20000324

7Group companies. It was incorporated in the province of the Punjab on November 20, 1991 as a public limited company. The company is a subsidiary of Nagina Cotton Mills Ltd.

The main preoccupation of this enterprise is the manufacturing and marketing of cloth.

The company has fixed asset base of Rs 417.12 million at cost or Rs 230.30 million at book value on 30th September 1999. During the year there were additions in the fixed assets to the tune of Rs 4.80 million mostly, in plant and machinery.

In the previous annual report the directors had reported that they had decided to expand the capacity of the mill by the installation of additional 60 weaving units at the estimated capital outlay of Rs 200 million.

In the report under review, the said information has been recalled with the rundown of on-going development on this issue. It is reported that studies have been completed, financing garnered and letters of credit have established for 60 TOYODA airjet weaving machines, compressor, humi-dification plant and other auxiliaries.

Some local equipment was still in the process of procurement as reported on February 26, 2000.

On that date it was also reported that the building to house the machinery was nearing completion. The shipment of the machinery was scheduled between 15th February and 14th March 2000.

The directors are confident that the new facilities will go on stream in the first quarter of the ensuing financial year. With this expanded facility, the plant will increase its size to 192 airjet looms from existing 132 airjet weaving machines.

The share in the company is quoted on two stock exchanges at Karachi and Lahore. At present the share is under spot trading and the price is quoted at Rs 13 carrying 30 percent premium over the par value of Rs 10. This price proves the growing interest in the shares of Nagina Group because the ruling price is almost double of last yearÕs average price which is a happy sign for all stakeholders i.e. the investors, the sponsors and other stakeholders. Last year the price oscillated between Rs 7 and Rs 5 per share but at a nominal turnover of only one thousand shares throughout the fiscal year 1998-99.

In fact the present price, is the record highest price since the share was listed at the Karachi Stock Exchange in 1995.

The sponsors have the growing large for the social responsiveness as except for the initial two years, they had been regular in the profit distribution. In fact the year under review is rewarding like favourable lottery ticket. The year has enriched the investors as the dividend payout rate in cash for 1998-99 is 30%, plus 5% additional payout for last yearÕs plus the capital gain on the share which was at Rs 5 to 7 in the previous year and now the shares is roaring upward at Rs 13.

Now doubt the largest group of the beneficiaries of the bonanza are the shareholders of Nagina Cotton which is the holding company of this unit. In Prosperity TextileÕs shareholdings, the stockholding of the individual investors in negligible as their category constitutes on 2.1% of total the share capital of Rs 96 million so most of the benefit of the surge in the profit distribution rate and market value goes mostly to sponsors.

The accumulated earning has beefed up the shareholders equity as the equity bases has enlarged by 90 percent of the share capital. This enrichment of the equities has extensively guarded the debt. Resultantly the debt/equity ratio is quite comfortable at 39.61 as against the base ratio of 60:40.

The empowered equity base has been mostly instrumental in the easy liquidity position as can be glimpsed from the current ratio of 1.07.

In this easy liquidity profile, the reflection also comes from the sharp decline in the receivable period which is now reduced to merely 5.8 weeks from 11 weeks in the preceding year.

But all the achievement is because of record sales of Rs 0.974 billion, missing the billion rupees threshold by only Rs 25.4 million only.

Export sale constituted 13.6% of total sales.

The companyÕs profit after tax at Rs 47.2 million was substantial but beaten by last yearÕs figure because of eroding margins.

Performance Statistics (Million Rs)

September 30 1999 1998

Capital & LiabilitiesÉÉ

Paid-up Capital: 96.00 96.00

Unapp. Profit: 86.28 72.69

Equity: 182.28 168.69

L.T. Debts: 118.88 151.06

Other Non Current

Liabilities: 5.56 4.53

Current Liabilities: 522.80 539.79

Assets

Fixed Capital

Expenditure: 267.07 288.80

Other Non Current

Assets: 2.89 1.93

Current Assets: 559.56 573.34

Total Assets: 829.52 864.07

Sales, Profit & PayoutÉÉ

Sales Ñ Net: 974.65 921.45

Gross Profit: 136.97 148.39

Operating Profit: 94.02 104.71

Other Income: 0.11 0.06

Depreciation: 29.55 32.26

Financial Charges: 29.03 42.53

Profit Before

Taxation: 60.78 58.23

Profit After Taxation: 47.19 56.41

Addl. Dividend

1998 (5%): 4.80 Ñ

Dividend Cash 30%

(1998: 20%): 28.80 19.2

Financial RatiosÉÉ

Share Price Spot

(Rs) 14/3/2000: 13.00 Ñ

Book Value Per

Share (Rs): 18.98 17.57

Price/Book Value

Ratio: 0.68 Ñ

Debt/Equity Ratio: 39:61 47:53

Current Ratio: 1.07 1.06

Asset Turnover Ratio: 1.17 1.07

Days Receivables: 41 77

Days Inventory: 22 23

Gross Profit

Margin (%): 14.05 16.10

Operating Margin (%): 9.65 11.36

Net Profit Margin (%): 4.84 6.12

EPS (Rs): 4.92 5.88

Price/Earning Ratio: 2.64 Ñ

R.O.E. (%): 25.88 30.94

R.O.A. (%): 5.68 6.52

R.O.C.E. (%): 15.38 10.46

A) Plant Capacity & Production (Million Meters)ÉÉ

A) Cloth 50 PicksÉÉ

Capacity: 23.296 23.296

Production: 20.152 19.381

Capacity

Utilisation (%): 86.50 83.19

B) Air Jet Looms: 132 132

C) Actual

Production: 18.397 17.636

D) ÒIt is difficult to precisely describe production capacity in the textile industry since it fluctuates widely depending on various factors such as loom width, width of fabric produced, type of yarn used etc.Ó

Company information: Chairman: Shaikh Enam Ellahi. MD (Chief Executive): Shaukat Ellahi Shaikh. Directors: Faiq Husain (PLHC)/Shahzada Ellahi Shaikh/Shafqat Ellahi Shaikh/M. Ejaz Ahmad Baig/Tahir Hussain Raza. Corporate Secretary: Sheikh Mohammad Shafi. Registered Office: Nagina House, 91-B-1, M.M. Alam Road, Gulberg-III, Lahore. Phone: NA. Email: NA. Factory: Mouza Ghazi Androon Sheikhupura Ñ Sharaqpur Road, Tehsil & District Sheikhupura (Punjab).