Gul Ahmed Textile Mills : TRANSMISSION OF QUARTERLY ACCOUNTS FOR THE PERIOD ENDED 31-03-2024

GUL AHMED TEXTILE MILLS LIMITED

FINANCIAL INFORMATION

FOR THE PERIOD ENDED

MARCH 31, 2024

Company Information

BOARD OF DIRECTORS	Mohomed Bashir	- Chairman
	Zain Bashir	- Vice Chairman/ Executive Director
	Mohammed Zaki Bashir	- Chief Executive Officer
	Ziad Bashir	- Non Executive Director
	Ehsan A. Malik	- Non Executive Director
	Zeeba Ansar	- Independent Director
	Kamran Y. Mirza	- Independent Director
CHIEF FINANCIAL OFFICER	Abdul Aleem
COMPANY SECRETARY	Salim Ghaffar
AUDIT COMMITTEE	Kamran Y. Mirza	- Chairman & Member
	Mohomed Bashir	- Member
	Ehsan A. Malik	- Member
	Salim Ghaffar	- Secretary
HUMAN RESOURCE AND	Zeeba Ansar	- Chairman & Member
REMUNERATION	Mohomed Bashir	- Member
COMMITTEE	Zain Bashir	- Member
	Salim Ghaffar	- Secretary
BANKERS	Allied Bank Limited
	Al Baraka Bank (Pakistan) Limited
	Askari Bank Limited
	Bank Al Habib Limited
	Bank Alfalah Limited
	Bank of Khyber
	Bankislami Pakistan Limited
	Dubai Islamic Bank Pakistan Limited
	Faysal Bank Limited
	Habib Bank Limited
	Habib Metropolitan Bank Limited
	Industrial and Commercial Bank of China
	JS Bank limited
	MCB Bank Limited
	MCB Islamic Bank Limited
	Meezan Bank Limited
	National Bank Of Pakistan
	Samba Bank Limited
	Silkbank Limited
	Soneri Bank Limited
	Standard Chartered Bank (Pakistan) Limited
	Summit Bank limited
	The Bank Of Punjab
	United Bank Limited
AUDITORS	KPMG Taseer Hadi & Co.
	Chartered Accountants
INTERNAL AUDITORS	Grant Thornton Anjum Rahman
	Chartered Accountants
LEGAL ADVISORS	A.K. Brohi & Co
	Advocates
REGISTERED OFFICE	Plot No.H-7,
	Landhi Industrial Area,
	Landhi, Karachi-75120
SHARE REGISTRAR	FAMCO Associates (Private) Limited
	8-F, Next to Hotel Faran, Nursery, Block 6,
	P.E.C.H.S., Shahrah-E-Faisal, Karachi.
	Phone No. ([phone]
	Fax No. ([phone]
MILLS	Landhi Industrial Area,
	Karachi-75120
E-MAIL	[e-mail]
URL	www.gulahmed.com

Directors' Report

Dear Members

The Directors of the Company are pleased to present the performance review and the unaudited financial statements for the nine months ended March 31, 2024.

Global Economic Landscape:

The global economy has been surprisingly resilient, despite significant central bank interest rate changes to restore price stability. Inflationary pressures have subsided more rapidly than anticipated across many nations, resulting in a more balanced global outlook compared to the previous year. Global growth, which was estimated at 3.2% in 2023, is forecasted to maintain the same momentum throughout the year.

On the downside, new price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel, had, along with persistent core inflation where labor markets are still tight, raise interest rate expectations and reduce asset prices. The challenges are further compounded by China's economic deceleration and declining trade, particularly affecting the global manufacturing sector. Further, a potential escalation of the Middle East of Iran and Israel could have a "strong effect" on limiting growth as well as expectation of increase in crude commodities.

Pakistan's Economic Landscape:

Pakistan's economic and financial position continues to improve with each passing month of the current fiscal year, attributed to prudent policy management and the resumption of inflows from multilateral and bilateral partners. Pakistan has reached a Staff-Level Agreement in its final review successfully concluding the IMF's Stand-By Arrangement (SBA) program and securing a disbursement of $1.1 billion. The instalment of $1.1 billion is anticipated to be early May, subject to Board meeting of IMF Executive Committee. Furthermore, as part of its efforts to secure additional financial support, Pakistan has formally requested a new bailout package from the International Monetary Fund (IMF), with the proposed loan program ranging between $6 to $8 billion.

During the first nine months of fiscal year 2024, Pakistan made significant strides in narrowing its trade deficit, which contracted by 24.45% to $17.14 billion compared to $22.68 billion in the previous fiscal year. While exports saw a modest uptick of 9%, reaching $22.93 billion, imports recorded a notable decrease of 8.35%, totalling $40.07 billion.

Inflation rate in Pakistan fell for the third consecutive month to 20.7% in March 2024, the lowest since May 2022, from 23.1% in February.

Pakistan's Textile Sector:

Pakistan earned $12.44 billion from exports of textile products during the first nine months of the current financial year (2023-24). The exports of the textile product however, witnessed a nominal decline of 0.25 percent during July-March(2023-24) as against the exports of $ 12.47 billion during July-March(2022-23).

Below is the breakdown of export sales for key textile commodities:

Textile Commodities	Export July23 -Mar24	Export July22 -Mar23	Change
	(Million)	(Million)
Knit wear	$ 3,240	$ 3,390	-4%
Readymade garments	$ 2,597	$ 2,657	-2%
Bed wear	$ 2,088	$ 2,032	3%
Cotton cloth	$ 1,423	$ 1,538	-7%
Cotton Yarn	$ 792	$ 573	38%
Cotton	$ 56	$ 13	332%
Others	$ 2,249	$ 2,273	-1%
Total	$ 12,445	$ 12,476	-0.3%

Meanwhile, on a year-on-year basis, the textile exports increased by 3 percent going up from $ 1,258 million in March 2023 to $ 1,299 million in March 2024.

The path ahead, however, is fraught with challenges. The stringent economic reforms mandated by the International Monetary Fund (IMF), coupled with inflation, unprecedented increase in gas and utility prices and dwindling foreign exchange reserves, pose significant hurdles.

Financial Performance:

A comparison of the key financial results of the Company for the period ended on March 31, 2024, is as follows:

Profit and Loss Summary - Unconsolidated

MarchMarch

20242023

------- (Rupees in '000) -------

Percentage Favorable / (Unfavorable)

Direct Export

Indirect Export

Local

Sales (Net) Cost of Sales Gross Profit Finance Cost

Profit before Taxation Profit after Taxation Earning per Share (EPS)

71,444,395

24,714,347

8,987,339

105,146,080

(93,065,042)

12,081,038

(3,912,280)

3,820,399

2,309,632

3.12

48,982,951

25,761,617

5,691,872

80,436,440

(69,466,004)

10,970,436

(3,215,359)

4,110,885

2,635,793

3.56

45.86% -4.07% 57.90%

30.72%

33.97%

10.12%

21.67% -7.07%-12.37%

Company Sales Performance:

Your Company's Export Sales in USD have increased by 19% in comparison with Same Period Last Year (SPLY), it is noteworthy to mention that Country's Textile Exports have reduced by 0.25% for the nine months when compared with SPLY. In Rupee terms, Export sales have witnessed a notable increase of 45.86%, primarily attributable to the favourable impact of currency and Increase in Exports in USD terms. Similarly, in Local Sales, including Indirect Exports, despite all the challenges, there has been a rise of 7.15% in comparison with SPLY. The company's overall Sales, in PKR, have grown by an impressive 31% as compared to SPLY. This notable sales increase is attributed to Management's timely BMR and grabbing Export opportunities worldwide and Local opportunities by targeting profitable niche markets. However, it's crucial to acknowledge potential challenges on the horizon. The looming threat of rising inflation and energy prices have exert pressure on Sales.

Costs and Financial Metrics:

The Cost of Sales has seen a notable upsurge of 34%, primarily propelled by several factors including heightened material costs, increased energy expenditures, and a rise in minimum wages.

Due to the limited availability of gas in the country, management has been compelled to turn to alternative, albeit more expensive, fuels, leading to a notable increase in the Company's overall energy expenditures. During the current review period, Fuel & Power costs have escalated to Rs. 8.4 billion from Rs. 4.1 billion, marking a significant Rs. 4.3 billion increase (up by 104%) that has severely impacted the Company's profitability.

In response to this challenge, the Company has undertaken a substantial initiative by signing a term sheet of 17.1 MW solar project with K Solar (Private) Limited on BOOT basis, in addition to 2 MW on EPC basis. This strategic endeavor not only aims to address the mounting costs associated with traditional energy sources but also signifies a pivotal step towards fostering a sustainable future and reshaping Pakistan's energy landscape. This move underscores our unwavering commitment to environmental stewardship and the adoption of sustainable business practices.

Despite the daunting challenges presented by the current economic environment, it brings us great satisfaction to announce that the Company has effectively sustained its positive operating cash flows at a robust level of Rs. 5.7 billion as against Rs. 3.5 billion SPLY. This showcases our resilience and adept navigation of the challenges posed by the current economic landscape.

Future Economic Outlook:

The baseline forecast for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023.A slight acceleration for advanced economies where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025 will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now at 3.1 percent is at its lowest in decades. Global inflation is expected to decrease from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025.

Pakistan is expected to continue facing foreign exchange liquidity issues due to the persistent trade deficit and limited access to external financing. Even with the recent successful completion of the IMF-SBA and continued rollovers, reserves are projected to remain low. Import management measures are expected to continue disrupting domestic supply chains, while tight macroeconomic policies will mute aggregate consumption and investment. Economic activity is therefore expected to remain subdued with real GDP projected to grow at 2 percent in FY24.

The IMF have predicted that average inflation in Pakistan will reduce to 24.8% this year from last year's 29.2%, and slow further to 12.7% in the next fiscal year. The current account deficit is expected to rise from 0.7% of GDP last year to 1.1% this year and increase to 1.2% next year. Unemployment in Pakistan is forecasted to decline from 8.5% in the previous fiscal year to 8% this year and further to 7.5% next year. Monetary tightening is expected to remain during the remaining period of financial year 2024. Despite these challenges, the government remains proactive in implementing corrective measures to address the situation, fostering optimism for improved economic stability in the near future.

Acknowledgement:

We extend our gratitude to our dedicated employees and the unwavering support of our customers, financial institutions, shareholders, and esteemed Board of Directors.

For and on behalf of the Board

MOHOMED BASHIR	MOHAMMED ZAKI BASHIR
Chairman	Chief Executive Officer

April 29, 2024

Karachi

Gul Ahmed Textile Mills Limited

Unconsolidated Condensed Interim Statement of Financial Position

As at 31 March 2024

ASSETS	Note
Non-Current Assets
Property, plant and equipment	4
Intangible assets	5
Long term investments	6
Long term loans
Long term deposits
Total non-current assets
Current Assets
Stores and spares
Stock-in-trade	7
Trade debts
Loans, advances and other receivables
Short term prepayments
Receivable from government
Short term investments
Cash and bank balances
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Share Capital And Reserves

Authorised share capital

5,000,000,000 (30 June 2023: 5,000,000,000) ordinary shares of Rs.10 each

Issued, subscribed and paid-up share capital 740,059,458 ordinary shares of Rs. 10 each

(30 June 2023: 740,059,458 ordinary shares of Rs. 10 each)

Reserves	8
Non-Current Liabilities
Long term financing - secured	9
Deferred taxation
Deferred income - government grant
Defined benefit plan - staff gratuity
Total non-current liabilities
Current Liabilities
Trade and other payables
Accrued mark-up / profit
Short term borrowings
Current maturity of long term financing - secured	9
Current maturity of deferred income - government grant
Unclaimed dividend
Unpaid dividend
Taxation-net
Total current liabilities
Contingencies and commitments	10
TOTAL EQUITY AND LIABILITIES

The annexed notes from 1 to 19 form an integral part of these unconsolidated condensed interim financial statements.

_____________________	_________________________
Mohomed Bashir	Mohammed Zaki Bashir
Chairman	Chief Executive Officer

(Unaudited)		(Audited)
31 March		30 June
2024	2023

(Rupees in '000)

50,497,036	50,121,838
22,645	38,251
3,591,206	3,591,206
31,066	67,901
148,262	132,947
54,290,215		53,952,143
2,128,232	1,762,858
47,370,403		38,450,431
24,492,332		23,421,883
3,612,870		2,070,610
256,485		172,505
3,186,378		3,301,038
1,243		-
204,229		334,471
81,252,172		69,513,796
135,542,387	123,465,939

50,000,000	50,000,000
7,400,594	7,400,594
34,980,415	32,670,783
42,381,009		40,071,377
15,260,011	20,117,007
257,699		257,699
81,344		102,606
447,046		329,018
16,046,100		20,806,330
34,443,029	27,220,295
776,111		1,570,154
37,583,766		30,205,729
3,332,929		3,096,186
29,292		32,388
9,840		9,931
23,505		23,505
916,806		430,044
77,115,278		62,588,232
-	-
135,542,387	123,465,939

_____________________

Abdul Aleem

Chief Financial Officer

Gul Ahmed Textile Mills Limited

Unconsolidated Condensed Interim Statement of Profit or Loss (Unaudited)

For the nine months ended 31 March 2024

Note

(Unaudited)

Nine Months Ended	Three Months Ended
July to March	July to March	31 March	31 March
2024	2023	2024	2023
----------------------------	(Rupees in '000) ----------------------------

Sales - net

11

Cost of sales

Gross profit

Selling and distribution cost

Administrative cost

Other operating cost

Operating profit

Other income

Finance costs

Profit before taxation

Taxation

- Current12 - Prior

Profit after taxation

Earnings per share - basic and diluted (Rs.)

105,146,080

(93,065,042)

12,081,038

(2,332,001)

(2,721,742)

(302,310)

(5,356,053)

6,724,985

1,007,694

(3,912,280)

3,820,399

(1,510,767)

-

(1,510,767)

2,309,632

3.12

80,436,440

(69,466,004)

10,970,436

(1,461,664)

(2,540,948)

(279,995)

(4,282,607)

6,687,829

638,415

(3,215,359)

4,110,885

(1,002,178)

(472,914)

(1,475,092)

2,635,793

(Restated)

3.56

36,044,349

(32,084,745)

3,959,604

(880,577)

(952,423)

(121,950)

(1,954,950)

2,004,654

246,342

(745,218)

1,505,778

(496,427)

-

(496,427)

1,009,351

1.36

29,428,177

(24,977,980)

4,450,197

(485,717)

(909,012)

(92,226)

(1,486,955)

2,963,242

(193,839)

(1,375,369)

1,394,034

(385,513)

-

(385,513)

1,008,521

(Restated)

1.36

The annexed notes from 1 to 19 form an integral part of these unconsolidated condensed interim financial statements.

_____________________	_________________________	_____________________
Mohomed Bashir	Mohammed Zaki Bashir	Abdul Aleem
Chairman	Chief Executive Officer	Chief Financial Officer

Gul Ahmed Textile Mills Limited

Unconsolidated Condensed Interim Statement of Comprehensive Income (Unaudited)

For the nine months ended 31 March 2024

			(Unaudited)
	Nine Months Ended		Three Months Ended
	July to March		July to March		31 March		31 March
	2024	2023	2024	2023
	----------------------------	(Rupees in '000) ----------------------------
Profit after taxation	2,309,632	2,635,793	1,009,351	1,008,521
Other comprehensive income	-	-	-	-
Total comprehensive income for the period
2,309,632	2,635,793	1,009,351	1,008,521

The annexed notes from 1 to 19 form an integral part of these unconsolidated condensed interim financial statements.

_____________________	_________________________	_____________________
Mohomed Bashir	Mohammed Zaki Bashir	Abdul Aleem
Chairman	Chief Executive Officer	Chief Financial Officer

Gul Ahmed Textile Mills Limited

Unconsolidated Condensed Interim Statement of Changes in Equity

For the nine months ended 31 March 2024

				Reserves
Issued,		Capital reserve -
	against long				Revenue
subscribed		term		Capital reserve -					Total
			reserve -		Total
and paid-up		investments,		amalgamation				equity
			unappropriated		reserves
share capital		capacity		reserve
			profit
		expansion and
		BMR
--------------------------------------------------------------				(Rupees	in '000) --------------------------------------------------------------

Balance as at 30 June 2022 (Audited)	6,167,162
Total comprehensive income for the nine
months ended 31 March 2023
Profit after taxation		-
Other comprehensive income for the period		-
Total comprehensive income for the period	-
Balance as at 31 March 2023 (Unaudited)
6,167,162
Transaction with owners
Issuance of bonus shares @ 20%	1,233,432

Total comprehensive income for the

three months ended June 30, 2023 (Un-audited)

-

-

-

-

-

-

8,252,059

-

-

-

8,252,059

-

21,714,078

2,635,793

-

2,635,793

24,349,871

(1,233,432)

29,966,137

2,635,793

-

2,635,793

32,601,930

(1,233,432)

36,133,299

2,635,793

-

2,635,793

38,769,092

-

Profit after taxation	-
Other comprehensive income	-
Total comprehensive income for the period	-
Balance as at 30 June 2023 (Audited)	7,400,594
Reclassification of Reserves (Note 8)	-
Total comprehensive income for the nine
months ended 31 March 2024
Profit after taxation	-
Other comprehensive income for the period	-
Total comprehensive income for the period	-

-

-

-

-

23,000,000

-

-

-

-

-

-

8,252,059

-

-

-

-

1,350,226

(47,941)

1,302,285

24,418,724

(23,000,000)

2,309,632

-

2,309,632

1,350,226

• 47,941
  1,302,285

32,670,783

-

2,309,632

-

2,309,632

1,350,226

• 47,941
  1,302,285

40,071,377

-

2,309,632

-

2,309,632

Balance as at 31 March 2024 (Unaudited)	7,400,594	23,000,000	8,252,059	3,728,356	34,980,415	42,381,009

The annexed notes from 1 to 19 form an integral part of these unconsolidated condensed interim financial statements.

_____________________	_________________________	_____________________
Mohomed Bashir	Mohammed Zaki Bashir	Abdul Aleem
Chairman	Chief Executive Officer	Chief Financial Officer