The 19th AGM of the shareholders of Din Textile Mills Ltd is scheduled to be held on 12th September 2006 but agenda of this meeting does not contain recommendation for dividends.
For the year ended 30th June 2006 (FY 2005-06), this is the first corporate entity in the textile sector about which a review as "Brief Recordings" have been attempted. Hence one may have first glance of the most recent past of the textile industry although it would not be comprehensively representative of this industry.
The directors of the company term year 2006 as difficult year for the textile industry the prices of raw cotton in the local market during the season 2005-06 were 15% to 25% higher than preceding year's causing adverse impact on textile sector.
Looking towards export market the latest news published by UNDP Asia pacific Human Development Report is that "Pakistan textile sector has failed to benefit from the post quota regime after 2005 whereas neighbouring China and India took full advantage of the opportunity (Daily Business Recorder Dated 30th August 2006).
During FY 2005-06, the company posted net sales at 2.453 bln and gross profit at Rs 233.52 mln which were record highest since the year 2002 (5 years). But Net Profit after taxation at Rs 19.44 mln were second lowest of last 5 years. Last year FY 2004-05, the company had suffered Net Loss of Rs 120.67 mln the directors have computed performance comparison on annualised basis against preceding fiscal year of 9 months. Sales increased by 44%, gross profit by 0.22% finance cost escalated by 81% selling expenses increased by 64%.
Din Textile Mills Ltd is a public limited company incorporated in the province of Sindh in June 1988. It was listed on the Karachi Stock Exchange in 1991 and its shares are also quoted on the Lahore Stock Exchange.
On 28 August, 2006, the closing of the share was quoted at Rs 26.35 per share which is nearly three times of the par value.
This is the lowest price of the share of the last one year while the highest price of the year was recorded at Rs 52.50 per share.
However at the current price its market capitalisation of the company work out to Rs 488 million while its present paid up capital is in the sum of Rs 185.30 mln.
But its reserves have jacked up its shareholders equity at Rs 724.88 mln which works out to the break up value of the share at Rs 39.11 per share which is very close to 4 times of the par value.
This lends great support to the financial backbone of the balance sheet. The financial position has remained strong despite net loss after taxation last year. The strength is demonstrated by its solvency and liquidity ratios which are appended with this write up.
As regard ownership of its equity the enterprise appears to be a close family affair as the director have 78.7% stake in the company's stock its 774 individual shareholders own 14.6% and NBP Trustee Deposit holds 3.4% of the company's stock remaining shares are owned by other institutional investors. Looking from the small shareholders point view, we seen from the pattern of shareholding emerged on the share counts on 30th June 2006, that they are also 774 member and they hold lots of 10,000 lots are smaller lot while their aggregate shareholding adds up to 3.4% of the company's stock.
As regards dividend distribution track record the same has not been mentioned in the six years' financial statistics published with the 19th Annual Report 2006 of the company from the directors report it appear that they did not recommend dividend for the year under review (FY 2005-06) because of tight liquidity position.
This position has been caused by heavy payment of long term liability on account of financial institutions and substantial capital investment during the year. As regards previous year's dividends the daily stock exchange report show that last year in 2004-05 also the company had skipped dividend possibly because substantial loss. For the year 2003-04, the company had announced 20% bonus stock report dividend mentioned in daily stock exchange report.
At this point it will be pertinent to reflects on the point that the stakeholders would like to know about the dividend history. This approach will provide depth in the investment activity of small investors and broaden the base of stock exchange.
Din Textile Mills Ltd is a textile spinning unit, is located in District Kasur (Punjab) while its registered office is situated near Beach Luxury Hotel Karachi. Its manufacturing facilities include 61,728 spindles and its annual production capacity has been rated at 22.036 million kgs of yarn in terms of 20/1 count.
During the 12 months of the FY 2005-06, the year under review the company recorded production of yarn at 20.942 million kgs attaining 95.04 percent utilised capacity. As regards some shortfall in the utilised capacity, the note annexed to account reasoned that it was due to the production of specialised melange yarn and plant's normal repair and maintenance.
The last financial year 2004-05, was for only 9 months, so the production figure of fiscal 05 was for 9 months are not comparable with figures of fiscal 06. However, it will be appropriate compute capacity utilisation which was 95.3% showing that present productivity trend remained flat. During the year under review the company made substantial additions in the fixed assets which amounted to Rs 256 million (FY 2004-05: Rs 1,521 million). The continued focus is on the production of value added yarn.
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Performance Statistics (Million Rupees)
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30th June 2006 2005
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Share Capital-Paid-up: 185.30 185.30
Reserves: 539.58 520.14
Shareholders Equity: 724.88 705.44
L.T. Loans from Directors: 500.00 -
L.T. Debts: 665.28 1,200.05
Deferred Liabilities: 206.02 201.26
Current Liabilities: 951.65 1,081.43
Fixed Assets: 2,120.56 2,153.55
L.T. Deposits: 3.85 3.59
Current Assets: 923.42 1,081.04
Total Assets: 3,047.83 3,238.18
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Profit & Loss A/c for
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The Year Ended 9 Months Ended
June 30 2006 June 30 2005
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Sales-Net: 2,453.34 1,280.17
Gross Profit: 233.52 119.10
Other Operating Income: 8.03 3.54
Finance (Cost): (142.65) (58.99)
(Depreciation): (213.82) 91.98
Profit Before Taxation: 34.58 22.70
Profit/(Loss) After Taxation: 19.44 (120.67)
Earnings Per Share (Rs): 1.05 (6.51)
Dividend (%): - -
Share Price (Rs) on 28/08/06: 26.35 -
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Financial Ratios
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Price/Earning Ratio: 25.09 -
Book Value Per Share: 39.11 38.07
Price/Book Value Ratio: 0.67 -
Debt/Equity Ratio: 26:74 63:37
Current Ratio: 0.97 1.00
Asset Turn Over Ratio: 0.80 0.40
Days Receivables: 32 71
Days Inventory: 89 206
Gross Profit Margin (%): 9.52 9.30
Net Profit Margin (%): 0.79 (9.42)
R.O.A. (%): 0.63 (3.73)
R.O.C.E. (%): 0.93 (5.60)
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Plant Capacity & Production of Yarn (in million kgs)
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Installed Capacity
Converted into 20/1 Count: 22.036 9.371
Actual Production
Converted into 20/1 Count: 20.942 8.933
Capacity Utilization (%): 95.04 95.33
Total Number of Spindles Installed: 61,728 61,728
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COMPANY INFORMATION: Chairman & Chief Executive: Shaikh Mohammad Muneer; Director: Shahzad Naseer; Secretary: Islam Ahmed; Chief Financial Officer: Noman Ahmed; Registered Office: Din House, 35-A/1 Lalazar, Area, Opp Beach Luxury Hotel Karachi; Website: Not Reported; Factories: Units-I & II: Kot Akbar Khan, 70 Km Multan Road, Tehsil, Pattoki, District Kasur Punjab; Unit-III: Revenue State Bhai Kot, Raiwind Road, Tehsil & District Lahore.
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