Chemicals: SHAFFI CHEMICAL INDUSTRIES LIMITED - First Quarter Ended March 31 2004

This company of chemical sector was listed at the Karachi Stock Exchange in 1996. At present the market value of Shaffi Chemicals have been quoted at Rs 5.60 per at substantial discount to the par value of Rs 10.
During September 2004, only 10 thousand shares of the company were traded at prices ranging between Rs 4.50 and Rs 5.10 per share. During the last one year the highest price of the share was quoted at Rs 9.55 per share which is slightly less than the par value.
The company has not been able to announce dividend during the last two years. Its sales have drastically reduced to Rs 0.35 million during Q1, 2004, the period under review. In the same period last year Q1 2003, the company had posted sales at Rs 8.35 million creating a shortfall is Rs 8 million.
Inevitably the company suffered gross loss as well as net loss after taxation. The accumulated deficit of Rs 82.10 million has wiped out a large portion of its paid up capital producing break-up value of the share at Rs 3.16 which 68.4% discount to the par value.
The company does not have long term debts except for the directors loan of Rs 95.61 million. If it is interest free and no intention to withdraw in the near term than this would work like quasi equity.
The liquidity crunch did not surface due to the Directors Loan. Hence the current ratio at 1.79 is much better than the benchmark ratio. The directors lamented that there was fierce raw material prices shot up.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31  December 31

                                     2004         2003

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Share Capital-Paid-Up:             120.00       120.00

Accumulated (Loss):                (82.10)     (79.53)

Shareholders Equity:                37.90        40.47

Surplus on Revaluation

 of Fixed Assets:                   61.22        62.74

Directors' Loan:                    95.61        95.61

Current Liabilities:               120.74       106.38

Tangible Fixed Assets:              84.77        86.83

L T Investments:                    14.23        14.23

Current Assets:                    216.47       204.14

Total Assets:                      315.47       305.20

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Profit & Loss A/c For the

 First Quarter Ended        March 31 2004         2003

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Sales-Net:                           0.35         8.35

Gross (Loss)/Profit:                (0.64)        0.98

Operating Profit/(Loss):            (2.52)        0.17

Other Income/(Loss):                 0.05            -

Financial (Charges):                (1.62)      (3.28)

(Loss)/Profit Before Taxation:      (4.09)      (3.45)

(Loss)/Profit After Taxation:       (4.09)      (3.45)

Earnings Per Share (Rs):            (0.34)        0.29

Share Price (Rs) on 12/10/04:        5.60            -

Price /Earning Ratio:                  (-)           -

Book Value of Share (Rs):            3.16         3.37

Debt/Equity Ratio:                  0:100        0:100

Current Ratio:                       1.79         1.92

Gross Profit Margin (%):          (182.86)       11.73

Net Profit Margin (%):          (1,168.57)       41.32

R.O.A (%):                          (1.30)        1.13

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