MIRA INFORM REPORT
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Report Date : |
24.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
SERVICE INDUSTRIES LIMITED |
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Registered Office : |
Servis House, 2-Main Gulberg, Lahore |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2007 |
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Year of Establishment : |
1957 |
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Com. Reg. No.: |
0000864 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
Manufacture & Sale of Footwear, Tyres and Tubes and Technical
Rubber Products |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
Business Name
SERVICE INDUSTRIES LIMITED
Full Address
Registered
Address
Servis House, 2-Main Gulberg, Lahore,
Pakistan
Tel 92 (42) 5751990 - 96
(6 Lines)
Fax 92 (42) 5710593,
5712109
Website : www.servis.com
Short Description Of Business
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a. |
Nature of Business |
Principal activities of the Company are manufacture & sale of Footwear,
Tyres and Tubes and technical rubber products |
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b. |
Year Established |
1957 |
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c. |
Registration # |
0000864 |
Factories Location
(1) G.T. Road, Gujrat, Pakistan
(2) Muridke-Sheikhupura Road, Muridke, Pakistan
Auditors
S.M. Masood & Company
(Chartered
Accountants)
Legal Status
Service Industries
Limited was incorporated as a Private Limited Company on March 20, 1957 and was
converted to into a Public Limited Company on September 23, 1959. The shares of
the Company are quoted on the Lahore & Karachi Stock Exchanges.
Details of Directors
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Names |
Designation |
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Mr. Arif Saeed Mr. Shahid Hussain Mr. M. Ijaz Butt Mr. Mohammad Akram Mr. Hasan Javed Mr. Shahid H. Kardar Mr. Riaz Ahmed Mr. Zahid Hussain Mr. Anis Wahab Zuberi |
Chairman Chief Executive Director Director Director Director Director Director Director |
Shareholders
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Categories of
Shareholders |
Percentage
(%) |
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Directors, Chief Executive Officer and their spouse & minor
children Associated Companies, Undertakings and related parties NIT & ICP Banks, Development Financial Institutions, Non-Banking Financial
Institutions Modarabas and Mutual Funds General Public Others |
14.43 19.83 28.40 03.30 --- 32.75 --- |
Associated Companies
· Service Sales Corporation (Pvt) Limited, Pakistan.
· Shahid Arif Investment (Pvt) Limited, Pakistan.
Products
Principal activities of the Company are manufacture &
sale of Footwear, Tyres and Tubes and technical rubber products
Number of Employees
More than 300
Plant Capacity
Footwear and
others
Due to the nature of the Company’s business production capacity is not
determinable.
Installed
Capacity Actual Production
2007 2006 2007
2006
Tyres (Nos) 5,738,000
5,201,600 3,366,740 3,595,107
Tubes (Nos) 8,719,000
7,719,600 8,481,686 7,599,332
Annual Sales Volume (Last 2
Years)
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Years |
Rupees in ‘000’ |
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2006 2007 |
3,836,801/- 4,521,147/- |
Customers
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Mainly in all important cities of Pakistan |
Bankers
(1) Habib Bank Limited, Pakistan.
(2) United Bank Limited, Pakistan.
(3) MCB Bank Limited, Pakistan.
(4) Faysal Bank Limited, Pakistan.
(5) ABN AMRO Bank, Pakistan.
(6) Allied Bank Limited, Pakistan.
(7) The Hong Kong & Shanghai Banking
Corporation, Pakistan.
Business Review
Company performance during the year under review showed significant
improvement over the previous year mainly on the back of higher sales volumes,
improved efficiency and increased selling prices, which translated into profit
after tax of Rs. 161.48 million. This was achieved despite the depreciation
reaching the level of Rs. 81.59 million. The sales revenue increased by 17.84%
to Rs. 4,521.15 million compared to Rs. 3,836.80 million achieved last year.
Gross profit ratio was recorded at 15.84% as against 15.12% last year, which is
a net increase of 0.72%. Management
have continued to focus on improving working-capital management, which has
helped in reducing its short term borrowings and maintaining the financial cost
at the same level. Cost push inflationary pressures emanating from the increase
in raw material prices were also successfully absorbed.
Future Outlook
Political stability, consistency in Government policies and stable law
and order situation are pre-requisites to attain economic and investment
growth. The economy will continue to face major challenges in 2008, including
high international oil prices, inflation and widening current-account deficit,
energy crises, deteriorating law and order situation, infrastructural issues
and unemployment. The Government has only recently partially increased the
prices of petroleum products and power tariff but has largely delayed the
difficult decisions of increase in prices of petroleum products and other
utilities since 2007. The exchange rate will remain under pressure due to the
above factors. Based on the above scenario, the economic growth rate of the
country is expected to slow down considerably. In addition to the above macro
economic factors, constantly increasing raw material prices, higher energy
costs and increase in minimum wages could have adverse impact on its
profitability.
Foreign Exchange Rates
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Currency |
Unit |
Pakistani Rupee |
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US Dollar |
1 |
Rs. 71.60 |
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UK Pound |
1 |
Rs. 142.80 |
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Euro |
1 |
Rs. 113.40 |
Comments
Subject is a well-established company having fine track. Directors are
reported as experienced, respectable and having satisfactory means of their own.
Trade relations are reported as fair. Payments are usually correct and as per
commitments. Company can be considered for normal business dealings at usual
trade terms and conditions.
BALANCE SHEET AS AT DECEMBER 31,
2007
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2007 |
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2006 |
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Note |
Rupees in '000 |
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EQUITY AND LIABILITIES |
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SHARE CAPITAL AND RESERVES |
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Share capital |
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7 |
120,288 |
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120,288 |
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Reserves |
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8 |
634,852 |
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509,458 |
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755,140 |
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629,746 |
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NON CURRENT LIABILITIES |
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Long term financing |
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9 |
210,000 |
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250,000 |
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Liabilities against assets subject to finance lease |
10 |
166,086 |
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152,878 |
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Long term deposits |
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11 |
550 |
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510 |
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Deferred liabilities |
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12 |
79,706 |
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43,071 |
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456,342 |
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446,459 |
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CURRENT LIABILITIES |
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Trade and other payables |
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13 |
572,625 |
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500,927 |
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Interest and mark-up accrued |
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14 |
22,714 |
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37,653 |
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Short term borrowings |
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15 |
508,067 |
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769,348 |
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Current portion of: |
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Long term financing |
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9 |
60,000 |
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40,000 |
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Liabilities against assets subject to finance lease |
10 |
38,298 |
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32,029 |
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Provision for taxation |
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34 |
37,459 |
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26,108 |
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1,239,163 |
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1,406,065 |
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CONTINGENCIES AND COMMITMENTS |
16 |
- |
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- |
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2,450,645 |
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2,482,270 |
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2007 |
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2006 |
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Note |
Rupees in '000 |
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ASSETS |
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PROPERTY, PLANT
AND EQUIPMENT |
17 |
829,815 |
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692,993 |
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LONG TERM LOANS |
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18 |
6,679 |
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3,369 |
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LONG TERM
DEPOSITS |
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19 |
22,790 |
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20,097 |
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CURRENT ASSETS |
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Stores, spares and loose tools |
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20 |
19,837 |
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12,716 |
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Stock in trade |
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21 |
698,556 |
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836,659 |
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Trade debts |
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22 |
652,980 |
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723,565 |
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Loans and advances |
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23 |
134,070 |
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88,034 |
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Trade deposits and prepayments |
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24 |
1,904 |
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6,287 |
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Other receivables |
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25 |
76,529 |
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92,684 |
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Cash and bank balances |
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26 |
7,485 |
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5,866 |
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1,591,361 |
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1,765,811 |
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2,450,645 |
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2,482,270 |
FOREIGN EXCHANGE
RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs. 41.96 |
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UK Pound |
1 |
Rs.83.78 |
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Euro |
1 |
Rs.65.82 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)