The auditors have referred to note No 3 of the accounts under review. The company sustained a loss of Rs 12.30 million (2002: profit of Rs 6.66 million) along with carry forward losses from previous year converted the equity into a negative balance.
The liquidity problem continuing. The company this year has current liability of Rs 121.48 million which exceeded the current assets by Rs 55.15 million.
This has been mainly due to shortage of working capital. The other reasons for such unfavourable condition still are increase in the process of cotton and polyester increasing trend of power tariff, mandatory provision of enhanced minimum wages of labour.
Such factors left the management to face scarcity of working capital and severe liquidity problem leading towards fall in production. Due to credit restriction the company cannot even open a simple letter of credit unless 100% margin is deposited with the bank.
Efforts continue to convince SBP to lift restrictions on banks and financial institutions to extend financing.
Khyber Textile Mills Ltd is a public limited company, incorporated on 26th August 1961 under the Companies Act 1913 (Now the Companies Ordinance, 1984).
Its registered office and factory are located at Baldher, Haripur NWFP. Khyber Textile Mills Ltd's Head Office is situated at 8th Floor 802-Alfalah Court, Off I.I. Chundrigar Road Karachi. The principal activities of the company are manufacture and sale of yarn and cloth.
Its manufacturing facilities include 51,240 spindles. During the year under review, the company's production of yarn was recorded at 7.100 million kgs of yarn converted into 20's count against 10.84 million kgs spun in the preceding year.
The production of yarn of actual counts was recorded at 4.30 million kgs out of which fine yarn was 63% total output.
Whereas medium yarn was 30.8% and coarse yarn was 5.8%. The output in terms of 20's count yarn declined by 34.5% from the preceding.
The annual capacity of the plant has been rated at 12.75 million kgs. Hence the output of yarn could attain only 55.67%.
The company is listed on Karachi and Lahore Stock Exchanges. At present the share in the company is trading at Rs 13 per share carrying 30% premium over the par value of Rs 10.
During the last one year the market value of Rs 13 per share has remained constant. In the pattern of shareholding dated 30th September 2003, the directors and their relatives held 34.45% of the company's total 1.227 million shares of Rs 10 each.
The aggregate shareholding of its 409 individual shareholders works out to 64.27%.
During the year under review, the company generated sales in terms of value at Rs 375.92 million as compared to Rs 564.13 million posted in the preceding year.
The decline in sales was 33.3%. The sales amount was the lowest of last six years. All sales were consigned to the domestic market. As a result of high prices of polyester and cotton the financial results of the company were less than satisfactory.
The production activities remained closed for thirty four days (102 shifts) and further the plant operated less than 50% of the installed capacity.
Other reasons for the said results were recessionary trend in the local and international markets, upward revision in the minimum wages, increase in power tariff and the difficulties in the refund of sales tax.
Due to the sharp escalation in the cost of sales the company's gross profit declined by 72% from Rs 17.08 million in the preceding year to Rs 4.83 million during the year under review. Gross margin decreased to 1.28% from 3.03% in the preceding year.
On the other hand financial charges were on the lower side and operating expenses were identical to the last year's.
The company's bottom line was in the red, but with very thin loss. It posted pre-tax loss at Rs 1.36 million but significantly higher loss after taxation.
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Performance Statistics (Million Rupees)
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30 September 2003 2002
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Share Capital-Paid-up: 12.27 12.27
Reserves: 0.26 0.26
Accumulated (Loss): (16.91) (5.20)
Shareholders Equity: (4.38) 7.33
Deferred Liabilities: 13.85 13.21
Current Liabilities: 121.48 151.83
Fixed Assets: 64.53 71.71
L T Deposits: 0.09 0.09
Current Assets: 66.33 100.57
Total Assets: 130.95 172.37
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Sales, Profit & Pay Out
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Sales: 375.92 564.13
Gross Profit: 4.83 17.08
Operating Profit: 1.23 13.35
Other Income: 0.11 0.04
Financial (Charges): (2.70) (3.42)
(Depreciation): (7.18) (7.98)
(Loss)/Profit Before Taxation: (1.36) 9.48
(Loss)/Profit After Taxation: (12.30) 6.66
Accumulated Loss B/F: (5.20) (11.86)
(Loss)/Earnings Per Share (Rs): (10.02) 5.42
Share Price (Rs) Dated 24-3-2004: - 13.00
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Financial Ratios
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Price/Earning Ratio: (-) -
Book Value Per Share: (3.56) 5.97
Price/Book Value Ratio: (-) -
Debt/Equity Ratio: (0:100) (0:100)
Current Ratio: 0.55 0.66
Asset Turnover Ratio: 2.87 3.27
Days Receivables: 7 3
Days Inventory: 23 27
Gross Profit Margin (%): 1.28 3.03
Net Profit Margin (%): (3.27) 1.18
R.O.A (%): (9.39) 3.86
R.O.C.E (%): 129.9 32.42
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Plant Capacity & Production Million Kgs
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A) Yarn Converted Into 20's Count
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Installed Capacity: 12.754 12.754
Production: 7.100 10.840
Capacity Utilisation (%): 55.67 85.00
B) Number of Spindles: 51240 51240
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COMPANY INFORMATION: Chairman Taj Mohammad Khanzada; Chief Executive: Farid M. Jadoon; Director: Aman Ullah Khan Jadoon; Head Office: 8th Floor, 802-Alfalah Court Off I.I. Chundrigar Road Karachi; Registered Office & Factory: Baldher District Haripur NWFP.
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