Karachi: Dewan Mushtaq Textile Mills Limited reported its annual audited financial statements for the fiscal year ending June 30, 2023, amidst a backdrop of severe economic challenges in Pakistan. These challenges have been exacerbated by long-standing structural weaknesses and political uncertainty, as detailed in the company’s financial report presented by its Board of Directors.
The fiscal year 2023 presented significant hurdles for Pakistan, including geopolitical tensions, a difficult financial environment, and high inflationary pressures, which have collectively impacted global growth prospects. Notably, devastating floods and political unrest further compounded these issues, leading to macroeconomic imbalances, flood damages, and supply shocks that contributed to a dampened economic growth rate of just 0.29% for FY2023, a stark contrast to the 6.1% growth achieved in FY2022. The policy rate saw a sharp increase from 13.75% to 22.0%, while the import compression policy negatively affected exports, causing a 12.7% decline. Remittances similarly fell by 13.74% to USD 27 billion, in comparison to the previous year, all amid the highest recorded inflation rate in Pakistan’s history at 37.97% and a significant devaluation of the Pak Rupee by approximately 40% against the US Dollar.
The textile sector, a critical component of Pakistan’s economy, contributing about 60% to the country’s exports and employing 40% of the labor force, experienced a negative growth of 16.03% with exports declining by 14.6% during FY2023. The sector faced myriad challenges, including severe damage to cotton and other crops due to the 2022 flash floods, higher international raw material prices, persistent supply chain difficulties, gas shortages, unprecedented inflation, and increased political instability. These factors, combined with a burdensome tax regime, have hindered the competitiveness of Pakistan’s textile industry on the global stage.
According to information available from the Pakistan Stock Exchange (PSX), Dewan Mushtaq Textile Mills Limited reported its financial position with an issued, subscribed, and paid-up capital of 115.61 million as of June 30, 2023, unchanged from the previous year. Revenue reserves stood at 45 million, while accumulated losses increased to 697.15 million from 668.10 million in 2022. The capital reserve, marked by a surplus on the revaluation of property, plant, and equipment, slightly decreased to 775.15 million from 781.91 million, leaving the total equity and liabilities at 858.99 million, down from 909.14 million in the previous fiscal year.
Non-current liabilities dropped to 30.03 million from 68.41 million, reflecting a reduction in provisions for staff gratuity and deferred taxation. However, current liabilities increased slightly to 590.35 million, from 566.30 million, driven by short-term borrowings, which rose to 232.20 million from 170.70 million. The company’s non-current assets, primarily property, plant, and equipment, decreased to 813.66 million from 844.12 million, while current assets also saw a decline, with trade debts and cash balances standing at 14.24 million and 3.55 million, respectively.
The company’s financials reflect the broader economic challenges faced by Pakistan’s textile industry, emphasizing the need for strategic measures to enhance competitiveness and sustainability in the global market.