Resultantly, the company recorded highest ever figures of sales, gross profit, operating profit, total fixed assets and above all net profit after taxation.
During the year under review, the company posted sales at Rs 692.72 million (FY 2003-04: Rs 504.98 million), Gross Profit at Rs 122.60 million (FY 2003-04: Rs 91.47 million) and net profit after taxation at Rs 40.83 million (FY 2003-04: Rs 24.79 million) registering growth by 37.2%, 34.0% and 64.7%) respectively.
Financial backbone of the company remained robust as evidenced from various ratios mentioned in the Performance Statistics, appended with this write-up.
As regards future outlook, the company sees a series of challenges ahead. There is acute scarcity of pig iron required to keep the foundry running. Cost constraints emanating from inflationary market pressure, higher interest rate, progressive devaluation of rupee. However positive side is expansionist trend in the demand for automobiles tractors and motor cycles.
Allwin Engineering Industries Ltd was incorporated in the province of Sindh as a private limited company in 1963 and was converted into a public limited company on July 15, 1966.
It is one of the constituent members of a large conglomerate, Atlas Group which is headed by Pakistani Industrialist Yusuf H. Shirazi. The Group has diversified interests in insurance battery, cars and motorcycles progressive manufacturing, production of spare parts for cars, motorcycles, and tractors, investment in securities corporate brokerage house in stock market, investment banking and leasing, trading in office equipment.
Allwin Engineering Industries Ltd, is engaged in manufacturing of components and parts for automotive vehicles, motorcycles and tractors. Its factory and registered office are situated at 15th Mile National Highway, Landhi Karachi.
The list of its customers include Atlas Honda Ltd, Indus Motor Company Ltd, Al-Ghazi Tractors Ltd, Millat Tractors Ltd, Dawood Yamaha Ltd.
Its holding company Shirazi Investment (Private) Ltd owns 61.60% of its total 12.337 million paid-up shares of Rs 10 each. The company's directors etc own 9.95% of its stock. Its 1033 individual shareholders hold 20.17% of its stock.
Its shares are listed on the Karachi and Lahore Stock exchanges. The market value of the share has trended upward since 2002 when on June 30 the price of the share was recorded at below par value at Rs 6.50 after that the value of the share kept on increasing above par and on June 30, 2005, the closing date of the accounts (under review), reached Rs 33 per share which is more than three times of the par value.
During the last 52 weeks the price of the share had peaked at Rs 75 per share. On October 18, 2005, the closing quotation of the share was recorded at Rs 43.55 per share.
The consistent strong performance of its share at the stock market reflects its strengthening of profit and dividend pay out profile and above all emerging as a reliable manufacturer and supplier of good quality auto parts in the country. It has helped in expanding its customer base among giant automobile assemblers which is proven by its customer list.
Since the last four years the company has been regular in dividend announcements. However the payouts remained modest.
For the year under review, the Board of Directors recommended cash dividend @10% which is similar to the previous financial year's. The modest dividend pay out rate is possibly because the company's investment in the manufacturing facilities are partially being financed from internal sources of finance which includes ploughed back profit.
The investment in capital goods is essential to sustain a competitive edge. In the year, 2004-05 the company made relatively large investment of Rs 216.40 million as against total investment of over Rs 298 million since 2001. This investment was utilised for acquiring and upgrading machinery, equipment and technology in order to meet the demand.
The chairman of the company emphasised that the investment will help to improve overall internal efficiency and quality of work leading to tangible savings and customer satisfaction.
During the financial year 2004-05, the company concluded a technical assistance agreement with a leading electrical parts manufacturing company of Japan for providing know how and technical assistance for providing CDI and Regulators required in the assembly of motor cycles. Following the agreement the machinery for manufacturing of CDI and Regulators were installed and company's engineers and workers trained.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-Paid-up: 123.36 49.35
Reserves: - 70.00
Unappropriated Profit/Accumulated (Loss): 11.49 (24.41)
Shareholder Equity: 134.85 94.94
Surplus on Rev. F/A: 118.68 118.68
L.T. Debts: 205.96 89.38
Deferred Liability: 10.37 9.69
Deferred Taxation: 45.33 19.81
Current Liabilities: 199.41 168.63
Fixed Assets: 503.26 302.42
Intangible Assets: 0.21 -
L.T. Loans & Advances: 1.47 1.03
L.T. Deposits & Prepayments: 1.91 1.77
Deferred Cost: - 4.44
Current Assets: 207.75 191.47
Total Assets: 714.60 501.13
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Sales, Profit & Pay Out
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Sales: 692.72 504.98
Gross Profit: 122.60 91.47
Other Operating Income: 9.76 0.56
Operating Profit: 88.29 49.67
Finance (Cost): (14.77) (10.90)
(Depreciation)/Amortization: (23.17) (18.59)
Profit Before Taxation: 69.85 36.86
Profit After Taxation: 40.83 24.79
Earnings Per Share (Rs): 2.79 1.49
Dividend (%): 10.00 10.00
Share Price (Rs) on 18-10-05: 43.55 -
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Financial Ratios:
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Price/Earning Ratio: 4.35 -
Book Value Per Share: 10.93 19.23
Price/Book Value Ratio: 3.99 -
Debt/Equity Ratio: 45:45 29:71
Current Ratio: 1.04 1.14
Asset Turn Over Ratio: 0.97 1.01
Days Receivables: 21 25
Days Inventory: 75 85
Gross Profit Margin (%): 17.70 18.11
Net Profit Margin (%): 5.89 4.90
R.O.A (%): 5.71 4.95
R.O.C.E (%): 7.92 7.45
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Plant Capacity
"The production capacity of the plant cannot be determined as this depends on the relative proportions of various types of components and parts of vehicles and tractors produced."
COMPANY INFORMATION: Chairman: Yusuf H. Shirazi; Chief Executive Officer: Muhammad Atta Karim; Director: Frahim Ali Khan; Company Secretary: Fida Hussain Zahed; Registered Office (Factory): 15th Mile National Highway Landhi Karachi 75120; Web Address: Not Reported; Branch Offices: Salam Chamber, Lahore; Atlas House Multan; Madina Town Faisalabad; R.A. Bazar Rawalpindi.