Idrees Textile Mills : TRANSMISSION OF QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2023

IDREES

TEXTILE MILLS LIMITED

CONDENSED INTERIM

FINANCIAL STATEMENTS

FOR THE QUARTER ENDED

MARCH, 2023

(UN-AUDITED)

COMPANY INFORMATION

BOARD OF DIRECTORS

COMPANY SECRETARY

CHIEF FINANCIAL OFFICER

AUDITORS

AUDIT COMMITTEE

HUMAN RESOURCE & REMUNERATION COMMITTEE

BANKERS

Mr. Rizwan Idrees Allawala	- Chairman
Mr. S. M. Mansoor Allawala	- Executive Director / CEO
Mr. Omair Idrees Allawala	- Executive Director
Ms. Aamnah Mansoor	- Non - Executive Director
Mr. Muhammad Zubair	- Non - Executive Director
Syed Masud Arif	- Independent Director
Ms. Azra Yaqub Vawda	- Independent - Director
Syed Shahid Sultan
Mr. Muhammad Jawaid
M/s. Yousuf Adil
Chartered Accountants
Ms. Azra Yaqub Vawda	- Chairperson
Syed Masud Arif	- Member
Ms. Aamnah Mansoor	- Member
Syed Shahid Sultan	- Secretary
Syed Masud Arif	- Chairman
Ms. Aamnah Mansoor	- Member
Ms. Azra Yaqun Vawda	- Member

National Bank of Pakistan

Bank Alfalah Limited

Habib Metropolitan Bank Ltd.

Meezan Bank Ltd.

Bank of Punjab Ltd.

BankIslami Pakistan Ltd.

Askari Bank Limited

Dubai Islamic Bank Pakistan Ltd.

Samba Bank Limited

REGISTERED OFFICE	6-C, Ismail Centre, 1st Floor,
	Central Commercial Area,
	Bahadurabad,
	Karachi - 74800.
MILLS	Kot Shah Mohammad,
	Tehsil Nankana,
	District Nankana,
	Punjab.
	www.idreestextile.com
SHARES REGISTRAR	M/S. JWAFFS Registrar Services (Pvt) Ltd.
	407-408, 4th Floor, Al-Ameera Centre,
	Shahrah-e-Iraq, Saddar, Karachi.

2

DIRECTORS' REPORT

The Directors are pleased to present the un-audited Condensed Interim Financial Statements of your Company for the third quarter and nine months period ended March 31, 2023.

FINANCIAL AND OPERATIONAL OVERVIEW

The principal activity of the Company is manufacturing, processing and sale of yarn. During the period under review, there has not been any material change in the Company's business activities.

During the period, the Company's turnover amounted to Rs. 2,809 million as compared to Rs. 3,628 million in the same period of last year. Gross profit amounted to Rs. 261 million compared to Rs. 501 million for the corresponding period and loss for the period amounted to Rs. 25 million against profit of Rs. 270 million in the comparable period. Loss per share amounted to Rs. 1.26 against earnings of Rs. 13.61 in the same period of last year.

The economy is bearing the brunt of soaring inflation which has severely affected consumer demand and has also shaken business confidence. Historic weakening of Pak Rupee and exorbitantly high interest rates are the major factors responsible for the prevailing economic condition. Due to steep rise in the cost of borrowing, your Company's finance cost in the Jan-Mar 2023 quarter has doubled which significantly impacted the bottom-line. The Company's turnover during the nine months period has also declined as a result of low demand in the local as well as in the international market. Rise in the cost of inputs, in the aftermath of Pak Rupee devaluation and historic rise in discount rate, and increase in minimum wage have increased the cost of production and, as a result, gross profit margin has declined in the period under review. The Government is unable to provide reliable and affordable energy to the industry. The gas quota has been capped at 50 percent and withdrawal of Regionally Competitive Energy Tariff is looming. Insufficient level of foreign exchange reserves caused delays in opening of letters of credit and retirement of documents, which remained a disturbing factor for business operations.

FUTURE OUTLOOK

Work on expansion of the mill is nearing completion. Erection of machinery is underway and is expected to be completed by the end of FY23. The Company has also ventured into home textile export business which is picking up gradually. Going forward, the Government has to act immediately to control the prevailing inflation that has engulfed the whole economy. Political uncertainty, meagre foreign exchange reserves, insufficient size and quality of our cotton crop, supply of reliable and affordable energy to the export-oriented industry and reduction in interest rate are the issues that need to be addressed forthwith. The textile sector, being a large employment provider and earner of foreign exchange, deserves due attention in terms of policy decisions. Continuation of Regionally Competitive Energy Tariff is essential for the industry to remain competitive in the international market. The management is striving to steer successfully through these economic conditions by focusing on cost optimization, process efficiency and enhancement in production capacity.

Consolidated Condensed Interim Financial Statements of the Company and its wholly-owned subsidiary ORA Home LLC, for the nine months period ended March 31, 2023, are annexed in accordance with the statutory requirements.

ACKNOWLEDGEMENT

The Board has profound appreciation for the trust of the customers, bankers, suppliers and shareholders and for the valuable services rendered by the employees.

Rizwan Idrees Allawala	S.M. Mansoor Allawala
	Chief Executive

April 28, 2023

UNCONSOLIDATED

CONDENSED INTERIM

FINANCIAL STATEMENTS

FOR THE QUARTER ENDED MARCH, 2023 (UN-AUDITED)

UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION (UN-AUDITED)

AS AT MARCH 31, 2023

		March 31,	June 30,
		2023	2022
		(Un-audited)	(Audited)
ASSETS	Note	------------ (Rupees) ------------
Non-current assets
Property, plant and equipment	4	3,247,096,825	2,334,249,192
Long-term deposits		17,895,681	3,129,361
Long term investment		-	-
		3,264,992,506	2,337,378,553
Current assets
Stores, spares and loose tools		86,530,649	57,521,846
Stock-in-trade	5	1,994,886,870	1,207,120,704
Trade debts		705,523,051	768,563,631
Loans and advances		93,588,757	171,739,107
Prepayments		3,423,324	1,905,463
Other receivables		207,762,482	184,464,687
Other financial assets		173,827,523	134,473,034
Cash and bank balances		40,449,892	5,875,276
		3,305,992,548	2,531,663,748
Total assets		6,570,985,054	4,869,042,301
EQUITY AND LIABILITIES
EQUITY
Share capital and reserves
Authorized
22,000,000 ordinary shares of Rs.10/- each		220,000,000	220,000,000
Issued, subscribed and paid-up capital		198,528,000	198,528,000
Capital reserves
Surplus on revaluation of property, plant and equipment - net of tax		883,867,363	882,490,524
Equity portion of loan from related parties		9,352,187	15,895,730
Revenue reserves		1,428,932,228	1,420,418,461
Total equity		2,520,679,778	2,517,332,715
LIABILITIES
Non-current liabilities
Long-term finance		672,878,293	214,521,468
Lease liability		300,000	1,962,284
Deferred government grant		113,484,523	44,261,234
Deferred tax liability		188,375,649	229,182,802
Retirement benefit obligation		73,494,965	60,143,460
		1,048,533,430	550,071,248
Current liabilities
Trade and other payables		666,810,394	607,349,650
Accrued mark-up		83,486,954	26,323,596
Short-term borrowings	6	1,919,873,965	883,049,126
Current portion of long-term finance		224,101,191	143,862,034
Current portion of lease liability		2,189,413	7,767,062
Current portion of deferred government grant		31,028,739	5,297,394
Unclaimed dividend		2,752,598	2,899,903
Provision for taxation		71,528,592	125,089,573
		3,001,771,846	1,801,638,338
Total liabilities		4,050,305,276	2,351,709,586
Total equity and liabilities		6,570,985,054	4,869,042,301
CONTINGENCIES AND COMMITMENTS	7

The annexed notes from 1 to 15 form an integral part of these condensed interim financial information.

CHAIRMAN / DIRECTOR

CHIEF EXECUTIVE

CHIEF FINANCIAL OFFICER