Feroze1888 Annual Report

IF YOU BELIEVE IN YOURSELF
ANYTHING IS POSSIBLE
103-126 Performance and Position
CONTENTS Financials at a Glance

Ratios
Horizontal and Vertical Analysis of Statement of Financial Position
04-33 Company Overview and External Environment
Horizontal and Vertical Analysis of Statement of Profit or Loss
Vision and Mission Summary of Cash Flow Statement
Code of Conduct Statement of Value Addition and its Distribution
Core Values - PROSPER® DuPont Analysis
Ethics and Culture Free Cash flows
Company Information Economic Value Added
Feroze1888 at a Glance Statement of Cash Flow - Direct Method
Our Journey Continues... Quarterly Performance Analysis
Export Destinations Analysis of the Financial and Non-Financial Performance
Organizational Chart Major Capital Expenditures
Position within Value Chain Share Price Information and Sensitivity Analysis.
Composition of Local vs. Imported Material and Sensitivity Analysis
Factors Affecting the External Environment (STEEPLE Analysis)
Risks and Opportunities Report 127-183 Striving for Excellence in Corporate Reporting
Competitive Landscape and Market Positioning Statement of Adoption and Adherence with the International Integrated
SWOT Analysis Reporting Framework.
Statement of Unreserved Compliance of International Financial
34-41 Strategy, Resource Allocation and Outlook Reporting Standards (IFRSs)
Brief About the Report
Strategy and Resource Allocation Auditors Report to Members
Business Model Financial Statements
Forward Looking Statement
184-200 Stakeholders Information
42-84 Governance Calendar of Notable Events

Pattern of Holding of the Shares Held by the Shareholders
Chairman's Review Pattern of Shareholding
CEO's Message Notice of Annual General Meeting (English)
Directors' Profile Notice of Annual General Meeting (Urdu)
Directors' Report BCR Criteria Content Index
Directors' Report in Urdu Proxy Form (English)
Governance Framework Proxy Form (Urdu)
Report of Audit Committee
Review Report on CCG
CHED ON
Statement of Compliance with CCG R ATTA PA
Pandemic Recovery Plan by the Management and Policy Statement APE GE
P N
ED
O
85-102
.8
Sustainability and Corporate Social Responsibility
SE
7
About the Report
Leadership Statement
Sustainability at a Glance
Sustainability Strategy
Certifications
Awards
Economic, Environmental and Social Performance
Sustainability & CSR Snapshot
Stakeholder Engagement
PLANT
seeds of change
VISION MISSION
Our aim is to be a market leader in terry textile manufacturing We are a leading vertically integrated industry
with our strong commitment to 3Ps (People – Planet – known for its state of the art machinery,
Prosperity). We will prosper by creating unmatchable value for infrastructure, standardized systems, production
our global customers and stakeholders through our exceptional processes and adopting the ideology of 3Ps
quality products and services. (People – Planet - Prosperity). We are committed to
the ongoing learning, development and growth of
our valued employees. Our focus is on building an
environment of prosperity and gratification for all
our customers and stakeholders through our
operational excellence and solution based
innovations.
04 Feroze1888 Mills Limited Annual Report 2021 05

CODE OF CONDUCT Gift & Entertainment Policy
Gifts / entertainment / gratitude of any kind, that
corporate resources included but not limited to
corporate data & corporate information system.
the Company’s assets, safeguarding the are offered by vendors, suppliers, current &
Business Ethics
Company’s interest, avoiding conflict of interest & potential employees, potential vendors and Non-Discrimination
Feroze1888 is committed to conduct its business
ensuring that we do not involve in any unlawful suppliers, or any other individual or organization, The Company believes in creating an encouraging
in an honest, ethical and legal manner. The
activity even after office hours that may ruin the no matter the value will not be accepted by any working environment which is free from
management condemns corrupt and fraudulent
organization’s reputation is emphasized. employee, at any time, on or off the work premises discrimination. The Company also ensures that
practices and ensures transparency, integrity and
as a result of providing / receiving any favor employees remain motivated and productive
honesty in all aspects of work.
Spreading grapevine/rumors, exchanging or (whether justified or unjustified). through the provision of equal growth opportunity.
Compliance with Law & Regulations sharing any information within the organization or
outside either by word of mouth, email, text Confidentiality of Information Equal Employment Opportunity
The Company is committed to comply and take
message or social media; which may create It is the responsibility of every employee to The Company believes in providing equal
all required actions for compliance with all
chaos and portray false image of the organization maintain confidentiality of information (during and opportunity for employment. The Company
applicable laws, rules and regulations of state or
are all deemed as breach of commitment. after the employment term) related to Feroze1888 policies in this regard have to be complied with
local jurisdiction in which the Company conducts
Mills that he/she may come across in any form as and no discrimination upon race, religion, age,
business. Every director and employee, no matter
a result of his position or interactions. He / she national origin, gender, or disability is acceptable.
what position he or she holds, is responsible for Zero Tolerance for Harassment
Harassment in any form including verbal / should refrain from discussing any confidential
ensuring compliance with applicable laws.
emotional (e.g. making or using derogatory business matters to outsiders or even insiders to Corporate Social Responsibility
comments, name calling, racial jokes etc.), whom the matter does not relate. The Company is committed to carry its business
Commitment & Accountability -
physical (e.g. assault, impeding, blocking in a sustainable manner and promote preservation
Safeguarding Organization’s Interest
movements etc.), sexual (e.g. touching, leering, Intellectual Property and sustainability of the environment.
It is expected from every employee that he/she
making inappropriate gestures, suggestive All employees are responsible and accountable for
remains honest & committed with his/her work at
objects or pictures, cartoons or posters etc.) is the corporate information and resources entrusted
all times. Employee is not only expected to own
strictly prohibited. to them. Due diligence & care must be exercised
the entire process of his/her job but also uphold
to ensure the security & integrity of these
the true spirit of accountability; in that, protecting

Success Will
CORE VALUES - PROSPER® We possess a strong will to succeed under all circumstances.
People Development Proactive

We are committed to invest in employees personal and professional development We believe in being proactive while facing challenges, adopting technology,
and creating an environment that instigate the ownership for self - learning. systems and procedures.
Respect Excellence In Work

We believe in crafting a culture of respect and dignity for all our customers, Our commitment is to enhance customer satisfaction by fostering an
stakeholders, vendors, employees and community. environment of self-reliance, efficiency and integrity in all that we do.
Ownership & Accountability Reliability

Our work is our pride: we take full ownership of it and hold ourselves accountable for all We demonstrate reliability through our team work and consistent quality in
our actions, interactions within and between teams. products and services.

ETHICS CULTURE
Integrity and upholding our commitments are at the heart of Feroze1888 Mills The cultural framework of any organization defines the Company’s vision and the
business values. Our standards for doing business are based on transparency, guidelines it has established to achieve that vision.
impartiality and exhibiting thorough professionalism in our dealings with
internal and external stakeholders. The management of Feroze1888 Our core values PROSPER® drive our energies and focus in building a value
condemns fraudulent practices and focuses on developing teams and systems driven work culture. We believe in developing our valuable employees, enabling
to work as per the established business ethics. The organization is known for them to deliver their optimal best; helping them collaborate with each other for
its reputation for doing business as per defined ethical boundaries and for not reliable results and instigating a never give up attitude with a consistent
tolerating any kind of misconduct that can hamper the repute. These principles reinforcement of being proactive in dealing with all situations. We promote
are embedded in organization’s code of conduct and further reinforced by dynamic and creative lateral thinking and have complete trust in our employees’
policies and standard operating procedures. skills to achieve the goals. Diversity is our strength and we take pride in our
culture of meeting high standards of professionalism and excellence and deliver
nothing less but the best.

FEROZE1888
It is indeed a moment of immense pleasure that Feroze1888 Mills has been selected as
one of the 200 Best Under A Billion Companies by Annual Forbes Asia - August 2020
FEROZE1888
SELECTED IN
issue. MILLS
This selcection is not an ordinary one - it truly reflects the confidence the customers CELEBRATES
have in our products and services and the sheer dedication of all the team members to
provide unmatchable value to all the stakeholders. FORBES ASIA THE SUCCESS
OF BEING
Our journey of success does not stop here; in fact this recognition has fueled up our
aspiration to live our vision of being the market leaders and continue to serve our valued 200 BEST SELECTED AS
customers with even greater enthusiasm.
UNDER A ONE OF THE “200
Together we Achieve - Together we Prosper
BILLION
BEST UNDER A
Together We Blend & We Blend it Like Feroze1888 BILLION
COMPANIES COMPANIES BY
LIST 2020 FORBES ASIA”.
Congratulations!

COMPANY INFORMATION FEROZE1888 AT A GLANCE
We are the leading Manufacturer and Exporter of Specialized Yarn & Textile Terry Products in Pakistan. Starting the
journey in early 1970’s, Feroze1888 has progressed gradually & today it enjoys an eminent presence in the global terry
Board of Directors Registered Office market. We maintain high level of standards in all areas, ranging from the highest quality products to maximum
Mr. Jonathan R. Simon Director/Chairman Plot # H-23/4-A, Scheme # 3, Landhi employee satisfaction. Company has state of the art vertically integrated terry towel manufacturing facility. Being
Mr. Nasim Hyder Director/ Vice Chairman Industrial Area, Landhi, Karachi. partnered with 1888Mills USA, we are recognized as a progressive and global manufacturer of quality textiles for
Mr. Khaleequr Rahman Director Home, Hospitality & Healthcare.
Mr. Shabbir Ahmed Director Office Building
Mr. Abdul Rehman Yaqub Director K&N Centre, 2nd and 3rd Floors, 160 The ownership of upholding commitment to Triple Bottom Line (3Ps), untiring focus on operational excellence and
Mr. Perwez Ahmed Director Banglore Town, Shahrah -e-Faisal, Karachi. creating unmatchable values for our customers is what makes us stand tall amongst other competitors in the market.
Mr. Anas Rahman Director Feroze1888 believes in providing a professional work environment with tremendous growth opportunities at all levels.
Mr. Zain Ashraf Mukaty Director
Ms. Huma Pasha Director Factory Addresses
Ms. Aminah Zahid Zaheer Director
Our Moto: Our Commitments:
Mr. Rehan Rahman Chief Executive Officer Sindh:
Plot # H-23/4-A, H-23-/4-B & H- 23/3-II, Scheme • Excellent Execution Every time • Environmental Friendly Production Processes
# 3, Landhi Industrial Area, Landhi, Karachi. • Customer Satisfaction • Product Quality
Board Audit Committee • Conducive Work Environment
Mr. Nasim Hyder Chairman Plot # A-5, B-4/A, C-3, C-31, F-125, F-342 & • Employee Engagement & Empowerment
Mr. Khaleequr Rahman Member F-89, SITE, Karachi.
Mr. Zain Ashraf Mukaty Member Key Products and Markets
Ms. Aminah Zahid Zaheer Member Plot # 342/A, Haroonabad, SITE, Karachi.
The Company is principally engaged in production and export of terry products. The key export markets are the USA
Board HR & Remuneration Committee and Europe. Feroze1888 deals in wide range of terry products starting from the white, dyed, printed, dobby and
Plot # L-26, F.B. Industrial Area, Karachi
Ms. Aminah Zahid Zaheer Chairperson jacquard available in variety of sizes and categories consisting of hand towel, bath towel, bath robe, kitchen towel and
beach towel.
Mr. Zain Ashraf Mukaty Member Plot # PL-15 & ST-03 North Karachi Industrial
Mr. Nasim Hyder Member Area, Karachi.
Chief Financial Officer Survey # 81, 242, 72 to 75, 165, 166, 171, 172,
Ms. Javeria Siddiqui 176 to 181, 186 to 190, 156, 210, 211, 243, Deh
Moachko, Tapo Gabopat, Keamari Town,
Company Secretary Karachi.
Mr. Mudassir Moten
Baluchistan:
Bankers Plot# D-12 to D-17, K-1 to K-3, M-34,
Allied Bank Limited HITE, all in Mauza Pathra, Tehsil Hub,
Bank Al Habib Limited District Lasbela, Balochistan.
Bank Alfalah Limited
BankIslami Pakistan Limited Legal Advisor
Faysal Bank Limited Mohsin Tayebaly & Co.
Habib Bank Limited 1st Floor, Dime Centre Khayaban-e- Iqbal,
Habib Metropolitan Bank Limited Block 9, Clifton, Karachi.
Meezan Bank Limited
Standard Chartered Bank (Pakistan) Limited Share Registrar/Transfer Agent
FAMCO Associates (Pvt.) Ltd
External Auditors 8-F, Next to Hotel Faran Nursery, Block-6,
EY Ford Rhodes, PECHS, Shahrah-e-Faisal, Karachi.
Chartered Accountants Progressive
Plaza, Beaumount Road, Karachi. Website
http://www.feroze1888.com
Internal Auditors
A.F. Ferguson & Co. Chartered Accountants CEO’s Presentation is available on Company’s
State Life Building No. 1-C, I.I Chundrigar Road, website
City Railway Colony Karachi.

OUR JOURNEY CONTINUES...
MERGER OF FEROZE WATER
ACQUISITION OF TEXTILE INDUSTRIES RECLAIM PLANT
WASTE WATER NAKSHBANDI A Promise to PACKAGING
WEAVING UNIT SPINNING UNIT WAREHOUSE & FEROZE1888 Sustainability & Inauguration of fully
Laying the foundation of Whirling the Fabulous Preserving the Eminence TREATMENT PLANT INDUSTRIES LIMITED Unification of business Better Environment- automated Corrugated
Feroze1888 Mills Limited Quality of Yarn with the of Cotton- Laying the Reflecting our strong Expanding the business- acumen- Merger of Waste Water is Carton manufacturing
with the inauguration of inauguration of Spinning foundation of large belief in playing our role Acquired Naqshbandi Feroze Textile Industries recycled & reused in plant & other packaging
Weaving Unit Unit at Hub Location warehousing facility to save Environment Industries & Feroze1888 our processes accessories
1970 1985 2006 2008 2009 2012 2016 2018
1980 1996 2007 2008 2010 2014 2017
STITCHING UNIT DYEING & MERGER OF FEROZE FIBER DYEING FACILITY NAKSHBANDI'S PRINTING FACILITY EMBROIDERY
A Stitch in time saves PROCESSING UNIT TEXTILE & FRIENDSHIP Setting an example in NAME CHANGED Adding Value, To augment product
nine- Inauguration of Terry Textile Sector Creativity & Vivacity in range installed
Stitching Unit
Inducing the Colors of TEXTILE with the inauguration of TO FEROZE1888 our products- Set up of embroidery setup
Life to the Fabric- Sky is the limit- Merger Expanding the Horizons-
Fiber Dyeing Facility Printing Facility
Opening of Dyeing & of Feroze Textile Conversion of
Processing Unit Industries & Friendship Nakshbandi into
Feroze1888
Textile Mills to expand
& create excellence
OUR JOURNEY
PRODUCT GLIMPSES

EXPORT
DESTINATIONS
Australia Canada Denmark France Germany Japan Netherlands Poland Portugal Saudi South Spain United United
Arabia Africa Kingdom States

Shareholders
ORGANIZATIONAL CHART
Board of
Directors
HR &
Remuneration
Audit
Committee
Committee
Company Chief
Secretary Executive
Officer
Chief Director Director Director Director Director Head of

Director Marketing & Director Supply Chain Information Plant Quality
Financial Operations Internal
HR & A Officer Customer Management Technology Engineering Assurance Audit
Services
Administrative Reporting
Functional Reporting

RESEARCH,
POSITION WITHIN
PRODUCT
DEVELOPMENT
& DESIGN
VALUE CHAIN
UP STREAM MARKETING
COMPOSITION OF LOCAL VS.
IMPORTED MATERIAL AND
PLANNING &
SENSITIVITY ANALYSIS
RAW MATERIALS TRANSPORTATION PRODUCTION
For the year ended June 30, 2021
2020-21 2019-20
SPINNING
32% 41%
WEAVING 68% 59%
DYEING & PRINTING Local Imported
The Company is the leading Manufacturer and Exporter of Specialized yarn and Textile terry Products.
Backward Integrated
Company’s raw materials comprise fibers, yarn, dyes & chemicals and packing materials. Imported raw
Facilities material and local raw material represent 32% and 68% of Cost of Sales for the year ended June 30,
• Corrugation STITCHING 2021 and were 41% and 59% in the corresponding year, respectively.
• Poly Bags / Sheet & FINISHING
• Packaging Accessories Cost of sales of the Company will increase/decrease by 3% and 6% in case of foreign currency
exchange rate fluctuation by 10% and 20% respectively. Hence, this particular cost componenet is
highly sensitive to such fluctuation and substantial portion of cost of sales. This analysis assumes that
QUALITY all other variables remain constant.
ASSURANCE
LOGISTICS &
END USER RETAIL PORT TRANSPORTATION
DOWN STREAM

STEEPLE ANALYSIS
Social, Technological, Environmental, Economic, Political, Legal
and Ethical factors that can impact Feroze1888’s business
environment
S T E E P L E
SOCIAL TECHNOLOGICAL ENVIRONMENTAL ECONOMIC POLITICAL LEGAL ETHICAL
The social or, more specifically, the Since the dawn of the industrial With growing environmental Economic factors determine the Political factors involve how and Businesses nowadays are Ethics can be defined as a
socio-cultural factors focus on the revolution, technology has played an awareness, businesses cannot financial condition of an to what extent a government required to understand the legal general code of ethics, followed
demographic characters, norms, and essential role in the health of any undermine related factors fully. organization or a specific intercedes on an organization or premises under which they can by people of a particular
customs of the population within business organization. Innovations in Moreover, the scarcity of raw industry. As these factors play a specific industry. It refers to the operate adequately. Although religion. Similarly, ethical
which an organization is functioning. technology can impact the operations materials, carbon footprint targets, an important role in deciding the influences of governmental some of these factors overlap factors are those factors that
These factors help the marketer to of the industry and markets, both and pollution targets have made supply-demand models in the policies may have on your with the Political factors, they help a company to decide what
Description understand their customers’ needs favorably and unfavorably. It has made them even more pivotal to an economy, it has a long-term business. These are the factors generally include more specific is a good or bad business deed.
more clearly. It also highlights the it very important to analyze and organization's functioning. This has influence on a business, be it that need to be taken into laws and policies. Companies Specifically, these determine
local workforce and the sustainable monitor these factors. They vastly led to many companies getting more direct or indirect. Since it affects account when assessing the need to know what is and what what is good and bad for
conditions under which they will be contribute to specific decision-making and more involved in practices such the purchasing power of attractiveness of a potential is not legal in order to trade company, employees and
willing to work. scenarios like to enter or not enter as corprate social responsibility consumers and could possibly market. successfully and ethically. If an society as a whole.
certain industries, to launch or not (CSR) and sustainability. change demand/supply models organization trades globally this
launch certain products or to outsource in the economy. Consequently it becomes especially tricky since
production activities abroad. also affects the way companies each country has its own set of
price their products and rules and regulations. In
services. addition, you want to be aware
of any potential changes in
legislation and the impact it may
have on your business in the
future.
• Population size and growth rate • Technology innovations, incentives • Weather & climate • Growth rate and Interest rate • Government stability/instability • Health and safety laws • Industry specific regulations /
• Lifestyles and awareness. • Environmental policies • Inflation and Exchange rate • Corruption level • Employment laws duties
• Wealth distribution • Technological innovations • Natural disasters • Availability of credit • Tax policies • Consumer protection laws • Morality and Integrity
• Health consciousness • Automation • Air and water pollution • Spending habits of people • Freedom of press • Copyright and patent laws • Proper marketing techniques
Factors include
• Ethical concerns • R&D activity • Recycling standards • Federal government budget • Government regulation and • Education laws and fair play
• Cultural & religious norms and • Communiation & Internet • Attitudes towards green products deficits deregulation • Creating healthy and safe
values infrastructure • Support for renewable energy • Gross domestic product trend • Level of government subsidies working conditions for
• Education level • Unemployment trend • Bilateral relationships employees
• Per capita income • Stock market trends • Import-export • Waste product utilization and
• Economic policies regulation/resctrictions recycling
• Price fluctuations • Trade control
• Size of government budgets
The Company complies with ISO - With a strong financial standing, The Company continuously The Company ensures Fair and ethical business
Our Company ,being a socially The management is fully aware of the 14001:2015 Environmental the Company is very vigilant analyzes and monitors the compliance with all the required practices are at the heart of the
responsible organization, effectively fact that in today's world, technological Management System & ISO 45001 - about the Debt:Equity ratio and political situation of the Country laws and regulations. Further, it Feroze1888 values. Choosing
Organizational contributing towards the creation of a advancement plays a decisive role in 2018 Occupational Health & Safety. maintains an optimal balance. including changes in duty stays updated about new laws the course of highest integrity is
Response socially secure society. The the success of an organization. The Company adheres to all Further, all the efforts are made structures and taxes to mitigate and ensures that the relevant our intent and we establish and
Company feel humbled in donating Therefore, to cope up with the applicable standards and regula- to contain the costs in every any unwarranted affect through departments are complying with maintain the highest
for various social causes including technological competitive environment, tions and voluntarily takes environ- sphere. Responding to the post timely adjustment of strategies. the same. Company has also professional and ethical
healthcare, education and we have always welcomed the mentally conscious initiatives to lock-down senario due to engaged an efficient team of standards to be perceived as
environmental challenges. We have oppurtunity by exploring latest create long-term value for the COVID-19, the Company has professionals to ensure impartial and independent. The
also acquired various certifications to technology to strengthen the society through efficient usage of done remarkably well to prevent compliance with all enacted and management condemns corrupt
comply with wellbeing and safety operations and to achieve competitive natural resources in order to reduce work loss and maintain business or substantially enacted and fraudulent practices and
controls in order to maintain a edge. Our entity has regularly been our carbon foot print. The Company growth inspite of difficult statutes, acts and ordinances. ensures transparency and
healthy and secure work investing significantly in balancing, has also installed a water treatment economic condiions. integrity.
environment. The Company is modernization, and replacement of plants to recover a major proportion
continuously aspiring towards going plants and machinery in addition to of waste water for re-use. Moreover,
an extra mile in CSR domain. training needs and technological skills we are also GRS and RCS
enhancement of the employees. compliant.

RISKS & OPPORTUNITIES REPORT
WHAT IS RISK? Accountability for Risk Management
Risk is described as “the effect of uncertainty on objectives”. Risk is the probability of an internal or external situation Risk Management Framework provides:
having the potential to impact upon Company; preventing Company from successfully achieving its objectives, delivering • An environment where staff understand and assume responsibility for managing the risks for which they are
its services or capitalizing on its opportunities. responsible and the controls to mitigate those risks;
• Independent assurance and audit activities to provide feedback to management that quality processes and controls are
RISK MANAGEMENT? in place and are effective.
Risk management is defined as the coordinated activities to direct and control an organization with regard to risk. Risk • Relevant, timely information across clear reporting structures.
management is the sum of culture, processes and structures that are directed towards realizing potential opportunities
whilst managing an adverse effect. The main objective of the risk management is to assure uncertainty does not deflect Governance and Oversight of Risk Management Activities
the endeavor from the business goals.
The Board is responsible for the Risk Management Framework. The Executive Leadership Team under the leadership of
RISK MANAGEMENT FRAMEWORK: the Chief Executive is responsible for implementing the strategy, culture, people, processes, technology and structures
The Company’s risk management system is designed to identify the risks it faces and has measures in place to keep which constitute the Risk Management Framework.
those risks to an acceptable minimum level. The existence of risk presents both threats and opportunities to the Compa-
ny. Company’s Risk management process is aligned with ISO 31000. The Company is effectively equipped to face any challenges and uncertainties that are likely to arise. Through combined
experience, skill and effective business reporting, Management remains aware of internal and external developments.
The Risk Management Framework describes the following:
CAPITAL STRUCTURE’S ADEQUACY:
Categorization of Risk Management believes that there is no inadequacy in capital structure.
Risk management framework starts with the understanding of the business objectives in ensuring that key risks are
identified.
Identify and manage potential events that may affect the Company
Risk management framework provides a structured and consistent approach to identifying, rating, mitigating, managing
and monitoring risks. It also assists decision makers to make good management decisions within an environment of
tolerable strategic and business risk limits, including identifying and leveraging opportunities.
Type of Risk Risk Sensitivity Source Nature Likelihood Consequences Mitigating Strategy / Organizational Response Related Opportunities / Value creation Risk
Ranking
Strategic Risk High competition in High External Ongoing Likely - Profit margins may shrink due to - Regular market analysis performed by senior management for To maximize the market share and augment presence
global market pressure on pricing. analyzing the marketing needs. through innovation, cost control and optimum product
- Sharing of customer base may impact - Continous improvement in product quality through research quality.
the sales growth. and development.
- Use of latest technology to achieve cost competitiveness. 2
- Focus on innovation.
- Expanding customer base by exploring new export markets.
- Aggressive marketing strategies and relationship building with
the customers.
Technological Medium External / Long term / Likely Mismatch with the momentum of - Substantial investment in new expansion projects and BMR of Timely investment in latest production facilities brings 4
obsolescence of Internal Ongoing technological advancements may lead existing manufacturing facility by opting for latest state of the art operational synergies and efficiency in our processes
production facilities to inefficiency of the processes and technology to achieve cost competitiveness and optimum ultimately resulting in cost competitiveness and
Strategic Risk and IT infrastructure ultimately impacting cost of production production efficiency. ultimate production quality.
and sales volume. - Continuous development of information technology
infrastructures and Management Information Systems (MIS)
software along with the ERP in order to meet latest reporting
needs.
Financial / Credit risk due to Low External Medium Term / Remote Defaults in payments may impact the - Monitoring of the receivable aging on regular basis to ensure Planning and monitoring cash flows could result in 7
Commercial default by customers Ongoing Company's cash flows, which in turn timely recoveries. significant cost-savings and investment opportunities.
Risks may impact the profitability. - Mechanism for Reconciliation and confirmations are also in
place.
- Expanding customer base by exploring new export markets.
- Customer's credit limits and terms have been assigned and
regularly reviewed by a credit committee after complete
evaluation of the credit worthiness and associated risk
involved.

RISKS & OPPORTUNITIES REPORT
Type of Risk Risk Sensitivity Source Nature Likelihood Consequences Mitigating Strategy / Organizational Response Related Opportunities / Value creation Risk
Ranking
Certain operating and capital expenditures - A team of dedicated treasury professionals is in place to closely Insulation form the adverse effects of currency 3
are exposed to foreign exchange risk. monitor the forex market and capitalize the fluctuations in the fluctuaton can help the Company to explore more
Further, Unfavorable PKR/USD parity has market on regular basis. areas for sustaining and improving its profitability.
Financial Risk Fluctuations in High External Medium Term Very likely resulted in loss of export competitiveness - The Company has natural hedge also in case of USD.
foreign exchange and become a challenge for the business - The risk of forex fluctuation is being hedged through financial
rates to budget the costs in line with the derivatives (forward contracts) in accordance with the policy
fluctuations in order to make accurate approved by the Board.
decision making.
Operational Risk - Price hike in raw High External Medium Term Very likely Raw materials form substantial part of The Company regularly reviews raw material prices to go for In case of some direct materials, possibility for availing 1
materials cost of goods sold hence, increase in their proactive approach in case of any unwarranted senario. bulk buying at discounted rates and enhancement of
- Shortage of raw prices directly impacts profitability and - An extended and improved storage capacity for timely sourcing of storage capacity may lead to less dependence on
material price compatibility. goods. vendors.
- The management is also committed towards implementation of
the strategies to enhance the operational efficiences and for
effective cost controls.
Operational Risk Variability in supply or High External Medium Term Very likely Fuel, power and water are pivotal in - The Company is using energy from multiple sources to avoid over Exploration of multiple sources of energy leading to 5
cost of energy, fuel manufacturing business and any reliance on any one along with the mechanism for having an non reliance on any one together with increased
and water imbalance in the supply or cost will be optimal mix to minimize the cost. efficiency and reduction in cost by achieving optimal
directly related to the success and well run - The capacity to generate solar base power / captive power has mix.
of the business. augmented significantly the operational efficiency & productivity
in addition to reduction in cost.
- Company is successfully operating waste water treatment plant to
cater the need and also certified in ISO 50001 - 2011 (Energy
Management System).
Operational Risk Turnover of skilled Low Internal Short Term Likely Excessive turnover of the skilled - The Company esures the following to mitigate the risk and create Targeted personnel development and training can aid 9
staff employees may affect the smooth running value and to keep the employees motivated and loyal: the Company in becoming the best in class and help
of the operations. This may also lead to * Congenial working environment to generate ideas and suggestions that make
hurdles in locating suitable, skilled and * Optimal growth opportunities significant contributions to our success. Further, it will
qualified resources consequently resulting * Market based remuneration package enable us to secure sufficient number of qualified
in increase in salaries and additional cost * Career planning and development through mentoring and young workforce with the potential to become the next
related to onboarding and training of trainings generation of highly skilled specialists and executives.
employees. * Succession planning with the aim to create future leaders
Operational Risk Risk of new wave of Low External Medium Term Remote Cessation of the operations due to lock The Company is still monitoring the COVID-19 situation and A safe working environment which acts as a catalyst 6
COVID-19" down imposed internationally as well as in development across the globe and is ready to combat any for increasing the productivity and satisfaction of our
Pakistan. unfavourable senario through driving the collective response employees and supply chain partners. Further,
strategies to the business. starting of new ventures for digital transformation.
- The management has implemented strong health & safety
measures including compulsory vaccination, mask and social
distancing with in the premises to minimize its spread.
Compliance risk Non-compliance of Medium Internal Short term Remote Exposure to penalties, litigations and The company has equipped with a competent legal team of To operate in a stable market with least volatility and 8
applicable laws and repercussions due to non-compliance of professionals along with the pool of advisors to make itself updated low occurrence of unforeseen variables.
regulations laws and regulations in addittion to and ensure compliance on all legal & regulatory requirements
adverse impact on the reputation. including employment and industrial laws, Tax laws, code of
corporate governance and Companies Act 2017 in order to avoid
any legal consequences.
Commercial Trade protectionism Medium - External Medium Term Likely Decrease in export sales and business. Ensuring that prices and quantum of exports maintain the demand Market diversification with better customer 10
amongst export High of the Company's product intact. Additionally, maintaining diversity satisfaction.
markets via of export markets to limit dependence on one single destination.
imposition of tariffs
could impact
Company sales.

COMPETITIVE LANDSCAPE
AND MARKET POSITIONING SWOT ANALYSIS
The competition dynamics both in the international and domestic markets has been altered as the economies are reopening • Consistency in Quality
and gaining momentum after the COVID-19 slow down. In specific case of Pakistan, we face a growing urge to reclaim the
STRENGTHS
• State of the art vertically integrated manufacturing facilities
trading volumes that neighboring countries lost due to the Pandemic catastrophe that they dealt with. This scenario coupled with
raw material prices on historically high levels - putting pressure on the sales price and business volumes. • Experienced and skilled work force
• Strong customer base
The manufacturing landscape both internationally and domestically is expanding with investments in capacity enhancement and
modernization - the need to fill the additional/idle capacities creates pressure on defending the market share. Other major areas
• Environmentally responsible organization
include retail landscape and instable Pakistani Rupee. • Access to renowned global customer base
• Economies of scale
Over the decades, Feroze1888 has strengthened its bond with the Global Retail, Hospitality & Healthcare leaders – a business
relationship that has been erected on the premise of delivering quality, broadening product base and swiftly responding to their • Focus on Compliance & Sustainability
changing needs. We continue to leverage our strategic partnership with 1888Mills USA.
WEAKNESSES • Relatively homogeneous product - limiting pricing strategies
The focus is to capitalize on strengths, exploiting the opportunities with addressing the weaknesses and risks. The areas
include: • Reliance on depleting natural resources
• High labor-intensive industry
- Product Development & Innovation
• Dependence on particular region for sales
- New Market Development
- Enhancing product portfolio with respect to different price points/categories
- Strengthening backward integration OPPORTUNITIES • Value addition in product lines
- Adopting 3R (Reduce, Reuse and Recycle) philosophy
- Leading with Excellent Execution at all times • Product Diversification
• Region-wise distribution diversification
• Implementation of energy efficient technologies
• Technological advancements for optimization of manufacturing
processes and cost rationalization
• Fierce Competition
THREATS
• Increase in raw material, fuel and labor costs
• Price - Cost Parity
• Economical and Un-interrupted supply of natural gas
• Instable home currency
• Inconsistent Government Policies for Textile Industry
• Struggling Global Supply Chain after COVID-19

KNOW YOUR LIMITS BUT
NEVER STOP TRYING TO
EXCEED THEM

STRATEGY AND
RESOURCE ALLOCATION
Transforming vision into reality
Feroze1888 believes in making right choices today for a better tomorrow. Management has the core
objective to revolutionize the Company through strong leadership, unique organizational culture,
professional excellence and financial strength in order to maximize the return for stakeholders.
S. No OBJECTIVES NATURE STRATEGIES RESOURCE ALLOCATED STRATEGIES DIRECTLY KPI MONITORED

AFFECTED BY
1 Sales growth & profitability Medium to Long Term Business growth and Financial capital, human Social & Environmental - Profitability margins
profitability initiatives through capital, social and changes - Sales growth versus market
continued focus on relationship capital. growth
optimization and efficiency. - New export destinations
- Improved customer satisfaction index
2 Enhance operational Short to Medium Term Ensure optimum utilization of Financial capital, human Technological & Gross profit margin, net profit
efficiency & Cost optimization Company resources and capital, manufactured capital Environmental changes margin and Return on Investment.
implement systems and and intellectual capital.
processes to enhance
synergy among the functions.
3 Optimum product quality to Short to Medium Term Implementation of strict Financial capital, human Social & Environmental - Percentage of Rejection
achieve Customer quality assurance policies & capital, Intellectual capital, changes - Product Quality Survey
satisfaction guidelines along with social and relationship
obtaining certification of capital.
Quality Management System
(QMS) ISO 9001: 2015.
4 Environmental sustainability Long Term Reduce carbon footprints and Financial capital, human Technological & CSR investments and energy
contribute positively to capital, social and Environmental changes efficiency.
protect the environment by relationship capital.
investing in projects to
reduce waste, conserve
water and energy.
5 Be an employer of choice Medium to Long Term Focus on employee Financial capital, human Social & Environmental Employee turnover rate and
motivation. Take initiatives capital, social and changes feedback on employee
that build value of trust and relationship capital. engagement surveys.
contribute in creating an
enjoyable, diversified and
learning work environment.

BUSINESS MODEL
FUTURE RELEVANCE
The KPIs will remain relevant in the future.
STRATEGY TO OVERCOME ANY LIQUIDITY PROBLEMS Manufactured Human Capital Natural Capital
Capital • 13000+Diverse, committed and • Water, energy and environment
Vertically integrated empowered Workforce conservation initiatives
The Company’s ability of generating sufficient liquidity is its strength. This provides Management the flexibility to manufacturing facilities • Experienced and able leadership • Active contribution towards UN SDGs
fund business expansion and invest in cost saving initiatives. The Company has a strong capital structure which is
adequately supported by shareholders' equity. Moreover, the Company utilizes subsidized financing provided to
exporters to fund long and short-term requirements.
Strategy & Resource Risk & Opportunity Governance
Allocation
The Company has the legacy of timely payments and there have been no defaults against any payment due to
financial institutions, vendors, Government agencies, etc. The management is confident to successfully manage the
liquidity position in future as well.
Due to strong financial position, Feroze1888 enjoys good business relationship with all reputable banks and Spinning Weaving Export of Terry
financial institutions of the Country. The Company regularly monitors the debt-equity to effectively manage the Textile products
capital structure and other financing ratio.
SIGNIFICANT CHANGES FROM PRIOR YEARS Production

Input Planning Processing
Output
There is no material change in Company’s objective and strategies from the previous year.
SIGNIFICANT PLANS AND DECISIONS FOR CORPORATE RESTRUCTURING, BUSINESS Product

Cutting & Outcome & Value
EXPANSION OR DISCONTINUANCE OF OPERATIONS Development
Sewing Distribution
• Return to Shareholders
In the near future, there are no plans for any restructuring or discontinuance of operations except for the expansion • Payment to Government taxes &
of production capacities at the production sites of the Company which is underway. Logistics &
Duties
Finishing • Wages & Salaries to Employees

Transportation
• Payment to provider of Finance
• Contribution towards society
Performance Sustainability Future Outlook
Social & Relationship Intellectual Capital

Financial Capital
Capital • Highly Skilled and experienced professionals
•Equity: PKR 24,453 million • Advanced ERP
•Total Assets: PKR 51,867 million • Long relationship with customer
• State of the art manufacturing facilities
• Strong Goodwill

FORWARD LOOKING STATEMENT
The upcoming year will be the year of the “survival of the fittest” – both in terms of the adaptability to the drastically Sources of Information:
changed scenario and in retaining the customer base. The raw material prices are reaching the extraordinary
levels with global supply chain grappling with booming demand and delays due to slow recovery in certain parts of Management has referred data and statistics from SBP monetary policies, inflation snapshot and different
the World. The regional players are live now with all the efforts to recapture the customer orders – Pakistani economic research reports. Management has developed its estimates based on assessment of market surveys,
exporters have an uphill task ahead of them to protect the export base that has been built in 2020-21. economic research reports, discussions with industry professionals and in-house professional discussions. The
Company prepares annual budgets and forecasts to manage business more effectively. Past trends, prevailing
We at Feroze1888 are geared and aligning the strategy to coup with the challenges and to deliver sustainable conditions and future expectations form the basis of our projections, and corrective actions are incorporated
results. To remain competitive in the export market, the emphasis has always been on optimizing the cost of therein to devise operational and financial plans for the future, in line with the approved strategies. Further, macro
production by enhancing and modernizing the production facilities with investment in higher throughput, waste and micro economic indicators, markets trends, international and local material price forecasts, data from
and energy efficient machine & equipment. There is even greater focus on Lean Management practices to be regulatory & taxation authorities, seasonal variations and competitors’ actions etc. also form basis for the
embedded in not only the production floor but also in other areas to reduce wastages that in turn results in forecasting. Internal capacities are reviewed based on available data and alignment is planned to achieve desired
optimizing the costs. results.
The Government is set to unveil an ambitious Textile and Apparel Policy 2020-25 laden with subsidies and lower Assumptions Used:
rates on utilities to boost production and exports of value-added textile products. The proposed policy, which will
be the third such policy, estimates three scenarios that the measures will lift the textile and clothing exports to a This Annual Report contains or may contain forward-looking statements, all of which are based on management’s
minimum of US$ 15.7billion and a maximum of US$ 20.8 billion by end of the year 2025. One of the major current expectations and are subject to risks and uncertainties which may cause results to differ materially from
recommendations of the textile division is the restoration of the zero-rated regime for the five export-oriented those set forth in the statements. Stakeholders can identify these forward-looking statements by their use of
sectors. The facility was withdrawn in the year 2019. The draft policy 2020-25 reveals that electricity and gas tariff words such as “anticipates,” “expects,” “plans,” “will,” “estimates,” “forecasts,” “projects” “intend,” “may,” and other
will be fixed regionally for the next five years till 2025 to bring them at par with energy cost of exporters of regional words of similar meaning, or negative variations of any of the foregoing. One can also identify them by the fact
competitors such as Bangladesh, Vietnam and India for growth in exports ensuring Pakistan’s products in that they do not relate strictly to historical or current facts. These statements are likely to address the Company’s
international market at competitive rates. growth strategy, financial results, product development, product approvals, product potential, and development
programs. Stakeholders must carefully consider any such statement and should understand that many factors
Company Performance against Last Year’s Projections could cause actual results to differ materially from the Company’s forward-looking statements. These factors
include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are
Fiscal year 2020-21 was a year wherein the Company learnt to sustain in face of the worst Pandemic of the known and some that are not. No forward-looking statement can be guaranteed and actual future results may
century and yet made remarkable progress in volumes and sustaining the profitability. The textile export orders in vary materially. The Company does not assume the obligation to update any forward-looking statement. The
the Country have recorded a historical jump after the COVID-19 situation in neighboring countries, it is also Company cautions its stakeholders not to place undue reliance on these forward-looking statements.
evident by the significant growth in the Company’s net sales revenue. The financial results reflected
improvements both in figures and in ratios.
The BMR investments as envisaged in the previous year forward looking statement have been undertaken as
planned.

YOU ARE WHAT YOU BELIEVE
YOURSELF TO BE

CHAIRMAN’S
On behalf of the Board of Directors, I am pleased to present the review report before our valued shareholders
highlighting the overall performance of the Company for the year ended June 30, 2021 and effectiveness of the Board
in achieving the objectives.
REVIEW The emergence of the COVID-19 pandemic has caused a major catastrophe and has altered the business dynamics
worldwide - resulting in major disruptions of industrial activities and ultimately re-evaluation of strategies and
competencies. It gives me immense satisfaction to inform that we lived to our Pandemic recovery policy statement:
It is a privilege to be entrusted with Chairmanship “It is possible to turn risk into opportunity by being prepared and proactive”
of the Board of Feroze1888 Mills Limited, -the timely and effective measures taken by your Company has delivered strong results despite the unprecedented
comprising of diverse and proficient group of challenges posed by COVID-19.
highly accomplished entrepreneurs &
professionals. The composition of the Board depicts reasonable balance and diversity including independent Directors - as a group,
possesses the requisite skills, core competencies and industry knowledge to lead the Company. During the year, the
Board performed its duties as required under the Companies Act, 2017 and the Listed Companies (Code of Corporate
Governance) Regulations, 2019 (Regulations) effectively and diligently. Moreover, I am grateful to the valuable
contributions of my fellow Board members, who offered unparalleled strategic guidance and direction in paving a
prosperous way forward for the Company. Together, we endeavor to guide the Company to achieve new heights.
The Company has continued to follow growth-oriented strategy and capitalized on major decisions taken on
expansions and capacity enhancements for more sustainable growth. Furthermore, I would also like to put forward,
my appreciation for the admirable performance of our Chief Executive Officer under whose inspiring leadership, the
Company continued with growth trajectory regardless of the global pandemic. Moving ahead, together we are
committed to work earnestly in steering the Company towards the accomplishment of its objectives and deliver
sustained results while ensuring value creation for the shareholders.
On behalf of the Executive Management Team and Board members, I take this opportunity to thank our valued global
customers for the trust and confidence they continue to place in the Company and its products. I would also like to
express my gratitude to all our shareholders, business partners, associates and employees for their continued support
and encouragement in building Feroze1888 Mills Limited a matchless Company.
Jonathan R. Simon
Chairman and Director
Date: August 30, 2021

CEO’S MESSAGE
Assalam-o-Alaikum
The year 2020-21 was a year like no other. The start was nervous, the entire world saw the COVID-19 health
crisis, which grew into a global pandemic impacting industries, economies and countries around the world –
the variants are still a threat.
Alhamdulillah, Pakistan as a Country performed better in terms of containing the impacts - resulting in shift of
export orders especially in textiles was a breakthrough. The export numbers show the strong performance of
the Country and Feroze1888 Mills alike. Despite the challenging business landscape in second half of the
year, we remained steadfast in executing our strategies, sustaining operational efficiencies and ensuring
financial discipline.
This year I would like to focus my message on our Values – PROSPER and how this confluence of
challenging conditions has provided the impetus for us to live out our values when it counted the most. We
have remained strong because of our values:
People Development – Securing the well-being, health and safety of our employees and their families.
Respect – A culture that helped us during these testing times with our customers, stakeholders, vendors,
employees and community
Ownership & Accountability – We take ownership of the decisions we took in the face of uncertainty and that
paid off for us
Success Will – The resilience to succeed in all situations
Proactive – Living our Pandemic policy statement of “It is possible to turn risk into opportunity by being
prepared and proactive”
Excellence In Work - The level of coordination, logistics and communication to maintain the highest levels of
customer service while keeping employees safe speak volumes of our commitment towards excellence.
Reliability – Exhibited the dependability and reliability to our customers with consistent quality and delivering
on promises.
Our character is both internally embedded and externally recognized as selected by Forbes Asia 200 Best
Under A Billion Companies List 2020.
With solid foundations of our vision, mission and values, I am confident that we will be able to withstand the
headwinds in the ensuing year and will manage to maintain the growth momentum to propel us forward in
the times to come.
I would like to thank entire Feroze1888 family for demonstrating resilience and great commitment in
unprecedented times. I am also grateful for the support and stewardship that the Board of Directors have
provided through the past year and our Shareholders, for the trust they have placed in us.
Please take care and stay healthy for yourself and your loved ones!!
Rehan Rahman
Chief Executive Officer

DIRECTORS’ PROFILE
Mr. Jonathan R. Simon Mr. Nasim Hyder Mr. Khaleequr Rahman Mr. Shabbir Ahmed
Chairman / Non-Executive Director Vice Chairman – Independent Director Non-Executive Director Non-Executive Director
Mr. Jonathan Simon is the Chairman on the Board Mr. Nasim Hyder has over thirty years of experience Mr. Khaleequr Rahman is in textile industry for more Mr. Shabbir Ahmed belongs to a family who has
of Feroze1888 Mills Limited since 2016 and is also in accountancy, audit, tax, corporate affairs and than four decades. Belonging to a family in business diversified stake in industries, trade and commerce
currently serving on the Board of 1888 Mills USA consultancy. He is regarded as one of the leading for generations, he was made part of business for many decades in Pakistan. He himself is
and Premier 1888 Mills Limited, Bangladesh. He authorities in the country on taxation and was during his education days and started to learn and engaged in similar activities for almost 45 years both
previously served as President of Shel-Nor Mills actively involved in policy making regarding tax understand the textile and other family businesses. independently and in joint ventures / partnership with
1983-1996, President ESN, Inc 1996-2003, legislations in Pakistan when in practice. other family members as well as other business
President 1888 Mills 2003-2005, President and CEO With the broadening of experience and exposure, houses and individuals. In addition to trading/
1888 Mills 2005-2020. Mr. Hyder served as a Country Tax Leader/Senior his role was enhanced over time and ultimately commercial activities he has a substantial stake in
Partner of EY Ford Rhodes (Previously Ernst & assigned the responsibility to lead the business. textile sector and is involved in the overall
With over 35 years in the Home and Commercial Young Ford Rhodes Sidat Hyder), Chartered After assuming of role, he strongly emphasized on management as Chief Executive and Director.
Textile Industry, Mr. Simon brings global business Accountants. He also served as the President, change in culture, adopting and practicing the more
experience across the continents including North elected member and member of the council and proven technological advancements and made all He travels extensively for updating on advancement
America, Asia, Europe, Middle East, and Africa. As various committees of the Institute of Chartered his efforts to adopt good practices and introduced in textile sector and for exploring export markets,
a former member of ITMF (International Textile Accountants of Pakistan (ICAP). the culture of high performance with maximum contract negotiation and customer retention. Mr.
Manufacturers Federation) Home Textiles economization. With his vision and leadership Shabbir is highly respected in the business
Producers Committee, he worked on Social and Mr. Hyder is a fellow member of the Institute of capabilities and foresightedness, he not only community as a man of commitment.
Environmental Audit compliance initiatives. Chartered Accountant of Pakistan. enhanced the volume and profit by many folds but
the Company also on sustainable basis to rank as Other Directorship
He has proudly been associated with Feroze1888 Other Directorship the largest in the Country.
Mills Limited for over 25 years and helped it to UTI Industries (Pvt.) Ltd.
establish the retail towel business in the USA. The Orix Leasing Pakistan Ltd. He is an individual who is highly respected in the Prominence Hospitality Pakistan (Pvt.) Ltd.
depth of his knowledge and breadth of his The Indus Hospital Textile Industry for his professional acumen, vision
experience is a driving force behind the Board of and innovations.
Feroze1888 Mills Limited.
Other Directorship
Mr. Simon received his education from Indiana
University, with a Bachelor’s Degree in Business ARS Impex (Pvt.) Ltd.
Administration & Management and from the The Indus Hospital
University Of Chicago Booth School Of Business, The ILM Foundation
AMP. DMS Education Foundation
Nigehban (Pvt.) Ltd.
Other Directorship
1888 Mills, LLC

Premier 1888 Ltd.

Mr. Abdul Rehman Yaqub Mr. Perwez Ahmed Mr. Anas Rahman Mr. Zain Ashraf Mukaty
Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director
Mr. Abdul Rehman Yaqub after completing his Mr. Perwez Ahmed’s career began nearly five Mr. Anas Rahman has more than 20 years of Mr. Zain Ashraf Mukaty graduated from the
education in the US entered into textile industry decades ago and his association with Feroze1888 is experience in the textile sector. He has worked in University of Pennsylvania, with a dual degree in
almost 35 years back. Starting out as a young from the beginning as he was among the founding different capacities such as Director Marketing, Economics and Engineering as part of the exclusive
businessman with a strong work ethic, he started members of the Company. Over the span of his Chief Executive Officer and Vice Chairman for Management and Technology Program. He worked
sales and distribution textile Company named as professional service he has proven his expertise in Feroze1888 Mills Limited. As a visionary and at Cornerstone Research in New York as a Financial
Eastern Imports Ltd. Within few years, he expanded strategically leading the business with a strong strategic thinker, he has good leadership skills and Litigation Consultant before moving back to
the operation by acquiring manufacturing facilities in acumen in finance, sales, marketing and general has lead teams effectively and successfully. Pakistan.
Bangladesh and Sri Lanka. While his company was management. Mr. Anas Rahman is currently involved in
growing internationally, he worked on expanding his diversifying his family business profile by selecting Zain has been an integral part of the new venture
US operations by merging with another niche textile Mr. Perwez is very active is the textile community to and evaluating different businesses. He completed development team at Liberty Group. He has a
company to become Eastern-Shelnor, Inc. date and has represented the Company in various his M.B.A. in Marketing from Institute of Business multifaceted role and is involved in various new
(ESN). From the success and growth of ESN associations & forums over the years. He has very Management Karachi. projects that diversified Liberty Group portfolio. He is
another merger came into play with him leading the strong interpersonal & communication skills and is leading the development of two 50 MW wind power
way. ESN merged with a textile manufacturer and actively involved in philanthropic activities. Other Directorship projects, Liberty Wind Power 1 & 2, as the Executive
became 1888 Mills, LLC with manufacturing Director. He is also the Director of Pakistan
capabilities in the US. Other Directorship Frieden Management (Pvt.) Ltd. Aluminum Beverage Can Limited playing an active
Dost-e-Zeest Foundation role in its strategy and growth.
Over the years, he has utilized his many years of The Patient’s Behbud’s Society for AKUH Friendship Dairies (Pvt.) Ltd.
knowledge and understanding of the global textile M&N Impex (Pvt.) Ltd. Johanmacia Pharmaceutical (Pvt.) Ltd. In addition, Zain is the Chief Executive Officer at
market to be the visionary of the Company. His Friendship Dairies (Pvt.) Ltd. Premier1888 Ltd. Oncogen Pharma (Private) Limited, developing the
unique ability to bring together people of diverse first cancer drugs manufacturing facility in Pakistan.
cultures and backgrounds has enabled 1888 Mills His key role in the company is highly enterprising,
US to be one of the pioneers of global textile focusing on successful project execution, technology
production, with mills in Pakistan, Bangladesh, transfer and system development.
Ghana and the United States. Today Mr. Yaqub is
seen as a predominant global business leader. Other Directorship
Other Directorship Liberty Mills Ltd.

Pakistan Aluminum Beverage Cans Ltd.
1888 Mills, LLC Oncogen Pharma (Pvt.) Ltd.
GMI Fund, LLC
Grangeford USA INC
Premier1888 Ltd.

Ms. Huma Pasha, FCA, CIA, CRMA & CICA Ms. Aminah Zahid Zaheer Mr. Rehan Rahman
Independent Director Independent Director Chief Executive Officer
Ms. Huma is currently serving as the Senior Partner Ms. Aminah is currently employed as the Managing Mr. Rehan Rahman was appointed Chief Executive
at Usmani & Co. and brings with her over 35 years Director of Zahid Zaheer & Associates, a Officer of Feroze1888 Mills in April 2016 and upon
of local and international working experience with multi-disciplinary, reputable well-established completion of his first term as CEO - was re-appointed
various national and global institutions including management consultancy firm based in Karachi. Ms. for the second term effective April 2019. He brings with
Citibank, Hub Power Company and Dawood Aminah has over 25 years of diverse working him an extensive and cross functional hands on
Hercules group in several management capacities. experience with some of the world’s largest FMCG experience of over 20 years in Feroze1888 and legacy
Besides this, she is a professional trainer and has firms – namely Unilever, Johnson Wax, Johnson & companies.
been carrying out workshops, seminars and Johnson, L’Oreal SA and The Body Shop. Aminah
conferences at various reputable institutions. She is has acquired over 15 years of Boardroom Mr. Rahman played an instrumental role in the
highly passionate for training services and more experience and has served on diverse boards both integration process after the acquisition of Nakshbandi
frequently indulge herself in various trainings on in the private and public sector. Industries Limited (NBIL) in 2010. He was also
Directors training, Board performance evaluation, appointed as CEO of NBIL and transformed a
risk based internal audit including role of Internal Ms. Aminah is a specialist in the areas of Business deteriorating unit into a gradually performing unit.
Audit in connection with Ethics and Fraud, and Start Ups, Acquisitions, Mergers & Joint Ventures,
sustainable business propositions etc. Restructuring & Integration, Corporate Strategy and As Chief Executive Officer, Rehan leads Feroze1888
Brand Creation. Aminah has had an exposure to a Mills in its purpose: “Weaving a Better World” with a
Huma has served on the Audit Committee of the cross section of industries within Pakistan and Asia commitment to drive the organization forward with his
State Bank of Pakistan Banking Services Pacific, including Pharmaceuticals, Home Cleaning, progressive mindset. In various roles within the
Corporation and carried out quality assurance Health and Personal Care, Cosmetics and Beauty. Company, he has consistently been focusing on
review of State Bank of Pakistan’s Internal Audit and She has lived and worked in multiple geographies driving high quality & disciplined execution and
Compliance Department. She has also served on within Asia Pacific, including China, Australia and, building strong teams.
the Quality Assurance Board of ICAP and several of most recently, in Singapore.
their Committees and was highly active with the During his tenure as a CEO of Feroze1888 Mills since
Institute of Internal Auditors Global and Institute of Ms. Aminah completed Masters in Business April 2016, the Company has achieved many
Internal Auditors International Board. She was the Administration from The Institute of Business milestones; from highest ever sales revenue and
first Chairperson of the Chartered Accountants Administration (IBA) Karachi in 1990 with majors in profitability, capacity enhancements, HR development
Woman’s Forum of ICAP. Finance. She has also completed innumerable programs - to winning multiple customer and
training courses with INSEAD in France and with sustainability awards, locally and internationally.
She is a Chartered Accountant by profession and The Johnson Learning Institute and Cornell
has obtained various certifications including University in USA. Besides focus on business, the cause of the wider
Certification in Risk Management Assurance; community is central to his vision. Over the years, he
Internal Controls and Internal Audit. Other Directorship has led the Company to participate in various
charitable activities and steered the Company and the
Other Directorship Fauji Food Pakistan Ltd. employees too, to contribute to the society at large.
Orix Leasing Pakistan Ltd.
HI-TECH Alloy Wheels Ltd. Other Directorship
UBL Fund Manager Ltd.
Medical Aid Foundation Premier1888 Ltd.
Path Education Society

DIRECTORS’ REPORT On the other hand, cotton production in Pakistan for
FY21 has been recorded at the lowest in decades.
This production shortfall to the critical level has
The Company tried hard to keep the operational
costs in line with the increase in sales volume and
also made focused efforts to keep administrative cost
In compliance with Section 227 of the Companies Pakistan’s total exports have witnessed a growth of pushed the cotton prices to a record 11 years high to under control. While on the other side of the coin, the
Act, 2017 and section 34 of the Code of 18.28 percent during 2020-21 recorded their highest Rs.13,000 / maund consequently cotton imports continued raise in yarn prices, volatility of rupee to
Corporate Governance Regulation 2019, the level at $25.3 billion compared to $21.39 billion have increased by 59.75% in quantity and 68.12% in US dollar parity, delay in releasing of DLTL refund
Directors are pleased to present the Annual during 2019-20, higher than the $25.11 billion US dollars during July-June 2020-21 as compared to claims from the Government and short availability of
Report along with audited financial statements recorded in 2013-14. Notwithstanding, the recent rise last year. The import of synthetic fiber and artificial containers/vessels has resulted in increased freight,
and Auditors’ Report thereon for the year ended in COVID-19 cases, Pakistan has been showing silk yarn have also increased by 47.19% & 30.21% delay in shipments - consequently significant high
30 June 2021. signs of a fragile economic recovery with a gradual respectively in US dollar terms. Further, prices also levels of finished goods inventory were the major
resumption of economic dynamism, according to a remained higher in the international market. challenges faced during the year.
ECONOMIC OUTLOOK new World Bank report. Pakistan’s economic growth Consequently, despite increasing textile exports by
for the FY2021 is 3.94 percent and further 22.94%during the last fiscal year, Pakistan remained DIVIDEND & APPROPRIATIONS
The COVID-19 viral Pandemic continues to be a strengthening is expected in upcoming years. The a net importer with 68% increase in cotton imports.
highly personal, individual experience that is also an baseline economic growth forecast, however, is Keeping in view the results, the Board of Directors
unprecedented globally-shared phenomenon with highly uncertain, especially given the new and REVIEW OF OPERATIONS & FINANCIAL has announced final cash dividend for the year
wide-ranging repercussions. The Pandemic has more-contagious wave of the Pandemic with rapidly RESULTS ended June 30, 2021 at Rs. 1.43/- per share
disrupted lives across all countries and communities spreading Delta variant and rolling Pandemic hot (14.3%). This is in addition to interim cash dividend
and negatively affected global economic growth spots which could prolong the Pandemic and A brief overview of performance of your Company for already paid at Rs. 2/- per share (20%), thus making
beyond anything experienced in nearly a century. dampen prospects of a recovery. the year ended 30th June 2021 is stated below: a total cash dividend at Rs. 3.43/- per share (34.3%)
The World Health Organization (WHO) first declared for the year. Future prospects of dividend are
COVID-19 a world health emergency in January INDUSTRY OVERVIEW Rs. in '000 dependent on future economic conditions.
Jun-21 Jun-20
2020; on March 11 it announced the viral outbreak
was officially a Pandemic, the highest level of health The Country's textile exports have witnessed a EVALUATION OF COMPANY’S PERFORMANCE
Sales- net 42,575,465 31,205,677
emergency. Since then, the emergency evolved into growth of 22.94 percent during the last financial i.e.
Gross profit 10,066,127 7,497,064 For the purpose of evaluating the performance of the
a global public health and economic crisis that 2020-21 and remained $15.4 billion compared to
Profit before taxation 4,789,284 3,283,625 Company, the Management uses various indicators
affected the $90 trillion global economy and the virus $12.526 billion during 2019-20. It registered an
Profit after taxation 4,311,291 2,937,221 like industry growth, position of peer companies, prior
has been detected in over 200 countries. The human increase of 57.81 percent on month-on-month basis
EPS 11.44 7.80 years’ performance, macroeconomic indicators and
costs in terms of lives lost will permanently affect as it reached $1.660 billion in June 2021 compared
global economic growth in addition to the cost of to $1.051 billion in May 2021. business environment impacting the Company.
elevated levels of poverty, lives upended, careers The Company’s profit after tax has amplified by Rs. Budgets are formulated and actual performance is
derailed, and increased social unrest. Raw cotton exports, as expected registered 95.27 1,374.07 million i.e. by 46.78% in comparison with measured against the budget, at regular intervals
In response to the unprecedented drop in economic percent decline during July-June 2020-21 and corresponding period of last year. The financial during the year, enabling remedial actions on a timely
activity, governments across the globe adopted a remained at $0.804 million compared to $17.002 results reflected improvements both in figures and in basis.
series of actions initially comprised of monetary million during the same period of last year whereas ratios. The textile export orders in the Country have
policies aimed at stabilizing financial markets and cotton yarn exports grew by 3.26 percent during recorded a historical jump this year and it is also
ensuring the flow of credit. In the second phase, July-June 2020-21 and remained at $1.016 billion reflected through the significant growth in the
policy actions shifted to fiscal measures aimed at compared to $984 million during the same period of Company’s net sales revenue which increased by
sustaining economic growth as governments last year and reflected 67.76 percent & 62.71 percent Rs. 11,370 million i.e. by 36.44% in comparison with
adopted quarantines and social distancing growth on month-on-month and year-on-year basis corresponding period of last year and reached to Rs.
measures. In the third phase, government policies respectively and remained at $120.931 million in 42,575 million.
shifted to developing, purchasing and distributing June 2021. Specifically towel exports went up
vaccines. 31.81% in value and 22.71% in quantity and stood at
$937.5 million during the year 2020-21.

SUBSEQUENT EVENTS statements in accordance with the accounting and AUDITORS quality and safety for our employees. Further, we
reporting standards as applicable in Pakistan and the also hold certification in ISO 14001 - 2015
No material changes or commitments affecting the requirements of Companies Act, 2017 (XIX of 2017) The existing auditors EY Ford Rhodes, Chartered (Environmental Management System) and ISO
financial position of the Company have taken place and for such internal control as Management Accountants, in their independent auditors’ report on 45001 - 2018 (Occupational Health & Safety).
between the end of the year and the date of this determines is necessary to enable the preparation of financial statements of the Company for the year
report. financial statements that are free from material have expressed an unqualified opinion on the state SUSTAINABILITY & CORPORATE SOCIAL
misstatement, whether due to fraud or error. of affairs of the Company. RESPONSIBILITY
DEFAULT OF REPAYMENTS, DEBT/LOAN
ETC. REVIEW OF RELATED PARTY The Board has recommended, as suggested by the Being conscious of its Corporate Social
TRANSACTIONS Audit Committee, the appointment of EY Ford Responsibilities, your Company made significant
Adhering to the best business practices, the Rhodes, Chartered Accountants, the retiring auditors contributions during the year to multiple nonprofit
Company recognizes its responsibility of timely In compliance with the Companies Act, 2017, Code who being eligible, have offered themselves for organizations for education, healthcare, social
repayments of due amount. No default on payment of Corporate Governance and other applicable laws re-appointment for the ensuing year, subject to welfare and environmental protection in line with its
of loan/debts was recorded during the year under and regulations, details of all related party approval of the members in the forthcoming corporate social responsibility policies. These
review. Furthermore, no payment on account of transactions are placed periodically before the Audit Annual General Meeting. included donations to the Indus Hospital, Green
taxes, duties and levies is overdue or outstanding at Committee and upon their recommendation, the Crescent Trust, Karachi Down Syndrome Program,
financial year end. same are placed before the Board for review and ENVIRONMENT, HEALTH AND SAFETY Burns Centre, Kiran Foundation and Hunar
approval. The details of transactions where majority (EHS) Foundation. The Company believes in returning to
CHANGE IN NATURE OF BUSINESS of directors are interested are also placed annually the community by actively participating in various
before the members for approval. Your Company is committed towards safeguarding a social initiatives and the significant portion of CSR
No change has occurred during the financial year healthy environment for everyone by reducing the funds goes to education and health sector.
concerning the nature of the business of the PRINCIPAL RISKS AND UNCERTAINTIES environmental impacts of its business through
Company. compliance with all environmental standards at the We focus on sustainability by minimizing our carbon
The Company is effectively equipped to face any production facility and fully cognizant of its footprint and undertaking projects that help in
ADEQUACY OF INTERNAL CONTROL challenges and uncertainties that are likely to arise. responsibility in this regard. conservation of water and energy. The Company has
Through combined experience, skill and effective successfully achieved the target by meeting the
The Board of Directors has established a system of business reporting, Management is always aware of The recent rise in COVID-19 cases through new and National Environmental Quality Standard (NEQS).
sound internal control, which is effectively internal and external developments. The Company more-contagious wave of the Pandemic with rapidly Moreover, the Company has been investing in
implemented and maintained at all levels within the has formulated unique specialized cross functional spreading Delta variant required an urgent and green energy projects to protect the environment by
Company. The independent internal audit function of teams that routinely discuss key issues and risks to concerted response as it imposed grave danger on reducing environmental footprints and also
the Company is outsourced to a reputable come up with the most forward approach. To face the general public. As a major player in the market, collaborated with World Wide Fund (WWF) for a
professional service firm, A.F.Ferguson & Co vigorous competition, Management ensures that the we are completely aware of our responsibilities plantation drive.
(member of PWC network) who are suitably qualified capacity to produce and to sell is fully utilized to its towards joining the community in the fight against the
and experienced for the purpose. utmost potential. Pandemic. For the cause, we have been conducting We are committed to responsible business practices,
constant awareness sessions, providing vaccination both within the Company and throughout our value
The internal audit is conducted as per the internal The Board of Directors of the Company has carried facility to the employees and workers at the factory chain. The Company has a proven track record of its
audit plan duly reviewed and approved by the Audit out a vigilant and thorough assessment of both premises and ensuring that all the staff get strong commitment towards the purpose and feel
Committee. The internal audit plan is driven by the internal and external risks that the Company might vaccinated on time. In addition to that, a dedicated proud to work in the best interest of all the
Company’s organizational objectives and priorities, face and have taken concrete steps to mitigate these clinic/dispensary, managed by a qualified team is stakeholders and environment. Furthermore, details
and the risks that may prevent the Company from risks. Following are some of the challenges which the also available in the factory premises for wellbeing of regarding CSR activities performed by us during the
meeting those objectives. The Audit Committee Company is facing: the staff. period is provided on page 87 to 102.
reviews the effectiveness of the internal control
framework whereas AFF regularly monitors and • New wave of COVID-19 Pandemic variant Our production practices conform to international
provides assurance on the effectiveness and DELTA standards and comply with good manufacturing
adequacy of the internal controls. • Surge in raw material costs practices. Our processes and controls are agile and
• International supply chain challenges sustainable, ensuring that we do not compromise on
MANAGEMENT’S RESPONSIBILITY • Instability of currency exchange rate
TOWARDS PREPARATION AND • Overall inflationary increase in operational
expenses
PRESENTATION OF FINANCIAL
STATEMENTS
The Management is aware of its responsibility for the

preparation and fair presentation of its financial

STATEMENT OF COMPLIANCE WITH THE Male 9 DIRECTORS’ TRAINING through innovation, improved efficiency and effective
CODE OF CORPORATE GOVERNANCE Female 2 cost containment initiatives.
REGULATIONS, 2019 The Directors of the Company are adequately trained
The current composition of the Board is as follows: to perform their duties and are aware of their powers Moreover, to ensure a safe and healthy work
As required by the Listed Companies (Code of and responsibilities under the Companies Act, 2017 environment, the Company is adapting its health and
Corporate Governance) Regulations 2019, the Executive Director 1 and the Regulations of PSX Rule book. safety practices in line with WHO guidelines to deal
Directors are pleased to state as follows: Non-Executive Directors 7 with the Pandemic and mitigate the adverse impacts.
Independent Directors 3 PATTERN OF SHAREHOLDING
• The financial statements, prepared by the Going forward, we remain committed to work
Management of the Company, present fairly its COMMITTEES OF THE BOARD Pattern of shareholding of the Company in together earnestly in steering the Company towards
state of affairs, the results of its operations, cash accordance with the Companies Act, 2017 as at the accomplishment of its objectives while ensuring
flows and changes in equity. The Board has formed the following committees June 30, 2021 is annexed. value creation for the stakeholders.
• Proper books of accounts of the Company have comprising of members given below:
been maintained. FUTURE OUTLOOK AND CHALLENGES INTERNATIONAL RECOGNITION &
• Appropriate accounting policies have been BOARD AUDIT COMMITTEE: ACKNOWLEDGMENT
consistently applied in preparation of financial In order to keep pace with the rapidly changing world
statements. Accounting estimates are based on Mr. Nasim Hyder Chairman due to technological up-gradation, the Company has It is indeed a moment of pleasure that, during the
reasonable and prudent judgment. (Independent Director) been investing in the long term expansion plan for its year, Feroze1888 Mills has been selected as one of
• International Financial Reporting Standards, as Mr. Khaleequr Rahman Member spinning and composite unit in conjunction with the the 200 Best Under A Billion Companies by Forbes
applicable in Pakistan, have been followed in Mr. Zain Ashraf Mukaty Member inclusion of state of the art machineries and Asia.
preparation of financial statements and any Ms. Aminah Zahid Zaheer Member processes with the aim to elevate the Country’s
departure therefrom has been adequately (Independent Director) export and continuing growth for the Company. Our journey of success does not stop here; in fact
disclosed and explained. It’s imperative for us as organization, and the industry this recognition has fueled up our aspirations to live
• The Company maintains a sound internal control as a whole, to be flexible and adaptable to the our vision of being the market leaders and continue
BOARD HUMAN RESOURCE AND to serve our valued customers with even greater
system which gives reasonable assurance changing environment. We will continue to build on
against material misstatement or loss. The REMUNERATION COMMITTEE: our competencies and review our strategies to enthusiasm.
internal control system is regularly reviewed. Ms. Aminah Zahid Zaheer Chairperson ensure that they remain relevant and most suited, in
• We affirm the Company’s ability to continue as a (Independent Director) line with changing dynamics in the global The Board takes this opportunity to express its deep
going concern. Mr. Nasim Hyder Member marketplace. Your Company is making all efforts to sense of gratitude to the shareholders, employees,
• There has been no departure from the best (Independent Director) sustain profitability in the upcoming years where raw customers, financial institutions and other
practices of corporate governance. Mr. Zain Ashraf Mukaty Member material costs significantly impacting the bottom line stakeholders for the confidence and faith they have
• Key operating and financial data for the last six and we expect to sail through the rough waters always reposed in the Company.
years is summarized on page 105 to 115. DIRECTORS’ REMUNERATION
• Outstanding taxes, statutory charges and duties, For and on behalf of the Board of Directors
if any, have been duly disclosed in the financial In line with the requirements of Listed Companies
statements. (Code of Corporate Governance) Regulations, 2019
• Significant deviations, from last year in the and the Articles of Association of the Company, the
operating results of the Company have been policy for remuneration of non-executive directors
highlighted and explained. (including independent directors) has been approved Rehan Rahman Aminah Zahid Zaheer
• The Directors on the Board are fully conversant by the Board of Directors according to which the Chief Executive Officer Director
with their duties and responsibilities as directors Company does not pay any remuneration to its
of corporate bodies. non-Executive directors (including independent
• Outstanding debts, if any, have been duly directors) except as meeting fees for attending the Karachi
disclosed in the financial statements. Board and its Committee meetings. The Date: August 30, 2021
remuneration of a director for attending meetings of
COMPOSITION OF THE BOARD the Board of Directors or its Committees shall from
time to time be determined and approved by the
In line with the requirements of the Regulations, the Board of Directors
Company encourages representation of independent
and non-executive directors, as well as gender
diversity on its Board. The total number of directors
are eleven including Chief Executive as a deemed
director as per the following:

GOVERNANCE FRAMEWORK
GOVERNANCE STRUCTURE: Listed Companies (Code of Corporate Governance) ROLE OF THE CHAIRMAN & THE CEO:
Regulations, 2019 with responsibility, diligence and in
Corporate Governance refers to a framework through compliance with the legal framework after due Following is the brief comparison of roles of the Chairman & the Chief Executive Officer:
which Board of Directors (“the Board”) ensures deliberations in its meetings. These include but are
accountability, fairness, responsibility and not limited to approval of annual budgets including ROLE OF THE CHAIRMAN ROLE OF THE CEO
transparency in the Company's relationship with all capital expenditures, investments in new ventures,
its stakeholders and sustainable value creation for approval of related party transactions and The Chairman of the Board has the responsibility The CEO is primarily responsible for the
them. Corporate governance is the system by which appointment of key management positions etc. to lead the Board and ensure its effective management of the Company and its procedures
companies are directed and controlled. Boards of Financial statements of the Company, interim and functioning and continuous development. in financial and other matters, subject to the
directors are responsible for the governance of their final dividends and review of internal / external audit oversight and directions of the Board, in
companies. observations regarding the overall control accordance with the Companies Act, 2017.
environment including effectiveness of the control
The governance and control of Feroze1888 is carried procedures are also approved by the Board. The Chairman represents the non-executive The responsibilities include implementation of
out through number of corporate bodies. Division of directors of the Board and is entrusted with the strategies and policies approved by the Board,
responsibilities and duties between the shareholders, Matters Delegated To the Management: overall supervision and direction of the Board’s making appropriate arrangements to ensure that
the Board and the CEO are regulated inter alia by the proceedings, and has the power to set the all the resources are properly safeguarded and
Companies Act, 2017, the Company’s Articles of Chief Executive Officer of the Company has been agenda, give directions and sign or delegate the are used economically, efficiently and effectively
Association, the Corporate Financial Reporting entrusted by the Board with the primary responsibility signing of the minutes of the Board meetings. and in accordance with all statutory obligations.
Framework of Securities and Exchange Commission of conducting the routine business operations in an
of Pakistan and the Listed Companies (Code of effective and ethical manner, in line with the Board’s The Chairman ensure that the Board of Directors The CEO of the Company is to whom all
Corporate Governance) Regulations, 2019. approved strategies and goals including annual remains effective in its tasks of setting and Business and Functional heads directly or
targets of production, sales, revenues, cost, implementing the Company’s direction and indirectly report and is responsible for
The basis of our strategy is to ensure that the profitability and compliance with legal requirements. strategy. presentation of the Company’s aims and policies
Company follows the direction defined by its Core The management is responsible for the identification to the Government and all stakeholders.
Values, current regulatory frameworks and global and administration of key risks and opportunities
best practices. Our approach towards corporate which could impact the Company in the ordinary
governance ensures ethical behavior, transparency course of business. It is also the responsibility of the
and accountability. Company’s management to establish and maintain a
system of internal controls and financial reporting in
ROLE AND RESPONSIBILITIES OF THE conformity with the approved accounting standards
and the requirements of the Companies Act, 2017.
BOARD OF DIRECTORS:
All strategic decisions of the Company are taken by

the Board of Directors. The Board exercises all
powers granted to it by the Companies Act, 2017 and

PERFORMANCE EVALUATION OF THE GOVERNANCE PRACTICES EXCEEDING CONFLICT OF INTEREST AMONG BOARD (I) AUDIT COMMITTEE:
DIRECTORS ON THE BOARD: LEGAL REQUIREMENTS: MEMBERS: The Audit Committee of the Board of Directors of
Feroze1888 Mills Limited assists the Board of
Complying with Listed Companies (Code of Feroze1888 has always believed in going the extra The Code of Conduct implemented by the Board Directors in the oversight of:
Corporate Governance) Regulations, 2019 the Board mile and staying ahead with legal formalities. In view provides guidance to strictly avoid conflict of interest a) The integrity of Financial Statements of the
has approved a comprehensive mechanism for of this strategy, the Company’s commitment to the (or even the perception of a potential conflict) Company;
evaluation of its performance. The Company has highest levels of moral and ethical values is between the director’s personal, social, financial or
introduced a questionnaire covering the Board’s demonstrated by voluntary adoption of best business political interests and the advancement of the b) Effectiveness of:
scope, objectives, function and Company’s practices from around the world in addition to the Company’s business interests, the interests of its i) External Audit, with respect to the appointment
performance and monitoring. All individual Board mandatory regulatory requirements. Some of the customers and with other directors. of, rotation, qualification and independence of
members answer the comprehensive questionnaire governance practices exceeding legal requirements External Auditors and the conduct of Audit;
focused on evaluating, from various angles, whether that have been adopted by the Company include: BUSINESS CONTINUITY PLANNING: ii) The system of Internal Control;
the Board has discharged its duties diligently and iii) The Internal Audit Function;
with foresight. The Chairman of Board collates • Best corporate reporting practices as Significant efforts have been made in ensuring iv) The compliance, including compliance with legal
individual responses and presents them to the Board. recommended jointly by the Institute of uninterrupted business operations. Business and regulatory requirements.
This exercise allows the critical self-assessment of Chartered Accountants of Pakistan (ICAP) and Continuity Plans (BCP) are in place to protect the
the Board to evaluate its performance and overall Institute of Cost and Management Accountant of organization and its resources and ensure minimum It consists of four members including its Chairman.
effectiveness in setting strategies, devising control Pakistan (ICMAP). disruption in case of any adverse or unforeseen Two members are Non-Executive Directors, while
processes, assessing market trends by monitoring • The Code of Corporate Governance requires events through availability of the critical business Chairman and one member of Committee are
micro and macroeconomic factors and setting that at-least seventy five percent of the directors functions. Independent Directors including a female director. Its
standards to respond to the adverse unforeseen on the Board of a Company must have meetings are held in every quarter for reviewing and
situations to further the cause of a learning completed the Directors' Training Program by DISASTER RECOVERY PLANNING: recommending the Company's Financial Statements.
organization. This process also ensures that the 30th June 2021. Currently, more than 75% of the In addition, the Board can convene a special meeting
Board is constantly growing intellectually and the Directors are certified. To manage the information security risk, we have of this Committee to discuss any special agenda.
responsibility of steering the Company to new • The Board of Directors of the Company consists adopted an effective disaster recovery plan to Detail regarding attendance of committee meetings is
heights of success is discharged effectively and of two female directors and both are minimize and contain any disaster, to provide a rapid disclosed in Directors’ Report.
efficiently. Board’s performance evaluation is carried independent directors. Whereas, the Listed and smooth transition to a backup mode of
out internally and no external consultant has been Companies (Code of Corporate Governance) operations and expeditiously recover the normal TERMS OF REFERENCE:
hired for the same in last three years. Regulations, 2019, requires each listed company operations in the data center. Such planning ensures
to have at least one female director. that essential/critical functions are supported with a) Financial Reporting:
DIRECTORS’ ORIENTATION SESSION: • Disclosure of various financial analysis including minimum disruption following a disaster. Review of quarterly, half yearly and annual
ratios, reviews, risk matrices and graphs etc. in financial statements of the Company, prior to
The Company has a practice to carry out orientation the Annual Report. SHARE HELD BY SPONSORS / DIRECTORS their approval by the Board of Directors, through
sessions for their directors to acquaint them with • Implementation of aggressive Health, Safety and / EXECUTIVES: discussion with Management and External
applicable laws and regulations and their duties and Environment strategies to ensure safety of Auditors (where relevant) focusing on significant
responsibilities in order to enable them to effectively employees and equipment in order to As at 30 June 2021, the Sponsors, Directors and financial reporting issues and judgments,
govern the affairs of the Company on behalf of continuously improve, achieve and exceed Executives of the Company held the following sufficiency of disclosures in compliance with
shareholders. global standards. number of shares. regulatory framework, significant audit matters
and disclosure of related party transactions.
DIRECTORS’ TRAINING: COMPANIES IN WHICH THE EXECUTIVE Particulars Number of Shares
DIRECTOR IS SERVING AS b) Internal Controls and Risk Management:
The Directors’ on the Board are well aware of their NON-EXECUTIVE DIRECTOR: Sponsors and Directors 221,670,334 • Determination of appropriate measures to
duties and responsibilities as outlined in the Associates 87,863,959 safeguard the Company’s assets.
Corporate Laws and Regulations. In compliance with There is no such Company in which the executive Executives 24,454,231 • Ascertainment of the adequacy of the internal
the provisions of the Listed Companies (Code of director of the organization is serving as control systems including financial and
Corporate Governance) Regulations, 2019, nine of non-executive director. operational controls, accounting systems for
BOARD COMMITTEES:
our directors including Chief Executive have already timely and appropriate recording and reporting
attended and completed the required Directors’ structure.
BOARD MEETINGS HELD OUTSIDE Board of Directors have constituted Audit Committee
Training. In addition to this, during the year one • Review of the effectiveness of the Company’s
PAKISTAN: and Human Resource and Remuneration Committee
female Executive has also completed Directors’ internal controls and risk management systems.
to work under its guidance. Details about the
Training Program as per directives of the Code of • Review of Company policies and amendments
During the year all Board of Directors and Committee composition and terms of reference of both
Corporate Governance Regulations. thereto.
meetings were held in Pakistan. committees are as under:
• Internal Audit Reports.

c) External Audit: DUTIES AND RESPONSIBILITIES: ATTENDANCE IN THE MEETINGS OF BOARD COMMITTEES:
• Consider and make recommendation to the
Board on the appointment and removal of The duties and responsibilities are as under: Board of Director Board Audit Board Human
external auditors and their audit fees. • The Committee ensures that plans are in place S. No Name of Directors Meeting Committee Meeting Resources and
• Facilitate the external audit and discuss major for orderly succession of Executive Officers Remuneration
observations of the auditors arising from audits including the Chief Executive Officer. Committee
and any other matters that the auditors may wish • The Committee reviews and discusses the 1. Mr. Jonathan R. Simon 7/7 N/M N/M
to highlight. Company’s organizational structure with the
• Review Management Letter issued by the 2. Mr. Rehan Rahman 7/7 N/M N/M
CEO for appropriateness to the Company’s
external auditors and management’s responses business strategy and future plans. 3. Mr. Nasim Hyder 7/7 4/4 5/5
thereto. • The Committee recommends to the Board the 4. Ms. Huma Pasha 7/7 N/M N/M
framework / policy for the remuneration of the 5. Ms. Aminah Zahid Zaheer 7/7 4/4 5/5
d) Other Matters: Company's Chairman, Board members, Chief 6. Mr. Khaleequr Rahman 7/7 4/4 N/M
Consider any other matter assigned to it by the Executive and other Executive Officers. In 7. Mr. Shabbir Ahmed 7/7 N/M N/M
Board or by the Regulators. The Committee determining such policy, the Committee takes
shall make recommendations to the Board it 8. Mr. Perwez Ahmed 7/7 N/M N/M
into account all factors which it deems necessary
deems appropriate on any area under its review including relevant legal and regulatory 9. Mr. Abdul Rehman Yaqub 7/7 N/M N/M
where action or improvement is needed. requirements, the provisions and 10. Mr. Anas Rahman 7/7 N/M N/M
recommendations of the Code of Corporate 11. Mr. Zain Ashraf Mukaty 7/7 4/4 5/5
(II) HUMAN RESOURCE & REMUNERATION Governance.
• The Committee considers and approves N/M: Non-Member
COMMITTEE:
recommendations of the Chief Executive on OVERSIGHT OF FUNCTIONS BY EXTERNAL SPECIALIST:
There is a Human Resource and Remunerations selection, evaluation, compensation and
(HR&R) Committee to assist the Board in: succession planning for key management With the vision to establish a system of sound internal controls, the independent internal audit function of the
a) Recommending human resource management positions who report directly to the Chief Company is outsourced to a reputable professional firm, A.F.Ferguson & Co. (AFF), Chartered Accountants
policies to the Board; Executive. who are suitably qualified and experienced for the purpose and are conversant with the policies and procedures
b) Recommending to the Board, the function, • The Committee may seek assistance from of the company.
evaluation, compensation (including retirement outside in consideration to fulfill its duties and
benefits) and succession planning of the Chief responsibilities. The internal audit is conducted as per the internal audit plan duly reviewed and approved by the Audit
Executive Officer (CEO), Chief Financial Officer • The Committee undertakes annually a formal Committee. The internal audit plan is driven by the organizational objectives and priorities, and the risks that
(CFO), Company Secretary and the Internal process of evaluation of performance of the may prevent the Company from meeting those objectives. The Audit Committee reviews the effectiveness of
Audit Head. Board as a whole and its committees either the internal control framework whereas AFF regularly monitors and provides assurance on the effectiveness
directly or by engaging external independent and adequacy of the internal controls and risk management framework.
The Committee consists of three Board members, consultant and if so appointed, a statement to
with two Independent Directors and one that effect shall be made in the Director’s Report
Non-Executive Director. The Chairperson of the or Governance Framework.
Committee is an Independent female director. The
Committee meets as many times as it deems
necessary, however, at minimum it has to meet at
least twice a year. Detail regarding attendance of
committee meetings is disclosed in Directors’ Report.

CODE OF CONDUCT – Our greatest asset is our people & we are committed POLICY FOR SAFEGUARDING OF RECORDS & Speak Up Instances during the Year:
to provide equal employment opportunities based on IT GOVERNANCE: During the year 2021, there were no instances that
COMPANY POLICIES merit and in creating a workplace where all are qualified as of material nature.
respected, satisfied and appreciated. To maintain this The Company considers information as one of the
POLICY ON NON-EXECUTIVE AND culture of respect we are staunch proponent of no most valued business asset and place great During the year 2021, only one complaint was
INDEPENDENT DIRECTORS’ harassment in any form including verbal / emotional, emphasis on storage and safe custody of its financial received and disposed after formal investigation.
REMUNERATION: physical or sexual. and non-financial records. The Company uses the
Oracle ERP system for recording its financial HUMAN RESOURCE MANAGEMENT &
In line with the requirements of Listed Companies RELATED PARTIES TRANSACTION information. The access to electronic information is SUCCESSION POLICIES:
(Code of Corporate Governance) Regulations, 2019 POLICY: limited and secured through implementation of a
and the Articles of Association of the Company, the comprehensive password protected authorization At Feroze1888 we believe in crafting HR policies that
policy for remuneration of non-executive directors In the light of regulations issued by SECP under matrix. are derived from our vision and philosophy. We
(including independent directors) has been approved SRO 1194(I) / 2018 dated 2 October 2018 and intend to make our policies a true reflection of our
by the Board of Directors according to which the Section 208 of Companies Act 2017 for Related Further, we have aligned ourselves to efficient use of core values at all levels. This, we believe, will lead to
Company does not pay any remuneration to its Party Transactions, the Related Parties Transaction IT resources in achieving the strategic and a well - blended team of professionals and experts
non-Executive directors (including independent Policy of the Company has been approved by the operational objectives while increasing shareholders’ working collaboratively in a cordial environment. Our
directors) except as meeting fees for attending the Board . The Company maintains proper record of all value. To ensure value creation through benefits focus in on upholding the true spirit of impartiality and
Board and its Committee meetings. The transactions pertaining to Related Parties and realization and resource optimization, the Company a transparent system to attract, hire, develop,
remuneration of a director for attending meetings of relevant details have been appropriately disclosed in has IT framework which governs to achieve engage, retain and motivate all the employees to
the Board of Directors or its Committees shall from Note 36 of the Financial Statements in accordance excellence in IT risk management structure, utilize their skill set to the optimal and continue to
time to time be determined and approved by the with Fourth schedule of Companies Act 2017. These development of internal controls, automation of strive for excellence at work.
Board of Directors. transactions were reviewed and recommended by business functions, structured decision making and
Audit Committee and were subsequently approval by safeguarding of assets. Moreover, in order to ensure the going concern of the
RETENTION OF BOARD FEE BY THE the Board on 30 August 2021. operations, we have also devised & implemented a
EXECUTIVE DIRECTOR IN OTHER The Company’s physical record are managed, concrete succession planning model to support in
INVESTORS’ RELATIONS AND retained and disposed-off in effective and efficient developing bench strength for critical leadership
COMPANIES:
COMMUNICATION POLICY: manner. The records are kept at secure places with positions based on predefined criteria.
adequate safety measures in place. All records are
Executive Director of Feroze1888 may serve as
Feroze1888 Mills Limited strives to develop and retained as long as they are required to meet legal, SOCIAL AND ENVIRONMENTAL
Non-Executive Director on the board of any other
maintain trustworthy relations with its stakeholders, administrative, operational, and other requirements of RESPONSIBILITY POLICY:
Company by virtue of the Companies Act 2017. Fees
including shareholders and investors. In this relation the Company.
paid by any other Company in compliance with
a policy has also been approved by the Board of Company is committed to provide safe and secure
remuneration policy of respective Company,
Directors. It recognizes the importance of timely and The Company believes and practices that the work environment to its employees and ensures that
approved by the Board of Directors may be retained
fair disclosure of all material information to them, information should be accessed on a need to- know processes do not adversely affect the nearby
by the Executive Director in lieu of services rendered
without advantage to any particular investor group or basis. For this purpose, the Company has put in communities, environment and society as a whole.
as Non-Executive Director.
investment advisor / analyst, in order to enable them place a mechanism to define required access control Employees are directed to follow all applicable health
to make informed decisions about investing in the measures to Company’s information, applications and safety rules and practices and cooperate with
STATEMENT ON SECURITY CLEARANCE and system resources in a controlled environment to officials who are responsible to ensure these rules
OF FOREIGN DIRECTORS: Company’s equity and other debt instruments (if
any). Further all information disclosed to the public is protect the privacy, security and confidentiality of all and practices. Employees need to follow all security
in accordance with the Rule Book of the Pakistan stored data, both physical and electronic. measures and guidelines for a safe work
Security clearance of Foreign Directors is initially environment, which also includes use of personal
done by the Company Secretariat by verifying their Stock Exchange Limited (“PSX”), as well as the
Listed Companies (Code of Corporate Governance) WHISTLE BLOWING POLICY: protective equipment (PPEs) as per the nature of the
provided documents as per requirements of job.
prevailing laws. Finally, it is carried out by the Regulations, 2019. The Company also gives its
shareholder the option to express their grievances The Company’s purpose and values set the standard
Regulator i.e. Securities and Exchange Commission for how it does business and actively encourage The Company also contributes to various social and
of Pakistan as per law / regulatory requirements, as and any other enquiries electronically via its website.
Main principles of the Investors Grievance Policy are openness, integrity and accountability. In accordance charitable causes including health and education.
their forms related to appointment is accepted with the Company’s continued commitment to good Moreover, the Company has defined and
subject to clearance by the Ministry of Interior. as follows:
governance, a ‘Whistle Blowing’ policy has been implemented Code of Conduct for the employees
- All the investors are treated fairly and equally at adopted. The policy ensures that the ‘Whistle Blower’ that fits with local customs and regulations. It ensures
DIVERSITY POLICY: will be subject to no repercussion and the said highest standards of ethical business and the desired
all times
- Complaints raised by investors are dealt with non-conformance, will be investigated in a fair, corporate values and behaviors.
Feroze1888 is committed to promote hiring people of transparent, reliable and principled manner.
different age groups, educational backgrounds, courtesy, fairness and in a timely manner
religion, ethnicity, specially able people and gender - The Management works in good faith and
so the workplace should be a mix of all diversity without prejudice towards the interests of
components. We provide equal opportunity to all job any of the investors
applicants through clearly defined and consistently
applied induction standards and have developed an
unbiased and impartial working environment for all;
thereby enabling each employee to develop to the
fullest.

STAKEHOLDER the members along with the notices and also
available on our website.
ENGAGEMENT • Shareholders are encouraged to comment, raise
queries and provide feedback in the meeting.
PRESENCE OF THE CHAIRMAN AUDIT • It is also ensure to comply all the regulatory
COMMITTEE AT THE AGM: requirements and takes all possible steps to
encourage attendance of minority shareholders
Shareholders are invited to all General Meetings and in general meetings.
are encouraged to share their concerns and queries.
Certain Members of the Board, Chief Executive and INVESTORS’ RELATIONS SECTIONS ON
other senior management personnel were present at THE WEBSITE:
the General Meetings held during the year, to
address all concerns and queries raised by the Feroze1888 Mills Limited is committed to maintain
shareholders. Chairman of the Audit committee was strong and transparent relations with all stakeholders
also present at the AGM held to approve financial including the investors and shareholders. In an effort
statements for the year ended 30 June 2020 to to harness the relationship with the investors and
answer any questions on the same and Audit shareholders and to provide them accurate,
Committee’s activities and matters within the scope transparent and timely information, the Company has
of the Committee’s responsibilities. maintained a dedicated section on its website
(http://www.feroze1888.com). The website is
STEPS TAKEN BY THE MANAGEMENT TO regularly updated to ensure that the Company meets
ENCOURAGE MINORITY SHAREHOLDERS' its requirements and provides all information relevant
PARTICIPATION IN ANNUAL GENERAL to all stakeholders including customers.
MEETING:
ISSUES RAISED AT LAST AGM:
The Company ensures that the interest of the
minority Shareholders is protected. In order to ensure General clarifications were sought by the
their participation in general meetings, Feroze1888 shareholders on Company’s Annual Report,
management takes following steps: however, no significant issue was raised during the
48th AGM of the Company held on 26 October 2020.
• All notices related to the Shareholders’ meetings
are being announced timely through Pakistan CORPORATE BRIEFING:
Stock Exchange and also published in
newspapers in English and Urdu language as Feroze1888 conducted a corporate briefing based on
per the specified timeline and requirements. 30 June 2020 Financial Statements on 24 November
• All notices of the Shareholders’ meetings are 2020 through zoom video link to apprise the
dispatched at the registered addresses of the stakeholders about the Company’s operational and
Shareholders available with the Company as per financial performance and to solicit and understand
regulatory requirement to acquaint them with the views of shareholders. Chief Financial Officer
agenda of the meeting. summarized the Company performance for the year
• Annual Report is being sent to each member of 2020. The briefing was also attended by the Chief
the Company before the AGM in electronic form Executive, Head of Operations, Company Secretary
through CD and in hard copy form who asked for and other senior officials of the Company. The
the same. briefing was followed by a Question & Answer
• Shareholders are facilitated and encouraged in session to provide further explanation on the matters
appointing proxies in case they are unable to stated in briefing.
attend the AGM in person. For this purpose
proxies in English and Urdu Language is sent to

Wherever required, the Chief Financial Officer of the reporting standards. No additional matter was
Company attends the meeting by invitation, Head of required to be discussed other than already
Internal audit is present in all the Committee disclosed in the financial statements. Contents of
meetings whereas External Auditors attend the the External Audit Report are in accordance with
meetings when matters pertaining to their functions the applicable Regulations in Pakistan; the
come up for consideration. For this reason they auditors have issued unmodified audit reports in
attended one meeting during the year. The heads of respect of the financial statements.
REPORT OF THE departments were also present for the appropriate
items of the agenda, as and when required. • Appropriate accounting policies have been
AUDIT COMMITTEE Report and Conclusion reached

consistently applied except for the changes, if
any, which have been appropriately disclosed in
the financial statements. Accounting estimates
Composition • Reviewing the effectiveness of the Company’s The Committee has concluded its annual review of are based on reasonable and prudent judgment.
audit function, the Company’s internal financial the operations of the Company for the year ended
The Company has established an Audit Committee controls and systems of internal control and risk June 30, 2021 and based on reviews and • The Company’s system of internal control is
(the Committee) in compliance with Listed management. discussions in the meetings, reports that: sound in design and has been continually
Companies (Code of Corporate Governance) • Overseeing the appointment, remuneration, evaluated for effectiveness and adequacy.
Regulations, 2019. It comprises of four non-executive independence and performance of the external • The Committee has reviewed the quarterly, half
directors. auditors and the integrity of the audit process as yearly and annual financial statements of the • Proper, accurate and adequate accounting
a whole, including the engagement of the Company and recommended them for approval records have been maintained by the Company.
Mr. Nasim Hyder – Independent Non-Executive external auditors to provide non-audit services to of the BoD. These financial statements present a
Director (Chairman) the Company. true and fair view of the Company’s state of • All related Party transactions have been
Mr. Khaleeq Ur Rahman - Non-Executive Director • Reviewing the systems in place to enable those affairs, results of operations, profits, cash flows reviewed by the Committee prior to approval by
Mr. Zain Ashraf Mukaty - Non-Executive Director who work for the Company to raise concerns and changes in equity of the Company for the the BoD.
Ms. Aminah Zahid Zaheer - Independent about possible improprieties in financial reporting year under review.
Non-Executive Director or other issues and for those matters to be • The Company’s approach towards risk
investigated. • The Chief Executive Officer and the Chief management has been disclosed in the risk
The Chairman of the Committee, Mr. Nasim Hyder is Financial Officer have reviewed the financial assessment portion of the Directors’ Report. The
the fellow member of the Institute of Chartered Meetings held statements of the Company. They types and detail of risks along with mitigation
Accountants of Pakistan (ICAP). All the Committee acknowledged their responsibility for true and fair measures are disclosed in relevant disclosure of
members as a whole possess significant economic, The Committee met four times during the year. The presentation of the financial statements, the financial statements.
financial and business acumen. The names and attendance of the members at these meetings stated accuracy of reporting and compliance with
profiles of the Committee members are part of this in the Directors’ Report. During its meetings, the regulations and applicable accounting • The Company has adhered, without any
Annual Report. Committee has reviewed the relevant matters as standards; material departure, with the mandatory
required under the Committee’s terms of reference provisions of the Pakistan Stock Exchange,
Role and make relevant recommendations to the BoD. • The financial statements comply with the Code of Corporate Governance, Company’s
The Committee’s review covered the findings of both requirements of the Fourth Schedule to the code of conduct and values and the best
The Committee monitors the effectiveness of the the internal and the external auditors, internal Companies Act, 2017 and the applicable practices of governance throughout the year.
Company’s financial reporting, systems of internal controls, risk assessment, annual review of the International Financial Reporting Standards as
control and risk management and the integrity of the continuing related party transactions of the notified by SECP.
Company’s external and internal audit processes. Company, tax and legal updates and the financial
reporting matters (including the annual results for the • Review process of financial statements by the
Responsibilities year ended 30 June 2021, before recommending Committee also include detailed consideration of
them to the BoD for approval. related matters and issues which were dealt in
• Monitoring and obtaining assurance that the accordance with applicable accounting and
process to identify, manage and mitigate
principal and emerging financial risks are
appropriately addressed by the management
and that the system of internal control is
designed and implemented effectively.
• Reviewing financial statements and other
financial disclosures and monitoring compliance
with relevant legal and listing requirements.

• The Company’s Annual Report is properly EVALUATION OF EFFECTIVENESS OF
structured to provide all necessary information in EXTERNAL AUDIT PROCESS
sufficient detail. Not only it gives financial
information like state of affairs and financial • The statutory auditors of the Company, EY Ford
performance as per applicable accounting Rhodes, Chartered Accountants, have
framework, it also enlightens through financial completed their audit assignment of the
analysis in easy to comprehend style. Besides Company’s financial statements and the
the core financial information, it also covers all statement of compliance with the Code of
other necessary domains like background details Corporate Governance for the year ended June
about Company and its directors, 30, 2021 and shall retire on the conclusion of the
comprehensive management reviews and future Annual General Meeting;
prospects, stakeholders’ information and • The Committee has reviewed and discussed
corporate governance. The Committee has audit observations with the external auditors. A
reviewed the Annual Report and concluded that meeting was also held with the external auditors
it is fair, balanced and understandable and it in absence of the management;
also provides the necessary information for the • The external auditors have direct access to the
shareholders to assess the Company’s position Committee and internal auditor, hereby ensuring
and performance, business model and strategy. the effectiveness, independence and objectivity
of the audit process;
EVALUATION OF INTERNAL AUDIT FUNCTION • The performance, cost and independence of the
external auditors is reviewed annually by the
The Company has devised and implemented an Committee. Being eligible for reappointment
effective internal control framework which also under the listing regulations, the Committee has
includes an independent Internal Audit Function. recommended to the Board the reappointment of
EY Ford Rhodes, Chartered Accountants for the
• The Internal Auditors review the risks and control year 2021-22. A resolution to this effect has
processes. They carry out reviews in been proposed at the forthcoming Annual
accordance with the internal audit plan approved General Meeting.
by the Committee;
• The internal audit function has direct access to
the Committee; SELF - EVALUATION OF THE COMMITTEE
• The Committee reviews the findings and PERFORMANCE
observations of the Internal Audit with agreed
management actions. These findings were The Committee views that it discharged its
carefully considered by the Committee, with responsibilities satisfactorily as per its terms of
management given direction to ensure that reference approved by the BoD. Committee conducts
necessary steps were taken to mitigate any an annual evaluation of its own effectiveness by
issues. Accordingly, as and when necessary the completing a Self-Assessment checklist in form of a
Committee escalated matters to the Board for questionnaire.
their review and action;
• Committee has ensured that the function has all
necessary access to management and the right
to seek information and explanations;
• The Committee met with the Internal Auditors in
absence of the management.

STATEMENT OF COMPLIANCE 8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance
with the Act and these Regulations;
WITH LISTED COMPANIES 9. The Company stands complied with requirements of Directors’ Training Program (DTP) under the CCG.
(CODE OF CORPORATE Name of Directors / Executive who have obtained certificate of DTP:
GOVERNANCE) REGULATIONS, 1. Mr. Khaleequr Rehman Non-Executive Director
2019 2.
3.
Mr. Shabbir Ahmed
Mr. Perwez Ahmed
Non-Executive Director
Non-Executive Director
The Company has complied with the requirements of the Listed Companies (Code of Corporate Governance) 4. Mr. Anas Rahman Non-Executive Director
Regulations, 2019 (the Regulations) in the following manner: 5. Mr. Zain Ashraf Mukaty Non-Executive Director
6. Mr. Nasim Hyder Independent Director
1. The total number of Directors are eleven including the Chief Executive as a deemed Director as per the
following: 7. Ms. Huma Pasha Independent Director
As at 30 June 2021 8. Ms. Aminah Zahid Zaheer Independent Director
9. Mr. Rehan Rehman Chief Executive
a. Male 9
10. Ms. Javeria Siddiqui Executive (Chief Financial Officer)
b. Female 2
10. The Board has approved appointment of Company Secretary including his remuneration and terms and
2. The composition of Board is as follows: conditions of employment and complied with relevant requirements of the Regulations. However, there is
As at 30 June 2021 no new appointment of Chief Financial Officer and Head of Internal Audit during the year;
Particulars No. Names of Directors 11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval
of the Board;
Independent 3 Mr. Nasim Hyder
Directors Ms. Huma Pasha 12. The Board has formed Committees comprising of members given below:-
Ms. Aminah Zahid Zaheer
a).
Mr. Jonathan R. Simon
Mr. Khaleequr Rahman Board Audit Committee 30 June 2021
Mr. Shabbir Ahmed
Non-executive Directors 7 Mr. Abdul Rehman Yaqub Mr. Nasim Hyder Chairman
Mr. Perwez Ahmed
Mr. Anas Rahman Mr. Khaleequr Rahman Member
Mr. Zain Ashraf Mukaty
Mr. Zain Ashraf Mukaty Member
Executive Director 1 Mr. Rehan Rahman, CEO
Female Directors 2 Ms. Huma Pasha Ms. Aminah Zahid Zaheer Member
Ms. Aminah Zahid Zaheer b).
3. The Directors have confirmed that none of them is serving as a director on more than seven listed Board HR & Remuneration Committee 30 June 2021
companies, including this Company;
Ms. Aminah Zahid Zaheer Chairperson
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; Mr. Nasim Hyder Member
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of Mr. Zain Ashraf Mukaty Member
the company. The Board has ensured that complete record of particulars of significant policies along with
their date of approval or updating is maintained by the Company;
6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken
by the Board/Shareholders as empowered by the relevant provisions of the Act and these Regulations;
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a Director elected
by the Board for this purpose. The Board has complied with the requirements of Act and the Regulations
with respect to frequency, recording and circulating minutes of meeting of Board;

13. The terms of reference of the aforesaid Committees have been formed, documented and advised to the
Committee for compliance; PANDEMIC RECOVERY PLAN BY
14. The frequency of meetings (quarterly/half yearly/ yearly) of the committee were as per following: THE MANAGEMENT AND POLICY
a) Board Audit Committee Quarterly STATEMENT
b) Board HR and Remuneration Committee Quarterly
Policy statement
15. The Board has outsourced the internal audit function to A. F. Ferguson & Co., Chartered Accountants who
Resilience – we change by what happens, we refuse to be reduced by it.
are considered suitably qualified and experienced for the purpose and are conversant with the policies and
procedures of the company.
We at Feroze1888 believe that Resilience is about always improving. The standard idea of “returning to
normal” after the COVID-19 Pandemic is counterproductive because it re-establishes the same lack of
16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating
resilience – the emphasis is on “building back better”. Since, there isn’t a clear timeline of ending the Pandemic,
under the quality control review program of the Institute of Chartered Accountants of Pakistan and
it is crucial to be prepared to come out on the other side as efficiently as possible.
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
Pandemic recovery has and still is occurring in phases - the key is an unwavering focus on safety of our
Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a
people, while ensuring business continuity and undisrupted provision of service to our customers.
close relative (spouse, parent, dependent and non-dependent children) of the Chief Executive Officer,
Chief Financial Officer, Head of Internal Audit, Company Secretary or Directors of the company;
People - Our first priority is our people. So far, we have had the good fortune of not having lost any of our
people to the deadly disease caused by the Coronavirus. We managed to have in-house vaccine drive with the
17. The statutory auditors or the persons associated with them have not been appointed to provide other
collaboration of the local district Government to control the spread both for our people and as a responsible
services except in accordance with the Act, these Regulations or any other regulatory requirement and the
corporate citizen of the Country. The activity continues.
auditors have confirmed that they have observed IFAC guidelines in this regard.
Processes – As economies limping back to normalcy, survival is the name of the game. There is an opportunity
18. We confirm that all requirements of Regulations 3, 7, 8, 27, 32, 33 and 36 of the Listed Companies (Code
to work on the process improvements. The areas this year include supply chain optimization, improving working
of Corporate Governance) Regulations, 2019 have been complied with.
capital efficiency, smart sourcing, improving inventory management and process automation along with
reviewing the existing processes to make these leaner and agile.
19. Explanations for not rounding up the fractional number under Regulation 6 and also other regulations are
as follows:
Customer Intimacy – Customer is at the epicenter of what we do. We strive to improve the customer
experience and build on the long term business relationships - to withstand the challenges and prove to be a
a) Regulation 6(1) of the Companies (Code of Corporate Governance) Regulations, 2019 stipulates that it is
true business partner.
mandatory for each listed company to have at least two or one third members of the Board, whichever is
As the policy statement says:
higher, as independent directors. In a Board comprising 11 Directors, one third would equate to 3.667
persons. The fraction contained in such one-third is not rounded up as one as the Company has enough
“Resilience – we change by what happens, we refuse to be reduced by it.”
experienced and well reputed independent directors on the Board who perform and carry out their
responsibilities diligently.
We live by the Policy statement to hardwire new ways of working - embed behaviors and drive excellent
execution everytime.
Jonathan R. Simon
Chairman
Karachi: 30 August 2021

A SOCIETY IS DEFINED NOT
ONLY BY WHAT IT CREATES,
BUT BY WHAT IT REFUSES TO
DESTROY

ABOUT THE REPORT LEADERSHIP STATEMENT
I am pleased to present Feroze1888 Mills’ Annual Sustainability Report shared as part of the Company’s
Reporting period Financial year 2021 (July 01, 2020 to June 30, 2021) Annual Report 2020-21. The Company’s voluntary adoption of sustainability reporting to UN Sustainable
Development Goals (UNSDGs) is a testament to the Company’s commitment to responsible
Reporting Cycle Annual stewardship. We are cognizant of the impact that we as a manufacturing concern and exporter has on
Report Content The contents of this report are based on the results of our engagement the economy, environment and community we operate in. We are driven by our Brand promise of
“Weaving a Better World” – work towards maximizing the positive contributions, offsetting the negative
with stakeholders and requirements of the Global Reporting Initiative (GRI) impacts while ensuring sustainable growth and value for our stakeholders.
Sustainability Reporting Standards. No specific limitation exist.
2020-21 - A year of challenges and a year of change. The challenges created by the COVID-19
Report Boundary The report covers the businesses and corporate functions of Feroze1888, pandemic impacted every part of the World - the need to partner and drive change towards a more
including manufacturing sites and corporate office. sustainable and resilient system has been pronounced more than ever before. The health and safety of
our employees – our extended family was the top priority and continues as the in-house vaccination
Contact us To share any feedback or comments related to the Sustainability Report, drive continues.
please email at: Secretary@feroze1888.com
During the year, on climatic impacts – 50% increase in energy generation through Renewable Energy
Source, reduction in CO2 emissions by 2,500 tons by installing energy efficient machines, 6.9+M
Gallons of water saved through process management and installing water efficient machinery. At
Feroze1888, we believe in paying back to the society and community we operate in – arranged blood
donation drive, 13,500+ of man hours of trainings to enhance skillset of our human capital and
supporting deserving students with their higher education are few amongst the ones undertaken during
the course of the year.
We as a responsible corporate citizen of this Country committed to invest in circularity, clean energy,
sustainability, skills & education of our employees and community at large – living our brand promise of
“Weaving a Better World”.
Best Regards
Rehan Rahman
Chief Executive Officer

SUSTAINABILITY AT A GLANCE SUSTAINABILITY STRATEGY
Skills & Education Being a socially responsible company, In order to meet our targets, we create opportunity
Feroze1888 has embedded sustainability to all. The built in performance management
continuously reviews and close the gaps from
Provided complete four years scholarships to 4 financially challenged students to pursue bachelor’s education at the core of its operations. Sustainability personal needs to business development.
Supported education of 120+ students by effectively managing Educational Assistance Program is integrated in all areas of the Company’s
operations – for the benefit of customers, Planet
In order to bridge the gap between industry and academia, provided internship opportunities to 14 students
shareholders, employees, and the world
10 Non-Management Employees through initiating Spinning Certification program
Enhanced skills of around it. Every day we make effort to Reduce, Reuse and
Recycle waste (3R), minimize natural resource
Provided 11,500+ man hours of trainings to enhance skillset of our human capital
Sustainability is a broad discipline where consumption treat any harmful emissions before
responsible interaction is made to contribute within they are released to curtail environmental footprint.
Well being the environment via condition of balance and Different resource efficiency initiatives are being
resilience. Feroze1888 is committed to fashion undertaken at our multiple locations for the same
Supported 10 marriages by organizing combined Marriage Ceremony
innovative value through sustainable practice. The purpose. Moreover, trainings and awareness are
Distributed quilts to 10,000+ non-management staff during winter season mission is to solve significant global challenges to being provided to all individuals regarding
condense our footprint and heighten our impact for stewardship towards our Planet.
Collected & donated 125+ blood bags by organizing blood donation drives
the sole purpose of enhancing the quality of life and
Arranged in-house COVID-19 vaccination facility for all employees community we live in. Prosperity
Fostering health & safety culture by providing trainings and conducting risk assessment of all areas
The Company’s sustainability strategy is simple Being the largest manufacturer of Terry Textile
and compelling. The essence of sustainability at products in Pakistan, Feroze1888 realizes the
Gender Equality Feroze1888 is translated by three P’s; People, importance of continuous growth in all aspects of
Provided complete four years scholarships to 2 female students to pursue engineering education Planet, & ensuring Prosperity of all. Manufacturing Excellence either it be the capacity
enhancement, introduction of sustainable cutting
People edge technology, nurturing our talent pool, creating
Empowerment employment or giving back to the society.
Empowering employees through fostering Kaizen Culture We consider employees and the community are Feroze1888 Mills. is highly committed to the
equally important stakeholders steps for their ideology of 3Ps and safeguards the interest of
development and well-being are the top priority of people, planet and ensuring prosperity of all. We
Combat against Climate Change the organization. Keeping in view the strategic goal, hold ourselves responsible and accountable for all
Feroze1888 focuses on human resource our endeavors and our responsibilities to the
In collaboration with WWF-Pakistan, planted 5,000 mangrove trees to combat against climate change utmost towards social responsibility.
development by recruiting the best talent from local
Generated 2.6 M+ kWhrs of energy through Renewable Energy Source viz., Solar, thus reducing CO2 community and provides them with learning culture
emissions by more than 1,800 tons along with healthy and safe working environment.
Developing infrastructure to utilize natural light at maximum, thus saving 16,000+ kWhrs of energy
Initiated working with Apparel Impact Institute (aii) to reduce environmental footprint
Responsible Resource Utilization

Saving 6.9M+ Gallons of water through installing state of the art Exhaust Dyeing Machine
Saving 46,000+ MMBTU of energy via installing energy efficient Finishing machines
Certified multiple facilities with GRS and GOTS

CERTIFICATIONS AWARDS - By the grace of Almighty ALLAH
Employer of the year award 2020 Occupational Safety Health
Feroze1888 Mills. won the & Environment Award
"Sapphire Prize" in the 08th Feroze1888 is oblige on
Employer of the Year Award event, receiving Occupational Safety
ENVIRONMENTAL held on 12th March 2021. The Health & Environment Award
awards were given to companies in Textile sector by Employee
who demonstrated excellence in Federation of Pakistan (EFP)
their best practices related to HR in its 15th Corporate OSH
Management, OSH & E, Learning & Best Practices Award.
Development, Decent Work &
Sustainable Development, COVID-19
protocols adherence, etc.
Exporters Recognition Award Best Corporate Report Award

Feroze1888 Mills. being among Top 100 Exporting Feroze1888 won Merit Certificate for the Annual
SOCIAL Companies in the Year 2020 has received the Report 2019 in Best Corporate Report Awards by
Employers Federation of Pakistan's Exporters Institute of Chartered Accountants of Pakistan
Recognition Award presented by the President of (ICAP) and Institute of Cost and Management
Pakistan Dr. Arif Alvi in a ceremony held on 28th Accountants of Pakistan (ICMAP). The objective of
June 2021 at Aiwan-e-Sadar, Islamabad. the report is that it is be easily understandable by
all stakeholders and ensure utmost transparency.
QUALITY
Best Under a Billion

The annual Forbes Asia ''Best Under A Billion'' list
spotlights top performing publicly listed companies
in the Asia-Pacific region with sales under USD 1
SECURITY billion. From a universe of some 18,000 small and
mid-sized companies, these 200 companies were
selected based on various quantitative and
qualitative criteria. Feroze1888 has managed to
secure a place in that list. This achievement is
certainly not only ours but of our country men a like
and we are deeply humbled to make our Country
proud with this international recognition.

ECONOMIC, ENVIRONMENTAL
AND SOCIAL PERFORMANCE
Area Material Topic Target 2020-21 Achievement Achievement % SDG Goals
Economic Employment Provide atleast 1,000 man-hours of Lean trainings to Provided 1,000+ man-hours of trainings on Lean tools and 100%
Learning & employees. techniques
Development
Economic Market Presence To support the economy through creating atleast 1,000 new During the period, more than 1,300 employees were employed in 100%
employment opportunities. different departments.
Economic / Compliance Compliance with Environmental Management System, The Company complies with ISO - 14001:2015 (Environmental 100%
Environmental / Quality Management system & Occupational Health & Management System), ISO 9001-2015 (Quality Management
Social Safety. System) & ISO 45001 - 2018 (Occupational Health & Safety).
Environmental Energy Increase energy generation by 40% through renewable Increased almost 50% of energy generation through renewable 100%
energy sources. energy sources (Baseline Installed capacity 2048kW; Current
3105kW).
Environmental Emissions, Reduce our environmental footprint by investing in state of Reduced CO2 emissions by 2,500+tons (in absolute numbers) by 100%
Effluents & Waste the art technology and better resource management installing energy efficient machines. Furthermore, we have worked
along with "aii" to calculate CO2 baseline, thus setting target to
reduce approx 2% CO2.
Environmental Water Reduce water consumption by atleast 8 million gallons. Saved 6.9M+ gallons of water through process management and 85%
installing water efficient machinery. Furthermore, we have signed up
for CBD program & working for the conservation of water
Environmental Emissions R&D of sustainable products and packaging in order to During the period we have worked out on approx 5 sustainable 100%
develop atleast 2 Sustainable product and covert it in developments. Further, Cotton hemp & Recycled polyester are two
business numbers products that are converted in business numbers

Area Material Topic Target 2020-21 Achievement Achievement % SDG Goals
Environmental Recycling Use atleast 20% of recycled content in our product. (GRS We are Certified with GRS in this regard. 100%
Certification)
Environmental Plantation / Plant atleast 2,000 trees to combat against climate change Plant 5,000 mangrove trees in collaboration with WWF 100%
Climate
Social Training & Provide complete 4 years scholarship to 4 financially Provided 4 years scholarship to 4 financially challenged students of 100%
Education challenged students to pursue higher education. NED University
Social Local Reserved reasonable amount to support marriages of Utilized that amount to support 10 marriages this year. 100%
Communities female workforce / daughter of workers through organizing
combined marriage ceremony.
Social Local Budget reserved for the support of workers and community. Distributed 10,000+ Quilts to Non-Management Staff during winter 100%
Communities season
Social Gender Equality / Provide full 4 years scholarships to 2 female students to Scholarships were awarded to 2 female students of NED University 100%
Non pursue their higher education.
Discrimination
Social Employment Provide atleast 8,000 hours of training to management Provided 11,500+ man-hours of trainings to management employees 100%
Learning & employees.
Development
Social Occupational Fostering health & safety culture throughout the Company. Collected more than 125 blood bags through hosting a blood drive 80%
Health and Safety and was awarded with appreciation certificate from Indus Hospital for
being a Corporate partner. Further, in collaboration with Sindh and
Baluchistan governments, the management has arranged mass
vaccination centers at different locations.

SUSTAINABILITY & CSR
SNAPSHOT
HIGG Index The theme of this year's WQD was the importance Plantation Drive Global Organic Textile Standard (GOTS)
of Quality, Changing Behaviors of Customers &
Feroze1888 Mills arranged training by SGS Creating Customer Value. Participants of the We are proactive in promoting activities that deal Feroze1888 Mills has been certified with the Global
Pakistan on 23rd Feb 2021 on HIGG Index, summit deliberated on different dimensions related with environment-preservation. Tree plantation Organic Textile Standard (GOTS). GOTS is the
conducted by Mr. Taj Hussain from HIGG INDEX. to the theme & formulated World Quality Resolution drives are at the forefront of our sustainable globally recognized leading textile standard. This
"The Higg Index is a suite of tools that enables to create Customer Value in view of the changing eco-friendly practices. This year, in collaboration standard stipulates requirements throughout the
brands, retailers, and facilities of all sizes - at every requirements. with WWF, Feroze1888 has planted over 5,000 supply chain for both ecological and labor
stage in their sustainability journey - to accurately mangrove trees within the surrounding area of conditions in textile and apparel manufacturing
measure and score a company or product's A memento of the day was presented to the Leads Karachi. Plantation is also regularly carried out at using organically produced raw materials.
sustainability performance. The Higg Index delivers of Production, Processing and Quality departments different production sites of Feroze1888. Certification to GOTS corroborates the compliance
a holistic overview that empowers businesses to acknowledging their efforts to keep running the with each of the 17 UN Sustainable Development
make meaningful improvements that protect the cycle of continuous improvement, pursuing Goals, and reflects our efforts of being
well-being of factory workers, local communities, Excellence. environmentally and socially responsible.
and the environment.
ESS-L&D Module Certificate of Appreciation From The Indus
Hospital
Being a lean organization Feroze1888 is in a
constant journey of continuous improvement, The Indus Hospital Blood Center recognized
resource optimization, and wastage control. Under Feroze1888 Mills as a "Corporate Partner" in
the umbrella of lean, L&D has achieved another hosting blood drives in the month of January, 2021.
milestone and has developed the ESS-L&D It supports our mission "Motivating the nation
module; that is the digital transformation of the towards 100% voluntary blood donation"
entire Training and development cycle. L&D
Module is offering our employees quick and easy
Quality Day Summit access to their learning journey and boosting
productivity, improved compliance and time and
On 12th November 2020, the Quality Assurance energy savings.
Department arranged the "Quality Day Summit'' to
observe World Quality Day (WQD), which is
celebrated on the second Thursday of November
each year. To mark the day QA team arranged Water
different activities including Walk on Floors:
reinforcing the importance of practicing quality Responsible consumption of water and its
standards, banners display and Quality Day conservation are an integral part of Feroze1888’s Combined Wedding Ceremony
Summit - which was attended by the senior sustainability efforts and its drive towards utilizing Combined Wedding Ceremony successfully held
management including our CEO. the resources responsibly. The Company has on March 2021. Initiated to share the responsibility
installed the state of the art Dyeing machines to of a Sunnah, combined wedding event facilitates
save water and makes every effort towards our female workers and the daughters of our
reducing water wastage through installation of male workers, assisting them to fulfill their
water reclaim & reject RO plant. responsibility with dignity and respect.
Energy This is the third consecutive year and by the grace

of Almighty ALLAH, the trust & confidence in this
The Company has taken many initiatives including
event has only increased since then. We are
The purpose of the summit was to share & highlight replacement of conventional lights with LEDs,
humbled to be of service to our extended family
installation of solar energy generation and building
members.
infrastructure that enable us to enhance natural
light utilization.

COVID-19 Vaccination Drive Transforming Raw Hands to Skilled Hands
The health and safety of the extended family In collaboration with SMA Rizvi Textile Institute the
members have always been the top priority of course intended for our non-management
Feroze1888. After the onset of COVID-19, the employees with a blend of theory and practical. The
management has consistently ensured to comply contents of this course are designed to provide &
with the safety protocols set by the Federal and develop hands-on technical expertise related to
Provincial governments and also keep reviewing Spinning & assist them with the personality
safety guidelines and ensure their implementation development tools. During the year, 10 employees
at work for employees' safety. In collaboration with have completed the Certification successfully.
Sindh and Baluchistan governments, the
management has arranged mass in-house
vaccination at different locations to facilitate the
employees. The vaccination centers are being
operated under the supervision of qualified
paramedical staff. The management is committed
to vaccinating 100% of its employees.

STAKEHOLDER ENGAGEMENT
Key Stakeholder Groups
Stakeholder Frequency of Communication Topics Identified by Company’s Responses

Group Engagement Mode Stakeholders
Being a responsible corporate citizen, we understand the importance of stakeholder engagement and treat
its implications on priority. The Company interact with its stakeholders to seek their opinions and their Shareholders/ Regular Annual Report, Future prospects of the The Company is committed towards
expectations. This process allows the Company to define a timely and adequate response to the issues Investors Company secretary, business, capacity transparency of financial and
they deem important for our business and for our ability to make an impact that matters. Corporate briefing enhancements and on-financial information, timely
sessions, AGMs and expansions, Country’s communication for sustainable
Key initiatives taken by the Company for stakeholder engagement carried out during the year includes: disclosure of material export market business growth.
information etc. performance etc.
Stakeholder Stakeholder Management Initiatives
Group Employees Regular CEO’s “Town hall” Career and The Company gives utmost
meeting, quarterly professional growth; importance to transparency in
Shareholders/Investors The Company has conducted AGMs and EOGMs as per the statutory guidelines to inform magazine, annual and Training & employee related affairs; and
and obtain the consent of shareholders. The Board members were also present in these performance development. simultaneously emphasize on capacity
meetings to respond to the queries and concerns of the shareholders and investors. The appraisals and / skill development training programs.
Company has also been conducting corporate briefing sessions since last two years. We internal
believe that these sessions are the best platform to address its existing and potential communication etc.
shareholders and investors. These sessions were chaired by Chief Executive Officer and
other key management personnel were also present during the session. Customers Regular Effective system to Competitive prices, Attractive and competitive product
manage customer quality of products, offerings; Timely deliveries; Ensuring
Employee engagement and alignment with corporate strategy is very crucial for the Company. feedback and timely deliveries and social, quality and environment related
Employees For this purpose “Town halls” are conducted by Chief Executive Officer to share timely follow-up; visits of compliance of social, compliance.
updates with employees about key business initiatives taken by management and strategic manufacturing sites. quality and
alignment across the Company. environment related
In addition to above, the Company has also taken various employee engagement initiatives, standards.
like quarterly publication of KIN magazine for employees awareness on various topics,
Employee of the quarter award for each department, Annual performance appraisals, 180 Corporate level Favorable payment The Company has a transparent
degree performance appraisals of middle to senior management employees and value champ Suppliers Regular communications; terms and conditions. system that enables suppliers for
scoring - serves as important communication channels and monitoring of the employee’s visits of supplier’s discussion and negotiation of contract
engagement targets. business facilities. terms and conditions. The Company is
committed toward its ethical trade
Customers are at the core of what we do. To ensure customer satisfaction, the Company has philosophy.
Customers taken multiple initiatives for customer engagement to maintain and build strong customer
relationships: including customer visits to manufacturing facilities, Compliance of social, Banks Regular Annual Report; Payment of loan’s The Company ensures on-time
quality and environmental related standards, deploying systems to improve feedback and Financial projections; principle and interest payment of principal and interest to its
regular follow-ups with customers. On-on-one meetings; on time; Maintaining money lenders. Debt covenants
emails; phone calls. required levels of performance is also closely monitored.
different debt
The Company places great importance to its bankers . Company ensures full compliance of covenants.
Banks all money lending requirements from its banks. Apart from that, Company ensures effective
engagement of its partner banks through one-on-one meetings, Annual report, monthly and Government and Case/need basis Submission of data Compliance with Company ensures compliance of all
quarterly financial performance along with financial projections and communication to bank other regulatory for compliance; applicable statutory statutory and legal requirements in
about key business achievements. bodies meetings with regulations and laws. Company’s affairs.
Government officials.
The Company believes that health and education are the major contributors to the success of
any nation. The Company actively played its role toward providing better education & health Local Community Regular Representative of Negative impact of Company ensures compliance of all
Local Community facilities to our communities, giving scholarships to talented students and investing in plant’s operations manufacturing sites; legal and regulatory requirements and
education and health support programs & initiatives. and CSR teams. Employment also possess multiple ISO certifications
opportunity for including EMS, QMS & OHS.
The Company has maintained a sound system to share timely and prompt updates regarding neighboring
any material information for stakeholders on Company’s website and stock exchange website. communities; and
Media Social media communication policy is also in place. The Company ensures its presence in all communal services.
major social media platforms.
Education Occasional Mentoring sessions Job opportunities; The Company regularly organizes
Civil Society/NGOs The Company has actively participated and donated in the areas of health, education, Institutions and Internship working environment; mentoring sessions in collaboration
community development and environment. programs etc. and career growth with different universities. In addition to
prospects. that Company also runs internship and
Educational Institutions The Company regularly organizes mentoring sessions in collaboration with different recruitment programs for university
universities. These events played pivotal role in improving student’s vision for professional life students.
and experiences.

THE DIFFERENCE IN
WINNING AND LOSING
IS MOST OFTEN
NOT QUITTING

FINANCIALS AT A GLANCE
Assets Equity & Liabilities Profitability Ratio Liquidity Ratios
Rs. in million Rs. in million Percentage Times
60,000 60,000 35.00% 4.00 3.79
32.15%
51,867 2,238 51,867
1,810 190 29.79% 3.50
3,306 1,639 2,110 30.00%
50,000 50,000
2,713 584 3,306 29.84% 28.68%
43,262 43,262 689 3.00 2.76
25.00%
40,000 40,000 24.57%
20.41%
2.50
20.00% 2.23
17.31% 17.63% 1.94
17.02% 2.00
30,000 30,000 18.67% 1.67
17.16% 15.64% 13.89% 1.73 1.61
15.00% 17.63% 16.55% 1.53
13.29% 12.62%
1.50
13.68% 1.24
20,000 20,000 9.41% 10.13% 1.11 1.11
11.88% 11.79%
10.00% 0.98
1.00
6.79% 8.31%
10,000 10,000
5.00% 0.50 0.43
0.28 0.25
0.02 0.03 0.08
- 0.00% -
2019-20 Property, plant Inventory Trade debts Short term Other assets 2020-21 2019-20 Share capital & Long term Trade and other Short term Other laibilities 2020-21 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
and equipment investment reserves financing payables borrowings
Decrease Increase Decrease Increase Net profit to sales Return on capital employed Return on assets Return on equity Current ratio Quick / acid test ratio Cash ratio
Operating Cycle EPS vs Dividend per Share

Days Rupees
180 18.00
168
Profit or Loss Cash Flows 160 16.00
15.90
Rs. in million Rs. in million

147
16,000 10,000
2,810 138 137 14.00
140
11,370
8,000
14,000 116 12.00
1,899 120 11.44
113 10.11
6,000
10.00
12,000 4,248 97
100 87 94 7.80
4,000
81 80 84 8.00 7.30
1,625 76 80 6.61
10,000 80 6.35
2,000 69
73
6.00
62
8,000 - 60 4.10 3.65
50 4.00 3.43
2.70
2.34
(2,000) 40
6,000 29 29 2.00
82 22 22 23
8,801 4,311 (4,000)
20
20 -
4,000 2,937 934 211 132
(6,000) 2016 2017 2018 2019 2020 2021
-
2,000 2016 2017 2018 2019 2020 2021
(8,000)
(7,332) Earning per share Dividend per share
No. of Days in Inventory No. of Days in Receivable No. of Days in Creditors Operating Cycle
- (10,000)
2019-20 Sales - net Cost of sales Other Other Income Finance cost Taxation 2020-21 Cash and cash Operating activities Financing activities Investing activities Cash and cash
Operating equivalent 2019-20 equivalent 2020-21
Decrease Increase
Expenses
Decrease Increase
Market Value vs Book Value Turnover & Profitability
Rupees Rs. in million
140.00 42,500
132.00 42,575
40,000
37,500
120.00
35,000
100.87
32,500 31,206
100.51 29,348
100.00 95.00 30,000
27,500
81.80
25,000
80.00
22,500 20,463 21,009
21,849
64.90
60.00 56.12
20,000
60.00 17,500
53.35
15,000
42.91
38.50 12,500
40.00 33.88 10,066
10,000
7,748 7,311 7,497
7,500 6,200 7,051
20.00 4,946 4,899 4,971
5,000 4,565
5,990 4,311
2,500 3,810 3,078
2,490 2,752 3,635 2,937
- -
2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021
Breakup value per share Market value per share

Sales Gross Profit Net Profit EBITDA

107
Others
Current ratio
Operating Cycle
Return on equity
Gross profit ratio
Liquidity Ratios
Return on assets
Net profit to sales
Feroze1888 Mills Limited

Price to book ratio
Capital Structure
Price earning ratio
Interest cover ratio

Dividend yield ratio
Dividend cover ratio

Profitability Ratios
Shareholders' Funds
% of plant availability
Quick / acid test ratio
Non Financial Ratio

Dividend payout ratio
Financial leverage ratio
Revenue per employee

No. of Days in Creditors
No. of Days in Inventory
EBITDA margin to sales
Operating leverage ratio
Cash to current liabilities
Cash dividend per share
Production per employee

No. of Days in Receivable
Activity / Turnover Ratio
Investment / Market ratio

Return on capital employed
Average total asset turnover

Average fixed asset turnover
Weighted average cost of debt
Employee Productivity Ratio

RATIOS
Return on Shareholders' Funds
Debt to equity ratio (book value)

Cash flow from operation to sales
Debt to equity ratio (market value)

Earning per share - basic & diluted
Spare inventory as % of Total Asset

Lowest market value during the year
Highest market value during the year
Breakup value per share with surplus
Market value per share at the year end

Breakup value per share without surplus
Maintenance cost as % of operating expenses

%
%
%
%
%
%
%
%
%
%
%
%
%
Kg
PKR
PKR
PKR
PKR
PKR
PKR
PKR
Days
Days
Days
Days
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
Times
PKR in '000
2021
3,362
4,122
1.12
11.83
81.01
127.48
100.51
60.95
64.90
3.34
0.30
0.03
0.73
3.43
8.79
11.44
137
29
73
94
2.25
0.90
0.04
0.08
1.11
1.61
0.47
1.30
2.07%
0.40%
95%
2.61%
14.28%
22.12%
17.63%
17.63%
16.56%
8.31%
16.55%
10.13%
23.64%
2020
2,687
3,351
1.04
13.37
66.70
105.24
81.80
52.18
56.12
3.33
0.30
0.03
0.72
2.34
10.49
7.80
171
26
84
113
2.01
0.81
0.12
0.26
0.98
1.54
0.49
2.14%
0.44%
93%
2.30%
16.97%
23.70%
13.83%
(6.80)
13.83%
15.94%
6.78%
13.68%
9.41%
24.06%
2019
2,688
3,756
0.69
79.11
53.00
126.00
100.87
49.37
53.35
2.50
0.40
0.06
1.12
6.35
6.35
15.90
147
20
80
87
2.41
1.02
0.11
0.28
1.11
1.73
0.59
3.49
2.00%
0.82%
96%
1.32%
5.22%
9.91%
29.79%
29.79%
24.91%
17.63%
28.68%
20.41%
26.40%
2018
2,059
3,655
0.44
66.44
58.05
113.00
60.00
38.93
42.91
2.00
0.50
0.06
0.97
3.65
8.21
7.30
138
23
80
81
2.28
1.04
0.10
0.03
1.24
1.94
0.69
3.80
1.97%
1.35%
91%
1.93%
3.32%
4.64%
17.02%
17.02%
16.67%
11.79%
15.64%
12.62%
22.27%
2017
2,076
3,668
0.29
159.12
109.78
314.94
132.00
34.52
38.50
2.45
0.41
0.02
2.65
2.70
19.98
6.61
116
22
62
76
2.79
1.22
0.07
0.02
1.67
2.76
0.77
2.13%
0.70%
94%
2.12%
0.88%
3.01%
17.16%
(14.44)
17.16%
14.69%
13.29%
17.31%
11.88%
23.36%
2016
2,158
3,669
0.21
347.96
55.60
446.15
95.00
29.91
33.88
2.47
0.41
0.04
2.31
4.10
9.40
10.11
97
22
50
69
3.26
1.45
0.16
0.43
2.23
3.79
0.82
5.14
2.38%
1.23%
96%
2.55%
1.21%
3.40%
29.84%
29.84%
22.36%
24.57%
32.15%
18.67%
30.12%
HORIZONTAL ANALYSIS - STATEMENT OF

FINANCIAL POSITION
2021 2020 2019 2018 2017 2016
Rupees in '000 % Rupees in '000 % Rupees in '000 % Rupees in '000 % Rupees in '000 % Rupees in '000 %
Assets
Non current assets
Property, plant and equipment 20,308,105 15.42 17,595,012 30.73 13,458,882 24.08 10,846,978 31.29 8,262,151 22.40 6,749,864 16.87
Long-term investments - - - (100.00) 186,153 100.00 - (100.00) 608 100.00 - -
Other non current assets 86,279 13.63 75,930 316.47 18,232 78.69 10,203 1.24 10,078 57.54 6,397 (41.16)
20,394,384 15.41 17,670,942 29.33 13,663,267 25.85 10,857,181 31.24 8,272,837 22.45 6,756,261 16.76
Current assets
Store and spares 1,303,298 47.02 886,495 (2.42) 908,514 43.59 632,710 27.04 498,033 (12.23) 567,422 27.47
Stock-in-trade 8,437,202 2.03 8,269,628 28.99 6,411,087 64.71 3,892,270 7.00 3,637,710 19.39 3,046,969 27.89
Trade debts 10,115,920 48.56 6,809,503 (10.75) 7,629,994 46.97 5,191,492 19.23 4,354,193 56.48 2,782,631 (1.43)
Advances, deposits, prepayments
and other receivables 4,108,247 31.77 3,117,789 76.12 1,770,295 (23.33) 2,309,031 35.08 1,709,434 25.25 1,364,780 39.32
Taxation – net 284,732 (39.72) 472,382 (2.04) 482,195 11.71 431,649 62.32 265,920 100.00 - -
Short-term investments 5,598,019 47.80 3,787,643 100.00 - - - - - - - -
Cash and bank balances 1,625,126 (27.71) 2,247,990 (31.21) 3,267,698 1,506.82 203,364 118.83 92,931 (90.62) 990,908 244.17
31,472,544 22.98 25,591,430 25.02 20,469,783 61.68 12,660,516 19.91 10,558,221 20.63 8,752,710 26.52
Total assets 51,866,928 19.89 43,262,372 26.75 34,133,050 45.14 23,517,697 24.89 18,831,058 21.42 15,508,971 22.07
Share capital and reserves

Issued, subscribed and
paid-up capital 3,768,009 - 3,768,009 - 3,768,009 - 3,768,009 - 3,768,009 - 3,768,009 -
Reserves 20,684,867 19.02 17,379,049 6.39 16,335,440 31.75 12,399,195 15.45 10,739,820 19.33 8,999,880 44.11
24,452,876 15.63 21,147,058 5.19 20,103,449 24.35 16,167,204 11.44 14,507,829 13.63 12,767,889 27.51
Liabilities
Non-current liabilities
Deferred liabilities 451,864 120.04 205,355 43.11 143,494 100.00 - - - - - -
Long-term financing 5,409,360 7.92 5,012,562 151.69 1,991,546 165.42 750,334 71.65 437,142 0.69 434,150 13.28
Provision for GIDC 1,334,357 100.00 - - - - - - - - - -
Lease liabilities 660,502 284.73 171,678 100.00 - - - - - - - -
7,856,083 45.76 5,389,595 152.44 2,135,040 184.55 750,334 71.65 437,142 0.69 434,150 13.28
Current liabilities
Trade and other payables 5,958,050 (10.36) 6,646,839 30.94 5,076,402 31.25 3,867,635 16.51 3,269,858 42.57 2,293,479 4.39
Short-term borrowings 11,750,000 21.89 9,640,000 48.54 6,490,000 154.51 2,550,000 410.00 500,000 100.00 - -
Current portion of non-current
liabilities 1,669,712 381.85 346,524 25.83 275,388 69.46 162,508 47.72 110,008 1,780.48 5,850 (93.91)
Other current liabilities 180,207 95.12 92,356 75.01 52,771 163.64 20,016 221.76 6,221 (18.18) 7,603 (50.01)
19,557,969 16.93 16,725,719 40.62 11,894,561 80.22 6,600,159 69.84 3,886,087 68.45 2,306,932 (0.06)
Total equity and liabilities 51,866,928 19.89 43,262,372 26.75 34,133,050 45.14 23,517,697 24.89 18,831,058 21.42 15,508,971 22.07
Annual Report 2021
108
109
VERTICAL ANALYSIS - STATEMENT OF
FINANCIAL POSITION

2021 2020 2019 2018 2017 2016
Assets
Non current assets
Property, plant and equipment 20,308,105 39.15 17,595,012 40.67 13,458,882 39.43 10,846,978 46.12 8,262,151 43.88 6,749,864 43.52
Long-term investments - - - - 186,153 0.55 - - 608 0.00 - -
Other non-current assets 86,279 0.17 75,930 0.18 18,232 0.05 10,203 0.04 10,078 0.05 6,397 0.04
20,394,384 39.32 17,670,942 40.85 13,663,267 40.03 10,857,181 46.17 8,272,837 43.93 6,756,261 43.56
Current assets
Store and spares 1,303,298 2.51 886,495 2.05 908,514 2.66 632,710 2.69 498,033 2.64 567,422 3.66
Stock-in-trade 8,437,202 16.27 8,269,628 19.12 6,411,087 18.78 3,892,270 16.55 3,637,710 19.32 3,046,969 19.65
Trade debts 10,115,920 19.50 6,809,503 15.74 7,629,994 22.35 5,191,492 22.07 4,354,193 23.12 2,782,631 17.94
Advances, deposits, prepayments
and other receivables 4,108,247 7.92 3,117,789 7.21 1,770,295 5.19 2,309,031 9.82 1,709,434 9.08 1,364,780 8.80
Taxation – net 284,732 0.55 472,382 1.09 482,195 1.41 431,649 1.84 265,920 1.41 - -
Short-term investments 5,598,019 10.79 3,787,643 8.76 - - - - - - - -
Cash and bank balances 1,625,126 3.13 2,247,990 5.20 3,267,698 9.57 203,364 0.86 92,931 0.49 990,908 6.39
31,472,544 60.68 25,591,430 59.15 20,469,783 59.97 12,660,516 53.83 10,558,221 56.07 8,752,710 56.44
Total assets 51,866,928 100.00 43,262,372 100.00 34,133,050 100.00 23,517,697 100.00 18,831,058 100.00 15,508,971 100.00
Share capital & reserves

Issued, subscribed and paid-up capital 3,768,009 7.26 3,768,009 8.71 3,768,009 11.04 3,768,009 16.02 3,768,009 20.01 3,768,009 24.30
Reserves 20,684,867 39.88 17,379,049 40.17 16,335,440 47.86 12,399,195 52.72 10,739,820 57.03 8,999,880 58.03
24,452,876 47.15 21,147,058 48.88 20,103,449 58.90 16,167,204 68.74 14,507,829 77.04 12,767,889 82.33
Liabilities
Deferred liabilities 451,864 0.87 205,355 0.47 143,494 0.42 - - - - - -
Long-term financing 5,409,360 10.43 5,012,562 11.59 1,991,546 5.83 750,334 3.19 437,142 2.32 434,150 2.80
Provision for GIDC 1,334,357 2.57 - - - - - - - - - -
Lease liabilities 660,502 1.27 171,678 0.40 - - - - - - - -
7,856,083 15.15 5,389,595 12.46 2,135,040 6.26 750,334 3.19 437,142 2.32 434,150 2.80
Current liabilities
Trade and other payables 5,958,050 11.49 6,646,839 15.36 5,076,402 14.87 3,867,635 16.45 3,269,858 17.36 2,293,479 14.79
Short-term borrowings 11,750,000 22.65 9,640,000 22.28 6,490,000 19.01 2,550,000 10.84 500,000 2.66 - -
Current portion of non-current
liabilities 1,669,712 3.22 346,524 0.80 275,388 0.81 162,508 0.69 110,008 0.58 5,850 0.04
Other current liabilities 180,207 0.35 92,356 0.21 52,771 0.15 20,016 0.09 6,221 0.03 7,603 0.05
19,557,969 37.71 16,725,719 38.66 11,894,561 34.85 6,600,159 28.06 3,886,087 20.64 2,306,932 14.87
Total equity and liabilities 51,866,928 100.00 43,262,372 100.00 34,133,050 100.00 23,517,697 100.00 18,831,058 100.00 15,508,971 100.00
Equity:
Assets:
Liabilities:
issued by ICAP.
Current Assets
Current Liability
manufacturing facilities.
Non-Current Assets
Non-Current Liability
is in line with the growing business needs.

OF FINANCIAL POSITION
over the past six years, primarily due to increase in retained profits of the Company.
COMMENTS ON STATEMENT
have increased steadily over the period on account of growth in business levels and operations.
The shareholder’s equity comprises of share capital and reserves. The equity has increased at a CAGR of 13.9%
The current liabilities have increased due to increase in short term borrowing and trade and other payables which
Non-current portion of GIDC provision has been reclassified from current liabilities in accordance with guidance
acquisition of plant and machinery on account of expansion and modernization of production facilities.
GIDC provision. Long term financing has increased over the years due to long term finance obtained for
Non current liabilities includes long term financing, deferred liabilities, lease liabilities and non-current portion of
Current assets primarily includes stock-in-trade, trade debts, other receivables and short-term investment, which
over the period of last six years at a CAGR of 24.73% on account of expansion, modernization and balancing of
Non-current assets primarily include property, plant and equipment, which have increased by PKR 13,638 million
Annual Report 2021

110
111
HORIZONTAL ANALYSIS - STATEMENT OF
PROFIT OR LOSS

2021 2020 2019 2018 2017 2016
Sales 42,575,465 36.43 31,205,677 6.33 29,348,438 34.32 21,849,178 4.00 21,008,635 2.66 20,463,445 10.33
Cost of sales (32,509,338) 37.12 (23,708,613) 9.76 (21,600,408) 27.43 (16,950,429) 5.52 (16,063,005) 12.62 (14,263,192) 4.79
Gross profit 10,066,127 34.27 7,497,064 (3.24) 7,748,030 58.16 4,898,749 (0.95) 4,945,630 (20.24) 6,200,253 25.61
Administrative costs (1,258,470) 10.28 (1,141,164) 10.16 (1,035,928) 11.42 (929,747) 17.40 (791,937) 17.13 (676,100) 15.31
Distribution costs (3,141,547) 38.01 (2,276,372) 12.31 (2,026,890) 27.84 (1,585,488) 6.24 (1,492,349) 14.31 (1,305,531) (18.39)
Other expenses (619,275) (7.27) (667,832) 87.21 (356,736) 68.03 (212,307) (2.38) (217,483) (18.49) (266,807) 49.40
(5,019,292) 22.86 (4,085,368) 19.47 (3,419,554) 25.37 (2,727,542) 9.02 (2,501,769) 11.27 (2,248,438) (4.92)
Other income 300,776 37.41 218,888 (89.31) 2,048,510 185.04 718,671 1,080.51 60,878 (56.31) 139,352 55.34
Operating profit 5,347,611 47.29 3,630,584 (43.07) 6,376,986 120.670 2,889,878 15.38 2,504,739 (38.78) 4,091,168 53.75
Finance costs (558,327) 60.92 (346,959) 122.56 (155,892) 81.84 (85,729) 55.76 (55,039) (6.90) (59,117) (55.65)
Profit before taxation 4,789,284 45.85 3,283,625 (47.22) 6,221,094 121.85 2,804,149 14.47 2,449,700 (39.24) 4,032,051 59.52
Provision for taxation (477,993) 37.99 (346,404) 49.77 (231,284) 344.33 (52,052) (230.20) 39,977 (118.01) (221,968) 9.89
Profit after taxation 4,311,291 46.78 2,937,221 (50.96) 5,989,810 117.65 2,752,097 10.54 2,489,677 (34.66) 3,810,083 63.83
VERTICAL ANALYSIS - STATEMENT OF

PROFIT OR LOSS
2021 2020 2019 2018 2017 2016
Sales - net 42,575,465 100.00 31,205,677 100.00 29,348,438 100.00 21,849,178 100.00 21,008,635 100.00 20,463,445 100.00
Cost of sales (32,509,338) (76.36) (23,708,613) (75.98) (21,600,408) (73.60) (16,950,429) (77.58) (16,063,005) (76.46) (14,263,192) (69.70)
Gross profit 10,066,127 23.64 7,497,064 24.02 7,748,030 26.40 4,898,749 22.42 4,945,630 23.54 6,200,253 30.30
Administrative costs (1,258,470) (2.96) (1,141,164) (3.66) (1,035,928) (3.53) (929,747) (4.26) (791,937) (3.77) (676,100) (3.30)
Distribution costs (3,141,547) (7.38) (2,276,372) (7.29) (2,026,890) (6.91) (1,585,488) (7.26) (1,492,349) (7.10) (1,305,531) (6.38)
Other expenses (619,275) (1.45) (667,832) (2.14) (356,736) (1.22) (212,307) (0.97) (217,483) (1.04) (266,807) (1.30)
(5,019,292) (11.79) (4,085,368) (13.09) (3,419,554) (11.65) (2,727,542) (12.48) (2,501,769) (11.91) (2,248,438) (10.99)
Other income 300,776 0.71 218,888 0.70 2,048,510 6.98 718,671 3.29 60,878 0.29 139,352 0.68
Operating profit 5,347,611 12.56 3,630,584 11.63 6,376,986 21.73 2,889,878 13.23 2,504,739 11.92 4,091,168 19.99
Finance costs (558,327) (1.31) (346,959) (1.11) (155,892) (0.53) (85,729) (0.39) (55,039) (0.26) (59,117) (0.29)
Profit before taxation 4,789,284 11.25 3,283,625 10.52 6,221,094 21.20 2,804,149 12.83 2,449,700 11.66 4,032,051 19.70
Taxation (477,993) (1.12) (346,404) (1.11) (231,284) (0.79) (52,052) (0.24) 39,977 0.19 (221,968) (1.08)
Profit after taxation 4,311,291 10.13 2,937,221 9.41 5,989,810 20.41 2,752,097 12.60 2,489,677 11.85 3,810,083 18.62
Annual Report 2021
112
COMMENTS ON STATEMENT SUMMARY OF CASH FLOW
OF PROFIT OR LOSS STATEMENT
Sales: 2021 2020 2019 2018 2017 2016
-------------------------------------------- Rupees in '000 --------------------------------------------
Revenues have nearly doubled in the past six years from PKR 20.46 billion in 2016 to PKR 42.57 billion in 2021 CASH FLOWS FROM
at a CAGR of 15.78%. The increase in sales revenue is attributable to management's continuous focus to OPERATING ACTIVITIES
Profit before taxation 4,789,284 3,283,625 6,221,094 2,804,149 2,449,701 4,032,050
increase market share and customer base, while the rupee devaluation against foreign currencies also impacted
the net turnover positively. The sales prices have been under pressure owing to competition in export market Adjustments for:
however, the overall product mix has been improved to maintain the average prices. In the current year, the Depreciation and Amortization 1,703,743 1,339,966 933,609 745,374 573,674 473,395
Loss / (gain) on disposal of
Company has recorded its highest ever sales revenue both value and volumes. operating fixed assets 20,821 47,595 15,026 46,530 54,688 (1,942)
Impairment - - - 608 - -
Cost of Sales: Operating fixed assets written off - 13,379 - - - -
Provision for slow moving and
obsolete stores and spares 14,677 23,807 - - - -
Cost of sales increased from PKR 14.26 billion in 2016 to PKR 32.51 billion in 2021. The increase in cost of sales Provision for doubtful advances - 104,969 - - - -
is primarily attributable to volumetric growth. However, the ever increasing trend in raw material cost, energy cost Allowance for expected credit
loss on trade debts 6,163 16,944 - - - -
and negative impact of exchange rate fluctuation on key cost components creates challenges to keep the cost Finance costs 558,327 346,959 155,892 85,729 55,039 59,117
competitive. Provision for gratuity 217,839 111,680 143,494 - - -
Reversal of provision against
doubtful advances (62,901) - - - - -
Operating Profit: Interest on bank deposit (49,237) (59,801) (55,627) - - -
Dividend income on open ended
mutual fund units (188,638) (159,087) - - - -
Operating profit increased over the past six years from PKR 4,091 million in 2016 to PKR 5,348 million in 2021 at 2,220,794 1,786,411 1,192,394 878,241 683,401 530,570
a CAGR of 5.5%. The steady growth in operating profit of the Company is a result of management's focused Changes in working capital
efforts to improve efficiencies and economies of scale. Stores and spares (431,480) (1,788) (275,804) (134,677) 69,389 (122,276)
Stock-in-trade (167,574) (1,858,541) (2,518,817) (254,560) (590,742) (664,406)
Trade debts (3,312,580) 803,547 (2,438,502) (837,300) (1,571,562) 40,415
Advances, deposits, prepayments and
other receivables (933,706) (1,290,618) 354,769 (526,449) (252,084) (385,005)
Trade and other payables 637,500 1,560,598 1,208,769 524,631 883,809 96,320
(4,207,840) (786,802) (3,669,585) (1,228,355) (1,461,190) (1,034,952)
Cash generated from operations 2,802,238 4,283,234 3,743,903 2,454,035 1,671,912 3,527,668
Finance costs paid (555,013) (307,408) (123,636) (72,229) (51,579) (72,008)

Income taxes paid (290,343) (336,591) (281,830) (217,780) (230,902) (217,009)
Long-term deposits (16,580) - (8,047) (1,230) (707) (666)
Gratuity paid (41,175) (26,888) - - - -
(903,111) (670,887) (413,513) (291,239) (283,188) (289,684)
Net cash generated from operating activities 1,899,127 3,612,347 3,330,390 2,162,796 1,388,724 3,237,984
CASH FLOWS FROM

INVESTING ACTIVITIES
Fixed capital expenditure (3,827,021) (5,253,765) (3,633,853) (3,441,082) (1,762,999) (1,463,373)
Proceeds from disposal of
operating fixed assets 61,611 98,253 73,332 65,455 37,721 22,812
Long term investment made - - - - (608) -
Short-term investments made (3,810,376) (1,684,533) - - - -
Interest received on bank deposit 55,386 54,100 53,439 - - -
Dividend income received on open
ended mutual fund units 188,638 55,977 - - - -
Net cash used in investing activities (7,331,762) (6,729,968) (3,507,082) (3,375,627) (1,725,886) (1,440,561)
CASH FLOWS FROM

FINANCING ACTIVITIES
Dividends paid (909,265) (1,921,651) (2,053,066) (1,092,427) (1,167,966) (1,055,160)
Long-term financing obtained – net 1,705,579 2,975,446 1,354,092 365,691 107,150 (39,262)
Short-term borrowings obtained – net 2,110,000 3,150,000 3,940,000 2,050,000 500,000 -
Principal portion of lease liabilities paid (96,543) (105,882) - - - -
Net cash generated / (used) from
financing activities 2,809,771 4,097,913 3,241,026 1,323,264 (560,816) (1,094,422)
Net (decrease) / increase in

cash and cash equivalents (2,622,864) 980,292 3,064,334 110,433 (897,978) 703,001
Cash and cash equivalents at the

beginning of the year 4,247,990 3,267,698 203,364 92,931 990,909 287,908
Cash and cash equivalents at the

end of the year 1,625,126 4,247,990 3,267,698 203,364 92,931 990,909

COMMENTS ON STATEMENT STATEMENT OF VALUE ADDITION
OF CASH FLOW AND ITS DISTRIBUTION
Operating Activities: 2021 2020
Rupees in '000 % Rupees in '000 %
The Company has been able to generate healthy operating cash flows over a period of time. In current year, cash
generated from operating activities decreased primarily on account of higher trade debts as at the year end owing Wealth generated
to higher sales in last two quarters.
Sales including sales tax 42,674,117 31,263,560
Investing Activities: Other operating income 300,776 218,888
Brought-in-material & services (29,807,266) (21,555,795)
The cash used in investing activities comprises mainly of investment in Capital expenditure and short-term 13,167,627 100% 9,926,653 100%
investment. The cash flows used in investing activities were PKR 7,332 Million in 2021 compared to PKR 1,440
Million in 2016. Investment in capital expenditure relates to the expansion, modernizing and replacement of the Wealth distribution
manufacturing facilities which were the major constituents of cash outflows from investing activities. While, the To Employees
Company have made short-term investment from it's surplus funds during the year. Salaries, benefit and other cost 5,961,428 45.27% 4,866,863 49.03%
To Government
Financing Activities: Income tax, sales tax, excise duty and others 610,272 4.63% 428,990 4.32%
To Society
Financing activities comprises mainly of cash flows from long-term and short-term loans and dividends paid to Donation towards education and health 22,566 0.17% 6,654 0.07%
shareholders. To Provider of capital
Cash dividend to shareholder 975,915 7.41% 1,921,685 19.36%
Finance cost 558,327 4.24% 346,959 3.50%
To Company
Depreciation, amortization & retained profit 5,039,119 38.27% 2,355,502 23.73%
13,167,627 100% 9,926,653 100%
Rupees in ’000
Company,
2,355,502
Employees, Employees,
5,961,428 4,866,863
Company,
5,039,119
Provider of capital, Provider of capital,

1,534,242 2,268,644
Society, Government, Government,
22,566 610,272 Society, 428,990
6,654
Company Provider of capital Society Government Employees

DUPONT ANALYSIS
Net Sales
Net Profit 42,575 million
Year ROE Profit Margin Total asset Financial
After Tax turnover Leverage
4,311 million
Net Profit
Margin
10.13% 2021 17.63% 10.13% 0.82 2.12
Total Cost 2020 13.89% 9.41% 0.72 2.05
Net Sales 38,264 million
2019 29.79% 20.41% 0.86 1.69
42,575 million
Return on 2018 17.02% 12.60% 0.94 1.44
Asset
8.31%
X 2017 17.16% 11.85% 1.12 1.29
2016 29.84% 18.62% 1.32 1.21
Current Asset
Asset Total Asset 31,473 million
Turnover 51,867 million Comments on DuPont Analysis
0.82
• Profit margin of the Company increased in the current year mainly on account of higher sales and thus
leverage of fixed cost. Also, corresponding last year had the impact of COVID-19 affecting Q4FY20.
Non-current
Return on Net Sales Asset • The asset base of the Company has improved during the current year mainly on account of expansion,
42,575 million 20,394 million modernization and replacement of manufacturing facilities.
Equity
17.63 % X
• The Financial Leverage ratio of the Company has increased due to long-term loans obtained to finance the
acquisition of plant and machinery.
Share Capital
& Reserves
24,453 million
Total Asset Currnet
51,867 million Liabilities
19,558 million
Financial
Leverage Total Liabilities
2.12 27,414 million
Non-current
Liabilities
7,856 million
Total Asset
51,867 million
Share Capital
& Reserves
24,453 million
Total Liabilities
27,414 million

FREE CASH FLOW STATEMENT OF CASH FLOW
2021 2020 DIRECT METHOD
------- Rupees in '000 -------
2021 2020
Cash generated from operating activities 1,899,127 3,612,347
------- Rupees in '000 -------
Less: Capital expenditure incurred (3,827,021) (5,253,765)
(1,927,894) (1,641,418)
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from customers 38,287,333 30,879,949
Proceeds from Government refundable 645,733 1,187,265
2,000 38,933,066 32,067,214
1,427
1,000 Payments to suppliers / service providers etc. (30,552,484) (23,264,666)
Payments to employees (5,578,344) (4,519,314)
- Finance costs paid (555,013) (307,408)
Income taxes paid (290,343) (336,591)
(1,000) Long-term deposits (16,580) -
Gratuity paid (41,175) (26,888)
(2,000)
(1,641) (1,713) (1,928) (37,033,939) (28,454,867)
(3,000)
Net cash generated from operating activities 1,899,127 3,612,347
(4,000)
CASH FLOWS FROM INVESTING ACTIVITIES
(5,000)
2019-20 Cash generated from Capital expenditure 2020-21 Fixed capital expenditure (3,827,021) (5,253,765)
operating activities incurred Proceeds from disposal of operating fixed assets 61,611 98,253
Short-term investments made (3,810,376) (1,684,533)
Interest income received on bank deposit 55,386 54,100
Free cashlfows for the year ended June 30, 2021 is negative due to decrease in cash generated from operating Dividend income received on open ended mutual fund units 188,638 55,977
activities as compared to previous year. It was significantly higher due to reduced working capital requirement for Net cash used in investing activities (7,331,762) (6,729,968)
business activities as a result of COVID-19 lock-down in Q4FY20 and trade debtors outstanding as at Q3FY20
reporting period end. CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (909,265) (1,921,651)
ECONOMIC VALUE ADDED Long-term financing obtained – net

Short-term borrowings obtained – net
Principal portion of lease liabilities paid
1,705,579
2,110,000
(96,543)
2,975,446
3,150,000
(105,882)
Net cash generated from financing activities 2,809,771 4,097,913
2021 2020
------- Rupees in '000 ------- Net increase in cash and cash equivalents (2,622,864) 980,292
Net operating profit after tax 4,869,618 3,284,180 Cash and cash equivalents at the beginning of the year 4,247,990 3,267,698
Cost of capital (3,424,067) (2,239,742)
Economic value added 1,445,551 1,044,438 Cash and cash equivalents at the end of the year 1,625,126 4,247,990
Cost of capital
Total assets 51,866,928 43,262,372

Less: current liabilities (19,557,969) (16,725,719)
Invested capital 32,308,959 26,536,653
WACC 10.60% 8.44%
Cost of capital 3,424,067 2,239,742

This is a story of two halves - the business situation was in stark contrast. The above quarterly analysis of statement of profit or loss shows consistency in Company's earning
Foreign currency exchange rate experienced high volatility during the year posing a challenge in planning. Moreover, owing to booming demand of goods and some economies
performance , except for the first quarter. The key cost components were almost in line with expectations, however, yarn cost started increasing from second half of the year.
23.6%
100.0%
-76.4%
-3.0%
-7.4%
-1.5%
-11.8%
11.9%
0.7%
12.6%
-1.3%
11.2%
-1.1%
10.1%
%
ANALYSIS ON FINANCIAL &
Annual
Rupees in '000
(32,509,338)
(1,258,470)
(3,141,547)
(619,275)
(5,019,292)
(558,327)
(477,993)
NON-FINANCIAL PERFORMANCE
10,066,127
42,575,465
5,046,835
300,776
5,347,611
4,789,284
4,311,291
11.44
Financial Performance
19.4%
100.0%
-80.6%
-3.0%
-7.1%
1.8%
-8.3%
11.1%
0.2%
11.3%
-2.0%
9.3%
-1.1%
8.2%
%
4th Quarter
I. Financial Performance in comparison with Prior year

Rupees in '000
(8,588,944)
(318,422)
(759,021)
(882,267)
(209,327)
(116,673)
2,067,119
10,656,063
195,176
1,184,852
16,073
1,200,925
991,598
874,925
2.32
The Company has successfully managed to achieve highest ever net sales revenue in its history of PKR 42,575
million in current year as compared to PKR 31,206 million in prior year with an increase of 36.43%. The textile export
orders in the Country have recorded a historical jump after the COVID-19 lock-down situation in the neighboring
QUARTERLY PERFORMANCE ANALYSIS
countries which is also evident by the significant growth in the Company’s net sales revenue. The gross profit
margin during the year under review has slightly decreased primarily due to sharp increase in raw material prices.
24.2%
100.0%
-75.8%
-3.1%
-7.6%
-3.3%
-14.0%
10.2%
0.4%
10.6%
-1.1%
9.5%
-1.0%
8.5%
Whereas the net profit after tax during the period is PKR 4,311 million as compared to PKR 2,937 million in prior
%
3rd Quarter
year, an increase of 46.78% over last year. The increase in net profit margin as compared to last year is double fold.
Foremostly, there is significant volumetric growth in sale volumes and also the Q4 of last year had an impact of
Rupees in '000
(8,202,798)
(335,398)
(824,701)
(358,540)
(1,518,639)
(114,012)
(110,721)
2,620,376
10,823,174
1,101,737
41,125
1,142,862
1,028,850
918,129
2.44
lock-down.
The comprehensive analysis of the Company’s financial performance in comparison to the prior year has been
reported in the financial and operations overview section of Directors’ Report. Further details given in the section six
years analysis of financial statement of this Annual Report.
23.8%
100.0%
-76.2%
-2.7%
-7.8%
-3.2%
-13.8%
10.0%
0.6%
10.7%
-1.2%
9.5%
-1.3%
8.2%
%
2nd Quarter
II. Financial performance in comparison with Budget

Rupees in '000
(8,407,903)
(301,759)
(861,289)
(357,293)
(1,520,341)
(127,755)
(146,849)
2,626,801
11,034,704
1,106,460
71,302
1,177,762
1,050,007
903,158
2.40
The management strictly follow the practice of preparation & monitoring of budgets to ensure that the financial,
still struggling, the distribution cost rose in second half of the year aggravating the situation.
operational and capital plans that were developed and approved for implementation as part of the budget processes
are being implemented. After execution, budget are rigorously monitored in order to enforce accountability related
to spending. In addition, this regular & comprehensive monitoring exercise allows the management to evaluate
service level provision, ensure any new initiatives are making expected progress towards goals/expectations and
27.4%
100.0%
-72.6%
-3.0%
-6.9%
-1.0%
-10.9%
16.4%
1.7%
18.1%
-1.1%
17.1%
-1.0%
16.1%
learn more about trends that may impact future operations.

%
1st Quarter
The Company’s sales have exceeded the budgeted numbers for the current financial year. The cost however
Rupees in '000
(7,309,693)
(302,891)
(696,536)
(98,618)
(1,098,045)
(107,233)
(103,750)
2,751,831
10,061,524
1,653,786
172,276
1,826,062
1,718,829
1,615,079
4.29
remained higher than the Budget expectation due to changes in market scenario and global supply chain situation.
Profit before taxation
Profit after taxation

Administrative costs
Earning per share

Distribution costs
Operating Profit
Other expenses
Finance costs
Other income
Cost of sales
Gross profit
Particular
Taxation
Sales

Key Performance Indicators Non-Financial Indicators
Key Performance Indicator is a measurable value that demonstrates how effectively the Company is achieving key
business objectives. The Company uses KPIs at multiple levels to evaluate their success in achieving targets. The KPIs Capital Form Objective KPI Monitored
evaluated to measure achievement against objectives has been detailed below:
Manufactured Capital Customer Satisfaction Product quality is maintained at every stage of
production cycle to ensure that our products
meet the requirements of our customer at all
times.
Process improvement and Adoption of Kaizen techniques across all

innovation functional levels and process improvements
Earnings were observed.
per Share
42,575 10,066 11.44

Revenue Gross Profit
Human Capital Employee’s engagement Given the COVID-19 SOPs, the Company
managed to organize activities and events for
employee engagement.
(Rs in Million) (Rs in Million) (Rs) Health & Safety The health and safety measures is at the very
top of the Company’s core philosophy.
Increased by 36.43% Increased by 34.27% Increased by 46.66% Company wide COVID-19 vaccination drive is
in progress, in addition to that regular refresher
sessions were conducted to ensure health and
safety of employees.
Natural Capital Adopting and promoting The Company has taken multiple steps to
environmental good practices Reduce, Reuse and Recycle waste (3Rs),
minimizing natural resource consumption and
Breakup Value Market Value treat any harmful emissions before they are
Total Assets released to minimize environmental footprints.
51,867 64.90 100.51

Per Share Per Share
Financial Capital Maximizing market share and Consistent growth in sales revenue has
expanding customer base enabled the Company to increase its market
share in Country’s terry export market and
(Rs in Million) (Rs) (Rs) expanding its customer base.
Increased by 19.89% Increased by 15.63% Increased by 22.87% Social and Relationship

Capital
Responsibility & contribution
towards society
The Company actively participated and
contributed towards various CSR related
activities.
Intellectual Capital Recruitment, retention and Being one of the core values of the Company,
development of employee various trainings sessions were executed to
competencies improve competencies and development of
Return on employees across all cadres.
Return on
equity
7,051
EBITDA
17.63 8.31
asset
Budget
The Company acknowledges the importance of non-financial objectives and accordingly has allocated budget for the
(Rs) % (Rs in Million) development of its manufactured / human / social / relationship capital for the upcoming year. The management
continuously monitors the above KPIs and significant deviations from the previous year are investigated for
Increased by 27.47% Increased by 22.57% Increased by 41.86% corrective actions.

SHARE PRICE INFORMATION AND
SENSITIVITY ANALYSIS
Methods and Assumptions used in compiling the Key Performance
Indicators
A key performance indicator represents parameters and factors that may cast an impact of decisive nature on a
Company’s financial and non-financial performance. The Company uses different sets of methods and assumptions while
compiling its financial and non-financial indicators. All the indicators are devised in the light of below stated basic
assumptions and are periodically reviewed and monitored.
Share price sensitivity analysis
The key assumptions used for compiling non-financial indicators are export market trends, building relationships with
customers, stakeholder’s expectation, and process improvement through variety of technological advancement. Share prices depend on overall market performance, investor confidence in the economy, this particular sector, the
overall fundamentals of the company and policies issued/imposed by Government and regulatory bodies. Positive
The key assumptions used for compiling financial indicators are given below: sentiments, news flows prevailing in the market may result in fluctuation of the share price of the Company.
Financial Position Being a responsible and law-compliant Company, Feroze1888 circulates price sensitive information to the Stock
Exchange in accordance with the requirements of listing regulations in timely manner. FML's share price was PKR 81.8
• Appropriateness of capital mix in the Company. per share on June 30, 2020 as compared to PKR 100.51 on June 30, 2021. As shown in below graph, the share price of
• Change in operating cycle. the Company is consistently increasing since last year. During the year market price of the share observed fluctuation
• Monitoring current ratio. from the lowest of PKR 81.01 per share on July 09, 2020 to highest of PKR 127.48 per share on January 14, 2021.
Financial performance
140
• Growth in export sales performance. 60,000
• Hedging foreign currency transaction to mitigate adverse impact of currency rate fluctuation. 120
• Monitoring key components of variable cost. 50,000
• Initiating and maintaining techniques for optimal fixed cost absorption. 100
40,000
Liquidity Position 80
30,000
60
• Monitoring of funds used in / generated from operating, investing and financial cash flow activities.
• Reviewing funds used in working capital management. 20,000
40
10,000
20
MAJOR CAPITAL EXPENDITURES

- -
jul/20 Aug/20 Sep/20 Oct/20 Nov/20 Dec/20 Jan/21 Feb/21 Mar/21 Apr/21 May/21 Jun/21
In order to remain competitive and serve growing needs of customers, the Company invests regularly to enhance Share Price KSE Index
production capacity and bring efficiency into existing operations. This year, capital expenditure of Rs. 3.8 billion has been
made. This mainly includes, apart from routine replacements, investment made in enhancing production capacity of
spinning, weaving, dyeing and stitching processes. These capacity enhancement projects will enter into advanced stages
during next fiscal year.

DON’T LIMIT YOURSELF TO
THE SKIES WHEN THERE IS A
WHOLE GALAXY OUT THERE
1274Feroze1888 Mills Limited Annual Report 2021 128

ADOPTION AND STATEMENT STATEMENT OF UNRESERVED
OF ADHERENCE WITH THE COMPLIANCE OF INTERNATIONAL
INTERNATIONAL INTEGRATED FINANCIAL REPORTING
REPORTING FRAMEWORK (IIRF) STANDARDS (IFRSs)
Feroze1888 is working with a strategy of value properly. Thus, the stakeholders are made aware of The Financial Statements of the Company have been prepared in accordance with the International Financial
creation for the organization and its stakeholders. the Company’s philosophy and attitude towards Reporting Standards issued by International Accounting Standards Board (IASB) as notified under the
Achieving sustainable corporate value by focusing achieving the enhanced stakeholders’ value and Companies Act, 2017. Further, there are certain standards and interpretations which are yet to be effective in
economic, societal, technological and environmental customer satisfaction. The stakeholders’ value is Pakistan and certain standards not adopted by SECP, as disclosed in note 4.2 of the financial statements.
factors and their impacts is Company’s core strength. maximized through returns on investment, which However, the management believes these standards and interpretation do not have any material impact on the
For users of this report, it is imperative to ensure, that management believes can be achieved through financial statements of the Company.
the information is presented in such a way that it revenue maximization and cost control measures.
enables the stakeholders to better understand the Adoption of International Integrated Reporting
activities of the Company. It also assures that the
Company concisely reports material information
depicting how well it is performing in non-financial
Framework depends on the individual circumstances
of an organisation and is still considered to be a
practice in its early stages. We will continue to
BRIEF ABOUT THE REPORT
Feroze1888 Mills has always been committed towards transparency in its practices to create value for its
dimensions that affect the quality of the Company’s improve the information produced to make it even
stakeholders. The Report is structured to provide information about the operations and affairs of the Company to
formulated strategy and its execution. The Company easier to understand, while taking into account the
assist our investors and other stakeholders in assessing our business. We have adopted the International Integrated
has adopted the Integrated Reporting Framework to opinion of stakeholders reading this report. Initially,
Reporting Framework to design this Annual Report to give readers an insight into the strategic thinking that drives
give an overview of its philosophy to explain the Company has included following content elements
Feroze1888 Mills forward, governance, performance and future prospects. This report covers the following sections:
connection between financial and non-financial for the users of this report:
information. The business strategy information is
• Company overview and external environment
linked directly to business activities and non-financial • Company overview and external environment
• Strategy, Resource allocation and Future Outlook
information, and provides explanations accordingly. • Strategy and resource allocation
• Risks and opportunities
Integration of financial, social and environmental • Risks and opportunities Outlook
• Governance
information is one of the most effective way for an • Governance
• Stakeholder’s relationship and engagement
organization to report its performance and activities • Performance and position
• Sustainability & Corporate social responsibility
and to demonstrate, to the market and society, the • CorporateSocial Responsibility and
• Excellence in corporate reporting
importance of linking sustainability issues to business Sustainability
strategies. • Corporate Reporting
The report includes both financial and non-financial information on performance, risks and opportunities and
outcomes attributable to our activities and key stakeholders of the Company.
Feroze1888 is in the process of adopting and
adhering to the International Integrated Reporting
Framework (IIRF) and strives to follow the best
corporate governance practices. The framework
requires a strong commitment by the Company’s
management which is ultimately responsible for the
message the Company is delivering to all of its
stakeholders. Connectivity of the information is
another aspect which needs to be addressed

30 September 2021

STATEMENT OF FINANCIAL POSITION STATEMENT OF PROFIT OR LOSS
As at June 30, 2021 For the year ended June 30, 2021
2021 2020 2021 2020

Note ------------ Rupees in ‘000 ------------ Note ------------ Rupees in ‘000 ------------
ASSETS Sales - net 25 42,575,465 31,205,677

Non current assets Cost of sales 26 (32,509,338) (23,708,613)
Property, plant and equipment 6 20,308,105 17,595,012 Gross profit 10,066,127 7,497,064
Intangible assets 7 23,309 29,540
Long term deposits 8 62,970 46,390 Administrative cost 27 (1,258,470) (1,141,164)
20,394,384 17,670,942 Distribution cost 28 (3,141,547) (2,276,372)
Current assets Other expenses 29 (619,275) (667,832)
Stores and spares 9 1,303,298 886,495 (5,019,292) (4,085,368)
Stock in trade 10 8,437,202 8,269,628 5,046,835 3,411,696
Trade debts 11 10,115,920 6,809,503
Advances, deposits, prepayments and other receivables 12 4,108,247 3,117,789 Other income 30 300,776 218,888
Taxation - net 284,732 472,382 Operating profit 5,347,611 3,630,584
Short term investment 13 5,598,019 3,787,643
Cash and bank balances 14 1,625,126 2,247,990 Finance cost 31 (558,327) (346,959)
31,472,544 25,591,430 Profit before taxation 4,789,284 3,283,625
Total assets 51,866,928 43,262,372
Taxation 32 (477,993) (346,404)
EQUITY AND LIABILITIES
Share capital and reserves Profit after taxation 4,311,291 2,937,221
Authorised share capital
400,000,000 (2020: 400,000,000) ordinary shares of Rs 10/- each 4,000,000 4,000,000 ------------ Rupees ------------
Issued, subscribed and paid-up capital 15 3,768,009 3,768,009 Earning per share basic & diluted 33 11.44 7.80
Capital reserve 16 758,663 758,663
Revaluation surplus on property, plant and equipment 1,486,262 1,486,262 The annexed notes 1 to 45 form an integral part of these financial statements.
Revenue reserve - accumulated profit 18,439,942 15,134,124 100
24,452,876 21,147,058
Liabilities
Deferred liabilities 17 451,864 205,355
Long term financing 18 5,409,360 5,012,562
Provision for GIDC 19 1,334,357 -
Lease liabilities 20 660,502 171,678
7,856,083 5,389,595
Current liabilities
Trade and other payables 21 5,958,050 6,646,839
Short term borrowings 22 11,750,000 9,640,000
Accrued mark-up 23 111,651 90,449
Current portion of long term financing 18 1,457,377 214,838
Current portion of lease liabilities 20 212,335 131,686
Unclaimed dividend 1,814 1,907
Unpaid dividend 66,742 -
19,557,969 16,725,719
CONTINGENCIES AND COMMITMENTS 24
Total equity and liabilities 51,866,928 43,262,372
The annexed notes 1 to 45 form an integral part of these financial statements.
JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER
Chief Financial Officer Chief Executive Officer Director Chief Financial Officer Chief Executive Officer Director

STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CASH FLOWS
For the year ended June 30, 2021 For the year ended June 30, 2021
2021 2020 2021 2020

Note ------------ Rupees in ‘000 ------------ Note ------------ Rupees in ‘000 ------------
Profit after taxation 4,311,291 2,937,221 CASH FLOW FROM OPERATING ACTIVITIES
Other comprehensive (loss) / income Profit before taxation 4,789,284 3,283,625

Adjustment for:
Depreciation on operating fixed assets 6.5 1,479,055 1,204,398
Items that will not to be subsequently reclassified Depreciation on right-of-use assets 6.9.1 218,457 134,551
to statement of profit or loss Amortization 7 6,231 1,017
Operating fixed assets written off 29 - 13,379
Actuarial (loss) / gain on post-employment benefits 17.1.2 (29,559) 28,073 Provision for slow moving and obsolete stores and spares 29 14,677 23,807
Provision for doubtful advances 29 - 104,969
Total comprehensive income for the period 4,281,732 2,965,294 Allowance for expected credit loss on trade debts 29 6,163 16,944
Finance cost 31 558,327 346,959
The annexed notes 1 to 45 form an integral part of these financial statements. Provision for gratuity 17.1.3 217,839 111,680
Interest on bank deposit 30 (49,237) (59,801)

Dividend income on open ended mutual fund units 30 (188,638) (159,087)
Reversal of provision against doubtful advances 30 (62,901) -
Loss on disposal of property, plant and equipment - net 29 20,821 47,595
2,220,794 1,786,411
(Increase) / decrease in current assets
Stores and spares (431,480) (1,788)
Stock in trade (167,574) (1,858,541)
Trade debt (3,312,580) 803,547
Advances, deposits, prepayments and other receivables (933,706) (1,290,618)
(4,845,340) (2,347,400)
Increase in current liability
Trade and other payables 637,500 1,560,598
Net cash used in operations 2,802,238 4,283,234
Finance costs paid (555,013) (307,408)

Income taxes paid (290,343) (336,591)
Gratuity paid 17.1.1 (41,175) (26,888)
Long term deposits (16,580) -
Net cash generated from operating activities 1,899,127 3,612,347
CASH FLOW FROM INVESTING ACTIVITIES

Fixed capital expenditure (3,827,021) (5,253,765)
Proceeds from disposal of operating fixed assets 6.7 61,611 98,253
Short term investments made (3,810,376) (1,684,533)
Interest received on bank deposit 55,386 54,100
Dividend income received on open ended mutual fund units 188,638 55,977
Net cash used in investing activities (7,331,762) (6,729,968)
CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (909,265) (1,921,651)
Principal portion of lease liabilities paid (96,543) (105,882)
Short term borrowings obtained – net 2,110,000 3,150,000
Long term financing obtained - net 1,705,579 2,975,446
Net cash generated from financing activities 2,809,771 4,097,913
Net (decrease) / increase in cash and cash equivalent (2,622,864) 980,292
Cash and cash equivalent at beginning of the year 4,247,990 3,267,698
Cash and cash equivalent at end of the year 37 1,625,126 4,247,990

JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER
Chief Financial Officer Chief Executive Officer Director Chief Financial Officer Chief Executive Officer Director

STATEMENT OF CHANGES IN EQUITY NOTES TO THE FINANCIAL STATEMENTS
Capital Revaluation Revenue 1 THE COMPANY AND ITS OPERATIONS

Share Merger Share surplus on Accumulated Total
capital reserve premium property, plant profit
and equipment Feroze1888 Mills Limited (the Company) was incorporated in Pakistan as a Public Limited Company in October
1972 . The shares of the Company are quoted on Pakistan Stock Exchange Limited. The Company is principally
-------------------------------------------------------- (Rupees ‘000) --------------------------------------------------------
engaged in the production and export of towels. The registered office of the company is situated at H-23/4-A Scheme
Balance as at June 30, 2019 3,768,009 543,413 215,250 1,499,008 14,077,769 20,103,449 # 3, Landhi Industrial Area, Karachi.
Net profit for the year - - - - 2,937,221 2,937,221 1.1 Geographical location and address of business units
Other comprehensive income for the year - - - - 28,073 28,073
Total comprehensive income for the year - - - - 2,965,294 2,965,294
Registered Office H-23/4A, Scheme # 3, Landhi Industrial Area, Karachi
Final cash dividend for the year ended
June 30, 2019 @ Rs. 3.35 per share - - - - (1,262,283) (1,262,283) Office building Plot # 160, Bangalore Town, Shahrah-e-Faisal Road, Darwaish Colony, Karachi

Interim cash dividend for the year ended

June 30, 2020 @ Rs. 1.75 per share - - - - (659,402) (659,402) Mill and Production Plant H- 23/4-A & H- 23/4-B and H- 23/3-II, Scheme no. 3, Landhi Industrial Area, Karachi.
Plot # B-4/A, SITE, Karachi
Revaluation surplus reversed on disposal of asset (12,746) 12,746 - Plot # A-5, SITE, Karachi
Balance as at June 30, 2020 3,768,009 543,413 215,250 1,486,262 15,134,124 21,147,058

Plot # C-3, SITE, Karachi
Net profit for the year - - - - 4,311,291 4,311,291 Plot # C-31 SITE, Karachi
Other comprehensive loss for the year - - - - (29,559) (29,559) Plot # F-89, SITE, Karachi
Total comprehensive income for the year - - - - 4,281,732 4,281,732 Plot # F-125, SITE, Karachi
Final cash dividend for the year ended
Plot # F-342, SITE, Karachi
June 30, 2020 @ Re. 0.59 per share - - - - (222,312) (222,312) Plot # L-26, F.B. Industrial Area, Karachi
Plot # PL-15, North Karachi Industrial Area, Karachi.
Interim cash dividend for the year ended Plot # ST-03, North Karachi Industrial Area, Karachi.
June 30, 2021 @ Rs. 2.00 per share - - - - (753,602) (753,602)

Plot # 342/A, Haroonabad, SITE, Karachi
Balance as at June 30, 2021 3,768,009 543,413 215,250 1,486,262 18,439,942 24,452,876 Survey no. 81, 242, 72 to 75, 165, 166, 171, 172, 176 to 181, 186 to 190, 156, 210, 211,
243, Deh Moachko, Tapo Gabopat, Keamari Town, Karachi
Plot # D-12 to D-17, K-1 to K-3, M-34, HITE, Hub, Lasbela, Balochistan

1.2 Significant transactions and events affecting the Company’s financial position and performance

During the year, the Company has acquired property, plant and equipment amounting to Rs.3,827 million. This includes
Rs. 1,104 million for building and Rs. 2,614 million for plant and machinery. These acquisitions have increased the
production capacity of the Company.
Significant borrowings were made under the State Bank of Pakistan Long Term Finance Facility and Temporary
Economic Refinance Facility for acquisition of plant and machinery and under Export Refinance Facility for working
capital requirements which resulted in an increase in finance cost.
2 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 Standard Board (IASB)
as notified under the Companies Act, 2017 (the Act); and
- Provisions of and directives issued under the Act.

Where provisions of and directives issued under the Act differ from IFRS, the provisions of and directives issued under
the Act have been followed.
JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER

Chief Financial Officer Chief Executive Officer Director

NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
3 BASIS OF PREPARATION Improvements to Accounting Standards Issued by the IASB (2018-2020 cycle)

3.1 These financial statements have been prepared under the historical cost convention except as otherwise disclosed in IFRS 9 Financial Instruments – Fees in the ‘10 percent’ test
the accounting policies below. for derecognition of financial liabilities 01 January 2022
IAS 41 Agriculture – Taxation in fair value measurements 01 January 2022
3.2 These financial statements are prepared in Pak Rupees, which is the Company’s functional and presentation currency. IFRS 16 Leases: Lease incentives 01 January 2022

4 NEW STANDARDS, AMENDMENTS, IMPROVEMENTS TO APPROVED ACCOUNTING STANDARDS AND THE The above standards and amendments and improvements are not expected to have any material impact on the
FRAMEWORK FOR FINANCIAL REPORTING Company’s financial statements in the period of initial application.
4.1 Amendments to approved accounting standards and the framework for financial reporting that became Further, the following new standards have been issued by IASB which are yet to be notified by the SECP for the
effective during the current year purpose of applicability in Pakistan and are not expected to have any material impact on the Company’s unconsolidated
financial statements in the period of initial application.
The Company has adopted the following standards, amendments, interpretation and improvements to International
Financial Reporting Standards (IFRSs) which became effective for the current years: IASB Effective date
(annual periods
Amendment of Framework beginning on or after)
IFRS 3 Business Combinations - Definition of a Business (Amendments) Standards
IFRS 9 / IAS 39 / IFRS 7 Interest Rate Benchmark Reform (Amendments)
IAS 1 / IAS 8 “Definition of Material (Amendments) “ IFRS 1 First time adoption of IFRSs 01 January 2004
Conceptual Framework for Financial Reporting IFRS 17 Insurance Contracts 01 January 2023

The adoption of above amendments to the approved accounting standards and the framework for financial reporting 4.3 Significant accounting judgments, estimates and assumptions
did not have any material impact on the Company’s unconsolidated financial statements.
The preparation of the financial statements in conformity with approved accounting standards, as applicable in Pakistan,
4.2 Standards, amendments and improvements to the approved accounting standards that are not yet effective requires the management to make judgment, estimates and assumptions that affect the application of policies and
the reported amounts of revenues, expenses, assets and liabilities and accompanying disclosures. Uncertainty about
The following amendments and improvements to the approved accounting standards as applicable in Pakistan would these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
be effective from the dates mentioned below against the respective amendment or improvements: assets or liabilities affected in future periods.

Effective date (annual The estimates and associated assumptions are based on historical experience and various other factors that are
periods beginning believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the
on or after) carrying values of assets and liabilities that are not readily apparent from other sources.
Amendment or Improvement
Estimates, assumptions and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are
IFRS 9, IAS 39, IFRS 7, Interest Rate Benchmark Reform - Phase 2 (Amendment) 01 January 2021 recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
IFRS 4 and IFRS 16 revision and future periods if the revision affects both current and future periods.
IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021 01 April 2021
(Amendments) In the process of applying the accounting policies, management has made the following estimates and judgments
IFRS 3 Reference to the Conceptual Framework (Amendments) 01 January 2022 which are significant to the financial statements:
IFRS 10/IAS 28 Sale or contribution of Assets between an investor and Not yet finalized
its Associate or Joint Venture (Amendment) 4.3.1
Property, plant and equipment

IAS 1 Classification of Liabilities as Current or Non-current 01 January 2023 The estimates for revalued amounts of freehold and leasehold land are based on valuation performed by external
(Amendments) professional valuer and recommendation of in house technical department of the Company. The Company reviews
appropriateness of the rate of depreciation, useful life and residual value used in the calculation of depreciation on
IAS 1 Disclosure of Accounting Policies (Amendments) 01 January 2023 an annual basis. Further, where applicable, an estimate of the recoverable amount of assets is made for possible
IAS 16 Proceeds before Intended Use (Amendments) 01 January 2022 impairment on an annual basis. In making these estimates, the Company uses the technical resources available to the
IAS 8 Definition of Accounting Estimates (Amendments) 01 January 2023 Company. Any change in the estimates in the future might affect the carrying amount of respective item of operating
IAS 12 Deferred tax related to Assets and Liabilities arising from a 01 January 2023 property, plant and equipment, with corresponding effects on the depreciation charge and impairment.
single transaction (Amendments)
IAS 37 Onerous Contracts – Costs of Fulfilling a Contract 01 January 2022
(Amendments)

Stock-in-trade and stores and spares

4.3.2 The Company has several lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the
The Company reviews the carrying amount of inventories on an ongoing basis and as appropriate, inventory is written lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or
down to its net realisable value (NRV) or provision is made for obsolescence. NRV is estimated with reference to the termination. After the commencement date, the Company reassesses the lease term if there is a significant event or
estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs change in circumstances that is within its control that affects its ability to exercise or not to exercise the option to renew
necessary to make the sale. or to terminate.
4.3.3
Staff gratuity Estimating the incremental borrowing rate

Certain actuarial assumptions have been adopted as disclosed in note 17.1 to the financial statements for the valuation The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
of present value of defined benefit obligations and fair value of plan assets. Any changes in these assumptions in future rate (‘IBR’) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow
years might affect gains and losses in those years. over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-
use asset in a similar economic environment.
4.3.4 Impairment of financial assets
5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company uses a provision matrix to calculate ECLs for trade debts and other receivables. The provision rates are
based on days past due for Company’s various customer that have similar loss patterns. 5.1 Property, plant and equipment

The provision matrix is initially based on the Company’s historical observed default rates. The Company will calibrate the 5.1.1 Operating assets
matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic
conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in the These are stated at cost less accumulated depreciation and impairment loss, if any, except for land which is stated at
manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default revalued amount less impairment, if any. Depreciation is charged to statement of profit or loss applying the reducing
rates are updated and changes in the forward-looking estimates are analysed. balance method at the rates mentioned in note 6.1 to the financial statements except for lease hold improvement and
major overhauling cost of turbines and generators which are depreciated on straight line basis at the rates mentioned
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs in note 6.1 to these financial statements. Depreciation is charged from the month in which an asset is available for use,
is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic while no depreciation is charged in the month on which an asset is disposed off.
conditions. The Company’s historical credit loss experience and forecast of economic conditions may also not be
representative of customer’s actual default in the future. The information about the ECLs on the Company’s financial Maintenance and repairs are charged to statement of profit or loss as and when incurred. Major overhauling which
assets exposed to credit risk is disclosed in note 40.2. increase the asset’s remaining useful economic life or the performance beyond the current estimated levels are
capitalized and the assets so replaced, if any, are retired.
4.3.5 Taxation
Gains or losses on disposals of operating assets, if any, are recognized in the statement of profit or loss.
In applying the estimate for income tax payable, the Company takes into account the applicable tax laws and the
decision by appellate authorities on certain issues in the past. Instance where the Company’s view differs from the view The assets residual values, useful lives and depreciation methods are reviewed and adjusted if appropriate, at each
taken by the income tax department at the assessment stage and where the Company considers that its view on items financial year end.
of material nature is in accordance with law, the amounts are shown as contingency.
Increases in the carrying amounts arising on revaluation of land are recognized, in statement of other comprehensive
4.3.6 Contingencies income and accumulated in reserves in shareholders’ equity. To the extent that the increase reverses a decrease
previously recognized in statement of profit or loss, the increase is first recognized in statement of profit or loss.
The assessment of the contingencies inherently involves the exercise of significant judgment as the outcome of the Decreases that reverse previous increases of the same asset are first recognized in statement of other comprehensive
future events cannot be predicted with certainty. The Company, based on the availability of the latest information, income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to statement of
estimates the value of contingent assets and liabilities which may differ on the occurrence / non-occurrence of the profit or loss.
uncertain future events.
The carrying values of property, plant and equipment are reviewed at each statement of financial position date for
Lease liabilities
4.3.7 impairment when events or changes in circumstances indicate that carrying values may not be recoverable. If such
indication exists where the carrying values exceed the estimated recoverable amounts, the assets are written down to
Determining the lease term of contracts with renewal and termination options their recoverable amounts.

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered 5.1.2 Capital work-in-progress
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised. These are stated at cost less impairment, if any, and represent expenditures incurred and advances made in respect
of specific assets during the construction / installation year. These are transferred to relevant operating fixed assets as
and when assets are available for use.


5.1.3 Right of use asset i) Financial assets

The Company recognises a right-of-use assets at the commencement date of the lease (i.e. the date the underlying Initial recognition and measurement
asset is available for use). Right-of-use assets are measured at cost less any accumulated depreciation and impairment
losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of Financial assets are classified at initial recognition and subsequently measured at amortized cost, fair value through
lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date other comprehensive income or fair value through profit or loss.
less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
5.2 Intangible assets characteristics and the Company’s business model for managing them. With the exception of trade receivables, the
Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through
These are stated at cost less accumulated amortization and impairment, if any. profit or loss, transaction costs. Trade receivables are measured at the transaction price determined under IFRS 15.

Amortization is charged on straight line method. Amortization on additions is charged in the month in which an asset In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give
comes into operation while no amortization is charged for the month in which the asset is disposed of. rise to cash flows that are SPPI on the principal amount outstanding. This assessment is referred to as the SPPI test
and is performed at an instrument level. The Company’s business model for managing financial assets refers to how it
5.3 Stores and spares manages its financial assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both.
These are valued at lower of moving average cost and estimated net realizable value (NRV) except items in-transit, if
any, are valued at cost comprising invoice values plus other charges incurred thereon up to the date of statement of Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
financial position. convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the Company
commits to purchase or sell the asset.
Provision, if required is made in the financial statements for slow moving, obsolete and unusable items. Stores and
spares are assessed and provision is applied according to degree of ageing based on a specific criteria. Subsequent measurement

5.4 Stock-in-trade For purposes of subsequent measurement, financial assets are classified into following categories:

Raw materials and finished goods are valued at lower of average cost and estimated NRV, except items in-transit, if - Financial assets at amortised cost (debt instruments).
any, are valued at cost comprising invoice values plus other charges incurred thereon up to the statement of financial
position date. - Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (Equity instruments)
Cost signifies in relation to:
- Financial assets at fair value through profit or loss
Raw and packing material Purchase cost on average basis
Finished goods and Cost of direct material, labour and proportion of manufacturing overheads Financial assets at amortised cost (debt instruments)
work-in-process
Stock-in-transit Invoice value plus other charges paid thereon up to the date of statement of The Company measures financial assets at amortized cost if both of the following conditions are met:
financial statement
- The financial asset is held within a business model with the objective to hold financial assets in order to collect
Work-in-process is valued at average cost of raw-materials including a proportionate of manufacturing overheads. contractual cash flows; and

Cost of finished goods includes cost of direct materials, labour and appropriate portion of manufacturing overheads. - 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.
Provision, if required is made in the financial statements for slow moving, obsolete and unusable items to bring their
carrying value down to NRV. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject
to impairment. Gains and losses are recognised in statement of profit or loss when the asset is derecognised, modified
5.5 Financial instruments or impaired.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity Financial assets designated at FVOCI (equity instruments)
instrument of another entity.
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments
designated at FVOCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are
not held for trading. The classification is determined on an instrument-by-instrument basis.


Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
income in profit or loss when the right of payment has been established, except when the Company benefits from such risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within
proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in
instruments designated at fair value through OCI are not subject to impairment assessment. credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).
Financial assets at FVPL
For trade debts, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not
Financial assets at FVPL include financial assets held for trading, financial assets designated upon initial recognition track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The
at FVPL, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-
for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets with cash looking factors specific to the debtors and the economic environment.
flows that are not solely payments of principal and interest are classified and measured at fair value through profit or
loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized The Company considers a financial asset in default when contractual payments are 90 days past due. However, in
cost or at FVOCI, as described above, debt instruments may be designated at FVPL on initial recognition if doing so certain cases, the Company may also consider a financial asset to be in default when internal or external information
eliminates, or significantly reduces, an accounting mismatch. indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account
any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation
Financial assets at FVPL are carried in the statement of financial position at fair value with net changes in fair value of recovering the contractual cash flows.
recognised in statement of profit or loss.
ii) Financial liabilities
This category also includes derivative instruments and listed equity investments which the Company had not irrevocably
elected to classify at FVOCI. Dividends on listed equity investments are also recognised as other income in profit or loss Initial recognition and measurement
when the right of payment has been established.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
Derecognition borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

A financial asset is primarily derecognised (i.e., removed from the Company’s statement of financial position) when: All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
- The rights to receive cash flows from The asset have expired; or
Financial liabilities at FVPL
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the are recognised in statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through
asset. profit or loss are designated at the initial date of recognition, only if the criteria in IFRS 9 are satisfied. This category also
includes derivative financial instruments entered into by the Company that are not designated as hedging instruments
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through in hedge relationships as defined by IFRS 9. Derivatives that do not qualify for hedge accounting are recognized
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. in the statement of financial position at estimated fair value with corresponding effect to the statement of profit or
loss. Derivative financial instruments are carried as assets when fair value is positive and liabilities when fair value is
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control negative.
of the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the associated liability are Financial liabilities at amortised cost
measured on a basis that reflects the rights and obligations that the Company has retained.
After initial recognition, borrowings and payables are subsequently measured at amortized cost using the EIR method.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the Gains and losses are recognised in statement of profit or loss when the liabilities are derecognised as well as through
original carrying amount of the asset and the maximum amount of consideration that the Company could be required the EIR amortization process.
to repay.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
Impairment of financial assets an integral part of the EIR. The EIR amortisation is included as finance costs in statement of profit or loss.

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value Borrowings are classified as current liabilities unless the Company has an unconditional right to defer the settlement
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with of the liability for at least twelve months after the reporting date. Exchange gains and losses arising in respect of
the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original borrowings in foreign currency are added to the carrying amount of the borrowing.
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.


Derecognition
Company as a lessee
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms The Company applies a single recognition and measurement approach for all leases, except for short-term leases and
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in representing the right to use the underlying assets.
the statement of profit or loss.
Lease liabilities
Offsetting of financial instruments
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of
Financial assets and financial liabilities are set off and the net amount is reported in the financial statements only when lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance
the Company has a legally enforceable right to set off and the Company intends to either settle on a net basis, or to fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
realize the assets and to settle the liabilities simultaneously. Income and expense items of such assets and liabilities are amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of
also offset and the net amount is reported in the financial statements. a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the
lease, if the termination option is reasonably certain to be exercised. Variable lease payments that do not depend on
5.6 Advances, deposits, prepayments and other receivables (excluding financial assets) an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which
the event or condition that triggers the payment occurs. In calculating the present value of lease payments at the lease
These are stated initially at fair value and subsequently measured at amortized cost using the effective interest rate commencement date, the Company uses the interest rate implicit in the lease. In case where the interest rate implicit in
method. the lease is not readily determinable, the Company uses its incremental borrowing rate. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
Exchange gains or losses arising in respect of deposits, advances and other receivables in foreign currency are added In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term,
to their respective carrying amounts and charged to statement of profit or loss. a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

5.7 Taxation Short-term leases

Current The Company applies the short-term lease recognition exemption to its short term leases (i.e., those lease that have a
lease term of 12 months or less from the commencement date and do not contain a purchase option). Lease payments
The charge for current taxation is based on taxable income at the current rates of taxation in accordance with Income on short term leases are recognised as expense on a straight line basis over the lease term.
Tax Ordinance, 2001.
5.11
Staff benefits
Deferred
Defined contribution plan
Since the major portion of income of the Company is subject to tax under Final Tax Regime, no deferred tax liability has
been accounted for in these financial statements as the Company’s tax liability will be assessed under the said regime The Company operates an approved defined contribution provident fund for its eligible employees. Monthly contributions
and, hence, no temporary differences are likely to arise in respect of sales, whereas, temporary differences in respect are made both by the Company and employees to the fund at the rate of 10% of basic salary.
of other income are expected to be negligible.
Defined benefit plan
5.8 Cash and cash equivalents
The Company operates an approved gratuity fund for all permanent employees who have completed the minimum
These are carried at cost. For the purpose of statement of cash flows, cash and cash equivalents comprise of cash in qualifying year of service for entitlement of gratuity. The contributions to the fund are made in accordance with the
hand, bank balances, short term running finance and trade deposit receipts. independent actuarial valuation. Actuarial gains and losses are recognized in full in the period in which they occur in
the other comprehensive income. All the past service costs are recognised at the earlier of when the amendments or
5.9 Share Capital curtailment occurs and when the Company has recognised related restructuring or terminations benefits. The latest
actuarial valuation was carried out as of June 30, 2021 using Projected Unit Credit method.
Ordinary shares are classified as equity and recognized at their face value. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Employees’ compensation absences

5.10 Leases The Company accounts for the liability in respect of employees’ compensated absences in the year in which these are
earned.
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration.

5.12 Government grants 5.19 Impairment of non-financial assets

Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached The carrying amounts of non-financial assets are assessed at each reporting date to ascertain whether there is
conditions will be complied with. As the grant relates to an expense item, it is recognised as income on a systematic any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated to determine
basis over the periods that the related costs, for which it is intended to compensate, are expensed. the extent of impairment loss, if any. An impairment loss is recognised, as an expense in statement of profit or loss.
The recoverable amount is the higher of an asset’s fair value less cost to disposal and value in use. Value in use is
5.13 Contract liabilities ascertained 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 which the estimate of future cash flow
A contract liability is the obligation of the Company to transfer goods or services to a customer for which the Company have not been adjusted. For the purpose of assessing impairment, assets are grouped at the lowest levels for which
has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration there are separately identifiable cash flows (cash-generating units).
before the Company transfers goods or services to the customer, a contract liability is recognised when the payment
is made or the payment is due (whichever is earlier). Contract liability are recognised as revenue when the Company An impairment loss is reversed if there is a change in the estimates used to determine the recoverable amount. An
performs under the contract. 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 recognised
5.14 Provisions previously. Reversal of an impairment loss is recognised immediately in statement of profit or loss.

Provisions are recognized when the Company has a present (legal or constructive) obligation as a result of past events, 5.20 Revenue recognition
and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate of the obligation can be made. Provisions are reviewed at each statement of financial position date Revenue is recognised at amounts that reflect the consideration that the Company expects to be entitled to in exchange
and adjusted to reflect current best estimate. for transferring goods or services to a customer. Revenue is measured at the fair value of the consideration received
or receivable, and is recognised when performance obligation is fulfilled, at a point in time, when control of goods have
5.15 Unclaimed dividend been transferred to a customer. Generally, the normal credit term is 30 to 120 days upon shipment.

The Company recognises unclaimed dividend which was declared and remained unclaimed from the date it was due 5.21 Other income
and payable.
Return on short-term deposits and investments at amortised cost are accounted for using the effective interest rate
5.16 Unpaid dividend method.

Dividend declared and remain unpaid from the date it is due and payable is recognised as unpaid dividend. Dividend income is recognised when the right to receive the dividend is established.

5.17 Contingencies 5.22 Borrowing Costs

Contingencies are disclosed when the Company has a possible obligation that arises from past events and whose Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective
within the control of the entity or a present obligation that arises from past events but is not recognised because it is assets. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and
not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the other costs that an entity incurs in connection with the borrowing of funds.
amount of the obligation cannot be measured with sufficient reliability.
5.23 Foreign currency transactions and translation
5.18 Offsetting of financial instruments
Transactions in foreign currencies are translated into Pak Rupees at the foreign exchange rate ruling at the date of the
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if transaction. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net are translated into Pak Rupees at the foreign exchange rate prevailing at that date. Foreign exchange gains and losses
basis, to realise the assets and settle the liabilities simultaneously. resulting from the settlement of such transactions and from the translations at the year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognized in the statement of profit or loss.

5.24 Earnings per share 6.1 Operating fixed assets

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated Free
hold land
Building
on
Lease
hold land
Building
on
Lease-
hold
Plant and
machin-
Electric
fittings /
Office
equip-
Computers Furniture
and
Vehicles Arms and
ammuni-
Total
by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of freehold freehold improve- ery equipment fixtures tions
land land ments ments
ordinary shares outstanding during the period. 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
As at July 01, 2019
Cost / revalued amount 441,808 148,250 1,551,678 2,932,299 229,671 10,603,401 409,099 108,496 150,210 60,948 237,521 32 16,873,413
potential ordinary shares. Accumulated depreciation - (104,940) - (777,685) (181,756) (3,990,007) (147,367) (47,509) (102,426) (27,779) (105,761) (32) (5,485,262)
Net book value 441,808 43,310 1,551,678 2,154,614 47,915 6,613,394 261,732 60,987 47,784 33,169 131,760 - 11,388,151

5.25 Dividend and appropriation to reserves
Year ended June 30, 2020
Opening net book value 441,808 43,310 1,551,678 2,154,614 47,915 6,613,394 261,732 60,987 47,784 33,169 131,760 - 11,388,151
Additions / transfers
during the year - - - 1,096,342 - 2,892,170 14,767 9,834 14,961 3,561 15,936 - 4,047,571
Dividend and appropriation to reserve are recognized in the financial statements in which these are approved. Transfer Disposals / transfers
Cost - - (25,410) - - (387,306) (18,850) (2,913) (18,655) (3,555) (45,958) - (502,647)
between reserves made subsequent to the statement of financial position date is considered as a non-adjusting event Accumulated depreciation - - - - - 280,529 13,699 1,777 16,868 2,393 28,154 - 343,420
and is recognized in the financial statements in the period in which such transfers are made. Net book value - - (25,410) - - (106,777) (5,151) (1,136) (1,787) (1,162) (17,804) - (159,227)
Reclassification
Cost - - - - - (22,183) (5,509) 26,823 584 285 - - -
Accumulated depreciation - - - - - 13,739 1,936 (15,331) (185) (159) - - -
5.26 Segment reporting Net book value - - - - - (8,444) (3,573) 11,492 399 126 - - -
Depreciation for the year - (4,331) - (285,272) (41,610) (793,292) (26,465) (8,494) (15,407) (3,514) (26,013) - (1,204,398)
Closing net book value 441,808 38,979 1,526,268 2,965,684 6,305 8,597,051 241,310 72,683 45,950 32,180 103,879 - 14,072,097
The activities of the Company are organized into one operating segment i.e., manufacturing, marketing and export of

towels and other textile products. The Company operates in the said reportable operating segment based on the nature
As at June 30, 2020
Cost / revalued amount 441,808 148,250 1,526,268 4,028,641 229,671 13,086,082 399,507 142,240 147,100 61,239 207,499 32 20,418,337
of the product, risks and returns, organizational and management structure, and internal financial reporting system. Accumulated depreciation - (109,271) - (1,062,957) (223,366) (4,489,031) (158,197) (69,557) (101,150) (29,059) (103,620) (32) (6,346,240)
Net book value 441,808 38,979 1,526,268 2,965,684 6,305 8,597,051 241,310 72,683 45,950 32,180 103,879 - 14,072,097
Accordingly, the figures reported in the financial statements are related to the Company’s only reportable segment.
Year ended June 30, 2021
Opening net book value 441,808 38,979 1,526,268 2,965,684 6,305 8,597,051 241,310 72,683 45,950 32,180 103,879 - 14,072,097
5.27
Current versus non-current classification Additions / transfers
during the year - - 817,007 587,659 3,586 3,217,294 161,895 71,837 8,181 33,300 29,317 - 4,930,076
Disposals
Cost - - - - - (228,320) - (1,595) - - (51,562) - (281,477)
The Company presents assets and liabilities in the statement of financial position based on current/non-current Accumulated depreciation - - - - - 164,351 - 1,207 - - 33,487 - 199,045
classification. An asset is current when it is: Net book value - - - - - (63,969) - (388) - - (18,075) - (82,432)
Reclassification
Cost - - - - - (3,765) 743 3,537 (557) 42 - - -
Accumulated depreciation - - - - - 1,020 (630) (917) 557 (30) - - -
- Expected to be realised or intended to be sold or consumed in the normal operating cycle; Net book value - - - - - (2,745) 113 2,620 - 12 - - -
- Held primarily for the purpose of trading;
Depreciation for the year - (3,898) - (325,494) (6,663) (1,050,802) (35,135) (16,421) (14,783) (4,945) (20,914) - (1,479,055)
- Expected to be realised within twelve months after the reporting period; or Closing net book value 441,808 35,081 2,343,275 3,227,849 3,228 10,696,829 368,183 130,331 39,348 60,547 94,207 - 17,440,686

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least As at June 30, 2021
twelve months after the reporting period.” Cost / revalued amount 441,808 148,250 2,343,275 4,616,300 233,257 16,071,291 562,145 216,019 154,724 94,581 185,254 32 25,066,936
Accumulated depreciation - (113,169) - (1,388,451) (230,029) (5,374,462) (193,962) (85,688) (115,376) (34,034) (91,047) (32) (7,626,250)
Net book value 441,808 35,081 2,343,275 3,227,849 3,228 10,696,829 368,183 130,331 39,348 60,547 94,207 - 17,440,686

All other assets are classified as non-current. Annual rates of depreciation - 10% - 10% 40% - 65% Note 6.1.1 10% 15% 30% 10% 20% 15%

A liability is current when: Depreciation is charged at the rate of 10% on reducing balance method except for major overhauling cost of turbines
and generators which is depreciated at the rate of 33% on straight line basis.
- It is expected to be settled in the normal operating cycle;
- It is held primarily for the purpose of trading; 6.2 During the year ended June 30, 2017, four of the Company’s plots of land were revalued resulting in surplus of Rs.
- It is due to be settled within twelve months after the reporting period; or 1,499 million. The valuation was carried out by an independent valuer - M/s. Joseph Lobo (Private) Limited on May 22,
- There is no unconditional right to defer the settlement of the liability for at least twelve months after 2017 on the basis of present market values for similar sized plots in the vicinity of land and replacement values of similar
the reporting period. type of land based on present cost (level 2).

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity Had there been no revaluation the net book value of freehold and leasehold land would have been Rs. 145.68 million
instruments do not affect its classification. (2020: Rs.145.68 million) and Rs. 183.83 million (2020: Rs.183.83 million), respectively.

All other liabilities are classified as non-current.

2021 2020
6 PROPERTY, PLANT AND EQUIPMENT Note ------------ Rupees in ‘000 ------------
Operating fixed assets 6.1 17,440,686 14,072,097

Capital work-in-progress 6.8 2,145,165 3,248,220
Right of use asset 6.9 722,254 274,695
20,308,105 17,595,012

6.3 Forced Sale value as per the last revaluation report as of June 30, 2017 of freehold and lease hold land is Rs.441.81 The detail of disposals of property, plant & equipment having book value of more than Rs. 500,000 during the year are
6.7
million and Rs.1,399.36 million, respectively. as follows:

6.4 Particular of Immovable Asset in the name of the Company are as follows: Particular Cost Accumulated Book Sale Gain / Mode of Disposal Particulars of
Depreciation Value Proceed (Loss) Purchasers
------------------------ Rupees in ‘000 ------------------------
Particular Location Total area (in acres)
Plant and machinery
Production Plant H- 23/4-A & H- 23/4-B and H- 23/3-II, Scheme Pressure Dryer 14,096 13,430 666 100 (566) Negotiation Shah Deen
no. 3, Landhi Industrial Area, Karachi. 34.47 Ring Frames 16,790 14,140 2,650 2,000 (650) Negotiation Hasan & Co.
Loop Dryer 16,470 10,439 6,031 700 (5,331) Negotiation Mubarik Processing Mills
(Pvt.) Ltd.
Production Plant Survey no. 81, 242, 72 to 75, 165, 166, 171, 172, 176 Roving Frame 7,015 5,610 1,405 600 (805) Negotiation Hasan & Co.
to 181, 186 to 190, 156, 210, 211, 243, Deh Moachko, Fine Opener 1,742 921 821 100 (721) Negotiation Salman Machinery
Tapo Gabopat, Keamari Town, Karachi 124.23 Trading Co.
Ring Frames 27,546 17,845 9,701 7,500 (2,201) Negotiation Ideal Trading Co.
Ring Frames 8,356 5,413 2,943 2,700 (243) Negotiation Ideal Trading Co.
Production Plant Plot no. 342-A, Haroonabad Industrial Area. 0.04 Ring Frames 22,474 16,766 5,708 9,800 4,092 Negotiation Ideal Trading Co.
Long Hemming Machine 7,125 4,559 2,566 100 (2,466) Negotiation Shah Deen
Production Plant Plot no. D-12 to D-17, K-1 to K-3, M-34, HITE, Air Conditioning Plant 7,928 - 7,928 1,000 (6,928) Negotiation Salman Machinery
Trading Co.
Hub, Lasbela, Baluchistan. 18.75 Dyeing Machine 5,542 4,903 639 325 (314) Negotiation Mazhar Abbas
Humidification Plant 4,369 3,678 691 780 89 Negotiation Noor Hakeem
Winding Machine 54,914 38,979 15,935 8,100 (7,835) Negotiation H.R Cotton Exports
2021 2020 194,367 136,683 57,684 33,805 (23,879)
Vehicles
6.5 Depreciation charge for the year Note ------------ Rupees in ‘000 ------------ Honda Civic - (BDT-951) 2,156 1,450 706 706 - As per Company’s Policy Mr. Adeel Yahya
has been allocated as under: Honda City - (BJT-510) 1,547 781 766 1,028 262 As per Company’s Policy Mr. Salman Hassan
Toyota Corolla - (BHE-062) 1,863 1,033 830 1,152 322 As per Company’s Policy Mr. Muhammad Faheem
Cost of sales 26.1 1,404,224 1,126,388 Honda City - (BEF-969) 1,522 1,019 503 521 18 As per Company’s Policy Mr. Muhammad Imran
Honda City - (BEJ-713) 1,522 1,019 503 458 (45) As per Company’s Policy Mr. Javaid Afsar
Administrative cost 27 74,831 78,010 Honda Civic - (BED-993) 2,226 1,502 724 729 5 As per Company’s Policy Mr. Saleem Ahmed
1,479,055 1,204,398 Khanzada
Toyota Corolla - (BHF-763) 1,863 1,061 802 1,013 211 As per Company’s Policy Mr. Muhammad Kamran
6.6 Leasehold improvements include assets at an aggregate cost of Rs. 229.67 million (2020: Rs. 167.04 million) which Honda City (BFL-230) 1,537 1,008 529 554 25 As per Company’s Policy Mr. Majid Ali
Toyota Corolla - (BHE-064) 1,863 1,104 759 948 189 As per Company’s Policy Mr. Qasim Zeeshan
have been fully depreciated and are still in use of the Company. Toyota Corolla - (BEX-314) 1,828 1,221 607 599 (8) As per Company’s Policy Mr. Umair Ahmed
Siddiqui
Toyota Hiace - (JF-6881) 2,325 1,775 550 1,435 885 Negotiation Mr. Muhammad Yousuf
Toyota Corolla - (BGE-102) 1,863 1,239 624 641 17 As per Company’s Policy Mr. Muhammad Shahid
22,115 14,212 7,903 9,784 1,881

Items having book value of
less than Rs. 500,000 64,995 48,150 16,845 18,022 1,177

Total for the year ended
June 30, 2021 281,477 199,045 82,432 61,611 (20,821)

Total for the year ended
June 30, 2020 502,647 343,420 159,227 98,253 (60,974)

2021 2020
6.8 Capital work-in-progress Note ------------ Rupees in ‘000 ------------
Building on leasehold land 1,153,482 636,671

Plant and machinery 677,236 1,278,126
Furniture and fixtures 542 1,651
Equipment 118,277 60,653
Leasehold improvement 640 22,011
6.8.1 1,950,177 1,999,112

Advance against fixed assets 175,998 871,779
Stand-by equipments 18,990 377,329
2,145,165 3,248,220

2021 2020 6.9.2 Lease obligations of the Company comprises of lease arrangements giving it the right-of-use over premises utilized
6.8.1 The movement is as follows: Note ------------ Rupees in ‘000 ------------ as office building, mill and production plants. The right-of-use assets are depreciated on straight line basis over the
remaining lease term.
Balance at the beginning of the year 1,999,112 1,776,058

Capital expenditure during the year 2021 2020
Building on leasehold land 1,118,491 806,042 7 INTANGIBLE ASSETS – Software Note ------------ Rupees in ‘000 ------------
Plant and machinery 2,410,609 3,254,100
Leasehold improvement 99 - Cost
Furniture and fixtures 2,895 3,038 As at July 01 64,416 35,711
Equipment 279,368 11,922 Additions during the year - 28,705
3,811,462 4,075,102 As at June 30 7.1 64,416 64,416
Transferred to operating fixed assets
Building on leasehold land (585,252) (1,078,185) Accumulated amortization
Plant and machinery (2,995,904) (2,749,053) As at July 01 (34,876) (33,859)
Leasehold improvement (3,586) - Charge for the year 7.2 (6,231) (1,017)
Furniture and fixtures (4,002) (1,550) As at June 30 (41,107) (34,876)
Equipment (221,745) (2,416)
(3,810,489) (3,831,204) Net book value as at year end 23,309 29,540

Transferred to expenses / adjustment (49,908) (20,844) Annual rates of amortization 20% 20%
1,950,177 1,999,112
7.1 Includes intangible asset at a cost of Rs. 28.72 million (2020: Rs. 28.72 million) in respect of implementation and
6.9 Right-of-use assets development of Enterprise Resource Planning (ERP). The Company’s ERP was fully amortized , however, it is still in
active use.
As at July 01
Cost 409,246 - 7.2 This represents the amortization charged to cost of sales.
Impact of initial application of IFRS 16 - 406,240
Accumulated depreciation (134,551) -
Closing balance 274,695 406,240 2021 2020
8 LONG TERM DEPOSITS Note ------------ Rupees in ‘000 ------------
Year ended June 30
Opening net book value 274,695 - Includes the amount due from the following related parties:
Impact of initial application of IFRS 16 - 406,240
Additions during the year 91,842 3,006 UTI Industries (Private) Limited 17,525 945
Lease modifications during the year 574,174 - Nigehban (Private) Limited 9,295 9,295
Less: Depreciation charge for the year 6.9.1 (218,457) (134,551) M&N Impex (Private) Limited 13,005 13,005
Closing net book value 722,254 274,695 Frieden Management (Private) Limited 6,765 6,765
46,590 30,010
As at June 30
Cost 1,075,262 409,246 9 STORES AND SPARES
Accumulated depreciation (353,008) (134,551)
Net book value 722,254 274,695 General stores 333,234 236,363
Chemicals 479,324 415,180
6.9.1 Depreciation charge for the year on right-of-use Packing stores 380,439 241,075
assets has been allocated as follows: 1,192,997 892,618

Cost of sales 26.1 178,619 100,374 Stores and spares in transit 148,785 17,684
Administrative cost 27 39,838 34,177 Less: Provision for slow moving 9.1 (38,484) (23,807)
218,457 134,551 1,303,298 886,495

2021 2020 2021 2020

9.1 Movement of provision for slow moving Note ------------ Rupees in ‘000 ------------ 11.2 Movement of allowance for Note ------------ Rupees in ‘000 ------------
and obsolete stores and spares is as follows: expected credit loss is as follows:

Balance at the beginning of the year 23,807 32,284 Balance at the beginning of the year 16,944 -
Charge for the year 14,677 23,807 Charge for the year 6,163 16,944
Reversal during the year - (32,284) Balance at the end of the year 23,107 16,944
Balance at the end of the year 38,484 23,807
12 ADVANCES, DEPOSITS, PREPAYMENTS AND
10 STOCK-IN-TRADE OTHER RECEIVABLES

Raw material Advances
- hand 10.1 2,126,332 3,743,625
- transit 631,090 339,993 Suppliers
2,757,422 4,083,618 Considered good 12.1 737,090 203,675
Considered doubtful 42,068 104,969
Work-in-progress 10.2 & 10.3 3,136,835 2,597,780 779,158 308,644
Finished goods 10.4 & 10.5 2,542,945 1,588,230 Provision for doubtful advances 12.2 (42,068) (104,969)
8,437,202 8,269,628 737,090 203,675
Employees
10.1 Includes items costing Rs. 13.38 million (2020: Rs. 30.56 million) which have been valued at their net realizable value Considered good 401 2,311
of Rs. 3.82 million (2020: Rs. 15.28 million). 737,491 205,986

10.2 Includes inventory of Rs. 523.11 million (2020: Rs. 297.32 million) held with the various parties for processing. Deposits 61,371 2,556

10.3 Includes items costing Rs. 43.7 million (2020: Rs. 8.52 million) which have been valued at their net realizable value of Prepayments 12.3 10,975 404,640
Rs. 20.77 million (2020: Rs. 4.26 million).
Other receivables
10.4 Includes items costing Rs. 767.82 million (2020: Rs. 469.02 million) which have been valued at their net realizable value Sales tax refundable 1,378,338 1,757,654
of Rs. 568.27 million (2020: Rs. 240.90 million). Export rebate / duty drawback 167,674 204,142
Due from Government 12.4 1,662,318 483,972
10.5 Includes stock in transit of Rs. 661.16 million (2020: Rs. 393.94 million). Others 90,080 58,839
3,298,410 2,504,607
2021 2020 4,108,247 3,117,789
11 TRADE DEBTS Note ------------ Rupees in ‘000 ------------
12.1 Includes interest free advances to major foreign suppliers having maturity latest by September 2021.
Export
Considered good 11.1 10,103,623 6,797,429 Jurisdiction Name
Considered doubtful 23,107 16,944
10,126,730 6,814,373 Asia Beijing PFM Screen Trading Co. Ltd.
Less: allowance for expected credit loss 11.2 (23,107) (16,944) Dezhou Sunrise Textile Co. Ltd.
10,103,623 6,797,429 Global Commodities Limited
Local Hubei Chuyuan Import And Export Co. Ltd.
Considered good 12,297 12,074 Huntsman (Singapore) PTE Ltd.
10,115,920 6,809,503 Kyung-In Synthetic Corporation
Mainetti R2 (Shanghai) Limited
Qatar Chemical And Petrochemical Marketing And Distribution Company
11.1 Includes an amount of Rs. 349.57 million (2020: Rs. nil) due from 1888 Mills LLC. The maximum amount due from Samuda Chemical Complex Ltd.
related parties, at the end of any month during the year was Rs. 349.57 million (2020: Rs. 495.51 million). Winwin Machinery Co. Ltd
Europe Allenberg Cotton Co.

Faircot S.A.
Paul Reinhart AG
Promar Endustriyel Kimyasallar Sanayi Ltd.

2021 2020 15 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

12.2 Movement of provision for doubtful advances is as follows: ------------ Rupees in ‘000 ------------
2021 2020 2021 2020
Balance at the beginning of the year 104,969 - ------------ Number of Shares ------------ ------------ Rupees in ‘000 ------------
Charge for the year - 104,969
116,728,612 116,728,612 Ordinary shares of Rs.10 each fully 1,167,286 1,167,286
Reversal during the year (62,901) -
Balance at the end of the year 42,068 104,969 paid in cash
859,020 859,020 Issued as bonus shares 8,590 8,590
12.3 Includes balance of Rs. Nil (2020: Rs. 393.41 million) outstanding with 1888 Mills LLC. Issued against consideration other than
259,213,336 259,213,336 cash – assets 2,592,133 2,592,133
2021 2020 376,800,968 376,800,968 3,768,009 3,768,009
12.4 Due from government Note ------------ Rupees in ‘000 ------------
15.1 As at June 30, 2021, institutions and others held 124,778,017 and 252,022,951 shares, respectively (June 30, 2020:
Drawback of Local Taxes and Levies (DLTL) receivable 1,442,853 315,217 117,663,555 and 259,137,413). Voting rights, board selection, right of first refusal and block voting are in proportion to
Technology Upgradation Fund Scheme 89,278 89,278 their shareholding.
Mark-up receivable 130,187 79,477
1,662,318 483,972 15.2 Associated Company and undertakings held an aggregate of 87,863,959 (2020: 83,347,959) ordinary shares in the
Company as at year end.
13 SHORT TERM INVESTMENT 2021 2020
16 CAPITAL RESERVE Note ------------ Rupees in ‘000 ------------
At amortised cost
Term Deposit Receipt - 2,000,000 Merger reserve 16.1 543,413 543,413
Share premium 16.2 215,250 215,250
Fair value through profit or loss 758,663 758,663
Open Ended Shariah Compliant Money Market Scheme 13.1 5,598,019 1,787,643
5,598,019 3,787,643 16.1 The merger reserve represents merger surplus created at the time of merger between Feroze1888 Mills Limited and
Feroze Textile Industries (Private) Limited in the year 2011-12.
13.1 Represents investment in 74.92 million and 185.30 million units (2020: 25.70 million and 50.24 million units) of Open
Ended Shariah Compliant mutual funds units. 16.2 The share premium reserve is a capital reserve and can be applied only in accordance with provisions of section 81 of
the Companies Act, 2017.
2021 2020
14 CASH AND BANK BALANCES Note ------------ Rupees in ‘000 ------------ 2021 2020
17 DEFERRED LIABIILITIES Note ------------ Rupees in ‘000 ------------
With banks:
On current account Defined benefit obligation - approved gratuity fund 17.1 406,436 200,213
- Local currency 354,905 1,672,826 Government grant 17.2 45,428 5,142
- Foreign currency 1,085,143 116,680 451,864 205,355
1,440,048 1,789,506
On savings account 17.1 In accordance with the requirements of IAS-19 “Employee Benefits”, actuarial valuation was carried out as at June
- Local currency 14.1 182,015 455,356 30, 2021, using the “Projected Unit Credit Method”. Provision has been made in the financial statements to cover
1,622,063 2,244,862 obligation in accordance with the actuarial recommendations. Details of significant assumptions used for the valuation
Cash in hand and disclosures in respect of above mentioned fund is as follows:
3,063 3,128
1,625,126 2,247,990 2021 2020
Amounts recognized in the statement Note ------------ Rupees in ‘000 ------------
14.1 This carries interest rate ranging from 5.50% to 6.22% (2020: 5.50% to 12.40%) per annum. of financial position as follows:

Present value of defined benefit obligation 17.1.1 406,436 200,213
Fair value of plan assets - -
406,436 200,213

2021 2020 17.1.9 Risks on account of defined benefit plan

17.1.1 Movement in the present value of defined benefit obligation Note ------------ Rupees in ‘000 ------------
Final salary risk
Opening balance 200,213 143,494
Current service cost 101,789 85,828 The risk that the final salary at the time of cessation of service is greater than what was assumed. Since the benefit is
Past service cost 93,725 - calculated on the final salary, the benefit amount increases proportionately with the increase in salary.
Interest cost 22,325 25,852
Actuarial loss / (gain) on remeasurement 17.1.2 29,559 (28,073) Discount rate fluctuation
Payment made during the year (41,175) (26,888)
Closing balance 406,436 200,213 The plan liabilities are calculated using a discount rate determined by reference to market yields (at the statement
of financial position date) on government bond. A decrease in government bond yields will increase plan liabilities,
17.1.2 Represents actuarial loss / (gain) arising on remeasurement due to: although this will be partially offset by an increase in the value of the current plans’ bond holdings.

Change in financial assumption 1,725 (4,754) Withdrawal risk
Change in demographic assumption (659) -
Change in experience adjustment 28,493 (23,319) The risk that the actual withdrawal experience is different from assumed withdrawal probability. The significance of the
29,559 (28,073) withdrawal risk varies with the age, service and entitled benefits of the beneficiary.

17.1.3 Amounts have been charged in the statement of profit or Inflation fluctuation
loss in respect of these benefits:
The salary inflation is the major risk that the funds carry. In a general economic sense and in a longer view, there
Current service cost 101,789 85,828 is a case that if bond yields increase, the change in salary inflation generally offsets the gains from the decrease in
Past service cost 93,725 - discounted benefit obligations. But viewed with the fact that the plan have no asset, the impact of salary inflation might
Interest cost 22,325 25,852 be significant.
217,839 111,680
Mortality risk
17.1.4 Significant actuarial assumptions
The risk that the actual mortality experience is different. The effect depends on the beneficiaries’ service/age distribution
Valuation discount rate per annum 10.00 % 9.25% and the benefit.
Salary increase rate per annum 10.00 % 9.25%
Normal retirement age of employees 60 years 60 years
2021 2020
17.1.5 Sensitivity analysis for actuarial assumptions 17.2 Government grant Note ------------ Rupees in ‘000 ------------

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Balance at beginning of the year 14,980 -
Impact on defined benefit obligation Received during the year 66,242 14,980
0.5% increase 0.5% decrease Released to the statement of profit or loss (17,888) -
------------ Rupees in ‘000 ------------ Balance at end of the year 17.2.1 63,334 14,980

Assumptions Current portion of government grant 17,906 9,838
Non-current portion of government grant 45,428 5,142
Effect of change in discount rate 486,153 525,910 63,334 14,980

Effect of change in future salary increase 527,007 484,963 17.2.1 Government grants have been recorded against reduced rate loan obtained from commercial banks pursuant to a
refinance scheme introduced by State Bank of Pakistan to provide working capital and long term loan at concessional
17.1.6 As of June 30, 2021, a total of 8,966 employees (2020: 4,902) have been covered under the above fund. During the mark-up rates for businesses to finance salary expense during the COVID-19 outbreak and to import plant and
year, Company has transferred 2,102 employees from provident fund to gratuity fund. machinery respectively.
17.1.7 As per the recommendation of the actuary, the charge for the year ending June 30, 2022 amounts to Rs. 242.56
million.
17.1.8 Weighted average duration of the obligation is 7.85 years (2020: 12.36 years).

2021 2020 2021 2020

18 LONG TERM FINANCING - secured Note ------------ Rupees in ‘000 ------------ 20.1 Reconciliation of the Note ------------ Rupees in ‘000 ------------
carrying amount is as follows:
Long Term Finance Facility (LTFF) 18.1 5,134,400 4,684,919
Temporary Economic Refinance Facility (TERF) 18.2 1,179,185 - Balance at beginning of the year 303,364 -
Refinance Scheme for Payment of Wages and Salaries 18.3 553,152 542,481 Initial application of IFRS 16 on July 1, 2019 - 406,240
Current portion (1,457,377) (214,838) Additions during the year 91,842 3,006
5,409,360 5,012,562 Lease modifications during the year 574,174
Accretion of interest 69,733 48,270
18.1 Represent financing facilities obtained from various commercial banks for import of machinery under LTFF Scheme by Lease rental payments made during the year (166,275) (154,152)
State Bank of Pakistan (SBP) repayable in four and five years through semi-annually and quarterly installments latest Lease Liability as at June 30 872,838 303,364
by November 2026. These carry mark-up at the SBP rate plus spread ranging from 0.45% to 1% (2020: 0.45% to 1%) Current portion of lease liabilities (212,335) (131,686)
per annum. These facilities are secured against specific charge on plant and machinery of the Company. As of June 30 Long-term lease liabilities as at June 30 660,503 171,678
, 2021, unutilized portion of the facility is nil (2020: Rs. 1,330 million).
20.2 The amount of future payment under the lease arrangement and the period in which these payments will become due
18.2 Represent financing facilities obtained from various commercial banks for import of machinery under TERF Scheme by are as follows:
SBP repayable in five, six and eight years through semi-annually and quarterly installments latest by June 2031 and has
been recognised at present value discounted at the effective rate of interest. These carry mark-up at the SBP rate plus 2021 2020
spread ranging from 0.75% to 1% (2020: nil) per annum. The differential mark-up has been recognised as government Maturity analysis Note ------------ Rupees in ‘000 ------------
grant which will be amortised over the period of facility. These facilities are secured against specific charge on plant and
machinery of the Company. As of June 30, 2021, unutilized portion of the facility is Rs. 5,015 million (2020: Nil). Gross lease liabilities - minimum lease payments:

18.3 Represent financing facilities obtained from a commercial bank for payment of wages and salaries under the Refinance Not later than one year 320,342 166,794
Scheme by SBP repayable in 8 equal quarterly installments latest by December 2022 and has been recognised at Later than one year but not later than five years 675,098 177,713
present value discounted at the effective rate of interest. These carrying mark-up at the rate of SBP rate plus spread 995,440 344,507
0.50% per annum (2020: 0.50%). The differential mark-up has been recognised as government grant (as mentioned in Future finance charge (122,603) (41,143)
note 17.2) which will be amortised over the period of facility. The facility is secured against first pari-passu hypothecation Present value of finance lease liabilities 872,837 303,364
charge over current assets. As of June 30, 2021, unutilized portion of the facility is nil (2020: Rs. 189 million).
21 TRADE AND OTHER PAYABLES
19 PROVISION FOR GAS INFRASTRUCTURE DEVELOPMENT CESS (GIDC)
Creditors 21.1 2,958,739 2,251,093
Represents non current portion of provision for GIDC. During the period, the Honorable Supreme Court of Pakistan Accrued liabilities 21.2 2,338,025 3,728,499
(SCP) has upheld the Gas Infrastructure Development Cess Act, 2015 to be constitutional and intra vires allowing Derivative financial instruments 105,613 381,164
settlement of GIDC over a period of forty eight monthly installments. However, the Company has filed an appeal Workers’ profits participation fund 21.3 217,383 148,096
before the Honorable High Court of Sindh (The Court) on the grounds that no burden of GIDC had been passed to Workers’ welfare fund 33,627 24,703
its customers and thus, the Company is not liable to pay GIDC under GIDC Act 2015. The Court vide its order dated Contract liabilities 37,067 26,028
September 18, 2020 has granted stay to the Company. Current portion of government grant 17,906 9,838
Current portion of provision for GIDC 190,622 -
The Company without prejudice to the suit filed, has provided provision amounting to Rs. 1,524 million under the Payable to provident fund 25,343 23,488
relevant accounting standards. Others 33,725 53,930
5,958,050 6,646,839
2021 2020
20 LEASE LIABILITIES Note ------------ Rupees in ‘000 ------------ 21.1 Includes an amount of nil (2020: Rs. 397.54 million) due to 1888 Mills LLC.

21.2 Includes an amount of Rs. 516.11 million (2020: Rs. 516.11 million) in respect of Gas tariff provision and Rs. 273.87
Lease liabilities 872,837 303,364 million (2020: Rs. 238.27 million) in respect of RLNG provision.
Current portion of lease liabilities (212,335) (131,686)
20.1 660,502 171,678

2021 2020 2021 2020

21.3 Workers’ profits participation fund Note ------------ Rupees in ‘000 ------------ 25 SALES - net Note ------------ Rupees in ‘000 ------------
Opening balance 148,096 300,626 Local 629,434 346,126

Interest on WPPF 137 24 Export 25.1 41,502,746 30,590,200
Charge for the year 217,246 148,096 42,132,180 30,936,326
365,479 448,746 Export rebate 547,363 336,618
Less: Payment during the year (148,096) (300,650) 42,679,543 31,272,944
Closing balance 217,383 148,096 Less:

22 SHORT-TERM BORROWINGS - secured Sales tax 98,652 57,883
Trade discounts 5,426 9,384
Export re-finance 22.1 11,750,000 9,640,000 104,078 67,267
42,575,465 31,205,677
22.1 Represents utilized portion of export re-finance facilities from various commercial banks of Rs. 13,250 million (2020: Rs.
10,850 million) carrying mark-up at the rates ranging from SBP Export refinance rate plus 0.25% to 1% (2020: 0.25% 25.1 Represents sales made to the following geographical regions:
to 1%) per annum. These are secured against first pari passu charge over stock-in-trade, receivables and other current
assets of the Company. America 35,429,781 24,894,710
Europe 5,571,973 5,112,931
22.2 The Company also has unutilized running finance facilities of Rs. 180 million (2020: Rs. 180 million). These carry mark- Asia 271,889 253,949
up at the rates ranging from 1 month KIBOR plus 0.5% to 3 month KIBOR plus 0.50% (2020: 1 month KIBOR plus Australia 146,212 221,686
0.5% to 3 month KIBOR plus 0.50%) per annum. This is secured against first pari passu charge over stock-in-trade, Africa 82,891 106,923
receivables and other current assets of the Company. 41,502,746 30,590,200

2021 2020 26 COST OF SALES
23 ACCRUED MARK-UP Note ------------ Rupees in ‘000 ------------
Opening stock of finished goods 1,588,230 1,098,393
Long term loans 37,079 28,303 Finished Towel Purchase - 17,593
Short term borrowings 74,572 62,146 Add: Cost of goods manufactured 26.1 33,464,053 24,180,857
111,651 90,449 35,052,283 25,296,843
Less: Closing stock of finished goods 10 (2,542,945) (1,588,230)
24 CONTINGENCIES AND COMMITMENTS 32,509,338 23,708,613

24.1 Contingencies 26.1 Cost of goods manufactured

No contingencies exist as at the reporting date. Raw material consumed 26.1.1 20,303,171 13,423,623
Stores and spares consumed 4,220,109 3,486,922
24.2 Commitments Salaries, wages and other benefits 26.1.2 4,616,096 3,741,467
Fuel, power and water 2,765,273 2,219,454
Outstanding letter of credit 2,970,714 650,050 Insurance expense 66,009 57,502
Repair and maintenance 217,795 141,414
Outstanding letter of guarantee 1,433,589 1,221,427 Vehicle running expenses 15,374 15,089
Communication and transportation 100,620 72,065
Capital expenditure 5,044,343 849,016 Rent 26.1.3 13,626 127
Depreciation on operating fixed assets 6.5 1,404,224 1,126,388
Post dated cheques 24.2.1 4,328,717 3,148,213 Depreciation on right-of-use assets 6.9.1 178,619 100,374
Amortization 7.2 6,231 1,017
24.2.1 This represents the post dated cheques issued to Custom Authorities in respect of duties on imported items. Quality control and inspection 75,478 47,810
Others 20,483 15,240
34,003,108 24,448,492

Opening work-in-process 2,597,780 2,330,145
Closing work-in-process 10 (3,136,835) (2,597,780)
33,464,053 24,180,857

2021 2020 28.1 Includes amount of Rs. 10.16 million (2020: Rs. 8.54 million) in respect of staff provident fund.
26.1.1 Raw material consumed Note ------------ Rupees in ‘000 ------------

Opening stock 4,083,618 2,982,549 2021 2020
Purchases during the period 18,976,975 14,524,692 29 OTHER EXPENSES Note ------------ Rupees in ‘000 ------------
23,060,593 17,507,241
Less: closing stock 10 (2,757,422) (4,083,618) Loss on disposal of operating fixed asset - net 6.7 20,821 47,595
20,303,171 13,423,623 Workers’ profit participation fund 217,246 148,096
Workers’ welfare fund 33,627 24,703
26.1.2 Includes an amount of Rs. 89.89 million (2020: Rs. 79.86 million) in respect of staff provident fund and Rs. 217.84 million Operating fixed assets written off - net - 13,379
(2020: Rs. 111.68 million) in respect of staff gratuity expense. Allowance for expected credit loss 6,163 16,944
Provision for slow moving and obsolete stores and spares - net 14,677 23,807
26.1.3 The Company has recognised charge of Rs. 6.35 million (2020: Nil) in respect of short term leases not included in the Provision for doubtful advances - 104,969
measurement of lease liabilities Exchange differences on export receivables, trade
payables and derivative financial instruments 300,304 275,095
2021 2020 Donations 29.1 / 29.2 22,566 6,654
27 ADMINISTRATIVE COST Note ------------ Rupees in ‘000 ------------ Auditors’ remuneration 29.3 3,871 6,590
619,275 667,832
Director fee 12,720 11,220 29.1 Includes donation to following organizations exceeding Rs 1,000,000 or 10% of total donation whichever is higher.
Salaries and benefits 27.1 902,861 796,141
Utilities 25,663 22,176 2021 2020
Repairs and maintenance 26,074 23,899 Name of Donee Note ------------ Rupees in ‘000 ------------
Vehicle running expenses 29,832 31,384
Communication 7,658 7,312 The Indus Hospital 4,000 2,612
Rent, rates, taxes and license fee 14,249 14,244 Karachi Down Syndrome Program 1,000 1,000
Conveyance and traveling 2,345 11,068 Patron of Expo 2020 Pakistan 10,000 -
Printing and stationery 955 1,140
Legal and professional 15,517 10,098 29.2 Includes the following in which a director or their spouse were interested:
Fees and subscriptions 15,236 13,837
Depreciation on operating fixed assets 6.5 74,831 78,010 Name of Directors Name / Address of Donee Interest in Donee
Depreciation on right-of-use assets 6.9.1 39,838 34,177
Security and Janitorial services 76,657 65,714 Mr. Khaleequr Rahman / Indus Hospital, Plot C-76, Sector 31/5,
Training and development expense 4,477 8,550 Mr. Nasim Hyder Korangi Crossing, Karachi Director
Others 9,557 12,194
1,258,470 1,141,164
2021 2020
29.3 Auditors’ remuneration Note ------------ Rupees in ‘000 ------------
27.1 Includes amount of Rs. 39.94 million (2020: Rs. 37.64 million) in respect of staff provident fund.
Audit fee 1,625 1,380
2021 2020 Half yearly review 675 575
28 DISTRIBUTION COST Note ------------ Rupees in ‘000 ------------ Out of pocket expenses 426 465
Other certification / assignments 1,145 4,170
Salaries and benefits 28.1 212,505 169,939 3,871 6,590
Freight and insurance 644,636 370,903 30 OTHER INCOME
Inspection and forwarding charges 299,825 192,455
Marketing and other related expenses 1,888,036 1,458,895 Interest on bank deposit 49,237 59,801
Export development surcharge 92,022 81,086 Dividend income on open ended mutual fund units 188,638 159,087
Others 4,523 3,094 Reversal of provision against doubtful advances 62,901 -
3,141,547 2,276,372 300,776 218,888

2021 2020 2021 2020

31 FINANCE COST Note ------------ Rupees in ‘000 ------------ 35 PROVIDENT FUND DISCLOSURES Un-audited Audited
------------ Rupees in ‘000 ------------
Mark-up / interest on
- Long term financing 148,186 95,998 Size of the trust 1,033,915 898,891
Cost of investment 990,761 886,878
- Short term borrowings 233,884 127,483
Fair value of investment 1,007,713 877,397
- Lease liability 69,732 48,270
- Workers’ profits participation fund 137 24 2021 2020
451,939 271,775 ------------ Percentage ------------
Bank charges 106,388 75,184
558,327 346,959 Percentage of investment made 96% 99%
32 TAXATION Major categories of investment of provident fund are as follows:
Current 460,054 348,060 2021 2020

Prior 17,939 (1,656) --------- Unaudited --------- --------- Audited---------
477,993 346,404 Rs. in ‘000 % Rs. in ‘000 %
Shares in listed Companies 8,682 0.86 10,580 1.21

32.1 The Company has filed its return of income up to tax year 2020. The return so filed is deemed to be an assessment Mutual fund 514,673 51.07 100,066 11.40
order issued by the Taxation Authorities on the date the complete return is filed. The Company is subject to Final Tax Investment in fixed deposit 301,845 29.95 592,267 67.50
Regime under Section 169 of the Income Tax Ordinance, 2001, therefore, relationship between income tax expense Sukuk and ijarah certificates 136,210 13.52 135,155 15.40
and accounting profit has not been presented. Others 46,303 4.59 39,329 4.48
1,007,713 100.00 877,397 100.00
2021 2020
33 EARNINGS PER SHARE – basic and diluted Note ------------ Rupees in ‘000 ------------ 35.1 Investments out of provident fund have been made in accordance with the provisions of section 218 of the Act and the
rules formulated for this purpose.
Net profit for the year 4,311,291 2,937,221
36 TRANSACTIONS WITH RELATED PARTIES

Weighted average number of ordinary shares in issue 376,800,968 376,800,968 Related parties of the Company comprise of companies with common directorship, associates, directors, major
shareholders of the Company, key management personnel and staff provident fund. Details of transactions with related
--------------- Rupees --------------- parties during the year, other than those which have been disclosed elsewhere in these financial statements are as
follows:
Earnings per share - basic and diluted 11.44 7.80
2021 2020
36.1 Nature of transaction Note ------------ Rupees in ‘000 ------------
34 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Transaction with associates
2021 2020 Sale of goods 2,438,577 1,142,170
Particular Chief Executives Total Chief Executives Total Sale of fixed asset - 37,089
Executive Executive Purchases & services 358,779 10,356
------------------------------------------------ Rupees in ‘000 ------------------------------------------------ Marketing Fee 1,722,630 1,170,675
Lease rental 118,994 119,865
Managerial remuneration 36,000 965,999 1,001,999 29,550 803,554 833,104 Rent expense 6,350 -
Bonus 3,000 77,074 80,074 3,600 64,280 67,880
Retirement benefits 2,387 58,746 61,133 1,959 50,163 52,122
Donation 4,000 2,762
Leave encashment - 17,997 17,997 - 149 149
Other benefits 1,500 63,879 65,379 1,250 36,992 38,242 Transaction with directors
42,887 1,183,695 1,226,582 36,359 955,138 991,497 Meeting fee 12,720 11,220
Numbers 1 318 319 1 269 270
Transaction with key management personnel
34.1 The Chief Executive and certain executives are provided with Company maintained cars and are also covered under Remuneration paid 54,084 53,901
Company’s Health Insurance Plan along with their dependents. Post-employment benefits 3,083 3,121

34.2 Meeting fee of Rs. 12.72 million (2020: Rs. 11.22 million) has been paid to ten (2020: eight) directors. Transaction with other related party
Contribution to staff provident fund 140,492 126,046

36.1.1 Following are the related parties with whom the Company had entered into transactions or have arrangement / 38 PRODUCTION CAPACITY
agreement in place 2021 2020
Particular Relationship Aggregate % of Spinning

shareholding Total number of spindles installed 48,072 45,828
Average number of spindles worked 46,950 42,258
1888 Mills LLC, USA Common Directorship 0.2655% Total number of rotors installed 2,116 2,116
The Indus Hospital Common Directorship - Average number of rotors worked 2,116 2,116
M&N Impex (Private) Limited Common Directorship - Installed capacity after conversion into 12/s lbs 74,388,971 62,445,309
Friedden Management (Private) Limited Common Directorship - Actual production after conversion into 12/s lbs 67,382,160 56,852,875

Nigheban (Private) Limited Common Directorship -
Weaving
UTI Industries (Private) Limited Common Directorship -
Total number of looms installed 371 378
Liberty Mills Limited Common Directorship 12.6449%
Average number of looms worked 366 363
Feroze1888 Mills Limited - Provident Fund Retirement benefit fund - Installed capacity meters 154,149,648 135,607,345
Mr. Rehan Rahman Chief Executive / Director 2.2443% Actual production meters 150,612,635 128,300,408
Mr. Jonathan R. Simon Director -
Mr. Khaleequr Rahman Director 2.8367% The production capacity and its comparison with actual production of Processing and Stitching is impracticable to
Mr. Shabbir Ahmed Director 19.7378% determine due to varying manufacturing processes, run length of order lots and various other factors.
Mr. Perwez Ahmed Director 5.7837%
Mr. Anas Rahman Director 1.7424% 38.1 Production is lower as compared to capacity due to variation in production mix and various technical and market
Mr. Abdul Rehman Yaqub Director - factors.
Mr. Zain Ashraf Mukaty Director -
Mr. Nasim Hyder Director 0.0001% 39 FINANCIAL INSTRUMENTS BY CATEGORY
Ms. Huma Pasha Director 0.0001% 2021 2020
Ms. Aminah Zahid Zaheer Director 0.0001% 39.1 Financial assets as per statement of financial position Note ------------ Rupees in ‘000 ------------
Ms. Javeria Siddiqui Key Management Personnel -
Mr. Mudassir Moten Key Management Personnel - Financial assets measured at amortized cost
- Long term deposits 62,970 46,390
36.1.2 All transactions with related parties are entered into at agreed terms duly approved by the Board of Directors of the - Trade debts 11 10,115,920 6,809,503
Company. - Deposits and other receivable 12 3,359,781 2,507,163
- Term Deposit Receipt (TDR) 13 - 2,000,000
36.2
Associated Companies Incorporated Outside Pakistan - Cash and bank balances 14 1,625,126 2,247,990
15,163,797 13,611,046
Financial assets measured at fair value through profit or loss
- Short term investment 13 5,598,019 1,787,643
Name Basis of Association Country of Incorporation
20,761,816 15,398,689

1888 Mills LLC, USA Common Directorship United States of America
39.2 Financial liabilities as per statement of financial position

Financial liabilities measured at amortized cost
2021 2020 - Long term financing 18 5,409,360 5,012,562
37 CASH AND CASH EQUIVALENTS Note ------------ Rupees in ‘000 ------------ - Provision for GIDC 19 1,334,357 -
- Lease liability 20 660,502 171,678
Term Deposit Receipt - 2,000,000 - Trade and other payables 21 5,852,437 5,927,161
Cash and bank balances 1,625,126 2,247,990 - Short term borrowings 22 11,750,000 9,640,000
1,625,126 4,247,990 - Accrued mark-up 23 111,651 90,449
- Current portion of long term financing 18 1,457,377 214,838
- Current portion of lease liabilities 20 212,335 131,686
- Unclaimed dividend 1,814 1,907
- Unpaid dividend 66,742 -
26,856,575 21,190,281
Financial liabilities measured at fair value through profit or loss
- Derivative financial instrument 21 105,613 381,164
26,962,188 21,571,445

40 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Exposure to currency risk

The Company’s activities expose it to a variety of financial risks i.e. market risk (including interest rate risk, currency The Company’s exposure to foreign currency risk is as follows:
risk and price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on 2021 2020
the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial ---------- AED in ‘000 ----------
performance.
Trade and other payables (150) (3)
The Company’s senior management oversees the management of these risks. The Company’s senior management Closing exchange rate 43.40 45.95
provides policies for overall risk management, as well as policies covering specific areas such as foreign exchange risk,
interest rate risk, and credit risk, use of financial derivatives, financial instruments and investment of excess liquidity. It is 2021 2020
the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors ---------- EUR in ‘000 ----------
review and agree policies for managing each of these risks which are summarized below:
Trade debts 78 265
40.1 Market risk Trade and other payables (6) (17)
72 248
Market risk is the risk that fair value of future cash flows will fluctuate because of changes in market prices. Market
prices comprise three types of risk: interest rate risk, currency risk and equity price risk, such as equity risk. Closing exchange rate 188.12 189.11
40.1.1 Interest rate risk 2021 2020

---------- USD in ‘000 ----------
nterest rate risk is the risk that the fair value or future cash flows of the financial instruments will fluctuate because of
changes in the market interest rates. The Company’s interest rate risk arises from term deposit receipts, long-term Trade debts 68,805 42,204
financing and short-term borrowings obtained with floating rates. All the borrowings of the Company are obtained and Foreign currency bank balances 6,877 690
investments made in the functional currency. Trade and other payables (4,959) (3,402)
70,723 39,492
2021 2020
At the reporting date, the interest rate profile of Company’s Note ------------ Rupees in ‘000 ------------ Closing exchange rate 157.80 168.25
interest-bearing financial instruments was:
Sensitivity Analysis
Financial asset
The sensitivity to a reasonably possible change in the exchange rates, with all other variables held constant, of the
Term Deposit Receipt 13 - 2,000,000 Company’s profit before taxation is as follows:
Local currency - savings account 14 182,015 455,356
182,015 2,455,356 2021 2020
Financial liabilities

Long-term financing 18 6,866,737 5,227,400 Change in exchange rate + / - 10% 10%
Short-term borrowings 22 11,750,000 9,640,000 Effect on profit before tax (Rupees in ‘000) + / - 1,116,709 669,129
18,616,737 14,867,400
40.1.3 Equity price risk
40.1.2 Currency risk
Equity price risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of
Currency risk is the risk that the value of financial assets or a financial liability will fluctuate due to a change in a changes in market prices. The Company does not have investment in equity shares.
foreign exchange rate. It arises mainly where receivables and payables exist due to transactions in foreign currency.
The Company’s exposure to the risk of changes in foreign exchange rates relate primarily to the Company’s operating 40.2 Credit risk
activities (when revenue or expenses are denominated in a different currency from the Company’s functional
currency). Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to discharge its
obligation and cause the other party to incur a financial loss. Concentrations of credit risk arise when a number of
counterparties are engaged in similar business activities or have similar economic features that would cause their
ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations of credit risk indicate the relative sensitivity of the Company’s performance to developments affecting a
particular industry. The Company’s management is regularly conducting detailed analysis on sectors.

The Company seeks to minimize the credit risk exposure through having exposures only to customers considered The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted
credit worthy. The maximum exposure to credit risk at the reporting date is: payments:
2021 2020 2021 Upto 1 year 1 – 5 years More than Total

Note ---------- Rupees in ‘000 ---------- five years
----------------------- Rupees in ‘000------------------------
Long term deposits 62,970 16,380
Trade debts 11 10,115,920 6,809,503 Long-term financing 1,597,620 5,370,915 395,000 7,363,535
Deposits and other receivable 12 3,359,781 2,371,458 Lease liabilities 320,342 675,098 995,440
Short term investment 13 5,598,019 3,787,643 Trade and other payables 5,355,832 - - 5,355,832
Bank balances 14 1,622,063 2,244,862 Short-term borrowings 11,750,000 - - 11,750,000
20,758,753 15,229,846 Accrued mark-up 111,651 - - 111,651
Unclaimed dividend - 1,814 - 1,814

Unpaid dividend 66,742 - - 66,742
Quality of financial assets 19,202,187 6,047,827 395,000 25,645,014
The credit quality of financial assets that can be assessed by reference to external credit ratings or the historical 2020 Upto 1 year 1 – 5 years More than Total
information about counter party default rates as shown below: five years
----------------------- Rupees in ‘000------------------------
2021 2020
---------- Rupees in ‘000 ----------
Long-term financing 214,838 4,271,982 740,580 5,227,400
Lease liabilities 131,686 171,678 - 303,364
Bank balances Trade and other payables 6,057,010 - - 6,057,010
A-1+ 1,622,063 2,244,862 Short-term borrowings 9,640,000 - - 9,640,000
Accrued mark-up 90,449 - - 90,449
Short term investments Unclaimed dividend - 1,907 - 1,907
AA(f) 5,598,019 1,787,643 16,133,983 4,445,567 740,580 21,320,130
40.3.1 Changes in liabilities from financing activities

2021 2020
---------- Rupees in ‘000 ---------- July 01, Cash June 30,
2020 flows 2021
Trade debt ------------ Rupees in ‘000 ------------

The aging of trade debts at the statement of financial position date was: Long term financing 5,227,400 1,705,579 6,932,979

Not past due 8,730,184 6,388,260 Short term borrowings 9,640,000 2,110,000 11,750,000
Past due 1-60 days 1,325,589 339,010
Past due 61 days - 90 days 3,170 39,473 40.4 Capital risk management
More than 90 days 80,084 59,704
10,139,027 6,826,447 The primary objective of the Company’s capital management is to maintain healthy capital ratios, strong credit rating
and optimal capital structures in order to ensure ample availability of finance for its existing and potential investment
40.3 Liquidity risk projects, to maximize shareholders value and reduce the cost of capital.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company The Company manages its capital structure and makes adjustment to it, in light of changes in economic conditions. In
applies prudent liquidity risk management by maintaining sufficient cash and the availability of funding through an order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders,
adequate amount of committed credit facilities. return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net debt is
calculated as total loans and borrowings including any finance cost thereon, less cash and cash equivalents.


2021 2020 2020

The gearing ratios as at June 30, 2021 Note ---------- Rupees in ‘000 ---------- Level 1 Level 2 Level 3 Total
and 2020 are as follows: ----------------------- Rupees in ‘000 -----------------------

Deferred liabilities 17 451,864 205,355 Assets measured at fair value:
Long-term financing 18 5,409,360 5,012,562
Provision for GIDC 19 1,334,357 - Free hold and lease hold land - 1,968,076 - 1,968,076
Lease liabilities 20 660,502 171,678
Trade and other payables 21 5,958,050 6,481,124 Short term investment - 1,787,643 - 1,787,643

Short-term borrowings 22 11,750,000 9,640,000
Liability measured at fair value:
Accrued mark-up 23 111,651 90,449
Current portion of long-term financing 18 1,457,377 214,838 Derivative financial instruments - 381,164 - 381,164
Current portion of lease liabilities 20 212,335 131,686
Unclaimed dividend 1,814 1,907 41 OPERATING SEGMENTS
Unpaid dividend 66,742
Total debt 27,414,052 21,949,599 These financial statements have been prepared on the basis of a single reportable segment.

Cash and bank balances (1,625,126) (2,247,990)
Revenue from export sales represents 98.51% (2020: 98.88%) of the total gross revenue of the Company.
Net debt 25,788,926 19,701,609

All non-current assets of the Company at June 30, 2021 are located in Pakistan.
Share capital 3,768,009 3,768,009

Reserves 20,684,867 17,379,049
Sales made by the Company to two customers which constitutes 33% (2020: 39%) and 23% (2020: 19%) ,
Total capital 24,452,876 21,147,058
respectively.

Capital and net debt 50,241,802 40,848,667 42 DIVIDEND AND APPROPRIATIONS

Gearing ratio 51.33% 48.23%
Subsequent to year ended June 30, 2021, the Board of Directors in its meeting held on August 30, 2021 has proposed

final cash dividend @ Rs. 1.43/- per share amounting to Rs. 538.83 million (2020: Re. 0.59/- per share amounting to
40.5 Fair value measurement
Rs. 222.31 million) for approval of the members at the Annual General Meeting. This is in addition to the interim cash
dividend @ Rs. 2.00/- per share amounting to Rs. 753.60 million (2020: Rs. 1.75/- per share amounting to Rs. 659.40
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
million) approved by the Board of Directors for the year ended June 30, 2021.
between market participants at the measurement date.
43 NUMBER OF PERSONS EMPLOYED
The carrying values of all financial assets and liabilities reflected in these financial statements approximate fair values.

Number of persons employed as at June 30, 2021 were 13,354 (2020: 11,971) and average number of persons
The following table shows assets recognized at fair value, analyzed between those whose fair value is based on:
employed during the year were 12,663 (2020: 11,613). Number of persons employed at factory as at June 30, 2021
were 11,381 (2020: 10,167) and average number of persons employed at factory during the year were 10,774 (2020:
Level 1: Quoted prices in active markets for identical assets or liabilities,
9,836).
Level 2: Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and 44 DATE OF AUTHORIZATION FOR ISSUE
Level 3: Those whose inputs for the asset or liability that are not based on observable market data (unobservable
inputs). These financial statements were authorized for issue on August 30, 2021 by the Board of Directors of the Company.
2021

Level 1 Level 2 Level 3 Total 45 GENERAL
----------------------- Rupees in ‘000 -----------------------
45.1 All figures in these financial statements are rounded off to the nearest thousand.
Assets measured at fair value:
45.2 Corresponding figures have been reclassified / rearranged wherever necessary for better presentation.
Free hold and lease hold land - 2,785,083 - 2,785,083

Short term investment - 5,598,019 - 5,598,019

Liability measured at fair value: JAVERIA SIDDIQUI REHAN RAHMAN AMINAH ZAHID ZAHEER
Chief Financial Officer Chief Executive Officer Director
Derivative financial instruments - 105,613 - 105,613


STRUGGLE CULTIVATES STRENGTH
THAT CANNOT BE DEVELOPED ANY
OTHER WAY

CALENDAR OF FORM 34
NOTABLE EVENTS PATTERN OF HOLDINGS OF THE
Calendar of Corporate events SHARES HELD BY THE SHAREHOLDERS
As at 30 June 2021
July-2020 to June-2021
No of Shareholders Shareholdings Total shares held
July 2020 Extraordinary General Meeting Monday, July 20, 2020
August 2020 BOD Meeting held to appoint Chairman of the Monday, August 3, 2020 467 From 1 to 100 12702
263 From 101 to 500 86,338
Board
108 From 501 to 1000 98,465
September 2020 BOD Meeting for Annual Accounts Friday, September 11, 2020 154 From 1001 to 5000 392,048
42 From 5001 to 10000 313,801
BOD Budget Meeting for FY21 Wednesday, September 16, 2020
18 From 10001 to 15000 237,313
October 2020 48th Annual General Meeting Monday, October 26, 2020 7 From 15001 to 20000 130,500
5 From 20001 to 25000 116,500
BOD Meeting for first quarter ended September 30, 2020 Thursday, October 29, 2020
5 From 25001 to 30000 147,000
November 2020 Corporate Briefing Session 2020 Tuesday, November 24, 2020 2 From 30001 to 35000 66,000
February 2021 BOD Meeting for half year ended December 31, 2020 Friday, February 26, 2021 3 From 35001 to 40000 114,000
3 From 40001 to 45000 127,300
April 2021 Extraordinary General Meeting Thursday, April 15, 2021 2 From 45001 to 50000 100,000
BOD Meeting for third quarter ended March 31, 2021 Thursday, April 29, 2021 1 From 55001 to 60000 60,000
1 From 65001 to 70000 67,800
1 From 95001 to 100000 98,572
1 From 145001 to 150000 150,000
Calendar of other events 2 From 195001 to 200000 399,700
July-2020 to June-2021 1 From 205001 to 210000 210,000
1 From 220001 to 225000 222,704
1 From 235001 to 240000 239,000
August-2020 Independence Day Celebration (*) Friday, August 14, 2020
1 From 250001 to 255000 251,700
September-2020 The KIN – Company’s 1st Quarter Magazine Wednesday, September 30, 2020 1 From 295001 to 300000 300,000
1 From 300001 to 305000 304,500
October-2020 World Mental Health Day (*) Saturday, October 10, 2020
1 From 400001 to 405000 403,000
November-2020 World Diabetes Day (*) Saturday, November 14, 2020 1 From 420001 to 425000 421,000
1 From 500001 to 505000 501,105
December-2020 The KIN – Company’s 2nd Quarter Magazine Thursday, December 31, 2020
1 From 670001 to 675000 671,000
Human Rights Day (*) Thursday, December 10, 2020 1 From 995001 to 1000000 999,434
February-2021 World Cancer Day (*) Thursday, February 04, 2021 1 From 1380001 to 1385000 1,382,600
1 From 2995001 to 3000000 3,000,000
March-2021 The KIN – Company’s 3rd Quarter Magazine Wednesday, March 31, 2021 1 From 3990001 to 3995000 3,991,000
World Water Day (*) Monday, March 22, 2021 1 From 5020001 to 5025000 5,023,114
1 From 5650001 to 5655000 5,652,015
Pakistan Day (*) Tuesday, March 23, 2021 2 From 6500000 to 6505000 13,000,747
April-2021 World Health Day (**) Wednesday, April 07, 2021 1 From 6525001 to 6530000 6,526,132
1 From 6550001 to 6555000 6,550,231
Earth Day (*) Thursday, April 22, 2021 5 From 6955001 to 6960000 34,782,194
Health & Safety Day (*) Wednesday, April 28, 2021 1 From 7055001 to 7060000 7,059,465
1 From 7345001 to 7350000 7,347,618
May-2021 World Firefighters Day (**) Tuesday, May 04, 2021 1 From 8455001 to 8460000 8,456,412
World Hypertension Day (**) Monday, May 17, 2021 1 From 10685001 to 10690000 10,687,542
1 From 13245001 to 13250000 13,249,907
World No Tobacco Day (**) Monday, May 31, 2021 1 From 17495001 to 17500000 17,497,685
June-2021 The KIN – Company’s 4th Quarter Magazine Wednesday, June 30, 2021 1 From 19085001 to 19090000 19,088,949
1 From 21790001 to 21795000 21,793,054
World Environment Day (**) Saturday, June 05, 2021 1 From 23255001 to 23260000 23,259,900
World Blood Donor Day (**) Monday, June 14, 2021 1 From 39190001 to 39195000 39,192,607
1 From 47645001 to 47650000 47,646,000
1 From 74370001 to 74375000 74,372,314
(*) Flyer
1122 376,800,968
(**) Activity / Flyer

PATTERN OF SHAREHOLDING
As at 30 June 2021
PATTERN OF SHAREHOLDING
As at 30 June 2021
Shareholders' Category Number of Shareholders Number of Shares held

Categories of Shareholders Number of Shares Held Percentage
Associated Companies, undertaking and related parties 4 87,863,959
shareholders
Investment Companies, Mutual Funds and Other
M/s. Investment Corporation of Pakistan 1 6
Associated Companies, undertaking 4 87,863,959 23.32
M/s. Shirazi Investment Ltd 1 13
and related parties Trustee National Bank of Pakistan Employees Pension Fund 1 10,551
CDC - Trustee Meezan Balanced Fund 1 67,800
CDC - Trustee AKD Index Tracker Fund 1 13,100
Investment Companies and Mutual Funds 15 2,049,670 0.54 CDC - Trustee Al Meezan Mutual Fund 1 199,700
CDC - Trustee Meezan Islamic Fund 1 1,382,600
CDC - Trustee Meezan Tahaffuz Pension Fund - Equity Sub Fund 1 200,000
Directors, Chief Executive Officer and CDC - Trustee ABL Stock Fund 1 3,700
their Spouse 11 141,860,128 37.65 CDC - Trustee First Habib Stock Fund 1 19,000
CDC-Trustee First Habib Islamic Stock Fund 1 37,500
CDC - Trustee First Habib Asset Allocation Fund 1 12,000
Joint Stock Companies 15 10,962,141 2.91 MCBFSL - Trustee ABL Islamic Stock Fund 1 400
CDC - Trustee Meezan Asset Allocation Fund 1 60,000
CDC Trustee - Meezan Dedicated Equity Fund 1 43,300
Banks, Development Finance
Directors and their spouse(s) and minor children
Institutions, Non-Banking Finance 12 23,899,247 6.34 Mr. Jonathan R.Simon Director/Chairman 1 -
Institutions, Insurance and others Mr. Rehan Rahman Chief Executive 1 8,456,412
Mr. Khaleequr Rahman Director 1 10,688,842
Mr. Shabbir Ahmed Director 1 74,372,314
Individuals 1065 110,165,823 29.24 Mr. Abdul Rehman Yaqub Director 1 -
Mr. Perwez Ahmed Director 1 21,793,054
Mr. Anas Rahman Director 1 6,565,231
1,122 376,800,968 100.00 Mr. Zain Ashraf Mukaty Director 1 -
Mr. Nasim Hyder Director 1 500
Ms.Huma Pasha Director 1 500
Ms. Aminah Zahid Zaheer Director 1 500
Mrs.Shahnaz Rahman (Spouse) Spouse 1 6,956,412
Mrs.Saba Perwez (Spouse) Spouse 1 6,526,132
Mrs.Sana Rehan (Spouse) Spouse 1 6,500,231
Executives 2 24,454,231
Joint Stock Companies 15 10,962,141
Bank, Development Finance Institutions,

Non-Banking Finance Companies 2 514,565
Insurance Companies, Takeful, Modarabas and Pension Fund 10 23,384,682
Shareholders holding 5% or more

voting interest:
M/s. EFU Life Assurance Ltd 1 23,259,900
M/s. Grangeford USA Inc 1 39,192,607
M/s. Liberty Mills Limited 1 47,646,000
Mr. Omair Rehman 1 19,088,949
Mr. Shabbir Ahmed 1 74,372,314
Mr. Perwez Ahmed 1 21,793,054

NOTICE OF 49TH 5. For attending the meeting through video link due to COVID-19 Pandemic:
ANNUAL GENERAL MEETING In pursuance of SECP Circular No. 4 of 2021 dated 15 February 2021 respectively regarding Regulatory
Relief to dilute impact of Corona Virus (COVID-19) for Corporate Sector, the shareholders interested in
attending the General Meetings through video link facility (“Zoom” which can be downloaded from Google
Play or Apple App Store) are requested to get themselves registered with the Company Secretary office at
Notice is hereby given to the Members that the 49th Annual General Meeting of the Company will be held on least two working days before the holding of the time of the AGM at secretary@feroze1888.com or through
Thursday, 28 October 2021 at 09:30 a.m. at C-3, SITE, Karachi / video link to transact the following businesses: share registrar of the Company FAMCO Associates (Pvt.) Ltd, 8-F, Next to Hotel Faran, Nursery Block-6,
PECHS, Shahrah-e-Faisal, Karachi by providing the following details:
ORDINARY BUSINESS:
Name of CNIC No. Folio / CDC Cell No. Email Address
1. To confirm the minutes of Extraordinary General Meeting of the Company held on 15 April 2021. Shareholders
2. To receive, consider and adopt the Annual Audited Financial Statements of the Company for the year ended
30 June, 2021 together with the Chairman’s Review, Directors’ and Auditors’ report thereon. • Upon receipt of the above information from interested shareholders, the Company will send the login details
at their email addresses.
3. To consider and, if thought fit, approve as recommended by the Board of Directors, final cash dividend at the • On the AGM day, the shareholders will be able to login and participate in the AGM proceedings through their
rate of Rs.1.43 per share i.e. (14.3%) to all shareholders of the Company. This is in addition to Rs. 2.00 per smart phone or computer devices from their any convenient location.
share i.e. (20%) interim cash dividend already declared/paid for the year ended 30 June 2021. • The login facility will be opened twenty (20) minutes before the meeting time to enable the participants to join
the meeting after identification process and verification process
4. To appoint statutory auditors for the year ending 30 June 2022 and to fix their remuneration. The present
auditors M/s. EY Ford Rhodes, Chartered Accountants retire and being eligible, have offered themselves for 6. In pursuance of Section 242 of the Companies Act, 2017 which mandates all listed companies to pay
Re-appointment. dividend only by way of electronic mode directly into the bank account of entitled shareholders designated by
them. Therefore, through this notice all shareholders are requested to update their bank account details in
ANY OTHER BUSINESS: the Central Depository System through respective participants. In case holding physical shares, provide
bank account details to company Share Registrar, M/s. Famco Associates (Pvt.) Ltd.
5. To transact any other business with the permission of the Chair.
Please note that all dividends, declared by the Company, will only be remitted to designated bank accounts
By order of the Board and not otherwise, so please ensure an early update of your particulars to avoid any inconvenience in future.
(Mudassir Moten)
Company Secretary 7. Shareholders are informed that the Government of Pakistan has made certain amendments in Section 150
of the Income Tax Ordinance, 2001 whereby different rates are prescribed for deduction of withholding tax
Karachi: on the amount of dividend paid by the Companies. These tax rates are as under:
05 October 2021
a ) for Filers of Income Tax Return 15%
NOTES: b ) for Non-filer of Income Tax Return 30%
1. Share Transfer Books of the Company will remain closed from Friday, 22 October 2021 to Thursday, 28 Shareholders are advised to provide their valid and updated CNIC/NTN to CDC Participants and our Share
October 2021 (both days inclusive). Transfer received at the office of Share Registrar at the close of Registrar for availing the benefit of withholding tax rate applicable to filers.
business on Thursday, 21 October 2021 will be considered in time to attend and vote at the meeting and for
the purpose of above entitlement to the transferees. Incase of joint account shareholders are requested to please furnish the shareholding ratio details of
themselves as Principal shareholder and their Joint Holders, to the Company’s Share Registrar, enabling the
2. A member of the Company entitled to attend and vote at this meeting may appoint a proxy to attend, speak Company to compute withholding tax of each shareholder accordingly. The required information must reach
and vote instead of him/her. A proxy must be a member of the company. An instrument appointing a proxy the Company’s Share Registrar by October 18, 2021, otherwise each shareholder will be assumed to have
and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of equal proportion of shares and the tax will be deducted accordingly.
such power of authority to be valid must be received at the Registered Office of the Company or at the Office
of the Share Registrar not later than forty eight hours before the time fixed for the Meeting. A member shall 8. As per Section 72 of the Companies Act 2017, every listed company shall be required to replace its physical
not be entitled to appoint more than one proxy. If a member appoints more than one proxy and more than shares with book-entry form in a manner as may be specified and from the dated notified by the
one instrument of proxy are deposited by a member with the Company, all such instruments shall be Commission, within a period note exceeding four years from the commencement of the Act i.e. 30 May
rendered invalid. The proxy shall produce his/her Original National Identify Card or Passport to prove his/her 2017.
identity.
The shareholders having physical shareholding are encouraged to open Investor Accounts Services (CDC)
3. Members are requested to submit copies of their CNICs and promptly notify any change in their address by or Sub Account with any of the brokers to place their physical shares into scrip less form, this will facilitate
writing to the office of the share registrar. 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.
4. Members should quote their Folio/CDC number in all correspondence and at the time of attending the
Meeting.

9. SECP SRO 787(I)/2014 Dated September 8, 2014, the Company can circulate its Annual Financial
Statements alongwith Company’s Notice of Annual General Meeting through email to its shareholders.
Shareholders of the company who wish to receive Annual Report via email are requested to provide
complete consent form to the Company already available at our website.
10. Members can also exercise their right of e-Voting subject to the requirements of Section 143 and 144 of the
Companies Act, 2017 and the applicable clause of the Companies (Postal Ballot) Regulations, 2018.
11. GUIDELINES FOR CDC ACCOUNT HOLDERS ISSUED BY SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN
For attending the Meeting

I. In case of individuals, the account holder or sub-account holder and/or the person whose securities are in
group account and their registration details are uploaded as per the Regulations, shall authenticate his/her
identity by showing his/her original National Identity Card or original passport at the time of attending the
meeting.
II. In case of corporate entity, the Board of Directors’ 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.
For appointing proxies

i. In case of individual, the account holder or sub-account holder and/or the person whose securities are in
group account and their registration details are uploaded as per the Regulations, shall submit the proxy form
as per the above requirement.
ii. The proxy form must be witnessed by two persons whose names, addresses and Computerized National
Identity Card (CNIC) number shall be mentioned on the form.
iii. Attested copies of CNIC or the passport of the beneficial owners and of the proxy shall be furnished with the
proxy form.
iv. The proxy shall produce his/her Original CNIC or Original Passport at the time of the meeting.
v. In case of corporate entity, the Board of Directors’ resolution/power of attorney with specimen signature shall
be submitted (unless is has been provided earlier) alongwith proxy form to the Company.
Registered Office Share Registrar

Feroze1888 Mills Limited FAMCO Associates (Pvt.) Ltd
H-23/4A, Scheme # 3 8-F, Next to Hotel Faran, Nursery
Landhi Industrial Area, Karachi Block-6 PECHS, Shahrah-e-Faisal, Karachi

BCR CRITERIA CONTENT INDEX
S. No BCR Criteria contents Page Ref.
1 ORGANIZATIONAL OVERVIEW AND EXTERNAL ENVIRONMENT
What does the organization do and circumstances under which it operates
1.01 Principal business activities and markets local and international including key brands, products and
Page no. 15
services.
1.02 Geographical location and address of all business units including sales units and plants. Page no. 14
1.03 Mission, vision, code of conduct, culture, ethics and values. Page no. 4 to 11
1.04 Ownership, operating structure and relationship with group companies (i.e. subsidiary, associated
undertaking etc.) and number of countries in which the organization operates. Also name and
N/A
country of origin of the holding company/subsidiary company, if such companies are a foreign
company.
1.05 Organization chart indicating functional and administrative reporting, presented with legends.
Page no. 22 & 23
1.06 Identification of the key elements of the business model of the company through simple diagram
supported by a clear explanation of the relevance of those elements to the organization. (The key
Page no. 39
elements of business model are Inputs, Business activities, Outputs and Outcomes).
1.07 Key quantitative information (Number of persons employed as on the date of financial statements
and average number of employees during the year, separately disclosing factory employees). Page no. 183
1.08 Position of the reporting organization within the value chain showing connection with other
businesses in the upstream and downstream value chain. (This disclosure shall be provided by the
Page no. 24
companies in service and non-service sector organizations through graphical presentation).
1.09 Significant factors effecting the external environment and the associated organization’s response
(external environment includes commercial, political, economic, social, technological,
environmental and legal environment). Also describe the effect of seasonality on business in terms Page no. 26 & 27
of production and sales.
1.10 Significant changes from prior years (regarding the information disclosed in this section). Page no. 38
1.11 Composition of local versus imported material and sensitivity analysis in narrative form due to
Page no. 25
foreign currency fluctuations.
1.12 Competitive landscape and market positioning (considering factors such as the threat of new
competition and substitute products or services, the bargaining power of customers and suppliers,
Page no. 32
relative strengths and weaknesses of competitors and customer demand and the intensity of
competitive rivalry).
2 STRATEGY AND RESOURCE ALLOCATION
Where does the organization want to go and how does it intend to get there
2.01 Short, medium and long term strategic objectives.
Page no. 36 & 37
2.02 Strategies in place or intended to be implemented to achieve those strategic objectives.

Page no. 36 & 37
2.03 Resource allocation plans to implement the strategy and financial capital structure.
(Resource mean CAPITALS including financial capital (e.g. liquidity, cash flows, financing
arrangements); human capital, manufactured capital (e.g. building, equipment, infrastructure); Page no. 36 & 37
intellectual capital (e.g. patents, copyrights, software, licenses, knowledge, system, procedures);
social and relationship capital and natural capital).
2.04 The effect of technological change, societal issues such as (population and demographic changes,
human rights, health, poverty, collective values and educational systems), environmental
Page no. 36 & 37
challenges, such as climate change, the loss of ecosystems, and resource shortages, on the
company strategy and resource allocation.
2.05 Specific processes used to make strategic decisions and to establish and monitor the culture of the
organization, including its attitude to risk and mechanisms for addressing integrity and ethical Page no. 36 & 37
issues.
2.06 Key performance indicators (KPIs) to measure the achievement against strategic objectives
including statement as to whether the indicators used will continue to be relevant in the future. Page no. 36 & 37

2.07 Strategy to overcome liquidity problem and the company's plan to manage its repayment of debts 4.12 How the organization’s implemented governance practices exceeding legal requirements. Page no. 69
Page no. 38
and meet operational losses. 4.13 Board’s policy on diversity (including gender), any measurable objectives that it has set for
Page no. 73
2.08 Significant plans and decisions such as corporate restructuring, business expansion and implementing the policy, and progress on achieving the objectives.
Page no. 38
discontinuance of operations etc. 4.14 No. of companies in which the executive director of the reporting organization is serving as non-
Page no. 69
2.09 Significant changes in objectives and strategies from prior years. Page no. 38 executive director.
3 RISKS AND OPPORTUNITIES 4.15 a) Names of related parties in Pakistan and outside Pakistan, with whom the company had entered
Specific risks and opportunities that affect the organization’s ability to create value over the into transactions or had agreements and / or arrangements in place during the financial year,
short, medium and long term, and how it is dealing with them along with the basis of relationship describing common directorship and percentage of
3.01 Key risks and opportunities effecting availability, quality and affordability of CAPITALS in the shareholding.
Page no. 28 to 31
short, medium and long term. b) Contract or arrangement with the related party other than in the ordinary course of business on Page no. 73,
3.02 Description of the Risk Management Framework including risk management methodology. an arm’s length basis, if any along with the justification for entering into such contract or 175 & 176
Page no. 28 to 29 arrangement.
3.03 Sources of risks and opportunities (internal and external). c) Approved policy for related party transactions including policy for disclosure of interest by
Page no. 28 to 31 directors in this regard.
3.04 The initiatives taken by the company in promoting and enabling innovation. 4.16 Details of board meetings held outside Pakistan during the year. Page no. 69
Page no. 28 to 31
4.17 Disclosure of policy for actual and perceived conflicts of interest relating to members of the board
Page no. 70
3.05 Assessment of the ‘likelihood’ that the risk or opportunity will come to fruition and the of directors and a disclosure that how such a conflict is managed and monitored.
Page no. 28 to 31
‘magnitude’ of its effect if it does. 4.18 Investors’ grievance policy. Page no. 73
3.06 Specific steps being taken to mitigate or manage key risks or to create value from key 4.19 Policy for safety records of the company. Page no. 74
opportunities by identifying the associated strategic objectives, strategies, plans, policies, targets Page no. 28 to 31 4.20 Disclosure of IT Governance Policy. Page no. 74
and KPIs. 4.21 Disclosure of Whistle blowing policy established to receive, handle complains in a fair and
3.07 Board’s efforts for determining the company’s level of risk tolerance by establishing risk transparent manner and providing protection to the complainant against victimization, and Page no. 74
Page no. 57 disclosure of the number of such incidences reported to the Audit Committee during the year.
management policies.
3.08 A statement from the board of directors that they have carried out a robust assessment of the 4.22 Human resource management policies including preparation of a succession plan. Page no. 74
principal risks facing the company, including those that would threaten the business model, future Page no. 57 4.23 Social and environmental responsibility policy. Page no. 74
performance and solvency or liquidity. 4.24 Review by the board of the organization’s business continuity plan or disaster recovery plan.
Page no. 70
3.09 Inadequacy in the capital structure and plans to address such inadequacy.
Page no. 29 4.25 Disclosure of beneficial (including indirect) ownership and flow chart of group shareholding and
N/A
4 GOVERNANCE relationship as holding company, subsidiary company or associated undertaking.
How does the organization’s governance structure support its ability to create value in the 4.26 Compliance with the Best Practices of Code of Corporate Governance (No marks in case of any non-
Page no. 81 to 83
short, medium and long term compliance).
4.01 Board composition: 4.27 A brief description about role of the Chairman and the CEO. Page no. 68
a) Leadership structure of those charged with governance. 4.28 Shares held by Sponsors / Directors / Executives. Page no. 70,
Page no. 67, 81 &
b) Name of independent directors indicating justification for their independence. 187 to 189
49 to 54
c) Profile of each director including education, experience and involvement / engagement of in 4.29 Salient features of TOR and attendance in meetings of the board committees (Audit, Human
Page no. 70 to 72
other entities as CEO, Director, CFO or Trustee etc. Resource, Nomination and Risk management).
4.02 Review Report by the Chairman of the company on the overall performance of the board and 4.30 Timely Communication
Page no. 45 to 46 Date of authorization of financial statements by the board of directors:
effectiveness of the role played by the board in achieving the company’s objectives.
4.03 A statement of how the board operates, including a high-level statement of which types of within 40 days ---6 marks
Page no. 67 within 60 days ---3 marks Page no. 183
decisions are to be taken by the board and which are to be delegated to management.
(Entities requiring approval from a Regulator before finalization of their Financial Statements
4.04 Shariah Advisor Report and Profile of the Shariah Advisor / Members’ of the Shariah Board.
N/A would be provided a 20 days relaxation, on providing evidence to the Committee).
4.05 Annual evaluation of performance, along with description of criteria used for the members of the 4.31 Audit Committee Report should describe the work of the committee in discharging
Page no. 69 its responsibilities. The report should include:
board and its committees, CEO and the Chairman.
4.06 Disclosure if the board’s performance evaluation is carried out by an external consultant once in a) Composition of the committee with at least one member qualified as “financially literate and all
Page no. 69 members are non-executive / Independent directors including the Chairman of the Audit
three years.
Committee.
4.07 Details of formal orientation courses for directors. Page no. 69
b) Role of the committee in discharging its responsibilities for the significant issues in relation to
4.08 Directors’ Training Program (DTP) attended by directors, female executive and head of
the financial statements, and how these issues were addressed with details where particular
department from the institutes approved by the SECP and names of those who availed exemptions Page no. 69
attention was paid in this regard.
during the year.
c) Committee’s overall approach to risk management and internal control, and its processes,
4.09 Description of external oversight of various functions like systems audit / internal audit by an outcomes and disclosure.
external specialist and other measures taken to enhance credibility of internal controls and Page no. 72 d) Role of Internal Audit to risk management and internal control, and approach to Internal Audit
systems. to have direct access to Audit Committee and evaluation of Internal Auditor’s performance.
4.10 a) Policy for remuneration to non-executive directors including independent directors. e) Review of arrangement for staff and management to report to Audit Committee in confidence,
b) Policy of retention of board fee by the executive director earned by him against his services as Page no. 73 concerns, if any, about actual or potential improprieties in financial and other matters and
non-executive director in other companies. recommended instituting remedial and mitigating measures. Page no. 77 to 79
4.11 Policy for security clearance of foreign directors. Page no. 73 f) An explanation as to how it has assessed the effectiveness of the external audit process and the

approach taken to the appointment or reappointment of the external auditor, and information on 5.10 Segmental review of business performance. N/A
the length of tenure of the current statutory auditor; and if the external auditor provides non- 5.11 Share price sensitivity analysis using key variables (i.e. selling price, raw material cost, interest
Page no. 126
audit services, an explanation as to how auditor’s objectivity and independence is safeguarded. rate and currency) with the consequent impact on the company’s earning.
g) If Audit Committee recommends external auditors other than the retiring external auditors, 5.12 History of major events during the year. Page no. 186
before the lapse of three consecutive years, reasons shall be reported. 5.13 Business rationale of major capital expenditure /projects during the year and for
Page no. 125
h) The Audit Committee’s views whether the Annual Report was fair, balanced and understandable those planned for next year.
and also whether it provided the necessary information for shareholders to assess the company’s 5.14 Brief description and reasons;
position and performance, business model and strategy. a) For not declaring dividend despite earning profits and future prospects of dividend. N/A
i) Results of the self-evaluation of the Audit Committee carried out of its own performance. b) Where any payment on account of taxes, duties, levies etc. is overdue or outstanding.
5.15 CEO presentation video on the organization’s website explaining the business overview,
Company's
performance, strategy and outlook. (Please provide reference / web link on company's annual
website
report).
4.32 Presence of the chairman of the Audit Committee at the AGM to answer questions on the Audit 6 OUTLOOK
Committee’s activities and matters within the scope of the Audit Committee’s responsibilities. Page no. 75 6.01 Forward looking statement in narrative and quantitative form including projections or forecasts
about known trends and uncertainties that could affect the entity’s resources, revenues and
4.33 Where an external search consultancy has been used in the appointment of the Chairman or a non- operations in the short, medium and long term.
executive director, it should be disclosed if it has any other connection with the company. Also explaining the external environment including political, economic, social, technological,
N/A
environmental and legal environment that is likely to be faced in the short, medium and long term
and how it will affect the organization in terms of its business performance, strategic objectives
4.34 Chairman’s significant commitments and any changes thereto. Page no. 46
and availability, quality and affordability of capitals.
4.35 Disclosure about the Government of Pakistan policies related to company’s business/sector in
Page no. 55
Directors’ Report and their impact on the company business and performance. 6.02 Explanation as to how the performance of the entity meets the forward looking disclosures made in Page no. 40 & 41
4.36 Pandemic Recovery Plan by the management and policy statement. Page no. 84 the previous year.
5 PERFORMANCE AND POSITION 6.03 Status of the projects in progress and were disclosed in the forward looking statement in the
To what extent has the organization achieved its strategic objectives for the period and what previous year.
are its outcomes in terms of effects on the capitals 6.04 Sources of information and assumptions used for projections / forecasts in the forward looking
5.01 Analysis of the financial and non-financial performance using both qualitative and quantitative statement and assistance taken by any external consultant.
indicators showing linkage between: 6.05 How the organization is currently equipped in responding to the critical challenges and
(a) Past and current performance; and uncertainties that are likely to arise.
(b) Performance against targets /budget 7 STAKEHOLDERS RELATIONSHIP AND ENGAGEMENT
(c) Objectives to assess stewardship of management. State of key stakeholder relationships and how the organization has responded to key
The analysis should cover significant deviations from previous year in operating results and the stakeholders’ legitimate needs and interests
reasons for loss, if incurred and future prospects of profits. Page no. 122 to 7.01 How the company has identified its stakeholders. Page no. 101 &
Note: Analysis of non-financial performance shall be presented for material non-financial KPIs 124
102
relevant for the business and stakeholders around other forms of capitals as mentioned under 7.02 Stakeholders’ engagement process and the frequency of such engagements during the year.
International Integrated Reporting Framework <IR>, i.e. human capital, manufactured capital,
Explanation on how these relationships are likely to affect the performance and value of the
intellectual capital, social and relationship capital and natural capital. Inspiration can also be
entity, and how those relationships are managed. These engagements may be with:
taken from the Specific Standard Disclosures of G4 Guidelines of the Global Reporting Initiative
a) Institutional investors;
(GRI) for measurement and reporting on non-financial KPIs.
b) Customers & suppliers; Page no. 101 &
c) Banks and other lenders; 102
5.02 Analysis of financial statements:
d) Media;
a) Financial Ratios (Refer Annexure ‘I’ ) Page no. 107
e) Regulators;
b) DuPont Analysis Page no. 117 &
f) Local committees and
118 g) Analysts.
c) Free Cash Flow Page no. 119
d) Economic Value Added (EVA) Page no. 119 7.03 Steps taken by the management to encourage the minority shareholders to attend
Page no. 75
5.03 Combined analysis both vertical and horizontal of the Balance Sheet and Profit and Page no. 108 to the general meetings.
Loss Account for last 6 years. 113 7.04 Investors' Relations section on the corporate website. Page no. 75
5.04 Summary of Cash Flow Statement for last 6 years. Page no. 114 & 7.05 Issues raised in the last AGM, decisions taken and their implementation status. Page no. 75
115 7.06 Statement of value added and its distribution with graphical presentation:
5.05 Graphical presentation of the Balance Sheet, Profit & Loss Account and analysis in 5.02, 5.03 and Page no. 105 & a) Employees as remuneration
5.04 above. 106 b) Government as taxes (separately direct and indirect)
5.06 Explanation of negative change in the performance against prior year including analysis of variation c) Shareholders as dividends Page no. 116
Page no. 110,
in results reported in interim reports with the final accounts, including comments on the results 113,115,118, d) Providers of financial capital as financial charges
disclosed as per 5.02, 5.03 and 5.04 above. 119, 121,122 e) Society as donation; and
f) Retained within the business
5.07 Information about defaults in payment of any debts and reasons thereof period. Page no. 38
5.08 Methods and assumptions used in compiling the indicators. & 125 7.07 Stakeholders engagement policy and steps board has taken to solicit and understand the views of
5.09 Cash Flow Statement based on Direct Method (separate Cash Flow for specific funds e.g. Zakat). stakeholders through corporate briefing sessions and disclosure of brief summary of Analyst Page no. 75
Page no. 120 briefing conducted during the year.

7.08 Highlights about redressal of investors' complaints. Page no. 73
PROXY FORM
8 SPECIFIC DISCLOSURES OF THE FINANCIAL STATEMENTS
8.01 For Specific Disclosures of the Financial Statements please refer Annexure ‘II’ . Page no. 137 to
183
8.02 Industry specific additional disclosures (if applicable):
a) Insurance Company - Annexure ‘III’
b) Banking Company - Annexure ‘IV’ N/A
c) Shariah compliant companies/ companies listed on the Islamic Indices - Annexure ‘V’
9 SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY
9.01 Highlights of the entity's performance, policies, initiatives and plans in place relating to the various
aspects of sustainability and corporate social responsibility (including environment related Page no. 87 to 90
obligation applicable on the company and initiatives taken to fulfil during the year and company’s & 92 to 102
responsibility towards the staff, their health & safety).
9.02 Certifications acquired and international standards adopted for best sustainability and CSR
Page no. 91
practices.
10 BUSINESS MODEL
Business model is a system of transforming inputs, through business activities, into outputs and
Page no. 39
outcomes that aims to fulfil the organization’s strategic purposes and create value over the
short, medium and long term
10.1 Describe the business model including inputs, business activities, outputs and outcomes in
accordance with the guidance as set out under section 4C of the International Integrated Reporting Page no. 39
Framework <IR>.
11 STRIVING FOR EXCELLENCE IN CORPORATE REPORTING
11.01 Statement by management of unreserved compliance of International Financial Reporting
Page no. 130
Standards (IFRS) issued by the International Accounting Standards Board (IASB).
11.02 Adoption of International Integrated Reporting Framework <IR> by fully applying the ‘Fundamental
Concepts’ and ‘Guiding Principles’ of <IR> into their corporate reporting in addition to the Page no. 129
‘Content Elements’ (disclosures) of <IR>, as covered in this criteria.
11.03 Disclosures beyond BCR criteria (Note: The participating organization to send the list of Page 48, 87 to
additional disclosures to BCR Committee). 102, 186
12 ASSESSMENT BASED ON QUALITATIVE FACTORS
12.01 Please refer Annexure ‘VI’ Overall Report
13 OTHERS
13.01 BCR criteria cross referred with page numbers of the annual report. Page 195 to 200
13.02 Brief about contents, scope and boundaries of the annual report. Page no. 130
13.03 SWOT analysis. Page no. 33
200 Feroze1888 Mills Limited

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CONTENTS Financials at a Glance

42-84 Governance Calendar of Notable Events

04 Feroze1888 Mills Limited Annual Report 2021 05

06 Feroze1888 Mills Limited Annual Report 2021 07

People Development Proactive

Respect Excellence In Work

Ownership & Accountability Reliability

08 Feroze1888 Mills Limited Annual Report 2021 09

10 Feroze1888 Mills Limited Annual Report 2021 11

LIST 2020 FORBES ASIA”.

12 Feroze1888 Mills Limited Annual Report 2021 13

14 Feroze1888 Mills Limited Annual Report 2021 15

1970 1985 2006 2008 2009 2012 2016 2018

1980 1996 2007 2008 2010 2014 2017

18 Feroze1888 Mills Limited Annual Report 2021 19

20 Feroze1888 Mills Limited Annual Report 2021 21

Chief Director Director Director Director Director Head of

22 Feroze1888 Mills Limited Annual Report 2021 23

WEAVING 68% 59%

DYEING & PRINTING Local Imported

24 Feroze1888 Mills Limited Annual Report 2021 25

26 Feroze1888 Mills Limited Annual Report 2021 27

28 Feroze1888 Mills Limited Annual Report 2021 29

30 Feroze1888 Mills Limited Annual Report 2021 31

32 Feroze1888 Mills Limited Annual Report 2021 33

34 Feroze1888 Mills Limited Annual Report 2021 35

S. No OBJECTIVES NATURE STRATEGIES RESOURCE ALLOCATED STRATEGIES DIRECTLY KPI MONITORED

36 Feroze1888 Mills Limited Annual Report 2021 37

The KPIs will remain relevant in the future.

SIGNIFICANT CHANGES FROM PRIOR YEARS Production

SIGNIFICANT PLANS AND DECISIONS FOR CORPORATE RESTRUCTURING, BUSINESS Product

Finishing • Wages & Salaries to Employees

Performance Sustainability Future Outlook

Social & Relationship Intellectual Capital

38 Feroze1888 Mills Limited Annual Report 2021 39

40 Feroze1888 Mills Limited Annual Report 2021 41

42 Feroze1888 Mills Limited Annual Report 2021 43

Date: August 30, 2021

45 Feroze1888 Mills Limited Annual Report 2021 46

Success Will – The resilience to succeed in all situations

47 Feroze1888 Mills Limited Annual Report 2021 48

1888 Mills, LLC

49 Feroze1888 Mills Limited Annual Report 2021 50

Other Directorship Liberty Mills Ltd.

51 Feroze1888 Mills Limited Annual Report 2021 52

53 Feroze1888 Mills Limited Annual Report 2021 54

55 Feroze1888 Mills Limited Annual Report 2021 56

The Management is aware of its responsibility for the

57 Feroze1888 Mills Limited Annual Report 2021 58

59 Feroze1888 Mills Limited Annual Report 2021 60

All strategic decisions of the Company are taken by

67 Feroze1888 Mills Limited Annual Report 2021 68

69 Feroze1888 Mills Limited Annual Report 2021 70

71 Feroze1888 Mills Limited Annual Report 2021 72

73 Feroze1888 Mills Limited Annual Report 2021 74

75 Feroze1888 Mills Limited Annual Report 2021 76

AUDIT COMMITTEE Report and Conclusion reached

77 Feroze1888 Mills Limited Annual Report 2021 78

79 Feroze1888 Mills Limited Annual Report 2021 80