Annual Report

2024

NAGINA COTTON MILLS LIMITED

NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

CONTENTS

Company Information 2

Notice of Annual General Meeting 3

Vision and Mission Statement 10

Chairman Review Report 11

Directors’ Report to the Members 14

Statement of Compliance with Listed Companies 25

(Code of Corporate Governance) Regulations, 2019

Shareholders’ Information 27

Pattern of Shareholding 30

Key Financial Information 32

Independent Auditors’ Review Report to the Members on the Statement of 33

Compliance Contained in Listed Companies (Code of Corporate Governance)
Regulations, 2019

Independent Auditors’ Report to the Members 34

Statement of Financial Position 38

Statement of Profit or Loss and Other Comprehensive Income 40

Statement of Cash Flows 41

Statement of Changes in Equity 42

Notes to the Financial Statements 43

Form of Proxy 83

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ANNUAL REPORT 2024
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COMPANY INFORMATION NAGINA GROUP

BOARD OF DIRECTORS Mr. Shahzada Ellahi Shaikh Non-Executive Director / Chairman

Mr. Naweed Akhter Sharif Independent Non-Executive Director
Mr. Shafiq ur Rehman Independent Non-Executive Director
Ms. Tosheeba Sarwar Independent Non-Executive Director
Mr. Hasan Ahmad Non-Executive Director
Mr. Shafqat Ellahi Shaikh Non-Executive Director
Mr. Raza Ellahi Shaikh Non-Executive Director
Mr. Haroon Shahzada Ellahi Shaikh Non-Executive Director
Mr. Shaukat Ellahi Shaikh Executive Director
Mr. Amin Ellahi Shaikh Executive Director
CHIEF EXECUTIVE OFFICER Mr. Amin Ellahi Shaikh
AUDIT COMMITTEE Mr. Shafiq ur Rehman Chairman
Mr. Raza Ellaahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member
Mr. Syed Mohsin Gilani Secretary

HUMAN RESOURCE & REMUNERATION Mr. Shafiq ur Rehman Chairman

(HR & R) COMMITTEE Mr. Amin Ellahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member
Mr. Muhammad Azam Secretary
EXECUTIVE COMMITTEE Mr. Amin Ellahi Shaikh Chairman
Mr. Shaukat Ellahi Shaikh Member
Mr. Raza Ellahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member
Mr. Muhammad Azam Secretary
CORPORATE SECRETARY Mr. Syed Mohsin Gilani
CHIEF FINANCIAL OFFICER (CFO) Mr. Tariq Zafar Bajwa
HEAD OF INTERNAL AUDIT Mr. Farjad Ashfaq
AUDITORS Messrs Yousuf Adil
Chartered Accountants
LEGAL ADVISOR Makhdoom & Makhdoom Advocates
LEAD BANKERS Allied Bank Ltd.
Askari Bank Ltd.
Bank Alfalah Ltd.
Faysal Bank Ltd.
Habib Bank Ltd.
Habib Metropolitan Bank Ltd.
JS Bank LTD.
Meezan Bank Ltd.
Industrial Development Bank of Pakistan
MCB Bank Ltd.
National Bank of Pakistan
Pakistan Kuwait Investment Bank Limited
Samba Bank Ltd.
Standard Chartered Bank (Pakistan) Ltd.
The Bank of Punjab
United Bank Ltd.
REGISTERED OFFICE 2nd Floor, Shaikh Sultan Trust Bldg. No.2
26, Civil Lines, Beaumont Road,
Karachi - 75530
REGIONAL OFFICE Nagina House, 91-B-1, M.M. Alam Road,
Gulberg-III, Lahore-54660.
WEB REFERENCE www.nagina.com
SHARE REGISTRAR M/s Hameed Majeed Associates (Pvt.) Ltd.
5th Floor, Karachi Chambers,
Hasrat Mohani Road, Karachi.
Phone # 021-32412754, 32424826
Fax # 021-32424835
MILLS Aminabad, A-16, S.I.T.E., National Highway, Kotri

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NAGINA COTTON MILLS LTD.
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NOTICE OF ANNUAL GENERAL MEETING
NAGINA GROUP
Notice is hereby given that the 57th Annual General Meeting (AGM) of members of NAGINA COTTON
MILLS LTD. will be held at the Registered Office of the Company situated at 2nd Floor, Shaikh Sultan
Trust Bldg. No. 2, 26-Civil Lines, Beaumont Road, Karachi-75530 on Monday, October 28, 2024 at
12:00 noon and virtually through video conference facility to transact the following business:-
ORDINARY BUSINESS
1) To confirm minutes of the Annual General Meeting held on October 27, 2023.
2) To receive, consider and adopt the Audited Financial statement of the Company together with the
Chairman's Review Report, Directors' and Auditors' reports thereon for the year ended June 30,
2024.
In accordance with Section 223 of the Companies Act, 2017 (the Act) and pursuant to the
S.R.O.389(I)/2023 dated March 21, 2023, issued by the Securities and Exchange Commission of
Pakistan (the SECP), the financial statements of the Company can be accessed through the
following weblink and QR enabled code:

3) To approve and declare final cash dividend at Rs. 1/50 per share i.e. 15% for the year ended June
30, 2024, as recommended by the Board of Directors.
4) To appoint Auditors of the Company and fix their remuneration for the year ending on June 30, 2025.
SPECIAL BUSINESS
5) To ratify and approve transactions conducted with Related Parties for the year ended June 30, 2024
and authorize the Board of Directors of the Company to approve transactions with related parties by
passing the following special resolutions with or without modifications:
a) RESOLVED that the transactions conducted with Related Parties as disclosed in Note 39 of the
financial statements for the year ended June 30, 2024 be and are hereby ratified, approved and
confirmed.
b) FURTHER RESOLVED that the Board of Directors of the Company be and is hereby authorized to
approve all related party transactions to be carried out during the financial year 2025. These
transactions shall be deemed to have been approved by the shareholders and shall be placed
before the shareholders in the next AGM for their formal ratification/approval.
6) To transact any other ordinary business with the permission of the Chair.
Statements under Section 134 (3) of the Companies Act, 2017 pertaining to the special business and
under the Companies (Investment in Associated Companies or Associated Undertakings) Regulations,
2017 are annexed.
By Order of the Board

Syed Mohsin Gilani

September 30, 2024 Corporate Secretary

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NOTES
1. The Share Transfer Books of the Company will remain closed from October 22, 2024 to October 28,
2024 (both days inclusive). Transfers received in order by our Shares Registrar, M/s Hameed
Majeed Associates (Pvt.) Limited, 5th Floor, Karachi Chambers, Hasrat Mohani Road, Karachi by
the close of business on October 21, 2024 will be considered in time to entitle the transferees for
payment of dividend and to attend the AGM.
2. A member of the Company entitled to attend and vote at the General Meeting may appoint another
member as his/her proxy to attend and vote in place of him/her at the meeting. Proxies in order to be
effective must be received at the Registered Office of the Company duly stamped and signed not
less than 48 hours before the time of meeting. A proxy must be a member of the Company. Proxy
Forms in Urdu and English languages are attached to the notice circulated to the shareholders.
3. Members who have deposited their shares into Central Depository Company of Pakistan Limited
(CDC) will further have to follow the under mentioned guidelines as laid down by the Securities and
Exchange Commission of Pakistan in Circular No 1 of 2000.
A. For Attending the Meeting
a) In case of Individuals, the account holder and/or sub-account holder whose registration details
are uploaded as per the CDC Regulations, shall authenticate his/her identity by showing his/her
original CNIC or, original Passport at the time of attending the Meeting.
b) In case of corporate entity, the Board's resolution power of attorney with specimen signature of
the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting.
B. For Appointing Proxies
a) In case of individuals, the account holder and/or sub-account holder whose registration details
are uploaded as per the CDC Regulations, shall submit the proxy form as per above
requirements.
b) The proxy form shall be witnessed by two persons, whose names, addresses and CNIC
numbers shall be mentioned on the form.
c) Attested copies of the CNIC or the passport of beneficial owners and the proxy shall be furnished
with the proxy form.
d) The proxy shall produce his original CNIC or original passport at the time of the Meeting.
e) In case of corporate entity, the Board's resolution power of attorney with specimen signature
shall be furnished (unless it has been provided earlier) along with proxy form to the Company.
4. The members can also participate in the General Meeting through video link facility.
To attend the Annual General meeting through video link, members and their proxies are
requested to register their following particulars by sending an e-mail at [email protected].
Folio/CDC No. of Name CNIC No. Cell No. Email
Account Shares address
No. held

The video link and login credentials will be shared with the shareholders whose e-mails, containing
all the requested particulars, are received at the given e-mail address by or before the close of
business hours (5:00 p.m.) on October 27, 2024.
5. Voting Through Postal Ballot / E-voting
Pursuant to Companies (Postal Ballot) Regulations 2018 and read with Sections 143 and 144 of the
Companies Act, 2017, members will be allowed to exercise their right to vote through voting by post
or electronic voting facility for the special business agenda items # 5 in its forthcoming Annual
General Meeting to be held on Monday, October 28, 2024, at 12:00 noon in accordance with the
requirements and subject to the conditions contained in the aforesaid Regulations.

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a) E-Voting will start from October 24, 2024 and shall close on October 27, 2024 at 5:00 pm. Details
of e-voting facility will be shared through e-mail with those members of the Company who have
their valid CNIC numbers, Cell Numbers, and e-mail addresses available in the Register of
Member by the close of business on October 21, 2024.
b) Members of the Company who want to opt for voting through postal ballot are requested to
ensure that duly filled and signed ballot paper along with clear copy of valid CNIC should reach at
the address, The Chairman, NCML, 2nd Floor, Shaikh Sultan Trust Bldg. No. 2, 26-Civil Lines,
Beaumont Road, Karachi or email at [email protected] one day before the Annual General
Meeting, i.e., on October 27, 2024 before 5:00 p.m. during working hours. The signature on the
ballot paper shall match with their signature on CNIC. The Ballot paper has also been placed on
the Company's website https:// www.nagina.com to download. A postal ballot received after this
time/date shall not be considered for voting.
6. In accordance with the provisions of Section 242 of the Companies Act, 2017 and Companies
(Distribution of Dividends) Regulation 2017, it is mandatory for a listed company to pay cash
dividend to its shareholders only through electronic mode directly into their bank account designated
by the entitled shareholders instead of issuing physical dividend warrants. Therefore, shareholders
are requested to provide the particulars relating to name, folio number, bank account number, IBAN
Number, title of account and complete mailing address of the bank directly to the Company's Share
Registrar in case of physical shareholders and directly to the relevant Participant / CDC Investor
Account Service in case of maintaining shareholding under Central Depository System (CDS).
In case of non-receipt of above information, the dividend shall be withheld.
7. The rates of deduction of income tax from dividend payments under Section 150 of the Income Tax
Ordinance, 2001 shall be as follows:

i) Rate of Withholding Income Tax deduction for the persons

whose names are appearing on ATL. 15%
ii) Rate of Withholding Income Tax deduction for the persons
whose names are not appearing on ATL. 30%
To enable the company to make tax deduction on the amount of cash dividend @ 15% instead of
30%, shareholders whose names are not appearing on Active Taxpayers' List (ATL) available on the
website of FBR are advised to immediately make sure that their names are entered in ATL,
otherwise tax on their cash dividend will be deducted @ 30% instead of 15%.

Further, according to clarification received from Federal Board of Revenue (FBR), withholding tax
will be determined separately on “Filer/ Non-Filer” status of principal shareholder as well as joint-
holders (s) based on their shareholding proportions, in case of joint accounts. In this regard all
shareholders who hold shares jointly are requested to provide shareholding proportions of principal
shareholder and joint-holder(s) in respect of shares held by them to our Share Registrar, in writing,
within 10 days of this notice, otherwise it will be assumed that the shares are equally held by principal
shareholder and joint-holder(s).

8. The financial statements for the year ended June 30, 2024 shall be uploaded on the Company's
website www.nagina.com twenty-one days prior to the date of holding of annual general meeting.

9. Members can exercise their right to demand a poll subject to meeting requirements of Section 143 -
145 of Companies Act, 2017 and applicable clauses of Companies (Postal Ballot) Regulations 2018.

10. If the Company receives consent from the members holding at least 10% shareholding residing in a
city, to participate in the meeting through video-link at least 07 days prior to date of the meeting, the
Company will arrange facility of video-link in that city subject to availability of such facility in that city.

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11. As per Section 72 of the Companies Act, 2017, every existing listed company shall be required to
replace its physical shares with book-entry form in a manner as may be specified and from the date
notified by the Commission, within a period not exceeding four years from the commencement of this
Act, i.e. May 30, 2017.
The shareholders having physical shareholding are encouraged to open CDC sub-account with any
of the brokers or Investor Account directly with CDC to place their physical shares into scrip less
form, this will facilitate them in many ways, including safe custody and sale of shares, any time they
want, as the trading of physical shares is not permitted as per existing regulations of the Pakistan
Stock Exchange Ltd.
12. Members are requested to promptly notify the Company of any change in their registered address.
13. For any query/ information, the investors may contact the Shares Registrar and / or the Company:
Mr. Syed Mohsin Gilani, Phone No. 042-35756270 Ext. 337, email address:
[email protected]

STATEMENT UNDER SECTION 134(3) OF THE COMPANIES ACT, 2017

This statement sets out the material facts concerning the Special Business to be transacted at the
Annual General Meeting of the Company to be held on October 28, 2024.

1. Agenda item No. 5 (a) - Ratification and Approval of Related Party Transactions

All the transactions carried out by the Company with related parties during the financial year ended June
30, 2024 given in the related party note 39 of the Annual Financial Statements of the Company for the
year ended June 30, 2024.

The Company carried out transactions with Related Parties on arm's length basis as per the approved
Related Party Transactions Policy in the normal course of business and periodically reviewed by the
Board Audit Committee pursuant to Clause 15 of Listed Companies (Code of Corporate Governance)
Regulations, 2019.

The transactions with related parties have been approved by the Board in the quarterly / annual financial
statements during the fiscal year 2023-24, however, the Board decided to place above related party
transaction concluded during the fiscal year 2023-24 before the shareholders in AGM for ratification and
approval due to the interests/concerns of some of the directors due to common directorship.

2. Agenda item No. 5 (b) - Authorization for the Board of Directors to approve related party
transactions during the financial year ending June 30, 2025

The Company shall be conducting transactions with the related parities during the year ending June 30,
2025 in the ordinary course of business and at arm's length basis under the policy of the Company for
related party transactions. All transactions entered into or to be entered into with related parties require
the approval of the Audit Committee of the Board. Upon recommendation of the Audit Committee, such
transactions shall be placed before the Board of Directors for approval. In order to promote transparent
business practices, the shareholders are recommended to authorize the Board of Directors of the
Company to approve transactions with the related parties for the year ending June 30, 2025, which
transactions shall be deemed to be approved by the shareholders. These transactions shall be placed
before the shareholders in the next AGM for their formal ratification/approval. The Directors are
interested in the resolutions only to the extent of their common directorship in such related parties.

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STATEMENT UNDER RULE 4(2) OF THE COMPANIES (INVESTMENT IN ASSOCIATED

COMPANIES OR ASSOCIATED UNDERTAKINGS) REGULATIONS, 2017

a) Total investment Rs.100,000,000/= (Rupees one hundred million only) to each

approved; of the following associated company:

i) Prosperity Weaving Mills Ltd. (PWML)

ii) Ellcot Spinning Mills Ltd. (ESML)

b) Amount of Nil
investment made
to date;

c) Reasons for Due to better cash flows, the associated companies did not
deviations from need funds envisaged u/s 199 of the Companies Act, 2017.
the approved Therefore, no investment transaction took place during the
timeline of year 2023-24.
investment,
where
investment
decision was to
be implemented
in specified time;
and

d) Material change in Present Financial Financial Position at the

Position as on time of Approval as on
financial June 30, 2024 June 30, 2020
statements of PWML ESML PWML ESML
associated Rupees in Millions
company or
Net sales 18,746.628 15,510.705 6,018.541 6,152.929
associated
Gross profit 1,182.106 1,047.131 529.557 757.673
undertaking since
Profit before tax 227.390 319.625 247.968 361.369
date of the
Profit after tax 86.655 152.980 154.755 225.879
resolution passed
for approval of
investment.

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BALLOT PAPER FOR VOTING THROUGH POST

In person and virtual Annual General Meeting to be held on Monday, October 28, 2024 at 12:00 noon,
2nd Floor, Shaikh Sultan Trust Bldg. No. 2, 26-Civil Lines, Beaumont Road, Karachi-75530, Phone :021-
35688123, Website: www.nagina.com

Designated email address of the Chairman at which the duly filled in ballot paper may be sent:
[email protected]

Name of shareholder/joint shareholders

Registered Address

Number of Shares held (on close of October

21, 2024) and folio number
CNIC No/Passport No (in case of foreigner)
(Copy to be attached)
Additional information and enclosures (in case
of representative of body corporate,
Corporation and Federal Government)

I / we hereby exercise my/our vote in respect of the following resolution through postal ballot by
conveying my/our assent or dissent to the following resolution by picking tick (v) mark in the appropriate
box below:

1. Resolution for Agenda No.05

RESOLVED that the transactions conducted with Related Parties as disclosed in Note 39 of the financial
statements for the year ended June 30, 2024 be and are hereby ratified, approved and confirmed'

FURTHER RESOLVED that the Board of Directors of the Company be and is hereby authorized to
approve all related party transactions to be carried out during the financial year 2025. These
transactions shall be deemed to have been approved by the shareholders and shall be placed before the
shareholders in the next AGM for their formal ratification/approval.

Resolution I/We assent to the resolution I/We dissent to the resolution

(FOR) (AGAINST)
Resolution for Agenda No. 05

Signature of shareholder(s):________________Place:_______________ Date:_________________

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NOTES/PROCEDURE FOR SUBMISSION OF BALLOT PAPER:

1. Duly filled and signed original postal ballot should be sent to the Chairman, Nagina Cotton Mills Ltd.,
at 2nd Floor Sheikh Sultan Trust Bldg. No. 2, 26-Civil Lines, Beaumont Road, Karachi or a scanned
copy of the original postal ballot to be emailed at: [email protected].

2. Copy of CNIC / Passport (in case of foreigner) should be enclosed with the postal ballot form.

3. Postal Ballot forms should reach chairman of the meeting on or before October 27, 2024 during
working hours. Any Postal Ballot received after this date, will not be considered for voting.

4. Signature on Postal Ballot should match the signature on CNIC / Passport (in case of foreigner).

5. Incomplete, unsigned, in correct, defaced, tom, mutilated, over written ballet papers will be rejected.

6. In case of representative of body corporate and corporation, Postal Ballot must be accompanied
with copy of CNIC of authorized person, along with a duly attested copy of Board resolution, Power
of Attorney, or Authorization Letter in accordance with Section(s) 138 or 139 of the Companies Act
2017, as applicable, unless these have already been submitted along with Proxy Form. In case of
foreign body corporate etc. all documents must be attested from the Pakistani Embassy having
jurisdiction over the member.

7. Ballot paper has also been placed on the website of the Company www.nagina.com. Members may
download the ballot paper form the website or use original/photocopy published in newspapers.

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Vision:
To strive for excellence through commitment, integrity, honesty and team work.

Mission:
The mission of Company is to operate state of the art spinning machinery capable of
producing high quality carded and combed, cotton, core spun and blended yarn for knitting
and weaving.

The Company will conduct its operations prudently assuring customer satisfaction and will
provide profits and growth to its shareholders through;

?
Providing quality products and services to our customers mainly engaged in the
manufacturing of textile products.

?
Manufacturing of cotton, core spun and blended yarn as per the customers'
requirements and market demand.

?
Exploring the global market with special emphasis on Europe and USA.

?
Keeping pace with the rapidly changing technology by continuously balancing,
modernization and replacement (BMR) of plant and machinery.

?
Enhancing the profitability by improved efficiency and cost controls.

?
Recruiting, developing, motivating and retaining the personnel having exceptional
ability and dedication by providing them good working conditions, performance
based compensation, attractive benefit program and opportunity for growth.

?
Protecting the environment and contributing towards the economic strength of the
country and function as a good corporate citizen.

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REVIEW REPORT BY THE CHAIRMAN ON THE OVERALL PERFORMANCE

OF BOARD AND EFFECTIVENESS OF THE ROLE PLAYED BY THE BOARD
IN ACHIEVING THE COMPANY'S OBJECTIVES

The Board of Directors (the Board) of Nagina Cotton Mills Limited (NCML) has performed their
duties diligently in upholding the best interest of shareholders of the Company and has managed
the affairs of the Company effectively and efficiently. The Board has exercised its powers and has
performed its duties in compliance with Companies Act 2017 and Listed Companies (Code of
Corporate Governance) Regulations, 2019 (the Code). During the financial year 2023-24 the Board
achieved its objectives by performing the following functions:

• Actively participated in the strategic planning process, enterprise risk management system,
policy development, and financial structure, monitoring and approval;

• All the significant issues throughout the year were presented before the Board or its committees
to strengthen and formalize the corporate decision making process and particularly all the
related party transactions executed by the Company were approved by the Board on the
recommendation of the Audit Committee. In case the majority of the Directors either directly, or
indirectly becomes interested in related party transactions due to Group's structure;
accordingly, additional approval from shareholders in respect of transactions with a related
party shall be obtained in the Annual General Meeting so that the Company can carry its
business smoothly;

• Reviewed the effectiveness of internal control system through self-assessment mechanism

and / or internal audit activities;

• Approved the director's report, quarterly and annual financial statements and ensured that the
content of the directors' report are in accordance with the requirement of applicable laws and
regulations;

• Ensured the hiring, evaluation and compensation of quality professionals with focus on creating
a work environment with equal opportunity for all.

• Ensured the timely dissemination of information among its members and that the Board
members are kept abreast of developments between meetings;

• Exercised its powers in light of the power assigned to the Board as per the relevant laws and
regulations applicable on the Company and the Board has always prioritized the Compliance
with all the applicable laws and regulations in terms of their conduct as directors and exercising
their powers and decision making; and

• Necessary Board agenda and related supporting documents were duly made available to the
board in sufficient time before the Board and its Committee Meetings. The non-executive and
independent directors are equally involved in important decisions of the board.

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The annual evaluation of the Board's performance is assessed based on the key areas where the
Board requires clarity to provide high level oversight, including the strategic process; key business
drivers and performing milestones, the global economic environment and competitive context in
which the Company operates; the risks faced by the Company's business; Board dynamics;
capability and information flows. Based on the aforementioned, it can reasonably be stated that the
Board of NCML has played a key role in ensuring that the Company objectives are not only achieved
but also exceeded expectations through a joint effort with the management team and guidance and
oversight by the Board and its members.

Shahzada Ellahi Shaikh

September 30, 2024 Chairman

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2023-24

2024 30

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DIRECTORS' REPORT TO THE MEMBERS

The Directors have the honor to present 57th Annual Report of your Company together with Audited
Financial Statements and Auditors' Report thereon for the year ended June 30, 2024. Figures for
the previous year ended June 30, 2023 are included for comparison.
Company Performance
The business environment during the year posed several challenges such as exponential increase
in power tariffs, high financial costs, recession in yarn market and low demand in textile value chain.
Despite these hurdles, the company managed to remain profitable. For the year under review, the
company recorded an after-tax profit of Rs. 77,024,988 representing 0.38% of sales, compared to
Rs. 589,947,021 or 4.60% of sales in the same period of last year (SPLY). Earnings per share (EPS)
for the year stand at Rs. 4.12, a decrease from Rs. 31.55 during the SPLY.
Sales revenue saw a substantial increase of 59.52% over the SPLY, reaching Rs. 20,448,120,237
compared to Rs. 12,818,757,718 in the previous year. This growth is primarily attributed to higher
sales volumes due to increased productivity and increase in yarn prices. However, the cost of sales
also rose, climbing from 89.55% of sales in the SPLY to 92.11% of sales during the year under
review. The primary driver of this increase was a significant rise in energy costs, which eroded the
gross profit margin. Consequently, the gross profit margin declined from 10.45% of sales in the
SPLY to 7.89% in the current period. The surge in costs effectively outweighed the positive impact
of higher sales revenue, leading to a reduction in profitability.
Operating expenses decreased to 2.72% of sales, compared to 3.86% during the SPLY, largely due
to lower provisions for the Workers' Profit Participation Fund (WPPF) and Workers' Welfare Fund
(WWF). The company successfully maintained stable cash flows, allowing for timely settlement of
its operating liabilities. However, finance costs increased to 4.16% of sales from 2.02% in the SPLY,
primarily due to higher interest rates on long term as well as short term borrowings. Despite these
financial challenges, the company's cash flows remained stable, ensuring the timely discharge of
its liabilities.
According to the figures issued by the Pakistan Cotton Ginners Association, for the crop year 2024-
25, Kapas, (seed cotton) arrivals up to August 31, 2024, at the Ginneries totaled 1.194 million bales
compared to 2.861 million bales for the year 2023-24 showing decrease in arrival of 59.69%.
Capital Assets Investment
In line with strategic plans for enhancing spinning productivity, quality and efficiency, your Company
has invested Rs. 338.879 million (2023: Rs. 2.362 billion) in BMR/Expansion. In order to reduce
costs and enhance green energy, the Company is installing another 1.5 MW solar plant. The new
solar plant should become operational in financial year 2025.
Future Outlook
The textile industry is navigating through challenging times. Both global and domestic markets are
sluggish. Rising costs of energy, wages, finance, administration, packaging, and transportation is
taking a toll on margins. Reduced demand from the value-added textile industry is likely to affect
sales volumes. Government regulated energy prices are likely to rise further. Cotton production
figures upto end August are disappointing. Local cotton prices are now substantially above
international prices. Pakistan spinning industry will have to import a substantial quantity of cotton to
maintain production. Therefore, the outlook for the 1st quarter of the current financial year is not
very promising. However, management is making all efforts to remain profitable through vigorous
cost controls, aggressive marketing and product diversification.

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State Bank of Pakistan (SBP) monetary policy has started to ease. The policy rate announced by
SBP was reduced by 2 percent to 17.5%. Reduction in interest rates is a very welcome move.
Financial markets are expecting further declines in the policy rate. We hope that SBP will continue
to reduce the interest rates and bring the rate to single digit within this financial year. SBP has
successfully managed the current account of the country reducing the deficit to negligible levels. As
a result, the Rupee exchange rate against USD has been stable.

The government is about to obtain Extended Fund Facility (EFF) of USD 7 billion from the IMF. The
program aims to support the government's efforts to stabilize the economy and create conditions for
stronger, more inclusive, and resilient growth. However, the path ahead also presents numerous
challenges for the economy and industries. The fresh EFF comes at the cost of a substantial
increase in energy prices, taxation and the withdrawal of various incentives.

It is hoped that the Government will bring in business friendly policies such as uninterrupted energy
supplies in cost effective manner, refund of outstanding taxes, controlling the inflation rate and
reducing the financial costs and release of LTFF facility against the machinery against which LCs
has already been retired. Government policies should encourage the completion of the value chain
in the textile sector so that the country can export finished products.

Dividend

The Board of Directors has recommended final cash dividend @ 15% i.e., Rs. 1/50 per ordinary
share for the year ended June 30, 2024. The dividend will amount to Rs. 28,050,000.

Principal Activity

The principal activity of the Company is the manufacturing and sale of yarn.

Principal Risks and Uncertainties

The Board of Directors is responsible to oversee the Company's operations and to devise an
effective strategy to mitigate any potential adverse impact of risks.

The Company's principal financial liabilities comprise long term finances, trade and other payables
and short-term borrowings. The main purpose of these financial liabilities is to raise finance for the
Company's operations. The Company's principal financial assets comprise of trade receivables,
advances, short-term deposits, other receivables and cash and bank balances that arise directly
from its operations.

The Company's activities expose it to a variety of financial risks: market risk (including currency risk,
interest rate risk and price risk), credit risk and liquidity risk.

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.

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NAGINA GROUP

Material Changes and Commitments

No adverse material changes and commitments affecting the financial position of the Company
have occurred between the end of the financial year to which this balance sheet relates and the date
of the Director's Report.

Corporate Social Responsibility

The Company strongly believes in the integration of Corporate Social Responsibility into its
business, and consistently endeavors to uplift communities that are influenced directly or indirectly
by our business.

Environment, Health and Safety

The Company maintains safe working conditions avoiding the risk to the health of employees and
public at large. The management has maintained safe environment in all its operations throughout
the year and is constantly upgrading their safety and living facilities.

Safety is a matter of concern for machinery as well as the employees working at plant. Fire
extinguishers and other fire safety equipments have been placed at sites as well as registered and
head office of the Company. Regular drills are performed to ensure efficiency of fire safety
equipments.

Sustainability Risks

The Board of Directors is committed to ensuring the sustainability of the Company's operations,
considering environmental, social, and governance (ESG) factors that can impact the long-term
success of the business. As part of this commitment, your management provides insights into the
assessment of sustainability-related risks, how these risks are managed or mitigated.

The Company has implemented a robust risk management framework to address sustainability-
related risks. This framework integrates ESG considerations into the Company's risk assessment
and decision-making processes, ensuring that sustainability issues are proactively managed and
mitigated. The Company is committed to fostering a diverse, equitable, and inclusive workplace
where all employees feel valued and respected.

Diversity, Equity and Inclusion (DEI)

We believe that promoting diversity, equity, and inclusion (DEI) is a key priority for the Company and
is integral for driving innovation, improving decision-making, and enhancing the overall
performance of the Company. The Company promotes diverse and inclusive Board and
management composition provides equal opportunities to all employees, irrespective of their
culture, race, gender, caste, and religion and promotes a work environment free from
discrimination, harassment and intimidations of any nature.

Internal Financial Controls

A system of sound internal control is established and implemented at all levels of the Company by
the Board of Directors. The system of internal control is sound in design for ensuring achievement of
Company's objectives and operational effectiveness and efficiency, reliable financial reporting and
compliance with laws, regulations and policies.

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NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

Related Parties
All related party transactions were on an arm's length basis which were in line with transfer pricing
methods and the policy for related parties approved by the Board. All related party transactions
were duly approved by the internal audit followed by the approval of the audit committee and placed
before the Board for their consideration and approval. However, the Board of Directors in their
meeting decided that the related party transactions approved by the Board shall also be placed
before the general meeting of the company for member's approval.
Furthermore, the Board of Directors also decided to avail the approval of members in the general
meeting of the company for the transactions to be carried out during the fiscal year ending June 30,
2025 and same shall be placed before the shareholders in the next general meeting for their formal
ratification/approval.
Shareholding Pattern
The shareholding pattern as at June 30, 2024 for ordinary shares is annexed.
Appointment of Auditors
The present External Auditors M/s. Yousuf Adil, Chartered Accountants, Karachi are due to retire
and being eligible, have offered themselves for re-appointment as Auditors for the financial year
2024-25. As proposed by the Audit Committee, the Board recommends their appointment as
auditors of the Company for the year ending June 30, 2025.
Financial Statements Audit
Financial statements of the Company have been audited without any qualification by Messrs.
Yousuf Adil, Chartered Accountants, the statutory external auditors of the Company.
Corporate Governance & Financial Reporting Framework
Further, Directors are pleased to report that:
a) The financial statements prepared by the management of the Company present fair state of the
Company's operations, cash flows and changes in equity.
b) Proper books of account of the Company have been maintained.
c) Appropriate accounting policies have been consistently applied in the preparation of financial
statements and accounting estimates are based upon reasonable and prudent judgment.
d) International Financial Reporting Standards (IFRS), as applicable in Pakistan, have been
followed in the preparation of financial statements any departures therefrom have been
adequately disclosed and explained.
e) The system of internal control is sound in design and has been effectively implemented and
monitored.
f) There are no doubts upon the Company's ability to continue as a going concern.
g) Key operating and financial data for the last six years is annexed.
h) There are no statutory payments on account of taxes, duties, levies and charges that are
outstanding as on June 30, 2024 except for those disclosed in the financial statements.

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NAGINA GROUP

Composition of Board

The Board of Directors as at June 30, 2024 consist of:

Total number of Directors:

a) Male: 9 (Nine)
b) Female: 1 (One)

Composition:

(i) Independent Directors: 3 (Three)

(ii) Other Non-Executive Directors 5 (Five)
(iii) Executive Director 2 (Two)

Name of Directors

Mr. Shahzada Ellahi Shaikh Chairman

Mr. Shafiq ur Rehman
Ms. Tosheeba Sarwar
Mr. Hasan Ahmad
Mr. Naweed Akhtar Sharif
Mr. Shafqat Ellahi Shaikh
Mr. Raza Ellahi Shaikh
Mr. Haroon Shahzada Ellahi Shaikh
Mr. Shaukat Ellahi Shaikh
Mr. Amin Ellahi Shaikh Director / Chief Executive Officer

Committees of the Board:

The Board has made following sub-committees:

Audit Committee

Mr. Shafiq ur Rehman Chairman

Mr. Raza Ellahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member

Human Resource and Remuneration (HR&R) Committee

Mr. Shafiq ur Rehman Chairman

Mr. Amin Ellahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member

Executive Committee

Mr. Amin Ellahi Shaikh Chairman

Mr. Shaukat Ellahi Shaikh Member
Mr. Raza Ellahi Shaikh Member
Mr. Haroon Shahzada Ellahi Shaikh Member
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NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

Significant Features of Directors' Remuneration

The Board of Directors has approved a formal policy for remuneration of executive and non-
executive directors depending upon their responsibility in affairs of the Company. The remuneration
is commensurate with their level of responsibility and expertise needed to govern the Company
successfully and to encourage value addition from them.

Non-executive directors including the independent director are entitled only for fee for attending the
Board and its committees' meetings. Remuneration of executive and non-executive directors shall
be approved by the Board, as recommended by the Human Resource and Remuneration
Committee. For information on remuneration of Directors and CEO in 2023-24, please refer notes
to the Financial Statements.

Acknowledgment

Continued diligence and devotion of the staff and workers of the Company and good human
relations at all levels deserve acknowledgement. The Directors also wish to place on record their
thanks to the bankers and other stakeholders for their continued support to the Company.

On behalf of the Board

Amin Ellahi Shaikh Raza Ellahi Shaikh

September 30, 2024 Chief Executive Officer Director

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NAGINA

NAGINA GROUP

59.52

20
NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

28,050,000 1/50 15

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NAGINA GROUP

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NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

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2024 30

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NAGINA COTTON MILLS LTD.
NAGINA
STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019 NAGINA GROUP
Name of Company: Nagina Cotton Mills Limited
Year ended: June 30, 2024
The Company has complied with the requirements of the Regulations in the following manner:
1. The total number of directors are ten as per the following:
a) Male: Nine
b) Female: One
2. The composition of the Board of Directors is as follows:

Category Names
i. Independent Directors Mr. Shafiq ur Rehman
Ms. Tosheeba Sarwar
Mr. Naweed Akhtar Sharif
ii. Non-Executive Directors Mr. Shahzada Ellahi Shaikh
Mr. Hasan Ahmad
Mr. Shafqat Ellahi Shaikh
Mr. Raza Ellahi Shaikh
Mr. Haroon Shahzada Ellahi Shaikh
iii. Executive Directors Mr. Shaukat Ellahi Shaikh
Mr. Amin Ellahi Shaikh
iv. Female Director Ms. Tosheeba Sarwar
3. The Directors have confirmed that none of them is serving as a director on more than seven listed companies, including this Company.
4. The Company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to disseminate it throughout
the Company along with its supporting policies and procedures.
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company. The Board
has ensured that complete record of particulars of the significant policies along with their date of approval or updating is maintained by
the company.
6. All the powers of the board have been duly exercised and decisions on relevant matters have been taken by the Board / shareholders
as empowered by the relevant provisions of the Companies Act, 2017 (“the Act”) and Listed Companies (Code of Corporate
Governance) Regulations, 2019 (“the Regulations”).
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose.
The Board has complied with the requirements of the Act and the Regulations with respect to frequency, recording and circulating
minutes of meeting of the Board.
8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these
Regulations.
9. Out of the ten directors, nine have obtained Directors Training Program (DTP) certification. The one director who did not complete the
training has over 30 years of experience and qualifies for an exemption. The Board is considered compliant with the requirement.
10. The Board has approved appointment of Chief Financial Officer, Company Secretary and Head of Internal Audit, including their
remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations.
11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the Board.
12. The Board has formed committees comprising of members given below:-
a. Audit Committee
Mr. Shafiq ur Rehman, Chairman
Mr. Raza Ellahi Shaikh, Member
Mr. Haroon Shahzada Ellahi Shaikh, Member
b. Human Resource and Remuneration (HR & R) Committee
Mr. Shafiq ur Rehman, Chairman
Mr. Amin Ellahi Shaikh, Member
Mr. Haroon Shahzada Ellahi Shaikh, Member
13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for
compliance.
14. The frequency of meetings of the aforesaid committees were as per following:
Committee No. of meetings
Audit Committee 04 quarterly meeting
HR and Remuneration Committee 01 annual meeting
15. The Board has set up an effective internal audit function which is considered suitably qualified and experienced for the purpose and are
conversant with the policies and procedures of the Company.
16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control
Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of Pakistan, that they
and all their partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by
the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative
(spouse, parent, dependent and non-dependent children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal Audit,
Company Secretary or Director of the Company.

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ANNUAL REPORT 2024
17. The statutory auditors or the persons associated with them have not been appointed to provide other services except NAGINA
in accordance with the Act, these Regulations or any other regulatory requirement and the auditors have confirmed
that they have observed IFAC guidelines in this regard. NAGINA GROUP

18. We confirm that all requirements of the regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have been complied
with.
Explanation as required under the Regulations is mentioned below:
The Company has three independent directors out of ten directors. Fractional requirement for Independent directors
have not been rounded up as all independent directors have requisite competencies, skills, knowledge and
experience to discharge and execute their duties competently as per laws and regulations under which hereby fulfill
the necessary requirements; therefore, not warrant the appointment of a fourth independent director.
19. Explanation for requirements other than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below:
S# Requirement Regulation Explanation of Non-compliance
No.
1. Nomination Committee 29 The responsibilities as prescribed for the
The Board may constitute a separate nomination committee are being taken
committee, designated as the care of at board level as and when
nomination committee, of such num ber needed, so a separate committee is not
and class of directors, as it may deem considered to be necessary.
appropriate in its circumstances
2. Risk Management Committee.- 30 Currently, the Board has not constituted a
The Board may constitute the risk risk management committee and senior
management committee, of such officers of the Company performs the
number and class of directors, as it requisite functions and apprise the Board
may deem appropriate in its accordingly.
circumstances, to carry out a review of
effectiveness of risk management
procedures and present a report to the
Board.
3. Anti-Harassment Policy 10(4) & On June 12, 2024, the SECP has
To have Anti-Harassment Policy to 35(1) amended the Regulations, and added
safeguard the rights and well-being of these requirements. Consequently,
employees and protection against compliance with the matter is being
harassment at workplace as per the reviewed and assessed. Board will make
relevant laws. It is also required to post policies in due course of time.
such policy on the website of the
Company.
4. Directors Training Program for 19 (3) Female executive and head of
Female Executive and Head of department has not obtained the DTP
Departments certification yet. DTP will be arra nged as
and when needed.
It is encouraged to obtain DTP
certification for female executive and
one head of department every year
starting from July 2020 and July 2022
respectively.
5. Role of the Board and its members 10A On June 12, 2024, the SECP has
to address sustainability risk and amended the Regulations, and added
opportunities: these requirements. Board will asses s
The Board has been made responsible the requirements and will make policies
to consider Sustainability Risks and in due course of time.
Opportunities and make policies to
promote diversity, equity and incl usion
(DE&I) and make strategies, priorities
and targets. Also board is required to
periodically review and monitor and
disclose the assessment of risks and
disclose measures taken.
On behalf of the Board

Amin Ellahi Shaikh Shahzada Ellahi Shaikh

September 30, 2024 Chief Executive Officer Chairman

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NAGINA COTTON MILLS LTD.
NAGINA

SHAREHOLDERS' INFORMATION NAGINA GROUP

Annual General Meeting (AGM)

The 57th Annual General Meeting of members of NAGINA COTTON MILLS LTD. will be held at the Registered
Office of the Company situated at 2nd Floor, Shaikh Sultan Trust Bldg. No. 2, 26-Civil Lines, Beaumont Road,
Karachi-75530 on Monday, October 28, 2024 at 12:00 noon and virtually through video conference facility.

Eligible shareholders are encouraged to participate and vote.

Participation in AGM through video link facility

The Shareholders can also participate in the General Meeting through video link facility

To attend the Annual General meeting through video link, members and their proxies are requested to register
their following particulars by sending an e-mail at [email protected].

Folio/CDC No. of CNIC No. Cell No. Email

Account Shares address
No. held

The video link and login credentials will be shared with the shareholders whose e-mails, containing all the
requested particulars, are received at the given e-mail address by or before the close of business hours (5:00
p.m.) on October 27, 2024.

Eligible shareholders are encouraged to participate and vote.

Ownership

On June 30, 2024, the Company has 927 Shareholders.

Web Reference

The Company maintains a functional website. Annual, half-yearly and quarterly reports are regularly posted
at the Company's website: http://www.nagina.com

Dividend

The Board of Directors in its meeting held on September 26, 2024 has recommended, payment of the final
cash dividend at the rate of Rs. 1/50 per share i.e.15% for the year ended June 30, 2024.

Closure of Share Transfer Books

The Share Transfer Books of the Company will remain closed from October 22, 2024 to October 28, 2024
(both days inclusive). Transfers received in order by our Shares Registrar, M/s Hameed Majeed Associates
(Pvt.) Limited, 5th Floor, Karachi Chambers, Hasrat Mohani Road, Karachi by the close of business on
October 21, 2024 will be considered in time to entitle the transferees for payment of dividend and to attend the
AGM.

PAYMENT OF CASH DIVIDEND ELECTRONICALLY (E DIVIDEND MECHANISM)

As per the provisions of Section 242 of the Companies Act, 2017 and Companies (Distribution of Dividends)
Regulation 2017, it is mandatory for a listed company to pay cash dividend to its shareholders only through
electronic mode directly into their bank account designated by the entitled shareholders instead of issuing
physical dividend warrants. Therefore, shareholders are requested to provide the following particulars
directly to the Company's Share Registrar in case of physical shareholders and directly to the relevant
Participant / CDC Investor Account Service in case of maintaining shareholding under Central Depository
System (CDS):

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ANNUAL REPORT 2024
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NAGINA GROUP

Detail of Bank Mandate

Name of Shareholder
Folio No. / CDC Account No.
Cell Number of Shareholder
Landline Number of Shareholder
E-mail address
Title of Bank Account of shareholder
International Bank Account Number PK_________________________ ( 24 digits)
(IBAN) “Mandatory” (kindly provide your accurate IBAN after consulting
with your respective bank branch, in case of any error
or omission in given IBAN, the company will not be
held responsible in any manner for any loss or delay
in your cash dividend payment).
Bank’s Name
Branch Name and Address
Branch Code
CNIC No. (copy attached)
NTN (in case of Corporate Entity)
It is stated that the above-mentioned information is correct, that I will intimate the changes in the above-
mentioned information to the Company and the concerned Share Registrar as soon as these occur.
_______________________
Signature of the Shareholder
In case of non-receipt of the above information, the dividend shall be withheld.
Requirement of CNIC Number / National Tax Number (NTN) Certificate.
Individual Members who have not yet submitted a copy of their valid Computerized Identity Card (CNIC) to the
Company are once again requested to send a copy of their valid CNIC at the earliest directly to the office of
Share Registrar of the Company, M/s. Hameed Majeed Associates (Pvt) Ltd., 5th Floor, Karachi Chambers,
Hasrat Mohani Road, Karachi. Corporate Members are requested to provide their National Tax Number
(NTN) and folio number thereon while sending the copies to the Share Registrar of the Company. In case of
non-receipt of the copy of a valid CNIC or NTN (as the case may be), the Company would be unable to comply
with the requirements of the Companies Act, 2017 and SROs issued there under.
Deposit of Physical Shares into CDC Accounts
As per Section 72 of the Companies Act, 2017, every existing listed company shall be required to replace its
physical shares with book-entry form in a manner as may be specified and from the date notified by the
Commission, within a period not exceeding four years from the commencement of this Act, i.e. May 30, 2017.
The shareholders having physical shareholding are encouraged to open CDC sub-account with any of the
brokers or Investor Account directly with CDC to place their physical shares into scrip less form, this will
facilitate them in many ways, including safe custody and sale of shares, any time they want, as the trading of
physical shares is not permitted as per existing regulations of the Pakistan Stock Exchange Ltd.
Deduction of Withholding Tax on Dividend
1. The rates of deduction of income tax from dividend payments under Section 150 of the Income Tax
Ordinance, 2001 shall be as follows:

i) Rate of Withholding Income Tax deduction for the persons

whose names are appearing on ATL. 15%
ii) Rate of Withholding Income Tax deduction for the persons
whose names are not appearing on ATL. 30%

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NAGINA COTTON MILLS LTD.
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NAGINA GROUP

To enable the company to make tax deduction on the amount of cash dividend @ 15% instead of 30%,
shareholders whose names are not appearing on Active Taxpayers' List (ATL) available on the website of
FBR are advised to immediately make sure that their names are entered in ATL, otherwise tax on their
cash dividend will be deducted @ 30% instead of 15%.

2. Withholding tax will be determined separately on 'persons names appearing on ATL/persons names not
appearing on ATL' status of Principal Shareholder as well as Joint-holder(s) based on their shareholding
proportions, in case of joint accounts. In this regard, all shareholders who hold shares jointly are
requested to provide shareholding proportions of Principal Shareholder and Joint-holder(s) in respect of
shares held by them to our Share Registrar, in writing within 10 days of this notice; otherwise it will be
assumed that the shares are equally held by Principal Shareholder and Joint-holder(s).

3. As per FBR Circulars C.No.1(29)WHT/2006 dated 30 June 2010 and C.No. 1(43)DG(WHT)/2008-VoI.II-
66417-R dated May 12, 2015, the valid exemption certificate is mandatory to claim exemption of
withholding tax U/S 150 of the Income Tax Ordinance, 2001 (tax on dividend amount) where the statutory
exemption under Clause 47B of Part-IV of Second Schedule is available. The shareholders who fall in the
category mentioned in above clause and want to avail exemption U/S 150 of the Ordinance, must provide
valid Tax Exemption Certificate to our Share Registrar before book closure otherwise tax will be deducted
on dividend as per applicable rates.

Zakat Declaration (Form CZ-50)

The Shareholders claiming exemption from deduction of Zakat are advised to submit their Zakat Declaration
Form CZ-50 under Zakat and Usher Ordinance, 1980 & Rule 4 of Zakat (Deduction & Refund Rules), 1981 to
our Share Registrar, M/s Hameed Majeed Associates (Pvt.) Limited, 5th Floor, Karachi Chambers, Hasrat
Mohani Road, Karachi. The Shareholders while sending the Zakat Declarations must quote the company
name and their respective Folio Nos and /or CDC A/c Nos.

Delivery of the Unclaimed / Undelivered Shares & Dividend

Shareholders, whose dividends still remain unclaimed and / or undelivered share certificates, are hereby
once again requested to approach the Company's Share Registrar, M/s Hameed Majeed Associates (Pvt.)
Limited, 5th Floor, Karachi Chambers, Hasrat Mohani Road, Karachi to claim their outstanding dividend
amounts and/ or undelivered share certificates.

Consent For Video Conference Facility

Pursuant to Section 134(1)(b) of the Act, shareholders residing in a city holding aggregate 10% or more
shareholding may demand to participate in the meeting through video conference. The request for video-link
facility shall be shall be received by the Share Registrar at their address at least seven days prior to the date
of the meeting on the Standard Form available on the website of the Company.

Investor Relations Contact

For any query / problem / information, the investors may contact Mr. Syed Mohsin Gilani, Corporate
Secretary, email address:[email protected], Ph # (+92-42) 35756270

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ANNUAL REPORT 2024
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NAGINA GROUP

PATTERN OF SHAREHOLDING
AS AT JUNE 30, 2024
CUIN (INCORPORATION NUMBER) 0002500
No. of Shareholding Total
Shareholders From To Shares Held

434 1 100 13,010

250 101 500 71,828
69 501 1,000 57,231
110 1,001 5,000 269,056
33 5,001 10,000 236,167
6 10,001 15,000 74,768
5 15,001 20,000 88,498
2 20,001 25,000 44,500
1 25,001 30,000 27,500
2 30,001 35,000 64,868
- 35,001 55,000 -
1 55,001 60,000 60,000
- 60,001 65,000 -
1 65,001 70,000 70,000
- 70,001 115,000 -
1 115,001 120,000 118,736
- 120,001 210,000 -
1 210,001 215,000 211,650
- 215,001 315,000 -
1 315,001 320,000 318,658
- 320,001 695,000 -
2 695,001 700,000 1,400,000
- 700,001 1,015,000 -
3 1,015,001 1,020,000 3,051,542
- 1,020,001 1,395,000 -
1 1,395,001 1,400,000 1,400,000
1 1,400,001 1,405,000 1,400,500
- 1,405,001 3,225,000 -
2 3,225,001 3,230,000 6,454,419
- 3,230,001 3,265,000 -
1 3,265,001 3,270,000 3,267,069
927 Total:- 18,700,000

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NAGINA COTTON MILLS LTD.
NAGINA
CATAGORIES OF SHAREHOLDERS
NAGINA GROUP
AS AT JUNE 30, 2024
Sr # Categories of Shareholders Shares Held Percentage
1) Directors, Chief Executive Officer, and their
Spouse and Minor Children
i) MR. SHAHZADA ELLAHI SHAIKH 3,227,350 17.26
ii) MR. SHAUKAT ELLAHI SHAIKH 3,267,069 17.47
iii) MR. SHAFQAT ELLAHI SHAIKH 3,227,069 17.26
iv) MR. RAZA ELLAHI SHAIKH 1,400,500 7.49
v) MR. AMIN ELLAHI SHAIKH 1,400,000 7.49
vi) MR. HAROON SHAHZADA ELLAHI SHAIKH 700,000 3.74
vii) MR. SHAFIQ UR REHMAN 500 0.00
viii) MR. HASAN AHMED 500 0.00
ix) MS. TOSHEEBA SARWAR 500 0.00
x) MR. NAVEED AKHTER SHARIF 500 0.00
xi) MRS. HUMERA SHAHZADA ELLAHI SHEIKH 4,248 0.02
xii) MRS. MONA SHAUKAT SHAIKH 4,248 0.02
xiii) MRS. SHAISTA SHAFQAT 4,248 0.02

13,236,732 70.78
2) Associated Companies, Undertakings and Related Parties
i) HAROON OMER (PVT) LIMITED 1,017,147 5.44
ii) MONELL (PVT) LIMITED 1,017,147 5.44
iii) ICARO (PVT) LIMITED 1,017,248 5.44
iv) ELLAHI INTERNATIONAL (PVT) LIMITED 9,000 0.05
3,060,542 16.37
3) NIT and ICP 1,430 0.01
4) Banks, Development Finance Institutions,
Non Banking Finance Institutions

i) ESCORTS INVESTMENT BANK LIMITED 30 0.00

ii) NATIONAL DEVE. FINANCE CORP. 5,560 0.03
5,590 0.03

5) Insurance Companies 318,658 1.70

6) Modarabas and Mutual Funds Nil Nil

7) Shareholders Holding 10% or more

i) MR. SHAUKAT ELLAHI SHAIKH 3,267,069 17.47

ii) MR. SHAHZADA ELLAHI SHAIKH 3,227,350 17.26
iii) MR. SHAFQAT ELLAHI SHAIKH 3,227,069 17.26
9,721,488 51.99
8) General Public
i) a. Local 2,013,910 10.77
ii) b. Foreign - -
9) Others (Joint Stock Companies) 63,138 0.34

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NAGINA GROUP

KEY FINANCIAL INFORMATION

YEAR ENDED 30TH JUNE
2024 2023 2022 2021 2020 2019

Sales Rs.'000 20,448,120 12,818,758 11,235,579 7,184,635 7,070,172 6,932,310

Gross profit Rs.'000 1,613,829 1,339,638 2,507,668 1,419,328 593,821 832,426

Operating profit Rs.'000 1,161,608 1,062,882 2,069,802 1,144,400 378,087 574,525

Profit / (loss) before tax Rs.'000 311,055 803,518 1,826,779 988,876 100,273 361,126

Profit after tax Rs.'000 77,025 589,947 1,812,562 743,498 7,629 308,620

Share capital - paid up Rs.'000 187,000 187,000 187,000 187,000 187,000 187,000

Shareholders' equity Rs.'000 4,728,369 4,667,040 4,307,501 2,568,397 1,880,495 2,023,913

Total assets Rs.'000 12,730,252 12,588,753 10,172,038 6,389,585 6,924,313 5,816,796

Earnings (loss) Per share - Pre Tax Rs. 16.63 42.97 97.69 52.88 5.36 19.31

Earnings / (loss) Per Share - after tax Rs. 4.12 31.55 96.93 39.76 0.41 16.50

Cash Dividend per share Rs. 1.50 6.00 10.00 10.00 - 5.00
Market value per share Rs. 52.50 62.95 78.80 74.65 38.93 41.85

Gross profit to Sales % 7.89 10.45 22.32 19.76 8.40 12.01

Operating profit to sales % 5.68 7.08 18.40 15.93 5.35 8.29

Profit / (loss) before tax to Sales % 1.52 6.27 16.26 13.76 1.42 5.21

Profit / (loss) after tax to Sales % 0.38 4.60 16.13 10.35 0.11 4.45

Current ratio 2.28 : 1 2.10 : 1 2.40 : 1 2.33 : 1 1.45 : 1 1.42 : 1

Total debt to total assets ratio % 89.86 82.12 57.65 59.80 72.84 65.21

Debt Equity Ratio % 53.13 52.23 45.54 47.08 54.49 36.80

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NAGINA

NAGINA GROUP

STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2024
2024 2023
Note Rupees Rupees
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized share capital

50,000,000 (2023: 50,000,000) ordinary shares of Rs. 10 each 500,000,000 500,000,000

Issued, subscribed and paid-up capital 6 187,000,000 187,000,000

Capital reserves 7 262,238,346 198,262,201
Revenue reserve - Unappropriated profit 4,279,130,477 4,281,777,150
TOTAL EQUITY 4,728,368,823 4,667,039,351

LIABILITIES

NON CURRENT LIABILITIES

Long term finances 8 4,797,375,158 4,721,892,278

Employee retirement benefits 9 241,031,213 191,948,868
5,038,406,371 4,913,841,146

CURRENT LIABILITIES

Current portion of long-term finances 8 562,649,569 380,544,257

Current deferred government grant 10 - -
Trade and other payables 11 1,547,579,311 1,521,203,569
Contract liability - advance from customers 2,675,380 9,389,454
Unclaimed dividend 11,904,654 10,989,419
Accrued interest / mark-up 12 150,579,516 144,041,836
Short-term borrowings 13 688,088,033 941,704,041
2,963,476,463 3,007,872,576

TOTAL LIABILITIES 8,001,882,834 7,921,713,722

CONTINGENCIES AND COMMITMENTS 14

TOTAL EQUITY AND LIABILITIES 12,730,251,657 12,588,753,073

The annexed notes from 1 to 49 form an integral part of these financial statements.

Raza Ellahi Shaikh Tariq Zafar Bajwa

September 30, 2024 Director Chief Financial Officer

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NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

2024 2023
Note Rupees Rupees

ASSETS

NON CURRENT ASSETS

Property, plant and equipment 15 5,964,975,353 6,213,446,157

Investment properties 16 12,866,120 13,066,865
Intangible assets 17 - -
Long-term deposits 1,021,858 1,021,858
5,978,863,331 6,227,534,880

CURRENT ASSETS

Stores and spares 18 175,946,946 154,951,770

Stock-in-trade 19 2,345,519,612 3,506,232,808
Trade receivables 20 2,423,990,217 1,206,972,178
Advances 21 444,171,607 818,409,748
Prepayments 22 3,777,750 2,487,395
Other receivables 23 12,165,011 59,930,963
Tax refundable 24 64,631,798 158,079,245
Other financial assets 25 1,155,266,963 216,958,291
Cash and bank balances 26 125,918,422 237,195,795
6,751,388,326 6,361,218,193

TOTAL ASSETS 12,730,251,657 12,588,753,073

The annexed notes from 1 to 49 form an integral part of these financial statements.

Amin Ellahi Shaikh

Chief Executive Officer

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NAGINA GROUP

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED JUNE 30, 2024
Restated
2024 2023
Note Rupees Rupees

Revenue from contracts with customers 27 20,448,120,237 12,818,757,718

Cost of goods sold 28 (18,834,290,751) (11,479,120,128)

Gross profit 1,613,829,486 1,339,637,590

Distribution cost 29 (313,468,617) (233,149,980)

Administrative expenses 30 (220,864,882) (199,300,505)
Other expenses 31 (21,668,840) (62,552,575)
(556,002,339) (495,003,060)

Other income 32 103,780,803 218,247,098

Operating profit 1,161,607,950 1,062,881,628

Finance cost 33 (850,552,767) (259,363,522)

Profit before levies and taxation 311,055,183 803,518,106

Levies 34 (234,030,195) (203,867,680)
Profit before taxation 77,024,988 599,650,426
Taxation 35 - (9,703,405)
Profit for the year 77,024,988 589,947,021

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Remeasurement loss on defined benefit liability 9.3 (12,139,615) (20,493,603)

Fair value gain / (loss) on investment in equity instruments
designated at FVTOCI 25.5 108,644,099 (22,915,092)

96,504,484 (43,408,695)
Total comprehensive income for the year 173,529,472 546,538,326

Earnings per share - basic and diluted 36 4.12 31.55

The annexed notes from 1 to 49 form an integral part of these financial statements.

Raza Ellahi Shaikh Tariq Zafar Bajwa Amin Ellahi Shaikh

September 30, 2024 Director Chief Financial Officer Chief Executive Officer

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NAGINA COTTON MILLS LTD.
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NAGINA GROUP

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2024
2024 2023
Note Rupees Rupees
A. CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from / (used in) operations 37 2,146,744,734 (19,486,226)

Payments made:
Employees retirement benefits 9.2 (30,353,351) (16,695,802)
Finance cost (844,015,088) (155,660,168)
Levies and taxes 24.1 (212,625,953) (212,250,733)
Net cash generated from / (used in) operating activities 1,059,750,342 (404,092,929)

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (338,878,567) (2,362,326,809)

Proceeds from disposal of operating fixed assets 39,567,500 4,695,000
Purchase of other financial assets (1,679,172,720) (5,563,824,271)
Proceeds from sale of other financial assets 935,301,771 6,786,934,410
Rental income received 34,188,378 31,389,958
Dividend received 25,576,017 80,902,692
Net cash used in investing activities (983,417,621) (1,022,229,020)

C. CASH FLOWS FROM FINANCING ACTIVITIES

Long-term finances obtained 641,500,000 1,772,082,382

Repayment of long-term finances (383,911,806) (338,277,266)
Obtained short-term borrowings excluding running finance 3,539,165,751 324,684,557
Repayment of short-term borrowings excluding running finance (3,086,288,167) (855,292,608)
Dividend paid (111,284,765) (185,447,197)
Net cash generated from financing activities 599,181,013 717,749,868
Net increase / (decrease) in cash and cash equivalents (A+B+C) 675,513,734 (708,572,081)
Cash and cash equivalents at beginning of the year (702,604,631) (1,440,618)
Effect of Unrealized exchange (loss) / gain on cash and cash equivalents 31 & 32 (5,063,618) 7,408,068
Cash and cash equivalents at end of the year (32,154,515) (702,604,631)

Cash and cash equivalents

Cash and bank balances 26 125,918,422 237,195,795

Other financial assets - terms deposits with banks 25 76,903,615 1,903,615
Short-term running finances 13 (234,976,552) (941,704,041)
(32,154,515) (702,604,631)

The annexed notes from 1 to 49 form an integral part of these financial statements.

Raza Ellahi Shaikh Tariq Zafar Bajwa Amin Ellahi Shaikh

September 30, 2024 Director Chief Financial Officer Chief Executive Officer

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NAGINA GROUP

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED JUNE 30, 2024
Revenue
Capital reserves
Issued, reserve
subscribed Capital
Amalgamatio Total
and paid up redemption Fair value Total capital Unappropriated
n reserve
capital reserve reserve reserves profit
Note 7.1 Note 7.2

--------------------------------------------------------------------- (Rupees) --------------------------------------------------------------------------

Balance as at June 30, 2022 187,000,000 241,860,000 12,104,417 (70,354,394) 183,610,023 3,936,891,002 4,307,501,025

Comprehensive income

Profit for the year - - - - - 589,947,021 589,947,021

Other comprehensive income

Remeasurement of defined benefit liability - - - - - (20,493,603) (20,493,603)

Fair value loss on investment in equity instrument

designated at FVTOCI - - - (22,915,092) (22,915,092) - (22,915,092)

Transfer of realized loss on sale of investments - - - 37,567,270 37,567,270 (37,567,270) -

Total comprehensive income for the year - - - 14,652,178 14,652,178 531,886,148 546,538,326

Transactions with owners:

Final dividend for the year ended June 30, 2022 @

100% i.e. Rs. 10 per ordinary share - - - - - (187,000,000) (187,000,000)

Balance as at June 30, 2023 187,000,000 241,860,000 12,104,417 (55,702,216) 198,262,201 4,281,777,150 4,667,039,351

Comprehensive income

Profit for the year - - - - - 77,024,988 77,024,988

Other comprehensive income

Remeasurement of defined benefit liability - - - - - (12,139,615) (12,139,615)

Fair value gain on investment in equity instrument

designated at FVTOCI - - - 108,644,099 108,644,099 - 108,644,099

Transfer of realized gain on sale of investments - - - (44,667,954) (44,667,954) 44,667,954 -

Total comprehensive income for the year - - - 63,976,145 63,976,145 109,553,327 173,529,472

Transactions with owners:

Final dividend for the year ended June 30, 2023 @
60% i.e. Rs. 6 per ordinary share - - - - - (112,200,000) (112,200,000)

Balance as at June 30, 2024 187,000,000 241,860,000 12,104,417 8,273,929 262,238,346 4,279,130,477 4,728,368,823

The annexed notes from 1 to 49 form an integral part of these financial statements.

Raza Ellahi Shaikh Tariq Zafar Bajwa Amin Ellahi Shaikh

September 30, 2024 Director Chief Financial Officer Chief Executive Officer

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NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2024
1. LEGAL STATUS AND OPERATIONS

Nagina Cotton Mills Limited (the Company) was incorporated in Pakistan on May 16, 1967 as a public limited company
under the Companies Act, 1913 (repealed) now the Companies Act, 2017 and is listed on Pakistan Stock Exchange
Limited. The principal business of the Company is to manufacture and sale of yarn.

Following is the geographical location and address of all business units of the Company:

Head Office:
2nd Floor, Shaikh Sultan Trust Building No.2, 26-Civil Lines, Beaumont Road, Karachi, Sindh.

Manufacturing facility:
A-16, National Highway, Aminabad, S.I.T.E Kotri, Sindh.

Regional Office:
Nagina House 91 – B-1, M.M. Alam Road, Gulberg-III, Lahore, Punjab.

2. BASIS OF PREPARATION

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)
as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and
directives issued under Companies Act, 2017 have been followed.

2.2 Basis of measurement

These financial statements have been prepared under the historical cost convention, except for staff retirement benefits at
present value and certain financial assets measured at fair value.

2.3 Functional and presentation currency

These financial statements are presented in Pak Rupees, which is the Company's functional and presentation currency.

2.4 Changes in accounting standards

2.4.1 Amendments to accounting standards that are effective for the year ended June 30, 2024

The following amendments to accounting standards are effective for the year ended June 30, 2024. These amendments
are either not relevant to the Company's operations or are not expected to have significant impact on the Company's
financial statements other than certain additional disclosures.

Amendments to IAS 1 'Presentation of Financial Statements' and IFRS practice statement 2 - Disclosure of accounting
policies

Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' - Definition of accounting
estimates

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Amendments to IAS 12 'Income Taxes' - Deferred tax related to assets and liabilities arising from a single transaction

Amendments to IAS 12 'Income taxes' - International Tax Reform — Pillar Two Model Rules

Due to the adoption of Amendments to IAS 1 'Presentation of Financial Statements' - Disclosure of accounting policies
effective from January 01, 2023. The word 'significant' has been replaced with 'material' as reflected in related note of
accounting polices (note 4). Although the amendments did not result in any changes to the accounting policies themselves.

2.4.2 New Standard and amendments to accounting standards that are not yet effective

The following new standard and amendments are only effective for accounting periods, beginning on or after the date
mentioned against each of them. These amendments are either not relevant to the Company's operations or are not
expected to have significant impact on the Company's financial statements other than certain additional disclosures.

Effective from accounting period

beginning on or after

Amendments to IFRS 16 'Leases' - Clarification on how seller-lessee January 01, 2024

subsequently measures sale and leaseback transactions

Amendments to IAS 1 'Presentation of Financial Statements' - Classification of January 01, 2024

liabilities as current or non-current along with Non-current liabilities with
Covenants

Amendments to IAS 7 'Statement of Cash Flows' and IFRS 7 'Financial January 01, 2024
instruments disclosures' - Supplier Finance Arrangements

Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates' - January 01, 2025
Clarification on how entity accounts when there is long term lack of
Exchangeability

IFRS 17 – 'Insurance Contracts' (including amendments made in June 2020 and January 01, 2026
December 2021)

Amendments IFRS 9 'Financial Instruments' and IFRS 7 'Financial instruments January 01, 2026
disclosures' - Classification and measurement of financial instruments

Other than the aforesaid amendments, the International Accounting Standards Board (IASB) has also issued the following
standards which have not been adopted locally by the Securities and Exchange Commission of Pakistan (SECP):

- IFRS 1 – First Time Adoption of International Financial Reporting Standards

- IFRS 18 - Presentation and Disclosures in Financial Statements

- IFRS 19 - Subsidiaries without Public Accountability: Disclosures

3. ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with accounting and reporting standards requires the use of certain
critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the
Company's accounting policies. Estimates and judgments are continually evaluated and are based on historical
experience, including expectations of future events that are believed to be reasonable under the circumstances. The areas
where various assumptions and estimates are significant to the Company's financial statements or where judgment was
exercised in application of accounting policies are as follows:

i. Assumptions and estimates used in determining the residual values and useful lives of property, plant and
equipment, investment properties and intangible assets (note 4.1, 4.3, 4.4, 15,16 and 17)

ii. Assumptions and estimates used in writing down items of stores and spares to their net realizable value (note 4.5
and 18)

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iii. Assumptions and estimates used in writing down items of stock in trade to their net realizable value (note 4.6 and 19
)
iv. Assumptions and estimates used in calculating the provision for impairment of trade receivables (note 4.8 and 20)

v. Assumptions and estimates used in accounting for defined benefit plan (note 4.10 and 9)

vi. Assumptions and estimates used in determining levy, current and deferred taxation (note 4.15, 34 and 35)

4. MATERIAL ACCOUNTING POLICY INFORMATION

The material accounting policies applied in the preparation of these financial statements are set out below. These have
been consistently applied to all the years presented, except for taxation policy as disclosed in note 4.13.

4.1 Property, plant and equipment

Owned

Property, plant and equipment except freehold land, leasehold land and capital work in progress are stated at cost less
accumulated depreciation and impairment loss, if any. Freehold land, lease hold land and capital work in progress are
stated at cost, less impairment, if any.

Assets' residual values and their useful lives are reviewed and adjusted at each financial year end, if significant.

Depreciation is charged to statement of profit or loss and other comprehensive income applying the reducing balance
method at the rates specified in the note 15.1. Depreciation on all additions is charged from the month on which the asset
is available for use and no depreciation is charged in the month of disposal.

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 repairs and maintenance are charged to the statement of profit or loss and other
comprehensive income during the financial year in which they are incurred.

Assets are derecognized when disposed or when no future economic benefits are expected from its use or disposal. Gains
and losses on disposal of assets, if any, are recognized in the statement of profit or loss and other comprehensive income,
as and when incurred.

Capital work in progress

These are stated at cost less accumulated impairment losses, if any. All expenditures connected with specific assets
incurred and advances made during installation and construction period are carried under this head. These are transferred
to specific asset as and when the asset is available for its intended use.

4.2 Right of use assets and lease liabilities

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The right of use assets is initially measured at cost, and subsequently at cost less any accumulated depreciation and
impairment losses if any, and adjusted for certain re-measurements of the lease liability. The right of use asset is
depreciated using the straight line method over the shorter of the lease term and the asset’s useful life. The estimated
useful lives of assets are determined on the same basis as that for operating fixed asset. In addition, the right of use asset
is reduced by impairment losses, if any.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s
incremental borrowing rate.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments
made. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, a
change in assessment of whether extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.

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Each lease payment is allocated between the liability and finance cost. The finance cost is charged to statement of profit or
loss and other comprehensive income over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.

The Company has elected to apply the practical expedient not to recognize right-of-use asset and lease liabilities for short
term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated
with these leases are recognized as an expense on a straight-line basis over the lease term.

4.3 Investment properties

Investment properties are properties held to earn rentals and / or capital appreciation. The investment properties of the
Company comprise of land and buildings which are valued using the cost method i.e. at cost less accumulated
depreciation and impairment loss, if any.

Depreciation on buildings is charged to the statement of profit or loss and other comprehensive income applying the
reducing balance method at the rates specified in the note 16.

4.4 Intangible assets

An intangible asset is recognized as an asset if it is probable that future economic benefits attributable to the asset will flow
to the Company and the cost of such asset can be measured reliably.

Generally costs associated with developing or maintaining computer software programmes are recognized as an expense
as incurred. However, costs that are directly associated with identifiable software and have probable economic benefits
exceeding one year, are recognized as an intangible asset. Direct costs include the purchase cost of software and related
overhead cost. Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if
any, thereon.
Intangible asset with a definite useful life is amortized on a straight line basis over its useful life. Amortization on all
additions in intangibles is charged from the month in which the asset is available for use and on disposals up to the month
of disposal. Amortization charge is recognized in the statement of profit or loss and other comprehensive income. The rate
of amortization is disclosed in note 17.

4.5 Stores and spares

These are valued at lower of moving average cost and net realizable value less impairment, if any, for obsolete items.
Items in transit are valued at cost incurred up to the reporting date.

4.6 Stock in trade

These are valued at lower of cost and net realizable value. Costs are determined using the following basis:

- Raw material Moving weighted average cost

- Work in process Average manufacturing cost
- Finished goods Average manufacturing cost
- Waste Net realizable value

Average manufacturing cost in relation to work in process and finished goods represents manufacturing cost which
consists of prime cost and proportion of manufacturing overheads.

Net realizable value represents estimated selling price in the ordinary course of business less estimated cost of completion
and estimated costs necessary to make the sale.

4.7 Cash and cash equivalents

For the purpose of statement of cash flows, cash and cash equivalents consist of cash in hand, balances with banks, short-
term running finances and term deposit receipts of less than 3 months.

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4.8 Financial instruments

Financial assets and financial liabilities are recognized in the Company’s statement of financial position when the
Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are
initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognized immediately in profit or loss.

4.8.1 Financial assets

Classification

The Company classifies its financial assets into following three categories:

IFRS 9 contains three principle classification categories for financial assets at:

i) Amortized cost (AC),

ii) Fair value through other comprehensive income (FVTOCI) and
iii) Fair value through profit or loss (FVTPL).

i) Financial assets at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as FVTPL:

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus
the principal repayments, plus the cumulative amortization using the effective interest method of any difference between
that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset
is the amortized cost of a financial asset before adjusting for any loss allowance.

ii) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI only if it meets both of the following conditions and is not designated as FVTPL:

- the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

On initial recognition, for an equity investment that is not held for trading, the Company may irrevocably elect to present
subsequent changes in fair value in Other Comprehensive Income (OCI). This election is made on an investment-by-
investment basis.

FVTOCI financial assets are subsequently measured at fair value with gains and losses arising due to changes in fair value
recognized in Other Comprehensive Income (OCI).

iii) Financial assets at fair value through profit or loss (FVTPL)

All other financial assets are classified as FVTPL (for example: equity held for trading and debt securities not classified
either as amortized cost or FVTOCI).

In addition, on initial recognition, the Company may designate a financial asset that otherwise meets the requirements to
be measured at amortized cost or at FVTOCI as at FVTPL, if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

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Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Company changes
its business model for managing financial assets.

Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If
the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may
have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds
received.

On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognized in statement of profit or loss and other comprehensive
income.

4.8.2 Subsequent measurement of financial assets

Financial assets at amortized cost

Financial assets at amortized cost are subsequently measured at amortized cost. Amortized cost is calculated using the
effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial instrument to the net carrying amount of the financial asset.

Financial assets at FVTOCI

All financial assets at FVTOCI are subsequently measured at fair value with gains and losses arising due to changes in fair
value recognized in Other Comprehensive Income (OCI).

For debt instruments classified as financial assets at FVTOCI, the amounts in other comprehensive income are reclassified
to income statement on derecognition of financial assets. This treatment is in contrast to equity instruments classified as
financial assets at FVTOCI, where there is no reclassification on derecognition.

Financial assets at FVTPL

All financial assets designated at fair value through profit or loss are subsequently carried at fair value, with gains and
losses arising from changes in fair value recorded in the statement of profit or loss and other comprehensive income.

4.8.3 Fair value measurement principles and provision

The fair value of financial instruments is determined as follows:

Basis of valuation of equity securities

The fair value of shares of listed companies is based on their prices quoted on the Pakistan Stock Exchange Limited at the
reporting date without any deduction for estimated future selling costs.

Basis of valuation of investment in mutual funds

The fair value of units of Funds is based on the net assets value per unit announced by Mutual Funds Association of
Pakistan (MUFAP), which is determined on the basis of net assets value communicated by the Asset Management
Company on daily basis.

4.8.4 Financial liabilities

All financial liabilities are measured subsequently at amortized cost using the effective interest method. The effective
interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including
all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the
amortized cost of a financial liability.

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Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. Where an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the difference in respective carrying amounts is recognized in the
statement of profit or loss and other comprehensive income.

4.8.5 Impairment

Financial assets

The Company recognizes a loss allowance for expected credit loss "ECL" on trade receivables. The amount of ECL is
updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial assets.

The Company always recognizes lifetime ECL for trade receivables. The ECL on these financial assets are estimated
using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to
the receivables, general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the reporting date, including time value of money where appropriate.

For all other financial assets, the Company recognizes lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since
initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month
ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or
risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the
reporting date.

Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events
on a financial instrument that are possible within 12 months after the reporting date.

Non-financial assets

The carrying amounts of non-financial assets are reviewed at each reporting date to ascertain whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment
loss is recognized, as an expense in the statement of profit or loss and other comprehensive income, for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less cost to sell and value in use. Value in use is determined through discounting of the estimated future cash flows
using a discount rate that reflects current market assessments of the time value of money and the risk specific to the
assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).

An impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

4.8.6 Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position
when there is a legally enforceable right to off set the recognized amounts and there is an intention to settle on a net basis,
or realize the asset and settle the liability simultaneously.

4.9 Deferred grant

The benefit of interest rate lower than market rate on borrowings obtained under State Bank of Pakistan (SBP) under
Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of the Company, is accounted for
as a government grant which is the difference between loan received and the fair value of the loan. The differential amount
is recognized and presented in statement of financial position as deferred government grant.

In subsequent periods, the grant shall be amortized over the period of loan and amortization shall be recognized and
presented as reduction of related interest expense.

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4.10 Employee retirement benefits

Defined benefit plan

The Company operates an unfunded gratuity scheme for its confirmed employees who have completed the minimum
qualifying period of service as defined under the scheme. The Company's obligation under the scheme is determined
through actuarial valuation carried out at each reporting date under the Projected Unit Credit Method. The most recent
valuation of the scheme was carried out as at June 30, 2024.

Remeasurements which comprise actuarial gains and losses on defined benefit obligations are recognized immediately in
other comprehensive income.

4.11 Provisions

Provisions are recognized when the Company has a present, legal or constructive obligation, as a result of past events,
when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the
current best estimate.

4.12 Revenue recognition

Revenue from contracts with customers is recognized at the point in time when the performance obligation is satisfied i.e.
when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company
expects to be entitled to in exchange of those goods.

For each sale transaction, purchase order forms a contract between the Company and a customer and the goods to be
delivered under that contract are the Company's identified performance obligation, the contract contains determined and
allocated transaction price. The Company satisfies a performance obligation on delivery of goods to the customer and
recognizes the revenue.

Dividend income is recognized on the date on which the Company's right to receive the dividend is established.

Interest income is accrued on a time proportionate basis, by reference to the principal outstanding and at the applicable
effective interest rate.

Rental income is recognized on accrual basis.

4.13 Taxation

Current

Provision for current taxation is based on taxable income at the enacted / corporate tax rate after taking into account tax
credits and rebates available, if any, as per the Income Tax Ordinance, 2001.

Deferred

Deferred tax is provided using the liability method for all temporary differences at the reporting date between tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes after considering, the effective rate of tax.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax asset is recognised for all
deductible temporary differences and carried forward unused tax losses, if any, to the extent that it is probable that taxable
profit will be available against which such temporary differences and tax losses can be utilised.

Deferred tax assets and liabilities are measured at effective tax rate that are expected to apply to the period when the
asset is realised or the liability is settled.

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Levies
The tax charged under Income Tax Ordinance, 2001 which is not based on taxable income or any amount paid / payable in
excess of the calculation based on taxable income is classified as levies in the statement of profit or loss and other
comprehensive income as these levies fall under the scope of IFRIC 21 'Levies' or IAS 37 'Provisions, Contingent
Liabilities and Contingent Assets'.

4.14 Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred and are subsequently stated at amortized
cost. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer the settlement
of the liability for at least twelve months after the reporting date. Exchange gains and losses arising in respect of
borrowings in foreign currency are added in the carrying amount of the borrowing.

4.14.1 Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time till the assets are substantially ready for their intended use or sale. Investment income earned on
the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization.

All other borrowing costs are recognized in statement of profit or loss and other comprehensive income in the period in
which they are incurred.

4.15 Dividend and other appropriations

Dividend distribution to the Company’s shareholders is recognized as a liability in the financial statements in the period in
which the dividends are approved by the shareholders of the Company.

4.16 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares.

4.17 Segment Reporting

Segment information is presented on the same basis as that used for internal reporting purposes by the Chief Operating
Decision Maker (CODM). The Company considers Chief Executive as its CODM who is responsible for allocating
resources and assessing performance of the operating segments. On the basis of its internal reporting structure, the
Company considers itself to be a single reportable segment; however; certain information about the Company’s products,
as required by the accounting and reporting standards, is presented in note 45 to these financial statements.

5. CHANGE IN ACCOUNTING POLICY

The Institute of Chartered Accountants of Pakistan (ICAP) issued 'IAS 12 Application Guidance on Accounting for Minimum
Taxes and Final Taxes' (the guide) in May 2024 and withdrawn the Technical Release 27 'IAS 12 - Income Taxes (Revised
2012)'. The guide requires to classify certain amounts of tax paid under minimum and final tax regime separately as a
levies instead of classifying under current tax.

The guide has provided two approaches namely Approach A and Approach B to select any of them considering the
business model of the Company. The Company has selected Approach B, according to which, designate the amount
calculated on taxable income using the notified tax rate as an income tax within the scope of IAS 12 ‘Income Taxes’ and
recognise it as current income tax expense. Any excess over the amount designated as income tax, is then recognised as
levies falling under the scope of IFRIC 21 'Levies' or IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'. For
calculation of deferred tax, effective rate of tax is required to be used.

This change has been considered as change in accounting policy and has been applied retrospectively in these financial
statements in accordance with the requirements of IAS 8 'Accounting Policies, Change in Accounting Estimates and
Errors'. Following are the effects as a result of this change:

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2023
Had there After Impact of change
been no incorporating in accounting
change in effects of change policy
accounting in accounting
policy policy
------------------------------ (Rupees) ----------------------------------
Statement of profit or loss and other comprehensive income

Profit before taxation 803,518,106 599,650,426 203,867,680

Levies - 203,867,680 203,867,680
Taxation 213,571,085 9,703,405 203,867,680

There has been no effect on the statement of financial position, the statement of cash flows and earnings per share as a
result of above change.

In addition to above, the effective tax rate for deferred tax has been calculated as per the guide, resultant deferred tax
asset has not been recognised. Therefore, comparative figures have not been restated.

6. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

2024 2023 2024 2023

Number of ordinary shares of Rupees Rupees
Rs.10 each

3,133,000 3,133,000 Fully paid in cash 31,330,000 31,330,000

15,567,000 15,567,000 As bonus shares 155,670,000 155,670,000
18,700,000 18,700,000 187,000,000 187,000,000

6.1 The Company has one class of ordinary shares which carries no right to fixed income. The holders are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings of the shareholders. All shares
rank equally with regard to right in the Company's residual assets.

6.2 Shares held by associated undertakings of the Company as at the reporting date are as follows :

2024 2023
Number of shares
Associated undertakings - due to common directorship and
shareholding in the Company
Monell (Private) Limited 1,017,147 1,017,147
Haroon Omer (Private) Limited 1,017,147 1,017,147
ICARO (Private) Limited 1,017,248 1,017,248
Ellahi International (Private) Limited 9,000 9,000
3,060,542 3,060,542

2024 2023
Note Rupees Rupees
7. CAPITAL RESERVES

Capital redemption reserve 7.1 241,860,000 241,860,000

Amalgamation reserve 7.2 12,104,417 12,104,417
Remeasurement for the investments designated
as at fair value through other comprehensive income 8,273,929 (55,702,216)
262,238,346 198,262,201

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7.1 This represents capital reserve created for the redemption of preference shares.

7.2 This represents capital reserve created on amalgamation of Ellahi Electric Company Limited with the Company.

2024 2023
Note Rupees Rupees

8. LONG-TERM FINANCES

From banking companies and other financial institutions - secured

Term finances 8.2 2,613,185,154 2,052,955,970

Long-term financing facilities (LTFF) 8.3 2,744,007,420 3,039,492,996
Long-term financing facility (NIDF) 8.4 - 7,155,414
Custom debentures 8.5 2,832,155 2,832,155
5,360,024,729 5,102,436,535

Less: Current portion shown in current liabilities

Term finance 91,406,664 12,130,438
Long-term financing facilities (LTFF) 468,410,750 358,426,250
Long-term financing facility (NIDF) - 7,155,414
Custom debentures 2,832,155 2,832,155
562,649,569 380,544,257

4,797,375,160 4,721,892,278

8.1 Reconciliation of liabilities arising from long term financing activities

The table below details changes in the Company's liabilities arising from the financing activities, including both cash and non-
cash changes, if any. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will
be, classified in the Company's statement of cash flows as cash flows from financing activities.

Cash flows Non-Cash flows

July 01, 2023 Obtained Repaid Transferred June 30, 2024

-------------------------------------------------- (Rupees) --------------------------------------------------

Term finances (note 8.6) 2,052,955,970 641,500,000 (14,288,816) (66,982,000) 2,613,185,154

Long-term financing facility (LTFF) (note 8.6) 3,039,492,996 - (362,467,576) 66,982,000 2,744,007,420
Long-term financing facility (NIDF) 7,155,414 - (7,155,414) - -
Custom debentures 2,832,155 - - - 2,832,155

2024 5,102,436,535 641,500,000 (383,911,806) - 5,360,024,729

2023 3,601,213,195 1,772,082,382 (338,277,266) 67,418,224 5,102,436,535

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8.2 Term Finances

Name of financial Details of financing, security and repayment

Limit Outstanding amount
institution / bank terms
2024 2023 2024 2023
Rupees Rupees Rupees Rupees

Habib Bank 1,700,000,000 1,700,000,000 658,569,144 662,356,080 Facility is secured against first joint pari passu
Limited charge on all present and future fixed assets of
the Company with 25% margin. The loan is
subject to mark-up at the rate of average of 3
month offer rate of KIBOR plus 125 bps (2023 :
average of 3 month offer rate of KIBOR plus 125
bps) repayable in 32 equal quarterly installments
commencing from June 2024 to April 2025.

Bank of Punjab 850,000,000 850,000,000 850,000,000 850,000,000 Facility is secured against first joint pari passu
charge over fixed assets (land, building, plant
and machinery) of the Company with 25%
margin. The loan is subject to mark-up at the rate
of 3 months KIBOR plus 125 bps (2023: 3
months KIBOR plus 125 bps ) repayable in 32
equal quarterly installments commencing from
May 2025.

Pak Kuwait 1,500,000,000 1,500,000,000 1,104,616,010 463,116,010 Facility is secured against first joint pari passu
Investment charge on all present and future fixed assets of
Company the Company with 25% margin. The loan is
(Private) Limited subject to mark-up at the rate of 3 month offer
rate of KIBOR plus 150 bps (2023: 3 month offer
rate of KIBOR plus 150) repayable in 32 equal
quarterly installments commencing from
September 2024 to August 2026.

Allied Bank - 100,000,000 - 77,483,880 Facility is secured against first joint pari passu
Limited charge over fixed assets (land, building, plant
and machinery) of the Company with 25%
margin. The loan was subject to mark-up at the
rate of 3 months KIBOR plus 125 bps (2023: 3
months KIBOR plus 125 bps) repayable in 39
equal quarterly installments. During the year, the
loan was transferred from term finance to long
term finance under SBP's renewable energy (RE)
scheme IH & SMEFD Circular no. 10 of 2019,
amounting to Rs. 66.982 million.
2,613,185,154 2,052,955,970

8.3 Long Term Finance Facilities (LTFF)

Name of financial Details of financing, security and repayment

Limit Outstanding amount
institution / bank terms
2024 2023 2024 2023
Rupees Rupees Rupees Rupees

United Bank 149,693,155 149,693,155 42,101,202 60,812,846 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan is subject to mark-up at the rate of 3.5
% (2023: 3.5%) per annum. In 2015, the loan was
transferred from NIDF to LTFF Scheme under
SBP's LTFF scheme and SMEFD Circular No.14
of 2015 and is repayable in 32 equal quarterly
installments commenced from November 2017
initially (after deferment commenced from May
2021).

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Name of financial Details of financing, security and repayment

Limit Outstanding amount
institution / bank terms
2024 2023 2024 2023
Rupees Rupees Rupees Rupees

United Bank 142,813,663 142,813,663 53,555,123 71,406,831 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan is subject to mark-up at the rate of 2.5
% (2023: 2.5%) per annum. In 2016, the loan was
transferred from NIDF to LTFF Scheme under
SBP's LTFF scheme and SMEFD Circular No.18
of 2015 and is repayable in 32 equal quarterly
installments commenced from July 2018 initially
(after deferment commnced from April 2021).

United Bank 149,628,405 149,628,405 65,462,421 84,165,973 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan is subject to mark-up at the rate of 2.5
% (2023: 2.5%) per annum. In 2016, the loan was
transferred from NIDF to LTFF Scheme under
SBP's LTFF scheme and SMEFD Circular No.18
of 2015 repayable in 32 equal quarterly
installments commenced from March 2019
initially (after deferment commenced from June
2021).

United Bank 122,869,575 122,869,575 65,274,465 80,633,161 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan is subject to mark-up at the rate of 2.5
% (2023: 2.5%) per annum. In 2017, the loan was
transferred from NIDF to LTFF Scheme under
SBP's LTFF scheme and SMEFD Circular No.18
of 2015 repayable in 32 equal quarterly
installments commenced from September 2019
initially (after deferment commenced from June
2021).

United Bank 27,502,020 27,502,020 8,493,184 10,380,560 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan is subject to mark-up at the rate of 2.5
% (2023: 2.5%) per annum. In 2017, the loan was
transferred from NIDF to LTFF Scheme under
SBP's LTFF scheme and SMEFD Circular No.18
of 2015 repayable in 32 equal quarterly
installments initially commenced from March
2020 after deferment repayments commenced
from June 2021.

Habib Bank 850,000,000 850,000,000 411,448,000 493,732,000 Facility is secured against first joint pari passu
Limited charge on all present and future fixed assets of
the Company with 25% margin. The loan is
subject to mark-up at the rate of 3% (2023: 3%)
per annum. In 2021, the loan was transferred
from Term Finance Facility to LTFF Scheme
under SBP's LTFF scheme and SMEFD Circular
No.18 of 2015 repayable in 32 equal quarterly
installments commenced from July 2021 and
August 2021.

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Name of financial Details of financing, security and repayment

Limit Outstanding amount
institution / bank terms
2024 2023 2024 2023
Rupees Rupees Rupees Rupees

Habib Bank 1,700,000,000 1,700,000,000 960,158,400 1,023,504,000 Facility is secured against first joint pari passu
Limited charge on all present and future fixed assets of
the Company with 25% margin. The loan is
subject to mark-up at the rate of 3.25% and
5.25% (2023 : 3.25% and 5.25% ) repayable in
32 equal quarterly installments commencing from
October 2023 to July 2024.

Pak Kuwait 1,500,000,000 1,500,000,000 375,471,500 386,214,000 Facility is secured against first joint pari passu
Investment charge on all present and future fixed assets of
Company the Company with 25% margin. The loan is
(Private) Limited subject to mark-up at the rate of 3.50% and
5.50% (2023 : 3.50% and 5.50%) repayable in 32
equal quarterly installments commencing from
February 2024 to August 2024.

Allied Bank 350,000,000 350,000,000 224,062,125 266,488,625 Facility is secured against first joint pari passu
Limited charge over fixed assets (land, building, plant
and machinery) of the Company with 25%
margin. The loan is subject to mark-up at the rate
of 2.5% (2023: 2.5%) per annum. In 2020, the
loan was transferred from Term Finance Facility
to LTFF Scheme under SBP's LTFF scheme and
SMEFD Circular No.18 of 2015 repayable in 32
equal quarterly installments commenced from
October 2021 and January 2022, including two
years grace period.

Allied Bank 100,000,000 - 59,102,000 - Facility is secured against first joint pari passu
Limited charge over fixed assets (land, building, plant
and machinery) of the Company with 25%
margin. The loan is subject to mark-up at the rate
of 3.25%. The loan was transferred from Term
finance facility to LTFF under SBP's renewable
energy scheme IH & SMEFD Circular no. 10 of
2019, repayable in 34 equal quarterly
installments initially commenced from September
2023.

Bank Alfalah 750,000,000 750,000,000 478,879,000 562,155,000 Facility is secured against first joint pari passu
Limited charge over fixed assets (land, building, plant
and machinery) of the Company with 25%
margin. The loan is subject to mark-up at the rate
of 3% (2023: 3 %) per anum repayable in 32
equal quarterly installments commenced from
April 2022, including two years grace period.
2,744,007,420 3,039,492,996
8.4 Long Term Finance Facilities (NIDF)
Name of financial Details of financing, security and repayment
Limit Outstanding amount
institution / bank terms
2024 2023 2024 2023
Rupees Rupees Rupees Rupees

United Bank 157,493,182 157,493,182 - 7,155,414 Facility is secured against joint pari passu charge
Limited by way of equitable mortgage over fixed assets
(land, building and machinery) of the Company.
The loan was subject to mark-up at the rate of 3
months KIBOR plus 100 bps (2023: 3 Months
KIBOR plus 100 bps) repayable in 22 equal
quarterly installments intially commenced from
March 2017 (after deferment commenced from
June 2021).

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8.5 Debentures have been issued in favor of Collector of Customs of Karachi to cover deferred payment of custom duty on
imported machinery.

2024 2023
Rupees Rupees
9 EMPLOYEE RETIREMENT BENEFITS

Defined benefit liability - staff gratuity 241,031,213 191,948,868

The Company operates an unfunded gratuity scheme for all its confirmed employees who have completed the minimum
qualifying period of service as defined under the respective scheme. Provision is made to cover the obligations under the
scheme on the basis of actuarial assumptions and is determined using Projected Unit Credit Method. Details of actuarial
assumption and amounts charged in these financial statements are as follows:

2024 2023
9.1 Actuarial assumptions

Discount rate 14.75% 16.25%

Expected rate of salary increase 13.75% 15.75%

Mortality rate SLIC 2001 - 2005 SLIC 2001 - 2005

Setback 1 Year Setback 1 Year

Expected withdrawal rate for actuarial assumptions Age based Age based

2024 2023
Note Rupees Rupees
9.2 Movement in the net defined benefit liability

Balance at the beginning of the year 191,948,868 142,842,944

Recognised in the statement of profit or loss

Current service cost 38,570,600 27,487,530
Interest cost 28,725,481 17,820,593
9.4 67,296,081 45,308,123

Recognised in other comprehensive income

Remeasurement loss on defined benefit liability 9.3 12,139,615 20,493,603

Benefits paid during the year (30,353,351) (16,695,802)

Balance at end of the year 241,031,213 191,948,868

9.3 Remeasurement recognised in Other Comprehensive Income

Actuarial (gain) / loss from changes in financial assumptions (909,197) 1,268,845

Experience adjustments 13,048,812 19,224,758

12,139,615 20,493,603

9.4 Expense recognised in the statement of profit or loss

Current service cost 38,570,600 27,487,530

Interest cost 28,725,481 17,820,593

67,296,081 45,308,123

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9.5 Sensitivity analysis

The sensitivity analysis presented has been determined based on reasonably possible changes of the respective
assumptions occurring at the end of the reporting period, while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated.

This scheme exposes the Company to the actuarial risks such as:

Salary risk

The risk that the final salary at the time of cessation of service is higher than what was assumed. Since the benefit is
calculated on the final salary, the benefit amount increases similarly.

Mortality / withdrawal risk

The risk that the actual mortality / withdrawal experience is different. Its effect depends upon the beneficiaries' service
period / age distribution and the benefit.

Longevity risk

The risk arises when the actual lifetime of the retirees is longer than expectation. This risk is measured at the plan level
over the entire retiree population.

2024
Increase / (decrease) in defined
benefit obligation
Change in Increase in Decrease in
assumption assumption assumption
------------- (Rupees) -------------

Discount rate 0.5% (12,810,509) 14,494,214

Salary increment rate 0.5% 15,001,796 (13,496,602)

2023
------------- (Rupees) -------------

Discount rate 0.5% (5,425,364) 5,767,806

Salary increment rate 0.5% 5,956,833 (5,653,269)

In presenting the above sensitivity analysis, the change in present value of the defined benefit obligation has been
calculated using the Projected Unit Credit method at the end of the reporting period, which is the same as that applied in
calculating the defined benefit obligation liability recognised in the reporting date.

9.6 The expected maturity analysis of undiscounted benefit obligation is:

2024 2023
Rupees Rupees
Undiscounted payments

Less than a year 53,664,549 38,231,744

Between 1 to 2 years 41,854,649 32,659,072
Between 2 to 3 years 32,973,343 34,438,513
Between 3 to 4 years 50,322,148 26,804,513
Between 4 to 5 years 41,976,530 46,250,233
6 years and above 4,768,351,228 5,503,255,976

9.7 Expected provision to be recognised in statement of profit or loss and other comprehensive income for the year ending
June 30, 2025 is Rs. 81.122 million.

9.8 The average duration of the defined benefit obligation is 6 years.

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2024 2023
Note Rupees Rupees
10. DEFERRED GOVERNMENT GRANT

Deferred grant against SBP payroll financing facility 10.1 - -

Less: Current portion of deferred grant - -
- -

10.1 Movement of deferred government grant

Opening balance - 307,915

Recognised during the year - -
Amortization during the year - (307,915)
Closing balance - -

10.2 Deferred grant related to the difference between the fair value and actual proceeds of payroll finance obtained under
SBP's refinance scheme for payment of wages and salaries during the prior years. It is amortised over the period of loan
with an amount equal to the difference between the finance cost charged to statement of profit or loss and other
comprehensive income and the interest paid at SBP's defined rate as per the scheme. The grant amortised over the
period of loan and amortization was recognised and presented as reduction of related interest expense.

2024 2023
Note Rupees Rupees
11 TRADE AND OTHER PAYABLES

Creditors 174,462,901 189,883,405

Accrued liabilities 11.1 929,426,983 888,903,492
Advance rent 8,629,439 7,949,478
Workers' Profit Participation Fund 11.2 16,371,325 43,153,495
Workers' Welfare Fund 11.3 71,024,169 94,901,094
Preference shares redemption liability and dividend 733,365 733,365
Other government expenses - Infrastructure fee 11.4 287,363,957 232,676,330
Sales tax payable 52,002,381 52,151,329
Withholding income tax 5,402,133 10,492,573
Others 2,162,658 359,008

1,547,579,311 1,521,203,569

11.1 This includes an amount of Rs. 582.795 million (2023: Rs. 582.795 million) in respect of Gas Infrastructure Development
Cess.

Gas Infrastructure Development (GID) Cess was levied through GIDC Act, 2011 with effect from December 15, 2011 and
was chargeable from industrial gas customers at different rates as prescribed by the Federal Government through
OGRA notification.

On June 13, 2013, the Peshawar High Court declared the levy, imposition and recovery of the Cess unconstitutional with
the direction to refund the “Cess” so far collected. Supreme Court of Pakistan examined the case and vide its findings
dated August 22, 2014, concluded that GID Cess is a fee and not a tax and on either count the “Cess” could not have
been introduced through a money bill under Article 73 of the Constitution and the same was, therefore, not validly levied
in accordance with the Constitution. However, on September 25, 2014, the President of Pakistan had promulgated GID
Cess Ordinance 2014, which was applicable to the whole of Pakistan and has to be complied by all parties.

On September 29, 2014, the Sindh High Court gave a stay order to various parties against the promulgation of
Presidential order dated September 25, 2014.

59
ANNUAL REPORT 2024
NAGINA

NAGINA GROUP

On May 22, 2015, the GID Cess Act, 2015 was passed by Parliament applicable on all consumers. Following the
imposition of the said Act, many consumers filed a petition in Sindh High Court and obtained stay order against the Act
passed by the Parliament.

On October 26, 2016, the High Court of Sindh held that enactment of GIDC Act 2015 is ultra-vires to the Constitution of
Pakistan. Sui Southern Gas Company Limited filed an intra-court appeal before the Divisional Bench of High Court of
Sindh. On August 13, 2020, GIDC matter was decided by the Supreme Court of Pakistan and the Court ordered gas
consumers to pay outstanding amount of GIDC upto July 31, 2020 in twenty four equal monthly installments, starting
from August 2020. The Supreme Court further gave the Federal Government six months to commence work on the North-
South Gas Pipeline the GIDC Act 2015 was to become permanently in-operations and considered dead for all intents
and purposes. This period of six months expired on February 13, 2021 and no work on the North-South Gas Pipeline
commenced till date.

On September 29, 2020, we have challenged the imposition of GIDC upon us by SSGC and its quantum on various
grounds including that the Company had a judgment from the Honourable Sindh High Court which was not appealed in
time, that the Company had not passed on the burden of the Cess and in any event the GIDC Act 2015 could not apply
with retrospective effect. Sindh High Court has passed restraining order dated September 29, 2020.

During the year ended June 30, 2021, on review petitions filed by companies including those which had obtained the
judgment from the Sindh High Court, the Supreme Court through its judgment dated November 03, 2020 dismissed the
review petitions and allowed the recovery of the amount in fourty eight equal installments with one year grace period as
oppose to twenty four equal installments and six months grace period mentioned in the original decision dated August
30, 2020. Subsequently, the Company obtained stay order from Sindh High Court against the above payments as
directed by Supreme Court.

2024 2023
Note Rupees Rupees
11.2 Workers' Profit Participation Fund

Opening balance 43,153,495 98,108,469

Interest on funds utilised in the Company's business 11.2.1 212,233 9,273,266
43,365,728 107,381,735
Allocation for the year 31 16,371,325 43,153,495
59,737,053 150,535,230
Amount paid to the fund (43,365,728) (107,381,735)
16,371,325 43,153,495

11.2.1 Interest on funds utilised is charged at the rate of 45% (i.e 75% of 60% dividend announced) of last year.

11.3 During the year, the Company has adjusted the liability pertianing to Worker's Welfare Fund amounting to Rs. 23.877
million against Tax refundable as the tax authorities have already adjusted this refund in tax year 2021.

11.4 This represents Government of Sindh, provision for Sindh Development and Infrastructure Fee and Duty which was
levied by the Excise and Taxation Department, on goods entering or leaving the province of Sindh, through air or sea at
prescribed rate, under the Sindh Finance Ordinance, 2001. The imposition of the levy was initially challenged by the
Company along with other affectees, in the High Court of Sindh, and the Court was pleased to grant an interim
injunction, vide Order dated May 31, 2011, to the effect that for every consignment cleared after December 28, 2006,
50% of the value of infrastructure fee should be paid in cash and a bank guarantee for the remaining amount should be
deposited with the Court until the final order is passed. However, as a matter of prudence, in 2021 the Company has
paid 50% of the value of infrastructure fee to the concerned department and recorded liability for the remaining amount
which is supported by a bank guarantee. Starting from September 2021, the Company is providing 100% bank
guarantee in accordance with the order of Supreme Court of Pakistan dated September 01, 2021.

2024 2023
Rupees Rupees
12. ACCRUED INTEREST / MARK-UP

From banking companies

- Long-term finances 119,235,399 118,656,293
- Short-term borrowings 31,344,117 25,385,543
150,579,516 144,041,836

60
NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

2024 2023
13. SHORT-TERM BORROWINGS Note Rupees Rupees

Banking companies - secured

Foreign currency finance 13.2 453,111,481 -
Running finance 13.3 and 13.5 234,976,552 941,704,041
688,088,033 941,704,041

13.1 Reconciliation of liabilities arising from short term financing activities

The table below details changes in the Company's liabilities arising from the financing activities, including both cash and
non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows
will be, classified in the Company's statement of cash flows as cash flows from financing activities.

Cash flows Non-cash flows

July 01, 2023 Obtained Repaid Exchange loss / June 30, 2024
Transferred
------------------------------------------------------ (Rupees) ------------------------------------------------------

Foreign currency finance - 3,539,165,751 (3,086,288,167) 233,897 453,111,481

2023 594,717,608 324,684,557 (855,292,608) (64,109,557) -

13.2 The Company has availed foreign currency finance facility from various banks which carries mark-up ranging from 5% to
10% (2023: 2.10% to 4.10%) per annum.

13.3 Cash and running finance facilities are subject to variable markup ranging from 1 to 3 month KIBOR plus 0.12% to
0.75% (2023: from 1 to 3 month KIBOR plus 0.12% to 1.00%) per annum payable on quarterly basis.

13.4 The Company can avail foreign currency, cash and running finance facilities from various banks aggregating to Rs.
5,790 million (2023: Rs. 5,390 million). These borrowings are secured against hypothecation of stocks and book debts /
receivables of the Company and pari passu charge on present and future current assets, demand promissory notes and
lien on export orders / contracts.

13.5 The aggregate unavailed short-term borrowing facilities available amounted to Rs. 5,102 million (2023: Rs. 4,448
million).

2024 2023
Note Rupees Rupees
14. CONTINGENCIES AND COMMITMENTS

14.1 Contingencies

Bank guarantees issued on behalf of the Company 14.1.1 28,253,615 28,253,615

Bank guarantee in favor of Excise and Taxation department 293,442,448 243,442,448
Revolving Letter of credit favouring SSGC 82,051,880 82,051,880

14.1.1 It includes guarantee issued in favor of Hyderabad Electric Supply Corporation (HESCO) amounting Rs. 24.253 million
(2023: Rs 24.253 million).

61
ANNUAL REPORT 2024
NAGINA

NAGINA GROUP

14.1.2 The Company has filed the petition in the Sindh High Court challenging the amendments made by Finance Act 2020 in
section 65B of the Income Tax Ordinance, 2001, whereby credit has been reduced at 5%, instead of 10%, of the
investments made in plant and machinery and also reduced the period of claim ability of credit to tax year 2019 in
comparison to earlier committed period of tax year 2021. The Sindh High Court has admitted the petition and allowed the
Company to claim the credit as if no amendment in law has been made. Presently this matter is pending in the Supreme
Court in an appeal filed by the FBR. Initially the Company has claimed the credit in filing the tax return based on the
Sindh High Court decision, however effect of claim of Rs. 98,252,298 is presently not recorded in financial statements on
the ground of prudence and will be recognized upon final decision by the Supreme Court on the petition. Subsequent to
the year end, Supreme Court has given the decision in favour of the Company.

14.1.3 The Company challenged the imposition of super tax u/s 4C of the Income Tax Ordinance, 2001 (introduced through the
Finance Act, 2022) in the High Court of Sindh. The High Court of Sindh vide order dated December 22, 2022 passed in
CP 5842 of 2022 (Shell Pakistan Limited v/s Federation of Pakistan & other connected matters) allowed the petition
holding that, super tax would be payable prospectively from tax year 2023, and the proviso imposing rate of super tax at
10% for tax year 2022 was held to be discriminatory and struck down. The aforesaid order dated December 22, 2022
was applied mutatis mutandis on the Company. The FBR preferred an appeal against the order dated December 22,
2022 of the High Court of Sindh before the Supreme Court, which passed an interim order on February 16, 2023,
directing that super tax up to 4% for tax year 2022 would be payable during the pendency of the appeal. The High Court
of Sindh vide order dated February 24, 2023, directed that all sureties deposited with the Nazir of the Sindh High Court in
petitions challenging super tax u/s 4C were to be discharged to the extent of 4%. Thereafter the High Court of Sindh vide
order dated February 28, 2023, directed that those entities who had supplied the Nazir with a cheque for super tax
liability at 10% would be allowed to instead submit two cheques, one for super tax liability at 4% and one for super tax
liability at 6%, and the remaining would be retained by the Nazir till the decision of the Supreme Court in the aforesaid
appeals.

The Company has therefore submitted the two cheques for a 10% super tax liability pertaining to tax year 2022
amounting Rs. 46.215 million. Out of this, 4% (i.e. Rs. 18.486 million) has been paid, while the cheque for remaining 6%
(i.e. Rs. 27.729 million) is currently held by the Nazir of the High Court of Sindh. This matter is presently pending in the
Supreme Court.

2024 2023
Note Rupees Rupees

14.2 Commitments

Capital work
Machinery - 40,112,500
Civil work - 6,226,196
Raw material 1,481,895,235 524,972,137
Stores and spares 38,992,366 17,955,443
Bills discounted 730,817,471 556,701,868

Commitments for rentals of assets under short term lease

agreements

Not later than one year 4,207,472 4,006,582

15. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 15.1 5,893,797,509 3,565,934,646

Capital work in progress 15.2 71,177,844 2,647,511,511
5,964,975,353 6,213,446,157

62
 15.1 Operating fixed assets

2024
Accumulated Depreciation Accumulated Written down
Cost at Cost at
Particulars Additions / depreciation at for the depreciation at value at Rate of
July 01, June 30,
(Deletions) July 01, year / June 30, June 30, depreciation
2023 2024
2023 (Disposal) 2024 2024
---------------------------------------------------------------------------------- (Rupees) -------------------------------------------------------------------------------- %

Owned
NAGINA COTTON MILLS LTD.

Land - freehold ** 7,400,318 - 7,400,318 - - - 7,400,318 -

Land - leasehold ** 2,474,682 - 2,474,682 - - - 2,474,682 -

Commercial building on
free hold land 16,699,610 - 16,699,610 11,970,733 236,444 12,207,177 4,492,433 5

Mills buildings on leasehold land 337,626,579 552,978,017 890,604,596 193,598,437 19,244,403 212,842,840 677,761,756 10

Other buildings on leasehold land 47,888,572 - 47,888,572 22,983,342 1,245,261 24,228,603 23,659,969 5

63
Machinery and equipment 5,151,470,523 2,264,579,474 7,336,711,609 1,920,880,653 511,053,429 2,379,677,023 4,957,034,586 10
(79,338,388) (52,257,059)
Electric installations
and equipment 183,881,642 46,267,539 230,149,181 98,645,956 9,241,362 107,887,318 122,261,863 10

Gas installations 4,961,490 - 4,961,490 3,695,320 126,617 3,821,937 1,139,553 10

Office equipment 24,963,010 569,000 25,532,010 16,717,278 859,432 17,576,710 7,955,300 10

Furniture and fixtures 53,443,036 2,294,529 55,737,565 27,493,770 2,747,665 30,241,435 25,496,130 10

Vehicles 69,238,268 48,523,675 102,362,463 38,127,595 10,657,642 38,241,544 64,120,919 20

(15,399,480) (10,543,693)

5,900,047,730 2,915,212,234
** 8,720,522,096 2,334,113,084 555,412,255 2,826,724,587 5,893,797,509

(94,737,868) (62,800,752)
NAGINA

NAGINA GROUP
 2023
Accumulated Depreciation Accumulated Written down
Particulars Cost at Cost at
Additions / depreciation at for the depreciation at value at Rate of
July 01, June 30,
(Deletions) July 01, year / June 30, June 30, depreciation
2022 2023
2022 (Disposal) 2023 2023
--------------------------------------------------------------------------------------- (Rupees) -------------------------------------------------------------------------------- %
ANNUAL REPORT 2024

Owned

Land - freehold ** 7,400,318 - 7,400,318 - - - 7,400,318 -

Land - leasehold ** 2,474,682 - 2,474,682 - - - 2,474,682 -

Commercial building on
free hold land 16,699,610 - 16,699,610 11,721,844 248,889 11,970,733 4,728,877 5

Mills buildings on leasehold land 336,652,697 973,882 337,626,579 177,777,751 15,820,686 193,598,437 144,028,142 10

Other buildings on leasehold land 47,888,572 - 47,888,572 21,703,743 1,279,599 22,983,342 24,905,230 5

Machinery and equipment 4,779,435,916 397,403,596 5,151,470,523 1,607,183,354 336,681,093 1,920,880,653 3,230,589,870 10

64
(25,368,989) (22,983,794)
Electric installations
and equipment 183,067,642 814,000 183,881,642 88,804,883 9,841,073 98,645,956 85,235,686 10

Gas installations 4,961,490 - 4,961,490 3,537,111 158,209 3,695,320 1,266,170 10

Office equipment 24,070,810 959,700 24,963,010 15,870,207 872,130 16,717,278 8,245,732 10

(67,500) (25,059)

Furniture and fixtures 52,934,580 508,456 53,443,036 24,631,518 2,862,252 27,493,770 25,949,266 10

Vehicles 65,989,365 4,531,503 69,238,268 31,381,577 7,598,120 38,127,595 31,110,673 20

(1,282,600) (852,102)
5,521,575,682 **
405,191,137 5,900,047,730 1,982,611,988 375,362,051 2,334,113,084 3,565,934,646
(26,719,089) (23,860,955)

** Freehold lands are located at 91-B1, M.M. Alam Road, Gulberg-III, Lahore and 13.5 Km, Sheikhupura, Sharqpur Road, Mouza Ghazi Androon, Dist. Sheikhupura with an area of
0.221 acres and 9.62 acres respectively. Leasehold land is located at Kotri Industrial Trading Estate, Sindh with an area of 20.75 acres.
NAGINA

NAGINA GROUP
 2024 2023
Note Rupees Rupees
15.1.1 Depreciation for the year has been allocated as under:

Cost of goods manufactured 28.1 542,675,679 364,159,110

Administrative expenses 30 12,736,576 11,202,941

555,412,255 375,362,051

15.1.2 Details of disposal of assets

Relationship of
Accumulated Written Down Gain on Mode of
Description of assets Cost Sale Proceeds purchaser with Particulars of buyers
Depreciation Value disposal disposal
the Company
NAGINA COTTON MILLS LTD.

--------------------------------------------------------------------------------------- (Rupees) --------------------------------------------------------------------------------

-
Vehicles 66,467 47,155 19,312 55,000 35,688 Negotiation None Raja Muhammad Khan Khatak
House No 18, Choudry Colony, Samanabad,
Lahore.

Vehicles 1,593,100 1,034,821 558,279 1,050,000 491,721 Negotiation None Shakeel Ashraf
Dhok Sobaidar Imam Ali, Dak Khana Khas, Jind,

65
Salu, Tehsil Gojar Khan, District Rawalpindi

Vehicles 1,410,300 1,057,286 353,014 1,010,000 656,986 Negotiation None Karimi Construction Co
Plot No. 14/7, Block 4-D, Razia Apt, Nazimabad,
Karachi.

Vehicles 743,655 527,738 215,917 400,000 184,083 Negotiation None Niaz Ahmed
Flat No. 114, Block-2, Fl 11, West Estate, Clifton,
Karachi.

Vehicles 1,268,000 912,759 355,241 950,000 594,759 Negotiation None Muhammad Talha Afaq
House No. R-125, Sector 11, Area C-1, Latif
Nagar, North Karachi.

Vehicles 2,632,980 1,946,980 686,000 2,100,000 1,414,000 Negotiation None Wasim Mirza
H. No. A-32, Block 10 - A, Near Lasania
Restaurant, Gulshan-E-Iqbal, Karachi.

Vehicles 2,321,400 1,359,053 962,347 1,700,000 737,653 Negotiation None Naveed Akhtar
Chak No. 56, Dakhana Khas Nirman, Dist-
Bahawalpur.

1,722,639 1,260,254 462,385 1,575,000 1,112,615 Negotiation None Wasim Mirza

Vehicles
NAGINA

NAGINA GROUP
 Relationship of
Accumulated Written Down Gain on Mode of
Description of assets Cost Sale Proceeds purchaser with Particulars of buyers
Depreciation Value disposal disposal
the Company

--------------------------------------------------------------------------------------- (Rupees) --------------------------------------------------------------------------------

ANNUAL REPORT 2024

H. No. A-32, Blk 10-A, Near Lasania Restaurant,

Gulshan-E-Iqbal, Karachi.

Vehicles 2,260,939 1,440,221 820,718 1,750,000 929,282 Negotiation None Muhammad Talha Afaq
H. No. R-125, Sec-11, Area C-1, Latif Nagar,
North Karachi.
Vehicles 1,287,600 920,532 367,068 1,000,000 632,932 Negotiation None Asad Hussain
H. No. 100/2, Khayaban-E-Ameer Khusro, DHA,
Karachi.

Vehicles 92,400 36,894 55,506 110,000 54,494 Insurance None IGI Insurance Company
claim

66
Suite No 701-713, The Forum, Block 9, Khayaban-
E-Jami, Clifton, Karachi

Machinery and equipment 19,423,998 13,200,897 6,223,101 6,700,000 476,899 Negotiation None H.A Fibres (Private) Limited
236 - CCA, Sector-F, Phase IV, DHA, Lahore
Cantonment.

Machinery and equipment 40,613,279 27,381,528 13,231,751 13,367,500 135,749 Negotiation None H.A Fibres (Private) Limited
236 - CCA, Sector-F, Phase IV, DHA, Lahore
Cantonment.

Machinery and equipment 19,301,111 11,674,634 7,626,477 7,800,000 173,523 Negotiation None Combine Spinning Limited
148 Ahmad Block, New Garden Town, Lahore.

2024 94,737,868 62,800,752 31,937,116 39,567,500 7,630,384

2023 26,719,089 23,860,955 2,858,134 4,695,000 1,836,866

NAGINA

NAGINA GROUP
NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

2024 2023
Note Rupees Rupees
15.2 Capital work-in-Progress

Civil work 15.2.1 2,076,032 450,852,647

Machinery, electrical installations, furniture and equipment 15.2.2 69,101,812 2,196,658,864
71,177,844 2,647,511,511

15.2.1 Civil work

Opening balance 450,852,647 212,339,938

Additions 102,008,008 238,975,387
552,860,655 451,315,325

Transfer to operating fixed assets (550,784,623) (462,678)

Closing balance 2,076,032 450,852,647

15.2.2 Machinery, electrical installations, furniture and equipment

Opening balance 2,196,658,864 478,035,901

Additions 15.2.3 181,566,728 2,116,866,112

2,378,225,592 2,594,902,013

Transfer to operating fixed assets (2,309,123,780) (398,243,149)

Closing balance 69,101,812 2,196,658,864

15.2.3 It includes borrowing cost of Rs. 73.691 million (2023: Rs.141.178 million) capitalised during year. The capitalisation rate
used for determining the amount of borrowing cost eligible for capitalisation is 3.25% to 24.16%.

16. INVESTMENT PROPERTIES

- Cost Model
Cost Depreciation Written down Annual
value as at rate
As at July 01, Additions / As at June As at July Charge for As at June
June 30, of depreciation
2023 (disposals) 30, 2024 01, 2023 the year 30, 2024
2024
----------------------------------------------------------------- (Rupees) --------------------------------------------------------------- %

Building on freehold
land - 16.1 & 16.2 17,539,312 - 17,539,312 13,524,416 200,745 13,725,161 3,814,151 5

Land in Lahore -
freehold - 16.1 & 16.2 8,300,631 - 8,300,631 - - - 8,300,631 -

Land in Sheikhupura -
freehold - 16.1 & 16.3 -
751,338 - 751,338 - - - 751,338
2024 26,591,281 - 26,591,281 13,524,416 200,745 13,725,161 12,866,120

2023 26,591,281 - 26,591,281 13,313,106 211,310 13,524,416 13,066,865

16.1 As per the valuation done by M/s Hamid Mukhtar & Co. (Pvt) Ltd, the fair value of Land and building in Lahore - free hold is
Rs. 1.143 billion (2023: Rs. 1.143 billion) and Land in Sheikhupura is Rs 185 million (2023: Rs.185 million).

16.2 Freehold land and building there upon is situated at 91-B1, M.M. Alam Road, Gulberg-III, Lahore, having total area of 0.5
acres (4 kanals and 12 square feet).

16.3 Land is situated at 13.5 Km, Sheikhupura, Sharqpur Road, Mouza Ghazi Androon, Dist. Sheikhupura, having total area of
18.5 acres (148 kanals).

67
ANNUAL REPORT 2024
NAGINA

NAGINA GROUP

17. INTANGIBLE ASSETS

The Company is using Enterprise resource planning software costing Rs. 4.151 million which is fully amortized and is still in
use.

2024 2023
Note Rupees Rupees
18. STORES AND SPARES

Stores 40,310,292 29,935,494

Spares 135,636,654 125,016,276

175,946,946 154,951,770

19. STOCK-IN-TRADE

Raw material 1,600,589,445 2,846,192,621

Work-in-process 221,488,446 210,447,303
Finished goods 503,933,589 414,298,362
Waste 19,508,132 35,294,522

2,345,519,612 3,506,232,808

20. TRADE RECEIVABLES

Foreign - secured 296,203,688 417,916,472

Local - unsecured 2,129,727,335 790,996,512

20.1 2,425,931,023 1,208,912,984

Provision for expected credit losses (1,940,806) (1,940,806)
2,423,990,217 1,206,972,178

20.1 These are non-interest bearing, normal credit period is 15 to 45 days.

20.1.1 Aging of past due but not impaired

0-45 days 687,567,094 278,534,617

46-90 days 3,843,469 543,324
91-180 days 10,512,291 682,737
181 days and above 76,768,958 1,135,035
778,691,812 280,895,713

21. ADVANCES

Employees 315,268 829,506

Suppliers 438,494,251 813,363,287
Expenses 948,925 1,807,792
Letters of credit 4,413,163 2,409,163

444,171,607 818,409,748

22. PREPAYMENTS

Insurance 2,457,235 2,159,544

Rent 1,310,492 317,826
Others 10,023 10,025
3,777,750 2,487,395

68
NAGINA COTTON MILLS LTD.
NAGINA

NAGINA GROUP

2024 2023
Note Rupees Rupees
23. OTHER RECEIVABLES

Others 23.1 12,165,011 59,930,963

23.1 It includes profit receivable on term deposits amounting to Rs. 3.32 million (2023: Rs. 3.36 million) and guarantee margins
on LC amounting to Rs. 3 million (2023: Rs. 20.18 million).

2024 2023
Note Rupees Rupees
24. TAX REFUNDABLE

Sales tax refundable 50,378,571 98,544,855

Income tax refundable 24.1 14,253,227 59,534,390

64,631,798 158,079,245

24.1 Movement of advance tax is as under:

Opening balance 59,534,390 60,854,742

Provision for levies (234,030,195) (203,867,680)
WWF Adjustment (23,876,921) -
Income tax provision - (9,703,405)
Levies and taxes paid 212,625,953 212,250,733

14,253,227 59,534,390

25. OTHER FINANCIAL ASSETS

Designated at amortised cost

Terms deposits with banks having maturity of
- More than three months 45,100,000 82,500,000
- Three months or less 76,903,615 1,903,615
25.1 122,003,615 84,403,615

Designated at fair value through other comprehensive income

Investment in listed equity securities 25.2 13,461,600 132,205,022

Designated at fair value through profit or loss

Investment in mutual funds 25.3 1,019,801,748 349,654

1,155,266,963 216,958,291

25.1 Markup on term deposits ranges from 15.97% to 19.99% (2023: 14.5% to 20.1%) per annum.

25.2 Investment in listed equity securities

2024 2023 2024 2023

Number of shares Name of investee Rupees Rupees

- 1,282,500 Fauji Cement Company Limited - 15,082,200

- 447,500 Habib Metropolitan Bank Limited - 13,523,450
120,000 433,500 Bank Al Habib Limited 13,461,600 18,735,870
- 365,000 Fatima Fertilizer Company Limited - 10,880,650
- 376,704 United Bank Limited - 44,277,788
- 271,850 Bank Alfalah limited - 8,275,114
- 150,000 Oil & Gas Development Company Limited - 11,700,000
- 85,000 MCB Bank Limited - 9,729,950

13,461,600 132,205,022

69
ANNUAL REPORT 2024
NAGINA

NAGINA GROUP

2024 2023
Note Rupees Rupees

25.3 Investment in mutual funds

NAFA Money Market fund 81,877,009 units (2023: Nil) 819,441,486 -

ABL Cash Fund 19,563,384 units (2023: Nil) 200,307,537 -
HBL Cash Fund 511 units (2023: 3388 units) 52,725 349,654
1,019,801,748 349,654

25.4 Reconciliation between fair value and cost of investments classified as ‘equity instrument’.

2024 2023
Note Rupees Rupees

Through other comprehensive income

Fair value of investments

- in listed equity securities 25.2 13,461,600 132,205,022

Less : unrealized (gain) / loss on remeasurement of investments

25.5 (8,273,929) 55,702,216
as at June 30
Cost of investments 5,187,671 187,907,238

25.5 Unrealized gain / (loss) on remeasurement of equity instruments

through other comprehensive income

Opening balance (55,702,216) (70,354,394)

Fair value gain / (loss) arises for the year 108,644,099 (22,915,092)
Transfer of realized (gain) / loss on sale of investments (44,667,954) 37,567,270
Unrealized fair value gain for the year 63,976,145 14,652,178

Closing balance 8,273,929 (55,702,216)

25.6 Unrealized gain on remeasurement of mutual funds

through profit or loss

Fair value of investments in mutual funds 25.3 1,019,801,748 349,654

Less: Cost of investments (1,017,536,188) (348,383)

Unrealised gain on remeasurement of investments 2,265,560 1,271

26. CASH AND BANK BALANCES

Cash with banks - In current accounts

- Local currency 102,863,665 151,350,432
- Foreign currency 26.1 23,054,757 85,845,363

125,918,422 237,195,795

26.1 It is a current account denominated in USD amounting to USD 82,886.9 (2023: USD 299,967.2).

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27. REVENUE FROM CONTRACTS WITH CUSTOMERS

2024
Local Export Total
Note ----------------------------- (Rupees) ---------------------------------

Yarn 27.1 & 27.2 9,438,410,798 11,080,590,097 20,519,000,895

Waste 1,520,039,384 153,473,872 1,673,513,256
Raw material 541,524 - 541,524
10,958,991,706 11,234,063,969 22,193,055,675

Sales tax (1,671,697,363) (73,238,075) (1,744,935,438)

9,287,294,343 11,160,825,894 20,448,120,237

2023
Local Export Total
----------------------------- (Rupees) ---------------------------------

Yarn 27.1 & 27.2 1,952,117,646 11,345,983,571 13,298,101,217

Waste 909,127,307 176,200,919 1,085,328,226
Raw material 4,916,103 - 4,916,103
2,866,161,056 11,522,184,490 14,388,345,546

Sales tax (426,946,869) (1,142,640,959) (1,569,587,828)

2,439,214,187 10,379,543,531 12,818,757,718

27.1 Export sales includes exchange gain of Rs. 80.21 million (2023: Rs. 31.79 million).

27.2 Export sales include indirect export of Rs. 5.658 billion (2023: Rs. 6.904 billion) and indirect exports include sales of Rs.
0.527 billion (2023: Rs. 3.196 billion) to related parties (note 39).

2024 2023
Note Rupees Rupees

28. COST OF GOODS SOLD

Opening stock - finished goods and waste 449,592,884 221,494,535

Cost of goods manufactured 28.1 18,736,091,317 11,652,079,414
Purchase of waste material 68,733,974 6,218,980
19,254,418,175 11,879,792,929

Closing stock - finished goods and waste 19 (523,441,721) (449,592,884)

Cost of sale of waste material 103,314,297 48,920,083
18,834,290,751 11,479,120,128

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2024 2023
Note Rupees Rupees

28.1 Cost of goods manufactured

Raw material consumed 28.1.1 15,190,162,053 9,948,982,689

Packing material consumed 220,332,273 135,083,634
Stores and spares consumed 321,805,506 240,418,430
Salaries, wages and other benefits 28.1.2 601,904,358 439,713,367
Fuel 1,761,347,122 542,880,581
Rates and taxes 319,185 525,849
Insurance 40,899,558 25,001,936
Repairs and maintenance 9,165,865 17,137,219
Depreciation on property, plant and equipment 15.1.1 542,675,679 364,159,110
Other manufacturing overheads 58,520,861 36,152,573

18,747,132,460 11,750,055,388
Work in process
Opening stock 210,447,303 112,471,329
Closing stock 19 (221,488,446) (210,447,303)
(11,041,143) (97,975,974)
18,736,091,317 11,652,079,414

28.1.1 Raw material consumed

Opening stock 2,846,192,621 2,650,902,366

Purchases 13,944,558,877 10,144,272,944
16,790,751,498 12,795,175,310

Closing stock 19 (1,600,589,445) (2,846,192,621)

15,190,162,053 9,948,982,689

28.1.2 It includes Rs. 57.50 million (2023: Rs. 38.79 million) in respect of employee retirement benefits.

2024 2023
Rupees Rupees

29. DISTRIBUTION COST

Freight 184,959,000 141,070,972

Commission:
- Local 55,897,117 21,115,706
- Export 26,917,600 39,325,845
Stamp duty 641,038 415,608
Travelling 7,795,225 4,868,589
Export development surcharge 13,668,751 8,864,906
Quality claims 1,064,620 5,937,931
Handling and other charges 16,009,647 8,289,870
Insurance 824,422 590,106
Others 5,691,197 2,670,447

313,468,617 233,149,980

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2024 2023
Note Rupees Rupees
30. ADMINISTRATIVE EXPENSES

Directors' remuneration, fees and benefits 35,942,500 34,566,667

Staff salaries and other benefits 30.1 90,759,152 88,424,079
Travelling and conveyance 5,225,576 2,023,588
Printing and stationery 2,840,730 2,916,007
Postage and telephone 3,334,086 3,353,775
Fees, subscription and periodicals 15,878,733 9,879,345
Legal and professional 3,756,411 3,770,207
Advertisement 163,528 327,060
Utilities - net of recoveries 11,004,809 7,602,471
Rates and taxes 1,109,390 827,841
Short term lease 5,041,602 4,697,403
Insurance 2,734,525 2,913,431
Auditor's remuneration 30.2 1,641,700 1,355,000
Repairs and maintenance 2,312,065 2,749,530
Vehicles running and maintenance 20,974,516 18,180,826
Entertainment 2,681,949 1,759,353
Depreciation on property, plant and equipment 15.1.1 12,736,576 11,202,941
Depreciation on investment properties 16 200,745 211,310
Donations 30.3 225,000 200,000
Others 2,301,289 2,339,671
220,864,882 199,300,505

30.1 It includes Rs. 9.7 million (2023: Rs. 6.51 million) in respect of employee retirement benefits.

2024 2023
Rupees Rupees
30.2 Auditor's remuneration

Annual audit fee 1,000,000 805,000

Half yearly review fee 326,700 220,000
Review report on statement of compliance 55,000 55,000
Tax compliance services 150,000 165,000
Other certifications 110,000 110,000
1,641,700 1,355,000

30.3 Donations were not made to any donee in which a director or his spouse had any interest at any time during the year.
Donations made are not higher than Rs. 1 million therefore, names of donees is not disclosed.

2024 2023
Note Rupees Rupees
31. OTHER EXPENSES

Workers' Profit Participation Fund 11.2 16,371,325 43,153,495

Workers' Welfare Fund - 16,398,328
Unrealized loss on foreign currency loan 233,897 -
Unrealized loss on revaluation of foreign currency account 5,063,618 -
Reversal of unrealized gain on foreign currency loan - 3,000,752
21,668,840 62,552,575

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2024 2023
32. OTHER INCOME Note Rupees Rupees

Dividend income 29,411,229 127,592,057

Realized gain on sale of mutual funds 4,692,852 35,306,314
Unrealized gain on mutual funds 2,265,560 1,271
Interest income on term deposit receipt 20,540,468 4,664,380
Liability no longer payable - 801,781
Unrealized gain on revaluation of foreign currency account - 7,408,068
Scrap sales 5,634,251 4,894,221
Gain on disposal of property, plant and equipment - net 15.1.2 7,630,384 1,836,866
Realized gain on forward contracts 97,641 4,989,050
Rental income from investment property 33,508,418 30,753,090
103,780,803 218,247,098
33. FINANCE COST

Mark-up / interest on:

Long term finances 599,858,343 304,368,503
Short term borrowings 303,037,491 71,310,075
Workers' Profit Participation Fund 11.2.1 212,233 9,273,266
Bank charges and commission 21,135,340 15,589,732
924,243,407 400,541,576

Less: amounts included in the cost of qualifying asset 15.2.3 (73,690,640) (141,178,054)
850,552,767 259,363,522

Restated
2024 2023
34. LEVIES Rupees Rupees

Final taxes on:

- export sales 111,608,259 102,572,332
- local sales - 24,392,142
34.1
- dividend income 4,522,157 19,138,809
- capital gain 4,126,589 -
Super tax - 57,764,397
Prior year levies (2,317,989) -
Minimum Taxes 34.2 116,091,179 -
234,030,195 203,867,680

34.1 These represent final taxes paid on export sales, dividend income and capital gain account and are recognised as levies in
line with the requirements of IFRIC 21 'Levies' or IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' and
guide on IAS 12 ‘Income Taxes’ issued by Institute of Chartered Accountants of Pakistan.

34.2 This represents provision for minimum tax under section 113, of the Income Tax Ordinance, 2001. The provision for
minimum tax has been recognised as levies in these financial statements as per the requirements of IFRIC 21 'Levies' or
IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' and guide on IAS 12 ‘Income Taxes’ issued by Institute of
Chartered Accountants of Pakistan.

Restated
2024 2023
35. TAXATION Rupees Rupees

Current tax - 9,703,405

35.1 Deferred tax asset amounting to Rs. 78.094 million has not been recognised.

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Restated
2024 2023
Rupees Rupees
35.2 Relationship between tax expense and accounting profit

Accounting profit - before levies and taxation 311,055,183 803,518,106

Tax @ 29% 90,206,003 233,020,251

Effect of:
- Super tax - 56,780,400
- Fixed tax regime 42,840,677 (46,113,362)
- Rental income 7,111,015 (2,014,486)
- Dividend income (4,117,572) (17,862,888)
- Levies (234,030,195) (203,867,679)
- Prior year levies (2,317,989) -
- Tax impact of minimum tax credit 105,199,954 -
- Capital gain (4,891,893) (10,238,831)
(90,206,003) (223,316,846)
Tax charge for the year - 9,703,405

36. EARNINGS PER SHARE - basic and diluted

There is no dilutive effect on the basic earnings per share of the Company which is as follows :
2024 2023

Profit for the year (Rupees) 77,024,988 589,947,021

Weighted average number of ordinary shares 18,700,000 18,700,000
Earnings per share (Rupees) 4.12 31.55

2024 2023
37. CASH GENERATED FROM / (USED IN) OPERATIONS Note Rupees Rupees

Profit before levies and taxation 311,055,183 803,518,106

Adjustments for:
Depreciation on property, plant and equipment 15.1.1 555,412,255 375,362,051
Depreciation on investment properties 16 200,745 211,310
Provision for gratuity 9.2 67,296,081 45,308,123
Liability no longer payable 32 - (801,781)
Gain on disposal of property, plant and equipment - net 15.1.2 (7,630,384) (1,836,866)
Realised gain on sale of mutual funds 32 (4,692,852) (35,306,314)
Unrealized gain on mutual funds 32 (2,265,560) -
Finance cost 33 850,552,767 259,363,522
Unrealized loss on foreign currency loan 31 233,897 3,000,752
Unrealized loss / (gain) on revaluation of foreign currency account 31 5,063,618 (7,408,068)
Rental income from investment property 32 (33,508,418) (30,753,090)
Dividend income 32 (29,411,229) (127,592,057)
1,712,306,103 1,283,065,688
Changes in working capital
Decrease / (increase) in current assets

Stores and spares (20,995,176) (91,138,120)

Stock-in-trade 1,160,713,196 (521,364,578)
Trade receivables (1,217,018,039) (233,463,716)
Advances 374,238,141 (666,924,001)
Prepayments (1,290,355) 1,889,248
Other receivables 47,765,952 (20,493,087)
Tax refundable 48,166,284 96,349,547
391,580,003 (1,435,144,707)
Increase in current liabilities
Trade and other payables 49,572,702 133,563,388
Contract liability - advance from customers (6,714,074) (970,595)
Cash generated from / (used in) operations 2,146,744,734 (19,486,226)

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38. REMUNERATION OF DIRECTORS AND EXECUTIVES

2024 2023
Directors Directors
Chief Chief
Non- Non-
Executive Executive Executives Executive Executive Executives
Executive Executive
---------------------------------------- (Rupees) ----------------------------------------
---------------------------------------- (Rupees) ----------------------------------------
Remuneration 13,920,000 13,920,000 - 32,962,276 12,480,000 12,480,000 - 25,557,880
House rent
3,480,000 3,480,000 - 14,833,024 3,120,000 3,120,000 - 11,501,046
Allowance
Other allowances - - - 1,648,114 - - - 1,277,894
Retirement benefits - - - 2,475,203 - - - 1,870,511
Leave encashment - - - 416,219 2,166,667 - - 4,075,048
Bonus - - - - - - - 106,192
Meeting fee - - 1,142,500 - - - 1,200,000 -
17,400,000 17,400,000 1,142,500 52,334,836 17,766,667 15,600,000 1,200,000 44,388,571

No. of persons 1 1 4 16 1 1 5 13

38.1 Chief Executive and Executive Directors are provided with free use of the Company's maintained cars and Chief Executive is entitled for
reimbursement of utility bills.

39. TRANSACTIONS WITH RELATED PARTIES

The related parties comprise of associated undertakings, directors of the Company and key management personnel including chief executive
and directors, their close family members and post retirement benefit plans. The Company carries out transactions with various related parties
and continues to have a policy whereby all such transactions are carried out at agreed terms. There is no balance outstanding with or from
associated undertakings. Remuneration of directors and key management personnel are disclosed in note 38 and amount due in respect of
staff retirement benefits is disclosed in note 9. Other significant transactions with related parties are as follows:

2024 2023
Nature of relationship Nature of transactions
Rupees Rupees

Prosperity Weaving Mills Limited Purchase of goods 1,515,351 91,667

Sale of goods 1,656,901,345 2,746,674,441
Rental income 1,815,642 1,721,286

Ellcot Spinning Mills Limited Sale of goods - 449,922,033

Rental income 1,372,752 1,278,396

Ellahi International ( Pvt ) Ltd Dividend paid 54,000 90,000

Haroon Omer ( Pvt )Ltd Dividend paid 6,102,882 10,171,470

Monell (Pvt) Limited Dividend paid 6,102,882 10,171,470

Icaro (Pvt) Limited Dividend paid 6,103,488 10,172,480

Key management personnel Payment of dividend to directors and their 83,620,392 139,367,340
close family members

39.1 Following are the related parties with whom the Company has entered into transactions or have arrangements / agreements in place.
Aggregate % holding
Basis of
Name of related party Relationship in the Company as at
relationship
June 30, 2024

Ellcot Spinning Mills Limited Associated company Common directorship -

Prosperity Weaving Mills Limited Associated company Common directorship -
Ellahi International (Private) Limited Associated company Common directorship 0.05%
Haroon Omer (Private) Limited Associated company Common directorship 5.44%
Monell (Private) Limited Associated company Common directorship 5.44%
ICARO (Private) Limited Associated company Common directorship 5.44%
ARH (Private) Limited Associated company Common directorship -
Pacific Industries (Private) Limited Associated company Common directorship -
Mr. Shaukat Ellahi Shaikh Key management personnel Director 17.47%
Mr. Shafqat Ellahi Shaikh Key management personnel Director 17.26%
Mr. Shahzada Ellahi Shaikh Key management personnel Chairman / Director 17.26%
Mr. Hasan Ahmed Key management personnel Director 0.003%
Mr. Shafiq Ur Rehman Key management personnel Director 0.003%
Mr. Naweed Akhter Sharif Key management personnel Director 0.003%
Mr. Raza Ellahi Shaikh Key management personnel Director 7.49%
Ms. Tosheeba Sarwar Key management personnel Director 0.003%
Mr. Amin Ellahi Shaikh Key management personnel Director / CEO 7.49%
Mr. Haroon Shahzada Ellahi Shaikh Key management personnel Director 3.74%
Mrs. Humera Shahzada Ellahi Shaikh Close family member key management Spouse of director 0.02%
Mrs. Mona Shaukat Shaikh Close family member key management Spouse of director 0.02%
Mrs. Shaista Shafqat Close family member key management Spouse of director 0.02%
Mr. Omer Ellahi Shaikh Close family member key management Son of director 3.74%

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40. PLANT CAPACITY AND ACTUAL PRODUCTION

It is difficult to describe precisely the production capacity and the resultant production converted into base count in the
textile industry since it fluctuates widely depending on various factors such as count of yarn spun, raw material used,
spindle speed and twist. It would also vary according to the pattern of production adopted in a particular year.
2024 2023
Number of spindles installed No. 62,508 51,708
Total number of spindles worked No. 62,508 51,708
Number of shifts per day No. 3 3
Actual number of shifts in a year No. 1,098 1,095
Plant capacity on the basis of utilization converted in to 20s' count Kgs 24,641,884 20,216,085
Actual production converted into 20's count Kgs 23,237,206 20,950,937

41. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

41.1 Financial Instruments by category
2024
At fair value
At fair value
At amortized through other
through profit or Total
cost comprehensive
loss
income
------------------------------- ( Rupees) ------------------------------
Financial assets as per statement of financial position

Long term deposits 1,021,858 - - 1,021,858

Trade receivables 2,423,990,217 - - 2,423,990,217
Other receivables 12,165,011 - - 12,165,011
Other financial assets 122,003,615 13,461,600 1,019,801,748 1,155,266,963
Cash and bank balances 125,918,422 - - 125,918,422
2,685,099,123 13,461,600 1,019,801,748 3,718,362,471

2023
At fair value
At fair value
through other
At amortized cost through profit or Total
comprehensive
loss
income
------------------------------- ( Rupees) ------------------------------
Financial assets as per statement of financial position
Long term deposits 1,021,858 - - 1,021,858
Trade receivables 1,206,972,178 - - 1,206,972,178
Other receivables 59,930,963 - - 59,930,963
Other financial assets 84,403,615 132,205,022 349,654 216,958,291
Cash and bank balances 237,195,795 - - 237,195,795
1,589,524,409 132,205,022 349,654 1,722,079,085

2024 2023
Financial liabilities as per statement of financial position Rupees Rupees
At amortized cost
Long-term finances 5,360,024,729 5,102,436,535
Short-term borrowings 688,088,033 941,704,041
Trade and other payables 1,106,052,542 1,079,879,270
Unclaimed dividend 11,904,654 10,989,419
Accrued interest / mark-up 150,579,516 144,041,836
7,316,649,474 7,279,051,101
41.2 Financial risk management objectives and policies
The Company finances its operations through short term borrowings, long term finances and management of working
capital with a view to maintaining an appropriate mix between various sources of finance to minimize risk.
The Company has exposures to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Market risk

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The Board of Directors has overall responsibility for the establishment and oversight of Company’s risk management
framework. The Board is also responsible for developing and monitoring the Company's risk management policies. 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. No changes were made in the objectives, policies or processes and
assumptions during the year ended June 30, 2024 which are summarized below.
41.3 Credit risk and concentration of credit risk
Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail completely
to perform as contracted. Out of the total financial assets of Rs. 3,718.362 million (2023: Rs. 1,722.079 million), the
financial assets which are subject to credit risk amounted to Rs. 2,685.099 million (2023: Rs. 1,589.542 million). The
Company manages credit risk for trade receivables by assigning credit limits to its customers and thereby does not have
significant exposure to any individual customer.
The Company is exposed to credit risk from its operating activities primarily for trade receivables and other receivables,
deposits with banks and financial institutions, and other financial instruments. The credit risk on liquid funds is limited
because the counter parties are banks with reasonably high credit ratings i.e. A1+ to A1 in short term and AAA to A for
long term.
Credit risk related to receivables
Customers' credit risk is managed subject to the Company’s established policy, procedures and control relating to
customer credit risk management. The management monitors and limits the Company's exposure of credit risk by limiting
transactions with specific counter parties and continually assessing their credit worthiness. Outstanding customer
receivables are regularly monitored and any shipments to major export customers are generally covered by letters of
credit.
Trade receivables consist of a large number of customers, spread across geographical areas. Ongoing credit evaluation is
performed on the financial condition of trade receivables, where appropriate. The Company does not have any significant
credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. At June 30,
2024 the Company had approximately 40 (2023: 21) major local customers that owed more than Rs. 8 million each and
accounted for approximately 96% (2023: 89%) of local trade receivables. Export debts amounting to Rs. 296.203 million
(2023: Rs. 417.916 million) are secured against letters of credit.
41.4 Liquidity risk
Liquidity risk reflects the Company’s inability in raising funds to meet commitments. Management closely monitors the
Company’s liquidity and cash flow position. This includes maintenance of liquidity ratios, trade receivables and creditors
concentration both in terms of the overall funding mix and avoidance of undue reliance on large individual customers.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of short
term borrowings. The Company’s financial liabilities comprising of 34.43% (2023: 35.13%) will mature in less than one
year based on the carrying value reflected in the financial statements.
41.4.1 Liquidity and interest risk table
The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay. The table includes both interest and principal cash flows.
2024
Contractual Cash Less than 3 3 months - 1
Interest rate Carrying values 2 - 5 years More than 5 years
flows months year
(Range) -------------------------------------------------------- Rupees ---------------------------------------------------------------
Financial Liabilities
Long-term finances 2.5% to 23.91% 5,360,024,729 5,360,024,729 124,977,289 437,672,280 3,344,419,690 1,452,955,470
Short term borrowings 22.18% to 22.84% 688,088,033 688,088,033 688,088,033 - - -
Accrued interest / mark-up 150,579,516 150,579,516 150,579,516 - - -
Trade and other payables 1,106,052,542 1,106,052,542 1,106,052,542 - - -
Unclaimed dividend 11,904,654 11,904,654 11,904,654 - - -
7,316,649,474 7,316,649,474 2,081,602,034 437,672,280 3,344,419,690 1,452,955,470
2023
Contractual Cash Less than 3
Interest rate Carrying values 3 months - 1 year 1 - 5 years More than 5 years
flows months
(Range) --------------------------------------------------------------------- Rupees ------------------------------------------------------------------------
Financial Liabilities
Long-term finances 2.5% to 23.52% 5,102,436,535 5,102,436,535 83,636,107 296,908,150 3,354,035,278 1,367,857,000
Short term borrowings 15.05% to 22.73% 941,704,041 941,704,041 941,704,041 - - -
Accrued interest / mark-up 144,041,836 144,041,836 144,041,836 - - -
Trade and other payables 1,079,879,270 1,079,879,270 1,079,879,270 - - -
Unclaimed dividend 10,989,419 10,989,419 10,989,419 - - -
7,279,051,101 7,279,051,101 2,260,250,673 296,908,150 3,354,035,278 1,367,857,000

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41.5 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises of interest rate risk, currency risk and other price risk.

41.5.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.

The Company’s interest rate risk arises from long term finance, short term borrowings and term deposits with banks
amounting to Rs. 3,179.2 million (2023: Rs. 2,917.4 million) (financial liabilities on a net basis). These are benchmarked
to variable rates which exposes the Company to cash flow interest rate risk only.

Carrying amount
2024 2023
Variable rate instruments Rupees Rupees

Financial liabilities:
Long-term finance 2,613,185,154 2,060,111,384
Short-term borrowings 688,088,033 941,704,041
3,301,273,187 3,001,815,425
Financial assets:
Other financial assets - terms deposits with banks 122,003,615 84,403,615

Net financial liabilities at variable interest rates 3,179,269,572 2,917,411,810

Interest rate sensitivity analysis

If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company’s profit for
the year ended June 30, 2024 would decrease / increase by Rs. 31.79 million (2023: Rs. 29.17 million). This is mainly
attributable to the Company’s exposure to interest rates on its variable rate borrowings.

41.5.2 Foreign currency risk

Foreign currency risk arises mainly where receivables and payables exist due to transactions with foreign undertakings
and balances held in foreign currency. However, the Company is materially exposed to foreign currency risk on liabilities.
The Company enters into forward foreign exchange contracts to manage the foreign currency exchange risk associated
with the receipts and payments. As at June 30, 2024 financial assets include Rs. 319.258 million (2023: Rs. 503.761
million) and financial liabilities include Rs. 453.111 million (2023: Rs. Nil ) which are subject to foreign currency risk
against US Dollars.

Foreign currency sensitivity analysis

At June 30, 2024, if the Rupee had weakened / strengthened by 5% against the US Dollar with all other variables held
constant, the Company's profit for the year would have increased / decreased by Rs. - 6.692 million (2023: Rs. 25.188
million) determined on outstanding balance at year end.

41.5.3 Equity price risk

Equity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from currency risk or interest rate risk), whether those changes are
caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial
instruments traded in the market.

As at reporting date the Company is exposed to equity securities price risk as it has investment amounting to Rs. 13.462
million (2023: Rs. 132.205 million) in the shares of quoted companies as mentioned in note 25.

If price would have been 10% higher / lower with all others variables held constant, other comprehensive income for the
year of the company would have been higher / lower by Rs. 1.35 million (2023: Rs. 13.20 million).

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41.6 Operational risks

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes,
technology and infrastructure supporting the Company's activities, either internally within the Company or externally at the
Company's service providers, and from external factors other than credit, market and liquidity risks such as those arising
from legal and regulatory requirements and generally accepted standards of operation behavior. Operational risks arise
from all of the Company's activities.

The Company’s objective is to manage operational risk so as to balance limiting of financial losses and damage to its
reputation while achieving its business objective and generating returns for investors.

Primary responsibility for the development and implementation of controls over operational risk rests with the management
of the Company. This responsibility encompasses the controls in the following areas:

- requirements for appropriate segregation of duties between various functions, roles and responsibilities;

- requirements for the reconciliation and monitoring of transactions;

- compliance with regulatory and other legal requirements;

- documentation of controls and procedures;

- requirements for the periodic assessment of operational risks faced, and the adequacy of controls and
procedures to address the risks identified;

- ethical business standards;

- risk mitigation, including insurance where it is effective; and

- operational and qualitative track record of suppliers and service providers.

42. CAPITAL RISK MANAGEMENT

The objective of the Company when managing capital is to safeguard the Company’s ability to continue as a going
concern so that it can continue to provide returns for shareholders and bene?ts for other stakeholders and to maintain a
strong capital base to support the sustained development of its businesses.

The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of
changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividend paid to shareholders or issue new shares.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current
borrowings’ as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as
‘equity’ as shown in the statement of financial position plus net debt.

The gearing ratios at June 30, 2024 and 2023 were as follows:

2024 2023
Rupees Rupees

Total borrowings (note 8 & 13) 6,048,112,760 6,044,140,576

Less: bank balances (note 26) (125,918,422) (237,195,795)
Less: terms deposits (note 25) (122,003,615) (84,403,615)
Net debt 5,800,190,723 5,722,541,166
Total equity 4,728,368,823 4,667,039,351
Total 10,528,559,546 10,389,580,517

Gearing ratio 55% 55%

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43. FAIR VALUE 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.

The carrying value of all the financial instruments reported in the financial statements approximates their fair value as the
items are short term in nature.

The table below analyses financial instrument carried at fair value, by valuation method. The different levels have been
defined as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or the liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The valuation techniques used are as follows:

Level 1: Quoted prices (unadjusted) in active markets

The fair value of financial instruments traded in active markets is based on Net Asset Values (NAVs) of the units of the
mutual funds and quoted market price of the equity instrument at the reporting date. A market is regarded as active when it
is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing
information on an ongoing basis.

The following table presents the Company's financial assets which are carried at fair value:
June 30, 2024
Level 1 Level 2 Level 3 Total
----------------------------------------------- Rupees ------------------------------------------------
Financial assets
- measured at fair value through other
comprehensive income

Investment in listed equity securities 13,461,600 - - 13,461,600

- measured at fair value through profit or

loss

Investment in mutual funds 1,019,801,748 - - 1,019,801,748

1,033,263,348 - - 1,033,263,348

June 30, 2023

Level 1 Level 2 Level 3 Total
----------------------------------------------- Rupees ------------------------------------------------
Financial assets
- measured at fair value through other
comprehensive income

Investment in listed equity securities 132,205,022 - - 132,205,022

- measured at fair value through profit or

loss
Investment in mutual funds 349,654 - - 349,654

132,554,676 - - 132,554,676

At the reporting date, the Company holds above financial assets where the Company has used Level 1 inputs for the
measurement of fair values and there is no transfer between levels.

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44. CORRESPONDING FIGURES

Corresponding figures have been rearranged and reclassified, wherever necessary for the purpose of comparison and for
better presentation.

45. OPERATING SEGMENTS

Chief Executive considers the business as a single operating segment as the Company's assets allocation decisions are
based on a single, integrated business strategy, and the Company's performance is evaluated on an overall basis. Sales
of the Company related to export customers is 54.58 percent (2023: 80.97 percent) . As at year end, all non-current assets
of the Company are located within Pakistan.

46. NUMBER OF EMPLOYEES

2024 2023
Number of employees

- At June 30 1,083 1,069

- Average during the year 1,076 1,063

47. EVENTS AFTER THE REPORTING DATE

The Board of Directors in its meeting held on September 30, 2024 proposed to distribute to the shareholders of the
Company a cash dividend at the rate of 15 percent i.e. Rs. 1/50 per ordinary share. The dividend is subject to the
approval by the shareholders of the Company in its forthcoming Annual General Meeting. These financial statements do
not reflect the effect of such dividend which will be accounted for in the financial statements of the Company subsequent
to the year end, when it is approved by the shareholders of the Company.

48. DATE OF AUTHORIZATION FOR ISSUE

These financial statements were authorized for issue on September 30, 2024 by the Board of Directors of the Company.

49. GENERAL

Figures have been rounded off to the nearest to Rupee.

Raza Ellahi Shaikh Tariq Zafar Bajwa Amin Ellahi Shaikh

September 30, 2024 Director Chief Financial Officer Chief Executive Officer

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FORM OF PROXY
The Secretary,
NAGINA COTTON MILLS LTD.
2nd Floor, Shaikh Sultan Trust Building No. 2,
26-Civil Lines, Beaumont Road,91-B-1,
M.M. Alam Road,Karachi - 75530

I/We _________________________________________________ of _________________ being

member(s) of NAGINA COTTON MILLS LTD., and holder of __________________ Ordinary
Shares as per Share Register Folio No. __________ (In case of Central Depository System Account
Holder A/c No. _______________ Participant I.D. No. ______________________) hereby appoint
_______________________________________ of _________________ who is member of the
Company as per Register Folio No. ____________________ (In case of Central Depository System
Account Holder A/c No. ______________ Participant I.D. No. __________________________) or
failing him/her _____________________________________________ of _________________
who is member of the Company as per Register Folio No. ____________________ (In case of
Central Depository System Account Holder A/c No. _______________ Participant I.D.
No._______________) as my/our proxy to vote for me/us and on my/our behalf at the 57th Annual
General Meeting of the Company to be held on October 28, 2024 and at any adjournment thereof.

Signed at this the day of 2024

WITNESSES: affix
Rs. 50/=
Revenue
1. Signature 2. Signature
Stamp
Name Name
(Signature should
Address Address agree with the
Specimen
signature
registered
CNIC CNIC with the
Company)

NOTES:
1. If a member is unable to attend the meeting, he/she may sign this form and send it to the
Secretary so as to reach him not less than 48 hours before the time of holding the meeting.
2. Members through CDC appointing proxies must attach attested copy of their Computerized
National Identity Card (CNIC) with the proxy form.
3. The Shareholders through CDC, who wish to attend the Annual General Meeting are
requested to please bring, original Computerized Identity Card with copy thereof duly
attested by their Bankers, Account Number and Participant I.D Number for identification
purpose.
4. In case of corporate entity, certified copy of the Board of Directors’ resolution / power of
attorney with specimen signature shall be submitted (unless it has been provided earlier)
along with proxy form of the Company.

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57 2024 28

2024
50

84