Where Excellence Thrives: Annual Report 2019

where
Gadoon Textile Mills Limited excellence

thrives
7-A, Muhammad Ali Society T: 021 3520 5479 - 80
Abdul Aziz Haji Hashim Tabba Street F: 021 3438 2436
Karachi 75350 Pakistan
Annual Report 2019
gadoontextile.com
contents
Organizational Overview and 04 Diversity 63 Outlook 120
External Environment Related Parties 63 Forward-Looking Statement 122
Company Information 06 Detail of Board Meetings Outside Pakistan 64 SWOT Analysis 123
Gadoon at a Glance 07 Conflict of Interest 64
Business Model 08 Investors’ Grievance Policy 65 Stakeholder’s Engagement 124
Geographical Spread 10 Safety of Records 65 Relation with Stakeholders 127
Our Vision, Mission, Culture and Core Values 12 IT Governance 66 Statement of Value Addition and its Distribution 128
Code of Business Conduct and Ethical Principles 14 Whistle Blowing Policy 68 Stakeholder‘s Engagement Policy 129
Group Structure 15 Human Resource Excellence 69 Investor Roadshows / Corporate Briefing Program 129
Organizational Chart 20 Social and Environmental Responsibility Policy 73
Senior Management 21 Beneficial Ownership / Group Shareholding 74 Sustainability and Corporate 130
Position in the Value Chain 22 Review Report on the Statement of Compliance 75 Social Responsibility
Significant Factors Affecting the External Environment 24 contained in Listed Companies (Code of Highlights of Aspects of Sustainability 132
Seasonality of Business 26 Corporate Governance) Regulations, 2017 Highlights of Corporate Social Responsibility 134
Significant Changes from Prior Years 26 Statement of Compliance with Listed Companies 76 Certifications Acquired for 136
Composition of Local and Imported Material (Code of Corporate Governance) Regulations, 2017 Environmental Sustainability
/ Sensitivity Analysis 26 Role of Chairman and CEO 78 Corporate Affiliations 137
Awards and Achievements 27 Shares held by Sponsors / Directors / Executives 78
Board Committee 79 Corporate Reporting 138
Strategy and Resource Allocation 28 Report of Audit Committee 82 Statement of Unreserved Compliance 140
Strategic Objectives 30 Attendance in Annual General Meeting 83 of International Financial Reporting
Management Objectives 30 Standards (IFRSs)
Liquidity Strategy 31 Performance and Position 84 Integrated Reporting 141
Plans and Decisions 32 Analysis of Financial and Non-Financial Performance 86
Changes in Objectives and Strategies 32 Key Performance Indicators 87 Unconsolidated Financial Statements 142
Six Years at a Glance 90
Risks and Opportunities 34 Graphical Presentation of Statement of 91 Consolidated Financial Statements 197
Risk and Opportunity Report 36 Financial Position and Profit or Loss
Risk Management Policy 39 Financial Ratios 92 Pattern of Shareholding 256
Materiality Determination 40 DuPont Analysis 99 Notice of 32ndAnnual General Meeting 258
Capital Structure and Payment of Debts 41 Free Cash Flow 100 Glossary 266
Economic Value Added 101 Form of Proxy 267
Governance 42 Horizontal Analysis 102 Form of Proxy (Urdu Version) 269
Directors’ Profile 44 Vertical Analysis 106 Directors’ Report (Urdu Version) 279
Chairman’s Review 50 Summary of Cash flow 110
Directors' Report 52 Statement of Cash Flows - Direct Method 112
CEO’s Message 60 Quarterly Performance Analysis 113
Decisions taken by the Board and 62 Segmental View of Business Performance 114
Delegated to Management Share Price Sensitivity Analysis 115
Annual Evaluation of Board‘s Performance 62 History of Major Events 116
Orientation Courses and Directors’ Training Program 62 Calendar of Notable Events 118
Policy for Remuneration to Directors 62 Major Capital Expenditure 119
Governance Practice Exceeding Legal Requirement 63
where
possibility
thrives
Organizational Overview
and External Environment
company information gadoon at a glance
Board of Directors Head Office We at Gadoon Textile Mills Limited (GTML) are primarily • Ring Spun / Compact Spun Double Yarn on Doubling
Mr. Muhammad Yunus Tabba (Chairman) 7-A, Muhammad Ali Society, Abdul Aziz Haji Hashim engaged in the textile industry of Pakistan, the fiber Machine
Mr. Muhammad Sohail Tabba (Chief Executive Officer) Tabba Street, Karachi 75350. spinning and knitting sector markedly. The Company
Mr. Muhammad Ali Tabba Phone: 021-35205479-80 operates in the B2B segment of the industry and its Brands
Mr. Jawed Yunus Tabba Fax: 021-34382436 production facilities comprise of spinning and processing Koyal and peach are two of our brands having
Ms. Zulekha Tabba Maskatiya all categories of cotton and manmade fiber including significant prominence in the market.
Mr. Saleem Zamindar (Independent Director)
Liaison Office knitting home textile and jersey. Our customer’s portfolio
Syed’s Tower, Third Floor, Opposite Custom House,
Mr. Zafar Masud (Independent Director) includes a portion of the greatest names in the textile Knitted Fabric
Jamrud Road, Peshawar.
business of Pakistan and abroad. We appreciate • Grey and Dyed Fabric
Audit Committee Phone: 091-5701496
connections that have been fashioned, kept up and • Knitted Fitted Sheet / Comforter
Mr. Saleem Zamindar (Chairman) Fax: 091-5702029
reinforced amid the previous thirty-one years.
E-mail: [email protected]
Mr. Zafar Masud Dairy Segment
Mr. Muhammad Ali Tabba
Factory Locations To provide an alternative source of employment and to In addition to the textile sector, the Company has also
Mr. Jawed Yunus Tabba eradicate the poppy cultivation prevalent in the Gadoon invested in the Dairy segment, which has started its
• 200-201, Gadoon Amazai Industrial Estate,
Distt. Swabi, Khyber Pakhtunkhwa. Amazai area of District Swabi, Khyber Pakhtunkhwa; commercial production on June 30, 2019.
HR and Remuneration Committee
• 57 K.M on Super Highway, near Karachi. the Government, in the late 80’s, invited the private
Mr. Saleem Zamindar (Chairman)
sector to set up industrial units in the region.
Mr. Jawed Yunus Tabba Bankers
Ms. Zulekha Tabba Maskatiya Allied Bank Limited The Yunus Brothers Group (YBG) considered this as
Askari Bank Limited
Budget Committee Bank Al-Falah Limited
its corporate social responsibility to join hands with
Mr. Zafar Masud (Chairman) the Government in this noble cause and setup GTML.
Bank Al-Habib Limited Despite the fact that the Government unilaterally
Bank Islami Pakistan Limited withdrew the incentive in 1991 that it offered for setting
Mr. Muhammad Sohail Tabba
Dubai Islamic Bank Pakistan Limited up industrial units, the management of GTML decided
Mr. Jawed Yunus Tabba
Faysal Bank Limited to continue its operations and further strive to achieve
Executive Director Finance and Habib Bank Limited its goals. It is the timeless effort of GTML that made it
Company Secretary Habib Metropolitan Bank Limited “one of the largest spinning unit of Pakistan”.
Mr. Abdul Sattar Abdullah MCB Bank Limited
Meezan Bank Limited Following are some of the products that we
Chief Financial Officer National Bank of Pakistan manufacture:
Mr. Muhammad Imran Moten Soneri Bank Limited • Compact Yarn
Standard Chartered Bank Pakistan Limited • Murata Jet Spun Yarn
Chief Internal Auditor The Bank of Punjab • Core Spun Yarn
Mr. Haji Muhammad Mundia The Bank of Khyber • 100% Grey Cotton Ring Spun Yarn
United Bank Limited • Man-Made / Blended Yarn
Auditors
Deloitte Yousuf Adil E-Communication • Poly / Cotton Yarn
Chartered Accountants Website: www.gadoontextile.com • Murata Vortex Spun Yarn
A Member of Deloitte Touche Tohmatsu Facebook: www.facebook.com/Gadoontextile • Open-End Yarn
Linkedin:https://www.linkedin.com/company/ • Siro Yarn
Registered Office gadoontextilemillslimited • Lycra Yarn
200-201, Gadoon Amazai Industrial Estate, • Slub Yarn
Distt. Swabi, Khyber Pakhtunkhwa. Share Registrar / Transfer Agent • Slub Core Spun Yarn
Phone: 093-8270212-13 CDC Share Registrar Services Limited • Compact Core Spun Yarn
Fax: 093-8270311 CDC House 99-B, Block B, S.M.C.H.S. • Double Compact Spun Yarn on Ring Machine
E-mail: [email protected] Main Shahrah-e-Faisal, Karachi. (Without Doubling)
Toll-Free: 0800 23275
06 I Gadoon Textile Mills Limited Annual Report 2019 I 07

business model
Manufactured Natural Capital

Capital Human Capital Highest standards are
- Almost 5,000 strong adhered to with proper
Two most advanced workforce guidelines when natural
manufacturing facilities - Experienced Staff and resources are used in
with state-of-the-art able leadership manufacturing process
machineries
Ginning Outcome &

Value Distribution
Input Output
- Wages to Employees
Business - Return to Shareholders
Activities - Payment of government duties & taxes
- Investment towards Society
Spinning Knitting Yarn - Payment to provider of finance
Knitted
Fabric
Social and Intellectual

Financial Relationship Capital
Capital Capital - Highly Skilled and
experienced professionals
Equity: Rs. 9.2 billion - International and Local - Most advanced ERP,
Total borrowings: extensive footprint Business Intelligence Tools
Rs. 12.6 billion - Member of elite and cutting-edge
professional bodies Biometric Technology

geographical spread
Belgium Japan Sawabi
China Korea
Croatia Netherland Lahore
Dominican Republic Pakistan

Egypt Poland Faisalabad
Germany Portugal
Guatemala Taiwan
Manufacturing Plant
Honduras Turkey
Hong Kong USA Major Market
Karachi
Indonesia Vietnam
International Market
Italy

our vision, mission,
culture and core values
Vision
To be the textile manufacturer of the first choice for customers at home and abroad,
doggedly pursuing sustained leadership in the markets where it competes and making its
valuable contribution to the country’s exports.
Mission
Our mission is to manage a textile business entity aimed at producing quality yarns through
innovative technology and effective resource management, maintaining high ethical and
professional standards and coming up to the expectations of all our customers.
We persevere to achieve the highest possible operating efficiencies and lowest costs and expand the
business through selective expansion so that we are able to deliver maximum value to stakeholders.
Culture
GTML embraces a culture which is driven by a people-oriented approach and empowers a
collaborative environment for employees. The management is committed to promoting
coherent culture, facilitating effective teamwork at workplace thus our strong belief in
cultivating open-communication is reflected in all that we do. Frequent feedback and
performance evaluation on the various level is ensured to sustain equity and
transparency of employees, which supplement mutual trust and respect among
employees and with management.
Core Values
• Total Quality Management
• Ethical Practices
• Environmentally Conscious
• Innovation
12 I Gadoon Textile Mills Limited

code of business conduct
and ethical principles group structure
Statement of Intent Confidentiality
The Company ensures that ethical standards are highly In order to retain the privacy of the confidential
maintained and observed in the conducting of business information, the management of the Company ensures
functions. The Code of Conduct Policy has been devised that the person entrusted with such information may About YBG Gadoon Holdings (Private)
to provide direction to the Company employees in not disclose it to any third party or make use of it for YBG is one of the biggest conglomerates in Pakistan Limited (GHPL)
meeting the standards of professional and personal personal benefits. The disclosure of confidential data is with diversified interests in textiles, building materials, GHPL is a wholly owned subsidiary of GTML and was
integrity and guiding them towards the proficient permissible when there is written approval from real estate, power generation, chemicals, incorporated in Pakistan in the year 2018 as a private
conduct. The Human Resource department serves its authorized individuals or the information is required by pharmaceuticals, food and automotive. The group was limited company under the Companies Act, 2017. The
purpose in ensuring that the employees are well aware the court, regulatory body or governmental agency. established in 1962 as a trading house and then grew Company acts as an investing company to hold
of the guidelines. Following are the salient features of rapidly over the years. Currently, YBG is one of the investments. As of June 30, 2019; GHPL held 0.73%
Code of Conduct: Property Protection largest export houses in Pakistan. shares in ICI Pakistan Limited.
The Company ensures that the employee abides by the
Compliance with the Law laws of not getting involved in any unauthorized use or
and Regulations misappropriation of its property or services and it is
It is compulsory for all employees to ensure compliance being instructed to use GTML’s property responsibly.
with all laws and regulations. Employees are also ICI Pakistan Limited (ICIP)
encouraged to ensure that the rights of all Non-Discrimination ICIP is incorporated in Pakistan and is listed on Pakistan
stakeholders are protected. The Company believes in creating a propitious working YB Holdings (Private) Limited (YBHPL) Stock Exchange Limited (PSX). The Company is
environment which is free from discrimination for YBHPL was incorporated in Pakistan in the year 2013 engaged in the manufacturing of polyester staple fiber,
Corruption employees. The Company also ensure that employees as a Group Holding Company. The Company invests POY Chips, soda ash, specialty chemicals, sodium
It has been regulated that the Company will not be remain motivated and productive through the provision mainly in its group companies and has a diverse bicarbonate, and polyurethanes; marketing of seeds,
involved in any unkind practice and will continue to of equal growth opportunity. portfolio in building materials, textiles, energy, chemical, toll manufactured and imported pharmaceuticals and
conduct its business operations in an honest, open and trading, food and real estate. animal health products; and merchandising of general
ethical manner. GTML further commits to conducting Health, Safety and Environment chemicals. It also acts as an indenting agent and toll
the business in a fair manner by abstaining from GTML is focused to deliver occupational health, safety manufacturer. ICIP also has investments in the business
bribery or corruption for the means of securing and environmental protection. Considering this, the of manufacturing and sales of pharmaceutical products
business advantage. Company observes an efficient use of natural and infant milk powder.
resources and reduces the environmental impact of
Money Laundering the Company operations. Aziz Tabba Foundation (ATF)
GTML regulates that the employees commit to the ATF is a not-for-profit organization, established in 1987.
anti-money laundering laws. Moreover, the Company Conflict of Interest It is a platform of social activities dedicated to serving
prohibits any such business activity which involves As per GTML policy, the employees are not allowed to humanity in several vital areas of life. The Foundation Kia Lucky Motors Pakistan Limited (KLM)
people of criminal background and are engaged in get involved in any activity that conflicts with the renders its services to fulfill the need of underprivileged KLM was incorporated in Pakistan in December 2016
illegal activities. Company’s business interest. It is not permissible for people by providing them shelter, education, marriage, as a public unlisted company. The objective of the
people to make unfair use of their designation for the health care, vocational training program, laptop company is to carry out the business of assembling,
Quality Assurance sake of achieving personal benefits, thus, the support, equipment support, monthly aid, marketing, distribution and sales of Kia vehicles, parts
The quality is the utmost priority. The Company is appearance of such a conflict must be avoided. self-employment scheme (motorcycle) and Ramadan and accessories in Pakistan in collaboration with Kia
committed to discovering, developing, manufacturing ration support to bring prosperity and change to uplift Motors Corporation, South Korea. KLM was awarded
high-quality products without compromising on the the living standard of society. The foundation has with category “A” greenfield investment status in June
contractual or agreed quality of the product. successfully introduced Rickshaw support under 2017 by the Ministry of Industries and Production and
self-employment scheme. The Foundation has also is the first company to get such status under
placed tube well and conduct water boring through Automotive Development Policy 2016 – 2021.
drilling aims to ensure smooth water boring supply in
underprivileged areas of Karachi which are facing KLM started construction of the project in November
scarcity of water. 2017 and also signed a New Entrant Agreement with

Ministry of Industries & Production under the Automotive LCL strives to remain an efficient and low cost incorporated in July 1993. LEPL, is a gas-based
Development Policy 2016-2021 in December 2017. It producer and is one of the pioneers to introduce and thermal power generation unit, with a total production
commenced CKD operations within the originally install Waste Heat Recovery and Refuse Derived Fuel capacity of 56.575 MW. It is equipped with one of the
envisaged project timelines. KLM’s state of the art (RDF) and Tyre Derived Fuel (TDF) Plants in Pakistan. It most sophisticated and highly-efficient generators and Lucky Landmark (Private) Limited (LLPL)
facility has the capacity to produce 50,000 vehicles per also has self-sufficient Captive power generation supplies uninterruptible power to its group companies. LLPL owns the Lucky One Mall which is a magnificent,
annum on a double shift basis. The booking of “SPORTAGE” facility of 180 MW and supplies additionally generated multifaceted, first-of-its-kind regional shopping mall that
an SUV being KLM’s first model started on 30th June electricity to support the National grid. LCL owns a has revolutionized the shopping experience in Pakistan.
2019 and delivery thereof will start from the end of fleet of Bulkers and Trailers, which gives added The Mall is home to over 200 stores and different services
July 2019. The booking of “PICANTO” hatchback being advantage in terms of logistics and efficient deliveries with the largest parking structure in Pakistan of more
KLM’s second model is expected to start in August to all types of costumers spread across the length and Lucky Foods (Private) Limited (LFPL) than 1,500 parking spaces. It also includes largest indoor
2019 and delivery thereof from October 2019. breadth of the Country. Incorporated in 2015, LFPL has a strategic aim to be theme park in Pakistan known as Onederland, largest
one of the leading corporate dairy farms in Pakistan. Food Court in Pakistan and the only Food Street of any
The company is currently focusing on local animals and mall plus a three-story Atrium, a ramp for fashion shows,
has also developed its retail shops and home delivery banking enclave, and a large area for musical concerts.
network to reach household consumers.
Lucky Air (Private) Limited (LAPL) Lucky Commodities(Private)
LAPL is a subsidiary of Lucky Cement Limited and was Limited (LCPL) The company has also ventured into the marketing of
incorporated in Pakistan in the year 2012 as a private LCPL is the largest South African coal supplier in yogurt and plans to add more value-added dairy products.
Pakistan, a trading arm of the YBG, founded on three The farm is located at Super Highway, Karachi. LFPL
company limited by shares under the Companies
core values; integrity, quality, and reliability aim to
Lucky Textile Mills Limited (LTML)
Ordinance, 1984. The Company operates an Aircraft of aims to be a leading player in food-related products,
LTML was established in 1983 and has since remained one of
Lucky Cement Limited and provides services of aircraft provide exceptional customer service with utmost across Pakistan and in the export market.
the leading textile manufacturers in the country to-date.
crew, aircraft administration, management, fuel and dedication and efficiency. These key values have served
The Company is engaged in the activity of manufacturing
technical and engineering services on inbound and well in maintaining long-standing client relationships.
and export of fabrics, home textile, and garments.
outbound flights of the Aircraft for Lucky Cement Limited.
It has two state-of-the-art weaving mills that have altogether
Lucky Holdings Limited (LHL) 495 Sulzer Shuttle-less looms and 336 Air Jet looms
LHL is a subsidiary of LCL and was incorporated in which are equipped with a computerized back process
Pakistan in the year 2012 as a public unlisted Company comprising of Karlmayer warping and sizing machines.
Lucky Electric Power Company limited by shares under the Companies Ordinance, It has the capacity to process 72 million meters of
Lucky Cement Limited (LCL) Limited (LEPCL) 1984. LCL holds 75% shares of LHL. The main source of fabric per annum. Moreover, LTML has its own power
Founded in 1993, Lucky Cement Limited stands as the LEPCL is formed as an IPP under Government of earning of LHL is the royalty income received from ICIP. generation facility of 6 MW.
flagship company of YBG. LCL is one of the largest Pakistan Power policy. The company is wholly owned
producers and leading exporters of quality cement in by LCL Holdings Limited and is in the process of The stitching division is equipped with sophisticated high
Pakistan and is listed on the PSX. The Company has setting up 660 MW Super Critical Power Project on tech machines that can stitch fabrics and transform
also issued Global Depository Receipts (GDRs), listed Port Qasim using Thar Lignite. The company has them into home textile as well as apparel products with
and traded on the Professional Securities Market of achieved financial close of the project on June 25, a high degree of precision. Stitching machines including
the London Stock Exchange and the first Shariah 2018, after fulfilling all the necessary conditions and Lucky Knits (Private) Limited (LKL) Juki, Brother, Kansai, and automated Texpa plant.
Compliant Company of Pakistan certified by the SECP. accordingly, Private Power & Infrastructure Board Established in 2004, LKL has become one of the leading
(PPIB) has issued the necessary guarantee from the value-added fashion garment company of Pakistan. The
Over the years, the Company has grown substantially Government of Pakistan under the Implementation company is involved in the manufacturing and exports
and is expanding its business operations with production Agreement. The target date for Commercial of knitted apparel and product line ranges from T-shirts,
facilities at strategic locations in Karachi to cater to the polo shirts, hoodies, jackets, shorts & trousers, having a
Operations is March 01, 2021. LuckyOne (Private) Limited (LOPL)
Southern regions and Pezu, Khyber Pakhtunkhwa to large variety of styles in casual and sportswear. State LOPL is a project company which has constructed
furnish the Northern areas of the Country. Lucky of the art vertically integrated manufacturing facility Lucky One Mall and Lucky One Apartments. Lucky One
Cement is Pakistan’s first Company to export sizeable helps to achieve efficiency at every stage of the process Apartments is a magnificent, multifaceted, first-of-its-
quantities of loose cement being the only cement and ensure customer satisfaction in terms of value, kind hi-end residential complex that will revolutionize
manufacturer to have its own loading and storage Lucky Energy (Private) Limited (LEPL) quality, and delivery of products. the luxury living experience in Pakistan. Lucky One
terminal at Karachi Port. LEPL is a Captive Power Producer (CPP) under the Apartments integrates 7 elegant residential towers
National Electric Power Regulatory Authority (NEPRA) and a large 8 - acre Rooftop Park. The project comprises
of two phases of which Phase -1 is being launched.

Conveniently situated at the prime location of Karachi on
main Rashid Minhas Road, opposite UBL Sports Complex,
the apartments are easily accessible through major
Flyovers of Karachi. The unbeatable mix of top-class Tabba Kidney Institute (TKI)
luxury apartments and hi-end amenities like Swimming Formerly known as Aziz Tabba Kidney Centre, TKI, a
Yunus Energy Limited (YEL) Yunus Textile Mills Limited (YTML)
Pool, Gymnasium, Jogging Track, Tennis Courts, Yunus Energy Limited (YEL) was incorporated as YTML is a vertically integrated home textile unit
well-reputed Post Graduate Training & Research
Reading Room, Event Hall, Play areas and the amazing a Special Purpose Vehicle (SPV), with a corporate established in 1998, consisting of spinning, weaving,
Center with state-of-the-art technology and modern
8 - acre Rooftop Park make Lucky One Apartments the structure of a public unlisted company, in the year 2011, printing, dyeing, finishing and cut & sews with a workforce
expertise, is committed to providing comprehensive
premiere lifestyle destination for urban living in Karachi. to exclusively develop a 50 MW Wind Power Project in of 3,400 employees. In a span of 10 years, it became
Nephro-Urological and allied medical treatment under
Deh Kohistan, Jhimpir, District Thatta. the no. 1 home textile exporter of Pakistan with almost
one roof; it enjoys an impeccable image in the
10% share of all home textiles exported. The company
healthcare sector famous for the cure of
Project is equipped with state-of-the-art European has its international warehousing, distribution, and
kidney-related diseases.
technology. Wind Turbine Generators (WTGs) have design development offices in the USA, UK, and France.
been manufactured by Nordex Energy Germany, one of
Tabba Heart Institute (THI) This Institute runs a 100-bed modern hospital extending
the top WTG manufacturers from Europe; electrical
Since opening its doors in 2005, THI has become one of Rapid Emergency, In-Patient Department, Consultant
balance of plants has been supplied by Alstom France, a
the fastest-growing not for profit private sector Clinics/OPD, Clinical Laboratory, Pharmacy, High-Tech
leading grid solution provider; whereas construction
cardiac hospital in Pakistan. At THI, the focus is to Operation theaters equipped with the latest equipment
activities have been carried out by Descon Engineering
provide outstanding patient care with an ethical, like Flexible Ureterorenoscope, 3D Laparoscopic and
Limited, the biggest construction and engineering
thoughtful and sustainable approach at all time. 140-watt Laser and 4K Camera technology. The unmatched
company of Pakistan.
quality services of TKI has been certified by the
Founded by Mr. Abdul Razzak Tabba (late) with the International Organization for Standardization (ISO)
It is a clean energy project, harnessing the renewable
vision of “Quality Care at an Affordable Cost”, today THI and accredited also by the College of Physicians and
wind resource for the generation of electric power without
is 170 beds cardiac facility with 2 Outreach centers Surgeons Pakistan. TKI, being more than a hospital,
any carbon emissions. The project is supplying electricity
and 6 collection units located across Karachi to provide gains excellence in surgical researches and has developed
to the national grid on a regular basis post commencing
our Founder’s vision to the people of Pakistan. THI’s itself a staggering educational Institute. To facilitate
commercial operations in September 2016.
Quality cardiac care services are recognized by patients’ access to our exquisite healthcare services,
American College of Cardiology and our group of TKI has set-up a Diagnostic & Consultation Centre in
cardiologists are leaders in sub-specialized cardiology DHA Karachi and to spreading its services to the
fields such as Cardiac Imaging, Electrophysiology, Advanced patients across Sindh it also has opened a standalone
Heart Failure, Structural Heart and Valvular Outreach Center in Hyderabad city which has received
Implantations, Angioplasty and other Interventional overwhelmed response since its inauguration.
Procedures. Having these leaders on board allows the
organization to deliver the best cardiac services at
affordable cost which is at par with international
standards fortified by the association with the American
College of Cardiology for continuous improvement. Y.B. Pakistan Limited (YBPL)
Yunus brothers started a business in 1962 as a
This year THI will be expanding its services to Hyderabad, partnership by Mr. Abdul Razzak Tabba (Late) and Mr.
with a dedicated Diagnostic and Consultation facility. It Yunus Tabba. Initially, trading of grey cloth was the main
continuously strives to innovate and expand the resources business. However, with the time the firm started dealing
for maximum utilization where it is required ensuring both in other commodity items e.g. wheat, rice, corn, and
quality and integrity being up to the patients’ expectations. other pulse items. In order to encourage corporate culture,
the management decided in 2012 to convert the partnership
firm into a public limited company with name and style
of YBPL. The company has a diversified portfolio of
investment in various segment of businesses.

organizational chart senior management
Head Office
Board of Directors
Mr. Muhammad Sohail Tabba Mr. Abdul Sattar Abdullah Mr. Imroz Iqbal
Chief Executive Officer Executive Director Finance and Director Export Sales and Marketing
Company Secretary
HR & Remuneration Committee Chief Executive Officer Audit Committee
Chief Internal Auditor

Mr. Muhammad Imran Moten Mr. Salam Chottani Mr. Haji Muhammad Mundia
Chief Financial Officer Director Local Sales Chief Internal Auditor
Gadoon Amazai Plant
Factory Head Office Technical &

Administration Span Management Span Production Span
Mr. Vaqar Ahmed Khan Mr. Iftikhar Ahmed Mr. Mohammad Nadeem Riaz
Director Administration Director Technical Director Technical
Director Resident Chief General Director Executive Director Chief Head of Technical Technical Director
Administration Director Information Manager Export Director Finance Local Sales Financial Human Directors Power Plant
Officer Procurement Sales & and Company Officer Resource
Marketing Secretary
Mr. Shafqat Mumtaz Ahmed Mr. Haf iz Waseem Mr. Asad Ansari
Director Technical Director Technical Director Technical Power Plant
General Manager
Information Technology
General
Manager
General
Manager Accounts
General
Manager Finance
DGM
Taxation &
Karachi Plant
Export Corporate Affairs
Sales
The Key Quantitative Information i.e. the number

of employees employed on the date of financial
statements and an average number of employees
along with the number of factory employees has been
disclosed in the note 36 and note 37 of the Unconsolidated
Mr. Tahir Saleem Mr. Akhtar Kamdar and Consolidated financial statements respectively.
Executive Director Technical Resident Director

position in the value chain
Fiber
(Ginning)
Yarn
(Spinning) Retail
(Leading Store)
outlets
Value
Chain
Garment
(Manufacturing)
Fabric
(Knitted / Woven / Denim)

significant factors affecting
the external environment External
Component
Description Organizational Response
Legal Compliance with Legal / Regulatory In addition to its professional team, the Company
requirement is necessary for the also hire the services of lawyer / tax expert, on a
Organizations are affected directly or indirectly by the external Company’s smooth operations. need basis, in order to ensure compliance with all
legal / regulatory requirements.
environment in which they operate because it is stated with certitude
that it is not possible for companies to work in a vacuum or in Environmental Company activities have an impact on the The Company in addition to ensure compliance
environment in which they operate. With with applicable environmental laws and
insolation with its surroundings. The different elements of the the rise in importance of Corporate regulations, also take additional steps on a regular
external environment are discussed as under: Responsibility, the environmental factors basis. Few instances are:
are becoming increasingly important for • Successfully installed Waste Heat Recovery
PESTLE Analysis the growth of the Company. Plant (WHRP). The plant operates by
transforming the heat and smoke of the
External engine into the power that is used for
Description Organizational Response
Component further processes.
• Tree Plantation in the factory premise for
Political Stable political conditions are impediment - Consistent market analysis by the senior
for the growth of any Economy. Frequent management and proactive planning to limiting the emission of harmful gases in
changes in government policies affect the mitigate any unfavorable outcome on the the atmosphere.
confidence level of the investors and company’s business.
accordingly business on overall suffers. - Arranging session with investors / stakeholders
to boost their confidence.
Market Forces
The Porter’s five forces model has been used to analyze the industry structure and the corporate strategy of GTML for
Economic Economic conditions have a direct impact Company actively monitors the economic factors further measuring the competition intensity, attractiveness and profitability of the textile industry.
on the Company’s performance. An and take steps to minimize their negative impact.
adverse moment in exchange rate, interest Some of the steps taken during the past couple of
rates, inflation rate, etc. negatively impact years are: Forces Description
the business of the company. • Conversion of foreign currency-denominated
borrowings into local borrowings owing to Threat of New Entry The threat of new competitors is low mainly on account of following barriers:
possible devaluation of currency. - Huge Capital Expenditure required
• Efficient cotton procurement. - Inconsistent Government Policies
• Investment in diversified avenues. - Energy Crisis
Social Being socially responsible is yet another The Company not only participates diligently in the Threat of Substitution The threat of substitute is low to medium because of the limited options available in
immense factor of critical importance that CSR activities but also encourages its employees the market for the consumers to fulfill their needs, mainly because of lack of
adds on to the performance levels of the to devote their time for the betterment and investment in R&D.
Company. The organizations involved in playing well-being of the society. In this respect, different
an active role in the betterment of society activities are planned each year. Supplier Power The bargaining power of suppliers is low on account of a large number of suppliers of
earn a name in the market and accordingly, raw cotton in the domestic market, having almost the same quality. Further, many of
tend to attract and retain their customers, the companies also import large quantity of cotton on account of perception of better
employees and other stakeholders. quality, thus weakening the bargaining power of local suppliers.
Technological Technological developments and - In order to gain competitive advantage, the
Buyer Power Bargaining power of customers is categorized to be high due to emerging trends,
innovation determine the progression of Company on a regular basis invests significant
buyers demand new collections / variety, which Company has to adhere to on a
an organization. amounts on new technological advanced
timely basis. The negligible switching cost to customers also empowers their
machineries, which is evident from Rs. 2.8
billion CAPEX in this year also. bargaining power.
- The Company also ensure participation of its
Competitive Rivalry The level of competition of the export market of the Textile industry is high because of
senior management in various national /
international exhibition / training session, to the competition from countries like India and Bangladesh, mainly on account of
acquaint them with the latest technology. economies of scale and subsidized conversion cost. Pakistani manufacturers need to
work on cost reduction techniques to sustain in this competitive edge.

Seasonality of Business
Company’s significant business is manufacturing and sale of yarn. The marketing team performs regular trend analysis
awards and achievements
to pursue upcoming demand well before regional and international festivals. Also the business gets slow down during
the vacation in China on account of Chinese New Year.
Significant Changes from Prior Years • Top 25 Companies for the Year Award
There is no significant change in the organization regarding principal activities, products and services, ownership • Top Exporter (Foreign Exchange Earner) of the Province
including its vision, mission, culture and core values.
• Top Importer of the Province
However, the Company has continued its plan to diversify and expand its business by entering into new market • Top Income Tax Payer of the Province
segments. Keeping in view, the growing demand and the purchasing power of the target market, the Company has
ventured in the Dairy segment which has started commercial production on June 30, 2019. This new business venture
• Best Consumer Award
is a mere opportunity to explore new avenues of business, garner the maximum potential of this market and to • Businessman of the Year Gold Medal Award
generate higher returns.
• Business Excellence Award 2016 - 2017
Composition of Local and Imported Material / Sensitivity Analysis • ACCA and ICAEW Approved Employer Status
Being the yarn manufacturer, the Company’s main raw material is Raw Cotton. Following is the Composition of Raw
• ICAP's Outside Practice Scheme’s Enrollment
Material purchased during the year:
• Awarded with Best Corporate Report Award 2015 to 2018
Imported Local Total • Secured First Place in National Finance Olympiad (NFO) 2016 organized by ICAP
For the Year KG (in '000) Amount (in '000) KG (in '000) Amount (in '000) KG (in '000) Amount (in '000)
2019 49,741 13,367,880 38,022 8,101,037 87,763 21,468,917
2018 58,378 12,630,500 45,700 7,241,831 104,078 19,872,331
The Company is exposed to foreign currency fluctuation for its imported raw material. If the Pakistani Rupee had
weakened/strengthened by 10% against the US Dollars, Euros and Swiss Franc with all variables held constant, the
raw material cost for the year would have been lower / higher by Rs. 1.34 billion (2018: 1.26 billion). This analysis
assumes that all other variables, in particular, interest rates remain constant.

where
strategy
thrives
Strategy and Resource Allocation
strategy and resource allocation Resource allocation plan: In order to achieve this
objective, GTML has strong financial standing and has
Status: Ongoing process – Targets for the year achieved.
sufficient available limits (financial capital). In order to Opportunities / Threats: GTML plans to stay ahead of
manage the investment in diversified projects, GTML its’ competitors, and help achieve economies of scale in
has experienced management pool. The roles and the long run. Planned up-gradation helps the Company
The foundation of planning of an organization lies upon for the local companies in the prevailing situation where
responsibilities have also been appropriately assigned in ensuring minimum production downtime. However,
the identifiable goals towards which all organizational the government of regional competitors incentivizes
to a dedicated team responsible for managing investments the process of up-gradation and maintenance does
activities are directed. Objectives serve the basis of local manufacturers. Further, the trade war between
and their competency level has been ensured. result in high monetary costs initially.
managerial functions and organizational existence of global trade giants, is also negatively impacting the
any organization. GTML devises challenging objectives economy. This poses a further threat to the entire
Objective 3 Resource allocation plan: The Company in order to
for attaining profitable results and gaining a competitive sector, as well as issues, distinctly related to power,
Create and achieve overall business synergies by sustain industry leadership have been investing in
advantage in the market. The strategic and management tariff, incentive schemes, and increased conversion
maintaining operational efficiencies. technological advance machines (manufactured
objectives are an integral part of a business that plays costs would impede progress in the long run if not
capital) and anticipates that in the coming years the
a pivotal role in the success of the organization. The dealt by the Government with high priority.
Strategy: Constantly monitor the business processes Company will be able to rationalize its manpower
objectives of GTML are mentioned below.
and look for ways to make the overall process lean (human capital), which will bring in further value
Resource allocation plan: In addition to the budget
and efficient. addition to the Company. Further, the Company is
Strategic Objectives allocated for marketing to boost export sales (financial
also focusing on expanding its vertically integrated
• To further reinforce our strengths and deliver capital) and to explore new markets, the management
Priority: High segment and expectedly the new site
maximum utility to our stakeholders, by investing in is placing efforts to build a global image of the
(manufactured capital) will become operational by
diversified businesses and aiming to explore the Company (social and relationship capital) and for
Timeline: Short term first half of the year 2019 - 2020.
untapped markets. these reasons, various activities are being planned for
• To acquire and implement innovative technology the coming year too. The company, being a member of
and techniques in order to enhance the overall various forums/associations like APTMA, Sarhad
Status: Ongoing process – Targets for the year Liquidity Strategy
achieved.
productivity of the company. Chambers also attends Investment conferences and
Current Liquidity Position
• To maintain high ethical and professional standards seminars both locally and globally, thus promoting its
Opportunities / Threats: The Company strongly believes The liquidity position of the Company is on a solid
and provide a healthy working environment for corporate image (social capital). In addition to ensure
in the notion of continuous improvement and focuses on foundation and it has an adequate capital structure
our employees. presence at various events/seminars, our ‘Corporate
ways to improve overall efficiencies. Sometimes this mainly supported by equity.
• To promote awareness and encourage the best and Branding Team’ continuously monitors possible
requires the employment of unconventional practices
customs to support environmental sustainability. avenue and take active participation in them.
where outcomes may be unfavorable. 2019 2018
• To contribute effectively as a corporate entity and
Rupees in ‘000
play a vital role in flourishing the country’s economy. Objective 2
Resource allocation plan: The Company keeps a
Diversify risks and provide maximum return to Equity 9,209,433 8,213,510
significant focus on investment in the training and
Management Objectives shareholders by identifying and investing in
development of its staff and executives at various
Long Term Finance 2,675,091 594,338
Objective 1 diversified businesses.
local and international levels. This helps staff and
Sales Maximization and Global Footprint The Company stands on strong repayment legacy as
executives to improve their management and
Strategy: Expand within and outside the spinning the Company has never defaulted any payment against
technical skills and to equip them with the latest
Strategy: Maximize sales by exploring and entering sector by continuously seeking for viable avenues. financial institutions, vendors, Government agencies,
production techniques to enhance overall efficiency
new markets, hence increasing the global footprint of etc. and the management is confident that the Company
and effectiveness (Human capital)
the Company. Priority: High would not face any liquidity issues in the future.
Objective 4
Priority: High Status: On-going process The Company has sufficient liquid resources in hand to
Sustain Industry leadership.
meet its working capital requirement. The Company
Timeline: Short term Timeline: Medium term has managed to improve its current ratio over the years
Strategy: Planned and regular up-gradation of
which is evident from an increase in current ratio from
production facilities; timely deployment of the latest
Status: Ongoing Process Opportunities / Threats: Diversifying into new 0.82 in 2015 to 1.02 in 2019. This depicts the performance
technological innovations and manufacturing
avenues of business is a strategic decision that comes of the management in achieving the targets set by the
techniques to maximize overall efficiencies and
Opportunities / Threats: Increased globalization, with uncertain business outcomes, high costs both in board. The management ensures all necessary measures
production of a customer-centric product.
coupled with Government’s foreign policies (GSP+, terms of capital expenditure as well as human capital to manage the ratio at the optimum level.
etc.) status given to Pakistan has supported the requirements. GTML regularly searches for opportunities
Priority: High
industry in retention and further penetration in the to invest and diversify its investments and risks, thus
market. However, its withdrawal seems to be a threat ensuring maximum value for its shareholders. Timeline: Long term

The increase in Long term finance is mainly on Changes in Objectives and Strategies
account of CAPEX during the year. The principal The business objectives and strategies of the
repayment of Rs. 1.15 billion out of Rs. 2.68 billion Company are developed through extensive research,
appearing as long term finance as at June 30, 2019, planning and benchmark practices. The objectives and
will be due after 5 years. strategies have been designed in alignment with the
vision statement of the Company. To measure the
Financing Arrangements Company’s performance against the stated objectives,
The Company has cordial business relations with all Key Performance Indicators have been set, which are
the reputed banks and financial institutions of the measured and regularly monitored by the management.
country. Adequate unutilized financing facilities are There has been no material deviation from the targets’
available at the Company’s disposal. The Company has set to achieve the strategic objective during the year.
a sustainable growth with business stability.
Moreover, the gearing of the Company has also been
monitored and controlled in line with business
objectives. The Company regularly monitors the
debt-equity ratio to keep the Company from any
excessive debt pressure.
Plans and Decisions

The company has from time to time diversified its
business operation through expansion, restructuring
including the merger. However, in the near future,
there are no plans for any significant restructuring,
business operations or discontinuance of operations.

where
wisdom
thrives
Risk and Opportunities
risk and opportunity report Category
of Risk Risk Source
Form
of Capital Assessment Plans and Strategies to Mitigate Risk
Increased External Social and Likelihood: The Company believes that its years of
competition Relationship Medium experience, quality, research and
between local Capital / development, brand image and customer
The management of the company follows the rigorous approach to risk management which is essential to running a
and Financial Magnitude: loyalty are success factors to sustain
successful and sustainable business. The board of directors of the company is closely connected to effective risk
international Capital High even in this global economic scenario.
management. Risk assessment, reporting and control help to enhance governance and control policies, to keep the
suppliers of
company aligned with its objectives. Commercial the product
Risk
Our board members have diversified skills, knowledge and experience which enable them to identify and manage the Disposal of Internal Manufactured Likelihood: Management proactively monitors the
key risks that are likely to arise. They also steer the culture of an organization which promotes an appropriate waste in an Capital / Low arrangement in place and ensure that all
balance between risk and opportunities. appropriate Social and environment-related laws are being
manner Relationship Magnitude: complied with.
Risks, Opportunities and Counter Measures Capital Medium
Potential Risks Safety and Internal Manufactured Likelihood: The Company has formulated and
security of Capital Low implemented a safety and security
Assets mechanism throughout its manufacturing
Category Form
of Risk Risk Source of Capital Assessment Plans and Strategies to Mitigate Risk Magnitude: and administrative facilities. Moreover, all
Medium assets are insured through reputable
Economic and External Social and Likelihood: The Company believes in an open and
institutions in order to safeguard assets
Political Relationship Medium transparent relationship with the
against any unforeseen event of damage,
stability of Capital / Government, regulator and other political Operational
fire, theft, an act of terrorism etc.
the country Financial Magnitude: stakeholders. Risk
Capital High
As part of the larger industry, Company Employee Internal Human Likelihood: The Company provides a good working
through its representatives, provide turnover Capital Low environment and optimal growth
valuable suggestions to the regulator / opportunities to its employees in order to
Strategic committees / sub committees. We Magnitude: keep them motivated and to keep them
Risk regularly monitor the economic and legal Medium connected with the Company.
impacts of Government policies and
political actions on the Company as well Adverse External Financial Likelihood: The Company mainly meets its working
as the textile industry. changes in Capital Medium capital requirements through short-term
interest rates financing facilities. In order to mitigate
New Laws and External Social and Likelihood: Legal and Corporate Department Magnitude: the risk of rising interest rates,
Regulations Relationship Medium proactively monitors and ensures that all Medium management negotiates prevailing
Capital relevant laws and regulations are being market rates and maintains an efficient
Financial portfolio of sources of funds.
Magnitude: complied with.
Risk
Medium
Defaults in External Financial Likelihood: The company regularly monitors the
Payments by Capital Low credit period and balance of major parties.
Debtors Reconciliation and Confirmations are also
Magnitude: obtained from parties on a periodic basis.
Medium

Potential Opportunities
Pakistan is one of those countries where upper middle class and middle-class population forms the majority. This
risk management policy
factor opens up the opportunity to sell knitted wear and garments to the local mainstream population of the
country. The ever so competitive local and international market has made it difficult for companies to sustain. This
provides our Company the opportunity to acquire smaller players of the market and increase its market share and
economic efficiencies. The purpose of the Risk Management Policy (RMP) is to identify the
risk which may create hindrances for management to achieve
Key Opportunities Source
Capital
Form Strategy to Materialize Company’s objective and introduction of appropriate and effective
Increasing profits and External Social and Company continuously strives to increase its productivity controls to mitigate the identified risk. The Board of Directors
growing demand in the Relationship and profitability, and efficiently manages business (BOD), Chief Executive Officer (CEO) and concerned department
market Capital / operations to cope up with the growing demand.
Financial
head (HOD) are responsible for Risk Management Policy.
Capital
Maintaining healthy external External Social and The Company works on managing external relations, Following are the salient features of the Risk • Every HOD will prepare a document of identified risk
relationships strengthen the Relationship promoting the brand by enhancing its social media Management Policy: of his department along with the control measure to
company portfolio Capital presence and getting involved in branding activities for mitigate the risk. The HOD will keep the record of
cultivating its branding image. • Management must ensure that every HOD must change in the level of risk and will keep the track of
identify the risk of his department and should also reporting to higher authority and measures taken by
describe the measures to mitigate the identified risk. the concerned department to control the situation.
Hiring of quintessential Internal Human The Company participates in Talent Hunt Programs in Every department must be updated about relevant Every change in the level of risk shall be reported to
employees. Skilled resource Capital reputed universities and regularly updates its job regulatory requirements, laws, and codes the IA for assessment and updation in the Risk Register.
would assist in continually application process and develops talent assessment of conduct pertaining to the activity of his/her
changing business climate tests for hiring right-fit candidate. department and it should be observed and Risk Register & Annual Presentation to Board
implemented at various execution level. Internal Audit department shall prepare and update the
The Company actively conducts learning and development Risk Register. Internal Audit department shall evaluate
programs for improving the soft and technical skills of • Each risk should be categorized in 4 levels namely the effectiveness of control and should also check the
the employees so that innovation and change can be low, medium, high and crucial. reporting of the risk to the CEO/BOD when it is being
brought about. required to be reported. IA will present the report to
• HOD should set and change the levels of risk with the board annually about the newly identified risk of
Technology Advancement External Manufactured The Company continuously invests considerable the consultation of the Head of Internal Audit (IA). every department and control measure taken by the
Capital / amounts in technological advanced machineries in order HOD will also be empowered to modify the measures HOD along with the Risk Register of already identified risk.
Intellectual to remain competitive and cost-efficient. to cope up with already identified risk.
Capital
• Monitoring and Reporting level of each risk will
Diversification of External Social and The Company keeps itself updated regarding new be defined by the CEO with the consultation of IA
Product Range Relationship trends, customer choices, thus, the company cope with and HOD.
Capital / the new ideas accordingly.
Manufactured
Capital

materiality determination Sustainability
Area
Material Topic Marking Boundary
Social Business Ethics GTML / Supplier / Customer
Human Rights GTML

Materiality Assessment
Health and Safety GTML
Materiality determination of the Company is the value-creation strategy that prioritize the most impactful areas of
society, environment and economy. The issues highlighted influence the decision-making process of the stakeholders Training and Education GTML
and the responses need to be timely identified, evaluated, and formulated.
Compliance GTML / Regulator
Marketing Communications GTML
Data Privacy and Cyber Security GTML
Stakeholder and Community

GTML / Community
Prioritization Involvement
Identification Interpretation
of material Action Taken GTML
of Materiality and Validation Environment Energy and Water
issues
Emissions GTML / Community
Material GTML / Supplier
Economic Economic Performance GTML
Economic Returns GTML
Market Presence GTML
Relevant areas Evaluating the Interpretation Implementation

that may impact significance of of material of action plans Significance of Impacts on
stakeholders economic, social issues, action economy, society and environment
decisions and environmental planning and High Moderate
impacts reporting
High
Influence on Stakeholder
assessment and decision
Moderate
Materiality Matrix
The material issues identified have been presented in the table below. The matters have been marked on the basis of
their effect on Stakeholders Assessment and Decisions and significance of their impact on economy, society and
environment. The materiality analysis not only helps in identifying issues to the stakeholder but also assist us in
Robust Assessment of Risk Capital Structure and Payment of Debts
As disclosed in the Directors’ report, the Board of As discussed in the Strategy and Resource allocation
deciding the area of focus of our internal resources.
Directors has carried out a robust assessment of the section, the Company has adequate Capital structure,
principal risks which the company is facing and are mainly supported by Equity. Further, the Company has
confident that the Company has adequate a practice of setting obligation on a timely basis and
plans/resources to outweigh the possible negative accordingly there is no history of any default with
impact of these risks. respect to payment of debt.

where
industry
thrives
Governance
Board of Directors
Under the direction of our profound and astute leaders, we have successfully
marshaled the drive and passion of our people towards the road of prosperity.
Our Board of Directors have played a pivotal role in transforming GTML throughout
the course of its operations; they have led GTML from the front and at the same
time have stayed by their workforce through thick and thin. Their determination for
achieving excellence and staying by their employees is what drives GTML every day.
directors’ profile
Mr. Muhammad Yunus Tabba Mr. Muhammad Sohail Tabba Besides being the CEO of Lucky Energy (Private) Ltd,
Chairman Chief Executive Officer Yunus Energy Limited, Lucky One (Private) Limited; he
is the Director of Lucky Cement Limited, Kia Lucky
Mr. Muhammad Yunus Tabba started his over Mr. Muhammad Sohail Tabba - Pakistan’s business Motors Pakistan Limited and several other companies.
fifty-seven years-long career with YBG as one of its mogul and philanthropist, owes his prosperity to a
founding members and has seen it progress through conglomerate of businesses and export houses Driven to contribute to the community,
manufacturing, sales, marketing, and general bearing the YBG brand name. His proficient leadership Mr. Muhammad Sohail Tabba became Founding
management. With his expertise and diversified in diverse sectors – manufacturing, cement, energy, Trustee of Childlife Foundation Pakistan in 2012. His
experience, he has taken YBG to a level appreciated by entertainment, real estate and philanthropy - magnanimous contribution to the healthcare sector of
both local and international business communities. He spanning over almost three decades - has earned Sindh is treating almost 2,000,000 patients annually
has also been awarded as “Businessman of the Year’ laurels and accolades for his company and country. through contemporary children’s emergency rooms in
by the Chambers of Commerce several times during 7 government hospitals. He is also the Director of Aziz
his awe-inspiring entrepreneurial career. Recently, he Mr. Muhammad Sohail Tabba - the CEO of Gadoon Tabba Foundation that holds Tabba Heart and Kidney
has also been awarded “Sitara-e-Imtiaz” by the Textile Mills Limited, Lucky Knits Private Limited and Institutes besides several other welfare projects.
Government of Pakistan in Awards Honoring Director of Yunus Textile Mills Limited, Lucky Textile
Ceremony in Governor House, Karachi on Pakistan Mills Limited - is spearheading Pakistan‘s leading
Day – 23rd March 2019. group –YBG- in the arenas of textiles globally.
He was appointed as a Non-Executive Director on

Board of ICI Pakistan Limited in 2012 and since 2014
with his laudable leadership, he acquired the position
of Chairperson ICI Pakistan Limited. His escalation
further accelerated; he became the Chairperson of
NutriCo Morinaga (Private) Limited. In 2016
state-of-the-art Morinaga manufacturing facility was
established in Pakistan as a joint venture to produce
infant formula.
His vision enabled the manifestation of Lucky One Mall.

The magnificent edifice, in the heart of Karachi, provides
shopping facilities and entertainment at Onederland,
to children and people from all walks of life.

Mr. Muhammad Ali Tabba Association (APCMA), a regulatory and apex body of Mr. Jawed Yunus Tabba Ms. Zulekha Tabba Maskatiya
Director the cement manufacturers in Pakistan. He has been Director Director
appointed by the Government of Pakistan to serve on
Mr. Muhammad Ali Tabba is the Chief Executive Officer the Board of Directors of Pakistan International Mr. Jawed Yunus Tabba has a rich experience in the Having pursued a Bachelor’s degree in Management
of Lucky Cement Limited, which is one of the largest Airlines Corporation Limited. textile industry and is currently the Chief Executive Sciences from the University of Warwick and a Master’s
producers and leading exporters of quality cement Officer of a renowned textile mill, Lucky Textile Mills degree in Management, Organizations and Governance
in Pakistan. He has recently been appointed to the Council of Limited. His untiring efforts helped him acquire deep from the London School of Economics and Political
Business Leaders. The body is constituted and headed insight and expertise into export and manufacturing Science, Ms. Zulekha Tabba Maskatiya has been an
He also serves as the Chief Executive of Yunus Textile by the Prime Minister and is tasked with providing activities. He has been instrumental in managing the indispensable part of the business. She not only holds
Mills Limited, a state-of-the-art home textile mill and feedback on boosting exports, increasing investment, textile concerns of YBG and has transformed Lucky a prestigious position within the YBG but her
the largest exporter of home textile products from tariff and taxation policies. Textile Mills Limited into one of the premier Textile educational background brings the values of business
Pakistan with subsidiaries in North America and France. Companies in Pakistan. focus, corporate governance and social responsibility
He also serves in the capacity of Vice Chairman of the In recognition of his outstanding services and to the organization.
Board of ICI Pakistan Limited. contributions in the social development sector of He is on the Board & related sub-committees of Lucky
Pakistan, World Economic Forum (WEF) in 2010 Cement Limited, ICI Pakistan Limited and Kia Lucky
He is also the Chairman of Kia Lucky Motors Pakistan bestowed the title of Young Global Leader (YGL) on Motors Pakistan Limited. He is keenly involved in the
Limited. The company has entered into a joint venture Mr. Muhammad Ali Tabba. For his distinguished services formulation of vision, strategies & governance
agreement with the South Korean carmaker to rendered in the field of entrepreneurship, public structures of these companies.
manufacture, assemble, market, distribute, sell, offer service and philanthropy; the government of Pakistan
after-sales service, import, and export all types of Kia in 2018 conferred upon Mr. Tabba “Sitara-e-Imtiaz,” Mr. Jawed Yunus Tabba is also managing the Real
motor vehicles, parts and accessories in Pakistan. one of the highest awards government of Pakistan Estate Project Lucky One. Mr. Jawed Yunus Tabba is
bestows upon a civilian. extensively engaged in community welfare projects
He also serves in the role of Chairman of Lucky which include Aziz Tabba Foundation. He is also a
Electric Power Company Limited (LEPCL). LEPCL is He is the Vice Chairman of Aziz Tabba Foundation. member of Young President Organization (YPO).
setting up a 660MW supercritical coal power plant at
Port Qasim, Karachi.
He has also served as the Chairman of Pakistan

Business Council (PBC). PBC is a business policy
advocacy platform comprising of the largest
private-sector businesses and conglomerates, including
multinationals in Pakistan. PBC aims to improve the
general business environment of the country. He was
former chairman of All Pakistan Cement Manufacturing

Mr. Saleem Zamindar Mr. Zafar Masud Chairman of the I.T Committee of NBP, Member of the
Director Director Board of Directors and Chairman of the HR Committee
of Port Qasim Authority, Member Advisory Council,
Mr. Saleem Zamindar has a Bachelor of Arts (BA) Mr. Zafar Masud, a banker, and an entrepreneur, has Ministry of Maritime Affairs and Member of the Board of
degree in Economics from Boston University, USA and extensive experience of working at the Board of Directors Directors of TAF Foundation. He was also the Founding
a Master of Business Administration (MBA) from level including State Bank of Pakistan (SBP) and Partner of Burj Capital.
Durham University Business School, UK. He has over Barclays Bank Southern Africa while he is currently
24 years of experience across several countries in working as a member of the Board of Directors at He has a rich experience of working as the Regional
investment management, board level general management National Bank of Pakistan (NBP). Mr. Zafar obtained Managing Director & CEO for Southern Africa, Barclays
and international banking. He is a Certified Company his M.B.A. in Banking from the Institute of Business Bank PLC. Prior to Africa, he was also responsible for
Director by the Pakistan Institute of Corporate Administration, Karachi and a Bachelor of Commerce establishing one of the prime global Islamic banking
Governance and additionally also holds the globally from the Hailey College of Commerce, University of franchises – Dubai Islamic Bank - in Pakistan. At
prestigious Certificate in Company Direction from the the Punjab, Lahore. Citibank, he was a member of the Country Management
Institute of Directors (IoD) UK. Committee and responsible for handling Government
He is currently working as a Consultant with Karandaaz and Public Sector business. He was involved in all the
He is an IFC Certified Trainer on Corporate Governance Pakistan on National Savings and setting-up of first major deals done by Citibank between 1999-2005. He
and is a member of the faculty of Pakistan Institute of of its kind credit enhancement facility for social also joined American Express Bank Pakistan as
Corporate Governance (PICG). He serves on the Board infrastructure financing company in Pakistan. Most Management Trainee. Being the trainee, he appointed
of Directors of several publicly listed & private limited recently, he has worked as Director General-National member of the Country Capital Markets Taskforce,
companies. He is also the past President of the Rotary Savings, Ministry of Finance. implemented special initiatives/ projects of bonding
Club of Karachi, the largest and oldest Rotary Club in business and launched corporate business in the
District 3271, and is a member of the Managing Committee Formerly, being the member of Board of Directors of peripherals of Lahore city (Sialkot, Gujranwala, Gujrat, etc.)
of the Karachi Boat Club, member of the Sind Club the SBP, he has served as the member of Independent
Finance Sub-Committee and member of the Board of Monetary Policy Committee of the Government of
Governors of the Karachi Council on Foreign Relations. Pakistan. He was also the Chairman of Publications
Review Sub-Committee and Members of Human
Resources and Investment Sub-Committees of SBP.
He served as a Member of the Board of Directors and

Chairman of HR Committee at Oil and Gas Development
Company Limited. In addition to this, he has also
served as the member of the Board of Directors and

chairman’s review
The Board comprises of competent and proficient leaders having

immense experience in various sectors of the business world.
The board, being responsible for the management of During the year, the board recommended and approved
the company, formulates all significant policies and among other things:
strategies. The board is governed by relevant laws &
regulations and its obligation, rights, responsibilities, • Routine BMR;
and duties are as specified and prescribed therein. • Budget;
• Quarterly and annual financial statements;
During financial year 2018-2019, four board meetings • Internal audit and audit committee reports and finding;
have been conducted. The board strictly monitored its • Appointment of external auditors; and
own performance along with the performance of its • Distribution of dividend.
sub-committees. Comprehensive and effective
meetings of the board resulted in conducive decisions Accordingly, the Board has completed its annual
for the Company. Whereas, integration of all policies self-evaluation for the year 2019 and I am pleased to
assimilating to the company’s mission and vision was report that the overall performance benchmarked
ensured by the board. In addition to it, the board also on the basis of criteria set for the year 2019,
ensured compliance with all applicable rules and best remained satisfactory.
practices of the company.
The Board remained vigilant regarding the achievement

of the business goals and objectives along with its
financial performance. Oversight on these measures
was carried out on a consistent basis through the
presentations by the management and auditors.
The Board also keeps a check on the followings: Muhammad Yunus Tabba
Chairman
- Quality standards of its product.
- Stable and continual growth. Karachi: July 26, 2019
- Encouraging diversity and upholding ethical behavior.
- Development of skillful resources to attain
advancement and excellence.

directors’ report After receipt of financial assistance from friendly countries, MOU’s being signed for Foreign Direct Investments and the
approval of bailout package by the IMF, it is expected that the economy now finds its way towards gaining momentum.
Financial Results
A comparison of the key financial results of the Company for the year ended June 30, 2019 are as under:
Dear Members Corporate Restructuring
The Directors of your Company takes pleasure in During the current year, a Scheme of Arrangement
presenting before you the financial results of your (Scheme) was filed by Lucky Holdings Limited (LHL) – Profit and loss summary June 30, 2019 June 30, 2018 Favorable / (Unfavorable)
Company which include both Unconsolidated and an associate of the Company, before the Honorable Rupees '000 Percentage
Consolidated audited financial statements for the Sindh High Court (SHC), after getting the required
fiscal year ended June 30, 2019. approvals from the Board of Director and shareholders Export 8,345,846 10,329,551 (19.20)
of LHL. As per the Scheme, the LHL investment in ICIP Local 22,871,633 17,225,136 32.78
Overview Pakistan Limited (ICIP) will be divested and shares of Sales (net) 31,217,479 27,554,687 13.29
The principal business activity of your Company is the ICIP will be transferred to the existing shareholders of Gross Profit 2,892,723 1,944,890 48.73
manufacturing of yarn and knitted fabric. To facilitate LHL in the proportion of their shareholding. Finance Cost (1,098,179) (574,682) (91.09)
its customers and minimize the cost effect, the Company
Distribution expenses (401,764) (437,311) 8.13
has strategically set its manufacturing facility in two Accordingly, the number of shares to which the Company
regions i.e. North and South. is entitled will be transferred to Gadoon Holdings (Private) Administrative expenses (276,997) (224,245) (23.52)
Limited (GHPL) - a wholly-owned subsidiary of the Other Income 651,441 926,387 (29.68)
During the year, your Company recorded consolidated Company. The Company will retain its shareholding in Profit before taxation 1,668,457 1,473,646 13.22
turnover of Rs.31.21 billion against Rs.27.55 billion for LHL to the extent of remaining net assets excluding Profit after taxation 1,186,102 1,185,296 0.07
the Same Period Last Year (SPLY); there is a growth in the effect of the transaction. Earnings per share (Rs.) 42.32 42.29
revenue of 13.29% during this year when compared to
SPLY. Further, the consolidated gross profit margins The Scheme was approved by the SHC on April 09, 2019 In addition to the non-availability of export rebate for spinning segment this year as compared to SPLY, the trade war
have also increased from 7.06% to 9.27% from SPLY. The with July 01, 2018 being the effective date. Accordingly, among world economies was another reason for declining export sales during this year which resulted in fewer orders
increase in contribution margin is mainly on account of as GHPL now becomes the wholly-owned subsidiary of from China to which Pakistan’s export of yarn is at a higher percentage. However, the situation becomes stable in the
better product mix, generation and utilization of energy the Company by virtue of this arrangement, therefore in second half of the year with an increase of 94.70% in export sales of yarn bags and 78.59% in export of knitted fabric,
mix at its optimum levels and increased sales price. addition to the unconsolidated financial statements, when compared with the first half of this financial year.
the Company has also prepared its consolidated
The abrupt devaluation and hike in interest rate by financial statements for this year. Further, the Company is capitalizing the additional demand in the local market of the value-added sector, which has
State Bank of Pakistan, from 7.00 % to 12.25% has resulted in an increase of Rs.5.65 billion, 32.78% in local sales to Rs.22.87 billion against Rs.17.22 billion in SPLY.
affected the cost of sourcing for the Company. The Economic Prospects
finance cost has been increased to 3.52% of sales in The economy has initiated its way towards stability. The results of the final quarter of the year under review improved over the previous quarters on account of
comparison with 2.09% of SPLY. Despite the fact, the During the year, the country witnessed an insignificant improvement in yarn prices as a result of the devaluation of the Rupee, leading to increased costs of raw materials.
management maintained an efficient portfolio of funds decline of 1.00% in exports mainly due to higher cost of The Company’s inventory level were well covered to take benefits of increased selling rates. The breakup of
along-with minimum spreads, to keep the cost at the raw material. However, reduction of 9.86% on import manufacturing cost is as follows:
lowest possible rates. bill in USD term as compared to SPLY has supported
the economy in reducing the current account deficit by
2% 1%
During the year, despite the political uncertainties on 15.33%. Further, inflows from remittance have also 11%
account of election, trade war between Global Trade increased by 9.68% in USD term, which, we believe will
Giants, current account deficit and fierce competition bring economic stability in the country. 2% Raw materials consumed
with regional competitors, coupled with abrupt devaluation 3%
of currency and increase in interest and inflation rate, There have been uncertainties during the year, mainly Salaries wages and benefits
the consistent effort of the management has managed due to abrupt devaluation. The discount rates have also Store consumed
8%
to get the positive bottom lines of Rs. 1,186.10 million increased during the year which resulted in an increase Depreciation
as compared to Rs. 1,185.29 million SPLY. in inflation. Power and fuel
Packing materials
Others
73%

The significant portion of cost of goods manufacture Moreover, the reason for decrease in other income Further, during the current financial year, the Board of Directors have approved an investment in 150 MW Hydel
consists of raw material which is 73% and power cost is is the export rebate for spinning segment, not Power Project, proposed to be located in the province of Khyber Pakhtunkhwa. The information being material has also
11%, which has been the key concern for the extended to this financial year, which contributed been intimated to Pakistan Stock Exchange vide Company’s letter dated July 13, 2018. However, the Company is in the
management to control during this year too. In an effort Rs. 355.64 million in SPLY. process of obtaining various approvals from relevant authorities / regulators and accordingly, no investments have
to rationalize average production cost, management did been made up to date.
procure wisely with a mix of local and imported cotton. The management of the Company continues its BMR
strategy to replace old machineries with new technological Composition of Board
As regards to the power, the Company has changed its advanced machineries. In this respect, significant The Board of Directors as at June 30, 2019 consist of:
power generation mix during this year which resulted CAPEX has been incurred during the year. The increasing
in more electricity generation using Natural gas over cost of borrowing, due to significant CAPEX committed Total number of directors
the furnace oil, increased the use of more efficient during last years, will start to bring its benefits from a) Male 06
generators and also availed the benefit of Waste Heat next year, by further improving the quality of Company’s b) Female 01
Recovery Plant. This has helped the Company in products and in a more competitive cost.
reducing the overall power cost as compared to SPLY. Composition
Through the Finance Act, 2019, the rate of tax credit a) Independent Directors 02
The distribution cost has mainly decreased on account @10 % on investments under section 65(B) of the b) Other Non-Executive Directors 04
of decrease in export sales. Further, the increase in Income Tax Ordinance, 2001, which was allowed till tax c) Executive Director 01
administrative cost is mainly attributable to uncontrollable year 2018, has been withdrawn for tax year 2020
features, such as inflation, employee costs, etc. onwards. Further, the tax credit rates for the tax year Election of Board of Directors
2019 has also been reduced from 10% to 5%. The The election of directors of your Company was held on March 20, 2019. The following directors have been elected for a
Further, the returns from strategic investment in Company has to bear the additional cost by losing its period of three years:
diversified avenues remain on a similar level during this tax credit to the tune of Rs.134 million.
year when compared to SPLY with insignificant increase. 1 Mr. Muhammad Yunus Tabba Non-Executive Director / Chairman
2 Mr. Muhammad Sohail Tabba Executive Director / Chief Executive Officer
3 Mr. Muhammad Ali Tabba Non-Executive Director
Segmental Review of Business Performance
4 Mr. Jawed Yunus Tabba Non-Executive Director
The operations of your Company are primarily divided into two segments i.e. Spinning and Knitting segment. The
5 Ms. Zulekha Tabba Maskatiya Non-Executive Director
segment wise results for the year are as follows:
6 Mr. Saleem Zamindar Independent Director
7 Mr. Zafar Masud* Independent Director
Spinning Knitting Spinning Knitting
2019 2018
*Mr. Zafar Masud has been elected for the first time on the Board of Directors of the Company
Rupees in ‘000
Revenue 29,805,745 1,411,734 26,162,784 1,391,903 The Board of Directors of the Company place their sincere thanks to Mr. Imran Yunus and Ms. Mariam Tabba Khan –
Profit before tax 777,774 326,616 684,462 312,014 the retiring directors for the valuable services which they have delivered during their association with the Company
and wish them all the best for their future endeavors.
Further, the dairy business segment has started commercial production from June 30, 2019, the results of which are
going to be made part in next year financial statements. Committees of the Board
Subsequent to the election of Board of Directors, the Audit, Human Resource and Budget Committee were
Status of Strategic Investments reconstituted. Following are the details of the member of each committee:
During the current year, the Company has obtained an extension from the shareholders regarding their previous
Audit Committee Budget Committee
approval (dated: April 13, 2018), in respect of investment in Tricom Solar Power (Private) Limited, Tricom Wind Power
1 Mr. Saleem Zamindar Chairman 1 Mr. Zafar Masud Chairman
(Private) Limited and Yunus Wind Power Limited as the time frame of 12 months from the passing of special resolution
2 Mr. Zafar Masud Member 2 Mr. Muhammad Ali Tabba Member
as required under Regulation 6 of the “Companies (Investment in Associated Companies or Associated Undertakings)
3 Mr. Muhammad Ali Tabba Member 3 Mr. Muhammad Sohail Tabba Member
Regulations, 2017” was expiring and the Company was unable to invest the entire approved amount in any of these
4 Mr. Jawed Yunus Tabba Member 4 Mr. Jawed Yunus Tabba Member
three Companies, on account of remaining legal formalities.
Human Resource and Remuneration Committee

However, the Company is still actively pursuing this matter to ensure that investment is made within the approved time.
1 Mr. Saleem Zamindar Chairman
2 Mr. Jawed Yunus Tabba Member
3 Ms. Zulekha Tabba Maskatiya Member

Attendance of Board Meetings and its committees The Company has a practice of settling obligations Along with this, on account of International Women’s
on a timely basis, and accordingly, there is no history Day, a celebration was held to acknowledge the
Attendance
of any default with respect to payment of debts incredible strength of women. The prime focus was to
Board of Audit HR and Remuneration
S.No Directors including this year. empower women and appreciate them for their
Directors Committee Committee
untiring struggles.
1 Mr. Muhammad Yunus Tabba – Chairman 4/4 N/M N/M Adequacy of Internal Financial Control
2 Mr. Muhammad Sohail Tabba – CEO 4/4 5/5* 1/1* The effective system of internal financial control has To appreciate the endeavor for benefiting the society
3 Mr. Muhammad Ali Tabba 3/4 3/5 N/M been established by the Board of directors of the Company. at large, the Government of Pakistan awarded Mr.
4 Mr. Imran Yunus** 2/3 N/M N/M The controls have been put in place to ensure the Muhammad Yunus Tabba – the Chairman of the Board
efficient and smooth running of the business, prevention of Directors with Sitara-e-Imtiaz on occasion of
5 Mr. Jawed YunusTabba 4/4 5/5 1/1
and detection of fraud and errors, safeguarding of Pakistan Day held on 23rd of March 2019.
6 Ms. Mariam Tabba Khan** 1/3 N/M N/M
Company’s assets, compliance with laws and regulations,
7 Ms. Zulekha Tabba Maskatiya 2/4 3/4 1/1 accuracy and completeness of books of accounts and Directors’ Remuneration
8 Mr. Saleem Zamindar 4/4 5/5 1/1 timely preparation of reliable financial information. Through the Articles of the Company, the Board of
9 Mr. Zafar Masud 1/1 1/1 N/M Internal Financial Controls are periodically reviewed to Directors is authorized to fix remuneration of the Directors.
ensure these remain effective and are updated with In this regard, the Board of Directors have developed a
* Mr. Sohail Tabba attended all meetings of Audit and HR&R Committee, by way of invitation. amendments in any laws and regulations. comprehensive Remuneration policy for Non-executive
** Directors retired during the year. and Independent Directors of the Company.
N/M Not a member Health, Safety and Environment
Being part of the most reputed group in the country, Directors’ Training
Leave of absence was granted to directors who could not attend the Board and its committee’s meetings. we feel responsible for the health and safety of not The Directors of the Company are adequately trained
only our employees but also the people near our to perform their duties and are aware of their powers
Principal Risks and Uncertainty project till the last year has started commercial production factory premises. A dedicated clinic / dispensary is and responsibilities under the Companies Act, 2017
Businesses face numerous risks and uncertainties which if on June 30, 2019, and accordingly assets and liabilities managed by the qualified team where genuine medicine and the Regulations of PSX Rule book.
not properly addressed might cause serious loss to the of the dairy project as at June 30, 2019, have been is provided. We also ensure the compliance of our
Company. The Board of Directors of the Company has incorporated in the financial statements of the Company. production facility with all the environmental Auditors
carried out a vigilant and thorough assessment of both standards. Waste heat recovery plant and investment The present Auditors, M/s. Deloitte Yousuf Adil,
internal and external risks that the Company might face. Pattern of Shareholding in green energy projects are one of the examples. Our Chartered Accountants have completed the annual
Following are some of the risks which the Company is facing: The pattern of shareholding and additional information production facility does not discharge any harmful audit for the year ended June 30, 2019 and issued a
as at June 30, 2019, is part of the Annual Report of material. Moreover, we have strict compliance towards clean audit report. The auditors will retire on conclusion
• Technological advancement making it more your Company. Associated companies and public sector wastage and disposal. of the Annual General Meeting of the Company and
challenging for the Company to compete on the companies own 69.57%, Banks / Insurance Companies / being eligible; have offered themselves for reappointment.
national / international level. Mutual Funds own 8.97%, Director’s own 0.07% and Corporate Social Responsibility (CSR) As proposed by the Audit Committee, the Board
• Declining export sales due to trade war and increased individuals own 21.39% of the entire shareholding. The Company believes in returning back to the recommends their appointment as auditors of the
competition at global as well as regional levels. community and actively participates in the business Company for the year ending June 30, 2020.
• Currency volatility, abrupt Rupee devaluation, Repayments of Debts / Loans practices that produce an overall positive impact on
causing imported raw material expensive. Your Company has an effective cash flow strategy in society. Considering this, GTML allocates a sum of Future Outlook
• Rising trend of conversion, power cost on place whereby inflows and outflows are projected and amount to CSR activities and projects for societal It is believed that the revenue targets set by the
account increasing fuel / gas prices and other monitored on a regular basis. This comprehensive development, pertaining to philanthropy and government for the upcoming financial year can surely
inflationary impacts. strategy has always empowered your Company in environmental sustainability. be the beginning of new heights for the Country if
• Increasing KIBOR resulting in increased financing cost. smooth settlement of its financial commitments and achieved, nevertheless, the targets seem quite challenging.
• Withdrawal of Zero Rating for Five Export Oriented hopes to cater any and every challenge that will come During the current year, the Company contributed an
Sectors might have a negative impact on local sales in its way. In compliance with the above, the amount for the wellbeing of visually impaired persons The government’s main focus is to document the
along with additional working capital requirements. management has put constant endeavors to and laptops for the education and development of economy and the aggressive steps being planned in this
rationalize borrowing cost, which is done by managing underprivileged children of the society. In addition to respect have been anticipated to bring about long term
Change in Nature of Business a balanced portfolio of sources of funds and efficient this, the Company strives to be a constructive member sustainability and growth of the Country. It is probable
No significant changes have occurred during the financial financing arrangements. of the community by carrying out tree plantation and that the steps taken might slow down the economic
year concerning the nature of business of the Company. beach cleaning activities. activities in the first two quarters of this financial year.
However, dairy farm business, being disclosed as a pilot

The Company has crafted its strategy to overcome the contain its stability and there would be no significant
challenges after the withdrawal of SRO 1125 (1) of increase in interest rates in the upcoming year.
2011. It is expected that the overall sales of the textile
sector will be affected as the purchasing power of The Company is continuously taking measures to
common man will reduce. The Company has devised contain its cost by procuring the right mix of raw
the plan to cover this gap by identifying new products material at the most economical rates to manage its
and customers in the local market. The Company will stock. In addition, the sales mix will be altered based on
also be able to capture the additional demand of demand/supply basis to enhance its profit margins and
qualities being imported into the country owing to the to generate positive cash flows.
recently imposed antidumping duty on certain qualities
being imported to the Country. Further, the Company is In addition, the significant CAPEX made during the year
optimistic that ongoing trade war between global giant will start reaping positive cash flows from operations in
once ended will have a positive impact on World the upcoming years. This will not only increase the
Economy and Company’s exports in particular. Company’s market share and profitability but also add
Moreover, significant improvement in Country’s relation further support in reducing its working capital
with the global giants have also been witnessed requirements and ultimately the financial cost.
recently and accordingly it is expected that favorable
revisions in Foreign Trade Agreements will be made in Dividend Policy
due course. Bearing in mind our strategic investment, business
needs and Company’s ability to generate cash, the
In addition to the introduction of sales tax refunds Board of Directors is pleased to propose a final cash
bonds for export oriented Companies, it is hoped that dividend of Rs. 8.5 per share for the year ended June
government will come up with some other plan for the 30, 2019.
textile sector including but not limited to the resolution
of GIDC matter, timely release of tax and DLTL refunds Subsequent Events
to dilute the impact of the abolition of tax credits on There are no material changes and commitments
capital investment & increase in turnover tax. This will affecting the financial position of the Company between
hopefully boost the confidence of the textile sector and the end of the financial year and the date of this report.
to allow the Company to compete in the global market.
Acknowledgments
With the approval of the IMF bailout package, concessional The Directors record their appreciation of the performance
loan obtained from friendly countries, strict policies to of the Company’s workers, staff and executives.
regulate the foreign exchange transactions, and better
balance of trade during this year, mainly on account of For and on behalf of the Board
reduction in import bills, it is expected that rupee will
Muhammad Yunus Tabba Muhammad Sohail Tabba

Chairman Chief Executive Officer
Karachi: July 26, 2019

CEO’s message procuring the right mix of raw material. Further,
the Company will continue to explore new markets
for its product, especially the international market.
Moreover, it is also expected that government will
also come up with strong policy measures in order
to revive the Economy.
We are determined to create value for our shareholders through In the end, I express my gratitude to all the
continuous improvement in our business practices and by investing stakeholders who have always proven to be the
driving force behind the successful operations of
in technologically advanced equipment and diversified projects. the Company. The Company will continue to work
with utmost dedication for the business and the
stakeholder’s prosperity, which will further
strengthen and grow the bond we share.
Alhamdulillah, I am pleased to announce that the being made by the Federal Committee on Agriculture
financial year 2018-2019 marks the thirty-first year of (FCA) for better agricultural growth in the next fiscal
buoyant operations of GTML. In this fiscal year, we have year. The Company is optimistic for its future
strived our utmost efforts in fulfilling our commitments performance and intends to bring about positive
with the stakeholders. An increase was witnessed in results in upcoming years.
local sales along with an increase in operating profits,
which would not have been possible without the As far as Company’s operations are concerned, the
support and collective action of our determined leaders Company continued to invest in new technological
and team members. advance machinery and accordingly increased its Muhammad Sohail Tabba
production capacity in order to cater to the increasing Chief Executive Officer
In the process of evaluation of the economic prospects demand locally and internationally. Further, our
and the market review, it was witnessed that the GDP Company has shown impressive turnaround during the
growth rate for this year was 3.3% (2018: 5.8%). Out of current year, despite political instabilities (both local
the many other factors, one of the factor which and international), rise in interest rates and abrupt
resulted in declining GDP was the performance of devaluation of Pak Rupee. This performance was
agriculture sector, where the growth of 0.85% was achieved by implementing measures to minimize
witnessed as against the set target of 3.8%. The increasing conversion cost, strengthening our sales
agriculture sector underperformed mainly on account mix, by achieving operational excellence and the
of water shortages. results of strategic decisions to diversify our portfolio
by investing in profitable business segments. Further,
The cotton production has also shown a declining trend during the year the Company contributed Rs. 372.11
with a decrease of 17.5 % (production of 9.861 million million (2018: Rs. 282.26 million) in National Exchequer
bales as compared to 11.946 million bales in 2018). The on account of all kinds of duties and taxes.
cotton production was impacted largely due to a
contraction in the cultivated area, on account of less Value-creation has always been the prime focus of the
economic incentive to the farmers. The production was Company. We position ourselves as a socially conscious
also affected by unfavorable weather conditions, company that remains committed to investing back in
particularly the prolonged hot and dry weather that the society and community in which it operates. For
prevailed in the country. this purpose, a number of CSR activities have been
conducted this year. Being socially responsible, we are
Further, Country’s total export have shown a constantly exploring ways to minimize our waste and
downward movement of 1.00% (in dollar terms). Textile are taking all necessary steps to reduce its impact on
exports, being the major contributor to the country’s the environment.
export have shown a downward movement of 1.42% (in
dollar terms). Looking ahead, in addition to curtailing the conversion
cost by identifying and implementing an efficient
However, in order to handle the situation and to process to improve company's profitability, the
flourish the textile industry, plans and strategies are Company will also take measures to contain its cost by

Decision Taken by Board and • The Board reviews adequacy of internal controls and Committees shall be determined from time to time 5. The Company arranged directors training program
Delegated to Management risk management procedures. and approved by the Board of Directors. for its two HOD in the current year. However, as per
The board meetings of the Company are usually held on • The Board has developed a strategy for the • A Director shall be provided or reimbursed for all CCG 2017, the Company is required to arrange
a quarterly basis to decide the matters requiring directors’ organization that is central to its vision and traveling, hotel and other expenses incurred by him Directors training program each year for at least one
approvals. Further, if decision on any matter is required mission statement. for attending meetings of the Board or its HoD starting from the year 2021.
on an urgent basis, and it is not practicable to arrange • The Board receives signals of potential issues that Committees or General Meetings of the Company.
meeting, then such matters are decided on the basis of may adversely affect the Company’s key targets or • Any Director who performs services which, in the Diversity
circular resolution, duly signed by each director, which financial performance. opinion of the Board, are outside the scope of the GTML works together to preserve a culture of
is then presented in next board meeting for ratification. • The Board ensures that professional standards statutory duties of a Director, may be paid such diversity and inclusion. We work in collaboration and
and corporate values are put in place that extra remuneration. respect the differences of the diverse workforce
The board members ensure that they fulfill all promotes integrity for the Board, senior that include people of varying gender, ethnicity,
responsibilities assigned to them as required under management and employees in the form of the Governance Practice Exceeding national origin, cast, creed, age, religion, cultural
applicable laws and regulations. Moreover, the board Company’s Code of Conduct. Legal Requirement background, languages, educational background,
places more attention on areas such as strategic • The Board review reliable projections of future cash The Board of directors of the Company not only ensure abilities, etc.
investments, business expansion, internal control & risk flows for the medium and short-term, and is confident adequate adherence with any new legal and regulatory
management, governance, review and approval of policies. that the available funding will enable the Company to requirements but also ensure that governance The Board lies special emphasis on the fair
develop and operate as planned. mechanism does not fail to prevent any event which treatment of employees irrespective of their
The board also delegates its tasks to sub-committees can cause serious financial and/or reputational loss background and restricts discrimination. Further the
and the management, and keep follow up in board Orientation Courses and to the Company. The compliance team headed by the management ensures that the talent hunt programs
meetings. The day to day operational matters and the Directors’ Training Program CFO actively monitors global best practices and takes must reflect that we are an equal opportunity
task assigned by the board or its sub-committees are The Company has arranged Orientation Courses for all the necessary measures to assure that Company employer in all areas that strives to embrace work
dealt by the management in consultation with CEO. the directors and its senior management in the adopts the same. environment which is constructed on the premise of
preceding years. gender and diversity equity.
Annual Evaluation of Board’s Company in the past have proactively complied with
Performance No directors training program has been held during the many additional legal requirements, which were not The management of GTML is also committed to
As per the requirement of Listed Companies (Code year as 4 out of 7 directors already meet the exemption mandatory at that time. Some of the examples are: promoting diversity in the workplace and female
of Corporate Governance) Regulations, 2017, the criteria and 3 directors have already acquired the representation in all departments, thus taking several
board of director are required to carry out annual required training in previous years. 1. Currently, the Board of Director has one female initiatives to progress in this area.
evaluation of their own performance, members of Director. Previously from March 2013 to March
board and of its committees. Further, during the current year, the company 2019, there were 2 female directors on the board of Related Parties
arranged Directors’ Training Program for its two directors of the Company. This requirement was not
This year also the evaluation was carried out by the executives / HOD. The training was conducted by mandatory in the past and have been introduced by Policy
board of directors of the Company and results were Institute of Cost & Management Accountant of CCG 2017, which requires each listed company to The objective of this Policy is to set out the
found to be satisfactory. Pakistan based on two sessions in the month of have at least one female director. framework for the transactions between the
December 2018. 2. Chairman of the Board and Chief Executive Officer Company and its related parties based on the
Following major criteria are used to measure Board own of the Company are separate person since May 2005. applicable laws and regulations.
performance and of its committees including Chairman: Policy for Remuneration to Directors This requirement was introduced by CCG 2012.
The remuneration policy is applicable to all non-executive 3. Company has a past practice to get all the related As per the policy, the management must ensure that
• The Board demonstrates integrity, credibility, directors including independent directors who attend the party transactions approved from shareholder since all the necessary details with respect to related
trustworthiness and active participation in its Board and its committee meeting. As per the policy: 2014, as majority of directors of the Company are party transactions must be sent to Audit Committee
affairs, and has the ability to handle conflict deemed interested in such transactions on account of and Board of Directors at least seven days prior to
constructively. • The remuneration of the Board of Directors shall be their common directorship. The same practice has now the Board meeting and ensure that the following
• The Board provides guidance and direction, rather market-based in accordance with their experience been made mandatory by CCG 2017. In addition to steps must be complied with, in order to finalize the
than management to the Company. and competencies. that, the Company has been providing additional details review and approval of related party transactions:
• The Board reviews management succession • The Company will not pay any remuneration to its in related party disclosure in the financial statements
planning as needed. non-executive directors by way of salary except as for many years, in order to ensure transparency. • The details of all related party transactions shall be
• The level of communication between the Board and meeting fee for attending the Board and its 4. CCG 2012 have made it mandatory for each placed before the Audit Committee of the company
relevant parties (i.e., Committees, Auditors, Committee meetings. Company to have at least one independent director. and upon recommendations of the Audit Committee,
Management and Business Heads, etc.) is appropriate. • The remuneration of a Director for attending However, the Company has independent director in the same shall be placed before the Board for review
• The Board receives and reviews all compliance needs. meetings of the Board of Directors or its its board since September 2010. and approval.

• The related party transactions which are not executed
at arm's length price also be placed separately at each
• The records in respect of transactions with a related
party shall be kept minimum for the period of 15
investors’ grievance policy
board meeting along with necessary justification for years or such longer time as required by relevant
consideration and approval of the board on the laws and regulations.
recommendation of the Audit Committee of the Company.
The grievance is defined as any complaint, problem or concern
• The board of directors of the Company shall approve The detailed disclosure regarding transactions with of the affected person. The objective of this Policy is to safeguard
the pricing methods for related party transactions
that were made on the terms equivalent to those
related parties have been disclosed in note 37 and
note 38 to the unconsolidated and consolidated
and protect the interest of the investors/shareholders by
that prevalent for arm’s length transactions, only if financial statements respectively. handling their grievances.
such terms can be substantiated.
• During the review and approval of related party Detail of Board Meetings The Management is committed to ensuring that grievances • The Company’s employees work in good faith and
transactions, if majority of the directors approving outside Pakistan notified by the investors are handled and resolved Investors are informed of avenues to raise their
any transaction are interested and transaction is not During the year, no board meeting was held
efficiently without any discrimination, at an appropriate queries and complaints within the organization and
carried on an arm length basis than this matter shall outside Pakistan.
level within the shortest possible time. The Company’s their rights if they are not satisfied with the
be placed before general meeting as a special resolution.
Grievance policy follows the following principles: resolution of their complaints.
• Approval from shareholders in respect of
• Appropriate remedial action is taken immediately to
transactions with related party shall be obtained at • Queries and complaints are treated efficiently, fairly, ensure avoidance in the future.
the beginning of each year, in Annual General Meeting confidentiality in a courteous manner.
so that Company can carry its business smoothly.
conflict of interest safety of records

The Company believes in handling of actual or perceived conflict of interest The Company has implemented stringent controls to ensure that the records
constructively. Conflict of interest is a situation that has the potential to undermine maintained are not only in compliance with the standard procedures but are also
the impartiality of a person because of the possibility of a clash between the stored in a way that ensures their safety along with the timely retrieval of data,
person’s self-interest and professional or public interest. when required.
All employees are directed to avoid situations where Further, the directors are also reminded on a periodic In order to ensure the Safety of Records, the Company The company has so far scanned more than 3 million
there is a possibility of conflict, as inability to conform basis to avoid actual, potential or perceived conflict of has adopted the following measures: documents that has reduced the paper consumption,
to these ethical policies may render an individual at risk interests and to excuse themselves from any discussion markedly, as the access to print these scanned
• Introduction of ‘paperless environment’ initiative in documents are also controlled.
of disciplinary action, even subsequent dismissal in an on the matter that would give rise to conflict of interests.
the past under which all the records and relevant
instance where a severe breach occurs.
documents are being scanned so that they are
available electronically, addressing the safety and
Management of Conflict of Interest
time-bound concerns of the records.
The Conflict of Interests is managed and monitored in
• Implementation of precautionary measures such as the
the following ways:
use of fire-extinguishers and fire-resistant, ensuring the
security of sensitive documents of the Company.
• Instructing employees about managing and avoiding
• Efficient disposal of record and information when it
Conflict of Interest.
is no longer required.
• Staying away from any kind of actual and
perceived conflict.
• Imparting the Conflict to the Stakeholders.
• Enforcement of strategies to handle Conflict of Interest.

IT governance Utilization of Bio-Metric Technology
Bio-metric technology was initially introduced for the
Enployee Training
Training and Development of an employee will remain
enrollment of factory labor in 2016. After successfully the top most priority and same applies for IT as well.
In today’s highly competitive and dynamic environment, it is completing the enrollment process, we extended the
project to implement the bio-metric technology for
The policy is available for deserving and competent
staff to attain relevant / recognized certification which
imperative that companies align themselves with the advancements cash disbursement in 2017 and got tremendous response will support in IT improvement including carrier
of modern time. These advancements not only help in precise in overall cash payment process. Currently, we have progression of particular employee.
extended this facility at our Karachi Project Factory.
dissemination and presentation of information, but in particular
saves time and cost for the business. For the year 2019-20, we are planning to utilize the
bio-metric system for extended utilities including
verifying employee presence, past track record etc.
In this regard, we at GTML have consistently monitored grows and computer networks become bigger, data
Cash disbursement against salary and benefits through
and developed our IT framework and ensured that the integrity has become one of the most important aspects
ATM machine via bio-metric option is also in consideration.
systems we have implemented, effectively help in for organizations to consider. Although we have already
Since this is new concept and needs more detail, related
storing, safeguarding, retrieving and sharing of worked intensely on network security and VPN connectivity,
to technology and legal issues, hence currently it is in
information. We have a team of talented individuals, it is, however, important to keep our IT team up-to-date
evaluation phase.
who have been working tirelessly to make sure that the on the latest security threats and keep them ready for
methods adopted and implemented by the Company up-coming network security challenges.
are in line with the best practices of the industry.
For the year 2019-20, we have targeted to conduct
The Company has documented and monitored gap analysis in Network / VPN / Internet / Email
consistently the IT framework and maintains detailed, security considering current installation of physical
up-to-date inventory records for all computer firewall and network infrastructure and determining
hardware, software and data. The projects, mentioned ways to improve the overall network structure.
below have been planned and executed to bring about
progress in the operations of the Company. Business Continuity and Disaster Recovery Plan
It is vital for companies to have a backup plan for disaster,
Projects as no one can really predict when they will strike. We
have already developed dedicated BCP infrastructure
Business Intelligence (BI) Tool at our backup location with arrangement of around
BI has become an important asset for any company fifteen workstations for general staff members and one
that wants to reach the next level. BI is a dedicated room to accommodate two executive members.
technology-driven process for analyzing data and
presenting actionable information to help executives, The Board of Directors periodically monitors the Business
managers and other corporate end-users to make Continuity and Disaster Recovery of the Company for
informed business decisions. It comprises of the smooth functioning of the systems and servers and for
strategies and technologies used by enterprises for the the prevention of any unforeseen adversary. Further, the
data analysis of business information. board is also involved in continuously monitoring of the
risks which is exposed to the Company and the relevant
We have already acquired the TABLEAU BI license in strategies inplace to mitigate them. In this fiscal year, on
the first quarter of 2019 to formally introduce the November 24, 2018, a successful BCP drill was held and
desired technology in our organization. We are now we appreciate the efforts of our IT team in conducting
planning for formal training of subject technology for the drill. We believe that in any unfavorable event, our
our technical and non-technical staff. system will be up for use and will be fully operational,
thus fulfilling international standards of BCP.
Network Security and Awareness
With the increasing reliance on technology, it is For the year 2019-20, we are targeting to extend the
becoming more and more essential to secure every infrastructure in term of VPN connectivity and more
aspect of online information and data. As the internet space for formal Data-Centre.

whistle blowing policy human resource excellence
This policy sets out guidelines to encourage individuals if they Organization cannot build a good team of working professionals
believe or have discovered malpractice or impropriety in the without good Human Resource. As the pace of business accelerates
activities of the Company. and competition strengthens, companies are antagonized with
greater uncertainty and intricacy.
The Company is committed to the highest standards of The Investigation Committee comprising of independent
openness, honesty and accountability. In line with its members would work under the supervision of CEO.
While facing such contests, our human resource has Succession planning is a continuous process which is
commitment the Company encourages employees and Members of the Committee would be changed
the potential to be a crucial asset by ensuring that designed to identify, evaluate and develop the potential
/ or third parties (suppliers, customers, dealers etc.) depending on a case to case basis.
company indeed has the desired human capital to employees from within the organization who would be
with serious concerns about any aspect of the Company’s
compete and the ability to react fast to changing able to take up the leadership roles in future. The
work to come forward and blow whistle on those concerns. All reporting shall be handled in a confidential manner.
environments. They are determined to take company to purpose of this is to have a pool of talented and
It shall be ensured at any time the person raising the
new heights, and this commitment helps us to strive competent employees who can replace anyone in
Employees and stakeholders of the Company are issue, if not anonymous, is not targeted or penalized for
against the impossible and try to break our own leadership role. In this respect, HR department
encouraged to raise concerns internally on malpractice raising the matter in all circumstances. Confidentiality
benchmarks that we have set in the industry over the adequately plans employee recruitment, on job
or impropriety. These concerns may include but not be shall be maintained to the fullest extent possible.
time. The wonderful relationship that we share with training/sessions, job rotation and practical exposure
limited to the following: However, if the person raising issue has acted with
our employees is the key reason why the company has so that a person can easily fill the needed role.
false/malicious intent, then disciplinary action may be
a very low employee turnover.
• Financial malpractice or impropriety or fraud; taken against the person.
• Failure to comply with a legal obligation;
Employee Engagement
• Disclosure of Confidential Information within or
Human Resource Management Policy GTML always encourages relationship between the
The objective of this policy is to lay down salient features organization and its employees. In order to empower
outside the Company;
of Company’s philosophy with respect to its Human employee bonding and teamwork, different activities
• Deviation from full and fair reporting of the
resources management and its succession planning. were planned during the year. Detail of some of the
Company's financial position;
As per the policy, the Human Resource department activities are as:
• Dangers to Health and Safety or the environment;
of GTML shall ensure the implementation of the
• Unlawful Civil and Criminal activity;
following practices: Recreational Pakistan Tour
• Improper conduct or unethical behavior; and
• Attract and retain top talent at all level. The management of GTML took an initiative this year
• Attempts to conceal any of these.
• Performance-based / Market-based compensation & to introduce a recreational Pakistan tour. A total of ten
benefit to be provided to all employees. employees were selected through an electronic
All speak up shall be recorded, reviewed and where
• Performance evaluation of all employees shall be balloting system based on certain criteria for visiting
appropriate, independently investigated and presented
carried out on a periodic basis. Performance should northern areas of Pakistan which included Hunza,
to the Audit Committee. Where possible, feedback shall
be reviewed against the stated goals. Naran and Skardu. The fully paid trip was intended to
be provided to the employee and /or third parties
• Succession Plans for all critical positions to be create a team-building environment which in return
raising the concern.
documented with highlighted improvement areas. can have constructive effects on overall work
• To develop strong bench strength and provide productivity of the employees. The employees had a
development opportunities through cross-functional great time together and they built strong bonding with
exposure. each other.
• On job Training & Development to be provided to all
employees.
• Responsibility matrix should be clearly defined.
• High Achievers shall be awarded
• Code of Conduct should be disseminated to all
employees and their adherence must be ensured.
68 I Gadoon Textile Mills Limited Succession Planning Annual Report 2019 I 69

Hajj Balloting Women’s Day Celebration - Mindset Development Program
Hajj is an obligation of Islamic faith that every Muslim is required to undertake at least once in their lives. Keeping this At GTML, we strongly believe in creating a non-discriminated A complete Mindset Development Program was
in mind, GTML took a step forward in the accomplishment of this core responsibility of the employees and selected four workplace environment. With this zeal pf promoting designed and implemented in collaboration with
employees through electronic balloting for this blessed journey in the current year, thus fulfilling the commitment of balanced and diverse workplace, we celebrated Emprise Solutions. It started with the Training Need
regarding employees as its valuable assets. International Women’s Day 2019 on 8th March with Analysis (TNA) of employees, after which the
the theme ‘Balance for Better’ because a balanced program was designed to cater the development
Annual Family Day world is a better world. The session concluded with an needs of participants ranging from junior to middle
Employee revitalizing is essential for motivation, positive energy, and creativity. Considering this, GTML took the acknowledgment of the incredible strength of women. level employees. The program consisted of 4 phases
initiative of celebrating Annual Day at Lucky One Mall. In this event, the employees were invited with their families to (Attitude, Listening & Speaking, Reading & Writing
have an engaging yet an amusing day out. The employees mingled with each other, socialized in a casual way and had a World No Tobacco Day and Team work) where selected employees from
great time on thrilling rides of Onederland. It is one of the best employee engagement initiatives that we have practiced One of the other initiatives of GTML was to create every department of head office took part in it. The
this year with the involvement of their families with the aim to ensure employee happiness and increased productivity. awareness especially among youngsters about the program worked very well in enhancing employees’
fatal hazards of Tobacco use. Considering the hazards skill sets and brining a positive mindset shift.
of Tobacco, GTML organized an awareness session for
the employees so that they can abstain from - Leading Teams towards Goals
consuming Tobacco and live a healthy life. The other significant session was designed for HOD
which emphasized on ‘Leading teams towards Goals’
Training and Succession Planning and importance of KPIs development in order to
Training is the key to improve employee’s performance achieve already developed organizational goals.
and to help them achieve the required level of knowledge These KPIs measurement are part of annual
and skills needed for the job. In order to help them performance appraisals thus providing the
achieve those skills, the company organizes training management a chance to efficiently evaluate the
activities both internally and externally. This year also overall performance of employees and to relate
many different training sessions were organized. individual corporate goals with overall company goals.
Details of few external training sessions are as:
Cricket Night
When it is the season of Cricket, this game seems to rule the roost. Keeping the Cricket World Cup spirit high, the
Corporates planned to bring cricket frenzy employees closer. GTML organized Cricket Night at Kutchi Memon Cricket Ground
Karachi. This cricket event helped reconnect employees with the game and revitalized them after weeks of hectic schedules.
The game gave players a sense of courage to withstand the pressure of the field and perform with boosted team spirits. The
event was a great success which was intended to create a better organizational culture and encourage physical activity in
employees thus promoting healthy life style.

social and environmental
Talent Acquisition and Management
Keeping its past practice, the Company’s Talent Health and Safety
responsibility policy
acquisition team, this year also visits universities in At GTML, we have a strong commitment towards
different job fairs to recruit potential candidates and to ensuring that our employees work in a healthy and safe
environment, but when and if the need arises, we have
The purpose of this policy is to set guidelines for GTML’s objective
strengthen the internal database. This provides fresh
candidates an equal opportunity to get hired on market contingency action plans and the capacity to deal with to achieve sustainable protection of the environment, people and
competitive remuneration packages. such situations. planet through creating shared values for business and society.
Under Student Facilitation Program, the students of The HSE department of the Company has been further GTML is committed to creating a more equitable and human resources in the Country by sponsoring
universities, ACCA and CA background get the chance strengthened during the year through hiring of few inclusive society by supporting processes that lead to scholarship programs at leading universities/
to visit our factory premises and witness our state of more professionals, with the main aim to ensure that sustainable transformation and social integration. Our schools. Moreover, GTML shall support the provision
the art production process. Also, Company provided GTML is compliant of all International standards. This primary focus of social responsibility is to craft of facilities/resources to such places of learnings.
them opportunity to discuss career propositions with will not only portray good image of the Company but business policies that are ethical, equitable, • GTML shall provide free medical facilities through
HR and field professionals. The students also met and will also help in minimizing the calamities. Further, a environmentally conscious and gender-sensitive. welfare dispensaries located at plant sites.
design their university projects in collaboration with well-managed dispensary at both the locations are • GTML also encourages its employees to share their
technical, sales & marketing, finance and HR teams maintained by the Company for the welfare of the GTML shall strive to ensure the highest quality for time and skills in a socially constructive manner for
which provide them hands-on corporate experience employees, to ensure proper health and safety. its products and customer services together with the development of society.
and also strengthen their professional networking. maximum market outreach. GTML ensures that all
Moreover, various security and surveillance cameras social and environmental dimensions are considered Our People
Strategic HR Forum have been installed throughout our factory premises when developing its strategies, policies, practices, GTML recognizes that its human resources are its most
Exchanging information on challenges, experiences and and offices which are regularly monitored by security and procedures. valuable asset and it is committed to providing careers
goals is a key benefit of networking because it allows personnel to address the security concerns (if any). and working environments in which its people can
everyone to gain new insights. Keeping this in mind, a Safety drills are regularly carried out to train and Protecting the Environment achieve their full potential.
Strategic HR Forum was developed where HR educate employees for emergency situations. In order to protect the environment, GTML shall: • GTML is dedicated to protecting human rights
department of four group companies (Gadoon Textile • Meet or exceed the requirements of relevant through its “Code of Conduct” and provision of equal
Mills Limited, Lucky Knits (Private) Limited, Lucky legislative, regulatory and environmental standards. opportunity to potential employees and practices all
Textile Mills Limited and Yunus Textile Mills Limited • Identify, reduce and dispose of waste arising from fair labor practices.
collaborated in order to share helpful ideas, promote our operations in a manner that minimizes harm to • GTML shall ensure that its activities do not directly
employee engagement and CSR activities, reinforce the environment and prevents pollution of land, air, or indirectly violate human rights at any of GTML’s
talent, and generate best market practices and policies. and water. site (e.g. forced labor, child labor etc). As a policy,
• Reduce the consumption of energy and water and GTML does not hire minors as work-force.
use renewable and/or recyclable resources • GTML shall provide employment to differently-abled
wherever practicable. persons wherever business requirements allow.
• GTML shall make every reasonable and practicable
Supporting the communities effort to provide safe and healthy working
Sustainability and community development shall form a conditions in all its plants, sites and offices.
part of the Core Values at GTML.
• As a responsible social entity, GTML shall provide
support to national and local charities or entities to
promote the cultural and economic development of
local communities.
• GTML shall ensure community development and
uplifting of the standards of living of the masses
through interventions in health, education, and
environment.
• GTML shall support the development of quality

review report on the statement of compliance
beneficial ownership / contained in listed companies (code of
group shareholding corporate governance) regulations, 2017
INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS

Y.B. Holdings
(Private) Limited OF GADOON TEXTILE MILLS LIMITED
(Ultimate Holding Company)
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2017 (the Regulations) prepared by the Board of Directors of Gadoon Textile Mills Limited (the Company)
for the year ended June 30, 2019 in accordance with the requirements of Regulation 40 of the Regulations.
69.57% 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
Gadoon Textile Mills Limited
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 and
100%
also ensure compliance with the requirements of section 208 of the Companies Act, 2017. 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. We have not carried out procedures to assess and
determine the Company’s process for identification of related parties and that whether the related party transactions
were undertaken at arm’s length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
Investment in Subsidiary Investment in Associates does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in
(Gadoon Holdings the Regulations as applicable to the Company for the year ended June 30, 2019.
(Private) Limited)
7.21% 19.98%
Chartered Accountants
1%
ICI Pakistan Limited Yunus Energy Limited Place: Karachi
Date: August 20, 2019
Lucky Holdings Limited

statement of compliance with
listed companies (code of corporate
governance) regulations, 2017 10. The board has approved appointment of CFO, 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. CFO and CEO duly endorsed the financial statements before approval of the board.
Name of Company: Gadoon Textile Mills Limited (the Company)
12. The board has formed committees comprising of members given below:
Year ended: June 30, 2019
Committee Name of members and Chairman

The Company has complied with the requirements of the Regulations in the following manner:
a) Audit Committee Mr. Saleem Zamindar (Chairman)
Mr. Zafar Masud
1. The total number of directors are 7 as per the following:
a. Male: 6
b) HR and Remuneration Committee Mr. Saleem Zamindar (Chairman)
b. Female: 1
Ms. Zulekha Tabba Maskatiya
2. The composition of board is as follows:
13. The terms of reference of the aforesaid committees have been formed, documented and advised to the
Category Names
committee for compliance.
a) Independent Directors Mr. Saleem Zamindar
Mr. Zafar Masud
14. The frequency of meetings of the committees were as per following:
b) Other Non-Executive Directors Mr. Muhammad Yunus Tabba (Chairman)
Committee Frequency of meetings
a) Audit Committee Quarterly
Ms. Zulekha Tabba Maskatiya
b) HR and Remuneration Committee Annually
c) Executive Director Mr. Muhammad Sohail Tabba (CEO)
15. The board has set up an effective internal audit function and its members are considered suitably qualified and
3. The directors have confirmed that none of them is serving as a director on more than five listed companies,
experienced for the purpose and are conversant with the policies and procedures of the Company.
including this Company.
16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the
4. The Company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to
quality control review program of the ICAP and registered with Audit Oversight Board of Pakistan, that they or
disseminate it throughout the Company along with its supporting policies and procedures.
any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the
firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code
5. The board has developed a vision/mission statement, overall corporate strategy and significant policies of the
of ethics as adopted by the ICAP.
Company. A complete record of particulars of significant policies along with the dates on which they were
approved or amended has been maintained.
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
6. All the powers of the board have been duly exercised and decisions on relevant matters have been taken by board/
confirmed that they have observed IFAC guidelines in this regard.
shareholders as empowered by the relevant provisions of the Act and these Regulations.
18. We confirm that all other requirements of the Regulations have been complied with.
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 board.
8. The board of directors have a formal policy and transparent procedures for remuneration of directors in
accordance with the Act and these Regulations.
Muhammad Yunus Tabba Muhammad Sohail Tabba
9. All the directors have acquired the prescribed certification under Directors’ Training program specified and Chairman Chief Executive Officer
approved by the Commission.
Karachi: July 26, 2019

role of chairman and ceo board committee
Principally, Chairman is in charge of leadership of the Board
and to guarantee that the Board plays a compelling part in Audit Committee recording of purchases and sales, receipts and
payments, assets and liabilities and the reporting
1) Mr. Saleem Zamindar (Chairman)
satisfying every one of its duties. Whereas, Chief Executive 2) Mr. Zafar Masud structure are adequate and effective;
Officer is an executive director and is responsible to act as the 3) Mr. Muhammad Ali Tabba • Review of the company’s statement on internal
control systems prior to endorsement by the board
Head of the Company. 4) Mr. Jawed YunusTabba
of directors and internal audit reports;
The Audit Committee comprises of four members. The • Review of the scope and extent of internal audit,
Chairman of the Committee is an independent director. audit plan, reporting framework and procedures and
The Roles and Responsibilities Shares held by Sponsors / The Committee held five meetings during the year. The ensuring that the internal audit function has
of the Chairman include: Directors / Executives attendance of each member is disclosed in the adequate resources and is appropriately placed
• Setting agendas for the board’s consideration. The total number of shares held by Sponsors / Directors within the Company;
“Directors’ Report’.
• Leading the board and discussing all proposals put as at June 30, 2019 are 19,519,106 i.e. 69.64% of the • Determination of appropriate measures to safeguard
forward by the executive team. total paid-up capital of the Company.
Terms of Reference the Company’s assets and detection of frauds; and
• Liaising and coordinating with sub-committee chairs. • Consideration of major findings as a result of
The Terms of Reference of Audit Committee were presented
• Identifying and participating in selection of the Board No shares are held by any Executives of the Company. internal investigations of activities characterized by
to the members as required under the Code of Corporate
members and overseeing a formal succession plan fraud, corruption and abuse of power and
Governance and the same were approved by the Board.
for the Board, CEO, CFO and key senior management. The detailed breakup of shares has been mentioned management’s response thereto.
Accordingly, contents of the same are as under:
• Managing conflicts of interest and to maintain an in the section “Pattern of Shareholding” of this
effective team. Annual Report.
Financial Reporting Compliance
• Ensuring that good relations are maintained with • Determination of compliance with relevant statutory
• Company has followed appropriate accounting
the Company’s strategic stakeholders. requirements;
standards and made appropriate estimates and
• To ensure that stakeholders’ trust and confidence is • Review the adequacy and security of the Company’s
judgments, taking into account views of the
maintained in the company. arrangements for its employees and its contractors
external auditor.
• Review of quarterly, half-yearly and annual financial to raise concerns, in confidence, about possible
The Roles and Responsibilities statements of the Company prior to their approval wrongdoing in financial reporting or other matters.
of the CEO include by the Board of Directors, focusing on: The committee shall ensure that these arrangements
• Serving as Chief Representative of the Company. allow proportionate and independent investigation
1. Major judgmental areas, where different
• Overseeing the business operations and of such matters and appropriate follow up action; and
approaches are possible;
implementing the policies and strategies • Monitoring compliance with the best practices of
2. Significant adjustments resulting from the audit;
recommended and approved by the Board. corporate governance and identification of
3. Going concern assumption;
• Closely monitor the operating and financial results of significant violations thereof, receiving reports on
4. Any changes in accounting policies and practices,
the company against plans and budgets on a non-compliance (if any).
on a year by year basis;
consistent basis.
5. Compliance with applicable accounting standards;
• Ensuring that effective reporting mechanisms exist
6. Compliance with listing regulations and other External Audit
within the organization to provide feedback at all • Consider and make recommendations to the board in
statutory and regulatory requirements; and
levels of management. relation to the appointment, re-appointment, audit fees
7. All related party transactions.
• Ensuring that the Company complies with all and removal of the Company’s external auditor. The
• Review of preliminary announcements of results
relevant laws and corporate governance principles Committee shall oversee the selection process for a
prior to publication.
and that these principles are recommended and new auditor and, if an auditor resigns, the committee
adopted by the Board to mitigate key risks.
Internal Controls and Risk shall investigate the issues leading to such resignation
• Setting the tone in providing ethical leadership and
Management System and decide whether any action is required. The board
creating an ethical environment. of directors shall give due consideration to the
• Ascertaining that the internal control systems
including financial and operational controls, recommendations of the audit committee and where it
accounting systems for timely and appropriate acts otherwise it shall record the reasons thereof;

• Review the management letter and management’s Human Resource and Review of Terms of Reference Terms of Reference
response to the auditor’s findings and Remuneration Committee The terms of reference of the Committee may be • To review and analyze the operational plans and
recommendations; 1) Mr. Saleem Zamindar (Chairman) revised and modified with the approval of the board. annual budgets especially for revenues, expenses
• Develop and implement a policy on the supply of 2) Mr. Jawed Yunus Tabba and capital expenditures as prepared by the
non-audit services by the external auditor, taking 3) Ms. Zulekha Tabba Maskatiya Budget Committee management, according to specified parameters
into account any relevant ethical guidance on the 1 Mr. Zafar Masud (Chairman) and to suggest any revisions before Board’s
matter; and The Human Resource and Remuneration (HR&R) 2) Mr. Muhammad Ali Tabba consideration/approval;
• Facilitating the external audit and discussion with Committee comprises of three members. The 3) Mr. Muhammad Sohail Tabba • To recommend budget for Board’s approval;
external auditors on major observations arising from Chairman of the Committee is an independent director. 4) Mr. Jawed Yunus Tabba • To review budget variance on periodic basis; and
half-yearly review and annual audit, including any The Committee held one meeting during the year which • To recommend any matter of significance in relation
matter that the auditors may wish to highlight (in was attended by all the members. The Budget Committee comprises of four to budget to the Board of Directors.
the absence of management, where necessary). members. The Chairman of the Committee is an
Terms of Reference independent director.
Reporting Procedure The terms of reference of the - HR&R Committee shall
• The committee shall make whatever include the following:
recommendations to the Board it deems • Recommended to the board for consideration and
appropriate on any area within its remit where approval a policy framework for determining
action or improvement is needed; and remuneration of directors and senior management
• The committee shall produce a report on its preferably taking into consideration that such
activities to Board of Directors. remuneration commensurate with the performance
of the company and evaluation of board and
Other Matters management (as applicable). The definition of senior
• Be responsible for co-ordination of the internal and management will be determined by the board which
external auditors; shall normally include the first layer of management
• Instituting special projects, value for money studies below the chief executive officer level;
or other investigations on any matter specified by • Undertaking annually a formal process of evaluation
the Board of Directors in consultation with the CEO of performance of the board as a whole and its
and to consider remittance of any matter to the committees either directly or by engaging external
external auditors or to any other external body; independent consultant and if so appointed, a
• Review of arrangement for staff and management statement to that effect shall be made in the
to report to audit committee in confidence, concerns, if directors’ report disclosing name, qualifications and
any, about actual or potential improprieties in major terms of appointment;
financial and other matters and recommend • Recommending human resource management
instituting remedial and mitigating measures policies to the board;
• Arrange for periodic reviews of its own performance • Recommending to the board the selection,
and at least annually, review its constitution and evaluation, development, compensation (including
terms of reference to ensure it is operating at retirement benefits) of chief operating officer, chief
maximum effectiveness and recommend any financial officer, company secretary and head of
changes it considers necessary to the board for internal audit;
approval; and • Consideration and approval on recommendations of
• Consideration of any other issue or matter as may chief executive officer on such matters for key
be assigned by the Board of Directors. management positions who report directly to chief
executive officer or chief operating officer; and
Review of Terms of Reference • Reviewing the audit observations, if any, raised by
The terms of reference of the Committee may be the internal and external auditors of the company
revised and modified with the approval of the Board. relating to the HR function.

report of audit committee • The Committee has reviewed the “Whistle-Blowing
Policy” as an arrangement for staff and management
• The Audit Committee has reviewed and discussed
audit observations with the external auditors. The
to report to the audit committee in confidence, final Management Letter including such audit
concerns, if any, about actual or potential improprieties observations is required to be submitted within 45
in financial and other matters and recommended days of the date of the Auditors’ Report on the
Audit Committee Report • The Audit Committee reviewed quarterly, half-yearly
instituting remedial and mitigating measures. No financial statements as required by the Code of
The Audit Committee comprises of four members all of and annual financial statements of the Company and
material incidents regarding operations of the entity Corporate Governance and shall, therefore,
whom are either non-executive or independent recommended them for approval of the Board of
or otherwise were reported to the Audit Committee accordingly be discussed in the next Board Audit
directors and qualifies as ‘financially literate’. The Directors focusing on major judgmental areas (where
during the year; and Committee meeting.
Chairman of the Committee is an independent director. different approaches are possible), significant
• The Board has the practice to carry out the annual • The Audit Committee also separately meets the
adjustments resulting from the audit, going concern
evaluation of its committees and its members. The external auditors at least once a year without the
Meetings of the Audit Committee were held at least assumption used by the management, any changes
results of the evaluation carried out were found to presence of the management; and
once in every quarter. Five meetings of the Audit in accounting policies and practices (on a year by
be satisfactory. • Being eligible for reappointment as Auditors of the
Committee were held during the year 2018-19. The year basis), compliance with applicable accounting
Company, the Audit Committee has recommended
Audit Committee has concluded its annual review of standards, compliance with listing regulations and
Internal Audit the appointment of M/s. Deloitte Yousuf Adil,
the conduct and operations of the Company for the other statutory and regulatory requirements and all
• The Chief Internal Auditor (CIA) also attended the Chartered Accountants as external auditors of the
year ended June 30, 2019, and reports that: related party transactions. No significant issues have
Audit Committee meetings; Company for the year ending June 30, 2020.
been identified by the committee in this respect;
• The CIA has direct access to the Chairman of the
• The Company has adhered, without any material • The Chief Executive Officer (CEO) and the Chief
Audit Committee and its members. The Internal
departure, with the mandatory provisions of the Financial Officer (CFO) attended Audit Committee
Audit function has carried out its duties under the
Pakistan Stock Exchange, Code of Corporate meetings by invitation;
charter defined by the Committee;
Governance, Company’s code of conduct and values • The CEO and the CFO have endorsed the financial
• The CIA reports functionally to the Audit Committee Mr. Saleem Zamindar
and the best practices of governance throughout statements of the Company. They acknowledge their
and carries out the audits of different functions Chairman Audit Committee
the year; responsibility for a true and fair presentation of the
based on the Annual Audit Plan;
• The Company has issued a Statement of Company’s financial statements, the accuracy of
• For an appraisal of internal controls and monitoring Karachi: July 26, 2019
Compliance with the Code of Corporate reporting and compliance with regulations and
compliance, the Company has in place as appropriately
Governance which has also been reviewed by the applicable accounting standards;
staffed, Internal Audit Department. The Committee
external auditors of the Company; • The Audit Committee has reviewed all the related
reviewed the resources of the Internal Audit
• The Company’s Code of Conduct has been party transactions and recommended for the
disseminated across the organization; approval of the BOD;
Department to ensure that they were adequate for Attendance in Annual General Meeting
the planned scope of the Internal Audit function; and Mr. Saleem Zamindar (the Chairman of Audit
• Appropriate accounting policies have been • The Company’s system of internal controls is
• The Audit Committee reviewed the internal audit Committee) attended the Annual General Meeting of
consistently applied. All core and other applicable designed to manage and minimize the risk of not
reports presented by CIA which encompasses Audit the Company for the year 2018 held on September 27,
International Financial Reporting Standards were achieving business objectives and can only provide
findings, process improvement avenues, control 2018, to answer shareholders concerns/question/
followed in the preparation of financial statements reasonable and not absolute assurance against
weaknesses, and recommendation. A risk rating queries, if any, on audit committee’s scope, roles
of the Company on a going concern basis for the material misstatement or loss. The Committee has
system is used on the basis of likelihood and impact and responsibility.
financial year ended June 30, 2019, which represent ascertained that the internal control systems
and as a result, high to the low-risk rating is
fairly the state of affairs, results of operations, cash including financial and operational controls, accounting
assigned. The Committee has evaluated the During the meeting no significant issues were raised.
flows and changes in equity of the Company; systems for timely and appropriate recording of
performance of the Internal Audit and found the
• Accounting estimates are based on reasonable and purchases and sales, receipts and payments, assets
results to be satisfactory.
prudent judgment. Proper and adequate accounting and liabilities and the reporting structure are
records have been maintained by the Company in adequate and effective;
External Audit
accordance with Companies Act, 2017 and the • The Committee has reviewed the Annual Report and
• The external auditors M/s. Deloitte Yousuf Adil,
external reporting is consistent with management concluded that it is fair, balanced and
Chartered Accountants has been engaged as the
processes and adequate for shareholder needs; understandable and that it also provided with the
external auditors of the Company since 2005;
• The financial statements comply with the necessary information for the shareholders to
• They were allowed direct access to the Audit
requirements of the Fourth Schedule of the assess the Company’s position and performance,
Committee and necessary coordination with internal
Companies Act, 2017 and the applicable International business model and strategy;
auditors were ensured;
Financial Reporting Standards as notified by SECP;

where
methodology
thrives
Performance and Position
analysis of financial and
non-financial performance key performance indicators
Financial Performance In the current year, the Company’s sales are 5.8% less Key Performance Indicators (KPIs) to measure Achievement against Objectives
than budgeted, mainly on account of decrease in export Key Performance Indicators (KPIs) are the measurable values that determine the effectiveness and efficiency of
a) Financial Performance in comparison with Prior year sales, owing to trade war between USA and China. achievement of the key business objectives. The Company has used the KPIs to evaluate the success of the business
During the year, despite the political uncertainties on on reaching the targets. The business function of GTML evaluated through KPIs to measure achievement against
account of election, trade war between Global Trade Further, the increase in Finance Cost by 63% than objectives has been detailed below:
Giants, current account deficit and fierce budgeted, owing to increase in KIBOR rate has
competition with regional competitors, coupled with posted a negative impact on the results of the Financial Indicators
abrupt devaluation of currency and increase in Company and accordingly the Company’s actual net
interest and inflation rate, the consistent effort of profit is 23% lower than the budgeted profit.
Revenue % change Operating Profit % change
the management has managed to get the positive Rs. In million Rs. In million
bottom lines of Rs. 1,186.10 million as compared to
Rs. 1,185.29 million SPLY.
2019 31,217 2018 27,555 13.29% 2019 2,767 2018 2,048 35.11%
The detail analysis of Company’s performance in
comparison to previous year has been detailed in the Profit before tax % change Profit after tax % change
Rs. In million Rs. In million
section Financial Results of Directors’ Report.
Further detail can also be viewed in the section 2019 1,668 2018 1,474 13.16% 2019 1,186 2018 1,185 0.08%
Horizontal / Vertical Analysis of this annual report.
b) Financial Performance in comparison with Budget EBITDA % change EBITDA % change

The management has a practice of making yearly Rs. In million in %
budgets and to monitor performance against the 2019 3,561 2018 2,785 27.86% 2019 11.41% 2018 10.11% 12.86%
same. Deviation if any are bifurcated into controllable
and non-controllable factors in order to assess the
effectiveness of teams responsible for setting
Equity % change Return on Capital employed % change
budget. For controllable factors, timely corrective Rs. In million in %
actions are taken. For non-controllable factors, risk
management policies are considered and strategies
2019 9,209 2018 8,214 12.11% 2019 26.74% 2018 25.33% 5.57%
are designed to minimize its negative effect.
Return on Fixed Assets % change Earnings per share % change

in % Rupees
2019 13.33% 2018 15.56% -14.33% 2019 42.32 2018 42.29 0.07%
Market Capitalization % change Capital Expenditure % change

2019 3,878 2018 7,063 -45.10% 2019 2,839 2018 1,119 153.71%
Net Cash from Operating Activity % change SoP from Associates % change
2019 986 2018 (891) 210.66% 2019 483 2018 477 1.26%

Non-Financial Indicators Budget For financial indicators the Company analyses sales,
In addition to setting budgets for its financial indicators, gross profit, profit after tax, EPS, DPS and market value
the Company also places emphasize on its non-financial of its share on a regular basis to gauge its performance.
indicators and accordingly has allocated budget for
development of its Manufactured / Human/ Social / The Comparison of profit after tax to sales depict that
Capital Form Objectives KPI Monitored
Relationship Capital for the upcoming year. how much Company is able to retain distributable profit
for the provider of equity in comparison to its sales.
Invested in wind and solar projects and The management continuously monitors the above
Investing in diversified businesses and announced investments in hydel projects. KPIs and significant deviations from previous year are The Dividend payment indicates that how much
aiming to explore the untapped markets The Dairy segment of Company also investigated for corrective actions to be taken. Company wants to retain the amount from the
becomes operational on June 30, 2019. Further, the board also review these KPI on a distributable profits of shareholders for future
quarterly basis. The management anticipates these business expansion / growth.
Manufactured Introduction of Business Intelligence Tool,
Implementation of innovative technology KPI's to be relevant in the future in order to assess
Capital Upgradation in Business Continuity Plan
and techniques Company’s performance. The Company also compare Market price of share
(BCP) and Use of Bio-Metric technology.
with its book value to assess investors’ confidence
Methods and Assumptions used on the script.
Sustain Industry leadership
Significant CAPEX made during the year in in compiling the Indicators
technological advanced machines. The Company uses different set of method and In addition, the Company also monitors cash flow from
assumption while compiling its financial and operating activities access to its liquidity position and
Hiring of professionals for HSE department non-financial indicators. working capital requirement.
Provide a healthy working environment for
and implementation of organizational safety
our employees
programs. For compiling non-financial indicator, the Company
Human Capital consider its market positioning, competitor’s strength,
Results of External / Internal training
employee’s capabilities, working environment and
sessions were evaluated and significant
Maintaining operational efficiencies technological advancement.
improvements in employees technical /
interpersonal skills were noted.
Actively participated this year in

environmental sustainability activities
Encouraging best customs to support
Natural Capital including tree plantation and beach cleaning
environmental sustainability
activity. Further also ensured efficient use of
Cotton for manufacturing yarn.
- Increase in sale of yarn in Local Market.

Financial Capital Sales maximization and Global Footprint
- Increase in Export sales of Knitted fabric.
Social and Active participation in events and activities

Relationship Contribute effectively as a Corporate Entity for creating a Corporate image and building a
Capital sence of shared values and mutual respect.
Operational efficiencies of the Company are

Achieve overall business synergies by maintained by utilizing the strenght of high
Intellectual Capital
maintaining operational efficiencies profile and skilled employees and along with
the upgradation of IT system.

graphical presentation of statement
six years at a glance of financial position and profit or loss
2019 2018 2017 2016 2015 2014
Total Assets Total Equity and Liabilities
-------------------------------------------- (Rupees In ‘000) --------------------------------------------
2.64% 2.41% 0.41% 0.19% 1.03% 0.50%
Assets Employed
0.03% 0.41%
Property, Plant and Equipment 9,870,359 7,791,928 7,447,694 7,727,013 8,322,228 5,997,051 0.73%
Biological Assets 129,665 - - - - - 12.88%

Long Term Loans, Deposits And Deferred Costs 72,804 63,050 51,180 41,340 46,788 31,846
36.35%
Long Term Advances - - - - - - 0.03% 36.15% 32.20%
Current Assets 14,342,045 12,600,632 10,028,260 9,132,266 10,281,321 8,697,492
Long Term Investments 2,890,606 2,686,920 2,472,715 2,194,332 1,683,343 1,358,798
Total Assets Employed 27,305,479 23,142,530 19,999,849 19,094,951 20,333,680 16,085,187
30.76%
Equity and Liabilities 0.47%
Shareholder’s Equity 9,209,433 8,213,510 7,366,723 6,533,605 6,817,519 6,499,577 0.00% 1.17%
0.16%
0.11% 0.08% 9.60%
Long Term Finance 2,622,363 594,338 - - - 8,905
Current Portion Of Long Term Finance 52,728 - - - 8,905 17,814 10.59% 13.55% 2.06%
2.22%
3.26%
2,675,091 594,338 - - 8,905 26,719
Property, Plant and Equipment Consumables Issued, subscribed and paid up Trade and other
Biological Assets Trade Debts Capital Payables
Retirement benefit obligation 562,984 533,769 446,314 447,453 348,205 218,333 Unclaimed Dividend
Long Term Advances Loans and Advances Capital Reserves
Deferred tax liabilities 890,390 696,275 668,382 642,313 648,707 468,123 Revenue Reserves Accrued Mark-up
Long Term Loans Trade Deposit and Other
Current Liabilities 14,020,309 13,104,638 11,518,430 11,471,580 12,519,249 8,890,249 Short Term Prepayments Long term Financing Short term Borrowings
Long Term Deposits
Current Portion Of Loans (52,728) - - - (8,905) (17,814) Long Term Investments Other Recievables Retirement Benefit Obligation Current Portion of Long
13,967,581 13,104,638 11,518,430 11,471,580 12,510,344 8,872,435 Current Tax Asset Deferred Tax Liabilities Term Financing
Stores, Spares and Loose Tools
Total Equity and Liabilities 27,305,479 23,142,530 19,999,849 19,094,951 20,333,680 16,085,187 Stock in Trade Sales Tax Refund Bond
Cash and Bank Balances
Turnover And Profit
Turnover 31,217,479 27,554,687 23,248,578 21,269,477 23,003,447 20,066,084
Gross Profit 2,892,723 1,944,890 1,328,793 726,192 1,129,822 1,932,166 Income Expense
Operating Profit 2,766,636 2,048,328 1,427,539 357,012 701,200 1,478,787
0.32%
Profit / (Loss) Before Taxation 1,668,457 1,473,646 1,084,938 (92,164) (90,281) 739,149 0.53% 3.58% 1.57%
1.51% 0.90%
Profit / (Loss) After Taxation 1,186,102 1,185,296 806,986 (273,845) (392,334) 580,799 1.31% 92.31%
Cash Dividend 238,251 434,459 140,148 - - 117,188
Unappropriated Profit 7,064,263 6,068,340 5,221,553 4,388,435 4,672,349 5,162,077
Earnings Per Share (PKR) 42.32 42.29 28.79 (9.77) (14.59) 24.78
Book Value Per Share (PKR) 328.56 293.03 262.82 233.10 290.88 277.32
97.96%
Turnover Other Income Cost Of Sales Finance Cost

Share of Profit from Associates Distribution Cost Other Operating Expences
Administrative Expense Taxation

financial ratios EBITDA to sales Operating leverage
11.41% 40.00
12.00%
10.15%. 10.11% 32.23
9.34%
10.00% 30.00
Profitabilty Ratios
Percentage
8.00% 6.43%
20.00
Times
5.49%
UoM 2019 2018 2017 2016 2015 2014 6.00% 6.51
10.00 2.35
GP to sales Percentage 9.27% 7.06% 5.72% 3.41% 4.91% 9.63% 2.64
4.00% (1.66) (3.59)
PAT to sales Percentage 3.80% 4.30% 3.47% (1.29%) (1.71%) 2.89% 0.00
EBITDA to sales Percentage 11.41% 10.11% 9.34% 5.49% 6.43% 10.15% 2.00%
Operating leverage Times 2.64 2.35 32.23 6.51 (3.59) (1.66) 0.00% (10.00)
Return on equity after tax Percentage 13.62% 15.22% 11.61% (4.10%) (5.89%) 9.16% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Return on capita employed Percentage 26.74% 25.33% 20.54% 5.34% 10.50% 23.19% Years Years
Return on fixed assets Percentage 13.33% 15.56% 10.64% (3.41%) (5.48%) 10.10%
Retrun on equity after tax Return on capital employed

20.00%
GP to sales 15.22% 30.00%
25.33%
26.74%
15.00% 23.19%
12.00% 25.00%
9.16% 11.61% 13.62% 20.54%
Percentage
9.63% 9.27% 10.00%
Percentage
10.00% 20.00%
7.06% 10.50%
Percentage
8.00% 5.00%
4.91% 5.72% 15.00%
6.00% 0.00% 5.34%
3.41% 10.00%
4.00% (5.89%) (4.10%)
(5.00%)
2.00% 5.00%
0.00% (10.00%)
0.00%
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Years Years Years
PAT to sales Return on fixed assets

6.00% 20.00%
3.47% 4.30% 3.80% 15.56% Comments:
4.00% 2.89% 15.00%
10.64% Overall profitability ratios depicts improved trends
Percentage
10.10% 13.33%
2.00% Percentage for the last three years. Even though GP ratio has
10.00%
(1.71%) increased, but PAT to sales ratio has decreased on
0.00%
5.00% account of non-availability of rebate on export sales
(2.00%) (1.29%) of yarn for this year, which contributed Rs. 355.64
0.00% million last year. As siginificant CAPEX has been made
(4.00%)
(3.41%) in the second half of current year, therefore the
2014 2015 2016 2017 2018 2019 (5.00%)
(5.48%) benefit of these investments will come in next year
Years
(10.00%) and accordingly return on fixed assets will improve in
2014 2015 2016 2017 2018 2019 the upcoming years.
Years

Liquidity Ratios Operating Ratios
UoM 2019 2018 2017 2016 2015 2014 UoM 2019 2018 2017 2016 2015 2014
Current ratio Times 1.02 0.96 0.87 0.80 0.82 0.98 Inventory turnover Times 3.57 3.89 4.04 4.09 4.13 3.68
Quick ratio Times 0.38 0.35 0.33 0.30 0.39 0.29 No of days in inventory Days 102 94 90 89 88 99
Cash to current liability Times 0.01 0.01 0.01 0.03 0.04 0.04 Debtor turnover Times 10.44 13.07 14.10 11.92 14.84 17.83
Cash flow from operation to sales Times 0.03 (0.03) 0.06 0.06 0.07 (0.03) No of days in receivable Days 35 28 26 31 25 20
Creditor turnover Times 10.00 10.35 11.96 11.54 15.55 19.05
No. of days in payable Days 36 35 31 32 23 19
Operating cycle Days 101 87 86 88 90 100
Current ratio Quick ratio Total Assets turnover Times 1.24 1.28 1.19 1.08 1.26 1.34
Fixed Assets turnover Times 3.51 3.62 3.06 2.65 3.21 3.49
1.20 1.02 0.50
0.98 0.96 0.39 0.38 Equity multiplier Times 2.90 2.77 2.81 2.95 2.73 2.35
0.87 0.35
1.00 0.82 0.80 0.33
0.40 0.30
0.29
0.80
0.30 Working capital ratios (in Days) Turnover ratios (in Times)
0.60
Times
Times
0.20 120 4.00

3.62 3.51
0.40 99
102
3.50
3.49
100 94 3.21
88 89 90 2.95 3.06
0.10 3.00 2.81 2.77 2.90
0.20 2.73 2.65
80
2.50 2.35
Times
0.00 0.00
Days
60 2.00
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 1.50 1.34 1.26 1.28
40 35 35 36 1.19 1.24
Years Years 31 32 26
31 28 1.08
25 23 1.00
20 19
20
0.50
0 0.00
Cash to current liability Cash flow from operation to sales 2014 2015 2016 2017
Years
2018 2019 2014 2015 2016 2017
Years
2018 2019
0.05 days of inventory days of receivable days of payable total asset turnover fixed asset turnover equity multiplier
0.10
0.04 0.04
0.07
0.04 0.06 0.06 Working capital ratios (in Times)
0.03
0.05 0.03
Comments:
0.03 25.00 Till previous year, the operating cycle of the Company
had shown positive trend. However, during the current
Times
Times
0.02 20.00 19.05 year, mainly on account of increase in trade debts

0.00 17.83
0.01 0.01 0.01 14.84
15.55 (owing to increase in sales in the month of June 2019)
0.01 15.00 14.10
13.07 and increase in inventory levels (to secure the risk of
Times
11.92 11.54 11.96

(0.03) (0.03) 10.35 10.44 10.00 price increase), the operating cycle has increased. Fixed
0.00 (0.05) 10.00
assets turnover and total assets turnover have
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 decreased on account of significant CAPEX made
5.00 3.68 4.13 4.09 4.04 3.89 3.57
Years Years during second half of this financial year as mentioned
above in profitability ratios.
0.00
Comments: 2014 2015 2016 2017 2018 2019
Years
Liquidity ratios have been consistent over the years mainly on account of strong working capital management
policies. Current ratio of 1.02 as at June 30, 2019 is the highest since 2013. Inventory turnover Debtor turnover creditor turnover

Market Ratios Price / book ratio Market value
UoM 2019 2018 2017 2016 2015 2014 100.00% 90.13% 86.00% 500.00
80.28% 332.44 332.18 323.62
EPS Rupees 42.32 42.29 28.79 (9.77) (14.59) 24.78 400.00 264.00
315.00
Times
80.00% 300.00 249.95 153.20 211.00 252.00
Price to earnings ratio Times 3.27 5.96 7.33 - - 10.09 164.76
Percentage
200.00 128.59 138.34
176.00
Price / book ratio Percentage 42.10% 86.00% 80.28% 55.17% 56.64% 90.13% 60.00% 100.00 125.00
154.89
112.10 128.50
56.64% 55.17% 0.00
Dividend yield Percentage 6.14% 6.15% 2.37% - - 2.00%
2014 2015 2016 2017 2018 2019
Dividend payout ratio Percentage 20.09% 36.65% 17.37% - - 20.18% 40.00% 42.10%
Years
Dividend cover Times 4.98 2.73 5.76 - - 4.96
20.00%
Cash dividend per share Rupees 8.50 15.50 05 - - 05 Highest share price during the year
Book value per share as 0.00% Market Value as at June 30th
at June 30th Rupees 328.56 293.03 262.82 233.10 290.88 277.32 Lowest share price during the year
2014 2015 2016 2017 2018 2019
Market value per share Years
as at June 30th Rupees 138.34 252.00 211.00 128.59 164.76 249.95
Highest share price during
the year Rupees 315.00 264.00 323.62 153.20 332.18 332.44
Lowest share price during Book value vs market value Dividend ratio
the year Rupees 138.34 176.00 128.50 112.10 154.89 125.00
400.00 40.00% 36.65%

328.56
EPS vs DPS 277.32 290.88

262.82
293.03
Percentage
233.10
30.00%
Times
60.00 200.00 252.00 20.18%
249.95
42.29 42.32 164.76
211.00
20.00% 17.37%
20.09%
128.59 138.34
40.00 28.79
24.78 - 6.15%
10.00%
Times
6.14%
20.00 15.50 2014 2015 2016 2017 2018 2019
8.50 2.00% 2.37%
5.00 0.00% 0.00%
Years
0.00 0.00
0.00%
0.00 Book Value / Breakup value per Share at as June 30th
5.00 (14.59) 2014 2015 2016 2017 2018 2019
(9.77) Market value per Share at as June 30th Years
(20.00)
2014 2015 2016 2017 2018 2019 Dividend Payout Ratio
Years
Dividend Yield
EPS Cash Dividend per share
Earnings ratio Comments:

On account of political / economic instability, the performance of PSX Index was on declining trend during the current
15.00 year which resulted in decrease in market price of Company's share. The declining market price has impaired the
Investment / Valuation ratios which had shown improvement till last year. However, EPS of the Company is highest
10.09 since 2014 and Book value per share is highest of all times which indicates that Company's earning potential to
10.00 create value for its stakeholders.
Times
7.33
5.96
4.98
5.00
5.76
4.96
2.73 3.27
0.00 0.00
0.00
2014 2015 2016 2017 2018 2019
Years
Price to Earnings Ratio Dividend Cover

Capital Structure Ratios dupont analysis
UoM 2019 2018 2017 2016 2015 2014
Degree of financial leverage ratio Times - 1.08 1.32 (0.67) 3.02 3.92
Weighted average cost of debt Percentage 9.52% 6.02% 3.77% 4.50% 8.78% 10.96% Return on
Equity
Debt to equity ratio (book value) Percentage 29.05% 7.24% - - 0.13% 0.41%
Debt to equity ratio (market value) Percentage 68.99% 8.41% - - 0.23% 0.46% 13.62%
Interest coverage ratio Times 2.52 3.56 4.17 0.79 0.89 2.00
Degree of financial leverage ratio WAC of debt Asset Turnover

Profit Margin Equity Multiplier
6.00 12.00% 10.96% 3.8% 1.24 2.90

Times Times
10.00% 9.52%
3.92 8.78%
4.00
Percentage
3.02 8.00%
6.02%
Times
2.00 6.00%
1.32 1.08 4.50% 3.77%
Profit for the year Sales Sales Total Assets Total Assets Equity
0.00
0.00 4.00% 1,186 31,217 31,217 25,224 25,224 8,711
Rs. in Million Rs. in Million Rs. in Million Rs. in Million Rs. in Million Rs. in Million
2.00%
(0.67)
(2.00) 0.00%
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Non
Years Years Current Assets Current Assets
11,753 13,471
Rs. in Million Rs. in Million
Debt to equity ratios Interest coverage ratio

100.00% 5.00
68.99%
4.17 3.56
4.00
Percentage
2.52
Profit Margin Asset Turnover Equity Multiplier ROE
Times
50.00% 3.00 Years

(A) (B) (C) AxBxC
8.41% 2.00
7.24% 29.05%
0.46% 2.00 2019 3.80% 1.24 2.90 13.62%
0.23%
0.41% 0.89
0.13% 0.00% 0.00% 0.79
0.00% 1.00 2018 4.30% 1.28 2.77 15.22%
2014 2015 2016 2017 2018 2019 2017 3.47% 1.19 2.81 11.61%
Years 0.00
2016 (1.29%) 1.08 2.95 (4.10%)
D to E (book value) D to E (mkt value)
2014 2015 2016 2017 2018 2019
2015 (1.71%) 1.26 2.73 (5.89%)
Years
2014 2.89% 1.34 2.35 9.16%
Comments:
The Company has availed the Long Term Finance Facility to finance its new Plant and machinery, which has
resulted in an increase in Debt to Equity ratio from 7.24% to 29.05%. Further, on account of increase in KIBOR rates
the finance cost of the Company has increase, accordingly interest coverage ratio for the year has decreased.

free cash flow economic value added
2019 2018 2019 2018
(Rupees in ‘000) (Rupees in ‘000)
Cash generated from / (used in) operations 986,064 (890,942) Net operating profit after tax 2,284,281 1,759,978
Less: Capital expenditure incurred - net (2,741,981) (1,082,875) Cost of Capital (869,303) (1,396,925)
Free Cash Flow (1,755,917) (1,973,817) Economic value added 1,414,978 363,053
Cost of Capital
1,500,000 Total Assets 27,305,479 23,142,530

986,064 Less: Current Liabilities (15,420,955) (14,334,682)
1,000,000
Invested Capital 11,884,524 8,807,848
500,000 WACC 7.31% 15.86%
- Cost of Capital 869,303 1,396,925
Rupees in ‘000
(500,000)
(1,000,000)
(890,942)
(1,082,875) 2,500,000 2,284,281
(1,500,000)
2,000,000 1,759,978
(2,000,000) 1,414,978
(1,755,917) 1,500,000
(1,973,817)
Rupees in ‘000
(2,500,000) 1,000,000
363,053
500,000
(3,000,000) (2,741,981)
-
Cash generated from / (used in) Capital expenditure Free Cash Flow (500,000)
in operations incurred - net (1,000,000)
(869,303)
(1,500,000)
2019 2018 (1,396,925)
(2,000,000)
Net operating profit after tax Cost of Capital Economic value added
Comment:
2019 2018
Despite increase in capital expenditure by Rs. 1.66 billion in this year as compared to previous year, free cash flow
has improved in the current year on account of improvement in cash generated from operating activities by Rs. 1.84 billion.
Comment:
Economic value addition is better than last year as the Company has better operating profit and reduced WACC.
WACC reduced mainly on account of decline in KSE All index over the period and long-term finance obtained by the
Company for financing its capital expenditure

horizontal analysis Horizontal Analysis of
Total Assets
36.07%
Horizontal Analysis of
Total Equity & Liabilities
140.00%
123.40%
30.00% 25.65% 120.00%
24.20% 22.97%
100.00%
20.00%
Statement of Financial Position - Horizontal Analysis
Percentage
Percentage
18.21% 9.81% 80.00% 63.67%
2019 2018 2017 2016 2015 2014 10.00% 60.00%
43.37%
vs vs vs vs vs vs 9.27% (0.89%)
13.82% 31.35%
00.00% 40.00%
2018 2017 2016 2015 2014 2013 5.72%
40.82%
0.09% 12.75% 13.77% 12.13%
Assets 20.00% 26.11%
9.31%
(10.00%)
Non current assets (11.18%)
0.00% 5.09% 4.89% 2.29% 11.49%
(4.16)% 0.41% 6.99%
Property, Plant and Equipment 26.67% 4.62% (3.61%) (7.15%) 38.77% 8.99% (20.00%) (20.00%) (8.37)%
Biological Assets 100.00% - - - - - 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Long Term Advances - - - - - -
Non Current Assets Current Assets Net Equity Non Current Liability Current Liabilities
Long Term Loans 23.62% 50.50% 44.18% (25.42%) 100.81% 55.65%
Long Term Deposits 5.08% 0.05% 10.56% 0.41% 18.99% -
Long Term Investment 7.58% 8.66% 12.69% 30.36% 23.88% 10.41% Comments on Statement Of Financial Position - Horizontal Analysis
22.97% 5.72% 0.09% (0.89%) 36.07% 9.27%
Current Assets
Property, Plant and Equipment
Property, Plant and Equipmentof the Company grew by 64% over past six years due to continuous capital expenditure on
Stores, Spares and Loose Tools 10.42% 11.70% (4.68%) (2.35%) 25.69% 17.39%
Stock in Trade 12.43% 31.03% 10.72% 5.17% (14.11%) 37.35% building and machines.
Consumables 100.00 % - - - - -
Trade Debts 42.76% 40.75% 13.13% (23.46%) 87.37% (7.94%) Long Term Investments
Loans and Advances (30.32%) 9.31% (2.15%) 15.14% (16.54%) 150.70% Long Term Investments have increased over the years on account of investments in new companies and increasing
Receivable from Associates - - - (100.00) - - Share of profits from associates.
Short Term Investments - - (100.00%) 26.76% 21.91% 30.30%
Trade Deposit and Other Short Term Prepayments (72.42%) 82.55% (40.22%) 269.94% 96.12% (52.12%) Stores, Spare parts & loose tools, Stock in trade and Trade debts
Other Recievables (24.86%) 3.23% 106.97% 19.81% 72.68% 0.04% Stores, Spare parts & loose tools, Stock in trade and Trade debts increased over past six years on account of
Current Tax Asset 1.07% (8.63%) 0.29% 6.66% 7.93% 31.89% increase in operations and expansions.
Sales Tax Refund Bond 100.00 % - - - - -
Cash and Bank Balance (40.42%) 15.21% (57.69%) (23.51%) 52.63% (30.89%) Other Receivables
13.82% 25.65% 9.81% (11.18%) 18.21% 24.20%
Other Receivables mainly include sales tax and rebate receivable. Sales tax refunds have shown both increasing /
Total Assets 17.99% 15.71% 4.74% (6.09%) 26.41% 16.87% decreasing trends over the years and its recovery depends on multiple factors including but not limited to funds available
at government treasury, pending verification of sales tax claim by sales tax department, status of sales tax audit.
Equity & Liabilities
Further, in the current year, significant amount was received in respect of rebate and resultantly the rebate
Issued, Subscribed and paid-up Capital - - - 19.59% - -
receivable has reduced.
Capital Reserves - - - (84.10%) 738.67% -
Revenue Reserves 12.78% 12.19% 13.62% 6.95% (7.20%) 5.38%
Current Tax Assets
Total Equity 12.13% 11.49% 12.75% (4.16%) 4.89% 5.09%
Current Tax Assets have been consistent over the years mainly on account of pending verification of refund claim on
the part of tax authorities.
Non Current Liabilities
Long Term Financing 341.22% 100.00% - - (100.00%) (66.67%) Share Capital and Reserves
Retirement Benefit Obligation 5.47% 19.59% (0.25%) 28.50% 59.48% 29.56%
Share Capital and Reserves grew over last six years as the company continue to make profits; moreover, issuance of
Deferred Tax Liabilities 27.88% 4.17% 4.06% (0.99%) 38.58% 40.08%
123.40% 63.67% 2.29% 9.31% 43.37% 31.35% shares in 2015-16 in pursuant to amalgamation also resulted in increase in shareholders' equity.
Current Liabilities
Long-term Financing
Trade and Other Payables 19.83% 11.12% 49.69% (5.04%) 74.19% 0.13%
In order to avail the benefit of reduced rate of financing, the Company this year has obtained additional long term
Unclaimed Dividend 2.13% 39.53% (0.50%) (0.37%) 36.67% 16.43%
Accrued Mark-up 145.09% 48.09% 92.23% (65.96%) (5.84%) 108.71% financing facility for its new machines, which has resulted in an increase in long term finance.
Short Term Borrowings 0.63% 14.23% (9.61%) (8.19%) 36.98% 30.24%
Current portion of Long Term Financing 100.00 % - - (1.00) (0.50) - Deferred tax liabilities
6.99% 13.77% 0.41% (8.37%) 40.82% 26.11% Deferred tax liabilities have increased over the years mainly on account of increase in CAPEX and share of profit
from associates.
Total Liability 21.21% 18.17% 0.57% (7.06%) 41.00% 26.48%
Current liabilities
Total Equity and Liability 17.99% 15.71% 4.74% (6.09%) 26.41% 16.87% The Company has maintained its current liability at a manageable level. Current liabilities mainly increased due to accrued
payments against import of raw material and increase in short-term finance to cater increased working capital requirement.

horizontal analysis Horizontal Analysis of Expense
300.00%
200.00%
Percentage
Profit or Loss - Horizontal Analysis 100.00%
2019 2018 2017 2016 2015 2014
0.00%
vs vs vs vs vs vs
2018 2017 2016 2015 2014 2013 (100.00%)
(200.00%)
Turnover 13.29% 18.52% 9.30% (7.54%) 14.64% 7.46% 2014 2015 2016 2017 2018 2019
Years
Cost of Sales 10.60% 16.83% 6.70% (6.08%) 20.62% 10.39%
Cost of Sales Distribution Cost
Gross Profits 48.73% 46.37% 82.98% (35.73%) (41.53%) (13.99%)
Distribution Cost (8.13%) 56.28% (6.54%) (19.14%) 20.63% (6.52%) Administrative Expense Finance Cost
Administrative Expense 23.52% 15.64% (10.10%) (4.92%) 97.03% 31.91% Other Operating Expenses Taxation
Operating Profit 72.52% 50.09% 305.08% (60.37%) (64.73%) (17.52%)
Finance Cost 91.09% 67.74% (23.73%) (43.25%) 7.01% 70.40% Horizontal Analysis of Profit
Other Operating Expenses (38.80%) 80.73% 15.66% 253.60% (88.22%) (14.07%)
Other Income (62.41%) 61.77% 588.10% 65.25% 11.50% 7.46%
1400.00%
Share of Profit of Associates 1.13% 24.23% 110.14% 10.14% 25.49% 150.53% 1200.00%
Profit Before Taxation 13.22% 35.83% 1277.18% (2.09%) (112.21%) (41.06%) 1000.00%
Taxation 67.28% 3.74% 52.99% (39.85%) 90.75% 27.50%
Percentage
800.00%
Profit for the year 0.07% 46.88% 394.69% 30.20% (167.55%) (48.60%) 600.00%
400.00%
200.00%
0.00%
Horizontal Analysis of Income (200.00%)
(400.00%)
2014 2015 2016 2017 2018 2019
Years
600.00% Gross profits Operating Profit Profit before Taxation Profit for the year
500.00% Comments on Profit or Loss - Horizontal Analysis

Turnover
Percentage
400.00%
Turnover increased over past six years mainly on account of aggressive marketing strategy including identification
300.00% of new markets (locally and internationally) and widening product range, along with appreciation in market prices.
200.00% Gross profit

Steady increase in gross profit over last four years shows prosperous growth of the Company. The increase in GP is
100.00%
mainly attributable to better market price of the product along with procuring the right mix of raw material at the
0.00%
most economical rates.
(100.00%) Finance Cost

2014 2015 2016 2017 2018 2019 Finance cost of the Company was on declining trend till the year 2017 and increased significantly for the last two
Years
years mainly on account of increasing working requirements and increase in KIBOR rates.
Turnover Other Income Share of Profit from Associates
Further, on account devaluation of currency, the Company, last year, shifted its exposure from foreign currency
denominated borrowings into local borrowings and resultantly this also resulted in increase in finance cost.
Net profit
In addition to the factors mentioned above, net profit during last three years has shown improvement due to return
from strategic investments and export rebate on yarn for the year 2017 and 2018.

vertical analysis Vertical Analysis of Total Assets
100.00%
80.00%
Statement Of Financial Position – Vertical Analysis
Percentage
54.07% 50.56% 47.83% 50.14% 54.45% 52.52%
2019 2018 2017 2016 2015 2014
Assets 60.00%
Non current assets
Property, Plant and Equipment 36.15% 33.67% 37.24% 40.47% 40.93% 37.28% 40.00%
Biological Assets 0.47% - - - - - 52.17%
45.93% 49.44% 49.86% 45.55% 47.48%
Long Term Advances - - - - - - 20.00%
Long Term Loans 0.16% 0.15% 0.12% 0.09% 0.11% 0.07%
Long Term Deposits 0.11% 0.12% 0.14% 0.13% 0.12% 0.13% 0.00%
Long Term Investments 10.59% 11.61% 12.36% 11.49% 8.28% 8.45% 2014 2015 2016 2017 2018 2019
47.48% 45.55% 49.86% 52.17% 49.44% 45.93% Years
Current Assets Non Current Assets Current Assets

Stores, Spares and Loose Tools 2.22% 2.37% 2.46% 2.70% 2.60% 2.61%
Stock in Trade 30.76% 32.28% 28.50% 26.96% 24.08% 35.43%
Consumables 0.03% - - - - - Vertical Analysis of Total Equity and Liabilities
Trade Debts 12.88% 10.65% 8.75% 8.10% 9.94% 6.71%
Loans and Advances 0.73% 1.24% 1.31% 1.41% 1.15% 1.74%
100.00%
Receivable from Associates - - - - 4.86% -
Short Term Investments - - - 0.40% 0.29% 0.30%
Trade Deposit and Other Short Term Prepayments 0.03% 0.14% 0.09% 0.15% 0.04% 0.03% 80.00%
55.16% 57.59% 56.63% 50.31%
Other Recievables 2.64% 4.14% 4.64% 2.35% 1.84% 1.35% 61.53% 60.08%
Percentage
Current Tax Asset 2.41% 2.81% 3.56% 3.72% 3.28% 3.84% 60.00%
Sales Tax Refund Bond 0.41% - - - - -
Cash and Bank Balance 0.41% 0.82% 0.82% 2.03% 2.49% 2.06% 40.00% 4.43% 5.57% 7.88% 15.38%
4.95% 5.71%
52.52% 54.45% 50.14% 47.83% 50.56% 54.07%
20.00% 40.41% 33.53% 34.22% 36.83% 35.49% 34.31%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
0.00%
Equity & Liabilities 2014 2015 2016 2017 2018 2019
Issued, subscribed and paid up Capital 1.03% 1.21% 1.40% 1.47% 1.15% 1.46% Years
Capital Reserves 0.50% 0.59% 0.69% 0.72% 4.25% 0.64%
Revenue Reserves 32.20% 33.69% 34.74% 32.03% 28.12% 38.31% Shareholder's Equity Non Current Liabilities Current Liabilities
Total Equity 33.73% 35.49% 36.83% 34.22% 33.53% 40.41%
Non Current Liabilities Comments on Statement Of Financial Position - Vertical Analysis

Long Term Financing 9.60% 2.57% - - - 0.06%
Retirement Benefit Obligation 2.60% 2.31% 2.23% 2.34% 1.71% 1.36% Property, Plant and Equipment
Deferred Tax Liabilities 3.26% 3.01% 3.34% 3.36% 3.19% 2.91%
Ratio of fixed asset to total assets has remain in line over the last 6 years. This is an evidence of the fact that Company
14.93% 7.88% 5.57% 5.71% 4.90% 4.32%
Current Liabilities
place strong emphasize in machineries and keep itself regularly updated with the latest technological advancement.
Trade and Other Payables 13.55% 13.35% 13.90% 9.72% 9.62% 6.98%
Unclaimed Dividend 0.08% 0.09% 0.08% 0.08% 0.08% 0.07% Trade Debtors
Accrued Mark-up 1.17% 0.56% 0.44% 0.24% 0.66% 0.88% Trade debtors have increased over the last four years which is mainly due to change in sales mix.
Short Term Borrowings 36.35% 42.63% 43.18% 50.03% 51.17% 47.23%
Current Portion of Long Term Financing 0.19% - - - 0.04% 0.11% Equity / Long term finance
51.35% 56.63% 57.59% 60.08% 61.57% 55.27%
Company has started to obtained long term finance facility from the year 2018, which has resulted in increase in
Total Liability 66.27% 64.51% 63.17% 65.78% 66.47% 59.59%
long term finance percentage. Resultantly equity and short term borrowing have decrease on percentage basis.
Total Equity and Liability 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

vertical analysis Vertical Analysis of Total Expense
0.81% 1.28% 0.83% 1.06%

1.20% 1.57%
100.00%
0.94% 0.09% 0.35% 0.39% 0.59%
Profit or Loss - Vertical Analysis 98.00% 2.06% 1.48%
0.32%
2019 2018 2017 2016 2015 2014 3.36% 2.11%
Percentage
3.77% 0.99% 0.84%
96.00% 0.82% 3.58%
1.38% 1.21%
Turnover 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0.96% 1.60%
94.00% 0.59% 0.90%
Cost of Sales 90.73% 92.94% 94.28% 96.59% 95.09% 90.37% 1.56% 1.57%
1.31%
Gross profits 9.27% 7.06% 5.72% 3.41% 4.91% 9.63% 92.00%
94.38% 94.88%
Distribution Cost 1.29% 1.59% 1.20% 1.41% 1.61% 1.53% 93.82%
90.00% 92.33% 92.74% 92.31%
Administrative Expense 0.89% 0.81% 0.83% 1.01% 0.99% 0.57%
Operating Profit 7.09% 4.66% 3.68% 0.99% 2.32% 7.53% 88.00%
Finance Cost 3.52% 2.09% 1.47% 2.11% 3.44% 3.69% 2014 2015 2016 2017 2018 2019
Other Operating Expenses 0.32% 0.59% 0.38% 0.36% 0.09% 0.92% Years
Other Income 0.54% 1.63% 1.19% 0.19% 0.11% 0.11%
Cost of Sales Distribution Cost Administrative Expense
Share of Profit from Associates 1.55% 1.73% 1.65% 0.86% 0.72% 0.66%
Profit before Taxation 5.34% 5.35% 4.67% (0.43%) (0.39%) 3.68%
Finance Cost Other Operating Expenses Taxation
Taxation 1.55% 1.05% 1.20% 0.85% 1.31% 0.79%
Profit for the year 3.80% 4.30% 3.47% (1.29%) (1.71%) 2.89%
Comments on Profit or Loss - Vertical Analysis

Gross profit
Gross profit of the Company has increased over the last couple of years in terms of ratio and amount as well, mainly
Vertical Analysis of Total Income
on account of contained power and fuel cost, efficient utilization of labour and availability of raw materials at
competitive rates.
100.00%
0.65% 0.72% 0.85% Taxation
0.11% 0.11% 1.61% 1.68% 1.51%
99.00% 0.19% The ratio of taxation to sales has increased in current year mainly on account of reduction of tax credit on
investments from 10% to 5%, introduced through the Finance Act, 2019.
Percentage
0.53%
98.00%
1.16%
1.58% Net profit
97.00% 99.24% 99.18% 98.96% Net profit to sales has shown improvement over the last couple of years in terms of amount. However, net profit
97.96% ratio for the year 2018 was better than 2019, mainly on account of availability of rebate on export of yarn in 2018
96.00% 97.23% along with reduced finance cost.
96.75%
95.00%
2014 2015 2016 2017 2018 2019
Years
Turnover Other Income Share of Profit from Associates

summary of cash flow
2,500,000
2,000,000 1,826,106
2019 2018 2017 2016 2015 2014 1,503,863
1,500,000 1,271,568 1,315,073
(Rupees in '000)
986,064
Cash generated from operations 2,057,405 (171,282) 1,985,767 2,122,687 2,679,748 343,297 1,000,000
500,000 271,059
Rupees in '000
Finance cost paid (909,583) (532,519) (300,539) (537,535) (908,113) (693,824)
(77)
Income tax paid (293,314) (197,645) (260,236) (230,417) (170,369) (175,529) -
(8,963)
Rebate received 242,639 96,452 3,284 - - - (130,846) (197,445)
(500,000) (309,184)
Gratuity paid (111,083) (85,948) (113,203) (83,167) (97,403) (52,175) (578,231) (579,273) (529,849)
(1,000,000)
(1,071,341) (719,660) (670,694) (851,119) (1,175,885) (921,528) (1,024,527) (890,942) (852,240)
(1,500,000)
Net cash generated from / (used in)
operating activities 986,064 (890,942) 1,315,073 1,271,568 1,503,863 (578,231) (2,000,000)
(2,500,000)
(2,503,712)
Net cash used in investing activities (2,503,712) (852,240) (197,445) (529,849) (579,273) (1,024,527)
(3,000,000)
Net cash generated from / (used in) 1,826,106 271,059 (77) (8,963) (130,846) (309,184) 2014 2015 2016 2017 2018 2019
Years
financing activities Net cash generated from / (used in) operating activities
Net increase / (decrease) in cash & Net cash used in investing activities
cash equivalents 308,458 (1,472,123) 1,117,551 732,756 793,744 (1,911,942) Net cash generated from / (used in) financing activities
Cash & cash equivalents at the (9,520,886) (8,048,763) (9,166,314) (9,899,070) (7,264,440) (5,352,498)
Comments on Cash flows
beginning of the year
Transferred from FTML as on - - - - (3,428,374) - Cash flow from operating activities
October 1, 2014 on amalgamation The Company’s net cash generated from operating activities for the year is Rs. 986.06 million after payments of Rs.
1.31 billion in respect of finance cost, gratuity and income taxes, which represents that the Company is operating
Cash & cash equivalent at the end of the year (9,212,428) (9,520,886) (8,048,763) (9,166,314) (9,899,070) (7,264,440)
well in terms of generation of cash, which could have been even better if trade debts had not increased by Rs. 1.05
billion, resulting in blockage of working capital. The increase in trade debts is mainly on account of increase in sales in
the month of June 2019.
Further, the analysis of year wise cash flow from operating activities indicates that the Company has generated
cash from its operations over the years, except for the year 2018 and 2014, where cash flows were negative mainly
on account of increased investment in stock in anticipation of expected increase in raw material price.
Cash used in investing activities

The Company's net cash used in investing activity over the years mainly represents amount invested in purchase of
machineries and related civil work.
Cash generation from / (used in) financing activities

The Company's net cash generated from financing activity is positive for the last two years mainly on account of
receipt of long term finance. Further, over the years the cash used in financing activities mainly represent dividend
payments to the shareholders.

statement of cash flows –
direct method quarterly performance analysis
2019 2018 Q1 Q2 Q3 Q4
(Rupees in ‘000) September 30, December 31, March 31, June 30,
2018 2018 2019 2019
Rupees in '000
A. CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customer 30,178,013 26,803,104
Sales-net 6,374,634 7,991,652 7,885,038 8,966,155
Cash paid to suppliers, employees and others (28,120,608) (26,974,386) Cost of sales (5,549,243) (7,523,913) (7,476,413) (7,775,187)
Finance cost paid (909,583) (532,519) Gross profit 825,391 467,739 408,625 1,190,968
Income tax paid (293,314) (197,645)
Gratuity paid (111,083) (85,948) Distribution cost (80,310) (93,259) (104,180) (124,015)
Rebate received 242,639 96,452 Administrative expenses (69,353) (73,178) (63,139) (71,327)
(149,663) (166,437) (167,319) (195,342)
Net cash generated from / (used in) operating activities 986,064 (890,942)
675,728 301,302 241,306 995,626
Finance cost (187,068) (253,409) (334,445) (323,257)

B. CASH FLOWS FROM INVESTING ACTIVITIES Other operating expenses (43,427) (3,013) 1,722 (54,050)
230,495 256,422 332,723 377,307
Purchase of property, plant and equipment (2,839,346) (1,119,172) 445,233 44,880 (91,417) 618,319
Sale proceeds from disposal of property, plant and equipment 64,988 36,297
Other income 12,859 38,774 18,413 98,832
Proceeds on disposal of share 7,998 -
Share of profit from associates 164,552 24,026 112,293 181,692
Loans paid to employees (8,743) (16,117) 177,411 62,800 130,706 280,524
Long-term deposits given - (15) Profit before taxation 622,644 107,680 39,289 898,843
Profit received from bank deposits 1,374 1,554
Dividend received 270,017 245,213 Taxation:
Net cash used in investing activities (2,503,712) (852,240) Current 80,721 8,959 11,223 181,452
Prior - 4,011 - -
Deferred 17,060 52,112 30,002 96,816
C. CASH FLOWS FROM FINANCING ACTIVITIES
97,781 65,082 41,225 278,268
Profit after taxation 524,863 42,598 (1,936) 620,575
Long-term finance obtained 2,080,753 594,338
Repayment of long term musharakah financing of GHPL (9,844) - Earnings per share - basic and diluted (Rupees) 18.73 1.52 (0.08) 22.14
Dividend paid (244,803) (323,279)
Net cash generated from financing activities 1,826,106 271,059
Net increase / (decrease) cash and cash equivalents (A+B+C) 308,458 (1,472,123)
Cash and cash equivalents at the beginning of the year (9,520,886) (8,048,763)
Cash and cash equivalents at the end of the year (9,212,428) (9,520,886)

Quarterly Analysis share price sensitivity analysis
Profit after taxation
Profit before taxation

The share price of the Company depends on the Company’s overall performance and reputation in the respective
Sales-net industry in which it exists, combined with other external factors on which management has lesser or no control. The
Company’s share price is sensitive to the following uncontrollable external factors:
0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Stock Market
Sales-net Profit before taxation Profit after taxation Company’s share price depends on overall market performance, investor confidence in the economy and particular
1st Qtr 20.42% 37.32% 44.25% sector and the overall fundamentals of the company. Positive sentiments, news flows prevailing in the market may
2nd Qtr
result in an appreciation of the share price of the company.
25.60% 6.45% 3.59%
3rd Qtr 25.26% 2.35% (0.16%) Government Policies
4th Qtr 28.72% 53.87% 52.32% GTML is exposed to inconsistent Government regulations, taxes schemes, policies, incentives schemes which
directly affects the company’s financial performance which in turn may affect the share price.
Political Instability
Comments on Quarterly Analysis The stable political situation in the country improves the overall business performance, investor confidence and also
encourages foreigners to deal with some of the prestigious companies in the country, which may have an impact on
Sales Company’s share price.
Quarter wise sales of the Company have been significantly varied over the year. Sales of Quarter 1 have decreased
by 2.22% as compared to SPLY. However, boost was observed in the sales of remaining three quarters with an increase of Exchange Rate
24.47%, 11.88% and 18.49% respectively when compared with SPLY. The increase in sales is mainly attributable to GTML generated 26.33 percent of its revenue from exports and imported 56.68 percent of its raw material,
increasing trend fo yarn price which was capitalised by our sales and marketing team. The management of the through which the entity is exposed to exchange rate risk. Any favorable or unfavorable movement in exchange
Company expects the consistent increase in sales growth in future years. rates might affect the company’s profitability and hence, affect the share price. The company has also adopted
effective strategies to minimize the risk of exchange rates.
Profitability:
Interest Rate
Quarter wise profitability of the Company has been volatile over the year. Quarter 1 results showed a significant
The Company’s Finance Cost is 3.5 percent of the turnover. Any interest rate movement might affect the company’s
improvement when compared with SPLY. However, results of Quarter 2 and Quarter 3 observed a dip due to increasing
profitability and hence, affect the share price.
cost of sales and finance cost, thereby, contributing 3.59% and -0.16% respectively to the total profit for the year.
However, Quarter 4 outperformed all the 3 quarters mainly on account of increase in sales quantity as well as Availability of Raw Material
improvement in yarn prices as a result of the devaluation of the Rupee, leading to increased costs of raw materials. The Company’s performance is largely dependent upon the availability of raw material, which is highly sensitive to
The Company’s inventory level were well covered to take benefits of increased selling rates and accordingly resulted seasonal fluctuations. Thus, any negative or positive change in the crop yield will dampen the Company’s
in better GP and NP for the quarter. performance and influence the share price.
Segmental View of Business Performance

Based on internal management reporting structure and products produced and sold, the Company is organized into
Share Price Analysis
the following two operating segments:
50,000 350
KSE 100 Index (points)

45,000
GTML Share Price

300
- Spinning segment: manufacturing and sale of yarn 40,000
35,000 250
- Knitting segment: manufacturing and sale of knitted fabric
30,000 200
25,000
20,000 150
The detail regarding segment wise performance is appearing in the unconsolidated and consolidated financial
15,000 100
statement of the Company. 10,000
5,000 50
0 0
Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
Months
KSE 100 Price

history of major events
2015-2019
• Investment in diversified business
2000–2005 avenues has started to reap its
• Pioneered and set up “Jet benefits
Spinners” in the country. • BMR of existing machinery to
• Replaced diesel generators have state of the art machineries
with gas generators. • Invested in wind projects and
1990–1995 • Number of spindles announced investments in solar
• The Company started increased and hydel projects.
commercial production by to 194,392. 2005-2010 • Number of spindles increased to
producing Poly/Cotton yarn • Acquired 14 acres of land • Set up an additional production 342,420.
with 14,400 spindles. for erecting additional facility at Karachi. • Successful Installation and
• Number of spindles increased sheds and underground • Performed marvelously despite operation of Waste Heat
to 64,800. water reservoir. the global financial meltdown. Recovery Plant.
1995–2000 2010-2015
• Planned investment in environment friendly 50
• Number of spindles increased
MW Wind Power Project.
to 128,160.
• Started commercial operations at Karachi Plant
• Introduced “Compact Spinning”
and increased installed capacity to 245,000 spindles.
with 15,840 spindles for the
• Acquired assets of another textile mill located
first time in Pakistan
in Gadoon Amazai Industrial Estate.
• Invested in shares of ICI Pakistan Limited
• Acquired new electric generators based on
natural gas to enhance power generation capacity
• Signed PC contract to generate additional2.66
MW based on Waste Heat Recovery
• Fazal Textile Mills Limited (FTML) merged with
and into GTML
• Number of spindles increased to around
321,000 by virtue of merger of FTML

calendar of notable events major capital expenditure
Notable Events For The Financial Year In order to remain competitive at national and international level, the Company invests regularly in new technological
advanced machineries. The purpose of the investment is not only to reduce cost of production by achieving operational
BOD Meeting for Yearly Accounts - 2018 July 30, 2018 efficiencies but also to better serve customers in terms of quality and supplementary services.
31st Annual General Meeting – 2018 September 27, 2018 This year the Company has made significant Capex of Rs. 2.8 billion and has developed a phase-wise strategy for the
replacement of old and obsolete machines.
BOD Meeting for first quarter ended September 30, 2018 October 26, 2018
BOD Meeting for half year ended December 31, 2018 February 6, 2019
Extraordinary General Meeting for Election of Directors and revalidation of

March 20, 2019
approval for investment in Associated Companies (YWPL, TWPPL & TSPPL)
BOD Meeting for third quarter ended March 31, 2019 April 25, 2019
Tentative Dates for Next Financial Year
BOD Meeting for Yearly Accounts - 2019 July 26, 2019
Annual General Meeting – 2019 September 28, 2019
BOD Meeting for first quarter ending September 30, 2019 October 28, 2019
BOD Meeting for half year ending December 31, 2019 January 27, 2020
BOD Meeting for third-quarter ending March 31, 2020 April 27, 2020
BOD Budget Meeting 2020-2021 June 22, 2020

where
opportunity
thrives
Outlook
forward-looking statement SWOT analysis
With the approval of the IMF bailout package, Company Performance against SWOT analysis is an approach to watch out for the Strengths, Weaknesses, Opportunities and Threats of the business.
concessional loan obtained from friendly countries, Last Year’s Projections GTML ensure that it makes use of its strength to utilize the opportunities available, eliminate the risk and to turn its
strict policies to regulate the foreign exchange During the year mainly on account of trade war weaknesses into the strength of the business.
transactions, and better balance of trade during this between the global giants, the Company’s Export sales
year, mainly on account of reduction in import bills, it have decreased from previous year, as against the Strengths Opportunities
is expected that rupee will contain its stability and anticipated increase in export sales in previous year • Market dominance • Access to untapped markets to increase sales
there would be no significant increase in interest forward-looking statement. However, there was • In-house power generation • Availability of expansion in existing and untapped
rates in the upcoming year. Further, the revenue increase in Local Sales as compared to previous year, • Strong group structure segments with bare minimum capital expenditure
targets set for the upcoming year, if achieved, can which helps Company to retain its bottom line in • Economies of scale • Diversification of Product Range. Target the niche
surely be the beginning of new heights for the comparison with previous year. • Availability of wide range of products market due to wide range of product manufactured
Country and accordingly will have a positive impact
• State-of-the-art plant and production facilities • Hiring of Qualified Staff for changing business climate
on the Economy. Further, as anticipated in previous year, the return • Global reach to internationally acclaimed clients • Increasing Profits and Growing Demand in the Market
from strategic investments have increased. Even • Experienced and Skilled workforce • Technology Advancement
In order to dilute the Political instability and boost the though the increase is of only 1.13%, but considering
confidence of textile sectors, it is expected that the fact that all macroeconomic indicators were
government will come up with some plan for the textile posing a negative impact on the Economy, the
sector including but not limited to resolution of GIDC associates of the Company still performed well in
matter, timely release of tax and DLTL refunds. the weakening economy.
On account of withdrawal of SRO 1125 (1) of 2011

from July 1, 2019, it is expected that the overall
Sources of Information and
sales of the textile sector will be affected as the Assumptions used for Forecast
purchasing power of common man will reduce. The Company on the basis of current monetary and
However, the Company has devised the plan to fiscal policy, affiliation / contacts with associations
cover this gap by identifying new products and including APTMA, Sarhad Chamber of Commerce and
customers both the locally and internationally. Industry, consultation with industry experts including
Further, the Cost of production will also reduce on advisory firms, market research including past trends,
account of significant CAPEX made during the forecast the factors i.e. exchange rate, interest rate,
second half of current year, which will help cotton prices, sales prices, etc. having significant
Company to achieve operational efficiencies through impacts on the Company’s operations and accordingly
reduction in labor and power cost. Furthermore, the makes projections/budgets for the upcoming year.
Company also expects increase in returns from its
strategic investments. Status of Projects
Apart from investment in state of art technological
The Company is confident that it will be able to increase machines and strategic investments, no other major
its sales and profitability at least by 8% - 10% for the projects are in pipelines from previous year, the
year 2019-2020. progress of which needs to be disclosed.
Weaknesses Threats
In addition to achieving its financials milestone, the Further, keeping in view the profitability and • Labor intensive operations • Political Instability
Company has allocated adequate budget for the anticipated demands for its Knitted fabrics, the • Larger portion of production based on volatile • Imposition of innovative taxes and uncertain
development of its Capital i.e. Human Capital, Company has decided to expand its Knitting segment. cotton market government policies e.g. GIDC
Manufactured Capital, Intellectual Capital and Social & In this respect, the construction of separate division • Dependence on particular region for sales • Shortage of raw material due to natural disasters
Relationship Capital and anticipates that it will be able for Knitting segment at Karachi Factory is in progress. • Major reliance on the spinning segment • Abrupt fluctuation in interest and exchange rates
to satisfy the need of all stakeholders. The project is expected to be completed during first • High labor-intensive industry
half of the year 2019 - 2020, which once completed will • Availability of subsidized yarn by regional competitors
help the Company to achieve operational efficiencies.

where
engagement
thrives
Stakeholder’s Engagement
stakeholder’s engagement relation with stakeholders
GTML focuses on establishing strong relationship with its stakeholder to encourage growth and existence of the Management recognizes the fact that the dispute with the stakeholders can have hindrance in day to day business
Company. The Company makes use of commitment, sincerity, competence, effective communication and reliable operations, and therefore give due importance to their feedback / suggestion. Accordingly, stakeholders are allowed
behavior to collaborate with its stakeholders. to have direct access to Company secretary in case of any grievance.
Minority Shareholders
Stakeholders Description Frequency Apart from timely submission of accounts and notices to shareholders, the company in order to encourage minority
shareholders to attend the general meetings and on the basis of section 132(2) of the Companies Act, 2017, have
The Company strives to come up with new ways to interact with its provided the video conferencing facility to shareholders (having shareholding of 10% or more in aggregate), subject
Customer and customers and suppliers. It engages with all its customers and suppliers to availability of video conference facility in that city and receipt of intimation from the shareholders at least 7 days
Continuous prior to date of meeting.
Suppliers through get-togethers, market visits and customer satisfaction
surveys, and feedback on a periodic basis.
Investors' Relations Section
The Company communicates all major financial information needed for investors’ dicision making by uploading it on
GTML engages with the media and disseminates news and other
corporate website i.e. (http://gadoontextile.com/) under the section of ‘Investor Relations’, on a timely basis.
happenings to its stakeholders through press releases, corporate
briefings, media announcements and presentations, etc.
Media As required
Further, our Corporate Branding team regularly update our social
media and website.
To update Investors / Shareholders about the Company’s current

performance / future plans and to provide them platform for raising Annually / Quarterly
Investors and
their concerns, the Company engages with them through Annual / Continuous /
Shareholders
General Meetings, Quarterly / Half Yearly / Annual Reports, Websites As required
and Investor / Corporate briefing sessions.
GTML believes in strict compliance with applicable laws and regulations.

To remain compliant, GTML ensures that all the queries of the regulators Periodic / As
Regulators
are responded on a timely basis including filing of various statutory required
returns / forms.
GTML consider the providers of funds to be our partners in success and

Banks and Lenders ensure that they are frequently engaged with the Company and taken Continuous / As
of Finance into confidence as and when required. The Company maintains excellent required
relationship with all the leading financial institutions of the country.
GTML actively participates in various CSR initiatives and activities in

Local Communities As required
health, education and social sector.

statement of value addition
and its distribution stakeholder’s engagement policy
2019 2018 GTML is fully committed to developing an effective working
Rs. in ‘000 % Rs. in ‘000 % relationship with all its stakeholders. The objective of this policy
Wealth Generated
Sales including sales tax 31,229,771 97.96% 27,593,222 96.75%
is to lay down key principles of engagement with stakeholders.
Other operating income 651,441 2.04% 926,387 3.25%
31,881,212 100.00% 28,519,609 100.00% With respect to the engagement of its stakeholders, GTML is committed to:
Wealth Distribution
Cost of sales 26,027,921 81.64% 23,561,665 82.62% • Providing accurate and timely information to all stakeholders;
Administrative, distribution and others 573,587 1.80% 666,830 2.34% • Obtaining regular feedback from stakeholders;
Employees 2,500,776 7.84% 2,204,251 7.73% • Evaluating the effectiveness of stakeholders’ engagement activities and working continually to improve
such engagements.
Income tax 482,355 1.51% 288,350 1.01%
Sales tax 12,292 0.04% 38,535 0.14%
Frequency of engagements is based on the corporate and business requirements as laid down by the corporate
Financial charges 1,098,179 3.44% 574,682 2.02%
laws, contractual obligations or as and when required. Employee communication is undertaken through in-house
Dividend to shareholders 238,251 0.75% 434,459 1.52% newsletters, climatic surveys, intranet updates, and emails.
Distribution within business 947,851 2.97% 750,837 2.63%
31,881,212 100.00% 28,519,609 100.00% Investor Roadshows / Corporate Briefing Program
Our stakeholder extends valuable contribution towards our growth and existence. The Company understands the
importance of continuous collaboration with all its stakeholders.
Wealth Distribution The Board has devised a mechanism to arrange interactive sessions between management of the Company and its
shareholders to solicit and understand views of shareholders. The purpose of these sessions is to brief shareholders
about the performance of the Company, macro and micro economic factors affecting the Company, prospects of
the Company and the steps taken by the Company to improve its performance in challenging circumstances. These
2019 2018 communications helps the Company to understand and resolve the concerns of the shareholders and to add
synergy factor to achieve better results in the Company’s prospects.
2.97% 2.63%
3.44% 2.02% The Board is pleased to inform that the Company, represented by our CFO Mr. Imran Moten, attended an investor
0.75% 1.52% roadshow program at Boat Club held on February 18, 2019 which intended to highlight the challenges and future
0.04% 0.14%
opportunities in textile industry. Interactive session was held between research analysts, fund managers and
1.51% 1.01%
management representative where details of current economic situation and challenges faced by the Company
7.84% 7.73%
were discussed with the investors.
1.80% 2.34%
Looking forward, the Board has set the intentions and the management has planned to hold the Corporate briefing
81.64% 82.62% session for the year ended June 30, 2019 in first week of October 2019. The purpose of this session is not only to
ensure compliance with the directives of PSX but also to enlighten the investors with the Company’s insights on its
current performance and future prospects.
Cost of sales Administrative, distribution & others Employees Income tax
Sales tax Financial charges Dividend to shareholders Distribution within business

where
hope
thrives
Sustainability and Corporate
Social Responsibility
highlights of aspects
of sustainability The Company not only works for the betterment of
society but also focuses on spreading ethical values
Communities
GTML fulfills its commitment towards the wellbeing of
amongst people. Initially, the people of Swabi were communities by carrying out several initiatives that
involved in cultivation of poppy and opium on their have been presented in the next section of Corporate
agricultural lands in order to earn their livelihood. The Social Responsibility.
The Companies achieve sustainable development by Energy Saving Measures
change was brought about when the foundation of
adopting the business strategies that protects, sustains GTML aims to conserve natural resources and reduce
GTMLwas laid in that area with the aim of providing
and enhance the human and natural resources that will energy consumption. Hence, the Company has acquired
employment to the locals and to help them distance
be needed in the future. a state-of-the-art Waste Heat Recovery Plant (WHRP).
themselves from these harmful practices. Thus, GTML
is not only a profit-making entity but also has a core
The incorporation of GTML proved to be a great example WHRP does not need any externally fed fuel to operate,
objective to be socially responsible.
of contribution towards the betterment of the society but it uses the excess heat from the system as fuel.
in terms of Health, Safety and Environment. GTML makes The design of these plants hinges on the idea of
The Company considering the social and emotional
sustainability a priority in every aspect of organizational encapsulating all the excess heat from the production
need of its employees, provides accommodation facilities
operations and is involved in compliance, environmental system and using this heat to generate steam from boilers,
for its staff and workers at both locations. Further,
protection, occupational health and safety. which drive the turbine engines, thus producing electricity.
subsidized mess, ambulance service and shuttle service
are also provided to employees. The Company also
The highlights of the Company’s performance, policies, In addition to this, the Company has made a conscious
maintains the retirement benefit plan for its employees
initiatives and plans in place relating to various aspects effort to save energy, as small as mindfully turning off
to provide them financial security after retirement.
of sustainability are as follows: unnecessary lights or computers during office breaks
or as immense as using energy efficient office equipment.
Economic
The economic aspect of sustainability is regarded to Paper-Waste Disposal
have comprise the potential to amalgamate sustainable GTML is a socially responsible organization, striving
practices, technology and money-making tools. hard to reduce the use of paper. Technology such as
scanning and digital data storage is implemented
GTML is determined to provide value along with wherever possible. Further, the Company over the last
consistent growth to its stakeholders. Further, the couple of years have collected and donated tons of
presence of the Company in the market positively paper for recycling.
impacts the economic development of Pakistan by
opening up the employment and business opportunities. Social
The Company also pays focus on the upgradation of The Company’s aim in respect of Social pillar of
technology for enhanced productivity and growth that sustainability is to focus on health, wellness and
contributes to the economic development. education of the people and thereby prioritizing the
quality of life over everything. The Company believes in
Environmental the promotion of betterment of society.
It has long been known as the primary reason for
sustainability and now has been incorporated into the Industrial Relations / Employment
corporate environment. GTML believes that without a Maintaining wondrous relations with the employees
healthy environment, the human pursuits of economy and labor is one of the prime focus of GTML. The
and society cannot be sustained. The Company abide by Company ensures that the employees and their
the environmental laws and continually improves its managers share strong bond, that employees receive
environmental management system. fair treatment, and that any issues arising between
employees and management are solved quickly and as
Mitigating Adverse Risk of Industrial Effluents amicably as possible.
The company’s policy of ‘clean environment; healthy
life’, is aiming to implement process and procedures
that ensure disposal of waste materials and chemicals
in a way that is least harmful for the environment.
Training and awareness sessions are conducted on a
regular basis for this purpose.

highlights of corporate
social responsibility
GTML positions itself as one of the conscientious member Visit to Orphanage Tree Plantation Activity
of the Corporate Community. The Company has worked GTML participated in spreading happiness by visiting On Independence Day, GTML decided to give back to
munificently to a number of charitable causes in the Mashal Orphanage to share the joy of Eid by distributing the environment and our mother nation by organizing a
segment of health, education and social sectors. the gifts and toys. The volunteers of the Company Tree Plantation Activity in collaboration with ACCA
gifted presents amongst these innocent human beings Pakistan at factory premises to plant 750 saplings
Donation Drive at Street to School and spent time with them. The children were overwhelmed where students and GTML staff both participated. This
GTML took a step forward in donating laptops to the with this gesture and the smile on their faces was noble cause was very well supported by senior
children of Street to School on International Day of priceless. The idea was to spread happiness and to management and we are planning to extend this to
Education. The purpose was to boost morale and deliver grins amongst the children and to ensure that other parts of the city as well in future.
develop an urge to acquire education among the street no child remains empty-handed this Eid.
children. Giving is not just about making a donation, it is Beach Cleaning Activity
all about making a difference. Working for the Strategic HR Partnership Earth is the only home we have; we need to clean it up.
well-being of society and focusing on philanthropic • In this Holy month of Ramadan, GTML collaborated Environmental cleanliness begins with an individual
activities is one of the essential core values of our with YB Group Companies and organized a Lucky desire to be clean. Realizing the importance of
organization and group. The Company believes that Wall CSR activity. This activity was aimed to help the conserving the nature, GTML took part in the World
these children will have bright futures and aspire to be people in need in which belongings such as clothes, Earth Day by taking an initiative of beach cleaning drive
the future leaders of Pakistan. bags, and shoes were donated. for the purpose of cleaning the debris on the seashore
held at Sea View Karachi. A number of volunteers from
Blood Donation Drive • Lucky Iftar Distribution Activity on the roadside was the organization participated in this activity with great
Giving back to society is our priority. With this passion, also organized by the same group companies. The ardor and energy. Little efforts can make big
GTML arranged a blood donation drive in collaboration volunteers from each company distributed Iftar differences. Beach cleaning was aimed to create a
with the National Institute of Blood Disease (NIBD) on boxes to the people passing by the road. This was sense of awareness so that each individual can take up
World Health Day. Considering blood donation as one of just a divine gesture that helped revitalize the sense the responsibility of playing their role in keeping the
the divine act that serves a humanitarian cause, we of gratification by serving other human beings. environment clean. This campaign also worked to
believe that helping the ones in need is our core benefit in portraying the message of promoting a
responsibility. Our employees actively participated in culture of cleanliness to the world.
this noble cause and we feel proud to have volunteers
who willingly join hands in providing this life-saving gift
to someone in need. The mere objective of this drive
was to contribute towards social help by donating
blood and to raise awareness among our staff for
adopting the healthy lifestyle practise.
Visit and Charity to Old Age House

It is a privilege to contribute donations to mankind
because it is good to be blessed but better to be a
blessing. GTML participated in this social cause by
donating some basic household stuff to Gills Shelter
Old Age House. The volunteers of the Company spent
valuable time with the senior citizens at the shelter
house and shared their griefs and miseries where
everyone had a piece of the heart-wrenching story to
share. It is not just a matter of giving, but it is a mean
of spreading happiness and smiles.

certifications acquired for
environmental sustainability corporate affiliations
• Affiliated with OEKO-TEX 100 Standards
• Member of Management Association of Pakistan
• Member of Karachi Chamber of Commerce and Industry
• Member of Sarhad Chamber of Commerce and Industry
• Member of All Pakistan Textile Mills Association Khyber Pakhtunkhwa
• Member of Better Cotton Initiative (BCI) and Fair Trade
• Member and licensee of SUPIMA

where
compliance
thrives
Corporate Reporting
statement of unreserved compliance
of international financial reporting
standards (IFRSs) integrated reporting
The Financial Statements of the Company have been prepared in The integrated reporting is a concise communication about how
accordance with the IFRS issued by IASB as notified under the company’s strategy, governance, performance and prospects, in
Companies Act, 2017. the context of its external environment, lead to the creation of
value over the short, medium and long term.
Further, there are certain standards and interpretations which
are yet to be effective in Pakistan and certain standards not That value has two interrelated aspects – value created Content Elements for
for the organization itself, which enables financial Integrated Reporting
adopted by SECP, as disclosed in note 2.5 and note 3.5 of the returns to the providers of financial capital; and others The Company has incorporated in this report the
(i.e., stakeholders and society at large).
unconsolidated and consolidated financial statements following Content Elements of IR Framework: -
respectively. However, the management believes these GTML is in the process of adopting and adhering to the • Organizational overview and external environment
standards and interpretation does not have any material International Integrated Reporting Framework (IIRF)
and strives to follow the best corporate governance
• Strategy and resource allocation
• Risks and opportunities
impact on the financial statements of the Company. practices. The reporting is further carried out to create • Governance
a considerable value for the organization and its • Outlook
stakeholders. Additionally, GTML has focused on • Position and Performance
concise and coherent reporting of the business affairs • Business Model
presented in the form of financial and non-financial
information. Further, the Company is committed to Status
achieving excellence in transparent reporting along Though in current year, the Company has fulfilled
with consistent improvement in the quality of the certain requirements of the frameworks by disclosing
information presented. some additional information, however, the Company is
still reviewing the framework to assess / compile the
Guiding Principles for complete required information which needs to be
Integrated Reporting presented under this framework and it is expected that
The following guiding principles underpin the preparation the Company will be able to comply with the complete
of an integrated report, informing the content of the provision of the framework in the years to come.
report and how information is presented:
• Strategic focus and future orientation

• Connectivity of information
• Stakeholder relationships
• Materiality
• Conciseness
• Reliability and completeness
• Consistency and comparability

where
reward
thrives
Financial Statements
Unconsolidated Financial Statements

Independent Auditor's Report to the Members 144
- Unconsolidated Financial Statements
Unconsolidated Statement of Financial Position 148
Unconsolidated Statement of Profit or Loss 150
Unconsolidated Statement of Comprehensive Income 151
Unconsolidated Statement of Cash Flows 152
Unconsolidated Statement of Changes In Equity 153
Notes to the Unconsolidated Financial Statements 154
independent auditor’s report
to the members
Report On The Audit Of The Unconsolidated Financial Statements S.No. Key audit matters How the matter was addressed in our audit
1 Contingencies
Opinion
The Company is subject to material litigations In response to this matter, our audit procedures included:
We have audited the annexed unconsolidated financial statements of Gadoon Textile Mills Limited (the Company), which comprise involving different courts pertaining to GID Cess, Discussing legal cases with the internal legal department to
the unconsolidated statement of financial position as at June 30, 2019, and the unconsolidated statement of profit or loss, taxation and other matters, which requires understand the management’s view point and obtaining and
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity, the unconsolidated management to make assessment and judgements reviewing the litigation documents in order to assess the
statement of cash flows for the year then ended, and notes to the unconsolidated financial statements, including a summary of with respect to likelihood and impact of such facts and circumstances.
significant accounting policies and other explanatory information, and we state that we have obtained all the information and litigations on the unconsolidated financial
explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit. statements of the Company. Obtaining independent opinion of legal council’s dealing with
such cases in the form confirmations.
In our opinion and to the best of our information and according to the explanations given to us, the unconsolidated statement of Management engaged independent legal counsels
financial position, unconsolidated statement of profit or loss, unconsolidated statement of comprehensive income, the on these matters. We also evaluated the possible outcome of these legal cases
unconsolidated statement of changes in equity and the statement of cash flows together with the notes forming part thereof in line with the requirements of IAS 37: Provisions, contingent
conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies The assessment of provisioning against such liabilities and contingent assets.
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 litigations is a complex exercise and require
as at June 30, 2019 and of the profit, the comprehensive income, the changes in equity and its cash flows for the year then ended. significant judgements to determine the level of The disclosures of legal exposures and provisions were
certainty on these matters. assessed for completeness and accuracy.
Basis for Opinion
The details of contingencies along with
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities management’s assessment are disclosed in note 23
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section to the unconsolidated financial statements.
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 Information Other than the Financial Statements and Auditor’s Report Thereon
obtained is sufficient and appropriate to provide a basis for our opinion.
Management is responsible for the other information. The other information comprises the report of audit committee, directors’
Key Audit Matters report, Chairman’s review, analysis on financial performance, comments on the financial results, key performance indicators,
analysis of cost and statement of value additions and its distribution.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
unconsolidated financial statements of the current year. These matters were addressed in the context of our audit of the Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
unconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate conclusion thereon.
opinion on these matters.
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 unconsolidated 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 We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. independence, and where applicable, related safeguards.
Board of Directors are responsible for overseeing the Company’s financial reporting process. From the matters communicated with the board of directors, we determine those matters that were of most significance in the
audit of the unconsolidated financial statements of the current period and are therefore the key audit matters. We describe these
Auditor’s Responsibilities for the Audit of the Unconsolidated Financial Statements 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
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material so would reasonably be expected to outweigh the public interest benefits of such communication.
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 Report on Other Legal and Regulatory Requirements
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 Based on our audit, we further report that in our opinion:
of users taken on the basis of these financial statements.
a) proper books of account have been kept by the Company as required by the Companies Act, 2017
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain 1 (XIX of 2017);
professional skepticism throughout the audit. We also:
b) the unconsolidated statement of financial position, the unconsolidated statement of profit or loss, the
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or unconsolidated statement of other comprehensive income, the unconsolidated statement of changes in equity
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and the unconsolidated statement of cash flows together with the notes thereon have been drawn up in
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional returns;
omissions, misrepresentations, or the override of internal control.
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are the Company’s business; and
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control. 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management. The engagement partner on the audit resulting in this independent auditor’s report is Hena Sadiq.
• 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 Chartered Accountants
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 the date of our auditor’s report. However, future events or Karachi
conditions may cause the Company to cease to continue as a going concern. Date: August 20, 2019
• 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.

unconsolidated statement
of financial position
As at June 30, 2019 2019 2018
Note ----------------- (Rupees in ‘000) ---------------
2019 2018 EQUITY AND LIABILITIES
Note ----------------- (Rupees in ‘000) --------------- Share Capital and Reserves
ASSETS Authorized
Non-Current Assets 57,500,000 ordinary shares of Rs.10/- each 575,000 575,000
Property, plant and equipment 4 9,870,359 7,791,928
Biological assets 5 129,665 - Issued, subscribed and paid-up capital 17 280,296 280,296
Long term advance 6 - - Capital reserves 137,541 137,541
Long term loans 7 43,677 35,331 Revenue reserves 8,771,640 7,795,673
Long term deposits 29,127 27,719 Total Equity 9,189,477 8,213,510
Long term investments 8 2,869,812 2,686,920
12,942,640 10,541,898 Non-Current Liabilities
Current Assets Long term finance 18 2,622,363 594,338
Stores, spares and loose tools 9 606,538 549,319 Retirement benefit obligation 19 562,984 533,769
Stock-in-trade 10 8,397,926 7,469,561 Deferred tax liabilities 20 889,350 696,275
Consumables 11 9,435 - 4,074,697 1,824,382
Trade debts 12 3,517,747 2,464,181 Current Liabilities
Loans and advances 13 199,991 286,996 Trade and other payables 21 3,695,695 3,088,479
Trade deposits and short term prepayments 8,901 32,273 Unclaimed dividend 21,879 21,423
Other receivables 14 719,881 958,077 Current portion of long term finance 18 52,728 -
Current tax asset 659,202 651,362 Accrued mark-up 318,196 129,830
Sales tax refund bond 15 110,797 - Short term borrowings 22 9,926,683 9,864,906
Cash and bank balances 16 106,297 188,863 14,015,181 13,104,638
14,336,715 12,600,632 Total Liabilities 18,089,878 14,929,020
Total Assets 27,279,355 23,142,530 Total Equity and Liabilities 27,279,355 23,142,530
CONTINGENCIES AND COMMITMENTS 23
The annexed notes from 1 to 44 form an integral part of these financial statements.
MUHAMMAD YUNUS TABBA MUHAMMAD SOHAIL TABBA MUHAMMAD IMRAN MOTEN

Chairman / Director Chief Executive Officer Chief Financial Officer

unconsolidated statement unconsolidated statement
of profit or loss of comprehensive income
For the Year Ended June 30, 2019 For the Year Ended June 30, 2019
2019 2018 2019 2018
Note ----------------- (Rupees in ‘000) --------------- Note ----------------- (Rupees in ‘000) ----------------
Sales - net 24 31,217,479 27,554,687 Profit for the year 1,166,293 1,185,296
Cost of sales 25 (28,324,756) (25,609,797)
Gross profit 2,892,723 1,944,890 Other comprehensive income
Distribution cost 26 (401,764) (437,311) Items that will be reclassified subsequently

Administrative expenses 27 (276,932) (224,245) to profit or loss
(678,696) (661,556)
2,214,027 1,283,334 Share of other comprehensive income/(loss) from associates - net of tax 8 130 (15,074)
Finance cost 28 (1,097,949) (574,682) Items that will not be reclassified subsequently
Other operating expenses 29 (97,601) (161,393) to profit or loss
1,018,477 547,259 - Remeasurement of defined benefit obligation 19.5 73,048 7,297
- Income tax relating to defined benefit obligation (14,450) (1,384)
Other income 30 163,860 449,217 58,598 5,913
Share of profit from associates 8 463,969 477,170 Other comprehensive income / (loss) 58,728 (9,161)
Profit before taxation 1,646,306 1,473,646
Total comprehensive income for the year 1,225,021 1,176,135
Taxation 31 (480,013) (288,350)
Profit for the year 1,166,293 1,185,296 The annexed notes from 1 to 44 form an integral part of these financial statements.
Earnings per share - basic and diluted (Rupees) 32 41.61 42.29
MUHAMMAD YUNUS TABBA MUHAMMAD SOHAIL TABBA MUHAMMAD IMRAN MOTEN MUHAMMAD YUNUS TABBA MUHAMMAD SOHAIL TABBA MUHAMMAD IMRAN MOTEN
Chairman / Director Chief Executive Officer Chief Financial Officer Chairman / Director Chief Executive Officer Chief Financial Officer

unconsolidated statement unconsolidated statement
of cash flows of changes in equity
2019 2018
------------Capital Reserves------------ ---------------- Revenue Reserves ---------------
Note ----------------- (Rupees in ‘000) ----------------
Issued, Share Amalgamation Sub General Amalgamation Unappropriated Sub Grand
A. CASH FLOWS FROM OPERATING ACTIVITIES subscribed premium reserve total reserve reserve profit total total
Cash generated from / (used in) operations 33 2,057,856 (171,282) and paid-up
Finance cost paid (909,583) (532,519) share capital
Income tax paid (292,878) (197,645) -------------------------------------------------------(Rupees in '000)------------------------------------------------------
Retirement benefits paid (111,083) (85,948)
Rebate received 242,639 96,452 Balance as at July 1, 2017 280,296 103,125 34,416 137,541 1,000,000 727,333 5,221,553 6,948,886 7,366,723
(1,070,905) (719,660)
Transaction with owners
Final dividend @ Rs. 5/- per share for - - - - - - (140,148) (140,148) (140,148)
B. CASH FLOWS FROM INVESTING ACTIVITIES the year ended June 30, 2017
Purchase of property, plant and equipment (2,839,346) (1,119,172) Additional / Interim dividend @ - - - - - - (189,200) (189,200) (189,200)
Sale proceeds from disposal of property, plant and equipment 64,988 36,297 Rs. 6.75/- per share
Loans paid to employees (8,743) (16,117) - - - - - - (329,348) (329,348) (329,348)
Long term deposits given - (15)
Total comprehensive income for the year
Investment in subsidiary (100) -
Profit received from bank deposits 1,374 1,554 Profit for the year - - - - - - 1,185,296 1,185,296 1,185,296
Dividend received 261,162 245,213
Net cash used in investing activities (2,520,665) (852,240) Other comprehensive loss - - - - - - (9,161) (9,161) (9,161)
C. CASH FLOWS FROM FINANCING ACTIVITIES Total comprehensive income for the year - - - - - - 1,176,135 1,176,135 1,176,135
Long term finance obtained 2,080,753 594,338
Balance as at June 30, 2018 280,296 103,125 34,416 137,541 1,000,000 727,333 6,068,340 7,795,673 8,213,510
Dividend paid (244,803) (323,279)
Net cash generated from financing activities 1,835,950 271,059 Transaction with owners
Net decrease / (increase) in cash and cash equivalents (A+B+C) 302,236 (1,472,123) Final dividend @ Rs. 8.75/- per share for - - - - - - (245,259) (245,259) (245,259)
Cash and cash equivalents at the beginning of the year (9,520,886) (8,048,763) the year ended June 30, 2018
Cash and cash equivalents at the end of the year (9,218,650) (9,520,886) - - - - - - (245,259) (245,259) (245,259)
Effect of restructuring on investments - - - - - - (3,795) (3,795) (3,795)

CASH AND CASH EQUIVALENTS (Note 8.1.1)
Cash and bank balances 16 106,297 188,863
Short term borrowings 22 (9,324,947) (9,709,749) Total comprehensive income for the year
(9,218,650) (9,520,886)
Profit for the year - - - - - - 1,166,293 1,166,293 1,166,293
CHANGES ARISING FROM FINANCING ACTIVITIES Other comprehensive income - - - - - - 58,728 58,728 58,728
2018 Financing Financing Non-cash 2019 Total comprehensive income for the year - - - - - - 1,225,021 1,225,021 1,225,021
cash inflows cash outflows changes
----------------------------------------------------- Rupees in '000 --------------------------------------------------------- Balance as at June 30, 2019 280,296 103,125 34,416 137,541 1,000,000 727,333 7,044,307 8,771,640 9,189,477
Long term finance 594,338 2,080,753 - - 2,675,091

Unclaimed dividend 21,423 - (244,803) 245,259 21,879 The annexed notes from 1 to 44 form an integral part of these financial statements.

notes to the unconsolidated
financial statements
For the Year Ended June 30, 2019 2.4 Use of estimates and judgments
1. THE COMPANY AND ITS OPERATIONS The preparation of financial statements in conformity with approved accounting and reporting standards, as applicable in
Pakistan, requires management to make judgments, estimates and assumptions that affect the application of accounting
1.1 Gadoon Textile Mills Limited (the Company) was incorporated in Pakistan on February 23, 1988 as a public limited company policies and the reported amount of assets, liabilities, income and expenses.
under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) and is listed on Pakistan Stock Exchange.
The principal activity of the Company is manufacturing and sale of yarn and knitted fabrics. The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying
Y.B. Holdings (Private) Limited is the ultimate holding company of the group. values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates. The estimates underlying the assumptions are reviewed on an on-going basis. Revisions to accounting estimates
These are the separate financial statements of the Company in which investment in subsidiary is accounted for at cost are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
less impairment, if any, and investment in associates is accounted for using equity basis of accounting. revision and future periods if the revision affects both current and future periods.
Following are the geographical location and address of all business units of the Company: The areas where various assumptions and estimates are significant to the Company's financial statements or where
judgment was exercised in application of accounting policies are as follows:
Head Office:
7-A, Muhammad Ali Society, Abdul Aziz Haji Hashim Tabba Street, Karachi, Province of Sindh, South, Pakistan. a) determining the residual values and useful lives of the property, plant and equipment (note 3.1);
b) valuation of biological assets (note 3.2);
Manufacturing facility: c) valuation of stock-in-trade - at lower of cost and NRV (note 3.4);
a) 200-201, Gadoon Amazai Industrial Estate, District Swabi, Province of Khyber Pakhtunkhwa, North, Pakistan. d) provisions - for loss allowance (note 3.6);
b) 57 Km on Super Highway (near Karachi), Province of Sindh, South, Pakistan. e) impairment of financial and non financial assets (notes 3.10.2);
f) provision for taxation including deferred tax (note 3.12);
Liaison Office: g) accounting for retirement benefits obligation (notes 3.13);
Syed’s Tower, Third Floor, Opposite Custom House, Jamrud Road, Peshawar, Province of Khyber Pakhtunkhwa, North, Pakistan. h) provisions - for slow moving stores, spares and loose tools (note 3.17);
i) provisions - for doubtful advances (note 3.17); and
2. BASIS OF PREPARATION j) provisions against liability (note 3.17).
2.1 Statement of compliance 2.5 Changes in accounting standards and interpretations
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable 2.5.1 New accounting standards / amendments and IFRS interpretations that are effective for the year ended June 30, 2019
in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, The following standards, amendments and interpretations are effective for the year ended June 30, 2019. These standards,
2017 and provisions of and directives issued under the Companies Act, 2017. Where provisions of and directives issued interpretations and the amendments are either not relevant to the Company's operations or are not expected to have
under the Companies Act, 2017 differ from the IFRS, the provisions of and directives issued under the Companies Act, significant impact on the Company's financial statements other than certain additional disclosures.
2017 have been followed.
Amendments to IFRS 2 'Share-based Payment' - Clarification on January 01, 2018
2.2 Basis of measurement the classification and measurement of share-based payment transactions.
These financial statements have been prepared under the historical cost convention except: IFRS 4 'Insurance Contracts' - Amendments regarding the interaction January 01, 2018
- obligations under the defined benefit plan are stated at present value; of IFRS 4 and IFRS 9.
- biological assets i.e. livestock are stated at fair value less estimated point-of-sale cost; and
- investment in associates are accounted for using equity method. IFRS 9 'Financial Instruments' - This standard will supersede IAS 39 Financial July 01, 2018
Instruments: Recognition and Measurement upon its effective date.
2.3 Functional and presentation currency
IFRS 15 'Revenue' - This standard will supersede IAS 18, IAS 11, July 01, 2018
Items included in the financial statements are measured using the currency of the primary economic environment in IFRIC 13, 15 and 18 and SIC 31 upon its effective date.
which the Company operates. The financial statements are presented in Pakistani Rupees, which is the Company’s
functional and presentation currency.

Effective from accounting period Effective from accounting period
beginning on or after: beginning on or after:
Amendments to IAS 40 'Investment Property' - Clarification on transfers January 01, 2018 Amendments to IAS 1 'Presentation of Financial Statements' and IAS 8 January 01, 2020
of property to or from investment property 'Accounting Policies, Changes in Accounting Estimates and Errors'
- Amendments regarding the definition of material.
IFRIC 22 'Foreign Currency Transactions and Advance Consideration' - Provides January 01, 2018
guidance on transactions where consideration against non-monetary prepaid Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
asset / deferred income is denominated in foreign currency.
Certain annual improvements have also been made to a number of IFRSs.
Other than the aforesaid standards, interpretations and amendments, the International Accounting Standards Board
2.5.2 New accounting standards and amendments that are not yet effective (IASB) has also issued the following standards which have not been adopted locally by the Securities and Exchange
Commission of Pakistan (SECP):
The following standards, amendments and interpretations are only effective for accounting periods, beginning on or after
the date mentioned against each of them. These standards, interpretations and the amendments are either not relevant - IFRS 1 'First Time Adoption of International Financial Reporting Standards'
to the Company's operations or are not expected to have significant impact on the Company's financial statements other - IFRS 14 'Regulatory Deferral Accounts'
than certain additional disclosures. - IFRS 17 'Insurance Contracts'
Effective from accounting period
beginning on or after: 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Amendments to IFRS 3 'Business Combinations' - Amendments January 01, 2020 The significant accounting policies adopted in the preparation of these financial statements are the same as those applied in
regarding the definition of business the preparation of the financial statements of the Company for the year ended June 30, 2018 except for the change in the
policy for revenue recognition and financial assets' recognition and measurement due to adoption of IFRS-15 and IFRS-9
Amendments to IFRS 9 'Financial Instruments' - Amendments regarding January 01, 2019 respectively. The implications of these standards have insignificant impact on these financial statements of the Company. In
prepayment features with negative compensation and modifications of addition to this, there are certain other changes in policies which are as disclosed below:
financial liabilities.
3.1 Property, plant and equipment
Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28 Effective from accounting period
'Investments in Associates and Joint Ventures' - Sale or contribution of beginning on or after a date to be Property, plant and equipment except freehold land and capital work-in-progress are stated at cost less accumulated depreciation
assets between an investor and its associate or joint venture. determined. Earlier application and impairment losses, if any. Freehold land and capital work-in-progress are stated at cost less impairment losses, if any.
is permitted.
All expenditure connected with specific assets incurred during installation and construction period are carried under capital
IFRS 16 'Leases' - This standard will supersede IAS 17 'Leases' upon January 01, 2019 work-in-progress. These are transferred to specific assets as and when these assets are available for intended use.
its effective date.
Depreciation is charged, from the month when the asset is available for use and ceased from the month of disposal, to profit and
Amendments to IAS 28 'Investments in Associates and Joint Ventures' January 01, 2019 loss account applying the reducing balance method except for leasehold land, which is depreciated using the straight-line method.
- Amendments regarding long term interests in an associate or joint venture The residual values, useful lives and depreciation methods are reviewed and changes, if any, are treated as change in accounting
that form part of the net investment in the associate or joint venture but to estimates, at each reporting date. Rates for depreciation are stated in note 4.1 to the financial statements.
which the equity method is not applied.
Maintenance and repairs are charged to profit and loss account as and when incurred. Major renewals and improvements are
Amendments to IAS 19 'Employee Benefits' - Amendments regarding January 01, 2019 capitalized and the assets so replaced, if any, are retired.
plan amendments, curtailments or settlements.
Gains and losses on disposal of assets are taken to the statement of profit or loss as and when incurred.
IFRIC 23 'Uncertainty over Income Tax Treatments' - Clarifies the January 01, 2019
accounting treatment in relation to determination of taxable profit (tax loss), 3.2 Biological assets
tax bases, unused tax losses, unused tax credits and tax rates, when there
is uncertainty over income tax treatments under IAS 12 'Income Taxes'. Livestock are measured at their fair value less estimated point-of-sale costs. Fair value of livestock is determined by an independent
valuer on the basis of best available estimates for livestock of similar attributes.
Gains or losses arising from changes in fair value less estimated point-of-sale costs of livestock are recognized in the statement
of profit or loss.

3.3 Stores, spares and loose tools 3.8 Cash and cash equivalents
These are stated at lower of cost and net realizable value. Cost is determined using moving average method. Items in transit Cash and cash equivalents for cash flow purposes include cash in hand, current and deposit accounts held with banks.
are stated at invoice value plus other charges incurred thereon until the reporting date. Short term borrowings (except export re-finance) availed by the Company which are payable on demand and form an
integral part of the Company’s cash management are included as part of cash and cash equivalents for the purpose of
For items that are slow moving adequate provision is made, if necessary, for any excess carrying value over estimated realizable the statement of cash flows.
value and charged to the statement of profit or loss.
3.9 Investments
3.4 Stock-in-trade
Investment in subsidiary
Basis of valuation is as under:
- Raw material in hand (imported) Lower of cost (weighted average / specific identification Investment in subsidiary company is initially recognized at cost. At subsequent reporting dates, the recoverable amounts
basis) and net realizable value (NRV) are estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted
- Raw material in hand (local) Lower of cost (weighted average) and NRV accordingly. Impairment losses are recognized as expense. Where impairment losses subsequently reverse, the carrying
- Raw material in-transit Cost accumulated to end of reporting period amounts of the investments are increased to the revised recoverable amounts but limited to the extent of initial cost of
- Work-in-process Lower of cost (weighted average) and NRV investments. A reversal of impairment loss is recognized in the statement of profit or loss.
- Finished goods Lower of cost (weighted average) and NRV
- Waste NRV Investment in associates
Cost in relation to work-in-process and finished goods represents annual average manufacturing cost which consists of Associates are entities over which the Company exercises significant influence. Investment in associates is accounted
prime cost and appropriate manufacturing overheads. for using equity basis of accounting, under which the investment in associate is initially recognized at cost and the carrying
amount is increased or decreased to recognize the Company’s share of profit or loss of the associate after the date of
NRV signifies the estimated selling price in the ordinary course of business less estimated cost of completion and estimated acquisition. The Company’s share of profit or loss of the associate is recognized in the Company’s statement of profit or
cost necessary to be incurred to effect such sale. loss. Distributions received from associate reduce the carrying amount of the investment. Adjustments to the carrying
amount are also made for changes in the Company’s proportionate interest in the associate arising from changes in the
3.5 Consumables associates’ other comprehensive income that have not been recognized in the associate’s profit or loss. The Company’s
share of those changes is recognized in the statement of other comprehensive income of the Company.
Consumables are stated at lower of cost and net realizable value. Cost is determined using moving average method. Net
realizable value signifies the estimated selling price in the ordinary course of business less estimated cost necessary to The carrying amount of the investment is tested for impairment, by comparing its recoverable amount (higher
be incurred to effect such sale. of value in use and the fair value less costs to sell) with its carrying amount and loss, if any, is recognized in the
statement of profit or loss.
Milk is initially measured at its fair value less estimated point-of-sale costs at the time of milking. The fair value of milk is
determined based on market prices in the local area. Derecognition
3.6 Trade debts and other receivables The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortized cost less entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues
loss allowance, if any. The Company always measures the loss allowance for trade debts at an amount equal to lifetime to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for
expected credit losses (ECL). The expected credit losses on trade debts are estimated using a provision matrix by reference amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred
to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that financial asset, the Company continues to recognize the financial asset and also recognizes a collateralised borrowing for
are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment the proceeds received.
of both the current as well as the forecast direction of conditions at the reporting date.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount
There has been no change in the estimation techniques or significant assumptions made during the current reporting period. and the sum of the consideration received and receivable is recognized in profit or loss. In addition, on derecognition of an
investment in a debt instrument classified as at fair value through other comprehensive income (FVTOCI), the cumulative
Trade debts and other receivables considered irrecoverable are written off. gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on
derecognition of an investment in equity instrument which the Company has elected on initial recognition to measure at
3.7 Derivative financial instruments FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to
profit or loss, but is transferred to retained earnings.
Derivatives that do not qualify for hedge accounting are recognized in the statement of financial position at estimated
fair value with corresponding effect to the statement of profit or loss. Derivative financial instruments are carried as
assets when fair value is positive and liabilities when fair value is negative.

3.10 Financial instruments The Company always recognizes lifetime ECL for trade debts. The ECL on these financial assets are estimated using a
provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions
instrument. Financial assets are de-recognized when the Company loses control of the contractual rights that comprise at the reporting date, including time value of money where appropriate.
the financial assets. Financial liabilities are de-recognized when the obligation specified in the contract is discharged,
cancelled or expired. For all other financial assets, the Company recognizes lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or reporting date.
financial liabilities at fair value through profit or loss are recognized immediately in the statement of profit or loss.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial
3.10.1 Financial assets instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months after the reporting date.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame (i) Significant increase in credit risk
established by regulation or convention in the marketplace. All recognized financial assets are measured subsequently
in their entirety at either amortized cost or fair value, depending on the classification of the financial assets. In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the
Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a
Financial assets at amortized cost default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Company
considers both quantitative and qualitative information that is reasonable and supportable, including historical experience
Instruments that meet the following conditions are measured subsequently at amortized cost: and forward-looking information that is available without undue cost or effort.
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual For financial guarantee contracts, the date that the Company becomes a party to the irrevocable commitment is considered
cash flows; and to be the date of initial recognition for the purposes of assessing the financial instrument for impairment. In assessing
whether there has been a significant increase in the credit risk since initial recognition of a financial guarantee contracts,
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal the Company considers the changes in the risk that the specified debtor will default on the contract.
and interest on the principal amount outstanding.
The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant
Financial assets at fair value through profit or loss (FVTPL) increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant
increase in credit risk before the amount becomes past due.
Financial assets that do not meet the criteria for being measured at amortized cost or FVTOCI are measured at fair value
through the statement of profit or loss (FVTPL). Specifically: The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition
if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined
- Investments in equity instruments are classified as at FVTPL, unless the Company designates an equity investment that is to have low credit risk if:
neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition.
(a) The financial instrument has a low risk of default,
- Debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria are classified as at FVTPL. In (b) The borrower has a strong capacity to meet its contractual cash flow obligations in the near term, and
addition, debt instruments that meet either the amortized cost criteria or the FVTOCI criteria may be designated as at (c) Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce
FVTPL upon initial recognition. If such designation eliminates or significantly reduces a measurement or recognition the ability of the borrower to fulfil its contractual cash flow obligations.
inconsistency (so called ‘accounting mismatch’) that would arise from measuring assets or liabilities or recognizing the
gains and losses on them on different bases. The Company has not designated any debt instruments as at FVTPL. (ii) Definition of default
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or The Company employs statistical models to analyse the data collected and generate estimates of probability of default
losses recognized in the statement of profit or loss. (“PD”) of exposures with the passage of time. This analysis includes the identification for any changes in default rates
and changes in key macro-economic factors across various geographies of the Company.
3.10.2 Impairment of financial assets
The Company recognizes a loss allowance for ECL on trade debts. The amount of ECL is updated at each reporting date
to reflect changes in credit risk since initial recognition of the respective financial assets.

(iii) Credit-impaired financial assets Financial liabilities at FVTPL
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on changes in fair value recognized
flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data in the statement of profit or loss to the extent that they are not part of a designated hedging relationship. The net gain
about the following events: or loss recognized in the statement of profit or loss incorporates any interest paid on the financial liability.
(a) significant financial difficulty of the issuer or the borrower; However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial
(b) a breach of contract, such as a default or past due event (see (ii) above); liability that is attributable to changes in the credit risk of that liability is recognized in statement of other comprehensive
(c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider; create or enlarge an accounting mismatch statement of in the profit or loss. The remaining amount of change in the fair
(d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or value of liability is recognized in the statement of profit or loss. Changes in fair value attributable to a financial liability’s
(e) the disappearance of an active market for that financial asset because of financial difficulties. credit risk that are recognized in statement of other comprehensive income are not subsequently reclassified of the
statement of profit or loss; instead, they are transferred to retained earnings upon derecognition of the financial liability.
(iv) Write-off policy
Gains or losses on financial guarantee contracts issued by the Company that are designated by the Company as at FVTPL
The Company writes off a financial asset when there is information indicating that the counterparty is in severe are recognized in the statement of profit or loss.
financial difficulty and there is no realistic prospect of recovery.
Financial liabilities measured subsequently at amortized cost
(v) Measurement and recognition of ECL
Financial liabilities that are not designated as FVTPL, are measured subsequently at amortized cost using the effective
The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of
there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial future cash payments (including all fees and points paid or received that form an integral part of the effective interest
assets, this is represented by the assets’ gross carrying amount at the reporting date; for financial guarantee contracts, rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where
the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected appropriate) a shorter period, to the amortized cost of a financial liability.
to be drawn down in the future by default date determined based on historical trend, the Company’s understanding of
the specific future financing needs of the debtors, and other relevant forward-looking information. Derecognition of financial liabilities
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled
due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration
at the original effective interest rate. paid and payable is recognized in the statement of profit or loss.
Non-financial assets 3.10.4 Offsetting of financial assets and financial liabilities
The Company assesses at each reporting date whether there is any indication that assets except inventories, biological Financial assets and financial liabilities are offset and the net amount is reported in the financial statements only when
assets and deferred tax asset may be impaired. If such indication exists, the carrying amounts of such assets are reviewed there is legally enforceable right to set-off the recognized amounts and the Company intends either to settle on a net
to assess whether they are recorded in excess of their recoverable amount. Where carrying values exceed the respective basis or to realize the assets and to settle the liabilities simultaneously.
recoverable amount, assets are written down to their recoverable amounts and the resulting impairment loss is recognized
in the statement of profit or loss. The recoverable amount is the higher of an asset's 'fair value less costs to sell' and 3.11 Borrowings and their costs
'value in use'. Borrowings are recognized initially at fair value, net of transaction costs incurred, and subsequently at amortized cost.
Borrowing costs are recognized as an expense in the period in which these are incurred except to the extent of borrowing
Where impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised recoverable costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Such borrowing
amount but limited to the extent of the carrying amount that would have been determined (net of amortization or costs, if any, are capitalized as part of the cost of that asset.
depreciation) had no impairment loss been recognized. Reversal of impairment loss is recognized as income.
3.12 Taxation
3.10.3 Financial liabilities
Income tax expense comprises current and deferred tax. Income tax expense is recognized in the statement of profit or
All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL. loss account.

Current 3.16 Revenue recognition
Provision for current taxation is based on taxability of certain income streams of the Company under presumptive / final Revenue from contracts with customers is recognized at the point in time when the performance obligation is satisfied
tax regime at the applicable tax rates and remaining income streams chargeable at current rate of taxation under the i.e. control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company
normal tax regime after taking into account tax credits and tax rebates available, if any. The charge for income tax includes expects to be entitled to in exchange for those goods.
adjustments to charge for prior year.
Interest income is recognized on a time proportionate basis using the effective rate of return.
Deferred
3.17 Provisions
Deferred tax is recognized using the liability method, providing for temporary difference between the carrying amount
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of Provisions are recognized when the Company has a present, legal or constructive obligation as a result of past event, it
deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
liabilities, using the tax rates enacted or substantively enacted at the reporting date. reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the
current best estimate.
In this regard, the effects on deferred taxation of the portion of income subject to final tax regime is also considered in
accordance with the requirement of Technical Release – 27 of Institute of Chartered Accountants of Pakistan. 3.18 Dividend and appropriation to / from reserves
The Company recognizes deferred tax asset to the extent that it is probable that taxable profits for the foreseeable Dividend distribution to the Company's shareholders and appropriation to / from reserves is recognized in the period in
future will be available against which the assets can be utilized. Deferred tax asset is reduced to the extent that it is no which these are approved.
longer probable that the related tax benefit will be realized.
3.19 Operating segments
3.13 Staff retirement benefits
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
Defined benefit plan decision maker. The BOD has identified different chief operating decision makers responsible for strategic decisions of all
the reportable segments.
The Company operates an unfunded gratuity scheme for its confirmed employees who have completed the minimum
qualifying period of service as defined under the scheme. The Company's obligation under the scheme is determined 3.20 Earnings per share
through actuarial valuation carried out at each year end under the Projected Unit Credit Method. The most recent valuation
of the scheme was carried out as at June 30, 2019. The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of
Remeasurement changes which comprise actuarial gains and losses are recognized immediately in the statement of other ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to
comprehensive income. ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares.
3.14 Trade and other payables
2019 2018
Trade and other payables are recognized initially at fair value plus directly attributable cost, if any, and subsequently Note ----------------- (Rupees in ‘000) ----------------
measured at amortized cost using the effective interest method. 4. PROPERTY, PLANT AND EQUIPMENT
3.15 Foreign currency transactions and translation

Operating fixed assets 4.1 9,610,032 7,344,400
Capital work-in-progress 4.2 260,327 447,528
Transactions in foreign currencies are translated into Pak Rupees at the rates of exchange approximating those prevailing
9,870,359 7,791,928
on the date of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated into Pak Rupees at the rates prevailing on the reporting date.
Gains and losses arising on retranslation are included in the statement of profit or loss for the period.

4.1 Operating fixed assets 4.1 Operating fixed assets
-------------------------------------------------------------------------------------- 2019------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- 2018-------------------------------------------------------------------------------------------
Cost as at Additions/ Cost as at Accumulated Depreciation Accumulated Carrying Rate of Cost as at Additions/ Cost as at Accumulated Depreciation Accumulated Carrying Rate of
Particulars July 01, (Disposals) June 30, depreciation for the depreciation value as at depreciation Particulars July 01, (Disposals) June 30, depreciation for the depreciation value as at depreciation
2018 2019 as at July 01, year/ as at June 30, June 30, 2017 2018 as at July 01, year/ as at June 30, June 30,
2018 (Disposals) 2019 2019 2017 (Disposals) 2018 2018
---------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------- % ---------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------- %
Land: Land:
Leasehold 59,180 23,968 83,148 9,712 599 10,311 72,837 1 Leasehold 59,180 - 59,180 9,065 647 9,712 49,468 1
Freehold 880 - 880 - - - 880 - Freehold 880 - 880 - - - 880 -
Buildings on leasehold land: Buildings on leasehold land:

Mills 2,034,399 125,083 2,159,482 1,019,549 104,143 1,123,692 1,035,790 10 Mills 2,033,114 1,285 2,034,399 906,802 112,747 1,019,549 1,014,850 10
Roads 47,456 - 47,456 20,668 2,679 23,347 24,109 10 Roads 43,488 3,968 47,456 17,765 2,903 20,668 26,788 10
Power plant 178,146 - 178,146 99,077 7,907 106,984 71,162 10 Power plant 178,146 - 178,146 90,292 8,785 99,077 79,069 10
Office 60,513 - 60,513 23,383 3,713 27,096 33,417 10 Office 60,513 - 60,513 19,257 4,126 23,383 37,130 10
Workers' colony 202,539 - 202,539 76,337 12,620 88,957 113,582 10 Workers' colony 202,539 - 202,539 62,315 14,022 76,337 126,202 10
Other 432,500 160,647 593,147 155,066 14,702 169,768 423,379 5 Other 414,001 18,499 432,500 141,055 14,011 155,066 277,434 5
Buildings on freehold land: Buildings on freehold land:

Family colony 179,396 - 179,396 97,275 8,212 105,487 73,909 10 Family colony 179,396 - 179,396 88,150 9,125 97,275 82,121 10
Plant and machinery 10,672,861 2,166,657 12,474,195 5,947,979 514,901 6,141,994 6,332,201 10 Plant and machinery 9,857,740 957,830 10,672,861 5,594,075 476,474 5,947,979 4,724,882 10
(365,323) (320,886) (142,709) (122,570)
Power plant 1,247,234 536,458 1,783,692 731,910 58,355 790,265 993,427 10 Power plant 1,111,140 151,094 1,247,234 699,969 42,249 731,910 515,324 10
(15,000) (10,308)
Electric installations 456,331 958 457,289 270,530 18,636 289,166 168,123 10 Electric installations 451,371 4,960 456,331 250,094 20,436 270,530 185,801 10
Tools and equipment 13,774 19,636 33,410 10,937 284 11,221 22,189 10 Tools and equipment 13,774 - 13,774 10,622 315 10,937 2,837 10
Furniture and fittings 24,895 4,898 29,793 13,444 1,309 14,753 15,040 10 Furniture and fittings 24,895 - 24,895 12,172 1,272 13,444 11,451 10
Computer equipment 24,675 6,148 30,749 18,694 3,160 21,798 8,951 30 Computer equipment 21,444 3,614 24,675 17,260 1,701 18,694 5,981 30
(74) (56) (383) (267)
Office equipment and installations 23,470 1,762 25,217 12,943 1,136 14,074 11,143 10 Office equipment and installations 22,694 924 23,470 11,933 1,133 12,943 10,527 10
(15) (5) (148) (123)
Fork lifters and tractors 38,094 - 38,094 30,973 1,424 32,397 5,697 20 Fork lifters and tractors 38,094 - 38,094 29,193 1,780 30,973 7,121 20
Vehicles 248,197 72,976 273,447 94,176 37,796 98,513 174,934 20 Vehicles 154,649 122,021 248,197 88,021 20,946 94,176 154,021 20
(47,726) (33,459) (28,473) (14,791)
Fire fighting equipment 11,847 - 11,847 6,724 512 7,236 4,611 10 Fire fighting equipment 11,847 - 11,847 6,155 569 6,724 5,123 10
June 30, 2019 16,080,114 3,119,191 18,786,167 8,735,714 794,827 9,176,135 9,610,032 June 30, 2018 15,002,632 1,264,195 16,080,114 8,147,489 736,284 8,735,714 7,344,400
(413,138) (354,406) (186,713) (148,059)
Additions to operating fixed assets include transfers from capital work-in-progress amounting to Rs. 3.01 billion. Additions to operating fixed assets include transfers from capital work-in-progress amounting to Rs. 1.26 billion.

2019 2018 4.2 Capital work-in-progress
Note ----------------- (Rupees in ‘000) ----------------
4.1.1 Depreciation charged for the year has been allocated as under:
Gadoon Amazai Karachi Project
Civil Plant and Vehicles Markup Sub-total Civil Plant and Vehicles Markup Sub-total Total
Cost of sales 25.1 765,781 715,545 works machinery capitalized works machinery capitalized
Administrative expenses 27 29,046 20,739 ---------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------
794,827 736,284 Year ended June 30, 2019
Balance as at July 1, 2018 - 241,015 5,365 42,217 288,597 100,284 51,809 5,223 1,615 158,931 447,528
4.1.2 Disposal of operating fixed assets having net book value in excess of Rs. 500,000
Additions during the year 69,366 1,189,221 48,376 16,841 1,323,804 262,856 1,189,245 14,011 36,980 1,503,092 2,826,896
Transfers to operating fixed assets (48,168) (1,389,481) (53,741) (58,382) (1,549,772) (172,824) (1,241,054) (19,234) (31,213) (1,464,325) (3,014,097)
Description Cost Accumulated Carrying Sale Gain/(loss) Mode of disposal Purchaser
depreciation value proceeds
Balance as at June 30, 2019 21,198 40,755 - 676 62,629 190,316 - - 7,382 197,698 260,327
---------------------------- (Rupees in '000) -------------------------------
Year ended June 30, 2018
Plant and Machinery 3,710 2,160 1,550 650 (900) Negotiation M/S AMS Enterprises
3,301 1,286 2,015 368 (1,648) Negotiation M/S AMS Enterprises
Balance as at July 1, 2017 - 239,897 7,924 41,739 289,560 12,711 288,366 686 1,228 302,991 592,551
Additions during the year 5,253 713,657 109,870 10,302 839,082 106,072 150,045 14,129 5,306 275,552 1,114,634
Transfers to operating fixed assets (5,253) (712,539) (112,429) (9,824) (840,045) (18,499) (386,602) (9,592) (4,919) (419,612) (1,259,657)
8,457 7,530 927 150 (777) Negotiation M/S AMS Enterprises
Balance as at June 30, 2018 - 241,015 5,365 42,217 288,597 100,284 51,809 5,223 1,615 158,931 447,528
8,331 7,509 822 150 (672) Negotiation M/S AMS Enterprises 5. BIOLOGICAL ASSETS
As at June 30, 2019, the Company held 265 mature livestock (including pregnant livestock) able to produce milk and 351
immature livestock which are being raised to produce milk in the future. The Company also held 12 breeding bulls.
The valuation of dairy livestock as at June 30, 2019 has been carried out by an independent valuer. In this regard, the
valuer examined the physical condition of the livestock, assessed the farm conditions and relied on the representations
made by the Company as at June 30, 2019. Further, in the absence of an active market of the Company’s dairy livestock
in Pakistan, market and replacement values of similar live stock from active markets in USA, EU and Australia, have been
8,457 7,570 887 750 (138) Negotiation A.J Textile Mills Limited
used by the independent valuer as a basis of his valuation. The valuation is considered to be level 2 in the fair value hierarchy
due to observable market data other than quoted prices in active markets.
Gain arising from changes in fair value of livestock amount to Rs. 77.95 million.
8,457 7,578 879 583 (296) Negotiation M/S AMS Enterprises 2019 2018
8,350 7,038 1,312 583 (729) Negotiation M/S AMS Enterprises Note ----------------- (Rupees in ‘000) ----------------
181,464 151,138 30,326 6,976 (23,352) 6. LONG-TERM ADVANCE
- Considered doubtful
Vehicle 1,186 486 700 1,075 375 Company policy Mr. Sadat Khan - Employee
6,700 6,142 558 2,900 2,342 Negotiation M/S Dhanji Trading Company Investment in a joint venture - Advance 6.1 66,667 66,667
2,148 1,463 685 1,503 818 Company policy Mr. Asad Ansari - Employee Less: Provision against advance (66,667) (66,667)
5,257 1,005 4,252 4,500 248 Negotiation Mr. Syed Shahid Khursheed Ali - -
1,746 679 1,067 1,067 - Negotiation Yunus Energy Limited - Associate
1,557 1,041 516 1,090 574 Company policy Mr. Muhammad Imran - Employee
1,405 269 1,136 1,408 272 Company policy Mr. Naeem Qaiser - Employee 6.1 This represents first and second tranche of advance for a Joint Venture Project of Rs. 4,250 million. The principal activity
19,999 11,085 8,914 13,543 4,629 of the Joint Venture Project was acquisition and development of a real estate project in Karachi through a Joint Venture
Company. The Company's share in this Joint Venture project is ten percent. Currently, the future of this project is not
Total 201,463 162,223 39,240 20,519 (18,723) certain and the recovery of this amount is considered doubtful.
4.1.3 Leasehold and freehold land are situated at the manufacturing facilities having combined area of 137.8 acres.

2019 2018 2019 2018
Note ----------------- (Rupees in ‘000) ---------------- Note ----------------- (Rupees in ‘000) ----------------
7. LONG - TERM LOANS 8.2 Investment in associates - equity method
- Considered good
ICI Pakistan Limited (ICIP) 8.3 1,761,406 1,661,022
Loan to employees 7.1 Lucky Holdings Limited (LHL) 8.4 4,284 185,341
Yunus Energy Limited (YEL) 8.5 939,906 840,557
Related parties - Key management personnel 31,781 21,757 2,705,596 2,686,920
Other employees 31,734 33,017
63,515 54,774
Less: current portion 13 (19,838) (19,443) 8.2.1 Investment in Lucky Holdings have been calculated after incorporating the effect of transaction as appearing in note 8.1 to these
43,677 35,331 unconsolidated financial statements.
7.1 These are interest free loans recoverable in monthly installments over a period of three years. These loans are secured 8.2.2 The Company's investment in ICIP, LHL and YEL is less than 20% but these are considered associates as the Company has
against employees' retirement benefit obligation. significant influence over the financial and operating policies through representation on the board of directors of these companies.
7.2 The maximum amount of loans to the key management personnel outstanding at the end of any month during the year 8.2.3 The principal place of business of all the associates is located in Pakistan.
ended June 30, 2019 was Rs. 48.08 million (2018: Rs. 41.49 million). 2019 2018
2019 2018 ----------------- (Rupees in ‘000) ----------------
Note ----------------- (Rupees in ‘000) ----------------
8. LONG - TERM INVESTMENTS 8.3 Investment in ICI Pakistan Limited (ICIP) - at equity method
Investment in subsidiary - cost 8.1 164,216 - Number of shares held 5,980,917 5,980,917
Investments in associates - equity method 8.2 2,705,596 2,686,920
Cost of investment (Rupees in '000) 1,114,963 1,114,963
2,869,812 2,686,920
Fair value of investment (Rupees in '000) 3,184,659 4,793,705
8.1 Investment in subsidiary - cost
Ownership interest 6.48% 6.48%
This represents the investment in Gadoon Holdings (Private) Limited (GHPL) – a wholly owned subsidiary. The principal Balance as at July 01 1,661,022 1,571,147
place of business of GHPL is in Pakistan. Share of profit 176,596 213,688
Share of other comprehensive income / (loss) 1,540 (16,157)
During the current year, a Scheme of Arrangement (Scheme) was filed by the management of Lucky Holdings Limited Dividend received (77,752) (107,656)
(LHL) - an associate, before the Honourable Sindh High Court (SHC), after the required approvals from the Board of Balance as at June 30 1,761,406 1,661,022
Director and shareholders of LHL.
The financial year end of ICIP is June 30, 2019. Summarized financial highlights of ICIP and the related share of the Company
The SHC vide its order dated April 11, 2019 sanctioned the Scheme effective from start of business on July 01, 2018. A as at year end are as follows:
certified copy of the Court order has been filed by LHL with SECP.
2019 2018
----------------- (Rupees in ‘000) ----------------
The Scheme, amongst other arrangements, determines LHL Demerged Undertakings as primarily comprising the assets,
liabilities and obligations of LHL relating to its underlying investment in ICI Pakistan Limited - an associate. Under the
Scheme, the share of LHL Shareholders in LHL Demerged Undertakings proportionate to their respective shareholding Total assets 49,441,421 45,012,532
in LHL has been amalgamated with and into their respective wholly owned subsidiary companies and their proportionate Total liabilities (28,048,855) (24,979,698)
shares in LHL to that extent have been cancelled. Consequently, out of Company's total investments in LHL, an amount
of Rs. 164.12 million have been transferred to GHPL. Net assets 21,392,566 20,032,834
Company's share of net assets 1,386,238 1,298,128
8.1.1 Summarized effect of restructuring:
Revenue 59,382,411 49,992,068
Cancellation of shares of LHL (refer note 8.4) Rs. 184.39 million; reduction in deferred tax liability pertaining to LHL Rs. Profit for the year 2,536,630 3,297,654
16.48 million; and amount transferred as investment in GHPL Rs. 164.12 million. This has resulted in loss of Rs. 3.79 Company's share of profit 164,374 213,688
million as recognized in revenue reserves of the Company.
Other comprehensive income / (loss) for the year 23,770 (249,330)
Company's share of other comprehensive income / (loss) 1,540 (16,157)

2019 2018 2019 2018
Note ----------------- (Rupees in ‘000) ---------------- ----------------- (Rupees in ‘000) ----------------
8.4 Investment in Lucky Holdings Limited (LHL) - at equity method
Total assets 12,467,075 12,392,073
Number of shares held 8,580 1,500,000 Total liabilities (7,851,249) (8,272,755)
Cost of investment (Rupees in ‘000) 429 74,920 Net assets 4,615,826 4,119,318
Ownership interest 1% 1% Company's share of net assets 922,242 823,040
Balance as at July 01 185,341 164,843 Revenue 2,939,540 2,601,285

Cancellation of shares due to restructuring 8.1.1 (184,396) - Profit for the year 1,420,174 1,205,903
Share of profit 3,339 22,301
Company's share of profit 284,034 241,181
Share of other comprehensive loss - (1,803)
Balance as at June 30 4,284 185,341 Other comprehensive (loss) / income for the year (6,379) 1,039
Company's share of other comprehensive (loss) / income (1,275) 208
The financial year end of LHL is June 30, 2019. LHL results for the year are not comparable with last year due to restructuring
as disclosed in note 8.2.1 of these financial statements. Summarized financial highlights of LHL as at year end and the related 9. STORES, SPARES AND LOOSE TOOLS
share of the Company are as follows:
2019 2018
Stores 246,236 261,155
----------------- (Rupees in ‘000) ----------------
Spares in
- hand 350,002 291,393
Total assets 775,242 50,773,791 - transit 61,366 47,810
Total liabilities (375,827) (27,269,327) Loose tools 1,035 1,062
Net assets 399,415 23,504,464 658,639 601,420
Less: Provision for slow moving stores, spares and loose tools (52,101) (52,101)
Company's share of net assets 3,994 235,045
606,538 549,319
Revenue 423,750 49,992,068
Profit for the year 333,941 3,032,209 10. STOCK-IN-TRADE
Company's share of profit 3,339 22,301
Raw material in
Other comprehensive loss for the year - (243,169)
- hand 6,080,886 5,838,903
Company's share of other comprehensive loss - (1,803) - transit 632,267 477,945
6,713,153 6,316,848
8.5 Investment in Yunus Energy Limited (YEL) - at equity method Work-in-process 345,359 286,033
Finished goods
Number of shares held 61,136,500 61,136,500 - Yarn 1,261,788 707,074
- Knitted fabric 41,104 44,712
Cost of investment (Rupees in ‘000) 611,365 611,365
- Waste 36,522 114,894
Ownership interest 19.98% 19.98% 1,339,414 866,680
8,397,926 7,469,561
Balance as at July 01 840,557 736,725
Share of profit 284,034 241,181 11. CONSUMABLES
Share of other comprehensive (loss) / income (1,275) 208
Dividend received (183,410) (137,557)
Feed 9,186 -
Balance as at June 30 939,906 840,557
Unprocessed milk 249 -
9,435 -
The financial year end of YEL is June 30, 2019. Summarized financial highlights of YEL as at year end and the related share of
the Company are as follows:

2019 2018 13.1 As at June 30, 2018 the balance included advance given for pilot project of dairy farm. Since the dairy project has started its
Note ----------------- (Rupees in ‘000) ---------------- commercial operations on and from June 30, 2019 (refer note 5 to the financial statements), it has now been reclassified in
respective financial statement line items.
12. TRADE DEBTS
13.2 This represents subordinated loan and advance against shares in following companies. The shares will be issued in due course
Considered good in accordance with the regulatory requirements.
2019 2018
Foreign - Secured 1,103,762 861,002 Note ----------------- (Rupees in ‘000) ----------------
Local - Unsecured 12.1 2,413,985 1,603,179
3,517,747 2,464,181 13.2.1 Subordinated loan
Considered doubtful
Tricom Solar Power (Private) Limited 13.3 6,599 -
Local - Unsecured 4,093 4,093
Tricom Wind Power (Private) Limited 13.3 10,773 -
Provision for loss allowance 38.2.1 (4,093) (4,093)
Yunus Wind Power Limited 13.3 5,149 -
- -
22,521 -
3,517,747 2,464,181
13.2.2 Advance against shares

12.1 Trade balances outstanding from associated companies are as:
Tricom Solar Power (Private) Limited - 4,534

Lucky Textile Mills Limited 17,103 4,634
Tricom Wind Power (Private) Limited 13.3 39,566 1,797
Lucky Knits (Private) Limited 1,798 1,745
Yunus Wind Power Limited - 594
18,901 6,379
39,566 6,925
12.2 The maximum amount due from related parties, at the end of any month during the year were Rs. 78.49 million (June 30, 2018:
13.3 As part of strategic investments, the Company had given subordinated loan and advance against issuance of shares to Tricom
Rs. 181.8 million). The transactions with associated companies are carried on agreed terms.
Solar Power (Private) Limited, Tricom Wind Power (Private) Limited and Yunus Wind Power Limited. However, during the current
year, the Company has obtained extension from the shareholders regarding their previous approval (dated: April 13, 2018), in
12.3 Following are the details of debtors in relation to export sales:
respect of investment in the above mentioned companies, as the time frame of 12 months from the passing of special resolution
as required under Regulation 6 of the "Companies (Investment in Associated Companies or Associated Undertakings) Regulations,
2019 2018 2017" was expiring and the Company was unable to invest the entire approved amounts in any of these three Companies, on
Jurisdiction Category Note ----------------- (Rupees in ‘000) ---------------- account of remaining legal formalities.
Asia Letter of credit 456,919 658,407

However, the Company is actively pursuing this matter to ensure that investment is made within the approved time.
Contract 183,073 -
Europe Letter of credit 27,008 -
2019 2018
Contract 10,510 46,618
Central America Letter of credit - 154,242 Note ----------------- (Rupees in ‘000) ----------------
14. OTHER RECEIVABLES
Contract 103,743 -
North America Contract 322,509 1,735
Considered good
Sales tax 430,644 433,623
Total Letter of credit 587,670 812,649
Federal excise duty 26,201 27,762
Contract 516,092 48,353
Claims receivable 4,330 33,865
Rebate receivable on export sales 256,865 460,723
13. LOANS AND ADVANCES
Others 1,841 2,104
- Unsecured - considered good
719,881 958,077
Considered doubtful
Current portion of long term loans 7 19,838 19,443
Claims receivable 23.1.2 20,000 20,000
Advance to employees 13,203 8,457
Sales tax 14.1 52,439 52,439
Advance to suppliers and contractors 13.1 89,868 251,764
Others 14.2 5,600 5,600
Letters of credit, fee and expenses 921 407
78,039 78,039
Subordinated loan 13.2.1 22,521 -
Provision for doubtful other receivables (78,039) (78,039)
Advance against shares 13.2.2 39,566 6,925
- -
LC Margin 14,074 -
719,881 958,077
199,991 286,996
14.1 Pursuant to S.R.O. 179 of 2013 dated March 7, 2013, the Company filed a special sales tax return and paid Rs. 52.4 million being 2019 2018
2% of the value of zero rated supplies made by the Company during the period from April 2011 to February 2013. The said ----------------- (Rupees in ‘000) ----------------
amount has been paid by the Company under protest and it has filed an appeal before the tax authority for refund of such amount.
However, being prudent, the Company has fully provided the amount in these financial statements. 18. LONG TERM FINANCE
- Banking companies - secured
14.2 The Company received a demand cum show cause notice for the amount of Rs. 13.17 million from Custom Authorities deleting
their Manufacturing Bond Entry for import of Polyester Staple Fiber (PSF). The Company has paid Rs. 5.61 million under protest Long term finance 2,675,091 594,338
against this demand and also made provision for the same amount. Since the goods were imported for re-export, the FBR has Less: Current portion of long term finance (52,728) -
rectified the anomaly through S.R.O. 688(I)/2010 dated July 27, 2010. Management believes that no further provision is required 2,622,363 594,338
for the remaining amount and the amount so paid shall become refundable.
The Company has entered into a long term finance agreement with commercial banks, with an approved limit of Rs. 3.09 billion
15. SALES TAX REFUND BOND (June 30, 2018: Rs. 605 million). The facility carries a mark-up ranging from SBP Base Rate + 0.1% to SBP Base Rate + 0.6%
payable on a quarterly basis (June 30, 2018: SBP Base Rate + 0.1% to SBP Base Rate + 0.3% payable on a quarterly basis). The
Sales tax refund bonds are issued by the Federal Board of Revenue (FBR) against sales tax refundable of Rs. 110 million. The tenure of this facility is 10 years including grace period of 2 years, starting from July 10, 2017. The Company has drawn Rs.
bonds so issued bear profit @ 10% per annum. Profit is accrued in the statement of profit or loss on sales tax refund bonds for 2.67 billion upto June 30, 2019 (June 30, 2018 Rs. 594 million).
the period amounting to Rs. 0.79 million.
2019 2018 The above financing agreement is secured by pari passu charge over plant and machinery of the Company.
Note ----------------- (Rupees in ‘000) ----------------
2019 2018
16 CASH AND BANK BALANCES Note ----------------- (Rupees in ‘000) ----------------
Cash in hand 7,950 8,119 19. RETIREMENT BENEFIT OBLIGATION

Cash with banks in - current account 16.1 98,347 180,744
106,297 188,863 Retirement benefit obligation 19.1 562,984 533,769
16.1 It includes balances in foreign currency bank accounts amounting to US Dollars 7,126 equivalent to Rs. 1.16 million (2018: US 19.1 Staff retirement gratuity
Dollars 7,126 equivalent to Rs. 0.87 million).
The Projected Unit Credit method based on following significant assumptions was used for valuation of the scheme. The basis
17. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL of recognition together with details as per actuarial valuation are as under:
2019 2018 2019 2018 2019 2018

----------- (Number of Shares) ----------- ------------ (Rupees in ‘000) ------------
Valuation discount rate 14.25% 8%
6,000,000 6,000,000 Ordinary shares of Rs. 10 each fully paid in cash 60,000 60,000 Salary increase rate (Long term) 12.25% 8%
Salary increase rate (Short term) 9.25% for 3 years 12% for 2 years
17,437,500 17,437,500 Ordinary shares of Rs. 10 each issued 174,375 174,375
Mortality rate Adjusted Adjusted
as fully paid bonus shares
SLIC 2001-05 SLIC 2001-05
4,592,083 4,592,083 Ordinary shares of Rs. 10 each issued as fully paid in 45,921 45,921
pursuant of amalgamation 2019 2018
28,029,583 28,029,583 280,296 280,296 ----------------- (Rupees in ‘000) ----------------
19.2 Liability recognized in the statement of financial position

17.1 As at June 30, 2019, Y.B. Holdings (Private) Limited (the Holding Company) hold 19,499,741 (2018: 19,499,741) ordinary shares
of Rs. 10 each.
Present value of defined benefit obligation 562,984 533,769
17.2 The Company has one class of ordinary shares which carries no right to fixed income. The holders are entitled to receive dividends
as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with
regard to the Company's residual assets.

2019 2018 Withdrawal risk: The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit
Note ----------------- (Rupees in ‘000) ---------------- obligation. The movement of the liability can go either way.
19.3 Movement in liability during the year
19.8 The weighted average duration of defined benefit obligation as at June 30, 2019 is 31.18 years (2018: 32.7 years).
Expense recognized in the statement of profit or loss 19.4 212,939 180,700 2019 2018
Gratuity transferred from dairy farm 407 - Note ----------------- (Rupees in ‘000) ----------------
Total remeasurements recognized in 19.9 Expected maturity analysis of undiscounted retirement benefit plans
the statement of other comprehensive income 19.5 (73,048) (7,297)
Benefits paid (111,083) (85,948) Undiscounted payments
Balance as at June 30 562,984 533,769 Year 1 137,663 104,253
More than 1 year 529,399 486,493
19.4 Expense recognized in the statement of profit or loss
20. DEFERRED TAX LIABILITIES
Current service cost 174,681 148,433
Interest cost 38,258 32,267 Balance as at June 30 20.1 889,350 696,275
212,939 180,700
19.5 Total remeasurements recognized in the statement of 20.1 Deferred tax liability comprises of taxable / (deductible) temporary differences in respect of following:
other comprehensive income
2019 2018
Actuarial gain on liability arising on
----------------- (Rupees in ‘000) ---------------
- financial assumptions (51,546) - Deferred credits / (debits) arising due to:
- demographic assumptions - 3,028 - Accelerated tax depreciation on property, plant and equipment 894,906 719,199
- experience adjustments (21,502) (10,325) - Provision against retirement benefit obligation (111,364) (101,253)
(73,048) (7,297) - Provision against long term advance (13,187) (12,647)
- Provision against stores, spares and loose tools (10,306) (9,883)
19.6 Sensitivity analysis - Provision against doubtful other receivables (15,437) (14,803)
- Gain arising from changes in fair value of livestocks 22,605 -
The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions - Share of profit from associates 122,133 115,662
occurring at the end of the reporting period, while holding all other assumptions constant: 889,350 696,275
Increase / (decrease) in defined 20.2 The income tax department did not allow credit of unabsorbed tax depreciation worked out for the tax holiday period from
benefit obligation 1990 to 2000 against the profits of post tax holiday period. The Company filed appeal before the Commissioner of Inland
Change in Increase in Decrease in Revenue (Appeals) and Appellate Tribunal Inland Revenue. In 2012, the matter was decided in favour of the Company but
assumption assumption assumption appeal effect order had not been given by the tax department. The income tax department filed appeal in Peshawar High
% ---------------- (Rupees in ‘000) --------------- Court and the matter is pending adjudication. Deferred tax asset approximately of Rs. 133.52 million on tax depreciation
related to tax exempt period from 2010 to 2012 has also not been recorded due to uncertainty of recovery.
Discount rate 1 (6,600) 5,918
Salary growth rate 1 8,749 (9,490)
2019 2018
Note ----------------- (Rupees in ‘000) ----------------
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the 21 TRADE AND OTHER PAYABLES
Projected Unit Credit method at the end of the reporting period, which is the same as that applied in calculating the defined
benefit obligation liability recognized in the statement of financial position. Creditors 485,154 459,588
Foreign bills payable 465,188 132,822
19.7 The gratuity scheme exposes the Company to the following risks: Advance from customers 27,811 52,075
Accrued liabilities 2,503,791 2,305,943
Longevity risk: The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan Withholding income tax 1,008 1,388
level over the entire retiree population. Sales tax 12,035 11,391
Workers' welfare fund 105,728 96,213
Salary increase risk: The most common type of retirement benefit is one where the benefit is linked with final salary. The risk Workers' profit participation fund 21.1 53,231 642
arises when the actual salaries are higher than expectation and impacts the liability accordingly. Others 41,749 28,417
3,695,695 3,088,479

2019 2018 In September 2014, the Federal Government promulgated GIDC Ordinance No. VI of 2014 to circumvent earlier decision of
Note ----------------- (Rupees in ‘000) ---------------- the Supreme Court on the ground that GIDC was a 'Fee' and not a 'Tax'. In May 2015, the said Ordinance was approved in the
21.1 Workers' profit participation fund Parliament and became an Act.
Balance as at July 1 642 57,102 The Company has challenged GIDC Act, 2015 and filed writ petition in the Peshawar High Court (PHC) challenging the vires
Provision made during the year 29 87,148 77,825 and legality of the levy and demand of GIDC including its retrospective application. The Court has granted stay against charging
Interest on funds utilized in business 28 6 14,302 of the GIDC under the said Act.
Payments made during the year (34,565) (148,587)
Balance as at June 30 53,231 642 On May 31, 2017, PHC dismissed the said petition, however, the Company has obtained interim relief from the payment of
GIDC through monthly bills. Further, the Company has filed Civil Petition for Leave to Appeal (CPLA) in honorable Supreme
22. SHORT TERM BORROWINGS Court, against the said order of PHC.
Banking companies - secured
Running finance under mark-up arrangements 22.1 8,629,697 6,819,999 Since this issue is being faced by industry at large, management is of the view that decision of the case will be in its favour
Short term finances 22.2 695,250 2,889,750 and there is no need to maintain any provision against this liability.
Foreign currency loan against: - Export re-finance 22.3 601,736 155,157
9,926,683 9,864,906 23.1.4 National Accountability Bureau (NAB) had filed a reference on February 2, 2016 against Executives of the Company in the
Accountability Court (Peshawar), alleging that the Company purchased electricity from Peshawar Electric Supply Company
(PESCO) at a cheaper price and at the same time it sold the electricity to PESCO at a higher price. The management believes
22.1 Facilities for running finance, import finance, export finance and export refinance are available from various commercial banks that the allegations are false, unsubstantiated and unfounded. The case is devoid of merits as the Company sold the electricity
upto Rs. 28.61 billion (2018: Rs. 27.78 billion). For running finance facility, the rates of mark-up range between KIBOR + 0.00% after required approvals, licenses and at price on which all captive power plants were selling electricity to distribution companies
to KIBOR + 0.50% per annum (2018: KIBOR + 0.00% to KIBOR + 0.20% per annum). These are secured against hypothecation in accordance with approved policy of Government of Pakistan.
of stock, receivables and plant and machinery.
23.1.5 The Finance Act 2010 had introduced Clause 126F in Part I of Second Schedule of Income Tax Ordinance, 2001 (the Ordinance)
22.2 This represents short term finance facilities under sub-limit of the facilities mentioned in note 22.1 from various commercial exempting the tax on profits and gains derived by a tax payer located in the ‘war on terror’ affected areas of Khyber
banks having mark-up ranging between KIBOR - 0.05% to KIBOR + 0.00% per annum (2018: KIBOR - 0.12% to KIBOR + 0.00% Pakhtunkhwa. As a result of this change, the income of the Company including tax on export proceeds for tax years 2010 to
per annum). These are secured against hypothecation of stock, charge on receivables and plant and machinery. 2012 was exempt. However, the said clause does not specifically address the exemption of turnover tax under Section 113.
In this regard, some companies located in the affected areas filed a petition in PHC against the recovery of turnover tax seeking
22.3 The rate of mark-up on export re-finance is 2.1% to 2.5% (2018: 2.1%). a declaration regarding Section 113 and 159 as discriminatory and contrary to the Constitution and the Court granted a relief
restraining the recovery of turnover tax. The Company along with other companies in the affected areas also filed the petition
23. CONTINGENCIES AND COMMITMENTS on the same grounds. The PHC in its order dated July 19, 2012, directed the respondents to extend the benefit to the Company.
Subsequently, the Chief Commissioner Inland Revenue filed an appeal in the Supreme Court of Pakistan against the Company
23.1 Contingencies and other tax payers of the affected areas, which is pending for adjudication.
23.1.1 Outstanding guarantees given on behalf of the Company by commercial banks in normal course of business amounting to Rs. Through the Finance Act, 2015, a sub clause (XX) of clause 11(A) of the Second Schedule to the Ordinance has been added
1,129.55 million (2018: Rs. 990.04 million). which gives relief to the Company that Section 113 does not apply to the tax payers falling under clause 126F. However, the
matter of tax charged on other than local sales i.e. tax on export, is still pending for adjudication. Based on the judgment of
23.1.2 In prior years, Sui Northern Gas Pipeline Limited (SNGPL) charged the Company with an amount of Rs. 168 million on account the PHC management believes that the Company will not be subject to tax on export sales and hence, has not made any
of under billing of gas. The Company lodged a complaint with the Appellate Authority (the Authority) against SNGPL and on provision on account of tax on export sales for the years ended June 30, 2010, 2011 and 2012.
January 21, 2010, the Authority partly admitted the plea of the Company and allowed partial relief of Rs. 53.89 million. The
Company has paid Rs. 113.63 million in prior years. Subsequent to the decision of the Authority, both the Company (to claim 23.1.6 The Income Tax return of Fazal Textile Mills Limited (FTML) (previously merged with the Company in the year 2015) for the
additional relief) and SNGPL (against the relief provided) have filed appeals with higher authorities against the decision. tax year 2013 was amended under section 122(5A) by Additional Commissioner Income Revenue (ACIR) vide its order dated
Management is of the view that no further liability will arise as it is expected that the final outcome of this case will be in its favour. March 4, 2014 on account of certain disallowances primarily against Worker’s Welfare Fund (WWF). The Company filed an
appeal against the amended order against which Commissioner Inland Revenue Appeals (CIRA) allowed some relief to the
23.1.3 The Company filed a suit before the High Court of Sindh, challenging the applicability of Gas Infrastructure Development Cess Company. The Company being dissatisfied had filed an appeal in the Appellate Tribunal which is pending adjudication. On the
(GIDC) Act, 2011. The Sindh High Court has restrained the Federation and gas companies from recovering GIDC over and other hand Federal Board of Revenue (FBR) has selected said return for the audit under sections 177 and 214C. In pursuance
above Rs. 13 per MMBTU. On August 22, 2014, the Supreme Court of Pakistan declared that the levy of GIDC as a tax was to the aforementioned audit the amended assessment order was further amended by the Deputy Commissioner Inland
not levied in accordance with the Constitution and hence not valid. Revenue (DCIR) making additions of Rs 1.63 million on account of certain disallowed expenses, levied WWF of Rs. 9.16 million
and also restricted tax refundable to the amount of advance tax thereby reducing it by Rs. 48.89 million. The Company had
filed an appeal before CIRA against the said audit on the grounds that the assessment was prejudicially re-amended without
evaluating current status. The appeal is pending adjudication.

Based on the opinion of tax advisors of the Company, the management believes that the aforementioned matters will ultimately 2019 2018
be decided in the favour of the Company. Accordingly, no provision is required to be made against the said amounts in these Note ----------------- (Rupees in ‘000) ----------------
financial statements. 24. SALES - net
23.1.7 The Assistant Commissioner Inland Revenue (ACIR), Peshawar, has passed an order for the Tax Year 2015 which was under Export
audit. The Company has preferred an appeal before the Commissioner Inland Revenue (Appeals) (CIRA) against the frivolous
demand created by the ACIR. CIRA has given partial relief and the tax demand has now been reduced to Rs. 462 million. The - Yarn 6,416,132 8,853,725
Company has filed a second appeal before the Appellate Tribunal Inland Revenue (ATIR) for relief of remaining unjustified additions - Knitted fabric 1,318,881 930,130
for which the order was received on December 14, 2018 in favour of the Company. Although, there were some difference of - Waste 702,111 649,668
legal opinion between the Judicial and Accountant Member, therefore an independent member of Tribunal have to be appointed 8,437,124 10,433,523
to resolve the matter. According to the Company’s legal counsel, the Company has a strong legal ground and there is likelihood Commission on direct export sales (91,278) (103,972)
that the same will be decided in its favour. Accordingly, no provision is required to be made in these financial statements. 8,345,846 10,329,551
Local
23.1.8 The Additional Commissioner Inland Revenue has issued an Order dated April 30, 2019 under section 122(9) of the Ordinance
for the Tax Year 2013, created the demand of Rs. 60 million on the issues of carried forward unabsorbed depreciation and - Yarn 22,381,325 16,578,091
tax credit under section 65B of the Ordinance, which actually pertains to the Tax Year 2012, hence, barred by time for - Knitted fabric 139,921 489,645
assessment. In response, the Company has also filed an appeal before Commissioner Inland Revenue – Appeals against the - Waste 480,266 271,507
said impugned order. 23,001,512 17,339,243
Commission on local sales (117,587) (75,572)
Further, the Company has also moved forward to file the Review in Writ Petition before the honorable PHC, after receiving Sales tax (12,292) (38,535)
impugned judgement passed in utter haste without mentioning proper argument presented by the Company’s legal counsel, 22,871,633 17,225,136
who is assertive to steer the decision with firm legal and factual arguments, in favour of the Company. Thus, no additional 31,217,479 27,554,687
provision is recorded in this regards.
2019 2018 25. COST OF SALES
----------------- (Rupees in ‘000) ----------------
23.1.9 Others Opening stock - finished goods 866,680 1,280,468
Cost of goods manufactured 25.1 28,797,490 25,196,009
Export bills discounted with recourse 1,277,307 2,562,265 Less: Closing stock - finished goods 10 (1,339,414) (866,680)
Local bills discounted 192,333 126,873 28,324,756 25,609,797
Indemnity bond in favour of Collector of Customs against imports 5,906 4,105
Post-dated cheques in favour of Collector of Customs against imports 974,071 456,182
23.2 Commitments
Letters of credit opened by banks for:

Plant and machinery 836,937 254,806
Raw materials 225,272 267,771
Stores and spares 38,500 63,280
Further, the Company has outstanding contractual commitment under sponsors support agreement, for debt servicing of
two loan installments upto Rs. 338 million on behalf of Yunus Energy Limited, an associated undertaking.

2019 2018 2019 2018
Note --------------- (Rupees in ‘000) --------------- Note ----------------- (Rupees in ‘000) ----------------
25.1 Cost of goods manufactured 26. DISTRIBUTION COST
Raw material consumed 25.1.1 21,072,612 17,713,068 Logistic and related charges 275,165 304,599
Salaries, wages and benefits 25.1.2 2,296,835 2,048,132 Loading and others 30,186 30,637
Stores, spares and loose tools 739,476 622,643 Fee and subscriptions 20,601 25,285
Packing material 565,069 572,185 Salaries, wages and benefits 26.1 42,595 28,691
Rent, rates and taxes 3,108 2,832 Bank charges on export documents 13,824 24,962
Doubling charges 11,260 13,969 Travelling and conveyance 7,227 11,211
Dyeing, stitching and knitting charges 128,914 164,159 Vehicles running and maintenance 2,344 1,851
Mixing charges 32,594 31,004 Insurance 4,886 5,117
Depreciation 4.1.1 707,426 669,202 Communication 3,102 2,585
Fuel and power 25.1.3 3,160,387 3,263,816 Entertainment 58 108
Repairs and maintenance 17,283 23,103 Printing and stationary 430 392
Printing and stationary 418 350 Repairs and maintenance 71 126
Legal and professional 3,453 8,525 Others 1,275 1,747
Entertainment 6,561 5,904 401,764 437,311
Fee and subscriptions 8,270 7,893
Insurance 60,610 36,637
Travelling and conveyance 26,395 20,332 26.1 Salaries, wages and benefits include Rs. 6 million (2018: Rs. 3.13 million) in respect of retirement benefit obligation.
Communication 3,703 3,427
Other manufacturing expenses 12,442 12,336 2019 2018
28,856,816 25,219,517 Note ----------------- (Rupees in ‘000) ----------------
Work-in-process 27. ADMINISTRATIVE EXPENSES
Opening stock 286,033 262,525
Closing stock 10 (345,359) (286,033) Salaries, wages and benefits 27.1 161,346 127,428
(59,326) (23,508) Legal and professional 4,648 5,430
Cost of goods manufactured 28,797,490 25,196,009 Depreciation 4.1.1 29,046 20,739
Travelling and conveyance 12,915 8,644
25.1.1 Raw material consumed Electricity 11,887 12,306
Fee and subscriptions 5,261 8,777
Opening stock 6,316,848 4,157,585 Vehicles running and maintenance 12,325 10,700
Purchases - net 21,468,917 19,872,331 Insurance 13,856 10,587
Less: Closing stock 10 (6,713,153) (6,316,848) Communication 6,206 6,053
21,072,612 17,713,068 Entertainment 2,505 2,286
Secretarial expenses 1,913 1,977
Auditors' remuneration 27.2 1,600 1,300
25.1.2 Salaries, wages and benefits include Rs. 195.45 million (2018: Rs. 165.69 million) in respect of retirement benefit obligation. Printing and stationary 5,480 3,190
Repairs and maintenance 5,297 2,459
25.1.3 This includes depreciation expense of Rs. 58.36 million (2018: Rs. 46.34 million). Advertisement 23 160
Rent, rates and taxes 314 330
Books and periodicals 61 54
Others 2,249 1,825
276,932 224,245
27.1 Salaries, wages and benefits include Rs. 11.49 million (2018: Rs 11.88 million) in respect of retirement benefit obligation.

2019 2018 31.1 Relationship between tax expense and accounting profit
Note ----------------- (Rupees in ‘000) ----------------
27.2 Auditors' remuneration The numerical reconciliation between the average tax rate and applicable tax rate has not been presented in these financial
statements as the total income of the Company attracts minimum tax under section 113 of the Income Tax Ordinance, 2001
Statutory audit fee 1,350 1,150 and its export sales fall under final tax regime.
Half yearly review and other certifications 150 150
Audit fee for consolidated accounts 100 - 31.2 Management had a practice of recording tax expense based on the generally accepted interpretation of tax laws and accordingly
1,600 1,300 sufficient provision in respect of taxation for last three years has been provided in these financial statements.
28. FINANCE COST
31.3 As per section 5(A) of the Income Tax Ordinance, 2001, tax at the rate of 5% shall be imposed on every public Company which
Mark-up / interest on: derives profit for the year. However, this tax shall not apply in case of the Company which distributes at least 20 percentage of
Long term finance 27,047 9,352 after tax profits within six months of the end of the tax year in the form of cash dividend. Liability in respect of such tax, if any,
Short term borrowings 1,075,853 516,307 is recognized when the prescribed time period for distribution of dividend expires.
Workers' profit participation fund 21.1 6 14,302
1,102,906 539,961 32. EARNINGS PER SHARE - Basic and Diluted
Bank and other financial charges 51,513 50,329 There is no dilutive effect on the basic earnings per share of the Company which is based on:
1,154,419 590,290 2019 2018
Less: Borrowing cost capitalized 28.1 (56,470) (15,608)
1,097,949 574,682 Profit for the year Rupees in '000 1,166,293 1,185,296
Ordinary shares Number of shares 28,029,583 28,029,583
28.1 Borrowing cost is capitalized at weighted average borrowing capitalization rate of 4.06% (2018: 3.77%). Earnings per share Rupees 41.61 42.29
2019 2018 2019 2018

29. OTHER OPERATING EXPENSES 33. CASH GENERATED FROM OPERATIONS
Workers' profit participation fund 21.1 87,148 77,825 Profit before taxation 1,646,306 1,473,646
Workers' welfare fund 9,515 5,024
Exchange loss on foreign currency transactions - net - 76,007 Adjustments for:
Loss on disposal of property, plant and equipment - net - 2,357 Depreciation 794,827 736,284
Others 938 180 (Gain) / loss on disposal of property, plant and equipment (6,257) 2,357
97,601 161,393 Gain arising from changes in fair value of livestock (77,947) -
30. OTHER INCOME Finance cost 1,097,949 574,682
Share of profit from associates (463,969) (477,170)
Profit on deposit accounts 1,407 1,515 Rebate on export sales (38,781) (411,625)
Profit accrued on long term bonds 797 - Profit accrued on sales tax refund bond (797) -
Scrap sales 38,364 36,077 Profit on deposits (1,407) (1,515)
Rebate on export sales 38,781 411,625 Provision for retirement benefit obligation 212,939 180,700
Gain arising from changes in fair value of livestock 77,947 - Working capital changes 33.1 (1,105,007) (2,248,641)
Exchange gain on foreign currency bank account - net 307 - 411,550 (1,644,928)
Gain on disposal of property, plant and equipment - net 6,257 - Cash generated from operations 2,057,856 (171,282)
163,860 449,217
31. TAXATION
Current
- for the year 281,027 257,481
- prior year 4,011 1,682
285,038 259,163
Deferred 194,975 29,187
480,013 288,350

2019 2018 35. PRODUCTION CAPACITY
----------------- (Rupees in ‘000) ---------------- 2019 2018
33.1 Working capital changes Spinning Mill ------------- -------------
(Increase) / decrease in current assets Total number of spindles installed 342,420 332,724
Stores, spares and loose tools (52,906) (57,529) Number of shifts worked per day 3 3
Stock-in-trade (928,365) (1,768,983) Number of days worked 365 365
Trade debts (1,050,219) (713,412) Number of shifts worked 1,094 1,094
Loans and advances (68,219) (20,193) Total number of spindles worked 352,808,927 352,519,113
Trade deposits and short term prepayments 23,372 (14,594) Installed capacity after conversion into 20's (Kgs) 143,370,707 139,311,008
Sales tax refund bond (110,000) - Actual production after conversion into 20's (Kgs) 134,417,781 132,048,782
Other receivables 34,375 285,154 Actual production (Kgs) 78,464,630 81,335,356
(2,151,962) (2,289,557)
Increase / (decrease) in current liabilities Knitting
Export re-finance 446,579 (268,146)
Trade and other payables 600,376 309,062 Total number of knitting machines installed 12 12
Average number of days worked - -
Working capital changes (1,105,007) (2,248,641) Installed capacity (Kgs) 1,485,000 1,485,000
It is difficult to describe precisely the production capacity in the textile industry since it fluctuates widely depending on various
34. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES factors such as count of yarn spun, spindles speed, twist per inch, raw material used, etc.
The aggregate amount charged in respect of remuneration and other benefits paid to chief executive and executives of the The knitting capacity has not been used during the year because the Company outsourced its knitting production in order to
Company were as follows: achieve lower cost of production.
-------------------------- 2019 ----------------------- --------------------2018 --------------------------
Chief Chief 36. NUMBER OF EMPLOYEES
Executive Executives Executive Executives
----------------------------------------------- Rupees in '000 ----------------------------------------------- 2019 2018
----------------------------------------------------------- ------------------------------------------------------
Remuneration 13,200 46,068 13,200 28,798
House rent 3,600 13,820 3,600 8,639 Factory Others Total Factory Others Total
Utilities 1,200 4,607 1,200 2,880 Number of employees
Bonus 1,875 8,092 1,875 4,173
Medical - 4,607 - 2,880 - At June 30 4,848 135 4,983 4,840 135 4,975
Leave encashment - 3,852 - 2,429
Retirement benefits - 13,019 - 13,082 - Average during the
19,875 94,065 19,875 62,881 year 4,829 133 4,962 4,848 139 4,987
Number of persons 1 19 1 19
37. RELATED PARTY TRANSACTIONS
34.1 The Company also provides vehicles for use to Chief Executive and Executives as per Company policy.
Transactions between the Company and the related parties are carried out as per agreed terms. Transactions with related
34.2 No remuneration has been paid to Directors of the Company except for meeting fee of Rs.1.17 million (2018: Rs. 0.99 million). parties, other than remuneration and benefits to key management personnel under the term of their employment as disclosed
in note 34 are as follows:

2019 2018 2019 2018
----------------- (Rupees in ‘000) ----------------
Name of Related Party Basis of % of Nature of Transaction ----------------- (Rupees in ‘000) ----------------
Relationship share- 38. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
holding
Y.B.Holdings (Private) Limited Ultimate Holding - Reimbursement of expenses 1,582 1,342 38.1 Financial instruments by category
Company to Company
Dividend paid 170,623 229,122
Financial assets
Gadoon Holdings Subsidiary 100% Investment in shares 100 -
(Private) Limited At amortized cost
ICI Pakistan Limited Associate 6.48% Purchase of fibre 1,678,237 1,960,860
Share of profit on investment 176,596 213,688 Sales tax refund bond 110,797 -
Share of other comprehensive 1,540 (16,157)
income/(loss)
Dividend received 77,752 107,656 At fair value through profit or loss
Yunus Energy Limited Associate 19.98% Reimbursement of expenses 2,879 12,382
to Company Loans to employees 63,515 54,774
Reimbursement of expenses 235 - Trade debts 3,517,747 2,464,181
from Company
Share of profit on investment 284,034 241,181 Loans and advances 14,124 8,864
Share of other comprehensive (1,275) 208 Other receivables 263,036 496,692
(loss)/income
Dividend received 183,410 137,557 Cash and bank balances 106,297 188,863
Vehicle sold 1,067 6,096 3,964,719 3,213,374
Financial liabilities
Lucky Holdings Limited Associate 1% Share of profit on investment 3,339 22,301
Share of other comprehensive - 1,803
income At amortized cost
Lucky Cement Limited Associated - Purchase of cement 59,005 21,950
Company Reimbursement of expenses 970 1,028 Long term finance 2,675,091 594,338
to Company
Trade and other payables 3,030,694 2,793,948
Lucky Knits (Private) Limited Associated - Yarn sold 1,201,631 871,999 Unclaimed dividend 21,879 21,423
Company Yarn purchase - 724 Accrued mark-up 318,196 129,830
Purchase of goods & services 28,265 34,506
Reimbursement of expenses 4,432 2,604 Short term borrowings 9,926,683 9,864,906
to Company 15,972,543 13,404,445
Yunus Textile Mills Limited Associated - Yarn sold 251,367 291,700
Company Sale of waste 77,391 20,780 38.2 Financial risk management
Lucky Textile Mills Limited Associated - Yarn sold 1,667,631 2,007,749
Company Sale of fabric 130,244 470,583 The Board of Directors has overall responsibility for the establishment and oversight of the Company's financial risk management.
Processing charges 267 2,310 The responsibility includes developing and monitoring the Company's risk management policies. To assist the Board in discharging
Reimbursement of expenses 3,369 2,408
to Company its oversight responsibility, management has been made responsible for identifying, monitoring and managing the Company's financial
risk exposures. The Company's exposure to the risks associated with the financial instruments and the risk management policies
Lucky Energy (Private) Limited Associated - Purchase of electricity/steam 1,123,074 1,096,878 and procedures are summarized as follows:
Company Reimbursement of expenses 2,144 1,558
to Company
38.2.1 Credit risk and concentration of credit risk
Lucky Landmark (Private) Limited Associated - Vehicle sold - 1,491
Company Reimbursement of expenses 3,600 1,200
to Company Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a
Tricom Wind Power (Private) Associated - Subordinated loan 10,773 -
financial loss, without taking into account the fair value of any collateral. Concentration of credit risk arises when a number of counter
Limited Company Advance against shares 39,566 1,797 parties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or other conditions. Concentrations of credit risk indicate the
Tricom Solar Power (Private) Associated - Subordinated loan 6,599 -
Limited Company Advance against shares - 4,534 relative sensitivity of the Company's performance to developments affecting a particular industry. The Company does not have any
significant exposure to customers from any single country or single customer.
Yunus Wind Power Limited Associated - Subordinated loan 5,149 -
Limited Company Advance against shares - 594
Credit risk of the Company arises principally from trade debts, loans and advances and bank balances. The carrying amount of financial
Kia Lucky Motors Pakistan Associated - Purchase of vehicle 2,149 1,999 assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is as follows:
Limited Company
37.1 Associate / Associated Companies comprise of related parties due to common directorship.

2019 2018 The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to
----------------- (Rupees in ‘000) ---------------- meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company's reputation. The Company manages liquidity risk by maintaining sufficient cash and bank balances
Long term loans 63,515 54,774 and availability of financing through banking arrangements, which includes Short term borrowings and discounting of foreign
Trade debts 3,517,747 2,464,181 receivables. Total unavailed facility balances as at June 30, 2019 are as reported in note 22.1 to these financial statements.
Loans and advances 14,124 8,864
Other receivables 263,036 496,692 38.2.3 Market risk
Bank balances 98,347 180,744
3,956,769 3,205,255 Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management
The trade debts are due from foreign and local customers for export and local sales respectively. Majority of the trade debts is to manage and control market risk exposures within acceptable parameters while optimizing returns.
from foreign customers are secured against letters of credit. Management assesses the credit quality of local and foreign
customers, taking into account their financial position, past experience and other factors. For bank balances, financial institutions Price risk
with strong credit ratings are accepted. Credit risk on bank balances is limited as these are placed with banks having good credit
ratings. Loans to employees are secured against their gratuity balances. Price risk is 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
The Company always measures the loss allowance for trade debts at an amount equal to lifetime ECL using the simplified approach. specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the
The expected credit losses on local trade debts are estimated using a provision matrix by reference to past default experience market. As at June 30, 2019 the Company is not exposed to price risk.
of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the Interest rate risk
forecast direction of conditions at the reporting date. The Company has recognized a loss allowance of Rs. 4.09 million against
all local trade debts. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. Majority of the interest rate risk arises from long and Short term borrowings from financial institutions.
38.2.2 Liquidity risk At the reporting date the interest rate risk profile of the Company’s interest-bearing financial instruments is:
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that 2019 2018
are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Company could ----------------- (Rupees in ‘000) ----------------
be required to pay its liabilities earlier than expected or would have difficulty in raising funds to meet commitments associated Fixed rate instruments
with financial liabilities as they fall due. The following are the contractual maturities of financial liabilities, including interest Financial assets 110,797 -
payments, excluding the impact of netting agreements:
Financial liabilities 601,736 155,157
June 30, 2019 Within 1 year 2 - 5 years More than 5 years Total
----------------------------------------------- Rupees in '000 --------------------------------------------------- Variable rate instruments
Financial liabilities Financial liabilities - KIBOR / SBP Base Rate 12,000,038 10,304,087
Long term financing 52,728 1,467,705 1,154,658 2,675,091
Trade and other payables 3,030,694 - - 3,030,694 Fair value sensitivity analysis for fixed rate instruments
Unclaimed dividend 21,879 - - 21,879
Accrued mark-up 318,196 - - 318,196 The Company does not account for any fixed rate financial assets and liabilities at fair value through of profit or loss. Therefore,
Short term borrowings 9,926,683 - - 9,926,683 a change in interest rate at the reporting date would not affect the statement of profit or loss.
13,350,180 1,467,705 1,154,658 15,972,543
Cash flow sensitivity analysis for variable rate instruments
----------------------------------------------- Rupees in '000 --------------------------------------------------- A change of 100 basis points in KIBOR / SBP Base Rate, financial liabilities at the reporting date would have increased /
Financial liabilities (decreased) equity and profit or loss by Rs. 120 million (2018: Rs. 103.04 million). This analysis assumes that all other variables,
Long term financing - 275,605 318,733 594,338 in particular foreign currency rates, remain constant. The analysis is performed on the same basis as in previous year.
Trade and other payables 2,793,948 - - 2,793,948
Unclaimed dividend 21,423 - - 21,423 Currency risk
Accrued mark-up 129,830 - - 129,830
Short term borrowings 9,864,906 - - 9,864,906 Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
12,810,107 275,605 318,733 13,404,445 foreign exchange rates. Currency risk arises mainly where receivables and payables exist due to transactions entered in
foreign currencies. The Company is exposed to foreign currency risk on sales, purchases and borrowings, which, are entered
in a currency other than Pak Rupees. As at year end, the financial assets and liabilities exposed to currency risk are as follows:

2019 2018 2019 2018 40. CAPITAL RISK MANAGEMENT
------------------------ USD ------------------------ ------------------- PKR in '000 -------------------
The objective of the Company when managing capital, i.e., its shareholders' equity is to safeguard its ability to continue as a
Trade debts 6,728,998 7,092,271 1,103,762 861,002 going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain
Foreign currency bank balances 7,126 7,126 1,162 865 a strong capital base to support the sustained development of its businesses.
Foreign bills payable (2,853,914) (1,094,086) (465,188) (132,822)
The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of
The following significant exchange rates applied during the year: changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividend paid to shareholders or issue new shares.
Average rates Reporting date rates
------------------------------------------------------- ------------------------------------------------------- 41. OPERATING SEGMENTS
2019 2018 2019 2018 Basis of segmentation
------------------------------------------------------- -------------------------------------------------------
US Dollars to PKR 136.4 109.9 163.5 / 163.0 121.6 / 121.4 A business segment is a group of assets and operations engaged in providing products that are subject to risks and returns
that are different from those of other business segments. Management has determined the operating segments based on
the information that is presented to the Board of Directors of the Company for allocation of resources and assessment of
As at June 30, 2019, if the Pakistani Rupee had weakened / strengthened by 10% against the US Dollars with all variables performance. Based on internal management reporting structure and products produced and sold, the Company is organized
held constant, profit or loss for the year would have been lower / higher by Rs. 63.97 million (2018: Rs. 72.90 million). This into the following two operating segments:
analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same
basis as in previous year. - Spinning segment: manufacturing and sale of yarn
39. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Management monitors the operating results of the abovementioned segments separately for the purpose of making decisions
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between about resources to be allocated and of assessing performance. Segment performance is evaluated based on operating profit
market participants at the measurement date. or loss which in certain respects, as explained in table below, is measured differently from statement of profit or loss in these
financial statements. Segment results and assets include items directly attributable to a segment as well as those that can
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. be allocated on a reasonable basis. All non current assets of the Company as at June 30, 2019 are located in Pakistan.
Fair value hierarchy Liabilities are incurred for the Company as a whole and are not segment-wise reported to the Board of Directors. All the
unallocated results and assets are reported to the Board of Directors at entity level. The following information presents
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair operating results information regarding operating segments for the respective years and asset information regarding
value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. operating segments as at reporting date:
---------------------------------- 2019 --------------------------------- ---------------------------------- 2018 ---------------------------------
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
Spinning Knitting Unallocated Total Spinning Knitting Unallocated Total
assets or liabilities.
---------------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------------
Segment revenues
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
Export 7,072,005 1,273,841 - 8,345,846 9,425,847 903,704 - 10,329,551
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Local 22,733,740 137,893 - 22,871,633 16,736,937 488,199 - 17,225,136
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
Profit before tax 777,774 326,616 541,916 1,646,306 684,462 312,014 477,170 1,473,646
that are not based on observable market data (unobservable inputs).
Finance cost 1,093,798 4,151 - 1,097,949 571,151 3,531 - 574,682

As at June 30, 2019, the Company has no financial instruments that falls into any of the above category.
Depreciation 764,494 1,287 29,046 794,827 714,238 1,307 20,739 736,284

There were no transfers between Level 1 and 2 in the year.
Segment assets
Property, plant and equipment 9,656,030 4,261 210,068 9,870,359 7,605,213 4,735 181,980 7,791,928
Other non-current assets - - 3,072,281 3,072,281 - - 2,749,970 2,749,970
Current assets 12,112,757 409,454 1,814,504 14,336,715 10,340,513 142,548 2,117,571 12,600,632

where
42. SUMMARY OF SIGNIFICANT TRANSACTIONS reward
thrives
Significant transaction arising during the year pertains to the following:
- During the year, the Company has established a wholly owned subsidiary by the name of Gadoon Holdings (Private) Limited as
disclosed in note 8.1 to these financial statements; and
- Reclassification of advance against pilot project of dairy farm business in respective financial statement line items as disclosed in
note 13.1 to these financial statements.
Financial Statements
43. CORRESPONDING FIGURES
Corresponding figures have been reclassified / rearranged wherever necessary for better presentation.
44. GENERAL
These financial statements has been rounded off to the nearest thousand rupees.
Consolidated Financial Statements
The Board of Directors proposed a final dividend for the year ended June 30, 2019 of Rs. 8.50 per share (2018: Rs. 8.75 per share)
amounting to Rs. 238.25 million (2018: Rs. 245.26 million).
Independent Auditor's Report to the Members 198
These financial statements were authorized for issue on July 26, 2019 by the Board of Directors of the Company. - Consolidated Financial Statements
Consolidated Statement of Financial Position 202

Consolidated Statement of Profit or Loss 204
Consolidated Statement of Comprehensive Income 205
Consolidated Statement of Cash Flows 206
Consolidated Statement of Changes In Equity 207
Notes to the Consolidated Financial Statements 208

independent auditor’s report
to the members
Report on the Audit of the Consolidated Financial Statements Following is the key audit matter:
S.No. Key audit matters How the matter was addressed in our audit
Opinion
1 Contingencies
We have audited the annexed consolidated financial statements of Gadoon Textile Mills Limited and its subsidiary (the Group),
which comprise the consolidated statement of financial position as at June 30, 2019, and the consolidated statement of profit The Group is subject to material litigations involving In response to this matter, our audit procedures included:
or loss and consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated different courts pertaining to GID Cess, taxation and Discussing legal cases with the internal legal department to
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of other matters, which requires management to make understand the management’s view point and obtaining and
significant accounting policies and other explanatory information. assessment and judgements with respect to reviewing the litigation documents in order to assess the
likelihood and impact of such litigations on the facts and circumstances.
In our opinion, consolidated financial statements give a true and fair view of the consolidated financial statements of the Group consolidated financial statements of the Company.
as at June 30, 2019, and of its consolidated financial performance and its consolidated cash flows for the year then ended in Obtaining independent opinion of legal council’s dealing with
accordance with the accounting and reporting standards as applicable in Pakistan. Management engaged independent legal counsels such cases in the form confirmations.
on these matters.
Basis for Opinion We also evaluated the possible outcome of these legal cases
The assessment of provisioning against such in line with the requirements of IAS 37: Provisions, contingent
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities litigations is a complex exercise and require liabilities and contingent assets.
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial significant judgements to determine the level of
Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards certainty on these matters. The disclosures of legal exposures and provisions were
Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of assessed for completeness and accuracy.
Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit The details of contingencies along with
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. management’s assessment are disclosed in note 24
to the consolidated financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon
consolidated financial statements of the current year. 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
Management is responsible for the other information. The other information comprises the report of audit committee, directors’
these matters.
report, Chairman review, analysis on financial performance, comments on the financial results, key performance indicators,
analysis of cost and statement of value additions and its distribution.
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. We have nothing
to report in this regard.
Responsibilities of Management and 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 the 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 • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative supervision and performance of the group audit. We remain solely responsible for our audit opinion.
but to do so. 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.
The Board of Directors is responsible for overseeing the Group’s financial reporting process.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements 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.
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. From the matters communicated with the board of directors, we determine those matters that were of most
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
decisions of users taken on the basis of these consolidated financial statements. the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional The engagement partner on the audit resulting in this independent auditor’s report is Hena Sadiq.
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 Chartered Accountants
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control. Karachi
Date: August 20, 2019
• 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.
• 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.

consolidated
statement of financial position
2019 2018
As at June 30, 2019
Note ----------------- (Rupees in ‘000) ----------------
2019 2018 EQUITY AND LIABILITIES
Note ----------------- (Rupees in ‘000) ---------------- Share Capital and Reserves
ASSETS Authorized
Non-Current Assets 57,500,000 ordinary shares of Rs.10/- each 575,000 575,000
Property, plant and equipment 5 9,870,359 7,791,928
Biological assets 6 129,665 - Issued, subscribed and paid-up capital 18 280,296 280,296
Long term advance 7 - - Capital reserves 137,541 137,541
Long term loans 8 43,677 35,331 Revenue reserves
Long term deposits 29,127 27,719 - Owners of the Holding Company 8,791,596 7,795,673
Long term investments 9 2,890,606 2,686,920 - Non-controlling interests - -
12,963,434 10,541,898 8,791,596 7,795,673
Current Assets Total Equity 9,209,433 8,213,510
Stores, spares and loose tools 10 606,538 549,319
Stock-in-trade 11 8,397,926 7,469,561 Non-Current Liabilities
Consumables 12 9,435 - Long term finance 19 2,622,363 594,338
Trade debts 13 3,517,747 2,464,181 Retirement benefit obligation 20 562,984 533,769
Loans and advances 14 199,991 286,996 Deferred tax liabilities 21 890,390 696,275
Trade deposits and short term prepayments 8,901 32,273 4,075,737 1,824,382
Other receivables 15 719,881 958,077 Current Liabilities
Current tax asset 658,310 651,362 Trade and other payables 22 3,700,823 3,088,479
Sales tax refund bond 16 110,797 - Unclaimed dividend 21,879 21,423
Cash and bank balances 17 112,519 188,863 Current portion of long term finance 19 52,728 -
14,342,045 12,600,632 Accrued mark-up 318,196 129,830
Total Assets 27,305,479 23,142,530 Short term borrowings 23 9,926,683 9,864,906
14,020,309 13,104,638
Total Liabilities 18,096,046 14,929,020
Total Equity and Liabilities 27,305,479 23,142,530
CONTINGENCIES AND COMMITMENTS 24
The annexed notes from 1 to 45 form an integral part of these consolidated financial statements.


consolidated consolidated statement
statement of profit or loss of comprehensive income
2019 2018 2019 2018
Sales - net 25 31,217,479 27,554,687 Profit for the year 1,186,102 1,185,296
Cost of sales 26 (28,324,756) (25,609,797)
Gross profit 2,892,723 1,944,890 Other comprehensive income
Distribution cost 27 (401,764) (437,311) Items that will be reclassified subsequently

Administrative expenses 28 (276,997) (224,245) to profit or loss
(678,761) (661,556)
2,213,962 1,283,334 Share of other comprehensive income/(loss) from associates - net of tax 9 277 (15,074)
Finance cost 29 (1,098,179) (574,682) Items that will not be reclassified subsequently
Other operating expenses 30 (98,767) (161,393) to profit or loss
1,017,016 547,259 - Remeasurement of defined benefit obligation 20.5 73,048 7,297
Other income 31 168,878 449,217 - Income tax relating to defined benefit obligation (14,450) (1,384)
Share of profit from associates 9 482,563 477,170 58,598 5,913
Profit before taxation 1,668,457 1,473,646 Other comprehensive income / (loss) 58,875 (9,161)
Taxation 32 (482,355) (288,350)
Total comprehensive income for the year 1,244,977 1,176,135
Profit for the year 1,186,102 1,185,296
Total profit attributable to: The annexed notes from 1 to 45 form an integral part of these consolidated financial statements.
- Owners of the Holding Company 1,186,102 1,185,296
- Non-controlling interests - -
1,186,102 1,185,296
Earnings per share - basic and diluted (Rupees) 33 42.32 42.29

consolidated statement consolidated statement
of cash flows of changes in equity
2019 2018
------------Capital Reserves------------ ---------------- Revenue Reserves ---------------
Note ----------------- (Rupees in ‘000) ----------------
Issued, Share Amalgamation Sub General Amalgamation Unappropriated Sub Grand
A. CASH FLOWS FROM OPERATING ACTIVITIES subscribed premium reserve total reserve reserve profit total total
Cash generated from / (used in) operations 34 2,057,405 (171,282) and paid-up
Finance cost paid (909,583) (532,519) share capital
Income tax paid (293,314) (197,645) -------------------------------------------------------(Rupees in '000)------------------------------------------------------
Retirement benefits paid (111,083) (85,948)
Rebate received 242,639 96,452 Balance as at July 1, 2017 280,296 103,125 34,416 137,541 1,000,000 727,333 5,221,553 6,948,886 7,366,723
(1,071,341) (719,660)
Transaction with owners
Final dividend @ Rs. 5/- per share for - - - - - - (140,148) (140,148) (140,148)
B. CASH FLOWS FROM INVESTING ACTIVITIES the year ended June 30, 2017
Purchase of property, plant and equipment (2,839,346) (1,119,172) Additional / Interim dividend - - - - - - (189,200) (189,200) (189,200)
Sale proceeds from disposal of property, plant and equipment 64,988 36,297 @ Rs. 6.75/- per share
Proceeds on disposal of shares of ICIP - an associate 7,998 - - - - - - - (329,348) (329,348) (329,348)
Loans paid to employees (8,743) (16,117) Total comprehensive income for the year
Long term deposits given - (15)
Profit received from bank deposits 1,374 1,554
Dividend received 270,017 245,213 Other comprehensive loss - - - - - - (9,161) (9,161) (9,161)
Net cash used in investing activities (2,503,712) (852,240)
Total comprehensive income for the year - - - - - - 1,176,135 1,176,135 1,176,135
C. CASH FLOWS FROM FINANCING ACTIVITIES
Long term finance obtained 2,080,753 594,338 Balance as at June 30, 2018 280,296 103,125 34,416 137,541 1,000,000 727,333 6,068,340 7,795,673 8,213,510
Repayment of long term musharakah financing of GHPL (9,844) -
Dividend paid (244,803) (323,279) Transaction with owners
Final dividend @ Rs. 8.75/- per share - - - - - - (245,259) (245,259) (245,259)
Net cash generated from financing activities 1,826,106 271,059
for the year ended June 30, 2018
- - - - - - (245,259) (245,259) (245,259)
Net increase / (decrease) in cash and cash equivalents (A+B+C) 308,458 (1,472,123)
Cash and cash equivalents at the beginning of the year (9,520,886) (8,048,763) Effect of restructuring on investments - - - - - - (3,795) (3,795) (3,795)
Cash and cash equivalents at the end of the year (9,212,428) (9,520,886) (Note 9.1.1)
CASH AND CASH EQUIVALENTS Total comprehensive income for the year
Cash and bank balances 17 112,519 188,863
Short term borrowings 23 (9,324,947) (9,709,749)
(9,212,428) (9,520,886) Other comprehensive income - - - - - - 58,875 58,875 58,875
CHANGES ARISING FROM FINANCING ACTIVITIES
Total comprehensive income for the year - - - - - - 1,244,977 1,244,977 1,244,977
2018 Financing Financing Non-cash 2019
cash inflows cash outflows changes
----------------------------------------------------- Rupees in '000 --------------------------------------------------------- Balance as at June 30, 2019 280,296 103,125 34,416 137,541 1,000,000 727,333 7,064,263 8,791,596 9,209,433
Long term musharaka finance - - (9,844) 9,844 -

Long term finance 594,338 2,080,753 - - 2,675,091 The annexed notes from 1 to 45 form an integral part of these consolidated financial statements.
Unclaimed dividend 21,423 - (244,803) 245,259 21,879

notes to the consolidated
financial statements
For the Year Ended June 30, 2019 2.1 Summarized effect of restructuring:
1. THE GROUP AND ITS OPERATIONS Cancellation of shares of LHL (refer note 9.3) Rs. 184.39 million; reduction in deferred tax liability pertaining to LHL Rs. 16.48
million; and amount transferred as investment in GHPL Rs. 164.12 million. This has resulted in loss of Rs. 3.79 million as
The Group consists of Gadoon Textile Mills Limited (The Holding Company) and its subsidiary company Gadoon Holdings recognized in revenue reserves of the Group.
(Private) Limited (GHPL). Brief profiles of the Holding Company and its subsidiary company is as follows:
3. BASIS OF PREPARATION
1.1 Gadoon Textile Mills Limited
3.1 Statement of compliance
The Holding Company was incorporated in Pakistan on February 23, 1988 as a public limited company under the repealed
Companies Ordinance, 1984 (now Companies Act, 2017) and is listed on Pakistan Stock Exchange. The principal activity of These consolidated financial statements have been prepared in accordance with the accounting and reporting standards
the Company is manufacturing and sale of yarn and knitted fabrics. as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as notified under the Companies
Y.B. Holdings (Private) Limited is the ultimate holding company of the group. 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 IFRS, the provisions of and directives issued under the Companies Act, 2017
Following are the geographical location and address of all business units of the Company: have been followed.
Head Office: 3.2 Basis of measurement

7-A, Muhammad Ali Society, Abdul Aziz Haji Hashim Tabba Street, Karachi, Province of Sindh, South, Pakistan.
These consolidated financial statements have been prepared under the historical cost convention except:
Manufacturing facility:
a) 200-201, Gadoon Amazai Industrial Estate, District Swabi, Province of Khyber Pakhtunkhwa, North, Pakistan. - obligations under the defined benefit plan are stated at present value;
b) 57 Km on Super Highway (near Karachi), Province of Sindh, South, Pakistan. - biological assets i.e. livestock are stated at fair value less estimated point-of-sale cost; and
- investment in associates are accounted for using equity method.
Liaison Office:
Syed’s Tower, Third Floor, Opposite Custom House, Jamrud Road, Peshawar, Province of Khyber Pakhtunkhwa, North, Pakistan. 3.3 Functional and presentation currency
1.2 Gadoon Holdings (Private) Limited Items included in the consolidated financial statements are measured using the currency of the primary economic
environment in which the Group operates. These consolidated financial statements are presented in Pakistani Rupees,
GHPL is a private limited company incorporated in Pakistan on July 16, 2018. GHPL is a wholly owned subsidiary of the which is the Group’s functional and presentation currency.
Holding Company. The subsidiary acts as an investing company to hold investments. The principal place of business of GHPL
is in Pakistan. 3.4 Use of estimates and judgments
2. SCHEME OF ARRANGEMENT The preparation of financial statements in conformity with approved accounting and reporting standards, as applicable in
Pakistan, requires management to make judgments, estimates and assumptions that affect the application of accounting
During the current year, a Scheme of Arrangement (Scheme) was filed by the management of Lucky Holdings Limited (LHL) policies and the reported amount of assets, liabilities, income and expenses.
- an associate, before the Honourable Sindh High Court (SHC), after the required approvals from the Board of Director and
shareholders of LHL. The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying
The SHC vide its order dated April 11, 2019 sanctioned the Scheme effective from start of business on July 01, 2018. A values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
certified copy of the Court order has been filed by LHL with SECP. estimates. The estimates underlying the assumptions are reviewed on an on-going basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
The Scheme, amongst other arrangements, determines LHL Demerged Undertakings as primarily comprising the assets, revision and future periods if the revision affects both current and future periods.
liabilities and obligations of LHL relating to its underlying investment in ICI Pakistan Limited - an associate. Under the Scheme,
the share of LHL Shareholders in LHL Demerged Undertakings proportionate to their respective shareholding in LHL has
been amalgamated with and into their respective wholly owned subsidiary companies and their proportionate shares in LHL
to that extent have been cancelled. Consequently, out of Company's total investments in LHL, an amount of Rs. 164.12 million
have been transferred to GHPL.

The areas where various assumptions and estimates are significant to the Group's consolidated financial statements or 3.5.2 New accounting standards and amendments that are not yet effective
where judgment was exercised in application of accounting policies are as follows:
The following standards, amendments and interpretations are only effective for accounting periods, beginning on or after the
a) determining the residual values and useful lives of the property, plant and equipment (note 4.1); date mentioned against each of them. These standards, interpretations and the amendments are either not relevant to the
b) valuation of biological assets (note 4.2); Group's operations or are not expected to have significant impact on the Group's consolidated financial statements other than
c) provisions - for slow moving stores, spares and loose tools (note 4.3); certain additional disclosures.
d) valuation of stock-in-trade - at lower of cost and NRV (note 4.4); Effective from accounting period
e) provisions - for loss allowance (note 4.6); beginning on or after:
f) impairment of financial and non financial assets (notes 4.10.2);
g) provisions - for doubtful advances (note 4.10.2); and Amendments to IFRS 3 'Business Combinations' - Amendments
h) provision for taxation including deferred tax (note 4.12); regarding the definition of business January 01, 2020
i) accounting for retirement benefits obligation (note 4.13); and
j) provisions against liability (note 4.17). Amendments to IFRS 9 'Financial Instruments' - Amendments
regarding prepayment features with negative compensation and January 01, 2019
3.5 Changes in accounting standards and interpretations modifications of financial liabilities.
3.5.1 New accounting standards / amendments and IFRS interpretations that are effective for the year ended June 30, 2019 Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28 Effective from accounting
'Investments in Associates and Joint Ventures' - Sale or contribution period beginning on or
The following standards, amendments and interpretations are effective for the year ended June 30, 2019. These standards, of assets between an investor and its associate or joint venture. after a date to be determined.
interpretations and the amendments are either not relevant to the Group's operations or are not expected to have significant Earlier application is permitted.
impact on the Group's consolidated financial statements other than certain additional disclosures.
IFRS 16 'Leases' - This standard will supersede IAS 17 'Leases'
Effective from accounting period upon its effective date. January 01, 2019
beginning on or after:
Amendments to IAS 28 'Investments in Associates and Joint Ventures' -
Amendments to IFRS 2 'Share-based Payment' - Clarification on the Amendments regarding long term interests in an associate or joint venture January 01, 2019
classification and measurement of share-based payment transactions January 01, 2018 that form part of the net investment in the associate or joint venture but
to which the equity method is not applied.
IFRS 4 'Insurance Contracts' - Amendments regarding the interaction
of IFRS 4 and IFRS 9. January 01, 2018 Amendments to IAS 19 'Employee Benefits' - Amendments regarding plan
amendments, curtailments or settlements. January 01, 2019
IFRS 9 'Financial Instruments' - This standard will supersede IAS 39 Financial
Instruments: Recognition and Measurement,upon its effective date. July 01, 2018 IFRIC 23 'Uncertainty over Income Tax Treatments' - Clarifies the
accounting treatment in relation to determination of taxable profit January 01, 2019
IFRS 15 'Revenue' - This standard will supersede IAS 18, IAS 11, IFRIC 13, (tax loss), tax bases, unused tax losses, unused tax credits and tax
15 and 18 and SIC 31 upon its effective date. July 01, 2018 rates, when there is uncertainty over income tax treatments under
IAS 12 'Income Taxes'.
Amendments to IAS 40 'Investment Property' - Clarification on transfers
of property to or from investment property. January 01, 2018 Amendments to IAS 1 'Presentation of Financial Statements' and IAS 8
'Accounting Policies, Changes in Accounting Estimates and Errors' - January 01, 2020
IFRIC 22 'Foreign Currency Transactions and Advance Consideration' - Amendments regarding the definition of material.
Provides guidance on transactions where consideration against January 01, 2018
non-monetary prepaid asset / deferred income is denominated Amendments to References to the Conceptual Framework in IFRS Standards January 01, 2020
in foreign currency.
Other than the aforesaid standards, interpretations and amendments, the (IASB) has also issued the following standards
which have not been adopted locally by the (SECP):

- IFRS 1 'First Time Adoption of International Financial Reporting Standards' Depreciation is charged, from the month when the asset is available for use and ceased from the month of disposal, to
- IFRS 14 'Regulatory Deferral Accounts' consolidated statement of profit or loss applying the reducing balance method except for leasehold land, which is depreciated
- IFRS 17 'Insurance Contracts' using the straight-line method. The residual values, useful lives and depreciation methods are reviewed and changes, if
any, are treated as change in accounting estimates, at each reporting date. Rates for depreciation are stated in note 5.1
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES to the consolidated financial statements.
The significant accounting policies adopted in the preparation of these consolidated financial statements are the same Maintenance and repairs are charged to the consolidated statement of profit or loss as and when incurred. Major renewals
as those applied in the preparation of the financial statements of the Holding Company for the year ended June 30, 2018 and improvements are capitalized and the assets so replaced, if any, are retired.
except for the change in the policy for revenue recognition and financial assets' recognition and measurement due to
adoption of IFRS-15 and IFRS-9 respectively. The implications of these standards have insignificant impact on these Gains and losses on disposal of assets are taken to the consolidated statement of profit or loss as and when incurred.
consolidated financial statements of the Group. In addition to this, there are certain other changes in policies which are
as disclosed below: 4.2 Biological assets
Basis for consolidation Livestock are measured at their fair value less estimated point-of-sale costs. Fair value of livestock is determined by an
independent valuer on the basis of best available estimates for livestock of similar attributes.
i) Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally
a shareholding of more than 50% of the voting rights. The existence and effect of potential voting rights that are Gains or losses arising from changes in fair value less estimated point-of-sale costs of livestock are recognized in the
currently exercisable or convertible are considered when assessing whether the Group controls another entity. consolidated statement of profit or loss.
Further, the Group also considers whether:
4.3 Stores, spares and loose tools
- it has power to direct the relevant activities of the subsidiaries;
- is exposed to variable returns from the subsidiaries; and These are stated at lower of cost and net realizable value. Cost is determined using moving average method. Items in
- decision making power allows the Group to affect its variable returns from the subsidiaries. transit are stated at invoice value plus other charges incurred thereon until the reporting date.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are derecognized For items that are slow moving adequate provision is made, if necessary, for any excess carrying value over estimated
from the date the control ceases. realizable value and charged to the consolidated statement of profit or loss.
The financial statements of the subsidiaries are consolidated on a line by line basis. Inter-Group transactions, balances, 4.4 Stock-in-trade
income and expenses on transactions between group companies are eliminated. Profits and losses (unrealized) are
also eliminated. Accounting policies of subsidiary is consistent with the policies adopted by the Group. Basis of valuation is as under:
ii) Where the ownership of a subsidiary is less than hundred percent and therefore, a non controlling interest (NCI) - Raw material in hand (imported) Lower of cost (weighted average / specific identification
exists, the NCI is allocated its share of the total comprehensive income of the period, even if that results in a basis) and net realizable value (NRV)
deficit balance.
- Raw material in hand (local) Lower of cost (weighted average) and NRV
The Group treats transactions with NCI that do not result in loss of control as transactions with equity owners of
the Group. The difference between fair value of any consideration paid and the relevant share acquired of the carrying - Raw material in-transit Cost accumulated to end of reporting period
value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to NCI are also recorded in equity.
- Work-in-process Lower of cost (weighted average) and NRV
4.1 Property, plant and equipment
- Finished goods Lower of cost (weighted average) and NRV
Property, plant and equipment except freehold land and capital work-in-progress are stated at cost less accumulated
depreciation and impairment losses, if any. Freehold land and capital work-in-progress are stated at cost less impairment - Waste NRV
losses, if any.
All expenditure connected with specific assets incurred during installation and construction period are carried under capital
work-in-progress. These are transferred to specific assets as and when these assets are available for intended use.

Cost in relation to work-in-process and finished goods represents annual average manufacturing cost which consists of for changes in the Group’s proportionate interest in the associate arising from changes in the associates’ other comprehensive
prime cost and appropriate manufacturing overheads. income that have not been recognized in the associate’s profit or loss. The Group’s share of those changes is recognized in
the consolidated statement of other comprehensive income of the Group.
NRV signifies the estimated selling price in the ordinary course of business less estimated cost of completion and estimated
cost necessary to be incurred to effect such sale. The carrying amount of the investment is tested for impairment, by comparing its recoverable amount (higher of value in use
and the fair value less costs to sell) with its carrying amount and loss, if any, is recognized in the consolidated statement of
4.5 Consumables profit or loss.
Consumables are stated at lower of cost and net realizable value. Cost is determined using moving average method. Net Derecognition
realizable value signifies the estimated selling price in the ordinary course of business less estimated cost necessary to be
incurred to effect such sale. The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
Milk is initially measured at its fair value less estimated point-of-sale costs at the time of milking. The fair value of milk is entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to
determined based on market prices in the local area. control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred
4.6 Trade debts and other receivables financial asset, the Group continues to recognize the financial asset and also recognizes a collateralised borrowing for
the proceeds received.
Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortized cost less loss
allowance, if any. The Group always measures the loss allowance for trade debts at an amount equal to lifetime expected credit On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount
losses (ECL). The expected credit losses on trade debts are estimated using a provision matrix by reference to past default and the sum of the consideration received and receivable is recognized in consolidated statement of profit or loss. In
experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the addition, on derecognition of an investment in a debt instrument classified as at fair value through other comprehensive
debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as income (FVTOCI), the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified
well as the forecast direction of conditions at the reporting date. to consolidated statement of profit or loss. In contrast, on derecognition of an investment in equity instrument which the
Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the
There has been no change in the estimation techniques or significant assumptions made during the current reporting period. investments revaluation reserve is not reclassified to profit or loss, but is transferred to consolidated retained earnings.
Trade debts and other receivables considered irrecoverable are written off. 4.10 Financial instruments
4.7 Derivative financial instruments Financial assets and liabilities are recognized when the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognized when the Group loses control of the contractual rights that comprise the
Derivatives that do not qualify for hedge accounting are recognized in the consolidated statement of financial position at financial assets. Financial liabilities are derecognized when the obligation specified in the contract is discharged, cancelled
estimated fair value with corresponding effect to the consolidated statement of profit or loss. Derivative financial instruments or expired.
are carried as assets when fair value is positive and liabilities when fair value is negative.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
4.8 Cash and cash equivalents to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
Cash and cash equivalents for cash flow purposes include cash in hand, current and deposit accounts held with banks. Short as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
term borrowings (except export re-finance) availed by the Group which are payable on demand and form an integral part of financial liabilities at fair value through profit or loss are recognized immediately in the consolidated statement of profit or loss.
the Group’s cash management are included as part of cash and cash equivalents for the purpose of the consolidated statement
of cash flows. 4.10.1 Financial assets
4.9 Investments All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame
Investment in associates established by regulation or convention in the marketplace. All recognized financial assets are measured subsequently
in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Associates are entities over which the Group exercises significant influence. Investment in associates is accounted for using
equity basis of accounting, under which the investment in associate is initially recognized at cost and the carrying amount is
increased or decreased to recognize the Group’s share of profit or loss of the associate after the date of acquisition. The
Group’s share of profit or loss of the associate is recognized in the consolidated’s statement of profit or loss. Distributions
received from associate reduce the carrying amount of the investment. Adjustments to the carrying amount are also made

Financial assets at amortized cost (i) Significant increase in credit risk
Instruments that meet the following conditions are measured subsequently at amortized cost: In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the
Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the
contractual cash flows; and Group considers both quantitative and qualitative information that is reasonable and supportable, including historical
experience and forward-looking information that is available without undue cost or effort.
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding. For financial guarantee contracts, the date that the Group becomes a party to the irrevocable commitment is
considered to be the date of initial recognition for the purposes of assessing the financial instrument for impairment.
Financial assets at fair value through profit or loss (FVTPL) In assessing whether there has been a significant increase in the credit risk since initial recognition of a financial
guarantee contracts, the Group considers the changes in the risk that the specified debtor will default on the contract.
Financial assets that do not meet the criteria for being measured at amortized cost or FVTOCI are measured at fair value
through profit or loss (FVTPL). Specifically: (ii) Definition of default
- Investments in equity instruments are classified as at FVTPL, unless the Group designates an equity investment that The Group employs statistical models to analyse the data collected and generate estimates of probability of default
is neither held for trading nor a contingent consideration arising from a business combination as at FVTOCI on initial recognition. (PD) of exposures with the passage of time. This analysis includes the identification for any changes in default rates
and changes in key macro-economic factors across various geographies of the Group.
- Debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria are classified as at FVTPL. In
addition, debt instruments that meet either the amortized cost criteria or the FVTOCI criteria may be designated as (iii) Credit-impaired financial assets
at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition
inconsistency (so called ‘accounting mismatch’) that would arise from measuring assets or liabilities or recognizing A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future
the gains and losses on them on different bases. The Group has not designated any debt instruments as at FVTPL. cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable
data about the following events:
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or
losses recognized in the consolidated statement of profit or loss. (a) significant financial difficulty of the issuer or the borrower;
(b) a breach of contract, such as a default or past due event (see (ii) above);
4.10.2 Impairment of financial assets (c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
The Group recognizes a loss allowance for ECL on trade debts. The amount of ECL is updated at each reporting date to (d) it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
reflect changes in credit risk since initial recognition of the respective financial assets. (e) the disappearance of an active market for that financial asset because of financial difficulties.
The Group always recognizes lifetime ECL for trade debts. The ECL on these financial assets are estimated using a (iv) Write-off policy
provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the forecast direction of The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial
conditions at the reporting date, including time value of money where appropriate. difficulty and there is no realistic prospect of recovery.
For all other financial assets, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since (v) Measurement and recognition of ECL
initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition,
the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. The assessment of The measurement of ECL is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there
whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default occurring since is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on
initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date. historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial
assets, this is represented by the asset’s gross carrying amount at the reporting date; for financial guarantee contracts,
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default to be drawn down in the future by default date determined based on historical trend, the Group’s understanding of the
events on a financial instrument that are possible within 12 months after the reporting date. specific future financing needs of the debtors, and other relevant forward-looking information.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that
are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at the original effective interest rate.

Non-financial assets 4.10.4 Offsetting of financial assets and financial liabilities
The Group assesses at each reporting date whether there is any indication that assets except inventories, biological . Financial assets and financial liabilities are offset and the net amount is reported in the consolidated financial statements
assets and deferred tax asset may be impaired. If such indication exists, the carrying amounts of such assets are reviewed only when there is legally enforceable right to set-off the recognized amounts and the Group intends either to settle on
to assess whether they are recorded in excess of their recoverable amount. Where carrying values exceed the respective a net basis or to realize the assets and to settle the liabilities simultaneously.
recoverable amount, assets are written down to their recoverable amounts and the resulting impairment loss is recognized
in the consolidated statement of profit or loss. The recoverable amount is the higher of an asset's 'fair value less costs 4.11 Borrowings and their costs
to sell' and 'value in use'.
Borrowings are recognized initially at fair value, net of transaction costs incurred, and subsequently at amortized cost.
Where impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised recoverable Borrowing costs are recognized as an expense in the period in which these are incurred except to the extent of borrowing
amount but limited to the extent of the carrying amount that would have been determined (net of amortization or costs that are directly attributable to the acquisition, construction or production of a qualifying asset. Such borrowing
depreciation) had no impairment loss been recognized. Reversal of impairment loss is recognized as income. costs, if any, are capitalized as part of the cost of that asset.
4.10.3 Financial liabilities 4.12 Taxation
All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL. Income tax expense comprises current and deferred tax. Income tax expense is recognized in the consolidated financial
statement of profit or loss.
Financial liabilities at FVTPL
Current
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on changes in fair value recognized
in the consolidated statement of profit or loss to the extent that they are not part of a designated hedging relationship. Provision for current taxation is based on taxability of certain income streams of the Group under presumptive / final tax
The net gain or loss recognized in the consolidated statement of profit or loss incorporates any interest paid on the regime at the applicable tax rates and remaining income streams chargeable at current rate of taxation under the normal
financial liability. tax regime after taking into account tax credits and tax rebates available, if any. The charge for income tax includes
adjustments to charge for prior year.
However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of that liability is recognized in the consolidated statement of Deferred
other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other the
consolidated statement of comprehensive income would create or enlarge an accounting mismatch in the consolidated Deferred tax is recognized using the liability method, providing for temporary difference between the carrying amount
statement of profit or loss. The remaining amount of change in the fair value of liability is recognized in the consolidated of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of
statement of profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognized in the deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and
consolidated statement of other comprehensive income are not subsequently reclassified to the consolidated statement liabilities, using the tax rates enacted or substantively enacted at the reporting date.
of profit or loss; instead, they are transferred to consolidated retained earnings upon derecognition of the financial liability.
In this regard, the effects on deferred taxation of the portion of income subject to final tax regime is also considered in
Gains or losses on financial guarantee contracts issued by the Group that are designated by the Group as at FVTPL are accordance with the requirement of Technical Release – 27 of Institute of Chartered Accountants of Pakistan.
recognized in the consolidated statement of profit or loss.
The Group recognizes deferred tax asset to the extent that it is probable that taxable profits for the foreseeable future
Financial liabilities measured subsequently at amortized cost will be available against which the assets can be utilized. Deferred tax asset is reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
Financial liabilities that are not designated as FVTPL, are measured subsequently at amortized cost using the effective
interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of 4.13 Staff retirement benefits
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective interest Defined benefit plan
rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where
appropriate) a shorter period, to the amortized cost of a financial liability. The Group operates an unfunded gratuity scheme for its confirmed employees who have completed the minimum qualifying
period of service as defined under the scheme. The Group's obligation under the scheme is determined through actuarial
Derecognition of financial liabilities valuation carried out at each year end under the Projected Unit Credit Method. The most recent valuation of the scheme was
carried out as at June 30, 2019.
The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid Remeasurement changes which comprise actuarial gains and losses are recognized immediately in the the consolidated
and payable is recognized in the consolidated statement of profit or loss. of other comprehensive income.

4.14 Trade and other payables 2019 2018
Note ----------------- (Rupees in ‘000) ----------------
Trade and other payables are recognized initially at fair value plus directly attributable cost, if any, and subsequently 5. PROPERTY, PLANT AND EQUIPMENT
measured at amortized cost using the effective interest method.
Operating fixed assets 5.1 9,610,032 7,344,400
4.15 Foreign currency transactions and translation Capital work-in-progress 5.2 260,327 447,528
9,870,356 7,791,928
Transactions in foreign currencies are translated into Pak Rupees at the rates of exchange approximating those prevailing
on the date of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated into Pak Rupees at the rates prevailing on the reporting date.
Gains and losses arising on retranslation are included in the the consolidated statement of profit or loss for the period.
4.16 Revenue recognition
Revenue from contracts with customers is recognized at the point in time when the performance obligation is satisfied
i.e. control of the goods is transferred to the customer at an amount that reflects the consideration to which the Group
expects to be entitled to in exchange for those goods.
Interest income is recognized on a time proportionate basis using the effective rate of return.
4.17 Provisions
Provisions are recognized when the Group has a present, legal or constructive obligation as a result of past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current
best estimate.
4.18 Dividend and appropriation to / from reserves
Dividend distribution to the Group's shareholders and appropriation to / from reserves is recognized in the period in which
these are approved.
4.19 Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The BOD has identified different chief operating decision makers responsible for strategic decisions of all
the reportable segments.
4.20 Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares.

5.1 Operating fixed assets 5.1 Operating fixed assets
-------------------------------------------------------------------------------------- 2019------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- 2018-------------------------------------------------------------------------------------------
Cost as at Additions/ Cost as at Accumulated Depreciation Accumulated Carrying Rate of Cost as at Additions/ Cost as at Accumulated Depreciation Accumulated Carrying Rate of
Particulars July 01, (Disposals) June 30, depreciation for the depreciation value as at depreciation Particulars July 01, (Disposals) June 30, depreciation for the depreciation value as at depreciation
2018 2019 as at July 01, year/ as at June 30, June 30, 2017 2018 as at July 01, year/ as at June 30, June 30,
2018 (Disposals) 2019 2019 2017 (Disposals) 2018 2018
---------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------- % ---------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------------- %
Land: Land:
Leasehold 59,180 23,968 83,148 9,712 599 10,311 72,837 1 Leasehold 59,180 - 59,180 9,065 647 9,712 49,468 1
Freehold 880 - 880 - - - 880 - Freehold 880 - 880 - - - 880 -
Buildings on leasehold land: Buildings on leasehold land:

Mills 2,034,399 125,083 2,159,482 1,019,549 104,143 1,123,692 1,035,790 10 Mills 2,033,114 1,285 2,034,399 906,802 112,747 1,019,549 1,014,850 10
Roads 47,456 - 47,456 20,668 2,679 23,347 24,109 10 Roads 43,488 3,968 47,456 17,765 2,903 20,668 26,788 10
Power plant 178,146 - 178,146 99,077 7,907 106,984 71,162 10 Power plant 178,146 - 178,146 90,292 8,785 99,077 79,069 10
Office 60,513 - 60,513 23,383 3,713 27,096 33,417 10 Office 60,513 - 60,513 19,257 4,126 23,383 37,130 10
Other 432,500 160,647 593,147 155,066 14,702 169,768 423,379 5 Other 414,001 18,499 432,500 141,055 14,011 155,066 277,434 5
Buildings on freehold land: Buildings on freehold land:

Family colony 179,396 - 179,396 97,275 8,212 105,487 73,909 10 Family colony 179,396 - 179,396 88,150 9,125 97,275 82,121 10
Plant and machinery 10,672,861 2,166,657 12,474,195 5,947,979 514,901 6,141,994 6,332,201 10 Plant and machinery 9,857,740 957,830 10,672,861 5,594,075 476,474 5,947,979 4,724,882 10
(365,323) (320,886) (142,709) (122,570)
Power plant 1,247,234 536,458 1,783,692 731,910 58,355 790,265 993,427 10 Power plant 1,111,140 151,094 1,247,234 699,969 42,249 731,910 515,324 10
(15,000) (10,308)
Electric installations 456,331 958 457,289 270,530 18,636 289,166 168,123 10
Electric installations 451,371 4,960 456,331 250,094 20,436 270,530 185,801 10
Tools and equipment 13,774 19,636 33,410 10,937 284 11,221 22,189 10
Tools and equipment 13,774 - 13,774 10,622 315 10,937 2,837 10
Furniture and fittings 24,895 4,898 29,793 13,444 1,309 14,753 15,040 10
Furniture and fittings 24,895 - 24,895 12,172 1,272 13,444 11,451 10
Computer equipment 24,675 6,148 30,749 18,694 3,160 21,798 8,951 30
(74) (56) Computer equipment 21,444 3,614 24,675 17,260 1,701 18,694 5,981 30
(383) (267)
Office equipment and installations 23,470 1,762 25,217 12,943 1,136 14,074 11,143 10
(15) (5) Office equipment and installations 22,694 924 23,470 11,933 1,133 12,943 10,527 10
(148) (123)
Fork lifters and tractors 38,094 - 38,094 30,973 1,424 32,397 5,697 20
Fork lifters and tractors 38,094 - 38,094 29,193 1,780 30,973 7,121 20
Vehicles 248,197 72,976 273,447 94,176 37,796 98,513 174,934 20
(47,726) (33,459) Vehicles 154,649 122,021 248,197 88,021 20,946 94,176 154,021 20
(28,473) (14,791)
Fire fighting equipment 11,847 - 11,847 6,724 512 7,236 4,611 10
Fire fighting equipment 11,847 - 11,847 6,155 569 6,724 5,123 10
June 30, 2019 16,080,114 3,119,191 18,786,167 8,735,714 794,827 9,176,135 9,610,032
(413,138) (354,406) June 30, 2018 15,002,632 1,264,195 16,080,114 8,147,489 736,284 8,735,714 7,344,400
(186,713) (148,059)
Additions to operating fixed assets include transfers from capital work-in-progress amounting to Rs. 3.01 billion.
Additions to operating fixed assets include transfers from capital work-in-progress amounting to Rs. 1.26 billion.

2019 2018 5.2 Capital work-in-progress
Note ----------------- (Rupees in ‘000) ----------------
5.1.1 Depreciation charged for the year has been allocated as under:
Gadoon Amazai Karachi Project
Civil Plant and Vehicles Markup Sub-total Civil Plant and Vehicles Markup Sub-total Total
Cost of sales 26.1 765,781 715,545 works machinery capitalized works machinery capitalized
Administrative expenses 28 29,046 20,739 ---------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------
794,827 736,284
Balance as at July 1, 2018 - 241,015 5,365 42,217 288,597 100,284 51,809 5,223 1,615 158,931 447,528
Additions during the year 69,366 1,189,221 48,376 16,841 1,323,804 262,856 1,189,245 14,011 36,980 1,503,092 2,826,896
Transfers to operating fixed assets (48,168) (1,389,481) (53,741) (58,382) (1,549,772) (172,824) (1,241,054) (19,234) (31,213) (1,464,325) (3,014,097)
5.1.2 Disposal of operating fixed assets having net book value in excess of Rs. 500,000
Balance as at June 30, 2019 21,198 40,755 - 676 62,629 190,316 - - 7,382 197,698 260,327
Description Cost Accumulated Carrying Sale Gain/(loss) Mode of disposal Purchaser
depreciation value proceeds
Balance as at July 1, 2017 - 239,897 7,924 41,739 289,560 12,711 288,366 686 1,228 302,991 592,551
---------------------------- (Rupees in '000) ------------------------------- Additions during the year 5,253 713,657 109,870 10,302 839,082 106,072 150,045 14,129 5,306 275,552 1,114,634
Transfers to operating fixed assets (5,253) (712,539) (112,429) (9,824) (840,045) (18,499) (386,602) (9,592) (4,919) (419,612) (1,259,657)
Plant and machinery 3,710 2,160 1,550 650 (900) Negotiation M/S AMS Enterprises
3,301 1,286 2,015 368 (1,648) Negotiation M/S AMS Enterprises Balance as at June 30, 2018 - 241,015 5,365 42,217 288,597 100,284 51,809 5,223 1,615 158,931 447,528
8,457 7,530 927 150 (777) Negotiation M/S AMS Enterprises 6. BIOLOGICAL ASSETS
As at June 30, 2019, the Group held 265 mature livestock (including pregnant livestock) able to produce milk and 351 immature
livestock which are being raised to produce milk in the future. The Group also held 12 breeding bulls.
8,495 7,217 1,278 150 (1,128) Negotiation M/S AMS Enterprises The valuation of dairy livestock as at June 30, 2019 has been carried out by an independent valuer. In this regard, the valuer
8,743 7,440 1,303 150 (1,154) Negotiation M/S AMS Enterprises examined the physical condition of the livestock, assessed the farm conditions and relied on the representations made by the
8,743 7,440 1,303 150 (1,154) Negotiation M/S AMS Enterprises Group as at June 30, 2019. Further, in the absence of an active market of the Group’s dairy livestock in Pakistan, market and
8,743 7,440 1,303 150 (1,154) Negotiation M/S AMS Enterprises replacement values of similar livestock from active markets in USA, EU and Australia, have been used by the independent valuer
11,594 9,673 1,921 150 (1,771) Negotiation M/S AMS Enterprises as a basis of his valuation. The valuation is considered to be level 2 in the fair value hierarchy due to observable market data
1,648 1,065 583 40 (543) Negotiation M/S AMS Enterprises other than quoted prices in active markets.
8,457 7,570 887 750 (138) Negotiation A.J Textile Mills Limited
8,496 7,505 991 583 (407) Negotiation M/S AMS Enterprises Gain arising from changes in fair value of livestock amount to Rs. 77.95 million.
2019 2018
8,962 7,671 1,291 150 (1,140) Negotiation M/S AMS Enterprises Note ----------------- (Rupees in ‘000) ----------------
8,457 7,578 879 583 (296) Negotiation M/S AMS Enterprises 7. LONG TERM ADVANCE
8,350 7,038 1,312 583 (729) Negotiation M/S AMS Enterprises
- Considered doubtful
181,464 151,138 30,326 6,976 (23,352)
Investment in a joint venture - Advance 7.1 66,667 66,667
Vehicles 1,186 486 700 1,075 375 Group policy Mr. Sadat Khan - Employee
Less: Provision against advance (66,667) (66,667)
6,700 6,142 558 2,900 2,342 Negotiation M/S Dhanji Trading Company
2,148 1,463 685 1,503 818 Group policy Mr. Asad Ansari - Employee - -
5,257 1,005 4,252 4,500 248 Negotiation Mr. Syed Shahid Khursheed Ali
1,746 679 1,067 1,067 - Negotiation Yunus Energy Limited - Associate
1,557 1,041 516 1,090 574 Group policy Mr. Muhammad Imran - Employee 7.1 This represents first and second tranche of advance for a Joint Venture Project of Rs. 4,250 million. The principal activity of
1,405 269 1,136 1,408 272 Group policy Mr. Naeem Qaiser - Employee the Joint Venture Project was acquisition and development of a real estate project in Karachi through a Joint Venture Company.
19,999 11,085 8,914 13,543 4,629 The Group's share in this Joint Venture project is ten percent. Currently, the future of this project is not certain and the recovery
Total 201,463 162,223 39,240 20,519 (18,723) of this amount is considered doubtful.
5.1.3 Leasehold and freehold land are situated at the manufacturing facilities having combined area of 137.8 acres.

2019 2018 2019 2018
Note ----------------- (Rupees in ‘000) ---------------- ----------------- (Rupees in ‘000) ----------------
8. LONG TERM LOANS 9.2 Investment in ICI Pakistan Limited (ICIP) - at equity method
- Considered good
Number of shares held 6,654,867 5,980,917
Loan to employees 8.1
Cost of investment (Rupees in '000) 1,341,311 1,114,963
Related parties - Key management personnel 31,781 21,757
Other employees 31,734 33,017 Fair value of investment (Rupees in '000) 3,543,517 4,793,705
63,515 54,774
Less: current portion 14 (19,838) (19,443) Ownership interest 7.21% 6.48%
43,677 35,331
Balance as at July 01 1,661,022 1,571,147
Shares granted due to restructuring 178,078 -
8.1 These are interest free loans recoverable in monthly installments over a period of three years. These loans are secured against Share of profit 195,190 213,688
employees' retirement benefit obligation. Share of other comprehensive income / (loss) 1,713 (16,157)
Disposal of shares (2,980) -
8.2 The maximum amount of loans to the key management personnel outstanding at the end of any month during the year ended Dividend received (86,607) (107,656)
June 30, 2019 was Rs. 48.08 million (2018: Rs. 41.49 million). Balance as at June 30 1,946,416 1,661,022
2019 2018 The financial year end of ICIP is June 30, 2019. Summarized financial highlights of ICIP and the related share of the Group as at
Note ----------------- (Rupees in ‘000) ---------------- year end are as follows:
2019 2018
9. LONG TERM INVESTMENTS Note ----------------- (Rupees in ‘000) ----------------
Investments in associates - equity method 9.1 2,890,606 2,686,920 Total assets 49,441,421 45,012,532
Total liabilities (28,048,855) (24,979,698)
9.1 Investment in associates - equity method
Net assets 21,392,566 20,032,834
ICI Pakistan Limited (ICIP) 9.2 1,946,416 1,661,022 Group's share of net assets 1,542,404 1,298,128
Lucky Holdings Limited (LHL) 9.3 4,284 185,341
Revenue 59,382,411 49,992,068
Yunus Energy Limited (YEL) 9.4 939,906 840,557
2,890,606 2,686,920 Profit for the year 2,536,630 3,297,654
Group's share of profit 182,891 213,688

9.1.1 Investment in Lucky Holdings have been calculated after incorporating the effect of transaction as appearing in note 2 to these
Other comprehensive income / (loss) for the year 23,770 (249,330)
consolidated financial statements.
Group's share of other comprehensive income / (loss) 1,713 (16,157)
9.1.2 The Group's investment in ICIP, LHL and YEL is less than 20% but these are considered associates as the Group has significant
influence over the financial and operating policies through representation on the board of directors of these companies. 9.3 Investment in Lucky Holdings Limited (LHL) - at equity method
9.1.3 The principal place of business of all the associates is located in Pakistan. Number of shares held 8,580 1,500,000
Cost of investment (Rupees in ‘000) 429 74,920
Ownership interest 1% 1%

Cancellation of shares due to restructuring 9.1.1 (184,396) -
Share of profit 3,339 22,301
Share of other comprehensive loss - (1,803)

The financial year end of LHL is June 30, 2019. LHL results for the year are not comparable with last year due to restructuring The financial year end of YEL is June 30, 2019. Summarized financial highlights of YEL as at year end and the related share of
as disclosed in note 2 of these consolidated financial statements. Summarized financial highlights of LHL as at year end and the the Group are as follows:
related share of the Group are as follows:
2019 2018 2019 2018
----------------- (Rupees in ‘000) ---------------- ----------------- (Rupees in ‘000) ----------------
Total assets 775,242 50,773,791 Total assets 12,467,075 12,392,073

Total liabilities (375,827) (27,269,327) Total liabilities (7,851,249 (8,272,755)
Net assets 399,415 23,504,464 Net assets 4,615,826) 4,119,318
Group's share of net assets 3,994 235,045 Group's share of net assets 922,242 823,040
Revenue 423,750 49,992,068 Revenue 2,939,540 2,601,285
Profit for the year 333,941 3,032,209 Profit for the year 1,420,174 1,205,903
Group's share of profit 3,339 22,301 Group's share of profit 284,034 241,181
Other comprehensive loss for the year - (243,169) Other comprehensive (loss) / income for the year (6,379) 1,039
Group's share of other comprehensive loss - (1,803) Group's share of other comprehensive (loss) / income (1,275) 208
9.4 Investment in Yunus Energy Limited (YEL) - at equity method 10. STORES, SPARES AND LOOSE TOOLS
Number of shares held 61,136,500 61,136,500 Stores 246,236 261,155

Spares in
Cost of investment (Rupees in ‘000) 611,365 611,365 - hand 350,002 291,393
- transit 61,366 47,810
Ownership interest 19.98% 19.98% Loose tools 1,035 1,062
658,639 601,420
Balance as at July 01 840,557 736,725 Less: Provision for slow moving stores, spares and loose tools (52,101) (52,101)
Share of profit 284,034 241,181 606,538 549,319
Share of other comprehensive (loss) / income (1,275) 208
Dividend received (183,410) (137,557) 11. STOCK-IN-TRADE
Raw material in
- hand 6,080,886 5,838,903
- transit 632,267 477,945
6,713,153 6,316,848
Work-in-process 345,359 286,033
Finished goods
- Yarn 1,261,788 707,074
- Knitted fabric 41,104 44,712
- Waste 36,522 114,894
1,339,414 866,680
8,397,926 7,469,561

2019 2018 2019 2018
14. LOANS AND ADVANCES
12. CONSUMABLES - Unsecured - considered good
Feed 9,186 - Current portion of long term loans 8 19,838 19,443

Unprocessed milk 249 - Advances to employees 13,203 8,457
9,435 - Advance to suppliers and contractors 14.1 89,868 251,764
Letters of credit, fee and expenses 921 407
13. TRADE DEBTS Subordinated loan 14.2.1 22,521 -
Advance against shares 14.2.2 39,566 6,925
Considered good
LC Margin 14,074 -
Foreign - Secured 1,103,762 861,002 199,991 286,996
Local - Unsecured 13.1 2,413,985 1,603,179
3,517,747 2,464,181
Considered doubtful 14.1 As at June 30, 2018 the balance included advance given for pilot project of dairy farm. Since the dairy project has started its
Local - Unsecured 4,093 4,093 commercial operations on and from June 30, 2019 (refer note 6 to the consolidated financial statments), it has now been
Provision for loss allowance 39.2.1 (4,093) (4,093) reclassified in respective financial statement line items.
- -
3,517,747 2,464,181 14.2 This represents subordinated loan and advance against shares in following companies. The shares will be issued in due course
in accordance with the regulatory requirements.
13.1 Trade balances outstanding from associated companies are as:
2019 2018
Lucky Textile Mills Limited 17,103 4,634 Note ----------------- (Rupees in ‘000) ----------------
Lucky Knits (Private) Limited 1,798 1,745
14.2.1 Subordinated loan
18,901 6,379
Tricom Solar Power (Private) Limited 14.3 6,599 -

13.2 The maximum amount due from related parties, at the end of any month during the year were Rs. 78.49 million (June 30, 2018: Tricom Wind Power (Private) Limited 14.3 10,773 -
Rs. 181.80 million). The transactions with associated companies are carried on agreed terms. Yunus Wind Power Limited 14.3 5,149 -
13.3 Following are the details of debtors in relation to export sales: 22,521 -
2019 2018
Jurisdiction Category ----------------- (Rupees in ‘000) ---------------- 14.2.2 Advance against shares
Tricom Solar Power (Private) Limited - 4,534

Asia Letter of credit 456,919 658,407 Tricom Wind Power (Private) Limited 14.3 39,566 1,797
Contract 183,073 - Yunus Wind Power Limited - 594
Europe Letter of credit 27,008 -
Contract 10,510 46,618
39,566 6,925
Central America Letter of credit - 154,242
Contract 103,743 -
14.3 As part of strategic investments, the Group had given subordinated loan and advance against shares to Tricom Solar Power
North America Contract 322,509 1,735
(Private) Limited, Tricom Wind Power (Private) Limited and Yunus Wind Power Limited. However, during the current year, the
Group has obtained extension from the shareholders regarding their previous approval (dated: April 13, 2018), in respect of
Total Letter of credit 587,670 812,649
investment in the above mentioned companies, as the time frame of 12 months from the passing of special resolution as required
Contract 516,092 48,353
under Regulation 6 of the "Companies (Investment in Associated Companies or Associated Undertakings) Regulations, 2017
was expiring and the Group was unable to invest the entire approved amounts in any of these three companies, on account of
remaining legal formalities.
However, the Group is actively pursuing this matter to ensure that investment is made within the approved time.

2019 2018 18. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
Note ----------------- (Rupees in ‘000) ----------------
15. OTHER RECEIVABLES 2019 2018 2019 2018
----------- (Number of Shares) ----------- ------------ (Rupees in ‘000) ------------
Considered good
Sales tax 430,644 433,623 6,000,000 6,000,000 Ordinary shares of Rs.10 each fully paid in cash 60,000 60,000
Federal excise duty 26,201 27,762
Claims receivable 4,330 33,865 17,437,500 17,437,500 Ordinary shares of Rs.10 each issued 174,375 174,375
Rebate receivable on export sales 256,865 460,723 as fully paid bonus shares
Others 1,841 2,104
719,881 958,077 4,592,083 4,592,083 Ordinary shares of Rs. 10 each issued as 45,921 45,921
fully paid pursuant to amalgamation
Considered doubtful
Claims receivable 24.1.2 20,000 20,000 28,029,583 28,029,583 280,296 280,296
Sales tax 15.1 52,439 52,439
Others 15.2 5,600 5,600
78,039 78,039 18.1 As at June 30, 2019, Y.B. Holdings (Private) Limited (the Ultimate Holding Company) hold 19,499,741 (2018: 19,499,741)
Provision for doubtful other receivables (78,039) (78,039) ordinary shares of Rs. 10 each.
- -
719,881 958,077 18.2 The Holding Company has one class of ordinary shares which carries no right to fixed income. The holders are entitled to
receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Holding Company.
All shares rank equally with regard to the Holding Company's residual assets.
15.1 Pursuant to SRO 179 of 2013 dated March 7, 2013, the Group filed a special sales tax return and paid Rs. 52.40 million being 2%
of the value of zero rated supplies made by the Group during the period from April 2011 to February 2013. The said amount has 2019 2018
been paid by the Group under protest and it has filed an appeal before the tax authority for refund of such amount. However, Note ----------------- (Rupees in ‘000) ----------------
being prudent, the Group has fully provided the amount in these consolidated financial statements. 19. LONG TERM FINANCE
- Banking companies - secured
15.2 The Group received a demand cum show cause notice for the amount of Rs. 13.17 million from Custom Authorities deleting their
Manufacturing Bond Entry for import of Polyester Staple Fiber (PSF). The Group has paid Rs. 5.60 million under protest against Long term finance 9.1 2,675,091 594,338
this demand and also made provision for the same amount. Since the goods were imported for re-export, the FBR has rectified Less: Current portion of long term finance (52,728) -
the anomaly through S.R.O. 688(I)/2010 dated July 27, 2010. Management believes that no further provision is required for the 2,622,363 594,338
remaining amount and the amount so paid shall become refundable.
16. SALES TAX REFUND BOND 19.1 The Group has entered into a long term finance agreement with commercial banks, with an approved limit of Rs. 3.09 billion
(June 30, 2018: Rs. 605 million). The facility carries a mark-up ranging from SBP Base Rate + 0.1% to SBP Base Rate + 0.6%
Sales tax refund bond are issued by the Federal Board of Revenue (FBR) against sales tax refundable of Rs. 110 million. The bond payable on a quarterly basis (June 30, 2018: SBP Base Rate + 0.1% to SBP Base Rate + 0.3% payable on a quarterly basis). The
so issued bear profit @ 10% per annum. Profit is accrued in the consolidated statement of profit or loss on sales tax refund bond tenure of this facility is 10 years including grace period of 2 years, starting from July 10, 2017. The Group has drawn Rs. 2.67
for the period amounting to Rs. 0.79 million. billion upto June 30, 2019 (June 30, 2018 Rs. 594 million).
2019 2018 The above financing agreement is secured by pari passu charge over plant and machinery of the Group.
Note ----------------- (Rupees in ‘000) ----------------
17. CASH AND BANK BALANCES 2019 2018

Note ----------------- (Rupees in ‘000) ----------------
Cash in hand 7,950 8,119 20. RETIREMENT BENEFIT OBLIGATION
Cash with banks in - current account 17.1 104,569 180,744
112,519 188,863 Retirement benefit obligation 20.1 562,984 533,769
17.1 It includes balances in foreign currency bank accounts amounting to US Dollars 7,126 equivalent to Rs. 1.16 million (2018: US
Dollars 7,126 equivalent to Rs. 0.87 million).

20.1 Staff retirement gratuity 20.6 Sensitivity analysis
The Projected Unit Credit method based on following significant assumptions was used for valuation of the scheme. The basis The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions
of recognition together with details as per actuarial valuation are as under: occurring at the end of the reporting period, while holding all other assumptions constant:
2019 2018 Increase / (decrease) in defined

benefit obligation
Valuation Discount rate 14.25% 8% Change in Increase in Decrease in
Salary increase rate (Long term) 12.25% 8% assumption assumption assumption
Salary increase rate (Short term) 9.25% for 3 years 12% for 2 years % ---------------- (Rupees in ‘000) ---------------
Mortality rate Adjusted SLIC Adjusted SLIC
2001-05 2001-05 Discount rate 1 (6,600) 5,918
Salary growth rate 1 8,749 (9,490)
2019 2018
Note ----------------- (Rupees in ‘000) ---------------- In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the
Projected Unit Credit method at the end of the reporting period, which is the same as that applied in calculating the defined
20.2 Liability recognized in the consolidated statement of financial position benefit obligation liability recognized in the consolidated statement of financial position.
Present value of defined benefit obligation 562,984 533,769 20.7 The gratuity scheme exposes the Group to the following risks:
20.3 Movement in liability during the year Longevity risk: The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan
level over the entire retiree population.
Expense recognized in the consolidated statement of profit or loss 20.4 212,939 180,700 Salary increase risk: The most common type of retirement benefit is one where the benefit is linked with final salary. The risk
Gratuity transferred from dairy farm 407 - arises when the actual salaries are higher than expectation and impacts the liability accordingly.
Total remeasurements recognized in the consolidated statement
of other comprehensive income 20.5 (73,048) (7,297) Withdrawal risk: The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation.
Benefits paid (111,083) (85,948) The movement of the liability can go either way.
20.8 The weighted average duration of defined benefit obligation as at June 30, 2019 is 31.18 years (2018: 32.1 years).
20.4 Expense recognized in the consolidated statement of profit or loss
2019 2018
Current service cost 174,681 148,433 Note ----------------- (Rupees in ‘000) ----------------
Interest cost 38,258 32,267 20.9 Expected maturity analysis of undiscounted retirement benefit plans
212,939 180,700
Undiscounted payments
Year 1 137,663 104,253
20.5 Total remeasurements recognized in the consolidated statement of other comprehensive income
More than 1 year 529,399 486,493
Actuarial gain on liability arising on
- financial assumptions (51,546) - 21. DEFERRED TAX LIABILITIES
- demographic assumptions - 3,028
- experience adjustments (21,502) (10,325) Balance as at June 30 21.1 890,390 696,275
(73,048) (7,297)

21.1 Deferred tax liability comprises of taxable / (deductible) temporary differences in respect of following: 2019 2018
Note ----------------- (Rupees in ‘000) ----------------
2019 2018
----------------- (Rupees in ‘000) ---------------- 23. SHORT TERM BORROWINGS
Banking companies - secured
Deferred credits / (debits) arising due to:
- Accelerated tax depreciation on property, plant and equipment 894,906 719,199 Running finance under mark-up arrangements 23.1 8,629,697 6,819,999
- Provision against retirement benefit obligation (111,364) (101,253) Short term finances 23.2 695,250 2,889,750
- Provision against long term advance (13,187) (12,647) Foreign currency loan against - Export re-finance 23.3 601,736 155,157
- Provision against stores, spares and loose tools (10,306) (9,883) 9,926,683 9,864,906
- Provision against doubtful other receivables (15,437) (14,803)
- Gain arising from changes in fair value of livestock 22,605 -
- Share of profit from associates 123,173 115,662 23.1 Facilities for running finance, import finance, export finance and export re-finance are available from various commercial banks
890,390 696,275 upto Rs. 28.61 billion (2018: Rs. 27.78 billion). For running finance facility, the rates of mark-up range between KIBOR + 0.00%
to KIBOR + 0.50% per annum (2018: KIBOR + 0.00% to KIBOR + 0.20% per annum). These are secured against hypothecation of
stock, receivables and plant and machinery.
21.2 The income tax department did not allow credit of unabsorbed tax depreciation worked out for the tax holiday period from
1990 to 2000 against the profits of post tax holiday period. The Group filed appeal before the Commissioner of Inland Revenue 23.2 This represents short term finance facilities under sub-limit of the facilities mentioned in note 22.1 from various commercial
(Appeals) and Appellate Tribunal Inland Revenue. In 2012, the matter was decided in favour of the Group but appeal effect banks having mark-up ranging between KIBOR - 0.05% to KIBOR + 0.00% per annum (2018: KIBOR - 0.12% to KIBOR + 0.00% per
order had not been given by the tax department. The income tax department filed appeal in Peshawar High Court and the annum). These are secured against hypothecation of stock, charge on receivables and plant and machinery.
matter is pending adjudication. Deferred tax asset approximately of Rs. 133.52 million on tax depreciation related to tax exempt
period from 2010 to 2012 has also not been recorded due to uncertainty of recovery. 23.3 The rate of mark-up on export re-finance is 2.1% to 2.5% (2018: 2.1%).
2019 2018 24. CONTINGENCIES AND COMMITMENTS

Note ----------------- (Rupees in ‘000) ----------------
24.1 Contingencies
22. TRADE AND OTHER PAYABLES
24.1.1 Outstanding guarantees given on behalf of the Group by commercial banks in normal course of business amounting to Rs.
Creditors 485,154 459,588 1.13 billion (2018: Rs. 990.04 million).
Foreign bills payable 465,188 132,822
Advance from customers 27,811 52,075 24.1.2 In prior years, Sui Northern Gas Pipeline Limited (SNGPL) charged the Group with an amount of Rs. 168 million on account of
Accrued liabilities 2,507,753 2,305,943 under billing of gas. The Group lodged a complaint with the Appellate Authority (the Authority) against SNGPL and on January
Withholding income tax 1,008 1,388 21, 2010, the Authority partly admitted the plea of the Group and allowed partial relief of Rs. 53.89 million. The Group has paid
Sales tax 12,035 11,391 Rs. 113.63 million in prior years. Subsequent to the decision of the Authority, both the Group (to claim additional relief) and
Workers' welfare fund 105,728 96,213 SNGPL (against the relief provided) have filed appeals with higher authorities against the decision. Management is of the view
Workers' profit participation fund 22.1 54,397 642 that no further liability will arise as it is expected that the final outcome of this case will be in its favour.
Others 41,749 28,417
3,700,823 3,088,479 24.1.3 The Group filed a suit before the High Court of Sindh, challenging the applicability of Gas Infrastructure Development Cess (GIDC)
Act, 2011. The Sindh High Court has restrained the Federation and gas companies from recovering GIDC over and above Rs. 13
22.1 Workers' profit participation fund per MMBTU. On August 22, 2014, the Supreme Court of Pakistan declared that the levy of GIDC as a tax was not levied in
accordance with the Constitution and hence not valid.
Balance as at July 1 642 57,102
Provision made during the year 30 88,314 77,825 In September 2014, the Federal Government promulgated GIDC Ordinance No. VI of 2014 to circumvent earlier decision of the
Interest on funds utilized in business 29 6 14,302 Supreme Court on the ground that GIDC was a 'Fee' and not a 'Tax'. In May 2015, the said Ordinance was approved in the
Payments made during the year (34,565) (148,587) Parliament and became an Act.
Balance as at June 30 54,397 642

The Group has challenged GIDC Act, 2015 and filed writ petition in the Peshawar High Court (PHC) challenging the vires and 24.1.7 The Assistant Commissioner Inland Revenue (ACIR), Peshawar, has passed an order for the Tax Year 2015 which was under
legality of the levy and demand of GIDC including its retrospective application. The Court has granted stay against charging of audit. The Group has preferred an appeal before the Commissioner Inland Revenue (Appeals) (CIRA) against the frivolous
the GIDC under the said Act. demand created by the ACIR. CIRA has given partial relief and the tax demand has now been reduced to Rs. 462 million. The
Group has filed a second appeal before the Appellate Tribunal Inland Revenue (ATIR) for relief of remaining unjustified additions
On May 31, 2017, PHC dismissed the said petition, however, the Group has obtained interim relief from the payment of GIDC for which the order was received on December 14, 2018 in favour of the Group. Although, there were some difference of legal
through monthly bills. Further, the Group has filed Civil Petition for Leave to Appeal (CPLA) in honorable Supreme Court, against opinion between the Judicial and Accountant Member, therefore an independent member of Tribunal have to be appointed to
the said order of PHC. resolve the matter. According to the Group’s legal counsel, the Group has a strong legal ground and there is likelihood that the
same will be decided in its favour. Accordingly, no provision is required to be made in these consolidated financial statments.
Since this issue is being faced by industry at large, management is of the view that decision of the case will be in its favour and
there is no need to maintain any provision against this liability. 24.1.8 The Additional Commissioner Inland Revenue has issued an Order dated April 30, 2019 under section 122(9) of the Ordinance
for the Tax Year 2013, created the demand of Rs. 60 million on the issues of carried forward unabsorbed depreciation and tax
24.1.4 National Accountability Bureau (NAB) had filed a reference on February 2, 2016 against Executives of the Group in the credit under section 65B of the Ordinance, which actually pertains to the Tax Year 2012, hence, barred by time for assessment.
Accountability Court (Peshawar), alleging that the Group purchased electricity from Peshawar Electric Supply Group (PESCO) In response, the Group has also filed an appeal before Commissioner Inland Revenue – Appeals against the said impugned order.
at a cheaper price and at the same time it sold the electricity to PESCO at a higher price. The management believes that the
allegations are false, unsubstantiated and unfounded. The case is devoid of merits as the Group sold the electricity after required Further, the Group has also moved forward to file the Review in Writ Petition before the Honorable PHC, after receiving
approvals, licenses and at price on which all captive power plants were selling electricity to distribution companies in accordance impugned judgement passed in utter haste without mentioning proper argument presented by the Group’s legal counsel,
with approved policy of Government of Pakistan. who is assertive to steer the decision with firm legal and factual arguments, in favour of the Group. Thus, no additional
provision is recorded in this regards.
24.1.5 The Finance Act 2010 had introduced Clause 126F in Part I of Second Schedule of Income Tax Ordinance, 2001 (the Ordinance)
exempting the tax on profits and gains derived by a tax payer located in the ‘war on terror’ affected areas of Khyber Pakhtunkhwa. 2019 2018
As a result of this change, the income of the Group including tax on export proceeds for tax years 2010 to 2012 was exempt. ----------------- (Rupees in ‘000) ----------------
However, the said clause does not specifically address the exemption of turnover tax under Section 113. In this regard, some
companies located in the affected areas filed a petition in PHC against the recovery of turnover tax seeking a declaration regarding 24.1.9 Others
Section 113 and 159 as discriminatory and contrary to the Constitution and the Court granted a relief restraining the recovery
of turnover tax. The Group along with other companies in the affected areas also filed the petition on the same grounds. The Export bills discounted with recourse 1,277,307 2,562,265
PHC in its order dated July 19, 2012, directed the respondents to extend the benefit to the Group. Subsequently, the Chief Local bills discounted 192,333 126,873
Commissioner Inland Revenue filed an appeal in the Supreme Court of Pakistan against the Group and other tax payers of the Indemnity bond in favour of Collector of Customs against imports 5,906 4,105
affected areas, which is pending for adjudication. Post-dated cheques in favour of Collector of Customs against imports 974,071 456,182
Through the Finance Act, 2015, a sub clause (XX) of clause 11(A) of the Second Schedule to the Ordinance has been added
which gives relief to the Group that Section 113 does not apply to the tax payers falling under clause 126F. However, the matter 24.2 Commitments
of tax charged on other than local sales i.e. tax on export, is still pending for adjudication. Based on the judgment of the PHC
management believes that the Group will not be subject to tax on export sales and hence, has not made any provision on account Letters of credit opened by banks for:
of tax on export sales for the years ended June 30, 2010, 2011 and 2012. Plant and machinery 836,937 254,806
Raw materials 225,272 267,771
24.1.6 The Income Tax return of Fazal Textile Mills Limited (FTML) (previously merged with the Holding Company in the year 2015) for Stores and spares 38,500 63,280
the tax year 2013 was amended under section 122(5A) by Additional Commissioner Income Revenue (ACIR) vide its order dated
March 4, 2014 on account of certain disallowances primarily against Workers Welfare Fund (WWF). The Group filed an appeal
against the amended order against which Commissioner Inland Revenue Appeals (CIRA) allowed some relief to the Group. The Further, the Group has outstanding contractual commitment under sponsors support agreement, for debt servicing of two
Group being dissatisfied had filed an appeal in the Appellate Tribunal which is pending adjudication. On the other hand Federal loan installments upto Rs. 338 million on behalf of Yunus Energy Limited, an associate.
Board of Revenue (FBR) has selected said return for the audit under sections 177 and 214C. In pursuance to the aforementioned
audit the amended assessment order was further amended by the Deputy Commissioner Inland Revenue (DCIR) making additions
of Rs 1.63 million on account of certain disallowed expenses, levied WWF of Rs. 9.16 million and also restricted tax refundable
to the amount of advance tax thereby reducing it by Rs. 48.89 million. The Group had filed an appeal before CIRA against the
said audit on the grounds that the assessment was prejudicially re-amended without evaluating current status. The appeal is
pending adjudication.
Based on the opinion of tax advisors of the Group, the management believes that the aforementioned matters will ultimately be
decided in the favour of the Group. Accordingly, no provision is required to be made against the said amounts in these consolidated
financial statements.

2019 2018 2019 2018
25. SALES - net 26.1 Cost of goods manufactured
Export Raw material consumed 26.1.1 21,072,612 17,713,068

- Yarn 6,416,132 8,853,725 Salaries, wages and benefits 26.1.2 2,296,835 2,048,132
- Knitted fabric 1,318,881 930,130 Stores, spares and loose tools 739,476 622,643
- Waste 702,111 649,668 Packing material 565,069 572,185
8,437,124 10,433,523 Rent, rates and taxes 3,108 2,832
Commission on direct export sales (91,278) (103,972) Doubling charges 11,260 13,969
8,345,846 10,329,551 Dyeing, stitching and knitting charges 128,914 164,159
Mixing charges 32,594 31,004
Local Depreciation 5.1.1 707,426 669,202
- Yarn 22,381,325 16,578,091 Fuel and power 26.1.3 3,160,387 3,263,816
- Knitted fabric 139,921 489,645 Repairs and maintenance 17,283 23,103
- Waste 480,266 271,507 Printing and stationary 418 350
23,001,512 17,339,243 Legal and professional 3,453 8,525
Commission on local sales (117,587) (75,572) Entertainment 6,561 5,904
Sales tax (12,292) (38,535) Fee and subscriptions 8,270 7,893
22,871,633 17,225,136 Insurance 60,610 36,637
31,217,479 27,554,687 Travelling and conveyance 26,395 20,332
Other manufacturing expenses 12,442 12,336
26. COST OF SALES 28,856,816 25,219,517
Work-in-process
Opening stock - finished goods 866,680 1,280,468 Opening stock 286,033 262,525
Cost of goods manufactured 26.1 28,797,490 25,196,009 Closing stock 11 (345,359) (286,033)
Less: Closing stock - finished goods 11 (1,339,414) (866,680) (59,326) (23,508)
28,324,756 25,609,797 Cost of goods manufactured 28,797,490 25,196,009
26.1.1 Raw material consumed
Opening stock 6,316,848 4,157,585

Purchases - net 21,468,917 19,872,331
Less: Closing stock 11 (6,713,153) (6,316,848)
21,072,612 17,713,068
26.1.2 Salaries, wages and benefits include Rs. 195.45 million (2018: Rs. 165.69 million) in respect of retirement benefit obligation.
26.1.3 This includes depreciation expense of Rs. 58.36 million (2018: Rs. 46.34 million).

2019 2018 2019 2018
27. DISTRIBUTION COST 28.2 Auditors' remuneration
Logistic and related charges 275,165 304,599 Statutory audit fee 1,350 1,150
Loading and others 30,186 30,637 Half yearly review and other certifications 150 150
Fee and subscriptions 20,601 25,285 Audit fee for consolidated accounts 100 -
Salaries, wages and benefits 27.1 42,595 28,691 Audit fee for standalone GHPL accounts 50 -
Bank charges on export documents 13,824 24,962 1,650 1,300
Travelling and conveyance 7,227 11,211
Vehicles running and maintenance 2,344 1,851 29. FINANCE COST
Insurance 4,886 5,117
Communication 3,102 2,585 Mark-up / interest on:
Entertainment 58 108 Long term finance 27,277 9,352
Printing and stationary 430 392 Short term borrowings 1,075,853 516,307
Repairs and maintenance 71 126 Workers' profit participation fund 22.1 6 14,302
Others 1,275 1,747 1,103,136 539,961
401,764 437,311 Bank and other financial charges 51,513 50,329
1,154,649 590,290
Less: borrowing cost capitalized 29.1 (56,470) (15,608)
1,098,179 574,682
27.1 Salaries, wages and benefits include Rs. 6 million (2018: Rs. 3.13 million) in respect of retirement benefit obligation.
2019 2018 29.1 Borrowing cost is capitalized at weighted average borrowing capitalization rate of 4.06% (2018: 3.77%).
Note ----------------- (Rupees in ‘000) ----------------
2019 2018
28. ADMINISTRATIVE EXPENSES Note ----------------- (Rupees in ‘000) ----------------
30. OTHER OPERATING EXPENSES
Salaries, wages and benefits 28.1 161,346 127,428
Legal and professional 4,648 5,430 Workers' profit participation fund 22.1 88,314 77,825
Depreciation 5.1.1 29,046 20,739 Workers' welfare fund 9,515 5,024
Travelling and conveyance 12,915 8,644 Exchange loss on foreign currency bank account - net - 76,007
Electricity 11,887 12,306 Loss on disposal of property, plant and equipment - net - 2,357
Fee and subscriptions 5,273 8,777 Others 938 180
Vehicles running and maintenance 12,325 10,700 98,767 161,393
Insurance 13,856 10,587 31. OTHER INCOME
Entertainment 2,505 2,286 Profit on deposit accounts 1,407 1,515
Secretarial expenses 1,916 1,977 Profit accrued on sales tax refund bond 797 -
Auditors' remuneration 28.2 1,650 1,300 Scrap sales 38,364 36,077
Printing and stationary 5,480 3,190 Rebate on export sales 38,781 411,625
Repairs and maintenance 5,297 2,459 Realized gain on sale of shares of ICI - an associate 5,018 -
Advertisement 23 160 Gain arising from changes in fair value of livestock 77,947 -
Rent, rates and taxes 314 330 Exchange gain on foreign currency bank account - net 307 -
Books and periodicals 61 54 Gain on disposal of property, plant and equipment - net 6,257 -
Others 2,249 1,825 168,878 449,217
276,997 224,245
28.1 Salaries, wages and benefits include Rs. 11.49 million (2018: Rs. 11.88 million) in respect of retirement benefit obligation.

2019 2018 2019 2018
----------------- (Rupees in ‘000) ---------------- Note ----------------- (Rupees in ‘000) ----------------
32. TAXATION 34. CASH GENERATED FROM OPERATIONS
Current Profit before taxation 1,668,457 1,473,646

- for the year 282,355 257,481
- prior year 4,011 1,682 Adjustments for:
286,366 259,163 Depreciation 794,827 736,284
Deferred 195,989 29,187 (Gain) / loss on disposal of property, plant and equipment (6,257) 2,357
482,355 288,350 Gain on sale of investments (5,018) -
Gain arising from changes in fair value of livestock (77,947) -
32.1 Relationship between tax expense and accounting profit Finance cost 1,098,179 574,682
Share of profit from associates (482,563) (477,170)
The numerical reconciliation between the average tax rate and applicable tax rate has not been presented in these consolidated Rebate on export sales (38,781) (411,625)
financial statments as the total income of the Group attracts minimum tax under section 113 of the Income Tax Ordinance, 2001 Profit accrued on sales tax refund bond (797) -
and its export sales fall under final tax regime. Profit on deposits (1,407) (1,515)
Provision for retirement benefit obligation 212,939 180,700
32.2 Management had a practice of recording tax expense based on the generally accepted interpretation of tax laws and accordingly Working capital changes 34.1 (1,104,227) (2,248,641)
sufficient provision in respect of taxation for last three years has been provided in these consolidated financial statments. 388,948 (1,644,928)
Cash generated from / (used in) operations 2,057,405 (171,282)
32.3 As per section 5(A) of the Income Tax Ordinance, 2001, tax at the rate of 5% shall be imposed on every public Company which
derives profit for the year. However, this tax shall not apply in case of the Company which distributes at least 20 percentage of 34.1 Working capital changes
after tax profits within six months of the end of the tax year in the form of cash dividend. Liability in respect of such tax, if any,
is recognized when the prescribed time period for distribution of dividend expires. (Increase) / decrease in current assets
Stores, spares and loose tools (52,906) (57,529)
33. EARNINGS PER SHARE - Basic and Diluted Stock-in-trade (928,365) (1,768,983)
Trade debts (1,050,219) (713,412)
There is no dilutive effect on the basic earnings per share of the Group which is based on: Loans and advances (68,219) (20,193)
Trade deposits and short term prepayments 23,372 (14,594)
2019 2018 Sales tax refund bond (110,000) -
Other receivables 34,375 285,154
Profit for the year Rupees in '000 1,186,102 1,185,296 (2,151,962) (2,289,557)
Number of ordinary shares Number of shares 28,029,583 28,029,583 Increase / (decrease) in current liabilities
Earnings per share Rupees 42.32 42.29
Export re-finance 446,579 (268,146)
Trade and other payables 601,156 309,062
Working capital changes (1,104,227) (2,248,641)

35. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES It is difficult to describe precisely the production capacity in the textile industry since it fluctuates widely depending on various
factors such as count of yarn spun, spindles speed, twist per inch, raw material used, etc.
The aggregate amount charged in respect of remuneration and other benefits paid to chief executive and executives of the
Group were as follows: The knitting capacity has not been used during the year because the Group outsourced its knitting production in order to achieve
lower cost of production.
-------------------------- 2019 ----------------------- --------------------2018 --------------------------
Chief Chief 37. NUMBER OF EMPLOYEES
Executive Executives Executive Executives
----------------------------------------------- Rupees in '000 ----------------------------------------------- 2019 2018
----------------------------------------------------------- ------------------------------------------------------
Remuneration 13,200 46,068 13,200 28,798 Factory Others Total Factory Others Total
House rent 3,600 13,820 3,600 8,639 Number of employees
Utilities 1,200 4,607 1,200 2,880
Bonus 1,875 8,092 1,875 4,173 - At June 30 4,848 135 4,983 4,840 135 4,975
Medical - 4,607 - 2,880
Leave encashment - 3,852 - 2,429 - Average during the
Retirement benefits - 13,019 - 13,082 year 4,829 133 4,962 4,848 139 4,987
19,875 94,065 19,875 62,881
Number of persons 1 19 1 19 38. RELATED PARTY TRANSACTIONS
Transactions between the Group and the related parties are carried out as per agreed terms. Transactions with related parties,
35.1 The Group also provides vehicles for use to Chief Executive and Executives as per Group policy. other than remuneration and benefits to key management personnel under the term of their employment as disclosed in note
35 are as follows:
35.2 No remuneration has been paid to Directors of the Group except for meeting fee of Rs.1.17 million (2018: Rs. 0.99 million).
36. PRODUCTION CAPACITY

2019 2018
Spinning Mill ------------- -------------
Total number of spindles installed 342,420 332,724

Number of shifts worked per day 3 3
Number of days worked 365 365
Number of shifts worked 1,094 1,094
Total number of spindles worked 352,808,927 352,519,113
Installed capacity after conversion into 20's (Kgs) 143,370,707 139,311,008
Actual production after conversion into 20's (Kgs) 134,417,781 132,048,782
Actual production (Kgs) 78,464,630 81,335,356
Knitting
Total number of knitting machines installed 12 12

Average number of days worked - -
Installed capacity (Kgs) 1,485,000 1,485,000

2019 2018 2019 2018
----------------- (Rupees in ‘000) ---------------- ----------------- (Rupees in ‘000) ----------------
Name of Related Party Basis of % of Nature of Transaction
Relationship share- 39. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
holding
39.1 Financial instruments by category
Y.B.Holdings (Private) Limited Ultimate Holding - Reimbursement of expenses 1,582 1,342
Company to Group
Dividend paid 170,623 229,122
Financial assets
ICI Pakistan Limited Associate 7.21% Purchase of fibre 1,678,237 1,960,860 At amortized cost
Share of profit on investment 195,190 213,688
Share of other comprehensive 1,713 (16,157)
income/(loss) Sales tax refund bond 110,797 -
Dividend received 86,607 107,656
Yunus Energy Limited Associate 19.98% Reimbursement of expenses 2,879 12,382 At fair value through profit or loss
to Group
Reimbursement of expenses 235 -
from Group Loans to employees 63,515 54,774
Share of profit on investment 284,034 241,181 Trade debts 3,517,747 2,464,181
Share of other comprehensive (1,275) 208
(loss)/income Loans and advances 14,124 8,864
Dividend received 183,410 137,557 Other receivables 263,036 496,692
Vehicle sold 1,067 6,096 Cash and bank balances 112,519 188,863
Lucky Holdings Limited Associate 1% Share of profit on investment 3,339 22,301 3,970,941 3,213,374
Share of other comprehensive - 1,803 Financial liabilities
income
Lucky Cement Limited Associated - Purchase of cement 59,005 21,950 At amortized cost
Company Reimbursement of expenses 970 1,028
to Group
Long term finance 2,675,091 594,338
Lucky Knits (Private) Limited Associated - Yarn sold 1,201,631 871,999 Trade and other payables 3,034,656 2,793,948
Company Yarn purchase - 724
Purchase of goods & services 28,265 34,506 Unclaimed dividend 21,879 21,423
Reimbursement of expenses 4,432 2,604 Accrued mark-up 318,196 129,830
to Group
Short term borrowings 9,926,683 9,864,906
Yunus Textile Mills Limited Associated - Yarn sold 251,367 291,700 15,976,505 13,404,445
Company Sale of waste 77,391 20,780
Lucky Textile Mills Limited Associated - Yarn sold 1,667,631 2,007,749 39.2 Financial risk management
Company Sale of fabric 130,244 470,583
Processing charges 267 2,310
Reimbursement of expenses 3,369 2,408 The Board of Directors has overall responsibility for the establishment and oversight of the Group's financial risk management.
to Group The responsibility includes developing and monitoring the Group's risk management policies. To assist the Board in discharging
its oversight responsibility, management has been made responsible for identifying, monitoring and managing the Group's
Lucky Energy (Private) Limited Associated - Purchase of electricity/steam 1,123,074 1,096,878
Company Reimbursement of expenses 2,144 1,558 financial risk exposures. The Group's exposure to the risks associated with the financial instruments and the risk management
to Group policies and procedures are summarized as follows:
Lucky Landmark Associated - Vehicle sold - 1,491
(Private) Limited Company Reimbursement of expenses 3,600 1,200 39.2.1 Credit risk and concentration of credit risk
to Group
Tricom Wind Power (Private) Associated - Subordinated loan 10,773 - Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to
Limited Company Advance against shares 39,566 1,797 incur a financial loss, without taking into account the fair value of any collateral. Concentration of credit risk arises when a
Tricom Solar Power (Private) Associated - Subordinated loan 6,599 - number of counter parties are engaged in similar business activities or have similar economic features that would cause their
Limited Company Advance against shares - 4,534 ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations
Yunus Wind Power Limited Associated - Subordinated loan 5,149 - of credit risk indicate the relative sensitivity of the Group's performance to developments affecting a particular industry. The
Company Advance against shares - 594 Group does not have any significant exposure to customers from any single country or single customer.
Kia Lucky Motors Pakistan Associated - Purchase of vehicle 2,149 1,999
Limited Company Credit risk of the Group arises principally from trade debts, loans and advances and bank balances. The carrying amount of
financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is as follows:
38.1 Associate / Associated Companies comprise of related parties due to common directorship.

2019 2018 June 30, 2019 Within 1 year 2 - 5 years More than 5 years Total
----------------- (Rupees in ‘000) ---------------- ----------------------------------------------- Rupees in '000 ---------------------------------------------------
Financial liabilities
Long term loans 63,515 54,774 Long term financing 52,728 1,467,705 1,154,658 2,675,091
Trade debts 3,517,747 2,464,181 Trade and other payables 3,034,656 - - 3,034,656
Loans and advances 14,124 8,864 Unclaimed dividend 21,879 - - 21,879
Other receivables 263,036 496,692 Accrued mark-up 318,196 - - 318,196
Bank balances 104,569 180,744 Short term borrowings 9,926,683 - - 9,926,683
3,962,991 3,205,255 13,354,142 1,467,705 1,154,658 15,976,505
The trade debts are due from foreign and local customers for export and local sales respectively. Majority of the trade debts ----------------------------------------------- Rupees in '000 ---------------------------------------------------
from foreign customers are secured against letters of credit. Management assesses the credit quality of local and foreign Financial liabilities
customers, taking into account their financial position, past experience and other factors. For bank balances, financial institutions Long term financing - 275,605 318,733 594,338
with strong credit ratings are accepted. Credit risk on bank balances is limited as these are placed with banks having good credit Trade and other payables 2,793,948 - - 2,793,948
ratings. Loans to employees are secured against their gratuity balances. Unclaimed dividend 21,423 - - 21,423
Accrued mark-up 129,830 - - 129,830
The Group always measures the loss allowance for trade debts at an amount equal to lifetime ECL using the simplified approach. Short term borrowings 9,864,906 - - 9,864,906
The expected credit losses on local trade debts are estimated using a provision matrix by reference to past default experience 12,810,107 275,605 318,733 13,404,445
of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the
forecast direction of conditions at the reporting date. The Group has recognised a loss allowance of Rs. 4.09 million against all The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
local trade debts. liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group's reputation. The Group manages liquidity risk by maintaining sufficient cash and bank balances and availability of financing
39.2.2 Liquidity risk through banking arrangements, which includes Short term borrowings and discounting of foreign receivables. Total unavailed
facility balances as at June 30, 2019 are as reported in note 23.1 to these consolidated financial statements.
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Group could be 39.2.3 Market risk
required to pay its liabilities earlier than expected or would have difficulty in raising funds to meet commitments associated with
financial liabilities as they fall due. The following are the contractual maturities of financial liabilities, including interest payments, Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
excluding the impact of netting agreements: the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters while optimizing returns.
Price risk
Price risk is 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. As
at June 30, 2019 the Group is not exposed to price risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. Majority of the interest rate risk arises from long and Short term borrowings from financial institutions.
At the reporting date the interest rate risk profile of the Group’s interest-bearing financial instruments is:

2019 2018 As at June 30, 2019, if the Pakistani Rupee had weakened / strengthened by 10% against the US Dollars with all variables held
----------------- (Rupees in ‘000) ---------------- constant, consolidated profit or loss for the year would have been lower / higher by Rs. 63.97 million (2018: Rs. 72.90 million).
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the
Fixed rate instruments same basis as in previous year.
Financial assets 110,797 -
40. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial liabilities 601,736 155,157
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
Variable rate instruments market participants at the measurement date.
Financial liabilities - KIBOR / SBP base rate 12,000,038 10,304,087
The carrying values of all financial assets and liabilities reflected in these consolidated financial statments approximate
Fair value sensitivity analysis for fixed rate instruments their fair values.
The Group does not account for any fixed rate financial assets and liabilities at fair value through consolidated the statement Fair value hierarchy
of profit or loss. Therefore, a change in interest rate at the reporting date would not affect consolidated the statement of profit
or loss. The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Cash flow sensitivity analysis for variable rate instruments
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
A change of 100 basis points in KIBOR / SBP base rate, financial liabilities at the reporting date would have increased / (decreased) or liabilities.
consolidated equity and profit or loss by Rs. 120.00 million (2018: Rs. 103.04 million). This analysis assumes that all other variables,
in particular foreign currency rates, remain constant. The analysis is performed on the same basis as in previous year. • Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Currency risk
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
that are not based on observable market data (unobservable inputs).
foreign exchange rates. Currency risk arises mainly where receivables and payables exist due to transactions entered in foreign
currencies. The Group is exposed to foreign currency risk on sales, purchases and borrowings, which, are entered in a currency
As at June 30, 2019, the Group has no financial instruments that falls into any of the above category.
other than Pak Rupees. As at year end, the financial assets and liabilities exposed to currency risk are as follows:
There were no transfers between Level 1 and 2 in the year.
2019 2018 2019 2018
------------------------ USD ------------------------ ------------------- PKR in '000 -------------------
41. CAPITAL RISK MANAGEMENT
Trade debts 6,728,998 7,092,271 1,103,762 861,002

The objective of the Group when managing capital, i.e., its shareholders' equity is to safeguard its ability to continue as a going
Foreign currency bank balances 7,126 7,126 1,162 865
concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong
Foreign bills payable (2,853,914) (1,094,086) (465,188) (132,822)
capital base to support the sustained development of its businesses.
The Group manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes
The following significant exchange rates applied during the year:
in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend paid
to shareholders or issue new shares.
Average rates Reporting date rates
------------------------------------------------------- -------------------------------------------------------
2019 2018 2019 2018
------------------------------------------------------- -------------------------------------------------------
US Dollars to PKR 136.4 109.9 163.5 / 163.0 121.6 / 121.4

42. OPERATING SEGMENTS 43. SUMMARY OF SIGNIFICANT TRANSACTIONS
Basis of segmentation Significant transactions arising during the year pertains to the following:
A business segment is a group of assets and operations engaged in providing products that are subject to risks and returns that - During the year, the Group has established a wholly owned subsidiary by the name of Gadoon Holdings (Private) limited as
are different from those of other business segments. Management has determined the operating segments based on the disclosed in note 2 to these consolidated financial statments; and
information that is presented to the Board of Directors of the Group for allocation of resources and assessment of performance.
Based on internal management reporting structure and products produced and sold, the Group is organized into the following - Reclassification of advance against pilot project of dairy farm business in respective financial statement line items as
two operating segments: disclosed in note 14.1 to these consolidated financial statments.
- Spinning segment: manufacturing and sale of yarn

44. CORRESPONDING FIGURES
Corresponding figures have been reclassified / rearranged wherever necessary for better presentation.
Management monitors the operating results of the abovementioned segments separately for the purpose of making decisions
about resources to be allocated and of assessing performance. Segment performance is evaluated based on consolidated
operating profit or loss which in certain respects, as explained in table below, is measured differently from consolidated statement 45. GENERAL
of profit or loss in these consolidated financial statments. Segment results and assets include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. All non current assets of the Group as at June 30, 2019 These consolidated financial statments has been rounded off to the nearest thousand rupees.
are located in Pakistan.
The Board of Directors proposed a final dividend for the year ended June 30, 2019 of Rs. 8.50 per share (2018: Rs. 8.75 per
Liabilities are incurred for the Group as a whole and are not segment-wise reported to the Board of Directors. All the unallocated share) amounting to Rs. 238.25 million (2018: Rs. 245.26 million).
results and assets are reported to the Board of Directors at entity level. The following information presents operating results
information regarding operating segments for the respective years and asset information regarding operating segments as at These consolidated financial statments were authorized for issue on July 26, 2019 by the Board of Directors of the Group.
reporting date:
---------------------------------- 2019 --------------------------------- ---------------------------------- 2018 ---------------------------------

Spinning Knitting Unallocated Total Spinning Knitting Unallocated Total
---------------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------------
Segment revenues
Export 7,072,005 1,273,841 - 8,345,846 9,425,847 903,704 - 10,329,551
Local 22,733,740 137,893 - 22,871,633 16,736,937 488,199 - 17,225,136
Profit before tax: 777,774 326,616 564,067 1,668,457 684,462 312,014 477,170 1,473,646
Finance cost 1,093,798 4,151 230 1,098,179 571,151 3,531 - 574,682

Depreciation 764,494 1,287 29,046 794,827 714,238 1,307 20,739 736,284 Chairman / Director Chief Executive Officer Chief Financial Officer
Segment assets
Property, plant and equipment 9,623,653 4,261 210,068 9,837,982 7,605,213 4,735 181,980 7,791,928
Other non-current assets - - 3,093,075 3,093,075 - - 2,749,970 2,749,970
Current assets 11,682,412 409,454 1,819,882 13,911,748 10,340,513 142,548 2,117,571 12,600,632 t

pattern of shareholding
As at June 30, 2019
Categories
No. of Shareholders Total Shares Held Categories of Shareholders Shareholdings Shares Held Percentage
From To
752 1 100 27,830 A) Director and Spouse(s)

742 101 500 182,088 Mr. Muhammad Yunus Tabba 1 3,673 0.01
364 501 1000 289,172 Mr. Muhammad Sohail Tabba 1 3,673 0.01
Mr. Muhammad Ali Tabba 1 3,673 0.01
224 1001 5000 529,783
Mr. Jawed Yunus Tabba 1 3,673 0.01
49 5001 10000 374,795
Ms. Zulekha Tabba Maskatiya 1 3,673 0.01
18 10001 15000 214,193 Mr. Saleem Zamindar 1 500 0.00
11 15001 20000 198,028 Mr. Zafar Masud 1 500 0.00
5 20001 25000 110,200
B) Associated Companies, Undertaking and Related Parties
2 25001 30000 54,700 Y.B. Holdings (Private) Limited 1 19,499,741 69.57
3 30001 35000 99,100
2 35001 40000 74,706 C) Executives - - -
2 45001 50000 98,500 D) Public Sector Companies and Corporations - - -

1 50001 55000 51,500
E) Banks, Development Finance Institutions, Non-Banking
3 60001 65000 185,767
Finance Companies, Insurance Companies, Takaful, 52 2,136,892 7.62
1 90001 95000 95,000
Modarabas, Pension Funds and REIT Management
1 105001 110000 106,300
1 120001 125000 120,711 F) Mutual Funds
GMCBFSL - Trustee JS Value Fund 1 33,200 0.12
1 130001 135000 132,497
CDC - Trustee JS Large Capital Fund 1 37,800 0.13
2 155001 160000 312,400 CDC - Trustee Atlas Stock Market Fund 1 8,700 0.03
1 325001 330000 326,803 CDC - Trustee Unit Trust of Pakistan 1 48,500 0.17
2 405001 410000 813,350 CDC - Trustee AKD Index Tracker Fund 1 1,500 0.01
1 525001 530000 529,993 CDC - Trustee JS Pension Savings Fund - Equity Account 1 11,497 0.04
MC FSL - Trustee JS Growth Fund 1 51,500 0.18
1 555001 560000 559,600
CDC - Trustee National Investment (Unit) Trust 1 132,497 0.47
1 560001 565000 563,522 M/s. First Cresent Modarba 1 4500 0.02
1 705001 710000 705,494
G) General Public
1 715001 720000 717,210
a - Local 2,118 5,988,937 21.38
1 1055001 1060000 1,056,600
b -Foreign 5 3,781 0.01
1 19495001 19500000 19,499,741 Foreign Companies 1 50,000 0.18
2,194 28,029,583 Other 1 1,173 0.00
Total 2,194 28,029,583 100.00

notice of 32nd
annual general meeting
Notice is hereby given that the 32nd Annual General Meeting of the members of Gadoon Textile Mills Limited (“Company”) is Notes
scheduled to be held on Saturday, September 28, 2019 at 10:30 a.m. at 200-201, Gadoon Amazai Industrial Estate, Gadoon Amazai,
District Swabi, Khyber Pakhtunkhwa to transact the following business: 1. CLOSURE OF SHARE TRANSFER BOOKS:
The Share Transfer Books of the Company will remain closed from Saturday, September 21, 2019 to Saturday, September 28,
Ordinary Business 2019 (both days inclusive). Transfer received in order at our Share Registrar/Transfer agent, CDC Share Registrar Services
1. To confirm the Minutes of Extraordinary General Meeting held on March 20, 2019.
Limited (CDCSRSL), CDC House, 99-B, S.M.C.H. Society, Main Shahrah-e-Faisal, Karachi 74400, at the close of business on
2. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended June 30, 2019 together
Friday, September 20, 2019 will be considered in time for the purpose of above entitlement to the transferees.
with the Chairman’s Review Report, Directors’ and Auditor’s report thereon.
3. To approve the cash dividend @ Rs.8.50 per share for the year ended June 30, 2019 as recommended by the Board of Directors.
4. To appoint Auditors for the year ending June 30, 2020 and fix their remuneration. 2. PARTICIPATION IN GENERAL MEETING
5. To transact any other business with the permission of the Chair. All shareholders of the company are entitled to attend and vote at the general meeting of the Company after verification of
their identity.
Special Business
1 To ratify the transactions carried out by the Company with related parties disclosed in the Financial Statements for the year A member eligible to attend and vote may appoint another member as his/her proxy to attend and vote instead of him/her.
ended June 30, 2019 by passing the following resolution:
Proxies in order to be effective must be received by the company at the Registered Office of the Company at 200-201, Gadoon
“RESOLVED THAT the transactions carried out by the Company with related parties including Gadoon Holdings (Private) Limited,
ICI Pakistan Limited, KIA Lucky Motors Pakistan Limited, Lucky Cement Limited, Lucky Energy (Private) Limited, Lucky Holdings Amazai Industrial Estate, Gadoon Amazai, District Swabi, Province of Khyber Pakhtunkhwa, at least 48 hours before the time
Limited, Lucky Knits (Private) Limited, Lucky Landmark (Private) Limited, Lucky Textile Mills Limited, Tricom Solar Power (Private) of holding the meeting.
Limited, Tricom Wind Power (Private) Limited, Y.B. Holdings (Private) Limited, Yunus Energy Limited, Yunus Textile Mills Limited,
Yunus Wind Power Limited and other such related parties during the year ended June 30, 2019 be and are hereby approved.” CDC account holders are advised to follow the following guidelines:
2. To approve potential transactions with related parties intended to be carried out in the financial year 2019-2020 (including For attending the meeting:
fiscal limits of general transaction) and to authorize the board of directors of the Company to carry out such related party
transactions at its discretion from time to time, irrespective of the composition of the board of directors.
i) In case of individuals, the account holder or sub-account holder and/or the person whose securities are in a group account
The resolutions to be passed as special resolutions are as under: and their registration details are uploaded as per the regulations, shall authenticate his/her identity by showing his/her
original Computerized National Identity Card (CNIC) or original passport at the time of attending the meeting.
“RESOLVED THAT the Company be and is hereby authorized to carry out transactions including, but not limited to, the sale of
yarn and other necessary goods, as well as the transaction of cement, cloth, power, steam, garments, textiles, vehicles and ii) In case of corporate entity, the Board of Directors’ resolution/power of attorney with specimen signature of the nominee
other ancillary machinery and relevant parts and other necessary commodities including receipt and payment of dividends, shall be produced (unless it has been provided earlier) at the time of the meeting.
with related parties from time to time including, but not limited to, Gadoon Holdings (Private) Limited, ICI Pakistan Limited, KIA
Lucky Motors Pakistan Limited, Lucky Cement Limited, Lucky Energy (Private) Limited, Lucky Holdings Limited, Lucky Knits
For appointing proxies
(Private) Limited, Lucky Landmark (Private) Limited, LuckyOne (Private) Limited, Lucky Textile Mills Limited, Lucky Wind
Power Limited, Tricom Solar Power (Private) Limited, Tricom Wind Power (Private) Limited, Y.B. Holdings (Private) Limited, Y.B.
Pakistan Limited, Yunus Energy Limited, Yunus Textile Mills Limited, Yunus Wind Power Limited and other such related parties i) In case of Proxy for an individual beneficial owner of shares from CDC, attested copies of beneficial owner’s CNIC or
to the extent of Rs.12,000,000,000/- (Rupees Twelve Billion Only) for the fiscal year 2019-20. Passport, Account and Participant’s I.D. numbers must be deposited along with the form of proxy.
FURTHER RESOLVED THAT within the above parameters approved by the shareholders of the Company, the board of directors of ii) In case of proxy for representative of corporate members from CDC, Board of Directors’ Resolution and Power of Attorney
the Company may, at its discretion, approve specific related party transactions from time to time, irrespective of the composition and the specimen signature of the nominee must be deposited along with the form of proxy. The proxy shall produce his/her
of the board, and in compliance with the Company’s policy pertaining to related party transactions and notwithstanding any original Computerized National Identity Card or Passport at the time of meeting.
interest of the directors of the Company in any related party transaction which has been noted by the shareholders.”
iii) In order to be effective, the form of proxy duly completed, stamped, signed and witnessed along with Power of Attorney, or
By order of the Board
other instruments (if any), must be deposited at the registered office of the Company at least 48 hours before the time of
holding the meeting.
iv) If a member appoints more than one proxy and more than one form of proxy are deposited by a member with the Company,
all such forms of proxy shall be rendered invalid.
Abdul Sattar Abdullah
Karachi: September 7, 2019 Company Secretary

3. NOTIFY THE CHANGES IN ADDRESSES OF SHAREHOLDERS: The shareholders are hereby advised to provide details of their bank mandate specifying: (i) Title of Account, (ii) IBAN, (iii)
The shareholders of the Company are requested to notify changes in their mailing addresses (if any), to our share Bank Name, (iv) Branch Name and Address to the Company's Share Registrar, shareholders who hold shares with
registrar/transfer agent. Participants/CDC are advised to provide the mandate to the concerned Broker/Participant/CDC Investor account services.
4. SUBMISSION OF COPIES OF CNIC (MANDATORY): The form for providing such information has been made available under the Investor Information section at Company’s
Pursuant to the Notification SRO.275(I)/2016 dated March 31, 2016 read with S.R.O.19(I)/2014 dated January 10, 2014 and website http://gadoontextile.com/investor-information/
SRO.831(I)/2012 dated July 5, 2012 of the Securities & Exchange Commission of Pakistan (SECP), Dividend Warrant(s) shall
mandatorily bear the Computerized National Identity Card (CNIC) numbers of shareholders. Shareholders are therefore 7. TRANSMISSION OF AUDITED FINANCIAL STATEMENTS / NOTICES THROUGH EMAIL
requested to fulfill the statutory requirements and submit a copy of their CNIC or NTN in case of corporate entities (if not As notified by the SECP vide SRO.787(I)/2014 dated September 8, 2014, all listed companies are allowed to circulate audited
already provided) to the Company's Share Registrar. financial statements along with notice of annual general meetings to its shareholders through their e-mail addresses
subject to written consent of the shareholders.
In case of non-availability of a valid copy of the Shareholders' CNIC in the records of the Company, the Company shall be
constrained to withhold the Dividend Warrants, which will be released by the Share Registrar only upon submission of a valid Shareholders of the company who wish to receive audited financial statements, notice of general meetings and other
copy of the CNIC in compliance with the aforesaid SECP directives. financial reports through e-mail are requested to fill the required information on the form earlier dispatched to the
Shareholders of the Company. The form is also available under the Investor Information section at company’s website
5. WITHHOLDING TAX ON DIVIDEND http://gadoontextile.com/investor-information/ Filled forms may please forward to the company’s share registrar.
Government of Pakistan through Finance Act, 2019, has made certain amendments in withholding tax provision by substituting
the definition of “Filers” with “Active Taxpayer List” (ATL), whereby the company is required to collect tax on dividend under 8. TRANSMISSION OF ANNUAL FINANCIAL STATEMENTS THROUGH CD/DVD/USB
Section 150 of the Income Tax Ordinance, 2001 from the person not appearing in the ATL at the rates specified in the Ordinance as SECP through its SRO.470(I)/2016 dated May 31, 2016 have allowed companies to circulate their annual balance sheet,
increased by 100%. These tax rates are as under: profit and loss account, auditor’s report and directors’ report to its members through CD/DVD/USB at their registered
addresses. In view of the above the Company has sent its Annual Report to the shareholders in the form of CD/DVD. Any
(a) For persons appearing in Active Taxpayer List 15.0% Member can send request for printed copy of the Annual Report to the Company on standard request form placed under the
(b) For persons not appearing in Active Taxpayer List 30.0% Investor Information section on its website http://gadoontextile.com/investor-information/
Shareholders who are filers, are advised to make sure that their names are entered into latest ATL provided on the website of FBR 9. AVAILABILITY OF AUDITED FINANCIAL STATEMENTS ON COMPANY’S WEBSITE
at the time of dividend payment, otherwise they shall be treated as person not appearing in ATL and tax on their cash dividend will The audited financial statements of the Company for the year ended June 30, 2019 have been made available on the
be deducted at the rate of 30% instead of 15%. Company’s website www.gadoontextile.com/investor-information/#report, in addition to annual and quarterly financial
statements for the prior years.
5.1 FOR JOINT SHAREHOLDERS
For shareholders holding their shares jointly as per the clarification issued by the Federal Board of Revenue, withholding 10. REQUIREMENT OF COMPANIES (POSTAL BALLOT) REGULATIONS 2018:
tax will be determined separately as per status of their names appearing in the ATL for principal shareholder as well as Pursuant to Companies (Postal Ballot) Regulations 2018, for any other agenda item subject to the requirements of Sections
joint-holder(s) based on their shareholding proportions. Therefore, all shareholders who hold shares jointly are required 143 and 144 of the Companies Act 2017, members present in person, through video-link or by proxy, and having not less than
to provide shareholding proportions of principal shareholder and joint-holder(s) in respect of shares held by them to our one-tenth of the total voting power can also demand a poll and exercise their right of vote through postal ballot, that is voting
Share Registrar in writing as follows: by post or through any electronic mode, in accordance with requirements and procedure contained in the aforesaid regulations.
GADOON TEXTILE MILLS LIMITED 11. UNCLAIMED DIVIDENDS:

As per the provision of section 244 of the Companies Act, 2017, any shares issued or dividend declared by the Company which
Principal Shareholder Joint Shareholder have remained unclaimed/unpaid for a period of three years from the date on which it was due and payable are required to
Folio/CDC be deposited with the Commission for the credit of Federal Government after issuance of notices to the shareholders to file
Total Shares Name and CNIC Shareholding Name and CNIC Shareholding
Account # their claim. In this regards, a notice to shareholder was sent at their provided addresses and subsequently final notice was
Proportion Proportion
published in newspapers having nationwide circulation.
(No. of Shares) (No. of Shares)
Shareholders are requested to ensure that their claims for unclaimed dividend and shares are lodged timely. In case, no claim
is lodged with the Company in the given time, the Company shall proceed to deposit the unclaimed/unpaid amount and shares
6. PAYMENT OF CASH DIVIDEND ELECTRONICALLY (E-DIVIDEND MECHANISM) with the Federal Government pursuant to the provision of Section 244 (2) of Companies Act, 2017.
As per provision of Section 242 of Companies Act, 2017 any dividend payable in cash shall only be paid through electronic
mode directly into the bank account designated by the entitled shareholders and SECP vide S.R.O.1145(I)/2017 (as
amended) directed all shareholders to provide their valid International Bank Account Numbers (IBAN) to receive cash
dividend electronically.

STATEMENT UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017
13. CONSENT FOR VIDEO CONFERENCE FACILITY: PERTAINING TO SPECIAL BUSINESS
Pursuant to Section 132(2) of the Companies Act, 2017, if company receives consent form from shareholders holding
aggregate 10% or more shareholding residing at geographical location to participate in the meeting through video This statement sets out the material facts pertaining to the special business, being Items on the notice, intended to be
conference at least 7 days prior to the date of meeting, the company will arrange video conference facility in that city
transacted at the annual general meeting of the Company to be held on September 28, 2019
subject to availability of such facility in that city. To avail this facility please provide following information and submit to
registered office of the Company:
As per the instructions of the Securities and Exchange Commission of Pakistan (the “SECP”), Gadoon Textile Mills Limited
(the “Company”) had been directed in the past to obtain a broad approval from the shareholders of the Company, regarding
12. DEPOSIT OF PHYSICAL SHARES INTO CDC ACCOUNTS:
related party transactions carried out by the Company from time to time, on a post facto basis.
In accordance with the requirement of section 72 of Companies Act, 2017 every existing Company shall be required to replace
its physical shares with book-entry form in a manner as may be specified and from the date notified by the Commission, within
a period not exceeding four years from the commencement of this Act. The shareholder having physical shares may open CDC On a strict reading of the laws, the SECP was of the opinion that due to the composition of the board of directors of the
sub-account with any of the broker or investor account directly with CDC to place their physical shares into scrip-less form. Company, the board of directors would be unable to approve the transactions carried out by the Company with other
companies having majority of common directors. However, no alternative mechanism was present under the Companies
Ordinance, 1984.
Consent Form for Video Conference Facility Although transactions carried out by the Company with related parties constitute a small fraction of the Company’s entire
business, a restriction to carry out business with related parties would adversely affect the business of the Company. The
I/We ______________________________________ of _______________________ being a shareholder of Gadoon Company carries out transactions with its associated companies and related parties in the normal course of business. It is
Textile Mills Limited, holder of __________ ordinary share(s) as per Register Folio / CDC Account No. ______________ emphasized that the Company carries out such transactions in a fair and transparent manner and on an arm’s length basis.
All transactions entered into with associated companies and related parties require the approval of the Audit Committee of
hereby opt for video conference facility at ___________________. the Company, which is chaired by the independent director of the Company. The Audit Committee reviews the transactions
and ensures that the pricing method is transparent and at par with running market practice and that the terms are as per
the Company’s practices. Only upon the recommendation of the Audit Committee, such transactions are placed before the
board of directors for approval.
The transactions with related parties carried out during the fiscal year 2018-2019 to be ratified have been disclosed in the
Signature of Member(s) financial statements for the year ended June 30, 2019. All such transactions were recommended by the Audit Committee
and were carried out at arm’s length basis.
THE STATEMENT UNDER SECTION 134(3) PERTAINING TO THE “SPECIAL BUSINESS” AND IN PURSUANCE TO THE SECTION Furthermore, since such transactions are an ongoing process and are approved by the board of directors on a quarterly
208 OF THE COMPANIES ACT, 2017 IS ANNEXED WITH THE NOTICE BEING SENT TO THE MEMBERS. basis, the shareholders are being approached to grant the broad approval for such transactions to be entered into by the
Company, from time to time, at the discretion of the board (and irrespective of its composition). The Company shall comply
*** with its policy pertaining to transactions with related parties as stated above to ensure that the same continue to be
carried out in a fair and transparent manner and on an arm’s length basis. This would also ensure compliance with the
Section 208(1) of the Companies Act, 2017 of which requires that shareholders’ approval shall be required where the
majority directors are interested in any related party transactions and regulation 4 of the Companies (Related Party
Transactions and Maintenance of Related Records) Regulations, 2018 which sets out the conditions for transactions with
related parties to be characterized as “arm’s length transactions” and states that the parties to the transaction must be
unrelated in any way.
Transactions intended to be carried out by the Company include, but are not limited to, the sale of yarn and other necessary
goods, as well as the purchase of cement, cloth, power, steam, garments, textiles, vehicles and other ancillary machinery
and relevant parts and other necessary commodities including receipt and payment of dividends with the following related
parties including, but are not limited to:

annexure
1 Gadoon Holdings (Private) Limited 2 ICI Pakistan Limited
3 KIA Lucky Motors Pakistan Limited 4 LuckyOne (Private) Limited
5 Lucky Cement Limited 6 Lucky Energy (Private) Limited
7 Lucky Holdings Limited 8 Lucky Knits (Private) Limited
9 Lucky Landmark (Private) Limited 10 Lucky Textile Mills Limited
11 Lucky Wind Power Limited 12 Tricom Solar Power (Private) Limited
13 Tricom Wind Power (Private) Limited 14 Y.B. Holdings (Private) Limited
15 Y.B. Pakistan Limited 16 Yunus Energy Limited
17 Yunus Textile Mills Limited 18 Yunus Wind Power Limited
The shareholders would note that it is not possible for the Company or the directors to accurately predict the nature of the
related party transaction(s) or the specific related party(ies) with which the transaction(s) shall be carried out. In view of
the same, the Company seeks the broad approval of the shareholders that the board may cause the Company to enter into
transactions with related party / parties from time to time in its wisdom and in accordance with the policy of the Company
to the extent of Rs.12,000,000,000/- (Rupees Twelve Billion Only) for the fiscal year 2019-20.
All such transactions are clearly stipulated at the end of the year in the company’s annual report. Furthermore, the
Company and the board continuously serve to protect the interests of the shareholders of the Company and the said
transactions are entered into in order to benefit the Company and its stakeholders.
The interest of the relevant directors of the Company in the associated companies / related parties are known to the
shareholders and are disclosed by the Company as per the applicable laws, including in the financial statements of the Company.

glossary form of proxy
ATL Active Tax Payers List KLM Kia Lucky Motors Pakistan Limited The Company Secretary,
ACIR Additional Commissioner Income Revenue LIBOR London Inter-Bank Offer Rate GADOON TEXTILE MILLS LIMITED
APCMA All Pakistan Cement Manufacturing Association LAPL Lucky Air (Private) Limited 200-201, Gadoon Amazai Industrial Estate.
AGM Annual General Meeting LCL Lucky Cement Limited Distt, Swabi, Khyber Pakhtunkhwa.
ATIR Appellate Tribunal Inland Revenue LCPL Lucky Commodities (Private) Limited
ATF Aziz Tabba Foundation LEPCL Lucky Electric Power Company Limited I/We of
ATKC Aziz Tabba Kidney Centre LEPL Lucky Energy (Private) Limited (full address)
BMR Balancing, Modernizing And Replacement LFPL Lucky Foods (Private) Limited
BCI Better Cotton Initiative LHL Lucky Holdings Limited being member of Gadoon Textile Mills Limited and holder of
BCP Business Continuity Plan LKL Lucky Knits (Private) Limited ordinary shares as per Share Register Folio No.
CPP Captive Power Producer LLPL Lucky Landmark (Private) Limited
and/or CDC Participant I.D. No.
CEO Chief Executive Officer LTML Lucky Textile Mills Limited
and Sub- Account No.
CFO Chief Financial Officer LOPL LuckyOne (Private) Limited
hereby appoint
CIA Chief Internal Auditor MBA Masters of Business Administration
of (full address)
CPEC China Pakistan Economic Corridor MW Megawatts
or failing him/her
CPLA Civil Petition for Leave to Appeal MMBTU Million Metric British Thermal Unit
CPSP College of Physicians & Surgeons Pakistan NAB National Accountability Bureau of (full address)
COD Commercial Operations Date NEPRA National Electric Power Regulatory Authority
who is also a member of Gadoon Textile Mills Limited, as my/our proxy in my/our absence to attend and to vote and
CIRA Commissioner Inland Revenue Appeals NRV Net Realizable Value
CNIC Computerized National Identity Card PBC Pakistan Business Council
act for me/us and on my/our behalf at the 32nd Annual General Meeting of the Company to be held on Saturday,
DCIR Deputy Commissioner Inland Revenue PICG Pakistan Institute of Corporate Governance September 28, 2019 at 10:30 am and at any adjournment thereof.
DPS Dividend Per Share PSX Pakistan Stock Exchange
EBITDA Earnings Before Interest Tax Depreciation And Amortization PESCO Peshawar Electric Supply Company `Signature this day of ,2019
EPS Earnings Per Share PSF Polyester Staple Fiber
ECL Expected Credit Losses PE Price Earning Ratio Witness
EOGM Extraordinary General Meeting RDF Refuse Derived Fuel 1) Signature :
FVTOCI Fair Value Through Other Comprehensive Income SPLY Same Period Last Year Name :
FTML Fazal Textile Mills Limited SECP Securities and Exchange Commission of Pakistan Address :
FBR Federal Board of Revenue SHC Sindh High Court CNIC No. :
FVTPL Financial Assets at Fair Value Through Profit or Loss SPV Special Purpose Vehicle Signature on Five
GHPL Gadoon Holdings (Private) Limited SNGPL Sui Northern Gas Pipeline Limited Rupee Revenue Stamp
2) Signature :
GTML Gadoon Textile Mills Limited THI Tabba Heart Institute
Name :
GIDC Gas Infrastructure Development Cess TKI Tabba Kidney Institute
Address :
GDR Global Depository Receipt ToRs Terms of Reference Signature of members should
CNIC No. :
ICIP ICI Pakistan Limited TDF Tyre Derived Fuel match with the specifimen signature
IoD Institute Of Directors WHRP Waste Heat Recovery Plant registered with the company
IAS International Accounting Standards WTG Wind Turbine Generators
Note:
IASB International Accounting Standards Board WWF Worker’s Welfare Fund
1. Proxies in order to be effective, must be received by the Company not less than 48 hours before the meeting.
IFAC International Federation of Accountants WEF World Economic Forum
IFRIC International Financial Reporting Interpretation Committee YBPL Y.B. Pakistan Limited Proxy must be a member of the Company.
IFRS International Financial Reporting Standards YBG Yunus Brother's Group
2. CDC Shareholders and their proxies are each requested to attach an attested photocopy of their
ISA International Standards On Auditing YEL Yunus Energy Limited
Computerized National Identity Card with this proxy form before submission to the Company.
KIBOR Karachi Inter-Bank Offer Rate YTML Yunus Textile Mills Limited

Annual Report 2019 I 271
2% 1%
11%
2%
3% Raw materials consumed
Salaries wages and benefits
8% Store consumed
Depreciation
Power and fuel
Packing materials
Others
73%


Where Excellence Thrives: Annual Report 2019

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Where Excellence Thrives: Annual Report 2019

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where

Gadoon Textile Mills Limited excellence

Annual Report 2019

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Manufactured Natural Capital

Ginning Outcome &

Social and Intellectual

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Belgium Japan Sawabi

Dominican Republic Pakistan

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Chief Internal Auditor

Gadoon Amazai Plant

Factory Head Office Technical &

The Key Quantitative Information i.e. the number

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2019 49,741 13,367,880 38,022 8,101,037 87,763 21,468,917

2018 58,378 12,630,500 45,700 7,241,831 104,078 19,872,331

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Plans and Decisions

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Social Business Ethics GTML / Supplier / Customer

Human Rights GTML

Marketing Communications GTML

Data Privacy and Cyber Security GTML

Stakeholder and Community

Material GTML / Supplier

Economic Economic Performance GTML

Economic Returns GTML

Market Presence GTML

Relevant areas Evaluating the Interpretation Implementation

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He was appointed as a Non-Executive Director on

His vision enabled the manifestation of Lucky One Mall.

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He has also served as the Chairman of Pakistan

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He served as a Member of the Board of Directors and

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The Board comprises of competent and proficient leaders having

The Board remained vigilant regarding the achievement

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Human Resource and Remuneration Committee

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Muhammad Yunus Tabba Muhammad Sohail Tabba

Karachi: July 26, 2019

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conflict of interest safety of records

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68 I Gadoon Textile Mills Limited Succession Planning Annual Report 2019 I 69

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS

Lucky Holdings Limited

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Committee Name of members and Chairman

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b) Financial Performance in comparison with Budget EBITDA % change EBITDA % change

Return on Fixed Assets % change Earnings per share % change