Textile Spinning: DAR ES SALAM TEXTILE MILLS LIMITED - Half Year Ended March 31 2004

The company is one of the constituent members of Service Group which has diversified interest shows, tyres, syringes manufacture (Service Industries Limited), retailing (Service Sales Corporation), Leather (Hilal Tanneries Ltd and Cotton yarn (Dar Es Salam Textile Mills Ltd).
The group has been operating since 1947 and boasts for a manpower strength of 7,000. Its annual revenue are in excess of Rs 4 billion.
Hence undoubtedly the group is reckoned as a giant in Pakistan in the ambit of manufacturing and retailing.
Dar Es Salam Textile Mills is a modern cotton spinning unit which commenced commercial production in December 1989. It specialises in the manufacture of premium knitting yarn. Apart from the domestic market, its major external markets are South East Asia, Brazil and the United States.
Its management systems are ISO 9002 certified since April 1999 and it is on the way to acquiring ISO 9001 2000 certification (new version).
The company is listed at Lahore and Karachi Stock Exchange. On 20th September 2004 the company's share closing market price was quoted at Rs 8.60 at 14% discount to the par value. During the last one year the market value of the share ranged between Rs 5 and Rs 13.40 per share. During the last two years the company did not declare dividend.
During the first half year of financial year 2003-04, the company has made all round improvement as its sales, gross profit were higher and net profit replaced the net loss of same period last year (SPLY).
Exports increased sharply from Rs 65.13 million of the six months last year to Rs 207.03 million during the period under review. It witnessed rise in gross profit in the second quarter (Q2 2003-04) as compared to Q1 2003-04 but the management fears that the upward trend may not continue in Q3 as they have experienced another sluggish demand and a drop in international cotton and yarn prices.
The unity's modernisation work is underway and the new back process machinery has been installed. This will significantly enhance the company's processing capability.

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Performance Statistics                (Million Rupees)

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Balance sheet                                  -As At-

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                                 March 31 September 30

                                     2004         2003

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Share Capital-Paid-up:              80.00        80.00

General Reserves:                   16.00        16.00

Accumulated (Loss):                 (1.66)      (4.03)

Shareholders Equity:                94.34        91.97

L T Debts:                          85.34        52.51

Deferred Liability

 - Staff Gratuity:                   1.64         1.57

Current Liabilities:               374.09       164.77

Tangible Fixed Assets:             195.01       159.57

L T Deposits:                        2.57         2.97

Current Assets:                    357.83       148.28

Total Assets:                      555.41       310.82

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Profit & Loss A/c For

 The Half Year Ended        March 31 2004         2003

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Sales:                             318.87       229.63

Gross Profit:                       30.26        20.80

Operating Profit:                   14.14         8.00

Other Income:                        0.17         0.14

Financial (Charges):                (4.10)      (2.63)

Profit/(Loss) Before Taxation:       3.98       (2.49)

Profit/(Loss) After Taxation:        2.36       (3.65)

Earning/(Loss) Per Share (Rs):       0.30       (0.46)

Share Price (Rs) on 20-09-04:        8.60            -

Price/Earning Ratio:                28.67            -

Book Value of Share (Rs):           11.79        11.50

Current Ratio:                       0.96         0.90

Debt Equity Ratio:                  47:53        36:64

Gross Profit Margin (%):             9.49         9.06

Net Profit Margin (%):               0.74       (1.59)

R O A (%):                           0.42         1.17

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