During the year under review, the company has continued planning on making additions in plant and machinery. This planning includes 53 ring frames from China; 6 simplex machine FL-100 Toyoda Japan; 14 Card machine Trutzschler Germany; 2 Contamination sorter.
Loeptex Italy; one line blow room machinery Trutzschler Germany; During the year under review, the company booked loss after taxation after four consecutive years of profitable operation.
The leadership in the enterprise focused on modernisation, automation, systemization and human resource development since the last several years.
This also reminds of huge investment in textile spinning sector wherein aging and outdated mills have been replaced with ultra modern and efficient plant and machinery. It is hoped that in the ensuing years the company would turn the table and book profit.
Salfi Textile Mills Ltd, was incorporated in the province of Sindh on January 05, 1968 as a public limited company. Its registered office is in Textile Plaza M.A. Jinnah Road Karachi and its manufacturing facilities are located at Landhi Industrial Estate, Karachi.
The principal business of the company is manufacture and sale of yarn. This is textile spinning unit is equipped with 39,036 spindles.
The installed capacity of the plant has been rated at 10.458 million kgs after conversion in 20/s count. During the year under review, the company recorded production at 12.512 million kgs as against 13.051 million kgs produced in the previous FY 2001-02 exhibiting 4.1% decline.
However its output by far exceeded its installed capacity. During the year under review, the company generated sales at Rs 824.74 million (FY 2001-02: Rs 834.30 million) registering 1.15% decline while sales declined, cost of sales increased by 4.2% forcing erosion in the Gross Margin. Margin decreased by 4.85 percentage point from 10.75% in the previous year to 5.90%.
Gross profit decline to Rs 48.69 million by 45.7% from the previous year's Rs 89.75 million. The operating profit further declined as administrative expenses were on the higher side. The contribution of "other" income to the profitability was less than half of the previous year's.
The company could produce profit before taxation merely because the financial charges reduced by Rs 15.64 million to Rs 23.67 million from the previous year's Rs 39.31 million.
Profit before taxation amounted to Rs 1.05 million as against Rs 34.52 million in the preceding year. Current year taxation figure was very close to previous year's, around Rs 4.4 million. But this figure was further reduced as deferred taxation was adjusted favourably.
Even the bottom line was in the red with loss after taxation at Rs 1.78 million. According to the 6 year's key statistics published with the 13th Annual Report under review, the company booked loss after four year's of profitable operation.
The chairman of the company recalls that during the past five years there has been total change in the culture and working environment at Salfi Textile Mills. The company has been focusing its attention towards modernisation, Automation systemization and Human Resource Development.
He also realises that, "the financial results under review remind us there still remains a great deal of planning and organisation towards improvement of plant & machinery." As regards future prospects the Chairman informed that whenever there are problems in mills in the spinning sector due to higher prices of cotton, there is switch over to the production of blended yarn increasing supply of blended yarn which means increase in competition.
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Performance Statistics (Million Rupees)
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30 September 2003 2002
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Share Capital-Paid-up: 30.39 30.39
Capital Reserve: 6.00 6.00
Unapp. Gain/(Loss): 45.48 (22.11)
Shareholders Equity: 81.87 14.28
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Unrealized Gain (Loss) In Value of
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Securities Available For Sale: 1.00 (0.02)
Surplus on Revaluation of F/A: 265.42 187.65
L.T. Debts: 125.09 73.91
Deferred Liabilities: 101.50 54.93
Current Liabilities: 409.63 446.96
Fixed Capital Expenditure: 546.39 327.29
L.T. Investments: 31.48 30.66
L.T. Deposits: 2.83 3.42
Current Assets: 403.81 416.34
Total Assets: 984.51 777.71
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Sales, Profit & Pay Out
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Sales: 824.74 834.30
Gross Profit: 48.69 89.75
Operating Profit: 19.44 63.01
Other Income: 5.38 12.81
Financial (Charges): (23.67) (39.31)
(Depreciation): (26.92) (28.83)
Profit Before Taxation: 1.05 34.52
(Loss)/Profit After Taxation: (1.79) 23.31
Dividend Cash Nil
(2002: Rs 1.25/Share): - (3.80)
Earnings Per Share (Rs): (0.59) 7.67
Share Price (Rs) Dated 22.01.2004: 27.50 -
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Financial Ratios
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Price/Earning Ratio: (-) -
Book Value Per Share: 26.94 4.70
Price/Book Value Ratio: 1.02 -
Debt/Equity Ratio: 26:74 28:72
Current Ratio: 0.99 0.93
Asset Turn Over Ratio: 0.84 1.07
Days Receivables: 40 35
Days Inventory: 88 122
Gross Profit Margin (%): 5.90 10.75
Net Profit Margin (%): (0.22) 2.79
R.O.A (%): (0.18) 3.00
R.O.C.E (%): (0.31) 7.74
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Plant Capacity & Production (Million Kgs)
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A) Yarn After Conversion Into 20/s Count
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Installed Capacity: 10.458 10.458
SProduction: 12.512 13.051
Capacity Utilization (%): 119.64 124.79
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B) Number of Spindles
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Installed/Worked: 39,036 39,036
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COMPANY INFORMATION: Chairman & Chief Executive: Anwer Ahmed Tata; Director: Shahid Anwar Tata; Company Secretary & Chief Financial Officer: Farooq Advani; Registered Office: 8, 8th Floor, Textile Plaza, M.A. Jinnah Road Karachi; Factory: HX-1, L.I.A, Landhi, Karachi.
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