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GQ Ball Pen Industries Ltd.

commenced its commercial operation in 1982 with an aim to


manufacture Ball Pen of various design !ualit" under the #rand $GQ% $&'()(% and
now the 'ompan" has diversified product range li*e+ com#, disposa#le glass, plate, #owl,
#urger #o-, lunch #o- etc. .aladesh International /Pvt.0 Ltd. su#sidiar" of the same
'ompan" produces mos!uito coil under the #rand name of $&lephant 1ing% $2dvanced
Boost%. GQBPIL is pioneer of #all point pen in the countr", pla"s a ma3or role in highl"
competitive mar*et as its ma3or product covers all the attri#utes from premium to economic.
GQ Ball Pen captures a mentiona#le share in mar*et /#eing a pioneer among local
manufacturer0 #esides the imported #all pen. 4he annual capacit" of the #all pan unit is
515,256 /gross0 and plastic unit has annual capacit" of 1,789,795 /gross0. Ball pen factor" is
located at B:'I' Industrial &state, ;essore and Plastic unit is located at 1hagan, :avar. 2s of
76 ;une 2612, total paid up 'apital stood at B<4 8=.9 million and 4otal :hareholders>
'apital stood at B<4 1,972.7 million /including revaluation surplus of B<4 1,279.2 million0.
Management and Human Resource
4he Board of the <irectors of the 'ompan", including one independent <irector, consists of
5 /five0 mem#ers. 4here are also 8 /si-0 :u#+'ommittees of .anagement &-ecutive,
.anagement (perational, :u#sidiar" 'ompan" ?eview, Investment, 2ppointment,
'onfirmation Promotion and Purchase 'ommittee. 2s of 76 ;ul" 2612 .anaging <irector
.r. Qa@i :aleemul Au!, .B2, is holding 1,898,998 num#er of shares which is accounted
a#ove 16B of total shares. 4he authori@ed capital of the 'ompan" is B<4 166.6 million
divided into 16,666,666 ordinar" shares of B<4 16.6 each.
Table 1
Shareholding by category of inventors of C'ompan"D
Category Percentage
:ponsor <irector =2.82
Institutions 1.82
Eoreign 6.65
General Pu#lic 55.71
Total 100.00
<etails of the shareholding position, categori@e #" the name of shareholders, is given in the
following e-hi#it+
Table 2
ist of !irector"s Shareholding #osition of C'ompan"D
S. $ame Position Held $o. of Shares Percentage
1 .r. Qa@i :aleemul Au!,
.B2
.anaging
<irector
1,898,998 28.7
2 .rs. :alma Au! <irector 8=1,952 9.9
7 .r. Qa@i .. :alman :arwar <irector 225,1== 7.5
= .s. :ara Au! <irector 1=7,795 2.2
5 .r. .d. 2@i@ur ?ahman,
E'.2
Independent
<irector
+ +
Total 2%&0'%2(&
Purchase committee and .anagement operation committee directl" supervise overall
operation of the GQ Ball Pen and :u#sidiar" committee is involved in supervising .aladesh
International Ltd. 4here were 178 officers and 278 staff wor*ers engaged in operation of
two industrial units for manufacturing of #all pen and disposa#le plastic items.
)R*+P PR*,-.
GQ Group is involved in diversified #usiness in the field of manufacturing and
distri#ution of Friting Instruments, :nac* Eood Processing, .os!uito 'oil, PP
Foven Bags, <isposa#le Glass, Plates, cups and several other plastic products.
GQBPIL was the first initiative of the Group which was incorporated in 1981 and in
1988 the 'ompan" #ecame a pu#lic limited compan". In 199=, GQ esta#lished PP
(ven #ag industr" as part his diversified #usiness strateg". In addition, to meet the
demand of emerging mar*et GQ also has launched plastic industries which are
producing household plastic materials and disposa#le items. In 1992, GQ started its
food manufacturing industr" named GQ Eoods Limited and production carried out
with modern technolog". Later in 199=, GQ entered into a technical cooperation with
.ala"sia with a 3oint venture named .aladesh International /PG40 Limited, a
mos!uito coil manufacturing industr".

4oda" GQ Group comprises+ GQ Ball Pen Industries Ltd. which is involved in #all+
pen manufacturing, disposa#le glass, plates, cups etc.H GQ Plastic Ltd. involved in
manufacturing plastic products and chairsH GQ .ar*eting Ltd. involved in
distri#ution and mar*eting of all manufacturing concern of the groupH GQ Industries
Ltd. involved in manufacturing PP Foven Bags. 4he diversification of the #usiness
units along with management a#ilit" to support mar*et demand reflects the
management>s innovative #usiness idea.

Table 1
Group Einancial Aighlights /2s on 71 <ecem#er 26120
Com#anies Sales
Co)S
/s 0
of
Sales
$et
Prof
it
1orro2
ed
,und
Shareholde
rs"
.3uity
1orro2ed
,und4.3u
ity
GQ Ball Pen Industries
Limited
269.
=9
99B
56.8
=
82.88 962.58I 6.12
GQ Industries Limited
112.
18
88B 5.89 9=.69 78.79 2.59
GQ Eoods Limited
88.9
1
96B 8.19 8.12 25.97 6.71
GQ Plastic Limited
=2.6
1
8=B =.71 + =2.58 +
.aladesh International /Pvt0
Limited
96.9
1
95B 1.67 28.85 97.25 6.78
Total
526.
7'
&50
8(.0
8
211.56 ((0.8& 0.8(
1+S-$.SS *9.R9-.:
GQ Ball Pen has few ma3or #rands in the mar*et, namel"+J&cono EK>, JGQ &-cel>, JGQ
Genius>, JGQ Laser Point>, JGQ :oft"> for lower end consumers, JGQ :upreme Gel>
J&cono :oft Grip> for high end consumers. 2mong the #rands J&cono EK> is the high demand
product and JGQ Genius>, JGQ Laser Point>, JGQ :oft"> are speciall" addressing the
competitors> #rands. 4he industr" is highl" competitive due to presence of Indian and
'hinese products which are targeted to low end consumers. 2mong the local manufacturers
GQ Ball Pen positioned itself as mentiona#le competitor /not mar*et leader rather follower0
#" focusing low end consumers #" its operational scale and mar*eting strateg" and even
design variation. ?aw materials were procured locall" and imported from India and 'hina.
.ost of the machineries are from ;apan, 4aiwan, German", 'hina and India where the
machineries have #een ac!uired various time since 1981 and fit to its growing demand in the
mar*et, still the 'ompan" replaces and ac!uires machineries when necessar".
.ar*et for the #all+pen is concentrated in 'hittagong, 'omilla, ;essore, :"lhet, )orth Bengal
and less in <ha*a. 2ll of the products including plastic and coil are mar*eted #" another
sister concern JGQ .ar*eting Ltd. GQ Ball Pen has divided whole countr" into 15 sales
regions among the 9 sales <epots, where 118 distri#utors widen the sales networ*. If the
'ompan" has aggressive trade promotional and consumer promotional activities, it ma" help
to create a si@ea#le mar*et. &ven its additional commission after achieving sales target ma"
also support to achieve large mar*et share in competitive mar*et. Brand image, design
variation, focusing diversif"ing various mar*et niche, widen organi@ed distri#ution
networ* and sales promotional activities can strengthen the 'ompan" position in highl"
competitive mar*et.
.aladesh International /Pvt.0 Ltd. su#sidiar" of GQ Ball Pen Industries Ltd. manufactures
J&lephant 1ing> J2dvanced Boost> .os!uito 'oil with monthl" capacit" of 18,966
cartons. 4he factor" is located at B:'I' Industrial &state, 4ongi, Ga@ipur on =1.77 decimal
land. 4otal 21 officers and 176 staffLwor*ers emplo"ed in the factor". Products are also
mar*eted #" GQ .ar*eting Ltd to all over the Bangladesh.
.;istence of broad #roduct line in 1all Pen segment creates sco#e for gro2th and
ca#turing additional mar<et share= ho2ever% Presence of -m#orted #roducts and local
#roducts ma<e the com#etition intense and hinders its #otential
GQ Ball Pen has few ma3or #rands in the mar*et, namel"+J&cono EK>, JGQ &-cel>, JGQ
Genius>, JGQ Laser Point>, JGQ :oft"> for lower end consumers, JGQ :upreme Gel>
J&cono :oft Grip> for high end consumers. 2mong the #rands J&cono EK> is the high demand
product and JGQ Genius>, JGQ Laser Point>, JGQ :oft"> are speciall" addressing the
competitors> #rands. 4he industr" is highl" competitive due to presence of Indian and
'hinese products which are targeted to low end consumers. 2mong the local manufacturers
GQ Ball Pen positioned itself as mentiona#le competitor /not mar*et leader rather follower0
#" focusing low end consumers #" its operational scale and mar*eting strateg" and even
design variation. ?aw materials were procured locall" and imported from India and 'hina.
.ost of the machineries are from ;apan, 4aiwan, German", 'hina and India where the
machineries have #een ac!uired various time since 1981 and fit to its growing demand in the
mar*et, still the 'ompan" replaces and ac!uires machineries when necessar". 4otal mar*et is
highl" competitiveH as there is local as well as international products are supporting
consumers demand. :o, compl"ing with mar*et condition 'ompan">s strateg" to focus
different mar*et niches can help to achieve competitive position.
.aladesh International /Pvt.0 Ltd. su#sidiar" of GQ Ball Pen Industries Ltd. manufactures
J&lephant 1ing> J2dvanced Boost> .os!uito 'oil with monthl" capacit" of 18,966
cartons. 4he factor" is located at B:'I' Industrial &state, 4ongi, Ga@ipur on =1.77 decimal
land.
*#timum ca#acity utili>ation hindered due to be short of a si>eable mar<et share or
creates huge demand of the #roducts
4he management reported 8=B capacit" utili@ation for #all pen unit and 95B capacit"
utili@ation plastic division respectivel" due to less mar*et demand. Eor #all pen unit there is
no alternate to set strategies for immediate capturing si@a#le mar*et share #" enhancing
utili@ation and scale of operation.
Price 9olatility in ra2 material resulting from for?e; e;#osure% bullied margin
Price volatilit" during last couple of "ears due to e-change rate fluctuation heightened raw
material cost which su#se!uentl" affected profita#ilit" margin. &ven raw material price
volatilit" in international mar*et adds up ris*s to generating cash flow. 4hough the compan"
imports around 86B of its total procurement /raw materials0 from a#road, it has *ept its cost
structure under control.
9ariation in design @ 3uality can be <ey factor to be mar<et leader from follo2er
Ere!uent change in shape, design and !ualit" of the product fits industr" norms. :o, to hold
the competitive position the 'ompan" needs to modif" the design and !ualit" fre!uentl",
ahead of competitor, otherwise incompati#l" designed products cannot capture a si@ea#le
share of the mar*et.
:ell established mar<eting channel minimi>es the mar<eting ris< of )A1P-
.ar*et for the #all+pen is concentrated in 'hittagong, 'omilla, ;essore, :"lhet, )orth Bengal
and less in <ha*a. 2ll of the products including plastic and coil are mar*eted #" another
sister concern JGQ .ar*eting Ltd. GQ Ball Pen has divided whole countr" into 15 sales
regions among the 9 sales <epots, where 118 distri#utors widen the sales networ*. If the
'ompan" has aggressive trade promotional and consumer promotional activities, it ma" help
to create a si@ea#le mar*et. &ven its additional commission after achieving sales target ma"
also support to achieve large mar*et share in competitive mar*et. Brand image, design
variation, focusing diversif"ing various mar*et niche, widen organi@ed distri#ution
networ* and sales promotional activities can strengthen the 'ompan" position in highl"
competitive mar*et.
$e2 1MR. ProBect and Construction of Commercial 1uilding ProBect e;#osure to
im#lementation ris<% cost overrun and funding ris<
)ew B.?& Pro3ect and 'onstruction of 'ommercial Building pro3ects also have e-posure to
implementation ris* relating to time schedule and cost overrun if there is dela" in completion.
1all Pen -ndustry
Ball Pen mar*et in Bangladesh is largel" dominated #" imported items mostl" from India and
'hinaH few products are also imported from ;apan and German". Local manufacturing
industr" comprised several Ball Pen manufacturers including .atador, GQ, (l"mpic,
&ducare /.erit0, 2lpha, ;anani etc. however, Indian #rands li*e Linc, 'ello, .onte-,
?a"nolds, 4oda", )atara3 hold ma3or mar*et share in low+to+mid range Ball PenLGel Pen
segment due to their larger promotional and mar*eting programs, wide range of products in
visual media. 4he demand for pen in local mar*et can #e divided into two #road categories M
regular demand and promotional demand. ?egular consumption of pens mostl" used for
academic and official purposes and promotional use of pens derives demand from
Pharmaceuticals, Insurances and other corporate entities as part of souvenir or gift items.
Fhile Indian and 'hinese pens dominate in the promotional+demand driven mar*et, local
pens and Indian pens compete intensel" for regular demand driven mar*et. 2ccording to the
pu#lished data /#ased on :ales value and 'apacit"0, .atador Ball Pen is the current mar*et
leader among the local manufacturers following to (l"mpic Industries Limited, GQ Ball Pen
Industries Limited, &ducare Industries Limited, 2lpha Ball Pen Industries and others.
Management -nformation System
4he 'ompan" has integrated software which was first implemented in 1998. :oftware is
called J&?P :olution> that was developed #" own engineer of the 'ompan". 4he 'ompan"
gets advantage and maintains proper internal control on reporting s"stem #" practicing the
&?P solution. 4his software supports operating efficienc" and ensures compliance with
applica#le policies and regulation.
C/P.C Plan
.anagement planned to e-pand its e-isting facilities of #all pen as well as plastic unit,
further more the process for construction of a multi+storied commercial #uilding on land
measuring 11 1atha 2 'hatta* at Nttara .odel 4own. 4otal pro3ect cost is estimated to #e
B<4 578.8 million of which B.?& of e-isting pro3ect will cost B<4 2=9.5 million and
'onstruction of multi+storied #uilding will cost B<4 289.7 million. 4he Board has proposed
for issuance of right offer of 8,=89,872 ordinar" share of B<4 16.6 each at an issue price of
B<4 86.6 each including B<4 56.6 per share totalling B<4 788.2 million. .anagement
e-pects B.?& pro3ect will complete within one and half "ear and construction of
commercial #uilding will ta*e three "ears to complete after receiving of right issue fund.
.anagement estimated that implementation of this pro3ect will generate annual revenue of
B<4 56.6 million.
Table 6
ProBect Cost
Particulars D1!T Mi.E Cost
0 of
Total
Land Land <evelopment
56.
6 9.7B
Building (ther 'ivil
'onstruction
25.
6 =.9B
Imported .achiner"
96.
6 18.8B
Local .achiner"
26.
6 7.9B
'ost of .achiner" Installation
1.
5 6.7B
Gehicles
16.
6 1.9B
Preliminar" pre+operating e-p
5.
6 6.9B
(ffice &!uipment (ther 2ssets
5.
6 6.9B
Total ,i;ed Cost of the ProBect
D1MR.E
268.
5 78.5B
Construction of multi storied
Commercial 1uilding at +ttara%
!ha<a.
289.
7 57.5B
)et For*ing capital
76.
6 5.8B
Table 6
ProBect Cost
?ights Issue
17.
6 2.=B
Total Cost
578.
8 166.6B
Means of ,inance
?ight Issue Proceed
788.
2
Ban* Loan
1=8.
8
Total
578.
8
1+S-$.SS R-SF
*#timum ca#acity utili>ation hindered due to be short of a si>eable mar<et share or
creates huge demand of the #roducts
4he management reported 8=B capacit" utili@ation for #all pen unit and 95B capacit"
utili@ation plastic division respectivel" due to less mar*et demand. Eor #all pen unit there is
no alternate to set strategies for immediate capturing si@a#le mar*et share #" enhancing
utili@ation and scale of operation.
Price 9olatility in ra2 material resulting from for?e; e;#osure% bullied margin
Price volatilit" during last couple of "ears due to e-change rate fluctuation heightened raw
material cost which su#se!uentl" affected profita#ilit" margin. &ven raw material price
volatilit" in international mar*et adds up ris*s to generating cash flow.
Presence of -m#orted #roducts and local #roducts ma<e the com#etition intense
4otal mar*et is highl" competitiveH as there is local as well as international products are
supporting consumers demand. :o, compl"ing with mar*et condition 'ompan">s strateg" to
focus different mar*et niches can help to achieve competitive position.
9ariation in design @ 3uality can be <ey factor to be mar<et leader from follo2er
Ere!uent change in shape, design and !ualit" of the product fits industr" norms. :o, to hold
the competitive position the 'ompan" needs to modif" the design and !ualit" fre!uentl",
ahead of competitor, otherwise incompati#l" designed products cannot capture a si@ea#le
share of the mar*et.
$e2 1MR. ProBect and Construction of Commercial 1uilding ProBect e;#osure to
im#lementation ris<% cost over run and funding ris<
)ew B.?& Pro3ect and 'onstruction of 'ommercial Building will cost B<4 578.8 million.
:uccess of the pro3ect is depending on raising fund through right share issuance /B<4 788.2
million0, which is su#3ect to approval of :&' to issue ?ight (ffer at B<4 56.6 Premium per
share. 4hese pro3ects also have e-posure to implementation ris* relating to time schedule and
cost overrun if there is dela" in completion.
,-$/$C-/ STR.$)TH /$/GS-S
4he half "earl" statements have #een audited #" 2ta 1han 'o., where previous "ear>s
financial statements have #een audited #" Ooha Oaman 1a#ir ?ashid 'o. Aalf "earl" /;an+
;un 26120 revenue stood at B<4 179.= million and )et profit stood at B<4 =7.2 million
/including other income of B<4 =8.5 million0. :hareholders> &!uit" in 2612 /;une0 stood at
B<4 1,986.= million, increased from B<4 91=.2 million due to revaluation of assets.
4here was little growth in ?evenue /7.5B in 2611 vs. +7.8B in 26160 and the growth was not
sta#le over the o#servation period. '2G? of revenue was 9.7B during 2669+2611. 'ost of
revenue relative to sales was sta#le at 86B /avg.0 during the last three "ears which was
improved from 96B in 2668 2669. )et profit margin of the 'ompan" was 18.=B and net
profit grew at 88.=B compared to 2616, though the sales grew at a lesser rate /7.5B0. Because
of addition of other income /gain on share sale, dividend earnings, interest on E<? etc.0 as
non+operating income #oosted net profit growth.
Table 7
Segregation of Profit
before Ta;

Half?
yearly Gear .nded on 61 !ecember
Particulars 2012 2011 2010 200' 200( 200&
Profit Erom Business
=.
59
8
.77
12.
85
22.
28
/1=.
990
/15.7
80
Profit Erom (ther
Income
=8.
=5
59
.61
29.
87
79.
58
25.
69
85.8
=
Total $et Profit
1efore Ta; 56.07
85.6
7 72.8' 5'.(8 10.10 &0.28
Profit Erom Business 9B 17B 76B 79B +1=8B +22B
Profit Erom (ther
Income 91B 89B 96B 87B 2=8B 122B
Total $et Profit
1efore Ta; 1000 1000 1000 1000 1000 1000
(ther Income actuall" saved the #ottom line of the compan" over the o#servation periods,
otherwise the net profit margin stood at +6.7B. Aalf+"earl" :tatement 2612 stated 9B profit
/#efore ta-0 from its core #usiness #ut 91B profit /#efore ta-0 stated as other income. 4he
'ompan" financial reported a#ove 96BP86B profit earned from other sources included+
income from gain on share trading, dividend earnings, interest income on E<? etc.
Table 5
.arnings and Profitability
Gear .nded on 61 !ecember
Particulars 2011 2010 200' 200( 200&
?evenue /B<4 .illion0 765.2 295.6 768.6 288.2 276.=
?evenue growth /B0 7.5 +7.8 8.9 2=.2 n.a.
': as B of ?evenue 86.6 99.9 86.2 92.8 96.1
&BI4<2 /B<4 .illion0 87.= 86.9 9=.8 25.= 8=.7
&BI4<2 Growth /B0 79.5 +18.9 19=.6 +89.8 n.a.
&BI4<2 .argin /B0 29.7 26.8 2=.= 8.9 78.8
)et Profit after ta- /B<4 .illion0 58.2 77.7 =9.9 8.5 5=.9
)et Profit after ta- growth /B0 88.= +76.6 879.9 +88.2 n.a.
'2G? of ?evenue /2669 + 26110 9.7
'2G? of &BI4<2 /2669 + 26110 +6.7
'2G? of )et Profit /2669 + 6.9
Table 5
.arnings and Profitability
Gear .nded on 61 !ecember
26110
Gross Profit .argin /B0 26.6 26.7 19.8 9.2 9.9
(perating Profit .argin /B0 =.8 5.8 9.1 +=.7 +=.8
)et Profit .argin /B0 18.= 11.7 15.8 2.7 27.9
?eturn on 2verage 2sset /B0 5.8 7.8 8.6 6.8 1=.6
?eturn on 2verage &!uit" /B0 8.2 5.7 8.2 1.2 19.5
Inventor" management of the 'ompan" needs attention as the inventor" da"s outstanding
reflects increasing trend and receiva#le da"s sta#le at 25P28 da"s. But li!uidit" of the
'ompan" managed well during last three "ears as operating cash flow of the 'ompan" was
positive and reflects increasing trend. 'apital structure of the 'ompan" was comforta#l"
levered and strong coverage position reflects moderate financial ris*.
Table 8
i3uidity
Gear .nded on 61 !ecember
Particulars 2011 2010 200' 200( 200&
'urrent ?atio /-0 1.8 1.8 2.7 2.6 1.8
Quic* ?atio /-0 1.1 1.2 1.9 1.8 1.1
)et For*ing 'apital to 42
/B0 19.9 2=.6 71.8 29.8 19.8
2verage Inventor" Processing
Period /<a"s0 212 198 158 1=9 162
2verage ?eceiva#le 'ollection
Period /<a"s0 25 28 15 15 12
2verage Pa"a#le Pa"ment Period
/<a"s0 98 79 77 71 22
(perating '"cle /<a"s0 279 26= 197 18= 11=
'ash 'onversion '"cle /<a"s0 181 189 1=6 177 92
Table &
everage and Coverage
Gear .nded on 61 !ecember
DMil 1!TE 2011 2010 200' 200( 200&
&!uit" 'apital 588.8 57=.9 519.7 559.1 586.5
4otal Borrowed Eund 92.8 85.2 1=.7 28.5 29.9
Eund Elow from (peration /EE(0 91.6 =8.9 59.8 19.= 89.8
'ash Elow from (peration /'E(0 89.9 88.8 57.6 +57.1 +169.5
?etained 'ash Elow /?'E0 81.5 58.8 75.= +82.8 +129.1
Eree 'ash Elow /E'E0 81.9 16.8 29.9 +97.7 +178.9
Ratios
<e#t to &!uit" /K0 6.1 6.1 6.1 6.6 6.1
Borrowed EundL&BI4<2 /K0 6.9 1.1 6.2 1.6 6.=
EE(L<e#t /B0 99.8 9=.9 =18.9 97.1 229.8
'E(L<e#t /B0 126.8 165.5 791.2 +266.= +781.9
?'EL<e#t /B0 112.2 96.2 2=8.7 +278.= +=7=.8
Table &
everage and Coverage
Gear .nded on 61 !ecember
DMil 1!TE 2011 2010 200' 200( 200&
E'EL<e#t /B0 85.7 18.7 195.= +298.9 +=89.8
(perating ProfitLInterest /K0 =.5 8.8 9.8 +5.6 +9.7
&BI4LInterest /K0 26.9 19.7 22.1 5.1 86.=
/&BI4<2+'2P&K0LInterest /K0 19.= =.8 27.9 8.6 87.6
Stable #erformance is observed 2ith a slight decline in core revenue in 2012 from the
#revious year= ho2ever% the Com#any <e#t is #rofitability and coverage #osition
comfortable through consistent income generation from non?o#erating segment and by
controlling its cost structure to some e;tent
GQBPIL o#tained sta#le performance in 2612 though the revenue shrun* #" around =B from
the previous "ear due to strong competition from local and foreign /Indian and 'hinese0 #all
pens manufacturers and high #argaining power of the costumers. Aowever, the 'ompan"
*ept its cost structure under control /'oG: as B of :ales was 99.=B in 2612 and 99.8B in
26110 and registered consistent #ottom+line profita#ilit" compared to 2611 as e-pressed in its
&BI4<2 .argin and )et Profit .argin which were respectivel" 78.9B /2611Q 79.2B0 and
2=.7B /2611Q 2=.5B0 in 2612. Li*e previous "ears, GQBPIL>s #ottom+line profita#ilit" was
also dominated #" other incomes generated from gain on sales of shares /P86B0, interest on
E<?s /P25B0 and income from cash dividend received etc. in 2612. 4he 'ompan" also
generated comforta#le cushion against its de#t o#ligation though financial e-penses were
increased in 2612 compared to 2611 as e-pressed #" &BI4LInterest ratio of 11.98 times
/2611Q 26.56 times0 and 'ash flow 'overage ?atio of 16.82 times /2611Q 26.52 times0 in
2612. In 2612, P88B revenue comes from Ball pen segment and rest of the portion comes
from Plastic segment which also depicts similar position li*e the previous "ear.
(ver the "ears, it is o#served that GQBPIL is dependent on non+operating income for saving
the #ottom line profita#ilit" of the compan", otherwise the net profit margin stood at negative
i.e. around +=B in 2612. Generating consistent income from these non+operating segment is
suscepti#le to various factors M dividend or interest receive from investment /stoc* or E<?0,
selling of stoc* at profita#le price M which would #e volatile in future /other than fi-ed income
securities i.e. E<?0 and ma" increase financial ris* to some e-tent.
Eirst Quarter /26170 Nnaudited Einancial :tatement of GQBPIL showed that the 'ompan"
generated revenue of B<4 78.59 million with /1Q, not annuali@ed0 )et Profit .argin of
P77B and it suggested that the 'ompan" will face challenges in the later !uarters of 2617 in
retaining its revenue si@e while non+operating revenue segment will still give GQBPIL
cushion against #etter #ottom+line profita#ilit" margins and coverage against e-isting de#t
o#ligations.
High cash conversion #eriod is observed due to high inventory #eriod 2hich intensify
2or<ing ca#ital scenario to some e;tent= ho2ever% by deferring the #ayment #eriod%
)A1P- decreased its cash conversion #eriod from #revious year. Inventor"
management of the 'ompan" needs attention as the inventor" da"s outstanding reflects
increasing trend and receiva#le da"s sta#le at 25P28 da"s. But li!uidit" of the 'ompan"
managed well during last three "ears as operating cash flow of the 'ompan" was positive and
reflects increasing trend till 2611H however, in 2612, EE( and 'E( decreased to some e-tent.
Prospective impact on revenue generation due to new B.?& pro3ect and construction of a
'ommercial Building /which ma" #e financed through offering right share also ta*en into
consideration, while assigning the rating.
Ca#ital structure of the Com#any 2as comfortably levered and strong coverage #osition
reflects moderate financial ris<= ho2ever% underta<ing of ne2 e;ternal borro2ing for the
Construction of Commercial 1uilding may heighten its leverage #osition in future
4he Einancial Polic" of the compan" is to depend on e-ternal #orrowed fund onl" for
wor*ing capital and capacit" e-pansion related purpose. Aowever, total #orrowing of
GQBPIL increased in 2612 due to inclusion of term loan /'urrent outstanding as on 26
;une 2617 was B<4 9.8= million0. 'urrent capital structure of the 'ompan" is comforta#l"
levered as e-pressed #" Borrowed Eund to :hareholders> &!uit" ratio of 6.6= times,
Borrowed Eund to 2d3usted &!uit"
1
ratio of 6.12 times and Borrowed Eund to &BI4<2
ratio of 1.62 times in 2612 which were respectivel" 6.12 times, 6.12 times and 6.68 times
in 2611.
1
Adjusted Equity is calculated by deducting BDT 1241.82 million of Revaluation Reseve fom Total !"ae"oldes# Equity of
BDT 1$44.%8 million