Summary - M/s Pakistan Poultry Farms

Requirement:

NIACF - Rs. 50.0M (Working Capital Requirements for Poultry

Business)
LC (DA) - Rs. 10.0M
Total:
Rs. 60.0M

Mark-up Rate:

NIACF: 3 Months KIBOR + 3.0%

LC (DA): APSC

Legal Status:

Partnership Concern

Originating Branch:

Jinnah Avenue, Islamabad.

Collateral / Security:
Prime:
Hypothecation of stock Rs. 48.0M of chicks, feed, eggs, machinery & poultry utensils of
the firm with 20% Margin duly insured by Banks approved Insurance Company
covering the risks of fire, burglary & earthquake.

DP to be calculated on hypothecated stocks & stock report to be obtained on

monthly basis.
Secondary:
Charge on Agri. Land / Full Registered Mortgage will be created on property measuring
32 Kanals 01 Marla (Poultry Farms: Land, Building & Machinery) bearing Khasra
#s 787/559 & 789/560; situated at Karmang Bala, Tehsil & Distt. Mansehra having
MV Rs. 100.697M with FSV Rs. 85.170M owned by Ch. Muhammad Akram & Ch.
Abdul Majeed as Sale Deeds are not available rather Register Haqdaran Zameen is held
as Collateral.
The above mentioned property will be insured covering the risks of Fire, Burglary &
earthquake.
Personal Guarantee of Partners / Mortgagers of the property.
DETAILS OF EXISTING LOANS:
Bank

Purpose
of Loan

Loan Amount
(Fund Based)

MCB

Poultry

ABL

Poultry

20.0M
9.0M (NonFund Based)
75.0M

Date of
Disbursemen
t
1-10-08

O/S

29.0M

Loan
Maturity
Date
30-09-09

08-06-09

75.0M

31-03-2010

Security

Properties &
Hypo. of Stock
Properties &
Hypo. of Stock

Grays
Leasing
Askari
Leasing
Al-Zamin
Leasing
Total
Lines

Poultry

5.536M

01-03-07

1.850M

28-02-2010

Poultry

10.30M

01-09-2005

1.425M

31-10-2009

Poultry

11.275M

01-02-2006

1.850M

31-01-2010

131.111M

Machinery &
Equipments
Machinery &
Equipments
Machinery &
Equipments

109.125M

Financial projections:

Particulars

2006 (Audited)

2007 (Audited)

2008 (Audited)

Sales

162,486,809

188,313,537

206,656,863

2.5

2.4

3.3

12

9.4

10.1

6.9

6.8

6.5

1.3

1.2

1.4

0.1

0.1

0.1

4.5

3.0

1.9

2.5

1.0

0.5

0.7

0.6

82%

75.1%

65.2%

38%

25.2%

15.7%

Profitability Ratios
Net Income/Sales
Net Income/Net Worth
Operating Profit/Sales
liquidity Ratios
Current Ratio
Quick Ratio
Leverage Ratios
Total Liabilities/Net Worth
Long Term Liab./Net Worth
Debt Service Coverage Ratio
Total Liabilities/Total Assets
Total LT Liabilities/Total Assets

Comments & Justification:

Basis of Recommendation
Strong Business Financial worth with positive future outlook for PPF as well overall
Poultry Business.

Clean financial record with other Financial Institutions.

Business experience over 25 years backed with poultry industry professionals.
Readily available Domestic market coupled with sufficient international market
presence.
Poultry industry after recessions has come out with only serious poultry players & PPF
is one of those entities.
Adequate Collateral Cover to safeguard Banks interest.

Assessment of Probability of Default

Probability of Default is minimal as evident from clean e-CIB plus diversified poultry
business enables them to generate appropriate funds to repay their loans & other
liabilities.
Business growth outlook is positive with increase sale margins getting apt returns on
Investment.
Assessment of sources of repayment
Hefty Sales returns with increasing profit margins enables PPF to repay outstanding
Liabilities as they have successfully repaid ZTBL liability on the same farms
comprehensively on time.
In Worst case scenario, we have requisite collateral cover with hypo charge on
machinery and stock additionally.
Overall Justification
Pakistan Poultry Farms leading business player of poultry industry of
Pakistan has immaculate track record with financial institutions.
They have succeed locally & have venture internationally in UAE now also in Saudi
Arabia due to lifting of Ban by Saudi Authorities for poultry products from Pakistan.
They want to avail Funded & Non funded financial services from UBL to meet the
working capital requirements together with Export LC.
Taking in consideration the financial strength, pristine relationship with Banks, viable
plans of expansion backed with security cover & sturdy outlook of poultry industry in
Pakistan, we strongly recommend approving above mentioned limits for Pakistan
Poultry Farms.