The directors of the company are happy to inform that the prestigious International Business Magazine Forbes Global included Nagina Cotton Mills Ltd, in their list of "Best under a Billion - 200 for 2003".
Net sales of the company improved by 8.55% during the year under review. During the year 11.131 million kgs (2002:10.224 million kgs) of Cotton and Core Spin Yarn were spun. Production increased by 8.9% and aver-count of yarn spun during the year was 4.16% coarser.
To improve the product quality and add more value to it, the company invested in Balancing modernisation, & Replacement of Mills Building, Machinery Equipment including Gas Electrical equipment and installation, (which is continuing process) was carried out at a cost of Rs 30.9 million.
Letters of Credit have been opened for one set of Gas Generator one Pallet Packing Machine. Local sales of yarn quantitatively, were higher by 51.05%, but in terms of value, local sales increased by 48.56% inspite of average sales price realised was 1.65% lower than the previous year's.
Nagina Cotton Mills Ltd is a spinning unit of Kotri, Sindh and a constituent member of Nagina Group of Companies. Nagina Group is headquartered at Lahore.
Ellcot Spinning Mills Ltd, is a subsidiary of Nagina Cotton Mills Ltd. Nagina Cotton has 60.25% stake in the equity of Ellcot Spinning which is quoted and public limited company.
During the year under review, FY 2002-03, the subsidiary earned net profit after taxation at Rs 48.19 million and its Board recommended payment of cash dividend at 15%.
Prosperity Weaving Mills Ltd ceased to be subsidiary of the company with effect from July 01, 2003. At the end of September 30 of the FY 2002-03 the company held 5.47% of Prosperity Weaving.
Last year the company had 50.01% of its equity. Now Prosperity is classified as associated under-taking instead of subsidiary.
During the year under review, Prosperity Weaving earned after tax profit of Rs 61.50 million and recommend payment of cash dividend @20%.
Last year the company had 20% stock of the Pacific Leasing Company Limited. During the year it does not hold any share in the leasing company.
The investment in the share of Ellcot Spinning amounted to Rs 54.48 million at cost and in terms of market value on 30 September 2003, reached Rs 133.57 million which is nearly 2.5 times of the investment at cost.
The investment in Prosperity Weaving amounted to Rs 5.26 million at cost. The market capitalisation of the investment shot up to Rs 16.79 million which is more than 3 times of the investment at cost.
The company was incorporated on 16 May 1967. It is quoted on stock exchanges in Pakistan. Its registered office is located at Shaikh Sultan Trust Building No. 2 Beaumont Road Karachi. At present the Nagina Cotton shares are trading at the price of Rs 17.05 per share carrying 70.5% premium of the par value of Rs 10/-.
During the last 52 weeks the price of the share appreciated to Rs 36.85 from Rs 14.50 per share which is more than double of the lower figure.
During the year under review the company made additions in the fixed assets to the extend of Rs 32.16 million as against Rs 286.39 million in the preceding year. In addition the capital work-in-progress was booked at Rs 3.76 million.
The production facilities of the company include 47,040 spindles and all of these were operative, exhibiting smooth production line.
The capacity utilisation peaked at 181.1% as against 166.4%, in the preceding year. Hence the company is availing economies of scale, optimising overhead cost.
Its annual production capacity is based on the capacity notified by the CBR under the defunct "Production Capacity (cotton yarn) Rules 1975.
It appears that this obsolete and fossilised rule is still prevalent although it may not emit significant signal of efficiency.
However there are obvious constraints. But it can be forcefully argued that a realistic rating of the capacity formula should be designed by the industry or the textile academia.
The notes annexed to the accounts also reasoned that it is difficult to describe precisely the production capacity in textile industry since it fluctuates widely depending on various factors such as count of yarn, raw material used spindle speed and trust.
It would also vary, according to the pattern of production in a particular year.
During the year its sales reached Rs 1.377 billion registering 8.55% rise over the preceding year's Rs 1.269 billion.
Net profit at Rs 63.13 million declined by 23.1%. The directors recommended cash dividend at 11% as compared to 15% in the preceding year also dividend @13%, per pref. share. Dividend in Specie @40%.
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Performance Statistics (Million Rupees)
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30 September 2003 2002
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Share Capital-Paid-up: 187.00 187.00
Reserves & Surplus: 405.38 437.00
Shareholders Equity: 592.38 624.00
L.T. Debts: 144.21 250.66
Deferred Liabilities: 52.03 56.48
Current Liabilities: 340.88 478.33
Fixed Capital Expenditure: 546.18 587.75
L.T. Investments: 59.74 136.48
L.T. Deposits: 1.01 1.37
Current Assets: 522.57 683.87
Total Assets: 1,129.50 1,409.47
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Sales, Profit & Pay Out
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Sales: 1,377.11 1,268.62
Gross Profit: 157.79 219.16
Trading Profit: 0.20 0.10
Other Income: 8.98 0.16
Operating Profit: 107.59 150.29
Dividend Income: 22.50 30.86
Financial (Charges): (46.65) 75.73
(Depreciation): (58.09) 61.78
Profit Before Taxation: 79.23 100.08
Profit After Taxation: 63.13 82.23
Earnings Per Share (Rs): 1.69 4.40
Share Price (Rs) Dated 05.01.2004: 17.05 -
Cash Dividend @ 11% (2002:15%): 20.57 28.05
Cash Dividend @ 13%
Preference Share: 31.44 -
Dividend (Stock) in Specie @ 40%: 42.74 -
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Financial Ratios
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Price/Earning Ratio: 10.09 -
Book Value Per Share: 31.68 33.37
Price/Book Value Ratio: 0.54 -
Debt/Equity Ratio: 20:80 29:71
Current Ratio: 1.53 1.43
Asset Turn Over Ratio: 1.22 0.90
Days Receivables: 25 22
Days Inventory: 34 54
Gross Profit Margin (%): 11.46 17.28
Net Profit Margin (%): 4.58 6.48
R.O.A. (%): 5.59 5.83
R.O.C.E. (%): 8.00 8.83
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Plant Capacity & Production Million Kgs
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A) Coarse + Medium + Fine Yarn
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Installed Capacity: 6.145 6.145
Production: 11.131 10.223
Capacity Utilisation (%): 181.14 166.36
B) Number of Spindles
Installed/Worked: 47,040 47,040
C) No of Shifts Per Day: 3 3
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COMPANY INFORMATION: Chairman: Shaikh Enam Ellahi; Chief Executive (Managing Director): Shaukat Ellahi Shaikh; Director: Shahzada Ellahi Shaikh; Company Secretary: Shaikh Muhammad Shafi; Chief Financial Officer (CFO): Shahid Afzal; Registered Office: 2nd Floor, Shaikh Sultan Trust Building No. 2, 26 Civil Lines Beaumont Road Karachi-75530; Factory: Aminabad, A-16 S.I.T.E National Highway Kotri (Sindh)
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