Artistic Denim Mills : TRANSMISSION OF QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2023

QUARTERLY REPORT

MARCH 31, 2023

CONTENTS
COMPANY INFORMATION	2
DIRECTORS' REVIEW REPORT TO THE MEMBERS	3
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION	5
CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS	6
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME	7
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY	8
CONDENSED INTERIM STATEMENT OF CASH FLOWS	9
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS	10

ARTISTIC DENIM MILLS LIMITED

QUARTERLY REPORT
MARCH 31, 2023
COMPANY INFORMATION
Board of Directors
Chief Executive	Mr. Muhammad Faisal Ahmed
Chairman	Mr. Muhammad Iqbal Ahmed
Directors	Mr. Muhammad Yousuf Ahmed
	Mr. Muhammad Ali Ahmed
	Ms. Zahra Faisal Ahmed
	Mr. Yazdani Zia
	Mr. Muneer Ahmed
Audit Committee
Chairman	Mr. Yazdani Zia
Members	Mr. Muhammad Iqbal Ahmed
	Mr. Muhammad Ali Ahmed
Human Resource and
Remuneration Committee
Chairman	Mr. Yazdani Zia
Members	Mr. Muhammad Faisal Ahmed
	Ms. Zahra Faisal Ahmed
Chief Financial Officer	Mr. Sagheer Ahmed
Company Secretary	Mr. Muhammad Ozair Qureshi
Chief Internal Auditor	Mr. Salman Arif
Auditors	M/s. Reanda Haroon Zakaria & Company
	Chartered Accountants
Legal Advisor	Monawwer Ghani
	Advocate
Share Registrar	M/s F.D. Registrar Services (SMC Pvt.) Limited
	17th Floor, Saima Trade Tower-A,
	I.I. Chundrigar Road, Karachi.
	Tel: [phone]
Bankers	Allied Bank Limited
	Bank Al Habib Limited
	BankIslami Pakistan Limited
	Faysal Bank Limited
	Habib Bank Limited
	Habib Metropolitan Bank Limited
	Meezan Bank Limited
	National Bank of Pakistan
	Standard Chartered Bank (Pakistan) Limited
	United Bank Limited
	Woori Bank
Registered Office	Plot No. 5-9,23-26, Sector 16,
	Korangi Industrial Area, Karachi.
	UAN: 111 236 236, Fax No. 3505 4652
	www.admdenim.com
Mills	Korangi Industrial Area, Karachi.
02	ARTISTIC DENIM MILLS LIMITED

QUARTERLY REPORT

MARCH 31, 2023

DIRECTORS' REVIEW

The Directors of Artistic Denim Mills Limited are pleased to present to the shareholders the Directors' Review Report of your Company together with the un-audited condensed interim financial statements of the Company for the nine months period ended March 31, 2023.

PERIOD UNDER REVIEW

Comparative financial results for the current period and that of the corresponding period last year are as follows:

	March 31, 2023	March 31, 2022
	Rs. in ('000')	Rs. in ('000')
Sales - net	12,469,373	12,059,238
Gross profit	2,039,090	1,175,152
Finance costs	614,198	306,750
Net profit	817,509	357,238
EPS (Rs. per share)	9.73	4.25

Despite substantial macro-economic challenges, during the first nine months of the ongoing financial year, your Company registered net sales of Rs.12,469 million, which represents a 3.40% increase in top-line performance when compared to the corresponding period last year.

Gross profit increased from Rs. 1,175 million (9.74%) to Rs. 2,039 million (16.35%) when compared to the nine months period under review. The prime reasons for increase in gross margin were devaluation of Pakistan Rupee and effective cost controls.

Finance costs increased to Rs. 614 million as compared to Rs. 307 million for the corresponding period of last year, which was due to steep rise in interest rates and increased borrowing due to increased working capital requirements.

As a result of the above, your Company ended the nine months period with a net profit of Rs. 818 million compared to a net profit of Rs. 357 million in the same period last year. This represents significant increase in profitability, up by 128.84%. This translated into Earnings per Share (EPS) of Rs. 9.73 as compared to Earnings per Share of Rs. 4.25 during the corresponding period.

FUTURE OUTLOOK

The textile industry in Pakistan is currently facing a severe economic crisis due to a confluence of factors, including poor economic management, political instability, natural disasters, elevated inflation, increasing interest rate, high energy prices, and immediate foreign debt payment obligations. Following the import constraints and devaluation of local currency against dollar, the exports of Pakistan have plummeted by 10% during nine months through July 2022 to March 2023, according to Pakistan Bureau of Statistics (PBS). As per the data, exports of the country slipped to $21.05 billion during the first nine months of the current fiscal year as compared with $23.35 billion in the same period of the last fiscal year.

ARTISTIC DENIM MILLS LIMITED 03

QUARTERLY REPORT

MARCH 31, 2023

Pakistan's export market which is, by and large, in US and Europe is facing an economic slowdown and declining global trade since July 2022 and their low purchasing power due to high inflation has caused a decrease in demand for local products in the export markets. We expect that consumption may remain weak in the short term in these regions due to inflation outpacing nominal wage growth.

Despite the foregoing, under the Board's leadership, the Management of your Company is making all efforts to steer the organization in the right direction. As per our strategy, we will maintain operational excellence and will continue to provide reliable, high quality products to our esteemed customers. Your Company remains focused on sustaining innovations through strong design and product development, while also making concerted efforts to improve performance through efficiency and effective cost control initiative. However, with rising cost pressures, maintaining market share as well as ensuring reasonable margins will be a challenge.

ACKNOWLEDGEMENTS

The Board of Directors of the Company would like to thank the financial institutions, shareholders, suppliers and customers who have been associated with the Company for their continuing support and cooperation. The Board of Directors would also like to acknowledge the hard work put in by all the employees of the Company.

On behalf of the BOARD of DIRECTORS

MUHAMMAD FAISAL AHMED	YAZDANI ZIA
CHIEF EXECUTIVE	DIRECTOR
Karachi: April 27, 2023

04 ARTISTIC DENIM MILLS LIMITED