kohi noor industries by mna

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Kohinoor Industries Limited

INTRODUCTION

Kohinoor Industries Limited - Faisalabad, the largest in the country,was established in 1950 with only 25,000 spindles. Through a rapidprocess of consolidation and expansion, colossus of 147,000 spindles.

The mills have the best-equipped laboratory in the country forcomplete testing of raw materials, other inputs and yarn. It runs asophisticated system of quality control for its products covering in-process surveillance and rigid finished product testing. It has technicalcollaboration 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 ahumble 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 andafter 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 - 40/165% 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] ).


http://profiles.wisi.com/profiles/scripts/corpinfo2.asp?CUSIP=C586CV030

http://profiles.wisi.com/profiles/scripts/corpinfo2.asp?CUSIP=C58669580


http://profiles.wisi.com/profiles/scripts/corpinfo2.asp?CUSIP=C586E0610

http://profiles.wisi.com/profiles/scripts/corpinfo2.asp?CUSIP=C586CV030



http://profiles.wisi.com/profiles/scripts/corpinfo2.asp?CUSIP=C586E0610




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

3.15 3.01

2.38

1.92

1.94

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 MillsLimited (13.3%).

Sales Comparisons (Fiscal Year ending 2001)





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 3.75Pakistan 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%.


Company

Sales

(blns)

Sales

Growth

Sales/

Emp

(US$)

Largest

Region

Kohinoor IndustriesLimited

1.937 1.1% N/A N/A

Dewan Textile Mills

Limited2.604 14.3% 18,031 N/A

Bhanero Textile Mills

Limited1.439 10.0% 18,239 N/A

Apollo Textile Mills

Limited1.098 13.3% 18,729 N/A




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





Book Sales

Wk

Pr

Chg

Kohinoor

Industries

Limited

11/15/02 N/A N/A 0.03 N/A

Dewan

Textile Mills

Limited

9/10/02 23.8 0.75 0.20 N/A

Bhanero

Textile Mills

Limited

10/30/02 4.7 0.57 0.15 N/A

Apollo Textile

Mills Limited10/21/02 14.3 0.19 0.04 N/A

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 inthe 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

Company Year

LT

Debt/

Equity

Days

AR

Kohinoor Industries

Limited 2001 0.25 68

Dewan Textile Mills

Limited2001 0.47 62

Bhanero Textile Mills

Limited2001 0.19 47





Apollo Textile Mills

Limited2001 0.80 72

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 wellas 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, silkweavers, 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 inmachinery, 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 personwhom 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 werecognize our responsibility to maximize the return on their

investment. We will be every customer’s supplier of choice for allmarkets 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 QuickRatio 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 controloperating 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 satisfactoryreturn 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 onlythe 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 prospectiveshareholders, 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 pershare 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 toequity 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 itsassets (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 takesspecial 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 liabilitiesdecreased 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, butthere 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, 31REGULAR (in thousands) INDEXED (%)






1999 2000 2001 1999 2000 2001

Sales 2,387,515

1,915,878

1,936,795

100.0

80.25 81.12

Cost of Sales 2,294,157

1,592,708

1,632,600

100.0

69.42 71.16

Gross Profit 93,358 323,170 304,195 100.0

346.2 325.8

Operating ExpensesAdministrative 57,603 62,734 60,521 100.

0

108.91 105.1

Selling 101,232 109,916 112,748 100.

0

108.6 114.4

Total Op. Exp. 158,835 172,650 173,269 100.

0

108.7 109.7

Operating Profit/ (Loss) (65,477) 150,520 130,926 100.

0

(230) (100)

Other Income 132,777 70,150 22,364 100.

0

52.83 16.84

E. B.I. T. 67,300 220,670 153,290 100.0

327.9 227.8

Financial Expenses 475,354 114,479 175,153 100.0

24.1 36.8

Workers profit participation fund

-- (11,288) -- -- -- --

Workers welfare fund -- (997) -- -- -- --

-- 93,906 (21,863) -- -- --

Unusual items -- 122,547 (55,713) -- -- --

Profit/ (Loss) Before

Taxation

(408,054) 216,453 (77,756) 100.

0

(53.04

)

19.0

Provision for Taxation

Current 11,938 (10,789) (16,668) 100.

0

(90.4) (139.6)

Prior -- -- 1,972 -- -- --

Profit/ (Loss) after

Taxation

(419,992) 205,664 (92,272) 100.

0

(48.97

)

21.97




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

9

1,348,14

8

1,348,14

8

28.6 29.85

7

31.2

Operating Assets 2,232,966 2,156,503 2,080,934 47.3 47.76 48.2

GOVT. Taken over

concerns

28,921 27,229 NO 0.61

2

0.603 --

Long Term Deposits 13,678 13,678 13,678 0.29 0.303 0.317

CURRENT ASSETS

Stores, Spares and Loose

Tools

80,244 38,480 33,458 1.7 0.85 0.77

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,Payments & other

Receivable

275,635 306,835 278,185 5.8 6.1 6.4

Cash and Bank Balances 7,955 132,783 95,205 0.16

8

2.9 2.21

TOTAL Current Assets 1,097,29

5

969,756 874,650 23.2 21.5 20.3

TOTAL ASSETS 4,723,68

9

4,515,31

4

4,317,41

0

100.

0

100.0 100.0




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 Fixed Assets

1,485,753

1,602,271

1,509,999

100.0

107.8 101.6

Long Term Loans 609,496 457,791 356,919 100.0

75.12 58.56

Liabilities against Assetssubject to Finance Lease

112,962 57,537 24,619 100.0

50.93 21.79

Deferred Liability 82,497 75,897 69,297 100.

0

92 84

CURRENT LIABILITIES

Short Term Loans 1,116,31

7

1,177,27

9

1,145,33

6

100.

0

105.4

6

102.6

Current portion of Long

Term Liabilities

270,612 416,584 548,855 100.

0

153.9

4

202.82

Creditors, Provisions and

Accrued charges

1,045,44

1

719,756 661,774 100.

0

68.85 63.30

Unclaimed Dividend 611 611 611 100.

0

100 100

Proposed Dividend NO 7,588 NO -- -- --

TOTAL Current

Liabilities

2,432,98

1

2,321,81

8

2,356,57

6

100.

0

95.43 96.86

TOTAL LIABILITIES 4,723,68

9

4,515,31

4

4,317,41

0

100.

0

95.59 91.4




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 2,387,515

1,915,878

1,936,795

100.0 100.0 100.0

Cost of Sales 2,294,157

1,592,708

1,632,600

96.1 83.13 84.3

Gross Profit 93,358 323,170 304,195 3.91 16.87 15.71Operating 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

participation fund

-- (11,288) -- -- (0.6) --

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) BeforeTaxation

(408,054) 216,453 (77,756) (17.1) 11.3 (4.01)

Provision for Taxation

Current 11,938 (10,789) (16,668) 0.50 (0.56)

(0.86)

Prior -- -- 1,972 -- 0.102

Profit/ (Loss) after

Taxation

(419,992) 205,664 (92,272) (17.69

)

10.73 4.76




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.





ǼNOW,

IN THE FOLLOWING PAGES, I:

PRESENT THE DATA COLLECTED

FROM

INTER NET





Stock Price Analysis


Quarter High Low CloseQtrly

Change12 mo.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/aJul - Sep 1993 0.000 0.000 26.957 7.6% n/aOct - Dec 1993 0.000 0.000 36.522 35.5% n/aJan - 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 retreatedsignificantly 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 ata 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


Year SalesSales

Growth EBITDA% of sales

Inc. bef Extra

% of sales Emps

Sales/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 billionPakistan 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

3.15 3.01

2.38

1.92

1.94

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)

Quarter EPS DivsTTMEPS

TTMDivs

PayoutRatio

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/a4Q1996 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 MonthsEPS: 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

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


Ratios Equity Capital Dividends

Year LastPrice P/E P/Bk

Earned

Growth%

Profit

Rate%

Book

ValueBegin Yr

Earnings

Per Share %Chg

Divs

Per Share Avg 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




Financial Position

At the end of 2001, Kohinoor Industries Limited had negative

working capital, as current liabilities were 2.36 billion PakistanRupees 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

Company Year

LT Debt/

Equity

Days

AR

Kohinoor Industries Limited 2001 0.25 68

kohi noor industries by mna

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