The Prime Minister of Pakistan Shaukat Aziz inaugurated new plant at the Security Papers Limited (SPL) on Saturday 30th October 2004. In the visitors book he wrote, "once again it is pleasure to visit PSPC. It is an excellent example of modern corporate governance and management in public sector enterprise. I congratulate the chairman and staff for a job well done. Keep up the good work."
The company has inducted state-of-the-art machinery and this has enabled Pakistan in its entry into high tech machinery for security paper manufacturing. In Europe the Central bankers, these are thinking to use such devices which can detect counterfeit 'Euros'. In this connection they are deliberating to use nanotechnology. In Pakistan it is general opinion that the bank notes are very weak and not usable for longer periods. It is hoped that the new machinery would be able to produce stronger notes.
Security Papers Ltd (SPL) was established in the year 1965 as a joint venture company of Iran, Turkey and Pakistan under the protocol of RCD - now ECO The basic function of the company was to produce paper for printing of bank notes and other security documents for State Bank of Pakistan and other government institutions.
It was converted to public limited company in 1967 and was listed at Karachi Stock Exchange (KSE) in the same year. Original plant (PM-1) supplier was Millspaugh UK and Technology supplier was Portals UK, commercial production started in 1969.
Source of raw materials are cotton products. Its annual production was rated at 1460 tonnes. Its customers are Pakistan Security Printing Corporation (Pvt) Ltd (PSPC) and educational boards. Its initial paid up capital was Rs 12.50 million and current paid-up capital is Rs 219.82 million. It has 502 employees. It has attained KSE Top Companies Award for consecutive three years in 2000, 2001 and 2002.
It was also given by ICAP & ICMAP Best Corporate Report in 2003. It achieved JCR-VIS Corporate Governance Rating of CGR-8.
The annual production capacity of newspaper manufacturing plant has been rated at 2000 tonnes which can be enhanced upto 3500 tonnes per year. The Prime Minister of Pakistan said that the project which he inaugurated is not only Pakistani but a regional project.
The German Company Voith, which is giant among paper machinery manufacturers is the supplier of the new machinery for SPL.
The Chairman and Chief Executive of the company Syed Naseem Ahmed has been the main architect of this successful project.
During the financial year 2003-2004, the company registered sales at Rs 856.40 million as against Rs 736.53 million posted in the preceding year registering 16.3% growth. This is highest sales figure in the history of the company.
The directors reported that due to lower cotton production and lower stocks with the suppliers, the supply of appropriate raw material remained scarce with resultant higher prices. This is evident from the company's net profit margin which dipped at 45.25% from 58.35% in the preceding year. The directors expect that with a better cotton crop and availability of raw material with the suppliers during the ensuing year, the company will be able to build its stocks position and control the raw material cost.
During the year under review the company posted profit before taxation at Rs 410.96 million as compared to Rs 449.12 million posted in the preceding year showing 8.5% decline. The main cause of decline appears to be high depreciation charges which emanated from new capital investment. However the company has maintained its attractive profit distribution profile. This year the dividend payout is at 55% as compared to 60% in the preceding year.
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Performance Statistics (Million Rupees)
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Balance sheet -As At-
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30 June
2004 2003
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Share Capital Paid-up: 219.82 219.82
Reserves & Surplus: 1,508.82 1,241.18
Shareholders Equity: 1,728.64 1,462.00
L T Debts: - 105.00
Current Liabilities: 207.00 385.83
Tangible Fixed Assets: 1,428.85 1,437.25
L T Investments: - 60.00
L T Loans: 0.01 0.03
L T Deposits: 14.05 13.79
Current Assets: 492.72 441.76
Total Assets: 1,935.64 1,952.83
Sales, Profit & Pay Out
Net Sales: 856.40 736.53
Gross Profit: 453.04 460.04
Operating Profit: 407.38 416.93
Other Income: 28.19 56.24
Financial (Charges): (2.33) (0.04)
(Depreciation): (56.76) (5.47)
Profit Before Taxation: 410.96 449.12
Profit After Taxation: 387.55 429.79
Dividend Cash @ 55% (2003 @ 60%): 120.90 131.89
Earning Per Share (Rs): 17.63 19.55
Share Price (Rs) Dated 28-10-04: 155.00 -
Financial Ratio
Price/Earning Ratio: 0.79 -
Book Value Per Share: 78.64 66.51
Price/Book Value Ratio: 1.97 -
Debt/Equity Ratio: 0:100 0:100
Current Ratio: 2.38 1.14
Assets Turn over Ratio: 0.44 0.38
Days Receivables: 65 67
Days Inventory: 77 61
Gross Profit Margin (%): 52.90 62.46
Net Profit Margin (%): 45.25 58.35
R O A (%): 20.02 23.00
R O C E (%): 22.42 27.42
Production & Capacity (Tonnes)
A) Old Paper Manufacturing Plant
Installed Capacity: 1,460 1,460
Actual Production: 6.94 1,711
Capacity Utilisation (%): 47.53 117.19
B) New Paper Manufacturing Plant
Installed Capacity: 2,000 -
Actual Production: 1,118 -
Capacity Utilisation (%): 55.90 -
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COMPANY INFORMATION: Chairman & Chief Executive: Syed Naseem Ahmed; Director: Firasat Ali; Company Secretary: Mohammad Abdul Aleem; Registered Office: 108 (1st Floor) SIDCO Avenue Center Moulana Deen Muhammad Wafai Road Karachi 74200; Web Address: www.security_papers.com Factory: Jinnah Avenue Malir Halt Karachi 75100.
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