CONTENTS

Company Information

03

About Us

04

Vision and Mission Statements

05

Chairman's review

06

Financial Highlights

07

Notice of Annual General Meeting

08

Director's Report to the Members

09

Director's Report in Urdu

12

Independent Auditor's Review Report to the Members on Statement of Compliance

with the Listed Companies (Code of Corporate Governance) Regulations, 2019

15

Statement of Compliance

with the Listed Companies (Code of Corporate Governance) Regulations, 2019

17

Independent Auditor's Report to the Members

20

Financial Position

28

Profit & Loss Account

30

Statement of Comprehensive Income

31

Cash Flow Statement

32

Statement of Changing in Equity

34

Notes to the Financial Statement

35

Pattern of Shareholding (Ordinary Shares)

70

Pattern of Share holding (Preference Shares)

72

Form of Proxy

73

COMPANY INFORMATION

BOARD OF DIRECTORS

Mian Muhammad Latif

(Chairman)

Mr. Muhammad Naeem (Chief Executive Officer)

Mian Muhammad Javed Iqbal

Mr. Muhammad Faisal Latif

Mr. Tariq Ayub Khan

Mr. Maqsood UI Hassan

Mr. Muhammad Hashim

Mr. Muhammad Salman Javed

Mrs. Sobia Chughtai

(Nominee Director)

Mr. Shahid Mahmood Khan

(Nominee Director)

CHIEF FINANCIAL OFFICER

Mr. Faisal Ali Sarwar

COMPANY SECRETARY

Mr. Muhammad Arshad

LEGAL ADVISOR

Ch. Shahid Mehmood (Advocate)

SHARE REGISTRAR

F.D. Registrar Services (SMC-Pvt.) Limited

Office # 1705, 17th Floor, Saima Trade Tower-A,

I.I. Chundrigar Road, Karachi.

Tel :021-32271905-6/021-35478192-3

REGISTERED OFFICE

Nishatabad, Faisalabad.

Tel:+92 41 8754472-8

Fax:+92 41 8752400, 8752700

WEBSITE

Email:- chenab@chenabgroup.com

Website:-www.chenabgroup.com

WORKS

-Spinning Unit- Toba Tek Singh. (Non-Core Asset)

-Weaving Unit- Kharianwala, Distt: Sheikhupura.

(Non-Core Asset)

-Weaving Unit- Shahkot, Distt: Nankana Sahib.

-Processing & Stitching Units - Nishatabad, Fsd.

BANKS

Allied Bank Limited.

Askari Bank Limited.

Al Baraka Bank (Pakistan) Limited.

Citibank, N.A.

Faysal Bank Limited.

First Credit & Investment Bank Limited.

Habib Bank Limited.

Habib Metropolitan Bank Limited.

KASB Bank Limited.

National Bank of Pakistan.

NIB Bank Limited.

Orix Leasing (Pakistan) Limited.

Pak Oman Investment Company Limited.

Pak Kuwait Investment Company (Pvt.) Limited.

Pak Libya Holding Company (Pvt.) Limited.

Saudi Pak Industrial & Agricultural Investment

Company (Pvt.) Ltd.

Silk Bank Limited.

Standard Chartered Bank (Pakistan) Limited.

The Bank of Punjab.

United Bank Limited.

AUDIT COMMITTEE

Mr. Tariq Ayub Khab

- Chairman

Mr. Muhammad Hashim

- Member

Mr. Muhammad Salman Javed - Member

HUMAN RESORCE & REMUNERATION COMMITTEE

Mr. Maqsood ul Hassan

- Chairman

Mr. Muhammad Naeem

- Member

Mr. Muhammad Salman Javed - Member

AUDITORS

RSM Avais Hyder Liaquat Nauman

Chartered Accountants.

ABOUT US

The Chenab Limited started its business as Private Limited Company in 1985 and subsequently converted into Public Limited Company. Thereafter in the year 2004 Preference Shares and in 2005 Ordinary Shares were listed on Pakistan Stock Exchange Limited.

It is state of art vertically integrated textile manufacturing company known for its word class textile development and export. Chenab is engaged in manufacturing and export of supreme quality of Home Textile and Garments. The company sells its products all over the world.

Our HR philosophy is to provide a conductive environment with a special focus on career development and making our employees enable to deal with challenges of today and tomorrow.

Vision

To be a competitive and customer focused organization with continuing commitment to excellence and standards.

Mission Statement

  • To be the business house of first choice for customers.
  • To be a change leader.
  • To produce innovative, relevant and cost effective products.
  • Setting and maintaining high standards.
  • To earn profits by achieving optimum level of production by using stateof are technologies.
  • To provide ideal working conditions to employees and to take care in their career planning and reward them according to their skill and responsibility.
  • To meet social and cultural obligations towards society being a patriotic and conscientious corporate citizens.

Global Certification

Chairman's Review

I am pleased to present a report on the overall performance of the Board of Directors and effectiveness of the role played by the Board in achieving the company's objectives.

The Board was constituted on 28-01-2022, after reversal of Winding up Order. The first object was to restart the operation of the Company.

The company is very hopeful that with restructuring and settlement of loan through "Scheme of Arrangement " approved by Honorable Lahore High Court Lahore, major lenders and shareholders, the financial health of the company will be improved which will enable the company to focus on new profitable avenues.

Pakistan's home textile industry also faces competition from China and India and the rising prices of raw material, increasing interest rate and energy rates coupled with unstable foreign currency rates and political conditions. Despite these challenges the Board of Directors remained focused on executing our business strategies target and achieved growth.

An annual self evaluation of the Board of Directors of the company is carried out. The purpose of this evaluation is to ensure Board's overall performance and effectiveness. The same is measured against expectations in the context of objectives set for the company. All Directors are equally involved in important decisions. The Board's overall performance for the year under review was satisfactory.

Mian Muhammad Latif

Chairman Board of Directors

Financial Highlights

2022

2021

2020

2019

2018

2017

2016

Operational Performance

Sales

503,740,633

-

-

360,869,643

915,909,663

1,764,452,242

2,007,632,402

Cost of sales

(724,673,438)

-

-

(430,828,397)

(1,081,014,516)

(2,493,140,675)

(2,259,157,207)

Gross (loss)

(220,932,805)

-

-

(69,958,754)

(165,104,853)

(728,688,433)

(251,524,805)

Operating (loss)

(449,641,437)

(144,480,491)

(149,267,541)

(155,039,514)

(303,610,504)

(868,913,029)

(403,287,485)

(Loss) / profit before taxtion

(443,306,317)

1,019,812,487

(81,248,670)

145,625,462

(261,067,736)

(970,675,503)

(379,229,841)

(Loss) / profit after taxtion

(452,377,202)

999,742,641

(96,579,788)

141,364,554

(281,858,960)

(992,228,304)

(389,703,307)

Financial Position

Property,Plant and equipments Right-of-use assets Investment property

Long term deposits Fixed capital expenditure Current assets

Store,spare parts and loose tools stocks in trade

Other current assets

Cash and cash equivalents

Non current assets held for sale Total assets

Current liabilities

Short term bank borrowing Currant portion of long term financing/lease liabilities Other current liabilities

Net working capital

Non-current liabilities

Shareholder's equity

9,615,704,320

-

559,975,280

13,418,150

10,189,097,750

44,251,070

77,600,081

364,045,877

77,396,188

563,293,216

147,942,743

10,900,333,709

-

726,220,500

1,335,677,822

2,061,898,322

8,838,435,387

8,914,786,727

(76,351,340)

9,651,578,837

169,522,097

873,060,285

11,738,715

10,705,899,934

28,743,953

230,000

95,648,347

34,341,523

158,963,823

-

10,864,863,757

4,344,992,444

3,855,894,245

1,040,371,780

9,241,258,469

1,623,605,288

1,350,079,426

273,525,862

9,729,874,102

171,248,441

889,195,976

11,738,715

10,802,057,234

28,743,953

230,000

139,577,791

12,917,307

181,469,051

-

10,983,526,285

4,344,992,444

3,557,894,245

2,154,526,358

10,057,413,047

926,113,238

1,653,575,144

(727,461,906)

10,717,044,490

173,047,260

-

12,636,768

10,902,728,518

28,743,953

230,000

138,395,255

17,565,397

184,934,605

-

11,087,663,123

4,344,992,444

3,104,745,818

2,164,051,501

9,613,789,763

1,473,873,360

2,351,752,556

(877,879,196)

10,993,406,655

-

-

12,636,768

11,006,043,423

36,190,798

29,794,979

1,838,023,531

18,790,040

1,922,799,348

-

12,928,842,771

4,344,994,597

2,981,041,297

3,239,709,865

10,565,745,759

2,363,097,012

3,410,477,832

(1,047,380,820)

11,185,697,330

-

-

12,636,768

11,198,334,098

67,364,712

32,775,124

1,820,136,526

28,422,073

1,948,698,435

-

13,147,032,533

4,342,498,926

2,784,877,799

3,133,986,777

10,261,363,502

2,885,669,031

3,672,011,347

(786,342,316)

10,848,915,539

-

-

12,636,768

10,861,552,307

422,273,351

334,657,862

1,824,969,368

24,231,624

2,606,132,205

-

13,467,684,512

4,988,748,313

2,757,064,088

2,842,070,097

10,587,882,498

2,879,802,014

3,270,026,044

(390,224,030)

Profiability analysis

Gross (loss) to sale (%)

-44%

-

-

-19%

-18%

-41%

-13%

Net (loss) / profit to sale (%)

-90%

-

-

39%

-31%

-56%

-19%

Return on Investment (%)

-4%

9%

-1%

1%

-3%

-9%

-4%

Return on equity (%)

592%

366%

13%

-16%

27%

126%

100%

Earnings per share (Rupees)

-3.93

8.49

-0.84

1.23

-2.45

-8.63

-3.39

Financial analysis

Current ratio (time)

0.27

Total Debt to Total Assets

0.83

Total Debt to Fixed Assets

0.89

-

-

0.02

0.02

0.02

0.18

0.19

0.88

0.87

0.88

0.76

0.75

0.89

0.88

0.90

0.89

0.88

-

-

0.25

0.75

0.93

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that 38th Annual General Meeting of the shareholders of the Company will be held at 11.30 A.M. on Monday the 15th January, 2024 at the Registered office of the Company at Nishatabad, Faisalabad to transact the following business:-

ORDINARY BUSINESS

  1. To confirm the Minutes of the last meeting dated October 09, 2023.
  2. To consider and approve the annual audited financial statements of the company for the year ended June 30, 2022 along with auditor's report and directors report thereon M/s. RSM Avais Hyder Liaquat Nauman, Chartered Accountants, Faisalabad.
  3. The shareholders have already approved the appointment of External Auditors M/s. RSM Avais Hyder Liaquat Nauman, Chartered Accountants, 478-D, Peoples Colony No.1, Faisalabad for financial year 2023 in AGM held on 17-07-2023.
  4. To transact any other business with the permission of the Chair.

BY ORDER OF THE BOARD

FAISALABAD

(MUHAMMAD ARSHAD)

DECEMBER 22, 2023

COMPANY SECRETARY

NOTES:

  1. A member entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him/her at the meeting. Proxies must be deposited at the
    Company's Registered Office not less than 48 hours before the time for holding the meeting. A proxy must be a member of the company.
  2. Shareholders whose shares are deposited with Central Depository Company (CDC), or their Proxies are requested to bring their original National Identity Cards (CNICs) or Passports alongwith the Participants ID numbers and their account numbers at the time of attending the Annual General Meeting for verification.
  3. All other members should bring their Original Computerized National Identity Cards for identification purpose.
  4. The shareholders are requested to notify the company immediately the change in their address, if any.

DIRECTORS REPORT TO THE MEMBERS

The directors are pleased to place before you the report and audited accounts of the company for the year ended June 30, 2022. The period under review consist of liquidation, trial run BMR, and commercial production. The main reason for the operational loss was, as the company was not fully commercially operational during the year hence resulted into high fuel and administrative cost. However the management is determined to make your company profitable in coming years.

REVENUE

The revenue was earned from rental income, toll manufacturing of local activities and exports sales of core activity.

FINANCIAL RESULTS

The financial results for the year ended June 30, 2022, with comparative figures, are as follows: -

Sales

Cost of sales

Gross (loss)

Operating expenses

Selling and distribution expense

Administrative expenses

Other operating expenses

Operating (Loss)

Other income

Finance cost

(Loss) / Profit before taxation

Provision for taxation

(Loss) / Profit for the year after taxation

Earnings per share- Basic& diluted

TO RATIFY BOARD'S RESOLUTION (S)

2022

2021

Rupees

Rupees

503,740,633

-

(724,673,438)

-

(220,932,805)

-

(7,333,103)

-

(186,412,304)

(144,480,491)

(34,963,225)

-

(228,708,632)

(144,480,491)

(449,641,437)

(144,480,491)

187,054,473

1,164,322,567

(180,719,353)

(29,589)

(443,306,317)

1,019,812,487

(9,070,885)

(20,069,846)

(452,377,202)

999,742,641

(3.93)

8.49

To ratify the Board's resolutions passed by the Directors by way of circulation under clause 78 of the Articles of Association of the Company since the holding of the last meeting i.e 15-09-2023.

FUTURE PROSPECTS

Pakistan is a significant player in the global textile market, and the future outlook depends on global economic conditions and demand for textiles. The country's textile sector relies on exporting goods, so changes in global demand, trade policies, and economic conditions in major importing countries has a major impact the industry and its growth. Furthermore the political instability, and Government policies such as Special trade agreements, Interest rate, exchange rate, taxation, and support for the textile sector, also has a significant influence. Unfortunately all these factors remains negative during this time period and even till date the situation is same. However the management of your company is trying its best to operate with minimum negative impact.

  1. ON GOING CONCERN

The Company managed to settle all its outstanding issues with its key financial institution and executed an agreement named SOA. The same SOA is fully implemented. The Gap between current assets and current liabilities is also reduced significantly to Rs.1,350.66 million which last year was at 9,082.29 million Reference note1.3.

  1. Disposal of Non-Core Assets
    To make the company operationally viable by reducing its debt liabilities and to generate working capital the management has agreed to sell its non-core assets to the tune of Rs. 1.4 billion under SOA. Till the signing of this report the company has managed to sell non-core assets of Rs.1,244.625 million. The bank liabilities were reduced by Rs.985.675 million till 15-12-2023.
  2. Settlement/rescheduling of loans/finances with lenders
    The company has entered into a SOA with its lenders and all its liabilities rescheduled for 14 years. (Reference Note No. 9.1)
  3. Additional Working Capital Facility
    With the successful implementation of SOA. The banks have allowed us additional /fresh working capital lines. The first draw down against fresh line was made on 23-12-2022.
  4. Induction of fresh equity

Sponsors have managed to inject total of Rs.808.90 Million fresh capital as director's loan as follows. This has increased the operational viability of the company.

From 01-07-2021 till 30-06-2022

: Rs.402.50

From 01-07-2022 till 30-06-2023

: Rs.179.90

From 01-07-2023 till 15-12-2023

: Rs.226.50

  1. EXPLANATION TO AUDITORS' OBSERVATIONS
  1. Majority of the preference shareholders have opted to convert their shares into ordinary shares but the matter is pending with court. Reference Note. 4.3. Therefore we could not calculate the diluted EPS.
  2. With complete start of production in coming years, the management is of the view that deferred tax asset will be created and liability will be adjusted subsequently.
  3. The company circulated the confirmation letters to all parties selected by the auditor. The Company remained non-operational for a long period of time therefore some parties were not responding which was beyond our control.
  4. The company has properly disclosed the outstanding liability.
  5. The company was under liquidation and the joint official liquidator has to operate under the instructions of the court therefore this revaluation was carried out at that particular date by them. Subsequently on 27-07-2023 the revaluation was carried out and the total value of assets determined by the valuators is Rs.10.319 billion Therefore the impairment in asset value is not required.
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Chenab Ltd. published this content on 22 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 December 2023 11:16:22 UTC.