The company's sales at Rs 964.45 million and gross profit at Rs 74.65 million registered increase by 16.9% and 53.3% over the corresponding figures posted last year.
Administrative expenses were on the higher side which were offset by the reduction in the financial expenses. Despite, relatively higher provision for taxation the company posted modest profit after tax at Rs 12.15 million as against loss after taxation at Rs 1.79 million in the previous year. The company is renovating its entire building at the factory and new humidification system is being installed.
Salfi Textile Mills Ltd is a public limited company incorporated in the province of Sindh on January 5, 1968 and is listed on Karachi Stock Exchange. The principal business of the company is manufacturing and sale of yarn. Its factory is located in Landhi Industrial Area, Karachi and its registered office is situated at Textile Plaza M.A. Jinnah Road Karachi.
The company is one of the constituent members of Tata Group of Companies whose other members are Island Textile Mills Ltd, and Tata Textile Mills Ltd. These companies of the Tata Group have received certification of EN ISO 9001: 2000 Quality Management System for manufacturing of yarn from natural and man-made fibres, and management of associated commercial, financial and human resources, administration and related support functions.
The ISO Certification covered all spheres of business activities leaving no area outside the ambit of ISO. Thus covering areas of production, maintenance, powerhouse, sales, after sales, international trade, procurement, finance, information technology, administration, human resource and quality control.
The share of Salfi Textile carries large premium at the stock exchange. On February 1, 2005, the closing price of the share was quoted at Rs 52 per share which is more than 5 times of the par value. During the last one year the price of the share ascended on the rising trend from Rs 22 to Rs 56.65 per share registering 157.5% increase.
Its dividend payout record is intermittent since 1999 and the payout rate remained within the range of 9.50 and 20%. Only during the year under review the dividend rate substantially increased to 20% (10% cash & 10% bonus stock dividend).
Even then the beneficiaries of these gains are mostly majority shareholders and institutional investors as it has 919 individual investors and their aggregate holding works out to 6.1% of the company's stock. On the other hand the aggregate shareholding of directors, spouses etc is 69.31% of the company's stock.
Its associated companies held 10.96% of the stock. So it can be seen that the company is a close family business affair as concentration of shares is not dispersed into wide socio-economic groups.
The paid up capital of the company is relatively small at Rs 30.39 million which has remained stagnant since 1999. But shareholders equity has swelled to Rs 104 million producing break-up value of the share at Rs 34.22 carrying 242.2% premium over the par value.
The company's addition in fixed assets amounting to Rs 38.81 million (2003: Rs 14.01 million). In addition, Rs 28.50 million has been booked in the account of capital work-in-progress.
The company is planning that out of two units about 20,000 spindles each engaged in the production of synthetic yarn, at least one unit should be shifted towards cotton based production.
The company's plant has been rated at the annual production capacity of 10.458 million kgs in terms of 20/s count of yarn. During the year the company produced 12.867 million kgs of yarn after conversion of 20/s count and achieved 123% utilisation of capacity. The production is second highest since 1999.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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Sept 30
2004 2003
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Share Capital-Paid-up: 30.39 30.39
Reserves & Surplus: 73.61 51.48
Shareholders Equity: 104.00 81.87
Unrealised Gain: 0.81 1.00
Surplus on Rev. of F/A: 255.45 265.42
L T Debts: 116.41 125.09
Deferred Liabilities: 93.75 101.50
Current Liabilities: 362.05 409.63
Fixed Assets: 531.63 546.39
L T Investments: 31.29 31.48
L T Deposits: 2.97 2.83
Current Assets: 366.58 403.81
Total Assets: 932.47 984.51
Sales, Profit & Pay Out:
Sales: 964.45 824.74
Gross Profit: 74.65 48.69
Other Income: 0.83 5.38
Operating Profit: 40.20 24.82
Financial (Charges): (19.35) (23.67)
(Depreciation): (38.39) 26.92
Profit Before Taxation: 19.27 1.05
Profit/(Loss) After Taxation: 12.15 (1.79)
Earning Per Share (Rs): 4.00 (0.59)
Dividend Cash @ 10% (2003: Nil): 3.04 -
Dividend Bonus
Stock 10% (2003: Nil): 3.04 -
Share Price (Rs) Dated 01/02/05: 52.00 -
Financial Ratios
Price/Earning Ratio: 13.00 -
Book Value Per Share: 34.22 26.94
Price/Book Value Ratio: 1.52 -
Debt/Equity Ratio: 24:76 26:74
Current Ratio: 1.01 0.99
Assets Turn Over Ratio: 7.74 0.83
Days Receivables: 42 41
Days Inventory: 67 43
Gross Profit Margin (%): 7.74 5.90
Net Profit Margin (%): 1.26 (0.22)
R O A (%): 1.30 0.18
R O C E (%): 2.13 0.31
Plant Capacity & Production (Million Kgs)
A) Yarn Converted into 20/s Count (Kgs)
Installed Capacity: 10.458 10.458
Production: 12.867 12.512
Capacity Utilisation (%): 123 119.65
B) Number of Spindles Installed: 39,036 39,036
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COMPANY INFORMATION: Chairman & Chief Executive Officer: Anwar Ahmed Tata; Director: Shahid Anwar Tata; Company Secretary & Chief Financial Officer: Farooq Advani; Registered Office: 8th Floor Textile Plaza M.A. Jinnah Road Karachi; Web Address: www.tatatex.com Factory HX-1, Landhi Industrial Area Landhi Karachi.