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Directors’ Report

Directors’ Report

Directors of your Company are pleased to present the Annual Report along with audited Financial Statements of the Company and Auditors’ Report thereon for the year ended 30 June, 2022.


Pakistan’s economy showed a growth rate as reflected by 5.97% GDP in FY 2022 from an increase of 2.07% in FY 2021. This high growth, however is unsustainable and has resulted in financial and macro economic imbalances. Headline inflation closed at an average of 24.9% versus9.74% of last year. On the monetary policy front, the State Bank of Pakistan (SBP) decided to keep the benchmark policy rate at 15%.Attempts have been made to investigate the challenges faced by the textile industry of Pakistan. A specific objective is to find out main reasons through qualitative study and suggest solution for further progress. The textile sector is the largest exporting industry in Pakistan, and the major export markets of Pakistani textile goods remain the United State and European markets.The textile sector can play a vital role increasing exports and reducing the current account deficit as its exports are about 63% of the total exports of the country and contribute8.5% of Gross Domestic Product (GDP). External economic factors,such as an increase in global commodity prices, and a high benchmark rate resulted in higher costs of production and a global economic slowdown.The recent floods in Pakistan have also caused damage to the local cotton crop, along with damage to US cotton due to water shortages.

Company's Performance

The company faced numerous challenges ranging from fluctuation in exchange rates, rising interest rates globally, a historic rise in cotton prices globally and locally, increase in energy cost, and demand curtailment. The company faced demand curtailment due to a global economic slowdown which resulted in inventory buildup due to which plant was temporarily shutdown. Due to the implementation of a super tax on pretax profit and the mentioned economic and environmental challenges the Company recorded a decrease in net profit of PKR 220.15 million as compared to a net profit PKR 361.49million last year. Profit per share for the period stood at PKR 25.48 (2021:Profit PKR 41.84).Due to the increase in interest rates thecompany faced a higher finance cost of PKR 96.54 million as compared to (2021: PKR 70.33 million).

 A brief financial analysis is presented as under:

Rupees in millions:

Income Statement 2022 2021 % Change
Sales 8,674 7,122 21.80%
Gross profit 639.86 728.95 12.22%
Operating profit 462.22 536.79 13.89%
Finance cost (96.54) (70.33) 37.27%
Profit before taxation 365.68 466.47 21.61%
Taxation (145.53) (104.97) 36.64%
Net Profit 220.15 361.50 39.10%
Earnings per share (EPS) (25.48) 41.84

Your Company earned a gross profit of Rs. 639.86 million compared to gross profit of Rs. 728.95 million of previous financial year. Downward trend gross profit was primarily due increase in costs of production and lower demand. Finance cost increased by 37.27 percent in comparison to last year caused by an increase in average borrowing due to credit sales. Income tax provision increased by 36.64% due increase in super tax.

Corporate Social Responsibility (Csr)

The Company strongly believes in integration of corporate social responsibility into its business. We focused on continuing social initiatives for worker and environmental welfare, as well as remaining compliant with social audits for various certifications.

Financial Risk Management

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, other price risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance. Risk management is carried out by the Company’s finance department under policies approved by the Board of Directors. The Company’s finance department evaluates and hedges financial risk management, as well as policies covering specific areas such as currency risk, other price risk, interest rate risk, credit risk, liquidity risk.

Financial Statements

As required under regulation 25 of Listed Companies (Code of Corporate Governance) Regulations, 2019 (“CCG Regulations, 2019”), the Chief Executive Officer and the Chief Financial Officer present the financial statements, duly endorsed under their respective signatures, for consideration and approval of the Board of Directors (Board), after consideration and approval, the Board authorize the signing of financial statements for issuance and circulation. The financial statements of the Company have been duly audited by the Messrs. Riaz Ahmad & Co, Chartered Accountants and their report is attached with the financial statements. They have issued an unqualified report to the members.


The auditors Messrs. Riaz Ahmad & Co., Chartered Accountants, retire and offer themselves for re-appointment for the FY2023. The Audit Committee has recommended their re-appointment which has been endorsed by the Board for shareholders consideration and approval at the forthcoming annual general meeting.

Subsequent Events

No material changes and commitments affecting the financial Position of the Company have occurred between the end of the financial year to which these financial statements relate and the date of the Director’s Report.

Pattern of Shareholding

Pattern of shareholding of the Company, as required by section 227(2)(f) of the Companies Act. 2017 as at June 30, 2022 is provided at page number 65 of this report.

Statement of Compliance with COCG

 The Company has compiled with requirements of the Listed

Companies (Code of Corporate Governance) Regulations 2019