Karachi November 4 2021; Disposal process of the second unit by AZGARD9 located at Muzaffargarh is ongoing under scheme of financial restructuring as per information shared by the company.
Proceeds from disposal of this unit would be utilized to reduce “the settlement finance loan” created through this restructuring scheme.
From this restructuring, the financial affairs of the Company have improved” says Mr Ahmad H. Sheikh company Chief Executive Officer.
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The Company has started meeting its financial obligations as due. Now with this restructured financial condition, it is hoped that the Company should be able to continue to meet its financial obligations in a timely manner.
Implementation of Company’s financial restructuring after its approval by Lahore High Court on July 31, 2019 was finally implemented on April 29, 2021. In this respect, during the year, the stitching unit located at Ruhi Nala, Lahore has been sold. Proceeds from the rights issue and from the sale of the stitching unit have been distributed in accordance with the terms of the creditors’ scheme of arrangement. Through this financial restructuring significant portion of the principal portion of the debt and related mark-up is settled. Resultantly, the debt burden and finance cost of the Company has reduced.
During this year, sales of the Company have increased by over 30 percent as compared to previous year. Profit from operations has increased by over 55 percent as compared to the previous year. Profit before taxation is PKR 710.37 million as compared to a loss for the previous year of PKR 223.26 million.
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During the year, the 2nd financial restructuring of the Company has been completed. Consequently, a gain has been booked on the restructuring of loans under this scheme. Profit for the year after recognition of this gain is PKR 7,559.40 million.
On the operations side, the impact of the various waves of Covid-19 have impacted the business of the Company. This resulted in less growth and less production for the year than was originally envisaged.
During the year cost of raw materials such as cotton, yarn and fabric increased significantly. This is following a global trend where the prices of many commodities have increased dramatically. On the other hand, the Pakistani rupee strengthened against the US dollar. At start of the year the USD exchange rate was PKR 168. This gradually moved to PKR 152.28 in May 21; closing at PKR 157.80 in June 30, 2021. Due to impacts of Covid-19,
the increasing input costs and the decreasing value of the US Dollar to the Pakistani Rupee, the margins of the Company remained under pressure.
During most part of the year the interest rates remained fairly stable. While the restructuring scheme has been implemented the funds of PKR 306.02 million due from National Bank of Pakistan still have not been released. It is expected that they may be received in the near future.
