the debts of the existing creditors and
there is no coushin for the potential creditors.
2= DEBT TO TOTAL EQUITY RATIO
SIGNIFICANCE: This measure tells us the relative importance of long-

term debt to the capital structure of the firm.
FORMULA:
LONG TERM DEBTS

----------------------
TOTAL EQUITY

YEARS:
356,919
2001 = ------------ = 0. 73 : 1
490,421
457,791
2000 = ----------- = 0. 93 : 1
490,421
INDICATES:
This ratio indicates that for every each Rs. 1, the outsiders have .73-
cent claims against the firm’s equity.
In 2001, the firm declines their Long Term Debts and therefore, claims
become 0.93 to 0.73 cent against the firm’s equity.
3= DEBT TO TOTAL ASSET RATIO
SIGNIFICANCE: This ratio serves a similar purpose to the debt to

equity ratio.

FORMULA:
TOTAL DEBT
---------------------
TOTAL ASSETS
YEARS:
2,713,495
2001 = -------------- = 0.62 : 1
4,317,410
2,779,609
2000 = -------------- = 0.62 : 1
4,515,314
INDICATES:
This ratio tells us that 62% of the firm’s assets are financed with debt,
while the remaining 38% of the financing comes from shareholders
equity.
This indicates that the company has financed above to half of its
assets (Fixed + Current) with debts.

4 = DEBT TO FIXED ASSET RATIO
SIGNIFICANCE: Measure the %age of Fixed Assets financed with

Long Term Debts
FORMULA:
LONG TERM DEBTS

----------------------
FIXED ASSETS
YEARS:
356,919
2001 = ------------- = 0.08 : 1
4,317,410
457,791
2000 =------------- = 0 . 10 : 1
4,515,314

INDICATES:
Because of the declining rate of the Long Term Debts in 2001, the
fixed assets are financed with only 0.08% of total worth. It reveals
that mostly current assets are used for financing fixed assets which is
not a good indication for investment purposes.
OVERALL FINDINGS
The analysis of leverage ratios tells that:

Debt equity ratio, Debt to total equity, Debt to fixed assets and
debt to total assets ratios have decreased in the year 2001 as
compared to year 2000. It shows a little better position of the
company regarding to leverage ratios.
IV) MANAGEMENT EFFICIENCY RATIO
(A) = 1 = ACCOUT RECEIVABLE TURNOVER RATIO
SIGINIFICANCE: Indicates how quickly receivables are collected.

FORMULA:
NET SALES
--------------------------------------
AVERAGE ACCOUNT RECEIVABLE
FOR AVERAGE)
OPENING + CLOSING (A/R)

------------------------------
2
YEARS:
1,936,795
2001 = ------------- = 8. 10 Times
239,065
1,915,878
2000 =------------- = 6.67 Times
287,066

NOTE: A higher receivable turnover ratio shows greater control of

management over their receivables collection.
INDICATES:
In 2001, receivable turnover ratio improved by 1: 43 Time than 2000
year. It shows that for the attainment of better position management
improved their efficiency in respect of receivables and the length of
operating cycle becomes shorter.
2 = AVERAGE DAYS RECEIVABLES
SIGNIFICANCE: Indicates in days how quickly receivables are

collected.
FORMULA:
NUMBER OF DAYS IN A YEAR

-------------------------------------
RECEIVABLES TURNOVER RATIO

YEARS:
360
2001 = ----------- = 44 Days
8.10
360
2000 = --------- = 54 Days
6.67
NOTE:
We Assume ♣ Total Sales is on credit base.

♣ Number of Days in a year 360.
♣ In 2000, receivables are average.
INDICATES:
Our above calculations show that only 44 Days in 2001and 54 Days in
2000 are required for the collection of Debts.
Now, if the management takes a time less than 44 or 54 Days for the
collection of Debts then the management is efficient and otherwise not
efficient.
In 2001, average collection period decreased by 10 Days, it means;
management becomes more efficient for the collection of receivables.
(B) =1= INVENTORY TURNOVER RATIO

SIGNIFICANCE: Indicates how quickly inventory sells.
FORMULA:
COST OF GOODS SOLD

--------------------------------
AVERAGE INVENTORY
FOR AVERAGE)
PENING + CLOSING (INV.)

------------------------------
2
YEARS:
1,632,600
2001 = --------------- = 7.14 Times
228,718
1,592,708
2000 = -------------- = 8.46 Times
188,257

NOTE: A low inventory turnover ratio implies over investment in

inventories, dull business, poor quality of goods and stock
accumulation.
INDICATES:
It shows that the inventories are sold 8 Times in 2000 and 7 Times in
2001. So, in 2001 ratio tells us over investment in inventories and a
dull business.
2 = AVERAGE DAYS INVENTORY TURNOVER
SIGNIFICANCE: Indicates in Days how quickly inventory sells.
FORMULA:
NUMBER OF DAYS IN A YEAR

-----------------------------------------
INVENTORY TURNOVER TIME
YEARS:

360
2001 = ------------ = 50 Days
7.14
360
2000 = ------------ = 43 Days
8.46
INDICATES:
The trend indicated by this analysis is unfavorable, since the length of
time required for Kohinoor Industries to turnover (sell) its inventory is
increasing.
OVERALL FINDINGS
Managerial Efficiency Ratios signifies that the management takes
special steps for the collection of Account Receivables and improved
their efficiency in this respect. But for the management of inventory,
there is a lack of control.
V) COVERAGE RATIOS
A = FIXED INTERESR COVERAGE RATIO

SIGNIFICANCE: To assess the risk to debt holders in– terms of number

of times interest charges were earned
FORMULA:
EARNINGS BEFORE INTEREST AND TAXES

------------------------------------------------
FIXED INTEREST CHARGES
YEARS:
153,290
2001 = ------------- 0.88 Times
175,153
220,670
2000 = ------------- = 1.93 Times
114,479
NOTE: A Ratio of 5.3 Times interest earned would be considered

strong in many industries.
INDICATES:
The measurement tells us that it is impossible for the company could
cover its interest payments without difficulty.

Because of net loss, it becomes more difficult to meet its obligations in

the year 2001. This ratio therefore allows owners, creditors and
managers to assess the firms ability to handle additional fixed-
payment obligations such as debt.
COMMON-SIZE AND INDEX ANALYSIS
COMMON-SIZE ANALYSIS
Net sales or revenues divide an analysis of percentage financial
statements where total assets and all income statement items divide
all balance sheet items.
INDEX ANALYSIS
An analysis of percentage financial statements where all balance or
income statement figures for a base year equal 100.0 (percent) and

subsequent financial statement items are expressed as percentages of

their values in the base year
INTERPRETATION
In 2001, Kohinoor Industries pays both long-term loans and liabilities
against assets subject to finance lease, therefore deferred liabilities
decreased by 92% to 84%.
In assets side, we see that there is no improvement in fixed assets
and current assets significantly declined by 88% to 79%.
The above both situations show that company uses the current assets
for the payment of debts. It is the basic reason of declining the rate of
short-term investment. We know that co. made short-term investment
only in this case, if current assets increased by safety margins, but
there is no indication of safety margin.
In 2001, cash and cash in hand decreased, because receivables and
inventories have inverse relationship.
KOHINOOR INDUSTRIESS LIMITED INCOME STATEMENTS

FOR THE YEAR ENDING DECEMBER, 31
REGULAR (in thousands) INDEXED (%)

1999 2000 2001 1999 2000 2001

Sales 2,387,51 1,915,87 1,936,79 100. 80.25 81.12
5 8 5 0
Cost of Sales 2,294,15 1,592,70 1,632,60 100. 69.42 71.16
7 8 0 0
Gross Profit 93,358 323,170 304,195 100. 346.2 325.8
0
Operating Expenses
Administrative 57,603 62,734 60,521 100. 108.91 105.1
0
Selling 101,232 109,916 112,748 100. 108.6 114.4
0
Total Op. Exp. 158,835 172,650 173,269 100. 108.7 109.7
0
Operating Profit/ (Loss) (65,477) 150,520 130,926 100. (230) (100)
0
Other Income 132,777 70,150 22,364 100. 52.83 16.84
0
E. B.I. T. 67,300 220,670 153,290 100. 327.9 227.8
0
Financial Expenses 475,354 114,479 175,153 100. 24.1 36.8
0
Workers profit -- (11,288) -- -- -- --
participation fund
Workers welfare fund -- (997) -- -- -- --
-- 93,906 (21,863) -- -- --
Unusual items -- 122,547 (55,713) -- -- --
Profit/ (Loss) Before (408,054) 216,453 (77,756) 100. (53.04 19.0
Taxation 0 )
Provision for Taxation
Current 11,938 (10,789) (16,668) 100. (90.4) (139.6)
0
Prior -- -- 1,972 -- -- --
Profit/ (Loss) after (419,992) 205,664 (92,272) 100. (48.97 21.97
Taxation 0 )

INTERPRETATION
The income statement of KIL reveals that sales increased by 1% and

cost of sales increased 2% as compared to previous year.
An increase in net sales considered alone, is not necessarily favorable.
The increase in Kohinoor industries net sales was accompanied by a
somewhat greater percentage increase in the cost of goods
(merchandise) sold, which indicates a narrowing of the gross profit
margin.
Selling expenses increased markedly and administrative expenses

decreased slightly, making an overall increase in operating expenses
of 109.7%, as contrasted with a 325.8% increase in gross profit.
The financial expenses increased significantly in the year 2001. The

amount of these expenses is greater than the operating income and in
the final net income figure becomes unfavorable, it would be incorrect
for management to conclude that its operations were at maximum
efficiency.

KOHINOOR INDUSTRIES LIMITED BALANCE SHEETS (AT DEC.

31)
REGULAR (in thousands) Common Size%

ASSETS 1999 2000 2001 1999 2000 2001
Land 1,350,82 1,348,14 1,348,14 28.6 29.85 31.2

9 8 8 7
Operating Assets 2,232,96 2,156,50 2,080,93 47.3 47.76 48.2
6 3 4
GOVT. Taken over 28,921 27,229 NO 0.61 0.603 --
concerns 2
Long Term Deposits 13,678 13,678 13,678 0.29 0.303 0.317
CURRENT ASSETS
Stores, Spares and Loose 80,244 38,480 33,458 1.7 0.85 0.77
Tools
Stock in Trade 362,547 188,257 269,179 7.7 6.2 6.2
Trade Debts 280,914 287,066 191,063 5.9 6.4 4.43
Short Term Investments 90,000 16,335 7,560 1.9 0.362 0.175
Advances, Deposits, 275,635 306,835 278,185 5.8 6.1 6.4
Payments & other
Receivable
Cash and Bank Balances 7,955 132,783 95,205 0.16 2.9 2.21
8
TOTAL Current Assets 1,097,29 969,756 874,650 23.2 21.5 20.3
5
TOTAL ASSETS 4,723,68 4,515,31 4,317,41 100. 100.0 100.0
9 4 0 0

KOHINOOR INDUSTRIES LIMITED BALANCE SHEETS (AT DEC. 31)
INTERPRETATION
In vertical analyses, we see that over the three-year span, the
percentage of long-term loan continuously decreased and in 2001, the
long –term loans are only 8.27% of total assets. Although, decreasing
trend of long-term loans is favorable, which shows the value of total
assets increased, but its good impact becomes less because of the
increasing trend of the current portion of long-term liabilities and
short-term loans. It shows that company delays its payments and
further borrows for its liabilities & operations.
On the assets side, operating assets are 48.2% of total assets in 2001,
it shows that operating assets are increased but it is not a fact. The
LIABILITIES 1999 2000 2001 1999 2000 2001
Surplus on revaluation of 1,485,75 1,602,27 1,509,99 100. 107.8 101.6

Fixed Assets 3 1 9 0
Long Term Loans 609,496 457,791 356,919 100. 75.12 58.56
0
Liabilities against Assets 112,962 57,537 24,619 100. 50.93 21.79
subject to Finance Lease 0
Deferred Liability 82,497 75,897 69,297 100. 92 84
0
CURRENT LIABILITIES
Short Term Loans 1,116,31 1,177,27 1,145,33
100. 105.4 102.6
7 9 6
0 6
Current portion of Long 270,612 416,584 548,855
100. 153.9 202.82
Term Liabilities 0 4
Creditors, Provisions and 1,045,44 719,756 661,774 100. 68.85 63.30
Accrued charges 1 0
Unclaimed Dividend 611 611 611 100. 100 100
0
Proposed Dividend NO 7,588 NO -- -- --
TOTAL Current 2,432,98 2,321,81 2,356,57 100. 95.43 96.86
Liabilities 1 8 6 0
TOTAL LIABILITIES 4,723,68 4,515,31 4,317,41 100. 95.59 91.4
9 4 0 0
total assets of the company significantly decreased as compared to

1999, and land, which is non-operating also increased. Here, the rate
of increase mental in operating expenses is low as compared to
declining the rate total assets during the 3 years. It is the basic
reason, it seems that there is an improvement in operating assets.
Short-term investment and cash & bank balance, both are decreasing
not only as compared to previous years but here, in comparison of
total assets too.

KOHINOOR INDUSTRIES LIMITED INCOME STATEMENTS
For The Year Ending December 31
REGULAR (in thousands) Common Size%

1999 2000 2001 1999 2000 2001
Sales 2,387,51 1,915,87 1,936,79 100.0 100.0 100.0
5 8 5
Cost of Sales 2,294,15 1,592,70 1,632,60 96.1 83.13 84.3
7 8 0
Gross Profit 93,358 323,170 304,195 3.91 16.87 15.71
Operating Expenses
Administrative 57,603 62,734 60,521 2.413 3.27 3.125
Selling 101,232 109,916 112,748 4.24 5.74 5.82
Total Op. Exp. 158,835 172,650 173,269 6.65 9.01 8.95
Operating Profit/ (Loss) (65,477) 150,520 130,926 (2.74) 7.86 6.76
Other Income 132,777 70,150 22,364 5.56 3.66 1.15
E. B.I. T. 67,300 220,670 153,290 2.82 11.52 7.9
Financial Expenses 475,354 114,479 175,153 19.91 6 9.04
Workers profit -- (11,288) -- -- (0.6) --
participation fund
Workers welfare fund -- (997) -- -- (0.1) --
-- 93,906 (21,863) -- 4.90 (1.13)
Unusual items -- 122,547 (55,713) -- 6.4 (2.88)
Profit/ (Loss) Before (408,054) 216,453 (77,756) (17.1) 11.3 (4.01)
Taxation
Provision for Taxation
Current 11,938 (10,789) (16,668) 0.50 (0.56 (0.86)
)
Prior -- -- 1,972 -- 0.102
Profit/ (Loss) after (419,992) 205,664 (92,272) (17.69 10.73 4.76
Taxation )

INTERPRETATION
In vertical analysis, every item is being compared with relation to

sales. The analysis indicates that sales are increased in 2001, but cost
of sales too much increased and becomes 84% of total sales. Company
gain only 15.71% of gross profit, which is less as compared to
previous years.
In the previous year, sales are decreased, but cost of sales decreased
in greater margin as compared to total sales and because of this
reason company’s gross profit improved in 2000, as compared to 1999
&2001.
In operating expenses i.e., (selling & admn.) there is no change and
therefore, operating profit decreased by 1% and Earning before
interest and taxes decreased by 4% in relation to total sales.
Overall company bears a net loss at the end of income year because of
financial expenses. In 2001, financial expenses increased by 3% and
become 9.04% of total sales.
It is the alarming situation that company should control their expenses
and take the improvement in the their efficiency.

Ǽ
NOW,
IN THE FOLLOWING PAGES, I:
PRESENT THE DATA COLLECTED
FROM
INTER NET


Stock Price Analysis

Qtrly 12 mo.
Quarter High Low Close Change Change
Jan - Mar 1993 0.000 0.000 29.565 n/a n/a
Apr - Jun 1993 0.000 0.000 25.043 -15.3% n/a
Jul - Sep 1993 0.000 0.000 26.957 7.6% n/a
Oct - Dec 1993 0.000 0.000 36.522 35.5% n/a
Jan - Mar 1994 0.000 0.000 53.478 46.4% 80.9%
Apr - Jun 1994 0.000 0.000 39.565 -26.0% 58.0%
Jul - Sep 1994 0.000 0.000 27.391 -30.8% 1.6%
Oct - Dec 1994 19.130 14.565 15.217 -44.4% -58.3%
Jan - Mar 1995 16.500 11.304 16.500 8.4% -69.1%
Apr - Jun 1995 0.000 0.000 9.250 -43.9% -76.6%
Jul - Sep 1995 0.000 0.000 12.000 29.7% -56.2%
Oct - Dec 1995 15.500 10.000 10.500 -12.5% -31.0%
Jan - Mar 1996 15.750 7.500 7.750 -26.2% -53.0%
Apr - Jun 1996 10.000 5.000 5.000 -35.5% -45.9%
Jul - Sep 1996 5.150 3.000 3.750 -25.0% -68.8%
Oct - Dec 1996 5.400 3.800 4.000 6.7% -61.9%
Jan - Mar 1997 10.500 3.750 6.500 62.5% -16.1%
Apr - Jun 1997 6.750 3.500 4.250 -34.6% -15.0%
Jul - Sep 1997 5.350 2.500 3.250 -23.5% -13.3%
Oct - Dec 1997 3.000 1.750 2.050 -36.9% -48.8%
Jan - Mar 1998 2.300 1.400 1.400 -31.7% -78.5%
Apr - Jun 1998 1.750 1.350 1.600 14.3% -62.4%
Jul - Sep 1998 1.500 1.000 1.200 -25.0% -63.1%
Oct - Dec 1998 1.100 1.000 1.000 -16.7% -51.2%
Jan - Mar 1999 1.100 0.800 1.100 10.0% -21.4%
Apr - Jun 1999 1.500 0.800 1.200 9.1% -25.0%
Jul - Sep 1999 2.900 1.000 1.900 58.3% 58.3%
Oct - Dec 1999 3.300 1.000 3.250 71.1% 225.0%
Jan - Mar 2000 5.700 3.000 4.200 29.2% 281.8%
Apr - Jun 2000 4.750 3.200 3.800 -9.5% 216.7%
Jul - Sep 2000 4.700 3.500 4.700 23.7% 147.4%
Oct - Dec 2000 5.250 4.000 4.950 5.3% 52.3%
Jan - Mar 2001 5.850 3.350 3.350 -32.3% -20.2%
Apr - Jun 2001 4.000 2.750 2.750 -17.9% -27.6%
Jul - Sep 2001 3.000 2.050 2.050 -25.5% -56.4%
Oct - Dec 2001 2.700 1.500 1.500 -26.8% -69.7%
Jan - Mar 2002 2.750 1.500 2.200 46.7% -34.3%
Apr - Jun 2002 3.050 1.950 2.200 0.0% -20.0%
Jul - Sep 2002 2.750 1.750 2.000 -9.1% -2.4%

Stock Performance
In recent years, this stock has performed terribly. In fiscal year

1996, the stock traded as high as 15.75 Pakistan Rupees, versus
1.80 Pakistan Rupees on 11/15/02. (In 1996, the stock retreated
significantly from its high, and by the end of the year was at
3.75 Pakistan Rupees).
The current (11/15/02) price of this stock is 1.80 Pakistan

Rupees. During the past 13 weeks, the stock has fallen 9.1%.
During the 12 months ending 12/31/01, the company has

experienced losses totalling 3.84 Pakistan Rupees per share.
These 12-month earnings are lower than the earnings per share
achieved during the last fiscal year of the company, which ended
in September of 2001, when the company reported earnings of
-3.20 per share. Note that the earnings number Includes 1.93
pre-tax charge in fiscal year 2001.
This company is currently trading at 0.03 times sales. This is at

a lower ratio than all three comparable companies, which are
trading between 0.04 and 0.20 times their annual sales. This
company has negative book value (and thus a price to book
value would not make any sense).

Sales & Profitability Summary
Figures expressed in billions of Pakistan Rupees
Sales % of Inc. bef % of Sales/

Year Sales Growth EBITDA sales Extra sales Emps Empl
1993 1.410 n/c 0.087 6.2% -0.072 -5.1% n/a n/a
1994 2.234 58.5% 0.344 15.4% 0.046 2.1% n/a n/a
1995 3.129 40.0% 0.095 3.1% -0.207 -6.6% n/a n/a
1996 3.307 5.7% 0.387 11.7% -0.095 -2.9% n/a n/a
1997 3.146 -4.9% 0.255 8.1% -0.380 -12.1% n/a n/a
1998 3.008 -4.4% 0.205 6.8% -0.282 -9.4% n/a n/a
1999 2.378 -21.0% 0.024 1.0% -0.420 -17.7% n/a n/a
2000 1.916 -19.4% n/a n/a 0.203 10.6% n/a n/a
2001 1.937 1.1% n/a n/a -0.092 -4.8% n/a n/a

Sales Analysis
Kohinoor Industries Limited reported sales of 1.94 billion

Pakistan Rupees (US$33.04 million) for the fiscal year ending
September of 2001. This represents a very small increase of
1.1% versus 2000, when the company's sales were 1.92 billion
Pakistan Rupees. Despite this increase, sales are still well below
the level achieved in 1999, when Kohinoor Industries Limited
reported sales of 2.38 billion Pakistan Rupees.
Sales of Kohinoor Industries Limited

3.31 2.38 1.94
3.15 3.01 1.92

1996 1997 1998 1999 2000 2001
(Figures in Billions of Pakistan Rupees)
Profitability Analysis

In 2001, earnings before extraordinary items at Kohinoor

Industries Limited were -92.27 million Pakistan Rupees, or
-4.8% of sales. This profit margin is lower than the level the
company achieved in 2000, when the profit margin was 10.6%
of sales.
The company's return on equity in 2001 was -5.5%. This was

significantly worse than the 13.6% return the company achieved
in 2000. (Extraordinary items have been excluded).
Earnings and Dividends Summary
Figures in Pakistan Rupees

Quarters are Fiscal Quarters (4th quarter ends in September)

TTM TTM Payout
Quarter EPS Divs EPS Divs Ratio
1Q1993 n/a 0.000 n/a n/a n/a
2Q1993 n/a 0.000 n/a n/a n/a
3Q1993 n/a 0.000 n/a n/a n/a
4Q1993 n/a 0.000 D -3.383 0.000 n/m
1Q1994 n/a 0.000 n/a 0.000 n/a
2Q1994 n/a 0.000 n/a 0.000 n/a
3Q1994 n/a 0.000 n/a 0.000 n/a
4Q1994 n/a 0.000 D 1.590 0.000 0.0%
1Q1995 n/a 0.000 n/a 0.000 n/a
2Q1995 n/a 0.000 n/a 0.000 n/a
3Q1995 n/a 0.000 n/a 0.000 n/a
4Q1995 A n/a 0.000 D -7.167 0.000 n/m
1Q1996 n/a 0.000 n/a 0.000 n/a
2Q1996 n/a 0.000 n/a 0.000 n/a
3Q1996 n/a 0.000 n/a 0.000 n/a
4Q1996 n/a 0.000 D -3.307 0.000 n/m
1Q1997 n/a 0.000 n/a 0.000 n/a
2Q1997 n/a 0.000 n/a 0.000 n/a
3Q1997 n/a 0.000 n/a 0.000 n/a
4Q1997 n/a 0.000 D -13.182 0.000 n/m
1Q1998 n/a 0.000 n/a 0.000 n/a
2Q1998 n/a 0.000 n/a 0.000 n/a
3Q1998 n/a 0.000 n/a 0.000 n/a
4Q1998 n/a 0.000 D -9.762 0.000 n/m
1Q1999 n/a 0.000 n/a 0.000 n/a
2Q1999 n/a 0.000 n/a 0.000 n/a
3Q1999 n/a 0.000 n/a 0.000 n/a
4Q1999 n/a 0.000 C -14.710 0.000 n/m
1Q2000 n/a 0.000 n/a 0.000 n/a
2Q2000 5.040 0.000 n/a 0.000 n/a
3Q2000 n/a 0.000 n/a 0.000 n/a
4Q2000 1.980 0.600 C 7.020 0.600 8.5%
1Q2001 n/a 0.000 n/a 0.600 n/a
2Q2001 -0.120 0.000 n/a 0.600 n/a
3Q2001 n/a 0.000 n/a 0.600 n/a
4Q2001 -3.080 0.000 BC -3.200 0.000 n/m
1Q2002 -0.700 0.000 -3.900 0.000 n/m
TTM: Trailing Twelve Months
EPS: Earnings per share
Divs: Dividends per share
(A): ALL ITEMS ADJUSTED FOR STOCK SPLITS OR DIVIDENDS - 15% IN FIS 95

(B): INCLUDES OR EXCLUDES EXTRAORDINARY CHARGE OR CREDIT -

INCLUDES 1.93 PRETAX CHG IN FIS 2001
(C): BASED ON AVERAGE SHARES OUTSTANDING
(D): EARNINGS PER SHARE ESTIMATED USING NET INCOME AFTER PREFERRED
DIVIDEND DIVIDED BY THE YEAR END SHARES OUTSTANDING OR THE LATEST
SHARES AVAILABLE
Dividend Analysis
This company has paid no dividends during the last 12 months.

The company also reported losses during the previous 12
months. Kohinoor Industries Limited last paid a dividend during
fiscal year 2000, when it paid dividends of 0.60 per share.
ANALYSIS SUMMRY

Note: All figures are in Pakistan Rupees
Ratios Equity Capital Dividends

Earned Profit Book Earnings Divs
Last Growth Rate Value Per % Per Avg
Year Price P/E P/Bk % % Begin Yr Share Chg Share Yield
1993 26.96 n/c n/c n/c n/c n/a D -3.383 n/c 0.00 0.0
1994 27.39 17.2 0.7 4.2 4.2 37.85 D 1.590 n/c 0.00 0.0
1995 12.00 n/c 0.3 -20.8 -20.8 34.46 D -7.167 n/c A 0.00 0.0
1996 3.75 n/c 0.1 -12.1 -12.1 27.29 D -3.307 n/c 0.00 0.0
1997 3.25 n/c 0.1 -35.9 -35.9 36.77 D -13.182 n/c 0.00 0.0
1998 1.20 n/c 0.1 -43.2 -43.2 22.58 D -9.762 n/c 0.00 0.0
1999 1.90 n/c 0.2 -121.1 -121.1 12.15 C -14.710 n/c 0.00 0.0
2000 4.70 0.7 0.1 12.5 13.6 51.48 C 7.020 n/c 0.60 12.8
2001 2.05 n/c 0.0 -5.5 -5.5 58.07 BC -3.200 n/c 0.00 0.0
2002 2.00 n/c n/c n/c n/c -24.45 n/a n/c 0.00 0.0
11/15/02 1.80 n/c n/c n/a n/a -24.45 -3.840 n/c 0.00 0.0
A): ALL ITEMS ADJUSTED FOR STOCK SPLITS OR DIVIDENDS - 15% IN FIS 95
(B): INCLUDES OR EXCLUDES EXTRAORDINARY CHARGE OR CREDIT -

INCLUDES 1.93 PRETAX CHG IN FIS 2001
(C): BASED ON AVERAGE SHARES OUTSTANDING
(D): EARNINGS PER SHARE ESTIMATED USING NET INCOME AFTER PREFERRED
DIVIDEND DIVIDED BY THE YEAR END SHARES OUTSTANDING OR THE LATEST
SHARES AVAILABLE

Financial Position
At the end of 2001, Kohinoor Industries Limited had negative

working capital, as current liabilities were 2.36 billion Pakistan
Rupees while total current assets were only 874.65 million
Pakistan Rupees. The fact that the company has negative
working capital could indicate that the company will have
problems in expanding. However, negative working capital in
and of itself is not necessarily bad, and could indicate that the
company is very efficient at turning over inventory, or that the
company has large financial subsidiaries.
At the end of 2001, the company had negative common

shareholder's equity of -705.66 million Pakistan Rupees. This
means that at the present time, the common shareholders have
essentially no equity in the company. Although the common
equity is negative, Kohinoor Industries Limited does have a net
positive equity position (as its preferred stock, minority interest,
etc. are positive).
As of September 2001, the company's long term debt was

381.54 million Pakistan Rupees and total liabilities (i.e., all
monies owed) were 2.81 billion Pakistan Rupees. The long-term
debt to equity ratio of the company is 0.25.
As of September 2001, the accounts receivable for the company

were 359.72 million Pakistan Rupees, which is equivalent to 68

days of sales. This is an improvement over the end of 2000,

when Kohinoor Industries Limited had 108 days of sales in
accounts receivable.
Financial Positions
LT Debt/ Days
Company Year Equity AR
Kohinoor Industries Limited 2001 0.25 68

Kohi Noor Industries by MNA

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Kohinoor Industries Limited

Kohinoor Industries Limited - Faisalabad, the largest in the country,

Kohinoor Industries Limited – Faisalabad is not only a gaint of an

UNIVERSITY OF AGRICULTURE FAISALABD

Saigols started business activities in Pakistan in 1948 by setting up the

• Kohinoor Industries Limited

UNIVERSITY OF AGRICULTURE FAISALABD

1948 – The First raindrop!

UNIVERSITY OF AGRICULTURE FAISALABD

Due to shift of resources from textile sector to electronics, processing

They have also been first to introduce blended fabrics in Pakistan.

UNIVERSITY OF AGRICULTURE FAISALABD

At present Kohinoor industries limited is running with 93,000 spindles.

KOHINOOR POWER COMPANY

Kohinoor Power Company is a captive power-generating unit of KIL

The Kohinoor power company limited, formed in 1991 is the first

UNIVERSITY OF AGRICULTURE FAISALABD

Mr. M. Naseem Saigol, Chairman.

Mr. M. Azam Saigol, Chief Executive.

Mrs. Sehyr Saigol.

Mrs. Razia Begum.

Mr. Shahid Sethi.

Mr. Imran Iqbal.

Mr. Shahid Nasim.

Sheikh Muhammad Shakeel.

UNIVERSITY OF AGRICULTURE FAISALABD

M/s Manzoor Hassain Mir & Co. Chartered Accountants.

Allied Bank of Pakistan Limited.

Askari Commercial Bank Limited.

Emirates Bank International Limited.

Faisal Bank of Pakistan.

Habib Bank Limited.

National Bank of Pakistan.

Union Bank Limited.

Slandered Chartered Bank.

United Bank Limited.

06-Egerton Road, Lahore.

UNIVERSITY OF AGRICULTURE FAISALABD

Main raw materials are cotton, viscose and polyester and

100% Carded Cotton Ring Spun 3/1 - 24/1

Polyester / Cotton Blends

40% Polyester/ 60% Carded Cotton 12/ - 26/1

UNIVERSITY OF AGRICULTURE FAISALABD

Acrylic / Cotton Blends

50% Acrilan / 50% Carded Cotton Open End 5.5/1 - 14/1

AT Present KIL is engaged in producing variety of yarn (combed,

UNIVERSITY OF AGRICULTURE FAISALABD

Countries to which yarn is exported.

KIL, s yarn is exported to Japan, USA & EEC countries.

KIL, s yarn is sent to its agents in Faisalabad, Karachi, Multan and

By aggressive marketing efforts they can cover the markets of

UNIVERSITY OF AGRICULTURE FAISALABD

In local market every yarn producer is the competitive of the Kohinoor

COMPARISON WITH OTHER UNITS IN THE SAME INDUSTRY

Kohinoor Industries Limited operates in the Yarn spinning mills sector.

UNIVERSITY OF AGRICULTURE FAISALABD

Kohinoor Industries Limited reported sales of 1.94 billion Pakistan

Sales of Kohinoor Industries Limited

3.15 3.01 1.92

Although sales at this company increased, they increased at a slower

Sales Comparisons (Fiscal Year ending 2001)

UNIVERSITY OF AGRICULTURE FAISALABD

The current (11/15/02) price of this stock is 1.80 Pakistan Rupees.