Karachi: Globe Textile Mills Limited has released its Annual Report for the year ended December 31, 2023, highlighting continued legal and operational difficulties. The Company remains entangled in significant legal and contractual issues, primarily due to a buyer's non-fulfilment of obligations under a Share Purchase Agreement initiated in 2017. The legal dispute, involving multiple notices and court actions, continues to impact the Company's operations and financial standing.
According to the Directors' Report, the Company's management relied on prior year's audited financial statements for opening balances due to these ongoing legal matters. An external audit resulted in a disclaimer of opinion, citing the inability to verify the opening balances or assess necessary adjustments. The report underscores the challenges faced by the textile sector, including volatile cotton prices, energy shortages, and high utility tariffs, which have further complicated the Company's revival efforts.
Despite previous attempts to resume spinning operations, the Board of Directors has decided to place the revival plan on hold, attributing the decision to the prevailing macroeconomic challenges such as inflation, high interest rates, and overall business uncertainty. The Company's financial statements have been prepared on a non-going concern basis, reflecting the significant accumulated losses and depressed cash flows.
The financial highlights reveal no revenue for the year, with administrative and other expenses amounting to Rs. 2.99 million, resulting in a net loss of Rs. 2.99 million. The loss per share stands at Rs. 0.18. No dividend has been declared due to the continuing losses. According to information available from the Pakistan Stock Exchange (PSX), the company's stock price experienced a Minor move during the period under review.
The report also addresses the auditors' disclaimer of opinion, which primarily stems from the legal uncertainties and reliance on prior year figures without sufficient audit evidence. The Company continues to monitor the ongoing legal proceedings and potential liabilities in consultation with legal advisors.
Furthermore, the report indicates that the Globe Textile Mills Limited has not engaged in any operational activities since April 2006, functioning minimally to manage legal and statutory compliance matters. The Company holds no employees and has not made any defaults in debt payments other than the disputed issues. The Directors, including Farzana Arif and Arshad Arif, received no remuneration or benefits during the year.
The Board confirms compliance with the Companies Act, 2017, to the extent practicable. The report notes no material changes affecting the Company's financial position between the end of the financial year and the report's release date. The Directors remain cautiously optimistic about future business opportunities if a more stable environment emerges.