Transmission of Annual Report for the Year Ended 2023

02 Hira TexÆle Mills Limited

HIRA TEXTILE MILLS

L I M I T E D

HIRA TEXTILE MILLS

L I M I T E D

Annual Report 2023 03

Noce is hereby given that 32nd annual general meeng of the members of Hira TexÆle Mills Limited will be held on Wednesday, November 20, 2024 at 03.00 PM at Company's registered office situated 8KM Manag Raiwind Road Raiwind District Kasur to transact the following:

1. To confirm the minutes of the last General Meeng.
2. To receive and adopt the audited accounts of the company for the year ended on June 30, 2023 together with the Directors and auditor's reports thereon.
3. To consider appointment of external audits for the financial year ending June 30, 2024.
4. Special Business
   To approve transacons conducted with related pares for the year ending on June 30, 2023. "Resolved That the transacons conducted with related pares as disclosed in Note No.42 of the financial statements for year ended June 30, 2023 hereby approved and confirmed".
5. To transact any other business with the permission of the Chair.

(By the order of the Board)

Muhammad Hassnain Saeed Sohbin

Company Secretary

Lahore: October 29, 2024

Notes

1- The share transfer books of the Company will remain closed from November 13, 2024 to November 20, 2024 on the register of members.

2. A member entled to aend and vote at the General Meeng may appoint any person as proxy to aend and vote instead of him/her. No person other than a member shall act as proxy. The instrument appoinng a proxy and the power of aorney or other Authority (if any) under which it is signed or a notarially cerfied copy of such power or authority, in order to be valid, must be deposited at the registered office of the company at least 48 hours before the me of the meeng and must be duly stamped, singed and witnessed.

1. Any individual beneficial owner of CDC entle to aend and vote at this meeng, must bring his/her original CNIC or passport, account and parcipants. ID numbers to prove his/her identy and incase of proxy it must enclose an aested copy of his/her CNIC of passport. Representaves of corporate members should bring the usual documents requires for such purpose.
2. In terms of sub secon 1(b) of Secon 134 of the Companies Act, 2017, Members can also aend and parcipate in the AGM through video conference facility, if members residing the vicinity, collecovely holding 10% or more shareholding, provide their consent in wriŒng, to parcipate in the AGM through video conference at least ten (10) days prior to date of AGM. AXer receiving the consent of the members in aggregate 10% or more shareholding, the Company will inmate members regarding venue of video conference facility at least five
   (5) days before the date of the AGM along with complete informaon necessary to enable them to access such facility.
3. The audited financial statements of the company for the year ended June 30, 2023 have been placed at the website: www.hiratex.com.pk
4. Shareholders are requested to immediately nofy change in address. If any to the company share register M/s. Vision Consulng Ltd. 3-C, 1st floor, LDA Flats, Lawrence Road Lahore. And also furnish aested photocopy of their CNIC as per lisng regulaon, if not provided earlier.

HIRA TEXTILE MILLS

L I M I T E D

Annual Report 2023 05

06 Hira TexÆle Mills Limited

CHAIRPERSON'S REVIEW

HIRA TEXTILE MILLS

L I M I T E D

It gives me pleasure to present you the annual review of the audited financial statement for the year ended June 30, 2023 and the overall performance of Board. I would take this opportunity to invite you for 32nd Annual General Meeng of the Company.

Review of the Company's Performance

Due to decrease in sales during this financial year, performance of the company in term of profitability is in alarming posion. Margins have been squeezed and it appears that they will be further compressed in me to come. I would like to appreciate the efforts of the management towards cost reducon, beer uµlizaon of capacies and product development. The Company has to work harder to compete with increasing compeŸon. Plans of the Company should yield beer efficiencies and reduce producon cost. The Board is aware of the importance of its role in achieving objecives of the Company. The Board acknowledges its responsibility for corporate & financial reporng Framework and is commied to good Corporate Governance. Board is devoted and focused towards Company's value and mission. All the significant issue throughout the year were presented before The Board and its commiees to strengthen and formulize the corporate decision-making process and parally all the related party transacons were approved by the Board on the recommendaon of audit commiee. The Board has prepared and approved the Director's report is published with the quarterly and annual financial statements of the company and the content of the Directors report are in accordance with the requirement of applicable law and regulaons. The Board ensured that the adequate system of internal control is in place and has been effecvely implemented and monitored. The Board of Directors met four mes during the year to review the overall performance, appraise financial results and overall effecveness of the role played by the Board in achieving the company's objecives. Meeng agendas and supporng papers were provided in mely manner for the Board meeng. Aendance of Board members in Board and commiee meeng has been sasfactory. Board members do have the suitable knowledge, variety of experse and experience that is required to successfully govern the business. Individual Board members are commied to perform for the beerment of the company. Areas of planning, risk management, policy development, budgeng, reporng, monitoring and approval have been appropriately given me and discussed with beer outcomes.

On behalf of the Board, I appreciate the support of all financial instuon. I express gratude to our valued customers. It is hard work and dedicaon of all our employees that have made such results possible.

08 Hira TexÆle Mills Limited

HIRA TEXTILE MILLS

L I M I T E D

The Board of Directors feels pleasure in presenng the Company's Audited financial statements together with the auditor's report thereon for the year ended on June 30, 2023. Financial Statements have been endorsed by the Chief Execuve Officer and the Chief Financial Officer in accordance with the Code of corporate Governance, having been recommended for approval by the Audit Commiuee of the Board and approved by the Board of Directors for presentaon.

Following are the operang & Financial results: -

Our company aer tax loss of Rs. 366.245 million as compared to loss of Rs. 583.94 million during the corresponding period. Loss per share for the year is Rs. 4.23 as compared to loss per share of Rs. 6.74 during the corresponding previous year. Gross loss for the year under review is 367% as compared to loss of 174.37%. Administrave expenses decreased 8.74% of sales to 2.47% of sales. Finance cost increased by 2.201% over the last year.

Due to the above factors, the Company faced severe liquidity crisis due to which it was unable to make mely repayments of loans and interest/mark-up thereon. Ten banks have filed recovery suits against the Company in Lahore High Court. Similarly, the Company has also filed recovery claims against these banks in Lahore High Court.

Capital Expenditures

Due to liquidity crisis the Company did not incur any capital expenditure.

Dividend

Due to Loss of the company and circumstances discussed above, the Board of Directors has not recommended dividend for the year ended June 30, 2023.

Related Pares

All transacons between the related pares are made at arm's length prices determined in accordance with the comparable uncontrolled prices method. The company has fully complied with the best pracces of the transfer pricing as contained in the lisng regulaon of Pakistan Stock exchanges. Related party transacons and transfer pricing policy were in line with Company's Act. 2017, the Listed Companies Code of Corporate Governance Regulaons 2017 and Companies Related Pares Transacons and Maintenance of Related Records Regulaons, 2018.

Financial Statements Audit and Auditors Report

The auditors of the Company have issued a disclaimer report on the basis of the following maers:

1- As reported in note 2.2, the Company has incurred gross loss of Rs. 154.876 million and loss aer taxaon of Rs.366.24 million during the year ended 30 June 2023. As at 30 June 2023, the Company has accumulated losses of Rs. 2859.562 million. Its current liabilies exceed current assets by Rs. 1344.768 million. The Company has not been able to make mely repayments of its debt finances and interest thereon. The providers of debt finances have filed recovery suits against the Company for Rs. 2077.45 million. All short-term borrowing facilies availed by the Company stand expired. These factors indicate existence of material uncertainty that raises doubts about the Company's ability to convnue as ageing concern and that the Company may not bearable to discharge its liabilies and realize its assets in the normal course of business. While the Company has prepared and presented the annexed financial statements on going concern basis based on the factors explained in note 2.2, we consider that in the absence of any favorable selement with the providers of debt finances, ability to obtain further financing and revival of its operaons, the Company may not be able to sele its liabilies and realize its assets in the normal course of business. Consequently, the use of going concern assump‰on in the preparaon of annexed financial statements is not appropriate and adjustments may be required to the amounts reported in the financial statements. The financial statements do not disclose this fact.

HIRA TEXTILE MILLS

L I M I T E D

Annual Report 2023 09

statements, the Company was unable to make mely repayments of long term finances and interest thereon. As a result, the Company breached provisions of long term financing agreements with Askari Bank Limited Note No. (11.1) MCB Bank Limited (see note 11.2 & 17.1), Habib Bank Limited (see note 11.5), The Bank of Punjab (see note 11.6 & 11.7), Bank Alfalah Limited (see note11.9 & 11.10) and Faysal Bank Limited (see note 11.11) and SAMBA Bank Ltd (Note# 17.2) where by the

enre liability under these agreements has become

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payable on demand. Internaonal Accounng Standard 'Presentaon of Financial Statements' requires that if an enty breaches a provision of a long-term loan arrangement on or before the end of the reporng period with the effect that the liability becomes payable on demand, it classifies the liability as current. However, the Company connues to classify these finances as non- current liabilies. Had these been classified as current liabilies, the total current liabilies of the Company as at the reporng date would have been higher by Rs. 1586.268 million.

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3- We have not received responses to our requests for direct confirmaons from bankers of the Company for debt finances amounng to Rs. 2,003.66 million, accrued interest thereon amounng to Rs. 624.59 million and bank guarantees amounng to Rs. 29.54 million. We were unable to sasfy ourselves by alternave means concerning these liabilies and conngencies as at the reporng date. Accordingly, we were unable to determine whether any adjustments or disclosures might have been found necessary in respect of recorded or unrecorded debt finances and accrued interest thereon or disclosed or undisclosed conngencies and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.

4- We were unable to send out requests for direct balance confirmaons to trade creditors amounng to Rs. 180.765 million reported in 16, advances from

customers amounng to Rs. 15.91 million reported in

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note 16. We were unable to sasfy ourselves by alternave means concerning these balances. Accordingly, we were unable to determine whether any adjustments might have been found necessary in respect of trade creditors, advances from customers and advances to suppliers and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.

Accrued liabilies has been reported in note 16 at Rs.51.64 million. We were unable to sasfy ourselves concerning accrued liabilies due to non-availability of underlying records and informaon and accordingly, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded liabilies and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.

Gas Infrastructure Development Cess ['GIDC'] payable has been reported in note 16 at Rs. 73.9 million. We were unable to sasfy ourselves concerning GIDC payable due to non-availability of underlying records and informaon and accordingly, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded liabilies pertaining to GIDC and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.

The Company has reported Rs. 1.699 million as payable to employees' provident fund trust in note 16. The Company's contribu]on to the provident recognized in the profit or loss has been reported at Rs. NIL and Rs. NIL in note 31.1 and note 33.1 respec‰vely. No informaon pertaining to these transacons and balances were made available to us for the purpose of audit. Audited financial statements of provident fund trust were also not available. We were unable to sasfy ourselves concerning the Company's and employees' contribu]on and payments to the provident fund and related liability and expenses recognized in the statement of financial posion and statement of profit or loss respec‰vely and thus we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded liabilies pertaining to the provident fund scheme and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.

The Company management did not arrange for us to carry out physical verificaon of property, plant and equipment at mill premises at year end. Accordingly, we were unable to determine whether any adjustments might have been found necessary to the carrying amount of property, plant and equipment and the elements making up the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows.