204613

About the Cover
At Nestlé, we understand that learning is a two-way street. That’s why

we encourage cross generational mentorship by bridging generations
through knowledge and skill sharing to be a force for good.
CONTENTS
02 04 12 13 14 16
OUR PURPOSE DIRECTORS’ ANNEXURE TO REVIEW REPORT BY COMPANY STATEMENT
AND AMBITION REPORT TO THE DIRECTORS’ REPORT THE CHAIRMAN PERFORMANCE OF WEALTH
SHAREHOLDERS ON CORPORATE 2022 CREATION AND ITS
GOVERNANCE DISTRIBUTION
17 18 19 20 21 23
KEY FINANCIAL PATTERN OF CLASSIFICATION KEY SHAREHOLDING STATEMENT OF INDEPENDENT
DATA (SIX YEARS SHAREHOLDING OF SHARES AND SHARES COMPLIANCE AUDITOR’S
AT A GLANCE) BY CATEGORIES TRADED WITH THE CODE REVIEW REPORT
OF CORPORATE
GOVERNANCE
24 25 26 30 32 34
BOARD OF COMPANY NOTICE OF ANNUAL ABOUT MANAGEMENT HUMAN
DIRECTORS DIRECTORY GENERAL MEETING NESTLÉ COMMITTEE RESOURCES
36 38 42 44 46 47
SUPPLY TECHNICAL AGRICULTURE SALES CONSUMER NUTRITION, HEALTH
CHAIN SERVICES COMMUNICATIONS AND WELLNESS
& MARKETING
SERVICES
48 49 50 62 66 68
FINANCE & CONTROL EXPORTS; SERVING OUR INDEPENDENT STATEMENT OF STATEMENT OF
AND INFORMATION BEYOND BORDERS BRANDS AUDITOR’S REPORT FINANCIAL POSITION PROFIT OR LOSS
TECHNOLOGY TO THE MEMBERS
OF COMPANY
69 70 71 73 125
STATEMENT OF STATEMENT OF STATEMENT OF NOTES TO THE FORM OF
COMPREHENSIVE CHANGES IN EQUITY CASH FLOWS FINANCIAL PROXY
INCOME STATEMENTS
Be a force for good MANAGEMENT REPORT 2022 01

OUR
PURPOSE
Unlocking the power of food to enhance quality of
life for everyone, today and for generations to come.
OUR
AMBITION
Globally, we have defined three overarching
ambitions for 2030 which guide our work and
support the achievement of the United Nations
Sustainable Development Goals:
Help
50 MILLION
children live healthier lives
Help to improve
30 MILLION
livelihoods in communities directly
connected to our business activities
Strive for
ZERO
environmental impact in our operations
Nestlé Pakistan supports apple growers in Gilgit-Baltistan to explore new varieties,
improve quality and increase the quantity of their produce.
DIRECTORS’
REPORT
To the Shareholders
The Directors of Nestlé Pakistan
Limited (the “Company”) are
pleased to submit the Annual
Report along with the audited
financial statements of the
Company for the year ended
December 31, 2022.
04
Financial Performance Sales
Nestlé Pakistan reported its full year results for 2022, recording
an increase of 21.9% in its revenue as compared to the same 2022 2021 Change
period last year. This growth was achieved despite external
challenges of high inflation and devastating floods. Relentless
162,516 133,295 +21.9%
focus on ensuring product availability, innovation and renovation
initiatives supported by investments behind the brands helped to Gross Profit Margin
offset the headwinds mentioned above.
2022 2021 Change
The Operating Profit also improved, as a result of sales growth,
favorable product mix, pricing management and tighter control 30.54% 30.38% +16 bps
on fixed costs.
Nestlé is a Good food, Good life Company, and our Purpose – to

Operating Profit Margin
unlock the power of food to enhance quality of life, today and for 2022 2021 Change
generations to come – is embedded in everything we do. Despite
the pandemic, we drove innovation to create products that are 16.48% 16.19% +29 bps
right for consumers and positively contribute to public health
and the environment. We adapted quickly and worked diligently
across the Company to help us stand out from the competition. Net Profit After Tax
2022 2021 Change
In 2022, Dairy brought in a number of exciting new launches.
These include LABAN drinking yogurt, MILKPAK Chocolate 9.26% 9.58% -32 bps
Breakfast Cream and MILO RTD in PET format for a better
gulping experience. Launch of New IRON + (BUNYAD), with
consistent investment, resulted into strong growth for the brand. Net Profit After Tax
A new variant was added to Nestlé Nutrition’s NESTLÉ 2022 2021 Change
CERELAC Nature’s Selection portfolio, and an essential range of
15,050 12,768 +17.87%
sachets introduced to drive the importance of fortified cereals
in supporting physical and cognitive development. We also
introduced new variants in RTD coffee and ICE mixes, and apple Earnings Per Share
variant in our accretive sparkling range under our premium
NESTLÉ FRUITA VITALS brand. 2022 2021 Change
We aim to continue driving category innovations that fulfill our 331.9 281.6 +17.87%
consumer needs and desires.
Dividends
In view of the financial performance of the Company, the Board of
Directors has recommended to pay final cash dividend of
Rs. 95 per share, in addition to the interim cash dividend already
paid of Rs. 240 per share, which brings the total dividend for
the year to Rs. 335 per share for 2022 compared to Rs. 285 per
share in 2021.

DIRECTORS’ REPORT
To the Shareholders
Investment Projects g) There has been no material departure from the best
practices of corporate governance, as detailed in the
In 2022, Nestlé Pakistan made investments of PKR 3.4 billion, listing regulations
including projects on Renewable Energy. Highlights are
h) The value of investments of employee’s funds are as
hereunder:
follow (PKR millions):
Sheikhupura Factory 1,255 Rs. in Million 2022 2021
Kabirwala Factory 755 Rs. in Million Provident Fund 3,981 3,941

Gratuity Fund 2,216 1,973
Water Plants 180 Rs. in Million Pension Fund 4,623 4,152
Distribution and Sales 519 Rs. in Million i) Statements regarding the following are annexed or
disclosed in the notes to the accounts:
Others 790 Rs. in Million ii) Key financial data for the last six years
iii) Pattern of shareholdings
Investments of approximately PKR 3 billion, are planned for 2023,
primarily in respect of operational reliability in order to meet iv) Trading in shares of the Company by its Directors, CEO,
consumer demands. CFO and Company Secretary
v) Number of Board meetings held during the year and
Corporate & Financial Reporting attendance by each director
Framework Remuneration Policy for Non-

Nestlé Pakistan is committed to maintain high standards of
corporate governance without any exception. The Directors Executive Directors and Disclosure
are pleased to state that the Company is compliant with the
provisions of the Code of Corporate Governance as required by
of Remuneration of Directors
SECP and formed as part of stock exchange listing regulations. The fee of the Non-Executive and Independent Directors for
Statement of Compliance with Code of Corporate Governance is attending the Board and Committee meetings of the Company
as under. is determined by the Board. The detail of the remuneration,
including other benefits paid during the year 2022, to the
The Directors confirm that: Chief Executive Officer, Executive Directors, and Non-Executive
Directors of the Company, are described in Note 41 of the
a) The financial statements prepared by the management financial statements.
of the Company present fairly its state of affairs, the
results of its operations, cash flow and changes in
equity
External Auditors:
Messrs. Ernst & Young Ford Rhodes, Chartered Accountants
b) Proper books of accounts of the Company have been
have completed their assignment for the year 2022 and retiring
maintained
at the conclusion of the 45th Annual General Meeting. Being
c) Appropriate accounting policies have been consistently eligible, they have offered themselves for re-appointment.
applied in preparation of financial statements and
accounting estimates are based on reasonable and
prudent judgment
Holding Company and Principal
d) International Financial Reporting Standards, as Activity:
applicable in Pakistan and the requirements of Société des Produits Nestlé SA (SPN), a Company incorporated
Companies Act, 2017 have been followed in the in Switzerland (the holding company), holds 27,936,173 ordinary
preparation of the financial statements; and any shares representing 61.6% equity interest in the Company. The
departure thereof has been adequately disclosed and principal activity of the Company is manufacturing, processing
explained and sale of food products including imported products. No
e) The system of internal control is sound in design and change has occurred during the financial year relating to the
has been effectively implemented and monitored nature of the business of the Company.
f) There are no significant doubts upon the Company’s

ability to continue as a going concern
06
Human Resources Management & to engage, motivate and inspire young female professionals.
We inducted a pool of 33 females this year under this program,
Employee Relations: equipping them with the knowledge, skills and experience
required for a successful career. Another such initiative is “Hay
This year’s highlight has been the New Nest – our new Head
Tum Pe Yakeen”, exclusively designed to break mental barriers
Office. The open layout, flexible seating and meeting spaces,
associated with employing differently-abled persons. After
bigger parking for employees, energy management have all been
successfully converting 40% employees to permanent roles
designed and picked to facilitate the employees’ well-being and
in the preceding batch, 10 associates were hired for the year
keep our promise of sustainability. The concept of hot desks has
2022 with a strong focus on building a strong talent pipeline
also been introduced to encourage more flexibility and cross
through these associates for the future. We also increased our
functional collaboration.
management female diversity from 27% to 30% in 2022.
Following relaxation in COVID restrictions there was a strong
need to bring our workforce back to normalcy with the same Creating Shared Value (CSV) and
energy and engagement. Happy Hours at the different themed
pit stops coupled with fun snacks and boardgames, Xbox, Community Work
football, cricket and table tennis tournaments are some of the Nestlé Pakistan believes in Creating Shared Value (CSV) for
activities that employees enjoyed most. the communities in which it works and lives. The health of our
company is intrinsically linked to the health and resilience of
This year was also jam packed with exciting development the society we operate in. It is our belief that for a company to
programs to enhance employee capability - sessions like the be able to create value for its shareholders, it must also create
People Manager Development Assessment Centre, People value for society. At Nestlé, social responsibility does not end
Academy Bootcamp, Digital Learning Portal, and Value Creation with a few philanthropic activities. Instead, CSV is embedded in
have brought back that learning spirit owing to on-ground our business model, where direct engagement and support to
trainings. The key highlight was the launch of NESLearn, the communities is extended across the value chain. A signatory to
three-part Life Skills Learn Quest on Mind, Heart dedicated the UN Global Compact for Ethical Business, the Company is
to Critical Thinking, Enabling Compassion & empathy in committed to the stakeholders and the communities for mutual
the workplace, as well as Mindfulness and Self-awareness. growth and sustainability. From offering quality products to
Combined training hours were recorded at 388+ as compared consumers and providing a fair and diverse work environment for
to last year’s number of just 91.5. The increase in trainings was our employees; from our partners and raw material providers to
record-breaking at 324%. implementing responsible sourcing models into our relationships;
from supporting under privileged communities to working with
People development and performance management activities small farmers; from enhancing sustainability and environmental
were carried out to support employees to enable them to nurture friendliness of our operations to embedding ethical and
their careers based on individual aspirations and succession transparent business practices, CSV is entrenched in the entire
plans. While the Career Coaching, 3-Party PDPs and Corporate value chain of Nestlé.
& Functional Mentoring continued, we launched the first ever
Cross-Generational Mentoring platform to enable our leaders to Contributing to nutritious and sustainable diets, strengthening
become more digital savvy and also build on their strengths using communities and helping to protect, renew and restore natural
the Clifton Strengths assessments. resources remain our focus areas for CSV. Our efforts in each of
these areas are supported through our specific commitments.
We continued to build on our global commitments with the focus These commitments will, in turn, enable us to meet our
to achieve our ambition under Nestlé Needs Youth. NestGen ambitions for 2030 in line with the timescale of the Sustainable
and International Youth Day celebrations were two notable zone Development Goals (SDGs).
led conventions where influential industry leaders from Google,
Facebook, Microsoft, Accenture & TikTok spoke on various topics The key CSV initiatives of 2022 include:
to inculcate a creative mindset in the future ready workforce.
Pakistan market stood out with one of the highest participations • Continuation of our Market Sustainability Roadmap to 2025
with 10,413 youth attendees. Alongside, 20 young people were as part of our global commitment to become a Net Zero
hired through the Management Trainee program and 190+ company by 2050
Nesterns were on boarded through various internship programs
• We reduced our carbon footprint in 2022 by replacing
throughout the year. In totality in 2022, we engaged and provided
low-yield local cows with high-yield imported cows and
support & development to 55,000+ aspiring youth of Pakistan.
switching to renewable energy resources such as solar
energy and biogas
Nestlé believes diversity in our workforce is an asset that
impacts the way we think and the way we work together. We • Facilitation for collection and management of more than
are committed to be an inclusive workplace that respects and 700 tons of waste under our waste management project
supports our people to perform to the best of their abilities. Our “Clean Gilgit-Baltistan Project” (CGBP) to encourage waste
initiative focusing on gender diversity, “Kero Aitemad” continued collection and management in Gilgit-Baltistan in alignment
with our vision of a waste free future

DIRECTORS’ REPORT
To the Shareholders
• We have trained nearly 400 hospitality professionals till

date and aired public awareness campaign on selected
Principal Risk & Uncertainty:
FM radios under ‘Travel Responsibly for Experiencing • Increase in input cost due to rising inflation and likely
Ecotourism in Khyber Pakhtunkhwa’ (TREK) – a collaboration further devaluation of the currency
between KP Government, World Bank Group and Nestlé
• Marco economic uncertainties which might affect
Pakistan
consumer demand
• Nutrition awareness for another 35,000 school children
• Increase in existing sales tax rates and levy of new taxes/
in the rural, suburban and urban areas under Nestlé for
duties
Healthier Kids (N4HK), extending the overall outreach to
more than 320,000 kids and 1,750 teachers on nutrition in
380 schools in the country Future Outlook:
• Overall enrollment of nearly 2,500 women as Nestlé BISP The Company maintains a cautious outlook for 2023 due to
Rural Women Sales Agents, a program in partnership with external challenges e.g. restriction on imports, low Foreign
Benazir Income Support Program (BISP) and Akhuwat exchange availability, pressure on the local currency, and an
Foundation increase in taxes.
• Provision of Clean and Safe Drinking Water to more than
60,000 people on daily basis through facilities in our Despite all the challenges, the Company remains committed to
operational areas profitable growth in the coming year, capitalizing on strong brand
equity and highly committed workforce supported by continuous
• Donations for flood affected communities which include initiatives for operational excellence.
in-kind support of 325,000 liters of water and 10,000 liters
of milk to National Disaster Management Authority (NDMA),
more than 700,000 servings of NESTLÉ BUNYAD, cash Acknowledgments:
donations worth PKR 3 million which were matched 1:1 We take this opportunity to thank our valued consumers who
by the company (A total of PKR 6 million was donated to have trust in our products and continue to provide sustained
Akhuwat Foundation for flood rehabilitation efforts). We also support in ensuring the progress of the Company. Our people
extended cash donation to Prime Minister’s Flood Relief are our greatest strength and they have demonstrated their
Fund 2022 to support the rehabilitation process led by the commitment once again throughout the pandemic by ensuring
government timely supply and availability of our products. We are guided by
• Installation of water sensors and drip irrigation in Punjab our strong values rooted in respect. Our purpose and our values
and Sindh with the help of farmers and partners including are the reasons why we all work for Nestlé’s success. They
Punjab Agriculture Department, Lahore University of are fundamental to everything we do, particularly in times of
Management Sciences and Pakistan Agriculture Research significant changes in the external environment.
Council to help reduce water wastage in agriculture
Nestlé Pakistan, whilst bringing international expertise and
• Continued support for programs involving dairy farmers
standards into its products, processes and manufacturing sites,
and rural women for skill enhancement related to dairy and
remains a “Har Dam Pakistani” company, very proud of its
livestock sector
achievements in Pakistan.
• Continued product support through Nutrition Support
Program for the underprivileged institutions and to the areas
affected by natural calamities FOR AND ON BEHALF OF THE
• Continuation of Chaunsa Project and Apple sourcing project BOARD OF DIRECTORS
with integration of fruit farmers in our value chain
• Support for Driver Training Facility at the National Highways
& Motorway Police Training Institute, Sheikhupura and Road
Safety Institute, Karachi
• Plantation of 25,000 trees at different locations near our
Samer Chedid Syed Yawar Ali
factories
Chief Executive Officer Chairman
Subsequent Events
February 27, 2023
No material changes and commitments affecting the financial
Lahore
position of the Company have occurred between the end of the
financial year to which this Balance Sheet relates and the date
of the Directors’ Report.
08
10
ANNEXURE TO
DIRECTORS’ REPORT
On Corporate Governance
Board of Directors’ Meetings Role and Responsibilities of the

During the year under review, the Board of Directors had the Chairman and the Chief Executive
following meetings:
The roles of the Chairman and the Chief Executive are segregated
Number of Board Meetings held for the financial year = 4 and they have distinct responsibilities. The Chairman of the
Board has responsibilities and powers vested in him by law
and the Articles of Association of the Company, as well as
Date of Meeting Date of Meeting duties assigned to him by the Board. In particular, the Chairman
coordinates the activities of the Board and presides over the
Time Time
meetings of the Board of Directors and Shareholders.
Video Conference Video Conference
The Managing Director is the Chief Executive Officer of the

Company and is responsible for the day-to-day operations
and conduct of its business in accordance with the powers
17-Feb-22 21-Apr-22 vested in him by law, the Articles of Association of the
Company and authority delegated to him through the Board of
9:00 A.M 9:00 A.M
Directors’ resolutions from time to time. The Managing Director
recommends policy and strategic directions and annual business
plans for the Board of Directors’ approval. The Managing
Director is also responsible for exercising the overall control,
Date of Meeting Date of Meeting
discretion, administration, and supervision for sound and efficient
Time Time management and conduct of the business of the Company.
Nestlé Pakistan Nestlé Pakistan
Limited, Packages Mall, Limited, Packages Mall,
Shahrah-e-Roomi,
Lahore
Shahrah-e-Roomi,
Lahore
Audit Committee
The Audit Committee comprises of three members including the
28-Jul-22 19-Oct-22 Chairman of the Committee, who is an Independent Director.
Two members are Non-Executive Directors. The terms of
9:00 A.M 9:30 A.M reference of the Committee, which is in line with the Code of
Corporate Governance, has been presented and approved by the
Board of Directors.
Detail of attendance of Directors at Board Meetings is summarized The Audit Committee held four meetings in 2022. The Chief
below: Financial Officer, Internal Auditors as well as External Auditors
were invited to the meetings.
Date of No. of Meetings
Name of Director
appointment Attended
Mr. Syed Yawar Ali 19.07.2022 4

Human Resources and
Mr. Samer Chedid 19.07.2022 4 Remuneration Committee
The Company has established this Committee in accordance with
Mr. Syed Babar Ali 19.07.2022 4
requirements of the Code of Corporate Governance. All issues of
Mr. Syed Hyder Ali 19.07.2022 3 remuneration are fully disclosed, deliberated, and decided at the
meetings of the Directors.
Ms. Komal Altaf 01.08.2022 1
Mr. Fabrice Cavallin 4

Strategic Planning
19.07.2022
Mr. Amr Rehan 19.07.2022 3

The Company’s strategic direction was reviewed at the meeting
Ms. Rabia Sultan 19.07.2022 3 of the Directors. A process has been put in place whereby long
term Market Business Strategies and Annual Operational Plans
Mr. David A. Carpenter 19.07.2022 4
established by the Management are regularly reviewed by the
Mr. Omar Saeed 19.07.2022 2 Directors in line with the Company’s overall business objectives.
Part of the process involves setting of the measurable Key
Mr. Osman Khalid Waheed 17.07.2019 1
(Resigned) Performance Indicators (KPls).
Mr. Syed Saiful Islam 19.07.2022 3

(Resigned)
12
REVIEW REPORT
BY THE CHAIRMAN
It gives me immense pleasure to present this report to the Shareholders of Nestlé

Pakistan Limited pertaining to the overall performance of the Board and effectiveness
of its role in attaining the company’s aims and objectives.
The company has implemented a strong governance framework supportive of effective and prudent management of business
matters, which is regarded as instrumental in achieving long-term success of the company.
During the year, the Board Committees continued to work with a great measure of proficiency. The Board as a whole has reviewed
the Annual Report and Financial Statements, and is pleased to confirm that in its view the report and financial statements, taken as
a whole, are fair, balanced, and understandable.
The Board carries out a review of its effectiveness and performance each year on a self-assessment basis. The Board Performance
assessment for the year was based on an evaluation of the integral components i.e. Strategic Planning, Board Composition, Board
Committees, Board Procedures, Board Interactions, Board and CEO’s Compensation, Board Information and Board & CEO’s
Effectiveness.
The Board of Directors of the Company received agendas and supporting written material including follow up materials in
sufficient time prior to the Board and its Committee meetings. The Board meets frequently enough to adequately discharge its
responsibilities. The Non-Executive and Independent Directors are equally involved in important decisions.
Syed Yawar Ali

Chairman

COMPANY
PERFORMANCE 2022
SALES EARNING PER SHARE
Rupees in million Rupees
162,516
160,000 350 331.86
322.87
140,000 133,295 300

281.55
118,553 120,701
115,962 118,781 256.05
120,000 250
100,000
200 195.91
80,000 162.17
150
60,000
100
40,000
50
20,000
0 0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
MARKET CAPITALIZATION RETURN ON EQUITY

Rupees in million Rupees in million
600,000 14,000 350%

316.0%
288.8%
521,520 12,000 300%
260.8%
500,000
10,000 225.9% 250%
236.3%
8,000 200%
212%
400,000
365,064 5,770
408,146 6,000 5,403 150%
4,634
4,020 4,190
302,255 100%
4,000 3,256
300,000
259,626
2,000 50%
266,202
200,000 0 0%
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Equity Return on Equity
MARKET PRICE PER SHARE VS. DIVIDEND PAYOUT RATIO

NET ASSETS PER SHARE Rupees in million
Rupees
12,000 11,500 700 20,000 180%
18,593
18,000 160%
10,000 600
16,000 14,965
9,000 140%
127%
8,050 500 14,000
8,000 120%
12,018 107%
12,000 11,609
6,665
400 100%
103% 89%
5,725 5,870 10,000
6,000
91% 91% 80%
300 7,845 7,936
8,000
4,000 60%
6,000
200
40%
102.2 119.1 127.2 4,000
92.4
2,000 88.6 71.8 100
2,000 20%
0 0 0%
0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Market Price Net asset per share Dividend Dividend Payout Ratio
14
NET FIXED ASSETS, FIXED CAPITAL OPERATING PROFIT
EXPENDITURE AND DEPRECIATION Rupees in million
Rupees in million
50,000
28,000 26,779 30
23,607
24,000
40,000 25
21,578
3,375 4,147 3,859 20,080
3,711 4,005 3,842 20,000
2,603 19.9% 20
5,457 3,157 3,379
30,000 4,533 3,804 16,061
15,025
16,000 16.6% 16.5%
16.2% 15
20,000 12,000 13.5%

13.0%
10
28,735 30,363 30,333 28,680 29,275 29,386
8,000
10,000
5
4,000
0 0 0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Net fixed assets Capital expenditure Depreciation Operating Profit % of Sales
PROFIT BEFORE TAX PROFIT AFTER TAX

Rupees in million Rupees in million
15,050
14,642
24,000 22,792 40.0% 15,000 25.0%
20,989
21,000 35.0% 12,768
12,500 11,612
17,954 20.0%
18,000 16,967 30.0%
10,000
15,000 25.0% 8,885
15.0%
12,591
7,354
12,000 10,716
20.0% 7,500 12.4%
17.7%
9.6%
9.6%
9,000 15.0% 9.3% 10.0%
14.1%
14.0% 5,000
13.5%
6,000 10.6% 10.0% 7.5%
6.3% 5.0%
9.2%
2,500
3,000 5.0%
0 0.0% 0 0.0%
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Profit Before Tax % of Sales Profit After Tax % of Sales

STATEMENT OF
WEALTH CREATION
AND ITS DISTRIBUTION
(PKR in 000) 2022 2021
Wealth Generated / Value Added:

Net turnover including sales tax 189,433,328 158,080,250
Purchased materials and services (120,586,498) (102,145,460)
Value Added 68,846,830 55,934,790
Other Income 631,543 295,578
Wealth Created 69,478,373 100% 56,230,368 100%
Wealth Distribution:
To Employees:
Salaries, benefits and other costs 14,512,997 20.9% 12,250,791 21.8%
To Government:
Income tax, sales tax, excise & custom duty, WWF, WPPF 33,663,085 48.5% 26,531,667 47.2%
To Society and Development Initiatives:

Donations and CSR Projects 6,659 0.0% 4,840 0.0%
*Dairy Development (Non-business returns) 152,340 0.2% 134,613 0.2%
To Providers of Capital:
Dividend to Shareholders 14,965,368 21.5% 11,609,493 20.6%
Mark-up / interest expenses on borrowed funds 2,335,994 3.4% 1,840,228 3.3%
To Company:
Depreciation and amortization 3,841,930 5.5% 3,858,736 6.9%
69,478,373 100.0% 56,230,368 100.0%
* This represents contribution of the Company towards development of the society and dairy sector in Pakistan.
16
KEY FINANCIAL DATA
Six Years at a Glance
(Rupees in million) 2022 2021 2020 2019 2018 2017
Operating performance
- Sales 162,516 133,295 118,781 115,962 120,701 118,553
- Gross profit 49,630 40,492 34,765 33,349 38,814 41,094
- Operating profit 26,779 21,578 16,061 15,025 20,080 23,607
- Profit before tax 22,792 17,954 12,591 10,716 16,967 20,989
- Profit after tax 15,050 12,768 8,885 7,354 11,612 14,642
Balance Sheet
- Net assets 5,770 5,403 4,190 3,256 4,020 4,634
- Reserves 5,317 4,950 3,737 2,802 3,567 4,181
- Operating fixed assets 29,386 29,275 28,680 30,333 30,363 28,735
- Net working capital 6,082 9,193 8,464 18,708 16,099 15,026
- Long term liabilities* 20,356 16,864 20,302 12,057 14,244 13,562
Investor information for six years

- Gross profit ratio 30.5% 30.4% 29.3% 28.8% 32.2% 34.7%
- Operating profit ratio 16.5% 16.2% 13.5% 13.0% 16.6% 19.9%
- Profit before tax ratio 14.0% 13.5% 10.6% 9.2% 14.1% 17.7%
- Profit after tax ratio 9.3% 9.6% 7.5% 6.3% 9.6% 12.4%
- Inventory turnover ratio 4.9 : 1 5.3 : 1 4.8 : 1 4.3 : 1 4.7 : 1 5.8 : 1
- Total assets turnover ratio 2.2 : 1 2.1 : 1 1.9 : 1 1.8 : 1 1.9 : 1 2.2 : 1
- Price earning ratio 17.7 20.3 34.0 49.6 35.1 35.6
- Return on capital employed 125% 101% 88% 97% 129% 153%
- Market value per share 5,870 5,725 6,665 8,050 9,000 11,500
- Debt equity ratio 77:23 81 : 19 85 : 15 90 : 10 87 : 13 82 : 18
- Current ratio 0.8:1 0.8 : 1 0.7 : 1 0.6 : 1 0.7 : 1 0.6 : 1
- Interest cover ratio 10.8 : 1 10.8 : 1 5.5 : 1 4.4 : 1 10.1 : 1 20.2 : 1
* Long term liabilities include current portion classified under current liabilities.

PATTERN OF
SHAREHOLDING
As at December 31, 2022
No. of Shareholdings Total Shares

Shareholders From To Held
724 1 to 100 20,083
226 101 to 500 59,399
85 501 to 1000 64,180
86 1001 to 5000 183,742
17 5001 to 10000 135,467
5 10001 to 15000 60,824
3 15001 to 20000 51,226
4 20001 to 25000 93,541
2 30001 to 35000 63,950
1 35001 to 40000 38,137
1 40001 to 45000 40,023
1 50001 to 55000 54,910
1 55001 to 60000 56,807
2 65001 to 70000 132,239
1 100001 to 105000 100,556
1 110001 to 115000 110,439
1 155001 to 160000 157,461
1 170001 to 175000 170,745
1 210001 to 215000 210,865
1 220001 to 225000 224,720
1 370001 to 375000 375,000
1 385001 to 390000 387,334
1 425001 to 430000 429,852
1 430001 to 435000 430,551
1 495001 to 500000 495,916
1 535001 to 540000 538,235
1 830001 to 835000 830,467
1 1195001 to 1200000 1,195,211
1 1290001 to 1295000 1,294,334
1 1330001 to 1335000 1,334,283
1 3645001 to 3650000 3,649,248
1 4350000 to 4430000 4,423,666
1 26500000 to 28000000 27,936,173
1177 45,349,584
18
CLASSIFICATION OF
SHARES BY CATEGORIES
Categories of Shareholders Shareholders Shares Held Percentage
Directors, Chief Executive Officer and their spouse(s) and minor children 8 1,859,230 4.10
Associated Companies, Undertakings and Related parties 8 36,964,454 81.51
Executives 5 220 0.00
NIT and ICP 1 1,100 0.00
Banks Development Financial Institutions, Non-Banking Financial
Institutions & Public Sector Companies 4 506,699 1.12
Insurance Companies 6 24,124 0.05
Modarabas and Mutual Funds 6 105,123 0.23

General Public:
a) Local Individuals 1,014 5,785,425 12.76
b) Foreign Individuals 32 1,959 0.00
c) Foreign Companies 5 34,203 0.08
Others 88 67,047 0.15
Totals 1,177 45,349,584 100
Shareholders holding 5% or above Shares Held Percentage
Société Des Produits Nestlé S.A. 1 27,936,173 61.60

IGI Investments (Pvt) Limited 1 4,423,666 9.75
Packages Limited 1 3,649,248 8.05

KEY SHAREHOLDING
AND SHARES TRADED
Name of Shareholder Number of shares Percentage

Associated Companies, Undertakings and Related parties
SOCIÉTÉ DES PRODUITS NESTLÉ S.A. 27,936,173 61.60
IGI INVESTMENTS (PVT) LIMITED 4,423,666 9.75
PACKAGES LIMITED 3,649,248 8.05
GURMANI FOUNDATION 538,235 1.19
NATIONAL MANAGEMENT FOUNDATION 224,720 0.50
BABAR ALI FOUNDATION 170,745 0.38
INDUSTRIAL TECHNICAL & EDUCATIONAL INSTITUTE 21,666 0.05
IGI FINEX SECURITIES LIMITED 1 0.00
36,964,454 81.51
Directors, Chief Executive Officer and their spouse(s) and minor children
SYED BABAR ALI 1,195,211 2.64
SYED HYDER ALI 429,852 0.95
SYED YAWAR ALI 23,220 0.05
OMER SAEED 20 0.00
RABIA SULTAN 1 0.00
DAVID ALEXANDER CARPENTER 1 0.00
PERWIN BABAR ALI 210,865 0.46
(W/O SYED BABAR ALI)
SYEDA NIGHAT ALI 60 0.00
(W/O SYED YAWAR ALI)
1,859,230 4.10
Executives
220 0.00
Banks Development Financial Institutions, Non-Banking Financial Institutions, Public Sector Companies & Corporations
ZARAI TARAQIATI BANK LIMITED 430,551 0.95
MCB BANK LIMITED - TREASURY 65,532 0.14
EMPLOYEES OLD AGE BENEFITS INSTITUTION 10,560 0.02
NATIONAL BANK OF PAKISTAN 56 0.00
506,699 1.12
Modarabas and Mutual Funds
CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST 100,556 0.22
CDC - TRUSTEE MEEZAN TAHAFFUZ PENSION FUND - EQUITY SUB FUND 2,920 0.01
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 720 0.00
CDC - TRUSTEE AKD INDEX TRACKER FUND 614 0.00
CDC - TRUSTEE ABL STOCK FUND 300 0.00
CDC - TRUSTEE MCB PAKISTAN STOCK MARKET FUND 13 0.00
105,123 0.23
Shareholders holding 5% and above

SOCIÉTÉ DES PRODUITS NESTLÉ S.A. 27,936,173 61.60
IGI INVESTMENTS (PVT) LIMITED 4,423,666 9.75
PACKAGES LIMITED 3,649,248 8.05
Following Director has purchased Shares during the year. However, there was no other Sale / Purchase of Nestlé
Pakistan’s shares by any other Director, Company Secretary, Executives, and their spouses during the year.
Number of Shares
Name Purchased
OMER SAEED 20
20
STATEMENT OF COMPLIANCE
With the Listed Companies (Code of Corporate Governance)
Regulations, 2019 for the Year Ended December 31, 2022
Nestlé Pakistan Limited (‘Company’) has the Board/Shareholders as empowered by the relevant
provisions of the Companies Act, 2017 and these
complied with the requirements of the Regulations;
Regulations in the following manner:
7. The meetings of the Board were presided over by the
1. The total number of Directors is 10 as per the following: Chairman and, in his absence, by a director elected by
the Board for this purpose. The Board has complied with
i. Male: 08 the requirements of the Companies Act, 2017 and the
ii. Female: 02 Regulations with respect to frequency, recording and
circulating minutes of the meeting of the Board;
2. The composition of the Board is as follows:
8. The Board has a formal policy and transparent procedures
Independent Directors: for remuneration of the Directors in accordance with the
Companies Act, 2017 and these Regulations;
i. Mr. Omar Saeed
ii. Mr. David A. Carpenter
9. The Directors of the Company have attended Directors’
iii. Ms. Rabia Sultan
Training program who were required as per the applicable
Code of Corporate Governance prescribed timelines.
Executive Directors:
i. Mr. Samer Chedid 10. The Board has approved appointment of the Chief
ii. Ms. Komal Altaf Financial Officer, Company Secretary and Head of Internal
iii. Mr. Amr Rehan Audit, including their remuneration and terms and
conditions of employment and complied with relevant
requirements of the Regulations;
Non-Executive Directors:
i. Mr. Syed Yawar Ali 11. Chief Financial Officer and Chief Executive Officer duly
ii. Mr. Syed Babar Ali endorsed the Financial Statements before approval of the
iii. Mr. Syed Hyder Ali Board;
iv. Mr. Fabrice Cavallin
12. The Board has formed following Committees comprising
Female Directors: of members given below:
i. Ms. Komal Altaf

ii. Ms. Rabia Sultan
Board Audit Committee
Name of the Committee Member Designation
3. The Directors have confirmed that none of them is serving
as a director on more than seven listed companies, Mr. Omar Saeed Chairman / Independent Director
including this company; Mr. Syed Babar Ali Member / Non-Executive Director
Mr. Syed Hyder Ali Member / Non-Executive Director

4. The Company has prepared a Code of Conduct and
has ensured that appropriate steps have been taken to Mr. Osama Bin Zafar Secretary / Head of Internal Audit
disseminate it throughout the Company along with its
supporting policies and procedures;
Human Resources and
5. The Board has developed a vision/mission statement, Remuneration Committee
overall corporate strategy and significant policies of the
Company. The Board has ensured that complete record Name of the Committee Member Designation
of particulars of the significant policies along with their
Ms. Rabia Sultan Chairperson / Independent Director
date of approval or updates (if any) is maintained by the
Company; Mr. Samer Chedid Member / Chief Executive Officer
Mr. Syed Hyder Ali Member

6. All the powers of the Board have been duly exercised
Secretary / Head of Human
and decisions on relevant matters have been taken by Ms. Hajra Omer Resources

13. The ‘Terms of Reference’ of the aforesaid Committees 17. The statutory auditors or the persons associated with
have been formed, documented and advised to the them have not been appointed to provide other services
Committee for compliance; except in accordance with the Companies Act, 2017,
these Regulations or any other regulatory requirement and
14. The frequency of meetings of the Committee were as the Auditors have confirmed that they have observed IFAC
follows: guidelines in this regard;
i. Audit Committee: 04 18. We confirm that all requirements of regulations 3, 6, 7, 8,

ii. HR and Remuneration Committee: 02 27,32, 33 and 36 of the Regulations have been complied
with.
15. The Board has set up an effective Internal Audit Function
which is considered suitably qualified and experienced 19. Regulation 6(1) of the Listed Companies (Code of
for the purpose and are conversant with the policies and Corporate Governance) Regulations, 2019 (CoCG-2019),
procedures of the Company; requires that “each listed company shall have at least
two or one-third members of the Board, whichever is
16. The statutory auditors of the Company have confirmed higher, as independent directors”, further the CoCG-
that they have been given a satisfactory rating under 2019 Regulations’ apply to the listed companies based
the Quality Control Review program of the Institute of on “comply or explain approach”. The Company’s total
Chartered Accountants of Pakistan and registered with number of directors results in a fractional number
Audit Oversight Board of Pakistan, that they and all their (3.33), and the fraction had not been rounded up to
partners are in compliance with International Federation one, therefore, the Board currently has 3 Independent
of Accountants (IFAC) guidelines on Code of Ethics as Directors. The Company considers that the existing
adopted by the Institute of Chartered Accountants of composition of the Board of Directors is in compliance
Pakistan and the partners of the firm involved in the audit with CoCG regulations and Company considers that the
are not a close relative (spouse, parent, dependent and existing composition of the Board of Directors brings in
non-dependent children) of the Chief Executive Officer, the relevant experience and valuable contributions to the
Chief Financial Officer, Head of Internal Audit, Company Board.
Secretary or Director of the Company;
Samer Chedid Syed Yawar Ali

Chief Executive Officer Chairman
22
INDEPENDENT AUDITOR’S
REVIEW REPORT
To the Members of Nestlé Pakistan Limited
Review Report on the Statement of Compliance Contained in the Listed Companies

(Code of Corporate Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance) Regulations,
2019 (the Regulations), prepared by the Board of Directors of Nestlé Pakistan Limited (the Company) for the year ended 31
December 2022 in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is
to review whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of the
Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is
limited primarily to inquiries of the Company’s personnel and review of various documents prepared by the Company to comply
with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control
systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board
of Directors’ statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal
controls, the Company’s corporate governance procedures and risks.
The Code require the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place
before the Board of Directors for their review and approval, its related party transactions. We are only required and have ensured
compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon
recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not
appropriately reflect the Company’s compliance, in all material respects, with the requirements contained in the Code as applicable
to the Company for the year ended 31 December 2022.
EY Ford Rhodes
Chartered Accountants
Engagement Partner: Abdullah Fahad Masood
Lahore: 17th March 2023
UDIN: CR202210177fkqz3Na1d

BOARD OF DIRECTORS
As on December 31, 2022
Syed Yawar Ali Samer Chedid Syed Babar Ali Syed Hyder Ali
Chairman Executive Director Non-Executive Director Non-Executive Director
Non-Executive Director Chief Executive Officer
(Nominee of SPN)
Komal Altaf Amr Rehan Fabrice Cavallin Omar Saeed

Executive Director Executive Director Non-Executive Director Independent Director
(Nominee of SPN) (Nominee of SPN) (Nominee of SPN)
David Alexander Rabia Sultan

Carpenter Independent Director
Independent Director
Officers Audit Committee Human Resource and

Samer Chedid Omar Saeed Remuneration Committee
Chief Executive Officer Chairman/ Independent Director
Rabia Sultan
Komal Altaf Syed Hyder Ali Chairperson/ Independent Director
Chief Financial Officer Member/Non-Executive Director
Syed Hyder Ali
Ali Sadozai Syed Babar Ali Member/Non-Executive Director
Company Secretary Member/Non-Executive Director
Samer Chedid
Osama Bin Zafar Osama Bin Zafar Member/Executive Director
Head of Internal Audit Secretary/Head of Internal Audit
Hajra Omer
Secretary/Head of Human Resources
24
COMPANY
DIRECTORY
Registered and Bankers HYDERABAD
Corporate Office • Standard Chartered Bank (Pakistan)

Fortune Arcade, Plot No.79, Block-H,
Commercial Premises No.2, Main
Limited. Jamshoro Road, Hyderabad, Sindh,
Packages Mall, • Habib Bank Limited. Pakistan.
Shahrah-e-Roomi, • MCB Bank Limited. Phone: (022)-2100725 -8
PO Amer Sidhu • Deutsche Bank AG.
Lahore - 54760, Pakistan. • Citibank N.A.
PABX: (042) 111 637 853 • United Bank Limited.
Centre Zone
Fax: (042) 35789303-4 • Meezan Bank Limited. GUJRANWALA
3rd Floor, State Life Building
Resident Factories G.T Road Gujranwala, Pakistan.
Corporate Office Phone: (055)-3733415, (055)-3733243
SHEIKHUPURA FAISALABAD
Tenancy # 2, 4th Floor,
29-km Lahore - Sheikhupura Road, 6/C, Al Fahad Plaza, Koh-e-Noor City,
Corporate Office Block
Sheikhupura, Pakistan. Jaranwala Road, Faisalabad, Pakistan.
Dolmen City, Pakistan.
Phone: (056) 3406615-29 Phone: (041)-8719131-2
Plot No. HC-3 Block 4 Clifton
Karachi, Pakistan. MULTAN
Phone: (021)-35291571-5 KABIRWALA
10-km, Khanewal Road, Kabirwala, Office No. 507, 5th Floor, United Mall,
Abdali Road, Multan Cantt, Pakistan.
Auditors District Khanewal, Pakistan.
Phone: (021) 38402086 Phone: (061)-4540560
Fax: (065) 241143
EY Ford Rhodes
Chartered Accountants ISLAMABAD North Zone
Plot No. 32, Street No. 3, Sector I-10/3, ISLAMABAD
Share Registrar/ Industrial Area Islamabad, Pakistan.
Plot 102, Street 7, Chambeli Road,
Phone: (051) 4445991-3
Transfer Agent Industrial Area, I-10/3, Islamabad,
Pakistan.
KARACHI
Phone: (051)-4104400
Central Depository Company Share Plot No. A23, North Western
Registrar Services Limited (CDCSRSL) Industrial Area, Port Qasim Karachi,
CDC House, 99-B, Block ‘B’ PESHAWAR
Pakistan.
S.M.C.H.S. Main Shahra-e-Faisal Phone: (021) 34720152-4 Office No. 302, Block A, 2nd Floor, JB
Karachi, Pakistan. - 74400 Towers, University Road, Peshawar,
Phone: 0800-23275 Pakistan.
PABX: (021) 111-111-500
Fax: (021) 34326053
Regional Sales Offices Phone: (091)-5703017
Email: [email protected] South Zone

Website: www.cdcsrsl.com
QUETTA
Legal Advisors Ground Floor, Serena Bazar
Serena Hotel, Zarghoon Road
Chima & Ibrahim. Quetta, Pakistan.
Advocates Phone: (081)-2834887, (081)-2821543,
Corporate Counsel (081)-2823946

NOTICE OF ANNUAL
GENERAL MEETING
Notice is hereby given that the 45th Annual General Meeting of Nestlé Pakistan Limited
(“Company”); will be held at 12:00 noon on Wednesday, April 17, 2023, at Company’s
Head Office, Packages Mall, Shahrah-e-Roomi, PO Amer Sidhu, Lahore, to transact the
following business:
Members are encouraged to attend the AGM through video conference facility managed by the Company
(please see the notes section for details).
ORDINARY BUSINESS: NOTES

i) Share Transfer Books of Nestlé Pakistan Limited
1- To receive, consider and adopt the Audited Accounts of (“Company”) shall remain closed from April 10, 2023, to
the Company for the year ended December 31, 2022, April 17, 2023 (both days inclusive) and no transfer will be
together with the Directors’ and Auditors’ reports thereon. registered during that time. Share transfer deeds received
in order with the Share Registrar of the Company, i.e.
As required under section 223(7) of the Companies Act, CDC Share Registrar Services Limited (CDCSRSL), CDC
2017, the Financial Statements of the Company have House, 99-B, Block ‘B’, S.M.C.H.S., Main Shahra-e-Faisal,
been uploaded on the website of the Company which can Karachi-74400 at the close of business on April 07, 2023,
be downloaded from the following link: will be treated in time for entitlement of the payment of
https://www.nestle.pk/investors/financialreports Final Cash Dividend.
ii) A member entitled to attend and vote at the Annual

General Meeting (“Meeting”) is entitled to appoint another
member as a proxy to attend and vote on his/ her behalf.
Proxies, in order to be effective, must be received by the
Company not less than 48 hours before the meeting. A
2- To appoint Auditors for the term ending at the conclusion proxy holder may not need to be a member of the
of the next Annual General Meeting and to fix their Company. In case of a corporate entity, being a member,
remuneration. The retiring Auditors M/s. EY Ford Rhodes, may appoint as its proxy any of its officials or any other
Chartered Accountants being eligible have offered person whether a member of the Company or not,
themselves for re-appointment. through Board Resolution/ Power of Attorney.
3- To approve payment of Final Cash Dividend of Rs. 95 iii) The instrument appointing a proxy duly stamped/ signed
per share i.e., 950% to those who are Shareholders as and witnessed and must be received at the Registered
at the close of business on April 07, 2023, in addition to Office of the Company at Nestlé Pakistan Limited,
the 2400% Interim Cash Dividend (i.e. Rs. 240 per share) Packages Mall, Shahrah-e-Roomi, Amer Sidhu, Lahore,
already paid during the year 2022, as recommended by not later than forty-eight (48) hours before the Meeting.
the Directors.
iv) Shareholders whose shares are registered in their
Any Other Business: account/sub-account with Central Depository System
(CDS) are requested to e-mail copy of the CNIC along with
their account number in CDS and participants’ ID number
4- To transact any other business with the permission of the for verification. In case of appointment of proxy by such
Chair. account holders it must be accompanied with participants’
ID number and Account/Sub-account number along
BY ORDER OF THE BOARD with attested photocopies of CNIC or the Passport of the
beneficial owner. Representatives of Corporate Members
should dispatch the usual documents required for such
purposes at Company’s resgistered address through
which they are appointed as Proxy of the respective
Shareholder.
Ali Sadozai
Company Secretary
Dated: March 22, 2023
26
v) Members should quote their Folio. / CDS Account number The Corporate Shareholders having CDC account are
in all correspondence with the Company and at the time required to have their National Tax Number (NTN) updated
of attending the Annual General Meeting. The proxy shall with their respective participants, whereas corporate
produce his/her valid original CNIC or original passport at physical shareholders should send a copy of their NTN
the time of the AGM. certificates to the Company or Company’s Share Registrar
and Share Transfer Agent, CDCSRSL.
vi) In case of joint holders, only one member whose name
will appear as main the title shareholder in the Company’s The shareholders while sending NTN or NTN certificates,
list of shareholders, will be allowed to attend the General as the case may be, must quote the Company name and
Meeting. their respective Folio Numbers.
vii) There was no investment made by the Company in its As per FBR’s clarification, the valid Tax Exemption
Associated Companies/ Undertaking during the year Certificate under Section 159 of the Ordinance is
2022, hence no update is required to be made as part of mandatory to claim exemption of withholding tax under
the Annual Report which is required under Regulations Clause 47B of Part-IV of the Second Schedule to the
4 and 6 of the Companies (Investment in Associated Ordinance. Those who fall in the category mentioned
Companies or Associated Undertakings) Regulations, in the above Clause must provide valid Tax Exemption
2019. Certificate to our Shares Registrar; otherwise, the tax
will be deducted on the dividend amount as per rates
SPECIAL NOTES TO THE prescribed in Section 150 of the Ordinance.
SHAREHOLDERS: For shareholders holding their shares jointly as per the

clarification issued by the FBR, withholding tax will be
viii) DEDUCTION OF INCOME TAX FROM DIVIDEND determined separately on the “Filer/ Non-Filer” status
UNDER SECTION 150 OF INCOME TAX ORDINANCE of Principal shareholder as well as Joint-holder(s)
2001: based on their shareholding proportions. Therefore, all
shareholders who hold shares jointly are required to
As per the provisions of Section 150 of the Income Tax provide shareholding proportions of Principal Shareholder
Ordinance, 2001 (“Ordinance”), whereby, different rates and Joint-holder(s) in respect of shares held by them to
are prescribed for the deduction of withholding tax on the the Company’s Share Registrar and Share Transfer Agent
amount of dividend paid by the Companies. in writing as follows:
The current withholding tax rates are as under: PRINCIPAL SHAREHOLDER JOINT SHAREHOLDER(S)
FOLIO
/ CDC TOTAL SHAREHOLDING SHAREHOLDING
ACCOUNT SHARES NAME AND
(a) For Filers of Income Tax Returns: 15% NO. CNIC NO.
PROPORTION
(NO. OF SHARES)
NAME AND CNIC NO. PROPORTION
(NO. OF SHARES)
(b) For Non-Filers of Income Tax Returns: 30%
To enable the Company to make tax deduction on the

amount of Cash Dividend at the rate 15% instead of 30%, ix) DECLARATION FOR ZAKAT EXEMPTION
all the shareholders whose names are not entered into
the Active Tax-payers List (ATL) provided on the website In order to claim exemption from compulsory deduction of
of the Federal Board of Revenue (“FBR”), despite the fact Zakat, shareholders are requested to submit a notarised
that they are Filers, are advised to make sure that their copy of Zakat Declaration Form “CZ-50” on Non-Judicial
names are entered into ATL before the date of issuance of Stamp Paper to the Share Registrar (CDCSRSL), of the
Dividend Warrants, otherwise, tax on their Cash Dividend Company by the first day of book closure. In case shares
will be deducted at the rate 30%. are held in scripless form such Zakat Declaration Form (CZ
-50) must be uploaded in the CDC account of

the shareholder, through their participant / Investor In case of non-receipt of IBAN detail, the Company
Account Services. Further, Non-Muslim shareholders are will be constrained to withhold payment of the
also required to file Solemn Affirmation with the Share dividend under Companies (Distribution of Dividends)
Registrar of the Company in case of shares are held in Regulations, 2017.
physical certificates or with CDC Participant / Investor
Account Services in case shares are in scripless form. No xi) UNCLAIMED DIVIDENDS AND SHARES (IMPORTANT
exemption from deduction of zakat will be allowed unless & MANDATORY)
the above documents are complete in all respects and
have been made available as above. Templates of the Shareholders of the Company are hereby informed that
above-referred forms are available at www.nestle.pk as per the record, there are some unclaimed/uncollected
/unpaid dividends and shares. Shareholders who could
x) PAYMENT OF CASH DIVIDEND THROUGH not collect their dividends/shares are advised to contact
ELECTRONIC MODE: (MANDATORY) Nestlé Share Registrar, CDCSRSL to collect/enquire about
their unclaimed dividend or shares, if any. In compliance
Under the provisions of Section 242 of the Companies with Section 244 (2) of the Companies Act, 2017, after
Act, 2017, it is mandatory for a listed company having completed the stipulated procedure, of three (3)
including Nestlé Pakistan Limited to pay cash dividend years or more from the date due and payable, shall be
to its shareholders ONLY through electronic mode i.e. deposited to the credit of the Federal Government in case
directly into bank account designated by the entitled of unclaimed dividend and in case of shares, shall be
shareholders. In order to receive dividend directly into delivered to SECP.
their bank account, shareholders are requested to fill in
the ELECTRONIC CREDIT MANDATE FORM (Form) xii) TRANSMISSION OF ANNUAL REPORT:
available at Company’s website and send the form duly
signed along with a copy of CNIC to the Share Registrar The Audited Financial Statements of the Company for
(CDCSRSL) of the Company in case of physical shares. In the year ended December 31, 2022, have been made
the case of shares held in CDC then the ELECTRONIC available on the Company’s website (https://www.nestle.
CREDIT MANDATE FORM (Form) must be submitted pk/) in addition to the Annual and Quarterly financial
directly to the shareholder’s broker/participant/ CDC statements for the previous years.
account services.
Further, Annual Report of the Company for the year ended
ELECTRONIC CREDIT MANDATE FORM: December 31, 2022, has been e-mailed by the Company
to the respective shareholders who have provided their
valid e-mail IDs to the Share Registrar of the Company
Folio Number
(CDSRSL).
Name of Shareholder
In those cases, where email addresses are not available
Title of Bank Account
with the Company’s Share Registrar, printed notices
Name of Bank of the AGM along-with the QR-enabled code/weblink
to download the said financial statements have been
Name of Bank Branch and Address dispatched.
International Bank Account Number (IBAN)
However, if a shareholder, requests for a hard copy of the
Cellular and Landline Number of Shareholder Annual Audited Financial Statements, the same shall be
provided free of cost within seven (07) days of receipt
E-mail Address
of such request. For the convenience of shareholders,
CNIC/NTN number (Attach copy) a “Standard Request Form for provision of Annual
Audited Accounts” has also been made available at the
Signature of Shareholder
Company’s website (https://www.nestle.pk/).
28
Further, shareholders are requested to kindly provide their xiv) PARTICIPATION IN AGM
valid email address (along with a copy of valid CNIC) to the
Company’s Share Registrar, CDCSRSL the member holds Members are required to update their valid e-mail
shares in physical form, or to the member’s respective addresses with the Share Registrar, CDCSRSL latest by
Participant/Investor Account Services, if shares are held in March 31, 2023 A detailed procedure to attend Annual
the book-entry form General Meeting shall be communicated through e-mail
directly to the shareholders who have provided their valid
xiii) CONVERSION OF PHYSICAL SHARES INTO CDC e-mail IDs and the same shall be placed at the Company’s
ACCOUNT: website (https://www.nestle.pk/) in investor relations
section.
The SECP, through its letter No. CSD/ED/Misc/2016-
639-640 dated March 26, 2021, has advised all listed Members are encouraged to attend the AGM proceedings
companies to adhere to the provisions of Section 72 of the via video-conferencing facility, which shall be made
Companies Act, 2017, which requires all companies to available by the Company. All shareholders/members
replace shares issued in physical form to book-entry form interested in attending the AGM, either physically or
within four years of the promulgation of the Act. through video-conference facility are requested to register
their Name, Folio Number, Cell Number, CNIC / Passport
Accordingly, all shareholders of the Company having number at https://forms.office.com/e/UXMAWf43bn
physical folios/share certificates are requested to convert (link or scan below QR code). The confirmation email for
their shares from the physical form into book-entry the physical meeting or video link and login credentials will
form at the earliest. Shareholders may contact a PSX be shared with only those shareholders whose registration
Member, CDC Participant, or CDC Investor Account are received at least 48 hours before the time of the AGM.
Service Provider for assistance in opening a CDS Account
and subsequent conversion of the physical shares into Shareholders can also provide their comments and
book-entry form. Maintaining shares in book-entry form questions for the agenda items of the AGM at the email
has many advantages — safe custody of shares with the address [email protected].
CDC, avoidance of formalities required for the issuance
of duplicate shares, and trade in shares anytime etc. The In case of appointment of a proxy, please communicate
shareholders of the Company may contact the Share the required information for the individual who has been
Registrar and Transfer Agent of the Company, namely appointed as proxy of the Shareholder to participate and
CDCSRSL for the conversion of physical shares into book- vote on behalf of the respective shareholder along with the
entry form. duly signed proxy form at
https://forms.office.com/e/UXMAWf43bn
In accordance with Section 132(2) of the Companies Act,

2017, if the companies receive consent from members
holding in aggregate 10% or more shareholding residing
in a geographical location to participate in the meeting
through video conference at least 7 days prior to the
date of Annual General Meeting, the Company will
arrange video conference facility in that city subject to the
availability of such facility in that city.

ABOUT NESTLÉ
PAKISTAN
We are the Good food,
Good life company.
Nestlé Pakistan is the leading food and beverage company in
Pakistan, reaching out to the remotest areas, offering products
and services for all stages of life, every moment of the day. We are
headquartered in Lahore, with four production facilities across the
country. We started our operations in Pakistan in 1988 under a
joint-venture with Milk Pak Ltd, whose management we took over
in 1992.
For the last several years, Nestlé Pakistan has been consistently
placed among the top companies of the Pakistan Stock Exchange.
Nestlé Pakistan continues to make its operations more sustainable.

We are working hard to achieve a waste-free future by ensuring that
more than 95% of our packaging will be designed for recycling by
2025, with a commitment to achieve 100%.
MANAGEMENT
COMMITTEE
Standing – From Left to Right

General Counsel & Business Manager, Coffee &
Mohammad Ali Sadozai Company Secretary
Muhammad Fahad CPW
Head of Communications &

Faisal Akhtar Rana Marketing Services
Ali Akbar Head of Supply Chain

Sitting – From Left to Right
Business Executive Officer - Business Executive Officer-
Masam Abbas Juices Ahmad Jamal Khan Infant Nutrition
Business Executive Officer -

Abdullah Jawaid Ahmad Nestlé Waters Faisal Nadeem Head of Technical**
Babar Hussain Khan Head of Sales Hajra Omer Head of Human Resources
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Jason Avanceña Chief Executive Officer*
Komal Altaf Chief Financial Officer
Business Executive Officer -

Khurram Zia Dairy
Head of Strategy & Business

Samra Maqbool Development
Samer Chedid Nausheen Jaffery Amr Rehan
Head of Corporate Affairs &
Sheikh Waqar Ahmad Sustainability Chief Executive Officer - Business Executive Officer - Head of Technical -
Nestlé Pakistan Nestlé Professional Nestlé Pakistan
*Effective 1st March 2023

** Effective 1st January 2023

HUMAN RESOURCES
With COVID-19 restrictions subsiding, Nestlé believes diversity in our workforce is an asset that impacts
how we think and work together. We are committed to be an
Human Resources is at the forefront inclusive workplace that respects and supports our people to
of ensuring smooth and effective perform their best, while tapping into their potential. As part of
transition back to normalcy for Nestlé enabling practices for both working mothers and fathers, all our
sites have a daycare facility.
employees. A primary focus of this
transition was to prioritize the well- In 2022 we were also able to continue our Nestlé needs YOUth
initiatives, which help youth access apprenticeships, traineeships,
being of employees, culminating in and job opportunities – empowering them with skills they need to
better business performance. Along thrive. In line with our initiative, we have engaged more than 55k+
with this, we are supplementing our youth through various forums.
bench strength with young, talented, In 2013, we made a commitment to turn the tide: to help 10
and diverse prospects through various million young people worldwide with access to economic
youth initiatives and forums, whilst also opportunities by 2030. In our commitment towards this cause,
we on-boarded 190+ interns through various internship
kickstarting our effective on-ground programs throughout the year.
trainings and development programs.
With a proven track record of producing leaders, Nestlé LEAD
Management Trainee Program remained a focus for the
organization. After a high conversion of 89% from the batch hired
in 2021, we launched 2022’s campaign with energetic career
At the core of Nestlé Pakistan’s post-COVID transition was its drives, where more than 2000+ youth were engaged through
move to the new Nest. The shift from the previously occupied various campus and virtual recruitment drives. As a result, a
308 Upper Mall was primarily due to space constraints. The high number of applicants showed interest and took online
spacious layout, dynamic seating, flexible meeting spaces, assessments to qualify for the Management Trainee Program.
larger parking for employees and energy management has This year, in line with our envigored approach, a new concept of
been designed to facilitate employees’ well-being, keeping our speed interviews was introduced to screen the candidates before
promise of sustainability. The open spaces of the new state-of- they were invited for assessment center. Capability building
the-art offices are calibrated for cross-functional collaboration sessions were conducted for a total of 73 assessors and 345
and synergy which fuel innovation whilst driving creativity. students were interviewed across different functions.
Another important aspect of Nestlé Pakistan’s post COVID-19 Shortlisted students were invited to the new Nest, for two days
transition is engaging the workforce in a stimulating and during which they were assessed through multiple group and
enjoyable manner that creates positive memories. Employees individual activities. To enrich the candidates experience, they got
enjoyed happy hours and snacks at differently themed pitstops, an opportunity to network, interact and learn from NIM members.
boardgames, Xbox, and football matches throughout the year.
A total of 20 candidates were shortlisted and onboarded through
Employee discounts at the Packages Mall food-court, free gym an extensive orientation featuring ice breakers, experiential
facility and daycare within the premises are additional benefits learning, career talks, innovation challenge workshops and visits
that help foster employee well-being. Hot desks were introduced to retail and production plants to enhance their understanding
at the new office, which has led to a more flexible and dynamic of the value chain. The Digital Learning Portal was launched on
environment in terms of cross-functional collaboration between iLearn with the first users being the Management Trainee batch,
peers. Open meeting spaces, silent rooms, and themed pitstops focusing on tech-savvy skills like machine learning, AI and Power
for unwinding or casual connects. All play a part in making the BI, tools that will enable the future leaders.
New Nest a conducive environment for employees to develop an
innovative and agile mindset. 2022 had multiple e-learning festivals that focused on
achieving our ambition under Nestlé Needs YOUth. NestGen
While building the new head office, we protected a longstanding and International Youth Day celebrations were two notable
tree at the entrance of the building by making it a part of the zone led conventions where influential industry leaders from
office design. In addition to this, the use of electric powered carts Google, Facebook, Microsoft, Accenture and TikTok spoke on
and solar energy contributes to reducing our carbon footprint various topics to inculcate a creative mindset in the future-ready
and overall waste levels. The installation of motion-sensored taps workforce. Pakistan market stood out with one of the highest
to reduce excess water consumption, and provision of waste participation pool: 10,413 youth attendees.
segregation at the pitstops continually remind employees of
Nestlé’s commitment to sustainability as one of its core values.
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40,000+ 303 52 20 13%
YOUth engaged Internships were Apprentices were Management Females in the
through Campus offered taken onboard Trainees were workforce
Drives & Job Fairs inducted
The flagship program, “Karo Aitemaad”, launched in 2016 that We did not lose foresight of mid-career professionals.
aims to break stereotypes and enable females to take up roles Interventions like NestLevel digital were launched, in order to
historically dominated by males, has been increasing women’s attract mid-career professionals to create a talent pipeline.
representation in functions like Supply Chain, Field Sales, Returnship Program was launched to take affirmative actions and
Engineering, Medical Delegates and Agri Services. rebalance gender scales. The program was designed to facilitate
women on a career break and help them make their way back to
After a successful conversion of 49% trainees that were hired the workplace.
in the preceding year, the program was re-launched with a new
look. A total of 33 associates were hired after thorough online This year was also jam packed with exciting development
assessments and interviews. The associates were given exposure programs to enhance employee capability, with sessions like
of the value chain through a two-day orientation where they the People Manager Development Assessment Centre, People
visited the Sheikhupura Factory, Sarsabz Farm, managed by Academy Bootcamp, Digital Learning Portal, and Value Creation;
Nestlé, distributions and head office. these programs brought back a learning spirit to the workforce
that is customary with effective on-ground trainings. We ended
“Hai Tum Pe Yakeen” is another program exclusively designed to Q3 with the launch of NESLearn, a three-part Life Skills Learn
break perception barriers associated with employing differently- Quest on Mind, Heart, and Body. The first segment on Mind was
abled persons. After successfully converting 40% employees to dedicated to Critical Thinking, with the second session on Heart
permanent roles in the preceding batch, 10 associates were hired being dedicated to Compassion and Empathy in the workplace;
in 2022. the third on Body will be dedicated to Mindfulness and Self-
awareness. Cumulative combined training hours were recorded
To expand youth outreach and showcase our commitment at 388+ and the increase in trainings was record-breaking, at
towards youth, programs like Youth Influencer Program helped 324%.
students become brand ambassadors and connect Nestlé to
their university.

SUPPLY CHAIN
Resilience, agility and proactivity Through successful implementation of projects like the delivery
window project and palletization, we were able to create a
have driven Supply Chain win-win situation for Nestlé and its customers by significantly
towards making Nestlé the reducing offloading delays and eliminating the need for manual
partner of choice in the market. handling. Having seamlessly executed these projects with
10 major customers, we are now planning to leverage the
learnings from these to engage other key-account customers
as well.
The year 2022 unfolded multiple challenges, including
continued ocean freight disruptions and high inflation. As the By collaborating cross-functionally, supply chain worked on
Russia-Ukraine war exacerbated the situation, the supply chain vehicle optimization and upsizing, leading to a significant
team worked relentlessly to ensure that our customers do not reduction in the number of trips. This helped us minimize
suffer because of any externality. From ensuring timely supply costs and maintain on-shelf availability, even during periods of
of SKUs to responsible sourcing of materials, we collaborated political unrest. Moreover, because of the improved reliability
extensively with our partners to consistently improve our of railway networks, we began transportation via trains,
stakeholders’ experience. which helped us deliver savings and reduce the emission of
Greenhouse Gases (GHGs). With more projects in the pipeline
Digitalization and data analytics have always been at supply for 2023, we aim to further optimize our operations.
chain’s core. This year, we continued using our advance
analytics capabilities to maximize the efficiency of operations. Supply Chain has always shown commitment towards
Eliminating manual and repetitive tasks resulted in boosting minimizing its carbon footprint by working on projects that
our team’s productivity, as we were able to invest more time in promote environmental sustainability. Continuing our journey
developing value-added processes. Given the importance of to use 100% designed-for-recyling (D4R) material, we
big data and its role in driving innovation, we also emphasized successfully replaced 198 tons of difficult to recycle packaging,
implementing data-driven decision making for quick and used for yoghurt tubs, with D4R. Additionally, we have begun
measurable results. transitioning to renewable energy resources, such as solar
energy and biomass steam generation. With 80% of our new
Facing volatile market conditions, our procurement team head office operating on solar power, overall GHGs emissions
performed remarkably well and delivered savings of PKR have been reduced by 2%. We are passionately working
4.4 billion through alternate sourcing and localization. The towards building a healthier and safer community by creating a
team also played a key role in benchmarking & optimization positive impact on the environment.
of raw & packaging material specifications, which led to
the development of cost-effective solutions. Additionally, With diversity and inclusivity incorporated in supply chain’s
localization of dairy powders has added to sustainability culture, we have worked rigorously to promote gender
in our operations, helping us eliminate dependency on diversity. Our workforce consists of 46% females, 23% of
foreign vendors and ensuring continuous supply amidst them in managerial positions. Having a diverse talent pool has
unprecedented cost pressures. helped us show that any individual with the right skills and
abilities can prove to be an asset for the company.
Customer supply chain team remained resilient in the face
of multiple challenges and focused on customer centricity. Our talented team is fully geared up to drive business
Despite the devastating floods in Khyber Pakhtunkhwa and continuity in the ever changing business environment. With
Sindh, the team consistently worked on improving on-time unparalleled determination towards continuous growth and
delivery (OTD), while also achieving a customer order fulfillment creating value for our stakeholders, our aim for the year 2023
(COF) rate of over 99%. Additionally, multiple 3PL warehouses is to innovate and digitally transform our processes to set new
have been set up to improve product availability across the benchmarks.
country.
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TECHNICAL
Technical division is the guardian of

Nestlé’s core values, which are rooted
in respect
Safety
Respect for the employees and
stakeholders
We aim to promote a safe working environment for our
employees. We prioritized our learnings from the previous
years and developed an action plan focusing on zero
recordable incidents. We also prioritized Caring Leadership in
Safety, Employee Behaviors and Machine Safety trainings and
refreshers, to promote a safe working environment.
By implementing Nestlé Life Saving Rules and capability

building of our people, we nourished the concept of ‘Safety
Starts with Me’. The training and refreshers on safety
topics were conducted to keep our employees updated and
vigilant. This year, we focused on management’s competencies
to identify positive and negative behaviors to address the root We ensure that high-quality raw and packaging materials are
causes of unsafe behaviors. procured by actively engaging farmers, raw and packaging
material suppliers. We work on their competence development
In 2022, we have achieved multi-site international certifications through knowledge sharing, updating them about the potential
like ISO 45001 and ISO 14001 for our factories, Head Office, quality and food safety challenges and guiding them on
Sales, Supply Chain and Agriculture Services. All four factories elimination of key defects.
of Nestlé Pakistan successfully maintained Alliance for Water
Stewardship certification. Our strong Quality and Food Safety culture helps us to deliver
safe food for our consumers. Our factories continued to sustain
Road safety remained a challenge this year. However, it was certifications for FSSC 22000, ISO 9001, PNAC on ISO 17025
tackled by increasing spot checks to behavioral change. Our and ‘Halal Certification’ by Islamic Food and Nutrition Council
efforts to identify gaps at distribution sites and sales are in of America. Our factories and milk collection centers are
progress with a focus on warehouse safety. continuously monitored and verified for quality by relevant local
food regulatory authorities.
Caring Leadership in Safety, Sustainable Machine Safety,
Life-Saving Rules, Safety Starts with Me campaign, and Safe Environmental Sustainability
behaviors will be the top lines for next year.
Respect for future generation
Quality One of Nestlé Pakistan’s key priorities is to reduce the number
of greenhouse gas emissions. By 2025, our ambition is
Passion for the best consumer experience to reduce 20% of greenhouse emissions as compared to
Quality and food safety are the cornerstones of Nestlé’s 2018. Water conservation, energy optimization, controlling
Corporate Business Principles. We strive for the best consumer greenhouse gas emissions, reduction in waste at source,
experience. Value chain activities are designed focusing on this reduction in packaging material and proper disposal of waste
vision. are the key environmental indicators for any manufacturing
facility. Nestlé takes care of these indicators in its operations
and is committed to improve its performance every year.
38
PLANS FOR 2023
In 2022, we invested our time and efforts in identifying
opportunities for energy optimization across operations
(including Manufacturing Units, Packaging and Agri Services).
Despite various challenges, we successfully executed several
projects and saved 62,000 tCO2e greenhouse gas emissions Opportunities for
in absolute numbers.
Water operational efficiency Renewable Energy Sources

Water withdrawl savings for 2022 are 92,500 m3 across our
manufacturing units. This water saving is based on initiatives
taken under Alliance for Water Stewardship Standard.
Waste Reduction at Source

Reduction of waste at source
We ensure that waste from our sites is disposed off according
to recycle, reuse, and reduce principles.
Water and Energy
To contribute to our global sustainability commitments, Conservation
initiatives focusing on reduction and recycling of plastic waste
generated from our production sites were taken. We have
sustained the elimination of single use plastic across all sites of
Nestlé Pakistan in 2022.
Reduction of
Greenhouse Gases
Planting Trees
Nestlé Pakistan planted a total of 25,000 indigenous trees
around our operational sites in 2022. Research & Development
for Packaging

Manufacturing
Sheikhupura Factory
Sheikhupura Factory successfully implemented preventive Maintenance Planning Tool, and Pro-Cal were also piloted in
guidelines for COVID-19 and returned to normal work routines 2022 at the Sheikhupura Factory.
while ensuring a safe working environment for our employees.
Further leveraging our entrepreneurial mindset in 2022,
Under our commitment to safety, we built capacity of Innovation & Renovation journey was kept at the forefront
employees and continued to nourish the concept of ‘Safety with the successful launch of Chilled Sweet Laban, Milkpak
is Everyone’s Responsibility’. Trainings and refreshers on Chocolate Cream, NESCAFÉ Salted Caramel PET, NESCAFÉ
lifesaving rules and machine safety methodologies remained a Chocolate Hazelnut PET, Milo PET & Docello Soft Serve Premix.
priority for the factory.
On the industrial front, expansion of 25g cereal line was
Our commitment to quality and compliance remained our completed despite the tough challenges of COVID-19
primary focus throughout the year. In 2022, our factory pandemic and will be operational in Q1 2023.
continued to sustain certifications for FSCC 22000, ISO
9001, PNAC on ISO 17025, ISO 4500, ISO14000 and ‘Halal We continued to strengthen our community presence through
Certification’ by Islamic Food and Nutrition Council of America. consistent engagement with key stakeholders throughout the
Other highlights of the year included Successful Ammonia year. Keeping environmental sustainability a priority, we worked
Safety Audit, Electrical and Fire Risk Assessment and Inburex on reducing of GHG emissions, water withdrawal and plastics
Dust Explosion-ATEX assessments. in our packaging.
Utilizing its high potential, Sheikhupura Factory continued its This year we embarked on the journey of renewable energy by
journey towards excellence and closed 2022 with one of installing a solar setup, with an aim to expand it in the coming
the lowest unplanned stoppages and line losses rates, making years.
manufacturing process more reliable and agile while optimizing
the Total Delivered Costs. Our drive on Diversity & Inclusivity continued to be our focus
approach to make the factory a preferred choice for female
Factory’s drive for operational excellence through digitalization professionals and differently-abled people, fostering a more
continued with 100% deployment of Digital Manufacturing inclusive culture at the Sheikhupura Factory.
Operation (Performance). Digital Manufacturing Operations
(CIP, MMS, Project Horizon-Energy), Indeavour, Predictive
40
Keeping people at the heart of operations, we continued The factory achieved satisfactory rating in Nestlé Internal
to build the capability of our employees through training Audit. The factory also successfully retained Alliance for Water
programs like Fit2Win, leveraging TPM methodologies and Stewardship recertification and cleared all third-party audits
leadership development. including FSSC 22000 and the ‘Halal Certification’. Extensive
trainings conducted to enhance the quality mindset among the
Kabirwala Factory team resulting in 100% FTR for the entire year and a significant
reduction in foreign bodies and consumer complaints. The
Continuous efforts were made to realize the impact of initiatives zero-safety incident journey was also led successfully ensuring
taken to drive operational efficiencies across our value stream the site is safe and secure for employees.
and sustain a high level of Asset Intensity aiming to improve
Total Delivered Cost. Our drive on Diversity & Inclusivity continued to make the
factory a preferred choice for female professionals, fostering a
Our top most priority remained people’s safety and their more inclusive culture. As a site, we are committed to delight
well-being. We are immensely proud of our employees who our consumers and positively enhance their quality of life by
adapted to the right safety behaviors and practices to maintain offering them healthy products.
a safe work environment on site.
Kabirwala Factory rigorously worked on improving First Time Islamabad Factory

Right quality and was re-certified by Bureau Veritas, SGS & Islamabad Factory adopted a holistic approach towards
IFANCA. Moreover, the factory has sustained an excellent achieving operational efficiency, quality, safety and contributing
rating since 2000 in Laboratory Proficiency Test. positively towards environmental sustainability in 2022.
Our team put in their best efforts towards the ongoing journey Leveraging NCE advanced practices in 2022, the factory
of environmental sustainability and came-up with novel delivered improved results in all dimensions of manufacturing
initiatives like Biomass Boiler Project. Under Fit for Purpose excellence, successfully sustaining the lowest unplanned
Project, the team contributed to virgin plastic optimization stoppages in HOD lines.
journey as well.
Islamabad Factory launched a new SKU NESTLÉ PURE LIFE
Furthermore, we continued to strengthen our community ACTIVE 18.9L with tremendous growth and positive consumer
presence through consistent engagement with key response. It has also been able to adhere to ISO 45001, ISO
stakeholders. Our drive on Diversity & Inclusion made the 14001, FSSC 22000 standards and got “HALAL” Certification
factory a preferred choice for female professionals and by Islamic Food and Nutrition Council of America, thus
differently-abled people, fostering a more dynamic and maintaining the trust of our consumers. Extensive trainings
engaging culture. We are committed to delight our consumers on food safety and foreign body and hygiene were conducted
and enhance their quality of life by offering nutritious and along with events on and occasions like World Water Day and
healthy products. World Safety Day. Other employee engagement activities were
organized, which kept team morale high.
Port Qasim Factory
Advancing the Nestlé Cares program, Islamabad Factory
The Port Qasim team derives its strength from teamwork and planted 2,000 trees in coordination with Environment
synergy. The factory demonstrated its agilities in an excellent Department, Capital Development Authority (CDA) Islamabad
way and delivered production volumes in a timely and efficient in the capital. To sustain high standards of sustainability,
manner. Our team remained resilient and committed in terms both within and outside of factory premises, Alliance for
of guarding the core and thus maintaining safety and quality as Water Stewardship journey continued with commitment and
their key priorities. dedication.
TPM methodologies were leveraged to achieve fruitful results The factory focused on functional capability building of team
for the asset intensity and operational losses. Team has also and developed 6 new trainers and coaches at site.
worked hard in delivering significant TDC savings. A positive
and determined approach towards environmental sustainability
has led people to bring multiple initiatives to reduce our
environmental footprint. Celebration of World’s Water Day, tree
plantation drives, and beach cleaning activity have also been
the highlights for this year.

AGRICULTURE
SERVICES
Agriculture Services is one of installed 107 soil moisture sensors at various locations in our
agriculture value chain. These not only help farmers in saving
Nestlé Pakistan’s integral pillars, irrigation but also serving as a lighthouse of efficient irrigation
contributing towards improvement system. Similarly, Nestlé Pakistan supported farmers in
in socioeconomic conditions and installing drip irrigation on 139 acres of land in Punjab. During
2022, the initiative has been scaled to cover an additional 75
livelihood of farmers. Nestlé provides acres of land in Sindh.
innovative solutions on dairy and
agriculture to farmers through While reducing the impact of greenhouse gases, we also
explored ways for carbon sequestration. This is an important
its trained team of professionals,
element in our aim to enhance net zero in the food value
specialized in agriculture and dairy chain. We started work on different studies on regenerative
farming. agriculture practices which can help farmers in getting better
yield with fewer GHG emissions. To further strengthen our
knowledge, Nestlé Pakistan signed an understanding with the
University of Agriculture, Faisalabad to conduct various studies
on regenerative agriculture practices.
Nestlé Pakistan continually explored opportunities for the
socio-economic benefits of farmers and to minimize climate Nestlé Pakistan is also helping farmers in improving crop yield
change impact. We have been promoting alternate energy and productivity. One of our major initiatives is supporting
sources, particularly amongst dairy farmers. During 2021- import of high efficiency cows. During 2021–2022, Nestlé
2022, Nestlé contributed to installation of solar systems Pakistan helped farmers import more than 7,000 cows, which
at 20 dairy farms to introduce renewable energy to reduce reduced GHG emissions while increasing productivity of the
greenhouse gas emissions and energy costs. If not handled herd and income of local farmers.
properly, cow dung can increase GHG emissions. However,
proper treatment of cow-dung through biodigester not only Nestlé is committed towards a zero carbon journey. For an
provides alternate energy biogas but also provides a good effective action plan, we need the experience of various
source of organic matter to agricultural land, reducing the interventions implemented to reduce greenhouse gases
use of synthetic fertilizers. In 2021-2022, we supported 15 under local conditions. For this purpose, we are developing a
biogas digesters installation at supplier farms. With cost and dairy farm with maximum possible interventions that aims to
environmental benefits, these farms with solar and biogas become carbon neutral in the coming years.
installations served as a lighthouse in their surrounding areas.
While we continue to source fruit and rice from Punjab, the
Nestlé Pakistan understands that the country is facing Nestlé team is now also working closely with farmers from
adversities because of climate change and is taking this Gilgit Baltistan to source fruit from the region. During 2022,
challenge seriously. Nestlé, together with its partners, Nestlé Pakistan sourced high-quality apples from Hunza,
developed a low-cost soil moisture sensor that helps farmers Nagar, Ghizer and Skardu regions. These apples are known
to decide when, and when not to, irrigate their crops. Our to be organic and are nourished by the purest glacier water.
initial field estimates have shown considerable water saving This initiative is helping farmers reduce fruit waste, hence
in irrigation with crop yield improvement. Till end 2022, we converting waste to value for farmers.
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SALES
2022 was a challenging year due to external

pressures like unprecedented floods, inflation and
other economic challenges. However, our sales
team showed great resilience and resolve to ensure
that Nestlé products remained available to our
customers without any disruptions, working on best-
in-class sales activations while ensuring operational
efficiencies.
We have continued to deliver growth with a strong focus on our sales and
distribution fundamentals and developing the right Route-to-market strategies
that helped us to ensure our products availability and accessibility across
Pakistan.
Various initiatives were taken to develop direct distribution across all geographies
while also providing various trainings and automation solutions to our distribution
partners to help them develop their business.
Dedicated efforts were made to develop emerging channels such as

E-commerce in line with changing shopper buying habits. At the same time, our
flagship rural deep reach program continued to educate our rural consumers on
nutrition health and wellness to build a better future for our consumers in rural
Pakistan.
Winning with Shoppers

There was a strong focus on creating better and bolder engaging shopper
activations and strong visibility in trade. Highlights of the year were our shopper
centric in-store executions, town storming in 100 locations across the country,
a complete 360-degree activation tourist engagement drive during the summer
in northern Pakistan and participation in over 100 Ramadan Bazars to leverage
high consumption moments. Best in class execution of consumer promotions
and multiple new launches were carried out across channels to engage with
shoppers and improve purchase consideration at trade level. All priority channels
as a result, such as Pharmacies, continued their strong growth trajectory.
Winning with Customers

The expansion of international and local modern trade continued in 2022 with
customers expanding their reach to new geographical locations, introducing new
store formats. This provided Nestlé with an excellent opportunity to collaborate
with these customers to drive strong shopper-centric activities while creating
winning long-term partnerships.
Driven by innovative new-launches and a strong portfolio Nestlé continues to be

among one of the preferred suppliers for all retail customers in modern trade.
The channel team executed series of activities in 2022 including Ramadan
promotions, Dairy, Juices and Nutrition events.
The relationship with modern trade customers touched new milestones focusing
on increasing collaboration in logistics, planning and commercial execution.
44
CONSUMER COMMUNICATIONS
& MARKETING SERVICES
Driving Human Centricity

Consumer & Marketplace Insights
As the world evolves faster than ever, a new world of consumer Consumer activations is key platform to interact with our
behavior has emerged. Consumers now live differently, buy consumers to give them the experiences through product trials
differently and in many ways, think differently. They spend more and get feedback instantly. This gives the opportunity to our
on crucial goods as they adopt a hybrid lifestyle of the digital and brands to stay top-of-mind by creating the best experiences and
physical world. To keep up with changing consumer preferences making consumers try the product.
and to lead the marketplace, we continuously endeavor to
understand the consumer better. Our traditional activations are now being managed through a
fully digitized web/mobile based solution for all stakeholders to
Consumer & Marketplace Insight (CMI) team helps brands monitor and control activity, and collect first-party consumer data.
lead with insights, trends and thought starters to understand
the business environment and identify strategic opportunities
through data analytics, while encouraging innovation. We stayed Media & Digital Acceleration
closely connected with consumers through direct and indirect 2022 has been a challenging year across TV, Digital, Out of Home
consumer immersions to truly understand the consumer value (OOH) and other mediums. While consumers continue to watch
propositions. TV, sports content led by cricket, has seen a steady audience
growth and interest. Consumers across all social strata continue
The CMI function continued to evolve and adapt to digital ways of to spend time on digital media while exploring new social
working by exploring digital/DIY solutions to help brands leverage platforms.
quick, cost-effective, and more robust ways of reaching the
consumer and understanding their behavior. Moving forward, we We continue to monitor and adjust our ways of working to win in
are adapting to a new vision of experimentation with new tools this ever-changing new reality by working closely with key digital
and data, evolving from traditional to digital ways of working. platform partners, creating new partnerships, and identifying new
opportunities across TV.
Connecting With Our Consumers With a continuous focus on excellence across effectiveness and
Consumer Engagement Services efficiency in our media spends, we have been able to drive strong
savings and brand value. We have further invested in data and
The Consumer Engagement Services (CES) team remains pivotal analytics to create more engaging brand experiences.
in building trust in Nestlé and its products through our 24/7 toll-
free hotline along with responsive WhatsApp and active support Our brand new Brand Building the Nestlé Way (BBNW) 4.0 which
on social media platforms. CES further enhanced response comes with advanced tools, is enabling our marketers to win with
efficiency and accuracy by upgrading to ENGAGE OMNI and our consumers in 2022 and beyond. A testament to that are our
integrating all touch points (voice, non-voice) into one window local and global marketing awards.
operations.
CES catered to consumer’s queries on all mediums and Enriching Brand Experiences
addresses them amicably. Each contact was an opportunity to not
only collect consumer insights but also create brand loyalty, drive
Excellence in Marketing
trust, and advocacy. The unit continues to handle thousands of
Excellence is at the core of our work at Nestlé and to support this
consumer contacts every year by being accessible on consumers’
effort for commercial teams, BBNW is our proprietary approach
preferred communication channels. to help achieve great brand building results. We facilitate in
improving the way Commercial Teams work by introducing,
Creating Engaging Brand adapting and enhancing systems, processes and tools so that
the team remain more relevant, agile, innovative and efficient in
Experiences an ever-changing business environment. We also have a robust
Education & Training (E&T) model for commercial teams, with
On Ground Brand Activations many capability-building interventions with internal and external
We help create valuable brand experiences for consumers by experts and trainers, both local and international. The E&T model
delivering effective and engaging activations and enabling brands adds directly by contributing to competence development for our
to achieve trial, conversion and loyalty. marketing community. The Marketing Competency Framework
helps in identifying and planning to acquire the necessary
function specific knowledge, skills, and behaviors to help delight
consumers, enhance lives, and build great brands.
46
NUTRITION, HEALTH
& WELLNESS
Enhancing the quality of people’s lives

by offering sustainable, tastier and
healthier food and beverage choices
and encouraging an active lifestyle.
We, at Nestlé, always strive to make our portfolio even

healthier and tastier, to inspire consumers to lead healthier
lives and develop a shared understanding of the connection
between nutrition and health. At Nestlé, we want to create
tastier and healthier food choices that nourish and delight the
senses, respect the planet and protect resources for future
generations. Products that are right for the consumers and
right for the planet make good business sense.
Nestlé’s strategy is focused on ensuring that our products are

part of a regenerative future for people, pets, communities,
and the planet. Our brands have compelling stories to tell in
support of our purpose. Our product packaging is the most
important medium to communicate these advantages and
brand actions. The new ‘backstory’ on our packs, supports our
brands in sharing purposeful stories while better organizing all
required product information for our consumers.
We believe these ‘backstories’ hold incredible potential in

encouraging consumers to discover the impact that our brands
are making and improve the likelihood that they consider
and select our products over competition. We continued
the implementation of Guideline Daily Amount (GDA) on our
products to provide information on the percentage of daily
requirement of important nutrients and calories.
We made sure Nutrition, Health & Wellness showcasing is

done strongly in harmony with changing trends and values,
promoting sustainability. We have executed joint events
with Key Opinion Leaders (KOLs) to articulate the health
benefits Nestlé products carry and how they contribute to
the fight against nutritional deficiencies. On other hand,
we also participated in events organized by academia to
stay connected with the young generation, their innovative
ideas and to guide them on how to upsurge as successful
professionals.
Nestlé’s strong NHW footprint was further strengthened by

providing our consumers, employees and their families with
healthy recipes, their health benefits and sharing awareness of
sustainable resourcing.

FINANCE & CONTROL AND
INFORMATION TECHNOLOGY
The Finance & Control function commits Building Synergies
to act as a copilot for driving timely and Nestlé Pakistan has always believed in building synergies
effective decisions across the value- by developing effective, agile yet unified teams which aim
chain. We, as change agents, monitor to collectively hit milestones. We continuously worked on
employee talent-enhancement through trainings and additional
and analyze key financial indicators, and development programs intended to polish their competencies
provide early visibility to businesses to for future roles. We empowered our resources to take on
ensure best possible change management new challenges in a highly dynamic business environment
and experience high levels of job satisfaction. One of our
and strong controls. Our team also key priorities is to maintain a healthy work-life balance and
strategically optimizes growth while build a diverse finance organization by promoting a culture of
aiming for long-term value creation. inclusivity and diversity.
Information Technology
Resilience in a Turbulent Year Nestlé Pakistan relocated to our new head office building,
2022 proved to be a challenging year for us given the instability called New Nest, in 2022. By establishing cutting-edge IT
of the macro-economic environment. We faced unprecedented services in the new head office for businesses, IT played a
cost pressures and currency devaluations further worsened by crucial part in ensuring that business activities ran smoothly.
destructive floods and political instability in the country. Our
team, however, remained resilient and steadfast in the face of Nestlé IT is stepping up to ensure that our solutions work
all such calamities, and delivered noteworthy financial results reliably and we have developed alternative solutions to meet
setting new standards and high spirits. the growing needs of our colleagues, particularly while they
are working from home/remotely. Our Information Security
Unbending Road to Digitalization Management System is applicable to all our digital services
and operations managed by Nestlé Pakistan’s IT team. On
In an era of digital revolution, we focused heavily on digital November 14, 2022, EY completed the second surveillance
initiatives supporting enterprise priorities and optimizing the audit and stated that, “IT Pakistan successfully passed the
Finance function. This year the Information Technology (IT) second surveillance audit and has retained the ISMS ISO
team worked in close coordination with Finance to identify 27001 Certification. Nestlé Pakistan is also by far the top
clerical and tedious workflows, and brought improvements, market when it comes to adhering to the standards”.
preferably automation, wherever possible. We also emphasised
on developing advanced data analytics tools for greater and Embarking on the adoption of digital technologies this year, we
quicker analysis, and training our talent pool to make the best equipped our teams across multiple functions with updated
use of them. The implementation of digital initiatives not only and cutting-edge technologies. A few examples include
helped in the continuity of operations but also resulted in implementation of transportation HUB to improve inter-visibility,
improved and efficient ways of working. digitization of Order to Cash process and smooth deployment
on Engage Omni and its integration with various technology
Governance and Risk Management platforms.
Strict compliance of a company’s internal policies and IT supported a variety of business functions with a focus
procedures, and external laws and regulations starts with on robotic process automation, business analytics and
strong internal controls. Sound internal controls also play e-commerce as part of our waste reduction strategies. This
a crucial role in ensuring seamless operations and delivery makes it possible for businesses to cut 1000+ man hour
of services as well as reliability of financial and managerial activities every year. With the help of these IT initiatives, Nestlé
information. They assist in achieving the company’s objectives Pakistan is able to innovate under the new normal while also
by managing risk exposure including safeguarding of its reinforcing and refining its current business model.
assets, and prevention and detection of frauds and errors.
In 2022, we carried out an End-to-End (E2E) internal control
assessment of all key processes with an objective to confirm
that all key controls were in place, hence, ensuring that the
governance structure is thorough and exhaustive.
48
EXPORTS; SERVING
BEYOND BORDERS
Nestlé Pakistan has a diverse yet unique portfolio, with iconic local brands
enjoying high trust and brand equity with Pakistanis not just living in
Pakistan, but across the globe.
At Nestlé Pakistan, we are committed to delighting consumers across age segments with our loved brands offering the highest
quality.
Our export business pillar has the same ambition. We are currently exporting to over 10 countries, targeting Pakistan’s diaspora
with the aim to delight them with brands that connect them to their homeland.
We are uniquely equipped to provide a vast choice of products with our brands; NESTLÉ EVERYDAY, NESTLÉ FRUITA VITALS,
NESTLÉ NESFRUTA and NESTLÉ MILKPAK CREAM, in a wide variety of formats.
Our third-party importers play a key role in helping us expand our availability along with focus on generating demand activities, in
countries where our Nestlé affiliates do not operate in existing categories and brands.
All Nestlé Pakistan factories maintain the highest standards in food safety, Hazard Analysis Critical Control Points (HACCP), quality
management, hygiene, and Good Manufacturing Practice (GMP), ensuring 100% compliance to regulatory and legal requirements.
The nucleus of success in this business is customers’ satisfaction, which is a continuous and ever-evolving process. Bearing this in
mind, we strive to serve our customers with passion and commitment, offering them the best that Nestlé Pakistan has to offer.

HOUSE OF NESTLÉ MILKPAK
NESTLÉ MILKPAK NESTLÉ MILKPAK

Nature’s gift of dairy has a fascinating taste and with over WHIPPING CREAM
three and a half decades of dairy expertise and leadership in
As Pakistan’s first dairy whipping cream in retail, NESTLÉ
Pakistan, NESTLÉ MILKPAK has perfected processes that allow
MILKPAK WHIPPING CREAM is the perfect solution to
it to capture this smooth, rich and creamy experience, the way
decorate and layer desserts. It gives the perfect texture to
nature meant it to be. Guaranteed by Nestlé’s quality systems
create flawless swirls.
and dairy expertise, NESTLÉ MILKPAK provides wholesome
nourishment. Whether it is a glass of milk for your children, a
creamy cup of tea with your loved ones or a dairy dessert for NESTLÉ MILKPAK YOGURT
your family, NESTLÉ MILKPAK makes you fall in love with the
NESTLÉ MILKPAK YOGURT is your perfect cooking partner in
taste of dairy goodness and enhances the quality of life of the
the kitchen. With NESTLÉ MILKPAK YOGURT, we bring the
people of Pakistan.
authentic taste of traditional yogurt that you are accustomed
to. Its thick texture and richness offers versatility, quality and
NESTLÉ MILKPAK CREAM a great taste that balances the spices in cooked food while
delivering a signature mouth-watering taste for you and your
As Pakistan’s pioneer and favorite cream brand, NESTLÉ
loved ones every time you cook.
MILKPAK CREAM encapsulates a strong heritage as well
as contemporary usage of this rich dairy product. NESTLÉ
MILKPAK CREAM believes in inspiring its consumers to weave NESTLÉ MILKPAK DAIRY BUTTER
their culinary magic and create delicious meals and desserts by
NESTLÉ MILKPAK DAIRY BUTTER, filled with dairy goodness,
igniting the spark of creativity through delicious easy-to-make
aims to make your breakfast special with its rich & creamy
recipes.
taste and easy spreadability. It is available in both salted and
unsalted variants to complement all your cooking and baking
NESTLÉ MILKPAK creations.
BREAKFAST CREAMS
Leveraging the heritage of NESTLÉ MILKPAK CREAM, NESTLÉ
MILKPAK BREAKFAST CREAM is specifically positioned to
be used as a spread for the breakfast occasion. It is slightly
sweetened and provides the milky taste of cream with a
nutritious start to the day. The range now offers NESTLÉ
MILKPAK CHOCOLATE BREAKFAST CREAM, which were
launched in 2022.
50
CHILLED DAIRY
NESTLÉ SWEET ‘n’ TASTY YOGURT

NESTLÉ SWEET ‘n’ TASTY YOGURT is your daily dose of delight that makes your everyday experiences more exciting through its
irresistibly rich and creamy taste of pure dairy goodness. It guarantees consistent delicious taste, nutritional goodness and hygiene.
So whether you are looking for quick hunger relief or making your breakfast more scrumptious and healthy by adding cereals and
nuts, NESTLÉ SWEET ‘n’ TASTY YOGURT is your partner.
NESTLÉ PODINA & ZEERA RAITA

Often one needs to enhance their food experience. Whether it is at the dining table or at an outdoor grill. NESTLÉ RAITA with Zeera
and Podina have unique mouth-watering flavors, guaranteed hygiene and convenience, promising to treat your taste buds and
transform your meal into a culinary delight.
NESTLÉ LABAN
NESTLÉ LABAN is a rich, smooth yogurt drink made with natural milk and has an irresistible creamy and sweetened taste. So if you
are looking for a healthy, refreshing and tasty drink to beat the summer heat, NESTLÉ LABAN is your go-to drink.
NESTLÉ NESVITA
Pakistani women are resilient, passionate and an important
pillar of every household . Whether at home or beyond its
confines, these women exhibit strength and character daily.
NESTLÉ NESVITA is a high calcium, low fat milk that enables
women to maximize their potential. It allows them to combine
their emotional strength with their physical strength by
adopting a proactive and healthy lifestyle with MOVE+.
MOVE+ is a unique blend of nutrients that contribute to the

function of normal bones and joints and help maintain your
body’s immune system, so you stay healthy and active.

TEA CREAMING
NESTLÉ EVERYDAY
NESTLÉ EVERYDAY, with its 30 years of heritage, has established itself as an ideal tea partner, delivering superior taste that remains
consistent. It stands as a market leader in the tea creamer category and is recognized for its golden brown color and Khaas creamy
taste.
With a wide portfolio, ranging from powder in sachets and large pouches to liquid variants, the recipe is specially formulated to
perform great. Whether separate tea is being prepared, or mixed, NESTLÉ EVERYDAY guarantees a perfect cup of tea every time.
NESTLÉ EVERYDAY Instant Tea Mixes range allows you to conveniently indulge in special flavored teas. Available in three variants;
Kashmiri, Cardamom, and Karak these 3in1 tea mixes are perfect for any mood.
52
CHILDREN HEALTH &
GROWTH SOLUTIONS
NESTLÉ NIDO
School Age Nutrition
NESTLÉ NIDO School Age Nutrition believes
in supporting every mother’s love to nurture
a healthy future for her child. A mother goes
the extra mile to ensure her child’s growth
and development for a happy and successful
life. Backed by Nestlé’s global experience
of 150 years in child nutrition, Nestlé has
developed NESTLÉ NIDO School Age Nutrition;
a specialized formula to meet specific needs
of school-going children between 5-12 years
of age. Special combination of macro and
micronutrients in NESTLÉ NIDO School Age
Nutrition helps children to GROW and fulfil their
potential, learning abilities and improving their
immunity.
NESTLÉ BUNYAD NESTLÉ MILO

NESTLÉ BUNYAD believes that no child deserves to be left Made from natural ingredients, (Malt, Milk and Cocoa) with
behind because of nutritional deficiencies. One in every two added vitamins and minerals, NESTLÉ MILO is a unique drink
children in Pakistan suffers from iron deficiency (National with its signature cocoa-malt taste that stands for wholesome
Nutritional Survey 2018) resulting in kids being tired and and balanced nutrition. NESTLÉ MILO aims to nourish the
lacking concentration. Such deficiencies can hold them back, ambitions of Pakistani mothers for their children to ensure they
especially during their formative years. In 2022, NESTLÉ grow up as successful, well-balanced individuals by providing
BUNYAD strengthened its promise of iron fortification by healthy energy, great taste and nourishment that help them
launching IRON+, a proprietary Iron source developed in succeed in life.
collaboration with Nestlé Research Center Switzerland and
Massey University New Zealand, which is 3 times more NESTLÉ MILO believes that sports is a great teacher and has
absorbent in human body than any other iron. NESTLÉ qualities that build children of substance and shapes their
BUNYAD is working on a long-term mission to fight iron future. There is an intrinsic linkage between the life values
deficiency and strengthen Pakistani children for a better life. learned from sports and successful, happy and well-balanced
NESTLÉ BUNYAD with IRON+ is striving to provide ‘Behtar children, MILO’s nutrition and energy gives children the ‘Energy
Zindagi ki aur bhi Mazboot Bunyad’. to go further’.
We have launched MILO in PET Bottle as value up proposition,

offering MILO in attractive gulpable experience, an alternative
for active tweens looking for nourishing products to replenish
their energy.

NESTLÉ BEVERAGES
NESTLÉ FRUITA VITALS

NESTLÉ FRUITA VITALS is the flagship brand within the NESTLÉ beverages range, made from the highest quality fruits sourced
from around the world. Our mission is to provide our consumers with delicious and healthy refreshment.
Building on its heritage of driving innovation in this category, NESTLÉ FRUITA VITALS has offered another popular addition to its
Sparkling range. Further enhancing our consumer experience with launch of delightful fusion of Soda & Fruit Juice in tantalizing
Apple variant.
NESTLÉ FRUITA VITALS with its refreshing fruit beverages, sparks in you a renewed spirit to welcome life, making it one of the
favorite beverage brands for millions of consumers across Pakistan.
NESTLÉ NESFRUTA
NESTLÉ NESFRUTA is the flagship mainstream still drink
brand reaching out to Gen-Z masses, who aspire to live for the
moment.
NESTLÉ NESFRUTA stands for the ultimate expression of

breaking the usual boring routine, which is manifested through
the brand’s ‘NEWISM’ positioning, which encourages youth to
add a flair of unique creativity to everything they do.
54
NESCAFÉ
Satisfy your love for great experiences and delicious coffee, and discover a world
of quality coffee moments from the comfort of your own home with NESCAFÉ.
Whether you like your coffee simply black or creamy rich, piping hot or ice cold,
there’s a NESCAFÉ to suit whatever mood you’re in.
NESCAFÉ ORIGINAL NESCAFÉ CHILLED RTD

Particularly roasted for your morning moment, to prepare Perfectly blended to be your afternoon pick-me-up. Sip and
you for what the day ahead has in store, NESCAFÉ Original take a moment to reboot, or share it with your friends to
gives a perfect start to every morning. To make our signature indulge in velvety smooth chilled coffee. This range of delicious
NESCAFÉ instant coffee ideal for everyone, coffee beans are cold coffees come in a convenient ready-to- drink (RTD)
carefully selected and roasted. The most supreme coffee flavor format.
is extracted and locked in every granule. So, no matter what
you have planned, grab a mug and get going.
NESCAFÉ ICE NESCAFÉ GOLD

Make your café style iced coffee at home! A pre-mix with the Crafted carefully for moments that matter.
perfect blend of coffee and creamer, available in four exciting NESCAFÉ GOLD coffee is crafted for a great taste. With a
flavors. Just add cold milk and be your own barista with the range of flavours to choose from, there’s something to suit
range of NESCAFÉ ICE. everyone. So, sit back, relax and savour a quality coffee
moment with someone special.

NESTLÉ WATERS
CHAMPIONING WATER FOR HEALTHIER GENERATIONS

NESTLÉ PURE LIFE was born in Pakistan in 1998 and, as a trusted brand, it continues to champion water for healthier generations.
GOING A STEP FURTHER FOR A BRIGHTER FUTURE

Healthy hydration contributes to the well-being of our body and functioning of our vital organs. Drinking water enhances body
performance and helps us stay hydrated in our daily routine.
NESTLÉ PURE LIFE takes ownership in driving the healthy hydration agenda for its consumers through new innovations and
launches. The brand does this through different pack sizes for different occasions as well as innovations like NESTLÉ PURE LIFE
ACTIVE, pH8 alkaline water with electrolytes.
Electrolytes are essential for basic life functions, such as muscle movement and active hydration of body cells. We also expanded
NESTLÉ PURE LIFE ACTIVE in a convenient 18.9 liter format for home consumption in Karachi, Lahore and Islamabad.
We are also driving water stewardship by enabling farmers to save water using drip irrigation techniques in collaboration with key
public and private partners including Pakistan Agriculture Research Council (PARC), Sustainable Development Policy Institute (SDPI)
and Lahore University of Management Sciences (LUMS). In addition to this, all our retail bottles are recyclable by design.
56
NESTLÉ BREAKFAST CEREALS
NESTLÉ Breakfast Cereals provide you and your family with wholesome breakfast
nutrition. They are a convenient, tasty and nutritious way to start the day!
NESTLÉ KOKO KRUNCH

NESTLÉ KOKO KRUNCH is the flagship brand in the kids’ breakfast cereals
range.
The crunchy bear-shaped petals are made with whole grain and are rich in fiber,
vitamins and minerals. KOKO KRUNCH serves as a nutritious and tasty start to
the day providing school-going kids the energy they need.
They might just be the best tasting chocolate cereals you’ll get.
Kids love them and mothers trust them.
NESTLÉ MILO CEREAL

NESTLÉ MILO CEREAL is a nutritious and delicious breakfast cereal with chocolate
and malt flavor. It contains the goodness of whole grain, is high in iron, vitamins and
calcium to help kids lead an active and healthy lifestyle.
Breakfast is always better with NESTLÉ MILO CEREAL!
NESTLÉ TRIX
NESTLÉ TRIX is a delicious fruit-flavored corn puff breakfast cereal. TRIX
contains FRUITY FLAVOR of six exciting fruits, blueberry, orange, watermelon,
grape, lemon and raspberry.
With whole grain as the main ingredient, TRIX is high in vitamins, calcium, and
Zinc. TRIX promises a perfect start to the day, making breakfast a whole lot of
fun!
NESTLÉ GOLD CORNFLAKES

NESTLÉ GOLD CORNFLAKES is a light nutritious cereal made with whole grain
and a crunchy texture. It contains essential vitamins and minerals for a healthy
breakfast for the whole family.
Great tasting crunchy GOLD CORNFLAKES give your mornings the right start
with the perfect combination of taste and nutrition.

NUTRITION
NESTLÉ CERELAC – Together,

Passionately Nourishing Babies to
Blossom!
With its long history in Pakistan, NESTLÉ CERELAC is now
enjoyed by its second generation users and is a household
name, trusted by mothers and endorsed by healthcare
professionals. Introduced in Pakistan, positioned as the ‘First
step to solid food’, after 6 months of age it has, over time,
come to be perceived as the trusted partner of the Pakistani
their healthy physical growth. Today, we serve over half a
mother. Each stage of a baby’s growth is different, and their
billion affordable and fortified bowls every year. Moreover, a
nutritional needs evolve as they grow. Accordingly, NESTLÉ
variety of NESTLÉ CERELAC raw materials are grown locally,
CERELAC portfolio is grouped into stages based on the
helping local farmers to adhere to international standards while
age of the baby, providing appropriate nutrition as per the
contributing to their livelihoods.
changing nutritional needs of a growing child, in continuation
to breastfeeding.
In 2020, in order to remain relevant to the evolving needs of
millennial mothers, we launched our breakthrough innovation
NESTLÉ CERELAC recipes are prepared with rice or wheat and
of NESTLÉ CERELAC Nature’s Selection, a new range that
contain iron, vitamins, and probiotics, that help in the cognitive
brings nutritious grains like oats and quinoa along with exotic
development of babies from 6 months onwards, along with
fruits like pomegranate & dates, for the first time.
In 2022, we launched an affordable single serve range

CERELAC Essentials to make nutrition affordable and
accessible to the bottom of the pyramid. These new additions
to our portfolio, in addition to our parent range enable us to
deliver the right nutrition and stay true to the brands purpose of
‘Together, passionately nourishing babies to blossom’.
58
NESTLÉ NIDO - Keep Exploring
The growing-up formulae, NESTLÉ NIDO 1+ and NESTLÉ
NIDO 3+, offer protection for children between 1 to 5 years
of age. The TRIPLE PROTECTION FORMULAE consist of a
combination of pre-biotic, pro-biotic strain & essential nutrients
that support the healthy development of your child’s gut,
immune and respiratory defenses.
The objective of the NESTLÉ NIDO brand is to nurture a

mother’s love by giving extra protection, so her toddler can
embark on a beautiful journey of self-discovery.
NESTLÉ NANGROW – Nourishing NESTLÉ LACTOGROW – Grow

Together Every Possible In Your Happy!
Child A child’s physical growth is very important when it comes to a
happy childhood. At NESTLÉ LACTOGROW, we believe childs’
The NESTLÉ NANGROW story is one of pioneering innovations
happiness forms the foundation of their satisfaction later in life.
backed by over 150 years of Nestlé’s expertise in child
Hence, we support mothers who feel the same and want to
nutrition.
raise happy children since there is no greater joy than seeing a
child grow up healthy and happy.
At NANGROW, we believe that possibilities are physical
and intellectual capabilities and skills that children have in
We know that a healthy tummy is vital for happy growth which
themselves. Beyond possibilities, EVERY POSSIBLE captures
is why, in the absence of breast milk, NESTLÉ LACTOGROW
the world of opportunities children will have to become the
3 & 4 have been designed with COMFORTIS GROW to look
best they can be at every stage.
after a child’s Gut Comfort, aid in digestion, and promote gut
defenses to help ensure healthy and happy growth in children
NANGROW’s formulation contains Human Milk
aged 1 to 5 years.
Oligosaccharide (HMO) 2’FL that is naturally present in breast
milk and contributes to innate immunity by enhancing growth
In order to cater to different needs of growing up children, our
of beneficial bacteria and modulating the immune system. In
portfolio also includes NESTLÉ LACTOGROW Recover – a low
the absence of breastfeeding, Nestlé NANGROW with HMO
lactose formula for management of acute diarrhea and NESTLÉ
can support children’s immune system, thus helping them
LACTOGROW ESSENTIALS – fortified with iron, zinc, vitamin A
build a strong foundation for their future.
and D to help prevent micronutrient deficiencies.
In 2022, NANGROW saw tremendous growth, backed by
Here’s to Growing Happy with NESTLÉ LACTOGROW!
strategic initiatives and the availability of NANGROW in more
affordable locally produced packs.

NESTLÉ PROFESSIONAL
Nestlé Professional Pakistan continuously strives to become

an inspirational and trusted partner for our Out-of-Home
BRANDED BEVERAGES:
customers. We see it as our mission to utilize our expertise in 1. Hot Beverage Solutions
providing efficient, innovative food and beverage solutions to
A range of hot beverages that complement varied menus,
all our business partners, helping them win by Making More
with a variety of delicious options. All restaurants get to
Possible.
serve a complete range of hot drinks, be it a temptingly
hot NESCAFÉ Cappuccino, a creamy mug of NESCAFÉ
At Nestlé Professional, we continuously invest in advancing
Latte, a richly intense taste of NESCAFÉ Espresso, or a
our understanding of customer and consumer tastes;
strongly aromatic NESCAFÉ Long Black. The hot drinks
experimenting and innovating to enhance product
range also comprises teas including NESTEA Karak Chai,
performance; and relentlessly developing solutions to the latest
NESTEA Cardamom Chai and NESTEA Kashmiri Chai
nutritional and sustainability challenges. This is the expertise
along with NESTLÉ Hot Chocolate, which are some of the
we put in the hands of chefs, operators, restaurants and
most sought-after hot drinks!
entrepreneurs across the Out-of-Home sector as part of our
dedication to making it more possible for their business, every
The list does not end there! NESTLÉ Roast and Ground
day.
coffee beans give a distinct flavor and aroma to every
cup, providing baristas with a perfect blend to create
The product portfolio is divided into two categories:
a masterpiece, available in variants like NESCAFÉ
EXCELLENTE (100% Arabica beans) and NESCAFÉ
BRANDED FOOD: AROMATICO (a blend of Arabica and Robusta beans) to
cater to different taste preferences.
1. Dessert Solutions
With our dairy and non-dairy creams and our Professional 2. Cold Beverage Solutions
Desserts & Confectionery range, Nestlé Professional
Nestlé Professional offers a complete range of powder
ensures its place at the center of the desserts plate in
drinks that can be enjoyed in liquid as well, using
Pakistan.
machines or consumed in slush format using blenders.
The range includes MANGO ICE, LEMON ICE, ORANGE
2. Meal Compliments & Chilled Dairy ICE, NESTEA PEACH & MINT MARGARITA which can be
Nestlé Professional also offers chilled dairy solutions enjoyed throughout the year.
including bulk butter, cooking butter and unsweetened
NESTLÉ MILKPAK YOGURT which are tailor-made for Out of Home Channels:
Out-of-Home customers.
Nestlé Professional Pakistan serves both commercial &
institutional channels through its specialized food & beverage
solutions and services.
60
FINANCIAL
STATEMENTS
For the year ended December 31, 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF NESTLÉ PAKISTAN LIMITED
Report on the Audit of the Financial Statements as at 31 December 2022
Opinion
We have audited the annexed financial statements of Nestlé Pakistan Limited (the Company), which comprise the statement
of financial position as at 31 December 2022, and the statement of profit or loss, the statement of comprehensive income,
the statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory information, and we state that
we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for
the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement of financial
position, statement of profit or loss, the statement of comprehensive income, the statement of changes in equity and the
statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards
as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so
required and respectively give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of the
profit and other comprehensive income, the changes in equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants
of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Following are the key audit matters:
S. No. Key audit matters How the matter was addressed in our audit
1 Revenue Recognition
During the year ended 31 December 2022, the Our audit procedures amongst others included the
Company recognized net revenue of Rs. 162.5 billion following:
from sale of goods as disclosed in Note 26 and
Understood the Company’s sales processes for various
according to the accounting policy described in Note
sales types, including the processes for agreeing trade
2.4.15 to the financial statements (2021: Rs. 133.3
spend deductions and the design and implementation
billion).
of relevant internal controls;
The Company generates revenue from a wide range
Understood the Company’s revenue recognition
of products which are sold through different sales
policies and procedures to assess compliance with
channels.
International Financial Reporting Standards (“IFRS”) as
The Company also offers various discounts/allowances applicable in Pakistan;
and incurs trade-spend from time to time on several
Performed substantive analytical procedures using
product categories for the various types of customers.
dis-aggregated data in order to gain assurance over
the revenue recognized and focused our testing on
outliers and unusual trends;
62
S. No. Key audit matters How the matter was addressed in our audit
Due to the above factors requiring significant Performed analytical review of sales by various
auditor attention on occurrence and considering the product and customer categories in order to identify
significance of revenue as a key performance indicator any inconsistencies with key performance indicators,
for users of financial statements, we have considered operational activities of the Company and overall
revenue recognition as a key audit matter. external economic environment;
Understood the significance of trade spend deductions,
the diversity of arrangements by cluster of customers,
the process flow by nature of arrangement and the
timing for accounting for estimates considering any
conditionality inherent in the trade spend arrangements;
Performed trend analysis and correlation between
revenue total trade spend and assessed the
reasonableness in the context of local environment
along with relating the same to movement in
receivables and cash;
Performed procedures to identify and review
any manual adjustments at year end impacting
revenue and total trade spend estimates to identify
significant or unusual items and reviewed underlying
documentation;
Tested supporting evidence in relation to a sample of
sales transactions including but not limited to dispatch
documentation, correspondence / acknowledgment by
customers and performing other tests of details;
Ensured that revenue items are correctly classified
with reference to guidance in International Financial
Reporting Standard 15 (“IFRS 15”);
Performed procedures around the cut off of revenue;
Reviewed credit notes and other transactions
subsequent to the year end to identify whether any
events causing reversal of revenue occur after year
end including transactions related to trade spend to
address the completeness and reasonableness of
accruals as at year end; and
We considered the accuracy and the adequacy of
the disclosure provided in Note 26 to the financial
statements in relation to the relevant accounting
standards.
63
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the annual report for the year ended
31 December 2022, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements and 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 the Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the
accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017(XIX of 2017)
and for such internal control as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to
do so.
Board of directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable
in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
64
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide to the Board of Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:

a) proper books of account have been kept by the Company as required by the Companies Act, 2017(XIX of 2017);
b) the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the
statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn
up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and
returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the
Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company
and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Abdullah Fahad Masood.
EY Ford Rhodes
Chartered Accountants
Lahore: 17 March 2023
UDIN: AR202210177B0z6cvw2T
65
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2022
(Rupees in 000) Note 2022 2021
EQUITY AND LIABILITIES

Share capital and reserves
Authorized capital
75,000,000 (2021: 75,000,000) ordinary shares of PKR 10 each 750,000 750,000
Issued, subscribed and paid up capital 3 453,496 453,496

Share premium - capital reserve 4 249,527 249,527
General reserve - revenue reserve 280,000 280,000
Cash flow hedge reserve - revenue reserve 2,289 (2,537)
Accumulated profits - revenue reserve 4,784,934 4,422,786
5,770,246 5,403,272
Non-current liabilities
Long term finances - secured 5 6,500,000 12,000,000
Lease liabilities 6 1,378,203 115,479
Deferred taxation 7 2,290 1,241,580
Retirement benefits 8 3,387,912 3,376,097
11,268,405 16,733,156
Current liabilities
Current portion of long-term liabilities 9 9,087,234 130,869
Short-term borrowings - secured 10 519,260 6,000,000
Running finance under mark-up arrangements - secured 11 3,756,401 4,226,529
Trade and other payables 12 43,739,673 28,023,293
Contract liabilities 13 766,154 682,065
Interest and mark-up accrued 14 297,289 480,643
Customer security deposits - interest free 15 224,225 195,890
Income tax payable 2,100,895 1,444,883
Unclaimed dividend 87,756 71,894
Unpaid dividend 6,034,213 2,011,404
66,613,100 43,267,470
Contingencies and commitments 16
83,651,751 65,403,898
The annexed notes 1 to 47 form an integral part of these financial statements.
KOMAL ALTAF SAMER CHEDID SYED YAWAR ALI

Chief Financial Officer Chief Executive Officer Chairman / Director
66
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2022
ASSETS
Non-current assets
Property, plant and equipment 17 29,386,433 29,274,553
Capital work-in-progress 18 2,612,423 2,026,307
Intangible assets 19 – –
Long-term loans 20 209,395 159,848
32,208,251 31,460,708
Current assets
Stores and spares 21 3,291,671 3,045,805
Stock-in-trade 22 27,094,551 18,600,718
Trade debts 23 1,989,358 923,484
Current portion of long-term loans 20 130,572 116,810
Sales tax refundable - net 11,771,112 7,059,231
Advances, deposits, prepayments and other receivables 24 6,623,728 3,453,222
Cash and bank balances 25 542,508 743,920
51,443,500 33,943,190
83,651,751 65,403,898

67
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED DECEMBER 31, 2022
Revenue from contracts with customers- net 26 162,516,255 133,295,472

Cost of goods sold 27 (112,886,474) (92,803,347)
Gross profit 49,629,781 40,492,125
Distribution and selling expenses 28 (17,347,229) (14,897,747)

Administration expenses 29 (5,503,574) (4,016,767)
Operating profit 26,778,978 21,577,611
Finance cost 30 (2,335,994) (1,840,228)

Other expenses 31 (2,282,490) (2,079,361)
(4,618,484) (3,919,589)
Other income 32 631,543 295,578

Profit before taxation 22,792,037 17,953,600
Taxation 33 (7,742,321) (5,185,499)
Profit after taxation 15,049,716 12,768,101
Earnings per share basic and diluted (Rupees) 35 331.86 281.55

68
STATEMENT OF COMPREHENSIVE INCOME
2022
(Rupees in 000) 2021
Other comprehensive income
Items that may be reclassified subsequently to profit or loss (net of tax)

Remeasurement gain / (loss) on 8,179 (3,551)
cash flow hedges - effective portion
Related tax (3,353) 1,014
4,826 (2,537)
Items that will not be reclassified subsequently to profit or loss (net of tax)
Remeasurement gain on 391,267 79,942
net retirement benefit liability
Related tax (113,467) (23,183)
277,800 56,759
Other comprehensive income for the year 282,626 54,222
Total comprehensive income for the year 15,332,342 12,822,323

69
STATEMENT OF CHANGES IN EQUITY
Capital Revenue
reserves reserves
Share Share General Cash flow Accumulated
(Rupees in 000) capital premium reserve hedge reserve profits Total
Balance as at January 01, 2021 453,496 249,527 280,000 – 3,207,419 4,190,442

Total comprehensive income for the
year ended December 31, 2021
Profit after taxation – – – – 12,768,101 12,768,101
Other comprehensive income – – – (2,537) 56,759 54,222
Total comprehensive income – – – (2,537) 12,824,860 12,822,323
Transaction with owners
directly recognized in equity
Final dividend for the year ended
December 31, 2020 (Rs. 61 per share) – – – – (2,766,324) (2,766,324)
Interim dividend for the six months period
June 30, 2021 (Rs. 115 per share) – – – – (5,215,202) (5,215,202)
Interim dividend for the nine months period
ended September 30, 2021 (Rs. 80 per share) – – – – (3,627,967) (3,627,967)
Balance as at December 31, 2021 453,496 249,527 280,000 (2,537) 4,422,786 5,403,272
Total comprehensive income for the
year ended December 31, 2022
Profit after taxation – – – – 15,049,716 15,049,716
Other comprehensive income – – – 4,826 277,800 282,626
Total comprehensive income – – – 4,826 15,327,516 15,332,342
Transaction with owners
directly recognized in equity
Final dividend for the year ended
December 31, 2021 (Rs. 90 per share) – – – – (4,081,464) (4,081,464)
Interim dividend for the six months period
June 30, 2022 (Rs. 155 per share) – – – – (7,029,188) (7,029,188)
Interim dividend for the nine months period
September 30, 2022 (Rs. 85 per share) – – – – (3,854,716) (3,854,716)
Balance as at December 31, 2022 453,496 249,527 280,000 2,289 4,784,934 5,770,246

70
STATEMENT OF CASH FLOWS
Cash flow from operating activities

Profit before taxation 22,792,037 17,953,600
Adjustment for non-cash charges and other items:
Depreciation on property, plant and equipment 17.4 3,841,930 3,858,736
Impairment (reversal) / charge - net 31 & 32 (42,543) 389,042
Gain on disposal of property, plant and equipment - owned 32 (202,305) (119,680)
Gain on termination of lease (170) –
Provision for Workers’ Profit Participation Fund 31 1,167,361 915,146
Provision for Workers’ Welfare Fund 31 555,301 349,316
Increase in provision for stores and spares 21.1 154,228 35,621
Increase / (decrease) in provision for stock in trade 274,310 (30,976)
Reversal of allowance for expected credit losses 32 (5,444) (7,717)
Exchange loss realized 31 293,605 362,171
Exchange loss unrealized 31 102,428 45,965
Provision for defined benefits plans 880,532 793,124
Finance cost 30 2,335,994 1,840,228
Profit before working capital changes 32,147,264 26,384,576
Effect on cash flow due to working capital changes:

(Increase) / decrease in current assets:
Stores and spares (400,094) (411,147)
Stock-in-trade (8,768,143) (2,317,721)
Trade debts (1,060,430) 1,014,566
Advances, deposits, prepayments and other receivables (7,882,387) (4,338,212)
Increase in current liabilities:

Trade and other payables 14,938,787 693,326
Contract liabilities 84,089 119,802
(3,088,178) (5,239,386)
Cash generated from operations 29,059,086 21,145,190
(Increase) / decrease in long term loans - net (63,309) 36,611

Increase / (decrease) in customer security deposits - interest free 28,335 (26,276)
Contributions by the Company - net (477,450) (454,746)
Workers’ Profit Participation Fund paid (965,099) (655,032)
Workers’ Welfare Fund paid (367,824) (294,812)
Finance cost paid (2,409,754) (1,641,295)
Income taxes paid (8,442,419) (5,297,567)
Net cash generated from operating activities 16,361,566 12,812,073
71
STATEMENT OF CASH FLOWS
Cash flow from investing activities

Fixed capital expenditure (3,379,435) (2,602,970)
Sale proceeds from disposal of property, plant and equipment 17.6 420,032 202,186
Net cash used in investing activities (2,959,403) (2,400,784)
Cash flow from financing activities

Long-term loans obtained 6,500,000 –
Long-term loans repaid (3,081,975) (3,698,319)
Short-term borrowings obtained 1,038,520 9,000,000
Short-term borrowings repaid (4,019,260) (11,917,473)
Short term borrowings - net (less than 90 days) (2,500,000) 2,500,000
Lease rentals paid 6.2 (144,035) (138,600)
Dividends paid (10,926,697) (9,598,316)
Net cash used in financing activities (13,133,447) (13,852,708)
Net increase / (decrease) in cash and cash equivalents 268,716 (3,441,419)

Cash and cash equivalents at beginning of the year (3,482,609) (41,190)
Cash and cash equivalents at end of the year 37 (3,213,893) (3,482,609)

72
NOTES TO THE FINANCIAL STATEMENTS
1 Legal status and nature of business

Nestlé Pakistan Limited (“the Company”) is a public limited company incorporated in Pakistan - under the repealed
Companies Ordinance, 1984 (now Companies Act, 2017) - and its shares are quoted on Pakistan Stock Exchange.
The Company is a subsidiary of Société des Produits Nestlé S.A. (SPN), the Holding Company, which in turn is a wholly
owned subsidiary of Nestlé S.A., the Ultimate Parent Company, incorporated in Switzerland.
The Company is principally engaged in manufacturing, processing and sale of dairy, nutrition, beverages and food
products including imported products. Registered office (which is also the Head Office) of the Company is situated at
Packages Mall, Shahrah-e-Roomi, PO Amer Sidhu, Lahore, previously it was situated at Babar Ali Foundation Building,
308 Upper Mall, Lahore.
The geographical locations and addresses of the Company’s manufacturing facilities are as under:
Manufacturing Facilities Address

Sheikhupura factory 29-km Lahore – Sheikhupura Road, Sheikhupura, Pakistan
Kabirwala factory 10-km, Khanewal Road, Kabirwala, District Khanewal, Pakistan
Port Qasim factory Plot No. A23, North Western Industrial Area, Port Qasim Karachi, Pakistan
Islamabad factory Plot No. 32 Street No 3 Sector I-10/3 Industrial Area Islamabad, Pakistan.
2 Basis of preparation and summary of significant accounting policies

2.1 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
– International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”) and Islamic Financial Accounting Standards (“IFAS”) issued by the Institute of Chartered
Accountants of Pakistan as notified under the Companies Act 2017;
– 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 or IFAS, the
provisions of and directives issued under the Companies Act, 2017 have been followed.
2.2 Accounting convention

These financial statements have been prepared under the historical cost convention, except for recognition of
certain employee benefits on the basis mentioned in note 2.4.6 and cash flow hedges that have been measured
at fair value.
2.3 Significant estimates and judgements

The preparation of financial statements in conformity with approved accounting standards requires management
to make judgments, estimates and assumptions that affect the application of policies and reported amounts
of assets and liabilities, income and expenses. The estimates and associated assumptions and judgments
are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the result of which form the basis of making the judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revision 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 revision and future periods if the revision affects both current and future periods. The areas
where various assumptions and estimates that have a significant risk and result in material adjustments to the
Company’s financial statements or where judgments, that had the significant effect on the amounts that have
been recognized in the period, were exercised in application of accounting policies are as follows:
73
2.3.1 Judgements
Lease term
The Company determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an
option to terminate the lease, if it is reasonably certain not to be exercised.
The Company has several lease options that include extension and termination options. The Company applies
judgements in evaluating whether it is reasonably certain whether to exercise the option to renew or terminate
the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal
or termination. After the commencement period, the Company reassesses the lease term if there is a significant
event or change in circumstances that is within its control and affects the ability to exercise or not to exercise
the option to renew or to terminate.
2.3.2 Significant estimates and assumptions

Company applies the estimates in following areas to determine the amounts in financial statements:
– Defined benefit plans 2.4.6

– Discounts, allowances and promotional rebates 2.4.15
Other areas, where estimates are involved to determine the amounts, are mentioned in their respective notes.
2.4 Summary of significant accounting policies

The significant accounting policies adopted in preparation of these financial statements are set out below and
have been applied consistently to all periods presented in these financial statements.
2.4.1 Financial instruments

2.4.1.1 Financial assets
Classification, recognition and measurement
On initial recognition, a financial asset is classified as:
– measured at amortized cost

– fair value through other comprehensive income (FVOCI) and
– fair value through profit or loss (FVTPL)
All financial assets or financial liabilities are initially recognized when the Company becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability
is initially measured at fair value. For an item not at FVTPL, transaction costs that are directly attributable to its
acquisition or issue are added to its fair value. A receivable without a significant financing component is initially
measured at the transaction price.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets, in which case all affected financial assets are reclassified on the
first day of the first reporting period following the change in the business model.
Amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated
as at FVTPL:
74
– it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
These assets are subsequently measured at amortized cost using the effective interest method. The amortized
cost is reduced by impairment losses, interest income, foreign exchange gains and losses. Any gain or loss on
derecognition is recognized in statement of profit or loss.
Financial assets measured at amortized cost comprise of trade debts, long term loans, cash margin withheld
by banks against imports, advances to employees against salaries, other deposits, receivables and bank
balances.
Debt Instrument - FVOCI

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as
at FVTPL:
– it is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
These assets are subsequently measured at fair value. Interest income calculated using the effective interest
method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains
and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to
statement of profit or loss. However, the Company has no such instrument at the statement of financial position
date.
Equity Instrument - FVOCI

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to
present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-
investment basis.
These assets are subsequently measured at fair value. Dividends are recognized as income in statement of
profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net
gains and losses are recognized in OCI and are never reclassified to profit or loss. However, the Company has
no such instrument at the statement of financial position date.
Fair value through profit or loss (FVTPL)

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at
FVTPL.
On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognized in statement of profit or loss. However, the Company has no such instrument at the
statement of financial position date.
Business model assessment

For the purposes of the assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
75
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company
considers the contractual terms of the instrument. This includes assessing whether the financial asset contains
a contractual term that could change the timing or amount of contractual cash flows such that it would not meet
this condition. In making this assessment, the Company considers:
– contingent events that would change the amount or timing of cash flows;
– terms that may adjust the contractual coupon rate, including variable-rate features;
– prepayment and extension features; and
– terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).
Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially
all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither
transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the
financial asset.
The Company might enter into transactions whereby it transfers assets recognized in its statement of financial
position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these
cases, the transferred assets are not derecognized.
2.4.1.2 Financial liabilities

Classification, recognition and measurement
Financial liabilities are recognized initially and measured subsequently at amortized cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expense, are recognized in statement of profit or loss. Other financial liabilities are subsequently
measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains
and losses are recognized in statement of profit or loss. Any gain or loss on derecognition is also recognized in
statement of profit or loss.
Financial liabilities at amortized cost comprise of: long term and short term financing, lease liabilities, customer
security deposits, unclaimed/unpaid dividend, trade and other payables and interest and markup accrued.
The Company has no financial liabilities to be designated at FVTPL as at year end.
Derecognition
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or
expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new financial liability based on the modified terms
is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount
extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is
recognized in statement of profit or loss.
2.4.2 Impairment losses

Financial assets
The Company recognizes an allowance for expected credit losses (“ECL”) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Company expects to receive. The shortfall is then
discounted at an approximation to the asset’s original effective interest rate.
76
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). However,
in certain cases, the Company may also consider a financial asset to be in default when internal or external
information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by the Company. A financial asset is written off when there
is no reasonable expectation of recovering the contractual cash flows.
For trade debts, the Company applies a simplified approach in calculating ECLs based on lifetime expected credit
losses. The provision matrix is initially based on the Company’s historical observed default rates. The Company
will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For
instance, if forecast economic conditions (i.e., gross domestic product and inflation) are expected to deteriorate
over the next year which can lead to an increased number of defaults in the sector, the historical default rates are
adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-
looking estimates are analyzed. The expected credit losses are recognized in the statement of profit or loss. For
long term loans to employees, the Company applies simplification under IFRS 9 as these financial assets have
low credit risk. At every reporting date, the Company evaluates whether this financial instrument is considered
to have low credit risk using all reasonable and supportable information that is available without undue cost
or effort. For bank balances and cash margin, the Company applies a simplified approach in calculating ECLs
based on lifetime expected credit losses. The Company reviews internal and external information available for
each bank balance to assess expected credit loss and the likelihood to receive the outstanding contractual
amount. The expected credit losses are recognized in the statement of profit or loss.
Non-financial assets
The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets,
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have
indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows
that largely are independent from other assets and groups.
Impairment losses are recognized in profit and loss. Impairment losses recognized in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets of the unit on a pro-rata basis. Impairment losses on goodwill shall not
be reversed.
2.4.3 Offsetting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the statement of financial
position if the Company has a legally enforceable right to set-off the recognized amounts and intends either to
settle on a net basis or to realize the asset and settle the liability simultaneously.
2.4.4 Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign
currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which
a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
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For the purpose of hedge accounting, hedges are classified as:
– Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or
liability or an unrecognised firm commitment;
– Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction or
the foreign currency risk in an unrecognised firm commitment; and
– Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Company formally designates and documents the hedge
relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for
undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the
risk being hedged and how the Company will assess whether the hedging relationship meets the hedge
effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio
is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness
requirements:
– There is ‘an economic relationship’ between the hedged item and the hedging instrument.
– The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship.
– The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the Company actually hedges and the quantity of the hedging instrument that the Company
actually uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:
Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge
reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash
flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item.
The Company uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast
transactions and firm commitments. The ineffective portion relating to foreign currency contracts is recognised
as other expense.
The forward element is recognised in OCI and accumulated in a separate component of equity under cost of
hedging reserve.
The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged
transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the
amount accumulated in equity is removed from the separate component of equity and included in the initial
cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will
not be recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-
financial asset or non-financial liability subsequently becomes a firm commitment for which fair value hedge
accounting is applied.
For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification
adjustment in the same period or periods during which the hedged cash flows affect profit or loss.
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If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain
in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will
be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the
hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the
nature of the underlying transaction as described above.
Fair value hedges

Changes in fair values of hedging instruments designated as fair value hedges and the adjustments for the risks
being hedged in the carrying amounts of the underlying transactions are recognized in the income statement.
As at reporting date there are no fair value hedges of the Company.
2.4.5 Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
2.4.5.1 Current
Provision of current tax is based on the taxable income for the year determined in accordance with the prevailing
law for taxation of income and the decisions of appellate authorities on certain cases issued in past. The charge
for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profit for the year if
enacted after taking into account tax credits, rebates and exemptions, if any. The charge for current tax also
includes adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years.
2.4.5.2 Deferred
Deferred tax is provided using the balance sheet method in respect of all temporary differences arising
from differences between the carrying amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is
probable that taxable profits will be available against which the deductible temporary differences, unused tax
losses and tax credits can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. Deferred tax relating to items recognized outside statement of
profit or loss is recognized outside statement of profit or loss. Deferred tax items are recognized in correlation
to the underlying transaction either in OCI or directly in equity.
2.4.6 Retirement benefits

2.4.6.1 Defined benefit plan
The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefits that employees have earned in current and prior periods, discounting
that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected
unit credit method. When calculation results in potential assets for the Company, the recognized asset is limited
to the present value of economic benefits available in the form of any future refunds from the plan or reduction
in future contributions to the plan.
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Remeasurement of net defined benefit liability, which comprise of actuarial gains and losses, the return on
plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest) are recognized
immediately in other comprehensive income. The Company determines net interest expense / (income) on the
defined benefit obligation for the period by applying the discount rate used to measure the defined benefit
obligation at the beginning of the annual period to the then-net defined benefit, taking into account any change
in the net defined benefit obligation during the period as a result of contributions and benefit payments. Net
interest expense and other expenses related to defined benefit plans are recognized in statement of profit or
loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates
to past service or the gain or loss on curtailment is recognized immediately in statement of profit or loss. The
Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate,
management considers the interest rates of government bonds, as set by Pakistan Society of Actuaries, and
interpolated linearly as needed along the yield curve to correspond with the expected term of the defined
benefit obligation.
2.4.6.2 Defined contribution plan

The Company operates a recognized provident fund for all its regular employees, excluding expatriates. Equal
monthly contributions are made to the fund both by the Company and the employees at the rate of 12% (2021:
12%) of the basic salary plus cost of living allowance. All regular employees are eligible for provident fund upon
their confirmation. Obligation for contributions to defined contribution plan is recognized as an expense in the
statement of profit or loss as and when incurred.
2.4.7 Leases
The Company assesses whether a contract is or contains a lease at inception of the contract. This assessment
involves the exercise of judgement about whether it depends on a specified asset, whether the Company
obtains substantially all the economic benefits from the use of that asset, and whether the Company has the
right to direct the use of the asset.
The Company recognizes a right-of-use (ROU) asset and a lease liability at the lease commencement date,
except for short term leases of 12 months or less and leases of low value items, which are expensed in the
statement of profit or loss on a straight-line basis over the lease term.
The lease liability is initially measured at the present value of the lease payment that are not paid at the
commencement date, discounted using the interest rate implicit in the lease. If this rate cannot be readily
determined, the Company uses the incremental borrowing rate (IBR) applicable in the market for such leases.
The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a
similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires
estimation when no observable rates are available or when they need to be adjusted to reflect the terms and
conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates)
when available and is required to make certain entity-specific estimates.
The lease liability is subsequently measured at amortized cost using the effective interest rate method and
remeasured (with a corresponding adjustment to the related ROU asset) when there is a change in future lease
payments in case of renegotiation, changes of an index or rate or in case of reassessment of options.
At inception, the ROU asset comprises the initial lease liability, initial direct costs and the obligations to refurbish
the asset, less any incentives granted by the lessors. The ROU asset is depreciated over the shorter of the lease
term or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an
indicator for impairment, as for owned assets.
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2.4.8 Trade and other payables

Trade and other payables are recognized initially at cost, which is the fair value of consideration to be paid in
the future for goods and services, whether or not billed to the Company. Exchange gains and losses arising
on translation in respect of liabilities in foreign currency are adjusted to the carrying amount of the respective
liabilities.
2.4.9 Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods or services to the customer, a contract liability is recognized
when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as
revenue when the Company performs under the contract.
2.4.10 Dividend
Dividend distribution to the Company’s shareholders is recognized as a liability in the Company’s financial
statements in the period in which dividends are approved.
2.4.11 Provisions and contingencies

Provisions are recognized in the statement of financial position when the Company has a legal or constructive
obligation as a result of past events and it is probable that outflow of economic benefits will be required to
settle the obligation and a reliable estimate of the amount can be made. However, provisions are reviewed at
each reporting date and adjusted to reflect current best estimate. Where the outflow of resources embodying
economic benefits is not probable, a contingent liability is disclosed, unless the possibility of outflow is remote.
2.4.12 Fixed capital expenditure and depreciation/amortization

2.4.12.1 Property, plant and equipment
Property, plant and equipment, except freehold land, are stated at cost less accumulated depreciation and any
identified accumulated impairment loss. Freehold land is stated at cost less any identified impairment loss.
Cost in relation to self constructed assets includes direct cost of material, labor, applicable manufacturing
overheads and borrowing costs on qualifying assets.
Depreciation is charged to statement of profit or loss, unless it is included in the carrying amount of another
asset, on straight line method whereby cost of an asset is written off over its estimated useful life at the rates
given in note 17.
Residual value and the useful life of an asset are reviewed at least at each financial year-end.
Depreciation on additions is charged from the month in which asset is capitalized / available for use, while no
depreciation is charged for the month in which asset is disposed off. Where an impairment loss is recognized,
the depreciation charge is adjusted in the future periods to allocate the assets revised carrying amount over its
estimated useful life. The estimates with respect to depreciable lives and pattern of flow of economic benefits
are based on the analysis of the management of the Company based on similar transactions in the past.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. All other repair and maintenance costs are charged to statement
of profit or loss during the period in which they are incurred.
The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds
and the carrying amount of the asset is recognized as an income or expense.
81
2.4.12.2 Capital work-in-progress

Capital work-in-progress is stated at cost less identified impairment loss, if any. It consists of all expenditure
and advances connected with specific assets incurred and made during installation and construction period.
These are transferred to relevant property, plant and equipment as and when assets are available for use.
2.4.12.3 Intangible assets

Intangible assets are stated at cost less accumulated amortization and any identified accumulated impairment
loss. These are amortized using the straight line method as disclosed in note 19. Amortization on additions
is charged from the month in which an intangible asset is acquired, while no amortization is charged for the
month in which the intangible asset is disposed off.
Subsequent expenditure on intangible assets is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditures are charged to statement of profit or
loss as and when incurred.
2.4.13 Inventories
Inventories are valued as per below mentioned valuation basis:
2.4.13.1 Stores and spares

Usable stores and spares except for in-transit, are valued principally at moving average method, while items
considered obsolete are carried at nil value. Provision is made against slow moving or obsolete stores and
spares on a systematic basis.
2.4.13.2 Raw and packing material

Value in relation to raw and packing materials except for in-transit is arrived at using FIFO basis. Provision for
unusable raw and packing material is made on an estimated basis, wherever required.
2.4.13.3 Finished goods and work-in-process

Value of finished goods and work in process both manufactured and purchased, is determined on weighted
average basis, except for in-transit goods. In-transit goods and materials are valued at cost comprising invoice
value plus other charges thereon. Cost in relation to work-in-process and finished goods includes an appropriate
portion of production overheads. Finished goods are valued at cost or net realizable value, whichever is lower.
Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs
of completion and cost necessary to be incurred in order to make a sale.
2.4.13.4 Provision for obsolete spares and unusable raw and packing material
Provision for stores and spares and stock-in-trade is made on the basis of management’s estimate of net
realizable value and ageing analysis prepared on an item-by-item basis. Net realizable value calculations are
estimated based on last recently-held transactions and values expected to be recovered for sale in normal
course of business less an estimate for selling costs.
2.4.14 Sales tax refundable

Sales tax refundable primarily includes input sales tax related to zero rated taxable supplies for prior years for
which refunds have been lodged with the Federal Board of Revenue. These arise in the usual trade cycle of
the Company and are settled accordingly. Management has classified the whole of the amount of sales tax
refundable as current asset based on the assessment that either the amount will be refunded in the next year
or related settlement of amounts due to Government, within next twelve months will include refund of Sales tax.
2.4.15 Revenue recognition

Sales represent amounts received and receivable from third parties for goods supplied to the customers and
are recognized at point in time when a customer obtains control of the goods under the contract, usually when
the product is delivered to the customers.
82
Revenue is measured based on the consideration specified in a contract with a customer, net of returns,
amounts collected on behalf of third parties (sales taxes etc.), pricing allowances, other trade discounts, volume
rebates and couponing, price promotions to customers / consumers and any other consideration payable to
customers (referred as trade spend). The level of discounts, allowances and promotional rebates are recognized,
on estimated basis using historical experience and the specific terms of the arrangement, as a deduction from
revenue at the time that the related sales are recognized or when such incentives are offered to the customer /
consumer.
2.4.16 Foreign currencies

All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates prevailing at
the reporting date. Exchange gains and losses resulting from the settlement of such transactions and from the
translations at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are taken to statement of profit or loss currently. Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated into rupees at exchange rates prevailing at the date of
transactions and those stated at fair value are translated into rupees at exchange rates prevailing at the date
when the fair values are determined.
2.4.17 Borrowing cost

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of
funds. The Company capitalizes borrowing costs that are directly attributable to the acquisition, construction or
production of qualifying assets as part of the cost of these assets. The Company recognizes other borrowing
costs as an expense in the period in which it incurs.
2.4.18 Cash and cash equivalents

Cash and cash equivalents are carried in the statement of financial position at cost. For the purpose of cash flow
statement, cash and cash equivalents comprise cash in hand, demand deposits, other short term highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of change in value and running finances that are repayable on demand.
2.4.19 Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses. Chief Executive Officer has been identified as the chief operating decision
maker and is responsible for performance, allocation of resources and assessment of results.
2.4.20 Share based payments

The Holding Company operates an equity settled share-based scheme with cash alternative for certain
employees of the Holding Company and its subsidiaries, including the Company. The Holding Company
systematically invoices for cost recharge to the subsidiaries during the accounting period for related benefits
granted to the employees.
The Company neither grants the awards in its own equity instruments nor has the obligation to settle the share-
based payment transaction, accordingly, the cost charged by Holding Company is treated as cash-settled
transaction and charge is taken to statement of profit or loss.
2.5 Standards, interpretations and amendments to published approved accounting standards

The accounting policies adopted are consistent with those of the previous financial period, except for the
following new and amended standards and interpretations effective for annual period beginning on January 01,
2022, as listed below:
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2.5.1 New Standards, Interpretations and Amendments effective in the reporting period
IFRS 3 Reference to conceptual framework — (Amendments)
IAS 16 Property, plant and equipment: Proceeds before intended use — (Amendments)
IAS 37 Onerous contracts - costs of fulfilling a contract — (Amendments)
AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first-time
adopter
AIP IFRS 9 Fees in the ‘10 per cent’ test for derecognition of financial liabilities
AIP IAS 41 Agriculture – Taxation in fair value measurements
The adoption of above new amendments applied for the first time in the period did not have any material
impact on the financial statements of the Company. The Company has not early-adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
2.5.2 Standards, interpretations and amendments to approved accounting standards that are not yet effective
The following revised standards, amendments and interpretations with respect to the approved accounting
standards as applicable in Pakistan would be effective from the dates mentioned below against the respective
standard or interpretation:
Effective date
(annual periods
Standard or Interpretation beginning on or after)
IAS 8 Definition of Accounting Estimates - Amendments January 01, 2023
to IAS 8 - The amendments clarify the distinction
between changes in accounting estimates and changes
in accounting policies and the correction of errors. Also,
they clarify how entities use measurement techniques
and inputs to develop accounting estimates.
IAS 1 and Disclosure of Accounting Policies - Amendments to January 01, 2023

IFRS Practice IAS 1 and IFRS Practice Statement 2 - The amendments
Statement 2 aim to help entities provide accounting policy disclosures
that are more useful by -’Replacing the requirement for
entities to disclose their ‘significant’ accounting policies
with a requirement to disclose their ‘material’ accounting
policies; and -’Adding guidance on how entities apply the
concept of materiality in making decisions about
accounting policy disclosures.
IAS 12 Deferred Tax related to Assets and Liabilities arising January 01, 2023
from a Single Transaction - Amendments to IAS 12 -
In May 2021, the Board issued amendments to IAS
12, which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies to
transactions that give rise to equal taxable and
deductible temporary differences.
IFRS 16 Lease Liability in a Sale and Leaseback — (Amendments) January 01, 2024
IAS 1 Classification of liabilities as current or non-current — January 01, 2024
(Amendments)
IFRS 10 and Sale or Contribution of Assets between an Investor and Not yet finalized
IAS 28 its associate or Joint Venture — (Amendments)
84
The above amendments are not expected to have any material impact on the Company’s financial statements
in the period of initial application.
In addition to the above standards and amendments, improvements to various accounting standards and
conceptual framework have also been issued by the IASB. Such improvements are generally effective for
accounting periods beginning on or after January 01, 2023.
The Company expects that such improvements to the standards will not have any material impact on the
Company’s financial statements.
Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the
purpose of applicability in Pakistan.
IASB effective date

(annual periods
Standard or Interpretation beginning on or after)
IFRS 1 First Time Adoption of IFRS July 01, 2009
IFRS 17 Insurance Contracts January 01, 2023
The Company expects that above mentioned standards will not have any material impact on the Company’s
financial statements in the period of initial application.
3 Issued, subscribed and paid up capital
2022 2021 2022 2021

(Number of shares) (Rupees in 000)
Ordinary shares of PKR 10 each as

29,787,058 29,787,058 fully paid in cash 297,870 297,870
Ordinary shares of PKR 10 each as
15,476,867 15,476,867 fully paid bonus shares 154,769 154,769
Ordinary shares of PKR 10 each issued
85,659 85,659 other than cash (under schemes of 857 857
arrangement for amalgamation)
45,349,584 45,349,584 453,496 453,496
3.1 As at December 31, 2022, Société des Produits Nestlé SA (SPN), Switzerland (“the Holding Company”), holds
27,936,173 (2021: 27,936,173) ordinary shares representing 61.60% (2021: 61.60%). In addition, 9,028,281
(2021: 9,029,159) ordinary shares are held by the following related parties as at December 31, 2022:
85
2022
2021
Name of related party (Number of shares)
IGI Investments (Pvt.) Limited 4,423,666 4,423,666

Percentage of equity held 9.76% (2021: 9.76%)
Packages Limited 3,649,248 3,649,248
Gurmani Foundation 538,235 538,235
National Management Foundation 224,720 224,720
Babar Ali Foundation 170,745 170,745
Industrial Technical and Educational Institution 21,666 21,666
Nestlé Pakistan Limited Employees Provident Fund – 878
IGI Finex Securities Limited 1 1
9,028,281 9,029,159
3.2 The holders of voting ordinary shares are entitled to receive dividends as declared (if any), and are entitled to
one vote per share at meetings of the Company.
4 Share premium
This reserve can be utilized by the Company only for the purposes specified in section 81(2) of the Companies Act,
2017.
5 Long-term finances - secured

Long-term finances utilized under mark-up arrangements:
Term Loan I 5.1 3,500,000 3,500,000

Term Loan II 5.2 2,500,000 2,500,000
Term Loan III 5.3 3,000,000 3,000,000
Term Loan IV 5.4 – 3,000,000
Term Loan V 5.5 3,500,000 –
Term Loan VI 5.6 3,000,000 –
15,500,000 12,000,000
Long-term financing facility 5.7 – 81,975
15,500,000 12,081,975
Interest and mark-up accrued 266,967 232,700
Amortised cost 15,766,967 12,314,675
Less: current maturity 9 (9,000,000) (81,975)
Less: interest and mark-up accrued shown under current liabilities 14 (266,967) (232,700)
6,500,000 12,000,000
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5.1 The loan obtained from Habib Bank Limited to meet the working capital requirement of the company. The term
of loan is 3 years with the principal repayment to take place in a single lump sum instalment in December 2023.
Mark-up is payable quarterly at a flat rate of 8.35% per annum.
5.2 The loan obtained from Standard Chartered Bank to meet capital expenditure requirement of the company. The
term of loan is 3 years with the principal repayment to take place in a single lump sum instalment in December
2023. Mark-up is payable quarterly at a flat rate of 8.35% per annum.
5.3 The loan obtained from Meezan Bank Limited under diminishing musharakah arrangement. The term of loan is
3 years with the principal repayment to take place in a single lump sum instalment in December 2023. Mark-up
is payable quarterly at a flat rate of 8.75% per annum.
5.4 The loan obtained from Habib Bank Limited to meet the working capital requirement of the company. The term
of loan was 3 years with the principal repayment to take place in a single lump sum instalment in August 2023.
Mark-up was payable semi-annually on a rate of 6 months KIBOR+10 bps. The entire amount of the loan has
been repaid during the year.
5.5 During the year, loan obtained from Habib Bank Limited to meet the working capital requirement of the
company, with the principal repayment to take place in a single lump sum instalment after 3 years in May 2025.
Mark-up is payable quarterly at a flat rate of 13.10% per annum.
5.6 During the year, loan obtained from Meezan Bank under diminishing musharakah arrangement with the
principal repayment to take place in a single lump sum instalment after 3 years in August 2025. Mark-up is
payable semi annually at a flat rate of 15.00% per annum.
5.7 This facility had an aggregate credit limit of PKR 1,500 million. The term was 5 years with a grace period of 18
months from the date of each disbursement. Repayments have been made in 8 equal semi-annual instalments.
This facility carried mark-up at the rate of 3.65% payable quarterly. The entire amount of the loan has been
repaid during the year.
5.8 All loans obtained from Habib Bank Limited, Standard Chartered bank and Meezan Bank limited are secured
by first joint pari passu hypothecation charge over fixed assets, amounting to PKR 18,656 million, PKR 8,465
million and PKR 6,000 million respectively, and current assets, amounting to PKR 4,000 million, PKR 6,100
million and PKR 4,500 million respectively, of the Company excluding land and building.
6 Lease liabilities
Present value of minimum lease payments 1,465,437 164,373
Less: current maturity 9 (87,234) (48,894)
1,378,203 115,479
6.1 The effective interest rate used as the discounting factor (i.e. incremental borrowing rate) ranges from 7.56% to
15.85% (2021: 7.44% to 16.00%). Minimum Lease Payments (MLP) and their Present Value (PV) are as follow:
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31-Dec-22
MLP Future PV of
(Rupees in 000) Finance Charges MLP
Due not later than 1 year 266,085 (178,851) 87,234

Due later than 1 year but not later than 5 years 1,008,330 (608,875) 399,455
Due later than 5 years 1,278,627 (299,879) 978,748
2,553,042 (1,087,605) 1,465,437
31-Dec-21
MLP Future PV of
(Rupees in 000) Finance Charges MLP
Due not later than 1 year 68,719 (19,825) 48,894

Due later than 1 year but not later than 5 years 124,935 (25,477) 99,458
Due later than 5 years 80,213 (64,192) 16,021
273,867 (109,494) 164,373
6.2 Set out below are the carrying amounts of lease liabilities and the movement during the year:
2022
Opening balance 164,373 70,673

Lease liabilities acquired during the year 1,356,642 210,827
Markup on lease liabilities 109,594 21,473
Termination of leases (21,137) –
1,609,472 302,973
Less: lease rentals paid (144,035) (138,600)
Closing balance 1,465,437 164,373
6.3 During the year the Company has entered into a lease agreement with Packages Real Estate Limited (Related
Party). The closing lease liability amounts to PKR 1,119.56 million (2021: Nil).
2022
7 Deferred taxation
Deferred tax assets on deductible temporary differences
Provision for obsolete spares (307,307) (258,784)
Provision for unusable raw and packing material (131,887) (13,395)
Allowance for expected credit losses (69,642) (33,305)
Lease liability recognized under IFRS 16 (496,006) (35,757)
Remeasurement loss of cash flow hedges 2,339 (1,014)
Other provisions (3,112,509) (1,722,915)
(4,115,012) (2,065,170)
Deferred tax liability on taxable temporary differences
Accelerated tax depreciation including right-of-use assets 4,117,302 3,306,750
2,290 1,241,580
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7.1 Movement in deferred tax liability is as follows:

Balance as at January 01 1,241,580 1,332,919
Charge to OCI related to cash flow hedges 3,353 (1,014)
Charge to statement of profit or loss 33 (1,242,643) (90,325)
Balance as at December 31 2,290 1,241,580
2022
8 Retirement benefits
Gratuity fund 1,687,099 1,435,066
Pension fund 1,700,813 1,941,031
3,387,912 3,376,097
The Company contributes to following defined benefit plans.
– Gratuity plan comprises of two types i.e. A and B. Type A members are those who have joined the plan and
have not opted to become members of Type B. Type B members are those who joined the Type A and opted
to become members of Type B.
– Type A represents old Plan that entitles an eligible employee to receive a lump sum amount equal to last drawn
basic salary multiplied by number of completed years of service with the Company, at the time of cessation of
employment. An eligible employee means the employee who has successfully completed one year of service
with the Company. In case if the employee leaves the employment before successful completion of 10 years of
service than he / she shall be entitled to 50% of gratuity amount.
– Type B represents cash plan that entitles the members to have their gratuity balance calculated from their
date of joining till December 31, 2020 based on Type A formula. Thereafter, the gratuity balance so calculated
is locked and profit is credited to employees’ account, annually based on performance of gratuity fund. The
locked balance of gratuity together with interest thereon will be paid to employee at the time of separation from
the company. Besides this, cash plan member is also entitled to a monthly cash allowance of 7.8% of basic
salary.
– Pension plan comprise of two types i.e. A and B. Type A members are those members who have joined the plan
and who have not opted to become members of Type B. Type B members are those members who fulfil the
criteria and opted to become member of Type B.
– Type A members are required to make a contribution of 5% of pensionable salary whereas the Company makes
contribution based on actuarial recommendations. The annual benefit amount of a Type A member shall be
2.75% of his/ her pensionable salary at the time of retirement multiplied by number of years of pensionable
service subject to a maximum of 82.5% of pensionable salary.
– Type B member can make a contribution of 3% or 5% of his / her pensionable salary and the Company will make
a contribution equal to employee contribution +2%. In case of those members who are transferred from Type
A to Type B, such members are required to make a contribution of 5% of pensionable salary and the Company
will make a contribution of 11.4%. Type B member shall be entitled to 30% of employer benefit after successful
completion of three years of pensionable service and thereafter additional 10% for each successful year till 10th
year when they are entitled to 100% of the benefit.
Gratuity and pension plans are administered through separate funds that are legally separated from the
Company. The Trust of the funds comprises of seven and five employees for pension and gratuity fund
respectively, out of which one employee is the Chairman. The Trustees of the funds are required by law to act in
the best interests of the plan and are responsible for making all the investments and disbursements out of the
funds.
89
These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and
market (investment) risk. As at balance sheet date, an actuarial valuation has been performed by M/s Nauman
Associates (Actuarial experts) for valuation of defined benefit obligation. The disclosure made in notes 8.1 to
8.13 are based on the information included in the actuarial report.
These defined benefit plans are fully funded by the Company. The funding requirements are evaluated by
the management using the funds’ actuarial measurement framework set out in the funding policies of the
plans. The funding of each plan is based on a separate actuarial valuation for funding purposes for which
the assumptions may differ from time to time. The investments out of provident fund and pension fund are
governed by and are compliant in all material aspects with the requirements of section 218 of the Companies
Act 2017.
The Company is responsible to manage the deficit in the defined benefit obligation towards fair value of the
plan assets. The Company has devised an effective periodic contribution plan to maintain sufficient level of
plan assets to meet its obligations. Further, the Company also performs regular maturity analysis of the defined
benefit obligation and manage its contributions accordingly.
Gratuity Pension
2022
(Rupees in 000) 2021 2022 2021
8.1 Present value of funded obligations

Amounts recognized in statement of
financial position are as follows:
Present value of defined benefit obligation 3,903,315 3,408,390 6,323,811 6,093,029
Fair value of plan assets (2,216,216) (1,973,324) (4,622,998) (4,151,998)
Net retirement benefit obligation 1,687,099 1,435,066 1,700,813 1,941,031
8.2 Movement in net obligation

Net liability as at January 01 1,435,066 1,340,277 1,941,031 1,777,384
Charge to statement of profit or loss 399,398 361,367 481,134 431,757
Charge to other comprehensive income 74,809 (53,908) (466,076) (26,034)
Contribution made by employees – – 148,973 139,596
Contribution made by Company (222,174) (212,670) (404,249) (381,672)
Net liability as at December 31 1,687,099 1,435,066 1,700,813 1,941,031
8.3 Movement in the liability for funded

defined benefit obligations
Liability for defined benefit obligations
as at January 01 3,408,390 3,185,483 6,093,029 5,527,708
Benefits paid by the plan (185,596) (260,747) (377,358) (325,098)
Current service cost 243,040 234,151 423,163 407,098
Interest cost 389,582 313,149 693,761 549,929
Remeasurements on obligation:
Actuarial losses / (gains) due to:
- Changes in financial assumptions 11,527 6,407 (533,995) 104,399
- Experience adjustments 36,372 (70,053) 25,211 (171,007)
47,899 (63,646) (508,784) (66,608)
Liability for defined benefit obligations
as at December 31 3,903,315 3,408,390 6,323,811 6,093,029
90
Gratuity Pension
2022
(Rupees in 000) 2021 2022 2021
8.4 Movement in fair value of plan assets

Fair value of plan assets as at January 01 1,973,324 1,845,206 4,151,998 3,750,324
Contributions paid into the plan 222,174 212,670 404,249 381,672
Benefits paid by the plan (185,596) (260,747) (377,358) (325,098)
Interest income on plan assets 234,015 186,670 489,440 387,308
Actuarial loss on plan assets (26,910) (9,738) (42,708) (40,574)
Other administrative expenses by fund (791) (737) (2,623) (1,634)
Fair value of plan assets as at December 31 2,216,216 1,973,324 4,622,998 4,151,998
8.5 Plan assets consist of the following:

In terms of amount:
Equity instruments 173,730 263,052 350,537 535,795
Debt instruments 1,141,465 975,492 2,450,494 2,107,219
Cash at bank and other deposits 901,021 734,780 1,821,967 1,508,984
2,216,216 1,973,324 4,622,998 4,151,998
8.5.1 Plan assets

Plan assets comprise:
Equity instruments by sector
Fertilizers 19,425 13,392 45,403 28,746
Oil and gas 29,709 25,502 58,523 65,557
Textile 3,982 6,490 6,670 11,691
Power 4,418 12,161 8,802 18,188
Commercial banks 27,619 47,701 55,330 94,746
Mutual funds 70,205 130,053 139,433 268,833
Cement 4,532 8,332 8,858 13,559
Chemicals 6,352 11,057 12,877 15,247
Automobile 1,706 4,543 5,552 10,163
Others 5,782 3,821 9,089 9,065
173,730 263,052 350,537 535,795
Debt instruments
Government bonds 1,141,465 975,492 2,450,494 2,107,219
Cash and other deposits

Balance in saving bank accounts 129,975 56,528 296,436 106,482
Term deposit receipts – 665,865 – 1,374,617
Treasury bills 757,864 – 1,508,282 –
Others 13,183 12,387 17,249 27,885
901,021 734,780 1,821,967 1,508,984
2,216,216 1,973,324 4,622,998 4,151,998
The Trustees ensure that the investment positions are managed within an Asset-Liability Matching (ALM)
framework to ensure alignment with the obligations under the defined benefit plans. Risk analysis of each
category is done to analyze the impacts of the interest rate risk and longevity risk.
91
Gratuity Pension
2022
(Rupees in 000) 2021 2022 2021
8.6 Statement of profit or loss includes the

following in respect of retirement benefits:
Interest cost 243,040 313,149 423,163 549,929
Current service cost 389,582 234,151 693,761 407,098
Interest income on plan assets (234,015) (186,670) (489,440) (387,308)
Contributions made by the employees – – (148,973) (139,596)
Other administrative expense by Fund 791 737 2,623 1,634
399,398 361,367 481,134 431,757
8.7 Charge for the year has been

allocated as follows:
Cost of goods sold 183,678 165,975 215,891 193,735
Distribution and selling expenses 157,459 115,410 165,383 148,411
Administration expenses 58,261 79,982 99,860 89,611
399,398 361,367 481,134 431,757
8.8 Actuarial losses and (gains) recognized

directly in other comprehensive income
Cumulative amount as at January 01 757,562 811,470 1,573,603 1,599,637
Remeasurements on obligation
Actuarial losses / (gains) due to:
Changes in financial assumptions 11,527 6,407 (533,995) 104,399
Experience adjustments 36,372 (70,053) 25,211 (171,007)
47,899 (63,646) (508,784) (66,608)
Remeasurements on fair value of plan assets 26,910 9,738 42,708 40,574
Losses / (gains) recognized during the year 74,809 (53,908) (466,076) (26,034)
Cumulative amount as at December 31 832,371 757,562 1,107,527 1,573,603
(Rupees in 000) 2022 2021 2020 2019 2018
8.9 Historical information for Gratuity plan

Present value of defined benefit obligation 3,903,315 3,408,390 3,185,483 3,156,983 2,999,495
Fair value of plan assets (2,216,216) (1,973,324) (1,845,206) (1,786,756) (1,698,880)
Deficit in the plan 1,687,099 1,435,066 1,340,277 1,370,227 1,300,615
Actuarial gain / losses arising on

plan liabilities 36,372 (70,053) (175,134) (121,984) 151,962
Actuarial gain / losses arising on
plan assets (26,910) (9,738) (7,242) (14,655) (77,233)
92
(Rupees in 000) 2022 2021 2020 2019 2018
8.10 Historical information for Pension plan

Present value of defined benefit obligation 6,323,811 6,093,029 5,527,708 4,743,169 3,707,704
Fair value of plan assets (4,622,998) (4,151,998) (3,750,325) (3,335,894) (2,910,299)
Deficit in the plan 1,700,813 1,941,031 1,777,383 1,407,275 797,405
Experience adjustments
arising on plan liabilities 25,211 (171,007) (115,679) 116,229 (11,280)
Experience adjustments
arising on plan assets (42,708) (40,574) (13,503) (29,080) (122,538)
2022 2021
Gratuity fund Pension fund Gratuity fund Pension fund
per annum per annum per annum per annum
8.11 Significant actuarial assumptions used for

valuation of these plans are as follows:
Discount rate used for profit and loss charge 11.75% 11.75% 10.25% 10.25%
Discount rate used for year-end obligation 14.25% 14.25% 11.75% 11.75%
Expected rate of salary increase 14.25% 14.25% 11.75% 11.75%
Expected rate of return on plan assets 14.25% 14.25% 11.75% 11.75%
Mortality rate SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005
Setback 1 year Setback 1 year Setback 1 year Setback 1 year
8.12 Actuarial assumptions sensitivity analysis
If the significant actuarial assumptions used to estimate the defined benefit obligation at the reporting date,
had fluctuated by 50 bps with all other variables held constant, the impact on the present value of the defined
benefit obligation would have been as follows:
Gratuity Pension
Impact on present value of defined benefit

obligation as at December 31, 2022
(Rupees in 000) Change Increase Decrease Increase Decrease
Discount rate 50 bps (178,260) 192,181 (162,638) 174,838
Future salary increase 50 bps 193,674 (181,241) 82,249 (78,550)
Expected mortality rates 1 year (1,506) 1,618 (34,609) 33,572
The sensitivity analysis of the defined benefit obligation to the significant actuarial assumptions has been
performed using the same calculation techniques as applied for calculation of defined benefit obligation
reported in the balance sheet.
8.13 Weighted average duration of the defined benefit obligation is 10 years for gratuity and 5 years for pension
plan.
93
9 Current portion of long term liabilities

Current maturity of long term finances 5 9,000,000 81,975
Current maturity of lease liabilities 6 87,234 48,894
9,087,234 130,869

10 Short-term borrowings - secured
Money market deals 10.1 – 6,000,000
Export refinance facility 10.2 519,260 –
519,260 6,000,000
Amortized cost 531,964 6,199,604
Less: interest and mark-up accrued 14 (12,704) (199,604)
519,260 6,000,000

10.1 This represents money market deals obtained from Habib Bank Limited, Standard Chartered Bank and Citi
Bank, having limits of PKR 2,500 million, PKR 8,000 million and PKR 1,500 million respectively i.e., PKR 12,000
million (2021: PKR 6,000 million) in aggregate and carry mark-up ranging from 7.33% to 15.28% (2021: 7.05%
to 10.19%) per annum. These deals were obtained for a period ranging from 30 to 90 days and were secured
by a hypothecation charge over fixed and current assets of the company as stated in Note 10.3.

10.2 The Company has obtained export refinance facility from Standard Chartered bank having an aggregate limit of
PKR 519 million (2021: PKR 1,000 million). The mark-up on this facility is ranging from 4.90% to 9.40% (2021:
2.40%) per annum. The deal is secured by a hypothecation charge over fixed and current assets of the company
as stated in Note 10.3.

10.3 All loans obtained from Habib Bank Limited, Standard Chartered bank and Citi Bank, are secured by first joint
pari passu hypothecation charge over fixed assets, amounting to PKR 18,656 million, PKR 8,465 million and
PKR 250 million respectively, and current assets, amounting to PKR 4,000 million, PKR 6,100 million and PKR
250 million respectively, of the Company excluding land and building.
11 Running finance under mark-up arrangements - secured

Running finance under mark-up arrangements - secured 3,756,401 4,226,529
Amortized cost 3,774,019 4,274,868
Less: interest and mark-up accrued 14 (17,618) (48,339)
3,756,401 4,226,529

The Company has obtained short term running finances from Habib Bank Limited, Standard Chartered bank,
Meezan Bank limited, CitiBank, United Bank Limited and Deutshe Bank A.G under mark-up arrangements
having an aggregate limit of PKR 14,546 million (2021: PKR 31,487 million). The mark-up on these facilities
ranges from 10.34% to 16.68% (2021: 7.45% to 9.62%) per annum. These facilities are secured by first joint
pari passu hypothecation charge over fixed assets, amounting to PKR 18,656 million, PKR 8,465 million,
PKR 6,000 million, PKR 250 million, PKR 1,000 million and PKR 500 million respectively, and current assets,
amounting to PKR 4,000 million, PKR 6,100 million, PKR 4,500 million, PKR 250 million, PKR 1,500 million and
PKR 500 million respectively, of the Company excluding land and building.
94
12 Trade and other payables

Trade creditors:
Related parties 4,514,241 2,255,467
Others 15,778,114 11,514,349
20,292,355 13,769,816
Accrued liabilities 16,506,319 11,064,660
General licensing fee payable 12.1 4,445,037 1,299,866
Workers’ profit participation fund 12.2 1,107,387 905,125
Workers’ welfare fund 536,793 349,316
Withholding taxes payable 702,204 396,917
Foreign exchange forward contracts
- designated as hedging instruments – 3,551
Others 149,578 234,042
43,739,673 28,023,293

12.1 Licensing fee is payable to Société Des Produits Nestlé S.A. the “Holding Company” having its registered office
at Avenue Nestlé 1800 Vevey, Switzerland. During the year, gross licensing fee amounting to PKR 1,045.46
million (2021: PKR 3,424.14 million) has been paid.
12.2 Workers’ Profit Participation Fund

Balance as at January 01 905,125 645,011
Provision for the year 31 1,167,361 915,146
2,072,486 1,560,157
Payments made during the year - net (965,099) (655,032)
Balance as at December 31 1,107,387 905,125

13 Contract liabilities
Advances from customers in respect of revenue
recongnized at a point in time 13.1 766,154 682,065

13.1 This represents advance received from customers for future sale of goods. The balance of contract liability as
at 31 December 2022, is expected to be recognized as revenue within one year.
14 Interest and mark-up accrued

Long-term finances - secured 5 266,967 232,700
Short-term borrowings - secured 10 12,704 199,604
Running finance under mark-up arrangements - secured 11 17,618 48,339
297,289 480,643
95
15 Customer security deposits - interest free
This represents security deposits obtained from customers and have been kept in a separate bank account. These
deposits are non-interest bearing and payable on the completion / termination of contract. The effect of discounting
as per the requirements of IFRS 9 is considered immaterial.

16 Contingencies and commitments
16.1 By way of the decision of the Honorable Supreme Court of Pakistan in suo moto case no. 26 of 2018, the
Company is subject to a potential water charge of PKR 1/-per liter on water extraction. The Company is
contesting this decision of the Honorable Supreme Court of Pakistan and has filed a review petition. Keeping in
view subsequent developments and follow up court hearings and orders, and on the representations of various
affected companies, the Supreme Court vide its order dated June 10, 2019, ordered, as an interim measure,
the collection of charge of PKR 0.25/- per liter of water produced based on the sales tax data/return of each
company, on the basis whereof bills were to be issued by authorities (nationwide), till the framing of legislation
by all the federal and provincial authorities. During the year, the Company has recognized an expense of PKR
194.09 million (2021: PKR 245.21 million) in line with the Honorable Supreme Court’s interim order. However,
the remaining potential charge, amount of which cannot be quantified because the matter is subjudice, is
considered as a contingency.
2022
16.2 Guarantees
Outstanding guarantees 749,844 271,207

16.3 Commitments

16.3.1 Outstanding letters of credit 6,468,633 1,588,390
16.3.2 Commitments in respect of capital expenditure 606,943 224,444
16.3.4 Commitments in respect of forward foreign currency contracts:
- USD 181,170 37,076

- EUR – 79,806
- CNY 54,965 61,947
236,135 178,829
96
17 Property, plant and equipment

Assets including Right-of-Use assets
Land & Plant and Furniture Vehicles IT Right-of-use Total

Building machinery and Equipment assets
(on freehold fixtures (Note 17.2)
(Rupees in 000) land)
Cost
Balance as at January 01, 2022 10,102,434 50,731,267 847,320 242,628 2,073,304 340,206 64,337,159
Additions/ Transfers during the year 286,909 2,071,460 86,805 6,542 341,604 1,356,642 4,149,962
Disposals (79,821) (1,414,828) (155,386) (39,721) (231,496) – (1,921,252)
Terminations – – – – – (56,364) (56,364)
Balance as at December 31, 2022 10,309,522 51,387,899 778,739 209,449 2,183,412 1,640,484 66,509,505
Balance as at January 01, 2021 9,820,257 47,354,892 917,594 460,946 1,851,836 1,228,376 61,633,901
Additions/ Transfers during the year 302,597 4,076,160 5,829 28,414 260,979 210,827 4,884,806
Disposals (20,420) (699,785) (76,103) (246,732) (39,511) – (1,082,551)
Terminations – – – – – (1,098,997) (1,098,997)
Balance as at December 31, 2021 10,102,434 50,731,267 847,320 242,628 2,073,304 340,206 64,337,159
Depreciation and impairment losses
Balance as at January 01, 2022 2,844,040 29,536,866 747,519 186,688 1,627,748 119,746 35,062,607
Depreciation for the year 288,260 3,009,584 70,814 23,721 300,282 149,269 3,841,930
Net impairment charged during the year - (42,543) – – – – (42,543)
Disposals (26,170) (1,214,460) (191,033) (41,579) (230,283) – (1,703,525)
Terminations – – – – – (35,397) (35,397)
Balance as at January 01, 2021 2,566,232 26,811,091 745,577 389,383 1,397,607 1,044,160 32,954,050
Depreciation for the year 278,009 3,023,477 78,030 35,010 269,627 174,583 3,858,736
Net impairment charged during the year – 348,862 – – – – 348,862
Disposals (201) (646,564) (76,088) (237,705) (39,487) – (1,000,045)
Terminations – – – – – (1,098,997) (1,098,997)
Net book value as at December 31, 2022 7,203,392 20,098,452 151,439 40,619 485,665 1,406,866 29,386,433
Net book value as at December 31, 2021 7,258,394 21,194,401 99,801 55,940 445,557 220,460 29,274,553
Rate of depreciation in % 2.5-10 4- 33.3 20-33.3 20 10 - 50 10 - 50
17.1 Plant and machinery includes trade assets having cost and net book value of PKR 2,435.48 million and PKR
831.16 million respectively (2021: PKR 2,244.25 million and PKR 811.60 million) that are located at customers’
premises.
17.2 There are fully depreciated assets, having cost of PKR 14,607.28 million (2021: PKR 13,044.86 million) that
are still in use as at the reporting date.
97
17.3 Property, plant and equipment contains the following in respect of right-of-use assets:
Building on Plant Furniture Total

lease hold and and
land machinery fixtures
Cost
Balance as at January 01, 2022 262,705 72,004 5,497 340,206
Additions during the year 1,356,642 – – 1,356,642
Terminations (56,364) – – (56,364)
Balance as at December 31, 2022 1,562,983 72,004 5,497 1,640,484
Balance as at January 01, 2021 1,131,942 37,211 59,223 1,228,376

Additions during the year 142,961 67,866 – 210,827
Terminations (1,012,198) (33,073) (53,726) (1,098,997)
Balance as at December 31, 2021 262,705 72,004 5,497 340,206
Depreciation
Balance as at January 01, 2022 95,061 19,188 5,497 119,746
Depreciation for the year 131,290 17,979 – 149,269
Depreciation on terminations (35,397) – – (35,397)
Balance as at January 01, 2021 958,752 30,319 55,089 1,044,160

Depreciation for the year 148,507 21,942 4,134 174,583
Depreciation on terminations (1,012,198) (33,073) (53,726) (1,098,997)

Net book value as at December 31, 2022 1,372,029 34,837 – 1,406,866

Net book value as at December 31, 2021 167,644 52,816 – 220,460
17.4 Depreciation charge for the year has been allocated as follows:
Cost of goods sold 27 3,026,501 3,058,987
Distribution and selling expenses 28 573,073 545,263
Administration expenses 29 242,356 254,486
3,841,930 3,858,736
98
17.5 Particulars of immovable property i.e. land and buildings:
Description of asset Purpose Location / Address within Pakistan Area
Land and building Manufacturing facility Sheikhupura Factory 63.46 Acre

Land and building Manufacturing facility Kabirwala Factory 85.58 Acre
Land and building Manufacturing facility Port Qasim Factory 5 Acre
Land and building Manufacturing facility Islamabad Factory 8.72 Kanal
Land and building Milk collection center Bhawana, District Chiniot 1 Acre
Land and building Milk collection center Renala, District Okara 1 Acre
Land and building Milk collection center Pindi Bhattian, District Hafiz Abad 17.9 Kanal
Land and building Milk collection center Ludden, District Vehari 7.8 Kanal
Land and building Milk collection center More Mandi, District Jhang 2 Kanal
Land and building Milk collection center Kalowal, District Chiniot 1 Kanal
Land and building General purpose Korangi Industrial Area, Karachi 2.85 Kanal
Land General purpose Korangi Industrial Area, Karachi 1.6 Kanal

17.6 Detail of property, plant and equipment sold during the year is as follows:
Description Cost Book Sale Gain/ Mode of Particulars Relationship

(Rupees in 000) value proceeds (loss) disposal of purchasers with the company
Buildings
Partitions - Head office 29,941 21,358 245 (21,113) Negotiation Third party None
Flooring - Head office 19,856 13,328 145 (13,183) Negotiation Third party None
Electrical installations - Head office 11,124 7,820 65 (7,755) Negotiation Third party None
Boundary wall - Head office 3,991 2,275 64 (2,212) Negotiation Third party None
False ceiling - Head office 4,249 2,965 49 (2,916) Negotiation Third party None
Drainage system - Head office 1,333 760 32 (728) Negotiation Third party None
Archive Building- Head office 2,246 1,167 – (1,167) Negotiation Third party None
New Social Block near NPL -
Head office 1,171 755 – (755) Negotiation Third party None

Plant and Machinery
300 KVA Diesel Generating Set +
ATS Panel 4,417 1,767 17 (1,750) Negotiation Third party None
Generator 300 KVA 3,694 1,179 1,385 206 Negotiation Third party None
Electrical Panel and Networking 3,187 1,275 17 (1,258) Negotiation Third party None
Auto Case Packer(1000ml x12)
line C Cermex 135,383 44,902 53,500 8,598 Negotiation Nestlé China Ltd Related party
Helicap upgradation of M/C C2
(Child Asset) 10,418 608 2,794 2,186 Negotiation Nestlé China Ltd Related party
Integrity tester 0.22 microns 1,239 619 44 (575) Negotiation Third party None
Tetra Prisma Asceptic 1000
A3/Flex - M/C ‘W’ 160,145 26,100 63,569 37,469 Negotiation Third party None
Tetra Filling A3 Flex TBA 500ml
Slim - M/C ‘R’ 130,087 23,771 28,180 4,409 Negotiation Third party None
Tetra filling A3 Flex TPA
1000ml - M/C ‘V’ 130,087 1,908 54,088 52,180 Negotiation Third party None
99
Description Cost Book Sale Gain/ Mode of Particulars Relationship

(Rupees in 000) value proceeds (loss) disposal of purchasers with the company
Upgrading of m/c ‘R’ - Conversion
to TBA 500ml S 69,288 10,737 15,010 4,273 Negotiation Third party None
Tetra Filling Machine TBA-19
125ml Slim M/C A 55,149 13,217 16,266 3,049 Negotiation Third party None
Cap Applicator-30 Flex - M/C ‘W’ 50,479 8,227 20,038 11,811 Negotiation Third party None
Cap Applicator 30 Machine 37,414 1,110 24,136 23,026 Negotiation Third party None
Tray Shrink-30 - M/C A 19,853 4,791 5,856 1,065 Negotiation Third party None
Straw Applicator-30 - M/C A 14,664 3,514 4,325 811 Negotiation Third party None
Accumulator Helix-30 - M/C ‘W’ 13,979 2,278 5,549 3,271 Negotiation Third party None
Tetra Filling A3 Flex TBA 500ml Slim 9,975 1,823 2,161 338 Negotiation Third party None
Conveyors - M/C A 9,374 2,247 2,765 518 Negotiation Third party None
Dry Lubrication System - M/C A 2,500 599 737 138 Negotiation Third party None
Furniture and fixture
Sensor operated taps 2,427 1,354 57 (1,297) Negotiation Third party None

Assets with book value
less than PKR 500,000 983,582 15,273 118,938 103,666
2022 1,921,252 217,727 420,032 202,305

2021 1,082,551 82,506 202,186 119,680
18 Capital work-in-progress
Civil works 299,126 281,664
Plant and machinery 2,110,413 1,650,987
Others 791,811 682,583
3,201,350 2,615,234
Less: Provision for impairment loss 18.2 (588,927) (588,927)
2,612,423 2,026,307
18.1 Movement in capital work-in-progress

Balance as at January 01 2,026,307 4,097,316
Additions to capital work-in-progress during the year 3,379,421 2,602,970
Transfers to property, plant and equipment during the year (2,793,305) (4,673,979)
Balance as at December 31 2,612,423 2,026,307
18.2 Provision for impairment loss on

capital work-in-progress
Charged during the year – 40,180
Balance as at December 31 588,927 588,927
100
2022
19 Intangible assets
Cost
Amortization
Charge for the year – –
Accumulated amortization as at December 31 272,655 272,655
Net book value as at December 31 – –
Amortization rate 20% 20%
Intangibles represents fully amortized software amounting to PKR 272.66 million.
2022
20 Long-term loans
To employees - considered good 339,967 276,658
Less: current portion shown under current assets (130,572) (116,810)
209,395 159,848
20.1 These represent long-term interest free loans to employees for the purchase of cars and motor cycles as per
the Company policy and are repayable within a period of 5 years. Loans are secured by the crossed cheques
from employees of the full loan amount in the name of the Company without mentioning any date as part of
collateral. The effect of discounting as per the requirements of IFRS 9 is considered immaterial.
20.2 No loan has been given to the Chief Executive Officer or any other Director of the Company.
20.3 The amount of loans to employees and the period in which these will become due are as follows:
Less than one year 130,572 116,810

More than one year but not more than 3 years 148,827 138,155
More than 3 years 60,568 21,693
339,967 276,658
21 Stores and spares

Stores 569,492 271,911
Spares, including in transit amounting to PKR 4.53
million (2021: PKR 75.30 million) 3,699,383 3,596,870
4,268,875 3,868,781
Less: Provision for obsolete spares 21.1 (977,204) (822,976)
3,291,671 3,045,805
21.1 Provision for obsolete spares

Provision charged during the year 154,228 35,621
101
22 Stock-in-trade
Raw and packing materials including in transit amounting
to PKR 5,118.56 million (2021: PKR 3,182.64 million) 19,266,823 13,118,188
Less: Provision for unusable materials 22.1 (265,590) (83,338)
19,001,233 13,034,850
Work-in-process 1,998,996 1,499,975
Finished goods 5,486,868 3,448,257
Goods purchased for resale including in transit amounting
to PKR 52.53 million (2021: PKR 91.84 million) 607,454 617,636
27,094,551 18,600,718
22.1 Provision for unusable raw and packing material

Provision during the year 265,590 83,338
Written off / adjusted during the year (83,338) (114,314)
23 Trade debts
Considered good - unsecured 1,984,559 920,431
Considered doubtful - unsecured 52,876 58,320
Less: allowance for expected credit losses 23.1 (52,876) (58,320)
1,984,559 920,431
Related parties - considered good 23.2 4,799 3,053
1,989,358 923,484
23.1 Allowance for expected credit losses

Provision charged during the year – –
Provision reversed during the year (5,444) (7,717)
23.2 Trade debts include the following amounts due from the
given related parties:
Packages Convertors Limited 1,905 1,463
Lahore University of Management Sciences 1,034 1,082
Bulleh Shah Packaging (Pvt.) Limited 1,386 508
Aitchison College Lahore 454 –
Systems Limited 20 –
4,799 3,053
The maximum aggregate amount of receivable due from related parties at the end of any month during the year
was PKR 4.99 million (2021: PKR 5.55 million).
102
23.3 Aging of overdue balances for related parties is as follows:
Party name Total Balance Balance Below 31 days

(Rupees in 000) Balance not yet due overdue 30 days & above
Systems Limited 20 – 20 20 –
Bulleh Shah Packaging (Pvt.) Ltd. 1,386 881 505 505 –
Total 1,406 881 525 525 –
24 Advances, deposits, prepayments and other receivables

Advances to suppliers - unsecured - considered good 24.1 2,854,121 1,316,002
Due from related parties - unsecured - considered good 24.2 861,934 575,584
Cash margin held against imports 2,289,892 842,527
Deposits and prepayments 106,235 222,553
- designated as hedging instruments 24.3 5,304 –
Other receivables 506,242 496,556
6,623,728 3,453,222
24.1 These arise from normal course of business of the Company and are interest free.
24.2 Due from related parties (including foreign affiliates on the basis of a common Holding Company) include the
following amounts, mainly on account of advances for purchases and shared services:
2022
Tetra Pak Pakistan Limited 355,000 390,549

Nestlé Philippines Inc. 121,895 29,859
Nestrade S.A. 86,004 8,483
Nestlé Manufacturing (Malaysia) 71,827 –
Nestlé Afghanistan Limited 70,751 28,569
Nestlé Dubai Manufacturing LLC 37,359 5,399
Nestlé France S.A.S. 34,080 9,577
Cereal Partners (Malaysia) Sdn Bhd 12,258 4,131
Nestlé Operational Services Worldwide S.A. 10,460 13,858
Nestlé Suisse S.A. 10,442 36,468
Nestlé Zimbabwe (Private) Limited 10,173 6,922
Nestlé South Africa 8,347 1,576
Nestlé Middle East FZE 6,479 5,520
Nestlé Burkina Faso S.A. 4,204 –
Wyeth Philippines, INC. 3,979 –
Nestlé Gabon 3,462 679
Nestlé Australia Ltd 2,793 2,080
Nestlé Senegal 1,891 1,486
Nestlé Central And West Africa 1,871 761
Nestlé Nestle Products SDN. BHD 1,739 –
Nestlé Regional Service Centre 1,589 4,883
Nestlé Nederland B.V. 1,369 349
103
2022
Nestlé UAE L.L.C. 1,096 611

Société des Produits Nestlé S.A. 1,014 2,814
Nestlé Singapore (Pte) Ltd 936 358
Nestlé Egypt S.A.E. 485 234
Nestlé ROH (Thailand) Ltd. 431 188
Nestlé Vietnam Ltd. – 7,722
Nestlé Brasil Ltda. – 6,377
Quality Coffee Products Ltd. – 2,762
Nestrade S.A. Malaysia Branch – 1,818
Nestlé Myanmar (Trading) Limited – 856
Wyeth Nutritionals (Singapore) – 695
861,934 575,584
24.2.1 The maximum aggregate amount of receivable due from related parties at the end of any month during the year
was PKR 861.93 million (2021: PKR 575.58 million).
24.2.2 Aging of overdue balances for related parties is as follows:
Party name Total Balance Balance Less than More than

(Rupees in 000) Balance not yet due overdue 6 months 6 months
Nestlé Afghanistan Limited 70,751 12,417 58,334 22,247 36,087

Nestlé Operational Services Worldwide S.A. 10,460 9,791 669 669 –
Nestlé France S.A.S. 34,080 34,034 46 – 46
Nestrade S.A. 86,004 83,852 2,152 2,152 –
Nestlé Zimbabwe (Private) Limited 10,173 3,251 6,922 – 6,922
Nestlé Middle East FZE 6,479 5,629 850 – 850
Nestlé Gabon 3,462 2,783 679 – 679
Nestlé Egypt S.A.E. 485 48 437 437 –
Nestlé Manufacturing (Malaysia) 71,827 71,205 622 186 436
Total 293,721 223,010 70,711 25,691 45,020
24.3 This reflects the positive change in fair value of foreign exchange forward contracts, designated as cash flow
hedges to hedge foreign currency trade payables and highly probable forecast purchases in foreign currencies.
24.3.1 Following are the foreign exchange forward contracts held by the Company along with their respective
maturities.
(Rupees in 000) Less than 1 to 3

1 month months
Foreign exchange forward contracts (highly probable forecast purchases)
USD Notional amount (Pak Rupees in ‘000) 130,449 50,722

Average forward rate (PKR/USD) 225.09 225.89
CNY Notional amount (Pak Rupees in ‘000) 54,964 –

Average forward rate (PKR/CNY) 30.95 –
104
25 Cash and bank balances

Cash in bank
- Local currency - current accounts 115,163 352,633
- Local currency - saving accounts 25.1 352,754 345,885
- Foreign currency - current accounts (USD) 25.2 65,800 38,730
533,717 737,248
Cash in hand 8,791 6,672
542,508 743,920
25.1 The balance in saving accounts carry rate of return ranging from 4.50% to 14.51% (2021: 2.75% to 7.35% ) per
annum.
25.2 Cash at bank in USD account was US$ 290,249.61 (2021: US$ 219,391.70 ).
25.3 The security deposits obtained from customers have been kept in saving accounts maintained by the Company.
26 Revenue from contracts with customers

Own manufactured
- Local 181,629,055 151,224,179
- Export 2,862,671 1,842,257
184,491,726 153,066,436
Goods purchased for resale 4,941,602 5,013,814
Less :
- Sales tax (10,713,732) (10,341,781)
- Discounts, incentives and allowances (16,203,341) (14,442,997)
162,516,255 133,295,472
26.1 Contract balances

Trade receivables 26.1.1 1,989,358 923,484
Contract liabilities 26.1.2 766,154 682,065
26.1.1 Trade receivables are non-interest bearing and are generally on terms of 7 to 45 days. The increase in trade
receivables pertains to increase in overall revenue from customers during the year.
26.1.2 Contract liabilities represents short term advances received from customers against delivery of goods in future.
The contract liabilities outstanding as at December 31, 2021 amounting to PKR 682.07 million (2020: PKR
562.26 million) have been recognized as revenue during the year.
105
27 Cost of goods sold

Raw and packing material consumed 85,089,716 68,877,004
Salaries, wages, amenities and training 27.1 7,027,952 5,919,554
General licensing fee (including related taxes) 5,821,674 4,656,733
Energy and power 6,973,155 4,220,057
Repairs, maintenance and vehicle running 3,432,149 3,144,313
Depreciation of property, plant and equipment 17.4 3,026,501 3,058,987
Communication and technology 430,341 603,932
Quality assurance and environmental expenses 391,202 306,376
Rent, rates, taxes and insurance 281,596 270,301
Legal and professional 16,006 15,756
Other expenses 221,756 297,478
112,712,048 91,370,491
Increase in work-in-process (499,021) (429,248)
Cost of goods manufactured 112,213,027 90,941,243
Increase in finished goods (2,130,669) (854,124)
Cost of goods sold - own manufactured 110,082,358 90,087,119
Cost of goods sold - purchased for resale 2,804,116 2,716,228
112,886,474 92,803,347
27.1 Salaries, wages and amenities include PKR 183.68 million (2021: PKR 165.98 million) in respect of gratuity,
PKR 215.89 million (2021: PKR 193.73 million) in respect of pension and PKR 176.21 million (2021: PKR
165.61 million) in respect of provident fund.
28 Distribution and selling expenses

Marketing and promotion 5,829,265 5,051,395
Freight outward and handling charges 5,338,423 4,089,203
Depreciation of property, plant and equipment 17.4 573,073 545,263
Communication and technology 82,199 314,641
Repairs, maintenance and vehicle running 314,927 234,835
Utilities and other office expenses 163,704 142,612
Legal and professional 127,619 53,121
17,347,229 14,897,747
28.1 Salaries, wages and amenities include PKR 157.46 million (2021: PKR 115.41 million) in respect of gratuity,
PKR 165.38 million (2021: PKR 148.41 million) in respect of pension and PKR 135.40 million (2021: PKR
123.44 million) in respect of provident fund.
106
29 Administration expenses
Depreciation of property, plant and equipment 17.4 242,356 254,486
Legal and professional 29.2 552,031 494,593
Communication and technology 1,245,428 464,910
Utilities and other office expenses 202,844 188,926
Repairs, maintenance and vehicle expenses 123,252 99,211
5,503,574 4,016,768
29.1 Salaries, wages and amenities include PKR 58.26 million (2021: PKR 79.98 million) in respect of gratuity, PKR
99.86 million (2021: PKR 89.61 million) in respect of pension and PKR 63.44 million (2021: PKR 80.35 million)
in respect of provident fund.
29.2 Legal and professional charges include the following

in respect of auditor’s services for:
Statutory audit fee including half year review 5,045 4,310
Other certificates 1,780 1,540
Out of pocket expenses 700 250
7,525 6,100
30 Finance cost
Mark-up on long-term financing - secured 1,393,842 1,018,236
Mark-up on short-term borrowings - secured 256,489 611,875
Mark-up on short-term running finance - secured 556,670 171,201
Markup on lease liabilities 109,594 21,473
Bank charges 19,399 17,443
2,335,994 1,840,228
31 Other expenses
Workers’ profit participation fund 12.2 1,167,361 915,146
Workers’ welfare fund 555,301 349,316
Exchange loss realized 293,605 362,171
Exchange loss unrealized 102,428 45,965
Donations and gifts 31.1 6,659 4,840
Impairment of property, plant and equipment
and capital work-in-progress 31.2 120,628 389,042
Others 36,508 12,881
2,282,490 2,079,361
107
2022
31.1 Donations
Party wise breakup of donations where any director
or his / her spouse has interest in the donee, is as follows:
Lahore University of Management Sciences (LUMS), 1,000 3,000

Defence Housing Authority, Lahore
(Syed Babar Ali, Director is also Pro Chancellor of LUMS)

(Syed Hyder Ali, Director is also a member of
Executive Committee of LUMS)
1,000 3,000
31.2 Impairment of plant and machinery and capital work-in-progress
The Company charged impairment on certain plant and machinery and capital work-in-progress after
considering the potential usage of these assets.
Segment-wise break-up of this impairment

is as follows:
- Dairy and Nutrition Products 102,577 301,534
- Powdered and Liquid Beverages 18,051 87,508
120,628 389,042
32 Other income
Income from financial assets:
Return on bank accounts 42,353 21,411
Income from non-financial assets:
Sale of scrap 218,270 146,770
Gain on disposal of property, plant and equipment 17.6 202,305 119,680
Reversal of impairment 32.1 163,171 –
Reversal of allowance for expected credit losses 23.1 5,444 7,717
631,543 295,578
32.1 This pertains to reversal of impairment charged on Powdered and Liquid Beverages.
33 Taxation
Current tax
For the year 8,712,232 5,268,838
Prior year 272,732 6,986
8,984,964 5,275,824
Deferred tax 7.1 (1,242,643) (90,325)
7,742,321 5,185,499
108
% Note 2022 2021
33.1 Average effective tax rate charged to

statement of profit or loss
Numerical reconciliation between the average

effective tax rate and the applicable tax rate:
Applicable tax rate 29.00 29.00
Tax effect of amounts that are:

Tax impact related to prior year including super tax 33.1.1 1.20 0.08
Tax impact of rate change 0.01 0.06
Tax impact due to current year super tax 4.18 0.00
Tax impact of final tax regime (0.57) (0.30)
Others 0.15 0.04
4.97 (0.12)
Average effective tax rate charged to statement of profit or loss 33.97 28.88
33.1.1 The company is subject to super tax according to Division IIB, Part I of First Schedule of Income Tax Ordinance,
2001. Super tax rate for the tax year 2023 and 2022 are 4% and, 10% on beverages and 4% other than
beverage items respectively.
34 Provident Fund
Investments out of provident fund have been made in accordance with the provisions of Section 218 of the Companies
Act 2017 and the rules formulated for this purpose.
2022
2021
35 Earnings per share
35.1 Basic earnings per share
Profit after taxation available for

distribution to ordinary shareholders Pak Rupees in ‘000’ 15,049,716 12,768,101
Weighted average number of ordinary shares Number in ‘000’ 45,350 45,350
Basic earnings per share Rupees 331.86 281.55
35.2 Diluted earnings per share
There is no dilution effect on the basic earnings per share as the Company has not issued instruments that
cause dilution.
109
36 Transactions with related parties
The related parties comprise of Holding Company, Associated Companies, other related Companies, key management
personnel and employees retirement benefit funds. The Company in the normal course of business carries out
transactions with various related parties. Amounts due from and to related parties are shown under receivables and
payables and remuneration to key management personnel is disclosed in note 41. Other significant transactions with
related parties are disclosed in note 36.1.
2022
36.1 Transactions during the year

Associated undertakings
General licensing fee 5,492,753 4,081,201
Dividends 12,198,274 7,247,979
Purchase of assets, goods, services and
reimbursable expenses 20,152,828 17,439,917
Sale of goods 360,062 1,166,524
Sale of fixed assets 83,811 –
Insurance premium paid 240,939 237,255
Insurance claims received 41,885 19,245
Donations 1,000 3,000
Other related parties
Contribution to staff retirement benefit plans 873,482 824,136
36.2 All transactions with related parties have been carried out on mutually agreed terms and conditions except for
donations.
36.3 Following is a list of foreign associated undertakings with whom the Company has entered into transactions
during the year. All foreign affiliates (except for Nestlé S.A. “the Holding Company”) are related to the Company
due to common holding of the Holding Company.
Name Country of Operations
Nestlé S.A. Switzerland

Nestrade S.A. Switzerland
Sofinol S.A. Switzerland
Nestec S.A. Switzerland
Nestlé Philippines Inc. Philippines
Nestlé Vietnam Ltd. Vietnam
Nestlé Australia Ltd Australia
Nestlé Egypt S.A.E. Egypt
Nestlé Dubai Manufacturing Llc UAE
Nestlé Middle East Manufacturing UAE
Nestlé Operational Services Switzerland
Nestlé Singapore (Pte) Ltd Singapore
Nestlé Waters Management & Issy Les Moulineaux France
Nestlé Manufacturing (Malaysia) Malaysia
Nestlé Business Services AOA, Inc. Philippines
110
Name Country of Operations
Nestlé Nederland B.V. Nederlands

Nestlé R&D Centre (Pte) Ltd Singapore
PT Nestlé Indonesia Indonesia
Nestlé France France
Nestlé Brasil Ltda. Brasil
Nestlé Regional Service Centre Malaysia
Nestlé Nederland B.V. Nederland
Nestlé USA Inc USA
Nestlé Ghana Limited Ghana
Nestlé Dubai Manufacturing LLC UAE
Nestlé (Thai) Ltd. Thailand
Nestlé Suisse S.A. Switzerland
Nestlé Bangladesh Limited Bangladesh
Nestlé UK Ltd. UK
36.4 Following is a list of local associated undertakings with whom the Company has entered into transactions
during the year:
Name Basis of Association
Associated undertakings
Babar Ali Foundation Common directorship
Bulleh Shah Packaging Private Limited Common directorship
Dairy and Rural Development Foundation Common directorship
Packages Convertors Limited Common directorship
Packages Limited Common directorship
Packages Real Estate (Pvt) Ltd Common directorship
Syed Maratib Ali Religious & Charitable Trust Society Common directorship
Tetra Pak Pakistan Limited Common directorship
Lahore University of Management Common directorship
Aitchison College Lahore Common directorship
Systems Limited Common directorship
The Pakistan Business Council Common directorship
Tri-Pack Films Limited Common directorship
World Wide Fund for Nature Common directorship
Other related parties

Nestlé Pakistan Limited Employees’ Gratuity Fund Retirement benefit plan
Nestlé Pakistan Limited Employees’ Pension Fund Retirement benefit plan
Nestlé Pakistan Limited Employees’ Provident Fund Retirement benefit plan
111
37 Cash and cash equivalents

Cash and bank balances 25 542,508 743,920
Running finance under mark-up arrangements - secured 11 (3,756,401) (4,226,529)
(3,213,893) (3,482,609)
38 Number of employees
Average number of employees during the year 3,718 3,772
Number of employees as at December 31 3,732 3,767
Capacity Production
2022
(Rupees in 000) 2021 2022 2021
39 Capacity and production of industrial units

Sheikhupura factory
Liquid products - Liters in thousand 1,238,483 1,238,483 681,457 685,272
Non-liquid products - Kgs in thousand 76,336 84,444 50,102 45,627
Kabirwala factory
Liquid products - Liters in thousand 41,976 62,565 24,667 34,653
Port Qasim factory
Islamabad factory
Total
Liquid products - Liters in thousand 1,874,004 1,953,744 995,361 1,013,016

39.1 Utilization of capacity is in line with seasonal impact of products and demand conditions arising from overall
economic environment.
40 Segment reporting
Segment information is presented in respect of how the Company’s chief decision maker allocates resources and
monitors performance based on business segments.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected
to be used for more than one year.
The Company’s operations comprise of the following main business segments and product categories:
i) Dairy and Nutrition Products

Milk based products and cereals
ii) Powdered and Liquid Beverages

Juices, drinking water and powdered drinks
iii) Other Products

Confectionery and other products
112
40.1 Segment analysis and reconciliation for the year ended and as at December 31
Dairy and Nutrition Products Powdered and Liquid Beverages Other Products Total
(Rupees in 000) 2022 2021 2022 2021 2022 2021 2022 2021
Revenue from contracts with customers 126,110,863 104,576,489 36,380,025 28,711,266 25,367 7,717 162,516,255 133,295,472
Depreciation and amortization 2,758,050 2,824,527 1,083,880 1,034,210 – – 3,841,930 3,858,737
Operating profit before tax and unallocated expenses 23,782,965 19,124,442 2,993,355 2,451,601 2,658 1,568 26,778,978 21,577,611
Unallocated corporate expenses:

Finance cost (2,335,994) (1,840,228)
Other expenses (2,282,490) (2,079,361)
Other income 631,543 295,578
Taxation (7,742,321) (5,185,499)
Segment assets 61,906,942 46,556,871 20,789,138 15,476,214 72,106 43,547 82,768,186 62,076,632
Unallocated assets 883,565 3,327,266
Total assets 83,651,751 65,403,898
Segment equity and liabilities 29,521,173 14,875,045 9,428,143 4,600,693 35,781 12,522 38,985,096 19,488,260
Unallocated equity and liabilities 44,666,655 45,915,638
Total equity and liabilities 83,651,751 65,403,898
Segment capital expenditure 2,791,876 1,540,266 582,250 988,091 5,309 127,675 3,379,435 2,656,032
2022
40.2 Geographical segments

Sales are made by the Company in the following countries:
Pakistan 159,653,584 131,453,215
Afghanistan 1,353,243 1,166,524
United States of America 613,690 294,754
Other foreign countries 895,738 380,979
162,516,255 133,295,472
The Company manages and operates manufacturing facilities and sales offices in Pakistan only.
113
40.2.1 Export sales to foreign related parties
2022
Country Party Name

Afghanistan Nestlé Afghanistan Limited – 1,109,603
Bangladesh Nestlé Bangladesh Limited – 35,280
Philippines Wyeth Philippines, INC. 24,102 21,641
Philippines Nestlé Philippines 82,961 –
Central Africa Nestlé Cameroun 35,174 –
Central Africa Nestlé Gabon 8,131 –
Ivory Coast Nestlé Cote D’Ivoire 8,192 –
Senegal Nestlé Senegal 98,364 –
Burkina Faso Nestlé Burkina Faso S.A. 30,264 –
41 Remuneration of Chief Executive Officer, Directors and Executives
The aggregate amounts charged in these financial statements during the year for remuneration, including certain
benefits, to the chief executive officer, executive directors, non-executive directors and executives of the Company are
as follows:
Chairman Chief Executive Officer Executive Directors Executives

(Rupees in 000) 2022 2021 2022 2021 2022 2021 2022 2021
Managerial remuneration / fee 8,375 6,966 99,121 69,214 109,274 79,488 2,404,144 2,082,920
Bonus – – 23,326 18,662 17,855 16,432 678,196 535,798
Retirement benefits – – – – – – 411,118 360,875
Housing – – 6,028 5,007 10,721 9,075 5,156 3,189
Reimbursable expenses 1,233 1,059 74,813 48,153 106,950 64,943 662,667 519,394
9,608 8,025 203,288 141,036 244,800 169,938 4,161,281 3,502,176
Number of persons 1 1 1 1 2 2 638 546
41.1 The chairman and chief executive of the Company are provided with use of Company maintained vehicles.
41.2 The aggregate amount charged in these financial statements in respect of contribution to provident fund of key
management personnel is PKR 180.12 million (2021: PKR 155.59 million).
41.3 Meeting fee amounting to PKR 2,520,000 (2021: PKR 3,075,000) was paid to 4 (2021: 4) non executive
directors during the year.
41.4 Remuneration to key management personnel includes PKR 149.7 million (2021: PKR 154.1 million) in respect
of share based payments made by the Holding Company and charged back to the Company.
114
42 Financial risk management
Financial risk factors
The Company’s activities expose it to a variety of financial risks, market risks (including currency risks, other price risks
and interest rate risks), credit risks and liquidity risks. The Company’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance.
The Company finances its operations through equity, borrowings and management of working capital with a view to
maintain an appropriate mix between various sources of finance to minimize risk. The Company follows an effective
cash management and planning policy and maintains flexibility in funding by keeping committed credit lines available.
Market risks are managed by the Company through the adoption of appropriate policies to cover currency risks and
interest rate risks. The Company applies credit limits to its customers and obtains advances from them.
42.1 Market risk
42.1.1 Currency Risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions or
receivables and payables that exist due to transactions in foreign currencies.
The Company is exposed to currency risk arising from various currency exposures, primarily with respect to
various currencies. Currently, the Company’s foreign exchange risk exposure is restricted to the amounts
receivable from / payable to the foreign entities. The Company’s major exposure to currency risk is as follows:
Particulars Currency 2022 2021
Assets
Foreign currency bank accounts USD 293,100 438,783
Cash in hand USD 29,915 29,915
EUR 6,985 6,985
Receivables USD 88,691 162,896
EUR 9,319 42,468
CHF 46,907 144,936
Liabilities
Net payables / (advances) USD 12,978,801 14,336,863
EUR (3,553,059) (2,436,224)
CHF 3,631,258 7,494,981
GBP 100,289 83,591
CNY 5,036,575 4,164,973
NZD 61,420 –
SAR 60,641 –
AED 7,685 (19,170)
SGD 2,892,693 2,772,379
Forward foreign currency contracts USD 804,072 37,076
EUR – 79,806
CNY 1,775,916 61,947
PKR (‘000) 3,798,977 3,869,790
115
42.1.1.1 The following significant exchange rates were applied during the year:
2022 2021
Average Reporting Average Reporting

(Rupees per currency unit) Rate date rate Rate date rate
US Dollar 206.97 226.70 162.53 176.45
Swiss Franc 216.90 245.19 187.48 194.10
Euro 216.99 241.50 192.08 199.49
Great Britain Pound 253.87 273.65 223.41 238.35
Chinese Renminbi 30.58 32.60 25.19 27.68
New Zealand Dollar 129.72 143.29 115.41 120.52
Saudi Riyal 54.56 60.28 43.53 47.02
U.A.E Dirham 50.91 61.73 44.59 48.66
Singapore Dollar 150.10 168.85 121.32 130.68
Currency rate sensitivity analysis
If the functional currency, at reporting date, had increased by 20% (2021: 10%) against the foreign currencies
with all other variables held constant, the impact on profit before taxation would have been as follows:
2022
Effect on profit and loss:

US Dollar 606,248 242,484
Euro (172,403) (47,995)
Swiss Franc 175,767 142,664
Great Britain Pound 5,489 1,992
Chinese Renminbi 44,421 11,698
New Zealand Dollar 1,760 –
Saudi Riyal 731 –
U.A.E Dirham 95 (93)
Singapore Dollar 97,687 36,229
759,795 386,979
The effect may be respectively lower / higher, mainly as a result of exchange gains / losses on translation of
foreign exchange denominated financial instruments.
Currency risk sensitivity to foreign exchange movements has been calculated on a symmetric basis.
42.1.2 Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk), whether
those changes are caused by factors specific to the individual financial instrument or its issuer, or factors
affecting all similar financial instruments traded in the market.
116
42.1.3 Interest rate risk
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Significant interest rate risk exposures are primarily managed by
a mix of borrowings at fixed and variable interest rates.
At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments is:
2022
Variable rate instruments

Liabilities
Long-term finances – (3,000,000)
Running finance under mark-up arrangements - secured (3,756,401) (4,226,529)
Lease liabilities (1,465,437) (164,373)
Assets
Bank balances - saving accounts 352,754 345,885
(4,869,084) (7,045,017)
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Company.
Cash flow sensitivity analysis for variable rate instruments
If interest rates on loans from borrowings from banks, at the year end date, fluctuate by 500 (2021: 100) bps
higher / lower with all other variables, in particularly foreign exchange rates held constant, profit before taxation
for the year and 2021 would have been affected as follows:
2022
Effect on profit and loss of an increase (243,454) (70,450)
Effect on profit and loss of a decrease 243,454 70,450
The effect may be higher / lower, mainly as a result of higher / lower mark-up income on floating rate loans /
investments.
The sensitivity analysis prepared is not necessarily indicative of the effects on the profit for the year and assets
/ liabilities of the Company.
42.1.4 Fair value measurement of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Underlying the definition of fair value is the presumption that the Company is a going concern and there is no
intention or requirement to curtail materially the scale of its operations or to undertake a transaction on adverse
terms.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange dealer, broker, industry group, pricing service, or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm’s length basis.
117
IFRS 13 ‘Fair Value Measurement’ requires the company to analyze assets carried at fair value by valuation
method. The different levels have been defined as follows:
– Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
– Inputs other than quoted prices included within Level 1 that are observable for the asset either directly
(that is, as prices) or indirectly (that is derived from prices) (Level 2)
– Inputs for the asset or liability that are not based on observable market data (that is, unadjusted) inputs
(Level 3)
Transfer between levels of the fair value hierarchy are recognized at the end of the reporting period during
which the changes have occurred.
The following table shows the carrying amounts of financial assets and financial liabilities. None of them are
currently measured at fair value since their carrying amount is a reasonable approximation of their fair value
except for foreign exchange forward contracts.
Carrying Amount
Financial Financial Total
(Rupees in 000) assets liabilities
December 31, 2022

Financial assets - measured at fair value
- designated as hedging instruments* – 5,304 5,304
Financial assets - not measured at fair value

Trade debts 1,989,358 – 1,989,358
Long term loans 339,967 – 339,967
Advances, deposits, prepayments
and other receivables 3,663,372 – 3,663,372
Cash and bank balances 542,508 – 542,508
6,535,205 – 6,535,205
Financial liabilities - measured at fair value – – –
Financial liabilities - not measured at fair value

Long term finances - secured – 15,500,000 15,500,000
Short term borrowings - secured – 519,260 519,260
Running finance under mark-up
arrangements - secured – 3,756,401 3,756,401
Customer security deposits – 224,225 224,225
Trade and other payables – 41,243,711 41,243,711
Unclaimed dividend – 87,756 87,756
Interest and mark-up accrued – 297,289 297,289
– 61,628,642 61,628,642
* The Company determines the fair value of these forward currency contracts as Level 2 of valuation method
defined above.
118
Carrying Amount
Financial Financial Total
(Rupees in 000) assets liabilities
December 31, 2021

Financial assets - measured at fair value – – –
Financial assets - not measured at fair value

Trade debts 923,484 – 923,484
Long term loans 276,658 – 276,658
Advances, deposits, prepayments
and other receivables 1,729,632 – 1,729,632
Cash and bank balances 743,920 – 743,920
3,673,694 – 3,673,694
Financial liabilities - measured at fair value

- designated as hedging instruments – 3,551 3,551
Financial liabilities - not measured at fair value

Long term finances - secured – 12,081,975 12,081,975
Short term borrowings - secured – 6,000,000 6,000,000
Running finance under mark-up
arrangements - secured – 4,226,529 4,226,529
Customer security deposits – 195,890 195,890
Trade and other payables – 26,134,342 26,134,342
Unclaimed dividend – 71,894 71,894
Interest and mark-up accrued – 480,643 480,643
– 49,191,273 49,191,273
Fair values of financial assets and liabilities
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their
fair values. Fair value is determined on the basis of objective evidence at each reporting date and is measured
in accordance with IFRS 13.
42.2 Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other
party by failing to discharge an obligation. Company’s credit risk is primarily attributable to its long term loans,
trade debts, advances, deposits and other receivables and balances at banks. The Company manages its credit
risk by the following methods:
– Monitoring of debts on a continuous basis
– Application of credit limits to its customers
– Obtaining adequate deposits / collateral where needed
119
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date is as follows:
2022
Particulars
Trade debts 1,989,358 923,484
Advances, deposits and other receivables 3,663,372 1,729,632
Long term loans 339,967 276,658
Bank balances 533,717 737,248
6,526,414 3,667,022
42.2.1 Trade debts
The aging of trade debts at the reporting date is:
Not yet due 1,985,351 912,846

Past due 0 - 30 days 3,544 7,392
Past due 30 days 463 3,246
1,989,358 923,484
The Company uses an allowance matrix to measure “Expected Credit Losses” (ECL) of trade debtors. Overdue
balances at the reporting date are immaterial and impact of application of ECL model, if any, is reflected in the
allowance for expected credit losses recognized.
The Company does not believe it is exposed to major concentration of credit risk as its exposure is spread over
several institutions and customers. However to manage any possible exposure the Company applies approved
credit limits to its customers.
42.2.2 Loans to employees
The Company obtains crossed cheques from employees of the full loan amount in the name of the Company
without mentioning any date as part of collateral. The Company has assessed, based on historical experience
and available securities, that the expected credit loss associated with loans to employees is trivial and therefore
no impairment charge has been accounted for.
42.2.3 Advances and other receivables
Advances and other receivables mainly comprise of cash margin withheld by banks against imports and
other deposits. The Company has assessed, based on historical experience and available securities, that the
expected credit loss associated with these financial assets is trivial and therefore no impairment charge has
been accounted for.
120
42.2.4 Bank balances
The credit risk on liquid funds is limited because the counterparties are banks with reasonably high credit
ratings. The Company believes that it is not exposed to major concentration of credit risk as its exposure is
spread over a large number of counterparties. The credit quality of cash and bank balances that are neither
past due nor impaired can be assessed by reference to external credit ratings or to historical information about
counterparty default rate:
Rating 2022 Rating 2021
Short Term Long Term Agency Short Term Long Term Agency
Habib Bank Limited A-1+ AAA VIS A-1+ AAA VIS

Standard Chartered Bank Limited A1+ AAA PACRA A1+ AAA PACRA
United Bank Limited A-1+ AAA VIS A-1+ AAA VIS
Citi Bank N.A F1 A+ Fitch F1 A+ Fitch
Deutsche Bank AG F2 BBB+ Fitch F2 BBB+ Fitch
MCB Bank Limited A1+ AAA PACRA A1+ AAA PACRA
Meezan Bank Limited A-1+ AAA VIS A-1+ AAA VIS
Due to the Company’s long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, management does not expect non-performance by these
counterparties on their obligations to the Company. Accordingly, the credit risk is minimal.
42.3 Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions. For this purpose the
Company has sufficient running finance facilities available from various commercial banks to meet its liquidity
requirements. Further, liquidity position of the Company is closely monitored through budgets, cash flow
projections and comparison with actual results by the Board.
42.3.1 The following are the contractual maturity analysis of financial liabilities as at December 31, 2022
Carrying Contractual On Less than 6 to 12 1 year to More than Total

(Rupees in 000) value cash flows Demand 6 months months 5 years 5 years
Financial liability
Long-term finances 15,500,000 15,766,967 – 266,967 9,000,000 6,500,000 – 15,766,967
Lease liabilities 1,465,437 2,553,042 – 133,043 133,043 1,008,330 1,278,627 2,553,042
Short-term borrowings
- secured 519,260 531,964 – 531,964 – – – 531,964
Running finance under mark
-up arrangements - secured 3,756,401 3,774,019 3,774,019 – – – – 3,774,019
Customer security deposits
- interest free 224,225 224,225 – 224,225 – – – 224,225
Unclaimed dividend 87,756 87,756 87,756 – – – – 87,756
Unpaid dividend 6,034,213 6,034,213 6,034,213 – – – – 6,034,213
Trade and other payables 41,243,711 41,243,711 41,243,711 - – – – 41,243,711
68,831,003 70,215,897 51,139,699 1,156,199 9,133,043 7,508,330 1,278,627 70,215,897
121
42.3.2 The following are the contractual maturity analysis of financial liabilities as at December 31, 2021
Carrying Contractual On Less than 6 to 12 1 year to More than Total

(Rupees in 000) value cash flows Demand 6 months months 5 years 5 years
Financial liability
Long-term finances 12,081,975 12,314,675 – 314,675 – 12,000,000 – 12,314,675
Lease liabilities 164,373 273,867 – 34,360 34,360 205,148 – 273,867
Short-term borrowings
- secured 6,000,000 6,199,604 – 6,199,604 – – – 6,199,604
Running finance under mark
-up arrangements - secured 4,226,529 4,274,868 4,274,868 – – – – 4,274,868
Customer security deposits
- interest free 195,890 195,890 – 195,890 – – – 195,890
Unclaimed dividend 71,894 71,894 71,894 – – – – 71,894
Unpaid dividend 2,011,404 2,011,404 2,011,404 – – – – 2,011,404
Trade and other payables 26,134,342 26,134,342 26,134,342 – – – – 26,134,342
50,886,407 51,476,544 32,492,508 6,744,529 34,360 12,205,148 – 51,476,544
43 Reconciliation of movement of liabilities to cash flows arising from financing activities
2022
Liabilities
Long-term Short-term Lease Interest and Unclaimed / Total
finances borrowings liabilities mark-up unpaid
(Rupees in 000) accrued dividend
Balance as at January 01, 2022 12,081,975 6,000,000 164,373 480,643 2,083,298 20,810,289
Cash flows
Finance cost paid – – – (2,409,754) – (2,409,754)
Long-term finances repaid - net 3,418,025 – – – – 3,418,025
Repayment of lease liabilities – – (144,035) – – (144,035)
Short-term borrowings repaid - net – (5,480,740) – – – (5,480,740)
Dividends paid – – – – (10,926,697) (10,926,697)
Changes from financing cash flows 3,418,025 (5,480,740) (144,035) (2,409,754) (10,926,697) (15,543,201)
Non-cash changes
Dividend approved – – – – 14,965,368 14,965,368
Finance cost – – 109,594 2,226,400 – 2,335,994
Addition to lease liabilities – – 1,356,642 – – 1,356,642
Termination to lease liabilities – – (21,137) – – (21,137)
Non-cash changes – – 1,445,099 2,226,400 14,965,368 18,636,867
Balance as at December 31, 2022 15,500,000 519,260 1,465,437 297,289 6,121,969 23,903,955
122
2021
Liabilities
Long-term Short-term Lease Interest and Unclaimed / Total
finances borrowings liabilities mark-up unpaid
(Rupees in 000) accrued dividend
Balance as at January 01, 2021 15,780,294 6,417,473 70,673 303,183 72,121 22,643,744
Cash flows
Finance cost paid – – – (1,641,295) – (1,641,295)
Long-term finances obtained - net (3,698,319) – – – – (3,698,319)
Repayment of lease liabilities – – (138,600) – – (138,600)
Short-term borrowings repaid - net – (417,473) – – – (417,473)
Dividends paid – – – – (9,598,316) (9,598,316)
Changes from financing cash flows (3,698,319) (417,473) (138,600) (1,641,295) (9,598,316) (15,494,002)
Non-cash changes
Dividend approved – – – – 11,609,493 11,609,493
Finance cost – – 21,473 1,818,755 – 1,840,228
Termination of leases – – – – – –
Addition to lease liabilities – – 210,827 – – 210,827
Non-cash changes – – 232,300 1,818,755 11,609,493 13,660,547
Balance as at December 31, 2021 12,081,975 6,000,000 164,373 480,643 2,083,298 20,810,289
44 Capital risk management
The Board’s policy is to maintain an efficient capital base so as to maintain investor, creditor and market confidence
and to sustain the future development of its business. The Board of Directors monitors the return on capital employed,
which the Company defines as operating income divided by total capital employed. The Board of Directors also
monitors the level of dividends to ordinary shareholders.
The Company’s objectives when managing capital are:
i) To safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and
ii) To provide an adequate return to shareholders
The Company manages the capital structure in the context of economic conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the Company may, for example, adjust the
amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt.
The Company monitors capital on the basis of debt to equity ratio, calculated on the basis of total debt to equity.
123
2022
The debt to equity ratio as at December 31:
Total borrowings 19,775,661 22,308,504
Total equity 5,770,246 5,403,272
Total debt and equity 25,545,907 27,711,776
Debt to equity ratio 77:23 81:19
There were no major changes in the Company’s approach to capital management during the year and the Company
is not subject to externally imposed capital requirements.
45 Date of authorization for issue
These financial statements were authorized for issue on February 27, 2023 by the Board of Directors of the Company.
46 Subsequent event
The Board of Directors in their meeting held on February 27, 2023 have proposed a final cash dividend for the year
ended December 31, 2022 of PKR 95 per share (2021: PKR 90 per share), amounting to PKR 4,308.21 million (2021:
PKR 4,081.46 million) for approval of the members at the Annual General Meeting to be held on April 17, 2023. These
financial statements do not reflect this dividend.
47 General
These financial statements are presented in Pak Rupees, which is the Company’s functional and presentation
currency. Figures have been rounded off to the nearest of thousands of rupee unless otherwise stated in these financial
statements.

124
FORM OF PROXY
Nestlé Pakistan Ltd.
I/We, ________________________________________________, of _______________________________________, being a
member of Nestlé Pakistan Ltd., holder of ________________________________ Ordinary Share(s) as per registered Folio No.
____________________________________ hereby appoint Mr. / Ms.______________________________________
Folio No. ___________ of ___________________________or failing him Mr. / Ms._____________________________
Folio No. _________________ of ____________________, who is also a member of Nestlé Pakistan Ltd., as my / our proxy in
my / our absence to attend and vote for me / us, and on my / our behalf at 45th Annual General Meeting of the Company to
be held on April 17, 2023 at 12:00 noon and at any adjournment thereof.
Signed under my / our hand this ________ day of _____________, 2023.
Signature across Rs. 5

Revenue Stamp
Signature should agree with the

Signed in the presence of: specimen signature registered
with the company
Signature of Witness No. 1 Signature of Witness No. 2
Name: _______________________________ Name: _______________________________
CNIC No.: ____________________________ CNIC No.: ____________________________
NOTES:
1. This instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized
in writing, or if the appointer is a corporation either under the common seal or under the hand of an official or attorney
so authorised. Any person can be appointed as proxy who is not a member of the Company qualified to vote except
that a corporation being a member may appoint a person who is not a member.
2. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or
a notarially certified copy of that power of authority, shall be deposited at Nestlé Pakistan Limited, Packages Mall,
Shahra-e-Roomi, PO Amer Sidhu,Lahore-54760, not later than 48 (forty eight) hours before the time for holding the
meeting at which the person named in the instrument proposes to vote, and in default the instrument of a proxy shall
not be treated as valid.
125
AFFIX
CORRECT
POSTAGE
The Company Secretary

Packages Mall, Shahrah-e-Roomi, PO Amer Sidhu, Lahore,
Phone No. +92 42 111 637 853
Fax No. +92 42 3578 9303
www.nestle.pk
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‫‪ 45‬پ ا‬
‫‪ 17‬ی‬
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‫م‬‫ملڈ‪� ،‬پ�یک� ج � ز� امل‪ ،‬اشرہاہِ رویم‪ ،‬اَرم دسوھ‪ ،‬الوہر ی‬
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AFFIX
CORRECT
POSTAGE
The Company Secretary

Packages Mall, Shahrah-e-Roomi, PO Amer Sidhu, Lahore,
Phone No. +92 42 111 637 853
Fax No. +92 42 3578 9303
www.nestle.pk
About the Cover
At the heart of good food is the quality of ingredients, the
people who produce them, and the soils and ecosystems
where they grow.
CONTENTS
02 04 06 12 20
CEO’s Message Creating Contributing to Strengthening Helping to
Shared Value Nutritious Communities Protect,
and Sustainable Renew and
Diets Restore
Natural
Resources
CEO’S MESSAGE
Our global focus areas are firmly
embedded in our purpose of unlocking
the power of food to enhance the
quality of life for everyone, today and for
generations to come.
Nestlé’s purpose of unlocking the power of food to enhance quality We served 2.49 billion fortified servings of our value-added
of life for everyone, today and for generations to come is not just nutritious products to help address micronutrient deficiencies in
restricted to its business principles. We are committed to be a Pakistan.
force for good throughout our value chain by Creating Shared
Value (CSV) for communities and delivering on our sustainability In 2022, our partnership with Benazir Income Support Program
agenda. This past year, we delivered value and contributed to the (BISP) completed five years. Through the Nestlé BISP Rural
United Nations Sustainable Development Goals (SDGs) through Women Sales Program, in collaboration with Akhuwat Foundation,
all our focus areas – helping to protect, renew, and restore natural we are supporting rural women to achieve financial empowerment.
resources, contributing to nutritious and sustainable diets and This year, the program increased the number of enrolled BISP
strengthening communities. beneficiaries as sales agents to nearly 2,500 with an ambition to
reach 5,000 by 2025.
From reducing our carbon footprint to taking another step closer
to a waste-free future by creating awareness, enlightening the Improving women’s representation in the workforce is reflective
younger generations about nutrition, enabling rural women to at our workplace too, where we believe that diversity is an asset
become financially empowered and aiding communities ravaged that impacts how we think and work together. As a company, we
by floods, our efforts on ground have made a positive impact in celebrate diversity and inclusion at every step.
many ways.
While there were multiple achievements to keep us motivated,
Nestlé is cognizant of the impact of its business operations on the the devastating floods destroyed homes and displaced vulnerable
communities where it operates. It is our ambition to achieve net communities in Pakistan. Nestlé, under its global initiative of Nestlé
zero by 2050. In efforts to meet this goal, we reduced our carbon Cares, redirected its efforts through cash and in-kind support
footprint this year by helping many of our dairy farmers shift to of 325,000 liters of water and 10,000 liters of milk to National
high-yield cows and switching to renewable energy resources Disaster Management Authority (NDMA) for distribution among
such as solar energy and biogas, where possible. We also planted the flood affectees. We also donated more than 700,000 servings
Moringa trees for carbon sequestration, and enabled farmers to of NESTLÉ BUNYAD, a specialized nutrition formula designed
embrace innovative technological solutions to overcome water to meet children’s daily iron requirement. Our employees made
mismanagement across hundreds of acres by installing drip cash donations worth PKR 3 million, which were matched 1:1 by
irrigation and smart soil moisture sensors. the company. A total of PKR 6 million was donated to Akhuwat
Foundation for flood rehabilitation efforts. We also donated
In line with our global vision for a waste-free future, Nestlé Pakistan cash to Prime Minister’s Flood Relief Fund 2022 to support the
partnered with the Gilgit-Baltistan Waste Management Company rehabilitation process led by the government.
(GBWMC) under Clean Gilgit-Baltistan Project (CGBP). The project
facilitates waste segregation and recycling systems for Gilgit- The impact we made last year was possible because of the efforts
Baltistan leading to responsible management of over 700 tons of of our employees, partners, and stakeholders across our value
plastic packaging in the region. chain. I want to take this opportunity to express my gratitude to
them for their contribution, hard work and resilience. Despite many
Our collaborative initiative, Travel Responsibly for Experiencing challenges, they continued our unwavering journey and remained
Eco-tourism in Khyber Pakhtunkhwa (TREK), with the World Bank dedicated to creating shared value. It is their dedication that
Group (WBG) and Khyber Pakhtunkhwa (KP) tourism department ensured we progressed in our commitments to making a positive
helps us take collective action towards a waste-free future impact for families, communities, and the planet.
encouraging behavior change. Till date, we have trained nearly
400 hospitality professionals through capacity building sessions at Together with our Nestlé Pakistan team, stakeholders, distributors,
tourist hotspots and aired a public awareness campaign. and value chain partners, I am certain that in the coming year, we
will continue to be a force for good and use our scale, resources,
We also aim to ensure that 100% of our packaging is designed for and expertise to contribute to a healthier future for people and the
recycling, with commitment to reach 95% by 2025. We continue planet. As a company, we are also conscious of the fact that this
to be the only company in Pakistan to offer paper straws across responsibility is a shared one and these goals can’t be achieved
our ready to drink range in our efforts to reduce the use of virgin alone. We are dedicated to taking collective action with our
plastics. stakeholders to accelerate our efforts to protect, renew, and restore
the planet and ensure that food systems continue to nourish
While our impact on the planet is important to us, our contributions people for generations to come.
to nutritious and sustainable diets is equally important. Through
Nestlé for Healthier Kids (N4HK), we worked closely with our
partner schools to increase nutritional awareness in children. In
2022, we successfully trained over 250 teachers and educated an
additional 35,000 children, bringing the total to 1,750 teachers and
320,000 children. This past year also gave us an opportunity to
extend our outreach to Gilgit-Baltistan. The program also partnered
with WWF-Pakistan to help teach the younger generation how to Jason Avanceña
manage waste responsibly through sustainability training sessions. Chief Executive Officer & Managing Director
Journey Towards
ReGeneration NESTLÉ IN SOCIETY REPORT 2022 03
CREATING SHARED VALUE
Nestlé Pakistan, as part of its global and local obligations, believes in Creating Shared Value
(CSV) for the communities in which it operates. It is our belief that for a company to be able
to create value for its shareholders, it must also create value for society.
At Nestlé, social responsibility is not restricted to a few

philanthropic activities. Instead, CSV is embedded in our
business model, where direct engagement and support Contributing to Nutritious
is extended to communities across the value chain. This and Sustainable Diets
adds value to the business and supports socioeconomic
development for the communities. Our inspiration is
governed by Nestlé Corporate Business Principles. A
signatory to the UN Global Compact for Ethical Business,
the company is committed to the stakeholders and the Strengthening
communities for mutual growth and sustainability. From Communities
offering quality products to consumers and providing a fair
and diverse work environment for our employees; from our
partners and raw material suppliers to ensuring responsible
sourcing models in our relationships; from supporting
Helping to Protect,
under privileged communities to working with small Renew and Restore
farmers; from enhancing sustainability and environmental Natural Resources
friendliness of our operations to embedding ethical and
transparent business practices, CSV is entrenched in the
entire value chain of Nestlé. As we move into a new year, we will continue to evolve and
strengthen our approach to Creating Shared Value as the
The company regularly conducts the “Seeing is Believing” way we do business, ensuring that this approach continues
initiative to showcase our value chain from ‘grass to glass’ to inform all our behaviors, policies and actions.
to turn stakeholders into advocates and make them aware
of our quality and safety standards. We at Nestlé touch billions of lives worldwide; from the
farmers we work with, to the individuals and families who
Our global focus areas are firmly embedded in our enjoy our products, the communities where we live and
purpose. Contributing to nutritious and sustainable diets, work, and the environment we thrive in. Their challenges
strengthening communities and helping to protect, renew are our challenges. Their success is success that we all
and restore natural resources, are interconnected and our share.
efforts in each of these areas are supported through our
specific commitments. These commitments will, in turn, We are taking steps and introducing various initiatives in
enable us to meet our ambitions for 2030 in line with the our manufacturing units and beyond, to exhibit Respect
Sustainable Development Goals (SDGs). Additionally, for the Future. We are striving towards zero environmental
ethical business practices, transparency and consumer impact of our operations. This is our local and global
trust – based on high quality products with a focus on commitment.
Nutrition, Health & Wellness – remain the hallmark of our
core business.
04
Muhammad Irfan, dairy agripreneur in Renala Khurd, Okara supplies milk to Nestlé regularly.
Nestlé supports farmers by providing them technical assistance on good farm practices
CONTRIBUTING TO
NUTRITIOUS AND
SUSTAINABLE
DIETS
Enabling healthier and happier lives
2030 Global Ambition: Help 50 million children

lead healthier lives
Food is not just a source of nutrition, it also brings us together
as families or friends. The United Nations believes the food
industry has a vital role to play in helping enable healthier lives.
At Nestlé, we believe this and aim to help shape a better and
healthier world. This was how we started over 150 years ago
when our founder Henri Nestlé created an infant cereal that
saved a child’s life.
Nestlé is building, sharing and applying its nutritional

knowledge, and contributing to a healthier future. We firmly
believe that nutrition and hydration play a role in helping
manage and treat diseases. We have a research team focused
on how to achieve this.
Nestlé for Healthier Kids
Pakistan is reported to have one of the highest levels of To date, the N4HK program in Pakistan has educated more
child malnutrition compared to other developing countries. than 320,000 children in rural, sub-urban and urban areas,
A focus on quality of diet and nutrition awareness is and has trained over 1750 teachers on nutrition in 380
extremely essential to prevent stunting, wasting and other schools.
forms of malnutrition.
N4HK is making a collective effort with its partners to
Nestlé for Healthier Kids (N4HK) is a global initiative which help address and overcome the nutrition challenge to
empowers parents, caregivers and educators to foster give children a happier and healthier future. The program
healthier eating, drinking and lifestyle habits among school- has partnerships nationwide and covers schools across
age children. The program equips children with nutrition Punjab, the Federal Capital, Sindh, Khyber Pakhtunkhwa
education to enable them to make better nutrition decisions and Gilgit-Baltistan. The program works in collaboration
from an early age to promote a healthier future. with 10 educational partners from the development, private
and public sector, including Care Foundation, Punjab
N4HK’s curriculum is developed in collabration with Oxford Workers Welfare Fund (PWWF), Trust for Education and
University Press. Development of Deserving Students (TEDDS) and Zindagi
Trust to name a few. Most recently, the program has
The program supports public health objectives and enables expanded to Gilgit-Baltistan with the launch of a program in
schools to improve nutrition knowledge and promote Skardu.
healthy habits among children by teaching the importance
of balancing good nutrition and healthy hydration with an N4HK also launched Sustainability Training for Kids
active lifestyle. in partnership with WWF-Pakistan to help teach the
younger generation about a more sustainable approach to
packaging and managing waste. The trainings are launched
in a bid to instill responsible behavior and enable children to
become better stewards of our planet.
Reached out to
320,000 students
Testimonial
“The launch of Nestlé for Healthier Kids Program in
Gilgit-Baltistan is a great initiative by Nestlé Pakistan. Trained over 1750 teachers
Nutrition interventions and initiatives like N4HK are
extremely essential as they positively affect child
development with the focus on the critical early Covered 380 school
years of life. We are confident that the awareness branches
imparted on nutrition will play a very important role in
promoting healthy habits and a better nourished future
generation.” Worked with 10
partners
Mohyuddin Ahmad Wani
Chief Secretary Gilgit-Baltistan
Developed a special curriculum
08
Teacher training session on nutrition awareness in Skardu
In Commitment with
NUTRITION SUPPORT PROGRAM
Under the Nutrition Support Program, Nestlé Pakistan
regularly provides milk to children and vulnerable
communities who suffer from key micronutrient
deficiencies in urban, semi-urban and rural areas.
Children attending educational institutes supported by
Nestlé hail from underprivileged backgrounds and face
nutritional challenges. These schools are selected after
careful consideration to ensure that the benefits of this
program reach those who need it most. The program also
supports organizations working with destitute women and
differently-abled children.
FORTIFIED PRODUCTS
Nestlé is committed to play its role to help reduce
micronutrient deficiencies on a global scale, by fortifying
products with essential micronutrients that combat the
impact of such deficiencies. on Pakistan’s population. In
2022, approximately 2.49 billion fortified servings were
served across the country.
10
Children drinking milk at the Mashal Model School in Islamabad
In Commitment with
STRENGTHENING
COMMUNITIES
Helping develop thriving and
resilient communities
2030 Global Ambition: Help to improve 30

million livelihoods in communities directly
connected to our business activities.
Nestlé began as a family business in a small town over 150
years ago. This local approach informs everything we do. We
are part of the local communities where we operate from.
Being part of a community brings great responsibility towards
it too, the greatest being respecting the rights of those who
work for us and with us.
We believe in improving livelihoods and developing thriving

communities. We do this by supporting women to be
economically and socially active, enabling them to be
independent. We work particularly in rural areas, to support
farmers by training them, enabling both men and women
to contribute to the workforce and build a brighter future for
themselves and their families.
Samina bibi has been learning professional stitching at Nestlé’s Vocational Training
Center in Kabirwala and hopes to gain financial independence through this skill
Nestlé BISP Rural
Women Sales Program
Nestlé Pakistan with Benazir Income Support Program (BISP) launched the Nestlé
BISP Rural Women Sales Program in 2017 to provide livelihood opportunities to
BISP beneficiaries.
Launched in 2008, BISP is Pakistan’s unconditional cash transfer program which

provides a quarterly stipend to its beneficiaries.
The main premise of the Nestlé BISP Rural Women Sales Program was to uplift
the rural women of Pakistan and put them on the path to prosperity. There
is no ‘magic bullet’ to women empowerment and central to this tenet is the
acknowledgment that long-term prosperity is only possible when women are
provided a level playing field to achieve their potential.
To date, this program has enrolled nearly 2,500 BISP beneficiaries as Sales
Agents. Nestlé Pakistan has also partnered with Akhuwat Pakistan (the largest
interest-free microfinance program) to, improve access to finance, disbursing
micro loans to women looking to scale their businesses.
This program has shown that economic upliftment can lead to wider social
empowerment. Traditionally, women of rural Pakistan have been unable to
participate in any structured economic activity. This intervention has helped
these women get into the business of retail hence paving the way for economic
empowerment. Furthermore, this project is allowing for greater financial inclusion.
Launched in 26
districts of Pakistan
Nearly 2,500 BISP beneficiaries

enrolled as Sales Agents
Total Sales to date of

PKR 153 Mio
Micro loans of average

PKR 10,000 – 20,000 disbursed
Average sales of PKR 5,000 – 10,000

each month
14
Riaz Bibi, a rural sales agent, at her shop in Renala Khurd
In Commitment with
Nestlé Chaunsa Project
Mango has its own specific nutrition, value and taste among all
fruits available in summer season in Pakistan. That’s why it is
not only the national fruit of Pakistan but also the king of fruits.
There is a growing demand for mango pulp, not just locally but
worldwide for drinks and juices, especially Pakistan’s Chaunsa
variety.
In Pakistan, most mango orchards are owned by small

growers who do not possess adequate knowledge of modern
techniques for cutting, pruning, insecticides and fertilizer
application, and management practices.
The Nestlé Chaunsa Project improves the livelihood of farmers

within the Chaunsa mango sector through strategic Creating
Shared Value interventions.
Through our Chaunsa Project, we train and build the capacity

of Chaunsa mango farmers, with support of our partners.
The identified training areas include pre- and post-harvest
horticulture, plant propagation and varietal assessment. Small
and medium mango farmers are equipped with skills required In Commitment with
so they can take advantage of new opportunities in the mango

farming sector, including pulping, canning and exporting.
These best farm practices help increase the yield and improve
the quality of Chaunsa mangoes.
The results of our endeavors have been quite fruitful, as the

partner farms have shown considerable improvement both
in quality and quantity of Chaunsa mangoes as a result of the
implementation of best farm practices.
Together with Mango Research Institute (MRI), Nestlé Pakistan
has also established a demonstration plot of high density and
Juices constitute one of the growth areas of our company, and
ultra high-density mango orchard in Multan. The orchard is
intervention within its highest volume variant would allow for
equipped with drip irrigation system that, helps in conserving
Creating Shared Value. NESTLÉ FRUITA VITALS is the flagship
water and reducing use of fertilizer to ensure environmental
brand within the Nestlé beverages range, made from highest
and economical sustainability. MRI has also developed a tunnel
quality fruits sourced from around the world. Our mission is to
to raise mango saplings, helping researchers to develop new
provide our consumers with delicious and healthy refreshment.
plantlets for mango growers at subsidized rates. This initiative
We use the best variant of Chaunsa mango as pulp raw
will help in capacity building of mango growers for sustainable
material for our premium quality Nestlé Chaunsa juices.
farming business.
We began procuring Chaunsa mangoes from our partners
It is our commitment to continue the project in the coming
in 2018, making them a significant part of our value chain.
years to enhance the quality of the Chaunsa pulp, used in
Through responsible sourcing of mango pulp and formation
our juices, resulting in socio-economic uplifting of small and
of linkages with Nestlé’s value chain, small farmers now have
medium mango farmers in Pakistan.
better access to markets where they can sell their mangoes at
competitive prices.
16
In Commitment with
Agriculture Services
Nestlé Pakistan keeps exploring opportunities to increase water mismanagement with the installation of drip irrigation
socio-economic benefits for farmers and to minimize in Punjab at 139 acres of land. During 2022, the initiative
the impact of climate change. We have been promoting was scaled to an additional 75 acres land in Sindh, for
alternate energy sources, particularly amongst dairy which water savings will come in 2023.
farmers. During 2021-2022, Nestlé contributed to
installation of solar systems at selected dairy farms to While reducing the impact of greenhouse gases, we also
introduce renewable energy to reduce Greenhouse Gas explored better ways for carbon sequestration. This is an
(GHG) emissions and energy costs. important element to aim for net zero in the food value
chain. We are conducting different studies on regenerative
If not handled properly, cow dung can increase GHG agriculture practices, which can help farmers in getting
emissions. However, proper treatment of cow dung better yield with lesser GHG emissions.
through bio-digester not only provides alternate energy
as biogas but also provides a good source of organic Our Agri Services team is helping farmers get better yield
matter for the agricultural land, reducing use of synthetic and improve productivity. One of our major initiatives is
fertilizers. In 2021-2022, we supported multiple biogas supporting the import of high efficiency cows. During 2021
digester installations at various suppliers’ farms. With - 2022, Nestlé Pakistan helped farmers import more than
cost and environmental benefits, farms with solar and 7000 cows, which helped in reducing GHG, increasing
biogas installations are also serving as a lighthouse in their productivity and improving incomes of local farmers.
respective areas.
Nestlé is committed towards a zero carbon journey. For an
Pakistan is amongst the countries, which have started effective action plan, we need to gain experience of various
facing adversities of climate change. Nestlé Pakistan is interventions implemented to reduce greenhouse gases
taking this challenge seriously. Nestlé, together with its under local conditions. For this purpose, we are developing
partners, developed a low-cost soil moisture sensor that a dairy farm, with maximum possible interventions, aiming
helps farmers decide when to irrigate their crops. Our initial to make it carbon neutral in the next few years.
field estimates have shown considerable water saving in
irrigation with crop yield improvement. Although we source fruit and rice from Punjab, our teams
are now working with farmers in the majestic valleys of
We have facilitated the installation of soil moisture sensors Gilgit-Baltistan as well to source fruit. During 2022, Nestlé
on 548 acres in our agriculture value chain. These are not Pakistan sourced high quality apples from Hunza, Nagar,
only helping farmers in saving the number of irrigations but Ghizer and Skardu regions. This initiative reduces fruit
also serving as lighthouses of an efficient irrigation system. wastage, and converts waste to value for farmers.
Nestlé Pakistan has been supporting farmers to reduce
Journey Towards
In Commitment with
Community Engagement Program

Nestlé Pakistan has an active and effective Community Engagement Program for the communities where we operate,
helping the company prioritize and plan services efficiently to meet community needs and aspirations. It also enables
the company and the community to work together. This initiative gives communities an opportunity to contribute to and
influence outcomes that directly impact their lives. Some of the key projects carried out under the Community Engagement
Program include:
Clean & Safe drinking water facilities Refurbishment and construction of schools
Vocational Training Centre for women Support for public sector projects
18
In Commitment with
Drivers Safety Training Program

The lack of proper knowledge and the absence of safe corporate organizations of the country. The facilities feature
driving practices and procedures are among the major driving safety training track, classrooms and high tech
causes of accidents on highways. Nestlé Pakistan in driving simulators. With state of art driver training facilities
collaboration with the National Highways and Motorway in Sheikhupura and Karachi, the Drivers Safety Program
Police (NH&MP) established the first drivers’ training has trained more than 31,000 drivers including over 7,000
institute near Sheikhupura aiming to ensure the safety Nestlé drivers. Apart from the professional and economic
and well-being of the communities it operates in. The impact, the program has also created a positive social
company developed the second driver training facility in impact not only on the drivers themselves, but also on their
Karachi. The Nestlé-NH&MP Drivers Training Institutes are families and communities.
fully equipped facilities that have been providing trainings,
under the supervision of experts, not just to the Nestlé
Pakistan’s service provider’s drivers and NH&MP, but also
catering for the drivers’ training needs of other public and
31,000 drivers including over

7,000 drivers from Nestlé service providers
Journey Towards
HELPING TO
PROTECT, RENEW
AND RESTORE
NATURAL
RESOURCES
Stewarding resources for the
future generations
2030 Global Ambition: Striving for zero

environmental impact in our operations
We rely on raw materials to make our products. To
continue doing so, we must use raw materials responsibly,
safeguarding these shared resources for the future. Our
2030 ambition is to strive for zero environmental impact
in our operations, with a special focus on reducing water
withdrawals, increasing renewable energy use, achieving
zero waste to landfill, and innovating sustainable packaging
solutions.
Alongside our 2030 operational ambition, in December

2020 we launched our Net Zero Roadmap, announcing
our intention to halve absolute emissions by 2030 and
bring them to net zero by 2050. Achieving this will
require addressing emissions throughout our value chain,
implementing regenerative agriculture and nature-based
solutions such as agroforestry and land restoration. The
roadmap will transform the way we operate, helping us to
inspire change and deliver impact.
SUSTAINABILITY
In Commitment with
Nestlé, in line with its various global commitments on In 2020, we launched our Science Based Targets initiative
issues like climate, packaging and water, among others – (SBTi)-aligned Net Zero Roadmap, a science-based plan
has embarked on a journey towards regeneration, which that expands on our climate ambitions and will help us to
can help us move beyond just minimizing our impact achieve net zero greenhouse gases emissions by 2050,
on resources and instead take a regenerative approach even as our business continues to grow. We realize that to
with the help of our partners. This evolved approach achieve net zero emissions, we need to reduce emissions
to sustainability will help us to protect, renew and as much as possible. Switching to source our ingredients
restore the environment to contribute to nutritious and from regenerative agriculture by 2030 will help us do so, as
sustainable diets, to help strengthen communities and to will investing in sustainable packaging and manufacturing
operate responsibly. activities.
The interconnected nature of the challenges and the In order to have clear roadmaps for our commitments, we
work that lies ahead has inspired us to build our Net have identified four sustainability pillars: Climate Action,
Zero Roadmap, highlight the importance of nature- Sustainable Packaging, Caring for Water and Responsible
based solutions like regenerative agriculture and renew Sourcing.
our commitment to water regeneration with the Nestlé
Waters Pledge.
Climate Sustainable Water Responsible

Action Packaging Sourcing
We will reach net zero by More than 95% of our Nestlé Waters will advance Source certain
2050 at the latest, even packaging will be designed the regeneration of the percentage of identified
as our business continues for recycling by 2025 with water cycle to help create key ingredients through
to grow. a commitment to achieve a positive water impact regenerative agriculture
100%. everywhere our Waters by 2030.
By 2025, we will reduce
Business operates by
absolute emissions by 20% We are on track to reduce
2025.
from 2018 levels. the use of newly made
plastic - or virgin plastic -
By 2030, we will reduce
by one third by 2025.
absolute emissions by by
50% from 2018 levels.
22
Climate Action
Climate change is increasingly impacting farmers Nestlé Pakistan is incentivizing farmers by facilitating the
and communities with whom we work. Degradation import of high-yield cows. A team of Agriculture Services
of forests, land soil and waterways adversely impact experts is working closely with farmers to develop efficient
farmers’ livelihoods and the availability and affordability of dairy farms to increase farmer income as well as to help
quality food. Building on our Net Zero Roadmap, we are them produce more milk. The Agriculture Services team
taking action to help address these threats by advancing provides required training and technical assistance to
regenerative food systems at scale. manage the herds of these exotic cows. Nestlé Pakistan
has also developed farm input suppliers for high-quality
A huge chunk of our Net Zero Roadmap involves carbon feed/fodder, milking machines, cow importers, farm sheds,
removals. As a company with a large dairy and agriculture etc and has connected them with farmers to fulfill farm
footprint, we aim at making a significant contribution to requirements.
decarbonization through natural climate solutions projects
in our value chain. These ‘insetting’ projects take place This is helping us to develop successful business models
within our supply chain. and attract young farmers to adopt dairy farming as a
sustainable business.
The following projects have been implemented at the
market level: Regenerative Agriculture
Nestlé Pakistan is initiating implementation of regenerative
Import of high-yield cows agriculture practices that are proven to help increase crop
Dairy farm profitability is dependent on cow yield and yields with lower agriculture inputs and lower greenhouse
feeding efficiency in addition to a number of different gas emissions. Demonstration trials on zero tillage and
factors. The average of daily milk production volume by use of natural crop residue as mulch, instead of burning
local cows is quite low. There are other breeds in the world, them, has proven to reduce the use of chemical fertilizers
whose daily milk yield is up to three times more than that of giving better yields. Nestlé Pakistan has partnered with the
our local breeds. This results in lower cost for the farmers University of Agriculture Faisalabad to evaluate the impact
as well as a lower carbon footprint. of these interventions in selected crops on farmers’ lands.
Journey Towards
Plantation of Moringa trees
Moringa tree is considered a climate-friendly plant due to
its high carbon sequestration potential. Moringa plantation
will also help us introduce unique fodder which help
farmers in several ways; as a source of nutrition, rumen
modifier and to improve conception rate in cows. This plant
has one of the highest biomass with its enhanced capacity
to sequester carbon. While studies are available on its
benefits in several markets, we are also going to conduct a
local study with the help of a partner university.
Switching to renewable energy sources

Increasing energy costs are damaging farmer revenues in
addition to contaminating the environment. Nestlé Pakistan
is subsidizing its farmers in solar installations. During 2021
and 2022, Nestlé supported installations of solar systems at
20 farms which reduced greenhouse gas emissions as well
as the burden of high energy bills on farmers.
Sustainable Packaging
Packaging plays an important role in safely delivering high- We remain committed to designing 100% of our plastic
quality food and drinks to consumers, and in reducing food packaging for recycling. By 2025, we expect that more than
loss and waste. However, we realize that these essential 95% of it will be. We are also on track to reduce the use of
requirements should not come at the expense of the planet. newly made plastic - or virgin plastic - by one third by 2025.
That’s why we are continually developing more sustainable
packaging and are committed to reducing waste from As we deploy new solutions, we will never compromise
packaging. the health of our consumers. Plastic packaging plays
an important role in safely delivering food and drinks to
As the largest food and beverage company, our actions consumers and reducing food loss and waste, so we need
matter, and we are committed to putting our size and scale to carefully consider alternatives before making changes.
to work. Nestlé’s vision for packaging is ambitious: a world The safety and quality of our foods and beverages are non-
in which none of our packaging, including plastics, ends negotiable.
up in landfill or as litter. We are working hard to deliver on it
and help achieve a waste-free future. We will transform our packaging by phasing out packaging
that is non-recyclable, shifting to paper, and initiating fit
In particular, we are doing our best to reduce our plastic for purpose projects that reduce the weight and size of
waste by reducing our use of new plastic by shifting to packaging materials.
paper or alternative materials, and helping create circular
systems that make it easier to collect, recycle and reuse
these products.
24
In Commitment with
Designed for Recycling Packaging Waste-Free Future

We are eliminating unnecessary packaging and phasing out Our vision of a waste-free future cannot be achieved
materials that are not recyclable or are hard to recycle. We alone. That is why we have partnered with external
are investing more in the development of mono-material organizations to increase the volume of packaging waste
packaging, as well as alternative materials. that can be collected and recycled. Driving new behaviors
by creating awareness amongst society – from industry
In 2022, we shifted from polystyrene cups for our yoghurts to the consumers and packaging manufacturers to the
to PET cups and also changed the material of the sleeves government – is also an important pillar in our sustainable
of our HOD bottles to make them designed for recycling packaging journey.
systems.
As of end of 2022, 89% of Nestlé Pakistan’s packaging is

designed for recycling in dedicated recycling facilities - but
we know we have more work to do.
Journey Towards
Clean Gilgit-Baltistan Project
The issue of plastic waste in the environment is one of the most pressing
challenges the world faces today. In recent years, Gilgit-Baltistan has become a
popular attraction for local and foreign tourists, with millions visiting every year.
This influx of tourists, on one hand, has created income generation for the local
communities but on the other hand has become a reason for increasing plastic
waste in the province.
The waste segregation and management system in the province is managed

by Gilgit-Baltistan Waste Management Company (GBWMC). Among other
factors of increase in PET waste, the tourists also bring a lot of plastic packaged
food products from all over the country and eventually leave this waste after
consumption.
Nestlé stepped up and launched ‘Clean Gilgit-Baltistan Project’ (CGBP) to

facilitate waste segregation and its management in the Gilgit-Baltistan region.
It’s our vision to ensure that none of our packaging, including plastics, ends up
in landfill or as litter.
The project has focus on infrastructure development for a formal waste

management system to be managed by GBWMC. We have donated three
compressing and baling machines, one each in Gilgit, Hunza and Skardu,
resulting in waste management of around 700 tons of plastic and paper
packaging waste in 2022. The PET and plastic packaging after compressing
and baling process, is brought downstream for recycling through a third-party
established recycler.
This project will eventually lead in management and recycling of up to 1000

tons plastic and paper packaging by 2025 to make the region waste-free and
promote sustainable tourism in the region. Under this project, we have also
installed benches and waste bins developed from recycled material at popular
tourist locations in Gilgit and Hunza.
CGBP which is the first of its kind at such a high-altitude residential location,
will make a positive environmental impact at both local and national level. This
intervention marks a significant milestone in Nestlé Pakistan’s journey towards a
waste-free future, in line with UN SDGs.
Donation of 15,000 bags Collected 700 tons of

packaging waste in 2022
26
Waste segregation and management in Gilgit-Baltistan
In Commitment with
Travel Responsibly for Experiencing Eco-
Tourism in Khyber Pakhtunkhwa
‘Travel Responsibly for Experiencing Eco-Tourism in The partnership reflects the role of tourism in job creation
Khyber Pakhtunkhwa’ (TREK) is an initiative under the and Khyber Pakhtunkhwa’s efforts for facilitating tourists by
Khyber Pakhtunkhwa Integrated Tourism Development improving accessibility through roads, rescue services, and
(KITE) project being implemented in partnership with the planning of tourism zones.
World Bank Group (WBG), Nestlé Pakistan and the Khyber
Pakhtunkhwa Tourism Department. As part of Nestlé’s vision for a waste-free future, our
partnership with WBG and the Government of Khyber
Apart from heritage preservation, tourism infrastructure Pakhtunkhwa is a step in that direction. Nestlé will
development, TREK activities include awareness campaigns be driving new behavior and enhancing the public’s
for tourists and training of local communities and hospitality understanding through community engagement, cleanup
businesses on waste management while adhering to activities, conducting trainings, and connecting waste
the fundamentals of responsible tourism. Till date, nearly recycling companies to the local administration.
400 participants have attended training workshops for
hospitality professionals while our public service awareness
campaigns have reached out to millions of people.
In Commitment with
28
CoRe Alliance
In line with our commitments on Sustainable
Packaging, Nestlé Pakistan played an
instrumental role in establishing an alliance
called CoRe (Collect & Recycle). We joined
hands with other like-minded organizations
that share our vision of a waste-free future.
CoRe comprises Pakistan’s leading industry

players, packaging companies, recyclers,
and non-governmental organizations. It is an
alliance created with the mission to eliminate
packaging waste by enabling formal collection
and recycling. It envisions the creation of a
circular economy by reducing the packaging
footprint and encouraging sustainable and
innovative practices.
This vision will be driven by the reduction

in plastics, innovation of new materials,
exploration of new and more sustainable
business models, policy advocacy, knowledge
exchange and behavioral change.
CoRe, together with Nestlé Pakistan, led

the successful advocacy with the Pakistan
Standards and Quality Control Authority
(PSQCA) for the approval of the Pakistan
Standard on food contact material including
plastic and food grade recycled plastic
including rPET in 2022.
In the years since its formation, Nestlé Pakistan

and other members have executed several
projects that promote a circular economy and
responsible behavior.
In Commitment with
Journey Towards
Caring for Water - Pakistan
For a food and beverage company, water is essential for all
areas of business. It is used by farmers to grow crops that
we use to make the foods we produce. We also use water
for our factory operations.
Being a responsible company, we are cognizant of the part

businesses can play in water use efficiency. Preserving
water resources is now part of our legacy. For decades,
water has been a major focus of our sustainability efforts,
across our entire value chain. processes. Nestlé Pakistan’s Sheikhupura Factory became
the first site in Pakistan and the first Nestlé site worldwide
Building on this heritage, we launched the Nestlé to be awarded the AWS Certification in 2017. Following
Waters Pledge in 2021 - our new Waters Business suit, our factories in Islamabad, Kabirwala, and Karachi
specific commitment. Under this, we have committed to were certified in 2018, 2019, and 2020 respectively.
regenerating the water used by our Waters Business and
have a net positive impact by 2025.
In-House Efficiencies
The Nestlé Waters Pledge is a reinforcement of our existing Our unwavering efforts to improve efficiencies by recycling
water stewardship efforts under our flagship Caring for and reusing water has allowed us to save more than
Water - Pakistan (C4W-Pakistan) initiative, launched in 92,000 m3 of water in 2022 across our manufacturing
2017. Through C4W-Pakistan, we encourage collective units. In addition, the wastewater resulting from our
action and bring different partners together to discuss and industrial processes is treated, and only treated water that
find solutions for the existing water challenges faced by meets the standards set by the environment authorities, is
the country. We have undertaken several activities under discharged.
the three over-arching pillars for C4W-Pakistan, which are
Factories, Communities, and Agriculture. WASH Pledge
We have committed to undertaking the WASH (Water,
Factories Sanitation and Hygiene) Pledge, as part of which
companies commit to implementing access to safe water,
AWS Certification sanitation, and hygiene at the workplace at appropriate
The Alliance for Water Stewardship (AWS) Standard is levels for employees in all premises under their control. All
an international standard for freshwater resources that of our four factories and other sites meet the WASH Pledge
guides organizations to manage water by taking site and requirements, covering more than 3,000 employees.
catchment relevant initiatives through stakeholder inclusive
30
In Commitment with
Communities Council (PARC). This site showcases best farm practices.

We have also established another demonstration site in
Clean and Safe Drinking Water Facilities a similar partnership with the University of Veterinary and
We have established 6 Clean and Safe Drinking Water Animal Sciences (UVAS) Lahore.
Facilities providing access to clean and safe water to more
than 60,000 people every day. Nestlé has also taken the In 2022, drip irrigation was operational across 139 acres in
responsibility of maintaining these plants through our third Punjab. We also expanded drip irrigation to Sindh, covering
party service provider with strict quality controls, checks 75 acres, the water savings for which will come in 2023.
and balances in place.
Smart Soil Moisture Sensors
Water Education Our team, in collaboration with Centre for Water Informatics
Through our Water Education Program, we have reached & Technology (WIT), LUMS has developed low-cost smart
out to 35,000 children and 250 teachers in schools in soil moisture sensors. These sensors read the moisture
2022. level of the soil and send regular data updates to a cloud
from where the farmer receives information about which
areas they should irrigate and how much. Moreover,
Agriculture a software has been developed, allowing farmers and
Drip Irrigation researchers to see the soil moisture level remotely on their
computer screens.
Nestlé Pakistan has worked with the Agriculture
Department, Government of Punjab to encourage local
In 2022, smart soil sensors were operational on 548 acres.
farmers to take up drip irrigation. Under the initiative,
According to our estimates, we achieved water savings of
we covered 40% of the farmer’s cost of putting up the
482,556 m3 during 2022 as a result of drip irrigation and
equipment for drip irrigation while the Punjab government
smart soil moisture sensors installation. Our water savings
covered the remaining 60% expense through a World Bank
are in the process of being validated through a third-party
program. In addition, we are showcasing drip irrigation in
study.
collaboration with the Pakistan Agriculture and Research
Journey Towards
Nestlé Cares
Respect for the rights of the people we employ, do business
with or otherwise interact with is the fundamental way that
Nestlé operates. This respect is at the core of Nestlé’s Corporate
Business Principles and is aligned with the UN Guiding Principles
Reporting Framework. Nestlé Cares provides our employees the
opportunity to engage and assist underprivileged communities
through their direct and indirect participation. The activities
primarily support and address the needs of local communities
based on Nestlé Creating Shared Value pillars. Employee
participation, while encouraged, is voluntary and remains an
employee decision. During 2022, the company planted more than
25,000 trees around our operational sites with the help of our
partners. We also organized a beach cleaning activity in Karachi
with a large number of employees participating in the activity.
Humanitarian Assistance During

Natural Disasters
Nestlé Pakistan, under Nestlé Cares, has been active in
supporting and providing humanitarian assistance to vulnerable
communities affected by natural calamities where needed.
Pakistan recently faced one of the most devastating floods in the
nation’s history. During the flood, Nestlé Pakistan immediately
reached out to the National Disaster Management Authority
(NDMA) and local NGOs to provide emergency relief.
Nestlé Pakistan donated 325,000 liters of clean drinking water

and 10,000 liters of packaged milk for those affected by the
floods. A company wide employee donation drive was launched,
for donations to Akhuwat Foundation for flood rehabilitation
efforts across Pakistan. These donations, which are matched in
monetary value by the company and were used to give interest-
free loans to the flood victims.
The Nestlé Group also channeled a donation for emergency

relief, half of which was used to donate over 700,000 servings
of NESTLÉ BUNYAD, a specialized nutrition formula designed
to meet children’s daily iron requirement in flood affected areas
in Sindh, through the Provincial Disaster Management Authority
(PDMA). The other half was donated to ‘Prime Minister’s Flood
Relief Fund 2022’ as cash support for the ongoing rehabilitation
process led by the government.
Laddering up support to the local communities, Nestlé also

engaged with its global partner, World Central Kitchen (WCK) to
provide over 1,000 hot meals, as well as clean water everyday to
impacted families in the northern Swat district.
32
Employee donation ceremony held at Nestlé Pakistan Head Office
In Commitment with
ENVIRONMENT
SUSTAINABILITY
IN 2022
We believe Nestlé is well placed to help
address the climate change challenge. We
aim to ensure the continuity of our own
business and those in our supply chain
while protecting the wider environment.
Nestlé Pakistan is taking steps and
introducing various initiatives in its
manufacturing units and beyond, to exhibit
Respect for the Future.
Carbon Foot Print Initiatives to

Address Climate Change
One of the key priorities of Nestlé Pakistan is to reduce executed several projects and we saved above 50,000
the number of greenhouse gas emissions. By 2025, our tCO2e greenhouse gas emissions in absolute numbers.
ambition is to reduce 20% of greenhouse emissions
as compared to 2018. Water conservation, energy
Water Operational Efficiency
optimization, controlling greenhouse gas emissions,
reduction in waste at source, reduction in packaging
Nestlé also saved more than 92,000 m3 of water across
material and proper disposal of waste are the key
our manufacturing units. This water saving is based on
environmental indicators for any manufacturing facility.
initiatives taken under Alliance for Water Stewardship
Nestlé takes care of these indicators in its operations and is
Standard.
committed to improving its performance on a yearly basis.
In 2022, we invested our time and efforts in identifying Total Tree Plantation in 2022
opportunities for energy optimization across operations
(including Manufacturing Units, Packaging and Agri Nestlé Pakistan planted a total of 25,000 trees in 2022
Services). Despite various challenges, we successfully around our sites and an additional 25,000 Moringa trees by
Agriculture Services.
34
In Commitment with
Greenhouse Gas Savings in Nestlé Pakistan Water Savings in Manufacturing Units

(tCO2e-ESG source) (m3)
80,000 100,000 92,540

69,000
70,000
80,000
60,000 57,089 68,171
50,000 60,000 54,000
40,000
30,000 40,000
23,669
20,000
20,000
10,000
0 0
2021 2022 Ambition 2023 2021 2022 Ambition 2023
Journey Towards
OUR PARTNERS
Contributing to Nutritious
and Sustainable Diets
Strengthening
Communities
Helping to Protect, Renew and

Restore Natural Resources
36

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About the Cover

At Nestlé, we understand that learning is a two-way street. That’s why

Be a force for good MANAGEMENT REPORT 2022 01

Nestlé is a Good food, Good life Company, and our Purpose – to

Be a force for good MANAGEMENT REPORT 2022 05

Sheikhupura Factory 1,255 Rs. in Million 2022 2021

Kabirwala Factory 755 Rs. in Million Provident Fund 3,981 3,941

Framework Remuneration Policy for Non-

f) There are no significant doubts upon the Company’s

Be a force for good MANAGEMENT REPORT 2022 07

• We have trained nearly 400 hospitality professionals till

Board of Directors’ Meetings Role and Responsibilities of the

The Managing Director is the Chief Executive Officer of the

Mr. Syed Yawar Ali 19.07.2022 4

Mr. Fabrice Cavallin 4

Mr. Amr Rehan 19.07.2022 3

Mr. Syed Saiful Islam 19.07.2022 3

It gives me immense pleasure to present this report to the Shareholders of Nestlé

Syed Yawar Ali

Be a force for good MANAGEMENT REPORT 2022 13

140,000 133,295 300

MARKET CAPITALIZATION RETURN ON EQUITY

600,000 14,000 350%

MARKET PRICE PER SHARE VS. DIVIDEND PAYOUT RATIO

20,000 12,000 13.5%

PROFIT BEFORE TAX PROFIT AFTER TAX

Be a force for good MANAGEMENT REPORT 2022 15

Wealth Generated / Value Added:

To Society and Development Initiatives:

Depreciation and amortization 3,841,930 5.5% 3,858,736 6.9%

69,478,373 100.0% 56,230,368 100.0%

(Rupees in million) 2022 2021 2020 2019 2018 2017

Investor information for six years

Be a force for good MANAGEMENT REPORT 2022 17

No. of Shareholdings Total Shares

Categories of Shareholders Shareholders Shares Held Percentage

Modarabas and Mutual Funds 6 105,123 0.23

Shareholders holding 5% or above Shares Held Percentage

Société Des Produits Nestlé S.A. 1 27,936,173 61.60

Be a force for good MANAGEMENT REPORT 2022 19

Name of Shareholder Number of shares Percentage

Shareholders holding 5% and above

i. Ms. Komal Altaf

Mr. Syed Hyder Ali Member / Non-Executive Director

Mr. Syed Hyder Ali Member

Be a force for good MANAGEMENT REPORT 2022 21

i. Audit Committee: 04 18. We confirm that all requirements of regulations 3, 6, 7, 8,

Samer Chedid Syed Yawar Ali

Review Report on the Statement of Compliance Contained in the Listed Companies

Be a force for good MANAGEMENT REPORT 2022 23

Komal Altaf Amr Rehan Fabrice Cavallin Omar Saeed

David Alexander Rabia Sultan

Officers Audit Committee Human Resource and

Registered and Bankers HYDERABAD

Corporate Office • Standard Chartered Bank (Pakistan)

Email: [email protected] South Zone

Be a force for good MANAGEMENT REPORT 2022 25

ORDINARY BUSINESS: NOTES

ii) A member entitled to attend and vote at the Annual

Dated: March 22, 2023

SHAREHOLDERS: For shareholders holding their shares jointly as per the

To enable the Company to make tax deduction on the

Be a force for good MANAGEMENT REPORT 2022 27

In accordance with Section 132(2) of the Companies Act,

Be a force for good MANAGEMENT REPORT 2022 29

Nestlé Pakistan continues to make its operations more sustainable.

Standing – From Left to Right

Head of Communications &

Ali Akbar Head of Supply Chain

Business Executive Officer -

Komal Altaf Chief Financial Officer

Business Executive Officer -

Head of Strategy & Business

*Effective 1st March 2023

Be a force for good MANAGEMENT REPORT 2022 33

Be a force for good MANAGEMENT REPORT 2022 35