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By SHABBIR H. KAZMI
Updated Mar 31, 2001

The announcement that the IMF has approved disbursement of US$ 133 million tranche came on Friday. Equities market continued a roller-coaster ride during this week. During next week market will be closed for two days. Though there were a number of good news during the week, market remained under the fear of T+3 system expected to be implemented from April 25. However, the announcement by the KSE that only two companies will be under this regime should be a sigh of relief for weak position holders.

GUL AHMED TEXTILE MILLS

The Board of Directors of the Company have recommended 70 per cent dividend for the year ending September 30, 2000. While profit after tax for the year 2000 amounts to Rs 558 million the amount payable to shareholders comes to Rs. 238.5 million. A sum of Rs 400 million has been transferred to general reserve. Like many other textile mills, financial and other charges of the Company seems to be on higher side Rs 238.6 million for the year under review. Therefore, it would be appropriate for the shareholders to ask the management the reasons for retaining the profit. Is the amount being retained for any expansion or simply for lending to associate companies? Further analysis indicate that the Company was able to contain its cost of goods sold which improved its gross profit from Rs 642.9 million for the year 1999 to Rs 1,133.5 million for the year under review a growth of over 76 per cent. This may be attributed to lower cost of inputs particularly cotton and PSF.

NAKSHBANDI INDUSTRIES

The core business of the Company is manufacturing and export of towels. As a result of improvement in sales and better cost controls operating profit of the Company for the year ending September 30, 2000 came to Rs 96.7 million as compared to that of Rs 79 million for the previous year. However, Rs 60.6 million was eaten up by financial and other charges and profit before tax was reduced to Rs 35.7 million. Higher profit after tax enabled the company to improve its dividend payout from 7 per cent for the year 1999 to 12.5 per cent for the year under review. While the Company was able to improve its sales, better cost controls improved profit margin of the Company though marginally from 14.6 per cent for the previous year to 16 per cent for the year 2000.

DEWAN MUSHTAQ TEXTILE MILLS

The Board of Directors have proposed 72.5 per cent dividend for the year ending September 30, 2000 as against a payout of 28 per cent for the previous year. This improvement was due to more than two fold increase in sales resulting in increased gross profit from Rs 34.7 million for the previous year to Rs 91.3 million for the year under review. While sales were Rs 267.7 million for the previous year, the quantum was above Rs 761 million for the year 2000. At the same time, the Company was able to contain its operating, administrative and general expenses. However, other charges nearly doubled during this period.

REGENT TEXTILE INDUSTRIES

The Company seems to belong to the group of perennially loss making entities. Accumulated losses as at September 30, 2000 exceeded Rs 141 million. Its entire operations appears to be dependent on borrowed money. It is evident from a fact that out of gross profit of Rs 36 million for the year 2000, an amount of Rs 20 million was eaten up by financial charges whereas operating expenses were around Rs 3 million. The Board approved 5 per cent dividend amounting to Rs 2.4 million from current year's profit after tax of Rs. 11.4 million.

BANK OF PUNJAB

As commercial banks are now required to raise their paid-up capital, their profit after tax, bonus issues and dividend announcements should be keenly watched by investors. Enhancing paid-up capital should not a problem for Bank of Punjab as its shareholders exceeded Rs 2,179 million at the end of year 2000. Profit before tax for the year ending December 31, 2000 was Rs 319.6 but due to higher tax rate applicable on banks, profit after tax reduced to Rs 157 million. Out of a total profit of Rs 356.629 million available for appropriations, the Board of Directors decided to issue bonus shares amounting to Rs 127.782 million, transferred Rs 157 million to general reserve and Rs 71.4 million to statutory reserve. An interesting feature observed was that while advances remained more or less at the level of previous year, investments increased from Rs 4,990.6 million to Rs 7,865.8 million during this period. Does it indicate any shift in lending policies of the Bank?

MITCHELL'S FRUIT FARMS

Results of financial year ending September 30, 2000 were more or less similar to those of previous year. However, dividend announced was 40 per cent as against a payout of 45 per cent for the year 1999. It seems that the Company retaining earnings for some future use. However, increasing financial charges should be cause of concern for the management which jumped from Rs 4 million to Rs 5.4 million during this period.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

Hubco

21.45

20.15

20.35

206,963,500

PTCL

18.55

17.75

17.95

102,142,500

Bank of Punjab

10.00

8.95

9.50

2,270,000

Askari Comm Bank

11.70

11.30

11.30

310,500

Mitchell

36.00

34.50

36.00

1,500

Gul Ahmed Textile

28.00

28.00

28.00

Nakshbandi Textile

10.75

10.75

10.75

Attock Refinery

41.50

41.50

41.50

Regent Textile

2.30

2.30

2.30

Dewan Textile

35.00

35.00

35.00

Source: Invest Capital & Securities