Mahmood Textile Mills : Transmission of Quarterly Report for the Period Ended 31-12-2023

HALF YEARLY ACCOUNTS

December 31, 2023

MAHMOOD TEXTILE MILLS

CORPORATE INFORMATION

CROWE HUSSAIN CHAUDHURY & CO.

Chartered Accountants

7th Floor, Gul Mohar Trade Center, 8-F Main Market,

Gulerg II Lahore, Punjab 54660, Pakistan

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MAHMOOD TEXTILE MILLS LIMITED

DIRECTORS' REVIEW

Dear Shareholders,

We are pleased to present the Director's Report of Mahmood Textile Mills Limited for the half year ending 31st December 2023. Despite the challenges faced by the textile industry, we are delighted to report that our company has shown resilience, adaptability, and steady growth throughout the period.

Industry Overview:

The textile sector in Pakistan continues to be a vital contributor to the country's economy, accounting for a significant portion of its exports and providing employment opportunities to millions of people. Despite facing challenges such as fluctuating raw material prices, energy price hikes, and global economic uncertainties, the sector has demonstrated its ability to innovate and remain competitive in the international market.

Financial Review:

During the reporting period, Mahmood Textile Mills Limited has continued its growth trajectory, achieving commendable financial results during these hard times. Here are the key highlights of our financial performance:

	December 31,	December 31,
	2023	2022
	(Rupees in Million)
Net turnover	33,979	23,710
Gross profit	4,908	2,865
Profit from operations	3,594	1,699
Other income	59	142
Finance cost	(3,336)	(1,464)
Profit before taxation	651	409
Profit after taxation	259	110

During the period under review the Company's net turnover increased from Rs.23.71 billion to Rs.33.98 billion. The gross profit as a percentage of sales increased to 14.44% from 12.08% in the corresponding period. The finance cost during the period increased to Rs. 3.336 billion from Rs. 1.464 billion in the corresponding period. The Company's profit after tax increased to Rs. 259 million from Rs. 110 million (i.e. 135% increase from the corresponding period).

Earnings per Share:

The earnings per share for the half year ended December 31, 2023 has increased to Rs. 8.62 as compared to Rs. 3.67 for previous year's corresponding period.

Operational Highlights:

Throughout the year, we focused on enhancing our operational capabilities and optimizing our production processes. Key initiatives included:

Investments in Technology: We continued to invest in state-of-the-art machinery and technology to improve

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MAHMOOD TEXTILE MILLS LIMITED

efficiency, reduce waste, and enhance product quality. These investments have enabled us to stay ahead of the competition and meet the evolving needs of our customers.

Product Diversification: We expanded our product portfolio to cater to a wider range of customer requirements.

Quality Assurance: Maintaining the highest standards of quality remains a top priority for us. We implemented rigorous quality control measures across all stages of the production process to ensure that our products meet or exceed customer expectations.

Sustainability Initiatives: As part of our commitment to sustainability, we implemented various initiatives to reduce our environmental footprint and promote responsible manufacturing practices. These efforts include energy conservation measures, waste recycling programs, and the adoption of eco-friendly materials. We have coalition with Net Zero Pakistan for achieving the ambition of Paris agreement.

MG Apparel is playing a pivotal role in this regard and is actively working on following sustainable development goals:

We are very much pleased that MG Apparel's first Sustainability annual report is also published and can be viewed at https://mgapparel.com/mg-apparel-sustainability-report/

Future Prospects:

The domestic environment, marked by political uncertainty, high financial costs, and escalating energy prices, poses significant challenges to the manufacturing industry. Urgent measures are imperative, including a substantial reduction in mark-up rates to revitalize the textile sector. Simultaneously, we are actively exploring diverse sustainable energy models-solar, biomass, and steam turbines-to effectively address rising energy costs and fortify the manufacturing landscape.

A substantial reduction of local cotton crop which is being substituted with expensive imports, along with delays in transit of imports and substantial impact on shipping costs due to Red sea tension is also making the industry uncompetitive.

Looking ahead, we remain cautiously optimistic about the future prospects of the textile sector in Pakistan. While challenges such as volatile raw material prices and global economic uncertainties may persist, we believe that our company is well-positioned to navigate these challenges and continue on a path of sustainable growth.

We will continue to focus on innovation, operational excellence, sustainability and customer satisfaction to drive our business forward. By staying agile and responsive to market dynamics, we are confident that we can create long-term value for our shareholders and stakeholders.

Acknowledgments:

We would like to express my sincere appreciation to our dedicated team of employees, whose hard work, professionalism, and commitment have been instrumental in our success. We would also like to thank our customers, suppliers, financial institutions and shareholders for their continued support and trust in Mahmood Textile Mills Limited.

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MAHMOOD TEXTILE MILLS LIMITED

Conclusion:

In conclusion, we are pleased with the progress we have made during the reporting period, and we are confident in our ability to achieve our strategic objectives in the future. We remain committed to delivering superior value to all our stakeholders and maintaining Mahmood Textile Mills Limited's position as one of the leaders in textile industry of Pakistan.

Thank you for your trust and confidence in us.

For and on behalf of the Board
Sd/-	Sd/-
Khawaja Muhammad Ilyas	Khawaja Muhammad Younus
Chairman	Director
Location: Multan
Dated: February 29, 2024

HALF YEARLY ACCOUNTS

04 December 31, 2023

MAHMOOD TEXTILE MILLS LIMITED

HALF YEARLY ACCOUNTS December 31, 2023

HALF YEARLY ACCOUNTS December 31, 2023

23,71033,979

2,8654,908

1,6993,594

14259

(1,464)(3,396)

59409

259110

HALF YEARLY ACCOUNTS

December 31, 2023

INDEPENDENT AUDITORS' REVIEW REPORT TO THE MEMBERS

OF MAHMOOD TEXTILE MILLS LIMITED

REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS

Introduction

We have reviewed the accompanying condensed interim statement of financial position of MAHMOOD TEXTILE MILLS LIMITED ("the Company'') as at December 31, 2023 and the related condensed interim statement of profit or loss and other comprehensive income, condensed interim statement of changes in equity, and condensed interim statement of cash flows, and notes to the condensed interim financial statements for the six-month period then ended (here-in-after referred to as the "interim financial statements"). Management is responsible for the preparation and presentation of these interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial statements consists of making inquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.

The figures of the condensed interim statement of profit or loss and other comprehensive income for the quarters ended December 31, 2023 and 2022 have not been reviewed, as we are required to review only the cumulative figures for the half year ended December 31, 2023.

The condensed interim financial statements for the half year ended December 31, 2022 and the annual financial statements for the year ended June 30, 2023 of the Company were reviewed and audited, by another firm of the chartered accountants who expressed an unmodified conclusion and opinion thereon vide their reports dated February 28, 2023 and October 06, 2023, respectively.

The engagement partner on the resulting in this independent auditor's review report is Amin Ali.

LAHORE;	CROWE HUSSAIN CHAUDHURY & CO.
UDIN: RR202310051BgacEXMlF	CHARTERED ACCOUNTANTS

HALF YEARLY ACCOUNTS

08 December 31, 2023

MAHMOOD TEXTILE MILLS LIMITED