The Chairman’s review included in the Annual Report deals inter alia with the business review, performance of the Company and Board, business risks, challenges and future outlook. The Directors endorse the contents of the Chairman’s review.
Pakistan’s economy rebounded significantly in fiscal year 2023-24, overcoming the severe challenges of the previous year. Despite facing headwinds such as import restrictions, natural disasters, political instability, and global economic uncertainties, the country demonstrated resilience through strategic interventions and economic reforms.
Pakistan's economy experienced a strong rebound in fiscal year 2023-24, with GDP growth reaching 2.38%. This marked a significant improvement from the previous year's contraction. The industrial sector also showed positive signs, with manufacturing output increasing by 2.42%. These positive developments were reflected in the strengthened Pakistani rupee and the surging stock market index, which gained 82.8%. The successful implementation of the IMF's Stand-by Arrangement program and overall economic stabilization played a crucial role in driving this growth.
Pakistan's economy is currently facing significant challenges and remains heavily dependent on IMF support. The upcoming year is expected to be difficult as the country navigates macroeconomic instability while adhering to strict monetary and fiscal policies. The economic outlook will largely depend on political stability and the continued implementation of reforms under the IMF program.
Despite these challenges, the business environment has shown significant improvement compared to the previous year. Eased import restrictions, currency stabilization, and reduced inflation have created a more conducive operating environment, enabling the company to expand its operations.
Looking ahead, the company is well-positioned to capitalize on positive economic trends. By prioritizing operational efficiency, we aim to achieve stronger financial performance in the coming year. The Board is confident in continued economic stability, increased profitability, and ongoing product expansion.
We anticipate a rise in sales revenue for the financial year ending June 30, 2025, which will likely contribute to further improvements in the company's profitability. We also expect to overcome our liquidity challenges, ensuring adequate working capital for our operations.
We remain committed to improving operational efficiency and driving innovation. Our goal is to consistently deliver sustainable returns to our valued shareholders.
The Directors confirm compliance with Corporate and Financial Reporting Framework of the Securities and Exchange Commission of Pakistan and Listed Companies (Code of Corporate Governance) Regulations, 2019 (the CCG Regulations) in the following matters:
1. The financial statements, prepared by the management of Bannu Woollen Mills Ltd., present fairly its state of affairs, the results of its operations, cash flows and changes in equity.
2. Appropriate accounting policies have been consistently applied in preparation of these financial statements and accounting estimates are based on reasonable and prudent judgments.
3. The Company has maintained proper books of account.
4. International accounting standards/International Financial Reporting Standards as applied in Pakistan, have been followed in preparation of these financial statements and departures therefrom have been adequately disclosed.
5. The Company maintains a system of internal control which has been effectively implemented and is monitored. Monitoring of internal controls is an on-going process with the objective to strengthen the controls and bring improvements in the system.
6. There are no significant doubts about the Company's ability to continue as a going concern.
7. There has been no material departure from the best practices of the Code of Corporate Governance Regulations as detailed in listing regulations.
8. There are no statutory payments on account of taxes, duties levies and charges which are outstanding as at June 30, 2024, except for those disclosed in the financial statements.
The Board comprises two independent Directors, one executive Director and four non-executive Directors. The Directors of the Company were re-elected in the Extraordinary General meeting of the Company held on May 20, 2023 The Company continues to maintain female representation on the Board of Directors and has two female Board members.
The Audit Committee assists the Board in fulfilling its oversight responsibilities, primarily in reviewing and reporting financial and non-financial information to share-holders, systems of internal control, risk management and the audit process. It has the autonomy to call for information from management and to consult directly with the external auditors or advisors as considered appropriate. The Chief Financial Officer regularly attends the Audit Committee meetings by invitation to present the financial statements. After each meeting, the Chairman of the Committee reports to the Board. The Committee met five (04) times during the year 2023-2024. The names of committee members are as follows:
i. Mr. Abdul Rehman Qureshi Chairman
ii. Syed Zubair Ahmad Shah Member
iii. Brig. (Retd.) Agha Arshad Raza Member
The Audit committee has reviewed the quarterly, half-yearly and annual financial statements, besides the internal audit plan, material audit findings and recommendation of internal audit department. In addition to above meetings, Audit Committee met with external auditors without Chief Financial Officer (CFO) and Head of Internal Audit (HIA). Audit Committee also met the head of internal audit without the CFO and the external auditors being present.
The Committee meets to review and recommend all elements of the compensation, organization and employee development policies relating to the senior executives’ remuneration and to approve all matters relating to the remunerations of the executive directors. The CEO of the Company attended the Human Resource and Remuneration Committee meetings held during the year as member of the committee. The Committee met two (02) times during the year 2023-2024. The names of committee members are as follows:
i. Mr. Abdul Rehman Qureshi Chairman
ii. Lt. Gen. (Retd.) Ali Kuli Khan Khattak Member
iii. Mr. Ahmad Kuli Khan Khattak Member
iv. Mrs. Shahnaz Sajjad Ahmad Member
v. Syed Zubair Ahmad Shah Member
vi. Brig. (Retd.) Agha Arshad Raza Member
The Company has an approved ‘Remuneration Policy for Directors’; the salient features of which are:
• The Company will not pay any remuneration to its non-executive directors except as meeting fee for attending the Board and its Committee meetings.
• The remuneration of a Director for attending meetings of the Board of Directors or its Committees shall from time to time be determined and approved by the Board of Directors.
• A Director shall be provided or reimbursed for all travelling, boarding, lodging and other expenses incurred for attending meetings of the Board, its Committees and/or General Meetings of the Company.
• Any Director who performs services which, in the opinion of the Board, are outside the scope of the statutory duties of a director, may be paid such extra remuneration.
The Company has executed all transactions with its related parties at agreed terms duly approved by the shareholders. The details of all related party transactions were reviewed by the Audit Committee and subsequently by the Board of Directors. As the majority of the directors were interested, the transactions were ultimately approved by shareholders in general meeting.
The Company operates recognized provident fund and non-contributory gratuity fund for its employees. Value of investments of Provident fund and the balance of Gratuity funds was Rs 63.00 million and Rs. 146.58 million respectively as on June 30, 2024.
There have been no material changes since June 30, 2024 to date of the report and the Company has not entered into any commitment during this period, which would have an adverse impact on the financial position of the Company.
The Company places great importance on the communication with the shareholders. Annual, half yearly and quarterly reports are distributed to them within the time specified in the Companies Act, 2017. The Company's activities are updated on its web site www.bwm.com.pk, on a timely basis.
We believe that our employees are the cornerstone of our success. We are dedicated to fostering a culture of excellence by empowering our talented and dedicated team. We invest in professional development through training programs, and our human resource policies are designed to attract, recruit, and retain top talent.
We prioritize the well-being and satisfaction of our workforce by offering competitive compensation and benefits. These include recognition programs, special health allocations, and adherence to labor laws. We maintain a strong relationship with the CBA Labor Union and regularly distribute bonuses to all employees. Additionally, we provide benefits like the Workers' Welfare Fund, Eid advance, social security, and EOBI pension facilities to demonstrate our commitment to their financial security.
The Company is dedicated to conducting business in a socially responsible manner, considering the environmental impact and ethical implications of our operations. We strive to balance the interests of all stakeholders, including the communities we serve and our customers.
As a leading textile composite company specializing in wool spinning, weaving, and finishing, we are dedicated to Corporate Social Responsibility (CSR). We integrate sustainable and ethical practices into our core operations to improve our corporate practices, protect the environment, and positively impact the communities we serve. Our management team rigorously assesses all CSR activities to ensure they align with our long-term goals of sustainability and inclusivity.
During the FY 23-24, the Company carried out several activities, some of which are disclosed below:
• Health and Safety: We conducted comprehensive blood tests and X-rays in collaboration with ESSI Medical Officers to ensure a safe working environment.
• Community Health: We organized a blood donation drive to support Thalassemia patients.
• Environmental Sustainability: We planted trees on our factory premises to contribute to environmental conservation.
• Education: We partnered with the government to establish a primary school on our factory grounds.
• Healthcare Access: We collaborated with ESSI, KPK to set up a medical post on our mills premises.
• Community Support: We partnered with the Utility Store Corporation to provide an on-site store for our employees and the local community.
Our company is committed to sustainability and recognizes the importance of Environmental, Social, and Governance (ESG) factors. To contribute to a more sustainable future, we've implemented green initiatives, renewable energy policies, and best operating practices. Our management has established specific, measurable ESG targets that align with our strategic objective of achieving greater sustainable resilience and positive social impact.
We've invested significantly in innovative, environmentally friendly technologies that support ethical production and consumption. While these sustainable activities may temporarily impact short-term profitability or margins, we believe they will ultimately enhance our business value through customer acquisition, retention, and a competitive edge. To ensure proactive risk management, we conduct a comprehensive analysis of both present and future risks, identifying specific areas of concern.
Sustainability related risk & opportunities helps to identify and manage risks related to environmental, social, and governance (ESG) factors, which are increasingly important to investors, regulators, and consumers. Under the context of this approach, the Company is mainly exposed to the following sustainability risks.
• ENVIRONMENTAL RISKS:
Carbon Emissions, Pollution, Water Usage, Waste Management and Chemical Use.
• SOCIAL RISKS:
Labor Practices, Human Rights, Health, and Safety.
• GOVERNANCE RISKS:
Regulatory Compliance, Supply Chain Transparency.
Failure to comply with sustainability regulations can lead to significant short-term and long-term consequences. These include penalties, legal fees, and reputational damage, which can result in lost clients and business. Inadequate transparency and monitoring of sustainability policies may also erode investor confidence and limit access to funding.
However, these risks also present opportunities. By adopting sustainable practices and increasing energy efficiency, companies can reduce costs and enhance their reputation. Adhering to Environmental, Social, and Governance (ESG) principles can provide a competitive advantage, boost investor confidence, reduce financial volatility, and ensure long-term profitability.
To effectively manage sustainability-related responsibilities, the Board has delegated additional authority to the Strategic Planning Committee. This committee will monitor and review sustainability risks, opportunities, and initiatives. Every six months, they will submit a report to the Board outlining how sustainability principles are being integrated into the organization's strategy and operations to increase corporate value.
Our company is dedicated to fostering a workplace that is inclusive, equitable, and diverse, reflecting both our workforce and the communities we serve. We believe that (DE&I) is essential to our ethical and sustainable business practices and have developed a comprehensive strategy to increase gender and ethnic diversity at all levels of our organization.
• Gender Diversity as a Strategic Priority:
We view gender diversity as a strategic asset that enhances decision-making and problem-solving, contributing to our competitive advantage. Our commitment to DE&I is reflected in our talent acquisition, engagement, and promotion strategies. We have created a culture of belonging and respect, ensuring that all employees feel valued and empowered.
• Key Initiatives and Achievements:
• Talent Acquisition: We actively participate in career fairs and collaborate with reputable organizations to attract diverse talent.
• Inclusive Policies: We have implemented policies such as sabbaticals, maternity and paternity leave, and an anti-harassment policy to foster an inclusive workplace.
• Equal Pay and Opportunity: We are committed to ensuring that all employees are paid fairly and have equal opportunities for advancement, regardless of gender.
• Progress and Goals: While our current female representation is 0.4% of the total workforce and with a 2% representation at Executive Management Team level, we are committed to increasing this number and enhancing our talent pool.
• Compliance and Accountability: We adhere to all relevant laws and regulations regarding (DE&I) and conduct regular evaluations to ensure compliance. Our commitment to fairness and equality extends to all aspects of employment, including hiring, salary reviews, and career advancement.
• Conclusion: Our Company is unwavering in its commitment to creating a diverse, equitable, and inclusive workplace. We believe that this is not only the right thing to do but also a strategic imperative for our long-term success.
Bannu Woollen Mills Limited is committed to fostering a culture of equality and inclusion for all employees. Firmly believing in the principles of diversity, the Company is dedicated to maintaining fair and transparent compensation practices across all genders. We are proud to affirm that there is no gender pay gap within our organization, reflecting our unwavering commitment to equity and equal opportunity for all
