In spite of various issues brought forward from the days of previous management still haunting this new management, the company has achieved several significant milestones. So the celebration of company's golden jubilee year has been most appropriate.
During the year under review the company registered 178% growth in sales at Rs 1.359 billion (2003-04: Rs 489.74 million). So the company crossed the rupee one billion threshold and at the same time recorded highest ever sales figure.
The company projects 30% higher production and Rs 1.70 billion sales figure because of concerted efforts on multiple fronts. After experiencing growing requirement of steel production for construction, the directors have embarked upon unprecedented modernisation and upgradation plan of its manufacturing facilities.
The company has recorded higher profit after taxation at Rs 56.63 million as compared to the previous year's figure of Rs 39.79 million. These profit figures to some extent reduced its large accumulated deficit. The statutory auditors have pointed out a number of issues in their report to members. The directors response shows firm resolve to address these issues.
Metropolitan Steel Corporation Limited was incorporated on August 24, 1955 as a public limited company. It is quoted on the Karachi Stock Exchange and at present its shares quotation are recorded on defaulters list of the Karachi Stock Exchange under the listing rule No 32(1)b. The rule stipulates that the company failed to declare dividend/bonus for five years from the date of last declaration (would be classified as defaulter).
The address of the company's registered office/head office/factory is Plot No HE-1 Landhi Industrial Area Karachi. But the URL of the company's website is not mentioned in the report.
The company was privatised in May 1992 through the Privatisation Commission. The consortium of banks sold their holding of 73.61 percent shares in the company through bidding process alongwith control and management to Alloy Steel Company through an agreement dated March 21, 2004.
The purchaser also assumed, took over and acquired all the sellers' rights, titles and interests in the entire outstanding long term loans. The note annexed to the accounts under review registered positive comment about new management. The note stated that the new management was confident that its concerted efforts on all fronts will help the company maximise its strength and capitalise on opportunities in the years to come.
The company is a manufacturer of steel products such as torsteel, ribbed bars, wire rods, bailing hoops, mild and special steel wires, transmission towers and cold profiles. A cursory glance at the data about production capacity in the performance statistics, appended with this write up, would show that the company has been able to improve productivity in most segments/products.
It has been a year to be reckoned because the company stepped into 51st year of existence celebrating "Golden Jubilee Year." The directors reported that the year improved its operating performance as the company attained above 30 percent installed capacity, except in hoop mill and cold profile plant which remained closed during the reporting period. Of the utilised capacity the tower plant accounted for the highest percentage at 79.7% and yielded most of the company's profit.
The company registered sales at Rs 1.359 billion (2003-04: Rs 489.74 million) an impressive growth at 177.6% as compared to the preceding year's and the sale figure of the year under review is the highest in the company's 50 years' career. So it is befitting to celebrate golden jubilee year of the company.
Due to high growth of the country's economy, the company's directors endorse the monthly Industrial Bulletin - June 2005 projection of 7.9 million tonnes per year of the country's requirement of steel (construction material) within next 10 years.
To avail of this business opportunity, the company has embarked upon an unprecedented plan to modernise and upgrade the existing facilities. The directors inform that the company is exerting concerted efforts to participate in the supply of higher denomination of KV Towers/Structures in the forthcoming tenders, under joint venture arrangements with well known foreign companies.
The Golden Jubilee year attained another significant milestone as the company achieved ISO Certification to further streamline and update its operating procedures.
The layout of the factory shops has been redesigned to ensure quick, smooth and economical movement of materials and effort to meet this goal is progressing satisfactorily.
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Performance Statistics (Million Rupees)
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30th June 2005 2004
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Share Capital-Paid-up: 309.78 309.78
Reserves: 80.50 80.50
Accumulated (Loss): (1,437.64) (1,519.13)
Shareholders Equity: (1,047.36) (1,128.85)
Surplus on Revaluation
of Fixed Assets: 564.32 589.18
L.T. Debts: 1,255.89 1,254.90
Other Long term Liability: - 4.50
Deferred Liabilities-Staff Gratuity: 10.71 9.39
Current Liabilities: 399.37 223.68
Fixed Assets: 719.61 730.33
L.T. Investment: 0.02 0.02
L.T. Deposits: 2.21 1.64
Current Assets: 461.09 220.81
Total Assets: 1,182.93 952.80
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Sales, Profit & Pay Out
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Net Sales: 1,359.47 489.74
Gross Profit: 121.91 4.92
Operating Profit/(Loss): 75.55 (15.05)
Other Income: 2.47 59.99
Finance (Charges): (5.96) (0.93)
(Depreciation): (25.32) (17.21)
Profit Before Taxation: 63.42 42.44
Profit After Taxation: 56.63 39.79
Earning Per Share (Rs): 1.83 1.28
Dividend: - -
Share Price (Rs) on 10/03/06: 12.20 -
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Financial Ratio
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Price/Earning Ratio: 6.66 -
Book Value Per Share: (33.80) (36.44)
Price/Book Value Ratio: (-) (-)
Debt/Equity Ratio: (-) (-)
Current Ratio: 1.15 0.99
Asset Turn Over Ratio: 1.15 0.51
Days Receivables: 56 39
Days Inventory: 40 61
Gross Profit Margin (%): 8.97 1.01
Net Profit Margin (%): 4.16 8.13
R.O.A. (%): 4.78 4.18
R.O.C.E. (%): 7.23 5.46
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Capacities & Production Capacity Production
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(000' Tons, Double Shift Basis) 2005 2004
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Hoop Mill: 25.00 - -
4th Mill: 20.00 8.39 0.87
Mill Mild Steel Wires: 7.00 1.80 1.19
Cold Profile Plant: 0.60 - -
Transmission Tower Plant
& Fabrication Shop: 10.00 7.97 1.21
Wire Road & Bar Mill (New): 75.00 15.31 10.07
Special Steel Wires: 9.00 2.70 3.76
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"These capacities are relative to product mix. Larger the size and quantity for continuous run, larger the production and vice versa. The capacities, however, retained on historical basis and are not necessarily attainable. Changes in product and product runs warranted by market demand results in lesser or higher production. The company has been successful in earning gross profit in the year ended June 30, 2005 and received orders in large quantities for its wire products. Further, sales of transmission towers also increased which has resulted in increased production of transmission towers during the year."
COMPANY INFORMATION: Chairman: Mehmood Ali Mehkri; Chief Executive & Managing Director: Engr. Syed Asghar Jamil Rizvi; Director: Abdul Razzak Noor; Company Secretary & CFO: Shariful Muzaffar; Registered Office/Head Office: Plot No HE-1 Landhi; Industrial Area, Karachi. Web Address: not reported.
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