Annual Report 2020

Nishat Mills Limited
20
Annual Report
CONTENTS
CORPORATE
Company Information ..................................................................................................................... 2
Directors’ Profile ................................................................................................................................... 4
Vision and Mission .............................................................................................................................. 6
Chairman’s Review Report ........................................................................................................... 7
Directors’ Report ................................................................................................................................. 8
Financial Highlights ........................................................................................................................ 21
Statement of Compliance with Listed Companies (Code of Corporate
Governance) Regulations, 2019 ......................................................................................... 23
Independent Auditors’ Review Report to the Members on the
Statement of Compliance contained in Listed Companies (Code of
Corporate Governance) Regulations, 2019 ................................................................ 26
Notice of Annual General Meeting ...................................................................................... 27
FINANCIAL STATEMENTS OF NISHAT MILLS LIMITED

Independent Auditor’s Report to the members ........................................................ 34
Statement of Financial Position ........................................................................................... 40
Statement of Profit or Loss ........................................................................................................ 42
Statement of Comprehensive Income ............................................................................. 43
Statement of Changes in Equity .......................................................................................... 44
Statement of Cash Flows ........................................................................................................... 45
Notes to the Financial Statements ...................................................................................... 46
CONSOLIDATED FINANCIAL STATEMENTS OF NISHAT MILLS LIMITED

AND ITS SUBSIDIARIES
Directors’ Report .............................................................................................................................. 112
Independent Auditor’s Report to the members ........................................................ 113
Consolidated Statement of Financial Position ......................................................... 120
Consolidated Statement of Profit or Loss .................................................................... 122
Consolidated Statement of Comprehensive Income .......................................... 123
Consolidated Statement of Changes in Equity ....................................................... 124
Consolidated Statement of Cash Flows .......................................................................... 125
Notes to the Consolidated Financial Statements .................................................. 126
Pattern of Holding of the Shares ....................................................................................... 207
Directors’ Report Consolidated in Urdu ......................................................................... 214
Directors’ Report in Urdu ........................................................................................................ 226
Forms of Proxy in Urdu & English
COMPANY INFORMATION
Board of Directors Chief Financial Officer JS Bank Limited
Mian Umer Mansha Mr. Muhammad Azam Meezan Bank Limited
Chief Executive Officer MCB Bank Limited
Company Secretary MCB Islamic Bank Limited
Mian Hassan Mansha Mr. Khalid Mahmood Chohan National Bank of Pakistan
Chairman Pair Investment
Auditors Company Limited
Syed Zahid Hussain Riaz Ahmad & Company Pak Brunei Investment
Mr. Farid Noor Ali Fazal Chartered Accountants Company Limited
Mr. Mahmood Akhtar Pakistan Kuwait Investment
Mrs. Sara Aqeel Legal Advisor Company (Private) Limited
Mrs. Mehak Adil Mr. M. Aurangzeb Khan, Samba Bank Limited
Advocate, Chamber No. 6, District Silk Bank Limited
Audit Committee Court, Faisalabad. Soneri Bank Limited
Mrs. Mehak Adil Summit Bank Limited
Chairperson / Member Bankers to the Company Standard Chartered Bank
Albaraka Bank (Pakistan) Limited (Pakistan) Limited
Syed Zahid Hussain Allied Bank Limited The Bank of Punjab
Member Askari Bank Limited The Bank of Punjab - Taqwa
Bank Alfalah Limited Islamic Banking
Mr. Mahmood Akhtar Bank Al Habib Limited The Bank of Khyber
Member Bank Islami Pakistan Limited United Bank Limited
Citibank N.A.
Human Resource & Dubai Islamic Bank Pakistan
Remuneration (HR & R) Limited
Committee Faysal Bank Limited
Mrs. Sara Aqeel Faysal Bank Limited - Islamic
Chairperson / Member Banking
Habib Bank Limited
Mian Umer Mansha Habib Metropolitan Bank Limited
Member Industrial and Commercial Bank
of China Limited
Mr. Mahmood Akhtar
Member
02
Annual Report 2020
Mills Branch Office, Lahore

Siddique Trade Centre,
Spinning units, Yarn Dyeing Terry Unit Office No. PL-29, PL Floor,
& Power plant 7 K.M. Nishat Avenue Off 22 K.M. 72 Main Boulevard Gulberg II,
Nishatabad, Faisalabad. Ferozepur Road, Lahore. Lahore.
Tel: 042-35781682
Spinning units & Power plant Apparel Unit
20 K.M. Sheikhupura Faisalabad 2 K.M. Nishat Avenue Off 22 K.M. Head Office
Road, Feroze Watwan. Ferozepur Road, Lahore. 7, Main Gulberg, Lahore.
Tel: 042-35716351-59, 042-111 332 200
Spinning units & Power plant Registered office Fax: 042-35716349-50
Plot No. 172-180 & 188-197, Nishat House, E-mail: [email protected]
M-3 Industrial City, Sahianwala, 53 - A, Lawrence Road, Lahore. Website: www.nishatmillsltd.com
FIEDMC, 2 K.M. Jhumra Chiniot Tel: 042-36360154, 042-111 113 333
Road, Chak Jhumra, Faisalabad. Fax: 042-36367414 Liaison Office
1st Floor, Karachi Chambers,
Weaving units & Power plant Shares Registrar Hasrat Mohani Road, Karachi.
12 K.M. Faisalabad Road, THK Associates (Private) Limited Tel: 021-32414721-23
Sheikhupura. Fax: 021-32412936
Head Office, Karachi
Weaving units, Dyeing & 1st Floor, 40-C, Block-6,
Finishing unit, Processing P.E.C.H.S, Karachi-75400
unit, Stitching units and Tel: 021-34168270, 021-111 000 322
Power plants Fax: 021-34168271
5 K.M. Nishat Avenue Off 22 K.M.
Ferozepur Road, Lahore.
03
DIRECTORS’ PROFILE
Mian Umer Mansha Mian Hassan Mansha Syed Zahid Hussain Mr. Farid Noor Ali Fazal
Chief Executive Officer Chairman Non-Executive Director Non-Executive Director
Mian Umer Mansha Mian Hassan Mansha Syed Zahid Hussain Mr. Farid Noor Ali
holds a Bachelors has been serving on is a seasoned Fazal is a Bachelor of
degree in Business the Board of various professional in Commerce, Bachelor of
Administration from listed companies for Pakistan’s corporate Laws and Bachelor of
USA. He has been several years. He also world. He possesses Management. He has
serving on the Board of serves on the Board of multi-faceted talents more than 47 years’
Directors of various Nishat Power Limited, and has attained experience of
listed companies for Security General exemplary marketing. He worked
more than 25 years. Insurance Company accomplishments. He on various positions in
Limited, Lalpir Power has in-depth Middle East and USA.
He also serves on the Limited, Pakgen Power knowledge of a wide He is associated with
Board of Adamjee Limited, Nishat Hotels range of subjects and cement industry in one
Insurance Company and Properties Limited, has extensively form or the other and
Limited, MCB Bank Nishat (Aziz Avenue) diversified experience was the acting
Limited, Adamjee Life Hotels and Properties and exposure in senior chairman of All
Assurance Company Limited, Nishat positions. He has Pakistan Cement
Limited, Nishat Dairy (Raiwind) Hotels and earned B.Sc, LLB and Manufacturers
(Private) Limited, Properties Limited, MA in International Association in 2002. He
Nishat Hotels and Nishat Dairy (Private) Relations. He has a vast also serves on the
Properties Limited, Limited, Pakistan experience of working Board of D. G. Khan
Nishat (Raiwind) Hotels Aviators and Aviation as Chairman / Chief Cement Company
and Properties Limited, (Private) Limited, Executive / Director of Limited and Nishat
Nishat Developers Nishat Real Estate various state owned Paper Products
(Private) Limited, Development enterprises and listed Company Limited.
Nishat Sutas Dairy Company (Private) companies. He has also
Limited, Hyundai Limited, Nishat served as the High
Nishat Motor (Private) Agriculture Farming Commissioner /
Limited, Nishat (Private) Limited and Ambassador of
Agriculture Farming Hyundai Nishat Motor Pakistan in Kenya, with
(Private) Limited and (Private) Limited. accredited
Nishat Agrotech Farms assignments of
(Private) Limited. Ambassadorship in
Tanzania, Uganda,
Rwanda, Krundse,
Ethiopia and Eritrea. He
is a fellow member of
the Institute of
Management, England,
International
Biographical Center,
the USA and the
Institute of Marketing
Management, Karachi.
04
Annual Report 2020
Mr. Mahmood Akhtar Mrs. Sara Aqeel Mrs. Mehak Adil

Non-Executive Director Independent Director Independent Director
Mr. Mahmood Akhtar Mrs. Sara Aqeel is a Mrs. Mehak Adil holds
holds an MBA degree qualified lawyer, with a an LLM from the
from Punjab University significant experience London School of
and has over 37 years of in litigation and Economics and Political
managerial experience academics. She holds a Science, with a
spread across various gold medal in specialization in
industries. He also Bachelors of Law and Corporate and
serves on the Board of has worked with Commercial Law. Mrs.
D. G. Khan Cement Ramday Law Mehak started her
Company Limited, associates. Her work career as a corporate
Lalpir Power Limited, includes cases lawyer at Cornelius,
Nishat Power Limited, pertaining to the Lane and Mufti in 2015,
Security General corporate sector with a where she was
Insurance Company special focus on the engaged in various
Limited, Nishat Banking Sector. In corporate and
Hospitality (Private) addition, she has also commercial cases.
Limited, Nishat Paper taught Law at Pakistan Mrs. Mehak is an
Products Company College of Law and Advocate of the High
Limited, Nishat acted as a coordinator Courts in Pakistan, with
(Gulberg) Hotels and for the external expertise in domestic
Properties Limited and program of Law offered and international
Nishat Commodities by the University of dispute resolution,
(Private) Limited. London. including international
Over the years she has arbitration.
participated in a
number of skills
training programs
which have focused
primarily on
International Law,
pertaining to Trade,
Human Rights and
Comparative
Jurisprudence.
05
VISION, MISSION & CORE VALUES

VISION STATEMENT:
To be and remain industry lead by safeguarding stakeholders’ interest, serving community

and playing a meaningful role in the economy of Pakistan.
MISSION STATEMENT:
To increase financial returns by pursuing sustainable business, producing the best quality
products and providing excellent customer services while adopting best practices.
CORE VALUES:
Value Slogan Connotation
Novelty Be Open to Nishat is open to innovation & creativity at

Newness organization level, systems level and individual level.
Integrity Be Honest Nishat operates through lawful means and fulfils its
legal, moral and ethical responsibilities.
Sustainability Be Sensitive to Nishat ensures best use of environmental resources

Environment by adopting benchmark process and bringing
continuous improvement in the same.
Humbleness Be Empathic Nishat encourages culture of mutual respect,

support and develops congenial environment for
people at workplace.
Accountability Be Responsible Nishat believes in 'participative decision making'

and assures that everyone should take responsibility
for all decisions at all levels.
Trust Trust the People Nishat trusts its employees the most and believes in
attaining sustainable competitive advantage
through its Human Capital.
06
Annual Report 2020
CHAIRMAN’S REVIEW REPORT

I am pleased to present you the annual report of Nishat Mills Limited (the “Company”) for the year ended
30 June 2020. The Company follows the best practices relating to corporate governance and complies
with all the relevant requirements of Companies Act, 2017 and the Listed Companies (Code of Corporate
Governance) Regulations, 2019 with respect to composition, meetings and procedures of the Board of
Directors (the “Board”) and its Committees.
Elections of the Board were held at 31 March 2020 to elect the directors for the next term of three years
because previous Board had completed its tenure. The new Board has seven members with diverse and
multi-generational background having core competencies, knowledge, skills and experience relevant to
the business of the Company. I am pleased to inform that Mrs. Sara Aqeel and Mrs. Mehak Adil joined the
Board as independent directors in place of Mr. Ghazanfar Husain Mirza and Mr. Maqsood Ahmed.
The Board has developed a mechanism for annual evaluation of Board’s own performance, Members of
the Board and its Committees in compliance with the provisions of Listed Companies (Code of Corporate
Governance) Regulations 2019. The performance evaluation mechanism ensures that all statutory and
legal requirements are fulfilled with regard to procedures, meetings and oversight role of the Board. The
Board carried out annual evaluation of Board’s own performance, members of the Board and its
Committees during the year. The performance of the Board, its Members and Committees was
satisfactory.
During the financial year 2019-20, the Board successfully achieved targets and objectives set for the
growth of the Company by performing the following functions:
• Approved the revised vision and mission statements.

• Performed effective and robust oversight.
• Reviewed and approved overall corporate strategy, annual business plan, key financial
performance indicators and other budgetary targets.
• Ensured the quality and appropriateness of financial reporting and the transparency of disclosures
in annual and quarterly financial statements.
• Carried out risk assessment, especially, of regulatory and legal requirements, market trends,
cotton supply and price, energy availability and cost, foreign exchange fluctuations, interest rate
and liquidity risks.
• Reviewed effectiveness of internal control system.
• Performed the due diligence of investments and evaluated returns.
• Reviewed and approved the financing / borrowing facilities.
• Ensured timely dissemination of price sensitive and inside information to relevant regulatory
authorities.
Mian Hassan Mansha

Chairman
Lahore
18 September 2020
07
Directors’
FINANCIAL REVIEW
Financial Performance
Report Profit after tax of the Company decreased during the

financial year ended 30 June 2020 as compared to the
profit after tax of the corresponding last year ended 30
June 2019. The main reasons for decrease were reduction
in sales due to outbreak of Covid-19 pandemic, decrease
Directors of Nishat in dividend income and decrease in exchange gain on
foreign currency.
Mills Limited (“the
Company”) are Financial highlights
2020
Rupees(000)
2019
Rupees(000)
pleased to present Revenue 60,904,096 63,499,029

Gross profit 7,276,126 7,656,601
the annual report EBITDA 8,719,892 11,211,441
Depreciation 2,738,196 2,646,227
of the Company for Finance cost 1,502,412 1,668,166
Dividend Income 2,044,302 3,029,845
the year ended 30 Pre-tax profit 4,479,284 6,897,048
After tax profit 3,506,284 5,859,048
June 2020 along
with the financial Revenue of the Company decreased by Rs. 2,594.933
million (4.09%) in the current year ended 30 June 2020 as
statements and compared to the corresponding year ended 30 June
2019. The main reason was decrease in export sales by
auditors’ report Rs. 2,451.650 million due to unfavorable quantity variance

because of lockdown, during the last quarter, in USA,
Europe and China which are our main markets. Still the
thereon. Company was able to cross the mark of Rs. 60.904 billion
08
Annual Report 2020
in its topline which is the second highest representing all major sectors of the industry
during the last five years. which contributes substantially in other
income in the form of dividend income and
Revenue capital gains.
70,000,000
60,000,000
50,000,000 Dividend Income
Rupees (000)
40,000,000 4,000,000
3,500,000
30,000,000
3,000,000
20,000,000
Rupees (000)
2,500,000
10,000,000
2,000,000
- 1,500,000
2015-16 2016-17 2017-18 2018-19 2019-20
1,000,000
Years 500,000
-
2015-16 2016-17 2017-18 2018-19 2019-20
The gross profit of the Company decreased by Years
4.97% from Rs. 7,656.601 million in the
corresponding last year to Rs. 7,276.126 million
in the current financial year. The main reason Finance Cost
1,800,000
was decrease in revenue by 4.09%. A glance 1,600,000
over the last five years indicates that the gross 1,400,000
1,200,000
Rupees (000)
profit margin of the Company remained 1,000,000
steady and decreased marginally to 11.95% in 800,000
600,000
the current year from 12.06% in the last year. 400,000
200,000
-
2015-16 2016-17 2017-18 2018-19 2019-20
Gross Profit
9,000,000 Years
8,000,000
7,000,000
6,000,000 Finance cost of the Company decreased by
Rupees (000)
5,000,000
4,000,000 9.94% due to reduction in average bank
3,000,000
2,000,000
borrowing rate and decrease in average short
1,000,000 term borrowings as a result of improvements
-
2015-16 2016-17 2017-18 2018-19 2019-20
in cashflows from operations. Overall finance
Years cost of the Company also decreased despite
investment in many new projects to diversify
The Company earned EBITDA of Rs. 8,719.892 the business lines and expand the existing
million during the year which reflects production facilities.
continuation of a steady trend over the last five
years. EBITDA to sales percentage was 14.32%. Profit after tax to sales % decreased from 9.23%
The strong EBITDA is the evidence of robust in the last year to 5.76% in the current year due
cashflows of the Company which enables us to to decrease in other income.
carry out regular BMR and finance working
capital requirements. After Tax Profit %
12.00%
10.00%
EBITDA
8.00%
12,000,000
Percentage
6.00%
10,000,000
4.00%
8,000,000
Rupees (000)
2.00%
6,000,000
0.00%
4,000,000
2015-16 2016-17 2017-18 2018-19 2019-20
2,000,000
Years
-
2015-16 2016-17 2017-18 2018-19 2019-20
Years Fixed Capital Expenditure
The contribution from dividend income to the The Company invested Rs. 5.132 billion on fixed
profitability of the Company was significant. capital expenditure (CAPEX) which is an
The Company received dividends of increase of 44.25% in the amount of CAPEX
Rs. 2,044.302 million during the financial year incurred during the corresponding last year.
ended 30 June 2020. Over the years, the Major projects include expansion of open-end
Company has built a strategic portfolio yarn production facility at Ferozewatwan,
09
establishment of a new towel manufacturing Earnings Per Share

unit and commissioning of 3.075 MW solar 18.00
16.00
power plant. 14.00
Rupees per Share

12.00
10.00
Fixed Capital Expenditure 8.00
6,000,000 6.00
4.00
5,000,000
2.00
4,000,000 -
Rupees (000)
2015-16 2016-17 2017-18 2018-19 2019-20

3,000,000
2,000,000
Years
1,000,000
Appropriations
-
2015-16 2016-17 2017-18 2018-19 2019-20
Years The Board of Directors of the Company has

recommended 40% cash dividend (2019: 40%)
and transferring of Rupees 2,101 million (2019:
Working Capital Management Rupees 4,386 million) to general reserve.
Current and quick ratios increased by 7.94%

and 7.27% to 1.36 and 0.59 times respectively SEGMENT ANALYSIS
which is the evidence of Company’s strength
to pay its short-term liabilities. The Following is the brief overview of the
improvement in working capital management segmental performance:
was achieved despite increased working
capital requirements due to lockdown after Spinning
coronavirus outbreak.
Cotton prices were low at the start of
Current Ratio
harvesting season during the FY 2019-20, but
1.38 news of cotton shortage triggered the hasty
1.36
1.34 buying which pushed the prices upward. The
1.32 Company started to procure the cotton as soon
1.30
as it became available in the market. The
Ratio
1.28
1.26
1.24
management also reconsidered its cotton
1.22 buying strategy due to rising trend in cotton
1.20
2015-16 2016-17 2017-18 2018-19 2019-20
prices which were adversely affecting
Years
profitability of the Division. The Company
closely watched the dynamics of local and
international cotton markets and made best
Quick Ratio available price mix of cotton stocks for the year.
0.80
0.70
0.60
Yarn Sales Quantity
0.50 35,000
0.40 30,000
Ratio
0.30 25,000
0.20
Kgs (000)
20,000
0.10
15,000
-
2015-16 2016-17 2017-18 2018-19 2019-20 10,000
Years 5,000
-
2015-16 2016-17 2017-18 2018-19 2019-20
Years
Earnings per Share
The Company maintains a positive stream of 12,000,000

Yarn Sales Value
Earning Per Share (EPS) as reflected by the last 10,000,000

five-year trend. It shows effectiveness of 8,000,000
Rupees (000)
management’s strategy which is pivot in 6,000,000

enhancing the shareholders’ value. 4,000,000
2,000,000
-
2015-16 2016-17 2017-18 2018-19 2019-20
Years
10
Annual Report 2020
Yarn Sales Rate Grey Cloth Sales Quantity

400 86,000
350
84,000
300
Rupees Per Kg
82,000
Meters (000)
250
200 80,000
150 78,000
100
76,000
50
- 74,000
2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20
Years Years
Financial performance of Spinning Division 16,000,000

Grey Cloth Sales Value
including the newly commissioned open-end 14,000,000
yarn unit was remarkable during the first nine 12,000,000
Rupees (000)
months of the financial year. However, 10,000,000
8,000,000
outbreak of Covid-19, continued US-China 6,000,000
trade war and delay in finalization of 4,000,000
Pak-China Free Trade Agreement were the 2,000,000
major factors which affected the profitability. -

2015-16 2016-17 2017-18 2018-19 2019-20
Demand and prices of cotton yarn in Years
international market consistently declined
during the year. Local market which was very
Grey Cloth Sales Rate
supportive during first nine months, also 200
became silent in last quarter due to lockdown
Rupees per meter
150
situation for Coronavirus preventive measures.
100
Weaving
50
The first nine months of the FY 2019-20 were -

somehow stable because there were not many 2015-16 2016-17 2017-18 2018-19 2019-20
Years
fluctuations in yarn and polyester prices which
are the major raw materials of the Division.
Rupee was also steady around Rs. 156 per US The future outlook of our grey cloth business
Dollar. Such stability gives a better visibility of does not look promising because pandemic
business and helps to plan accordingly. has not fully controlled. We expect that this
However, outbreak of coronavirus during the may negatively affect our future profitability.
last quarter of the year created uncertainty in
the world economy which severely affected Dyeing
the demand for textile products.
Covid-19 pandemic severely affected the
The Division successfully survived the financial performance of the Division during
pandemic due to its diversified product the last quarter. After the spread of
portfolio. Diversification has always been our Coronavirus, all our major customers
key strategy which paid off in the times of immediately cancelled or asked us to hold the
crisis. Since the retail business was the major production of their orders. The outbreak has
affectee, fashion fabric sale decreased upset the annual financial results of the
significantly. Most of our customers requested Division which performed well during the first
us to slowed down / stop processing of their nine months of the financial year ended 30
orders. On the contrary due to the pandemic June 2020.
there was a great shortage in the supply for
health and medical based textile (masks / Since the governments all over the world have
gowns etc.). Therefore the Division explored eased lockdowns due to slowdown in spread
the health care business. of the virus, the situation is expected to
improve somehow. However, end of pandemic
is nowhere in the sight. In current global
scenario, fashion industry foresees a very slow
demand for dyed cloth as there are huge
11
inventories piled up with retailers with continuous struggle after the outbreak of
reduced consumer demand. Notably there is pandemic and outcome is in shape of a
an increase in demand for Personal Protective healthy work force. This was possible only due
Equipment (PPE) related fabrics which are to the Division’s preparedness to deal with this
generally infrequent and low margin orders. crisis and overall determination to fight and
The Division also produced such fabric during beat this disease.
the last quarter of the financial year in order to
keep its production facilities running. The The Division already had some business
management of the Division believes that experience with Health Care Sector. Therefore,
development of the new product lines management immediately took steps to
featuring quality and sustainability would be explore Health Care Sector, right after
the key opportunities in this catastrophe. emergence of the disease, due to which the
Therefore, we are in touch with all of our Company got the earliest orders of Masks and
customers and keeping close eye on this Hospital Isolation Gowns from both local and
unexpected and unusual situation. foreign customers. Production capacities were
brought back online after massive retrofitting
Processed Cloth Sales Quantity and redesigning of production processes and
60,000
counselling of workers to implement the new
50,000
SOPs for fighting the spread of coronavirus.
40,000
We are happy to report that the Division is
Meters (000)
30,000 working at almost full capacity.

20,000
10,000
Processed Cloth and Made-ups Sales Quantity
- 30,000
2015-16 2016-17 2017-18 2018-19 2019-20
25,000
Years
20,000
Meters (000)
15,000
Processed Cloth Sales Value 10,000

18,000,000
16,000,000 5,000
14,000,000
-
12,000,000
Rupees (000)
2015-16 2016-17 2017-18 2018-19 2019-20

10,000,000
Years
8,000,000
6,000,000
4,000,000 Processed Cloth and Made-ups Sales Value
2,000,000 12,000,000
- 10,000,000
2015-16 2016-17 2017-18 2018-19 2019-20
Years 8,000,000
Rupees (000)
6,000,000
4,000,000
Processed Cloth Sales Rate
400 2,000,000
350 -
Rupees per meter
300 2015-16 2016-17 2017-18 2018-19 2019-20

250 Years
200
150
100 Processed Cloth and Made-ups Sales Rate
500
50
- 400
Rupees per meter
2015-16 2016-17 2017-18 2018-19 2019-20

Years 300
200
Home Textile 100
-
The Division operated at optimum capacity 2015-16 2016-17 2017-18 2018-19 2019-20
levels due to plenty of orders in the pipeline Years
despite outbreak of Covid-19 pandemic in the

third quarter. Still the last quarter was a Garments
struggle to survive and sustain. Sales went
down and focus was shifted to managing the Profitability of the Garments Division
responsibility of thousands of employees’ significantly increased during the current
health, livelihood and lives. It has become a financial year as compared to the
12
Annual Report 2020
corresponding last financial year. This Power Generation

improvement in profitability is attributable to
accomplishment of many milestones in the Power Division completed another milestone,
financial year which includes the highest in line with its plan to diversify its power mix,
production efficiencies, remarkable quality by commissioning a 3 MW Wartsila Solar
performance, investments made in research Power Plant at Sahianwala, Faisalabad in
and development, human development and November 2019. Further plans to acquire two
automated equipment to boost production. more Solar Power Plants for Power Divisions
located at Bhikki and Ferozwatwan are under
Outbreak of Covid-19 has severely affected the process while acquisition of a 320 KW Solar
growth trajectory of the Division. Management Power Plant for Lahore is at final stage. The
is observing many of the social and commissioning of plant is expected before the
environmental consequences of end of the year. A 3.2 MW Steam Turbine for
post-pandemic economic structures, power plant located at Lahore was also
expecting a major shift in worldwide commissioned in December 2019. This turbine
consumption approach for fashion. Instead generates electricity from high pressure /
utilization of natural resources under linear temperature steam produced by 9MW coal
economic model of take, make and dispose - power plant before this steam is transferred at
world would be tending towards more of low pressure / temperature to production halls
circular or regenerative approach based on of Dyeing and Home Textile Divisions.
renewal and reuse. Therefore, the Division Completion of this project has provided
would be taking multiple sustainable additional benefit from high pressure /
initiatives throughout our operations by temperature of steam which was previously
considering current crisis as an opportunity to wasted as steam at low pressure / temperature
create sustainable future. This would definitely is required in fabric dyeing and finishing
be an excellent response towards evolving process. This has resulted in cost saving by
market needs and would strengthen our around 30% in Coal Power Plant, Lahore.
position as market lead.
RISKS AND OPPORTUNITIES
Garments Sales Quantity
8,000
Nishat Mills Limited takes risks and creates
6,000
opportunities in the normal course of business.
Garments (000)
Taking risk is important to remain competitive

4,000 and ensure sustainable success. Our risk and
opportunity management encompass an
2,000
effective framework to conduct business in a
- well-controlled environment where risk is
2015-16 2016-17 2017-18 2018-19 2019-20
mitigated and opportunities are availed. Each
Years
risk and opportunity are properly weighted
and considered before making any choice.
Garments Sales Value
8,000,000 Decisions are formulated only if opportunities
outweigh risks.
6,000,000
Rupees (000)
4,000,000 Following is the summary of risks and

strategies to mitigate those risks:
2,000,000
- STRATEGIC RISKS
2015-16 2016-17 2017-18 2018-19 2019-20
Years We are operating in a competitive environment
where innovation, quality and cost matters,
Garments Sales Rate especially, in post Covid-19 world. This risk is
1,200
mitigated through continuous research &
1,000
Rupees per garment
development and persistent introduction of

800
new technologies under BMR. Strategic risk is
600
considered as the most crucial of all the risks.
400
Head of all business divisions meet at regular
200
intervals to form an integrated approach
-
2015-16 2016-17 2017-18 2018-19 2019-20
towards tackling risks present both at the
Years international and national level.
13
BUSINESS RISKS Currency risk
The Company faces a number of following The Company is exposed to currency risk
business risks: arising from various currency exposures,
primarily with respect to United States Dollar
Cotton Supply and Price (USD), Arab Emirates Dirham (AED), Euro and
Japanese Yen (JPY). The Company’s foreign
The supply and prices of cotton is subject to exchange risk exposure is restricted to the
the act of nature and demand dynamics of bank balances and the amounts receivable /
local and international cotton markets. There is payable from / to the foreign entities.
always a risk of non-availability of cotton and
upward shift in the cotton prices in local and Interest rate risk
international markets. The Company mitigates
this risk by the procurement of the cotton in The Company’s interest rate risk arises from
bulk at the start of the harvesting season. long term financing, short term borrowings,
loans and advances to subsidiary companies
Export Demand and Price and bank balances in saving accounts.
Financial instruments at fixed rate expose the
The exports are major part of our revenue. We Company to fair value interest rate risk.
face the risk of pandemics, competition and
decline in demand of our products in Credit risk
international markets. We minimize this risk
by building strong relations with customers, The Company’s credit exposure to credit risk
broadening our customer base, developing and impairment losses relates to its trade
innovative products without compromising on debts. This risk is mitigated by the fact that
quality and providing timely deliveries to majority of our customers have a strong
customers. financial standing and we have a long
-standing business relationship with all our
Energy Availability and Cost customers. We do not expect nonperformance
by our customers; hence, the credit risk is
The rising cost and un-availability of energy i.e. minimal.
electricity and gas shortage is a major threat to
manufacturing industry. This risk, if remains Liquidity risk
unmitigated, can render us misfit to compete
in the international markets. The Company has It is at the minimum due to the availability of
mitigated the risk of rising energy cost by enough funds through committed credit
opting for diversified fuels such as coal, facilities from the Banks and Financial
furnace oil, bio-mass, diesel along with solar institutions.
energy. The measures to conserve energy have
also been taken at all manufacturing facilities Capital risk
of the Company. Likewise, risk of
non-availability of the energy has been When managing capital, it is our objective to
minimized by installing power plants for safeguard the Company’s ability to continue as
generating electricity at all locations of the a going concern in order to provide returns for
Company along with securing electricity shareholders and benefits to other
connections from WAPDA. stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
FINANCIAL RISKS The Company maintains low leveraged capital
structure. We monitor the capital structure on
The Board of Directors of the Company is the basis of the gearing ratio. Our strategy is to
responsible to formulate the financial risk keep the gearing ratio at the maximum of 40%
management policies which are implemented equity and 60% debt.
by the Finance Department of the Company.
The Company faces the following financial
risks:
14
Annual Report 2020
OPPORTUNITIES SUBSIDIARY COMPANIES

As the leading textile company of the country,
the Company is in a position to avail and The Company has also annexed consolidated
exploit a number of opportunities. Following is financial statements along with separate financial
the summary of some exciting opportunities. statements in accordance with the requirements
of International Financial Reporting Standards
• Regionally diversified customer base across and Companies Act, 2017. Following is a brief
the world provides a sustainable growth to description of all subsidiary companies of Nishat
export sales; Mills Limited:
• Vibrant local and international subsidiary 1. Nishat Power Limited

companies create demand for our
products; The Company owns and controls 51.01%
shares of this subsidiary. The subsidiary is
• Vertical integration makes it possible to listed on Pakistan Stock Exchange Limited.
exploit operational synergies; The principle business of the subsidiary is to
build, operate and maintain a fuel powered
• Abundant supply of cotton in the country; station having gross capacity of 200MW in
Jamber Kalan, Tehsil Pattoki, District Kasur,
• High population growth of the country is a Punjab, Pakistan. The subsidiary commenced
source of suitable manpower and a its commercial production on 09 June 2010.
stimulus in creating the demand for textile
products. 2. Nishat Linen (Private) Limited
TEXTILE INDUSTRY OVERVIEW This is a wholly owned subsidiary of the

Company. The principal objects of the
Financial Year 2019-20 was very challenging, Subsidiary are to operate retail outlets for sale
right from start of the year, for the textile of textile and other products and to sell the
industry due to global stagnation of demand, textile products by processing the textile
increase in cost of doing business, trade goods in own and outside manufacturing
suspension with India and imposition of 17% facilities. The subsidiary started its operations
sales tax on textile products. Collective effect of in July 2011 and is presently operating 110
all these factors was decrease in profitability retail outlets including e-stores in Pakistan.
and cashflow squeeze. Yet, the worst came
during the third quarter in the form of 3. Nishat Hospitality (Private) Limited
worldwide outbreak of Covid-19 pandemic. It
increased the troubles of already struggling This is a wholly owned subsidiary of the
textile sector and led to closure of many small Company. Subsidiary’s object is to run a chain
and medium sized units. Moreover, thousands of hotels across the country. Currently it is
of employees, across all segments of textile operating a four star hotel in Lahore on
sector, have been laid off. international standards under the name of
“The Nishat St. James Hotel”. The subsidiary
Although the spread of disease has slowed started its operations on 01 March 2014.
down, pandemic is not yet over. It has come
out to be another factor that will contribute in 4. Nishat Commodities (Private) Limited
low demand of textile products because of
decrease in household income as a result of This is a wholly owned subsidiary of the
very high unemployment rate all over the Company. The object of the subsidiary is to
world. Therefore, future dynamics of textile carry on the business of trading of
sector are not going to significantly improve in commodities including fuels, coals, building
the next financial year. material in any form or shape manufactured,
semi-manufactured, raw materials and their
import and sale in Pakistan. The subsidiary
started its operations in March 2016.
15
5. Lalpir Solar Power (Private) Limited wholly owned subsidiary of the Company.
The subsidiary is principally engaged in
Lalpir Solar Power (Private) Limited is a trading of textile, blankets, towels, linens,
private limited Company incorporated in ready-made garments, garments accessories
Pakistan on 09 November 2015. It is a wholly and leather products along with ancillaries
owned subsidiary of Nishat Power Limited thereto through retail outlets and
which is a subsidiary of Nishat Mills Limited. warehouses across United Arab Emirates. The
The financial statements of the subsidiary subsidiary started its commercial operations
have been prepared on non-going concern in May 2011 and is presently operating 11 retail
basis. The explanation of which has been outlets in UAE.
provided in Note 1(a) of the Consolidated
Financial Statements and Directors’ Report 7. Nishat International FZE
on the Consolidated Financial Statements.
This is also a wholly owned subsidiary of
6. Nishat Linen Trading LLC Nishat Mills Limited. It was incorporated as a
Free Zone Establishment limited Liability
Nishat Linen Trading LLC is a limited liability Company in Jebel Ali Free Zone, Dubai
company incorporated in Dubai, UAE. It is a according to the laws of United Arab
Emirates (UAE). It has been registered in the
FZE register on February 07, 2013. The
principal activity of the Subsidiary Company
is trading in textile products such as blankets,
towels & linens, ready-made garments,
garments accessories and leather products
such as shoes, handbags and all such
ancillaries thereto.
8. Nishat Global China Company Limited
Nishat Global China Company Limited is

incorporated in Yuexiu District, Guangzhou,
China, as Foreign Invested Commercial
Enterprises “FICE”, in accordance with the
Law of Peoples Republic of China on
Foreign-Capital enterprises and other
relevant Laws and Regulations. Nishat Global
China Company Limited is a wholly owned
subsidiary of Nishat International FZE which
is a wholly owned subsidiary of Nishat Mills
Limited. The principal business of the
Subsidiary is wholesale, commission agency
(excluding auction), import and export of
textile goods and women fashion accessories.
The subsidiary started its commercial
operations in January 2014.
9. Nishat USA Inc.
The subsidiary is a corporation service

company incorporated in the State of New
York. It is a wholly owned subsidiary of the
Company and was acquired by the Company
on 01 October 2008. The corporation is a
liaison office of the Company’s marketing
department providing access, information
and other services relating to US Market.
16
Annual Report 2020
CORPORATE SOCIAL
RESPONSIBILITY
The Company takes a number of initiatives

regarding the discharge of its responsibility
towards society. Following is the brief
snapshot of Corporate Social Responsibility
(CSR) activities:
Environment Protection
Environment protection is the key focus area

and the Company regularly invests to
safeguard and protect environment. The
Company has installed Effluent Water
treatment plants at all dyeing, printing and
garments production facilities in order to
eliminate the hazardous impact of usage of
textile chemicals on water. These plants have
been in operations for many years. These
plants treat the water used in production
process for contamination and other
impurities before its final drainage. The
Company also regularly carries out tree
plantation drive at its offices and factories.
Energy Conservation
Availability of cheap energy is the biggest

challenge for the textile industry. Higher cost
of energy as compared to our competitors in
China, India and Bangladesh has severally
affected our competitiveness in international
market. Therefore, conservation of energy is
top priority and the Company has embraced
techniques such as replacement of existing
conventional tube lights with LED lights, by
installing waste and heat recovery plants to
generate steam from gas engine exhaust and
implementation of code of conducts for
employees to promote energy conservation.
Waste Recycling
In addition to acquiring new environment

friendly technologies, the Company also
invests in recycling of waste generated from its
operations which not only eliminates wastes
but also reduces cost. The caustic soda
recovery plant has been in operation for the
last 18 years at our dyeing and finishing plant.
The Company has also installed water
treatment plants, cotton recycling plants and
oil recycling machines at different sites to
recycle the water, textile waste and oil for
maximum saving of natural resources.
17
Occupational Safety and Health CORPORATE GOVERNANCE

Health and safety of the workers and staff is the Best Corporate Practices
most important thing for the Company. After
the outbreak of coronavirus pandemic in the Directors are committed to good corporate
third quarter of the year, the Company governance and comply with the requirements
immediately formulated a crisis management of the Listed Companies (Code of Corporate
team which implemented the directives issued Governance) Regulations, 2019 and the Rule
by Punjab Government regarding preventing Book of Pakistan Stock Exchange.
the spread of the disease. The team launched a
campaign at all locations of the Company and The statement of compliance with the CCG
its surrounding for the awareness of appropriate Regulations, 2019 is enclosed.
precautions which an individual should take to
save himself / herself and colleagues. Composition of Board of Directors
The Company also regularly organizes medical Clause 34 (2) (i, ii and iii) of Listed Companies
camps for malaria, typhoid, dengue and eye (Code of Corporate Governance) Regulations
sight. Further regular fumigation is carried out 2019 requires the disclosure of composition of
at premises of all manufacturing facilities by the Board and its Committees. Such disclosures
using fogging machines to prevent dengue. are given in serial No. 1, 2 and 12 of “Statement
The Company has also established of Compliance” annexed to the Annual Report.
dispensaries under the supervision of qualified
doctors at its production facilities which are Board Committees:
equipped with ambulances.
Audit Committee
Equal Opportunity Employer
The audit committee is performing its duties in
Diversity and ethics are the core value of the line with its terms of reference as determined
Company. The Company provides equal by the Board of Directors. During the year
opportunity for employment and career under review, four Audit Committee Meetings
progression to all irrespective of gender, class were held, attendance position was as under:-
and religious discrimination. Majority of the
workforce employed in Home Textile and No. of
Garments Divisions are women. Sr.# Name of Director Meetings
Attended
Community Welfare Schemes
1 *Mrs. Mehak Adil (Chairperson/Member) -
The Company regularly carries out schemes of 2 Syed Zahid Hussain (Member) 4
social welfare in areas adjacent to its 3 *Mr. Mahmood Akhtar (Member) 3
manufacturing facilities by engaging its staff 4 *Mr. Farid Noor Ali Fazal (Member) 3
and using its money. The Company regularly
organizes medical camps for malaria, typhoid *Mrs. Mehak Adil was appointed as member in
and eye sight for the people living in the place of Mr. Mahmood Akhtar and as a
surroundings of its manufacturing facilities. chairperson in place of Syed Zahid Hussain
with effect from April 01, 2020. Mr. Mahmood
Consumer Protection Measures Akhtar was re-appointed as member in place
of Mr. Farid Noor Ali Fazal with effect from April
The Company is also deeply concerned with 29, 2020.
consumers protection on humanitarian as well
as business perspective. The Company has Human Resource & Remuneration (HR&R)
acquired the certification of Customs-Trade Committee
Partnership Against Terrorism (C-TPAT) at all
its production facilities. C-TPAT is a voluntary The Human Resource & Remuneration
supply chain security program aimed at Committee is performing its duties in line with
improving the security of private companies’ its terms of reference as determined by the
supply chains with respect to terrorism. Board of Directors. During the year under
Further the Company has obtained OEKO Tex review, two Human Resource & Remuneration
Standards 100, SA-8000, WRAP and SEDEX Committee Meeting was held, attendance
certifications. position was as under:-
18
Annual Report 2020
No. of 4. International Financial Reporting Standards,

Sr.# Name of Director Meetings as applicable in Pakistan, have been
Attended followed in preparation of financial
statements and any departure there from
1 Mian Umer Mansha (Member) - has been adequately disclosed.
2 *Mrs. Sara Aqeel - 5. The system of internal control is sound in
(Chairperson/Member) design and has been effectively
3 Mr. Mahmood Akhtar (Member) 1 implemented and monitored.
4 *Syed Zahid Hussain (Member) 1 6. There are no significant doubts upon the
Company’s ability to continue as a going
*Mrs. Sara Aqeel appointed as member / concern.
chairperson of HR&R Committee in place of 7. There has been no material departure from
Syed Zahid Hussain with effect from April 01, the best practices of corporate governance,
2020. as detailed in the listing regulations.
8. Value of investments in respect of retirement
Meetings of the Board of Directors benefits fund: Provident Fund: 30th June,
2020: Rs. 3,562.395 Million Un-audited, 2019:
During the year under review, four meetings of Rs. 3,379.582 Million-Audited).
the Board of Directors of the Company were
held in Pakistan and the attendance position is Transactions with related parties
as follows:
The Company has fully complied with best
No. of practices on Transfer Pricing as contained in
Sr.# Name of Director Meetings the Listing Regulations of Pakistan Stock
Attended Exchange and Companies (Related Party
Transactions and Maintenance of Related
1 Mian Umer Mansha 3 Records) Regulations, 2018 while executing all
(Chief Executive Officer) transactions with related party. The detail of
2 Mian Hassan Mansha (Chairman) 4 arrangements for transactions, as approved by
3 Syed Zahid Hussain 4 the Board during the year, other than transactions
4 Mr. Mahmood Akhtar 4 in the ordinary course of business is as follows:
5 *Mr. Maqsood Ahmad 3
6 *Mr. Ghazanfar Hussain Mirza 3 1. Further equity investment of up to
7 Mr. Farid Noor Ali Fazal 3 Rs. 2.144 billion in MCB Bank Limited, an
8 *Mrs. Sara Aqeel 1 associated company, to earn dividend and
9 *Mrs. Mehak Adil - prospective capital gains.
2. Further investment of up to Rs. 1 billion as
*Mrs. Mehak Adil and Mrs. Sara Aqeel were loan and advances in Nishat Hotels and
appointed as Directors in place of Mr. Maqsood Properties Limited, an associated company,
Ahmad and Mr. Ghazanfar Hussain Mirza with in accordance with its investment policy to
effect from April 01, 2020. earn higher interest rate as compared to
other investment opportunities available to
Directors’ Statement company.
3. Equity investment of up to Rs. 950 million in
Following is the Directors’ statement on Nishat Sutas Dairy Limited, an associated
Corporate and Financial Reporting framework: company, to earn dividend and prospective
capital gains.
1. The financial statements, prepared by the 4. Further equity investment from Rs. 960
management of the Company, present million to Rs. 1,267.680 million in Hyundai
fairly its state of affairs, the result of its Nishat Motor (Private) Limited, an
operations, cash flows and changes in equity. associated company, to earn dividend and
2. Proper books of account of the Company prospective capital gains.
have been maintained. 5. Investment in Hyundai Nishat Motor
3. Appropriate accounting policies have been (Private) Limited, an associated company
consistently applied in preparation of the by way of guarantee / continuing Stand by
financial statements and accounting letter(s) of Credit (SBLC) from Rs. 1200 million
estimates are based on reasonable and to Rs. 1,532.544 million.
prudent judgment.
19
Auditors ADEQUACY OF INTERNAL FINANCIAL

CONTROLS
Financial Statement of the Company for the
year ended 30 June 2020 have been audited The Company has established an effective and
by M/s Riaz Ahmed & Company, Chartered efficient system of internal and financial
Accountants who have given an unqualified controls to safeguard the assets of the
report. Current auditors will retire on the Company, prevent and detect fraud and
conclusion of Annual General Meeting of the ensure compliance with all statutory and legal
Company. Being eligible, M/s Riaz Ahmed & requirements. The internal control structure is
Company, Chartered Accountants have regularly reviewed and monitored by the
offered themselves for reappointment for the Internal Audit function duly established by the
year ending 30 June 2021. Board. Audit Committee reviews the internal
control system on quarterly basis in
SUBSEQUENT EVENTS accordance with the term of its reference.
No material changes and commitments DIRECTORS’ REMUNERATION

affecting the financial position of the Company
occurred between 30 June 2020 and 18 The Board of Directors has approved Directors’
September 2020. Remuneration Policy. The main features of the
policy are as follows:
FUTURE PROSPECTS
• The Company shall not pay remuneration
Economic uncertainty inflicted by Covid-19 of its non-executive directors including
pandemic has greatly affected the future independent directors except for meeting
planning and current performance of the fee for attending the Board and its
Company. So far, our years old strategy to Committees‘ meetings.
diversify our product range paid off because • The Company will reimburse or incur
we were able to sell to health care sector as expenses of travelling and
soon as pandemic emerged. accommodation of Directors in relation to
attending of the Board and its
Apart from coronavirus pandemic, other major Committees’ meetings.
challenge is expected rise in cotton prices due • The Directors’ Remuneration Policy will be
to shortage of cotton crop as a result of floods reviewed and approved by the Board of
and heavy rains in cotton growing areas. Directors from time to time.
Management is aware of the ensuing
problems and has prepared its strategic plans PATTERN OF SHAREHOLDING
accordingly.
A statement of the pattern of shareholding as
Planned expansion of towel manufacturing at June 30, 2020, which is required to be
unit in June 2020 has been delayed due to disclosed under the reporting framework, is
delay in shipments of machinery and annexed to this report.
unavailability of foreign consultants who could
not reach Pakistan because of lockdown. The ACKNOWLEDGEMENT
revised date of commissioning of the unit is
expected in the first quarter of FY 2020-21. Directors are pleased and thankful to the
employees for their continued dedication and
efforts for the Company.
For and on behalf of the Board of Directors.
Mian Umer Mansha Farid Noor Ali Fazal

Chief Executive Officer Director
Lahore
18 September 2020
20
Annual Report 2020
FINANCIAL HIGHLIGHTS
Rupees in thousand
2020 2019 2018 2017 2016 2015
Summarized Statement of Financial Position
Non-Current Assets
Property, Plant and Equipment 31,292,722 28,968,219 28,180,049 27,767,699 24,715,095 24,357,269
Long Term Investments 37,979,074 34,930,333 44,757,279 60,008,322 55,399,080 51,960,454
Other Non-Current Assets 865,591 849,580 756,020 756,107 634,214 631,833
Current Assets
Stores, Spares and Loose Tools 2,256,569 3,102,988 1,714,031 2,106,878 1,269,509 1,335,763
Stock in Trade 20,753,543 17,008,459 12,243,652 12,722,712 9,933,736 10,350,193
Short Term Investments - - 2,581,520 2,535,973 2,065,217 2,189,860
Other Current Assets 17,513,415 15,685,813 12,503,482 11,632,584 12,582,368 10,314,628
Total Assets 110,660,914 100,545,392 102,736,033 117,530,275 106,599,219 101,140,000
Shareholders' Equity 71,427,860 66,615,270 75,713,145 88,762,796 82,155,155 76,142,823
Non-Current liabilities
Long Term Financing 9,222,781 5,259,927 5,190,839 5,245,629 4,629,456 5,582,220
Deferred Tax 302,672 215,440 571,833 783,292 261,567 247,462
Current Liabilities
Short Term Borrowings 19,329,768 17,982,262 12,507,590 14,697,393 10,475,657 11,524,143
Current Portion of Long Term Liabilities 703,032 1,784,470 2,144,900 2,093,024 1,980,768 1,783,250
Other Current Liabilities 9,674,801 8,688,023 6,607,726 5,948,141 7,096,616 5,860,102
Total Equity and Liabilities 110,660,914 100,545,392 102,736,033 117,530,275 106,599,219 101,140,000
Statement of Profit or Loss

Sales 60,904,096 63,499,029 53,729,124 49,247,657 47,999,179 51,200,223
Gross Profit 7,276,126 7,656,601 5,550,446 5,379,838 6,239,391 6,046,784
EBITDA 8,719,892 11,211,441 8,395,775 8,233,100 8,937,616 8,260,046
Other Income 3,032,390 5,158,380 4,102,639 4,259,666 4,079,054 3,982,009
Profit Before Tax 4,479,284 6,897,048 4,957,127 5,020,342 5,725,038 4,389,925
Profit After Tax 3,506,284 5,859,048 4,097,127 4,262,342 4,923,038 3,911,925
Cash Flows
Cash Flow from Operating Activities 1,560,005 905,102 2,153,808 (1,381,006) 4,704,482 5,298,151
Cash Flow from Investing Activities (4,828,502) (3,957,796) 1,851,315 (3,890,837) 735,980 (3,042,332)
Cash Flow from Financing Activities 2,820,113 3,524,492 (3,944,241) 3,200,620 (3,377,513) (5,005,916)
Changes in Cash & Cash Equivalents (448,384) 471,798 60,882 (2,071,223) 2,062,949 (2,750,097)
Cash and Cash Equivalent - Year End 128,241 576,625 104,827 43,945 2,115,168 52,219
Ratios
Profitability Ratios
Gross Profit % 11.95 12.06 10.33 10.92 13.00 11.81
EBITDA to sales % 14.32 17.66 15.63 16.72 18.62 16.13
Pre tax Profit % 7.35 10.86 9.23 10.19 11.93 8.58
After tax Profit % 5.76 9.23 7.63 8.65 10.26 7.64
Return on Equity % 5.08 8.23 4.98 4.99 6.22 5.41
Return on Capital Employed % 7.82 11.16 6.75 6.53 8.01 7.79
Operating Leverage Ratio 7.38 2.42 0.03 (4.75) (1.66) 3.21
21
2020 2019 2018 2017 2016 2015
Liquidity Ratios
Current Ratio 1.36 1.26 1.37 1.28 1.32 1.26
Quick Ratio 0.59 0.55 0.71 0.62 0.75 0.65
Cash to Current Liabilities Times - 0.02 - - 0.11 -
Cash Flows from Operations to Sales Times 0.03 0.01 0.04 (0.03) 0.10 0.10
Activity / Turnover Ratios

Inventory Turnover Ratio Times 2.84 3.82 3.86 3.87 4.12 3.91
No. of Days in Inventory Days 128.87 95.55 94.56 94.32 88.83 93.35
Debtors Turnover Ratio Times 13.48 14.53 17.12 21.89 18.22 17.22
No. of Days in Receivables Days 27.15 25.12 21.32 16.67 20.09 21.20
Creditors Turnover Ratio Times 3.49 4.39 4.46 4.30 4.65 5.84
No. of Days in Creditors Days 104.87 83.14 81.84 84.88 78.71 62.50
Operating Cycle Days 51.15 37.53 34.04 26.11 30.21 52.05
Total Assets Turnover Ratio Times 0.55 0.63 0.52 0.42 0.45 0.51
Fixed Assets turnover Ratio Times 1.95 2.19 1.91 1.77 1.94 2.10
Investment / Market Ratios

Earnings Per Share Rs. 9.97 16.66 11.65 12.12 14.00 11.13
Price Earning Ratio Times 7.82 5.60 12.10 13.09 7.71 10.26
Dividend Yield Ratio % 5.13 4.29 3.37 3.15 4.63 3.94
Dividend Payout Ratio % 40.12 24.01 40.77 41.24 35.71 40.43
Dividend Cover Ratio Times 2.49 4.17 2.45 2.42 2.80 2.47
Dividend Per Share Rs. 4.00 4.00 4.75 5.00 5.00 4.50
Break-up Value Rs. 203.15 189.46 215.34 252.45 233.66 216.56
Proposed Dividend % 40.00 40.00 47.50 50.00 50.00 45.00
Market value per share

Closing Rs. 78.01 93.34 140.92 158.68 107.90 114.23
High Rs. 119.75 153.73 171.56 185.63 86.83 137.49
Low Rs. 53.00 91.69 130.03 110.65 122.05 97.00
Capital Structure Ratios

Financial Leverage Ratio % 40.96 37.57 26.21 24.83 20.80 24.81
Weighted Average Cost of Debt % 5.54 7.44 4.75 4.68 5.82 8.43
Debt to Equity Ratio % 12.91 7.90 6.86 5.91 5.64 7.33
Interest Cover Ratio Times 3.98 5.13 5.99 6.49 6.47 3.52
Gearing Ratio % 29.06 27.31 20.77 19.89 17.22 19.88
Production machines
No. of Spindles 262,035 247,968 238,032 230,736 227,640 227,640
No. of Looms 790 790 794 795 805 789
No. of Thermosole Dyeing Machines 5 5 5 5 6 6
No. of Rotary Printing Machines 4 4 4 4 4 4
No. of Digital Printing Machines 10 9 8 7 2 2
No. of Stitching Machines 3,592 4,149 4,239 3,757 3,400 2,706
22
Annual Report 2020
STATEMENT OF COMPLIANCE
with Listed Companies (Code of Corporate Governance) Regulations, 2019
Name of company : Nishat Mills Limited

Year ended : June 30, 2020
The company has complied with the requirements of the Regulations in the following manner:
1. The total number of directors are Seven (7) as per the following:
a. Male: 5
b. Female: 2
2. The composition of board is as follows:
Category Names
Independent Directors Mrs. Sara Aqeel
Mrs. Mehak Adil
Non-Executive Directors Mian Hassan Mansha

Syed Zahid Hussain
Mr. Mahmood Akhtar
Mr. Farid Noor Ali Fazal
Executive Director Mian Umer Mansha
(Chief Executive Officer)
3. The Directors have confirmed that none of them is serving as a Director on more than seven listed
companies, including this company;
4. The company has prepared a code of conduct and has ensured that appropriate steps have been
taken to disseminate it throughout the company along with its supporting policies and procedures;
5. The Board has developed a vision / mission statement, overall corporate strategy and significant
policies of the company. The Board has ensured that complete record of particulars of the significant
policies along with their date of approval or updating is maintained by the company;
6. All the powers of the Board have been duly exercised and decisions on relevant matters have been
taken by the Board / shareholders as empowered by the relevant provisions of the Act and these
Regulations;
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a Director
elected by the Board for this purpose. The Board has complied with the requirements of Act and the
Regulations with respect to frequency, recording and circulating minutes of meeting of the Board;
8. The Board have a formal policy and transparent procedures for remuneration of Directors in
accordance with the Act and these Regulations;
9. The Board has arranged Directors’ Training program for the following:
Names of Directors
Mr. Mahmood Akhtar
Mr. Farid Noor Ali Fazal
Following Directors meet the exemption criteria of minimum of 14 years of education and 15 years of
experience on the Boards of listed companies, hence are exempt from Directors’ training program:
Names of Directors
Mian Umer Mansha
Syed Zahid Hussain
23
10. The Board has approved appointment of Chief Financial Officer, Company Secretary and Head of
Internal Audit, including their remuneration and terms and conditions of employment and
complied with relevant requirements of the Regulations;
11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before
approval of the Board;
12. The Board has formed committees comprising of members given below:
a) Audit Committee:
Names Designation held
Mrs. Mehak Adil Chairperson

Syed Zahid Hussain Member
Mr. Mahmood Akhtar Member
b) HR and Remuneration Committee:
Names Designation held
Mrs. Sara Aqeel Chairperson

Mian Umer Mansha Member
Mr. Mahmood Akhtar Member
13. The terms of reference of the aforesaid committees have been formed, documented and advised to
the committee for compliance;
14. The frequency of meetings (quarterly / half yearly / yearly) of the committee were as per following:
a) Audit Committee:
Four quarterly meetings were held during the financial year ended June 30, 2020.
b) HR and Remuneration Committee:
One meeting of HR and Remuneration Committee was held during the financial year ended
June 30, 2020.
15. The board has set up an effective internal audit function who are considered suitably qualified and
experienced for the purpose and are conversant with the policies and procedures of the company.
16. The statutory auditors of the company have confirmed that they have been given a satisfactory
rating under the Quality Control Review program of the Institute of Chartered Accountants of
Pakistan and registered with Audit Oversight Board of Pakistan, that they and all their partners are
in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as
adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the
firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent
children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal Audit, Company
Secretary or Director of the company;
17. The statutory auditors or the persons associated with them have not been appointed to provide
other services except in accordance with the Act, these Regulations or any other regulatory
requirement and the auditors have confirmed that they have observed IFAC guidelines in this
regard;
18. We confirm that all requirements of regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have
been complied with;
19. Explanations for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 and
36 are below:
24
Annual Report 2020
Sr. No. Requirement Explanation of Non-Compliance Regulation

Number
1 Nomination Committee Currently, the Board has not 29

The Board may constitute a separate constituted a separate nomination
committee, designated as the committee and the functions are
nomination committee, of such being performed by the human
number and class of directors, as it resource and remuneration
may deem appropriate in its committee. The Board shall consider
circumstances. to constitute nomination committee
after next election of directors.
2 Risk Management Committee Currently, the Board has not 30

The Board may constitute the risk constituted a risk management
management committee, of such committee and a senior officer of the
number and class of directors, as it Company performs the requisite
may deem appropriate in its functions and apprise the Board
circumstances, to carry out a review accordingly. The Board shall
of effectiveness of risk management consider to constitute risk
procedures and present a report to management committee after next
the Board. election of directors.
3 Disclosure of significant policies on Although these are well circulated 35

website among the relevant employees and
The Company may post key directors, the Board shall consider
elements of its significant policies, posting such policies and synopsis
brief synopsis of terms of reference on its website in near future.
of the Board’s committees on its
website and key elements of the
directors’ remuneration policy.
4 Representation of Minority No one intended to contest election 5

shareholders as director representing minority
The minority members as a class shareholders.
shall be facilitated by the Board to
contest election of directors by proxy
solicitation.
5 Responsibilities of the Board and Non-mandatory provisions of the 10(1)

its members Regulations are partially complied.
The Board is responsible for The company is deliberating on full
adoption of corporate governance compliance with all the provisions of
practices by the company. the Regulations.
20. The two elected independent directors have requisite competencies, skills, knowledge and
experience to discharge and execute their duties competently, as per applicable laws and
regulations. As they fulfill the necessary requirements as per applicable laws and regulations, hence,
appointment of a third independent director is not warranted.
Mian Hassan Mansha

Chairman
Lahore
18 September 2020
25
INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Nishat Mills Limited
Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate
Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate
Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Nishat Mills
Limited (the Company) for the year ended 30 June 2020 in accordance with the requirements of
regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company.
Our responsibility is to review whether the Statement of Compliance reflects the status of the Company’s
compliance with the provisions of the Regulations and report if it does not and to highlight any
non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the
Company’s personnel and review of various documents prepared by the Company to comply with the
Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board of Directors’ statement on internal control
covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the
Company’s corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation
of the Audit Committee, place before the Board of Directors for their review and approval, its related
party transactions. We are only required and have ensured compliance of this requirement to the extent
of the approval of the related party transactions by the Board of Directors upon recommendation of the
Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement
of Compliance does not appropriately reflect the Company's compliance, in all material respects, with
the requirements contained in the Regulations as applicable to the Company for the year ended 30 June
2020.
RIAZ AHMAD & COMPANY

Chartered Accountants
Lahore
September 18, 2020
26
Annual Report 2020
NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that Annual General Meeting of the Members of Nishat Mills Limited (the
“Company”) will be held on October 28, 2020 (Wednesday) at 03:30 p.m. at Emporium Mall, the Nishat
Hotel, Trade and Finance Centre Block, Near Expo Centre, Abdul Haq Road, Johar Town, Lahore, to
transact the following business:
1. To receive, consider and adopt the Audited Un-consolidated and Consolidated Financial Statements
of the Company for the year ended June 30, 2020 together with the Chairman Review, Directors’ and
Auditors’ reports thereon.
2. To approve Final Cash Dividend @ 40% [i.e. Rs. 4/- (Rupees Four Only) Per Ordinary Share] as
recommended by the Board of Directors.
3. To appoint statutory Auditors for the year ending June 30, 2021 and fix their remuneration.
By order of the Board
Lahore (KHALID MAHMOOD CHOHAN)

September 18, 2020 COMPANY SECRETARY
NOTES:
BOOK CLOSURE NOTICE: -
The Ordinary Shares Transfer Books of the Company will remain closed from 21-10-2020 to 28-10-2020
(both days inclusive) for entitlement of 40% Final Cash Dividend [i.e. Rs.4/- (Rupees Four Only) Per
Ordinary Share] for the year ended June 30, 2020 and attending and voting at Annual General Meeting.
Physical transfers / CDS Transactions IDs received in order in all respects up to 1:00 p.m. on 20-10-2020 at
the office of Share Registrar, THK Associates (Private) Limited, Karachi Office: 1st Floor, 40-C, Block-6,
PECHS, Karachi, Lahore Office: Siddique Trade Centre, Office No.PL-29, PL Floor, 72 Main Boulevard,
Gulberg II, Lahore, shall be considered in time for entitlement of above said 40% Final Cash Dividend and
attending of AGM.
Proxies
A member eligible to attend and vote at this meeting may appoint another member his / her proxy to
attend and vote instead of him / her. Proxies in order to be effective must reach the Company’s registered
office not less than 48 hours before the time for holding the meeting. Proxies of the Members through
CDC shall be accompanied with attested copies of their CNIC. In case of corporate entity, the Board’s
Resolution / power of attorney with specimen signature shall be furnished along with proxy form to the
Company. The shareholders through CDC are requested to bring original CNIC, Account Number and
Participant Account Number to produce at the time of attending the meeting.
27
Shareholders are requested to immediately notify the change in address, if any.
Members who have deposited their shares into Central Depository Company of Pakistan Limited (“CDC”)
will further have to follow the under mentioned guidelines as laid down by the Securities and Exchange
Commission of Pakistan.
A. For Attending the Meeting
a. In case of Individuals, the account holder and / or sub-account holder and their registration
details are uploaded as per the CDC Regulations, shall authenticate his / her identity by
showing his / her original CNIC or, original Passport at the time of attending the Meeting.
b. In case of corporate entity, the Board’s resolution / power of attorney with specimen signature
of the nominee shall be produced (unless it has been provided earlier) at the time of the
Meeting.
B. For Appointing Proxies
a. In case of individuals, the account holder and / or sub-account holder and their registration
details are uploaded as per the CDC Regulations, shall submit the proxy form as per above
requirements.
b. The proxy form shall be witnessed by two persons, whose names, addresses and CNIC numbers
shall be mentioned on the form.
c. Attested copies of the CNIC or the passport of beneficial owners and the proxy shall be
furnished with the proxy form.
d. The proxy shall produce his original CNIC or original passport at the time of the Meeting.
e. In case of corporate entity, the Board’s resolution / power of attorney with specimen signature
shall be furnished (unless it has been provided earlier) along with proxy form to the Company.
Deduction of Withholding Tax on Dividend:
Pursuant to the provisions of the Finance Act, 2019 the rates of deduction of income tax from dividend
payments under the Income Tax Ordinance have been revised as follows:
- Filler 15%
- Non-Filler 30%
All shareholders are advised to check their status on Active Taxpayers List (ATL) available on FBR Website
and may, if required, take necessary actions for inclusion of their name in ATL to avail the lower rate of tax
deduction.
Deduction of Withholding Tax on Dividend in case of Joint Account Holders:
All shareholders who hold shares jointly are requested to provide following information regarding
shareholding proportions of Principal Shareholder and Joint-holder(s) in respect of shares held by them
to our Share Registrar THK Associates (Private) Limited, Karachi Office: 1st Floor, 40-C, Block-6, PECHS,
Karachi, Lahore Office: Siddique Trade Centre, Office No.PL-29, PL Floor, 72 Main Boulevard, Gulberg II,
Lahore, latest by October 20, 2020, otherwise each joint holder shall be assumed to have an equal
number of shares.
28
Annual Report 2020
Name of the Company Nishat Mills Limited

Folio No. / CDS A/C No.
No. of Shares Held
Principal Name & CNIC
Shareholder Shareholding Proportion (No. of Shares)
Joint Name & CNIC
Shareholder(s) Shareholding Proportion (No. of Shares)
Signature of Primary Shareholder_______________________________
EXEMPTION OF WITHHOLDING TAX:
Withholding tax exemption from dividend income, shall only be allowed if copy of valid tax exemption
certificate is made available to our Share Registrar Office, Share Registrar THK Associates (Private)
Limited, Karachi Office: 1st Floor, 40-C, Block-6, PECHS, Karachi, Lahore Office: Siddique Trade Centre,
Office No.PL-29, PL Floor, 72 Main Boulevard, Gulberg II, Lahore, up to October 20, 2020.
SUBMISSION OF COPY OF CNIC (MANDATORY):
Individuals including all joint holders holding physical share certificates are requested to submit a copy
of their valid CNIC if not already provided to the Company or our Share Registrar, THK Associates (Private)
Limited, Karachi Office: 1st Floor, 40-C, Block-6, PECHS, Karachi, Lahore Office: Siddique Trade Centre,
Office No.PL-29, PL Floor, 72 Main Boulevard, Gulberg II, Lahore. The Shareholders while sending CNIC
must quote their respective folio numbers.
In case of non-receipt of the copy of a valid CNIC, the Company would be unable to comply with SRO
831(1)/2012 dated July 05, 2012 of SECP and would be constrained under SECP’s Order dated June 08, 2016
under Section 251(2) of the Companies Ordinance, 1984 to withhold the dispatch of dividend warrants to
such shareholders.
ZAKAT DECLRATION (CZ-50):
Zakat will be deducted from the dividends at source under the Zakat & Usher Laws and will be deposited
within the prescribed period with the relevant authority. Please submit your Zakat declarations under
Zakat and Usher Ordinance, 1980 & Rule 4 of Zakat (Deduction & Refund) Rules, 1981 CZ-50 Form, in case
you want to claim exemption, with your brokers or the Central Depository Company of Pakistan Limited
(in case the shares are held in CDC-Sub Account or CDC Investor Account) or to our Share Registrar, M/s.
THK Associates (Private) Limited, Karachi Office: 1st Floor, 40-C, Block-6, PECHS, Karachi, Lahore Office:
Siddique Trade Centre, Office No.PL-29, PL Floor, 72 Main Boulevard, Gulberg II, Lahore. The Shareholders
while sending the Zakat Declarations, as the case may be must quote company name and their
respective folio numbers.
Shareholders should also notify our Share Registrar, THK Associates (Private) Limited regarding any
change in their addresses.
MANDATORY PAYMENT OF CASH DIVIDEND THROUGH ELECTRONIC MODE:
The provisions of Section 242 of the Companies Act, 2017 require the listed companies that any dividend
payable in cash shall only be paid through electronic mode directly into the bank account designated by
the entitled shareholders. The shareholders who have not provided their bank account details so far are
advised to provide their below electronic dividend mandate information to Company’s Share Registrar at
the address given above and update their CDC accounts / Sub accounts as the case may be, enabling the
29
Company to credit your future dividend promptly, if any.
Folio No. / Investor

Account Number / CDC
Sub Account No.
Title of Account
IBAN Number
Bank Name
Branch
Branch Address
Mobile Number
Name of Network
(if ported)
Email Address
Signature of Shareholder_______________________________
Transmission of Annual Financial Statements through Email:
In pursuance of the directions given by the Securities and Exchange Commission of Pakistan (SECP) vide
SRO 787 (I) / 2014 dated September 8, 2014, those shareholders who desire to receive Annual Financial
Statements in future through email instead of receiving the same by Post are advised to give their formal
consent along with their valid email address on a standard request form which is available at the
Company’s website i.e. www.nishatmillsltd.com and send the said form duly signed by the shareholder
along with copy of his / her CNIC to the Company’s Share Registrar M/s THK Associates (Private) Limited.
Please note that giving email address for receiving of Annual Financial Statements instead of receiving
the same by post is optional, in case you do not wish to avail this facility please ignore this notice,
Financial Statements will be sent in compact disk to the registered address of the shareholders.
Circulation of Annual Reports through Digital Storage:
Pursuant to the SECP’s notification SRO 470 (I) / 2016 dated 31st May, 2016 the Members of Nishat Mills
Limited in EOGM held on 31st March 2017 had accorded their consent for transmission of annual reports
including audited annual financial statements and other information contained therein of the Company
through CD / DVD / USB instead of transmitting the same in hard copies. The shareholders who wish to
receive hard copies of the aforesaid documents may send to the Company Secretary / Share registrar, the
standard request form available on the Company’s website and the Company will provide the aforesaid
documents to the shareholders on demand, free of cost, within one week of such demand.
Unclaimed Dividend / Shares:
Shareholders who could not collect their dividend / physical shares are advised to contact our Share
Registrar to collect / enquire about their unclaimed dividend or shares, if any.
Video Conference Facility:
In terms of the Companies Act, 2017, members residing in a city holding at least 10% of the total paid up
share capital may demand the facility of video-link for participating in the annual general meeting. The
request for video-link facility shall be received by the Share Registrar at their address at least 7 days prior
to the date of the meeting on the Standard Form available on the website of the Company.
30
Annual Report 2020
Statement under Rule 4(2) of the Companies (Investment in Associated

Companies or Associated Undertakings) Regulations, 2017
Name of
Investee MCB Bank Hyundai Nishat Motor Nishat Hotels and Nishat Sutas
Company Limited (Private) Limited Properties Limited Dairy Limited
Total Equity Equity Guarantee / Equity Investment of Equity

Investment investment investment up to continuing Stand investment up to Rs. 1 billion by investment upto
Approved: up to Rupees Rupees 960 by Letter(s) of Rupees 200 way of working Rupees 950
2.144 billion for million was Credit (SBLC) for million was capital loan was million was
the period of approved by an amount of up approved for the approved for the approved for the
three (3) years members in to Rupees 1,200 period of three period of one period of three
was approved by EOGM held on million was (3) years by year by members (3) years by
members in March 28, 2018 approved by members in in AGM members in
EOGM held on which was members in EOGM held on held on October AGM held on
March 31, 2020. subsequently EOGM held on April 17, 2019. 28, 2019. October 28, 2019.
enhanced up to March 28, 2018
Rs. 1,267.680 which was
million for the subsequently
period of four (4) enhanced up to
years by Rupees 1,532.544
members in million for a
AGM held on tenure of 7.5
October 28, 2019. years by
members in
AGM held on
October 28, 2019.
Amount of Nil Investment of Bank guarantees Investment of Nil Investment of

Investment Rupees 1,017.886 of up to Rs. 1,451 Rupees 29.61 Rupees 166.300
Made to date: million has been million have million has been million has been
made against been issued made against made against
this approval to against this this approval to this approval to
date. approval to date. date. date.
Reasons for No investment Partial Eight bank Partial No loan has been Partial
deviations from has been made investment has guarantees from investment has extended after investment has
the approved in investee been made in different banks been made in the approval been made in
timeline of company after investee have been investee because fund investee
investment, the approval. company. extended after company. request has not company.
where Investment will Further the approval. Further yet been made Further
investment be made investment will Further investment will by the investee investment will
decision was to depending on be made guarantees will be made company. be made
be implemented market depending on be arranged on depending on depending on
in specified conditions at the financial requirement of the financial the financial
time: appropriate time. need of investee investee need of investee need of investee
company. company. company. company.
Material change At the time of As per latest As per latest At the time of At the time of At the time of
in financial approval and available audited available audited approval, as per approval, as per approval, the
statements of as per latest financial financial latest available latest available investee
associated available statements for statements for audited financial audited financial company had
company or audited financial the year ended the year ended statements for statements for not commenced
associated statements for December 31, December 31, the year ended the year ended its operations,
undertaking the year ended 2018 the basic 2018 the basic June 30, 2018, June 30, 2019 the therefore EPS
since date of December loss per share loss per share the basic loss per basic profit per and breakup
the resolution 31, 2019 the basic was Rs. 1.44 and was Rs. 1.44 and share was share was Rs. 1.42 value of share
passed for earnings per breakup value breakup value Re.0.30 and and breakup was not
approval of share was per share was per share was breakup value value per share available. As per
investment in Rs. 20.23 and Rs. 9.03. As per Rs. 9.03. As per per share was was Rs. 18.09. As latest available
such company: breakup value latest available latest available Rs. 12.65. per latest audited financial
per share was audited financial audited financial As per latest available annual statements for
Rs. 142.54. statements for statements for available annual financial the year ended
As per latest the year ended the year ended financial statements for December 31,
available half December 31, December 31, statements for the year ended 2019 the basic
yearly financial 2019 the basic 2019 the basic the year ended June 30, 2020 loss per share is
statements for loss per share is loss per share is June 30, 2020 the basic loss per Rs. 2.29 and
the half year Rs. 1.13 and Rs. 1.13 and the basic loss per share is Rs. 1.36 breakup value
ended June 30, breakup value breakup value share is Rs. 1.36 and breakup per share is
2020 the basic per share is Rs. per share is Rs. and breakup value per share is Rs. 7.71. As per
earnings per 8.97. As per latest 8.97. As per latest value per share is Rs. 18.43. latest available
share is Rs. 11.15 available half available half Rs. 18.43. half yearly
and breakup yearly financial yearly financial financial
value per share is statements for statements for statements for
Rs. 156.01. the half year the half year the half year
ended ended June 30, ended 30 June
June 30, 2020 2020 the basic 2020, the basic
the basic loss per loss per share is loss per share is
share is Rs. 1.721 Rs. 1.721 and Re. 1.33 and
and breakup breakup value breakup value
value per share is per share is per share is
Rs. 7.35. Rs. 7.35. Rs. 6.38.
31
Financial Statements of
for the year ended June 30, 2020
INDEPENDENT AUDITOR’S REPORT

Report on the Audit of the Financial Statements
Opinion
We have audited the annexed financial statements of Nishat Mills Limited (the Company), which
comprise the statement of financial position as at 30 June 2020, and the statement of profit or loss, the
statement of comprehensive income, the statement of changes in equity, the statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information, and we state that we have obtained all the
information and explanations which, to the best of our knowledge and belief, were necessary for the
purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the
statement of financial position, the statement of profit or loss, the statement of comprehensive income,
the statement of changes in equity and the statement of cash flows together with the notes forming part
thereof conform with the accounting and reporting standards as applicable in Pakistan and give the
information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively
give a true and fair view of the state of the Company's affairs as at 30 June 2020 and of the profit, other
comprehensive income, the changes in equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with the International Ethics Standards Board for Accountants’ Code of
Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan
(the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Following are the key audit matters:
Sr.
Key audit matters How the matters were addressed in our audit
No.
1. Inventory existence and valuation
Inventory as at 30 June 2020 amounted Our procedures over existence and valuation of
to Rupees 23,010.112 million, break up of inventory included, but were not limited to:
which is as follows:
• To test the quantity of inventories at all
- Stores, spare parts and loose tools locations, we assessed the corresponding
Rupees 2,256.569 million inventory observation instructions and
participated in inventory counts on sites.
- Stock-in-trade Rupees 20,753.543 Based on samples, we performed test counts
million and compared the quantities counted by us
with the results of the counts of the
Inventory is measured at the lower of cost management;
34
Annual Report 2020
Sr.
No.
and net realizable value. • For a sample of inventory items, re-performed

the weighted average cost calculation and
We identified existence and valuation of compared the weighted average cost
inventory as a key audit matter due to its appearing on valuation sheets;
size, representing 20.79% of the total
assets of the Company as at 30 June 2020, • We tested that the ageing report used by
and the judgment involved in valuation. management correctly aged inventory items
by agreeing a sample of aged inventory items
For further information on inventory, refer to the last recorded invoice;
to the following:
• On a sample basis, we tested the net
realizable value of inventory items to recent
- Summary of significant accounting selling prices and re-performed the
policies, Inventories note 2.16 to the calculation of the inventory write down, if any;
financial statements.
• We assessed the percentage write down
- Stores, spares parts and loose tools applied to older inventory with reference to
note 18 and Stock-in-trade note 19 historic inventory write downs and recoveries
to the financial statements. on slow moving inventory;
• In the context of our testing of the calculation,

we analysed individual cost components and
traced them back to the corresponding
underlying documents. We furthermore
challenged changes in unit costs; and
• We also made enquires of management,

including those outside of the finance
function, and considered the results of our
testing above to determine whether any
specific write downs were required.
2. Investments in equity securities
Quoted investments: Our procedures included, but were not limited to:
The Company’s portfolio of quoted • We documented and assessed the processes

investments, except for investment in and controls in place to record investment
quoted subsidiary company, makes up transactions and to value the portfolio;
26.77% of total assets. Due to materiality
of quoted investments in the context of • We agreed the valuation of all of quoted
the financial statements as a whole and investments from prices quoted on Pakistan
the requirements of applicable Stock Exchange Limited and redemption
accounting and reporting standards price in case of open-end mutual fund except
relating to classification, measurement for investment in subsidiary company
and disclosures of investments in related measured at cost less impairment loss, if any,
parties, they are considered to be the area in accordance with the provisions of IAS 27
which had the greatest effect on our ‘Separate Financial Statements’;
overall audit strategy and allocation of
resources in planning and completing • We agreed the holding of all quoted
our audit. investments from the Account Balance
Report of Central Depository Company of
Pakistan Limited, Statement of Account, in
case of open-end mutual fund and physical
share certificates in hand; and
• We verified the accuracy of management’s

judgement used in classification of quoted
investments in related parties.
35
Sr.
No.
Un-quoted investments: Our procedures included, but were not limited to:
Investments in unquoted equity • We evaluated the independent professional

securities except for investments in valuer’s competence, capabilities and
unquoted subsidiary companies are objectivity;
accounted for as financial assets at fair
value through other comprehensive • We assessed the valuation methodology used
income and are subject to fair valuation at by the independent professional valuer to
each reporting date. Investments in estimate the fair value of the investments;
unquoted subsidiary companies are
stated at cost less impairment loss, if any. • We checked, on a sample basis, the accuracy
The investments as at 30 June 2020 are and reasonableness of the input data
valued by an independent professional provided by management to the independent
valuer. With reference to the valuation, professional valuer, to supporting evidence,
management estimated the fair value of such as approved budgets and considering
the investments at Rupees 3,809.318 the reasonableness of these budgets by
million at year end. comparing the budgets to the historical
results and market data;
Investee companies are operating in
Insurance, Packaging, Dairy, Hotel and • We assessed the reasonableness of cash flows
Shopping Mall, Automobile and Energy projection, challenging and performing audit
sectors and therefore, fair values are procedures on management’s assumptions
highly dependent on their expansion such as the future business growth driven by
plans and significant management future expansion plan, future products selling
judgements. Accordingly, the valuation of prices and operating costs, discount rate by
the investments was considered as one of comparing the assumptions to historical
the key audit matters. results and published market and industry
data and comparing the current year’s results
The fair values were determined based on with the prior year forecast and other relevant
the present value technique. The information. Our internal valuation expert has
valuations involved significant been engaged to assist the review on
judgements and estimates from valuation methodology and discount rate. In
management, including future business addition, we had discussed with the
growth driven by future expansion plans, management of the investee companies to
future products selling prices and understand the business and assessed if there
operating costs of the investee, discount was any inconsistency in the assumptions
rate, etc. used in the cash flows projection;
For further information, refer to the • We agreed holding of all un-quoted investments
following: from physical share certificates in hand;
• We performed sensitivity analysis in

- Summary of significant accounting consideration of the potential impact of
policies, Investments note 2.9 to reasonably possible upside or downside
the financial statements. changes in these key assumptions; and
- Long term investments note 15 to • We verified the accuracy of management

the financial statements. calculation used for the impairment testing, in
case of subsidiary companies carried at cost
less impairment loss, if any.
3. Capital expenditures
The Company is investing significant Our procedures included, but were not limited to:
amounts in its operations and there are a
number of areas where management • We tested operating effectiveness of controls
judgement impacts the carrying value of in place over the property, plant and
property, plant and equipment and its equipment cycle including the controls over
respective depreciation profile. These whether costs incurred on activities is capital
include among other the decision to or operating in nature;
36
Annual Report 2020
Sr.
No.
capitalize or expense costs; and review of • We evaluated the appropriateness of

useful life of the assets including the capitalization policies and depreciation rates;
impact of changes in the Company’s
strategy. • We performed tests of details on costs
capitalized; and
We focused on this area since the
amounts have a significant impact on the • We verified the accuracy of management’s
financial position of the Company and calculation used for the impairment testing.
there is significant management
judgment required that has significant
impact on the reporting of the financial
position for the Company. Therefore,
considered as one of the key audit matters.
For further information, refer to the

following:
- Summary of significant accounting

policies, property, plant,
equipment and deprecation note
2.6 to the financial statements.
- Property, plant and equipment

note 13 to the financial statements.
4. Revenue recognition
The Company recognized net revenue of Our procedures included, but were not limited to:
Rupees 60,904.096 million for the year
ended 30 June 2020. • We obtained an understanding of the process
relating to recognition of revenue and testing
We identified recognition of revenue as a the design, implementation and operating
key audit matter because revenue is one effectiveness of key internal controls over
of the key performance indicator of the recording of revenue;
Company and gives rise to an inherent
risk that revenue could be subject to • We compared a sample of revenue
misstatement to meet expectations or transactions recorded during the year with
targets. sales orders, sales invoices, delivery documents
and other relevant underlying documents;
following: • We compared a sample of revenue
transactions recorded around the year-end
- Summary of significant accounting with the sales orders, sales invoices, delivery
policies, Revenue from contracts documents and other relevant underlying
with customers note 2.23 to the documentation to assess if the related
financial statements. revenue was recorded in the appropriate
accounting period;
- Revenue note 26 to the financial
statements. • We assessed whether the accounting policies
for revenue recognition complies with the
requirements of IFRS 15 ‘Revenue from
Contracts with Customers’; and
• We compared the details of a sample of

journal entries posted to revenue accounts
during the year, which met certain specific
risk-based criteria, with the relevant
underlying documentation; and
• We also considered the appropriateness of

disclosures in the financial statements.
37
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the
requirements of Companies Act, 2017 (XIX of 2017) and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Board of directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
38
Annual Report 2020
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the board of directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017
(XIX of 2017);
b) the statement of financial position, the statement of profit or loss, the statement of comprehensive
income, the statement of changes in equity and the statement of cash flows together with the
notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are
in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the
purpose of the Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted
by the Company and deposited in the Central Zakat Fund established under section 7 of that
Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Mubashar
Mehmood.

Lahore
Date: 18 September 2020
39
Statement of Financial Position

As at June 30, 2020
2020 2019
Note (Rupees in thousand)
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized share capital
1,100,000,000 (2019: 1,100,000,000) ordinary

shares of Rupees 10 each 11,000,000 11,000,000
Issued, subscribed and paid-up share capital 3 3,515,999 3,515,999

Reserves 4 67,911,861 63,099,271
Total equity 71,427,860 66,615,270
LIABILITIES
NON-CURRENT LIABILITIES
Long term financing 5 9,222,781 5,259,927

Deferred income tax liability 6 302,672 215,440
9,525,453 5,475,367
CURRENT LIABILITIES
Trade and other payables 7 9,357,977 8,359,680

Accrued mark-up 8 226,228 235,337
Short term borrowings 9 19,329,768 17,982,262
Current portion of non-current liabilities 10 703,032 1,784,470
Unclaimed dividend 11 90,596 93,006
29,707,601 28,454,755
TOTAL LIABILITIES 39,233,054 33,930,122
CONTINGENCIES AND COMMITMENTS 12
TOTAL EQUITY AND LIABILITIES 110,660,914 100,545,392
The annexed notes form an integral part of these financial statements.
CHIEF EXECUTIVE OFFICER
40
Annual Report 2020
2020 2019
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 13 31,292,722 28,968,219

Investment properties 14 455,544 459,974
Long term investments 15 37,979,074 34,930,333
Long term loans 16 305,264 275,246
Long term deposits 17 104,783 114,360
70,137,387 64,748,132
CURRENT ASSETS
Stores, spare parts and loose tools 18 2,256,569 3,102,988

Stock-in-trade 19 20,753,543 17,008,459
Trade debts 20 4,326,780 4,711,061
Loans and advances 21 9,427,202 8,040,700
Short term deposits and prepayments 22 67,629 74,969
Other receivables 23 3,526,888 2,253,678
Accrued interest 24 36,675 28,780
Cash and bank balances 25 128,241 576,625
40,523,527 35,797,260
TOTAL ASSETS 110,660,914 100,545,392
DIRECTOR CHIEF FINANCIAL OFFICER
41
Statement of Profit or Loss

For the year ended June 30, 2020
2020 2019
REVENUE 26 60,904,096 63,499,029

COST OF SALES 27 (53,627,970) (55,842,428)
GROSS PROFIT 7,276,126 7,656,601
DISTRIBUTION COST 28 (2,875,340) (2,769,744)

ADMINISTRATIVE EXPENSES 29 (1,238,301) (1,118,891)
OTHER EXPENSES 30 (213,179) (361,132)
(4,326,820) (4,249,767)
2,949,306 3,406,834
OTHER INCOME 31 3,032,390 5,158,380

PROFIT FROM OPERATIONS 5,981,696 8,565,214
FINANCE COST 32 (1,502,412) (1,668,166)

PROFIT BEFORE TAXATION 4,479,284 6,897,048
TAXATION 33 (973,000) (1,038,000)

PROFIT AFTER TAXATION 3,506,284 5,859,048
EARNINGS PER SHARE - BASIC AND

DILUTED (RUPEES) 34 9.97 16.66
CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER
42
Annual Report 2020
Statement of Comprehensive Income

2020 2019
(Rupees in thousand)
OTHER COMPREHENSIVE INCOME / (LOSS)
Items that will not be reclassified to profit or loss:
Surplus / (deficit) arising on remeasurement of investments

at fair value through other comprehensive income 2,799,937 (13,572,681)
Deferred income tax relating to this item (87,232) 356,393

2,712,705 (13,216,288)
Items that may be reclassified subsequently to profit or loss - -
Other comprehensive income / (loss) for the year - net of tax 2,712,705 (13,216,288)
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR 6,218,989 (7,357,240)
43
44
Reserves
Capital Reserves Revenue Reserves
Share Total
Capital Premium on Fair value General Unapprop- Total Equity
Issue of reserve FVTOCI Sub Total Reserve riated Sub Total
Right Shares investments Profit
Balance as at 01 July 2018 3,515,999 5,499,530 24,242,741 29,742,271 38,352,028 4,032,311 42,384,339 72,126,610 75,642,609
Transaction with owners - Final dividend for the

year ended 30 June 2018 @ Rupees 4.75 per share - - - - - (1,670,099) (1,670,099) (1,670,099) (1,670,099)
Transferred to general reserve - - - - 2,427,000 (2,427,000) - - -

Profit for the year - - - - - 5,859,048 5,859,048 5,859,048 5,859,048
Other comprehensive loss for the year - - (13,216,288) (13,216,288) - - - (13,216,288) (13,216,288)
Total comprehensive loss for the year - - (13,216,288) (13,216,288) - 5,859,048 5,859,048 (7,357,240) (7,357,240)
Balance as at 30 June 2019 3,515,999 5,499,530 11,026,453 16,525,983 40,779,028 5,794,260 46,573,288 63,099,271 66,615,270
Transaction with owners - Final dividend for the year

Statement of Changes In Equity
ended 30 June 2019 @ Rupees 4.00 per share - - - - - (1,406,399) (1,406,399) (1,406,399) (1,406,399)
Transferred to general reserve - - - - 4,386,000 (4,386,000) - - -
Profit for the year - - - - - 3,506,284 3,506,284 3,506,284 3,506,284
Other comprehensive income for the year - - 2,712,705 2,712,705 - - - 2,712,705 2,712,705
Total comprehensive income for the year - - 2,712,705 2,712,705 - 3,506,284 3,506,284 6,218,989 6,218,989
Balance as at 30 June 2020 3,515,999 5,499,530 13,739,158 19,238,688 45,165,028 3,508,145 48,673,173 67,911,861 71,427,860

Annual Report 2020
Statement of Cash Flows

2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 35 4,014,282 3,400,455

Finance cost paid (1,511,521) (1,542,207)
Income tax paid (1,009,748) (853,336)
Exchange gain on forward exchange contracts received 107,279 13,720
Net increase in long term loans (49,864) (68,813)
Net decrease / (increase) in long term deposits 9,577 (44,717)
Net cash generated from operating activities 1,560,005 905,102
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure on property, plant and equipment (5,132,005) (3,557,636)

Proceeds from sale of property, plant and equipment 91,403 149,082
Investments made (808,410) (604,609)
Loans and advances to subsidiary companies (39,353,653) (33,979,020)
Repayment of loans from subsidiary companies 37,941,748 30,660,227
Interest received 388,113 344,315
Dividends received 2,044,302 3,029,845
Net cash used in investing activities (4,828,502) (3,957,796)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term financing 4,245,115 1,870,498

Repayment of long term financing (1,363,699) (2,161,839)
Short term borrowings - net 1,347,506 5,474,672
Dividend paid (1,408,809) (1,658,839)
Net cash from financing activities 2,820,113 3,524,492
Net (decrease) / increase in cash and cash equivalents (448,384) 471,798
Cash and cash equivalents at the beginning of the year 576,625 104,827
Cash and cash equivalents at the end of the year 128,241 576,625
45
Notes to the Financial Statements

1 THE COMPANY AND ITS OPERATIONS
1.1 Nishat Mills Limited (the Company) is a public limited Company incorporated in Pakistan under the
Companies Act, 1913 (Now Companies Act, 2017) and listed on Pakistan Stock Exchange Limited. Its
registered office is situated at 53-A, Lawrence Road, Lahore. The Company is engaged in the business
of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching,
apparel, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from
raw cotton, synthetic fibre and cloth and to generate, accumulate, distribute, supply and sell electricity.
1.2 Geographical location and addresses of all business units are as follows:
Sr.
No. Manufacturing units and offices Address
1 Spinning units, yarn dyeing unit and power plant Nishatabad, Faisalabad.
2 Spinning units and power plant Plot No. 172-180 and 188-197, M-3 Industrial City,
Sahianwala, FIEDMC, 2 K.M., Jhumra Chiniot
Road, Chak Jhumra, Faisalabad.
3 Spinning units and power plant 20 K.M., Sheikhupura Road, Feroze Wattwan.
4 Weaving units and power plant 12 K.M., Faisalabad Road, Sheikhupura.
5 Weaving units, dyeing and finishing unit, 5 K.M., Nishat Avenue Off 22 K.M., Ferozepur
processing unit, stitching units and power plants Road, Lahore.
6 Terry unit 7 K.M., Nishat Avenue Off 22 K.M., Ferozepur
Road, Lahore.
7 Apparel unit 2 K.M., Nishat Avenue Off 22 K.M., Ferozepur
Road, Lahore.
8 Head office 7-Main Gulberg, Lahore.
9 Liaison office 1st Floor, Karachi Chambers, Hasrat Mohani
Road, Karachi.
10 Registered office Nishat House, 53 - A, Lawrence Road, Lahore.
1.3 These financial statements are the separate financial statements of the Company. Consolidated financial
statements of the Company are prepared separately. Details of the Company’s investments in
subsidiaries and associates are stated in note 15 to these financial statements.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these financial statements are set out below.
These policies have been consistently applied to all years presented unless otherwise stated:
2.1 Basis of preparation
a) Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan
comprise of:
- International Financial Reporting Standards (IFRSs) issued by the International Accounting

Standards Board (IASB) as notified under the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs, the
provisions of and directives issued under the Companies Act, 2017 have been followed.
b) Accounting convention
These financial statements have been prepared under the historical cost convention except as
otherwise stated in the respective accounting policies.
46
Annual Report 2020
c) Critical accounting estimates and judgments
The preparation of financial statements in conformity with the approved accounting standards
requires the use of certain critical accounting estimates. It also requires the management to exercise
its judgment in the process of applying the Company's accounting policies. Estimates and
judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The areas where various assumptions and estimates are significant to the Company's financial
statements or where judgments were exercised in application of accounting policies are as follows:
Financial instruments – fair value
The fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques based on assumptions that are dependent on conditions existing at the
reporting date.
Useful lives, patterns of economic benefits and impairment
Estimates with respect to residual values and useful lives and pattern of flow of economic benefits
are based on the analysis of the management of the Company. Further, the Company reviews the
value of assets for possible impairment on an annual basis. Any change in the estimates in the future
might affect the carrying amount of respective item of property, plant and equipment and investment
properties with a corresponding effect on the depreciation charge and impairment.
Inventories
Inventory write-down is made based on the current market conditions, historical experience and
selling goods of similar nature. It could change significantly as a result of changes in market
conditions. A review is made on each reporting date on inventories for excess inventories,
obsolescence and declines in net realisable value and an allowance is recorded against the inventory
balances for any such declines.
Income tax
In making the estimates for income tax currently payable by the Company, the management takes
into account the current income tax law and the decisions of appellate authorities on certain issues
in the past.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience and historical collection rates.
Provisions
As the actual outflows can differ from estimates made for provisions due to changes in laws,
regulations, public expectations, technology, prices and conditions, and can take place many years
in the future, the carrying amounts of provisions are reviewed at each reporting date and adjusted to
take account of such changes. Any adjustments to the amount of previously recognised provision is
recognised in the statement of profit or loss unless the provision was originally recognised as part of
cost of an asset.
Impairment of investments in subsidiaries
In making an estimate of recoverable amount of the Company's investments in subsidiaries, the

management considers future cash flows.
47

Revenue from contracts with customers involving sale of goods
When recognizing revenue in relation to the sale of goods to customers, the key performance
obligation of the Company is considered to be the point of delivery of the goods to the customer, as
this is deemed to be the time that the customer obtains control of the promised goods and therefore
the benefits of unimpeded access.
d) Standards, interpretations and amendments to published approved accounting standards that

are effective in current year and are relevant to the Company
Following standard, interpretation and amendments to published approved accounting standards

are mandatory for the Company’s accounting periods beginning on or after 01 July 2019:
• IFRS 16 ‘Leases’
• IFRS 9 (Amendments) ‘Financial Instruments’
• IAS 28 (Amendments) ‘Investments in Associates and Joint Ventures’
• IFRIC 23 ‘Uncertainty over Income Tax Treatments’
• IASB’s Annual Improvements to IFRSs: 2015 – 2017 Cycle
The above mentioned accounting standards did not have any impact on the amounts recognised in
prior periods and are not expected to significantly affect the current or future periods.
e) Standard and amendments to published approved accounting standards that are effective in
current year but not relevant to the Company
There are other standard and amendments to published standards that are mandatory for accounting
period beginning on or after 01 July 2019 but are considered not to be relevant or do not have any
significant impact on the Company’s financial statements and are therefore not detailed in these
f) Amendments to published approved accounting standards that are not yet effective but
relevant to the Company
Following amendments to existing standards have been published and are mandatory for the
Company’s accounting periods beginning on or after 01 July 2020 or later periods:
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8 ‘Accounting Policies,

Changes in Accounting Estimates and Errors’ (effective for annual periods beginning on or after 01
January 2020). The amendments are intended to make the definition of material in IAS 1 easier to
understand and are not intended to alter the underlying concept of materiality in IFRS. In addition,
the IASB has also issued guidance on how to make materiality judgements when preparing general
purpose financial statements in accordance with IFRS.
On 29 March 2018, the International Accounting Standards Board (the IASB) has issued a revised
Conceptual Framework. The new Framework: reintroduces the terms stewardship and prudence;
introduces a new asset definition that focuses on rights and a new liability definition that is likely to
be broader than the definition it replaces, but does not change the distinction between a liability and
an equity instrument; removes from the asset and liability definitions references to the expected flow
of economic benefits–this lowers the hurdle for identifying the existence of an asset or liability and
puts more emphasis on reflecting uncertainty in measurement; discusses historical cost and current
value measures, and provides some guidance on how the IASB would go about selecting a
measurement basis for a particular asset or liability; states that the primary measure of financial
performance is profit or loss, and that only in exceptional circumstances will the IASB use other
comprehensive income and only for income or expenses that arise from a change in the current value
of an asset or liability; and discusses uncertainty, derecognition, unit of account, the reporting entity
and combined financial statements. The Framework is not an IFRS standard and does not override
any standard, so nothing will change in the short term. The revised Framework will be used in future
standard-setting decisions, but no changes will be made to current IFRS. Preparers might also use
48
Annual Report 2020
the Framework to assist them in developing accounting policies where an issue is not addressed by
an IFRS. It is effective for annual periods beginning on or after 1 January 2020 for preparers that
develop an accounting policy based on the Framework.
Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business

combinations for which the acquisition date is on or after the beginning of annual period beginning
on or after 1 January 2020). The International Accounting Standards Board (IASB) has issued
amendments aiming to resolve the difficulties that arise when an entity determines whether it has
acquired a business or a group of assets. The amendments clarify that to be considered a business,
an acquired set of activities and assets must include, at a minimum, an input and a substantive
process that together significantly contribute to the ability to create outputs. The amendments
include an election to use a concentration test. The standard is effective for transactions in the future
and therefore would not have an impact on past financial statements.
Interest Rate Benchmark Reform which amended IFRS 9 ‘Financial Instruments’, IAS 39 ‘Financial
Instruments: Recognition and Measurement’ and IFRS 7 ‘Financial Instruments: Disclosures’ is
applicable for annual financial periods beginning on or after 1 January 2020. The G20 asked the
Financial Stability Board (FSB) to undertake a fundamental review of major interest rate benchmarks.
Following the review, the FSB published a report setting out its recommended reforms of some major
interest rate benchmarks such as IBORs. Public authorities in many jurisdictions have since taken
steps to implement those recommendations. This has in turn led to uncertainty about the long-term
viability of some interest rate benchmarks. In these amendments, the term interest rate benchmark
reform' refers to the market-wide reform of an interest rate benchmark including its replacement with
an alternative benchmark rate, such as that resulting from the FSB's recommendations set out in its
July 2014 report 'Reforming Major Interest Rate Benchmarks' (the reform). The amendments made
provide relief from the potential effects of the uncertainty caused by the reform. A company shall
apply the exceptions to all hedging relationships directly affected by interest rate benchmark reform.
Classification of liabilities as current or non-current (Amendments to IAS 1 ‘Presentation of Financial

Statements’) effective for the annual period beginning on or after 1 January 2022. These
amendments in the standards have been added to further clarify when a liability is classified as
current. The standard also amends the aspect of classification of liability as non-current by requiring
the assessment of the entity’s right at the end of the reporting period to defer the settlement of
liability for at least twelve months after the reporting period. An entity shall apply those amendments
retrospectively in accordance with IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and
Errors’.
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37 ‘Provisions, Contingent

Liabilities and Contingent Assets’) effective for the annual period beginning on or after 1 January
2022 amends IAS 1 ‘Presentation of Financial Statements’ by mainly adding paragraphs which
clarifies what comprise the cost of fulfilling a contract. Cost of fulfilling a contract is relevant when
determining whether a contract is onerous. An entity is required to apply the amendments to
contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting
period in which it first applies the amendments (the date of initial application). Restatement of
comparative information is not required, instead the amendments require an entity to recognize the
cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings or other component of equity, as appropriate, at the date of initial application.
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16 ‘Property,
Plant and Equipment’) effective for the annual period beginning on or after 1 January 2022. Clarifies
that sales proceeds and cost of items produced while bringing an item of property, plant and
equipment to the location and condition necessary for it to be capable of operating in the manner
intended by management e.g. when testing etc, are recognized in profit or loss in accordance with
applicable Standards. The entity measures the cost of those items applying the measurement
requirements of IAS 2 ‘Inventories’. The standard also removes the requirement of deducting the net
sales proceeds from cost of testing. An entity shall apply those amendments retrospectively, but only
to items of property, plant and equipment that are brought to the location and condition necessary
for them to be capable of operating in the manner intended by management on or after the beginning
49

of the earliest period presented in the financial statements in which the entity first applies the
amendments. The entity shall recognize the cumulative effect of initially applying the amendments as
an adjustment to the opening balance of retained earnings (or other component of equity, as
appropriate) at the beginning of that earliest period presented.
The following annual improvements to IFRS standards 2018-2020 are effective for annual reporting
periods beginning on or after 1 January 2022.
- IFRS 9 ‘Financial Instruments’ – The amendment clarifies that an entity includes only fees paid
or received between the entity (the borrower) and the lender, including fees paid or received by
either the entity or the lender on the other’s behalf, when it applies the ‘10 per cent’ test in
paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability.
- IFRS 16 ‘Leases’ – The amendment partially amends Illustrative Example 13 accompanying IFRS
16 ‘Leases’ by excluding the illustration of reimbursement of leasehold improvements by the
lessor. The objective of the amendment is to resolve any potential confusion that might arise in
lease incentives.
The above amendments and improvements do not have a material impact on the financial
statements.
g) Standards and amendments to approved published standards that are not yet effective and
not considered relevant to the Company
There are other standards and amendments to published standards that are mandatory for
accounting periods beginning on or after 01 July 2020 but are considered not to be relevant or do not
have any significant impact on the Company’s financial statements and are therefore not detailed in
these financial statements.
2.2 Employee benefit
The Company operates an approved funded provident fund scheme covering all its permanent
employees and permanent employees of a Group Company. Equal monthly contributions are made both
by the Company, other Group Company and employees at the rate of 9.5 percent of the basic salary to
the fund. The Company's contributions to the fund are charged to statement of profit or loss.
2.3 Taxation
Current
Provision for current tax is based on the taxable income for the year determined in accordance with the
prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or
tax rates expected to apply to the profit for the year, if enacted. The charge for current tax also includes
adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years.
Deferred
Deferred tax is accounted for using the liability method in respect of all temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are
generally recognized for all taxable temporary differences and deferred tax assets to the extent that it is
probable that taxable profits will be available against which the deductible temporary differences, unused
tax losses and tax credits can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences
reverse based on tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in the statement of profit or loss, except to the extent that it relates to
50
Annual Report 2020
items recognized in other comprehensive income or directly in equity. In this case, the tax is also
recognized in other comprehensive income or directly in equity, respectively.
2.4 Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the
primary economic environment in which the Company operates (the functional currency). The financial
statements are presented in Pak Rupees, which is the Company’s functional and presentation currency.
Figures are rounded off to the nearest thousand of Pak Rupees.
2.5 Foreign currency transactions and translation
All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at exchange rates
prevailing at the reporting date. Transactions in foreign currencies are translated into Pak Rupees at
exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are charged or credited to statement of profit or
loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign
currency are translated into Pak Rupees at exchange rates prevailing at the date of transaction.
Non-monetary assets and liabilities denominated in foreign currency that are stated at fair value are
translated into Pak Rupees at exchange rates prevailing at the date when fair values are determined.
2.6 Property, plant, equipment and depreciation
Property, plant and equipment except freehold land and capital work-in-progress are stated at cost less
accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant and
equipment consists of historical cost, borrowing cost pertaining to erection / construction period of
qualifying assets and other directly attributable costs of bringing the asset to working condition. Freehold
land and capital work-in-progress are stated at cost less any recognized impairment loss.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably. All other repair and maintenance costs
are charged to statement of profit or loss during the period in which they are incurred.
Depreciation
Depreciation on property, plant and equipment is charged to the statement of profit or loss applying the
reducing balance method so as to write off the cost / depreciable amount of the assets over their
estimated useful lives at the rates given in note 13. The Company charges the depreciation on additions
from the date when the asset is available for use and on deletions up to the date when the asset is
de-recognized. The residual values and useful lives are reviewed by the management, at each financial
year-end and adjusted if impact on depreciation is significant.
De-recognition
An item of property, plant and equipment is de-recognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is
included in the statement of profit or loss in the year the asset is de-recognized.
2.7 Investment properties
Land and buildings held for capital appreciation or to earn rental income are classified as investment
properties. Investment properties except land, are stated at cost less accumulated depreciation and any
recognized impairment loss. Land is stated at cost less any recognized impairment loss. Depreciation on
buildings is charged to the statement of profit or loss applying the reducing balance method so as to write
off the cost of buildings over their estimated useful lives at a rate of 10% per annum.
51

2.8 IFRS 16 “Leases”
The Company has adopted IFRS 16 from 01 July 2019. The standard replaces IAS 17 'Leases' and for
lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognized in
the statement of financial position. Straight-line operating lease expense recognition is replaced with a
depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on
the recognized lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses
associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS 17,
as the operating expense is now replaced by interest expense and depreciation in the statement of profit
or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating
activities and the principal portion of the lease payments are separately disclosed in financing activities.
For lessor accounting, the standard does not substantially change how a lessor accounts for leases.
The adoption of IFRS 16 has no financial impact on the financial statements of the Company.
Right-of-use assets
A right-of-use asset is recognized at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or
asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is shorter. Where the Company expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is charged over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any re-measurement of lease liabilities.
The Company has elected not to recognize a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on
these assets are charged to income as incurred.
Lease liabilities
A lease liability is recognized at the commencement date of a lease. The lease liability is initially
recognized at the present value of the lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are re-measured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is re-measured, an adjustment is made to the corresponding
right-of-use asset, or to statement of profit or loss if the carrying amount of the right-of-use asset is fully
written down.
2.9 Investments and other financial assets
a) Classification
The Company classifies its financial assets in the following measurement categories:
52
Annual Report 2020
• those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and
• those to be measured at amortized cost
The classification depends on the Company’s business model for managing the financial assets and
the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business model
in which the investment is held. For investments in equity instruments, this will depend on whether
the Company has made an irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income. The Company reclassifies debt
investments when and only when its business model for managing those assets changes.
b) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value
through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Company classifies its debt instruments:
Amortized cost
Financial assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in other income using the effective interest rate method. Any
gain or loss arising on derecognition is recognised directly in profit or loss and presented in other
income / (other expenses) together with foreign exchange gains and losses. Impairment losses are
presented as separate line item in the statement of profit or loss.
Fair value through other comprehensive income (FVTOCI)
Financial assets that are held for collection of contractual cash flows and for selling the financial
assets, where the assets’ cash flows represent solely payments of principal and interest, are
measured at FVTOCI. Movements in the carrying amount are taken through other comprehensive
income, except for the recognition of impairment losses (and reversal of impairment losses), interest
income and foreign exchange gains and losses which are recognised in profit or loss. When the
financial asset is derecognised, the cumulative gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss and recognised in other income /
(other expenses). Interest income from these financial assets is included in other income using the
effective interest rate method. Foreign exchange gains and losses are presented in other income /
(other expenses) and impairment losses are presented as separate line item in the statement of profit
or loss.
Fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. A gain or
53

loss on a debt instrument that is subsequently measured at FVTPL is recognised in profit or loss and
presented net within other income / (other expenses) in the period in which it arises.
Equity instruments
The Company subsequently measures all equity investments at fair value for financial instruments quoted
in an active market, the fair value corresponds to a market price (level 1). For financial instruments that
are not quoted in an active market, the fair value is determined using valuation techniques including
reference to recent arm’s length market transactions or transactions involving financial instruments which
are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible
extent, assumptions consistent with observable market data (level 3).
Where the Company’s management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification of fair value
gains and losses to profit or loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVTOCI are not reported separately from other changes in fair value.
Fair value through profit or loss
Changes in the fair value of equity investments at fair value through profit or loss are recognised in
other income / (other expenses) in the statement of profit or loss as applicable.
Dividends from such investments continue to be recognised in profit or loss as other income when the
Company’s right to receive payments is established.
2.10 Financial liabilities – classification and measurement
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured
at amortized cost using the effective interest method. Interest expense and foreign exchange gains and
losses are recognized in statement of profit or loss. Any gain or loss on de-recognition is also included in
profit or loss.
2.11 Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVTOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade debts and other receivables, the Company applies the simplified approach permitted by IFRS 9,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
2.12 De-recognition of financial assets and financial liabilities
a) Financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred, or it
neither transfers nor retains substantially all of the risks and rewards of ownership and does not
retain control over the transferred asset. Any interest in such derecognized financial assets that is
created or retained by the Company is recognized as a separate asset or liability.
54
Annual Report 2020
b) Financial liabilities
The Company derecognizes a financial liability (or a part of financial liability) from its statement of
financial position when the obligation specified in the contract is discharged or cancelled or expires.
2.13 Offsetting of financial instruments
Financial assets and financial liabilities are set off and the net amount is reported in the financial
statements when there is a legal enforceable right to set off and the Company intends either to settle on
a net basis or to realize the assets and to settle the liabilities simultaneously.
2.14 Investment in subsidiaries
Investments in subsidiaries are stated at cost less impairment loss, if any, in accordance with the
provisions of IAS 27 'Separate Financial Statements'.
2.15 Investment in associates - (with significant influence)
The Company is required to prepare separate financial statements, hence, in accordance with the
requirements of IAS 27 'Separate Financial Statements', the investments in associates are accounted for
in accordance with IFRS 9 'Financial Instruments’ and are classified as fair value through other
comprehensive income (FVTOCI).
2.16 Inventories
Inventories, except for stock in transit and waste stock / rags, are stated at lower of cost and net
realizable value. Cost is determined as follows:
Stores, spare parts and loose tools
Useable stores, spare parts and loose tools are valued principally at moving average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value
plus other charges paid thereon.
Stock-in-trade
Cost of raw material, work-in-process and finished goods is determined as follows:
(i) For raw materials: Annual average basis.

(ii) For work-in-process and finished goods: Average manufacturing cost including a portion of
production overheads.
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon. Waste
stock / rags are valued at net realizable value.
Net realizable value signifies the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make a sale.
2.17 Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables
generally do not include amounts over due by 365 days.
The Company has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
55

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
2.18 Non–current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount
is to be recovered principally through a sale transaction and a sale is considered highly probable. They
are stated at the lower of carrying amount and fair value less costs to sell.
2.19 Borrowings
Financing and borrowings are initially recognized at fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortized cost using the effective interest
method.
2.20 Borrowing cost
Interest, mark-up and other charges on long-term finances are capitalized up to the date of
commissioning of respective qualifying assets acquired out of the proceeds of such long-term finances.
All other interest, mark-up and other charges are recognized in statement of profit or loss.
2.21 Share capital
Ordinary shares are classified as share capital. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax.
2.22 Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally the
transaction cost.
2.23 Revenue from contracts with customers
i) Revenue recognition
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control
of the goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered
based on either a fixed price or an hourly rate.
Interest
Interest income is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income over
the relevant period using the effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of the
financial asset.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term.
Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are
recognised as income in the period when earned.
56
Annual Report 2020
Sale of electricity
Revenue from sale of electricity is recognized at the time of transmission.
Dividend
Dividend on equity investments is recognized when right to receive the dividend is established.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
ii) Contract assets
Contract assets arise when the Company performs its performance obligations by transferring goods
to a customer before the customer pays its consideration or before payment is due. Contract assets
are treated as financial assets for impairment purposes.
iii) Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to obtaining
a contract with a customer and are expected to be recovered. Customer acquisition costs are
amortised on a straight-line basis over the term of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was
obtained or which are not otherwise recoverable from a customer are expensed as incurred to profit
or loss. Incremental costs of obtaining a contract where the contract term is less than one year is
immediately expensed to profit or loss.
iv) Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs
relate directly to the contract or specifically identifiable proposed contract; (ii) the costs generate or
enhance resources of the Company that will be used to satisfy future performance obligations; and
(iii) the costs are expected to be recovered. Customer fulfilment costs are amortised on a straight-line
basis over the term of the contract.
v) Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an
estimate of customers who may exercise their right to return the goods and claim a refund. Such
rights are measured at the value at which the inventory was previously carried prior to sale, less
expected recovery costs and any impairment.
vi) Contract liabilities
Contract liability is the obligation of the Company to transfer goods to a customer for which the
Company has received consideration from the customer. If a customer pays consideration before the
Company transfers goods, a contract liability is recognized when the payment is made. Contract
liabilities are recognized as revenue when the Company performs its performance obligations under
the contract.
vii) Refund liabilities
Refund liabilities are recognised where the Company receives consideration from a customer and
expects to refund some, or all, of that consideration to the customer. A refund liability is measured at
the amount of consideration received or receivable for which the Company does not expect to be
entitled and is updated at the end of each reporting period for changes in circumstances. Historical
57

data is used across product lines to estimate such returns at the time of sale based on an expected
value methodology.
2.24 Provisions
Provisions are recognized when the Company has a legal or constructive obligation as a result of past
events and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligations and a reliable estimate of the amount can be made.
2.25 Earnings per share
The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the year.
2.26 Contingent assets
Contingent assets are disclosed when the Company has a possible asset that arises from past events
and whose existence will only be confirmed by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company. Contingent assets are not
recognized until their realization becomes certain.
2.27 Contingent liabilities
Contingent liability is disclosed when the Company has a possible obligation as a result of past events
whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Company. Contingent liabilities are not recognized, only
disclosed, unless the possibility of a future outflow of resources is considered remote. In the event that
the outflow of resources associated with a contingent liability is assessed as probable, and if the size of
the outflow can be reliably estimated, a provision is recognized in the financial statements.
2.28 Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to depreciation and are tested annually for
impairment. Assets that are subject to depreciation are reviewed for impairment at each statement of
financial position date or whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognized for the amount for which assets carrying
amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial
assets that suffered an impairment are reviewed for possible reversal of the impairment at each reporting
date. Reversals of the impairment losses are restricted to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or
amortization, if impairment losses had not been recognized. An impairment loss or reversal of impairment
loss is recognized in the statement of profit or loss.
2.29 Derivative financial instruments
Derivatives are initially recognized at fair value. Any directly attributable transaction costs are recognized
in the statement of profit or loss as incurred. They are subsequently remeasured at fair value on regular
basis and at each reporting date as a minimum, with all their gains and losses, realized and unrealized,
recognized in the statement of profit or loss.
2.30 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit
accounts and other short term highly liquid instruments that are readily convertible into known amounts
of cash and which are subject to insignificant risk of changes in values.
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Annual Report 2020
2.31 Ijara contracts
Under the Ijarah contracts the Company obtains usufruct of an asset for an agreed period for an agreed
consideration. The Company accounts for its Ijarah contracts in accordance with the requirements of
IFAS 2 ‘Ijarah’. Accordingly, the Company as a Mustaj’ir (lessee) in the Ijarah contract recognises the
Ujrah (lease) payments as an expense in the profit and loss on straight line basis over the Ijarah term.
2.32 Segment reporting
Segment reporting is based on the operating (business) segments of the Company. An operating
segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to the transactions with any
of the Company's other components. An operating segment's operating results are reviewed regularly by
the chief executive officer to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available.
Segment results that are reported to the chief executive officer include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. Those incomes, expenses, assets,
liabilities and other balances which cannot be allocated to a particular segment on a reasonable basis are
reported as unallocated.
The Company has following reportable business segments: Spinning at Faisalabad (I and II) and Feroze
Wattwan (I and II) (Producing different quality of yarn including dyed yarn and sewing thread using natural
and artificial fibres), Weaving at Bhikki and Lahore (Producing different quality of greige fabric using yarn),
Dyeing (Producing dyed fabric using different qualities of greige fabric), Home Textile (Manufacturing of
home textile articles using processed fabric produced from greige fabric), Terry (Manufacturing of terry
and bath products), Garments (Manufacturing of garments using processed fabric) and Power
Generation (Generation and distribution of power using gas, oil, steam, coal and biomass).
Transaction among the business segments are recorded at cost. Inter segment sales and purchases are
eliminated from the total.
2.33 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that
the grant will be received and the Company will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to profit or loss over the expected lives of the related
assets.
2.34 Dividend and other appropriations
Dividend distribution to the Company's shareholders is recognized as a liability in the Company's

financial statements in the period in which the dividends are declared and other appropriations are
recognized in the period in which these are approved by the Board of Directors.
59

3 ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL
2020 2019 2020 2019

(Number of Shares) Note (Rupees in thousand)
270,446,606 270,446,606 Ordinary shares of Rupees 10 each

fully paid-up in cash 2,704,466 2,704,466

issued to shareholders of Nishat
Apparel Limited under the Scheme
of Amalgamation 28,041 28,041

issued as fully paid for consideration
other than cash 3.1 235,780 235,780

issued as fully paid bonus shares 547,712 547,712
351,599,848 351,599,848 3,515,999 3,515,999
3.1 These mainly include shares issued to members of Umer Fabrics Limited as per the Scheme of
Arrangement as approved by the Honourable Lahore High Court, Lahore.
3.2 Ordinary shares of the Company held by the associated companies:
2020 2019
(Number of Shares)
D.G. Khan Cement Company Limited 30,289,501 30,289,501

Adamjee Insurance Company Limited 2,050 2,050
MCB Bank Limited 227 227
Adamjee Life Assurance Company Limited 400 80,000
30,292,178 30,371,778
2020 2019
4 RESERVES
Composition of reserves is as follows:
Capital reserves
Premium on issue of right shares 4.1 5,499,530 5,499,530

Fair value reserve FVTOCI investments - net
of deferred income tax 4.2 13,739,158 11,026,453
19,238,688 16,525,983
Revenue reserves
General reserve 45,165,028 40,779,028

Unappropriated profit 3,508,145 5,794,260
48,673,173 46,573,288
67,911,861 63,099,271
60
Annual Report 2020
4.1 This reserve can be utilized by the Company only for the purposes specified in section 81 of the
Companies Act, 2017.
4.2 This represents the unrealized gain on re-measurement of investments at fair value through other
comprehensive income and is not available for distribution. Reconciliation of fair value reserve - net of
deferred tax is as under:
2020 2019
Balance as on 01 July 11,241,893 24,814,574

Less: Fair value adjustment during the year 2,799,937 (13,572,681)
14,041,830 11,241,893
Less: Deferred income tax liability on unquoted

equity investments (302,672) (215,440)
Balance as on 30 June 13,739,158 11,026,453
5 LONG TERM FINANCING - SECURED
Long term loans 5.1 9,210,417 6,000,625

Long term musharika 5.2 715,396 1,043,772
9,925,813 7,044,397
Less: Current portion shown under current liabilities 10 (703,032) (1,784,470)
9,222,781 5,259,927
61

Rate of Number of Interest Interest

Lender 2020 2019 Interest Per Security
Installments Repricing Payable
Annum
5.1 Long term loans

Allied Bank 16,060 64,242 3 Month Twenty four Quarterly Quarterly First pari passu
Limited offer KIBOR equal quarterly hypothecation charge of
+ 0.50% installments Rupees 1,334 million over
commenced on all present and future
24 August 2014 plant, machinery and
and ending on equipment of the
24 May 2021 Company (excluding plant
(Note 5.4). and machinery in respect
of which the Company
has already created
exclusive charges in the
favour of its existing
creditors).
Pak Brunei 202,474 248,258 SBP rate for Three hundred - Quarterly First pari passu charge of
Investment LTFF and twenty Rupees 400 million over
Company + 0.25% unequal installments all the present and future
Limited commenced on plant and machinery of
30 August 2018 the Company with 25%
and ending on margin excluding those
28 December 2024 assets (part of the plant
(Note 5.4). and machinery) on which
the Company has created
exclusive charges in
favour of existing
creditors.
Faysal Bank 139,016 158,875 SBP rate for Twenty unequal - Quarterly First pari passu charge of
Limited LTFF installments Rupees 267 million on all
+ 0.30% commenced on present and future plant
22 November 2018 and machinery of the
and ending on Company (excluding
22 May 2024 those on which charge
(Note 5.4). has already been created).
Pakistan Kuwait 42,174 62,347 SBP rate for One hundred and sixty - Quarterly First pari passu charge of
Investment LTFF unequal installments Rupees 400 million on all
Company + 1.00% commenced on present and future plant
(Private) Limited 11 June 2016 and and machinery of the
ending on Company with 25%
26 January 2023 margin.
(Note 5.4).
Ranking hypothecation
16,440 21,535 SBP rate for Two hundred and - Quarterly charge of Rupees 267
LTFF fifty eight unequal million on plant and
+ 0.75% installments machinery of the
commenced on Company (excluding plant
15 September 2016 and machinery in respect
and ending on of which the Company
29 September 2023 has already created
(Note 5.4). exclusive charges in
charge holders /
creditors).
58,614 83,882
The Bank of 169,255 240,098 SBP rate One hundred and - Quarterly First pari passu charge of
Punjab for LTFF sixty unequal Rupees 667 million on
+ 0.50% installments present and future fixed
commenced on assets (plant and
30 January 2017 machinery) of the
and ending on Company.
07 April 2023
(Note 5.4).
62
Annual Report 2020

Annum
National Bank 44,466 60,780 SBP rate One hundred and - Quarterly First pari passu
of Pakistan for LTFF twenty unequal hypothecation charge of
+ 0.50% installments Rupees 534 million on all
commenced on present and future plant
12 April 2017 and and machinery (excluding
ending on plant and machinery
03 June 2023 which is under exclusive
(Note 5.4). charges of Company's
creditors).
Allied Bank 609,478 771,359 SBP rate Two hundred and - Quarterly First pari passu charge of
Limited for LTFF twenty unequal Rupees 1,333 million
+ 0.25% installments (inclusive of 25% margin
commenced on on all present and future
27 March 2018 plant and machinery of
and ending on the Company).
05 June 2024
(Note 5.4).
Bank Alfalah 596,935 751,071 SBP rate Four hundred and - Quarterly First pari passu charge of
Limited for LTFF sixty unequal Rupees 1,334 million on
+ 0.35% installments all present and future
commenced on plant and machinery
02 February 2018 (excluding plant and
and ending on machinery in respect of
25 May 2024 which the Company has
(Note 5.4). already created exclusive
charges in the favour of
existing creditors).
Bank Alfalah 182,592 224,729 SBP rate Twenty equal - Quarterly First pari passu
Limited for LTFF quarterly installments hypothecation charge of
+ 0.35% commenced Rupees 400 million with
on 31 August 2018 25% margin on present
and ending on and future plant and
31 May 2024 machinery of the
(Note 5.4). Company.
Allied Bank 772,933 934,678 SBP rate Four hundred - Quarterly First pari passu
Limited for LTFF and eighty four hypothecation charge of
+ 0.25% unequal installments Rupees 1,334 million over
commenced on all present and future
28 December 2018 and plant, machinery and
ending on 13 July 2025 equipment of the
(Note 5.4). Company (excluding plant
and machinery in respect
has already created
creditors).
Habib Bank 461,591 619,963 SBP rate One hundred - Quarterly Note 5.3
Limited for LTFF and eighty unequal
+ 0.40% installments
commenced on
17 September 2017
and ending on
25 November 2023
(Note 5.4).
63


Annum
Faysal Bank 267,338 296,361 SBP rate Eighty unequal - Quarterly First pari passu charge of
Limited for LTFF installments Rupees 400 million on all
18 January 2020 and machinery (excluding
and ending on plant and machinery in
05 November 2025 respect of which the
(Note 5.4). Company has already
created exclusive charges
in the favour of existing
creditors).
Allied Bank 908,011 778,483 SBP rate Two hundred - Quarterly First pari passu charge of
Limited for LTFF and twenty unequal Rupees 1,267 million over
+ 0.25% installments all present and future
commenced on plant, machinery and
26 January 2020 equipment of the
and ending on Company (excluding plant
17 September 2026 and machinery in respect
(Note 5.4). of which the Company
has already created
creditors).
Habib Bank 937,145 767,846 SBP rate Twenty four - Quarterly First pari passu charge of
Limited for LTFF unequal installments Rupees 4,084 million over
+ 0.25% commenced on all present and future
27 February 2020 plant, machinery and
and ending on equipment of the
27 November 2025 Company (excluding plant
(Note 5.4). and machinery in respect
has already created
creditors).
Allied Bank 222,715 - SBP rate Sixty unequal - Quarterly Ranking charge of Rupees
Limited for LTFF installments 1,267 million over all
+ 0.35% commencing on present and future plant,
24 January 2022 machinery and equipment
and ending on of the Company
28 October 2026. (excluding plant and
machinery in respect of
546,274 - SBP rate Four hundred - Quarterly which the Company has
for LTFF and forty one already created exclusive
+ 0.50% unequal installments charges in the favour of its
commencing on existing charge holders /
12 February 2022 creditors).
and ending on
18 February 2027.
100,000 - SBP rate for Twenty equal - Quarterly

financing power quarterly installments
plants using commencing on
renewable 14 May 2021
energy + 0.50% and ending on
14 February 2026.
868,989 -
Bank Alfalah 218,714 - SBP rate One hundred - Quarterly Ranking charge of Rupees
Limited for LTFF unequal installments 1,334 million on all
+ 0.50% commencing on present and future plant
23 December 2021 and machinery (excluding
21 October 2026. respect of which the
Company has already
created exclusive charge
in favour of its existing
charge holders / creditors)
of the Company with 25%
margin.
64
Annual Report 2020

Annum
Pakistan Kuwait 998,210 - SBP rate Seventy two - Quarterly Ranking charge of Rupees
Investment for LTFF unequal installments 1,334 million on all
Company + 0.65% commencing on present and future plant
(Private) Limited 13 April 2022 and and machinery (excluding
ending on plant and machinery in
18 May 2028. respect of which the
Company has already
created exclusive charge
in favour of its existing
charge holders / creditors)
of the Company with 25%
margin.
Habib 866,900 - SBP rate Sixty unequal - Quarterly Ranking charge of Rupees
Metropolitan for LTFF installments commencing 1,334 million over plant
Bank Limited + 0.65% on 24 September 2022 and machinery after
and ending on incorporating 25% margin
30 June 2027. (excluding plant and
which the Company has
already created exclusive
charge in favour of its
existing charge holders).
Allied Bank 891,696 - 3 Month Twenty four - Quarterly Ranking charge of Rupees
Limited offer KIBOR unequal installments 1,334 million over all the
(Note 5.5) + 0.20% commencing on present and future plant,
and ending on of the Company
16 November 2022 . (excluding plant and
existing creditors).
9,210,417 6,000,625
5.2 Long term musharika
Habib Bank 27,896 168,772 3 Month Fifty six unequal Quarterly Quarterly Note 5.3
Limited offer KIBOR installments
+ 0.35% commenced on
19 May 2016
and ending on
01 June 2021.
(Note 5.4)
Standard 687,500 875,000 3 Month Forty eight Quarterly Quarterly Specific charge of Rupees
Chartered Bank offer KIBOR unequal installments 1,334 million over fixed
(Pakistan) commenced on assets of the Company
Limited 14 February 2019 inclusive of 25% margin.
and ending on
06 December 2023.
(Note 5.4)
715,396 1,043,772
9,925,813 7,044,397
5.3 Long term loan and long term musharika from Habib Bank Limited are secured against first pari passu hypothecation charge of
Rupees 4,000 million on present and future fixed assets of the Company excluding specific and exclusive charges.
5.4 Repayment period includes deferment of repayment of principal loan amount by one year in accordance with the State Bank of
Pakistan BPRD Circular Letter No. 13 of 2020 dated 26 March 2020.
5.5 During the year, this long term finance did not carry rate of interest of State Bank of Pakistan refinance scheme for payment of
wages and salaries. Hence, does not contain any element of government grant
65

6 DEFERRED INCOME TAX LIABILITY
This represents deferred income tax liability on unrealized gain on remeasurement of unquoted equity
investments at fair value through other comprehensive income. Provision for deferred income tax on other
temporary differences was not considered necessary as the Company is chargeable to tax under section 169 of
the Income Tax Ordinance, 2001.
2020 2019
7 TRADE AND OTHER PAYABLES
Creditors 7.1 6,689,294 6,238,841

Accrued liabilities 1,415,195 1,184,933
Advances from customers 7.1 956,879 519,955
Securities from contractors - Interest free and
repayable on completion of contracts 7.2 13,561 11,538
Retention money payable 32,156 84,135
Payable to Employees' Provident Fund Trust 39,988 -
Income tax deducted at source 782 1,013
Fair value of forward exchange contracts 6,206 7,583
Workers' profit participation fund 7.3 203,916 311,682
9,357,977 8,359,680
7.1 These include amounts due to following related parties:
Creditors
Nishat Linen (Private) Limited - subsidiary company 103,068 2,185

Nishat USA Inc. - subsidiary company 3,665 -
Nishat Hospitality (Private) Limited - subsidiary company 132 34
Hyundai Nishat Motor (Private) Limited - associated company 37 -
Nishat International FZE - subsidiary company - 21,090
D.G. Khan Cement Company Limited - associated company 8,376 1,779
Security General Insurance Company Limited
- associated company 25,008 23,013
Adamjee Insurance Company Limited - associated company 15,382 24,967
Nishat Hotels and Properties Limited - associated company 289 -
Sanifa Agri Services Limited - associated company 403 -
Pakistan Aviators and Aviation (Private) Limited - related party - 2,612
Nishat (Chunian) Limited - related party 173,798 49,156
330,158 124,836
Advances from customers
Nishat Hotels and Properties Limited - associated company 820 2

Hyundai Nishat Motor (Private) Limited - associated company - 787
820 789
7.2 These deposits have been utilized for the purpose of business in accordance with the terms of written
agreements with contractors.
66
Annual Report 2020
2020 2019
7.3 Workers’ profit participation fund
Opening balance 311,682 184,164

Less: Adjustment on adoption of IFRS 15 - (3,435)
311,682 180,729
Add: Provision for the year 30 204,045 331,747
Add: Interest for the year 32 3,826 628
519,553 513,104
Less: Payments during the year (315,637) (201,422)
Balance as on 30 June 203,916 311,682
7.3.1 Interest is paid at prescribed rate under the Companies Profits (Workers Participation) Act, 1968 on funds
utilized by the Company till the date of allocation to workers.
8 ACCRUED MARK-UP
Long term financing 49,687 42,187

Short term borrowings 8.1 176,541 193,150
226,228 235,337
8.1 This includes mark-up of Rupees 2.803 million (2019: Rupees 2.779 million) payable to MCB Bank
Limited - associated company.
9 SHORT TERM BORROWINGS
From banking companies - secured
State Bank of Pakistan (SBP) refinance 9.1 and 9.3 14,184,868 13,764,706
Other short term finances 9.1 and 9.4 2,743,549 3,540,000
Temporary bank overdrafts 9.1, 9.2 and 9.5 2,401,351 677,556
19,329,768 17,982,262
9.1 These finances are obtained from banking companies under mark up arrangements and are secured
against joint pari passu hypothecation charge on all present and future current assets, other instruments
and ranking hypothecation charge on plant and machinery of the Company. These form part of total
credit facility of Rupees 42,975 million (2019: Rupees 39,705 million).
9.2 These finances include Rupees 76.206 million (2019: Rupees 120.307 million) from MCB Bank Limited -
associated company, which has been utilized for working capital requirements.
9.3 The rates of mark-up range from 2.15% to 3.00% (2019: 2.15% to 3.00%) per annum during the year on
the balance outstanding.
9.4 The rates of mark-up range from 1.87% to 14.01% (2019: 6.20% to 12.93%) per annum during the year
on the balance outstanding.
9.5 The rates of mark-up range from 8.75% to 15.56% (2019: 7.12% to 13.79%) per annum during the year
67

2020 2019
10 CURRENT PORTION OF NON-CURRENT LIABILITIES
Current portion of long term financing 5 703,032 1,784,470
11 UNCLAIMED DIVIDEND
As at the reporting date, the Company is in the process of complying with the provisions of Section 244 of the
12 CONTINGENCIES AND COMMITMENTS
a) Contingencies
i) Guarantees of Rupees 2,941.607 million (2019: Rupees 2,255.144 million) are given by the banks of
the Company to Sui Northern Gas Pipelines Limited against gas connections, Shell Pakistan Limited
and Pakistan State Oil Limited against purchase of furnace oil, Director Excise and Taxation, Karachi
against infrastructure cess, Chairman Punjab Revenue Authority, Lahore against infrastructure cess,
Directorate of Cotton Cess Management against cotton cess, Collector of Customs against regulatory
duty, Model Customs Collectorate Lahore against imported coal, State Bank of Pakistan against
mark-up subsidy, Inspector General Frontier Corps KP (South) and The President of Islamic Republic
of Pakistan through the Controller of Military Accounts (Defence Purchase) against fulfillment of sales
orders, High Court of Sindh, Karachi against the matter of importation of LED lights and to the bank
of Hyundai Nishat Motor (Private) Limited (associated company) to secure financial assistance to the
associated company. Further, the Company has issued cross corporate guarantees of Rupees 266.667
million (2019: Rupees Nil) and Rupees 16.2 million (2019: Rupees Nil) on behalf of Nishat Linen (Private)
Limited - wholly-owned subsidiary company and Nishat Hospitality (Private) Limited - wholly-owned
subsidiary company to secure the obligations of subsidiary companies towards their lenders.
ii) Post dated cheques of Rupees 8,223.314 million (2019: Rupees 6,695.544 million) are issued to
customs authorities in respect of duties on imported items availed on the basis of consumption and
export plans. If documents of exports are not provided on due dates, cheques issued as security
shall be encashable.
b) Commitments
i) Contracts for capital expenditure are approximately of Rupees 297.715 million

(2019: Rupees 970.420 million).
ii) Letters of credit other than for capital expenditure are of Rupees 2,146.440 million
iii) Outstanding foreign currency forward contracts of Rupees 389.348 million

2020 2019
13 PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 13.1 28,834,861 28,450,899

Capital work-in-progress 13.2 2,457,861 517,320
31,292,722 28,968,219
68
13.1 Operating fixed assets
Furniture,
Buildings on
Freehold Plant and Electric Factory fixtures and Computer
freehold Vehicles Total
land machinery installations equipment office equipment
land
equipment
At 30 June 2018
Cost 1,128,564 10,392,159 33,093,818 997,719 410,079 409,586 222,098 626,919 47,280,942
Accumulated depreciation - (4,341,807) (15,371,223) (584,051) (224,231) (236,447) (178,210) (318,940) (21,254,909)
Net book value 1,128,564 6,050,352 17,722,595 413,668 185,848 173,139 43,888 307,979 26,026,033
Year ended 30 June 2019

Opening net book value 1,128,564 6,050,352 17,722,595 413,668 185,848 173,139 43,888 307,979 26,026,033
Additions 681,669 1,149,589 3,188,288 26,873 16,458 26,937 13,669 90,849 5,194,332
Disposals:
Cost - (45,500) (398,869) (15,660) (668) (383) (704) (60,294) (522,078)
Accumulated depreciation - 42,906 313,389 13,053 524 328 435 37,795 408,430
- (2,594) (85,480) (2,607) (144) (55) (269) (22,499) (113,648)
Asset written off:
Cost - - (55,074) - - - - - (55,074)
Accumulated depreciation - - 40,561 - - - - - 40,561
- - (14,513) - - - - - (14,513)
Depreciation charge - (625,228) (1,858,697) (41,924) (19,819) (19,091) (15,453) (61,093) (2,641,305)
Closing net book value 1,810,233 6,572,119 18,952,193 396,010 182,343 180,930 41,835 315,236 28,450,899
At 30 June 2019
Cost 1,810,233 11,496,248 35,828,163 1,008,932 425,869 436,140 235,063 657,474 51,898,122
Net book value 1,810,233 6,572,119 18,952,193 396,010 182,343 180,930 41,835 315,236 28,450,899

Opening net book value 1,810,233 6,572,119 18,952,193 396,010 182,343 180,930 41,835 315,236 28,450,899
Additions 26,823 393,818 2,582,793 10,379 5,686 18,699 24,577 146,230 3,209,005
Disposals:
Cost - (4,300) (143,885) (1,575) - (230) (2,395) (82,596) (234,981)
Accumulated depreciation - 3,302 100,439 1,001 - 83 1,687 54,733 161,245
- (998) (43,446) (574) - (147) (708) (27,863) (73,736)
Depreciation charge - (660,111) (1,927,042) (40,130) (18,538) (19,574) (15,942) (69,970) (2,751,307)
Closing net book value 1,837,056 6,304,828 19,564,498 365,685 169,491 179,908 49,762 363,633 28,834,861
At 30 June 2020
Cost 1,837,056 11,885,766 38,267,071 1,017,736 431,555 454,609 257,245 721,108 54,872,146
Net book value 1,837,056 6,304,828 19,564,498 365,685 169,491 179,908 49,762 363,633 28,834,861
Annual rate of depreciation (%) - 10 10 10 10 10 30 20
69
Annual Report 2020
13.1.1 Detail of operating fixed assets, exceeding the book value of Rupees 500,000, disposed of during the year is as follows:
70
Quantity Accumulated Net book Sale Gain / Mode of
Description Cost Particulars of purchasers
Nos. depreciation value proceeds (Loss) disposal
Buildings on freehold land

Passenger Lifts 2 4,300 3,302 998 557 (441) Negotiation Mr. Habib-ur-Rehman, Faisalabad.
4,300 3,302 998 557 (441)
Plant and machinery

Stenter Machine 1 57,262 46,974 10,288 11,000 712 Negotiation Samira Fabrics (Private) Limited, Faisalabad.
Sewing Machines 33 2,272 1,365 907 1,000 93 Negotiation Taiga Apparel (Private) Limited, Lahore.
Sewing Machines 29 3,702 2,021 1,681 1,552 (129) Negotiation Lahore Apparel (Private) Limited , Lahore.
Sewing Machines 82 20,182 10,379 9,803 7,477 (2,326) Negotiation Azgard Nine Limited, Lahore.
Tonello Washing Machine 3 18,912 11,597 7,315 5,850 (1,465) Negotiation Azgard Nine Limited, Lahore.
Sewing Machines 2 2,562 1,811 751 775 24 Negotiation Cotton Web Limited, Lahore.
Sewing Machines 25 1,804 999 805 750 (55) Negotiation Lahore Apparel (Private) Limited, Lahore.
Rotary Air Dryer Model E/300 1 10,167 6,543 3,624 3,350 (274) Negotiation Cotton Web Limited, Lahore.
Air Handling Unit Rhoss 1 13,918 10,173 3,745 5,983 2,238 Negotiation International Trade (Private) Limited, Lahore.
Rotary Air Dryer Model E/300 1 11,465 7,256 4,209 5,025 816 Negotiation Cotton Web Limited, Lahore.
142,246 99,118 43,128 42,762 (366)
Electric Installations
Transformer 1 1,575 1,001 574 700 126 Negotiation Hyundai Nishat Motor (Private) Limited, Lahore.
1,575 1,001 574 700 126
Quantity Cost Accumulated Net book Sale Gain / Mode of
Description Particulars of purchasers
Nos. depreciation value proceeds (Loss) disposal
Vehicles
Honda City LE-15-1079 1 1,276 766 510 694 184 Company's Policy Mr. Khurram Farook, Company's ex-employee,
Lahore.
Toyota Corolla LED-15-2945 1 2,219 1,262 957 1,286 329 Company's Policy Mr. Shahzad Ahmad Malik, Company's employee,
Lahore.
Toyota Corolla LE-15-1078 1 1,693 1,026 667 904 237 Company's Policy Mr. Irfan Butt, Company's employee, Lahore.
Toyota Hiace Van LE-13-1404 1 3,984 2,958 1,026 2,071 1,045 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Toyota Corolla LEA-15-4354 1 1,683 1,024 659 898 239 Company's Policy Mr. Munir Ahmad, Company's employee, Karachi.
Honda City LEH-14-4578 1 1,691 1,039 652 894 242 Company's Policy Mr. Muhammad Arif Khan Tareen, Company's
employee, Quetta.
Honda Civic LED-15-4150 1 2,198 1,244 954 1,297 343 Company's Policy Mr. Saeed Nawaz Khan, Company's employee,
Lahore.
Toyota Corolla LEB-15-3846 1 1,683 1,024 659 897 238 Company's Policy Mr. Rana Muhammad Imran, Company's employee,
Faisalabad.
Toyota Corolla LEC-15-6196 1 1,694 1,007 687 927 240 Company's Policy Mr. Zahid Javaid, Company's employee, Lahore.
Toyota Corolla LEA-15-6706 1 1,852 1,126 726 987 261 Company's Policy Mr. Faisal Hafeez, Company's employee,
Lahore.
Honda City LEC-15-1378 1 1,278 764 514 701 187 Company's Policy Mr. Muhammad Jehanzeb, Company's employee,
Lahore.
Toyota Corolla LE-15-1056 1 1,693 1,055 638 904 266 Company's Policy Mr. Tariq Iqbal Khan, Company's employee, Lahore.
Honda City LEB-15-4265 1 1,691 1,000 691 860 169 Company's Policy Mr. Abdul Rehman, Company's ex-employee, Lahore.
Toyota Hiace LEB-11-1232 1 3,582 2,895 687 2,011 1,324 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Toyota Corolla LEC-15-6445 1 1,685 1,016 669 976 307 Company's Policy Mr. Amjad Abbas Majid, Company's employee,
Muzaffargarh.
Toyota Hiace LET-18-1581 1 3,328 2,615 713 1,711 998 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Honda City LEF-13-9941 1 1,710 1,208 502 690 188 Company's Policy Mr. Siraj-ud-Dean Mann, Company's ex-employee,
Faisalabad.
Toyota Corolla LEF-15-5461 1 2,021 1,204 817 1,109 292 Company's Policy Mr. Khalid Mehmood Chohan, Company's employee,
Lahore.
Honda Civic LEE-15-2183 1 1,857 1,112 745 1,005 260 Company's Policy Mr. Khalid Mehmood, Company's employee, Lahore.
Honda City LED-15-6571 1 1,280 770 510 694 184 Company's Policy Mr. Rizwan Aslam, Company's employee, Lahore.
Toyota Corolla LED-15-2944 1 1,886 1,144 742 1,004 262 Company's Policy Mr. Syed Amir Hussain, Company's employee,
Faisalabad.
Suzuki Swift LEF-15-6390 1 1,255 742 513 703 190 Company's Policy Mr. Ghulam Mustafa, Company's employee, Lahore.
43,239 28,001 15,238 23,223 7,985
Aggregate of other items of property,

plant and equipment with individual
book values not exceeding Rupees 500,000 43,621 29,823 13,798 24,161 10,363
234,981 161,245 73,736 91,403 17,667
71
Annual Report 2020

2020 2019
13.1.2 Depreciation charge for the year has

been allocated as follows:
Cost of sales 27 2,642,450 2,548,984

Distribution cost 28 8,322 8,448
Administrative expenses 29 82,994 83,873
Capital work-in-progress 17,541 -
2,751,307 2,641,305
13.1.3 Particulars of immovable properties (i.e. land and buildings) are as follows:
Manufacturing units and office Address Area of land

Acres
Manufacturing units
Spinning units, Yarn dyeing unit Nishatabad, Faisalabad. 87.32
and Power plant
Spinning units and Power plant Plot No. 172-180 & 188-197,
M-3 Industrial City, Sahianwala,
FIEDMC, 2 K.M., Jhumra Chiniot
Road, Chak Jhumra, Faisalabad. 98.95
Spinning units and Power plant 20 K.M., Sheikhupura Road, Feroze Wattwan. 66.94
Weaving units and Power plant 12 K.M., Faisalabad Road, Sheikhupura. 85.53
Weaving units, Dyeing and finishing 5 K.M., Nishat Avenue Off 22 K.M.,
units, Processing unit, Stitching Ferozepur Road, Lahore. 114.06
units and Power plants
Terry unit 7 K.M., Nishat Avenue Off 22 K.M.,
Ferozepur Road, Lahore. 12.54
Apparel unit 2 K.M., Nishat Avenue Off 22 K.M.,
Office 7-Main Gulberg, Lahore. 1.12
482.78
2020 2019
13.2 Capital work in progress
Buildings on freehold land 295,961 86,916

Plant and machinery 2,026,844 369,312
Electric installations - 1,163
Unallocated expenses 97,296 21,881
Letters of credit against machinery 8 1,159
Advances against purchase of land 29,447 23,658
Advances against furniture, fixtures and office equipment 2,046 1,948
Advances against purchase of vehicles 6,259 11,283
2,457,861 517,320
72
Annual Report 2020
14 INVESTMENT PROPERTIES
Note Land Buildings Total

At 30 June 2018
Cost 415,672 175,034 590,706
Accumulated depreciation - (125,810) (125,810)
Net book value 415,672 49,224 464,896

Opening net book value 415,672 49,224 464,896
Depreciation charge 30 - (4,922) (4,922)
Closing net book value 415,672 44,302 459,974
At 30 June 2019
Cost 415,672 175,034 590,706
Net book value 415,672 44,302 459,974

Depreciation charge 30 - (4,430) (4,430)
Closing net book value 415,672 39,872 455,544
At 30 June 2020
Cost 415,672 175,034 590,706
Net book value 415,672 39,872 455,544
14.1 Depreciation at the rate of 10 percent per annum on buildings amounting to Rupees 4.430 million (2019:
Rupees 4.922 million) charged during the year is allocated to other expenses. No expenses directly
related to investment properties were incurred during the year. The market value of land and buildings is
estimated at Rupees 4,622.255 million (2019: Rupees 4,143.237 million). Forced sale value of investment
properties as on the reporting date is Rupees 3,925.883 million (2019: Rupees 3,521.751 million). The
valuation has been carried out by an independent valuer.
14.2 Land and buildings having book value of Rupees 305.123 million (2019: Rupees 305.123 million) and
Rupees 31.296 million (2019: Rupees 34.773 million) respectively have been given on operating lease to
Nishat Hospitality (Private) Limited - subsidiary company.
14.3 Land having book value of Rupees 99.693 million (2019: Rupees 99.693 million) has been given on
operating lease to Nishat Linen (Private) Limited - subsidiary company.
14.4 Particulars of investment properties (i.e. land and buildings) are as follows:
Description Address Area of land

Kanal
Factory land 21 K.M., Ferozepur Road, Lahore. 33.65

Commercial building Mian Mehmood Kasuri Road, Gulberg III, Lahore 6.04
Factory land and building Nishatabad, Faisalabad 38.16
73

2020 2019
15 LONG TERM INVESTMENTS
Debt instruments 15.1 - 559,606

Equity instruments 15.2 37,979,074 34,370,727
37,979,074 34,930,333
15.1 Debt instruments
Sales tax refund bonds - at amortized cost
Nil (2019: 5,555) bonds of Rupees 100,000 each - 555,500

Add: Accrued interest - 4,106
- 559,606
15.2 Equity instruments
Subsidiary companies
Nishat Power Limited - quoted 15.2.1

180,632,955 (2019: 180,632,955) fully paid ordinary shares
of Rupees 10 each. Equity held 51.01% (2019: 51.01%) 1,806,329 1,806,329
Nishat USA Inc. - unquoted 39

200 (2019: 200) fully paid shares with no par value per share.
Equity held 100% (2019: 100%) 3,547 3,547
Nishat Linen (Private) Limited - unquoted 15.2.2

1,067,913 (2019: 1,067,913) fully paid ordinary shares of
Rupees 10 each. Equity held 100% (2019: 100%) 261,603 261,603
Nishat Linen Trading LLC - unquoted 15.2.3 & 39

4,900 (2019: 4,900) fully paid shares of
UAE Dirhams 1,000 each. 259,403 259,403
Nishat Hospitality (Private) Limited - unquoted

of Rupees 10 each. Equity held 100% (2019: 100%) 1,699,999 1,199,999
Advance for purchase of shares - 95,000
1,699,999 1,294,999
Nishat International FZE - unquoted 39

18 (2019: 18) fully paid shares of UAE Dirhams 1,000,000
each. Equity held 100% (2019: 100%) 492,042 492,042
Advance for purchase of shares 9,070 9,070
501,112 501,112
Nishat Commodities (Private) Limited - unquoted 15.2.4

1,000 (2019: 1,000) fully paid ordinary shares of
Rupees 10 each. Equity held 100% (2019: 100%) 10 10
74
Annual Report 2020
2020 2019
Equity instruments
Fair value through other comprehensive income
Associated companies (with significant influence)
D.G. Khan Cement Company Limited - quoted
Nishat Paper Products Company Limited - unquoted 15.2.5

Lalpir Power Limited - quoted 15.2.6

Rupees 10 each. Equity held 28.80% (2019: 28.80%) 1,640,306 1,640,306
Pakgen Power Limited - quoted 15.2.6

Nishat Dairy (Private) Limited - unquoted 15.2.7

Rupees 10 each. Equity held 12.24% (2019: 12.24%) 496,200 496,200
Nishat Energy Limited - unquoted 15.2.8

Rupees 10 each. Equity held 25% (2019: 25%) - -
Nishat Hotels and Properties Limited - unquoted 15.2.9

Hyundai Nishat Motor (Private) Limited - unquoted 15.2.10&15.2.11

Nishat Sutas Dairy Limited - unquoted 15.2.13

16,630,000 (2019: Nil) fully paid ordinary shares of
Rupees 10 each. Equity held 34.46% (2019: Nil) 166,300 -
Associated companies (others)

MCB Bank Limited - quoted
Adamjee Insurance Company Limited - quoted

Security General Insurance Company Limited - unquoted 15.2.12

75

2020 2019
Equity instruments
Related party
Nishat (Chunian) Limited - quoted

Rupees 10 each. Equity held 13.61% (2019: 13.61 %) 378,955 378,955
Others
Alhamra Islamic Stock Fund - quoted
1,121,410 (2019: 1,108,714) units. 3,135 3,025
Pakistan Petroleum Limited - quoted

23,937,244 23,128,834
Add: Fair value adjustment 14,041,830 11,241,893

37,979,074 34,370,727
15.2.1 The Company has pledged its 180,585,155 (2019: 180,585,155) shares to lenders of Nishat
Power Limited for the purpose of securing finance.
15.2.2 Investment in Nishat Linen (Private) Limited includes 2 shares held in the name of nominee
directors of the Company.
15.2.3 The Company is also the beneficial owner of remaining 5,100 (2019: 5,100) shares of UAE
Dirham 1,000 each of Nishat Linen Trading LLC held under Nominee Agreement dated 30
December 2010, whereby the Company has right over all dividends, interests, benefits and other
distributions on liquidation. The Company through the powers given to it under Article 11 of the
Memorandum of Association of the investee company, exercises full control on the management
of Nishat Linen Trading LLC.
15.2.4 Investment in Nishat Commodities (Private) Limited includes 2 shares held in the name of
nominee directors of the Company.
15.2.5 Fair value per ordinary share of Nishat Paper Products Company Limited is determined at
Rupees 47.23 by an independent valuer using present value technique.
15.2.6 Investments in Lalpir Power Limited and Pakgen Power Limited include 550 and 500 shares
respectively, held in the name of nominee director of the Company.
15.2.7 Fair value per ordinary share of Nishat Dairy (Private) Limited is determined at Rupees 6.26 by an
independent valuer using present value technique.
15.2.8 Investment in Nishat Energy Limited has been fully provided during the year ended 30 June
2017.
15.2.9 Fair value per ordinary share of Nishat Hotels and Properties Limited is determined at Rupees
13.95 by an independent valuer using present value technique.
76
Annual Report 2020
15.2.10 Investment in Hyundai Nishat Motor (Private) Limited includes 4 shares held in the name of
nominee directors of the Company.
15.2.11 Fair value per ordinary share of Hyundai Nishat Motor (Private) Limited is determined at Rupees
12.20 by an independent valuer using present value technique.
15.2.12 Fair value per ordinary share of Security General Insurance Company Limited is determined at
15.2.13 Nishat Sutas Dairy Limited has not yet started its operations, hence, cost of investment is
considered as an appropriate estimate of fair value.
2020 2019
16 LONG TERM LOANS
Considered good:
Executives - secured 16.1 & 16.2 226,090 175,504
Other employees - secured 16.2 199,934 200,656
426,024 376,160
Less: Current portion shown under current assets 21

Executives 59,288 43,742
Other employees 61,472 57,172
120,760 100,914
305,264 275,246
16.1 Maximum aggregate balance due from executives at the end of any month during the year was Rupees
226.809 million (2019: Rupees 175.504 million).
16.2 These represent loans given to executives and other employees as per the Company's policy for house
construction and general purposes. These are secured against balance to the credit of employees in the
provident fund trust and are recoverable in equal monthly installments.
16.3 The fair value adjustment in accordance with the requirements of IFRS 9 'Financial Instruments' arising in
respect of staff loans is not considered material and hence not recognized.
17 LONG TERM DEPOSITS
Security deposits 104,783 114,360
77

2020 2019
18 STORES, SPARE PARTS AND LOOSE TOOLS
Stores 18.1 1,549,127 2,560,063

Spare parts 707,508 541,774
Loose tools 4,152 5,375
2,260,787 3,107,212
Less: Provision for slow moving, obsolete and damaged store items 18.2 (4,218) (4,224)
2,256,569 3,102,988
18.1 These include stores in transit of Rupees 215.818 million (2019: Rupees 1,106.026 million).
18.2 Provision for slow moving, obsolete and damaged store items
Balance as on 01 July 4,224 4,290

Less: Provision reversed during the year 31 (6) (66)
19 STOCK IN TRADE
Raw materials 12,821,768 11,135,516

Work-in-process 19.2 2,032,268 2,015,512
Finished goods 19.3 5,899,507 3,857,431
20,753,543 17,008,459
19.1 Stock in trade of Rupees 564.159 million (2019: Rupees 376.615 million) is being carried at net realizable
value.
19.2 This includes stock of Rupees 11.612 million (2019: Rupees 10.912 million) sent to outside parties for
processing.
19.3 Finished goods include stock in transit of Rupees 1,296.236 million (2019: Rupees 934.523 million).
19.4 The aggregate amount of write-down of inventories to net realizable value recognized as an expense
during the year was Rupees 20.298 million (2019: Rupees 5.427 million).
78
Annual Report 2020
2020 2019
20 TRADE DEBTS
Considered good:
Secured (against letters of credit) 1,004,826 1,321,438

Unsecured:
- Related parties 20.1 & 20.2 554,266 378,871
- Others 20.3 2,783,184 3,025,971
4,342,276 4,726,280
Less: Allowance for expected credit losses 20.4 (15,496) (15,219)
4,326,780 4,711,061
20.1 This represents amounts due from following related parties:

Nishat Hospitality (Private) Limited - subsidiary company 41,677 -
Hyundai Nishat Motor (Private) Limited - associated company 2,110 -
MCB Bank Limited - associated company 37 -
Nishat International FZE - subsidiary company 56,984 114,439
554,266 378,871
20.2 The maximum aggregate amount receivable from related parties at the end of any month during the year
was as follows:
Nishat Linen (Private) Limited - subsidiary company 1,038,652 1,067,590
Nishat Hospitality (Private) Limited - subsidiary company 41,677 -
Hyundai Nishat Motor (Private) Limited - associated company 7,071 -
MCB Bank Limited - associated company 37 -
Nishat International FZE - subsidiary company 61,533 134,365
20.3 As at 30 June 2020, trade debts due from other than related parties of Rupees 170.803 million (2019:
Rupees 115.695 million) were past due but not impaired. These relate to a number of independent
customers from whom there is no recent history of default. The ageing analysis of these trade debts is as
follows:
Upto 1 month 92,989 101,921

1 to 6 months 77,814 11,848
More than 6 months - 1,926
170,803 115,695
79

2020 2019
20.4 Allowance for expected credit losses
Opening balance 15,219 -

Add: Recognized as on 01 July 2018 - 5,269
Add: Recognized during the year 30 277 9,950
Closing balance 15,496 15,219
21 LOANS AND ADVANCES
Considered good:
Employees - interest free:

– Executives 646 30
– Other employees 1,687 3,814
2,333 3,844
Current portion of long term loans 16 120,760 100,914
Advances to suppliers 102,234 141,994
Letters of credit 2,329 1,223
Advance income tax - net of provision for taxation 559,080 522,332
Other advances 21.1 8,640,466 7,270,393
9,427,202 8,040,700
Considered doubtful:
Others 108 108

Less: Provision for doubtful debts 108 108
- -
9,427,202 8,040,700
21.1 These include amounts due from following related parties. These are neither past due nor impaired:

Nishat Hospitality (Private) Limited - subsidiary company - -
Nishat USA Inc. - subsidiary company - 2,432
Nishat Commodities (Private) Limited - subsidiary company 100 91
8,553,542 7,144,060
80
Annual Report 2020
was as follows:
2020 2019
Nishat Hospitality (Private) Limited - subsidiary company - 130,000
Nishat USA Inc. - subsidiary company - 5,724
Nishat Commodities (Private) Limited - subsidiary company 100 91
22 SHORT TERM DEPOSITS AND PREPAYMENTS
Deposits 486 1,116

Prepayments 67,143 73,853
67,629 74,969
23 OTHER RECEIVABLES
Considered good:
Export rebate and claims 167,730 282,866

Duty draw back 576,897 708,511
Sales tax refundable 2,745,670 1,223,877
Fair value of forward exchange contracts 345 958
Miscellaneous receivables 36,246 37,466
3,526,888 2,253,678
24 ACCRUED INTEREST
On short term loans and advances to:

Nishat Hospitality (Private) Limited - subsidiary company - 103
Profit receivable on bank deposits 16 822
36,675 28,780
24.1 These are neither past due nor impaired. The maximum aggregate amount receivable from related parties
at the end of any month during the year was as follows:
Nishat Hospitality (Private) Limited - subsidiary company 56 698
81

2020 2019
25 CASH AND BANK BALANCES
With banks:
On current accounts 25.1 & 25.2
Including US$ 37,817 (2019: US$ 77,158) 20,870 55,893
Term deposit receipts 25.3 90,596 500,000
On PLS saving accounts 25.4
Including US$ 117 (2019: US$ 117) 20 19
111,486 555,912
Cash in hand 16,755 20,713
128,241 576,625
25.1 Cash at banks includes balance of Rupees 3.649 million (2019: Rupees 2.871 million) with MCB Bank
25.2 Cash at banks includes balance of Rupees 0.074 million (2019: Rupees 1.331 million) with MCB Islamic
Bank Limited - related party.
25.3 These represent term deposits with banking companies having maturity period upto one month and carry
profit at the rate of 6.40% (2019: 12%) per annum.
25.4 Rate of profit on bank deposits ranges from 8% to 14% (2019: 4.50% to 8.25%) per annum.
26 REVENUE
Export sales 45,346,137 47,797,787

Local sales 26.1 9,792,119 9,554,144
Processing income 5,159,573 5,552,601
Export rebate 199,090 188,326
Duty draw back 407,177 406,171
60,904,096 63,499,029
26.1 Local sales
Sales 26.1.1 12,336,152 9,662,704

Less: Sales tax (2,544,033) (108,560)
9,792,119 9,554,144
26.1.1 These include sales of Rupees 2,977.374 million (2019: Rupees 2,557.696 million) made to
direct exporters against standard purchase orders (SPOs). Further, local sales include waste
sales of Rupees 1,329.396 million (2019: Rupees 1,739.547 million).
82
Annual Report 2020
2020 2019
27 COST OF SALES
Raw materials consumed 27.1 31,278,042 32,831,279

Processing charges 368,437 241,777
Salaries, wages and other benefits 27.2 6,363,510 5,683,600
Stores, spare parts and loose tools consumed 6,797,584 6,167,441
Packing materials consumed 1,320,633 1,407,808
Repair and maintenance 367,026 357,846
Fuel and power 5,990,329 6,309,817
Insurance 50,123 49,362
Other factory overheads 508,668 553,513
Depreciation 13.1.2 2,642,450 2,548,984
55,686,802 56,151,427
Work-in-process
Opening stock 2,015,512 2,022,712

Closing stock (2,032,268) (2,015,512)
(16,756) 7,200
Cost of goods manufactured 55,670,046 56,158,627
Finished goods
Opening stock 3,857,431 3,541,232

Closing stock (5,899,507) (3,857,431)
(2,042,076) (316,199)
53,627,970 55,842,428
27.1 Raw materials consumed
Opening stock 11,135,516 6,991,589

Add: Purchased during the year 32,964,294 36,975,206
44,099,810 43,966,795
Less: Closing stock (12,821,768) (11,135,516)
31,278,042 32,831,279
27.2 Salaries, wages and other benefits include provident fund contribution of Rupees 185.766 million (2019:
Rupees 166.691 million) by the Company.
83

2020 2019
28 DISTRIBUTION COST
Salaries and other benefits 28.1 500,062 447,236

Outward freight and handling 1,218,212 1,159,821
Commission to selling agents 666,384 631,707
Royalty 28.2 11,591 4,788
Fuel cost 177,148 192,019
Travelling and conveyance 126,211 168,955
Rent, rates and taxes 17,085 15,948
Postage and telephone 95,856 87,682
Insurance 18,932 20,132
Vehicles’ running 17,695 15,616
Entertainment 7,223 7,841
Advertisement - 7
Printing and stationery 2,794 3,203
Fee and subscription 222 430
Depreciation 13.1.2 8,322 8,448
2,875,340 2,769,744
28.1 Salaries and other benefits include provident fund contribution of Rupees 25.794 million
(2019: Rupees 23.248 million) by the Company.
28.2 Particulars of royalty paid during the year are as follows:
Relationship with the

2020 2019
Name of the company Registered address Company or directors
Related / Other (Rupees in thousand)
American and Efird LLC 22 American Street, Other 6,299 4,620

Mount Holly, North
Carolina, 28120.
84
Annual Report 2020
2020 2019
29 ADMINISTRATIVE EXPENSES

Insurance 8,916 7,814
Legal and professional 23,114 18,945
Auditor's remuneration 29.2 5,807 5,478
Advertisement 1,488 633
Electricity and gas 10,525 9,342
Fee and subscription 7,253 5,294
Depreciation 13.1.2 82,994 83,873
Miscellaneous 48,357 43,268
1,238,301 1,118,891
29.1 Salaries and other benefits include provident fund contribution of Rupees 36.635 million
(2019: Rupees 32.932 million) by the Company.
29.2 Auditor’s remuneration
Audit fee 4,594 4,293

Half yearly review 961 945
Other certifications 75 75
Reimbursable expenses 177 165
5,807 5,478
30 OTHER EXPENSES
Workers’ profit participation fund 7.3 204,045 331,747

Operating fixed asset written off 13.1 - 14,513
Allowance for expected credit losses 20.4 277 9,950
Impact of de-recognition of financial instrument carried
at amortized cost 4,106 -
Depreciation on investment properties 14 4,430 4,922
Donations 30.1 321 -
213,179 361,132
30.1 There is no interest of any director or his spouse in donees’ fund.
85

2020 2019
31 OTHER INCOME
Income from financial assets
Dividend income 31.1 2,044,302 3,029,845

Profit on deposits with banks 97,132 961
Net exchange gain 122,843 1,437,722
Interest income on loans and advances to subsidiary companies 396,814 362,482
Interest income on sales tax refund bonds - 4,106
Others 9,602 8,512
2,670,693 4,843,628
Income from non-financial assets
Gain on sale of property, plant and equipment 17,667 35,434

Scrap sales 198,198 147,570
Rental income 145,826 131,682
Reversal of provision for slow moving, obsolete and damaged
store items 18.2 6 66
361,697 314,752
3,032,390 5,158,380
31.1 Dividend income
From related party / associated companies /

subsidiary companies

Nishat International FZE - subsidiary company 7,580 -
MCB Bank Limited - associated company 1,584,275 1,408,245
Adamjee Insurance Company Limited - associated company 257 257
Pakgen Power Limited - associated company - 153,786
Lalpir Power Limited - associated company - 109,393
Nishat Power Limited - subsidiary company 180,633 541,899
2,043,173 3,029,193
Others
Pakistan Petroleum Limited 1,000 652

Alhamra Islamic Stock Fund 129 -
2,044,302 3,029,845
86
Annual Report 2020
2020 2019
32 FINANCE COST
Mark-up on:

Short term borrowings 928,695 1,089,132
Interest on workers’ profit participation fund 7.3 3,826 628
Bank charges and commission 275,290 277,564
1,502,412 1,668,166
33 TAXATION
Current 33.1 973,000 1,038,000
33.1 The Company falls under the ambit of presumptive tax regime under section 169 of the Income Tax
Ordinance, 2001. Provision for income tax is made accordingly. Further, provision against income from
other sources is made under the relevant provisions of the Income Tax Ordinance, 2001.
33.2 Provision for deferred income tax is not required as the Company is chargeable to tax under section 169
of the Income Tax Ordinance, 2001 and no temporary differences are expected to arise in the foreseeable
future except for deferred tax liability as explained in note 6.
33.3 Reconciliation of tax expense and product of accounting profit multiplied by the applicable tax rate is not
required in view of presumptive taxation.
34 EARNINGS PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earnings per share which is based on:
2020 2019
Profit attributable to ordinary shareholders (Rupees in thousand) 3,506,284 5,859,048
Weighted average number of ordinary shares (Numbers) 351,599,848 351,599,848
Earnings per share (Rupees) 9.97 16.66
87

2020 2019
35 CASH GENERATED FROM OPERATIONS
Profit before taxation 4,479,284 6,897,048
Adjustments for non-cash charges and other items:

Depreciation 2,738,196 2,646,227
Operating fixed asset written off - 14,513
Gain on sale of property, plant and equipment (17,667) (35,434)
Dividend income (2,044,302) (3,029,845)
Allowance for expected credit losses 277 9,950
Net exchange gain (122,843) (1,437,722)
Interest income on loans and advances to subsidiary companies (396,814) (362,482)
Interest income on sales tax refund bonds - (4,106)
Impact of de-recognition of financial instrument carried at
amortized cost 4,106 -
Finance cost 1,502,412 1,668,166
Reversal of provision for slow moving, obsolete and damaged
store items (6) (66)
Working capital changes 35.1 (2,128,361) (2,965,794)
4,014,282 3,400,455
35.1 Working capital changes
(Increase) / decrease in current assets:

- Stores, spare parts and loose tools 846,425 (1,388,891)
- Stock in trade (3,745,084) (4,452,926)
- Trade debts 398,804 362,490
- Loans and advances 81,997 (43,435)
- Short term deposits and prepayments 7,340 15,647
- Other receivables (717,517) 601,850
(3,128,035) (4,905,265)
Increase in trade and other payables 999,674 1,939,471

(2,128,361) (2,965,794)
88
Annual Report 2020
35.2 Reconciliation of movement of liabilities to cash flows arising from financing activities.
2020
Liabilities from financing activities
Long term Short term Unclaimed Total
financing borrowings dividend
( Rupees in thousand )
Balance as at 01 July 2019 7,044,397 17,982,262 93,006 25,119,665

Long term financing obtained 4,245,115 - - 4,245,115
Repayment of long term financing (1,363,699) - - (1,363,699)
Short term borrowings - net - 1,347,506 - 1,347,506
Dividend declared - - 1,406,399 1,406,399
Dividend paid - - (1,408,809) (1,408,809)
Balance as at 30 June 2020 9,925,813 19,329,768 90,596 29,346,177
2019
Long term Short term Unclaimed Total
financing borrowings dividend
Balance as at 01 July 2018 7,335,738 12,507,590 81,746 19,925,074

Long term financing obtained 1,870,498 - - 1,870,498
Repayment of long term financing (2,161,839) - - (2,161,839)
Short term borrowings - net - 5,474,672 - 5,474,672
Dividend declared - - 1,670,099 1,670,099
Dividend paid - - (1,658,839) (1,658,839)
Balance as at 30 June 2019 7,044,397 17,982,262 93,006 25,119,665
36 EVENTS AFTER THE REPORTING PERIOD
36.1 The Board of Directors of the Company has proposed a cash dividend for the year ended 30 June 2020
of Rupees 4 per share (2019: Rupees 4 per share) at their meeting held on 18 September, 2020. The
Board of Directors also proposed to transfer Rupees 2,101 million (2019: Rupees 4,386 million) from
un-appropriated profit to general reserve. However, these events have been considered as non-adjusting
events under IAS 10 'Events after the Reporting Period' and have not been recognized in these financial
statements.
89

37 REMUNERATION OF CHIEF EXECUTIVE OFFICER, DIRECTOR AND EXECUTIVES
The aggregate amount charged in the financial statements for remuneration including all benefits to Chief
Executive Officer, Director and Executives of the Company is as follows:
Chief Executive Officer Director Executives

2020 2019 2020 2019 2020 2019
Managerial remuneration 32,503 27,169 11,163 12,064 554,058 460,235
Allowances
Cost of living allowance - - 1 1 781 668
House rent 13,001 10,868 216 288 148,293 125,965
Conveyance - - - - 880 1,020
Medical 3,250 2,717 912 1,068 47,939 40,438
Utilities - - 3,385 3,963 61,649 50,786
Special allowance - - 2 2 529 432
Contribution to provident fund trust - - 871 1,020 47,016 39,896
Leave encashment - - - - 12,867 17,838
48,754 40,754 16,550 18,406 874,012 737,278
Number of persons 1 1 Note 37.4 1 222 182
37.1 Chief Executive Officer, one director and certain executives of the Company are provided with Company
maintained vehicles and certain executives are also provided with free housing facility alongwith utilities.
37.2 Aggregate amount charged in the financial statements for meeting fee to five directors
(2019: five directors) was Rupees 1.080 million (2019: Rupees 1.040 million).
37.3 No remuneration was paid to non-executive directors of the Company.
37.4 This represents remuneration including all benefits paid to a director for the period from July 2019 to
March 2020. As on the reporting date, there are no paid directors of the Company.
90
Annual Report 2020
38 TRANSACTIONS WITH RELATED PARTIES
The related parties comprise subsidiary companies, associated undertakings, other related parties and key
management personnel. The Company in the normal course of business carries out transactions with various
related parties. Detail of transactions with related parties, other than those which have been specifically disclosed
elsewhere in these financial statements are as follows:
2020 2019
Subsidiary companies
Investment made 405,000 95,000

Dividend income 188,213 541,899
Purchase of goods and services 472,165 427,564
Sale of goods and services 7,303,323 7,102,544
Interest income 396,814 362,482
Short term loans given 39,353,653 33,979,020
Repayment of short term loans by subsidiary companies 37,941,748 30,660,227
Associated companies

Sale of goods and services 12,181 36,098
Purchase of operating fixed assets - 47,747
Sale of operating fixed assets 819 1,453
Dividend income 1,773,237 2,307,503
Dividend paid 121,487 143,886
Insurance premium paid 144,897 131,369
Insurance claims received 50,440 54,465
Finance cost 14,811 11,472
Other related parties
Dividend income 81,723 179,791

Purchase of goods and services 2,699,390 2,473,998
Company’s contribution to provident fund trust 249,304 222,876
38.1 Detail of compensation to key management personnel comprising of chief executive officer, director and
executives is disclosed in note 37.
91

38.2 Following are the related parties with whom the Company had entered into transactions or have arrangements /
agreements in place:
Transactions
entered or
agreements and
Name of the related party Basis of relationship / or arrangements in Percentage of
place during the shareholding
financial year ended
2020 2019
Nishat USA Inc. Wholly owned subsidiary company Yes Yes 100
Nishat Agriculture Farming
(Private) Limited Common directorship Yes No None
Nishat Dairy (Private) Limited Common directorship and shareholding No Yes 12.24
Nishat Sutas Dairy Limited Common directorship and shareholding Yes No 34.46
Nishat Hotels and Properties
Limited Common directorship and shareholding Yes Yes 7.40
Nishat (Gulberg) Hotels and
Properties Limited Common directorship No No None
Nishat (Raiwind) Hotels and
Properties Limited Common directorship No No None
Nishat (Aziz Avenue) Hotels
and Properties Limited Common directorship No No None
Security General Insurance
Company Limited Common directorship and shareholding Yes Yes 15.02
Nishat Commodities Wholly owned subsidiary company
(Private) Limited and common directorship Yes Yes 100
Nishat Hospitality
(Private) Limited Wholly owned subsidiary company Yes Yes 100
Nishat Power Limited Common directorship and subsidiary
company Yes Yes 51.01
Nishat Energy Limited Shareholding No No 25
Pakgen Power Limited Common directorship and shareholding No Yes 27.55
Lalpir Power Limited Common directorship and shareholding No Yes 28.80
Nishat Paper Products
Company Limited Common directorship and shareholding No No 25
Nishat Linen (Private) Limited Wholly owned subsidiary company Yes Yes 100
Nishat Linen Trading LLC Wholly owned subsidiary company No No 100
Nishat International FZE Wholly owned subsidiary company Yes Yes 100
Nishat Global China Wholly owned subsidiary of Nishat
Company Limited International FZE (subsidiary company) No No 100
Pakistan Aviators and Aviation
(Private) Limited Common directorship No Yes None
Nishat Developers
(Private) Limited Common directorship No Yes None
Nishat Real Estates
Development Company
(Private) Limited Common directorship No No None
Hyundai Nishat Motor
(Private) Limited Common directorship and shareholding Yes Yes 12
D.G. Khan Cement
Adamjee Life Assurance
Company Limited Common directorship Yes Yes None
Adamjee Insurance
MCB Bank Limited Common directorship and shareholding Yes Yes 7.43
MCB Islamic Bank Limited Wholly owned subsidiary of
associated company Yes Yes None
Nishat (Chunian) Limited Shareholding Yes Yes 13.61
Lalpir Solar Power Wholly owned subsidiary of Nishat Power
(Private) Limited Limited (subsidiary company) No No 51.01
Nishat Agrotech Farms
(Private) Limited Common directorship No No None
Nishat Chunian Power Executive of the Company is appointed
Limited (NCPL) as Director on the Board of NCPL No No None
Sanifa Agri Services Limited Associate of wholly owned
subsidiary company Yes No None
Nishat Mills Employees
Provident Fund Trust Post-employment benefit plan Yes Yes None
92
Annual Report 2020
38.3 Particulars of companies incorporated outside Pakistan with whom the Company had entered into transactions or had
agreements and / or arrangements in place are as follows:
Country of Percentage of
Name of the Company Basis of association
incorporation shareholding
Nishat USA Inc. USA Wholly owned subsidiary company 100
Nishat Linen Trading LLC UAE Wholly owned subsidiary company 100
Nishat International FZE UAE Wholly owned subsidiary company 100
Nishat Global China Company Limited China Wholly owned subsidiary of 100
Nishat International FZE
93
39 As on 30 June 2020, disclosures relating to investments and advance made in foreign companies are as follows:
94
Amount of investment / advance Default /
Terms and Litigations Gain / (loss) on
Amount of breach
Name of the Beneficial conditions of against disposal of
Jurisdiction Made during returns relating to
company owner Rupees in Foreign currency investment / investee foreign
the year received foreign
thousand advance company investment
ended 30 June company
Long term investments:

Nishat USA Inc. USA Nishat Mills 2009 3,547 USD 37,500 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Nishat Linen Trading LLC UAE Nishat Mills 2011 259,403 AED 10,000,000 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Nishat International FZE UAE Nishat Mills 2013 492,042 AED 18,000,000 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Advance:
Nishat International FZE UAE Nishat Mills 2014 9,070 AED 337,500 Advance for None None None Not applicable
Limited purchase of
shares of
subsidiary
company
39.1 As on 30 June 2019, disclosures relating to investments and advance made in foreign companies are as follows:
Amount of investment / advance Default /

Terms and Litigations Gain / (loss)
Amount of breach
Name of the Beneficial conditions of against on disposal
Jurisdiction Made during Rupees in returns relating to
company owner Foreign currency investment / investee of foreign
the year thousand received foreign
advance company investment
ended 30 June company
Long term investments:
Nishat USA Inc. USA Nishat Mills 2009 3,547 USD 37,500 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Nishat Linen Trading LLC UAE Nishat Mills 2011 259,403 AED 10,000,000 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Nishat International FZE UAE Nishat Mills 2013 492,042 AED 18,000,000 Investment in None None None Not applicable
Limited shares of
subsidiary
company
Advance:
Nishat International FZE UAE Nishat Mills 2014 9,070 AED 337,500 Advance for None None None Not applicable
Limited purchase of
shares of
subsidiary
company
40 PROVIDENT FUND
As at the reporting date, the Nishat Mills Employees Provident Fund Trust is in the process of regularizing its investments in accordance with section 218 of the Companies Act, 2017
and the regulations formulated for this purpose by Securities and Exchange Commission of Pakistan which allows transition period of three years for bringing the Employees Provident
Fund Trust in conformity with the requirements of the regulations.
41 NUMBER OF EMPLOYEES
2020 2019
Number of employees as on 30 June 18,278 17,711

Average number of employees during the year 18,558 18,012
95
Annual Report 2020
42 SEGMENT INFORMATION
96
Spinning Weaving
Elimination of
Power
Dyeing* Home Textile* Terry Garments inter-segment Total - Company
Generation
Faisalabad I Faisalabad II Feroze Wattwan I Feroze Wattwan II Bhikki Lahore* transactions
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Revenue
External 4,519,146 6,734,008 2,936,491 2,651,751 3,398,942 4,075,757 678,712 107,014 12,376,103 11,411,414 3,029,150 3,851,961 14,686,329 16,497,119 12,729,214 12,770,351 - - 6,506,782 5,352,185 43,227 47,469 - - 60,904,096 63,499,029
Intersegment 3,338,599 2,514,182 1,537,651 782,220 1,734,759 2,135,890 114,000 18,170 5,700,935 7,321,248 4,068,903 3,382,971 541,079 440,922 331,033 426,526 - - - - 6,550,874 6,701,472 (23,917,833) (23,723,601) - -
7,857,745 9,248,190 4,474,142 3,433,971 5,133,701 6,211,647 792,712 125,184 18,077,038 18,732,662 7,098,053 7,234,932 15,227,408 16,938,041 13,060,247 13,196,877 - - 6,506,782 5,352,185 6,594,101 6,748,941 (23,917,833) (23,723,601) 60,904,096 63,499,029
Cost of sales (7,121,048) (8,524,205) (4,910,727) (3,813,672) (5,280,206) (5,468,495) (676,816) (459,008) (16,392,603) (16,981,389) (6,705,384) (6,626,844) (13,054,215) (14,331,543) (11,230,069) (11,613,767) - - (5,593,699) (5,016,918) (6,581,036) (6,730,188) 23,917,833 23,723,601 (53,627,970) (55,842,428)
Gross profit / (loss) 736,697 723,985 (436,585) (379,701) (146,505) 743,152 115,896 (333,824) 1,684,435 1,751,273 392,669 608,088 2,173,193 2,606,498 1,830,178 1,583,110 - - 913,083 335,267 13,065 18,753 - - 7,276,126 7,656,601
Distribution cost (156,547) (240,717) (17,274) (17,496) (161,175) (101,021) (3,291) (265) (575,548) (511,952) (127,170) (143,805) (632,048) (681,052) (689,171) (635,397) - - (513,054) (438,025) (62) (14) - - (2,875,340) (2,769,744)
Administrative expenses (183,681) (184,062) (60,007) (47,494) (92,947) (73,714) (4,890) (743) (188,415) (165,755) (90,368) (80,938) (190,242) (184,800) (251,184) (209,411) - - (129,384) (129,539) (47,183) (42,435) - - (1,238,301) (1,118,891)
(340,228) (424,779) (77,281) (64,990) (254,122) (174,735) (8,181) (1,008) (763,963) (677,707) (217,538) (224,743) (822,290) (865,852) (940,355) (844,808) - - (642,438) (567,564) (47,245) (42,449) - - (4,113,641) (3,888,635)
Profit / (loss) before taxation and unallocated
income and expenses 396,469 299,206 (513,866) (444,691) (400,627) 568,417 107,715 (334,832) 920,472 1,073,566 175,131 383,345 1,350,903 1,740,646 889,823 738,302 - - 270,645 (232,297) (34,180) (23,696) - - 3,162,485 3,767,966
Unallocated income and expenses:

Other expenses (213,179) (361,132)
Other income 3,032,390 5,158,380
Finance cost (1,502,412) (1,668,166)
Taxation (973,000) (1,038,000)
Profit after taxation 3,506,284 5,859,048
42.1 Reconciliation of reportable segment assets and liabilities
Spinning Weaving
Power
Dyeing* Home Textile* Terry Garments Generation Total - Company
Faisalabad I Faisalabad II Feroze Wattwan I Feroze Wattwan II Bhikki Lahore*
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Total assets for reportable segments 9,434,886 5,879,238 4,101,580 5,221,230 6,833,108 7,363,931 1,815,833 772,390 6,205,215 6,773,821 964,856 1,364,567 8,350,346 7,675,552 8,824,933 7,479,977 1,745,976 - 3,905,344 4,301,821 7,140,653 7,865,622 59,322,730 54,698,149
Unallocated assets:
Long term investments 37,979,074 34,930,333
Other receivables 3,526,888 2,253,678
Cash and bank balances 128,241 576,625
Other corporate assets 9,703,981 8,086,607
Total assets as per statement of financial position 110,660,914 100,545,392
Total liabilities for reportable segments 921,782 768,003 208,341 348,720 202,895 110,873 17,232 10,764 908,113 493,954 178,886 174,141 851,351 877,969 1,359,831 1,127,595 36,573 - 729,280 621,979 3,092,256 3,026,437 8,506,540 7,560,435
Unallocated liabilities:
Deferred income tax liability 302,672 215,440
Other corporate liabilities 30,423,842 26,154,247
Total liabilities as per statement of
financial position 39,233,054 33,930,122
* Figures of these segments include extension / BMR.

Annual Report 2020
42.2 Geographical information
The Company's revenue from external customers by geographical locations is detailed below:
2020 2019
Europe 25,633,571 19,939,444

Asia, Africa and Australia 10,928,749 24,189,995
United States of America and Canada 9,390,084 4,262,846
Pakistan 14,951,692 15,106,744
60,904,096 63,499,029
42.3 All non-current assets of the Company as at reporting dates are located and operating in Pakistan.
42.4 Revenue from major customers
The Company's revenue is earned from a large mix of customers.
2020 2019
(Figures in thousand)
43 PLANT CAPACITY AND ACTUAL PRODUCTION
Spinning
100 % plant capacity converted to 20s count based
on 3 shifts per day for 1,029 shifts (2019: 1,095 shifts) (Kgs.) 86,111 82,283
Actual production converted to 20s count based

Weaving
100 % plant capacity at 50 picks based on 3 shifts
per day for 1,029 shifts (2019: 1,095 shifts) (Sq.Mtr.) 289,273 313,718
Actual production converted to 50 picks based

on 3 shifts per day for 1,029 shifts (2019: 1,095 shifts) (Sq.Mtr.) 275,483 300,155
Dyeing and Finishing

Production capacity for 3 shifts per day for 1,029 shifts
(2019: 1,095 shifts) (Mtr.) 52,856 56,400
Actual production on 3 shifts per day for 1,029 shifts
(2019: 1,095 shifts) (Mtr.) 42,912 49,394
Power Plant
Generation capacity (MWH) 932 788
Actual generation (MWH) 361 389
Processing, Stitching and Apparel
The plant capacity of these divisions are indeterminable due to multi product plants involving varying
processes of manufacturing and run length of order lots.
97

43.1 Reason for low production
In the note of plant capacity and actual production, plant capacity of each segment has been adjusted to
incorporate the impact of temporary suspension of operations due to lock down announced by the
Government of the Punjab. The Company resumed its operations after implementing necessary standard
operating procedures.
Under utilization of available capacity for spinning, weaving, dyeing and finishing is mainly due to normal
maintenance. Actual power generation in comparison to installed is low due to periodical, scheduled and
unscheduled maintenance and low demand.
44 FINANCIAL RISK MANAGEMENT
44.1 Financial risk factors
The Company's activities expose it to a variety of financial risks: market risk (including currency risk,
other price risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk
management programme focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the Company's financial performance. The Company uses derivative
financial instruments to hedge certain risk exposures.
Risk management is carried out by the Company's finance department under policies approved by the
Board of Directors. The Company's finance department evaluates and hedges financial risks. The Board
provides principles for overall risk management, as well as policies covering specific areas such as
currency risk, other price risk, interest rate risk, credit risk, liquidity risk, use of derivative financial
instruments and non-derivative financial instruments and investment of excess liquidity.
a) Market risk
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
transactions or receivables and payables that exist due to transactions in foreign currencies.
The Company is exposed to currency risk arising from various currency exposures, primarily with respect
to the United States Dollar (USD), Arab Emirates Dirham (AED), Euro, Japanese Yen (JPY) and Swiss
Franc (CHF). Currently, the Company's foreign exchange risk exposure is restricted to bank balances and
the amounts receivable / payable from / to the foreign entities. The Company's exposure to currency risk
was as follows:
2020 2019
Cash at banks - USD 37,934 77,275

Trade debts - USD 14,824,462 19,472,222
Trade debts - Euro 994,934 1,711,145
Trade debts - AED 1,244,456 2,571,661
Trade and other payables - USD (1,935,624) (1,572,549)
Trade and other payables - Euro (155,010) (63,404)
Trade and other payables - AED - (473,931)
Trade and other payables - JPY (131,220) (335,195)
Trade and other payables - CHF (11,835) -
Net exposure - USD 12,926,772 17,976,948
Net exposure - Euro 839,924 1,647,741
Net exposure - AED 1,244,456 2,097,730
Net exposure – JPY (131,220) (335,195)
Net exposure – CHF (11,835) -
98
Annual Report 2020
The following significant exchange rates were applied during the year:
2020 2019
Rupees per US Dollar

Average rate 158.82 137.29
Reporting date rate 168.25 164.00
Rupees per Euro

Rupees per AED

Rupees per JPY

Rupees per CHF

Average rate 163.18 -
Reporting date rate 177.43 -
Sensitivity analysis
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD, Euro,
AED, JPY and CHF with all other variables held constant, the impact on profit after taxation for the year
would have been Rupees 112.317 million (2019: Rupees 157.447 million) higher / lower mainly as a result
of exchange gains / losses on translation of foreign exchange denominated financial instruments.
Currency risk sensitivity to foreign exchange movements has been calculated on a symmetric basis. In
management's opinion, the sensitivity analysis is unrepresentative of inherent currency risk as the year
end exposure does not reflect the exposure during the year.
ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting all similar financial instruments traded in the market. The Company is not
exposed to commodity price risk.
Sensitivity analysis
The table below summarizes the impact of increase / decrease in the Pakistan Stock Exchange (PSX)
Index on the Company's equity (fair value reserve FVTOCI investments). The analysis is based on the
assumption that the equity index had increased / decreased by 5% with all other variables held constant
and all the Company's equity instruments moved according to the historical correlation with the index:
Impact on statement of other

Index comprehensive income
(fair value reserve)
2020 2019
PSX 100 (5% increase) 1,481,883 1,361,939

PSX 100 (5% decrease) (1,481,883) (1,361,939)
Equity (fair value reserve) would increase / decrease as a result of gains / losses on equity investments
classified as FVTOCI.
99

iii) Interest rate risk
This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Company's interest rate risk arises from long term financing, short term borrowings, bank balances
in saving accounts and loans and advances to subsidiary companies. Financial instruments at variable
rates expose the Company to cash flow interest rate risk. Financial instruments at fixed rate expose the
Company to fair value interest rate risk.
At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments was:
2020 2019
Fixed rate instruments

Financial liabilities
Long term financing 8,302,661 5,936,383
Short term borrowings 14,373,417 13,764,706
Financial assets
Sales tax refund bonds - 559,606
Term deposit receipts 90,596 500,000
Floating rate instruments

Financial assets
Bank balances - saving accounts 20 19
Loans and advances to subsidiary companies 8,553,442 7,141,537
Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss. Therefore, a change in interest rate at the reporting date would not affect profit or loss of the
Company.
Cash flow sensitivity analysis for variable rate instruments

If interest rates at the year end date, fluctuates by 1% higher / lower with all other variables held constant,
profit after taxation for the year would have been Rupees 18.565 million (2019: Rupees 17.079 million)
higher / lower, mainly as a result of lower / higher interest expense / income on floating rate financial
instruments. This analysis is prepared assuming the amounts of financial instruments outstanding at
reporting dates were outstanding for the whole year.
b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. The carrying amount of financial assets represents the
maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:
2020 2019

Loans and advances 9,068,823 7,650,397
Deposits 105,269 115,476
Trade debts 4,326,780 4,711,061
Other receivables 36,591 38,424
Accrued interest 36,675 28,780
Bank balances 111,486 555,912
47,132,695 43,903,380
100
Annual Report 2020
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external
credit ratings (if available) or to historical information about counterparty default rate:
Rating 2020 2019
Short term Long term Agency (Rupees in thousand)
Banks
National Bank of Pakistan A1+ AAA PACRA 123 6,981

Allied Bank Limited A1+ AAA PACRA 376 80
Askari Bank Limited A1+ AA+ PACRA 441 5,592
Bank Alfalah Limited A1+ AA+ PACRA 90,637 40
Faysal Bank Limited A1+ AA PACRA 108 16
Habib Bank Limited A-1+ AAA JCR-VIS 1,268 7,191
Habib Metropolitan Bank Limited A1+ AA+ PACRA 1,360 2,828
JS Bank Limited A1+ AA- PACRA 66 30
MCB Bank Limited A1+ AAA PACRA 3,649 2,871
Samba Bank Limited A-1 AA JCR-VIS 140 323
Silkbank Limited A-2 A- JCR-VIS 73 500,009
Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA 5,902 10,191
United Bank Limited A-1+ AAA JCR-VIS 1,783 245
AlBaraka Bank (Pakistan) Limited A1 A PACRA 268 269
Bank Islami Pakistan Limited A1 A+ PACRA 390 984
Meezan Bank Limited A-1+ AA+ JCR-VIS 2,929 5,125
Dubai Islamic Bank Pakistan Limited AA A-1+ JCR-VIS 352 421
The Bank of Punjab A1+ AA PACRA 176 299
Soneri Bank Limited A1+ AA- PACRA 394 9,093
Summit Bank Limited BBB- A-3 JCR-VIS 257 264
Industrial and Commercial Bank of China P-1 A1 Moody’s 6 108
MCB Islamic Bank Limited A1 A PACRA 74 1,330
Bank Al-Habib Limited A1+ AA+ PACRA 629 1,012
Citi Bank N.A P-1 Aa3 Moody's 79 601
Bank of Khyber A1 A PACRA 6 9
111,486 555,912
Long term investments
Adamjee Insurance Company Limited AA+ PACRA 3,404 3,603

Security General Insurance Company Limited AA JCR-VIS 590,975 676,364
Alhamra Islamic Stock Fund AA- (f) PACRA 9,723 9,546
Nishat (Chunian) Limited A-2 A+ JCR-VIS 1,060,769 1,144,781
MCB Bank Limited A1+ AAA PACRA 14,264,638 15,354,267
Pakistan Petroleum Limited Unknown - 52,068 72,215
D.G. Khan Cement Company Limited A1+ AA- PACRA 11,739,206 7,778,445
Pakgen Power Limited A1 AA PACRA 1,231,322 1,453,801
Lalpir Power Limited A1 AA PACRA 1,276,623 1,422,116
Nishat Paper Products Company Limited Unknown - 549,483 168,231
Nishat Energy Limited Unknown - - -
Nishat Hotels and Properties Limited A2 A- PACRA 1,032,620 1,018,555
Hyundai Nishat Motor (Private) Limited Unknown - 1,094,340 660,000
Nishat Dairy (Private) Limited Unknown - 375,600 481,800
Nishat Sutas Dairy Limited Unknown - 166,300 -
FBR Refund Settlement Company Limited
- Sales tax refund bonds Unknown - - 559,606
33,447,071 30,803,330
33,558,557 31,359,242
101

The Company's exposure to credit risk and allowance for expected credit losses related to trade debts is
disclosed in Note 20.
Due to the Company's long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, the management does not expect non-performance by these
counterparties on their obligations to the Company. Accordingly, the credit risk is minimal.
c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. At 30 June 2020, the Company had Rupees 25,956.148 million
(2019: Rupees 21,722.738 million) available borrowing limits from financial institutions and Rupees 128.241
million (2019: Rupees 576.625 million) cash and bank balances. The management believes the liquidity risk to be
low. Following are the contractual maturities of financial liabilities, including interest payments. The amount
disclosed in the table are undiscounted cash flows:
Contractual maturities of financial liabilities as at 30 June 2020
Carrying Contractual 6 months 6-12 1-2 More than

amount cash flows or less months Year 2 Years
Non-derivative financial liabilities:
Long term financing 9,925,813 10,698,231 158,930 806,388 2,755,819 6,977,094

Trade and other payables 8,150,206 8,150,206 8,150,206 - - -
Unclaimed dividend 90,596 90,596 90,596 - - -
Short term borrowings 19,329,768 19,885,294 19,771,393 113,901 - -
Accrued mark-up 226,228 226,228 226,228 - - -
Derivative financial liabilities 6,206 6,206 6,206 - - -
37,728,817 39,056,761 28,403,559 920,289 2,755,819 6,977,094

Long term financing 7,044,397 7,715,948 973,185 1,073,070 1,907,965 3,761,728

Accrued mark-up 235,337 235,337 235,337 - - -
32,882,032 34,003,177 27,220,028 1,113,456 1,907,965 3,761,728
The contractual cash flows relating to the above financial liabilities have been determined on the basis of interest
rates / mark-up rates effective as at 30 June. The rates of interest / mark up have been disclosed in note 5 and
note 9 to these financial statements.
102
Annual Report 2020
44.2 Financial instruments by categories
Amortised
FVTPL FVTOCI Total
cost
As at 30 June 2020
Assets as per statement of financial position

Long term investments - - 33,447,071 33,447,071
Loans and advances - 9,068,823 - 9,068,823
Deposits - 105,269 - 105,269
Trade debts - 4,326,780 - 4,326,780
Other receivables 345 36,246 - 36,591
Accrued interest - 36,675 - 36,675
Cash and bank balances - 128,241 - 128,241
345 13,702,034 33,447,071 47,149,450
Financial liabilities at
FVTPL Total
amortized cost
Liabilities as per statement of financial position
Long term financing 9,925,813 - 9,925,813

Accrued mark-up 226,228 - 226,228
Short term borrowings 19,329,768 - 19,329,768
Trade and other payables 8,150,206 6,206 8,156,412
Unclaimed dividend 90,596 - 90,596
37,722,611 6,206 37,728,817
Amortised
FVTPL FVTOCI Total
cost
As at 30 June 2019
Assets as per statement of financial position

Long term investments - 559,606 30,243,724 30,803,330
Loans and advances - 7,650,397 - 7,650,397
Deposits - 115,476 - 115,476
Trade debts - 4,711,061 - 4,711,061
958 13,679,411 30,243,724 43,924,093
103

Financial liabilities at
FVTPL Total
amortized cost
Liabilities as per statement of financial position
Long term financing 7,044,397 - 7,044,397

Accrued mark-up 235,337 - 235,337
Short term borrowings 17,982,262 - 17,982,262
Trade and other payables 7,519,447 7,583 7,527,030
Unclaimed dividend 93,006 - 93,006
32,874,449 7,583 32,882,032
44.3 Offsetting financial assets and financial liabilities
As on reporting date, recognized financial instruments are not subject to off setting as there are no
enforceable master netting arrangements and similar agreements.
44.4 Capital risk management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as
a going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the
capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new
shares or sell assets to reduce debt. Consistent with others in the industry and the requirements of the
lenders, the Company monitors the capital structure on the basis of gearing ratio. This ratio is calculated
as borrowings divided by total capital employed. Borrowings represent long term financing and short
term borrowings obtained by the Company as referred to in note 5 and note 9 respectively. Total capital
employed includes 'total equity' as shown in the statement of financial position plus 'borrowings'. The
Company's strategy, remained unchanged from last year. In accordance with the terms of agreement with
the lenders of long term finances in connection with deferment of principal amount for twelve months,
there is restriction on distribution of dividends by the Company during the relief period.
2020 2019
Borrowings Rupees in thousand 29,255,581 25,026,659

Total equity Rupees in thousand 71,427,860 66,615,270
Total capital employed Rupees in thousand 100,683,441 91,641,929
Gearing ratio Percentage 29.06 27.31
The increase in the gearing ratio resulted primarily from increase in borrowings of the Company.
104
Annual Report 2020
45 RECOGNIZED FAIR VALUE MEASUREMENTS - FINANCIAL INSTRUMENTS
i) Fair value hierarchy
Judgements and estimates are made in determining the fair values of the financial instruments that are
recognized and measured at fair value in these financial statements. To provide an indication about the reliability
of the inputs used in determining fair value, the Company has classified its financial instruments into the following
three levels. An explanation of each level follows underneath the table.
Recurring fair value measurements

Level 1 Level 2 Level 3 Total
At 30 June 2020
Financial assets
Fair value through other comprehensive income 29,637,753 - 3,809,318 33,447,071
Derivative financial assets - 345 - 345
Total financial assets 29,637,753 345 3,809,318 33,447,416
Derivative financial liabilities - 6,206 - 6,206
Total financial liabilities - 6,206 - 6,206

At 30 June 2019
Financial assets
Fair value through other comprehensive income 27,238,774 - 3,004,950 30,243,724
Total financial assets 27,238,774 958 3,004,950 30,244,682
The above table does not include fair value information for financial assets and financial liabilities not measured
at fair value if the carrying amounts are a reasonable approximation of fair value. Due to short term nature,
carrying amounts of certain financial assets and financial liabilities are considered to be the same as their fair
value. For the majority of the non-current receivables, the fair values are also not significantly different to their
carrying amounts.
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. Further
there was no transfer out of level 3 measurements.
The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end
of the reporting period.
105

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
trading and equity securities) is based on quoted market prices at the end of the reporting period. The
quoted market price used for financial assets held by the Company is the current bid price. These
instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximize the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities.
ii) Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include the use of quoted market prices or
dealer quotes for similar instruments and the fair value of the remaining financial instruments is determined using
discounted cash flow analysis.
iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the year ended 30 June 2020 and 30 June 2019:
Unlisted equity
securities
Balance as on 01 July 2018 4,888,528
Add: Investment made during the year 29,609

Less: Deficit recognized in other comprehensive income (1,913,187)
Balance as on 30 June 2019 3,004,950
Add: Investment made during the year 403,300

Add: Surplus recognized in other comprehensive income 401,068
Balance as on 30 June 2020 3,809,318
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Annual Report 2020
iv) Valuation inputs and relationships to fair value
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value
measurements.
Range of inputs
Relationship of
Description Fair value at (probability-
Unobservable inputs unobservable
weighted average)
inputs to
30 June 2020 30 June 2019 30 June 2020 fair value
Fair value through other

comprehensive income
Nishat Paper Products 549,483 168,231 Terminal growth 2.00% Increase / decrease in
Company Limited factor terminal growth factor
by 1% and decrease /
Risk adjusted 14.25% increase in discount
discount rate rate by 1% would
increase / decrease
fair value by Rupees
+165.089 million /
- 120.647 million.
Nishat Dairy (Private) Limited 375,600 481,800 Terminal growth 2.00% Increase / decrease in
factor terminal growth factor
increase / decrease
+ 55.800 million /
- 40.800 million.
Security General Insurance 590,975 676,364 Terminal growth 2.00% Increase / decrease in
increase / decrease
+108.296 million /
- 77.208 million.
Nishat Hotels and 1,032,620 1,018,555 Terminal growth 2.00% Increase / decrease in
Properties Limited factor terminal growth factor
increase / decrease
+ 592.924 million /
- 327.922 million.
Hyundai Nishat Motor 1,094,340 660,000 Terminal growth 2.00% Increase / decrease in
(Private) Limited factor terminal growth factor
increase / decrease
+ 340.860 million /
- 250.263 million.
There were no significant inter-relationships between unobservable inputs that materially affect fair values.
Valuation processes
Independent valuers perform the valuations of non-property items required for financial reporting purposes, including
level 3 fair values. The independent valuers report directly to the Chief Financial Officer. Discussions of valuation
processes and results are held between the Chief Financial Officer and the valuation team at least once every year, in
107

line with the Company’s annual reporting period.

The main level 3 inputs used by the Company are derived and evaluated as follows:
Discount rates for financial instruments are determined using a capital asset pricing model to calculate a rate that
reflects current market assessments of the time value of money and the risk specific to the asset.
Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of
companies.
Changes in level 2 and 3 fair values are analyzed at the end of yearly reporting period during the valuation discussion
between the Chief Financial Officer and the independent valuers. As part of this discussion the independent valuers
present a report that explains the reason for the fair value movements.
46 FAIR VALUE MEASUREMENTS - NON-FINANCIAL ASSETS
Judgements and estimates are made for non-financial assets not measured at fair value in these financial
statements but for which the fair value is described in these financial statements. To provide an indication about
the reliability of the inputs used in determining fair value, the Company has classified its non-financial assets into
the following three levels.
At 30 June 2020 Level 1 Level 2 Level 3 Total

Investment properties - 4,622,255 - 4,622,255

Total non-financial assets - 4,622,255 - 4,622,255
At 30 June 2019 Level 1 Level 2 Level 3 Total

Investment properties - 4,143,237 - 4,143,237

Total non-financial assets - 4,143,237 - 4,143,237
The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end
of the reporting period.
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. Further,
there was no transfer in and out of level 3 measurements.
ii) Valuation techniques used to determine level 2 fair values
The Company obtains independent valuations for its investment properties at least annually. At the end of each
reporting period, the management updates the assessment of the fair value of each property, taking into account
the most recent independent valuations. The management determines a property’s value within a range of
reasonable fair value estimates. The best evidence of fair value is current prices in an active market for similar
properties.
Valuation processes
The Company engages external, independent and qualified valuer to determine the fair value of the Company’s
investment properties at the end of every financial year. As at 30 June 2020, the fair values of the investment
properties have been determined by Al-Hadi Financial & Legal Consultants (an approved valuer).
Changes in fair values are analyzed at the end of each year during the valuation discussion between the Chief
Financial Officer and the valuer. As part of this discussion the team presents a report that explains the reason for
the fair value movements.
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Annual Report 2020
47 DISCLOSURES BY COMPANY LISTED ON ISLAMIC INDEX
2020 2019
Description
Loan / advances obtained as per Islamic mode:

Loans 5 and 9 4,754,667 7,823,043
Advances 7 956,879 519,955
Shariah compliant bank deposits / bank balances

Bank balances 25 4,336 17,939
Profit earned from shariah compliant bank deposits

/ bank balances
Profit on deposits with banks 31 - -
Revenue earned from shariah compliant business 60,904,096 63,499,029
Gain / (loss) or dividend earned from shariah

complaint investments
Dividend income 31.1 401,059 585,343
Unrealized gain / (loss) on remeasurement of investment at FVTOCI 3,488,630 (7,993,645)
Exchange gain earned 33,752 26,440
Mark-up paid on Islamic mode of financing 566,422 498,758
Profits earned or interest paid on any conventional

loan / advance
Profit earned on loans to subsidiary companies 396,814 362,482
Interest paid on loans 659,533 750,289
Profit earned on deposits with banks 97,132 961
Relationship with shariah compliant banks
Name Relationship
Habib Bank Limited Bank balance and long term financing

Standard Chartered Bank (Pakistan) Limited Bank balance, short term borrowings and long term financing
Al-Baraka Bank (Pakistan) Limited Bank balance
Bank Islami Pakistan Limited Bank balance and short term borrowings
Meezan Bank Limited Bank balance and short term borrowings
Dubai Islamic Bank Pakistan Limited Bank balance
MCB Islamic Bank Limited Bank balance
Faysal Bank Limited (Barkat Islami) Short term borrowings
The Bank of Punjab (Taqwa Islamic Banking) Short term borrowings
109

48 IMPACT OF COVID-19 (CORONA VIRUS)
The pandemic of COVID-19 that rapidly spread all across the world has not only endangered human lives but has
also adversely impacted the global economy. On 23 March 2020, the Government of the Punjab and the
Government of Sindh announced a temporary lock down as a measure to reduce the spread of the COVID–19.
Complying with the lockdown, the Company temporarily suspended its operations. After implementing all the
necessary Standard Operating Procedures (SOPs) to ensure safety of employees, the Company resumed its
operations and took all necessary steps to ensure smooth and adequate continuation of its business in order to
maintain business performance despite slowdown in economic activity. The lockdown caused disruptions in
supply chain including supply of goods to the customers resulting in a decline in sales. Subsequent to the year
ended 30 June 2020, due to significant reduction in outbreak, demand for the Company’s goods is fast reverting
back to normal levels. Due to this, management has assessed the accounting implications of these
developments on these financial statements, including but not limited to the following areas:
- expected credit losses under IFRS 9 ‘Financial Instruments’;
- the impairment of tangible assets under IAS 36 ‘Impairment of Assets’;
- the net realisable value of inventory under IAS 2, ‘Inventories’;
- provisions and contingent liabilities under IAS 37 Provisions, Contingent Liabilities and Contingent Assets’; and
- going concern assumption used for the preparation of these financial statements.
According to management’s assessment, there is no significant accounting impact of the effects of COVID-19 in
these financial statements.
49 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue on 18 September 2020 by the Board of Directors of the
Company.
50 CORRESPONDING FIGURES
Corresponding figures have been re-arranged, wherever necessary, for the purpose of comparison. However, no
significant rearrangements have been made.
51 GENERAL
Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.
110
Consolidated Financial Statements of

and its Subsidiaries
for the year ended June 30, 2020
Nishat Mills Limited and its Subsidiaries
DIRECTORS’ REPORT
The Directors are pleased to present their report together with the consolidated financial statement of Nishat Mills Limited
(“the Holding Company”) and its Subsidiary Companies (together referred to as Group) for the year ended 30 June 2020. The
consolidated results comprise of financial statements of Nishat Mills Limited, Nishat Power Limited, Nishat Linen (Private)
Limited, Nishat Hospitality (Private) Limited, Nishat USA Inc., Nishat Linen Trading LLC, Nishat International FZE, Nishat
Global China Company Limited, Nishat Commodities (Private) Limited and Lalpir Solar Power (Private) Limited.
The Holding Company has annexed its consolidated financial statements along with its separate financial statements, in
accordance with the requirements of International Financial Reporting Standards and Companies Act, 2017. The Directors’
Report, giving a commentary on the performance of Nishat Mills Limited for the year ended 30 June 2020 has been presented
separately. It also includes a brief description of all the subsidiary companies of the Holding Company.
Clarification to Qualifications in Audit Report
In their Report to the Members, Auditors have stated that consolidated financial statements include un-audited figures
pertaining to Nishat USA Incorporated, a wholly owned subsidiary of Nishat Mills Limited. This Subsidiary Company is
incorporated under the Business Corporation Law of the State of New York. The governing law does not require audit of
financial statements of the Subsidiary Company. Hence, we have used un-audited financial statements of the Subsidiary
Company to prepare Consolidated Financial Statements.
We would like to draw your attention to emphasis of matter paragraph (a) of the independent auditors’ report to the members
(i) which refers to an amount of Rs 816 million (2019: Rs 816 million) relating to capacity purchase price, included in trade
debts of Nishat Power Limited (NPL), not acknowledged by National Transmission and Despatch Company Limited
(‘NTDCL’). Further details are mentioned in note 23.6 of the annexed financial statements. Based on the favourable Expert
determination and International Arbitration Award, management of NPL strongly feels that under the terms of the PPA and
Implementation Agreement, the above amount is likely to be recovered by NPL. Consequently, no provision for the
above-mentioned amount has been made in these financial statements. (ii) which refers to delayed payment charges on
outstanding delayed payment invoices, not acknowledged by NTDCL. Further details are mentioned in note 14(b) of the
annexed financial statements. On prudence basis, the company has not recognized the income and corresponding
receivable in these financial statements due to its uncertainty on account of pendency of enforcement proceedings of the
final award.
We would also like to draw your attention to emphasis of matter paragraph (b) of the independent auditors’ report to the
members which refers to Note 1(a) to the consolidated financial statements and states the liquidation of two subsidiaries,
Nishat UK (Private) Limited and Concept Garments and Textile Trading FZE. The Board of Directors of the Holding Company
approved the winding up of Nishat UK (Private) Limited and Concept Garments and Textile Trading FZE on 26 February 2019
and 26 April 2019 respectively. Accordingly, Nishat UK (Private) Limited and Concept Garments and Textile Trading FZE were
liquidated on 23 July 2019 and 26 December 2019 respectively.
We would also like to draw your attention to emphasis of matter paragraph (c) of the independent auditors’ report to the
members which refers to Note 1(a) to the consolidated financial statements and states that the Lalpir Solar Power (Private)
Limited (LSPPL) is no longer a going concern, therefore, the financial statements of LSPPL have been prepared on the basis
of estimated realizable / settlement values of assets and liabilities respectively. LSPPL had fulfilled initialed conditions
required for the supply of electricity, but it could not get Power Acquisition Request and Consent from Central Power
Purchasing Agency. Therefore, project came to a standstill and the management of LSPPL has intended to initiate process
of winding up of LSPPL for which legal consultants have been approached. Therefore, financial accounts of LSPPL for year
2020 have been prepared on non-going concern basis.
For and on behalf of the Board of Directors
Mian Umer Mansha Farid Noor Ali Fazal

Chief Executive Officer Director
18 September 2020
Lahore
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Annual Report 2020
INDEPENDENT AUDITOR’S REPORT

Qualified Opinion
We have audited the annexed consolidated financial statements of Nishat Mills Limited and its
subsidiaries (the Group), which comprise the consolidated statement of financial position as at 30 June
2020, and the consolidated statement of profit or loss, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies and other explanatory information.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of
our report, the consolidated financial statements give a true and fair view of the consolidated financial
position of the Group as at 30 June 2020, and its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with the accounting and reporting standards as
applicable in Pakistan.
Basis for Qualified Opinion
The financial statements of Nishat USA, Inc. (Subsidiary Company) for the year ended 30 June 2020 were
unaudited. Hence, total assets of Rupees 17,183,659 as at 30 June 2020 and total turnover and net profit
of Rupees 48,272,966 and Rupees 848,180 respectively for the year ended 30 June 2020 pertaining to the
aforesaid Company have been incorporated in these consolidated financial statements by the
management using un-audited financial statements.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group in accordance with the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants as adopted by the Institute of the Chartered Accountants of
Pakistan (the Code), and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our qualified opinion.
Emphasis of Matters
We draw attention to the following matters:
a. Note 14(b) and Note 23.6 to the consolidated financial statements, which describe the matters
relating to litigations with National Transmission and Despatch Company Limited (NTDC) on account
of recoverability of delayed payment charges and capacity revenue respectively.
b. Note 1(a) to the consolidated financial statements, which refers to the liquidation of two subsidiaries,
Concept Garments and Textile Trading FZE and Nishat UK (Private) Limited during the year.
c. Note 1(a) to the consolidated financial statements, which states that the Lalpir Solar Power (Private)
Limited – Subsidiary Company is no longer a going concern, therefore, the financial statements of
Lalpir Solar Power (Private) Limited have been prepared on the basis of estimated realizable /
settlement values of assets and liabilities respectively.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. In addition to the matter described
in the Basis for Qualified Opinion section we have determined the matters described below to be the key
audit matters to be communicated in our report.
113
Following are the key audit matters:
Sr.
No.
1. Accounting for equity accounted

associates
Investments in equity-accounted Our procedures included, but were not limited to:
associates amounted to Rupees 34,134
million (22% of total assets) as at 30 June • We perused the supporting documentation
2020. and ensured that they are properly accounted
for in accordance with IAS 28;
There is a risk that associates are not
accounted for and disclosed properly. • We ensured proper equity accounting was
carried out during the year by looking at the
As such, we have identified the post-acquisition change in the Group’s share
impairment assessment, equity of net assets of the associates. In particular, we
accounting and disclosure for the have:
investments in equity accounted
associates as representing key audit - Tested additions of investments made
matters due to the significance of the during the year; and
balance to the consolidated financial
statements as a whole. - Checked the accuracy for computation of
share of dividend income and profit or loss
The Group’s management conducts its and other comprehensive income of the
impairment test to assess the associates.
recoverability of the equity accounted
associates and considers whether there • We assessed the adequacy of the disclosures
are indicators of impairment with respect presented within the consolidated financial
to these investments. Impairment statements to ensure they are in accordance
assessments of these investments with IFRS 12;
require significant judgement and there
is the risk that valuation of the • We sent group audit instructions to the
investments may be incorrect and any respective component auditors to gain
potential impairment charge comfort on the audit procedures performed
miscalculated. by the component auditors over the financial
statements of associates;
For further information on investments in
equity-accounted associates, refer to the • We evaluated the reasonableness of
following: management’s assumptions and estimates
used in determining the recoverable values of
- Summary of significant accounting material investments. We assessed the
policies, Consolidation – Associates assumptions and estimates based on our
note 2.2(b) to the consolidated knowledge of the Group and the industries.
- Critical accounting estimates and

judgements note 2.1(c)
- Long term investments note 18 to

the consolidated financial statements.
2. Assessment of control and significant

influence on investments
There is a risk that management has Our procedures included, but were not limited to:
made an error in judgement or may have
not fully considered all rules, facts and • We tested the design and implementation of
circumstances in assessing whether the key controls around the application of the
Group has control or significant influence accounting standards and evaluated the
on its investments which may have significant judgements that management
significant consequences on the exercised in determining whether the Group
consolidated financial statements. controls or have significant influence over the
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Annual Report 2020
Sr.
No.
For further information, refer to the investee companies;

following:
• We reviewed documents to support any key
- Summary of significant accounting judgments management has made in
policies, Consolidation note 2.2 to the determining whether they control or have
consolidated financial statements. significant influence over an investee e.g.
power over relevant activities;
- Note 1 and Note 18 to the
consolidated financial statements. • We have tested the consolidation process to
assess whether the conclusions reached have
been appropriately applied in the preparation
of the consolidated financial statements and
adequate disclosures have been made in the
consolidated financial statements.
3. Inventory existence and valuation
Inventory of the textile business of the Our procedures over existence and valuation of
Group as at 30 June 2020 represented a inventory included, but were not limited to:
material position in the consolidated
statement of financial position. • To test the quantity of inventories at all
locations, we assessed the corresponding
Inventory is measured at the lower of cost inventory observation instructions and
and net realizable value. participated in inventory counts on sites.
Based on samples, we performed test counts
We identified existence and valuation of and compared the quantities counted by us
inventory as a key audit matter due to its with the results of the counts of the
size, representing 19.24% of total assets of management;
the Group as at 30 June 2020, and the
judgment involved in valuation. • For a sample of inventory items, re-performed
the weighted average cost calculation and
For further information on inventory, refer compared the weighted average cost
to the following: appearing on valuation sheets;
- Summary of significant accounting • We tested that the ageing report used by

policies, Inventories note 2.16 to the management correctly aged inventory items
consolidated financial statements. by agreeing a sample of aged inventory items
to the last recorded invoice;
- Stores, spares and loose tools note 21
and Stock-in-trade note 22 to the • On a sample basis, we tested the net
consolidated financial statements. realizable value of inventory items to recent
selling prices and re-performed the
calculation of the inventory write down, if any;
• We assessed the percentage write down

applied to older inventory with reference to
historic inventory write downs and recoveries
on slow moving inventory;
• In the context of our testing of the calculation,

we analysed individual cost components and
traced them back to the corresponding
underlying documents. We furthermore
challenged changes in unit costs;
• We also made enquires of management,

including those outside of the finance
function, and considered the results of our
testing above to determine whether any
specific write downs were required.
115
Sr.
No.
4. Capital expenditures
The textile business of the Group is Our procedures included, but were not limited to:
investing significant amounts in its
operations and there are a number of • We tested operating effectiveness of controls
areas where management judgement in place over the property, plant and
impacts the carrying value of property, equipment cycle including the controls over
plant and equipment and its respective whether costs incurred on activities is capital
depreciation profile. These include or operating in nature;
among other the decision to capitalize or
expense costs; and review of useful life of • We evaluated the appropriateness of
the assets including the impact of capitalization policies and depreciation rates;
changes in the Group’s strategy.
• We performed tests of details on costs
We focused on this area since the capitalized;
amounts have a significant impact on the
financial position of the Group and there • We verified the accuracy of management’s
is significant management judgment calculation used for the impairment testing.
required that has significant impact on
the reporting of the financial position for
the Group. Therefore, considered as one
of the key audit matters.

following:

policies, Property, plant, equipment
and deprecation note 2.7 to the
- Property, plant and equipment note

15 to the consolidated financial
statements.
5. Revenue recognition
We identified recognition of revenue of Our procedures included, but were not limited to:
textile business of the Group as a key
audit matter because revenue is one of • We obtained an understanding of the process
the key performance indicators and gives relating to recognition of revenue and testing
rise to an inherent risk that revenue could the design, implementation and operating
be subject to misstatement to meet effectiveness of key internal controls over
expectations or targets. recording of revenue;
For further information, refer to the • We compared a sample of revenue

following: transactions recorded during the year with
sales orders, sales invoices, delivery
- Summary of significant accounting documents and other relevant underlying
policies, Revenue from contracts documents;
with customers note 2.23 to the
consolidated financial statements. • We compared a sample of revenue
transactions recorded around the year-end
- Revenue note 30 to the consolidated with the sales orders, sales invoices, delivery
financial statements. documents and other relevant underlying
documentation to assess if the related
revenue was recorded in the appropriate
accounting period;
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Annual Report 2020
Sr.
No.
• We assessed whether the accounting policies

for revenue recognition complies with the
requirements of IFRS 15 ‘Revenue from
Contracts with Customers’;
• We compared the details of a sample of

journal entries posted to revenue accounts
during the year, which met certain specific
risk-based criteria, with the relevant
underlying documentation;
• We also considered the appropriateness of

disclosures in the consolidated financial
statements.
6. Application of IFRS 16 ‘Leases’
The Group has adopted IFRS 16 ‘Leases’ Our audit procedures included the following:
with effect from 01 July 2019. IFRS 16 intro-
duces a single on consolidated statement • Obtaining an understanding of the
of financial position lease accounting management’s process for identification of
model for leases entered into by lessees. A agreements which contain leasing
lessee recognizes a right-of-use asset arrangements;
representing its right of using the under-
lying asset and a corresponding lease • Evaluating the selection of accounting
liability representing its obligations to policies and methodology followed by the
make lease payments. On adoption of management for determination and
IFRS 16, the Group has changed its measurement of right-of-use assets,
accounting policy for operating leases corresponding lease liabilities and other
which are now recognized on the consoli- related impacts;
dated statement of financial position. The
Group has accordingly recognized • On a sample basis, testing the underlying data
right-of-use assets and lease liabilities as used by the management from the lease
at 01 July 2019. The comparative figures contracts for determination of the
for the 2019 reporting period have not right-of-use assets and corresponding lease
been restated, as permitted under the liabilities. Further, performed re-computations
specific transitional provisions of the on a test basis to assess the accuracy of
standard. computations performed by the management;
and
The adoption of IFRS 16 involves estima-
tion and judgement. Because of the • Assessing whether the presentation and
significance of the impact of these judge- disclosures relating to the adoption of IFRS 16
ments / estimates, we considered this a in the consolidated financial statements are in
key audit matter. compliance with the applicable financial
reporting framework.
For further information on leases, refer to
the following:

policies, Leases note 2.10 to the
- Lease liabilities and Right-of-use

assets note 6 and note 17 to the
consolidated financial statements
respectively.
117
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the consolidated financial statements and our
auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. As described in the Basis for Qualified Opinion section
above, the Group should have consolidated Nishat USA, Inc. (Subsidiary Company) based on audited
financial statements. Accordingly, we are unable to conclude whether or not the other information is
materially misstated with respect to this matter.
Responsibilities of Management and the Board of Directors for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting and reporting standards as applicable in Pakistan and
Companies Act, 2017 and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
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Annual Report 2020
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mubashar
Mehmood.

Lahore
Date: 18 September 2020
119
Consolidated Statement of Financial Position

As at June 30, 2020
2020 2019
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized share capital
1,100,000,000 (2019: 1,100,000,000) ordinary

shares of Rupees 10 each 11,000,000 11,000,000
Issued, subscribed and paid-up share capital 3 3,515,999 3,515,999

Reserves 4 92,836,718 89,745,467
Equity attributable to equity holders of the Holding Company 96,352,717 93,261,466
Non-controlling interest 11,606,574 9,361,028
Total equity 107,959,291 102,622,494
LIABILITIES
NON-CURRENT LIABILITIES
Long term financing 5 9,372,451 5,915,226

Lease liabilities 6 1,765,873 -
Long term security deposits 7 271,133 217,030
Retirement benefit obligation 19,466 17,857
Deferred liability - accumulating compensated absences 1,540 2,321
Deferred income tax liability 8 1,973,011 2,399,735
13,403,474 8,552,169
CURRENT LIABILITIES
Trade and other payables 9 11,184,265 9,449,179

Accrued mark-up 10 395,513 469,245
Short term borrowings 11 24,080,517 24,402,574
Current portion of non-current liabilities 12 1,263,901 4,170,795
Unclaimed dividend 13 111,267 114,673
37,035,463 38,606,466
TOTAL LIABILITIES 50,438,937 47,158,635
CONTINGENCIES AND COMMITMENTS 14
TOTAL EQUITY AND LIABILITIES 158,398,228 149,781,129
The annexed notes form an integral part of these consolidated financial statements.
CHIEF EXECUTIVE OFFICER
120
Annual Report 2020
2020 2019
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 15 43,724,143 41,697,384

Intangible assets 16 1,259 3,739
Right-of-use assets 17 2,030,736 -
Long term investments 18 50,115,435 51,348,430
Long term loans 19 361,635 323,476
Long term deposits 20 225,882 213,901
96,459,090 93,586,930
CURRENT ASSETS
Stores, spare parts and loose tools 21 2,979,540 3,908,091

Stock-in-trade 22 28,367,135 24,368,886
Trade debts 23 23,604,593 21,795,191
Loans and advances 24 1,372,497 1,433,533
Short term deposits and prepayments 25 184,401 321,890
Other receivables 26 4,652,267 3,143,324
Accrued interest 27 2,301 2,862
Short term investment 28 17,677 -
Cash and bank balances 29 758,727 1,220,422
61,939,138 56,194,199
TOTAL ASSETS 158,398,228 149,781,129
DIRECTOR CHIEF FINANCIAL OFFICER
121
Consolidated Statement of Profit or Loss

2020 2019
REVENUE 30 88,709,830 96,005,322

COST OF SALES 31 (70,822,039) (79,108,980)
GROSS PROFIT 17,887,791 16,896,342
DISTRIBUTION COST 32 (6,093,102) (5,741,161)

ADMINISTRATIVE EXPENSES 33 (2,223,204) (1,833,976)
OTHER EXPENSES 34 (218,300) (394,678)
(8,534,606) (7,969,815)
9,353,185 8,926,527
OTHER INCOME 35 2,351,438 3,422,072

PROFIT FROM OPERATIONS 11,704,623 12,348,599
FINANCE COST 36 (2,957,854) (2,665,183)

8,746,769 9,683,416
SHARE OF PROFIT FROM ASSOCIATES 18.3 864,092 1,300,879

PROFIT BEFORE TAXATION 9,610,861 10,984,295
TAXATION 37 (839,106) (1,331,201)

SHARE OF PROFIT ATTRIBUTABLE TO:
EQUITY HOLDERS OF HOLDING COMPANY 6,352,753 7,806,357

NON-CONTROLLING INTEREST 2,419,002 1,846,737
8,771,755 9,653,094
EARNINGS PER SHARE - BASIC AND DILUTED (RUPEES) 38 18.07 22.20
122
Annual Report 2020
Consolidated Statement of Comprehensive Income

2020 2019
OTHER COMPREHENSIVE LOSS
Items that will not be reclassified to profit or loss:
Remeasurement of retirement benefits - net of tax 2,140 (29,115)

Deficit arising on remeasurement of investments at fair value
through other comprehensive income (1,279,310) (2,732,538)
Share of other comprehensive loss of associates (535,646) (1,837,479)
Deferred income tax relating to deficit on investments at fair value
through other comprehensive income 18,572 53,870
(1,794,244) (4,545,262)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations 5,491 158,994

Other comprehensive loss for the year - net of tax (1,788,753) (4,386,268)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 6,983,002 5,266,826
SHARE OF TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
EQUITY HOLDERS OF HOLDING COMPANY 4,564,000 3,420,089

NON-CONTROLLING INTEREST 2,419,002 1,846,737
6,983,002 5,266,826
123
124
Attributable to Equity Holders of the Holding Company
Capital Reserves Revenue Reserves
Share Non- Total
Capital Premium on Fair value Exchange Capital Total Shareholders’ Controlling Equity
reserve Statutory Redemption Maintenance General Unappropriated
issue of Translation Sub Total Sub Total Reserves Equity Interest
FVTOCI Reserve Reserve Fund Reserve Reserve Profit
right shares investments Reserve
Balance as at 01 July 2018 3,515,999 5,499,530 14,243,195 60,174 835 111,002 - 19,914,736 60,755,882 7,324,859 68,080,741 87,995,477 91,511,476 8,034,658 99,546,134
Transaction with owners - Final dividend for
the year ended 30 June 2018
@ Rupees 4.75 per share - - - - - - - - - (1,670,099) (1,670,099) (1,670,099) (1,670,099) - (1,670,099)
Transferred to general reserve - - - - - - - - 5,617,000 (5,617,000) - - - - -
Transferred to maintenance reserve - - - - - - 1,608,668 1,608,668 (1,608,668) - (1,608,668) - - - -

Transaction with owners - Dividend relating to
year 2018 paid to non-controlling interest - - - - - - - - - - - - - (520,367) (520,367)
Profit for the year - - - - - - - - - 7,806,357 7,806,357 7,806,357 7,806,357 1,846,737 9,653,094
Other comprehensive loss for the year - - (4,516,147) 158,994 - - - (4,357,153) - (29,115) (29,115) (4,386,268) (4,386,268) - (4,386,268)
Total comprehensive income for the year - - (4,516,147) 158,994 - - - (4,357,153) - 7,777,242 7,777,242 3,420,089 3,420,089 1,846,737 5,266,826
Balance as at 30 June 2019 3,515,999 5,499,530 9,727,048 219,168 835 111,002 1,608,668 17,166,251 64,764,214 7,815,002 72,579,216 89,745,467 93,261,466 9,361,028 102,622,494
Transaction with owners - Final dividend for
the year ended 30 June 2019
@ Rupees 4.00 per share - - - - - - - - - (1,406,399) (1,406,399) (1,406,399) (1,406,399) - (1,406,399)
Transferred to general reserve - - - - - - - - 6,399,000 (6,399,000) - - - - -
Transaction with owners - Dividend relating
to year 2019 paid to non-controlling interest - - - - - - - - - - - - - (173,456) (173,456)
Profit for the year - - - - - - - - - 6,352,753 6,352,753 6,352,753 6,352,753 2,419,002 8,771,755
Other comprehensive loss for the year - - (1,796,384) 5,491 - - - (1,790,893) - 2,140 2,140 (1,788,753) (1,788,753) - (1,788,753)
Total comprehensive income for the year - - (1,796,384) 5,491 - - - (1,790,893) - 6,354,893 6,354,893 4,564,000 4,564,000 2,419,002 6,983,002
Consolidated Statement of Changes in Equity
Net movement - - - - - - - - - (66,350) (66,350) (66,350) (66,350) - (66,350)
Balance as at 30 June 2020 3,515,999 5,499,530 7,930,664 224,659 835 111,002 1,608,668 15,375,358 71,163,214 6,298,146 77,461,360 92,836,718 96,352,717 11,606,574 107,959,291

Annual Report 2020
Consolidated Statement of Cash Flows

2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 39 10,125,221 3,357,974

Finance cost paid (3,031,586) (2,487,802)
Income tax paid (1,296,718) (1,221,371)
Long term security deposits received 54,103 23,520
Exchange gain on forward exchange contracts received 107,279 13,720
Net increase in retirement benefit obligation 151 5,101
Net increase in long term loans (62,807) (94,925)
Net increase in long term deposits (11,981) (50,514)
Net cash generated from / (used in) operating activities 5,883,662 (454,297)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment 97,272 250,765

Capital expenditure on property, plant and equipment (5,791,497) (4,325,970)
Dividends received 1,856,089 2,487,945
Investments made (430,587) (535,009)
Interest received 112,982 7,840
Net cash used in investing activities (4,155,741) (2,114,429)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term financing 4,454,967 1,871,034

Repayment of long term financing (4,404,834) (4,214,625)
Repayment of lease liabilities (347,769) -
Exchange differences on translation of net investments
in foreign subsidiaries 15,704 158,994
Short term borrowings - net (322,057) 7,316,093
Dividend paid (1,585,627) (2,174,036)
Net cash (used in) / from financing activities (2,189,616) 2,957,460
Net (decrease) / increase in cash and cash equivalents (461,695) 388,734
Cash and cash equivalents at the beginning of the year 1,220,422 831,688
Cash and cash equivalents at the end of the year 758,727 1,220,422
125
Notes to the Consolidated Financial Statements

1 THE GROUP AND ITS OPERATIONS
a) The Group consists of:
Holding Company
- Nishat Mills Limited
Subsidiary Companies
- Nishat Power Limited

- Nishat Linen (Private) Limited
- Nishat Hospitality (Private) Limited
- Nishat USA, Inc.
- Nishat Linen Trading LLC
- Nishat International FZE
- Nishat Global China Company Limited
- Nishat Commodities (Private) Limited
- Lalpir Solar Power (Private) Limited
NISHAT MILLS LIMITED
Nishat Mills Limited is a public limited Company incorporated in Pakistan under the Companies Act, 1913 (Now
Companies Act, 2017) and listed on Pakistan Stock Exchange Limited. Its registered office is situated at 53-A,
Lawrence Road, Lahore. The Company is engaged in the business of textile manufacturing and of spinning, combing,
weaving, bleaching, dyeing, printing, stitching, apparel, buying, selling and otherwise dealing in yarn, linen, cloth and
other goods and fabrics made from raw cotton, synthetic fibre and cloth and to generate, accumulate, distribute,
supply and sell electricity. Geographical location and addresses of all business units are as follows:
Sr.
Manufacturing units and offices Address
No.
1 Spinning units, yarn dyeing unit and power plant Nishatabad, Faisalabad.
2 Spinning units and power plant Plot No. 172-180 and 188-197, M-3 Industrial City,
Sahianwala, FIEDMC, 2 K.M., Jhumra Chiniot
Road, Chak Jhumra, Faisalabad.
3 Spinning units and power plant 20 K.M., Sheikhupura Road, Feroze Wattwan.
4 Weaving units and power plant 12 K.M., Faisalabad Road, Sheikhupura.
5 Weaving units, dyeing and finishing unit, 5 K.M., Nishat Avenue Off 22 K.M., Ferozepur
processing unit, stitching units and power plants Road, Lahore.
6 Terry unit 7 K.M., Nishat Avenue Off 22 K.M., Ferozepur
Road, Lahore.
7 Apparel unit 2 K.M., Nishat Avenue Off 22 K.M., Ferozepur
Road, Lahore.
8 Head office 7-Main Gulberg, Lahore.
9 Liaison office 1st Floor, Karachi Chambers, Hasrat Mohani
Road, Karachi.
10 Registered office Nishat House, 53 - A, Lawrence Road, Lahore.
NISHAT POWER LIMITED
Nishat Power Limited is a public limited Company incorporated in Pakistan under the repealed Companies Ordinance,
1984 (Now Companies Act, 2017) and listed on Pakistan Stock Exchange Limited. The Company is a subsidiary of
Nishat Mills Limited. The principal activity of the Company is to build, own, operate and maintain a fuel fired power
station having gross capacity of 200 MW ISO in Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. Its
126
Annual Report 2020
registered office is situated at 53-A, Lawrence Road, Lahore. Ownership interest held by non-controlling interests in
Nishat Power Limited is 48.99% (2019: 48.99%).
NISHAT LINEN (PRIVATE) LIMITED
Nishat Linen (Private) Limited, a wholly owned subsidiary of Nishat Mills Limited, is a private limited company
incorporated in Pakistan under the repealed Companies Ordinance, 1984 (Now Companies Act, 2017) on 15 March
2011. The registered office of Nishat Linen (Private) Limited is situated at 7- Main, Gulberg Lahore. The principal
objects of the Company are to operate retail outlets for sale of textile and other products and to sell the textile
products by processing the textile goods in own and outside manufacturing facility. Geographical location and
addresses of all business units are as follows:
Sr.
Business Units Address
No.
Manufacturing unit and office
1 Stitching Unit and office 21 K.M., Ferozepur Road, Lahore.
Stores
1 Nishat Emporium Mall Shop # G-26, Nishat Emporium Mall, Abdul Haque Road,
Johar Town, Lahore.
2 Swarovski-Emporium Mall Shop # KG-05, Ground Floor, Nishat Emporium Mall, Abdul
Haque Road, Johar Town, Lahore.
3 Gulberg Galleria Shop # 13, Ground Floor U/G1 & L/G2, Gulberg Galleria,
18-Main Boulevard, Gulberg III, Lahore.
4 Packages Mall Packages Mall, Walton Road, Lahore.
5 Tariq Road Plot No. 172-5, P.E.C.H.S, Block 2, Tariq Road, Karachi.
6 Wapda Town Main Boulevard, Johar Town, (Opposite Shaukat Khanum
Hospital), Lahore.
7 Fashion Avenue Fashion Avenue, Shop No. 5-7, College Block, Main
Boulevard, Allama Iqbal Town, Lahore.
8 Fair Price Shop - Karachi Plot No. CA-1-2, Ali Centre, Alfalah Cooperative Housing
Society Limited, Shah Faisal Colony, Karachi.
9 Canal West Bank Shop No. 1-3, Ground Floor Sraw Plaza, Near Muhafiz Town,
Phase 1, Canal West Bank Road, Lahore.
10 Phase IV DHA 176 DD, Commercial Area, Phase 4, DHA, Lahore.
11 Doctors Hospital 86 G/1, Johar Town (Opposite Doctors Hospital), Lahore.
12 Link Road Model Town Opposite Raja Sahib, Link Road Model Town, Lahore.
13 Mall Road Factory Outlet, 46, Mall Road, Regal Chowk, Lahore.
14 Shadman 118-Shadman, Lahore.
15 Mughalpura Ground Floor Building 9-A, Shalimar Link Road, Mughalpura,
Lahore.
16 Gulshan Ravi Factory Outlet, Shop No. 12-C, Main Boulevard Gulshan
Ravi, Lahore.
17 Thokar Niaz Baig Factory Outlet, Ground Floor, 55th Avenue, Thokar Niaz Baig,
Raiwind Road, Lahore.
18 E-Store 21 K.M., Ferozepur Road, Lahore.
19 Clifton G.F2, Jamalistan Shopping Center, DC-1, Block 8, Clifton,
Karachi.
20 Dolmen Clifton D-3, 1st Floor, Dolmen City, Block 4, Scheme 5, Clifton,
Karachi.
21 Dolmen Tariq Road SF-21, 2nd Floor, Dolmen Mall, Block 3, P.E.C.H.S., Tariq
Road, Karachi.
127

Sr.
No.
22 Dolmen Mall Hyderi 3rd Floor, Outlet No. T-5, Dolmen Mall Hyderi, Block C, North
Nazimabad, Karachi.
23 Ocean Mall Shop 250-254, 2nd Floor, Ocean Mall, Plot No. G-3,
Khyaban-e-Iqbal, Block 9, Clifton, Karachi.
24 KDA Outlet Store NL Outlet Store, 565-A, Block 3, KDA Scheme 24,
Gulshan-e-Iqbal, Karachi.
25 Mariam Heights Shop No. 2, Mariam Heights, Plot No. 1, Main
Shaheed-e-Millat Road (Opposite Naheed and Chase Super
Market), Karachi.
26 Lucky One Mall Lucky One Mall, Shop No. F-31, 1st Floor, Block 21, F.B.
Area, Main Rashid Minhas Road, Karachi.
27 Atrium Mall 1st Floor, Atrium Mall, Staff Lines, Fatima Jinnah Road,
Cantt. Karachi.
28 Millennium Mall Millennium Mall, Main Rashid Minhas Road, Adjacent
Drive-In Cinema, Gulshan-e-Iqbal, Karachi.
29 ANB Center ANB Center, Plot No. 13-V, (Behind PSO Petrol Pump) Jinnah
Super Market, F-7 Markaz, Islamabad.
30 F-10 Block No. 7, Malik Arcade, F-10 Markaz, Islamabad.
31 Centaurus Mall Shop No. 120, 1st Floor, Centaurus Shopping Mall, Jinnah
Avenue Plot No. 1, Blue Area, F-8/G-8, Islamabad.
32 Bahria Town Phase 7 Plaza 155, (Near Shaheen Chowk), Spring North, Phase 7,
Bahria Town, Islamabad.
33 PWD Ground Floor, Plaza No. 10, Main Road, Block A, PWD,
Islamabad.
34 World Trade Center World Trade Center, G.T. Road, Defence Housing Authority,
Phase II, Islamabad.
35 Awami Trade Center Awami Trade Center, Ground Floor, 31-33, G-9 Markaz,
Islamabad.
36 Adamjee Road Plot No. 5, Saddar, Adamjee Road, Rawalpindi.
37 Satellite Town Shop No. 3, Abbas Arcade, 5th Road, Satellite Town,
Commercial Market, Rawalpindi.
38 Crystal Mall Crystal Mall, Main Bosan Road, Multan.
39 Gulshan Market Factory Outlet, Shop No. 3, Block-S, 100 Feet Road,
Gulshan Market, New Multan Colony, Multan.
40 S.P Chowk Plot No. 1-A, S.P Chowk, Nusrat Road, Multan Cantt.,
Multan.
41 Masooma Shop No. 2-3, Masooma Shopping Center, Legacy Tower,
Koh-e-Noor City, Jaranwala Road, Faisalabad.
42 D-Ground 1298/B, Chen One Road, Peoples Colony No. 1, Faisalabad.
43 Gulberg Road Shop No. P-424, Jinnah Colony, Gulberg Road, Faisalabad.
44 The Boulevard Mall Shop No. 1, Ground Floor, The Boulevard Mall, Near Suzuki
Burj Motors, East Canal Road, Faisalabad.
45 Taj Shopping Center Ground Floor Taj Shopping Center, (Near National Bank)
Govt. Girls College Road, Satellite Town, Gujranwala.
46 Fazal Centre Hall No. 5, Fazal Centre, G.T. Road, Rahwali Cantt.,
Gujranwala.
47 Town Branch JB Tower, Ground Floor, University Road, Peshawar.
48 Cantt Branch Deans Trade Center, Islamia Road Cantt., Peshawar.
49 Abdullah Mall Abdullah Mall, Ground Floor, Kutchery Road, Gujrat.
50 Sialkot 97-A, Liberty Market, Aziz Shaheed Road, (Near Silver Spoon
Restaurant) Cantt., Sialkot.
128
Annual Report 2020
Sr.
No.
51 Bahawalpur Shop No. 2, Haqqi Centre, (Opposite Commissioner House)

Adjacent to DIG House, Bahawalpur.
52 Sargodha Shop No. 39, Raas Tower, Qasim Park, Opposite MCB Bank,
Main University Road, Sargodha.
53 Abbottabad Mansehra Road, Opposite Faisal Bank, Abbottabad.
54 Mardan Afaq Centre, (Opposite Premier Sugar Mills) Nowshera Road,
Mardan.
55 Sahiwal Azaan Heights, Jahaz Chowk, Sahiwal.
56 Swat Shop No. F-1 & F-2, Swat Trade Center, (Opposite Swat
Serena Hotel) Allah Chowk, Saidu Sharif, Swat.
57 Mandi Bahauddin Shop No. G9, Ground Floor, Hakim Mall, Jail Road, Mandi
Bahauddin.
58 Jhelum Shop No. 1-14, Ground Floor, Adnan Plaza, Jhelum.
59 Boulevard Mall First Floor A-14, Boulevard Mall, Auto Bhan Road, S.I.T.E.,
Hyderabad.
60 Burewala Opposite Imran Petroleum, Near Stadium Road, Multan
Road, Burewala.
61 Quetta Shop No. 1, Ground Floor, Millennium Mall, Gulistan Road,
Quetta.
62 Muzaffarabad Shop No. 1, Ground Floor, Al-Rahim Plaza, Neelum Valley
Road (Lower Plate), Muzaffarabad.
63 Sheikhupura Lower Ground, Khanjee Center, Civil Quarter Road,
Sheikhupura.
64 D.G. Khan Shop No. 48-49, Block No. 6, Sadar Bazar, Dera Ghazi Khan.
65 Rahim Yar Khan 5-Model Town, Near Town Hall, Opposite U Microfinance
Bank, Rahim Yar Khan.
66 Lalamusa Factory Outlet, Lower Ground Floor, City Mall, G.T. Road,
Lalamusa.
67 Fair Price Shop Sukheki Nishat Dairy, Sukheki.
68 Wah Cantt Shop No. 7-8 Lower Ground & Shop No. 7-8 Ground Floor,
City Centre Phase 2, New City, Wah Cantt.
69 Kasur Chandani Chowk, Plaza No. 216, Near Bank Alfalah, Railway
Road, Kasur.
70 Fair Price Shop - Lahore 21 K.M., Ferozepur Road, Lahore.
71 Fair Price Shop – Bhikhi Nishat Mills Limited, Weaving Unit Bhikhi, Sheikhupura.
72 Fair Price Shop –Faisalabad Nishat Mills Limited, Nishatabad, Faisalabad.
73 Centaurus – Inglot Shop No. 315, 3rd Floor, The Centaurus Mall, F-8,
Islamabad.
74 WTC – Inglot Shop No. 25, Hyperstar Floor Plot No. 1 Main G.T. Road DHA
Phase 2, Islamabad.
75 DMC – Inglot D-3, 1st Floor, Dolmen City, Block 4, Scheme 5, Clifton,
Karachi.
76 Emporium – Inglot Ground Floor, G-43, Emporium Mall, Lahore.
77 Swarovski Centaurus Plot No. 1, Tower A, 16th Floor, The Centaurus Mall,
Islamabad.
78 Packages – Inglot Shop No. 1065, Ist Floor, Packages Mall, Lahore.
79 Crystal Mall – Inglot Crystal Mall, Chungi No. 9, Bosan Road, Multan.
80 Sargodha – Inglot Plot No. 39, Raas Tower, Qasim Park University Road,
Sargodha.
81 Nishat Linen Tower 5-A-3, Mian Mahmood Ali Kasuri Road, Gulberg III, Lahore.
82 Factory Outlet - Lahore Karim Block, Allama Iqbal Town, Lahore.
129

Sr.
No.
83 The Mall – Karachi Shop No. 105, Ground Floor, Shanti Nagar, Main Rashid
Minhas Road, Opposite Aladin Amusement Park, Karachi.
84 Bahria Town - Rawalpindi Building 117, Civic Center, Phase 4, Bahria Town,
Rawalpindi.
85 Taj Shopping Center – Gujranwala Ground Floor, Taj Shopping Center, (Near National Bank)
Govt. Girls College Road, Satellite Town, Gujranwala.
86 Al Barkat Center – Gujranwala Shop No. 1839-A, Al Barkat Center, Near Marinate
Restaurant, G.T. Road, Gujranwala.
87 Dera Ismail Khan Opposite Liaqat Park, East Circular Road, Dera Ismail Khan.
88 Jhang 1 K.M., Faisalabad Road, Jhang Sadar.
89 Layyah Shop No. 2, College Road, Layyah.
90 Mirpur Shop No. 64, Sector F-1, Kotli Road, Mirpur Azad Kashmir.
91 Okara Tehsil Road, A-Block, Okara.
92 Hafizabad Vanike Road, Hafizabad.
93 Attock Kamra Road, near Fuel Mart CNG Station, Attock.
94 Phalia Shop No. 01, French Galleria, Gujrat Road, Phalia.
95 Boulevard Mall – Inglot Shop No. 8, The Boulevard Mall, East Canal Road, Near
Suzuki Burj Motors Showroom, Saeed Colony, Faisalabad.
96 Lucky Mall – Inglot Lucky One Mall, F-13, 1st Floor, Lucky One Mall, Rashid
Minhas Road, Karachi.
97 Swarovski – DMC Swarovski Shop No. 11A, Ground Floor, World Trade Center,
Islamabad.
98 Nishat Linen Tower – Inglot 5-A-3, Mian Mahmood Ali Kasuri Road, Gulberg III, Lahore.
99 Nishat Linen Tower – Swarovski 5-A-3, Mian Mahmood Ali Kasuri Road, Gulberg III, Lahore.
100 Swarovski-WTC Shop No. 11A, Ground Floor, World Trade Center, Islamabad.
101 Faisalabad Swarovski Shop No. G-10, Ground Floor, The Boulevard Shopping Mall,
East Canal Road, Faisalabad.
102 North Nazimabad Karachi Plot No. D-10/A, Block H, Main Khayaban-e-Sher Shah Suri,
North Nazimabad, Karachi.
103 Hyderabad Shop No. 23-A, Unit 3, Main Auto Bhan Road, Hyderabad.
104 Mianwali Shop No.3, Fahad Plaza, College Road, Mianwali.
105 Vehari Shop No.1, Ground and First Floor, Mall of Vehari, Hasilpur
Road, Vehari.
106 Daska Shop No.1, College Road, Daska.
107 Chandni Chowk Plot No. 221/B, 4th Road, Adjacent to KFC, Chandni Chowk,
Satellite Town, Rawalpindi.
108 Gojra Opposite Paradise City, Jhang Road, Gojra.
109 Sahiwal Shop No.1, Girls College Road, Sahiwal.
110 Haripur Akhtar Nawaz Plaza, Main Haripur Road, Haripur.
NISHAT HOSPITALITY (PRIVATE) LIMITED
Nishat Hospitality (Private) Limited, a wholly owned subsidiary of Nishat Mills Limited, is a private limited company
incorporated in Pakistan under the repealed Companies Ordinance, 1984 (Now Companies Act, 2017) on 01 July
2011. The registered office of Nishat Hospitality (Private) Limited is situated at 1-B Aziz Avenue, Canal Bank,
Gulberg-V, Lahore. The principal business place of the Company is situated at 9-A, Mian Mehmood Ali Kasuri Road,
Gulberg-III, Lahore. The principal activity of the Company is to carry on the business of hotels, cafes, restaurants and
lodging or apartment houses, bakers and confectioners in Pakistan and outside Pakistan.
NISHAT USA, INC.
Nishat USA, Inc. is a foreign subsidiary incorporated under the Business Corporation Laws of the State of New York.
130
Annual Report 2020
The registered office of Nishat USA, Inc. is situated at 676 Broadway, New York, NY 10012, U.S.A. The principal
business of the Company is to provide marketing services to Nishat Mills Limited - Holding Company. Nishat Mills
Limited acquired 100% shareholding of Nishat USA, Inc. on 01 October 2008.
NISHAT LINEN TRADING LLC
Nishat Linen Trading LLC is a limited liability company formed in pursuance to statutory provisions of the United Arab
Emirates (UAE) Federal Law No. (8) of 1984 as amended and registered with the Department of Economic
Development, Government of Dubai. Nishat Linen Trading LLC is a subsidiary of Nishat Mills Limited as Nishat Mills
Limited, through the powers given to it under Article 11 of the Memorandum of Association, exercise full control on
the management of Nishat Linen Trading LLC. Date of incorporation of the Company was 29 December 2010. The
registered office of Nishat Linen Trading LLC is situated at P.O. Box 28189 Dubai, UAE. The principal business of
Nishat Linen Trading LLC is to operate retail outlets in UAE for sale of textile and related products. The registered
address of Nishat Linen Trading LLC in U.A.E. is located at Shop No. SC 128, Dubai Festival City, P.O. Box 28189
Dubai, United Arab Emirates and the branches are located at:
Sr. No. Business Units
1 Dubai Outlet Mall, Al Ain street, Dubai, United Arab Emirates.

2 Shop No. 3, Al Souq Al Kabeer AB, Dubai, United Arab Emirates.
3 Unit No. M-101C, Oasis Center Mall, Dubai, United Arab Emirates.
4 Unit No. 1543, Arabian Centre, Dubai, United Arab Emirates.
5 FC 34, Al Ghurair Mall, Dubai, United Arab Emirates.
6 Shop No. F232-F233, 2nd Floor, Mega Mall, Sharjah, United Arab Emirates.
7 Al Wahda Sports Cultural Club Building, East 19, 0, Abu Dhabi, United Arab Emirates.
8 Shop No. F-39A, Al Ain Mall, Abu Dhabi, United Arab Emirates.
9 Baniyas Sports Club, Wahda C5D, 0, Baniyas East 2-6, Abu Dhabi, United Arab Emirates.
10 Shop No. U-029, 1st Floor, City Centre, Al Nahda Street, Sharjah, United Arab Emirates.
11 International Capital Trading LLC Building, West 9, 0, Abu Dhabi Island, United Arab Emirates.
NISHAT INTERNATIONAL FZE
Nishat International FZE is incorporated as free zone establishment with limited liability in accordance with the Law
No. 9 of 1992 and licensed by the Registrar of Jebel Ali Free Zone Authority. Nishat International FZE is a wholly owned
subsidiary of Nishat Mills Limited. Date of incorporation of the Company was 07 February 2013. The registered office
of Nishat International FZE is situated at P.O. Box 114622, Jebel Ali Free Zone, Dubai. The principal business of the
Company is trading in textile and related products.
NISHAT GLOBAL CHINA COMPANY LIMITED
Nishat Global China Company Limited is a Company incorporated in People's Republic of China on 25 November
2013. It is a wholly owned subsidiary of Nishat International FZE which is a wholly owned subsidiary of Nishat Mills
Limited. The primary function of Nishat Global China Company Limited is to competitively source products for the
retail outlets operated by Group companies in Pakistan and the UAE. The registered office of Nishat Global China
Company Limited is situated at N801, No. 371-375 East Huanshi Road, Yuexiu District, Guangzhou City, China.
NISHAT COMMODITIES (PRIVATE) LIMITED
Nishat Commodities (Private) Limited is a private limited Company incorporated in Pakistan on 16 July 2015 under the
repealed Companies Ordinance, 1984 (Now Companies Act, 2017). It is a wholly owned subsidiary of Nishat Mills
Limited. Its registered office is situated at 53-A, Lawrence Road, Lahore. The principal object of the Company is to
carry on the business of trading of commodities including fuels, coals, building material in any form or shape
manufactured, semi-manufactured, raw materials and their import and sale in Pakistan. Geographical location and
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addresses of all business units are as follows:
Sr. No. Business units Address
1 Head office 5 K.M., Nishat Avenue, Off 22 K.M., Ferozepur Road, Lahore.
2 Warehouse Plot 36/2, 1-C/1-1 and 1-C/2-1, Phase II, Mauripur Hawksbay Industrial Area,
Karachi.
3 Sub-office 1st Floor, Chamber Hasrat Mohani Road, Karachi.
4 Registered office Nishat House, 53 – A, Lawrence Road, Lahore.
LALPIR SOLAR POWER (PRIVATE) LIMITED
Lalpir Solar Power (Private) Limited is a private limited Company incorporated in Pakistan on 19 November 2015 under
the repealed Companies Ordinance, 1984 (Now Companies Act, 2017). It is a wholly owned subsidiary of Nishat
Power Limited which is a subsidiary of Nishat Mills Limited. Its registered office is situated at 53-A, Lawrence Road,
Lahore. The principal activity of the Company is to build, own, operate and maintain or invest in a solar PV power
project having gross capacity upto 20 MWp. The Company achieved various milestones like approval of feasibility
study, No Objection Certificate (NOC) from Environmental Protection Agency (EPA), approval of Grid Interconnection
Study (GIS) from Multan Electric Power Company Limited (MEPCO) and from National Transmission and Despatch
Company Limited (NTDCL). Further, consent for purchasing power from the project have also been provided by
MEPCO. Generation Licence No. SPGL/26/2018 has been granted by National Electric Power Regulatory Authority
(NEPRA) to the Company for its 11.120 MW Solar PV Power Project located at Mauza Verar, Sipra Mehmood Kot,
District Muzaffargarh, in the province of Punjab, pursuant to Section 14(B) of the Regulation of Generation,
Transmission and Distribution of Electric Power Act, 1997 / Amendment Act, 2018. The upfront solar tariff announced
by NEPRA expired on 30 June 2016.
The management of the Company continuously tried its best to get Power Acquisition Request and Consent to
Procure Power from Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) so that development of the
project can be moved forward. However, CPPA-G informed the Company that Ministry of Energy has conveyed the
Cabinet Committee on Energy (CCOE) decision to CPPA-G and further sent a list of 145 projects as approved by the
Cabinet for necessary action. The CPPA-G stated that power project of the Company is not included in the list of 145
projects, therefore, CPPA-G is of the view that request of the Company cannot be entertained. Furthermore, during
the year Alternate Energy Development Board (AEDB) informed that Solar PV Power Project of the Company is placed
under category Ill of the decision of the Cabinet Committee on Energy (CCoE). All category-Ill projects are allowed by
the CCoE to proceed ahead subject to becoming successful in the competitive bidding process to be undertaken by
AEDB, based on the quantum ascertained for each technology by Indicative Generation Capacity Expansion Plan
(IGCEP) by NTDCL.
The management of the Company understand that to-date, no such competitive bidding process has been
undertaken even the IGCEP has not been finalized to-date. The response of CPPA-G and AEDB have made the Solar
PV Power Project of the Company more complicated. Hence, voluntary winding up of the Company under the
Companies Act, 2017 is being considered.
In view of the aforesaid reasons, the Company is not considered a going concern
LIQUIDATION OF NISHAT UK (PRIVATE) LIMITED AND CONCEPT GARMENTS AND TEXTILE TRADING FZE
During the previous year, the management of Nishat International FZE, pursuant to resolution of board of directors of
Nishat Mills Limited dated 26 February 2019 and 26 April 2019 respectively, decided to liquidate Nishat UK (Private)
Limited and Concept Garments and Textile Trading FZE. During the current year, Nishat UK (Private) Limited and
Concept Garments and Textile Trading FZE were liquidated on 23 July 2019 and 26 December 2019 respectively.
b) Significant restrictions
Cash and bank balances held in foreign countries are subject to local exchange control regulations. These
regulations provide for restrictions on exporting capital from these countries, other than through normal
dividends. The carrying amount of these assets included within the consolidated financial statements to which
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these restrictions apply is Rupees 410.121 million (2019: Rupees 507.654 million).
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these consolidated financial statements are set
out below. These policies have been consistently applied to all years presented, unless otherwise stated:
2.1 Basis of preparation
a) Statement of compliance
These consolidated financial statements have been prepared in accordance with the accounting
and reporting standards as applicable in Pakistan. The accounting and reporting standards
applicable in Pakistan comprise of:
- International Financial Reporting Standards (IFRSs) issued by the International Accounting

Standards Board (IASB) as notified under the Companies Act, 2017; and
- Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs, the
provisions of and directives issued under the Companies Act, 2017 have been followed.
b) Accounting convention
These consolidated financial statements have been prepared under the historical cost convention
except as otherwise stated in the respective accounting policies.
c) Critical accounting estimates and judgments
The preparation of these consolidated financial statements in conformity with the approved
accounting standards requires the use of certain critical accounting estimates. It also requires the
management to exercise its judgment in the process of applying the accounting policies. Estimates
and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The areas where various assumptions and estimates are significant to the consolidated financial
statements or where judgments were exercised in application of accounting policies are as follows:
Financial instruments – fair value
The fair value of financial instruments that are not traded in an active market is determined by using
valuation techniques based on assumptions that are dependent on conditions existing at the
reporting date.
Useful lives, patterns of economic benefits and impairment
Estimates with respect to residual values and useful lives and pattern of flow of economic benefits
are based on the analysis of the management. Further, the Group reviews the value of assets for
possible impairment on an annual basis. Any change in the estimates in the future might affect the
carrying amount of respective item of property, plant and equipment and investment properties with
a corresponding effect on the depreciation charge and impairment.
Inventories
Inventory write-down is made based on the current market conditions, historical experience and
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selling goods of similar nature. It could change significantly as a result of changes in market
conditions. A review is made on each reporting date on inventories for excess inventories,
obsolescence and declines in net realisable value and an allowance is recorded against the
inventory balances for any such declines.
Income tax
In making the estimates for income tax currently payable by the Group, the management takes into
account the current income tax law and the decisions of appellate authorities on certain issues in the
past.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience and historical collection rates.
Provisions
As the actual outflows can differ from estimates made for provisions due to changes in laws,
regulations, public expectations, technology, prices and conditions, and can take place many years
in the future, the carrying amounts of provisions are reviewed at each reporting date and adjusted to
take account of such changes. Any adjustments to the amount of previously recognised provision is
recognised in the consolidated statement of profit or loss unless the provision was originally
recognised as part of cost of an asset.
Revenue from contracts with customers involving sale of goods
When recognizing revenue in relation to the sale of goods to customers, the key performance
obligation of the Group is considered to be the point of delivery of the goods to the customer, as this
is deemed to be the time that the customer obtains control of the promised goods and therefore the
benefits of unimpeded access.
Impairment of investments in equity method accounted for associates
In making an estimate of recoverable amount of the Group's investments in equity method

accounted for associates, the management considers future cash flows.
d) Standard, interpretations and amendments to published approved accounting standards that

are effective in current year and are relevant to the Group
Following standard, interpretation and amendments to published approved accounting standards

are mandatory for the Group's accounting periods beginning on or after 01 July 2019:
• IFRS 16 ‘Leases’
• IFRS 9 (Amendments) ‘Financial Instruments’
• IAS 28 (Amendments) ‘Investments in Associates and Joint Ventures’
• IFRIC 23 ‘Uncertainty over Income Tax Treatments’
• IASB’s Annual Improvements to IFRSs: 2015 – 2017 Cycle
The Group had to change its accounting policies and make certain adjustments without restating
prior year results following the adoption of IFRS 16. These are disclosed in note 2.10 to these
consolidated financial statements. Most of the other amendments listed above did not have any
impact on the amounts recognised in prior periods and are not expected to significantly affect the
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current or future periods.
e) Standard and amendments to published approved accounting standards that are effective in
current year but not relevant to the Group
There are other standard and amendments to published standards that are mandatory for
accounting period beginning on or after 01 July 2019 but are considered not to be relevant or do not
have any significant impact on the Group's financial statements and are therefore not detailed in
these consolidated financial statements.
f) Amendments to published approved accounting standards that are not yet effective but
relevant to the Group
Following amendments to existing standards have been published and are mandatory for the
Group’s accounting periods beginning on or after 01 July 2020 or later periods:
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8 ‘Accounting Policies,

Changes in Accounting Estimates and Errors’ (effective for annual periods beginning on or after 01
January 2020). The amendments are intended to make the definition of material in IAS 1 easier to
understand and are not intended to alter the underlying concept of materiality in IFRS. In addition,
the IASB has also issued guidance on how to make materiality judgements when preparing general
purpose financial statements in accordance with IFRS.
On 29 March 2018, the International Accounting Standards Board (the IASB) has issued a revised
Conceptual Framework. The new Framework: reintroduces the terms stewardship and prudence;
introduces a new asset definition that focuses on rights and a new liability definition that is likely to
be broader than the definition it replaces, but does not change the distinction between a liability and
an equity instrument; removes from the asset and liability definitions references to the expected flow
of economic benefits–this lowers the hurdle for identifying the existence of an asset or liability and
puts more emphasis on reflecting uncertainty in measurement; discusses historical cost and current
value measures, and provides some guidance on how the IASB would go about selecting a
measurement basis for a particular asset or liability; states that the primary measure of financial
performance is profit or loss, and that only in exceptional circumstances will the IASB use other
comprehensive income and only for income or expenses that arise from a change in the current
value of an asset or liability; and discusses uncertainty, derecognition, unit of account, the reporting
entity and combined financial statements. The Framework is not an IFRS standard and does not
override any standard, so nothing will change in the short term. The revised Framework will be used
in future standard-setting decisions, but no changes will be made to current IFRS. Preparers might
also use the Framework to assist them in developing accounting policies where an issue is not
addressed by an IFRS. It is effective for annual periods beginning on or after 1 January 2020 for
preparers that develop an accounting policy based on the Framework.
Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business

combinations for which the acquisition date is on or after the beginning of annual period beginning
on or after 1 January 2020). The International Accounting Standards Board (IASB) has issued
amendments aiming to resolve the difficulties that arise when an entity determines whether it has
acquired a business or a group of assets. The amendments clarify that to be considered a business,
an acquired set of activities and assets must include, at a minimum, an input and a substantive
process that together significantly contribute to the ability to create outputs. The amendments
include an election to use a concentration test. The standard is effective for transactions in the future
and therefore would not have an impact on past consolidated financial statements.
Interest Rate Benchmark Reform which amended IFRS 9 ‘Financial Instruments’, IAS 39 ‘Financial
Instruments: Recognition and Measurement’ and IFRS 7 ‘Financial Instruments: Disclosures’ is
applicable for annual financial periods beginning on or after 1 January 2020. The G20 asked the
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Financial Stability Board (FSB) to undertake a fundamental review of major interest rate
benchmarks. Following the review, the FSB published a report setting out its recommended reforms
of some major interest rate benchmarks such as IBORs. Public authorities in many jurisdictions have
since taken steps to implement those recommendations. This has in turn led to uncertainty about
the long-term viability of some interest rate benchmarks. In these amendments, the term interest
rate benchmark reform' refers to the market-wide reform of an interest rate benchmark including its
replacement with an alternative benchmark rate, such as that resulting from the FSB's
recommendations set out in its July 2014 report 'Reforming Major Interest Rate Benchmarks' (the
reform). The amendments made provide relief from the potential effects of the uncertainty caused by
the reform. An entity shall apply the exceptions to all hedging relationships directly affected by
interest rate benchmark reform.
Classification of liabilities as current or non-current (Amendments to IAS 1 ‘Presentation of Financial

Statements’) effective for the annual period beginning on or after 1 January 2022. These
amendments in the standards have been added to further clarify when a liability is classified as
current. The standard also amends the aspect of classification of liability as non-current by requiring
the assessment of the entity’s right at the end of the reporting period to defer the settlement of
liability for at least twelve months after the reporting period. An entity shall apply those amendments
retrospectively in accordance with IAS 8 ‘Accounting Policies, Changes in Accounting Estimates
and Errors’.
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37 ‘Provisions, Contingent

Liabilities and Contingent Assets’) effective for the annual period beginning on or after 1 January
2022 amends IAS 1 ‘Presentation of Financial Statements’ by mainly adding paragraphs which
clarifies what comprise the cost of fulfilling a contract. Cost of fulfilling a contract is relevant when
determining whether a contract is onerous. An entity is required to apply the amendments to
contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting
period in which it first applies the amendments (the date of initial application). Restatement of
comparative information is not required, instead the amendments require an entity to recognize the
cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings or other component of equity, as appropriate, at the date of initial application.
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16 ‘Property,
Plant and Equipment’) effective for the annual period beginning on or after 1 January 2022. Clarifies
that sales proceeds and cost of items produced while bringing an item of property, plant and
equipment to the location and condition necessary for it to be capable of operating in the manner
intended by management e.g. when testing etc, are recognized in profit or loss in accordance with
applicable Standards. The entity measures the cost of those items applying the measurement
requirements of IAS 2 ‘Inventories’. The standard also removes the requirement of deducting the net
sales proceeds from cost of testing. An entity shall apply those amendments retrospectively, but
only to items of property, plant and equipment that are brought to the location and condition
necessary for them to be capable of operating in the manner intended by management on or after
the beginning of the earliest period presented in the consolidated financial statements in which the
entity first applies the amendments. The entity shall recognize the cumulative effect of initially
applying the amendments as an adjustment to the opening balance of retained earnings (or other
component of equity, as appropriate) at the beginning of that earliest period presented.
The following annual improvements to IFRS standards 2018-2020 are effective for annual reporting
periods beginning on or after 1 January 2022.
- IFRS 9 ‘Financial Instruments’ – The amendment clarifies that an entity includes only fees paid
or received between the entity (the borrower) and the lender, including fees paid or received by
either the entity or the lender on the other’s behalf, when it applies the ‘10 per cent’ test in
paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability.
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- IFRS 16 ‘Leases’ – The amendment partially amends Illustrative Example 13 accompanying IFRS
16 ‘Leases’ by excluding the illustration of reimbursement of leasehold improvements by the
lessor. The objective of the amendment is to resolve any potential confusion that might arise in
lease incentives.
The above amendments and improvements do not have a material impact on the consolidated
g) Standards and amendments to approved published standards that are not yet effective and
not considered relevant to the Group
There are other standards and amendments to published standards that are mandatory for
accounting periods beginning on or after 01 July 2020 but are considered not to be relevant or do
not have any significant impact on the Group's financial statements and are therefore not detailed in
2.2 Consolidation
a) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The assets and liabilities of Subsidiary Companies have been consolidated on a line by line basis
and carrying value of investments held by the Holding Company is eliminated against Holding
Company's share in paid up capital of the Subsidiary Companies.
Intragroup balances and transactions have been eliminated.
Non-controlling interests are that part of net results of the operations and of net assets of Subsidiary
Companies attributable to interest which are not owned by the Holding Company. Non-controlling
interests are presented as separate item in the consolidated financial statements.
b) Associates
Associates are all entities over which the Group has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method of accounting, after
initially being recognised at cost.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in
profit or loss, and the Group’s share of movements in other comprehensive income of the investee
in other comprehensive income. Dividends received or receivable from associates are recognised as
a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest
in the entity, including any other unsecured long-term receivables, the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent
of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of equity
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accounted investees have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Investments in equity method accounted for associates are tested for impairment in accordance
with the provision of IAS 36 `Impairment of Assets`.
c) Translation of the financial statements of foreign subsidiaries
The financial statements of foreign subsidiaries of which the functional currency is different from that
used in preparing the Group's financial statements are translated in functional currency of the
Group. Statement of financial position items are translated at the exchange rate at the reporting date
and statement of profit or loss items are converted at the average rate for the period. Any resulting
translation differences are recognized under exchange translation reserve in consolidated reserves.
2.3 Employee benefit
The Group operates approved funded provident fund scheme covering all permanent employees. Equal
monthly contributions are made both by the employer and employees to the fund. The employer's
contributions to the fund are charged to consolidated statement of profit or loss.
2.4 Taxation
Current
Provision for current tax is based on the taxable income for the year determined in accordance with the
prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or
tax rates expected to apply to the profit for the year if enacted. The charge for current tax also includes
adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years.
The profits and gains of Nishat Power Limited - Subsidiary Company derived from electric power
generation are exempt from tax in terms of Clause (132) of Part I of the Second Schedule to the Income
Tax Ordinance, 2001, subject to the conditions and limitations provided therein. Under Clause 11(v) of
Part IV of the Second Schedule to the Income Tax Ordinance, 2001, the Subsidiary Company is also
exempt from levy of minimum tax on 'turnover' under section 113 of the Income Tax Ordinance, 2001.
However, full provision is made in the consolidated statement of profit or loss on income from sources
not covered under the above clauses at current rates of taxation after taking into account, tax credits and
rebates available, if any.
Provision for income tax on the income of foreign subsidiaries - Nishat USA, Inc. and Nishat Global China
Company Limited is computed in accordance with the tax legislation in force in the country where the
income is taxable.
Deferred
Deferred tax is accounted for using the liability method in respect of all temporary differences arising from
differences between the carrying amount of assets and liabilities in the consolidated financial statements
and the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are
generally recognized for all taxable temporary differences and deferred tax assets to the extent that it is
probable that taxable profits will be available against which the deductible temporary differences, unused
tax losses and tax credits can be utilized.
Deferred tax is calculated at the rates that are expected to apply to the period when the differences
reverse based on tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in the consolidated statement of profit or loss, except to the extent
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Annual Report 2020
that it relates to items recognized in other comprehensive income or directly in equity. In this case the tax
is also recognized in other comprehensive income or directly in equity, respectively.
Nishat Power Limited - Subsidiary Company has not made provision for deferred tax as the Subsidiary
Company's management believes that the temporary differences will not reverse in the foreseeable future
due to the fact that the profits and gains of the Company derived from electric power generation are
exempt from tax subject to the conditions and limitations provided for in terms of Clause 132 of Part I of
the Second Schedule to the Income Tax Ordinance, 2001.
2.5 Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest
in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and
the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in
the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at least annually.
2.6 Foreign currencies
These consolidated financial statements are presented in Pak Rupees, which is the Group’s functional
currency. All monetary assets and liabilities denominated in foreign currencies are translated into Pak
Rupees at the rates of exchange prevailing at the reporting date, while the transactions in foreign
currencies (except the results of foreign operation which are translated to Pak Rupees at the average rate
of exchange for the year) during the year are initially recorded in functional currency at the rates of
exchange prevailing at the transaction date. All non-monetary items are translated into Pak Rupees at
exchange rates prevailing on the date of transaction or on the date when fair values are determined.
Exchange gains and losses are recorded in the consolidated statement of profit or loss.
2.7 Property, plant, equipment and depreciation
Property, plant and equipment except freehold land and capital work-in-progress are stated at cost less
accumulated depreciation and accumulated impairment losses (if any). Cost of property, plant and
equipment consists of historical cost, borrowing cost pertaining to erection / construction period of
qualifying assets and other directly attributable costs of bringing the asset to working condition. Freehold
land and capital work-in-progress are stated at cost less any recognized impairment loss.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are
charged to consolidated statement of profit or loss during the period in which they are incurred. Major
spare parts and stand-by equipment qualify as property, plant and equipment when an entity expects to
use them for more than one year. Transfers are made to relevant operating fixed assets category as and
when such items are available for use.
Depreciation
Depreciation on property, plant and equipment is charged to consolidated statement of profit or loss
applying the reducing balance method, except in case of Nishat Power Limited and Nishat Linen Trading
LLC (Subsidiary Companies), where this accounting estimate is based on straight line method, so as to
write off the cost / depreciable amount of the assets over their estimated useful lives at the rates given in
Note 15.1. The depreciation is charged on additions from the date when the asset is available for use and
on deletions upto the date when the asset is de-recognized. The residual values and useful lives are
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reviewed by the management, at each financial year end and adjusted if impact on depreciation is
significant.
De-recognition
An item of property, plant and equipment is de-recognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is
included in the consolidated statement of profit or loss in the year the asset is de-recognized.
2.8 Investment properties
Land and buildings held for capital appreciation or to earn rental income are classified as investment
properties. Investment properties except land, are stated at cost less accumulated depreciation and any
recognized impairment loss. Land is stated at cost less any recognized impairment loss (if any).
Depreciation is charged to consolidated statement of profit or loss applying the reducing balance method
so as to write off the cost of buildings over its estimated useful lives at a rate of 10% per annum.
2.9 Intangible assets
Amortization on additions to intangible assets is charged from the date when the asset is acquired or
capitalized upto the date when the asset is de-recognized.
2.10 IFRS 16 “Leases”
The Group has adopted IFRS 16 from 01 July 2019. The standard replaces IAS 17 'Leases' and for
lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognized in
the consolidated statement of financial position. Straight-line operating lease expense recognition is
replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an
interest expense on the recognized lease liabilities (included in finance costs). In the earlier periods of the
lease, the expenses associated with the lease under IFRS 16 will be higher when compared to lease
expenses under IAS 17, as the operating expense is now replaced by interest expense and depreciation
in the consolidated statement of profit or loss. For classification within the consolidated statement of
cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease
payments are separately disclosed in financing activities. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases.
Impact of adoption
IFRS 16 has been adopted using the modified retrospective approach and as such the comparatives
have not been restated. The impacts of adoption as at 01 July 2019 are as follows:
Rupees in thousand
Right-of-use assets increased by 2,023,428

Short term prepayments decreased by 91,756
Lease liability increased by 1,931,672
Right-of-use assets
A right-of-use asset is recognized at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any initial
direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected
to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
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Right-of-use assets are depreciated on a straight line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is shorter. Where the Group expects to obtain ownership of
the leased asset at the end of the lease term, the depreciation is charged over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any re-measurement of lease liabilities.
The Group has elected not to recognize a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on
these assets are charged to income as incurred.
Lease liabilities
A lease liability is recognized at the commencement date of a lease. The lease liability is initially
recognized at the present value of the lease payments to be made over the term of the lease, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid
under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are re-measured if there is a change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is re-measured, an adjustment is made to the corresponding
right-of-use asset, or to consolidated statement of profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Nishat Power Limited - Subsidiary Company has a Power Purchase Agreement (PPA) with its sole
customer, National Transmission and Despatch Company Limited (NTDC) for twenty-five years which
commenced from 09 June 2010. SECP through SRO 986(I)/2019 dated 02 September 2019, has granted
exemption from the requirements of IFRS 16 to all companies to the extent of their power purchase
agreements executed before 01 January 2019. Therefore, IFRS 16 will not have any impact on the
consolidated financial statements to the extent of power purchase agreement of Nishat Power Limited -
Subsidiary Company.
Under IFRS 16, the consideration required to be made by the lessee for the right to use the asset is to be
accounted for as a finance lease. Nishat Power Limited - Subsidiary Company’s power plant’s control
due to purchase of total output by NTDC appears to fall under the scope of finance lease under IFRS 16.
Consequently, if Nishat Power Limited - Subsidiary Company was to follow IFRS 16 with respect to its
power purchase agreement, the effect on these consolidated financial statements would be as follows:
2020 2019
De-recognition of property, plant and equipment (9,132,804) (9,635,568)
De-recognition of trade debts (6,065,065) (5,510,129)
Recognition of lease debtor 9,738,063 11,556,096
Decrease in un-appropriated profit at the beginning of the year (3,589,601) (2,146,101)

Decrease in profit for the year (1,870,405) (1,443,500)
Decrease in un-appropriated profit at the end of the year (5,460,006) (3,589,601)
141

2.11 Investments and other financial assets
a) Classification
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and
• those to be measured at amortized cost
The classification depends on the Group's business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business
model in which the investment is held. For investments in equity instruments, this will depend on
whether the Group has made an irrevocable election at the time of initial recognition to account for
the equity investment at fair value through other comprehensive income. The Group reclassifies debt
investments when and only when its business model for managing those assets changes.
b) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value
through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group's business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Group classifies its debt instruments:
Amortized cost
Financial assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in other income using the effective interest rate method. Any
gain or loss arising on derecognition is recognised directly in profit or loss and presented in other
income / (other expenses) together with foreign exchange gains and losses. Impairment losses are
presented as separate line item in the consolidated statement of profit or loss.
Financial assets that are held for collection of contractual cash flows and for selling the financial
assets, where the assets’ cash flows represent solely payments of principal and interest, are
measured at FVTOCI. Movements in the carrying amount are taken through other comprehensive
income, except for the recognition of impairment losses (and reversal of impairment losses), interest
income and foreign exchange gains and losses which are recognised in profit or loss. When the
financial asset is derecognised, the cumulative gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss and recognised in other income /
(other expenses). Interest income from these financial assets is included in other income using the
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Annual Report 2020
effective interest rate method. Foreign exchange gains and losses are presented in other income /
(other expenses) and impairment losses are presented as separate line item in the consolidated
statement of profit or loss.
Fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. A gain or
loss on a debt instrument that is subsequently measured at FVTPL is recognised in profit or loss and
presented net within other income / (other expenses) in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value for financial instruments quoted in
an active market, the fair value corresponds to a market price (level 1). For financial instruments that are
not quoted in an active market, the fair value is determined using valuation techniques including
reference to recent arm’s length market transactions or transactions involving financial instruments which
are substantially the same (level 2), or discounted cash flow analysis including, to the greatest possible
extent, assumptions consistent with observable market data (level 3).
Where the Group's management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification of fair value
gains and losses to profit or loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVTOCI are not reported separately from other changes in fair value.
Fair value through profit or loss
Changes in the fair value of equity investments at fair value through profit or loss are recognised in
other income / (other expenses) in the consolidated statement of profit or loss as applicable.
Dividends from such investments continue to be recognised in profit or loss as other income when the
Group's right to receive payments is established.
2.12 Financial liabilities – classification and measurement
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured
at amortized cost using the effective interest method. Interest expense and foreign exchange gains and
losses are recognized in consolidated statement of profit or loss. Any gain or loss on de-recognition is
also included in profit or loss.
2.13 Impairment of financial assets
The Group assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVTOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade debts other than those due from the Government of Pakistan and other receivables, the Group
applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
143

2.14 De-recognition of financial assets and financial liabilities
a) Financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred, or it
neither transfers nor retains substantially all of the risks and rewards of ownership and does not
retain control over the transferred asset. Any interest in such derecognized financial assets that is
created or retained by the Group is recognized as a separate asset or liability.
b) Financial liabilities
The Group derecognizes a financial liability (or a part of financial liability) from its consolidated
statement of financial position when the obligation specified in the contract is discharged or
cancelled or expires.
2.15 Offsetting of financial instruments
Financial assets and financial liabilities are set off and the net amount is reported in the consolidated
financial statements when there is a legal enforceable right to set off and the Group intends either to settle
on a net basis or to realize the assets and to settle the liabilities simultaneously.
2.16 Inventories
Inventories, except for stock in transit and waste stock / rags are stated at lower of cost and net realizable
value. Cost is determined as follows:
Stores, spare parts and loose tools
Useable stores, spare parts and loose tools are valued principally at moving average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice value
plus other charges paid thereon.
Stock-in-trade
Cost of raw material, work-in-process and finished goods is determined as follows:
i) For raw materials: Annual average basis.

ii) For work-in-process and finished goods: Average manufacturing cost including a portion of
production overheads.
Materials in transit are valued at cost comprising invoice value plus other charges paid thereon. Waste
stock / rags are valued at net realizable value.
Net realizable value signifies the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make a sale.
2.17 Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables
generally do not include amounts over due by 365 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
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Annual Report 2020
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
However, in respect of companies holding financial assets due from the Government of Pakistan, SECP
through SRO 985(I)/2019 dated 02 September 2019 has notified that the requirements contained in IFRS
9 with respect to application of expected credit losses method shall not be applicable till 30 June 2021
and that such companies shall follow relevant requirements of IAS 39 in respect of above referred
financial assets during the exemption period.
2.18 Non–current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount
is to be recovered principally through a sale transaction and a sale is considered highly probable. They
are stated at the lower of carrying amount and fair value less costs to sell.
2.19 Borrowings
Financing and borrowings are initially recognized at fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortized cost using the effective interest
method.
2.20 Borrowing cost
Interest, mark-up and other charges on finances are capitalized up to the date of commissioning of
respective qualifying assets acquired out of the proceeds of such finances. All other interest, mark-up
and other charges are recognized in consolidated statement of profit or loss.
2.21 Share capital
Ordinary shares are classified as equity and recognized at their face value. Incremental costs directly
attributable to the issuance of new shares are shown in equity as a deduction, net of tax, if any.
2.22 Trade and other payables
Liabilities for trade and other amounts payable are initially recognized at fair value, which is normally the
transaction cost.
2.23 Revenue from contracts with customers
i) Revenue recognition
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control
of the goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered
based on either a fixed price or an hourly rate.
Interest
Interest income is recognised as interest accrues using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income over
145

the relevant period using the effective interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term.
Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are
recognised as income in the period when earned.
Sale of electricity
Revenue from the sale of electricity to NTDC, the sole customer of Nishat Power Limited –
Subsidiary Group, is recorded on the following basis:
Capacity revenue is recognized based on the capacity made available to NTDC; and Energy revenue
is recognized based on the Net Electrical Output (NEO) delivered to NTDC.
Capacity and Energy revenue is recognized based on the rates determined under the mechanism
laid down in the Power Purchase Agreement.
Dividend
Dividend on equity investments is recognized when right to receive the dividend is established.
Hotel business
Revenue from hotel ownership comprises amounts earned in respect of rental of rooms, food and
beverage sales, and other ancillary services and goods supplied by the Group. For each of the
revenue streams, the Group recognizes revenue over time or at a point in time specifically after the
performance obligation of transfer of goods or services to the customer has been fulfilled. Revenue
is recognized over the period when rooms are occupied or services are performed. Revenue from
sale of food and beverages and goods is recognized at the point of sale when the food and
beverages and goods are delivered to customers. Payment is due immediately when the hotel
guests occupies the room and receives the services and goods.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
ii) Contract assets
Contract assets arise when the Group performs its performance obligations by transferring goods to
a customer before the customer pays its consideration or before payment is due. Contract assets
are treated as financial assets for impairment purposes.
iii) Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to
obtaining a contract with a customer and are expected to be recovered. Customer acquisition costs
are amortised on a straight-line basis over the term of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was
obtained or which are not otherwise recoverable from a customer are expensed as incurred to profit
or loss. Incremental costs of obtaining a contract where the contract term is less than one year is
immediately expensed to profit or loss.
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Annual Report 2020
iv) Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs
relate directly to the contract or specifically identifiable proposed contract; (ii) the costs generate or
enhance resources of the Group that will be used to satisfy future performance obligations; and (iii)
the costs are expected to be recovered. Customer fulfilment costs are amortised on a straight-line
basis over the term of the contract.
v) Right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an
estimate of customers who may exercise their right to return the goods and claim a refund. Such
rights are measured at the value at which the inventory was previously carried prior to sale, less
expected recovery costs and any impairment.
vi) Contract liabilities
Contract liability is the obligation of the Group to transfer goods to a customer for which the Group
has received consideration from the customer. If a customer pays consideration before the Group
transfers goods, a contract liability is recognized when the payment is made. Contract liabilities are
recognized as revenue when the Group performs its performance obligations under the contract.
vii) Refund liabilities
Refund liabilities are recognised where the Group receives consideration from a customer and
expects to refund some, or all, of that consideration to the customer. A refund liability is measured
at the amount of consideration received or receivable for which the Group does not expect to be
entitled and is updated at the end of each reporting period for changes in circumstances. Historical
data is used across product lines to estimate such returns at the time of sale based on an expected
value methodology.
2.24 Provisions
Provisions are recognized when the Group has a legal or constructive obligation as a result of past events
and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligations and a reliable estimate of the amount can be made.
2.25 Earnings per share
Earnings per share (EPS) is calculated by dividing the profit or loss attributable to ordinary shareholders
of the Holding Company by the weighted average number of ordinary shares outstanding during the year.
2.26 Contingent assets
Contingent assets are disclosed when the Group has a possible asset that arises from past events and
future events not wholly within the control of the Group. Contingent assets are not recognized until their
realization becomes certain.
2.27 Contingent liabilities
Contingent liability is disclosed when the Group has a possible obligation as a result of past events
future events not wholly within the control of the Group. Contingent liabilities are not recognized, only
disclosed, unless the possibility of a future outflow of resources is considered remote. In the event that
the outflow of resources associated with a contingent liability is assessed as probable, and if the size of
147

the outflow can be reliably estimated, a provision is recognized in the consolidated financial statements.
2.28 Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to depreciation and are tested annually for
impairment. Assets that are subject to depreciation are reviewed for impairment at each consolidated
statement of financial position date or whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount for which
assets carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date. Reversals of the impairment losses are restricted to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if impairment losses had not been recognized. An impairment loss or
reversal of impairment loss is recognized in the consolidated statement of profit or loss.
2.29 Derivative financial instruments
Derivative that do not qualify for hedge accounting are recognized in the consolidated statement of
financial position at estimated fair value with corresponding effect to consolidated statement of profit or
loss. Derivative financial instruments are carried as assets when fair value is positive and liabilities when
fair value is negative.
2.30 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at banks on current, saving and deposit
accounts and other short term highly liquid instruments that are readily convertible into known amounts
of cash and which are subject to insignificant risk of changes in values.
2.31 Ijara contracts
Under the Ijarah contracts the Group obtains usufruct of an asset for an agreed period for an agreed
consideration. The Group accounts for its Ijarah contracts in accordance with the requirements of IFAS 2
‘Ijarah’. Accordingly, the Group as a Mustaj’ir (lessee) in the Ijarah contract recognises the Ujrah (lease)
payments as an expense in the profit and loss on straight line basis over the Ijarah term.
2.32 Segment reporting
Segment reporting is based on the operating (business) segments of the Group. An operating segment is
a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to the transactions with any of the Group's other
components. An operating segment's operating results are reviewed regularly by the Group's chief
operating decision makers to make decisions about resources to be allocated to the segment and assess
its performance, and for which discrete financial information is available.
Segment results that are reported to the chief operating decision makers include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis. Those incomes,
expenses, assets, liabilities and other balances which can not be allocated to a particular segment on a
reasonable basis are reported as unallocated.
The Group has following reportable business segments: Spinning at Faisalabad (I and II), Feroze Wattwan
(I and II) (Producing different quality of yarn including dyed yarn and sewing thread using natural and
artificial fibres), Weaving at Bhikki and Lahore (Producing different quality of greige fabric using yarn),
Dyeing (Producing dyed fabric using different qualities of greige fabric), Home Textile (Manufacturing of
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Annual Report 2020
home textile articles using processed fabric produced from greige fabric), Terry (Manufacturing of terry
and bath products), Garment (Manufacturing of garments using processed fabric), Power Generation
(Generation, transmission and distribution of power using gas, oil, steam, coal and biomass) and Hotel
(Business of hotel and allied services).
Transaction among the business segments are recorded at cost. Inter segment sales and purchases are
eliminated from the total.
2.33 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that
the grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to profit or loss over the expected lives of the related
assets.
2.34 Dividend and other appropriations
Dividend distribution to the shareholders is recognized as a liability in the consolidated financial

statements in the periods in which the dividends are declared and other appropriations are recognized in
the period in which these are approved by the Board of Directors.
3 ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL
2020 2019 2020 2019

(Number of Shares) Note (Rupees in thousand)

fully paid up in cash 2,567,723 2,567,723

issued to shareholders of Nishat
Apparel Limited under the Scheme
of Amalgamation 28,041 28,041

issued as fully paid for consideration
other than cash 3.1 372,523 372,523

issued as fully paid bonus shares 547,712 547,712
351,599,848 351,599,848 3,515,999 3,515,999
3.1 These mainly include shares issued to members of Umer Fabrics Limited as per the Scheme of
Arrangement as approved by the Honourable Lahore High Court, Lahore.
149

3.2 Ordinary shares of the Holding Company held by the associated companies:
2020 2019
(Number of Shares)
D.G. Khan Cement Company Limited 30,289,501 30,289,501

Adamjee Insurance Company Limited 2,050 2,050
MCB Bank Limited 227 227
Adamjee Life Assurance Company Limited 400 80,000
30,292,178 30,371,778
2020 2019
4 RESERVES
Composition of reserves is as follows:
Capital
Premium on issue of right shares 4.1 5,499,530 5,499,530

Fair value reserve FVTOCI investments - net of deferred income tax 4.2 7,930,664 9,727,048
Exchange translation reserve 2.2(c) 224,659 219,168
Statutory reserve 4.3 835 835
Maintenance reserve 1,608,668 1,608,668
Capital redemption reserve fund 4.4 111,002 111,002
15,375,358 17,166,251
Revenue
General 71,163,214 64,764,214

Unappropriated profit 6,298,146 7,815,002
77,461,360 72,579,216
92,836,718 89,745,467
4.1 This reserve can be utilized by the Holding Company only for the purposes specified in section 81 of the
4.2 This represents the unrealized gain on re-measurement of investments at fair value through other
comprehensive income and is not available for distribution. Reconciliation of fair value reserve net of
deferred tax is as under:
Balance as on 01 July 9,871,724 14,441,741

Fair value adjustment during the year (1,279,310) (2,732,538)
Share of fair value reserve of associates (535,646) (1,837,479)
8,056,768 9,871,724
Less: Deferred tax liability on unquoted equity investment (126,104) (144,676)

Balance as on 30 June 7,930,664 9,727,048
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Annual Report 2020
4.3 As required by UAE Federal Law No. (2) of 2015 and the Articles of Association of Nishat Linen Trading
LLC - Subsidiary Company, 10% of the profit for the year has to be transferred to a legal reserve until it
is equivalent to 50% of paid-up capital of the Subsidiary Company. This reserve is not available for
distribution.
4.4 An equity accounted associate created the fund for redemption of preference shares. The preference
shares were redeemed during the year ended 30 June 2007.
2020 2019
5 LONG TERM FINANCING
Long term loans 5.1 9,210,417 9,040,795

Long term musharika 5.2 923,197 1,043,772
Motor vehicles' loans 5.5 2,540 1,454
10,136,154 10,086,021
Less: Current portion shown under current liabilities 12 (763,703) (4,170,795)

9,372,451 5,915,226
151


Annum
5.1 Long term loans
Nishat Mills Limited - Holding Company
Allied Bank 16,060 64,242 3 Month Twenty four Quarterly Quarterly First pari passu
Limited offer KIBOR equal quarterly hypothecation charge of
commenced on all present and future plant,
24 August 2014 machinery and equipment
and ending on of the Company (excluding
24 May 2021 plant and machinery in
(Note 5.4). respect of which the
Company has already
created exclusive charges in
the favour of its existing
creditors).
Pak Brunei 202,474 248,258 SBP rate for Three hundred - Quarterly First pari passu charge of
Investment LTFF and twenty unequal Rupees 400 million over all
Company + 0.25% installments the present and future plant
Limited commenced on and machinery of the
30 August 2018 Company with 25% margin
and ending on excluding those assets (part
28 December 2024 of the plant and machinery)
(Note 5.4). on which the Company has
favour of existing creditors.
Faysal Bank 139,016 158,875 SBP rate for Twenty unequal - Quarterly First pari passu charge of
Limited LTFF installments Rupees 267 million on all
22 November 2018 and machinery of the
and ending on Company (excluding those
22 May 2024 on which charge has
(Note 5.4). already been created).
Pakistan Kuwait 42,174 62,347 SBP rate for One hundred and sixty - Quarterly First pari passu charge of
Investment LTFF unequal installments Rupees 400 million on all
Company + 1.00% commenced on present and future plant
(Private) Limited 11 June 2016 and machinery of the
and ending on Company with 25% margin.
26 January 2023
(Note 5.4).
Ranking hypothecation
charge of Rupees 267
16,440 21,535 SBP rate for Two hundred and - Quarterly million on plant and
LTFF fifty eight unequal machinery of the Company
+ 0.75% installments (excluding plant and
commenced on machinery in respect of
15 September 2016 which the Company has
and ending on already created exclusive
29 September 2023 charges in favour of its
(Note 5.4). existing charge holders /
creditors).
58,614 83,882
The Bank of 169,255 240,098 SBP rate One hundred and - Quarterly First pari passu charge of
Punjab for LTFF sixty unequal installments Rupees 667 million on
+ 0.50% commenced on present and future fixed
30 January 2017 assets (plant and
and ending on machinery) of the Company.
07 April 2023 (Note 5.4).
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Annual Report 2020

Annum
National Bank 44,466 60,780 SBP rate One hundred and - Quarterly First pari passu
of Pakistan for LTFF twenty unequal hypothecation charge of
+ 0.50% installments Rupees 534 million on all
commenced on present and future plant
12 April 2017 and machinery (excluding
and ending on plant and machinery which
03 June 2023 is under exclusive charges
(Note 5.4). of Company's creditors).
Limited for LTFF + twenty unequal Rupees 1,333 million
0.25% installments (inclusive of 25% margin on
commenced on all present and future plant
27 March 2018 and machinery of the
and ending on Company).
05 June 2024
(Note 5.4).
Bank Alfalah 596,935 751,071 SBP rate Four hundred and - Quarterly First pari passu charge of
Limited for LTFF sixty unequal Rupees 1,334 million on all
+ 0.35% installments present and future plant
commenced on and machinery (excluding
02 February 2018 plant and machinery in
and ending on respect of which the
25 May 2024 Company has already
(Note 5.4). created exclusive charges in
the favour of existing
creditors).
Bank Alfalah 182,592 224,729 SBP rate Twenty equal quarterly - Quarterly First pari passu
Limited for LTFF installments hypothecation charge of
+ 0.35% commenced on Rupees 400 million with
31 August 2018 and 25% margin on present and
ending on future plant and machinery
31 May 2024 of the Company.
(Note 5.4).
Allied Bank 772,933 934,678 SBP rate Four hundred and - Quarterly First pari passu
Limited for LTFF eighty four unequal hypothecation charge of
commenced on all present and future plant,
28 December 2018 machinery and equipment
13 July 2025 plant and machinery in
Company has already
creditors).
Habib Bank 461,591 619,963 SBP rate for One hundred and - Quarterly Note 5.3
Limited LTFF eighty unequal
+ 0.40% installments
commenced on
17 September 2017
and ending on
25 November 2023
(Note 5.4).
Faysal Bank 267,338 296,361 SBP rate Eighty unequal - Quarterly First pari passu charge of
Limited for LTFF installments Rupees 400 million on all
18 January 2020 and machinery (excluding
05 November 2025 respect of which the
the favour of existing
creditors).
153


Annum
Limited for LTFF twenty unequal Rupees 1,267 million over
+ 0.25% installments all present and future plant,
commenced machinery and equipment
on 26 January 2020 of the Company (excluding
17 September 2026 respect of which the
creditors).
Habib Bank 937,145 767,846 SBP rate Twenty four unequal - Quarterly First pari passu charge of
Limited for LTFF installments Rupees 4,084 million over
+ 0.25% commenced all present and future plant,
on 27 February 2020 machinery and equipment
27 November 2025 plant and machinery in
Company has already
creditors).
Allied Bank 222,715 - SBP rate Sixty unequal - Quarterly

Limited for LTFF installments
+ 0.35% commencing on
24 January 2022
and ending on Ranking charge of Rupees
28 October 2026. 1,267 million over all
present and future plant,
546,274 - SBP rate Four hundred and - Quarterly machinery and equipment
for LTFF forty one unequal of the Company (excluding
+ 0.50% installments plant and machinery in
commencing on respect of which the
12 February 2022 Company has already
and ending on created exclusive charges in
18 February 2027. the favour of its existing
100,000 - SBP rate Twenty equal - Quarterly charge holders / creditors).
for financing quarterly installments
power commencing on
plants using 14 May 2021
renewable and ending on 14
energy February 2026.
+ 0.50%
868,989 -
Bank Alfalah 218,714 - SBP rate One hundred unequal - Quarterly Ranking charge of Rupees
Limited for LTFF installments 1,334 million on all present
+ 0.50% commencing on and future plant and
23 December 2021 machinery (excluding plant
and ending on and machinery in respect of
21 October 2026. which the Company has
existing charge holders /
creditors) of the Company
with 25% margin.
154
Annual Report 2020

Annum
Pakistan 998,210 - SBP rate Seventy two unequal - Quarterly Ranking charge of Rupees
Kuwait for LTFF installments 1,334 million on all present
Investment + 0.65% commencing on and future plant and
Company 13 April 2022 machinery (excluding plant
(Private) and ending on and machinery in respect of
Limited 18 May 2028. which the Company has
existing charge holders /
creditors) of the Company
with 25% margin.
Habib 866,900 - SBP rate Sixty unequal - Quarterly Ranking charge of Rupees
Metropolitan for LTFF installments 1,334 million over plant and
Bank Limited + 0.65% commencing on machinery after
24 September 2022 incorporating 25% margin
and ending on (excluding plant and
30 June 2027. machinery in respect of
existing charge holders).
Allied Bank 891,696 - 3 Month Twenty four - Quarterly Ranking charge of Rupees
Limited offer KIBOR unequal installments 1,334 million over all the
+ 0.20% commencing on present and future plant,
16 November 2022. plant and machinery in
respect of which the
Company has already
created exclusive charge in
creditors).
9,210,417 6,000,625
Nishat Power Limited - Subsidiary Company
Consortium - 3,040,170 3 Month (Note 5.1.1) Quarterly Quarterly Registered first joint pari
of banks offer KIBOR passu charge on immovable
(Note 5.1.1) + 3.00% property, mortgage of
project receivables,
hypothecation of all present
and future assets and all
properties of Nishat Power
Limited - Subsidiary
Company (excluding the
mortgaged immovable
property and mortgaged
energy revenue
receivables), lien over
project bank accounts and
pledge of shares held by
the Holding Company in
Nishat Power Limited.
- 3,040,170
9,210,417 9,040,795
5.1.1 This represented long term financing obtained by Nishat Power Limited - Subsidiary Company from a consortium of banks led by Habib Bank
Limited (agent bank) and includes National Bank of Pakistan, Allied Bank Limited, United Bank Limited and Faysal Bank Limited. The portion
of long term financing from Faysal Bank Limited was on murabaha basis. The mark-up rate charged during the year on the outstanding balance
ranged from 14.22% to 16.85% (2019: 9.92% to 13.99%) per annum. This loan has been repaid during the year.
155


Annum
5.2 Long term musharika
Habib Bank 27,896 168,772 3 Month Fifty six unequal Quarterly Quarterly
Limited offer KIBOR installments
+ 0.35% commenced on Note 5.3
19 May 2016
and ending on
01 June 2021.
(Note 5.4)
Standard 687,500 875,000 3 Month Forty eight Quarterly Quarterly Specific charge of Rupees
Chartered offer KIBOR unequal installments 1,334 million over fixed
Bank (Pakistan) commenced on assets of the Company
Limited 14 February 2019 inclusive of 25% margin.
and ending on
06 December 2023.
(Note 5.4)
715,396 1,043,772
Nishat Linen (Private) Limited - Subsidiary Company
Faysal Bank 119,878 - 3 Month Eight equal Quarterly Quarterly Cross corporate guarantee
Limited offer KIBOR quarterly of Rupees 267 million of
+ 0.50% installments Nishat Mills Limited -
commencing on Holding company.
30 March 2021
and ending on
30 December 2022.
119,878 -
Nishat Hospitality (Private) Limited - Subsidiary Company
Faysal Bank 14,100 - SBP rate for Eight equal - Quarterly Cross corporate guarantee
Limited Salaries & installments of Rupees 16 million of
Wages commencing on Nishat Mills Limited -
+ 0.50% 31 March 2021. Holding Company with 25%
margin.
14,100 -
Faysal Bank 73,823 - SBP rate for Eight equal - Quarterly The financing is secured
Limited Salaries & installments against pari passu charge
Wages commencing on over all the present and
+ 0.50% 31 March 2021. future fuel stock / inventory
and energy revenue
receivables of Nishat Power
Limited - Subsidiary
Company.
73,823 -
923,197 1,043,772
156
Annual Report 2020
5.3 Long term loans and long term musharika from Habib Bank Limited are secured against first pari passu
hypothecation charge of Rupees 4,000 million on present and future fixed assets of the Holding Company
excluding specific and exclusive charges.
5.4 Repayment period includes deferment of repayment of principal loan amount by one year in accordance
with the State Bank of Pakistan BPRD Circular Letter No. 13 of 2020 dated 26 March 2020.
5.5 This represents loan obtained by Nishat International FZE - Subsidiary Company from a bank for
purchase of a vehicle at an interest rate of 7.43% to 8.80% per annum repayable in 48 monthly
installments.
2020 2019
6 LEASE LIABILITIES
Total lease liabilities 2,266,071 -

Less: Current portion shown under current liabilities 12 (500,198) -
1,765,873 -
6.1 Reconciliation of lease liabilities
Opening balance - -
Add: Adjustment on adoption of IFRS 16 on 01 July 2019 1,931,672 -
Add: Additions during the year 682,168 -
Add: Interest accrued on lease liabilities 264,457 -
Less: Payments during the period (613,152) -
Add: Currency retranslation 926 -
Closing balance 2,266,071 -
Less: Current portion shown under non-current liabilities 12 (500,198) -

Non-current portion 1,765,873 -
6.2 Maturity analysis of lease liabilities is as follows:
Upto 6 months 437,029 -

6-12 months 388,709 -
1-2 year 777,283 -
More than 2 years 1,376,248 -
2,979,269 -
Less: Future finance cost (713,198) -

Present value of finance lease liabilities 2,266,071 -
7 LONG TERM SECURITY DEPOSITS
These represent interest free security deposits received from stockists in connection with 'Nishat Linen' retail
outlets in Pakistan. These security deposits have been utilized for the purpose of business in accordance with the
terms of written agreements with stockists.
157

2020 2019
8 DEFERRED INCOME TAX
The liability for deferred taxation originated due to temporary

difference relating to:
Taxable temporary differences on:

Unquoted equity investment 126,104 144,676
Investments in associates 2,566,707 2,543,239
Accelerated tax depreciation 8.2 703,788 141,506
3,396,599 2,829,421
Deductible temporary difference on:

Turnover tax carried forward 8.3 (588,552) (286,401)
Lease liabilities (625,366) -
Deferred liabilities - accumulating compensated absences 8.4 (447) (673)
Unabsorbed tax losses and tax credits 8.4 (198,136) (142,612)
Others 8.4 (11,087) -
(1,423,588) (429,686)
1,973,011 2,399,735
8.1 Provision for deferred tax on temporary differences other than relating to surplus on revaluation of
unquoted equity investment of the Holding Company was not considered necessary as it is chargeable
to tax under section 169 of the Income Tax Ordinance, 2001. Temporary differences of Nishat Power
Limited - Subsidiary Company are not expected to reverse in the foreseeable future due to the fact that
the profits and gains derived from electric power generation are exempt from tax. Nishat Hospitality
(Private) Limited - Subsidiary Company has not recognised deferred tax assets of Rupees 34.325 million
(2019: Rupees 34.203 million) in respect of minimum tax paid and available for carry forward under
section 113 and 153 of the Income Tax Ordinance, 2001, as sufficient tax profit would not be available to
set these off in the foreseeable future. Minimum tax paid u/s 113 and 153 aggregating to Rupees 2.655
million, Rupees 6.567 million, Rupees 7.913 million, Rupees 9.189 million, Rupees 7.879 million and
Rupees 2.778 million would not be available for carry forward against future tax liabilities subsequent to
tax years 2021, 2022, 2023, 2024 and 2025 respectively.
8.2 This relates to Nishat Hospitality (Private) Limited, Nishat Linen (Private) Limited and Nishat Commodities
(Private) Limited - Subsidiary Companies.
8.3 This relates to Nishat Linen (Private) Limited - Subsidiary Company.
8.4 These relate to Nishat Hospitality (Private) Limited - Subsidiary Company.
158
Annual Report 2020
2020 2019
9 TRADE AND OTHER PAYABLES
Creditors 9.1 7,654,227 6,928,577

Accrued liabilities 1,665,606 1,324,989
Advances from customers 9.1 1,021,564 562,547
Securities from contractors - interest free and repayable on
completion of contracts 9.2 13,561 11,538
Retention money payable 36,500 88,357
Income tax deducted at source 782 1,013
Payable to employees provident fund trust 45,277 4,899
Fair value of forward exchange contracts 6,206 7,583
Workers' profit participation fund 9.3 639,524 517,276
Workers' welfare fund 101,018 2,400
11,184,265 9,449,179
9.1 This includes amounts due to following related parties:
Creditors

Adamjee Insurance Company Limited - associated company 25,726 31,258
Sanifa Agri Services Limited - associated company 2,379 -
Hyundai Nishat Motor (Private) Limited - associated company 37 -
Pakistan Aviators and Aviation (Private) Limited
- associated company - 2,612
Nishat Hotels and Properties Limited - associated company 31,477 12,982
294,078 124,682
Advances from customers
Hyundai Nishat Motor (Private) Limited - associated company - 787

Nishat Hotels and Properties Limited - associated company 820 2
820 789
9.2 These deposits have been utilized for the purpose of business in accordance with the terms of written
agreements with contractors.
159

2020 2019
9.3 Workers' profit participation fund

Less: Adjustment on adoption of IFRS 15 - (3,435)
517,276 367,136
Add: Provision for the year 451,176 536,964
Interest for the year 36 4,124 1,005
972,576 905,105
Less: Payments during the year (333,052) (387,829)
639,524 517,276
9.3.1 Interest is paid at prescribed rate under the Companies Profit (Workers' Participation) Act, 1968
on funds utilized till the date of allocation to workers.
10 ACCRUED MARK-UP

Short term borrowings 10.1 345,602 321,064
395,513 469,245
10.1 This includes markup of Rupees 2.803 million (2019: Rupees 2.779 million) payable to MCB Bank Limited
- associated company.
11 SHORT TERM BORROWINGS
State Bank of Pakistan (SBP) refinance 11.1 & 11.3 14,184,868 13,764,706
Other short term finances 11.1 & 11.4 2,743,549 3,540,000
Temporary bank overdrafts 11.1, 11.2 & 11.5 2,401,351 677,556
19,329,768 17,982,262
Short term running finances 11.6 4,750,749 5,220,315

Short term finances 11.7 - 1,199,997
4,750,749 6,420,312
24,080,517 24,402,574
160
Annual Report 2020
11.1 These finances are obtained from banking companies under mark up arrangements and are secured
against joint pari passu hypothecation charge on all present and future current assets, other instruments
and ranking hypothecation charge on plant and machinery of the Holding Company. These form part of
total credit facility of Rupees 42,975 million (2019: Rupees 39,705 million).
11.2 These finances include Rupees 76.206 million (2019: Rupees 120.307 million) obtained from MCB Bank
Limited - associated company, which has been utilized for working capital requirements.
11.3 The rates of mark up range from 2.15% to 3.00% (2019: 2.15% to 3.00%) per annum on the balance
outstanding.
11.4 The rates of mark up range from 1.87% to 14.01% (2019: 6.20% to 12.93%) per annum during the year
11.5 The rates of mark-up range from 8.75% to 15.56% (2019: 7.12% to 13.79%) per annum on the balance
outstanding.
11.6 The total running finance and running musharka main facilities obtained from various commercial banks
under mark-up arrangements aggregate Rupees 10,251.520 million (2019: Rupees 7,201.520 million).
Such facilities have been obtained at mark-up rates ranging from three months KIBOR plus 0.25% to 2%
per annum, payable quarterly, on the balance outstanding. The aggregate facilities are secured against
charge on present and future fuel stock / inventory and present and future energy purchase price
receivables of Nishat Power Limited - Subsidiary Company. The mark-up rate charged during the year on
the outstanding balance ranged from 8.86% to 15.85% (2019: 7.18% to 12.99%) per annum. Various sub
facilities comprising money market loans and letter of guarantee have also been utilized under the
aforementioned main facilities.
11.7 The total murabaha and term finance main facilities obtained from various commercial banks under
mark-up arrangements aggregate Rupees 550 million (2019: Rupees 2,650 million). Such facilities have
been obtained at mark-up rates ranging from one week to six months KIBOR plus 0.05% to 1.25%,
payable at the maturity of the respective murabaha transaction / term finance facility. The aggregate
facilities are secured against first pari passu charge on current assets comprising of fuel stocks /
inventory of Nishat Power Limited - Subsidiary Company. The mark-up rate charged during the year on
the outstanding balance ranged from 11.00% to 13.81% (2019: 6.41% to 13.75%) per annum. Various
sub facilities comprising running musharka and running finance have also been utilized under the
aforementioned main facilities.
11.8 The main facilities for opening letters of credit and guarantees aggregate Rupees 500 million (2019:
Rupees 500 million). The amount utilized at 30 June 2020, for letters of credit was Rupees Nil (2019:
Rupees 19.740 million) and for letters of guarantee was Rupees 113.000 million (2019: Rupees 112.500
million). The aggregate facilities for opening letters of credit and guarantee are secured by charge on
present and future current assets including fuel stocks / inventory of the Nishat Power Limited -
Subsidiary Company and by lien over import documents.
2020 2019
12 CURRENT PORTION OF NON-CURRENT LIABILITIES
Current portion of long term financing 5 763,703 4,170,795

Current portion of lease liabilities 6 500,198 -
1,263,901 4,170,795
161

13 UNCLAIMED DIVIDEND
13.1 Nishat Mills Limited - Holding Company
As at the reporting date, the Holding Company is in the process of complying with the provisions of
Section 244 of the Companies Act, 2017.
13.2 Nishat Power Limited - Subsidiary Company
The disclosure required under Section 244 of the Companies Act, 2017 are as follows:
2020 2019
Amount transferred into unpaid dividend account 2,794 635

Dividend claims received and settled 302 344
Profits generated from unpaid dividend account 2,366 1,496
Profits utilised - -
The reconciliation of carrying amount is as follows:

Dividend declared 354,089 1,062,266
Interest on dividend 2,366 1,496
Less: Dividend paid (357,450) (1,057,097)
14 CONTINGENCIES AND COMMITMENTS
a) Contingencies
i) Guarantees of Rupees 2,941.607 million (2019: Rupees 2,255.144 million) are given by the banks of
Nishat Mills Limited - Holding Company to Sui Northern Gas Pipelines Limited against gas
connections, Shell Pakistan Limited and Pakistan State Oil Limited against purchase of furnace oil,
Director Excise and Taxation, Karachi against infrastructure cess, Chairman Punjab Revenue
Authority, Lahore against infrastructure cess, Directorate of Cotton Cess Management against
cotton cess, Collector of Customs against regulatory duty, Model Customs Collectorate Lahore
against imported coal, State Bank of Pakistan against mark up subsidy, Inspector General Frontier
Corps KP (South) and the President of Islamic Republic of Pakistan through the controller of military
accounts (Defence Purchase) against fulfillment of sales orders, High Court of Sindh, Karachi
against the matter of importation of LED Lights and to the bank of Hyundai Nishat Motor (Private)
Limited (associated company) to secure financial assistance to the associated company. Further,
the Holding Company has issued cross corporate guarantees of Rupees 266.667 million (2019:
Rupees Nil) and Rupees 16.2 million (2019: Rupees Nil) on behalf of Nishat Linen (Private) Limited -
wholly owned subsidiary company and Nishat Hospitality (Private) Limited - wholly owned
subsidiary company to secure the obligations of subsidiary companies towards their lenders.
ii) Post dated cheques of Rupees 8,223.314 million (2019: Rupees 6,695.544 million) are issued by
Nishat Mills Limited - Holding Company to customs authorities in respect of duties on imported
items availed on the basis of consumption and export plans. If documents of exports are not
provided on due dates, cheques issued as security shall be encashable.
iii) Holding Company's share in contingencies of associates accounted for under equity method is
Rupees 5,203 million (2019: Rupees 5,624 million).
162
Annual Report 2020
iv) In financial year 2014, a sales tax demand of Rupees 1,218.132 million was raised against Nishat
Power Limited - Subsidiary Company through order dated 11 December 2013, passed by the
Assistant Commissioner Inland Revenue ('ACIR') disallowing input sales tax for the tax periods of
July 2010 through June 2012. The disallowance was primarily made on the grounds that since
revenue derived by the Subsidiary Company on account of 'capacity revenue' was not chargeable
to sales tax, input sales tax claimed by the Subsidiary Company was required to be apportioned
with only the input sales tax attributable to other revenue stream i.e. 'energy revenue' admissible to
the Subsidiary Company. Upon appeal before Commissioner Inland Revenue (Appeals) ['CIR(A)'],
such issue was decided in Subsidiary Company's favour, however, certain other issues agitated by
the Subsidiary Company were not adjudicated. Both the Subsidiary Company and department
have filed appeals against the order of CIR(A) before Appellate Tribunal Inland Revenue ('ATIR'),
which have not been adjudicated.
Subsequently, the above explained issue was taken up by department for tax periods of July 2009
to June 2013 (involving input sales tax of Rupees 1,722.811 million), however, the Subsidiary
Company assailed the underlying proceedings before Lahore High Court ('LHC') directly and in this
respect, through order dated 31 October 2016, LHC accepted the Subsidiary Company's stance
and annulled the proceedings. The department has challenged the decision of LHC before
Supreme Court of Pakistan and has also preferred an Intra Court Appeal against such order which
are pending adjudication.
Similarly, for financial year 2014, Subsidiary Company's case was selected for 'audit' and such
issue again formed the core of audit proceedings (involving input sales tax of Rupees 596.091
million). Subsidiary Company challenged the jurisdiction in respect of audit proceedings before
LHC and while LHC directed the management to join the subject proceedings, department was
debarred from passing the adjudication order. During the year, LHC has dismissed the petition in
favour of the department, by allowing the department to complete the audit proceedings that are
pending completion.
Since, the issue has already been decided in Subsidiary Company's favour on merits by LHC and
based on advice of the Subsidiary Company's legal counsel, no provision on these accounts have
been made in these consolidated financial statements.
v) During the year 2019, the Commissioner Inland Revenue has raised a demand of Rupees 179.046
million against Nishat Power Limited - Subsidiary Company through his order dated April 16, 2019,
mainly on account of input tax claimed on inadmissible expenses in sales tax return for the tax
periods of July 2014 to June 2017 and sales tax default on account of suppression of sales related
to tax period June 2016. The Subsidiary Company filed application for grant of stay before the ATIR
against recovery of the aforesaid demand that was duly granted. Further, the Subsidiary Company
has filed appeals before CIR(A) and ATIR against the order which is pending adjudication.
Management has strong grounds to believe that the case will be decided in Subsidiary Company's
favour. Therefore, no provision has been made on this account in these consolidated financial
statements.
vi) During the year 2019, National Electric Power Regulatory Authority (NEPRA) issued a show cause
notice dated February 13, 2019, to Nishat Power Limited - Subsidiary Company along with other
Independent Power Producers to provide rationale of abnormal profits earned since commercial
operation date (COD) that eventually led to initiation of proceedings against the Subsidiary
Company by NEPRA on March 18, 2019. The Subsidiary Company has challenged the authority of
NEPRA to take suo moto action before the Islamabad High Court (IHC) wherein IHC has provided
interim relief by suspending the suo moto proceedings. The case is currently pending adjudication
before IHC. Management of the Subsidiary Company is confident that based on the facts and law,
there will be no adverse implications for the Subsidiary Company.
163

vii) The banks have issued the following on behalf of Nishat Power Limited - Subsidiary Company:
a) Letter of guarantee of Rupees 11.50 million (2019: Rupees 11.00 million) in favour of Director
Excise and Taxation, Karachi, under direction of Sindh High Court in respect of suit filed for levy
of infrastructure cess.
b) Letters of guarantee of Rupees 100 million (2019: Rupees 100 million) in favour of fuel
suppliers.
c) Letter of guarantee of Rupees 1.5 million (2019: Rupees 1.5 million) in favour of Punjab
Revenue Authority, Lahore.
viii) Guarantees of Rupees 100.350 million (2019: Rupees 89.350 million) are given by the banks of
Nishat Linen (Private) Limited - Subsidiary Company to Director Excise and Taxation, Karachi
against infrastructure cess, Chairman Punjab Revenue Authority, Lahore against infrastructure cess
and Collectors of Customs against import consignments.
ix) Through orders, the deemed assessments for tax years 2016, 2015, 2014, 2013 and 2012 were
amended by Additional Commissioner Inland Revenue (ACIR) and Commissioner Inland Revenue
(CIR) under section 122(5A) of the Income Tax Ordinance, 2001. Nishat Linen (Private) Limited -
Subsidiary Company’s appeals before Commissioner Inland Revenue [CIR(A)] were successful
except for the legal issue of treating the Subsidiary Company as a manufacturer with relation to
toll-manufactured goods. Appeals on this point have been filed before the Appellate Tribunal Inland
Revenue which are pending adjudication. The Subsidiary Company is confident of favorable
outcome of its appeals based on advice of the tax advisor and has carry forward minimum tax paid
in tax years 2016, 2015 and 2014.
x) Through notice dated 25 January 2018, issued by the Deputy Commissioner Inland Revenue (DCIR)
under sections 161/205 of the Ordinance, Nishat Linen (Private) Limited - Subsidiary Company had
been called upon to demonstrate its compliance with various withholding provisions of the Income
Tax Ordinance, 2001. The subject proceedings have been finalized through order dated 03 August
2018, whereby, aggregate default amounting to Rupees 2.551 million has been adjudged against
the Subsidiary Company. The Subsidiary Company’s appeal before Commissioner Inland Revenue
(Appeals) [CIR(A)] was successful except for the legal issue amounting to Rupees 1.419 million.
Appeal on this point has been filed before the Appellate Tribunal Inland Revenue which is pending
adjudication. The Subsidiary Company is confident of favorable outcome of its appeal based on
advice of the tax advisor.
xi) Bank guarantee of Rupees 1.9 million (2019: Rupees 1.9 million) is given by the bank of Nishat
Commodities (Private) Limited - Subsidiary Company in favour of Director, Excise and Taxation to
cover the disputed amount of infrastructure cess.
b) Contingent asset:
i) On 07 August 2017, Nishat Power Limited - Subsidiary Company instituted arbitration proceedings
against NTDC/Government of Pakistan by filing a Request for Arbitration ('RFA') with the London
Court of International Arbitration ('LCIA') (the 'Arbitration Proceedings') for disallowing an amount
of Rupees 1,084.748 million relating to delayed payment charges on outstanding delayed payment
invoices. The Subsidiary Company believes it is entitled to claim delayed payment charges on
outstanding delayed payments receivables from NTDC as per terms of the PPA. However, NTDC
has denied this liability and objected on the maintainability of the Arbitration Proceedings, terming
it against the PPA and refused to pay delayed payment charges on outstanding delayed payments
receivables.
164
Annual Report 2020
The LCIA appointed a sole Arbitrator and a hearing was also held in March 2018. During the year,
the Arbitrator has issued Partial Final Award in which he has rejected the NTDC’s objection to the
maintainability of the Arbitration Proceedings.
While the Arbitration Proceedings on merits of the case are underway, Subsidiary Company has
submitted the Partial Final Award before LHC and obtained interim relief from honorable LHC,
whereby, LHC has restrained NTDC from taking steps for delaying the arbitration proceedings and
challenging the award in Civil Courts of Pakistan. As the above amount is disputed, therefore, on
prudence basis, the Subsidiary Company has not accounted for these amounts as receivable in
In April 2019, a final hearing was held and final decision was given in July 2020, in favour of the
Subsidiary Company. According to the final award, Arbitrator has accepted Subsidiary Company's
request and directed NTDC to pay (i) interest at the Delayed Payment Rate (DPR) on Delayed
Payment (DP) invoices, which is estimated at Rupees 1,422 million upto 30 June 2020 and may vary
as per legal advice (ii) DP invoices submitted pursuant to Section 9.6 of the PPA in consistent with
the first-in-first-out principle (iii) pay legal costs in the sum of Rupees 12,771,207 (iv) hearing
expenses in the sum of GBP 17,393 and (v) Arbitration cost in the sum of GBP 44,136.
The Subsidiary Company is in the process of filling the final award in LHC for enforcement
purposes. On prudence basis, the Subsidiary Company has not recognized the income and
corresponding receivable for the above mentioned amounts in these consolidated financial
statements due to its uncertainty on account of pendency of enforcement proceedings of the final
award. Such amounts as per final award would be recognized when it attains finality and its
collectability is certain.
c) Commitments
i) Contracts for capital expenditure of the Group are approximately of Rupees 322.818 million (2019:
Rupees 1,005.666 million).
ii) Letters of credit other than for capital expenditure of the Group are of Rupees 2,381.289 million
(2019: Rupees 1,040.985 million).
iii) Outstanding foreign currency forward contracts of the Group are Rupees 389.348 million (2019:
Rupees 463.868 million).
iv) The amount of future payments under operating lease and the period in which these payments will
become due from Nishat Power Limited - Subsidiary Company is as follows:
2020 2019
Not later than one year 3,894 3,894
15 PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 15.1 41,076,157 40,835,226

Capital work in progress 15.2 2,542,740 687,957
Major spare parts and standby equipment 15.3 105,246 174,201
43,724,143 41,697,384
165
15.1 OPERATING FIXED ASSETS - owned
166
Furniture, Kitchen
Freehold Buildings on Plant and Electric Factory fixtures and Computer equipment Total
Vehicles
land freehold machinery installations equipment office equipment and crockery
land equipment items
At 30 June 2018
Cost 2,011,126 12,272,592 50,198,274 1,260,071 420,282 814,086 351,132 804,838 34,354 68,166,755
Currency retranslation - 31,942 - - - 2,378 1,218 1,421 - 36,959
2,011,126 12,304,534 50,198,274 1,260,071 420,282 816,464 352,350 806,259 34,354 68,203,714
Accumulated depreciation - (5,129,747) (22,115,024) (677,726) (227,031) (373,196) (260,938) (400,017) (23,446) (29,207,125)
Currency retranslation - (18,439) - - - (845) (963) (792) - (21,039)
- (5,148,186) (22,115,024) (677,726) (227,031) (374,041) (261,901) (400,809) (23,446) (29,228,164)
Accumulated impairment - - (162,601) - - - - - - (162,601)
Net book value 2,011,126 7,156,348 27,920,649 582,345 193,251 442,423 90,449 405,450 10,908 38,812,949

Opening net book value 2,011,126 7,156,348 27,920,649 582,345 193,251 442,423 90,449 405,450 10,908 38,812,949
Additions 681,669 1,395,389 3,364,189 48,267 16,645 140,689 31,198 208,058 - 5,886,104
Assets written off:
Cost - - (55,074) - - (696) (513) - - (56,283)
Accumulated depreciation - - 40,561 - - 345 467 - - 41,373
- - (14,513) - - (351) (46) - - (14,910)
Disposals:
Cost - (45,500) (871,460) (15,660) (668) (3,118) (2,532) (67,338) (1,850) (1,008,126)
Accumulated depreciation - 42,906 676,919 13,053 524 2,576 2,070 42,351 1,264 781,663
- (2,594) (194,541) (2,607) (144) (542) (462) (24,987) (586) (226,463)
Depreciation charge - (745,524) (2,644,091) (60,051) (20,573) (52,341) (32,851) (98,024) (2,505) (3,655,960)
Currency retranslation - 28,348 - - - 3,457 413 1,288 - 33,506
Closing net book value 2,692,795 7,831,967 28,431,693 567,954 189,179 533,335 88,701 491,785 7,817 40,835,226
At 30 June 2019
Cost 2,692,795 13,654,423 52,635,929 1,292,678 436,259 953,339 380,503 946,979 32,504 73,025,409
Currency retranslation - 80,914 - - - 6,025 3,164 3,601 - 93,704
2,692,795 13,735,337 52,635,929 1,292,678 436,259 959,364 383,667 950,580 32,504 73,119,113
Currency retranslation - (52,566) - - - (2,568) (2,751) (2,313) - (60,198)
- (5,903,370) (24,041,635) (724,724) (247,080) (426,029) (294,966) (458,795) (24,687) (32,121,286)
Net book value 2,692,795 7,831,967 28,431,693 567,954 189,179 533,335 88,701 491,785 7,817 40,835,226

Opening net book value 2,692,795 7,831,967 28,431,693 567,954 189,179 533,335 88,701 491,785 7,817 40,835,226
Additions 26,823 722,042 2,725,766 133,747 10,344 160,117 59,401 177,140 1,134 4,016,514
Disposals:
Cost - (4,300) (274,588) (1,575) - (230) (3,950) (91,838) - (376,481)
Accumulated depreciation - 3,302 230,456 1,001 - 83 3,242 61,399 - 299,483
- (998) (44,132) (574) - (147) (708) (30,439) - (76,998)
Depreciation charge - (816,270) (2,574,598) (65,338) (19,430) (65,221) (35,886) (121,879) (1,886) (3,700,508)
Currency retranslation - 1,554 - - - 299 (84) 154 - 1,923
Closing net book value 2,719,618 7,738,295 28,538,729 635,789 180,093 628,383 111,424 516,761 7,065 41,076,157
At 30 June 2020
Cost 2,719,618 14,453,079 55,087,107 1,424,850 446,603 1,119,251 439,118 1,035,882 33,638 76,759,146
Currency retranslation - 9,116 - - - 657 277 501 - 10,551
2,719,618 14,462,195 55,087,107 1,424,850 446,603 1,119,908 439,395 1,036,383 33,638 76,769,697
Currency retranslation - (7,562) - - - (358) (361) (347) - (8,628)
- (6,723,900) (26,385,777) (789,061) (266,510) (491,525) (327,971) (519,622) (26,573) (35,530,939)
Net book value 2,719,618 7,738,295 28,538,729 635,789 180,093 628,383 111,424 516,761 7,065 41,076,157
Annual rate of depreciation (%) - 4-10 4-32.9 10 10 10 30-33 20 20-33

15.1.1 Land costing Rupees 45.721 million is held in the name of chief executive of Nishat Linen (Private) Limited - Subsidiary Company. This land is situated in the locality of Defence
Housing Authority (DHA) where by-laws restricted transfer of title of land in the name of the Subsidiary Company at the time of purchase.
15.1.2 Detail of operating fixed assets, exceeding the book value of Rupees 500,000, disposed of during the year is as follows:

Nos. depreciation value proceeds (loss) disposal
Buildings on free hold land
Passenger Lifts 2 4,300 3,302 998 557 (441) Negotiation Mr. Habib-ur-Rehman, Faisalabad.
4,300 3,302 998 557 (441)
Plant and Machinery
Stenter Machine 1 57,262 46,974 10,288 11,000 712 Negotiation Samira Fabrics (Private) Limited, Faisalabad.
Sewing Machines 33 2,272 1,365 907 1,000 93 Negotiation Taiga Apparel (Private) Limited, Lahore.
Sewing Machines 29 3,702 2,021 1,681 1,551 (130) Negotiation Lahore Apparel (Private) Limited, Lahore.
Sewing Machines 82 20,182 10,379 9,803 7,477 (2,326) Negotiation Azgard Nine Limited, Lahore.
Tonello Washing Machine 3 18,912 11,597 7,315 5,850 (1,465) Negotiation Azgard Nine Limited, Lahore.
Sewing Machines 2 2,562 1,811 751 775 24 Negotiation Cotton Web Limited, Lahore.
Sewing Machines 25 1,804 999 805 750 (55) Negotiation Lahore Apparel (Private) Limited, Lahore.
Rotary Air Dryer Model E/300 1 10,167 6,543 3,624 3,350 (274) Negotiation Cotton Web Limited, Lahore.
Air Handling Unit Rhoss 1 13,918 10,173 3,745 5,983 2,238 Negotiation International Trade (Private) Limited, Lahore.
Rotary Air Dryer Model E/300 1 11,465 7,256 4,209 5,025 816 Negotiation Cotton Web Limited, Lahore.
Embroidery Machine 1 757 71 686 757 71 Negotiation Ibrahim Knitwear, Lahore.
143,003 99,189 43,814 43,518 (296)
Electric Installations
Transformer 1 1,575 1,001 574 700 126 Negotiation Hyundai Nishat Motor (Private) Limited, Lahore
- (associated company).
1,575 1,001 574 700 126
167
Annual Report 2020
168
Nos. depreciation value proceeds (loss) disposal
Vehicles
Honda City LE-15-1079 1 1,276 766 510 694 184 Company's Policy Mr. Khurram Farook, Company's ex-employee,
Lahore.
Toyota Corolla LED-15-2945 1 2,219 1,262 957 1,286 329 Company's Policy Mr. Shahzad Ahmad Malik, Company's employee,
Lahore.
Toyota Corolla LE-15-1078 1 1,693 1,026 667 904 237 Company's Policy Mr. Irfan Butt, Company's employee, Lahore.
Toyota Hiace Van LE-13-1404 1 3,984 2,958 1,026 2,071 1,044 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Toyota Corolla LEA-15-4354 1 1,683 1,024 659 898 239 Company's Policy Mr. Munir Ahmad, Company's employee, Karachi.
Honda City LEH-14-4578 1 1,691 1,039 652 894 242 Company's Policy Mr. Muhammad Arif Khan Tareen, Company's
employee, Quetta.
Honda Civic LED-15-4150 1 2,198 1,244 954 1,297 343 Company's Policy Mr. Saeed Nawaz Khan, Company's employee,
Lahore.
Toyota Corolla LEB-15-3846 1 1,683 1,024 659 897 238 Company's Policy Mr. Rana Muhammad Imran, Company's employee,
Faisalabad.
Toyota Corolla LEC-15-6196 1 1,694 1,007 687 927 240 Company's Policy Mr. Zahid Javaid, Company's employee, Lahore.
Toyota Corolla LEA-15-6706 1 1,852 1,126 726 987 261 Company's Policy Mr. Faisal Hafeez, Company's employee, Lahore.
Honda City LEC-15-1378 1 1,278 764 514 701 187 Company's Policy Mr. Muhammad Jahanzeb, Company's employee,
Lahore.
Toyota Corolla LE-15-1056 1 1,693 1,055 638 904 266 Company's Policy Mr. Tariq Iqbal Khan, Company's employee, Lahore.
Honda City LEB-15-4265 1 1,691 1,000 691 860 169 Company's Policy Mr. Abdul Rehman, Company's ex-employee, Lahore.
Toyota Hiace LEB-11-1232 1 3,582 2,895 687 2,011 1,324 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Toyota Corolla LEC-15-6445 1 1,685 1,016 669 976 307 Company's Policy Mr. Amjad Abbas Majid, Company's employee,
Muzaffargarh.
Toyota Hiace LET-18-1581 1 3,328 2,615 713 1,711 998 Negotiation Mr. Farhan Makhdoom Khan, Toba Tek Singh.
Honda City LEF-13-9941 1 1,710 1,208 502 690 188 Company's Policy Mr. Siraj-ud-Dean Mann, Company's ex-employee,
Faisalabad.
Toyota Corolla LEF-15-5461 1 2,021 1,204 817 1,109 292 Company's Policy Mr. Khalid Mehmood Chohan, Company's employee,
Lahore.
Honda Civic LEE-15-2183 1 1,857 1,112 745 1,005 260 Company's Policy Mr. Khalid Mehmood, Company's employee, Lahore.
Honda City LED-15-6571 1 1,280 770 510 694 184 Company's Policy Mr. Rizwan Aslam, Company's employee, Lahore.
Toyota Corolla LED-15-2944 1 1,886 1,144 742 1,004 262 Company's Policy Mr. Syed Amir Hussain, Company's employee,
Faisalabad.
Suzuki Swift LEF-15-6390 1 1,255 742 513 703 190 Company's Policy Mr. Ghulam Mustafa, Company's employee, Lahore.
Suzuki Cultus LEA 18A 4919 1 1,555 414 1,141 1,141 - Company's Policy Mr. Bilal Naeem, Company's employee, Lahore.
44,794 28,415 16,379 24,364 7,984
Aggregate of other items of property,

plant and equipment with individual book
values not exceeding Rupees 500,000
182,809 167,576 15,233 28,133 12,900
376,481 299,483 76,998 97,272 20,273
Annual Report 2020
2020 2019
15.1.3 Depreciation and amortization charge

for the year has been allocated as follows:
Cost of sales 31 3,455,552 3,463,266

Distribution cost 32 50,239 39,310
Administrative expenses 33 179,656 160,122
Capital work-in-progress 17,541 -
3,702,988 3,662,698
15.1.4 Particulars of immovable fixed assets are as follows:
Description Address Area of land

Acres
Spinning units, Yarn dyeing unit Nishatabad, Faisalabad. 92.09

and Power plant
Spinning units and Power plant Plot No. 172-180 & 188-197,
M-3 Industrial City, Sahianwala,
FIEDMC, 2 K.M., Jhumra Chiniot
Road, Chak Jhumra, Faisalabad. 98.95
Spinning units and Power plant 20 K.M., Sheikhupura Road, Feroze Wattwan. 66.94
Weaving units and Power plant 12 K.M., Faisalabad Road, Sheikhupura. 85.53
Weaving units, Dyeing and finishing 5 K.M., Nishat Avenue Off 22 K.M.,
units, Processing unit, Stitching Ferozepur Road, Lahore. 114.06
units and Power plants
Terry unit 7 K.M., Nishat Avenue Off 22 K.M.,
Apparel unit 2 K.M., Nishat Avenue Off 22 K.M.,
Office 7-Main Gulberg, Lahore. 1.12
Freehold land Plot No. 14, Block-B, DHA Phase VIII, Lahore. 0.05
NL Tower (Retail Outlet) 5/A-3 Gulberg, Lahore. 0.25
Power Plant- Nishat Power Limited Jamber Kalan, Tehsil Pattoki, District Kasur. 34.07
Factory land 21 K.M., Ferozepur Road, Lahore. 4.21
Commercial building Mian Mehmood Kasuri Road, Gulberg III, Lahore. 0.76
526.89
169

2020 2019
15.2 Capital work-in-progress
Buildings on freehold land 320,429 199,825

Plant and machinery 2,030,943 376,033
Electric installations - 38,103
Unallocated expenses 102,070 27,069
Letters of credit against machinery 8 1,159
Advance against purchase of land 50,758 23,658
Advances against furniture and office equipment 2,046 8,776
Advances against vehicles 41,259 13,334
2,547,513 687,957
Less: Impairment loss (4,773) -
2,542,740 687,957
15.3 Major spare parts and standby equipment

Add: Additions during the year 37,502 165,796
211,703 358,623
Less: Transferred during the year (106,457) (184,422)
16 INTANGIBLE ASSETS
FRANCHISE COMPUTER Total

FEE SOFTWARE
At 30 June 2018
Cost 9,834 25,178 35,012
Accumulated amortization (8,131) (16,404) (24,535)
Net book value 1,703 8,774 10,477

Amortization charged (1,703) (5,035) (6,738)
Closing net book value - 3,739 3,739
At 30 June 2019
Cost 9,834 25,178 35,012
Net book value - 3,739 3,739

Opening net book value - 3,739 3,739
Amortization charged - (2,480) (2,480)
Closing net book value - 1,259 1,259
At 30 June 2020
Cost 9,834 25,178 35,012
Net book value - 1,259 1,259
Annual amortization rate (%) 20 20
170
Annual Report 2020
17 RIGHT-OF-USE ASSETS
Land Buildings Total

Net carrying amount
01 July 2019 30,911 1,992,517 2,023,428
30 June 2020 19,673 2,011,063 2,030,736
Currency retranslation - loss 395 9,820 10,215
Depreciation expense for the year ended 30 June 2020 10,843 653,802 664,645
Additions during the year ended 30 June 2020 - 682,168 682,168
Lease of land
The Nishat International FZE - Subsidiary Company obtained land on lease for warehouse purpose. Lease period
is 5 years.
Lease of buildings
The Group obtained buildings on lease for godowns and shops. Lease terms are negotiated on an individual
basis and contain a wide range of different terms and conditions. Lease periods range from two to fourteen years.
2020 2019
17.1 Depreciation charge for the year has been

allocated as follows:
Distribution cost 32 504,552 -

Administrative expenses 33 160,093 -
664,645 -
18 LONG TERM INVESTMENTS
Debt instruments 18.1 - 559,606

Equity instruments 18.2 50,115,435 50,788,824
50,115,435 51,348,430
18.1 Debt instruments
At amortized cost
Sales tax refund bonds - at amortized cost

Nil (2019: 5,555) bonds of Rupees 100,000 each - 555,500
Add: Accrued interest - 4,106
- 559,606
171

2020 2019
18.2 Equity instruments
Associates (with significant influence)

- under equity method
D.G. Khan Cement Company Limited - quoted

Lalpir Power Limited - quoted 18.2.1

109,393,555 (2019: 109,393,555) fully paid ordinary
shares of Rupees 10 each.
Equity held 28.80% (2019: 28.80%) 4,798,766 3,986,932
Pakgen Power Limited - quoted 18.2.1

102,524,728 (2019: 102,524,728) fully paid ordinary
shares of Rupees 10 each. Equity held 27.55%
(2019: 27.55%) 5,870,717 4,809,748
Nishat Paper Products Company Limited - unquoted

of Rupees 10 each. Equity held 25% (2019: 25%) 381,216 351,115
Nishat Dairy (Private) Limited - unquoted

of Rupees 10 each. Equity held 12.24% (2019: 12.24%) 315,510 330,126
Hyundai Nishat Motor (Private) Limited - unquoted 18.2.2

of Rupees 10 each. Equity held 12% (2019: 12%) 609,670 563,878
Sanifa Agri Services Limited - unquoted 18.2.3

of Rupees 10 each. Equity held 33.33% (2019: 33.33%) - 21,560
Nishat Hotels and Properties Limited - unquoted

of Rupees 10 each. Equity held 7.40% (2019: 7.40%) 454,075 581,379
Nishat Sutas Dairy Limited - unquoted

16,630,000 (2019: Nil) fully paid ordinary shares of
Rupees 10 each. Equity held 34.46% (2019: Nil) 166,300 -
34,133,862 33,528,051
172
Annual Report 2020
2020 2019
Associated companies (Others)
Adamjee Insurance Company Limited - quoted

MCB Bank Limited - quoted

Security General Insurance Company Limited - unquoted 18.2.4

12,864,388 12,864,388
Related party
Nishat (Chunian) Limited - quoted

Others
Alhamra Islamic Stock Fund - quoted

1,121,410 (2019: 1,108,714) units 3,135 3,025
Pakistan Petroleum Limited - quoted

67,544 67,434
Add: Fair value adjustment 2,670,686 3,949,996
15,981,573 17,260,773
50,115,435 50,788,824
18.2.1 Investments in Lalpir Power Limited and Pakgen Power Limited include 550 and 500 shares
respectively, held in the name of nominee director of the Holding Company.
18.2.2 Investments in Hyundai Nishat Motor (Private) Limited include 4 shares held in the name of
nominee directors of the Holding Company.
18.2.3 This includes 1,600 (2019: 1,600) shares held in the name of chief financial officer of the Holding
Company and ex-chief financial officer of the Holding Company. The shares held in the name of
ex-chief financial officer of the Holding Company are being transferred.
18.2.4 Fair value per ordinary share of Security General Insurance Company Limited is determined at
173
18.3 Reconciliation of investments in associates under equity method:
174
D. G. Khan Cement Nishat Paper Products Nishat Dairy Nishat Hotels and Hyundai Nishat Motor Sanifa Agri Nishat Sutas Total
Lalpir Power Limited Pakgen Power Limited Nishat Energy Limited
Company Limited Company Limited (Private) Limited Properties Limited (Private) Limited Services Limited Dairy Limited
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Cost 3,418,145 3,418,145 116,342 116,342 600,000 600,000 1,640,306 1,640,306 1,272,194 1,272,194 5,000 5,000 740,229 740,229 897,000 660,000 65,916 56,416 166,300 - 8,921,432 8,508,632
Share of post acquisition reserves:
As at 01 July 19,465,168 21,413,428 234,773 218,194 (269,874) (277,366) 2,346,626 2,110,578 3,537,554 3,096,875 (3,314) (3,314) (158,850) (55,307) (96,122) (61,464) (34,856) - - - 25,021,105 26,441,624
Share of profit / (loss) after income tax (677,820) 505,465 32,669 14,805 (14,616) 7,492 814,518 345,216 1,058,913 600,958 - - (127,304) (103,543) (191,208) (34,658) (31,060) (34,856) - - 864,092 1,300,879
Share of other comprehensive income / (loss) (530,311) (1,855,747) (2,568) (4,578) - - (2,684) 225 2,056 (6,493) - - - - - - - - - - (533,507) (1,866,593)
Adjustments due to adoption of IFRS 9 / IFRS 15 - (13,288) - 6,352 - - - - - - - - - - - - - - - - - (6,936)
Dividend received (137,574) (584,690) - - - - - (109,393) - (153,786) - - - - - - - - - - (137,574) (847,869)
As at 30 June (1,345,705) (1,948,260) 30,101 16,579 (14,616) 7,492 811,834 236,048 1,060,969 440,679 - - (127,304) (103,543) (191,208) (34,658) (31,060) (34,856) - - 193,011 (1,420,519)
18,119,463 19,465,168 264,874 234,773 (284,490) (269,874) 3,158,460 2,346,626 4,598,523 3,537,554 (3,314) (3,314) (286,154) (158,850) (287,330) (96,122) (65,916) (34,856) - - 25,214,116 25,021,105
Impairment loss - - - - - - - - - - (1,686) (1,686) - - - - - - - - (1,686) (1,686)
As at 30 June 21,537,608 22,883,313 381,216 351,115 315,510 330,126 4,798,766 3,986,932 5,870,717 4,809,748 - - 454,075 581,379 609,670 563,878 - 21,560 166,300 - 34,133,862 33,528,051
18.3.1 Summarized statement of financial position
Current assets 34,095,100 33,623,260 3,598,217 3,821,431 612,409 496,543 21,379,614 21,049,440 25,252,302 24,071,116 47 59 2,300,727 2,569,826 5,220,993 965,997 44,253 66,597
Non-current assets 95,456,434 92,318,165 1,585,161 1,644,729 2,667,958 2,746,261 7,439,204 8,579,333 6,391,553 7,258,400 - - 22,508,944 23,506,972 12,939,943 8,977,488 131,343 19,281
Current liabilities 37,624,257 34,247,052 2,778,731 3,178,737 701,991 525,545 12,090,882 15,783,587 10,285,981 13,840,737 75 87 5,373,571 9,703,462 3,999,727 1,394,552 150,145 13,428
Non-current liabilities 25,283,120 20,764,550 880,543 883,721 21,255 40,728 65,564 1,683 47,339 29,313 - - 13,384,915 8,601,827 8,668,771 3,438,095 26,757 7,772
Net assets 66,644,157 70,929,823 1,524,104 1,403,702 2,557,121 2,676,531 16,662,372 13,843,503 21,310,535 17,459,466 (28) (28) 6,051,185 7,771,509 5,492,438 5,110,838 (1,306) 64,678
Reconciliation to carrying amounts:
As at 01 July 70,929,823 77,134,421 1,403,702 1,337,384 2,676,531 2,615,323 13,843,503 13,023,895 17,459,466 15,859,820 (28) (2,114) 7,771,509 8,770,743 5,110,838 1,399,657 64,678 -
Prior year adjustments (1,408) - - - - - - - - - - 2,408 (241,551) (480,170) - - - 16,560
Adjustments due to adoption of IFRS 9 / IFRS 15 - (42,319) - 25,410 - - - - - - - - - - - - - -
Issue of share capital - - - - - - - - - - - - - 400,000 1,975,000 4,000,000 28,500 85,200
Profit / (loss) after income tax (2,158,661) 1,609,759 130,675 59,221 (119,410) 61,208 2,828,188 1,198,666 3,843,606 2,181,337 - (322) (1,478,773) (919,064) (1,593,400) (288,819) (94,484) (37,082)
Other comprehensive income / (loss) (1,687,478) (5,910,025) (10,273) (18,312) - - (9,318) 781 7,463 (23,569) - - - - - - - -
Dividend paid (438,119) (1,862,013) - - - - - (379,839) - (558,122) - - - - - - - -
As at 30 June 66,644,157 70,929,823 1,524,104 1,403,703 2,557,121 2,676,531 16,662,373 13,843,503 21,310,535 17,459,466 (28) (28) 6,051,185 7,771,509 5,492,438 5,110,838 (1,306) 64,678
Group's share (%) 31.40% 31.40% 25.00% 25.00% 12.24% 12.24% 28.80% 28.80% 27.55% 27.55% 37.75% 37.75% 7.40% 7.40% 12.00% 12.00% 33.33% 33.33%
Group's share 20,926,216 22,271,920 381,027 350,926 312,992 327,608 4,798,766 3,986,932 5,870,717 4,809,748 - - 447,796 575,100 659,093 613,301 - 21,560
Goodwill 611,392 611,393 189 189 2,518 2,518 - - - - - - 6,279 6,279 (49,423) (49,423) - -
Carrying amount 21,537,608 22,883,313 381,216 351,115 315,510 330,126 4,798,766 3,986,932 5,870,717 4,809,748 - - 454,075 581,379 609,670 563,878 - 21,560
18.3.2 Summarized statement of comprehensive income
Revenue 38,033,124 40,516,525 4,273,014 4,056,849 1,734,733 1,473,576 10,673,957 15,037,159 10,444,956 13,761,076 - - 3,855,646 4,220,346 997,604 95,253 351,011 62,780
Profit / (loss) for the period (2,158,661) 1,609,759 130,675 59,221 (119,410) 61,208 2,828,188 1,198,666 3,843,606 2,181,337 - (322) (1,478,773) (919,064) (1,593,400) (288,819) (94,484) (37,082)
Other comprehensive income / (loss) (1,687,478) (5,910,025) (10,273) (18,312) - - (9,318) 781 7,463 (23,569) - - - - - - - -
Total comprehensive income / (loss) (3,846,139) (4,300,266) 120,402 40,909 (119,410) 61,208 2,818,870 1,199,447 3,851,069 2,157,768 - (322) (1,478,773) (919,064) (1,593,400) (288,819) (94,484) (37,082)
Dividend received from associates 137,574 584,690 - - - - - 109,393 - 153,786 - - - - - - - -
18.4 Adamjee Insurance Company Limited and MCB Bank Limited are associated companies due to common directorship.
18.5 Interests in associates
Country of % of ownership Measurement

Name of associated company Note Quoted fair value Carrying amount
incorporation interest method
2020 2019 2020 2019 2020 2019
D.G. Khan Cement Company Limited 18.5.1 Pakistan 31.40% 31.40% Equity method 11,739,207 7,778,445 21,537,608 22,883,313
Nishat Paper Products Company Limited 18.5.2 Pakistan 25.00% 25.00% Equity method -* -* 381,216 351,115
Nishat Dairy (Private) Limited 18.5.3 Pakistan 12.24% 12.24% Equity method -* -* 315,510 330,126
Lalpir Power Limited 18.5.4 Pakistan 28.80% 28.80% Equity method 1,276,623 1,422,116 4,798,766 3,986,932
Pakgen Power Limited 18.5.5 Pakistan 27.55% 27.55% Equity method 1,231,322 1,453,801 5,870,717 4,809,748
Nishat Energy Limited 18.5.6 Pakistan 37.75% 37.75% Equity method -* -* - -
Nishat Hotels and Properties Limited 18.5.7 Pakistan 7.40% 7.40% Equity method -* -* 454,075 581,379
Hyundai Nishat Motor (Private) Limited 18.5.8 Pakistan 12.00% 12.00% Equity method -* -* 609,670 563,878
Sanifa Agri Services Limited 18.5.9 Pakistan 33.33% 33.33% Equity method -* -* - 21,560
Nishat Sutas Dairy Limited 18.5.10 Pakistan 34.46% - Equity method -* -* 166,300 -
18.5.1 D.G. Khan Cement Company Limited is engaged in production and sale of clinker, ordinary portland and sulphate resistant cement.
18.5.2 Nishat Paper Products Company Limited is engaged in the manufacture and sale of paper products and packaging material.
18.5.3 Nishat Dairy (Private) Limited is engaged in the business of production of raw milk.
18.5.4 The principal activities of Lalpir Power Limited are to own, operate and maintain an oil fired power station having gross capacity of 362 MW in Mehmood Kot, Muzaffargarh, Punjab, Pakistan.
18.5.5 The principal activities of Pakgen Power Limited are to own, operate and maintain an oil fired power station having gross capacity of 365 MW in Mehmood Kot, Muzaffargarh, Punjab, Pakistan.
18.5.6 The principal activity of Nishat Energy Limited is to build, own, operate and maintain coal power station having gross capacity of 660 MW with net estimated generation capacity of 600 MW at Mouza Ameer Pur, Rahim Yar Khan, Punjab, Pakistan.
18.5.7 The principal activity of Nishat Hotels and Properties Limited is to establish and manage shopping mall and hotel operations in Pakistan.
18.5.8 The principal activity of Hyundai Nishat Motor (Private) Limited is to import, assembly and distribution of both passenger and commercial category automobiles.
18.5.9 The principal activity of Sanifa Agri Services Limited is to produce and market high quality cotton seeds in Pakistan.
18.5.10 The principal activity of Nishat Dairy (Private) Limited is to manufacture, produce, distribute, market, acquire, process, package, sell, resell, import, export, preserve, deep freeze and otherwise deal in all types and kinds of milk and dairy based products.
*No quoted price available.
Annual Report 2020
2020 2019
19 LONG TERM LOANS
Considered good:
Executives - secured 19.1 & 19.2 253,434 198,262
Other employees - secured 19.2 247,045 239,410
500,479 437,672
Less: Current portion shown under current assets 24

Executives 63,365 47,361
Other employees 75,479 66,835
138,844 114,196
361,635 323,476
19.1 Maximum aggregate balance due from executives at the end of any month during the year was
Rupees 254.502 million (2019: Rupees 199.208 million).
19.2 These represent house construction and motor vehicle loans given to executives and employees of
Nishat Mills Limited - Holding Company, Nishat Linen (Private) Limited - Subsidiary Company and Nishat
Power Limited - Subsidiary Company and are secured against balance to the credit of employee in the
provident fund trusts of the respective companies and against registration of cars in the joint name of the
respective company and the employee. These are recoverable in equal monthly installments.
19.3 The fair value adjustment in accordance with the requirements of IFRS 9 'Financial Instruments' arising in
respect of staff loans is not considered material and hence not recognized.
20 LONG TERM DEPOSITS
Security deposits 225,882 213,901
21 STORES, SPARE PARTS AND LOOSE TOOLS
Stores 21.1 1,599,830 2,591,764

Spare parts 1,369,757 1,300,982
Loose tools 14,171 19,569
2,983,758 3,912,315
Less: Provision for slow moving, obsolete and damaged store items 21.2 (4,218) (4,224)
2,979,540 3,908,091
21.1 This includes stores in transit of Rupees 215.881 million (2019: Rupees 1,108.668 million).
175

21.2 Provision for slow moving, obsolete and damaged store items
2020 2019

Less: Provision reversed during the year 35 (6) (66)
22 STOCK IN TRADE
Raw materials 16,750,509 15,261,580

Work in process 22.2 2,244,439 2,218,560
Finished goods 22.3 & 22.5 9,393,252 6,909,811

Less: Provision for slow moving and obsolete stocks (21,065) (21,065)
9,372,187 6,888,746
28,367,135 24,368,886
22.1 Stock in trade of Rupees 654.768 million (2019: Rupees 436.764 million) is being carried at net realizable
value.
22.2 This includes stock of Rupees 11.612 million (2019: Rupees 10.912 million) sent to outside parties for
processing.
22.3 Finished goods include stock in transit of Rupees 1,384.397 million (2019: Rupees 1,074.319 million).
22.4 The aggregate amount of write-down of inventories to net realizable value recognized as an expense
during the year was Rupees 22.364 million (2019: Rupees 85.954 million).
22.5 Finished goods include stock of Rupees 558.751 million (2019: Rupees 630.911 million) which is in the
possession of stockists of Nishat Linen (Private) Limited - Subsidiary Company.
23 TRADE DEBTS
Considered good:
Secured 19,237,356 16,964,955

Unsecured:
- Related parties 23.1 & 23.4 48,124 18,726
- Other 23.3 4,349,703 4,839,963
23,635,183 21,823,644
Less: Allowance for expected credit losses 23.7 (30,590) (28,453)
23,604,593 21,795,191
176
Annual Report 2020
2020 2019
23.1 This represents amount due from following related parties:
Adamjee Insurance Company Limited - associated company 594 -

Nishat Dairy (Private) Limited - associated company - 497
Hyundai Nishat Motor (Private) Limited - associated company 2,110 1,270
Adamjee Life Assurance Company Limited - associated company 1 -
D.G. Khan Cement Company Limited - associated company - 63
MCB Bank Limited - associated company 104 27
MCB Islamic Bank Limited - related party - 37
48,124 18,726
was as follows:
Lalpir Power Limited - associated company - 17

Pakgen Power Limited - associated company - 33
Adamjee Insurance Company Limited - associated company 595 134
Nishat Dairy (Private) Limited - associated company - 497
Hyundai Nishat Motor (Private) Limited - associated company 7,071 1,557
Adamjee Life Assurance Company Limited - associated company 130 247
D.G. Khan Cement Company Limited - associated company - 240
Sanifa Agri Services Limited - associated company - 132
MCB Bank Limited - associated company 1,559 519
MCB Islamic Bank Limited - related party 679 246
23.3 As at 30 June 2020, trade debts due from other than related parties of Rupees 1,696.067 million (2019:
Rupees 1,837.087 million) were past due but not impaired. These relate to a number of independent
customers from whom there is no recent history of default. The ageing analysis of these trade debts is as
follows:
Upto 1 month 1,426,041 1,252,533

1 to 6 months 244,476 562,348
More than 6 months 25,550 22,206
1,696,067 1,837,087
177

23.4 As at 30 June 2020, trade debts due from related parties amounting to Rupees 45.976 million (2019:
Rupees 3.419 million) were past due but not impaired. The ageing analysis of these trade debts is as
follows:
2020 2019
Upto 1 month 45,588 -

1 to 6 months 388 3,419
More than 6 months - -
45,976 3,419
23.5 Trade receivables of Nishat Power Limited - Subsidiary Company from NTDC are considered good.
These are secured by a guarantee from the Government of Pakistan under the Implementation
Agreement and are in the normal course of business and interest free, however, a delayed payment
mark-up at the rate of three months KIBOR plus 4.5% per annum is charged in case the amounts are not
paid within due dates. The rate of delayed payment mark-up charged during the year on outstanding
amounts ranges from 10.64% to 18.42% (2019: 10.57% to 17.47%) per annum. Trade debts include
unbilled receivables of Rupees 2,740.517 million (2019: Rupees 652.678 million).
23.6 Trade debts of Nishat Power Limited - Subsidiary Company - Include an amount of Rupees 816.033
million relating to capacity revenue not acknowledged by NTDC as the plant was not fully available for
power generation. However, the sole reason of this under-utilization of plant capacity was non-availability
of fuel owing to non-payment by NTDC.
Since management considers that the primary reason for claiming these payments is that plant was
available, however, could not generate electricity due to non-payment by NTDC, therefore, management
believes that Subsidiary Company cannot be penalized in the form of payment deductions due to NTDC’s
default of making timely payments under the PPA. Hence, the Subsidiary Company had taken up this
issue at appropriate forums.
On 28 June 2013, the Subsidiary Company entered into a Memorandum of Understanding ('MoU') for
cooperation on extension of credit terms with NTDC whereby it was agreed that the constitutional
petition filed by the Subsidiary Company before the Supreme Court of Pakistan on the abovementioned
issue would be withdrawn unconditionally and it would be resolved through the dispute resolution
mechanism under the PPA. Accordingly, as per terms of the MoU, the Subsidiary Company applied for
withdrawal of the aforesaid petition in 2013 and on 25 January 2018, the Supreme Court disposed off the
petitions filed before it. During the financial year 2014, the Subsidiary Company in consultation with
NTDC, appointed an Expert for dispute resolution under the PPA.
During the financial year 2016, the Expert gave his determination whereby the aforesaid amount was
determined to be payable to the Subsidiary Company by NTDC. Pursuant to the Expert’s determination,
the Subsidiary Company demanded the payment of the aforesaid amount of Rupees 816.033 million from
NTDC that has not yet been paid by NTDC. The Subsidiary Company filed a request for arbitration in the
London Court of International Arbitration ('LCIA'), whereby an Arbitrator was appointed.
In October 2015, the Government of Pakistan ('GOP') through Private Power & Infrastructure Board
('PPIB') filed a case in the court of Senior Civil Judge, (“Civil Case 2015”), Lahore, against the
aforementioned decision of the Expert, praying it to be illegal, which is pending adjudication.
178
Annual Report 2020
Consequently, invitation to participate in arbitration was issued to the PPIB/GOP. PPIB filed separate Civil
Suit before the Civil Judge, Lahore, seeking inter alia that the parties should be restrained from
participating in the arbitration proceedings in the LCIA (“Civil Case 2016”). The Subsidiary Company filed
applications in the Civil Court where the Subsidiary Company prayed that the Civil Court, Lahore lacks
the jurisdiction in respect of the cases filed by PPIB. In respect of the aforementioned applications,
through its orders dated 18 April 2017, the Civil Court, Lahore rejected Subsidiary Company's pray and
granted the pray of PPIB whereby, the court accepted PPIB’s applications for interim relief in 2015 and
2016 Civil Suits. Being aggrieved, the company challenged before the Additional District Judge, Lahore
against the aforementioned orders of the Civil Court and continued to take part in the arbitration
proceedings. Furthermore, in response to the Subsidiary Company's continued participation in the
arbitration proceedings, PPIB filed contempt petition before Lahore High Court ('LHC') in respect of the
decision of the Civil Court, Lahore and the LHC passed an order in those proceedings. The Subsidiary
Company challenged the LHC’s order before the Division Bench of LHC, which decided the matter in
favour of the Subsidiary Company through its order dated 31 May 2017 whereby, the aforementioned
order of the LHC was suspended.
The Arbitrator, on 08 June 2017, declared his Partial Final Award and decided the matter principally in
Subsidiary Company's favour and declared that the above mentioned Expert's determination is final and
binding on all parties (“Final Partial Award”).
Aggrieved by the Partial Final Award, NTDC challenged the Arbitrator’s decision in Lahore Civil Court
(“Civil Case 2017”), which suspended the Final Partial Award on 10 July 2017. In response to this decision
of Civil Court, the Subsidiary Company filed a revision petition in District Court and the District Court
(“District Case 2017”) while granting interim relief to the Subsidiary Company, suspended the Civil Court’s
order on 12 August 2017. Along with challenging the Final Partial Award in Lahore Civil Court, NTDC also
challenged the same, on 06 July 2017, in Commercial Court of England. As per advice of foreign legal
counsel, the Subsidiary Company also filed a case for anti suit injunction in Commercial Court of England
against NTDC on 14 August 2017.
The District Judge, Lahore through his order dated 8 July 2017 set-aside the aforementioned orders of
the Civil Judge, Lahore dated 18 April 2017 and accepted Subsidiary Company's appeals but dismissed
the Subsidiary Company’s revision petitions concerning the issue of jurisdiction. Aggrieved by this
decision, (i) the Subsidiary Company filed writ petitions before the LHC, which announced a favourable
decision and suspended the proceedings of Civil Cases 2015 and 2016 till the final decision of LHC; and
(ii) GOP/PPIB filed revision petitions in the LHC, which are currently pending adjudication.
On 29 October 2017, the Arbitrator declared his Final Award whereby he ordered NTDC to pay to the
company: i) Rupees 816.033 million pursuant to Expert’s determination; ii) Rupees 189.385 million being
Pre award interest; iii) Rupees 9.203 million for breach of arbitration agreement; iv) Rupees 1.684 million
and USD 612,310 for the Subsidiary Company’s cost of proceedings; v) GBP 30,157 for company’s LCIA
cost of Arbitration and vi) Interest at KIBOR + 4.5% compounded semi-annually from the date of Final
Award until payment of these amounts by NTDC (“the Final Award”) that works out to Rupees 347.417
million up to 30 June 2020.
On 24 November 2017, NTDC challenged the Final Award in Commercial Court of England. On 29
November 2017, Subsidiary Company filed an application before Lahore High Court for
implementation/enforcement of Final Award that is also pending adjudication. During the hearing held in
December 2017 in London, NTDC withdrew its petitions dated 06 July 2017 and 24 November 2017 filed
before Commercial Court of England against the company, pertaining to Partial Final Award and Final
Award respectively.
179

On 4 May 2018, Commercial Court of England issued a favourable decision in the case of anti suit
injunction, thereby preventing NTDC from pursuing case in Pakistan Civil Courts against Partial Final
Award/Final Award and taking any steps outside England to set aside Partial Final Award/Final Award
issued by the Arbitrator. Aggrieved by this decision, NTDC had sought permission to file an appeal before
the Court of Appeals, London, which was rejected by the Court on 04 October 2018.
Based on the favourable Expert’s determination and Arbitration Award, management strongly feels that
under the terms of the PPA and Implementation Agreement, the above amount of Rupees 816.033 million
is likely to be recovered by the company. Consequently, no provision for this amount has been made in
Further, on prudence basis, the Group has not recognised the abovementioned amounts in these
consolidated financial statements for Pre-award interest, breach of arbitration agreement, Subsidiary
Company’s cost of proceedings, Subsidiary Company’s LCIA cost of Arbitration and interest thereon on
all these amounts as per Final Award due to its uncertainty since it is pending adjudication as mentioned
above. Such amounts as per Final Award would be recognized when it attains finality and it is certain.
2020 2019
23.7 Allowance for expected credit losses
Opening balance 28,453 -

Add: Recognized as on 01 July 2018 - 16,987
Add: Recognized during the year - net 34 2,137 11,466
30,590 28,453
24 LOANS AND ADVANCES
Considered good:
Employees - interest free:

– Executives 646 55
– Other employees 13,188 11,274
13,834 11,329
Current portion of long term loans 19 138,844 114,196
Advances to suppliers 251,714 315,079
Letters of credit 2,575 1,395
Advance income tax - net of provision for taxation 652,738 603,278
Other advances 312,792 388,256
1,372,497 1,433,533
Considered doubtful:
Others 108 108

Less: Provision for doubtful debts 108 108
- -
1,372,497 1,433,533
180
Annual Report 2020
2020 2019
25 SHORT TERM DEPOSITS AND PREPAYMENTS
Deposits 61,543 63,419

Prepayments 122,858 258,471
184,401 321,890
26 OTHER RECEIVABLES
Considered good:
Export rebate and claims 167,730 282,866

Duty drawback 576,897 708,511
Sales tax refundable 3,306,544 1,676,005
Fair value of forward exchange contracts 345 958
Workers' profit participation fund receivable 26.1 450,280 401,225
Workers' welfare fund receivable 98,852 -
Miscellaneous receivables 51,619 73,759
4,652,267 3,143,324
26.1 Under section 9.3(a) of the Power Purchase Agreement (PPA) between Nishat Power Limited - Subsidiary
Company and NTDCL, payments to Workers' Profit Participation Fund are recoverable from NTDCL as a
pass through item.
27 ACCRUED INTEREST
27.1 This includes an amount due from MCB Bank Limited - associated company amounting to Rupees 0.094
million (2019: Rupees 0.674 million) and from Sanifa Agri Services Limited - associated company
amounting to Rupees 1.432 million (2019: Rupees Nil).
27.2 The maximum aggregate amount due from MCB Bank Limited - associated company at the end of any
month during the year was Rupees 0.094 million (2019: Rupees 1.654 million) and from Sanifa Agri
Services Limited - associated company amounting to Rupees 1.432 million (2019: Rupees Nil).
28 SHORT TERM INVESTMENT
This represents investment of Nishat Power Limited - subsidiary company in 3 month Government Treasury Bills
which bear mark-up at 7.80% (2019: Nil) per annum.
181

2020 2019
29 CASH AND BANK BALANCES
With banks:
On current accounts 29.1 & 29.2

Including US$ 82,398 (2019: US$ 101,607.35) and
UAE Dirhams 8,604,600 (2019: UAE Dirhams 10,932,535) 557,158 608,113
Term deposit receipts 29.3 149,396 553,719
On PLS saving accounts 29.1 & 29.4

Including US$ 117 (2019: US$ 117) 17,459 12,055
724,013 1,173,887
Cash in hand
Including UAE Dirhams 188,154 (2019: UAE Dirhams 385,306) 34,714 46,535
758,727 1,220,422
29.1 Cash at banks includes balance of Rupees 31.700 million (2019: Rupees 45.759 million) with MCB Bank
29.2 Cash at banks includes balance of Rupees 0.077 million (2019: Rupees 1.544 million) with MCB Islamic
Bank Limited - related party.
29.3 These represent term deposits with banking companies having maturity period of upto one month and
carry profit at the rates ranging from 6.40% to 6.50% (2019: 10.40% to 12.50%) per annum.
29.4 Rate of profit on Pak Rupees bank deposits ranges from 6.29% to 14.00% (2019: 3.11% to 10.50%) per
annum.
2020 2019
30 REVENUE
Export sales 45,725,446 48,183,734

Local sales 30.1 42,039,527 46,828,846
Processing income 338,590 398,245
Export rebate 199,090 188,326
Duty drawback 407,177 406,171
88,709,830 96,005,322
30.1 Local sales
Sales 30.1.1 50,174,951 50,965,660

Less: Sales tax (5,774,939) (2,395,972)
Less: Discount (2,360,485) (1,740,842)
42,039,527 46,828,846
182
Annual Report 2020
30.1.1 This includes sale of Rupees 2,977.374 million (2019: Rupees 2,557.696 million) made to direct
exporters against standard purchase orders (SPOs). Further, local sales includes waste sale of
Rupees 1,818.936 million (2019: Rupees 2,414.876 million).
2020 2019
31 COST OF SALES
Raw materials consumed 45,987,292 53,336,672

Processing charges 742,535 624,779
Salaries, wages and other benefits 31.1 7,218,329 6,566,564
Stores, spare parts and loose tools consumed 6,971,855 6,525,952
Packing materials consumed 1,439,156 1,545,191
Fuel and power 6,034,186 6,357,661
Insurance 326,699 267,189
Royalty 31.2 7,800 8,593
Other factory overheads 734,800 782,797
Depreciation and amortization 15.1.3 3,455,552 3,463,266
73,331,359 79,912,193
Work-in-process
Opening stock 2,218,560 2,517,792

Closing stock (2,244,439) (2,218,560)
(25,879) 299,232
Cost of goods manufactured 73,305,480 80,211,425
Finished goods
Opening stock 6,909,811 5,807,366

Closing stock (9,393,252) (6,909,811)
(2,483,441) (1,102,445)
70,822,039 79,108,980
31.1 Salaries, wages and other benefits include provident fund contributions of Rupees 221.109 million (2019:
Rupees 197.290 million) and Rupees 0.362 million (2019: Rupees 0.241 million) in respect of provision for
compensated absences.
31.2 This represents the amount of royalty being paid to Saint James's Club Limited, London.
183

2020 2019
32 DISTRIBUTION COST

Outward freight and handling 1,679,658 1,591,469
Sales promotion 653,834 709,615
Commission to selling agents 666,384 631,897
Royalty 32.2 71,843 55,495
Fuel cost 178,411 192,559
Insurance 27,666 27,509
Advertisement 502,981 263,977
Depreciation on right-of-use assets 17.1 504,552 -
Depreciation 15.1.3 50,239 39,310
6,093,102 5,741,161
32.1 Salaries and other benefits include provident fund contributions of Rupees 43.931 million (2019: Rupees
38.681 million).
32.2 Particulars of royalty paid during the year are as follows:
Relationship with the

2020 2019
Name of the company Registered address Group or directors
Related / Other (Rupees in thousand)
American and Efird LLC 22 American Street, Other 52,312 51,374

Mount Holly, North
Carolina, 28120.
184
Annual Report 2020
2020 2019
33 ADMINISTRATIVE EXPENSES
Salaries and other benefits 33.1 1,315,633 1,191,625

Insurance 20,094 18,448
Legal and professional 60,479 32,296
Auditors’ remuneration 33.2 15,556 16,176
Advertisement 1,805 812
Depreciation on right-of-use assets 17.1 160,093 -
Depreciation 15.1.3 179,656 160,122
Miscellaneous 63,012 53,966
2,223,204 1,833,976
33.1 Salaries and other benefits include provident fund contributions of Rupees 50.105 million (2019: Rupees
44.562 million), Rupees 0.316 million (2019: Rupee 0.145 million) in respect of provision for compensated
absences and Rupees 3.374 million (2019: Rupees 1.982 million) in respect of retirement benefit -
gratuity.
33.2 Auditors' remuneration
Riaz Ahmad and Company
Audit fee 5,631 5,330

Other certifications 155 155
6,924 6,595
A.F. Ferguson and Company
Statutory audit fee 2,490 2,440
Tax services 495 2,075
Other certification services 380 369
4,572 6,040
Crowe Mak
Audit fee 3,964 -
Reimbursable expenses 96 -
4,060 -
Griffin Nagda and Company
Audit fee - 3,190
Reimbursable expenses - 351
- 3,541
15,556 16,176
185

2020 2019
34 OTHER EXPENSES
Workers’ profit participation fund 204,045 348,486

Bad debts written off 2,918 3,945
Impairment loss on capital work-in-progress 4,773 -
Operating fixed asset written off - 14,910
Provision for slow moving and obsolete stocks - 15,371
Allowance under expected credit losses 23.7 2,137 11,466
Donations 34.1 321 500
218,300 394,678
34.1 There is no interest of any director or his spouse in donees’ fund.
35 OTHER INCOME
Income from financial assets
Dividend income 35.1 1,718,515 1,640,076

Profit on deposits with banks 106,923 8,172
Net exchange gain 123,339 1,437,606
Interest income on loan to associated company 3,132 -
Gain on liquidation of subsidiary 66,350 -
2,018,259 3,089,960
Income from non-financial assets
Gain on sale of property, plant and equipment 20,273 24,302

Scrap sales 210,073 155,882
Reversal of provision for slow moving, obsolete and
damaged store items 21.2 6 66
Liabilities written back 2,488 2,065
Others 13,443 68,535
333,179 332,112
2,351,438 3,422,072
186
Annual Report 2020
2020 2019
35.1 Dividend income
From related party / associated companies
MCB Bank Limited 1,584,275 1,408,245

Nishat (Chunian) Limited 81,723 179,791
Adamjee Insurance Company Limited 257 257
Security General Insurance Company Limited 51,131 51,131
1,717,386 1,639,424
Others
Pakistan Petroleum Limited 1,000 652

Alhamra Islamic Stock Fund 129 -
1,129 652
1,718,515 1,640,076
36 FINANCE COST
Mark-up on:

Mark-up on lease liabilities 264,457 -
Interest on workers’ profit participation fund 9.3 4,124 1,005
Bank charges and commission 325,612 332,979
2,957,854 2,665,183
37 TAXATION
Current - for the year 1,286,087 1,361,966

Deferred (408,152) (30,763)
Prior year adjustment (38,829) (2)
839,106 1,331,201
38 EARNINGS PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earnings per share which is based on:
2020 2019
Profit attributable to ordinary shareholders of

Holding Company (Rupees in thousand) 6,352,753 7,806,357
Weighted average number of ordinary shares of

Holding Company (Numbers) 351,599,848 351,599,848
Earnings per share (Rupees) 18.07 22.20
187

2020 2019
39 CASH GENERATED FROM OPERATIONS
Profit before taxation 9,610,861 10,984,295
Adjustments for non-cash charges and other items:
Depreciation and amortization 3,685,447 3,662,698

Depreciation on right-of-use assets 664,645 -
Operating fixed assets written off - 14,910
Impairment loss on capital work-in-progress 4,773 -
Gain on liquidation of subsidiary (66,350) -
Trade debts written off 2,918 3,945
Provision for slow moving, obsolete and damaged store items - 15,371
Reversal of provision for slow moving, obsolete and
damaged store items (6) (66)
Allowance for expected credit losses 2,137 11,466
Net exchange gain (123,339) (1,437,606)
Gain on sale of property, plant and equipment (20,273) (24,302)
Dividend income (1,718,515) (1,640,076)
Profit on deposits with banks (110,055) (8,172)
Share of profit from associates (864,092) (1,300,879)
Provision for accumulated compensated absences 677 386
Interest income on sales tax refund bonds - (4,106)
Liabilities written back (2,488) (2,065)
Finance cost 2,957,854 2,665,183
Working capital changes 39.1 (3,903,079) (9,583,008)
10,125,221 3,357,974
39.1 Working capital changes
(Increase) / decrease in current assets:

- Stores, spare parts and loose tools 928,557 (1,229,917)
- Stock in trade (3,998,249) (5,969,826)
- Trade debts (1,799,160) (4,542,812)
- Loans and advances 135,144 (382,420)
- Short term deposits and prepayments 45,734 (37,281)
- Other receivables (954,056) 930,097
(5,642,030) (11,232,159)
Increase in trade and other payables 1,738,951 1,649,151
(3,903,079) (9,583,008)
188
Annual Report 2020
39.2 Reconciliation of movement of liabilities to cash flows arising from financing activities.
2020

Exchange
Long term Lease Short term Unclaimed
translation Total
financing liabilities borrowings dividend reserve
Balance as at 01 July 2019 10,086,021 - 24,402,574 114,673 219,168 34,822,436

Lease liabilities recognized - 2,613,840 - - - 2,613,840
Repayment of lease liabilities - (347,769) - - - (347,769)
Financing obtained 4,454,967 - - - - 4,454,967
Repayment of financing (4,404,834) - - - - (4,404,834)
Dividend declared - - - 1,582,221 - 1,582,221
Dividend paid - - - (1,585,627) - (1,585,627)
Short term borrowings - net - - (322,057) - - (322,057)
Exchange differences on translation
of net investments in
subsidiary companies - - - - 5,491 5,491
Balance as at 30 June 2020 10,136,154 2,266,071 24,080,517 111,267 224,659 36,818,668
2019

Exchange
Long term Lease Short term Unclaimed
translation Total
financing liabilities borrowings dividend reserve
Balance as at 01 July 2018 12,429,612 - 17,086,481 96,747 60,174 29,673,014

Financing obtained 1,871,034 - - - - 1,871,034
Repayment of financing (4,214,625) - - - - (4,214,625)
Dividend declared - - - 2,190,466 - 2,190,466
Dividend paid - - - (2,172,540) - (2,172,540)
Short term borrowings - net - - 7,316,093 - - 7,316,093
Exchange differences on translation
of net investments in
subsidiary companies - - - - 158,994 158,994
Balance as at 30 June 2019 10,086,021 - 24,402,574 114,673 219,168 34,822,436
40 EVENTS AFTER THE REPORTING PERIOD
40.1 The Board of Directors of the Nishat Mills Limited - Holding Company has proposed a cash dividend for the year ended 30
June 2020 of Rupees 4.00 per share (2019: Rupees 4.00 per share) at their meeting held on 18 September, 2020. The Board
of Directors also proposed to transfer Rupees 4,890 million (2019: Rupees 6,399 million) from un-appropriated profit to general
reserve. However, these events have been considered as non-adjusting events under IAS 10 'Events after the Reporting
Period' and have not been recognized in these consolidated financial statements.
189

41 REMUNERATION OF CHIEF EXECUTIVE OFFICER, DIRECTOR AND EXECUTIVES
The aggregate amount charged in these consolidated financial statements for remuneration including all benefits
to Chief Executive Officer, Director and Executives of the Holding Company is as follows:
Chief Executive Officer Director Executives

2020 2019 2020 2019 2020 2019
Managerial remuneration 32,503 27,169 11,163 12,064 554,058 460,235
Allowances
Cost of living allowance - - 1 1 781 668
House rent 13,001 10,868 216 288 148,293 125,965
Conveyance - - - - 880 1,020
Medical 3,250 2,717 912 1,068 47,939 40,438
Utilities - - 3,385 3,963 61,649 50,786
Special allowance - - 2 2 529 432
Contribution to provident fund trust - - 871 1,020 47,016 39,896

Leave encashment - - - - 12,867 17,838
48,754 40,754 16,550 18,406 874,012 737,278
Number of persons 1 1 Note 41.4 1 222 182
41.1 Chief Executive Officer, one director and certain executives of the Holding Company are provided with
Company maintained vehicles and certain executives are also provided with free housing facility along
with utilities.
41.2 Aggregate amount charged in these consolidated financial statements for meeting fee to five directors
(2019: five directors) of the Holding Company was Rupees 1.080 million (2019: Rupees 1.040 million).
41.3 No remuneration was paid to non-executive directors of the Holding Company.
41.4 This represents remuneration including all benefits paid to a director for the period from July 2019 to
March 2020. As on the reporting date, there are no paid directors of the Holding Company.
190
Annual Report 2020
42 TRANSACTIONS WITH RELATED PARTIES
The related parties comprise associated undertakings, other related companies and key management personnel.
The Group in the normal course of business carries out transactions with various related parties. Detail of
transactions with related parties, other than those which have been specifically disclosed elsewhere in these
consolidated financial statements are as follows:
2020 2019
Associated companies

Short term loans made 45,000 -
Sharing of expenses 11,082 4,864
Purchase of operating fixed assets - 49,630
Sale of operating fixed assets 819 4,530
Rent paid 78,920 73,936
Dividend paid 121,487 143,886
Insurance premium paid 437,800 373,895
Interest income 9,401 2,573
Insurance claims received 56,136 153,051
Finance cost 36,250 33,219
Other related parties
Dividend Income 81,723 179,791

Purchase of goods and services 2,961,120 2,526,262
Finance cost 637 880
Group’s contribution to provident fund trust 316,254 280,537
191

42.1 Detail of compensation to key management personnel comprising of chief executive officer, directors and executives
is disclosed in note 41.
42.2 Following are the related parties with whom the Group had entered into transactions or have arrangements /
agreements in place:
Transactions
entered or
agreements and / or
arrangements in Percentage of
Name of the related party Basis of relationship
place during the shareholding
financial year ended
2020 2019
Nishat Agriculture Farming Common directorship Yes No None

(Private) Limited
Nishat Dairy (Private) Limited Common directorship and shareholding Yes Yes 12.24
Nishat Sutas Dairy Limited Common directorship and shareholding Yes No 34.46
Nishat Hotels and Common directorship and shareholding Yes Yes 7.40
Properties Limited
Nishat (Gulberg) Hotels and Common directorship No No None
Properties Limited
Nishat (Raiwind) Hotels and Common directorship No No None
Properties Limited
Nishat (Aziz Avenue) Hotels Common directorship Yes Yes None
and Properties Limited
Security General Insurance Common directorship and shareholding Yes Yes 15.02
Company Limited
Nishat Energy Limited Shareholding No No 37.75
Pakgen Power Limited Common directorship and shareholding Yes Yes 27.55
Lalpir Power Limited Common directorship and shareholding Yes Yes 28.80
Nishat Paper Products Common directorship and shareholding No No 25.00
Company Limited
Pakistan Aviators and Aviation Common directorship Yes Yes None
(Private) Limited
Nishat Developers Common directorship Yes Yes None
(Private) Limited
Nishat Real Estates Development Common directorship No No None
Company (Private) Limited
Hyundai Nishat Motor Common directorship and shareholding Yes Yes 12.00
(Private) Limited
D.G. Khan Cement Common directorship and shareholding Yes Yes 31.40
Company Limited
Adamjee Life Assurance Common directorship Yes Yes None
Company Limited
Adamjee Insurance Common directorship and shareholding Yes Yes 0.03
Company Limited
MCB Bank Limited Common directorship and shareholding Yes Yes 7.43
MCB Islamic Bank Limited Wholly owned subsidiary of Yes Yes None
associated company
Nishat (Chunian) Limited Shareholding Yes Yes 13.61
Nishat Aggrotech Farms Common directorship No No None
(Private) Limited
Nishat Chunian Power Limited Executive of the Group is appointed No No None
as Director on the Board of NCPL
Sanifa Agri Services Limited Associated company Yes Yes None
Employees Provident Post-employment benefit plans Yes Yes None
Fund Trusts
192
Annual Report 2020
43 PROVIDENT FUNDS
43.1 Nishat Mills Limited - Holding Company and Nishat Linen (Private) Limited - Subsidiary Company
As at the reporting date, the Nishat Mills Employees Provident Fund Trust is in the process of regularizing
its investments in accordance with section 218 of the Companies Act, 2017 and the regulations
formulated for this purpose by Securities and Exchange Commission of Pakistan which allows transition
period of three years for bringing the Employees Provident Fund Trust in conformity with the requirements
of the regulations.
43.2 Nishat Power Limited - Subsidiary Company
The investments by the provident fund in collective investment schemes, listed equity and debt securities
have been made in accordance with the provisions of section 218 of the Companies Act, 2017 and the
conditions specified thereunder.
43.3 Nishat Hospitality (Private) Limited - Subsidiary Company
As per S.R.O. 856(I)/2019 dated 25 July 2019, a transition period of three years from the date of said
S.R.O has been granted to bring all the investments of the provident fund in conformity with the
provisions of the above regulations.
2020 2019
44 NUMBER OF EMPLOYEES
Number of employees as on 30 June 21,577 20,910

Average number of employees during the year 21,876 21,180
193

2020 2019
(Figures in thousand)
45 PLANT CAPACITY AND ACTUAL PRODUCTION
a) Holding Company - Nishat Mills Limited
Spinning
100 % plant capacity converted to 20s count based
Actual production converted to 20s count based

Weaving
100 % plant capacity at 50 picks based on 3 shifts
per day for 1,029 shifts (2019: 1,095 shifts) (Sq.Mtr.) 289,273 313,718
Actual production converted to 50 picks based

on 3 shifts per day for 1,029 shifts (2019: 1,095 shifts) (Sq.Mtr.) 275,483 300,155
Dyeing and Finishing

Production capacity for 3 shifts per day for 1,029 shifts
(2019: 1,095 shifts) (Mtr.) 52,856 56,400
Actual production on 3 shifts per day for 1,029 shifts

(2019: 1,095 shifts) (Mtr.) 42,912 49,394
Power Plant
Generation capacity (MWH) 932 788
Actual generation (MWH) 361 389
Processing, Stitching and Apparel
The plant capacity of these divisions are indeterminable due to multi product plants involving varying
processes of manufacturing and run length of order lots.
b) Subsidiary Company - Nishat Power Limited
Installed capacity [Based on 8,784 hours (2019: 8,760 hours)] (MWH) 1,715 1,711
Actual energy delivered (MWH) 277 675
c) Subsidiary Company - Nishat Hospitality (Private) Limited Total rooms available
Nishat Suites 21,789 21,179
45.1 REASON FOR LOW PRODUCTION
a) In the note of plant capacity and actual production, plant capacity of each segment of the Holding
Company has been adjusted to incorporate the impact of temporary suspension of operations due to
lock down announced by the Government of the Punjab. The Holding Company resumed its operations
after implementing necessary standard operating procedures.
Under utilization of available capacity by the Holding Company for spinning, weaving, dyeing and
finishing is mainly due to normal maintenance. Actual power generation in comparison to installed is low
due to periodical, scheduled and unscheduled maintenance and low demand.
b) Output produced by the plant of Nishat Power Limited - Subsidiary Company is dependent on the load
demanded by NTDCL and plant availability.
194
46 SEGMENT INFORMATION
Spinning Weaving Elimination of Inter-
Dyeing** Home Textile** Terry Garments Power Generation Hotel Total - Group
Faisalabad-I Faisalabad-II Feroze Wattwan I Feroze Wattwan II Lahore Bhikki Lahore** segment transactions
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Revenue
External 2,073,195 4,265,488 2,936,491 2,134,460 2,659,042 3,264,170 599,924 13,733 13,222,399 14,139,693 11,368,682 10,479,718 3,013,343 3,755,770 14,686,329 16,497,119 19,681,343 20,185,481 - - 6,506,263 5,340,260 11,781,598 15,635,861 181,221 293,569 - - 88,709,830 96,005,322
Intersegment 5,784,550 5,097,018 1,537,651 1,299,511 2,474,659 2,947,477 192,788 111,451 123,278 16,407 6,708,356 8,252,944 4,084,710 3,479,162 541,079 440,922 333,275 432,887 - - 519 277,856 6,550,874 6,701,472 637 92 (28,332,376) (29,057,199) - -
7,857,745 9,362,506 4,474,142 3,433,971 5,133,701 6,211,647 792,712 125,184 13,345,677 14,156,100 18,077,038 18,732,662 7,098,053 7,234,932 15,227,408 16,938,041 20,014,618 20,618,368 - - 6,506,782 5,618,116 18,332,472 22,337,333 181,858 293,661 (28,332,376) (29,057,199) 88,709,830 96,005,322
Cost of sales (7,125,478) (8,643,443) (4,910,727) (3,813,672) (5,280,206) (5,468,495) (676,816) (459,008) (12,503,195) (13,530,916) (16,392,603) (16,981,389) (6,705,384) (6,626,844) (13,054,215) (14,331,543) (14,778,884) (15,462,180) - - (5,593,738) (5,282,849) (11,901,033) (17,321,050) (232,136) (244,790) 28,332,376 29,057,199 (70,822,039) (79,108,980)
Gross profit / (loss) 732,267 719,063 (436,585) (379,701) (146,505) 743,152 115,896 (333,824) 842,482 625,184 1,684,435 1,751,273 392,669 608,088 2,173,193 2,606,498 5,235,734 5,156,188 - - 913,044 335,267 6,431,439 5,016,283 (50,278) 48,871 - - 17,887,791 16,896,342
Distribution cost (156,547) (240,717) (17,274) (17,496) (161,175) (101,021) (3,291) (265) (191,201) (173,633) (575,548) (511,952) (127,170) (143,805) (643,431) (689,243) (3,704,478) (3,427,392) - - (512,925) (435,623) (62) (14) - - - - (6,093,102) (5,741,161)
Administrative expenses (183,681) (184,062) (60,007) (47,494) (92,947) (73,714) (4,890) (743) (1,663) (2,663) (188,415) (165,755) (90,368) (80,938) (190,242) (184,800) (836,471) (597,718) - - (129,384) (129,539) (384,063) (316,705) (61,073) (49,845) - - (2,223,204) (1,833,976)
(340,228) (424,779) (77,281) (64,990) (254,122) (174,735) (8,181) (1,008) (192,864) (176,296) (763,963) (677,707) (217,538) (224,743) (833,673) (874,043) (4,540,949) (4,025,110) - - (642,309) (565,162) (384,125) (316,719) (61,073) (49,845) - - (8,316,306) (7,575,137)
Profit / (loss) before taxation and unallocated
income and expenses 392,039 294,284 (513,866) (444,691) (400,627) 568,417 107,715 (334,832) 649,618 448,888 920,472 1,073,566 175,131 383,345 1,339,520 1,732,455 694,785 1,131,078 - - 270,735 (229,895) 6,047,314 4,699,564 (111,351) (974) - - 9,571,485 9,321,205
Unallocated income and expenses:

Other expenses (218,300) (394,678)
Other income 2,351,438 3,422,072
Finance cost (2,957,854) (2,665,183)
Share of profit from associates 864,092 1,300,879
Taxation (839,106) (1,331,201)
Profit after taxation 8,771,755 9,653,094
46.1 Reconciliation of reportable segment assets and liabilities
Spinning Weaving
Dyeing** Home Textile** Terry Garments Power Generation Hotel Total - Group
Faisalabad-I Faisalabad-II Feroze Wattwan I Feroze Wattwan II Lahore Bhikki Lahore**
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Total assets for reportable segments 9,101,824 5,716,078 4,101,580 5,221,230 6,833,108 7,363,931 1,815,833 772,390 2,705,048 1,875,187 6,172,890 6,744,922 963,573 1,364,567 8,314,687 7,688,988 17,235,218 15,013,451 1,745,976 - 3,905,344 4,301,821 35,676,590 36,011,409 1,361,070 1,050,505 99,932,741 93,124,479
Unallocated assets:
Short term investment 17,677 -
Other receivables 4,652,267 3,143,324
Cash and bank balances 758,727 1,220,422
Other corporate assets 2,921,381 944,474
Total assets as per consolidated statement
of financial position 158,398,228 149,781,129
Total liabilities for reportable segments 841,152 768,003 208,341 348,720 202,895 110,729 17,232 10,764 539,423 127,614 908,113 493,710 178,886 173,854 861,031 884,934 2,563,533 2,008,573 36,573 - 727,221 604,205 8,721,222 13,005,567 119,289 34,137 15,924,911 18,570,810
Unallocated liabilities:
Deferred income tax liability 1,973,011 2,399,735
Other corporate liabilities 32,541,015 26,188,090
Total liabilities as per consolidated
statement of financial position 50,438,937 47,158,635
46.2 Geographical information

The Group's revenue from external customers by geographical location is detailed below:
2020 2019
Europe 25,633,571 19,939,554

Asia, Africa and Australia 11,308,058 24,539,689
United States of America and Canada 9,390,084 4,298,988
Pakistan 42,378,117 47,227,091
88,709,830 96,005,322
46.3 Significant non-current assets of the Group as at reporting dates are located and operating in Pakistan.
46.4 Revenue from major customers
Nishat Power Limited - Subsidiary Company sells electricity only to NTDCL whereas the Group's revenue from other segments is earned from a large mix of customers.
** Figures of these segments include extension / BMR.
195
Annual Report 2020

47 INTERESTS IN OTHER ENTITIES
47.1 Non-controlling interest (NCI)
Set out below is summarised financial information for Nishat Power Limited - Subsidiary Company that
has non-controlling interests that are material to the Group. The amount disclosed for Subsidiary
Company are before inter-company eliminations.
2020 2019
Summarised statement of financial position
Current assets 19,928,993 19,079,786

Current liabilities 5,571,430 9,323,019
Net current assets 14,357,563 9,756,767
Non-current assets 9,395,029 10,006,590

Non-current liabilities 55,367 654,638
Net non-current assets 9,339,662 9,351,952
Net assets 23,697,225 19,108,719
Accumulated non-controlling interest 11,609,271 9,361,361
Summarised statement of comprehensive income
Revenue 11,738,487 15,581,918
Profit for the year 4,942,595 3,769,549

Other comprehensive income - -
Total comprehensive income 4,942,595 3,769,549
Profit allocated to non-controlling interest 2,419,002 1,846,737
Dividend paid to non-controlling interest 173,456 520,367
Summarised cash flows
Cash flows from operating activities 5,073,890 1,330,677

Cash flows used in investing activities (96,472) (182,375)
Cash flows used in financing activities (3,323,797) (3,109,252)
Net increase / (decrease) in cash and cash equivalents 1,653,621 (1,960,950)
196
Annual Report 2020
48 FINANCIAL RISK MANAGEMENT
48.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, other
price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse
effects on the Group's financial performance. The Group uses derivative financial instruments to hedge
certain risk exposures.
Risk management is carried out by the finance departments of the Holding Company and Subsidiary
Companies under the policies approved by their respective Board of Directors. The Holding Company
and Subsidiary Companies' finance departments evaluates and hedge financial risks. The Board of each
Group Company provides principles for overall risk management, as well as policies covering specific
areas such as currency risk, other price risk, interest rate risk, credit risk, liquidity risk, use of derivative
financial instruments and non-derivative financial instruments and investment of excess liquidity.
a) Market risk
i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
transactions or receivables and payables that exist due to transactions in foreign currencies.
The Group is exposed to currency risk arising from various currency exposures, primarily with respect to
the United States Dollar (USD), Euro, United Arab Emirates Dirham (AED), Japanese Yen (JPY) and Swiss
Franc (CHF). Currently, the Group's foreign exchange risk exposure is restricted to bank balances, long
term loan, security deposit and the amounts receivable / payable from / to the foreign entities. The
Group's exposure to currency risk was as follows:
2020 2019
Cash at banks - USD 37,934 101,724

Cash in hand and at banks - AED - 11,317,841
Trade debts - USD 14,824,462 19,457,390
Trade debts - Euro 994,934 1,711,145
Trade debts - AED 1,244,456 73,969
Trade and other payables - USD (1,535,624) (1,791,612)
Trade and other payables - Euro (155,010) (63,404)
Trade and other payables - AED (1,384) (1,959,855)
Trade and other payables - JPY (131,220) (335,195)
Trade and other payables - CHF (11,835) -
Net exposure - USD 13,326,772 17,767,502
Net exposure - Euro 839,924 1,647,741
Net exposure - AED 1,243,072 9,431,955
Net exposure - JPY (131,220) (335,195)
Net exposure - CHF (11,835) -
197

2020 2019
The following significant exchange rates were applied during the year:
Rupees per US Dollar

Rupees per Euro
Rupees per AED
Rupees per JPY
Rupees per CHF
Average rate 163.18 -
Reporting date rate 177.43 -
Sensitivity Analysis
If the functional currency, at reporting date, had weakened / strengthened by 5% against the USD, Euro,
AED and JPY with all other variables held constant, the impact on profit after taxation for the year would
have been Rupees 122.784 million (2019: Rupees 182.008 million) higher / lower, mainly as a result of
exchange gains / losses on translation of foreign exchange denominated financial instruments. Currency
risk sensitivity to foreign exchange movements has been calculated on a symmetric basis. In
management's opinion, the sensitivity analysis is unrepresentative of inherent currency risk as the year
end exposure does not reflect the exposure during the year.
ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting all similar financial instruments traded in the market. The Group is not exposed
to commodity price risk.
Sensitivity Analysis
The table below summarises the impact of increase / decrease in the Pakistan Stock Exchange (PSX) Index
on Group's other comprehensive income (fair value reserve) for the year. The analysis is based on the
assumption that the equity index had increased / decreased by 5% with all other variables held constant
and all the Group's equity instruments moved according to the historical correlation with the index.
Impact on statement of other

Index comprehensive income
(fair value reserve)
2020 2019
PSX 100 (5% increase) 769,530 829,220

PSX 100 (5% decrease) (769,530) (829,220)
Equity (fair value reserve) would increase / decrease as a result of gains / losses on equity investments
classified as fair value through other comprehensive income.
198
Annual Report 2020
iii) Interest rate risk
This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Group's interest rate risk mainly arises from long term financing, short term borrowings, trade debts
and bank balances in saving accounts. Financial instruments at variable rates expose the Group to cash
flow interest rate risk. Financial instruments at fixed rate expose the Group to fair value interest rate risk.
At the reporting date the interest rate profile of the Group’s interest bearing financial instruments was:
2020 2019
Fixed rate instruments

Financial assets
Sales tax refund bonds - 559,606
Term deposit receipts - 500,000
Short term investment 17,677 -
Floating rate instruments

Financial assets
Bank balances - saving accounts 17,459 12,055
Trade debts - overdue 11,020,051 9,020,734
Term deposit receipts 149,396 53,719
Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Group.
Cash flow sensitivity analysis for variable rate instruments

If interest rates at the year end date, fluctuates by 1% higher / lower with all other variables held constant,
profit after taxation for the year would have been Rupees 4.518 million (2019: Rupees 56.995 million)
lower / higher, mainly as a result of higher / lower interest expense on floating rate financial instruments.
This analysis is prepared assuming the amount of financial instruments outstanding at reporting date
were outstanding for the whole year.
b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. The carrying amount of financial assets represents the
maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:
Investments 15,981,573 17,820,379

Loans and advances 827,105 837,257
Deposits 287,425 277,320
Trade debts 23,604,593 21,795,191
Other receivables 51,964 74,717
Accrued interest 2,301 2,862
Bank balances 724,013 1,173,887
41,478,974 41,981,613
199

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external
credit ratings (If available) or to historical information about counterparty default rate:
Rating 2020 2019
Short term Long term Agency (Rupees in thousand)
Banks
National Bank of Pakistan A1+ AAA PACRA 8,766 12,741

Allied Bank Limited A1+ AA+ PACRA 391 106
Askari Bank Limited A1+ AA+ PACRA 454 5,606
Bank Alfalah Limited A1+ AA+ PACRA 135,577 16,606
Faysal Bank Limited A1+ AA PACRA 35,214 1,020
Habib Bank Limited A-1+ AAA JCR-VIS 2,374 8,834
Habib Metropolitan Bank Limited A1+ AA+ PACRA 1,360 2,828
JS Bank Limited A1+ AA- PACRA 66 53,749
MCB Bank Limited A1+ AAA PACRA 154,619 422,280
Samba Bank Limited A-1 AA JCR-VIS 298,056 323
Silkbank Limited A-2 A- JCR-VIS 73 500,009
Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA 37,610 10,191
United Bank Limited A-1+ AAA JCR-VIS 10,463 10,623
AlBaraka Bank (Pakistan) Limited A1 A PACRA 269 272
Citibank N.A. P-1 Aa3 Moody's 133 654
Bank Islami Pakistan Limited A1 A+ PACRA 391 985
Meezan Bank Limited A-1+ AA+ JCR-VIS 5,320 5,126
Dubai Islamic Bank Pakistan Limited A-1 AA- JCR-VIS 354 422
The Bank of Punjab A1+ AA PACRA 189 311
Soneri Bank Limited A1+ AA- PACRA 394 9,093
Summit Bank Limited BBB- A-3 JCR-VIS 257 264
Industrial and Commercial Bank of China P-1 A1 Moody’s 6 108
MCB Islamic Bank Limited A1 A PACRA 239 1,560
HAB Bank Unknown - 7,501 4,009
Bank of China P-1 A1 Moody’s 16,548 9,493
Habib Bank AG Zurich, UAE NP Caa1 Moody’s 6,752 72,720
ICBC Standard Bank P-3 Baa3 Moody’s - 19,328
Bank Al-Habib Limited A1+ AA+ PACRA 629 1,012
Standard Chartered Bank P-1 A-1 Moody’s - 3,600
Burj Bank Limited A-1 A+ JCR-VIS 2 -
Bank of Khyber A1 A PACRA 6 14
724,013 1,173,887
Investments
Adamjee Insurance Company Limited AA+ PACRA 3,404 3,603

Security General Insurance Company Limited AA JCR-VIS 590,974 676,361
Alhamra Islamic Stock Fund AA- (f) PACRA 9,723 9,546
Nishat (Chunian) Limited A-2 A+ JCR-VIS 1,060,767 1,144,781
MCB Bank Limited A1+ AAA PACRA 14,264,638 15,354,267
Pakistan Petroleum Limited Unknown - 52,067 72,215
FBR Refund Settlement Company Limited
- Sales tax refund bonds Unknown - - 559,606
15,981,573 17,820,379
16,705,586 18,994,266
200
Annual Report 2020
The Group's exposure to credit risk and impairment losses related to trade debts is disclosed in Note 23.
Due to the Group's long standing business relationships with these counterparties and after giving due consideration to their
strong financial standing, management does not expect non-performance by these counterparties on their obligations to the
Group. Accordingly the credit risk is minimal.
c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
The Group manages liquidity risk by maintaining sufficient cash and the availability of funding through an adequate amount of
committed credit facilities. At 30 June 2020, the Group had Rupees 31,914.037 million (2019: Rupees 25,153.946 million)
available borrowing / financing limits from financial institutions and Rupees 758.727 million (2019: Rupees 1,220.422 million)
cash and bank balances. Management believes the liquidity risk to be low.
Following are the contractual maturities of financial liabilities, including interest payments. The amounts disclosed in the table
are undiscounted cash flows.

Long term financing 10,136,154 10,897,863 189,136 835,386 2,868,216 7,005,125

Lease liabilities 2,266,071 2,979,269 437,029 388,709 777,283 1,376,248
Long term security deposits 271,133 271,133 - - - 271,133
Accrued mark-up 395,513 469,245 469,245 - - -
46,636,755 54,964,633 41,411,435 1,255,193 3,645,499 8,652,506

Long term financing 10,086,021 10,759,291 2,122,672 2,311,495 2,563,396 3,761,728

Long term security deposits 217,030 217,030 - - - 217,030
Accrued mark-up 469,245 469,245 469,245 - - -
43,650,587 51,193,763 42,299,728 2,351,881 2,563,396 3,978,758
The contractual cash flows relating to the above financial liabilities have been determined on the basis of interest
rates / mark-up rates effective as at 30 June. The rates of interest / markup have been disclosed in note 5 and
note 11 to these consolidated financial statements.
201

48.2 Financial instruments by categories
Amortized
FVTPL FVTOCI Total
cost
As at 30 June 2020
Assets as per consolidated statement

of financial position
Investments - - 15,981,573 15,981,573
Loans and advances - 827,105 - 827,105
Deposits - 287,425 - 287,425
Trade debts - 23,604,593 - 23,604,593
345 25,531,770 15,981,573 41,513,688
Financial
FVTPL liabilities at Total
amortized cost
Liabilities as per consolidated

statement of financial position
Long term financing - 10,136,154 10,136,154

Lease liabilities - 2,266,071 2,266,071
Long term security deposits - 271,133 271,133
Trade and other payables 6,206 9,363,688 9,369,894
Short term borrowings - 24,080,517 24,080,517
Unclaimed dividend - 111,267 111,267
Accrued mark-up - 395,513 395,513
6,206 46,624,343 46,630,549
Amortised
FVTPL FVTOCI Total
cost
As at 30 June 2019
Assets as per consolidated statement

Investments - 559,606 17,260,773 17,820,379
Loans and advances - 837,257 - 837,257
Deposits - 277,320 - 277,320
Trade debts - 21,795,191 - 21,795,191
Cash and bank balances - 1,220,422 - 1,220,422
958 24,766,417 17,260,773 42,028,148
202
Annual Report 2020
Financial
FVTPL liabilities at Total
amortized cost
Liabilities as per consolidated statement

Long term financing - 10,086,021 10,086,021

Long term security deposits - 217,030 217,030
Trade and other payables 7,583 8,345,878 8,353,461
Short term borrowings - 24,402,574 24,402,574
Unclaimed dividend - 114,673 114,673
Accrued mark-up - 469,245 469,245
7,583 43,643,004 43,650,587
49 Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry and the requirements of the lenders, the Group monitors the capital
structure on the basis of gearing ratio. This ratio is calculated as borrowings divided by total capital employed.
Borrowings represent long term financing, short term borrowings obtained by the Group as referred to in note 5
and note 11 respectively. Total capital employed includes 'total equity' as shown in the consolidated statement
of financial position plus 'borrowings'. In accordance with the terms of agreement with the lenders of long term
finances in connection with deferment of principal amount for twelve months, there is restriction on distribution
of dividends by the Group during the relief period.
2020 2019
Borrowings Rupees in thousand 34,216,671 34,488,595

Total equity Rupees in thousand 107,959,291 102,622,494
Total capital employed Rupees in thousand 142,175,962 137,111,089
Gearing ratio Percentage 24.07 25.15
203

50 FAIR VALUE MEASUREMENTS - FINANCIAL INSTRUMENTS
Judgments and estimates are made in determining the fair values of the financial instruments that are recognised
and measured at fair value in these consolidated financial statements. To provide an indication about the
reliability of the inputs used in determining fair value, the Group has classified its financial instruments into the
following three levels. An explanation of each level follows underneath the table.

At 30 June 2020
Financial assets
comprehensive income 15,390,599 - 590,974 15,981,573
Total financial assets 15,390,599 345 590,974 15,981,918

At 30 June 2019
Financial assets
comprehensive income 16,584,409 - 676,364 17,260,773
Total financial assets 16,584,409 958 676,364 17,261,731
The above table does not include fair value information for financial assets and financial liabilities not measured
at fair value if the carrying amounts are a reasonable approximation of fair value. Due to short term nature,
carrying amounts of certain financial assets and financial liabilities are considered to be the same as their fair
value. For the majority of the non-current receivables, the fair values are also not significantly different to their
carrying amounts.
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. Further
there was no transfer out of level 3 measurements.
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of
the reporting period.
204
Annual Report 2020
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
equity securities) is based on quoted market prices at the end of the reporting period. The quoted
market price used for financial assets held by the Group is the current bid price. These instruments are
included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities.
ii) Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include the use of quoted market prices or
dealer quotes for similar instruments and the fair value of the remaining financial instruments is determined using
discounted cash flow analysis.
iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the year ended 30 June 2020 and 30 June 2019:
Unlisted equity
security
Balance as on 01 July 2018 924,043
Less: Deficit recognized in other comprehensive income (247,679)

Balance as on 30 June 2019 676,364
Less : Deficit recognized in other comprehensive income (85,390)

Balance as on 30 June 2020 590,974
iv) Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value
measurements.
Range of inputs
Relationship of
Description Fair value at (probability-
Unobservable unobservable
weighted average)
inputs inputs to
30 June 2020 30 June 2019 30 June 2020 fair value
Investment:
Security General Insurance 590,974 676,364 Terminal growth 2.00% Increase / decrease in
increase / decrease
+108.296 million /
- 77.208 million.
There were no significant inter-relationships between unobservable inputs that materially affect fair values.
205

Valuation processes
Independent valuer performs the valuations of non-property items required for financial reporting purposes, including
level 3 fair values. The independent valuer report directly to the Chief Financial Officer of the Holding Company.
Discussions of valuation processes and results are held between the Chief Financial Officer of the Holding Company
and the valuation team at least once every six month, in line with the Group’s half yearly reporting periods.
The main level 3 inputs used by the Group are derived and evaluated as follows:
Discount rates for financial instruments are determined using a capital asset pricing model to calculate a rate that
reflects current market assessments of the time value of money and the risk specific to the asset.
Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of
companies.
Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the half yearly valuation
discussion between the Chief Financial Officer of the Holding Company and the independent valuer. As part of this
discussion the independent valuer presents a report that explains the reason for the fair value movements.
51 DATE OF AUTHORIZATION FOR ISSUE
These consolidated financial statements were authorized for issue on 18 September 2020 by the Board of
Directors.
52 CORRESPONDING FIGURES
Corresponding figures have been re-arranged, wherever necessary, for the purpose of comparison. However, no
significant rearrangements have been made.
53 GENERAL
Figures have been rounded off to the nearest thousand of Rupees unless otherwise stated.
206
Annual Report 2020
Pattern of Holding
of the Shares held by the Shareholders of Nishat Mills Limited as at June 30, 2020
Number of Having shares

Shares Held Percentage
Shareholders From To
4,500 1 100 166,219 0.05

4,104 101 500 1,075,745 0.31
1,314 501 1,000 1,037,756 0.30
1,526 1,001 5,000 3,888,385 1.11
340 5,001 10,000 2,621,970 0.75
130 10,001 15,000 1,684,214 0.48
93 15,001 20,000 1,685,672 0.48
68 20,001 25,000 1,614,396 0.46
40 25,001 30,000 1,122,020 0.32
32 30,001 35,000 1,060,274 0.30
30 35,001 40,000 1,145,589 0.33
16 40,001 45,000 691,628 0.20
26 45,001 50,000 1,271,644 0.36
17 50,001 55,000 905,257 0.26
5 55,001 60,000 285,500 0.08
13 60,001 65,000 821,159 0.23
11 65,001 70,000 757,700 0.22
14 70,001 75,000 1,015,329 0.29
2 75,001 80,000 160,000 0.05
8 80,001 85,000 665,257 0.19
5 85,001 90,000 445,300 0.13
3 90,001 95,000 274,521 0.08
13 95,001 100,000 1,292,700 0.37
1 100,001 105,000 102,900 0.03
7 105,001 110,000 748,425 0.21
2 110,001 115,000 225,800 0.06
4 115,001 120,000 470,877 0.13
2 120,001 125,000 244,600 0.07
5 125,001 130,000 641,387 0.18
4 130,001 135,000 526,632 0.15
4 135,001 140,000 554,081 0.16
2 140,001 145,000 281,500 0.08
7 145,001 150,000 1,045,400 0.30
3 150,001 155,000 453,200 0.13
1 155,001 160,000 160,000 0.05
3 160,001 165,000 488,207 0.14
4 165,001 170,000 666,455 0.19
4 175,001 180,000 716,700 0.20
2 180,001 185,000 369,300 0.11
4 185,001 190,000 750,086 0.21
2 190,001 195,000 384,700 0.11
4 195,001 200,000 796,300 0.23
2 200,001 205,000 402,062 0.11
2 205,001 210,000 415,000 0.12
4 210,001 215,000 847,871 0.24
4 215,001 220,000 869,775 0.25
1 220,001 225,000 225,000 0.06
2 230,001 235,000 468,538 0.13
207
Pattern of Holding

1 235,001 240,000 237,500 0.07

2 240,001 245,000 482,400 0.14
1 245,001 250,000 247,800 0.07
2 250,001 255,000 504,800 0.14
1 260,001 265,000 263,100 0.07
3 270,001 275,000 815,760 0.23
1 275,001 280,000 279,500 0.08
2 290,001 295,000 585,100 0.17
2 295,001 300,000 596,400 0.17
1 305,001 310,000 307,092 0.09
4 310,001 315,000 1,254,347 0.36
2 325,001 330,000 654,550 0.19
2 330,001 335,000 665,300 0.19
2 345,001 350,000 694,100 0.20
1 355,001 360,000 360,000 0.10
2 365,001 370,000 734,616 0.21
2 370,001 375,000 741,493 0.21
1 380,001 385,000 382,000 0.11
1 385,001 390,000 387,500 0.11
1 395,001 400,000 398,000 0.11
1 405,001 410,000 409,100 0.12
1 420,001 425,000 425,000 0.12
1 430,001 435,000 434,495 0.12
1 435,001 440,000 440,000 0.13
2 445,001 450,000 892,300 0.25
1 455,001 460,000 456,700 0.13
1 475,001 480,000 479,100 0.14
1 500,001 505,000 500,200 0.14
1 515,001 520,000 516,000 0.15
1 520,001 525,000 521,000 0.15
1 530,001 535,000 535,000 0.15
1 540,001 545,000 541,100 0.15
1 585,001 590,000 588,974 0.17
1 590,001 595,000 593,280 0.17
3 595,001 600,000 1,800,000 0.51
1 645,001 650,000 650,000 0.18
1 670,001 675,000 671,126 0.19
1 790,001 795,000 791,300 0.23
1 800,001 805,000 805,000 0.23
1 830,001 835,000 834,400 0.24
1 845,001 850,000 847,500 0.24
1 860,001 865,000 865,000 0.25
1 865,001 870,000 869,500 0.25
1 875,001 880,000 879,400 0.25
1 885,001 890,000 890,000 0.25
1 890,001 895,000 891,300 0.25
1 975,001 980,000 976,731 0.28
1 980,001 985,000 981,900 0.28
208
Annual Report 2020

1 1,035,001 1,040,000 1,037,500 0.30

1 1,040,001 1,045,000 1,043,200 0.30
1 1,060,001 1,065,000 1,061,285 0.30
1 1,080,001 1,085,000 1,082,100 0.31
1 1,100,001 1,105,000 1,102,300 0.31
1 1,110,001 1,115,000 1,113,000 0.32
2 1,120,001 1,125,000 2,246,700 0.64
1 1,155,001 1,160,000 1,158,900 0.33
1 1,160,001 1,165,000 1,165,000 0.33
1 1,165,001 1,170,000 1,170,000 0.33
1 1,270,001 1,275,000 1,273,094 0.36
1 1,375,001 1,380,000 1,380,000 0.39
1 1,455,001 1,460,000 1,457,500 0.41
1 1,475,001 1,480,000 1,475,800 0.42
1 1,495,001 1,500,000 1,500,000 0.43
1 1,555,001 1,560,000 1,558,389 0.44
1 1,650,001 1,655,000 1,650,500 0.47
1 1,720,001 1,725,000 1,725,000 0.49
1 1,845,001 1,850,000 1,848,500 0.53
1 1,880,001 1,885,000 1,883,600 0.54
1 2,015,001 2,020,000 2,018,800 0.57
1 2,355,001 2,360,000 2,358,822 0.67
1 2,405,001 2,410,000 2,407,841 0.68
1 2,810,001 2,815,000 2,814,900 0.80
1 2,835,001 2,840,000 2,839,871 0.81
1 3,020,001 3,025,000 3,021,431 0.86
1 3,445,001 3,450,000 3,450,000 0.98
1 3,625,001 3,630,000 3,625,600 1.03
1 3,705,001 3,710,000 3,705,200 1.05
1 3,825,001 3,830,000 3,829,899 1.09
1 3,995,001 4,000,000 4,000,000 1.14
1 4,270,001 4,275,000 4,271,454 1.21
1 4,420,001 4,425,000 4,423,400 1.26
1 4,780,001 4,785,000 4,785,000 1.36
1 6,450,001 6,455,000 6,450,913 1.83
1 6,880,001 6,885,000 6,880,200 1.96
1 14,495,001 14,500,000 14,496,760 4.12
1 15,075,001 15,080,000 15,075,149 4.29
1 18,695,001 18,700,000 18,698,357 5.32
1 19,850,001 19,855,000 19,850,800 5.65
1 21,190,001 21,195,000 21,191,146 6.03
1 23,100,001 23,105,000 23,101,426 6.57
1 25,670,001 25,675,000 25,673,659 7.30
1 26,245,001 26,250,000 26,248,841 7.47
1 29,225,001 29,230,000 29,228,216 8.31
12,501 351,599,848 100.00
209
Pattern of Holding
Sr. Categories of Shareholders Shares Held Percentage

No.
1 DIRECTORS, CEO, THEIR SPOUSE AND MINOR CHILDREN 88,667,588 25.22
2 ASSOCIATED COMPANIES, UNDERTAKINGS AND RELATED PARTIES 30,292,178 8.62
3 NIT AND ICP 3,566 0.00
4 Banks Development Financial Institutions, Non banking

Financial Institutions 19,276,438 5.48
5 Insurance Companies 28,684,224 8.16
6 Modarabas And Mutual Funds 34,346,902 9.77
7 Shareholders Holding 5% or above 177,614,710 50.52
8 General Public
Local 95,834,770 27.26
Foreign 4,340,322 1.23
9 Others
Foreign Companies 25,725,027 7.32
Investment Companies 543,622 0.15
Joint Stock Companies 14,710,234 4.18
Provident / Pension Funds and Miscellaneous 9,174,977 2.61
210
Annual Report 2020
Information Under Listing Regulation No. 5.19.11 (X) of Pakistan

Stock Exchange Limited Rule Book as on June 30, 2020
No.
I) ASSOCIATED COMPANIES, UNDERTAKINGS AND RELATED PARTIES
1. D. G. KHAN CEMENT COMPANY LIMITED 30,289,501 8.6148

2. ADAMJEE INSURANCE COMPANY LIMITED 2,050 0.0006
3. MCB BANK LIMITED 227 0.0001
4. ADAMJEE LIFE ASSURANCE COMPANY LIMITED 400 0.0001
II) MUTUAL FUNDS:
PRUDENTIAL STOCKS FUND LIMITED 110 0.0000

SAFEWAY MUTUAL FUND LIMITED 13 0.0000
PRUDENTIAL STOCKS FUND LTD (03360) 23,500 0.0067
CDC - TRUSTEE PICIC INVESTMENT FUND 293,500 0.0835
CDC - TRUSTEE PICIC GROWTH FUND 382,000 0.1086
CDC - TRUSTEE ATLAS STOCK MARKET FUND 650,000 0.1849
CDC - TRUSTEE MEEZAN BALANCED FUND 270,600 0.0770
CDC - TRUSTEE FAYSAL STOCK FUND 23,000 0.0065
CDC - TRUSTEE ALFALAH GHP VALUE FUND 140,500 0.0400
CDC - TRUSTEE UNIT TRUST OF PAKISTAN 313,200 0.0891
CDC - TRUSTEE AKD INDEX TRACKER FUND 38,447 0.0109
CDC - TRUSTEE AKD OPPORTUNITY FUND 50,000 0.0142
CDC - TRUSTEE AL MEEZAN MUTUAL FUND 150,100 0.0427
CDC - TRUSTEE MEEZAN ISLAMIC FUND 3,625,600 1.0312
CDC - TRUSTEE FAYSAL ASSET ALLOCATION FUND 48,800 0.0139
CDC - TRUSTEE UBL STOCK ADVANTAGE FUND 976,731 0.2778
CDC - TRUSTEE ATLAS ISLAMIC STOCK FUND 425,000 0.1209
CDC - TRUSTEE AL-AMEEN SHARIAH STOCK FUND 2,358,822 0.6709
CDC - TRUSTEE NBP STOCK FUND 3,705,200 1.0538
CDC - TRUSTEE NBP BALANCED FUND 185,200 0.0527
CDC - TRUSTEE MCB DCF INCOME FUND 62,500 0.0178
CDC - TRUSTEE MEEZAN TAHAFFUZ PENSION FUND - EQUITY SUB FUND 347,700 0.0989
CDC - TRUSTEE APF-EQUITY SUB FUND 55,800 0.0159
CDC - TRUSTEE ALFALAH GHP ISLAMIC STOCK FUND 588,974 0.1675
CDC - TRUSTEE HBL - STOCK FUND 445,200 0.1266
CDC - TRUSTEE NBP ISLAMIC SARMAYA IZAFA FUND 1,475,800 0.4197
CDC - TRUSTEE APIF - EQUITY SUB FUND 41,000 0.0117
MC FSL - TRUSTEE JS GROWTH FUND 791,300 0.2251
CDC - TRUSTEE HBL MULTI - ASSET FUND 19,700 0.0056
CDC - TRUSTEE ALFALAH GHP STOCK FUND 252,300 0.0718
CDC - TRUSTEE ALFALAH GHP ALPHA FUND 168,300 0.0479
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 2,407,841 0.6848
CDC - TRUSTEE ABL STOCK FUND 805,000 0.2290
CDC - TRUSTEE FIRST HABIB STOCK FUND 30,000 0.0085
CDC - TRUSTEE LAKSON EQUITY FUND 1,043,200 0.2967
CDC - TRUSTEE NBP SARMAYA IZAFA FUND 180,000 0.0512
CDC - TRUSTEE NBP MAHANA AMDANI FUND - MT 212,500 0.0604
CDC - TRUSTEE HBL ISLAMIC STOCK FUND 188,100 0.0535
211
Information Under Listing Regulation No. 5.19.11 (X) of Pakistan

Stock Exchange Limited Rule Book as on June 30, 2020
No.
CDC - TRUSTEE HBL IPF EQUITY SUB FUND 35,200 0.0100

CDC - TRUSTEE HBL PF EQUITY SUB FUND 39,000 0.0111
CDC - TRUSTEE KSE MEEZAN INDEX FUND 387,500 0.1102
CDC - TRUSTEE FIRST HABIB ISLAMIC STOCK FUND 26,500 0.0075
CDC - TRUSTEE NAFA PENSION FUND EQUITY SUB-FUND ACCOUNT 234,600 0.0667
CDC - TRUSTEE NAFA ISLAMIC PENSION FUND EQUITY ACCOUNT 409,100 0.1164
MCBFSL - TRUSTEE ABL ISLAMIC STOCK FUND 891,300 0.2535
CDC - TRUSTEE UBL ASSET ALLOCATION FUND 73,200 0.0208
CDC - TRUSTEE FIRST CAPITAL MUTUAL FUND 42,000 0.0119
CDC - TRUSTEE AL-AMEEN ISLAMIC ASSET ALLOCATION FUND 332,300 0.0945
CDC - TRUSTEE AWT ISLAMIC STOCK FUND 137,000 0.0390
CDC - TRUSTEE AL-AMEEN ISLAMIC RET. SAV. FUND-EQUITY SUB FUND 500,200 0.1423
CDC - TRUSTEE UBL RETIREMENT SAVINGS FUND - EQUITY SUB FUND 196,300 0.0558
CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST 3,829,899 1.0893
CDC - TRUSTEE HBL ISLAMIC EQUITY FUND 57,500 0.0164
CDC - TRUSTEE NAFA ISLAMIC PRINCIPAL PROTECTED FUND - II 20,500 0.0058
CDC - TRUSTEE ABL ISLAMIC PENSION FUND - EQUITY SUB FUND 35,000 0.0100
CDC - TRUSTEE ABL PENSION FUND - EQUITY SUB FUND 33,500 0.0095
CDC - TRUSTEE NBP ISLAMIC STOCK FUND 2,018,800 0.5742
CDC - TRUSTEE NBP INCOME OPPORTUNITY FUND - MT 47,400 0.0135
CDC - TRUSTEE AWT STOCK FUND 68,100 0.0194
CDC - TRUSTEE NIT ISLAMIC EQUITY FUND 398,000 0.1132
CDC - TRUSTEE NITIPF EQUITY SUB-FUND 25,000 0.0071
CDC - TRUSTEE NITPF EQUITY SUB-FUND 14,500 0.0041
CDC - TRUSTEE NBP SAVINGS FUND - MT 300 0.0001
CDC - TRUSTEE AL AMEEN ISLAMIC DEDICATED EQUITY FUND 164,157 0.0467
CDC - TRUSTEE NBP ISLAMIC ACTIVE ALLOCATION EQUITY FUND 296,400 0.0843
CDC - TRUSTEE HBL ISLAMIC ASSET ALLOCATION FUND 36,700 0.0104
CDC - TRUSTEE AGIPF EQUITY SUB-FUND 11,600 0.0033
CDC - TRUSTEE AGPF EQUITY SUB-FUND 8,300 0.0024
CDC - TRUSTEE FAYSAL MTS FUND - MT 146,000 0.0415
CDC - TRUSTEE MEEZAN ASSET ALLOCATION FUND 141,000 0.0401
CDC - TRUSTEE LAKSON TACTICAL FUND 127,087 0.0361
CDC - TRUSTEE LAKSON ISLAMIC TACTICAL FUND 60,299 0.0171
MCBFSL TRUSTEE ABL ISLAMIC DEDICATED STOCK FUND 114,500 0.0326
CDC - TRUSTEE ALFALAH GHP ISLAMIC DEDICATED EQUITY FUND 91,226 0.0259
CDC TRUSTEE - MEEZAN DEDICATED EQUITY FUND 56,200 0.0160
MCBFSL - TRUSTEE AKD ISLAMIC STOCK FUND 60,000 0.0171
CDC - TRUSTEE UBL DEDICATED EQUITY FUND 9,690 0.0028
MCBFSL - TRUSTEE HBL ISLAMIC DEDICATED EQUITY FUND 9,100 0.0026
CDC - TRUSTEE NBP ISLAMIC REGULAR INCOME FUND 28,500 0.0081
CDC - TRUSTEE ATLAS ISLAMIC DEDICATED STOCK FUND 1,500 0.0004
CDC - TRUSTEE FAYSAL ISLAMIC DEDICATED EQUITY FUND 291,600 0.0829
CDC - TRUSTEE NIT ASSET ALLOCATION FUND 27,000 0.0077
212
Annual Report 2020

No.
III) DIRECTORS, CEO, THEIR SPOUSE AND MINOR CHILDREN
1. MIAN UMER MANSHA DIRECTOR /

CHIEF EXECUTIVE OFFICER 44,292,572 12.60
2. MIAN HASSAN MANSHA DIRECTOR / CHAIRMAN 44,372,016 12.62
3. MR. MAHMOOD AKHTAR DIRECTOR 500 0.00
4. MR. FARID NOOR ALI FAZAL DIRECTOR 500 0.00
5. MRS. SARA AQEEL DIRECTOR 1,500 0.00
6. MRS. MEHAK ADIL DIRECTOR 500 0.00
IV) EXECUTIVES NIL -
V) PUBLIC SECTOR, COMPANIES AND CORPORATIONS
JOINT STOCK COMPANIES 14,710,234 4.18
VI) SHAREHOLDERS HOLDING FIVE PERCENT OR MORE

VOTING INTREST IN THE LISTED COMPANY
1. MRS NAZ MANSHA SHAREHOLDER 29,088,712 8.27

2. MIAN RAZA MANSHA SHAREHOLDER 29,571,909 8.41
3. MIAN UMER MANSHA DIRECTOR / CHIEF EXECUTIVE OFFICER 44,292,572 12.60
4. MIAN HASSAN MANSHA DIRECTOR / CHAIRMAN 44,372,016 12.62
5. D. G. KHAN CEMENT ASSOCIATED COMPANY 30,289,501 8.61
COMPANY LIMITED
VII) BANKS, DEVELOPMENT FINANCIAL INSTITUTIONS,

NON-BANKING FINANCIAL INSTITUTIONS, INSURANCE
COMPANIES, TAKAFUL, MODARABAS AND PENSION FUNDS
1. INVESTMENT COMPANIES 543,622 0.15

2. INSURANCE COMPANIES 28,684,224 8.16
3. FINANCIAL INSTITUTIONS 19,276,438 5.48
4. MODARABAS COMPANIES 37,806 0.01
5. PENSION / PROVIDENT FUNDS 9,174,977 2.61
INFORMATION UNDER LISTING REGULATION NO. 5.19.11 (XII) OF PAKISTAN STOCK EXCHANGE
LIMITED RULE BOOK AS ON JUNE 30, 2020
There is no trading in the shares of the Company, carried out by its Directors, Chief Executive Officer, Chief
Financial Officer, Head of Internal Audit, Company Secretary, their spouses and minor children and other
employees of the Company for whom the Board of Directors have set the threshold.
213
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220
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224
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225
(000) 2019 (000) 2020
63,499,029 60,904,096
7,656,601 7,276,126
11,211,441 8,719,892
2,646,227 2,738,196
1,668,166 1,502,412
3,029,845 2,044,302
6,897,048 4,479,284
5,859,048 3,506,284
226
Form of Proxy
I /We
of
being a member of Nishat Mills Limited, hereby appoint
of
or failing him/her
of
member(s) of the Company, as my/our proxy in my/our absence to attend and vote for me/us and on my/our behalf at
the Annual General Meeting of the Company to be held on October 28, 2020 (Wednesday), at 03:30 p.m at Emporium
Mall, The Nishat Hotel, Trade and Finance Centre Block, Near Expo Centre, Abdul Haq Road, Johar Town, Lahore.
as witness may hand this day of 2020

Please
Signed by the said member affix
revenue
in presence of stamp
Rs. 50
Signature(s) of Member(s)
Signature of witness Signature of witness

Name Name
Address Address
CNIC # CNIC #
Please quote:
Folio No. Shares held CDC A/C. No.
Important: This instrument appointing a proxy, duly completed, must be received at the Registered Office of the Company
at Nishat House, 53-A, Lawrence Road, Lahore not later than 48 hours before the time to holding the annual general
meeting.
AFFIX
CORRECT
POSTAGE
The Company Secretary

Nishat House,
53-A, Lawrence Road, Lahore.
Tel: 042 - 36360154
UAN: 042 - 111 113 333
2020
AFFIX
CORRECT
POSTAGE
The Company Secretary

Nishat House,
53-A, Lawrence Road, Lahore.
Tel: 042 - 36360154
UAN: 042 - 111 113 333
VERSATILE Ph: +92 42 3712 1920
REGISTERED OFFICE:
Nishat House, 53-A, Lawrence Road, Lahore
Tel: 042-36360154, 042-111 113 333
[email protected]
www.nishatmillsltd.com

Annual Report 2020

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Nishat Mills Limited

FINANCIAL STATEMENTS OF NISHAT MILLS LIMITED

CONSOLIDATED FINANCIAL STATEMENTS OF NISHAT MILLS LIMITED

Mills Branch Office, Lahore

Mr. Mahmood Akhtar Mrs. Sara Aqeel Mrs. Mehak Adil

VISION, MISSION & CORE VALUES

To be and remain industry lead by safeguarding stakeholders’ interest, serving community

Value Slogan Connotation

Novelty Be Open to Nishat is open to innovation & creativity at

Sustainability Be Sensitive to Nishat ensures best use of environmental resources

Humbleness Be Empathic Nishat encourages culture of mutual respect,

Accountability Be Responsible Nishat believes in 'participative decision making'

CHAIRMAN’S REVIEW REPORT

• Approved the revised vision and mission statements.

Mian Hassan Mansha

Report Profit after tax of the Company decreased during the

pleased to present Revenue 60,904,096 63,499,029

auditors’ report Rs. 2,451.650 million due to unfavorable quantity variance

Years Fixed Capital Expenditure

establishment of a new towel manufacturing Earnings Per Share

Rupees per Share

2015-16 2016-17 2017-18 2018-19 2019-20

Years The Board of Directors of the Company has

Current and quick ratios increased by 7.94%

The Company maintains a positive stream of 12,000,000

Earning Per Share (EPS) as reflected by the last 10,000,000

management’s strategy which is pivot in 6,000,000

Yarn Sales Rate Grey Cloth Sales Quantity

Financial performance of Spinning Division 16,000,000

major factors which affected the profitability. -

The first nine months of the FY 2019-20 were -

30,000 working at almost full capacity.

Processed Cloth Sales Value 10,000

2015-16 2016-17 2017-18 2018-19 2019-20

300 2015-16 2016-17 2017-18 2018-19 2019-20

2015-16 2016-17 2017-18 2018-19 2019-20

Home Textile 100

levels due to plenty of orders in the pipeline Years

despite outbreak of Covid-19 pandemic in the

corresponding last financial year. This Power Generation

Taking risk is important to remain competitive

4,000,000 Following is the summary of risks and

development and persistent introduction of

BUSINESS RISKS Currency risk

OPPORTUNITIES SUBSIDIARY COMPANIES

• Vibrant local and international subsidiary 1. Nishat Power Limited

TEXTILE INDUSTRY OVERVIEW This is a wholly owned subsidiary of the

8. Nishat Global China Company Limited

Nishat Global China Company Limited is

9. Nishat USA Inc.

The subsidiary is a corporation service

The Company takes a number of initiatives

Environment protection is the key focus area

Availability of cheap energy is the biggest

In addition to acquiring new environment

Occupational Safety and Health CORPORATE GOVERNANCE

No. of 4. International Financial Reporting Standards,

Auditors ADEQUACY OF INTERNAL FINANCIAL

No material changes and commitments DIRECTORS’ REMUNERATION

For and on behalf of the Board of Directors.