Nadeem Textile Mills : Transmission of Annual Report for the year ended 2023-06-30

Vision and Mission Statements												2
Company Information															3
Notice of Annual General Meeting						4-5
Chairman's Review														6
Chairman's Review (Urdu Translate)					7
Director's Report													8-11
Director's Report (Urdu Translate)					12-15
Key Operating and Financial Data					16
Statement of Compliance with the Code of Corporate Governance		17-18
Auditor's Review Report on Code of Corporate Governance		19
Auditor's Report to the Members				20-22
Statement of Financial Position				23
Statement of Profit or Loss				24
Statement of Comprehensive Income		25
Statement of Cash Flows				26
Statement of Changes in Equity			27
Notes to the Financial Statements		28-62
Pattern of Share Holding		63

NADEEM TEXTILE MILLS LIMITED

Vision Statement

To be a dynamic, profitable and growth oriented Company.

Mission Statement

The mission of the Company is to prudently utilize the human resources and plant and machinery in order to achieve high levels of sustainable profitability and growth by:

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COMPANY INFORMATION

Dubai Islamic Bank Pakistan Limited

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NADEEM TEXTILE MILLS LIMITED

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 37 th Annual General Meeting of Nadeem Textile Mills Limited (the "Company") will be held on Monday, November 27, 2023 at 5:00 p.m. at registered office 801-804,8 th Floor, Lakson Square Building No.3, Block-A, Sarwar Shaheed Road, Karachi, to transact the following business:

Ordinary Business:

1.	th
To confirm the Minutes of the Extra Ordinary General Meeting of the Company held on 20 March, 2023.
2.	th
To receive, consider and adopt the audited financial statements of the company for the year ended 30 June, 2023 together with the Directors' report, Auditors'

Reports and Chairman's Review Report thereon.

1. To appoint external auditors for the next term i.e. year 2023-2024 and fix their remuneration. The retiring auditors M/s Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants, being eligible, offer themselves for reappointment as auditors of the Company.
2. Special Business:
3. 1. To ratify the transactions carried out by the Company with related parties as disclosed in the Financial Statements for the year ended June 30, 2023 by passing the following resolutions as ordinary resolutions:

"RESOLVED that the related parties transactions carried out by the Company with Nadeem International (Pvt.) Ltd. and directors of the company being related parties during the year ended June 30, 2023 be and are hereby approved."

FURTHER RESOLVED THAT the Company may carry out transactions including, but not limited to, the sale/purchase of yarn, sale/purchase of cotton/fibre, reprocessing of yarns, rent/lease of assets, sale/purchase of machinery and equipment and other necessary goods, including receipt, with related parties from time to time for the financial year 2023-24 and loan received from and return to the related parties.

1. To consider, and if deemed appropriate, to pass the following resolutions (with or without modifications) which would enable the Company to circulate the annual audited financial statements by way of QR enabled code and weblink to its shareholders as a part of the notice for annual general meeting.

Resolved that, the consent of the members be and is hereby accorded to transmit the annual audited financial statements including auditor's report, directors' report, chairman's review report and other reports contained therein to the members of company through QR enable code and weblink.

5. To transact any other business with the permission of the chairman. Moreover, the notice along with statement of material fact have been dispatched to the shareholders by post and uploaded/ placed on Company website at

Karachi	By order of the Board
Dated: October 30, 2023	Company Secretary

NOTES:

1. The share transfer books of the Company will remain closed from November 21, 2023 to November 27, 2023 (both days inclusive).

2. A member entitled to attend and vote at the General Meeting is entitled to appoint another member as his/her proxy to attend and vote instead of him/her. A proxy must be a member of the Company.

1. The instrument appointing a proxy, in order to be valid must be received at the Head Office of the Company at A -801-804, Lakson Square Building No.3, Sarwar Shaheed Road, Karachi, not less than forty-eight (48) hours before the time fixed for the meeting.
2. Any individual Beneficial Owner of CDC, entitled to attend and vote at this meeting, must bring his/her participant ID number and account/sub account number along-with original Computerized National Identity Card (CNIC) or passport at the time of attending the meeting to prove his/her identity and in case of Proxy must enclose additionally an attested copy of his/her CNIC or Passport, Representatives of corporate members should bring the usual documents required for such purpose.
3. CDC Account Holders will also have to follow the guidelines laid down in Circular No. 1 dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan.
4. Members are requested to immediately inform of any change in their addresses to our Share Registrar, M/S Hameed Majeed Associates (Pvt.) Ltd., 4th Floor, Karachi Chambers, Hasrat Mohani Road, Karachi.
5. Submission of copies of CNIC and NTN Certificate (Mandatory)

Pursuant to the directive of the Securities & Exchange Commission of Pakistan (SECP), Dividend Warrant shall mandatory bear the Computerized National Identity Card (CNIC) numbers of shareholders. Shareholders are therefore requested to fulfill the statutory requirements and submit a copy of their CNIC (if not already provided) to the Company's Share Registrar, Hameed Majeed Associates (Pvt.) Ltd., Karachi, without any delay.

In case of non-availability of a valid copy of the Shareholders' CNIC in the records of the Company, the company shall withhold the Dividend in terms of Clause (a) of proviso under Section 243(2) of the Companies Act 2017, which will be released by the Share Registrar, only upon submission of a valid copy of the CNIC in compliance with the aforesaid SECP directives.

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1. Unclaimed Dividend
   Shareholders, who by any reason, could not claim their dividend, if any, are advised to contact our Share Registrar: M/s Hameed Majeed Associates (Pvt) Ltd. Karachi Chamber, Hasrat Mohani Road, Karachi to collect / enquire their unclaimed dividend, if any.
   In compliance with section 244 of the Companies Act, 2017, after having completed the stipulated procedure all such dividend outstanding for a period of three years or more from the date due and payable shall be deposited to the Federal Government in case of unclaimed dividend, shall be delivered to the SECP.
2. Deposit of Physical Shares into CDC Accounts:
   As per Section 72 of the Companies Act, 2017 every existing company shall be required to replace its physical shares with book-entry form in a manner as may be specified and from the date notified by the Commission, within a period not exceeding four years from the commencement of the Companies Act, 2017. The shareholder having physical shareholding may open CDC sub-account with any of the brokers or investor's account directly with the CDC to place their physical shares into scrip-less form. This will facilitate them in many ways including safe custody and sale of shares, anytime they want as the trading of physical shares is not permitted as per existing Regulations of the Pakistan Stock Exchange Ltd.
3. Ballot Paper:

Postal poll paper is available for download from the website of Nadeem Textile Mills Limited at www.nadeem.com.pk Shareholders may download the ballot paper from website or use an original, photocopy and printed in annual reports.

11. Placement of Financial Statements on Website:

The Financial Statements of the Company for the year ended June 30, 2023 along with reports have been placed on the website of the Company:

http://www.nadeem.com.pk

STATEMENT UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017

This statement sets out the material facts concerning the Special Business, given as agenda item no. 6 of the Notice to be transacted at the 37 thAnnual General Meeting of the Company.

ITEMS NO. 5(A) OF THE AGENDA:

Nadeem Textile Mills Limited is engaged in manufacture and sale of yarn. The Company in the normal course of business carries out transactions with its associated entities. Summary of transactions carried out during the year with the associated entities is as follow:

S. No	Name of Associated Undertaking	Nature of Transactions	Rupees
1	Nadeem International (Pvt) Ltd.	Loan Received	-
2	Nadeem International (Pvt) Ltd.	Loan Re-Paid	21,800,000
3	Nadeem International (Pvt) Ltd.	Weigh Bridge Expenses	180,000
4	Nadeem International (Pvt) Ltd.	Balance outstanding	38,200,000
5	Nadeem International (Pvt) Ltd.	Contribution from Associated undertaking	340,000,000
6	Mr. Zahid Mazhar	Loan Received	72,000,000
7	Mr. Zahid Mazhar	Balance outstanding	82,000,000
8	Mr. Omer Bin Zahid	Loan Received	19,800,000
9	Mr. Omer Bin Zahid	Loan Re-paid	19,800,000
10	Mr. Omer Bin Zahid	Balance outstanding	-
11	Mr. Hassan Bin Zahid	Loan Received	19,800,000
12	Mr. Hassan Bin Zahid	Loan Re-paid	4,000,000
13	Mr. Hassan Bin Zahid	Balance outstanding	15,800,000

Mr. Zahid Mazhar, Mr. Omer Bin Zahid, Mr. Hassan Bin Zahid and Mrs. Naila Zahid are Directors of Nadeem Textile Mills Limited and are also Directors of Nadeem International (Private) Limited.

All related party transactions, during the year 2023, were reviewed and approved by the Audit Committee and the Board in their respective meetings. The transactions with related parties were carried out at arm's length prices determined in accordance with the comparable uncontrolled prices method.

The above concerned Directors abstained while the Board approved the above transactions in accordance with the requirement of relevant provision of the Companies Act, 2017 and listed Companies (Code of Corporate Governance) Regulations 2017.

The above transactions with related parties are an ongoing process and will also remain continued in future.

None of the Directors other than the above concerned directors have any direct or indirect interest in the above mentioned associated entities and have no interest in the above business, other than shareholders of the Company.

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NADEEM TEXTILE MILLS LIMITED

CHAIRMAN'S REVIEW REPORT

FOR THE YEAR ENDED JUNE 30, 2023

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the annual results of the Company for the year ended June 30, 2023.

BOARD COMPOSITION AND PERFORMANCE

The Board of Directors comprises both young and experienced professionals with relevant textile expertise and capabilities. The Board plays a vital role in guiding the company to achieve its goals while upholding the highest standards of corporate governance in a challenging business environment. The Board remains focused on its strategic role of helping the company achieve its key objectives and increase shareholder returns.

The Board has formed the "Audit Committee" and the "Human Resource and Remuneration Committee." These committees carried out their responsibilities effectively in accordance with the code of corporate governance and terms of reference duly approved by the Board of Directors. We will continue our efforts to adopt and implement best governance practices.

All quarterly, half-yearly, and annual financial results were thoroughly reviewed, and the Board extended its guidance to the management on a regular basis. The Board also played a key role in monitoring the management's performance and focused on major risk areas.

During the year under review, the Board effectively discharged its responsibilities as required under the Companies Act 2017 and the Listed Companies (Code of Corporate Governance) Regulations 2019.

BOARD PERFORMANCE AND EFFECTIVENESS

The Company adheres to the highest standards of corporate governance and complies with all applicable requirements of the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019, with respect to the composition, meetings, and procedures of the Board of Directors and its Committees.

The Board has developed a mechanism for the annual evaluation of its own performance in compliance with the Listed Companies (Code of Corporate Governance) Regulations 2019. The performance evaluation mechanism ensures that all statutory and legal requirements are fulfilled regarding procedures, meetings, and the role of the Board.

The Board played a pivotal role in achieving the Company's objectives by providing oversight, guidance, and strategic direction, and monitoring the Company's performance. All significant issues, including the planning process, risk management system, policy development, and financial management, were presented before the Board or its committees to formalize the corporate decision- making process.

ACKNOWLEDGEMENT

On behalf of the Board of Directors, I would like to express my sincere gratitude to all of our employees for their dedication and contributions to the Company's success. I would also like to thank our shareholders, customers, suppliers, bankers, and other stakeholders for their continued trust and support.

	for and on Behalf of the Board of Directors
Karachi	NAILA ZAHID
Dated: October 30, 2023	Chairperson

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2023 30

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The year ending 30

NADEEM TEXTILE MILLS LIMITED

DIRECTORS' REPORT TO THE SHAREHOLDERS

FOR THE YEAR ENDED JUNE 30, 2023

Dear Shareholders,

The Directors of the company are pleased to present the audited financial statements of the Company for the year ended June 30, 2023, together with the Auditor's Report thereon.

FINANCIAL HIGHLIGHTS

During the fiscal year ended June 30, 2023, the Company achieved sales turnover of Rs. 10.67 billion, a decrease of 22.57% from the Rs. 13.77 billion reported in the comparative year. The Company incurred a net loss after tax of Rs. 588.97 million during the period, primarily due to the increase in the cost of raw materials and other expenses.

The following table summarizes the Company's financial results for the year ended June 30, 2023, along with comparative figures for the previous year:

	Rupees in Million
	2023	2022
Sales	10,666.65	13,775.87
Gross profit	510.00	2,318.58
Gross profit % to sales	4.78%	16.83%
Profit / (loss) before tax	(584.06)	1,384.93
Profit / (loss) after tax	(588.97)	1,213.98

KEY FINANCIAL INDICATORS

· Sales decreased by Rs. 3,109.22 million, a decrease of 22.57%.

· The gross profit margin decreased to 4.78%, from 16.83% in the previous year.

· Net loss after tax was 5.52%, compared to net profit after tax of 8.81% in the previous year.

BREAK-UP VALUE AND EARNING PER SHARE

The break-up value per share as at June 30, 2023, was Rs. 181.88, compared to Rs. 191.86 as at June 30, 2022. The earnings per share for the year ended June 30, 2023, decreased to Rs. (27.31), from Rs. 56.43 for the year ended June 30, 2022.

DIVIDEND

The Board of Directors of the company has not recommended any dividend due to requirement of liquidity for BMR.

OVERVIEW

The economic and political environment of the country remained very challenging throughout the financial year 2023, leading to subdued business activities, low foreign reserves, high inflation, and a balance of payments crisis.

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June 2023 was one of the most difficult years for the textile industry of Pakistan. On the one hand, due to the global recession there was massive decline in the demand of textile products which resulted in reduction of sales volume. On the other hand, SBP raised the interest rate to a historically high figure of 22%. On top of this, there was a huge rise in the cost of energy. All of this compelled the company to curtail its production activities. Due to these factors your company has ended up in a loss this year. However, we forecast better times ahead and are confident that next year will be a profitable year.

OPERATING PERFORMANCE

The Company produced 19.45 million Kgs. 20/s count of spun yarn during the year as compared to 27.37 million Kgs. of previous year, showing a decrease of 28.94%.

PRESENT AND FUTURE OUTLOOK

Pakistan is currently facing a number of economic challenges, including political unrest and uncertainty, high debt, low foreign

exchange reserves, rising cost of living, expensive international trade, low investor confidence, delayed sales tax and income tax

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refunds, depreciating value of the Pakistani rupee, high interest rates, shortage of gas and very high price of energy, and volatile cotton prices. These challenges are making it difficult for Pakistan to pay its debt, keep its currency stable, and attract foreign investment. The government needs to carefully manage the economy in a way that addresses these challenges and keeps investors confident.

The outlook for Pakistan's cotton crop in 2023-24 is positive, with a projected production of about 10 million bales. This would be a significant improvement over the previous year, which was affected by unfavorable weather conditions and pest and disease outbreaks. However, the crop faces some challenges from heavy rains and floods that can damage the yield and quality of the fiber. In addition to weather risks, the cotton crop also faces challenges from pests and diseases. The government is working to develop and implement pest management strategies to minimize crop losses.

EXPANSION AND MODERNIZATION

The Company has a policy of continuous business process reengineering (BPR) to improve technology and manufacturing processes. During the year, the Company added the following machinery:

Blow Room Machinery

20 Sets Carding Machines

3 Nos. Draw Frames with Auto levellers

1 Set Autocone Savio Polar with Quantum

1 Set Murata 21-C Winder Machine Clipping Machine

1 Set Gas Genset MTU 1,500 KW Equipment for electricity load enhancement

HUMAN RESOURCE

The management firmly believes in teamwork and the integral role of manpower in achieving the targeted results of the Company.

The company has established a Human Resource and Remuneration Committee (HR&R Committee) comprised of three members, as mentioned in the company information. Based on the recommendations of the HR&R Committee, the management has developed a team of highly competent professionals and continuously upgrades its manpower through training facilities and by inducting more qualified staff.

COMPLIANCE WITH CODE OF CORPORATE GOVERNANCE

The Statement of Compliance with the Code of Corporate Governance is annexed.

STATEMENT OF CORPORATE AND FINANCIAL REPORTING FRAMEWORK

The Board is committed to maintain a high standard of corporate governance. The Board has reviewed the Code of Corporate Governance and declares that:

The financial statements, together with the notes thereon have been drawn up in conformity with the Companies Act 2017. These statements present fairly the Company's state of affairs, results of its operations, cash flow, comprehensive income and changes in equity.

Proper books of accounts of the Company have been maintained.

Appropriate accounting policies have been consistently applied in the preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.

The International Accounting Standards, as applicable in Pakistan, have been followed in the preparation of financial statements.

The system of Internal Control is sound in design and has been effectively implemented and monitored. The process of review and monitoring continues with the object to improve it further.

There is no significant doubt upon the Company's ability to continue as a going concern.

There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations. The key operating and financial data for the last six years in a summarized form is annexed.

Information about taxes and levies is given in the notes to the accounts.

The Company entered in arm-length transactions with other members of the group. These transactions are in compliance with the directives issued by the Securities & Exchange Commission of Pakistan in this regard.

All the directors of the company are registered as tax-payer and none of the company's directors is in default of payment of any

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dues to a banking company, DFI, NBFI or Stock Exchange.

None of the directors of the company is serving on the Board of 7 or more listed companies.

The company operates an unfunded gratuity covering all its employees who have completed their qualifying period. Provision is made annually to cover current obligations under the scheme. The company has adopted the revised IAS 19.

Trading in the shares of the Company during the year by the Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary and their spouses and minor children are mentioned in the annexed pattern of shareholding.

CORPORATE SOCIAL RESPONSIBILITY

The company has a strong commitment to corporate social responsibility. The Company believes in contributing to the society and environment by promoting a better working environment and contributing regularly to the national exchequer as per law.

1. Health, Safety and Environment:

We work continuously to ensure that our employees work in a safe and healthy working environment. The Company regularly contributes towards the health facility and retirement benefits available for the workers of the Company.

1. Business Ethics:
   The Management is committed to conducting all business activities with integrity, honesty, and observance of laws and regulations. A Code of Conduct detailing policies concerning the same has been developed and approved by the Board.
2. Energy Savings:
   The Management focuses on energy conservation. Many preventive measures have been adopted by fixing energyconserving devices to save energy. Workers are also made aware of various energy conservation methods to curtail the unnecessary consumption of energy.

BOARD MEETINGS

During the period under review, 8 meetings of the Board of Directors were held and the following were in attendance:

	Name of Directors	No. of Meetings Attended
1.	Mr. Zahid Mazhar	8
2.	Mr. Omer Bin Zahid	7
3.	Mr. Hassan Bin Zahid	7
4.	Mrs. Naila Zahid	8
5.	Mrs. Anam Omer	8
6.	Mrs. Shafia Hassan	7
7.	Mr. Waqar Hassan Siddiqui	8
8.	Mr. Nadeem Ahmed	8
9.	Mr. Noor Muhammad	7

Leave of absence was granted to the members not attending the board meetings.

COMPOSITION OF BOARD
Directors	Numbers
(a)	Male	06
(b)	Female	03
Composition	Numbers
a)	Independent Director	03
b)	Other Non-Executive Directors	03
c)	Executive Directors	03

ASSOCIATED COMPANIES

Following is the list of associated companies:

(a) Nadeem International (Pvt.) Ltd.

All transactions between related parties were conducted at arm's length, in full compliance with the best practices of transfer pricing as stated in the Listing Regulations. The related party transactions were approved by the Board of Directors on the recommendation of the Audit Committee.

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