Interloop Limited Directors' Report 2019

INTERLOOP LIMITED DIRECTORS’ REPORT 2019

8 DIRECTORS’ REPORT

The Directors of Interloop Limited are pleased to present the annual report of the Company together with the audited financial statements of the Company for the year ended June 30, 2019.

TEXTILE & APPAREL SECTOR AND ECONOMIC OVERVIEW

Financial year 2019 was a tough year for Pakistan due to challenges to the macro-economy. Consolidation measures to tackle the challenges brought a lot of pressure on performance of business and industry. After entering the IMF program Pakistan is now on the path of consolidation to tackle sizeable fiscal and current account deficits but the imbalances are expected to diminish slowly. The World Bank estimates the country’s GDP growth rate to deteriorate to 2.7% in 2019-20. However, the consolidation measures, coupled with other macroeconomic improvements, are likely to lead to an increase in the economic growth to 4% in the beginning in fiscal year 2020-21.

Textile & Apparel industry contributes 57% percent of total export volumes and 8.50% of the GDP of Pakistan. Annual Export during FY18 stood at $25.0 billion out of which $13.53 billion was from Textiles & Apparel. According to Textile Policy 2014-2019, Textile exports were to double i.e. from $13.0 billion to $26.0 billion, which could have created some 3.0 million additional jobs. Due to unfavorable economic conditions, inconsistent government policies, shortage of energy and lack of investment to modernize and enhance capacity, Textile and Apparel exports have stagnated.

Despite all these challenges, your company, by the grace of God Almighty, has been able to achieve a record Sales Turnover of Rs. 37.478 billion (FY18: PKR 31.139 billion). At the same time, Net Profit for the year has increased by 33.69% over the corresponding year.

OPERATING RESULTS

The summary of operating results for the year and appropriation of divisible profits is given below: 2019 2018 (R*. In Million*) Sales-net 37.47832 31.138.74 Gross proTit 11.954.71 9.144.50 FRITOA 7,960.92 5,903.89 Profit before Tax 5,420.98 4.005.77 Less; Tax Expense 22632 119.95 Profit jlterTax 5,194.77 3.88551 Un,ipptp;»nale(l profit brought forward 7,14257 12.522.99 Profit available for Approprialions 5,001.94 3.794.50 Apprapnaiions • inteom dividend 2017 950.55 - payment under swap arrangement 8.224.37 • Bonus Shares 2018 5.688.06 Interim dividend 2018 1,090.25 Unappropriated profit carried forward 536631 7,142.57 Earnings per share - Basic (Rs.) 6.67 5.10 Earnings per share - Diluted (Rs.) 6.67 5.10

14.000 12.000 II »4 71 10 000 9'144 50 8.000 b OX" 4.000 2.000 0 Grou Prol.l N«l Prolil C«h PfO#ll IBIDA

During the year under review, the Board of Directors approved 300% Interim Bonus Shares in the proportion of 3 share(s) for every 1 share(s) held followed by 12.5% Interim Cash Dividend and allotted/paid to the shareholders within stipulated time period in accordance with the applicable laws & regulations.

The Board of Directors of the Company in their meeting held on 23rd September 2019 have proposed a final cash dividend of Rs. 1.75 per share (i.e. 17.5%). This is in addition to Rs. 1.25 per share (i.e. 12.5%) first interim cash dividend already distributed; which make a total cash distribution of Rs. 3.0 per share (i.e. 30%) for the year ended June 30, 2019.

The proposed final cash dividend is subject to the approval of members at the Annual General Meeting to be held on October 14, 2019. These financial statements do not include the effect of above proposal which will be accounted for in the period it is approved by the members. 9 FINANCIAL AND OPERATIONAL PERFORMANCE

By the grace of God Almighty, the year has ended on a positive note for the Company with better performances both operationally as well as financially. Machinery has been added with the prime objective of reducing imbalance and inefficiencies, reducing utilities and maintenance requirements and produce additional value-added material and finished products. Performance of the Company during the year remained good in spite of all the challenges like pressure on export selling prices, shortage of gas, increase in minimum wages, lack of timely sales tax refunds by Government etc. At the same time, adjustment of exchange rate had a favorable impact on Company’s profits. During the year under review, Company sales suffered a slight set back due to filling of Bankruptcy by one of the customers namely Payless Shoe Source Inc. While financial loss was prevented as receivables from this company were insured through a factoring company, sales revenue suffered a slight set back. Company’s sales and marketing teams have worked hard and secured two other customers to fill the gap during next year.

Operational results show that the Company achieved revenue growth of +20.36% for the year ended June 30, 2019 compared to preceding year. Sales revenue stood at Rs. 37.478 billion (FY18: Rs. 31.139 billion). Gross profit for the year stood at Rs. 11.954 billion (FY18: Rs. 9.144 billion) whereas profit before taxation stood at Rs. 5.421 billion (FY18: Rs. 4.006 billion). The after tax for the year under review was Rs. 5.195 billion (FY18: Rs. 3.886 billion) whereas earning per share (EPS) stood at Rs. 6.67 per share (FY18: Rs. 5.10) per share.

Vertical Analysis

2019 2018 % % Gross profit 31.90 29.37 Operating profit 17.10 14.42 Profit before tax 14.46 12.86 Net profit after tax 13.86 12.48 EBITDA 21.24 18.96

31.9 4 2019 82019 32 18 412018 82018 37 31 17 14.42 16 30 2018 IS 2018 29 14 2H 2019 13 2019

Gross Profit Margin Operating Profit

14.46 14.5 14 y 2019 8 2019 14 12.86 13.S y 2018 8 2018 13.5 13 13 12.6 2018 2018 12.6 12 2019 12 2019 11.5

Profit Before Tax Net Profit After Tax

10 21.5 18.96>C u 2019 20,5 20 2018 19.5 l'> 2018 18.5 18 201'I 17.5

EBITDA

Despite the factors stated earlier, the Company performed with great resilience and maintained its position in the foreign markets. In the opinion of the directors, the results of the operations of the Company during the said financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than what has been mentioned in this report. Directors believe that the Company will be able to achieve even better results in the next financial year.

BUSINESS SEGMENTS

The management of the Company has determined the operating segments based on the information that is presented to the Board of Directors of the Company for allocation of resources and assessment of performance. Segment performance is generally evaluated based on certain key performance indicators including business volume and gross profit.

Based on internal management reporting structure and products produced and sold, the Company is organized into the following operating segments:

a) Hosiery- This segment relates to the sale of socks & tights. b) Spinning- This segment relates to the sale of yarn. c) Other operating segments- This represent various segments of the Company which currently do not meet the minimum reporting threshold mention in international financial reporting standards. These mainly includes domestic sales, energy, yarn dyeing, denim and active-wear.

FISCAL YEAR 2018-19 – AT A GLANCE

1 INTERLOOP’S LISTING ON THE PAKISTAN STOCK EXCHANGE (PSX)

Interloop Limited (ILP) was listed on the Pakistan Stock Exchange (PSX) at a prestigious Gong Ceremony, held on April 5, 2019 at PSX, Karachi. In the process of Interloop Limited’s Initial Public Offering (IPO), your Company received wide-spread participation from investment community ranging from major commercial banks, insurance companies, local and foreign institutions, asset management companies, TREC holders and high net worth individuals.

Interloop Limited successfully raised Rs. 5,025 million through the largest private sector Initial Public Offering (IPO), placing it amongst the top 50 companies listed on the Pakistan Stock Exchange by market capitalization. Book building portion of the IPO took place on the 13th and 14th of March, 2019 and was oversubscribed by 1.37 times. The general public was offered shares on March 21 - 22, 2019 at Rs. 46.10 per share. Despite tough market conditions, the IPO was oversubscribed by 1.5 times. We are confident that, God willing, the Denim segment will turn out be even bigger for us than the Hosiery sector. World’s top brands and retailers are our customers and consider us a responsible manufacturing company. We’ll move forward with them in our Hosiery business and believe that many of them will become our Denim customers.

2 DENIM PROJECT

As part of business diversification & expansion, Interloop is entering into the Denim Apparel Segment and has envisioned a production facility which will have minimal environmental impact, prioritise worker well-being and will maintain a very high stand ard for operational and cost efficiency, ensuring that Interloop continues to serve its customers effectively.

The production facility will be LEED Platinum Certified and will be the most technologically advanced and sustainable denim apparel production facility in this part of the world, underpinning Interloop’s Mission. The plant has gone into trial production in Q3, 2019 and has been conceived with a planned output exceeding one million garments per month. A fully operational develop ment/sampling center, with 125 sewing machines from Italy and Japan, with an approx. capacity of 3,400 pieces per day is operating successfully already.

As our commitment to environmental conservation, the production facility will: • Focus on women empowerment with the target to engage females as 50% of the total workforce • Plan initiatives such as in-house day care to enable women to continue work after childbirth, if they wish to do so • Plan at least 30% of the area as green space • Discharge ZERO hazardous material and waste

11 • Reduce the carbon footprint by up to 50% by maximising use of daylight, solar energy, insulation, bio-mass boilers, heat recovery and energy efficient systems • Introduce technology and redesign traditional processes to save 35 litres of water per garment – approximately 35m litres of water a month • Implement new technology aimed at enhancing worker safety, boosting labour productivity and minimising risk of work-related accidents or long term illness

A budget of PKR 3.90 billion approx. was allocated for plant and machinery. About 57% of this budget has already been consumed in the form of LCs retired, LCs which have been opened but are yet to be retired and machinery purchased locally.

We have successfully secured the financing of PKR 2.80 billion from Habib Bank Limited- Islamic Banking Division at a very competitive rate. Negotiations for a further financing of PKR 1.00 billion are in process with Allied Bank Limited- Islamic Banking Division.

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3 PILOT PROJECT OF PLANT 5

The Hosiery Plant 5 Pilot Project became operational on January 22, 2019 with 94 Modern Italian Knitting Machines. This Plant is distinct from the existing facilities because of the New Team Organogram concept. The new structure is designed to remove extra supervision layers, the management working in shifts and Knitting Technical and Knitting Operations teams merged as one team.

With the current production of 900,000 pairs of socks monthly, the Pilot project will be scaled up into a vertically integrated sustainable manufacturing facility with installed capacity of 1280 knitting machines producing approx. 17.28 million pairs of socks per month.

At present, Land measuring 76 acres has been successfully procured, at an Ideal location on Khurrianwala Jaranwala bypass. The location is well planned as our power supply lines from Interloop energy division are passing right near to the location of the land so we will be able to supply energy to our newly planned division from our own energy division.

As this unit will be one of Its kind, supplying to major brands in the world, layout planning and structural design is of paramount Importance. Meetings are being held with top notch architectures and internationally renowned lean and layout experts to design the building and layout for machines. It will be LEED certified (Leadership in Energy and Environmental Design) and will be a state of the art structure in textile industry in Pakistan.

SUBSIDIARY COMPANY

The Company has also annexed consolidated financial statements along with separate financial statements in accordance with the requirements of International Financial Reporting Standards and Companies Act, 2017.

Following is a brief description of the subsidiary company of Interloop Limited:

IL Apparel (Private) Limited

This is a wholly owned subsidiary of the Company which looks after the Knitwear & Active-wear business of the Company. The Knitwear Pilot Project at Faisalabad, a Cut to Pack garment manufacturing facility, is spread over 6 acres and commenced operations in January, 2019 and has exported the first shipment in March 2019. IL Apparel plans to put up a state of the art vertically integrated Knitwear garments manufacturing plant in the new Interloop Apparel Park near the Interloop Industrial Park.

12 EMPLOYEE STOCK OPTION SCHEME (ESOS)

We consider our employees to be our most important stakeholder and to get their commitment and efforts, we firmly believe in providing them conducive environment and making them feel a sense of security. The Company operates an equity settled stock option scheme called ‘Interloop Limited - Employees Stock Option Scheme, 2016’ duly approved by the Securities and Exchange Commis- sion of Pakistan (SECP). The compensation committee evaluates the performance and other criteria of employees and recommends to the Board for grant of options. The Board on the recommendation of the committee, on its discretion, grants recommended options to employees. These options vest after a specified period subject to fulfillment of certain conditions as defined in the scheme. Annual Performance Report on Offer and Administration of the Employees Stock Option Scheme (ESOS) - Interloop Limited as at June 30, 2019 along with the summary of the options granted till date is annexed with this report.

It is pertinent to mention here that the scheme is not in operation since listing of the Company on PSX primarily due to the fact that the terms of the scheme require to be consistent with the increased legal compliance for a listed entity. The proposal for subject updation in the Existing scheme is under review and pending approval from shareholders of the Company and SECP respectively.

CORPORATE GOVERNANCE

STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAMEWORK

The Directors are pleased to state that the Company is compliant with the provision of the Code of Corporate Governance as required by the Securities & Exchange Commission of Pakistan (SECP) and the Rule Book of Pakistan Stock Exchange. The Board of Direc- tors review the Company’s strategic decisions and it is committed to maintain high standards of corporate governance. A formal statement of compliance as required under the Listed Companies (Code of Corporate Governance) Regulations, 2017 is annexed which forms part of this Annual Report.

Following is the Directors’ statement on Corporate and Financial Reporting framework:

1 The financial statements, prepared by the management of the Company, present fairly its state of affairs, the result of its operations, cash flows and changes in equity. 2 Proper books of account of the Company have been maintained. 3 Appropriate accounting policies have been consistently applied in preparation of the financial statements and accounting estimates are based on reasonable and prudent judgment. 4 International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure there from has been adequately disclosed. 5 A mission statement, vision and overall corporate strategy for the company is prepared, adopted and reviewed as and when deemed appropriate by the Board. 6 The system of internal control is sound in design and has been effectively implemented and monitored. 7 There are no significant doubts upon the Company’s ability to continue as a going concern. 8 There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations.

COMPOSITION OF BOARD OF DIRECTORS

Interloop Limited has seven-member (6 Male & 1 Female) Board of Directors which comprises of individuals with diverse backgrounds having core competencies, knowledge and expertise relevant to the business of the Company. The Board is assisted by its sub-committees i.e., Audit Committee, Human Resource and Remuneration Committee and Nomination committee. These sub-committees held meetings and reported to the Board as per stipulations of the Listed Companies (Code of Corporate Governance) Regulations, 2017. The diverse mix of gender, knowledge, expertise and skill sets of the members enhances the effectiveness of our Board. Our Board composition represents the interests of all categories of shareholders and it consists of:

• Independent Director 2 • Other non-executive Directors 3 • Executive Director 2 in order to adopt and adhere to the best practices of the Code of Corporate Governance regulations, the Company prior to the filing of listing application with the PSX, appointed Mr. Tariq Iqbal Khan and Mr. Saeed Ahmad Jabal as an Independent Directors of the Company followed by appointment of Mr. Jahan Zeb Khan Banth, as Non-Executive Director in place of the casual vacancy created by the outgoing Directors of the Company. Furthermore, during the period under consideration, Mr. Navid Fazil was appointed as the Chief Executive Officer of the Company w.e.f. September 8, 2018 to fill up the casual vacancy caused by resignation of Mr. Musadaq Zulqarnain.

Meetings of the Board of Directors & Committees

Since Interloop Limited became listed on the Pakistan Stock Exchange on April 5, 2019, the information on the meetings of the Board of Directors of the Company is being shared from date of formal listing. Two meetings of Board of Directors and one each meeting of Audit Committee and HR & Remuneration Committee were respectively held during the year after listing on PSX. Attendance by the directors/members is given below;

13 Board of Directors:

Mr. Musadaq Zulqarnain (Chairman) 2 Mr. Navid Fazil (Chief Executive Officer) 2 Mr. Jahan Zeb Khan Banth 2 Mr. Muhammad Maqsood 2 Mrs. Shereen Aftab 0 Mr. Saeed Ahmad Jabal 2 Mr. Tariq Iqbal Khan 2

Audit Committee:

Mr. Tariq Iqbal Khan (Chairman) 1 Mr. Saeed Ahmad Jabal 1 Mr. Jahan Zeb Khan Banth 1

HR & Remuneration Committee:

Mr. Saeed Ahmad Jabal (Chairman) 1 Mr. Navid Fazil 1 Mr. Jahan Zeb Khan Banth 1

RELATED PARTY TRANSACTION AND TRANSFER PRICING

It is the policy of the company to ensure that all transactions entered with related parties must be at arm’s length. The Company has fully complied with best practices on Transfer Pricing as contained in the Listing Regulations of Pakistan Stock Exchange while executing all transactions with related party.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has established an effective and efficient system of internal and financial controls to safeguard the assets of the Company, prevent and detect fraud and ensure compliance with all statutory and legal requirements. The internal control structure is regularly reviewed and monitored by the Internal Audit function duly established by the Board. Audit Committee reviews the internal control system on quarterly basis in accordance with the term of its reference.

PATTERN OF SHAREHOLDING

Two statements of the pattern of shareholding as at June 30, 2019, for Ordinary Shares & Non-Voting Ordinary Shares respectively, which are required to be disclosed under the reporting framework, are annexed to this report.

DIRECTORS’ REMUNERATION

The remuneration of the Board members is approved by the Board itself. However, in accordance with the code of corporate governance, it is ensured that no Director takes part in deciding his own remuneration. The Company does not pay remuneration to non-executive directors except fee for attending the meetings.

EXTERNAL AUDITORS

The present auditors’ M/s. Kreston Hyder Bhimji & Company, Chartered Accountants, are retiring and being eligible, offer themselves for re-appointment. The Board of Directors proposes the re-appointment of M/s. Kreston Hyder Bhimji & Company, Chartered Accountants, as the auditors until the next Annual General Meeting.

HEALTH, SAFETY & ENVIRONMENT

Health, Safety & Environment is our core value, we take pride in our practices and will ensure that we run safe operations and are not a source of environmental degradation. The health and safety of our employees, the safety of our assets, the security of our operations and healthy environment always remain among the top priorities of the Company. Safety is an all-encompassing priority for the Company, from the Board down to the business units.

CORPORATE SOCIAL RESPONSIBILITY

The company is committed towards accomplishing its Corporate Social Responsibility (CSR) and actively takes part in social work programs. During the year under review as part of CSR program, substantial contribution was made in the sectors of education, health, culture and sports.

MATERIAL CHANGES

There have been no material changes since June 30, 2019 to date of the report and the Company has not entered into any commitment during this period, which would have an adverse impact on the financial position of the Company.

DESCRIPTION OF PRINCIPAL RISKS & UNCERTAINTIES

We expect no principal risks & uncertainties as at the closing period of June 30, 2019.

14 BUSINESS RISKS, CHALLENGES AND FUTURE OUTLOOK

While observing the rise in immense global competition in textiles, including speed to market requirements by retailers and brands, Company has to keep an eye on the shift in sourcing patterns. This can be effectively mitigated through efficiency improvements & interventions in supply chain, thus reducing lead times.

With the present economic conditions that are expected to prevail for foreseeable period, the company aims to develop and implement measures that will enable the company to minimize the adverse effect. We feel, in today's highly competitive global environment, the textile sector in Pakistan needs to upgrade its supply chain, improve productivity, and maximize value-addition to be able to survive in the global market.

CONSOLIDATED FINANCIAL STATEMENT

Consolidated financial statements for the period ended June 30, 2019 of the Company and its subsidiary IL Apparel (Private) Limited are annexed.

ACKNOWLEDGMENT

The Directors would like to thank all stakeholders of the Company including, customers, shareholders, vendors, government agencies, bankers & all other business associates for their continued support during the year. We place on record our appreciation for the contributions made by the employees at all levels.

For & On behalf of the Board of Directors

Sd/- Sd/- (Navid Fazil) (Jahan Zeb Khan Banth) Faisalabad, September 23, 2019 (Chief Executive Officer) (Director)

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I 16 INTERIOOPIIMITFO Pjttcfn of Sha'Choldrnj At onun^lO,^Qn ^ 1 400001 10 405000 401.438 1 10 100 2.472 1 410001 lo 415000 413,829 101 10 500 084,967 2 450001 lo 455000 903.500 SOI lo 1000 1,345.440 1 700001 lo 705000 701,250 1001 to 5000 2,8/2,841 1 720001 lo 725000 724,712 S001 lo 10000 1.308,254 I 725001 10 730000 726,503 10001 10 ISOOO 794,662 2 755001 lo 760000 1,511,642 1S001 10 20000 434,648 1 760001 to 765000 761,377 JOOOl 10 25000 196.491 1 770001 lo 775000 772.672 25001 lo 30000 378.563 I 880001 10 885000 883 382 10001 lo 35000 1,054.858 1 915001 lo 920000 915,520 JS001 10 40000 416,302 1 945001 lo 950000 946.662 40001 10 45000 127.517 1 1120031 10 1125000 1,125.000 d'jOOl 10 50000 94,36/ 1 1260001 lo 1265000 1,264,500 50001 10 55000 152.879 1 1435001 10 1440000 1,438.222 55001 lo 60000 115.631 1 I440O31 10 1445000 1,442.415 60001 to 65000 125.718 1 I49S001 lo 1500000 1,500,000 05001 10 70000 408.942 1 1575001 lo 1580000 1,577,750 20001 lo 75000 509,004 1 1695031 lo 1/03000 1,690,970 75001 10 80000 461.094 1 I970O31 lo 197S000 1,970,328 ftOOOl lo 85000 81,717 I 2130001 10 2135000 2,133,000 95001 10 100000 192,682 1 2170001 lo 2175000 2.174,000 100001 lo 105000 203.603 1 2270001 lo 2275000 2,272,500 105001 lo 110000 105,918 1 2710001 lo 2715000 2,713.500 115001 10 120000 240,000 1 3020001 10 3025000 3,020,110 120001 lo 125000 487,971 I 3605001 10 3610000 3,606,000 125001 lo 130000 125.719 1 3730001 10 3735000 3,735,000 U0001 lo 135000 134,005 1 3745031 lo 37SOOOO 3.746,250 140001 10 145000 143,319 1 3880031 10 3885000 3.884.420 I4S001 10 ISOOOO 797,375 2 3995001 lo 40W3000 8,000,000 100001 10 165000 486,92/ 2 4340031 10 4345000 8,681.396 105001 lo 170000 339.235 2 7195001 10 7200000 14,400.000 195001 lo 200000 394.000 1 7660001 lo 7665000 7,664,062 200001 10 205000 401,786 1 7810001 lo 7815000 7,812,500 220001 10 225000 224.500 1 809CO31 lo 8095000 8,095.000 250001 10 255000 254.000 1 10773001 10 10780000 10,776.172 275001 10 280000 277,313 I 13865001 lo 13870000 13,867,560 285001 to 290000 286.129 1 14635001 IO 14640000 14,639.500 310001 10 315000 310,250 1 16680001 to 1S585000 16.681.396 315001 lo 320000 319.148 1 37225001 10 37230000 37.229.040 345001 10 350000 345.727 I 73005001 IO 73010000 73.008.720 360001 to 365000 363,303 1 282495001 10 282530000 282,498,838 385001 lo 390000 385,250 1 298495001 10 298530000 298,498,840 395001 lo 400000 400,000 5131 869,400,000

17 INTERLOOP LIMITED Pattern of Shareholding As of June 30, 2019 Categories of Shareholders Shareholders Shares Held Percentage Directors and their spouse(s) and minor children 10 709,326,004 81.59 Associated Companies, undertakings and related parties - - Executives 8 23,611,384 2.72 Banks, development finance institutions, non-banking finance companies, insurance companies, takaful, modarabas and pension funds 18 51,257,548 5.90 Mutual Funds 43 32,463,723 3.73 General Public a. Local 4998 42,998,995 4.95 b. Foreign 3 153,515 0.02 Foreign Companies - Others 51 9,588,831 1.10 Totals 5131 869,400,000 100

Shareholders Shares Held Percentage Share holders holding 10% or more 2 596,997,680 68.66

18 Central Depository Company of Pakistan Limited Pattern Of Shareholding5

Security Symbol : IILNV XNTEBLOOP LiKITED - Page# : 1 of 1 rinonciol Year End Incornttlon as on : 30/06/2019 H0N-V0T3KG ORDIHARV Oser : C0064901 SHARES Date : 02/00/2019 Time : 0<:14:17

Kioibef q£ Shareholders Sharehold ings Prom - TO Total Huirber of Shares Held 9 101 - 500 2,767 7 501 - 1,000 5,305 162 1,001 - 5,000 451,588 114 5,001 - 10,000 015,891 33 10,001 - 15,090 410.536 10 IS,001 - 20,000 171.237 7 20,001 - 25,090 155,944 1 2S,001 - 30,000 20,594 3 30,001 - 35,000 99,150 1 35,001 - 40.000 39,074 2 <0,001 - 45,000 33,549 1 <5,001 - 50,000 47,507 50,001 - 55,000 103,547 1 55,001 - 60,000 56,064 1 75,001 - 60,000 76,462 1 95,001 - 100,040 97,142 1 150,001 - 155,000 150,087 35& 2,797,450

snorc^otdce'e category vnuibec of Sliatfehoiaera Nuxi&ec of Sliaeee Keio Percentage InOividuals 356 2,797,<50 i00-00 356 2.797,<50 J.00.0

19 INTERLOOP LIMITED

Unconsolidated FinancialFinancial Statements For the Year Ended June 30, 2019 -T-e KRESTON %^HYDER UYOTR BHIMJIBHIMJI && CO.CO CHARTERED ACCOUNTANTS

Independent Auditor's Report To the members oflnterloopof Interloop Limited Report on the Audit ofof Unconsolidated Financial StatementsStatements

Opinion

We have audited thethe annexedannexed unconsolidated financial statementsstatements oflnterloopof Interloop Limited ("the("the Company"), which comprise the unconsolidated statement of financialfinancial position as atat JuneJune 30, 2019,20'19, thethe unconsolidated statement of profit or toss,loss, the unconsolidated statement of comprehensive income, the unconsolidated statementstatement of changes in equity, thethe unconsolidated statement of cash flows for the year thenthen ended and notes toto thethe unconsolidated financialfinancial statements includingincluding a summary of significant accounting policies andand other explanatoryexplanatory information, andand we statestate that we have obtained ailall the informationinformation and explanations which, to the best ofof our knowledge and belief, were necessary for the purpose of thethe audit.audit,

In our opinionopinion and to the best of our information andand according toto thethe explanationsexplanations given toto us, the unconsolidated statementstatement of financial position, the unconsolidated the statement of profit oror loss, the unconsolidated statementstatement of comprehensive income,income, the unconsolidated statement of changes inin equity and the unconsolidated statementstatement of cash flowsflows together with the notes forming part thereof conform with the internationalinternational Financial Reporting Standard (IFRSs)IFRSsJ as applicable in Pakistan, and,and, givegive thethe informationinformation required by thethe Companies Act,Act,2017 2017 (XIX(XIX of 2017),201,7), inin thethe manner soso required and respectively give a truetrue and fair view of thethe statestate of thethe company's affairs as at June 30,201930, 201,9 and of the profit, total comprehensivecomprehensive income,income, the changes in equity andand its cash flows for the year then ended.ended.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs)(lSAs) as applicable inin Pakistan. Our responsibilities under those standards are further described inin the Auditor's Responsibilities for the Audit ofof the Financial Statements sectionsection of our report. We are independent ofof the Company in accordance with the International Ethics Standards Board forfor Accountants' Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants ofof Pakistan [thefthe Code)CodeJ and we have fulfilledfulfilled our'Otherour.'other ethicalethica] responsibilities inin accordance with the Code. We believe thatthat the audit evidence we have obtained isis sufficient and appropriateappropriate toto provide aa basis for our opinion.opinion,

Key Audit Matters

Key audit matters are thosethose matters that,that, in ourour professional judgment,judgment, were of most significance inin ourour audit of the financial statements of the current period. TheseThese matters were addressed in the contextcontext ofof our auditaudit of the financial statementsstatements as a whole, and in forming ourour opinion thereon,thereon, andand we do not provide aa separateseparate opinionopinion on these matters.matters,

Following are the Key Audit Matter(s):Matter(s)r

S. No Key Audit Matter(s) (lowHow the Matter was addressed in audit 1.L. Adoption of !FRSIFRS 9g "Financial"Financial instruments": (Refer notes 3.1 and 6.1 toto thethe unconsolidated financialfinancial statements)statementsJ IFRS 9 'Financial'Financial Instruments'Instruments'is is effective We reviewed and understood thethe for the CompanyCompany for thethe first time during requirements of the IFRS 9.9, Our auditaudit

si 206-l206-1" Floor,Floor. Business Centre, New Civil Line, Faisalabad-Pakistan. Phone: +92-41-2615632,+92-41-2615632,2615650 2615650 E-mail:E-mail : hyderbhimiifsd(2.1srn3iI.coinhyderbhimi ifsd@email. com Website;Website : www.krestoahb.comwww.krestonhb.com .€w'

-W KRESTON %^HYDER tyorR BHIMJIBHtMJt & CO.co. CHARTERED ACCOUNTANTS

the currentcurrent year andand replaces the financialfinancial procedures includedincluded thethe following: instruments standard IAS 39 'Financial'Financial Instruments;Instruments: Recognition and • Considered the management's Measurement'. process to assess the impact of adoption of IFRS 9 on thethe Company'sCompany's In relation to financialfinancial assets, IFRS 99 unconsolidated financial statements. requires the recognition of expectedexpected credit losses ('ECL')('ECL'J ratherrather thanthan incurred • Reviewed the appropriateness of the credit losseslosses under IASIAS 39 and is therefore assumptions used (future[future and a fundamentally different approach, historical),historicalJ, the methodology andand Management is required toto determine the policies applied toto assess the ECL inin expected credit lossloss that may occur over respect of financial assets ofof the either aa 12-month period or thethe Company,Company. remaining life of an asset, depending on the categorization ofofthe the individualindividual asset. • We reviewed andand assessed thethe impact and disclosures made inin thethe In accordance with IFRS 9, the unconsolidated financial statements measurement of ECL reflect a range of with regard to the effect of adoption unbiased and probability-weighted of IFRS 9,9. outcomes, time value of money, reasonable and supportable informationinformation based on thethe consideration ofof historical events, currentcurrent conditions and forecasts of future economiceconomic conditions. The calculation of ECLs inin accordance with IFRS 9 isis therefore complexcomplex and involvesinvolves aa number of judgmentaljudgmental assumptions.

We considered this as key audit matter due to the significant amountsamounts involvedinvolved and significant judgmentsjudgments made by management regarding the matter.

2. Adoption ofof IFRSIFRS IS15 "Revenue"Revenue from contracts with customers": (ReferfRefer notes 3.1 andand 6.2 to thethe unconsolidated financialfinancial statements)statements) The InternationalInternational Financial Reporting We reviewedreviewed and understood thethe Standard 15 "Revenue"Revenue from Contracts requirements of thethe IFRSIFRS 15. Our audit with Customers" (IFRS(IFRS 15)15J became procedures includedincluded thethe following: applicable for the firstfirst time for thethe preparation of thethe Company's annual unconsolidated financialfinancial statements for •o ConsideringConsidering thethe appropriatenessappropriateness of policy, including the year ended June 30,2019,30, 2019, revenue recognition policy, including recognition and classification criteriacriteria Under the aforesaid standard the revenuerevenue for tradetrade and other discountsdiscounts andand from salesale of goods isis recognized when thethe .gsx*v

;@ KRESTON % HYDERHvorR BHIMJI & CO.co CHARTERED ACCOUNTANTS

Company satisfiessatisfies itsits performance comparing itit with the applicable obligation by transferringtransferring the promised accounting standards.standards, goods to customer under thethe contract with customer. • Testing the effectivenesseffectiveness ofof Revenue from sale of goods isis measured Company's controlscontrols over thethe at transaction price net ofoftrade trade discounts. classification of trade discounts and correct timing of revenue recognition. As a result ofof application of thethe aforesaid standard the management has performed • Reviewing a sample of contractual extensive evaluation of its contractual Reviewing a of arrangement with its customers,customers, arrangement enteredentered into bybY the Company with its customers and We considered this as key audit matter checked the appropriateness of due toto the significant amounts involved classification ofof trade discounts, and significant judgments made bybY management regarding the matter. • Reviewing the adequacy ofof disclosure as required under applicable financialfinancial reporting framework. 3. Listing onon Pakistan StockStock Exchange (PSX)(PSX) fRefcrfRefer note 1,2],.2 and 45 to the unconsolidatedunconsolidated financial statements] During the year, thethe CompanyCompany gets itselfitself Our audit procedures inin relationrelation to listing listed on Pakistan Stock Exchange (PSX)(PSX) of Company isis Pakistan Stock Exchange and issued 109 million ordinary sharesshares of (PSX)IPSXJ includedincluded the following: Rs. 101"0 each. •o Reviewed thethe management working We considered this as key audit matter of utilization of proceeds from IPO.IPO' due to thethe significant amount involved,involved, requirements to disclose utilization of •o Reviewing the adequacyadequacy ofof disclosure proceeds from IPO and disclosure Reviewing requirements of 44thth Schedule of the as required under applicableapplica,ble financial Companies Act,Act,20'1.7. 2017. reporting framework and requirements of the CompaniesComPanies Act, 2017.

4. Property, plant andand equipment The CompanyCompany has made significantsignificant Our audit procedures inin relation to expenditure on expansion of capitalization of property, plant and manufacturing facilitiesfacilities andand new projects. equipment,equipmen! amongst others included the following:following; During the year, thethe Company has also reclassified some categories ofof itsits •o Understanding thethe design and operating fixedfixed assets and resultantly implementation of management comparative figures ofof thosethose categoriescategories of controls over capitalizationcaPitalization andand assets are also reclassified toto reflectreflect better performing teststests of controlcontrol overover presentation. authorization of capital expenditure -@ KRESTON K , HYDER BHIMJIBHTMJT & CO. CHARTERED ACCOUNTANTS

We identifiedidentified capitalization ofof property, and accuracy of its recording in the plant and equipmentequipment asas a key audit matter system.system, because there isis a riskrisk thatthat amounts being capitalized may not meet thethe capitalization criteriacriteria with related • Testing,Testing, on sample basis, the costs implications on depreciation charge for incurred on projects with supporting the yearyear and reclassification of categories documents and contracts. of assets. • Assessing thethe nature ofofcosts costs incurred for capital projects through testing, on samplesample basis, ofof amounts recorded and considering whether the expenditure meets the criteria for capitalization as per the accounting policy and applicable accounting standards.

• Checked the reasonableness of management's assessment ofof categories of assets andand working of reclassification inin categoriescategories of assets including impact of reclassification on both cost of assets and accumulated depreciation inin each category.

• Inspecting supporting documentsdocuments for the date of"of capitalization when project was ready for itsits intended use to assess whether depreciationdepreciation commenced and further capitalization of costs ceased fromfrom Chatthat date and assessing the useful life assigned by management includingincluding testing the calculation of relatedrelated depreciation.depreciation,

5. Inventories The company has significant levelslevels of Our audit focused on whether the valuation inventories amounting to Rs,Rs. 7,170.157,1,70.15 of year-endyear-end inventory was inin lineline with IASIAS million as at thethe reporting date,date, being 2. This includedincluded challenging judgmentsjudgments 18% ofofthe the totaltotal assetsassets ofofthe the company.company. taken regardingregarding obsolescenceobsolescence andand net realizable value provisions. There is a riskrisk in estimating thethe eventual NRV of itemsitems held, asas well as assessing We obtained assurance overover thethe which items maymay be slow-movingslow-moving or appropriateness of management's .l?!w

-E KRESTON l4#. KRESTON &A HYDERHvorR BHIMJI & CO.co CHARTERED ACCOUNTANTS

obsolete. assumptions applied inin calculating the value of inventoriesinventories by:bY: The Company'sCompany's principal accounting policy on stores and sparesspares andand stock inin •. Attending thethe year end stockstock take toto trade are disclosed inin notes - 5.6 and 5.75'7 gain comfort over the existenceexistence and to the unconsolidated financial condition of inventories and internalinternai statements controls designed bybY the company.comPany.

The significance ofof the balance coupled •r Obtaining thethe finalfinal valuation sheetssheets of with the judgmentsjudgments and estimatesestimates the inventories andand tracing quantitiesquantities involved onon theirtheir valuation has resulted from working papers of observation of in thethe inventories being considered as aa physical stockstock taking. key audit matter,matter. •o Obtaining understanding of internalinternal controls designeddesigned bybY the company over recording of purchasesPurchases and valuation of the inventories, and testing their operating effectivenesselfectiveness on samplesample basis.

•o Assessing historical costscosts recorded inin the inventory valuation by performing test ofofdetails details onon purchases.purchases, Evaluating that the valuation basis used are appropriate and consistent, includingincluding analysis of costingcosting ofof different itemsitems on sample basis.

•. Assessing the management's determination ofof the net realizable values and intended use ofof thethe inventories includingincluding performing teststests on thethe sales pricesPrices fetched bybY the company before and afterafter yearYear end.end.

•o Performing analytical and other relevant audit procedures.Procedures'

•. Considering the adequacyadequacY of thethe company's disclosures inin respect of inventories. "€^'% KRESTON ^ HYDERHyorR BHIMJIBHTMJT & CO.co CHARTERED ACCOUNTANTS

Information Other than the Unconsolidated Financial Statements andand Auditor's Report Thereon

Management is responsible for thethe other information.information, The otherother informationinformation comprisescomprises the [information includedincluded in the Director's report,report, but does not includeinclude thethe unconsolidated financial statements and auditor's reportreport thereon).thereon).

Our opinionopinion onon the financial statements does not cover the other information and we dodo not express any form of assurance conclusion thereon.

In connection with our auditaudit ofof the financial statements,statements, ourour responsibilityresponsibility is toto read the otherother information and, in doing so,so, considerconsider whether the otherother information is materially inconsistentinconsistent with the financialfinancial statementsstatements or ourour knowledge obtained in the audit or otherwiseotherwise appears toto be materially misstated. If,If, based on the work we have performed, we conclude that there isis a material misstatement of this information; we areare required toto report that fact. We have nothing to report in this regard,regard.

Responsibilities of Management and the Board of Directors for the Unconsolidated Financial Statements

Management is responsible for the preparation andand fair presentation of the unconsolidated financial statements inin accordance with accounting and reporting standards as applicable in Pakistan, thethe requirements of the Companies Act,Act, 201720L7 (XIX(XIX of 2017) andand for suchsuch internalinternal control as management determines isis necessary to enableenable the preparation of unconsolidated financial statementsstatements thatthat are free from material misstatement, whether duedue toto fraud oror error.

In preparing the financial statements,statements, management is responsible for assessing the Company's ability to continue as aa going concern,concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intendsintends toto liquidateliquidate the Company or to cease operations,operations, or has no realisticrealistic alternative but to do so,so.

The Board of directors isis responsible for overseeing the company'scompany's financial reporting process.

Auditors'Auditors'Responsibilities Responsibilities for the Audit of the Unconsolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether thethe unconsolidated financial statements as a whole are freefree from material misstatement, whether due toto fraud or error, and to issueissue an auditor's report that includesincludes our opinion. Reasonable assurance isis a high level of assurance, but isis not a guarantee that an audit conducted inin accordance with ISAsISAs asas applicable in Pakistan will always detect aa material misstatement when itit exists.exists. Misstatements cancan arise from fraud or error and are consideredconsidered material if,il individually or inin thethe aggregate, they couldcould reasonably be expected toto influence the economic decisions of users taken on thethe basis of these financial statements.

As part of an audit inin accordance with ISAs asas applicableapplicable in Pakistan, we exerciseexercise professional judgment and maintain professional skepticismskepticism throughoutthroughout thethe audit.audit, We also;also:

■' Identify and assess the risks of material misstatement of the financial statements,statements, whether due toto fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toto provide a basis for our opinion. The risk of not detecting a materialmaterial misstatement resulting from fraud is higher Chanthan for one "@ KRESTON %^ HYDERHYDER BHIMJ1BHIMJI & CO.CO CHARTERED ACCOUNTANTS

resulting from error, asas fraud may involveinvolve collusion, forgery, intentional omissions,omissions, misrepresentations, or the overrideoverride ofof internal control.

"' ObtainObtain an understanding of internalinternal control relevant to the audit inin order to design auditaudit procedures that are appropriate inin the circumstances, but not for thethe purpose ofof expressing an opinionopinion on the effectivenesseffectiveness ofof thethe Company's internal control.

■I Evaluate the appropriatenessappropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

■' Conclude on thethe appropriatenessappropriateness ofof management's use of the going concern basis of accounting and, based on the auditaudit evidence obtained,obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue asas a going concern. IfIf we conclude thatthat a material uncertainty exists, we areare required to draw attention in our auditor's report toto the related disclosures in the financial statements or,or, if such disclosures are inadequate, to modify our opinion.opinion, Our conclusionsconclusioris are based on the audit evidence obtained up to the date of our auditor's reportreport. However, future events or conditions may causecause the Company to cease to continue as a going concern.concern.

•' Evaluate the overall presentation, structure and content of the unconsolidated financialfinancial statements, includingincluding the disclosures, and whether the unconsolidated financial statementsstatements represent the underlying transactions andand events inin a manner that achieves fair presentation,presentation.

We communicate with thethe Board ofof Directors regarding, among other matters, the planned scope and timing ofof the audit andand significant audit findings, including anyany significant deficiencies in internalinternal control thatthat we identify duringduring our audit.

We also provide to the Board of Directors with aa statementstatement that we have complied with relevant ethical requirements regarding independence, and toto communicate with them allall relationships and other matters thatthat may reasonably be thought to bear onon our independence,independence, andand where applicable, related safeguards.

From the matters communicated with thethe Board ofof Directors, we determine those matters that were of most significance in thethe audit of the unconsolidated financial statementsstatements of the current period and are therefore thethe key audit matters. We describedescribe thesethese matters inin ourour auditor's report unless law or regulation precludes public disclosure about the matter oror when, in extremely rare circumstances, we determine thatthat a matter shouldshould not be communicated inin our report because the adverseadverse consequences of doingdoing so would reasonably be expected to outweigh thethe public interestinterest benefits ofof suchsuch communication.

Report on Other Legal and Regulatory Requirements:

Based on our audit,audit, we further report thatthat inin our opinion:

a) proper books ofofaccount account have been kept by the Company as required by thethe Companies Act,4ct,2017 2017 (XIXIXIX ofof 2017); blb] ' the unconsolidated statementstatement ofof financial position, thethe unconsolidated statement of profit oror loss, thethe unconsolidated statementstatement ofof comprehensive income,income, thethe /-W

-@ KRESTON V% HyorRHYDER BH1MJIBHTMJT & CO.co CHARTERED ACCOUNTANTS

unconsolidated statementstatement of changes in equityequity andand the unconsolidated statement of cash flows together with the notes thereonthereon have been drawn up inin conformityconformity with the Companies Act,Act,20t7 2017 (XIXIXIX of 2017}2077) and are inin agreement with the books ofof account andand returns;

c) investments made, expenditure incurredincurred and guarantees extended during the yearyear were in accordance with for thethe purpose of thethe Company'sCompany's business; and

d)dl zakat deductible at sourcesource under the ZakatZakat and Ushr Ordinance, 1980 [XVII1IXUII of 1980), was deducted by thethe Company and deposited in thethe Central Zakat Fund established under section 77 ofofthat that Ordinance.Ordinance.

The engagement partner onon the audit resulting inin this independent auditor's report isis Khan Muhammad -- FCA.FCA,

<> Date: September 23,201923,20L9 KRESTON co. Place: Faisalabad CHARTERED ACCOUNTA INTERTOOPI.NTERLOOP L!>JITEDLIMITED

UNCONSOLEDATEDUNCONSOIIDATED STATEMENT OF FINANCIAL POSITION AS AT JUNEIUNE 30.30,2019 2019

201920L9 2018 Note —--- Rupees inin'000 '000 —--- ASSETS NON CURRENT ASSETS

Property, plant andand equipmentequipment 7 18,256,474 15,451,969L5,451,,969 Intangible assetasset B8 66,16166,L6L 42,41042,41,0 Long term investmentsinvestments 9 1,008,7351,008,73 5 380,549 Long term loans 10 65,76265,762 60,74760,7 47 Long termterm depositsdeposits LL11 28,Ot928,019 25,0552 5,05 5 19,425.151t9,425,151 15,960,73015,960,7 30 CURRENT ASSETS Stores andand sparesspares 12T2 487,659887,659 779,198779,1,98 Stock inin trade 13 6,282,4916,2A2,49L 5,121,7185,r21,71,8 Trade debts 14L4 8,247.7408,247,7 40 7,293,008 Loans and advancesadvances 15 L,063,3421,063,342 617,743617 ,7 43 DepositDeposit, prepayment andand otherother receivablesreceivables 16L6 204,985 179,8641,79,864 Tax refunds duedue fromfrom Government 17L7 1,925,439L,925,439 2,451,8062,45I,806 Short termterm Investmentsinvestments 1B18 1,207,251L,207,25r 147,425L47,425 Deferred employeeemployee share optionoption compensation expenseexpense 22'., 5,014 Cash andand bank balances L919 1,538,5641,538.564 193,687193.687 21,357,47121,357,47L 16,789,463L6,789,463

TOTAL ASSETS 40,782.62240,782,622 32,750,1932a 750 L93

EQUITYANDEQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized share capitalcapital 20 __19p9!JA_q_10,000,000 __*______il_a!,0!q_3,000,000 Issued, subscribedsubscribed and paid upup capitalcapital 2t21 8,721,9754,72L,975 1,901,104t,901,,1,04 Reserves 22 3,791,602 38,863 Unappropriated profit 5,366,207s,366,2O7 7,142,5707 ,L42,57 0 L7,479,78417,879,784 9,082,537 NON CURRENT LIABILITIES Long termterm financing 23 3,628,745 2,247,936 Liabilities against assetsassets subjectsubject toto financefinance leaselease 242,4 615615 Deferred liabilitiesliabilities 25 2,482,623 1,925,612 6,111,3686,tLl,368 4,174,1634,1,7 4,1,63 CURRENT LIABILITIES Trade andand otherother payables 26 3,576,8613,576,a6L 2,730,4142,730,41,4 Dividend payable 130,935130,93 5 475,276475,27 6 Accrued markupmark up 27 110,483LLO,4A3 1,37,856137,856 Short term borrowings 282B 11,726,000Lt,726,O00 15,180,93715,180,93 7 Current portion ofof non current liabilitiesliabilities 29 1,247,191L,247,Lgl 969,010969,01,0 16,791,470L6,79L,470 19,493,493t9,493,493

CONTINGENCIES AND COMMITMENTS 30

TOTALTOTAT EQUITY AND LIABILITIES ______19Js2,622_40,782,622 32,750,193

The annexedannexed notes 11 toto 5252 formform anan integralintegral part of thesethese financialfinancial statements.statements.

V Q,r' CHIEF EXECUTIVE DIRECTORDIR"ECTOR CIIIBimNANClAL OFFICER WIAL'FFI.ER V4,/>- INTERTOOPINTERLOOP LIMITED

UNCONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED JUNEIUNE 30.201930, 2019

2019 201820LA Note —--- Rupees inin'000 '000 —---

Sales -- notnet 313l 37,478,32L37,478,321 31,138,73631,t38,736 Cost of salessales 32 (25,523,607){25,523,607) (21,994,237){2L,994,237) Gross profit 11,954,714LL,954,7L4 9,144,4999,L44,499

Operating expensesexpenses

Distribution costcost 33 (2,783,719)(2,783,719) (2,641,013)(2,641,013) Administrative expensesexpenses 34 (1,984,209)(L,eB4,z0e) (1,597,804)(1,se7,804) Other operating expensesexpenses 35 (784,540)(784,54O) (425,429)(425,42e) Other incomeincome 36 14,444 9,164

(5,538,024)(5,538,024) (4,655,082)[4,6s5,082) Profit from operationsoperations 6,416,6906,4L6,690 4,489,417

Finance cost 37 (995,707) (483,654)(483,654)

Profit before taxation 5,420,983 4,005,763

Taxation 383B (226,216) (119,954)(119,9541

Profit for thethe year 5,194,7675,L94,767 3,885,8093,BB5,BO9

Earnings per shareshare - basic (Rupees)(Rupees) 39.139.L 6.6706 5.100?5.10 07

Earnings per share -- diluteddiluted (Rupees)[Rupees) 39.239.2 6.6706 5-10035.10 0 3

The annexed notesnotes 1l- to 52 formform an integralintegral part ofofthese these financialfinancial statements.

tJ 1J,* CHMJF EXECUTIVE DIRECTOR cm CIAE OFFICER V-W?/ WFFIcER INTERLOOP LIMITED

UNCONSOLIDATEDUNCONSOTIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED IUNEJUNE 30,201930,20L9

20L92019 201820LB Note —--- Rupees in'000 —---

Profit forfor the year 5,194,767 3,885,809

Other comprehensive loss:

Items that will not be reclassified subsequently toto profit or loss:loss:

Remeasurement ofof post retirementretirement benefits obligationobligation 25.5 (192,825)(L92,A25) (91,305)[e1,30s)

Total comprehensive income for thethe year 5,00L,9425,001,942 3,794,504

The annexedannexed notes 1 to 5252 form anan integralintegral part ofofthese these financial statements.statements.

VWYPnt'

{l- ... J CHI EX DIRECTOR A NC1AL OFFICER QrYcrALoFF'[cERw INTERLDOPINTERLOOP LIMITEDLIMITED

UNCONSOL1UNCONSOLIDATED DATED STATEMENTSTATEMENT OF CHANGESCHANGES ININ EQUITY FOR THETHE YEAR ENDED 1UNEIUNE 330, Q. 2019

Capitalcapital ReserveReseroe Revenue ReservesReseryes Employee Shareshare CapitalCaDital ShareShareOption Option Unappropriatedljnappropriated Total ' Share PremiumPremium CompensarlonCompensation Profit ReserveReserue

Balance asas atat Julyfuly 01,201701, 2017 1,099,3851,899,385 19,424L9,+24 1,629r,629 12,522,99072,522,990 14,443.423t4,443,428

ProtUforProfit for thethe yearyear - - - 3,895,8093.885,809 3,385,8093,885,809 Other comprehensivecomprehensive lossloss - .- (91.305)191.3051 (91,305)f91,305 Total comprehensivecomprehensive Incomeincome forfor thethe yearyear - 3,794,5043,794,504 3,794,5043,794,50+ 8.2348,23+ Employee shareshare optionoption schemescheme (ESOS)[ESOS] • 0,2348,234 Shares issuedissued underunder thethe ESOSESOS 1,719L,719 10,831 [1,255}(7,2ss) 11,2951r,295

Transferred toto TnterloopInterloop HoldingsHoldings (Pvt)(Pvt) LtdLtd pursuantpursuant - • [8,224,372)(8,224,372) [8,224,372}(8,224,372) to SchemeScheme ofof Arrangement

Transactions with owners?ownersi Dividend toto ordinaryordinary shareholdersshareholders " [950,552)(950,ss21 [950,552)Ies0,ss2)

Balance asas atat JuneJune 30,30, 20182018 1,901,104L,90',104 30,25530,2 55 8,608 7.142,5707,742,570 9.082,5379,O42,537

Profit forfor thethe yearyear - - - 5,194,767 5,194,7675,194,',167 Other comprehensivecomprehensive lussloss . , [192,825)(152,A251 (192,825)(|92,AZS Total comprehensivecomprehensive incomeincome forfor thethe year - - 5,001,942s,oot,942 5,001,942s,o0t,94?

181« Employee shareshare optionoption schemescheme [ESOS)[ESOSJ - - 181B - Shares issuedissued underunder thethe ESOSESOS 7,5587,558 27,522 [8,626)(a,626') 26,454

Issuancelssuance ofof ordinaryordinary sharesshares 1,095,0001,095,000 3,934,900 - 5,029,900 Transaction costcost onon Issuanceissuance ofof sharesshares - (170,021))(170,820) - - (170,820)(1,7O,820)

IssuanceIssuance ofof bonus sharesshares 5,718,3135,718,3 13 (30,255)(30,2s s) - (5,688,058)(5,688,0s8) Transactions with owners:owners: Dividend toto ordinaryordinary shareholdersshareholders (1,090,247)(7,Oeo,247) (1,090.247)(7,O9O,247)

Balance asas atat Junelune 30,201930, 2019 8,721,975 3,791,602 5,360,207 17.079,7R4

The annexedannexed noiesnotes 11 ti>to 5252 formform anan integralintegral panpart ofofthese these financial'slatfinancial statements em en is.

v,v'&" nJ (,V

cmernstui VR DIRECTOR ClMriNAXCiALCIAL OFFICEROFFICER INTERLOOP LIMITED

UNCONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30,30,2019 2019

2019 201820lB Note ------Rupees inin'000 '000 --- a) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxationtaxation 5,420,983s,420,943 4,005,763+,005,763 AdjustmentsAdiustments for: Depreciation 1,641,2341,64L,234 1,471,535L,47L,535 Amortization 9,047 10,371 Workers' profit participation fundfund 285,315285,3L5 210,830 Staff retirement gratuity 522,833 414,5434L4,543 Employee shareshare optionoption compensationcompensation expense 5,031 4,1804,788 Loss onon disposal of property, plant andand equipmentequipment 47,09147,OgL 38,694 Remeasurement lossloss on investment inin mutual funds 20,78720,747 10,908 Profit on TDRsTDRs (182)(rB2) (225)(225) Interest on loan to Metis International (Pvt)[Pvt) Ltd (7,211)(7,?_L1) (8,923)lB,e23) Interest incomeincome on longlong term loan to SNGPLSNGPL • (16) Provision forfor impairment lossloss 70,814 -!tu, Interest onon receivables fromfrom ILIL Bangla Limited (5,796)(s,796) - Finance costcost 995,707 483,654483,654 Operating cashcash Howsflows before working capitalcapital changes 9,005,653 6,641,3226,647,322

Changes inin working capitalcapital (Increase)/decrease in current assets Stores andand sparesspares (108,461) (82,455)[82,4s5) Stock inin trade (1,160,773)(t,760,773) (1,555,837)[1,s5s,837) Trade debtsdebts (954,732) (2.478,788)(2,478,788) Loans and advancesadvances (436,565)(436,56s) 309,805 Deposit, prepayment andand otherother receivablesreceivables (12,114)(L2,lL4) 303,043 Tax refunds due fromfrom government 403,246 (310,852)[310,85 2) Short term investmentinvestment inin mutual fundsfunds -- net (4,258)(4,2s8) (5,447,853)(5,447,Bs3) (DecreaseJ/Incrcase(Decrease)/Increase in currentcurrent liabilities Trade andand other payables 744,150744.L50 855,174 (1,529,507)(t,529;607) (8,407,763)18,407,763) Cash generated froin/(usedfrom/(used in)in) operations 7,476,1467,476,L46 (1,766,441)(7,766,44I)

Finance costcost paid (1,001,655) (422,766)(422,7 66) Income taxtax paid (238,195)(238,L95) (289,281)(zge,2Br) Staff retirementretirement gratuity paid (131,021)(t3L,021) (152,194)(152,7e4) Workers' profit participation fundfund paid (232,069) (156,373) Long term loans paid (14,049)(74,049) (14,791)(14,7el) Long term deposits (paid)/received[paidJ/received (3,202)(3,202) 4,3174,377 Profit on TDRs receivedreceived 132Laz 225 interestInterest on loan toto Metis International (Pvt)(Pvt) Ltd receivedreceived - 6,522 Interest incomeincome on loanloan to SNGPLSNGPL receivedreceived - 1676 Net cashcash generated from/(used in)in) operating activities 5,856,137 (2,790,766)(2,790,766)

b) CASH FLOWS FROM INVESTING ACTIVITIES

Additions in;in: Property, plant andand equipment (4,632,295)(4,632,2e5) (3,418,451)(3,478,451) IntangibleIntangible assetasset (32,798)(32,7_98) (5,576)(s,s7 6) Advance forfor purchase of landland - (23,897)(23,8e7) Proceeds fromfrom disposal of property, plant andand equipmentequipment t39,466139,466 65,50765,507 Long term investmentsinvestments (699,000)(699,000) (1,084,864)(7,084,864) Net cashcash used inin investinginvesting activities (5,224,627) (4,467,281)(4,467,281.) 20192079 201820LB Note —--- Rupees inin'000 '000 —--- c) CASH FLOWS FROM FINANCING ACTIVITIES

Long term financingfinancing obtained 4,228,002 1,300,000 Repayment ofoflong long term financingfinancing (2,568,542) (1,010,816)[1,010,816) Payment ofofliabilities liabilities against assetsassets subject toto finance leaselease (847)(847) (435)(43s) Short termterm borrowings -- net (3,454,937) 7,544.3647,544,364 Share capital issued 1,102,558 L,7191,719 Share premium net ofoftransaction transaction costcost 3,782,976 9,5769,57 6 Dividend paid (1,434,588) (475,276)(47 s,27 6) Net cash generated from financing activities 7,654,6221,654,622 7,369,132

Net increaseincrease inin cash and cashcash equivalents (a+b+c) 2,286,1322,286,L32 111,085 Cash and cash equivalents at the beginning ofofthe the year 193,687L93,687 82,602 Cash and cashcash equivalents at the endend ofofthe the year 40 2,479,819 193,687

The annexed notes 1 toto 5252 formform an integralintegral part ofofthese these financial statements.statements.

V'^ez

{)- CH EF DIRECTOR Cl NCIAL OFFICER fifLoFFrcER / 1NTEUL00PINTERLOOP LIMITED

NOTES TO THE UNCONSOUDATEDUNCONSOLIDATED FINANCIALFINANCIAL STATEMENTSSTATEMENTS FORF'OR THE YEAR ENDED JUNEIUNE 30,30, 2019

1. LEGALLEGALSTATUSAND STATUS AND OPERATIONSOPERATIONS

1.1 Interlooplnterloop Limited (the[the Company]Company] was incorporatedincorporated inin Pakistan onon 25th25th April, 19921992 asas a private limitedlimited companycompany andand subsequentlysubsequently itit was convertedconverted Intointo public limitedlimited companycompany onon 18th [uly,fuly, 2008.2008. The CompanyCompany was listedlisted onon Pakistan StockStock Exchange onon 5thSth April, 2019,2019. The Company isis engagedengaged inin thethe business ofofmanufacturing manufacturing andand selling ofofsocks, socks, leggies,leggies, denimdenim andand yarn, providing yarnyarn dyeingdyeing servicesservices andand toto generategenerate electricityelectricity forfor Itsits ownown use.

The geographicalgeographical locationslocations andand addressesaddresses ofofthe the Company'sCompany's business units, includingincluding production facilitiesfacilities areare asas under:under:

- Registered office: Al-SadiqAl-Sadiq Plaza, P-i57,P-157 , Railway Road, Faisalabad. - Corporate officeoffice & Plant I:1: 1-KM, KhurrianwalaKhurrianwala -- JaranwalaJaranwala Road, Khurrianwala, Faisalabad-Pakistan.Faisalabad-Pakistan. - PlantPlant 2,2, Plant 4 & Spinning: 7-KM,7-KM, Khurrianwala -- JaranwalaJaranwala Road, Khurrianwala, Faisalabad-Pakistan.Faisalabad-Pakistan. •- Plant 5: 6-KM,6-KM, Khurrianwala -- Jaranwalafaranwala Road, Khurrianwala,Khurrianwala, Faisalabad-Pakistan. -- PlantPlant3&Denim: 3 & Denim: 8-KM,B-KM, Manga- Raiwind Road, Raiwind,Raiwind, Disl.Dist. Kasur, Lahore-Pakistan.

1.2 The Board ofof Directors of the Company decideddecided toto initiateinitiate thethe proceedings forfor enlisting ofof the Company on thethe Pakistan StockStock Exchange Limited to financefinance hosiery divisiondivision -- V andand denim projects. Hence, the Company issuedissued the prospectus forfor Initiallnitial Public Offer [IPO](IPOJ ofof 109 million ordinaryordinary sharesshares ofof Rupees 1010 eacheach atat aa floor priceprice ofof Rupees 45 per shareshare includingincluding shareshare premium ofof Rupees 3535 per shareshare as on 0505 March 2019,2019. Details regarding utilization ofoflPO IPO proceeds for denimdenim project andand plant expansionexpansion have beenbeen fullyfully explained Inin thethe prospectus.prospectus. Before thethe datedate ofof thethe reportingreporting period,period, 81.75081.750 million ordinaryordinary sharesshares were offeredoffered andand suecessfuilysuccessfully subscribed throughthrough bookbook building process by Institutional Investors andand High Net Worth Individuals (HNWf)IHNWI] atat aa strikestrike price ofof Rupees 46.1046.10 per shareshare while thethe remainingremaining 27.25027.250 million ordinaryordinary sharesshares were offeredoffered toto generalgeneral public for subscription at strikestrike price ofRupeesofRupees 46.1046.10 per share.share. Ordinary sharesshares offeredoffered to generalgeneral publicwerepublic were fullyfully subscribed andand sharesshares havehave beenbeen dulyduly allottedallotted toto all shareholders.shareholders. As onon OS05 April 2019,2019, PakistanPakistan StockStock Exchange Limited has approvedapproved the Company'sCompany's applicationapplication forfor formalformal listinglisting andand quotation ofofthe the sharesshares onon Pakistan Stock Exchange,Exchange.

2. BASISBASISOFPREPARATION OF PREPARATION 2.12.t Statement of compliance These unconsoildatedunconsolidated financialfinancial statementsstatements have been preparedprepared inin accordanceaccordance with thethe accountingaccounting andand reportingreporting standardsstandards as applicable inin Pakistan. The accountingaccounting andand reportingreporting standards applicableapplicable inin Pakistan comprisecomprise of:

- Internationallnternational FinancialFinancial Reporting StandardsStandards (IFRSflFRS Standards]StandardsJ issuedissued by thethe InternationalInternational Accounting Standards Board (IASB](IASBJ as notified underunder the CompaniesCompanies Act, 2017;2077; andand - Provisions ofofand and directivesdirectives issuedissuedunderthe under the Companies Act,Act,201,7. 2017. Where thethe provisions ofof andand directivesdirectives issuedissued under thethe Companies Act,Act,2017 2017 differdiffer fromfrom the IFRSIFRS Standards,Standards, the provisionsprovisions ofof and directives issuedissued under thethe CompaniesCompanies Act,Act,2077 2017 have been followed.followed. 2.2 Basis of measurement

These unconsolidated financialfinancial statementsstatements have been prepared under the historical costcost conventionconvention exceptexcept asas otherwiseotherwise staledstated hiin respective policy notes.

2.3 Functional andand presentation currencycurrency

These unconsolidated financialfinancial statementsstatements areare presented inin Pakistani Rupee which isis alsoalso the Company's functionalfunctional currency.currency.

3,3. NEW AND REVISED STANDARDS,STANDARDS, INTERPRETATIONSINTERPRETATIONS AND PRONOUNCEMENTS 3.1 Standards,Standards, interpretationsinterpretations andand amendments toto approvedapproved accountingaccounting standardsstandards which became effectiveeffective duringduring thethe year

• Amendment to IAS 4040 "Investment'Investment Property': Transfers of investmentinvestment propertyproperty clarifiesclarifies thatthat anan entityentity shallshall transfertransfer a property to,to, oror from,from, investmentinvestment property when, andand only when therethere isis aa change inin use.use. AA changechange inin use occursoccurs when the properlyproperty meets, oror ceases toto meet, thethe definition of investmentinvestnlent property and there isis evidenceevidence ofof the changechange inin use.use. InIn isolation,isolation, aa changechange inin management's intentionsintentions forfor the use ofof a property doesdoes not provide evidence ofofa a changechange inin use. TheThe amendmentamendment doesdoes not have any impactimpact onon Company'sCompany's financialfinancial statements.statements.

• Amendments toto IFRSIFRS 2 "Share-based'Share-based Payment' -- ClarifyingClarifying how to account forfor certaincertain types ofof share-basedshare-based payments:

The amendmentsamendments areare intendedintended toto eiiminateeliminate diversitydiversity inin practicepractice inin threethree main areas:areas: - The effects of vesting conditionsconditions onon thethe measurement ofof aa cash-settled share-basedshare-based payment transaction:transaction; -- The classificationclassification of aa share-basedshare-based payment transactiontransaction with netnet settlementsettlement featuresfeatures for withholdingwithholding tax obligations;obligations; - TheThe accountingaccounting where aa modification toto thethe terms andand conditionsconditions ofof aa share-basedshare-based payment transactiontransaction changeschanges itsits classificationclassifi cation fromfrom cash-settled toto equity-settied.equity-settled. The amendmentamendment doesdoes notnot have aa significantsignificant Impactimpact onon thesethese unconsolidated financialfinancial statements.statements. . AmeniimentAmendment toto IFRSIFRS 4 'Insurance'Insurance Contract"-Contract'- Applying IFRS 99 "Financial'Financial Instruments' with IFRS 4:4:

The amendmentamendment addressaddress issueissue arisingarising fromfrom thethe differentdifferent effectiveeffective datesdates of IFRSIFRS 99 andand the forthcomingforthcoming newnew insuranceinsurance contract standard IFRSIFRS 1717'Insurance 'Insurance Contracts'. The amendmentsamendments introduceintroduce twotwo alternative optionsoptions forfor entitiesentities issuingissuing contractscontracts within thethe scope ofof IFRS 4, notably a temporarytemporary exemptionexemption and anan overlayoverlay approach.approach. TheThe temporary exemptionexemption enablesenables eligibleeligible entitiesentities toto defer thethe implementationimplementation date ofof IFRS 9,9. The overlay approachapproach allows an entityentity applying IFRSIFRS 99 fromfrom July)uly 01, 20182018 onwardsonwards to remove from profit or loss thethe effects ofofsome some ofofthe the accountingaccounting mismatches thatthat may occur from applying IFRSIFRS 99 before IFRSIFRS 1717 isis applied. The amendmentamendment does not have anyany impactimpact onon thethe Company'sCompany's financialfinancial statements.statements.

. IFRS 99'Financial 'Financial instruments':instruments':

IFRS 99 isis aa replacementreplacement forfor IASIAS 39 'Financial'Financial Instruments'Instruments' andand coverscovers three distinctdistinct areas. Phase 11 containscontains new requirementsrequirements forfor the classification andand measurement ofof financial assetsassets andand liabilities.liabilities. Phase 22 relatesrelates toto thethe impairmentimpairment of financialfinancial assetsassets andand requires the calculationcalculation ofofimpairment impairment on anan expected lossloss basisbasis ratherrather thanthan the currentcurrent incurredincurred lossloss basis. Phase 33 relatesrelates toto lessless stringent requirementsrequirements forfor genera!general hedge accounting. ImpactImpact of adoptionadoption ofof IFRSIFRS 9 isis discloseddisclosed inin Note. 6.16.1 of thethe unconsolidated financial statements.statements.

-- IFRSIFRS IS,15,'Revenue 'Revenue fromfrom Contracts with Customers': This standardstandard deals with revenuerevenue recognitionrecognition andand establishes principles forfor reportingreporting useful informationinformation to users ofof financialfinancial statements aboutabout the nature,nature, amount,amount, timingtiming andand uncertainty ofof revenuerevenue andand cashcash flows arisingarising fromfrom anan entity'sentify's contracts with customers. Revenue isis recognized when aa customercustomer obtainsobtains controlcontrol ofof a goodgood oror serviceservice andand thusthus has thethe abilityabiliqz toto directdirect thethe use and obtainobtain thethe benefits fromfrom the good or service.service. TheThe standardstandard replaces IASIAS 1818'Revenue', 'Revenue', IASIAS 1111 'Construction'Construction contracts' andand IFRiCIFRIC 13.13, 'Customer'Customer Loyalty Programmes'. Impact of adoptionadoption ofof IFRSIFRS 1515 isis discloseddisclosed inin Note. 6.26.2 of thethe unconsolidated financialfinancial statements.

-- IFRIC 22,22,'Foreign 'Foreign currencycunency transactionstransactions andand advance consideration':

IFRIC 22 clarifiesclarifies which datedate shouldshould be usedused forfor translationtranslation when aa foreignforeign currencycurrency transactiontransaction involvesinvolves paymentpiyment or receiptreceipt Inin advance ofofthe the itemitem itit relates to.to. TheThe relatedrelated itemitem isis translatedtranslated using thethe exchangeexchange raterate on thethe datedate thethe advanceadvance foreignforeign currencycurrency isis receivedreceived oror paid andand thethe prepayment or deferreddeferred incomeincome isis recognized.recognized. The datedate ofofthe the transactiontransaction forfor thethe purpose ofofdetermining determining thethe exchange rate to use onon initialinitial recognitionrecognition ofof thethe relatedrelated asset, expenseexpense oror incomeincome [or[or partpart ofof it]it) would remainremain the datedate onon which receiptreceipt ofof payment fromfrom advanceadvance consideration was recognized.recognized. If therethere areare multiple paj'mentspayments oror receiptsreceipts inin advance,advance, thethe entity shall determinedetermine a datedate ofofthe the transactiontransaction forfor each payment oror receipt ofofadvance advance consideration.consideration. The interpretationinterpretation does not have aa significantsignificant Impactimpact onon thesethese unconsolidatedunconsolidated financialfinancial statements.statements.

-- Annual improvementsimprovements to IFRS standardsstandards 2014-201620t4-2lt6 cycle [Amendments[Amendments to IASIAS 28 'Investments'lnvestments inin Associates and Joint Ventures'):Ventures']:

Amendments toto IASIAS 282B clarifies thatthat a venture capital organizationorganization andand otherother similar entities may electelect to measure investmentsinvestments inin associates andand jointjoint venturesventures atat fairfair valuevalue through profit or loss,loss, forfor eacheach associateassociate or jointjoint ventureventure separately atat thethe limetime ofof initialinitial recognition ofofinvestment. investment Furthermore, similarsimilar election isis availableavailable toto non-investment entityentity thatthat has an interestinterest inin an associate or jointioint ventureventure that isis anan investment entity,entity, when applying the equity method, toto retain the fairfair value measurement appliedapplied byby that investment entityentity associateassociate oror jointjoint venture toto the investmentinvestment entityentity associate'sassociate's or joint venture's interests inin subsidiaries. ThisThis election isis made separatelyseparately forfor eacheach investmentinvestment entity associateassociate oror jointjoint venture. TheThe amendmentsamendments dodo not have any impactimpact on thesethese ; unconsolidated financialfinancial statements.statements.

The otherother amendments toto published standardsstandards andand interpretationsinterpretations thatthat areare mandatory forfor thethe financialfinancial year areare consideredconsidered not toto be relevantrelevant oror toto havehave any significantsignificant impactimpact onon thethe Company's financialfinancial reportingreporting and operationsoperations andand.are are thereforetherefore notnot discloseddisclosed inin these unconsolidated financialfinancial statements.statements.

3.2 Standards, interpretationsinterpretations and amendments toto approved accountingaccounting standards that areare issued but notnot yetyet effectiveeffective andand have not been early adoptedadopted by the Company - Amendment to IASIAS 19 'Employee'Employee Benefits, -- Plan Amendment, CurtailmentCurtailment or Settlement' (effective[effective for annualannual period beginning onon or after Januaryfanuary 01,01,2O19)t 2019):

The amendmentsamendments to IASIAS 191,9 specifyspeciSr that an entityentity must; (i)ti) determinedetermine currentcurrent serviceservice costcost forfor thethe remainderremainder ofof the period afterafter thethe plan amendment,amendment, curtailment oror settlement using the actuarial assumptionsassumptions usedused to remeasure the net defined benefit liabilityliability (asset)(asset] reflectingreflecting thethe benefits offeredoffered under the plan andand thethe plan assets afterafter thatthat eventevent and determine netnet interestinterest forfor thethe remainderremainder of thethe period afterafter thethe plan amendment, curtailment oror settlementsettlement using;using: (a)[a] the netnet defined benefit liabilityliability (asset)[asset] reflecting thethe benefits offeredoffered under thethe plan andand the plan assets afterafter that event;event; andand (b)[bJ the discountdiscount raterate used toto remeasureremeasure that netnet defined benefit liabilityliability (asset).[asset].

(ii)(iD determinedetermine anyany past serviceservice costcost, oror aa gaingain or lossloss onon settlement, without consideringconsidering thethe effecteffect of thethe assetasset ceiling. This amount isis toto be recognizedrecognized Inin profit oror loss.loss. An entity thenthen determinedetermine thethe effecteffect of thethe assetasset ceilingceiling afterafter thethe plan amendment, curtailment or settlementsettlement. Any changechange inin thatthat effect, excludingexcluding amounts includedincluded inin netnet interest,interest, isis recognized inin other comprehensive income.income.

The Company isis yet toto assessassess thethe full impactimpact ofof the amendment.amendment, Amendment to IASIAS 2828 'Investments'Investments inin Associates andand Jointfoint Ventures' -- Long term investmentinvestment Inin Associates andand Jointfoint Ventures (effective(effective for annualannual period beginning onon or after Januaryfanuary 01,Ol,2O19): 2019):

The amendmentamendment will affectaffect companiescompanies that finance suchsuch entitiesentities with preferencepreference sharesshares oror with loans forfor which repaymentrepayment isis not expected inin the foreseeableforeseeable future (referred(referred toto asas long-termlong-term interests oror'LTI'J. 'LTI'). TheThe amendment and accompanyingaccompanying exampleexample statestate that LTILTI areare inin thethe scopescope ofofboth both IFRSIFRS 99 and IASIAS 282B and explainexplain the annualannual sequencesequence inin which bothboth standards are toto bebe applied.applied. The amendment isis not likelylikely toto have anan Impactimpact on thethe Company's financialfinancial statements.statements.

Amendment to IFRSIFRS 9 'Financial'Financial Instrument'-Instrument'- prepayment Features with Negative CompcnsalionCompensation and modifications of financial liabilitiesliabilities (effective(effective for annual period beginning on or afterafter Januaryfanuary 01,2019):O1,2O19):

The amendmentamendment allowallow debtdebt instruments with negative compensationcompensation prepayment featuresfeatures toto be measured at amortizedamortized cost or fairfair value through otherother comprehensivecomprehensive Income,income. TheThe amendmentamendment alsoalso clarifiedclarified thatthat gains andand losseslosses arisingarising onon modifications ofof financial liabilitiesliabilities thatthat dodo notnot resultresult Inin derecognltionderecognition shouldshould be recognized inin profit or loss.loss,

IFRS 16,16, 'Leases''Leases' (effective(effective forfor periods beginning onon or after Januaryfanuary 01,2019):01, 2019): !FRSIFRS 1616 introducesintroduces aa singlesingle lesseelessee accountingaccounting model andand requiresrequires aa lesseelessee toto recognizerecognize assetsassets andand liabilitiesliabilities forfor ailall leasesleases with aa termterm ofof more thanthan 12 months, unless thethe underlying assetasset isis ofof lowlow value,value. A lesseelessee isis requiredrequired to recognize a right-of-useright-of-use assetasset representing itsits right toto use the underlying leasedleased assetasset and aa leaselease liabilityliability representingrepresenting itsits obligationobligation to make leaselease payments. The full impactimpact ofof thethe futurefuture adoption isis currentlycurrently under review.

IFRICIFR1C 2323 'Uncertainly'Uncertainty overover Income Tax Treatments' (effective(effective forfor annualannual periods beginning onon or afterafter Januaryfanuary 01,2019):0l,2O1.9):

IFRIC 2323 clarifies howhow the recognitionrecognition andand measurement requirementsrequirements ofof IASIAS 1212 'Income'lncome taxes', areare appliedapplied where therethere isis uncertainty overover incomeincome tax treatments.treatments. An uncertain taxtax treatment Isis anyany taxtax treatmenttreatment appliedapplied by an entity where therethere isis uncertainty overover whether that treatment will bebe acceptedaccepted byby the taxtax authority.authority. For example,example, a decision toto claimclaim aa deductiondeduction for a specific expenseexpense oror not toto includeinclude aa specific itemitem of incomeincome inin a taxtax return isis anan uncertain taxtax treatment ifif itsits acceptability isis uncertain under taxtax law.law. IFRiCIFRIC 23 appliesapplies toto allall aspectsaspects ofof incomeincome taxtax accounting where therethere isis an uncertaintyuncertainty regardingregarding thethe treatment ofof anan item,item, includingincluding taxabletaxable profit oror loss,loss, the taxtax bases ofof assetsassets and liabilities,liabilities, taxtax losseslosses andand credits andand taxtax rates. TheThe interpretation isis not expectedexpected to have significant impactimpact onon thethe Company'sCompany's financialfinancial statements.statements.

•' Amendments to IASIAS I,1, 'Presentation'Presentation ofof financial statements', andand IAS 8,8, 'Accounting'Accounting policies, changeschanges inin accountingaccounting estimates and errors'errors' (effective(effective forfor the Company's annual periodperiod beginning onon Januaryfanuary 1,2019):1,2O79):

These amendmentsamendments andand consequentialconsequential amendmentsamendments toto otherother iFRSs:IFRSs: (1)[iJ use aa consistentconsistent definition ofof materiality throughout IFRSsIFRSs and Chethe ConceptualConceptual FrameworkFramework forfor FinancialFinancial Reporting; (ii)[ii) clarifyclarify the explanationexplanation ofof thethe definitiondefinition ofof material; andand (ili)fiiiJ incorporate somesome of thethe guidanceguidance inin iASIAS 1]- aboutabout immaterialimmaterial information.information. These amendmentsamendments areare not expectedexpected to have aa significantsignificant impactimpact onon thethe Company's futurefuture Financialfinancial statements.statements. ■. Amendment to IFRSIFRS 3 'Business'Business Combinations' - Definition of aa Business (effective(effective for business combinationscombinations forfor which the acquisitionacquisition date is on or after the beginning of annualannual periodperiod beginning onon or afterafter 1 Januaryfanuary 2020):2020):

The IASBIASB hashas issuedissued amendments aiming to resolveresolve thethe difficultiesdifficulties that arisearise when anan entityentity determinesdetermines whether itit hashas acquiredacquired aa business oror a groupgroup of assets.assets. The amendmentsamendments clarifyclari$r that to be consideredconsidered aa business, anan acquired setset ofof activities andand assetsassets must include,include, atat aa minimum, anan inputinput andand aa substantivesubstantive process that together significantly contributecontribute toto thethe ability to createcreate outputs.outputs. The amendments includeinclude an electionelection toto useuse aa concentrationconcentration test.test. The standardstandard isis effectiveeffective forfor transactionstransactions inin thethe futurefuture andand therefore would not have anan impactimpact onon past financialfinancial statements.statements.

-' Annual ImprovementsImprovements toto IFRSIFRS Standards 2015-201720tS-2O77 Cycle. The new cycle of improvements addressesaddresses improvements toto following approved accounting standardsstandards (effective(effective forfor annualannual period beginning onon or after Januaryfanuary 1,2019):1,2019)t

•- !FRSIFRS 33 Business Combinations andand IFRSIFRS II11. Jointloint Arrangements,Arrangements. The amendmentamendment aimsaims toto clarifyclarify thethe accountingaccounting treatmenttreatment when aa companycompany increasesincreases its interest inin aa jointjoint operationoperation thatthat meets thethe definitiondefinition of aa business. A companycompany remeasuresremeasures its previouslypreviously held interestinterest inin a jointjoint operation when itit obtains controlcontrol ofofthe the business. A companycompany doesdoes not remeasureremeasure its previously heldheld interestinterest inin aa jointjoint operation when itit obtainsobtains jointioint controlcontrol ofof thethe business.business.

- IAS 12 Income Taxes. The amendmentamendment ciarifyclarify that allall incomeincome taxtax consequencesconsequences ofof dividends (including(including paymentspayments onon financial Instrumentsinstruments classifiedclassified asas equity) are recognizedrecognized consistentlyconsistently with thethe transactiontransaction that generates the distributable profits.

-- !ASIAS 2323 Borrowing Costs,Costs. TheThe amendment clarifyclarify that aa companycompany treatstreats asas part ofof generalgeneral borrowings anyany borrowing originally madsmade toto developdevelop anan assetasset when the asset isis readyready forfor itsits intendedintended use oror sale-sale.

Further, the followingfollowing new standardsstandards have been issuedissued by the International Accounting Standards Board (IASB),(IASB), which arcare yet toto be notified by thethe SecuritiesSecurities andand Exchange Commission of Pakistan (SECP),(SECP), forfor thethe purposes ofof theirtheir applicabilityapplicability Inin Pakistan:

IFRSIFRS -1- 1 'First'First timetime adoptionadoption ofof Internationallnternational Financial Reporting Standards'.Standards" IFRSIFRS -14- 14 'Regulatory'Regulatory DeferralDeferral Accounts'. IFRS -17- 17'lnsurance 'Insurance Contracts'. 4. CR!T)CAlCRITICAL ACCOUNTING ESTIMATES AND JUDGMENTSJUDGMENTS The preparationpreparation of financialfinancial statements inin conformityconformity with thethe approved accountingaccounting standardsstandards require management to makemal

The estimatesestimates andand underlyingunderlying assumptionsassumptions areare reviewedreviewed onon anan ongoingongoing basis. RevisionsRevisions toto accountingaccounting estimates areare recognized inin thethe period in which thethe estimatesestimates areare revisedrevised ififthe the revisionrevision affectsaffects onlyonly thatthat period, oror inin the period ofofthe the revisionrevision andand futurefuture periods. Judgmentsfudgments made by management inin application ofofthe the approvedapproved accountingaccounting standardsstandards that havehave significantsignificant effecteffect onon the unconsolidated financialfinancial statementsstatements and estimatesestimates with aa significant riskrisk ofof material adjustments inin the next yearyear areare discusseddiscussed inin respectiverespective policy notes.notes. TheThe areasareas where various assumptionsassumptions andand estimates areare significantsignificant toto thethe Company's financialfinancial statementsstatements oror where judgmentjudgment was exercisedexercised inin applicationapplication ofof accounting policies areare asas follows:

•. Estimate ofofuseful useful lifelife ofofoperating operating fixedfixed assets -- note 5,15.1 •. ImpairmentImpairment ofof non-financial assetsassets - note 5,55.5 •. Stores andand sparesspares -- notenote 5.65.6 •' Stock-in-trade -- notenote 5.75.7 •' StaffStaff retirement benefits -- notenote 5,105.10 •. Provisions -- note 5,135.13 ■. Contingencies -- note 5.14 •' Taxation -- notenote 5.15

5. SUMMARY OF SIGNIFICANTSIGNIFICANT ACCOUNTING POLICIES 5.1 OperatingOperating fixedfixed assetsassets andand depreciationdepreciation Operating fixedfixed assets,assets, exceptexcept freeholdfreehold landland which isis statedstated atat cost,cost, areare statedstated at costcost lessless accumulatedaccumulated depreciationdepreciation andand any Identifiedidentified accumulated impairmentimpairment loss.loss. CostCost comprises acquisitionacquisition andand otherother directlydirectly attributableattributable costs.costs. Depreciation Isis calculatedcalculated atat the ratesrates statedstated inin notenote 7.1 applying reducingreducing balance method.method. TheThe usefuluseful lifelife andand residualresidual value ofof major componentscomponents of operatingoperating fixedfixed assets areare reviewedreviewed annuallyannually toto determinedetermine thatthat expectations areare notnot significantlysignificantly differentdifferent from the previous estimates. Adjustment inin depreciationdepreciation raterate for currentcurrent and futurefuture periods isis made ifif expectationsexpectations are significantly differentdifferent from thethe previous estimates.estimates. Depreciation isis charged fromfrom the month when anan assetasset becomes available for use, whereas nono depreciation Isis chargedcharged inin the monthmonth ofof itsits disposal.disposal. Gain andand lossloss on disposaldisposal ofof fixedfixed assetsassets isis Includedincluded Inin statement ofofprofit profit or loss.loss.

Expenditure, which enhancesenhances oror extends the performance ofof operatingoperating fixed assets beyond itsits originaloriginal specificationspecification andand itsits useful life,life, Isis recognizedrecognized as aa capital expenditureexpenditure andand isis addedadded toto thethe costcost ofofthe the operatingoperating fixedfixed assets. These areare depreciateddepreciated onon reducingreducing balance method atat thethe rate mentioned inin thethe relevantrelevant note.

5.2 Capital work Inin progress Capital work inin progress isis statedstated atat costcost lessless anyany identifiedidentified Impairmentimpairment lossloss and representsrepresents direct costcost ofof material, labour,labour, applicable overheadsoverheads andand borrowing costscosts onon qualifyingqualifuing assets.assets. Transfers areare mademade toto relevantrelevant properly,property, plant andand equipmentequipment category as andand when assetsassets are availableavailable forfor itsits Intendedintended use.

5.3 Leases , Operating leases Leases where aa significantsignificant portion ofof thethe risksrisks and rewardsrewards ofof ownershipownership areare retainedretained by thethe lessorlessor areare classifiedclassified as operatingoperating leases. PaymentsPayments made under operatingoperating leases [net(net of anyany incentivesincentives received fromfrom the lessor]lessor] areare chargedcharged to the incomeincome statementstatement on a straight-linestraight-line basis over the period ofof lease.lease.

Finance leasesleases Leases inin termsterms of which thethe Company has substantially allall thethe risks andand rewardsrewards ofof ownership are classifiedclassified asas financefinance leases.leases. Assets subjectsubiect to financefinance leaselease areare statedstated atat thethe lowerlower of presentpresent value ofof minimum leaselease payments under thethe leaselease agreements andand the fairfair value of thethe assets, lessless accumulatedaccumulated depreciationdepreciation andand any identifiedidentified Impairmentimpairment loss.Ioss. The relatedrelated rentalrental obligations,obligations, netnet ofof financefinance costscosts areare classifiedclassified asas airrentcurrent andand longlong term liabilityliability dependingdepending upon thethe timingtiming ofof thethe paymentpayment.

Each leaselease payment Isis allocated between thethe liabilityliability and financefinance costcost soso asas toto achieve a constant ralerate onon thethe balance outstanding.outstanding. The interestinterest elementelement ofof thethe rentalrental Isis chargedcharged toto statementstatement ofof profit oror lossloss overover thethe leaselease term.term.

Assets acquiredacquired underunder a financefinance leaselease areare depreciated overover the estimatedestimated usefuluseful lifelife of the assetasset onon aa reducingreducing balancebalance method atat the ratesrates given inin notenote 7.1.7.1, Depreciation ofofleased leased assetsassets isis chargedcharged to statementstatement ofofprofit profit oror loss.loss.

Residual valuevalue andand thethe useful lifelife ofof anan assetasset areare reviewed atat leastleast atat eacheach financialfinancial year-end.year-end.

Depreciation onon additions toto leased assetsassets isis chargedcharged fromfrom thethe month inin which an assetasset isis acquired,acquired, while no depreciationdepreciation isis charged forfor thethe month inin which thethe asset isis disposeddisposed off.ofl 5.4 Intangible asset -- Computer software

Intangible assets are stated atat costcost lessless accumulatedaccumulated amortization andand any identifiedidentified accumulatedaccumulated impairmentimpairment loss.loss, These are amortized using the reducingreducing balance method at thethe ratesrates givengiven inin notenote 8.B. Amortization onon additionsadditions isis chargedcharged fromfrom the month inin which anan intangibleintangible assetasset isis acquired,acquired, while nono amortization isis chargedcharged Forfor thethe month inin which intangibleintangible assetasset isis disposeddisposed off.off,

Costs associatedassociated with maintaining computercomputer softwaresoftware program areare recognizedrecognized as anan expenseexpense as andand when incurred.incurred. Costs that are directly attributableattributable to identifiableidentifiable softwaresoftware andand have probable economiceconomic benefits exceedingexceeding oneone year,year, are recognized asas anan intangible assetasset atat thethe time ofof initialinitial recognition.recognition. Direct costscosts includeinclude thethe purchase cost ofof software and related overheadoverhead costs.costs.

Expenditure, which enhancesenhances or extendsextends thethe performance ofof computercomputer softwaresoftware beyond itsits originaloriginal specificationspecification andand useful life,life, isis recognized asas aa capitalcapital expenditureexpenditure and addedadded toto thethe costcost ofofthe the software.software. TheseThese areare amortizedamortized on reducingreducing balance method atat thethe rate mentioned inin thethe relevantrelevant note.note.

5.55,5 Impairment of non-financial assetsassets The carrying amountsamounts ofofthe the Company's non-financial assets,assets, other thanthan stockstock inin trade andand scoresstores andand spares,spares, are reviewedreviewed atat eacheach reporting datedate to determine whether therethere isis any indicationindication of impairment.impairment. Iflf anyany such indicationindication exists thenthen the asset'sasset's recoverable amount isis estimated.estimated. For goodwillgoodwill andand intangibleintangible assetsassets thatthat have indefiniteindefinite liveslives or thatthat areare not yetyet available forfor use,use, recoverable amount isis estimated atat eacheach reporting date.date.

An impairmentimpairment lossloss isis recognizedrecognized ifif the carrying amountamount ofof an asset or itsits cash-generatingcash-generating unitunit exceedsexceeds itsits recoverablerecoverable amountamount. A cash-generating unit Isis thethe smallest identifiabieidentifiable assetasset groupgroup thatthat generatesgenerates cashcash flowsflows thatthat largelylargely areare independentindependent fromfrom otherother assets andand groups.groups.

Impairment losseslosses areare recognized inin profit or loss.loss. ImpairmentImpairment losseslosses recognizedrecognized inin respectrespect of cash-generatingcash-generating units areare allocatedallocated firstfirst to reducereduce thethe carrying amountamount ofof anyany goodwillgoodwill allocatedallocated toto thethe units and thenthen toto reduce the carryingcarrying amountamount ofof thethe otherother assets ofof thethe unit onon a pro-rata basis.basis. ImpairmentImpairment losseslosses onon goodwill shallshall notnot be reversed.reversed.

An impairmentimpairment lossloss isis reversedreversed ifif therethere has been aa changechange inin thethe estimatesestimates used toto determine the recoverablerecoverable amount.amount. An impairment lossloss isis reversedreversed only toto the extentextent thatthat thethe asset'sasset's carryingcarrying amountamount doesdoes not exceedexceed thethe carrying amountamount thatthat would have been determined,determined, net ofof depreciationdepreciation oror amortization,amortization, ifif no impairment lossloss had been recognized.recognized. Prior Impairmentsimpairments ofof non- financial assetsassets areare reviewedreviewed forfor possible reversalreversal atat eacheach reportingreporting date.date.

5.6 Stores andand spares Stores andand sparesspares areare carried atat moving averageaverage cost.cost. Provision isis made forfor slowslow moving andand obsolete storestore itemsitems when soso identified. StoresStores and sparesspares held for capitalcapital expenditureexpenditure are includedincluded inin capitalcapital work inin progress.progress.

5.7s.7 Stock-in-tradeStock-in-trade

These areare stated atat the lowerlower ofof cost andand net realizablerealizable valuevalue (NRV).[NRV]. The methodsmethods used forfor thethe calculationcalculation of costcost areare as follows:follows:

Raw material -- At factoryfactory MMoving oving averageaverage costcost -- InIn transittransit InvoiceInvoice value plus directdirect charges inin respectrespect thereof.thereof. Work inin process andand finishedfinished goodsgoods Prime costcost Includingincluding aa proportion ofofproduction production overheads.overheads. Wastes are valuedvalued atat netnet realizablerealizable value.value

Stock-in-trade isis regularlyregularly reviewedreviewed by the management andand anyany obsoleteobsolete itemsitems areare brought downdown to their net realizablerealizable value.value MetNet realizable value signifies the selling price inin thethe ordinaryordinary coursecourse ofofbusiness business lessless costscosts necessary toto bebeincurred incurred toto affect suchsuch sale,sale.

5.8 Cash andand cashcash equivalentsequivalents

Cash andand cashcash equivalentsequivalents comprisecomprise ofof cashcash inin hand, chequescheques inin hand/cheques overdrawn,overdrawn, balances with banksbanks and includeinclude short term highly liquidliquid investments with original maturities ofof three months or less.less. The cashcash andand cashcash equivalentsequivalents areare readilyreadily convertible to known amountamount ofof cashcash andand areare subjectsubject toto insignificantinsignificant riskrisk ofof change inin value.

5.9 Non-current assets heldheld for sale Non-current assetsassets [or(or disposaldisposal groups}groupsJ areare classifiedclassified asas assetsassets held forfor sale when their carryingcarrying amountamount isis to be recovered principally throughthrough a salesale transactiontransaction ratherrather thanthan continuingcontinuing use andand a salesale isis consideredconsidered highly probable. They areare statedstated at thethe lower of carryingcarrying amountamount andand fairfair value lessless costs to sell.sell. Impairmentlmpairment losseslosses onon initialinitial classification as held forfor salesale andand subsequentsubsequent gains oror losseslosses on re-tncasurementsre-measurements areare recognized inin the statementstatement ofofprofit profit oror loss.loss.

Once classified asas held-for-sale, intangibleintangible assetsassets and property, plant and equipment,equipment, areare no longerlonger amortized oror depreciated.depreciated.

5.10 Staff retirementretirement benedtsbenefits (a)(a) Defined Benefit Plan The CompanyCompany operates anan unfunded gratuity schemescheme forfor allall employees accordingaccoiding toto the terrasterms of employment,employment, subjectsubject to aa minimum qualifyingqualifuing period ofof service.service, Annual provisionprovision Isis made onon thethe basis of actuarialactuarial valuation toto cover obligationsobligations under thethe scheme forfor all employeesemployees eligibleeligible to gratuitygratuity benefits.benefits. The costcost ofofproviding providing benefits Isis determineddetermined using the projectedprojected unit credit method, with actuarialactuarial valuation being carriedcarried out at each balance sheetsheet date.date. RemeasuremcntRemeasurement ofof net dellneddefined benefitbenefit liability,liability, which comprisecomprise ofof actuarialactuarial gainsgains andand losseslosses i.e.i,e, experienceexperience adjustments andand the effectseffects ofof changeschanges inin actuarial assumptions,assumptions, are recognizedrecognized immediatelyimmediately inin otherother comprehensivecomprehensive income.income. The Company determines netnet interestinterest expense/finexpense/(incor-ne] come) onon thethe defineddefined benefit obligationobligation forfor thethe period by applyingapplying thethe discount raterate used toto measure the defineddefined benefitbenefit obligation at thethe beginning ofof the annual periodperiod to then-netthen-net defineddefined benefit,benefil takingtaking intointo account anyany changechange inin the net defineddefined benefit obligationobligation duringduring the periodperiod asas aa result ofofcontributions contributions andand benefit payments. Net interest expense andand otherother expenses e.g. current serviceservice cost,cost, relatedrelated to defineddefined benefit plans areare recognizedrecognized inin statementstatement ofof profit or loss.loss.

(bj(b) Defined Contribution Plan There isis a contributorycontributory provident fund forfor executiveexecutive staffstaff ofof thethe Company forfor whicliwhich contributions are chargedcharged toto profit or lossloss asas and when incurred.incurred. The Company makes monthly contributioncontribution to the fundfund atat thethe raterate ofof 7.5%7.5o/o whereas employeesemployees ofof thethe Company make monthly contributions toto thethe fundfund atat thethe ratesrates rangingranging fromfrom7.5o/o 7.5% to 12.5%72.5o/o ofof basic salary.salary. TheThe assetsassets ofof thethe fundfund are held separatelyseparately underunder the contro!control ofof trustees,trustees.

{c)(c) Employees'Employees'Share Share Option Scheme (KSOS)(ESOS)

The CompanyCompany operates anan equityequity settledsettled stockstock optionoption schemescheme toto be calledcalled Tnterioop'lnterloop Limited -- Employees Stock Option Scheme,Scheme, 2016",2076'. TheThe compensation committeecommittee ("committee")["committee"J ofof thethe Board ofof directorsdirectors ("Board")("Board"J evaluatesevaluates thethe performanceperformance andand otherother criteria ofof employeesemployees andand recommendsrecommends toto thethe Board forfor grant ofof options. TheThe Board on the recommendationrecommendation of thethe committee,committee, onon itsits discretion,discretion, grantsgrants recommendedrecommended optionsoptions toto employees.employees. These options vest after aa specifiedspecified period subject to fulnilmenlfulfillment ofof certain conditions as defineddefined inin thethe scheme.scheme. Upon vesting, employeesemployees areare eligibleeligible to apply andand securesecure allotmentallotment ofof Company's shares at aa pre-determlnedpre-determined price onon thethe datedate ofof grant ofof options.

The fairfair value ofofthe the shareshare optionoption isis measured at grantgrant datedate as differencedifference ofof fairfair value ofofshare share and exerciseexercise price andand isis recognizedrecognized as anan employeeemployee compensationcompensation expense,expense, with aa correspondingcorresponding increaseincrease inin equity,equity, onon thethe straightstraight lineline basis overover the vesting period. The amountamount recognizedrecognized asas an expenseexpense Isis adjustedadjusted toto reflect thethe number-ofnumber of awardsawards for which thethe relatedrelated service andand non-market performance conditionsconditions areare expectedexpected toto be met, suchsuch that thethe amountamount ultimately recognized isis based onon thethe number ofof awardsawards thatthat meet thethe relatedrelated service andand non- market performance conditionsconditions atat thethe vesting date.date.

When shareshare optionsoptions areare exercised,exercised, thethe proceeds received,received, net ofof anyany transaction costs,costs, areare credited to siiareshare capitalcapital (nominal(nominal value)value] and shareshare premium. 5.11 Trade andand other payablcspayables Trade andand otherother payablespayables areare initiallyinitially recognizedrecognized at fairfair value andand subsequentlysubsequently atat amortizedamortized costcost using effectiveeffective interestinterest raterate method. Exchange gainsgains and losseslosses arisingarising on translationtranslation inin respect of liabilitiesIiabilities inin foreignforeign currencycurrency areare addedadded toto thethe carryingcarrying amount ofof the respective liabilities,liabilities. 5.125,12 Ijarah Ijarah payments under an ijarahIjarah are recognizedrecognized asas anan expenseexpense inin thethe statement ofof profit oror lossloss on a straight-linestraight-line basis overover thethe Ijarah term.term. 5.13 Provisions Provisions areare recognizedrecognized inin the balance sheetsheet when thethe Company has aa present legallegal or constructive obligation asas aa resultresult ofof past events andand itit isis probable thatthat anan outflowoutflow ofofresources resources will bebe requiredrequired to settlesettle thethe obligationobligation andand aa reliablereliable estimate ofofthe the amountamount can bebe made.

Provisions are reviewed atat eacheach balance sheetsheet datedate andand areare adjustedadjusted toto reflectreflect thethe currentcurrent best estimate. Iflf itit isis no longerlonger probable that anan outflowoutflow of resources embodyingembodying economiceconomic benefits will bebe required toto settlesettle thethe obligation,obligation, the provisions areare reversed.

5.14 Contingencies

The assessmentassessment ofof thethe contingenciescontingencies inherentlyinherently Involvesinvolves the exerciseexercise ofof significant judgment asas the outcomeoutcome ofof thethe futurefuture events cannot be predicted with certainty. TheThe company,company, based on thethe availabilityavailability ofof thethe latestlatest information,information, estimatesestimates the value of contingent assetsassets andand liabilitiesliabilities which may differ onon thethe occurrenceoccurrence / non-occurrence ofofthe the uncertainuncertain futurefuture events.events. 5.15 Taxation Current

The chargecharge forfor currentcurrent taxationtaxation Isis based onon taxabletaxable incomeincome at currentcurrent ralesrates ofof taxationtaxation afterafter takingtaking intointo accountaccount taxtax credits, rebates and exemptionsexemptions available, ifif any.any. However, forfor incomeincome coveredcovered underunder Final Taxation Regime (FTR),IFTRJ, taxationtaxation isis based onon thethe applicable taxtax ratesrates under suchsuch Regime afterafter takingtaking intointo accountaccount taxtax credits,credits, rebatesrebates and exemptions,exemptions, ifif any.

Deferred Deferred tax isis accountedaccounted forfor using thethe balancebalance sheetsheet liabilityliability method inin respectrespect ofof temporary differencesdifferences arisingarising fromfrom differencesdifferences between thethe carryingcarrying amountamount ofof assetsassets andand liabilitiesliabilities inin thethe unconsolidatedunconsolidated financialfinancial statementsstatements and thethe correspondingcorresponding taxtax basis used inin thethe computationcomputation ofof taxabletaxable income.income. Deferred taxtax isis calculatedcalculated by using thethe taxtax ratesrates enactedenacted at thethe balancebalance sheetsheet date. InIn thisthis regard,regard, thethe effecteffect onon deferreddeferred taxationtaxation ofofthe the portion ofofincome income subjectedsubjected to Final Tax Regime isis adjusted inin accordanceaccordance with the requirementsrequirements ofof Accounting TechnicalTechnical Release -- 2727 of thethe InstituteInstitute ofof Chartered Accountants of Pakistan, ifif considered materialmaterial. Deferred taxtax liabilityliability isis recognizedrecognized forfor allall taxabletaxable temporary differences andand deferreddeferred taxtax assetasset isis recognizedrecognized forfor all deductibledeductible temporary differencesdifferences andand carrycarry forwardforward of unused laxtax losseslosses andand unused taxtax credits,credits, ifif any,any, toto thethe extentextent thatthat itit isis probableprobable thatthat future taxabletaxable profit will be availableavailable against which these cancan be utilized.utilized.

Deferred taxtax assets are reducedreduced toto thethe extentextent thatthat itit isis nono longerlonger probable that thethe relatedrelated taxtax benefit will bebe realized.realized. SignificantSignificant management judgmentjudgment isis requiredrequired to determinedetermine the amountamount of deferreddeferred taxtax assetsassets that cancan be recognized,recognized, basedbased upon the likelylikely timing and levellevel ofof future taxabletaxable profitsprofits together with futurefuture taxtax planning strategies.strategies.

5.165.15 Foreign currencycurrency translation

All monetary assets andand liabilitiesliabilities inin foreignforeign currenciescurrencies are translated intointo rupeesrupees atat exchangeexchange ratesrates prevailing atat thethe balance sheetsheet date. Transactions inin foreignforeign currenciescurrencies areare translatedtranslated intointo rupeesrupees atat exchange ratesrates prevailing atat thethe datedate ofof transaction.transaction. Non- monetary assetsassets andand liabilitiesliabilities thatthat are measured inin termsterms ofof historical costcost inin aa foreignforeign currencycurrency are translated intointo rupeesrupees at exchange rates prevailing atatthe the datedate ofoftransaction. transaction. Non-monetary assetsassets andand liabilitiesliabilities denominateddenominated inin foreignforeign currencycurrency thatthat areare stated at fairfair value areare translatedtranslated Intointo rupees atat exchange ratesrates prevailingprevailing atat the datedate when fair valuesvalues areare determined.determined. Exchange gains andand losseslosses areare includedincluded inin thethe statement ofof profit or lossloss immcdiatoly.immediately.

5.17s.l7 Borrowing costscosts Borrowing costs directlydirectly attributable toto the acquisition,acquisition, construction oror production of qualifyingqualifying assets, which are assetsassets that necessarily taketake aa substantial periodperiod ofoftime time to get readyready forfor theirtheir intendedintended useuse or sale,sale, areare addedadded toto thethe costcost ofofthose those assets,assets, until suchsuch timetime when the assetsassets areare substantiallysubstantially readyready forfor theirtheir intendedintended use oror sale.sale. All other borrowing costscosts areare chargedcharged toto statementstatement of profitprofit oror lossloss inin the period ofof as andand when incurred.incurred.

5.1B5.18 Government grantsgrants Government grants areare recognizedrecognized when therethere isis reasonablereasonable assurance that entityentity will comply with the conditionsconditions attachedattached toto ilit and grantgrant will be received,received. S.1V5.19 Earnings per shareshare

The Company presents basic and diluteddiluted earnings per shareshare (EPS)[EPS] forfor itsits ordinaryordinary shares.shares. Basic EPS isis calculated by dividingdividing thethe profit by weighted average number of sharesshares outstandingoutstanding duringduring thethe period. Diluted EPS isis calculatedcalculated by adjustingadjusting forfor thethe effectseffects of all dilativedilutive potential ordinaryordinary shares.shares.

5.20 Share capitalcapital

Ordinary sharesshares are classified as equityequity andand recognizedrecognized atat theirtheir faceface value.value. 5.21s.2l Dividend Dividend distributiondistribution toto thethe Company'sCompany's shareholdersshareholders isis recognized asas aa liabilityliability Inin thethe Company's unconsolidated financialfinancial statements inin the period inin which dividendsdividends are approved.approved.

5.22s.22 Segment reporting

Segment reporting isis based onon the operatingoperating (business)(businessJ segmentssegments ofof the Company.Company. An operatingoperating segmentsegment isis aa componentcomponent of thethe Company thatthat engagesengages inin business activities fromfrom which itit may earnearn revenues andand incurincur expenses, includingincluding revenuesrevenues and expenses that relaterelate toto the transactionstransactions with any ofof thethe Company'sCompany's otherother components.components. An operatingoperating segment'ssegment's operatingoperating resultsresults areare reviewedreviewed regularly by the chiefchief operating decision maker ('CODM')['CODM'J toto make decisionsdecisions aboutabout resources to be allocated toto the segmentsegment andand assess itsits performance, andand forfor which discrete financialfinancial informationinformation isis available. TheThe CODM, who isis responsibleresponsible forfor allocatingallocating resources andand assessingassessing performanceperformance ofofthe the operatingoperating segments,segments, has been identifiedidentified asas the Board ofofDirectors Directors ofofthe the Company thatthat makes thethe strategicstrategic decisions.decisions.

Segment resultsresults that areare reported to the CODM includeinclude itemsitems directlydirectly attributableattributable toto a segmentsegment as well asas thosethose thatthat can bebe allocated on aa reasonablereasonable basis.basis. Those incomes,incomes, expenses,expenses, assets, liabilitiesliabilities andand other balancesbalances which cannotcannot bebe allocatedallocated toto aa particular segmentsegment onon aa reasonable basis areare reportedreported asas unallocated.unallocated.

Transaction among thethe business segmentssegments are recorded at cost.cost. InterInter segmentsegment salessales andand purchases areare eliminatedeliminated fromfrom thethe total.total.

5.23J.Z J InvestmentInvestment in subsidiary andand associateassociate Investments inin subsidiarysubsidiary and associateassociate are recognizedrecognized atat costcost lassless impairment loss,loss, ifif any.any. At eacheach balance sheetsheet date, thethe recoverable amountsamounts areare estimatedestimated toto determinedetermine thethe extent ofof impairmentimpairment losses,losses, ifif any,any, and carryingcarrying amountsamounts ofof investmentsinvestments areare adjusted accordingly.accordingly. ImpairmentImpairment losseslosses areare recognized asas expense.expense. Where impairmentimpairment losseslosses subsequently reverse,reverse, the carryingcarrying amounts of thethe investmentsinvestments areare increasedincreased to thethe revisedrevised recoverablerecoverable amountsamounts but limitedlimited toto the extentextent of initialinitial costcost ofof investments.investments. A reversalreversal ofof impairmentimpairment lossloss isis recognizedrecognized inin thethe statementstatement of profit oror loss.loss.

The profits andand losseslosses ofof subsidiary andand associatedassociated entitiesentities areare carriedcarried forwardforward inin theirtheir financialfinancial statementsstatements andand not dealtdealt withinwithin these financialfinancial statementsstatements exceptexcept toto the extentextent of dividend declareddeclared by the subsidiary andand associate.associate. CainsGains andand losseslosses onon disposal of investments areare includedincluded inin otherother income.income.

5.24s.24 RelatedRelated.party party transactionstransactions All transactions with relatedrelated parties are carriedcarried out atat agreed termsterms andand conditionsconditions and onon arm'sarm's lengthlength basis. 6. CHANGES ININ ACCOUNTING POLICIES DUE TO APPLICABILITY OF CERTAINCERTAIN INTERNATIONAL FINANCIALFINANCIAT REPORTING STANDARDSSTANDARDS (IFRS)(rFRS)

6.16,1 IFRSIFRS9,'FinancialInstruments': 9, 'Financial Instruments':

A financialfinancial Instrumentinstrument Isis anyany contract thatthat gives riserise toto aa financialfinancial assetasset ofof oneone entityentity andand aa financialfinancial liabilityliability or equity instrumentinstrument ofof another entity.entity.

6.1.1 Financial assetsassets The standard Introducedintroduced new classification andand measurement models for financialfinancial assets.assets, A financialfinancial assetasset shallshall be measured atat amortized costcost ifif itit isis held Inin orderorder toto collectcollect contractualcontractual cashcash flows which arisearise on specifiedspecified datesdates and thatthat are 'solely'solely payment ofof principal andand interest (SPPI)'ISPPI)' onon thethe principalprincipal amountamount outstanding. A debtdebt investmentinvestment shallshall be measured at fairfair value through otherother comprehensive incomeincome ifif itit isis held inin orderorder to collect contractualcontractual cash flowsflows which arisearise onon specifiedspecified datesdates thatthat areare solelysolely principal andand interest and as well asas sellingselling thethe assetasset onon thethe basis ofofits its fairfair value. All otherother financialfinancial assetsassets areare classified andand measured atat fairfair valuevalue through profit or lossloss unless the Company makes an irrevocableirrevocable electionelection onon initialinitial recognitionrecognition toto present gainsgains andand losseslosses onon equityequity instruments inin other comprehensivecomprehensive income,income. Despite these requirements,requirements, aa financialfinancial assetasset may be irrevocablyirrevocably designateddesignated asas measured at fairfair value throughthrough profit oror lossloss toto reducereduce the effect of,ol or eliminate,eliminate, anan accountingaccounting mismatch.

Key changeschanges inin accounting policies resultingresulting fromfrom application of IFRSIFRS 9

A. Classification and measurement of financialfinancial instrumentsinstruments iln.ve?tmg.nLs.Aii.d.p.thqr.finan.ci.al-itssp.tsInvestments and other financial assets

Classification:

The Company classifiesclassifies itsits financialfinancial assetsassets inin the followingfollowing measurement categories:categories: •- thosethosetobemeasuredsubsequentlyatfairvalue[eitherthroughothercomprehensiveincome,orthroughprofitorloss],and to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss], and

- thosethose toto bebe measured atat amortizedamortized cost The classification depends onon thethe Company's business ntodelmodel forfor managing the financialfinancial assetsassets andand thethe contractualcontractual termsterms ofof thethe cash flows.flows. InIn orderorder forfor aa financialfinancial asset toto be classifiedclassified andand measured alat amortizedamortized cost oror fairfair value throughthrough OCI,OCl, itit needs to give rise toto cashcash flowsflows thatthat areare'solely 'solely payments ofofprincipal principal andand interestinterest (SPPI)'ISPPI]' onon thethe principal amountamount outstanding.outstanding. ThisThis assessmentassessment isis referredreferred toto asas thethe SPPISPPI testtest andand isis performed atat anan instrumentinstrument level.level. The Company's businessbusiness model forfor managing financialfinancial assets refers to howhow itit manages itsits financialfinancial assetsassets inin orderorder toto generategenerate cashcash flows.flows.

For assetsassets measured atat fairfair value, gainsgains and losseslosses will eithereither be recordedrecorded inin profit or lossloss oror otherother comprehensivecomprehensive income.income. For investments inin debtdebt instruments,instruments, thisthis will depend on thethe business model inin which the Investmentinvestment isis held. For investmentsinvestments inin equity instruments, this will depend onon whether thethe Company hashas made an irrevocableirrevocable election atat thethe timetime ofof initialinitial recognitionrecognition toto account forfor thethe equityequity investmentinvestment atat fairfair value throughthrough otherother comprehensivecomprehensive income.income. The Company reclassifiesreclassifies debt investnienisinvestments when andand onlyonly when Itsits business mode!model forfor managing those assets changes.changes. Measurement:

At initialinitial recognition,recognition, the CompanyCompany measures aa financialfinancial asset atat itsits fairfair value plus, inin the casecase ofof aa financialfinancial assetasset notnot atat fairfair valuevalue through profitprofit or loss,loss, transactiontransaction costscosts thatthat areare directlydirectly attributableattributable toto thethe acquisitionacquisition ofof thethe financialfinaneial asset.asset. Transaction costscosts ofof financial assetsassets carried atat fairfair value through profit oror lossloss areare expensedexpensed inin profit oror loss.loss.

Financial assets with embeddedembedded derivativesderivatives areare consideredconsidered Inin theirtheir entiretyentirety when determiningdetermining whether theirtheir cashcash flowsflows areare solely payment ofof principal andand interest.interest.

ili) Debt,Detrt instrumentsinstruments Subsequent measurement ofof debtdebt instrumentsinstruments dependsdepends onon the Company's business model for managing thethe assetasset and thethe cashcash flow characteristics ofofthe the assetasset, There areare three measurement categoriescategories intointo which thethe CompanyCompany classifiesclassifies itsits debt instruments:instruments:

Amortized costcost

Financial assets thatthat are held forfor collectioncollection ofof contractual cashcash Rowsflows where thosethose cashcash Howsflows representrepresent solely payments ofof principal and interestinterest areare measured atat amortizedamortized cost.cost. Interestlnterest incomeincome fromfrom thesethese financialfinancial assetsassets isis includedincluded inin other incomeincome using thethe effective interestinterest raterate method. Any gain oror lossloss arisingarising onon dereeognitionderecognition isis recognizedrecognized directlydirectly inin profitprofit oror lossloss and presented inin other incomeincome / (other(other expenses]expensesJ togethertogether with foreignforeign exchangeexchange gains and losses.losses. Impairmentlmpairment losseslosses are presented asas separateseparate lineline item inin thethe statementstatement ofofprofit profit or loss.Ioss.

Fair valuevalue throughthrough otherother comprehensivecomprehensive incomeincome (FVTOCI)(FVTOCD

Financial assetsassets thatthat are heldheld for collection ofof contractual cashcash Rowsflows andand forfor sellingselling thethe financialfinancial assets,assets, where thethe assets' cashcash flowsflows represent solely payments ofof principal andand interest,interest, are measured atat FVTOCI. Movements inin thethe carryingcarrying amountamount areare takentaken throughthrough other comprehensive income,income, exceptexcept forfor thethe recognitionrecognition ofof impairmentimpairment losseslosses (and{and reversalreversal ofof impairmentimpairment losses],losses), interestinterest incomeincome and foreignforeign exchangeexchange gainsgains and losseslosses which areare recognized inin profit or loss.loss. When thethe financialfinancial asset isis derecognized,derecognized, thethe cumulative gaingain or lossloss previously recognized inin otherother comprehensivecomprehensive incomeincome isis reciassifiedreclassified fromfrom equity toto profit oror lossloss andand recognized inin other incomeincome / (other(other expenses).expenses]. Interest incomeincome fromfrom thesethese fmancialfinancial assetsassets isis Includedincluded inin other incomeincome usingusing thethe effective interestinterest rate method. Foreign exchangeexchange gainsgains andand losseslosses areare presented Inin other income/income/ (otherfother expenses)expenses] andand impairmentimpairment losses areare presented asas separateseparate lineline itemitem inin thethe statementstatement ofof profit oror loss.loss.

Fair value through profit oror lossloss

Financial assetsassets at fairfair value throughthrough profit or lossloss includeinclude fmancialfinancial assetsassets held forfor trading,trading, financialfinancial assets designateddesignated upon initialinitial recognition atat fairfair value through profit or loss,loss, oror (inancialfinancial assetsassets mandatorily required toto be measured atat fairfair value.value Financial assets areare classified asas held forfor tradingtracting ifif they areare acquiredacquired forfor the purpose of sellingselling oror repurchasingrepurchasing inin thethe near term.term. Financial assets with cashcash flowsflows thatthat areare not solely payments ofofprincipal principal andand interestinterest are classified andand measured atat fairfair value throughthrough profit or loss,loss, irrespectiveirrespective ofofthe the business model. Notwithstanding thethe criteriacriteria forfor debtdebt instrumentsinstruments toto be classifiedclassified atat amortized costcost or atat fair value through OCI,OCl, asas describeddescribed above,above, debt instrumentsinstruments may be designateddesignated atat fairfair valuevalue throughthrough profitprofit oror lossloss onon initialinitial recognition ifif doing soso eliminates,eliminates, oror significantlysignificantly reduces,reduces, an accounting mismatch.

Financial assetsassets atat fairfair value throughthrough profit oror lossloss areare carried inin the statementstatement ofoffinancial fmancial position atat fairfair value with net changeschanges inin fair value recognizedrecognized inin thethe statementstatement of profitprofit or loss.loss.

B.B, Derecognition A financial asset (or,(or, where applicable,applicable, aa part ofof aa financial assetasset oror part of aa group of similarsimilar fmancialfinancial assets)assetsJ isis primarily derecognized when:

The rightsrights toto receivereceive cash flowsflows fromfrom thethe assetasset have expired,expired, or

The Company has transferred itsits rightsrights toto receivereceive cash flowsflows fromfrom the assetasset oror has assumedassumed anan obligationobligation toto pay thethe received cashcash flows inin fullfull without material delay toto aa thirdthird party under aa 'pass-through''pass-through' arrangement;arrangement; andand eithereither (a)(a] the CompanyCompany hashas transferred substantiallysubstantially all the risksrisks and rewardsrewards of thethe asset,asset, oror (b)[bJ thethe Company hashas neitherneither transferredtransferred nor retainedretained substantially allall thethe risksrisks and rewardsrewards ofofthe the asset,asset, butbuthas has transferredtransferred controlcontrol ofofthe the asset.

When thethe Company has transferredtransferred itsits rightsrights toto receive cash flowsflows fromfrom anan asset oror has enteredentered intointo aa pass-through arrangement,arrangement, itit evaluates if,il and to what extent,extent, itit has retainedretained thethe risksrisks andand rewardsrewards ofof ownership.ownership. When itit hashas neither transferred nor retained substantially allall ofofthe the risksrisks andand rewards ofofthe the asset, nor transferred controlcontrol ofofthe the asset, thethe Company continuescontinues to recognizerecognize thethe transferred assetasset to the extent ofof itsits continuingcontinuing involvementinvolvement. inIn that case,case, thethe Company alsoalso recognizesrecognizes anan associated liability.liability. TheThe transferred assetasset and thethe associatedassociated liabilityliability areare measured onon aa basis thatthat reflects thethe rightsrights andand obligationsobligations that thethe Company has retained.retained.

Continuing involvementinvolvement that takestakes thethe formform ofof aa guarantee overover the transferred asset isis measured at thethe lowerlower ofof thethe originaloriginal carrying amountamount ofof the assetasset and thethe maximum amountamount ofof considerationconsideration that thethe CompanyCompany couldcould be required to repay.repay.

C. ImpairmentImpairment The adoptionadoption of 1FRSIFRS 9t has fundamentallyfundamentally changed thethe Company's accountingaccounting forfor impairmentimpairment losseslosses forfor financialfinancial assetsassets by replacing IASIAS 39's39's incurredincurred lossloss approachapproach with aa forward-lookingforward-looking expectedexpected credit-losscredit loss (ECh)(ECL) approach.approach. 1FRSIFRS 9 requiresrequires thethe Company toto record anan allowanceallowance forfor ECLs forfor allall loansloans andand otherother debt financial assetsassets not held atat FVPL,FVPL' flows ECLs areare based on the differencedifference between thethe contractualcontractual cashcash (lowsflows duedue inin accordanceaccordance with thethe contractcontract andand allall thethe cashcash flows that the Company expectsexpects toto receive.receive. TheThe shortfall isis thenthen discounteddiscounted at anan approximationapproximation to the asset'sasset's originaloriginal effectiveeffective interestinterest rate.rate.

For tradetrade andand otherother receivables, thethe CompanyCompany has applied thethe standard'sstandard's simplifiedsimplified approachapproach and has calculated ECLsECLs based onon lifetime expectedexpected credit losses.losses. The Company has establishedestablished aa provision matrix that isis based onon thethe Company's historical creditcredit loss experience,experience, adjustedadjusted forfor forward-lookingforward-looking factorsfactors specificspecific toto thethe debtors andand thethe economiceconomic environment.environment However, inin certaincertain the cases, thethe CompanyCompany may also consider aa fmancialfinancial assetasset to bebe inin defaultdefault when internalinternal oror externalexternal informationinformation indicatesindicates thatthat the Company isis unlikely toto receive thethe outstandingoutstanding contractual amountsamounts inin fullfull before taking intointo accountaccount anyany creditcredit enhancementsenhancements held by the Company.

D.D, HedgeHedgeaccounting accounting

IFRS 9 requiresrequires thatthat hedge accountingaccounting relationshipsrelationships areare alignedaligned with itsits riskrisk management objectivesobjectives and strategystrategy and toto applyapply aa more qualitativequalitative andand forward-lookingforward-looking approach toto assessingassessing hedge effectiveness.

There isis nono impactimpact ofofthe the saidsaid changechange onon thesethese unconsolidated fmancialfinancial statements asas there isis no hedgehedge activityactivity carried onon by thethe Company duringduring the yearyear endedended (uneJune 30,30,201'9. 2019. 6,1.26.1.2 financialFinancial liabilitiesliabilities

A. Classification andand measurement Financial liabilitiesliabilities areare classified,classified, at initialinitial recognition,recognition, as financialfinancial liabilitiesliabilities atat fairfair valuevalue throughthrough profit oror loss,loss, loansloans andand borrowings, payables,payables, oror asas derivatives designated as hedginghedging instrumentsinstruments inin anan effectiveeffective hedge, asas appropriate.

All financialfinancial liabilitiesliabilities are recognized Initiallyinitially atat fairfair value and,and, inin thethe casecase ofof loansloans andand borrowings and payables, net ofof directlydirectly attributable transaction costs.costs. i) Financial liabilities atat fair value throughthrough profit or lossloss Financial liabilitiesliabilities atat fairfair value throughthrough profit or lossloss includeinclude financialfinancial liabilitiesliabilities held forfor trading andand financialfinancial liabilitiesliabilities designateddesignated upon initialinitial recognitionrecognition asas atat fairfair value through profit or loss.loss. Gains oror losseslosses onon liabilitiesliabilities held forfor trading areare recognized Inin thethe unconsolidated statementstatement ofof profit oror loss.loss. Financial liabilitiesliabilities designated upon Initialinitial recognition atat fairfair value throughthrough profitprofit or loss are designateddesignated atat the initialinitial datedate ofof recognition,recognition, andand only ifif the criteria inin 1FRSIFRS 99 are satisfied.satisfied. The Company hashas not designateddesignated any financialfinancial liabilityliability asas atat fairfair value through profit oror loss.loss.

ii) Loans andand borrowings This isis the categorycategory most relevant toto the Company. After initialinitial recognition, interest-bearinginterest-bearing loansloans andand borrowingsborrowings areare subsequently measured at amortizedamortized costcost using thethe KIREIR method. Gains andand losseslosses areare recognized inin thethe statementstatement ofofprofit profit oror loss when the liabilitiesliabilities are derecognlzedderecognized as well asas through the E1REIR amortization process. Amortized costcost isis calculated by takingtaking intointo accountaccount anyany discountdiscount or premium onon acquisitionacquisition and feesfees oror costs thatthat are anan integralintegral part of thethe EIR. TheThe EIREIR amortizationamortization isis includedincluded asas financefinance costs inin the statementstatement ofof profit oror loss.loss.

This categorycategory generallygenerally appliesapplies to interest-bearinginterest-bearing loansloans and borrowings.

B. DorecogntlionDerecognition A financialfinancial liabilityliability isis derecognizedderecognized when thethe obligationobligation under thethe liabilityliability isis discharged oror cancelled oror expires.expires When anan existingexisting financial liabilityliability isis replaced.byreplaced by anotheranother from the samesame lender onon substantially differentdifferent terms,terms, oror the terms ofof an existingexisting liabilityliability are substantiallysubstantially modified, suchsuch an exchangeexchange or modification isis treated asas the derecognitionderecognition of thethe originaloriginal liabilityliability andand thethe recognition of aa new liability,liability. The differencedifference inin thethe respectiverespective carrying amounts isis recognizedrecognized in thethe unconsolidated statementstatement ofof profit oror loss.loss.

6.1.36,1.3 Offsetting of financial assetsassets andand liabilitiesliabilities Financial assetsassets andand financialfinancial liabilitiesliabilities areare set offoff andand thethe net amountamount isis reportedreported inin the unconsolidated financialfinancial statements when and there Isis aa legallylegally enforceableenforceable rightright toto set offoff andand thethe company intendsintends eithereither to settle onon aa net basis, oror to realizerealize thethe assetsassets and toto settlesettle the liabilitiesliabilities simultaneously.

6.1.4 ImpactsImpacts ofofadoption adoption ofofIFRS IFRS 9 onon these unconsolidatedunconsolidated financialfinancial statementsstatements At transition datedate toto IFRSIFRS 9, thethe Company has financialfinancial assets measured atat amortizedamortized costcost andand investmentsinvestments inin mutual fundsfunds atat fairfair value throughthrough profit oror loss.loss. The newnew classificationclassification andand measurement ofof thethe Company's financialfinancial assetsassets are, asas follows;follows:

Debt instruments atat amortizedamortized costcost forfor financial assets that areare heldheld within aa business model with the objectiveobjective to hold thethe financialfinancial assets inin order toto collectcollect contractualcontractual cashcash flowsflows that meet thethe SPPiSPPI criterion.criterion

Investmentslnvestments inin mutual fundsfunds thatthat areare held forfor trading inin near term and hashas recognizedrecognized initiallyinitially andand subsequentlysubsequently at fairfair valuevalue throughthrough profit oror loss.loss. On applicationapplication ofof IFRSIFRS -, 99 thethe Company has notnot optedopted toto recognize investmentsinvestments inin mutual fundsfunds atat fairfair value through other comprehensivecomprehensive incomeincome (FVTOCl],IFVTOCI). TheseThese are recognizedrecognized asas fairfair value throughthrough profit or loss.loss. 'amortized cost'' Further allall financial assets previouslypreviously classifiedclassified under thethe head 'loans'loans andand receivables' areare now classified as amortized cost.

The accountingaccounting forfor the Company's financial liabilitiesliabilities remainsremains largelylargely the samesame as itit was under IASIAS 39.39. and Accordingly, thethe adoption ofofIFRS IFRS 9t has not hadhad aa significantsignificant effecteffect on thethe Company's accountingaccounting policies relatedrelated toto financialfinancial assetsassets and liabilities.liabilities.

6.2 IFRSIFRS IS,15,'Revenue 'Revenue from Contracts with Customers': is not required The Company has adopted IFRS 15 by applyingapplying thethe modified retrospectiveretrospective approachapproach according toto which thethe Company is not required to restaterestate thethe prior yearyear results-results.

Key changeschanges inin accounting policies resulting fromfrom application of IFRSIFRS IS15

6.2.1 Revenue recognitionrecognition in exchange for Revenue isis recognizedrecognized atat anan amountamount thatthat refiectsreflects thethe considerationconsideration toto which thethe CompanyCompany isis expectedexpected to be entitled in exchange for with a customer; transferring goodsgoods or servicesservices toto aa customer.customer. For eacheach contract with aa customer, thethe Company: identifiesidentifies thethe contractcontract with a customer; ofvariable identifiesidentifies thethe performanceperfbrmance obligationsobligations inin thethe contract;contract; determines the transaction priceprice which takestakes intointo accountaccount estimatesestimates of variable basis ofthe consideration andand thethe timetime value ofofmoney; money; allocatesallocates thethe transactiontransaction price to thethe separateseparate performance obligations onon thethe basis of the as each relativerelative stand-alonestand-alone sellingselling price of eacheach distinctdistinct goodgood or serviceservice toto bebe delivered;delivered; and recognizesrecognizes revenuerevenue when oror as each promised' performance obligationobligation Isis satisfiedsitisfied inin aa manner thatthatdepicts depicts thethe transfertransfer to thethe customercustomer ofofthe the goods oror servicesservices promised. Variable considerationconsideration within thethe transactiontransaction price, ifif any,any, reflectsreflects concessions provided toto the customercustomer suchsuch asas discounts,discounts, rebates and refunds,refunds, anyany potential bonusesbonuses receivablereceivable fromfrom the customer andand any otherother contingentcontingent events.events. SuchSuch estimatesestimates areare determined using either the 'expected'expected value' or 'most'most likelylikely amount'amount' method. TheThe measurement of variable considerationconsideration isis subject toto aa constraining principle whereby revenuerevenue will only be recognized toto thethe extentextent thatthat itit isis highly probableprobable thatthat aa significantsignificant reversalreversal inin the amount ofofcumulative cumulative revenue recognizedrecognized will not occur.occur. The measurement constraint continues until thethe uncertainty associatedassociated with the variablevariable consideration isis subsequentlysubsequently resolved. Amounts receivedreceived that areare subjectsubject to thethe constraining principle areare initiallyinitially recognized asas deferreddeferred revenuerevenue inin the formform ofof a separateseparate refundrefund liability.liability.

a) Sale ofofgoods goods Revenue fromfrom thethe sale ofof goodsgoods isis recognizedrecognized at thethe point inin time when thethe customercustomer obtains control ofof the goods,goods, which isis generally atat thethe time of delivery. Otherwise, controlcontrol isis transferred over timetime and revenuerevenue isis recognizedrecognized overover timetime byby referencereference toto the progress towards completecomplete satisfactionsatisfaction ofof the relevantrelevant performanceperformance obligationobligation ifif oneone ofof the following criteriacriteria isis met:

- the customercustomer simultaneously receivesreceives andand consumesconsumes the benefits provided by the Company's performance asas thethe CompanyCompany performs;

-- the Company's performance createscreates andand enhancesenhances an assetasset that thethe customer controlscontrols asas thethe Company performs; or

-- the Company'sCompany's performanceperformance doesdoes not createcreate an assetasset with anan alternative useuse toto the Company andand thethe Company has anan enforceableenforceable right toto payment for performance completedcompleted toto date.date.

b) Rendering of services

Revenue from a contractcontract toto provideprovide servicesservices isis recognized overover timetime asas thethe servicesservices are rendered.rendered. c) Interest incomeincome

Interest incomeincome isis recognizedrecognized asas interest accruesaccrues using thethe effectiveeffective interestinterest method. This isis aa method ofof calculatingcalculating thethe amortized cost ofof a financialfinancial assetasset and allocatingallocating the interest incomeincome overover thethe relevant periodperiod using the effectiveeffective interestinterest rate,rate, which isis thethe raterate that exactlyexactly discountsdiscounts estimatedestimated futurefuture cashcash receiptsreceipts throughthrough thethe expectedexpected lifelife ofofthe the financialfinancial asset toto thethe netnet canyingcarrying amountamount ofof the financialfinancial assetasset. d) Otherother revenuerevenue

Other revenue isis recognizedrecognized when itit isis received oror when thethe right toto receivereceive payment isis established.established.

6.2.26,2,2 Trade andand other receivables Trade receivables areare Initiallyinitially recognizedrecognized atat fairfair value andand subsequentlysubsequently measured atat amortizedamortized costcost usingusing thethe effectiveeffective interestinterest method, lessless anyany allowanceallowance forfor expectedexpected creditcredit losses.losses.

The Company has appliedapplied the simplified approachapproach toto measuring expectedexpected creditcredit losses,losses, which uses aa lifetimelifetime expectedexpected lossloss allowance. To measure thethe expected creditcredit losses,losses, trade receivablesreceivables have been grouped based onon days overdue.overdue. Other receivablesreceivables areare recognizedrecognized at amortizedamortized cost,cost, lessless anyany allowanceallowance forfor expectedexpected creditcredit losses.losses.

6.2.36,2.3 ImpactsImpacts of adoption of 1FRSIFRS 15 on Ihesethese unconsolidated financial statementsstatements

The Company hashas concludedconcluded that revenuerevenue fromfrom salesale ofof goodsgoods should be recognizedrecognized atat thethe point inin time when control of thethe assetasset isis transferred toto the customer,customer, generallygenerally on delivery ofof the goods.goods. Therefore, thethe adoptionadoption of 1FRSIFRS 15 did not have anan impactimpact onon Ihethe timing ofof revenuerevenue recognitionrecognition andand the amountamount ofof revenuerevenue recognized.recognized.

The Company providesprovides salessales discountsdiscounts toto certaincertain customerscustomers which isis notnot inin thethe naturenature ofofvolume volume rebatesrebates fdiscounts).(discounts]. The Company estimates provision for discounts and revenuerevenue isis reducedreduced byby thethe amount of provision. ThisThis isis also inin alignment with thethe requirementsrequirements of IFRSIFRS IS15 andand diddid not have anan Impactimpact onon thethe revenuerevenue ofof thethe Company. Therefore,Therefore, thethe applicationapplication ofof thethe constraintconstraint onon variable consideration did not have any furtherfurther impactimpact onon the revenuerevenue recognizedrecognized byby the Company. o a o o o o o o N N

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Cost of sales \494,4641,490,464 1,338,1431,3 3 8,143 Administrative expenses 150,770r50,770 133,392 1,641,234t,641,234 1,471,5351,477,535 7,27.2 Capital work-in-proEresswork-in-progress Civil works 7.2.1 653,047 178,2031.78,203 Plant andand machinery 7.2.2aaa 135,550 32,696 Capital storesstores 7.2.3 3,913 87,200 Advances toto supplierssuppliers 425,524425,524 1,326r.326 ______Je1BJf.!_1,218,034 _-J22A2t_299,425

7.2.1 CivilCivilworksincludeborrowingcostamountingtoRs. works include borrowing cost amounting to Rs. 1616millioncalculatedattheratesrangingfrom2.33o/olo4.92a/operannum. million calculated at the rates ranging from 2.33% to 4.92% per annum. 7.2.27,2,2 PlantPlantandmachineryincludesamountofRs.L24.68millioninrespectoftrialproductioncostofdenimsamplingunit. and machinery includes amount of Rs. 124,68 million in respect of trial production cost of denim sampling unit. 7.2.37,2.3 Capital storesstores includeinclude factoryfactory toolstools andand equipments,equipments, office equipments,equipments, electricelectric installationsinstallations and furniturefurniture and fixturesfixtures that areare held inin storestore for futurefuture useuse andand capitalization.capitalization.

7.3 Details ofof immovableimmovable property inin the name of the Company:

Usage Location Area

Plant 11 Chak if# 767 6 RB. 11 -- KM, Jaranwalajaranwala Road, Khurrianwala, Faisalabad.Faisalabad. 19 Acres 77 Kanals 12 MariasMarlas { Chak#Chak # 194 RB. 11 -- KM, Jaranwalafaranwala Road, Khurrianwala, Faisalabad.,Faisalabad. 2 Acres 8B Kanals 13 MariasMarlas Chak # 108 RB. 11 -- KM, JaranwalaJaranwala Road, Khurrianwala, Faisalabad.Faisalabad. 9 MariasMarlas

Interloop IndustrialIndustrial r Chak #103# 103 RB,RB, 77 -- KM, JaranwalaJaranwala Road, Khurrianwala, Faisalabad. 97 Acres 19 Kanals 99 MariasMarlas 55 Sars.Sars Park -- (Plant(Plant Z,2, Plant 44 l" Chak #106# 106 RB, 6 -- KM, By Pass Road, Khurrianwala, Faisalabad,Faisalabad. 14 Acres 33 Kanals 121.2 MariasMarlas & Spinning]SpinningJ t- chak # 103 RB, 7 - KM, Jaranwala Road. Khurrianwala, Faisalabad. Chak # 103 RB, 7 - KM, Jaranwala Road, Khurrianwala, Faisalabad. 38 Acres 15 Kanals 15 MariasMarlas

PlantsPlant 3 8t -- KM, Manga Raiwind Road, Distt. Kasur, Lahore. 41 Acres 33 Kanals 8B MariasMarlas

Denim Division 8B -- KM, Manga Raiwind Road, DistLDistt. Kasur, Lahore.Lahore 26 AcresAcres 77 Kanals 14 MariasMarlas

Plant 5 Chak # 106106 R6,6RB, 6 -- KM, By Pass Road, Khurrianwala, Faisalabad. 75 Acres 13 Kanals 13 MariasMarlas

Office Block Chak # 200200 RB,RB, Near TollToll PlazaPlaza Gatwala, Lathianwala, Faisalabad,Faisalabad. 2 Acres 13 MariasMarlas 55 SarsalSarsai

2019 201820ta 8. INTANGIBLE ASSET Note —--- Rupees Inin'000 '000 —--- Computer SoftwareSoftware Cost: Opening balance t 98,196,8,1171f---sr,6zo 92,620 I 5,576s,szu Addition during thethe yearyear I 32,798szJga ll I 130,994t30,994 98,19698,r96

Amorrtzation:Amortization: Opening0pening balance f-- 55,786ssts6lt- 45,4154s,4fF] 9,047g,o+t 10,371 For thethe yearyear amortization I ll ro,szr I 64,833 55,786

Net book valuevalue ______s9,r91_66,161 ______--!2,4J9-_42,410 Amortization raterate ______2!%-_20% ___2!%--20%

9. LONG TERM INVESTMENTSINVESTMENTS Unquoted -- atat cost Associated companycompany IL Bangla Limited 9,19.1 308,735 379,549 Subsidiary companycompany ILIL Apparel (Pvt)fPvtl Limited 9.2 700,000 1,000 ____1p9B,Zr5_1,008,735 _____9_q-Q,5380,549 4e_ 9.1 ILIL Bangla Limited

Cost ofof investmentinvestment 9.1.19.L.L 379,549 379,549379,5-49 Provision forfor impairmentimpairment lossloss (70,814)(7o,814) 308,735 379,549 -__-__-3!9195------312'sl2- 9.1.1g.LL 31.8253I.825 million (2018:[2018: 31.82531.825 million)millionJ ordinaryordinary sharesshares ofof BDBD TakasTakas 10/-L0/- eacheach amountingamounting toto BOBD TakasTakas 318.250 million (2018:(2018: BDBD Takas 318.250 million).millionJ. Equity heldheld 31.61%31.61-0/o (2018;(2078:43.75%). 43.75%). _ _

9.2 5050 million (2018;(2018: 0.10.1 million)millionJ ordinaryordinary sharesshares of Rs. 10/- eacheach amountingamountingto to Rs. 500500 million (2018;[2018: Rs. 1 million)millionJ andand Rs.Rs.200 200 millionmillion asas shareshare deposit money. Equity held 100%. 201920L9 20182018 Note —--- Rupees In'000in'000 —--- 10. LONGLONG TERMTERM LOANS

Considered good •- SecuredSecured

Loans toto employeesemployees 10.110.1 43,11243,LL2 60,747 Loan toto directordirector 10.2lo.2 22,650 __!lI_62 05.702 ____-- 60,747j9f3J_ 10.1 Loans toto employeesemployees

Opening0pening balance 108,496roa,496 92,647 Add: disbursementdisbursement mariemade during thethe yearyear 10.1.1 78,8707A,A70 69,14969,1.49 187,366ta7 366 161,7961-6L,796 Less:Lessr amountamount received duringduring thethe year (90,571)(e0,s71) (53,300)(53,300) 90,79596,795 108,4961 08,496 Less: receivablereceivable within twelvetwelve months (53,683)(s3,683) (47,749)(47,74e) ______--43"JL2_43,112 ______S9l3l_60,747

10.1.1 TheseThese loansloans areare givengiven toto employeesemployees asas perper approvedapproved policy ofofthe the Company andand areare securedsecured againstagainst employeesemployees retirementretirenent benefits. 10.2 LoanLoan toto director Opening balance - Add: disbursementdisbursement mademade duringduring thethe yearyear 10.2.1ro.2.L 25,750 25,750 ' Less: amountamount receivedreceived during thethe year 25,750 Less: receivable within twelvetwelve months (3,100)(3,1001 22,650zz,6so

10.2.210.2.1 ThisThis represents loanloan paidpaid toto anan executiveexecutive directordirector ofof thethe Company asas per househouse building finance,finance policypolicy of thethe Company. Under thethe policy,policy, homehome ownership grantgrant ofof Rs. 2.52.5 million andand mortgage assistanceassistance ofof Rs,Rs. 23.25 million isis disburseddisbursed duringduring thethe year. TenureTenure ofof bothboth thethe home ownershipownership grant andand mortgage assistanceassistance isis forfor aa periodperiod ofof sixsix years.years. Mortgage assistanceassistance isis repayable Inin GO60 equalequal monthly installmentsinstallments alongalong with mark upup thereon.thereon.

II. LONG TERMTERM DEPOSITS Considered good:good:

Security depositsdeposits -- unsecuredunsecured 28,0192A,0t9 24,81724,81-7 Lease keykey money - 238 28,019za,or9 25,055

LZ. STORES AND SPARESSPARES

Stores 233,322 185,234 Spares 654,337 593,964 887,659aa7 ,659 779,198779,798

STOCK ININ TRADETRADE

Raw material ; 3,730,8403,730,440 3,166,2653,r66,265 Work inin process 597,562597,562 471,276 Finished goods 1,954,089 1-,484,1771,484,177 " 6,282,4916,242,49L 5,121,7185,721,,71-8

L4. TRADE DEBTS

Considered good:good: Foreign

-- Secured 14.1L4.t l---- 4,250,5014zsosor I f------3.154,7333ls4,rc I - g,so+,oeg :,eog,:zs - Unsecured I 3,564,083 | | 3,809.375 I 7,814,5847,AL4,5A4 6,964,108 Local -- Unsecured 433,156433,t56 328,9003 2 8,900 8,247,740a,247,740 7,293,008 X4.It4,l ItIt includesincludes receivablesreceivables fromfrom followingfollowing relatedrelated parties;parties;

IL Bangla LimitedLimited 44,28044,?AO 40,366 Texlan CenterCenter (Pvt)(Pvt) LimitedLimited 352,636 84.94444,944 Eurosox Plus BV 293,422 1,1,2,5Ll112.511 237,821 _____-----€9690,338 !!- -___-_-----33lB3J- 14.2L4,2 TheThe maximum aggregate amount of receivablereceivable due fromfrom relatedrelated partiesparties at thethe endend ofof anyany month duringduring thethe year was Rs.Rs. 1,052,511,052.51 million (2018:(2018; Rs. 319.60 millioiO-millionJ.

14.31{.g At JuneJune 30,30, 2019,2019, tradetrade debts duedue fromfrom relatedrelated partiesparties aggregatingaggregating toto Rs.Rs. 298,17298.17 million (2018;(2018: Rs. 163.99 million) were pastpast duedue but notnot impaired.impaired. TheThe ageingageing analysisanallrsis of thesethese tradetrade debtsdebts isis asas follows:follows:

Not yet duedue 392,170392,L70 73,828 UptaUpto 1l monthnonth 119,452rLg,45Z 108,536108,5 3 6 More thanthan 1 month 178,710L7A,7L6 SS.4S755,457 ______99qi4-690,338 237,821 --_____4Le2J- 2019 201820LA NolcNote —--- Rupees in'000 —--- 15" LOANS AND ADVANCES Considered good:good: Loans Current portion ofof loansloans toto employeesemployees •- SecuredSecured 10.110.1 53,683 47,749 Current portion ofof loanloan toto directordirector -- SecuredSecured 10.2L0.2 3,100 - Metis internationalinternational (Pvt](PftJ Limited -- SecuredSecured 15.1 9,560 33,41433,4L4 Advances Advances toto supplierssuppliers 989,590989,598 536,5805 3 6,580 Advances toto employeesemployees 15.2ts.2 7,401 ______-_!ps31,053,342 3!2_ ___9J1J-!3_617,743

IS.l15,1 ThisThis loanloan was given inin foreignforeign currencycurrency amounting toto US$ 275,000275,000 at rate ofof 15%15%o per annum. Upon lapselapse ofof payment date,date, additionaladditional mark upup atat thethe raterate ofof2.5o/owill 2.5% will bobe chargedcharged onon monthly mark upup installmentinstallment duedue forfor eacheach dayday ofofdelay delay uploupto aa maximum of 20%.200/o.The The loanloan isis securedsecured throughthrough anan irrevocableirrevocable lien/chargeIien/charge onon totaltotal assetsassets ofofthe the Metis InternationalInternational (Pvt)(Pvt) Limited.

15.2I5.Z Advances toto employees are givengiven toto meet business expensesexpenses andand are settledsettled asas andand when expensesexpenses areare incurred.incurred.

DEPOSIT, PUEPAVMENTPREPAYMENT AND OTHEROTHER RECEIVABLES Deposit L/C margin 70,3387O334 - Prepayment Insurance premium 40,226 25,16725,1.67 Other receivablesreceivables -. considered good:good; Receivables fromfrom relatedrelated partiesparties 16.1 83,980 86,76086,7 60 Accrued interestinterest onon loanloan toto Metis International (Pvt)(Pvt) Limited 10,441IO,4_41, 2,4012,401, Others0thers - 65,53665.53 6 204,985 179.864BSI------29!235-: ------Jl2 16.1L6.l Receivables fromfrom related parliesparties includeinclude receivablesreceivables from:from:

IL EanglaBangla LimitedLimited -- Unquoted associateassociate 16.4 82,766az,7-66 76,9707 6,970 1LIL Apparel [Pvt](P!t) Limited -- Unquoted subsidiarysubsidiary - 8,0178,0L7 Interloop Holdings {Pvt}(PvtJ LtdLtd -- anan associatedassociated undertakingundertaking r,2731,273 Interloop Welfare TrustTrust L,2L41,214 Interloop LimitedLimited ESOS ManagementManagement TrustTrust - 500 83,980 86,760

16.2L6.2 TheThe maximum aggregateaggregate amountamount ofof receivable dueciue from relatedrelated parties atat thethe endend of anyany montiimonth duringduring the yearyear was Rs,Rs. 83.9883.98 million [2018:(2018: Rs. 86.7686.76 million ].).

16,3 At |uneJune 30,30, 2019, receivables aggregating toto Rs. 83.9883.98 million (2010;(2018r Rs.Rs. 86.76 million) were past duedue but not impaired.impaired. TheThe ageingageing analysisanalysis of thesethese receivablesreceivables isis asas follows:followsr Upto 1l month 7,1537,r53 5,274 More thanthan 1 month 76,82776,427 81,48681-,486 _____,_____q!fp9_83,980 "______991_99-86,760

16.4L6.4 ThisThis represents balancebalance receivablereceivable againstagainst paymentspayments made onon behalfbehalf of ILIL GanglaBangla Limited. InterestInterest isis chargedcharged atat effectiveeffective raterate ofol 7.53%7 .53o/o per annum.annum.

17. TAXTAXREFUNDSDUEFROMGOVERNMENT REFUNDS DUE FROM GOVERNMENT Duty drawbacksdrawbacks '• 646.486646,446 1,054,3701-,054,370 Sales taxtax refundable 401,60840L,604 532,070 IncomeIncome taxtax refundablerefundable 877,345a77,345 865,366865,366 ______J.2Ee2_1,925.439 ______-_2$1399_2,451,806 18. SHORTSHORTTERMINVESTMENTS TERM INVESTMENTS Mutual FundsFunds •- Fair value throughthrough profit oror loss:loss: 18.118.1 & 18.2 Alfalah CUPGHP Income MultiplierMultiplier FundFund 56,657 AlfalahAlfaiah GHPGHP Alfa FundFund t7,30617,306 20,740 Alfalah GHPGHP SovereignSovereign FundFund 58,9445A,944 - Meezan IslamicIslamic Fund 34,795 45,978+5,978 Meezan Sovereign Fund 7 7 NAFA IslamicIslamic EnergyEnergy Fund - 24,0.4024,040 NAFA Financial SectorSector Incomelncome FundFund 909 NAFA StockStock Fund L6,94616,986 NAFA MoneyMoney Market FundFund 1,555 - UBL Growth And IncomeIncome Fund - 33 UBL GovernmentGovernment SecuritiesSecurities Fund 394 - 130,896 747,425147,425

Term Deposit Receipts (TDRs)(TDRsl -- Amortized cost;cost: 18.3 TheBankofPuniabThe Bank of Punjab t--1s0,341150,347 National Bank ofof Pakistan | 790,908 | 941,25594L,235 - Sales TaxTax Refund Bonds -- Amortized cost:cost: 18.418.4 FBRFBR Refund SettlementSettlement CompanyCompany (Private)(Private) LimitedLimited 135,100 -

______1]91a57_1,207,251 147,42547,48- -_-_--J 18.1 Detail ofoflnvestment lovestmenl Inin Mutual Funds

Number ofof Average Cost Fair value Remeasuremeut Name of the investee ofthe investee shares / unitsunits as at June 30,2019 as at June 30,2019 toss as atat (unelune 30,201930,2019 as at June 30,2019 No,No. ofofunits units'000 '000 ...... Rupees in '000 Alfalah GHP Alfa Fund 308.8077 22,2721a ?a) 17,306t7,306 (4.966}(4,966 Alfalah GHPGHP SovereignSovereisn Fund 554.0604 61,2216r,221 58,944 (2,277) Meezan IslamicIslamic Fund 725,9510725.951,0 45,97845,978 34,795 (11,183)1 1,183' Meezan SovereignSovereien FundFund 0.13710.1377 77 7 NAFA Financial SectorSector IncomeIncome Fund 86.502885.50 28 924 909 (15)15' NAFA StockStock Fund 1.416,4747!,476.47 47 19,307 16,986t6,986 (2,321)(2,327 NAFA Money Market FundFund 157.5662 1,5631,5 63 1,5551,555 (8)f8' OBLIBL Government SecuritiesSecurities Fund 3.7222 411+tI 394 (17)17] Total 3,253.2220 151,683 130,896 (20,787)

18.2L8,2 FairFair values ofof thosethese investmontsinvestments arcare determined usingusing quotedquoted market / repurchaserepurchase price.price.

18.318,3 ShortShort termterm investmentinvestment inin TDRsTDRS earnedearned interestinterest atat effectiveeffective rate ofof 111.55% l.S5% toto 12.05%12.050/o per annum.

18.4LA,4 By virtue ofof enactment of sectionsection 67A674 inin thethe SalesSales TaxTax Act, 1990,1990, Sales TaxTax Refunds claimantclaimant have beenbeen givengiven optionoption toto receivereceive theirtheir refundsrefunds inin shapeshape of Sales TaxTax Refund Bonds which havehave been directlydirectly creditedcredited toto thethe Corporate InvestorInvestor Account maintained with CDC (Central(Central Depository CompanyCompany of

Pakistan Limited}.Limited) .

The bonds soso Issuedissued have aa maturity period ofofthree three (3)(3) years andand shallshall bear simplesimple profit atat thethe raterate of 10%100/0 perper annum.annum. The bonds areare freelyfreely tradabletradable inin Pakistan's secondarysecondary markets andand shallshall be approved securitysecurity for calculatingcalculating thethe statutorystatutory liquidityliquidity reservereserve andand shallshall be acceptableacceptable by thethe banks asas collateral security.security. After periodperiod ofof maturity, thethe CompanyCompany shallshall returnreturn thethe bonds toto thothe Board andand thethe Board shallshall make thethe paymentpayment ofof amountamount duedue under thethe bonds, alongalong with profit due,due, toto thethe bond holders.

The bonds shallshall bebe redeemable before maturity onlyonly atat thethe optionoption ofof thethe Board alongalong with simplesimple profitprofit payablepayable atat thethe timetime ofof redemptionredemption inin thethe lightlight ofof genera!general oror specificspecific policy toto be formulated byby thethe Board.

The management intendintend toto tradetrade andand redeem thesethese bonds Inin nearnear future,future, therefore,therefore, thesethese areare groupedgrouped inin shortshort termterm investments.investnents.

201920L9 2018ZOLA —--" Rupees inin'000 '000 —--- 19.L9, CASHCASHANDBANKBALANCES AND BANK BALANCES

Cash inin hand 26,35326353 12,051 Cash atat banks Inln currentcurrent accountsaccounts l--T+4or4af---1,440,947 149,213Mslol In foreignforeign currencycurrency accountsaccounts | 71,2647L,264 ll 32,41832,478 | 1,512,211L,5l2,2lr 781,636101,636 ______!53!,s_q4-1.538.564 ------Jfie9l-193,687 ZO. AUTHORIZED SHARESHARE CAPITAL 201920t9 2018zoLa Number ofofshares shares inin'000 '000 965,000 265,000265,000 Ordinary sharesshares ofof Rs. 10 eacheach 9,650,000 2,650,000 35,000 35,00035,000 Non-voting ordinaryordinary sharesshares ofof Rs.Rs. 10L0 eacheach 350,000 350,000 ____1499,099_1,000,000 ____19!!!!_300,000 10,000,000 3,000,000

2L. ISSUED, SUBSCRIBEDSUBSCRIBED AND PAID UP CAPITALCAPITAL

201920t9 2018 Number ofofshares shares Inin '000'000 130,900 21,40021,400 Ordinary sharesshares ofof Rs,Rs. 10 eacheach fullyfully paidpaid inin cashcash 1,309,000 214,000274,O00 Ordinary sharesshares ofof Rs. 10 eacheach issuedissued asas fullyfully paidpaid 738,500 168,200 bonus sharesshares 7,385,000 1,682.0001,682,000 Non-voting ordinaryordinary sharesshares of Rs,Rs. 1010 eacheach fullyfully 1,266L,?66 510510 paid inin cashcash t2,66212,662 5,1045,1 04 Non-voting ordinaryordinary sharesshares ofof Rs. 10 eacheach issuedissued 1,531 - as fullyfully paidpaid bonusbonus sharesshares 15,313 872,197w_?_,LeJ_ 190,1101u_ 8,721,975a,72L,975 1,901,104 -______u_q, 21.1ZL.l Movement inin Issued,issued, subscribedsubscribed andand paid up capitalcapital Ordinary Shares ofof Rs.Rs, 10 eacheach fullyfully Ordinary SharesShares ofof Rs. 10 eacheach fullyfully paid paid inin cash bonus sharesshares

Note Voting Non-Voting Voting Non-VolingNon-Voting

Opening balance 21,4002L,400 510 168,200 -

Issued duringduring thethe year 21.1.1zL.L.7 109,500 756 570,300570,3 0 0 1,5311,5 31

Closing balance 130,900 1,266r,266 738,500 1,531

21.1.121,1.1 During thethe yearyear thethe Company has issuedissued 109 million ordinary sharesshares ofof Rs. 10 eacheach inin Initiallnitial Public Offerings (IPO},(lP0l. (Note.(Note. 1.2) 2019z019 20182018 Note —--- Rupees inin'000 '000 —--- 22,. RESERVES Capital reservereserve

Share premium 22,122.L 3,791,6023,79L,602 30.25530,2 5 5 Revenue reserve Employee shareshare option compensationcompensation reservereserve 22.222.2 - 8.6088,608 ______-3 3,791,602 i72J&9?-______-_lgE€_38,863

22.122,L ThisThis represents premiumpremium receivedreceived overover and aboveabove faceface value ofof thethe sharesshares Issuedissued toto institutionalinstitutional investors,investors, high netnet worth individualsindividuals and general public,public throughthrough initialinitial public offeringoffering (IPO)(lPO) and employees ofofthe the Company throughthrough employees stockstock optionoption schemescheme (ESOS).(ESOS). ThisThis reservereserve cancan be utilizedutilized by thethe Company only forfor thethe purposes specifiedspecified Iin n sectionsection 8181 ofof thethe Companies Act, 2017,2017.

22.2 EMPLOYEESEMPLOYEES SHARESHARE OPTIONOPTTON SCHEMESCHEME fESOS)(ESOS)

The shareholdersshareholders ofofthe the Company hashas approvedapproved interloopInterloop Limited -- Employee StockStock OptionsOptions Scheme,Scheme, 20162016 ("the("the scheme")scheme") forfor grantgrant ofofoptions options toto certaincertain eligible employeesemployees toto purchase ordinaryordinary sharesshares (non-voting)(non-voting) ofof thethe Company, toto be determineddetermined by thethe CompensationCompensation CommitteeComnittee constitutedconstituted by thethe Board of directorsdirectors ofof thethe Company.Company.

Under thethe Scheme,Scheme, thethe Company maymay grantgrant optionsoptions toto eligible employeesemployees selectedselected by thethe Compensation Committee, fromfrom timetime toto time,time, which shallshall notnot atat any timetime exceedexceed 15%15%o ofof thethe paidpaid up capitalcapital (ordinary(ordinary and voting)votingJ ofof thethe Company (as(as increasedincreased fromfrom time toto time).time). The optionoption entitles anan employeeemployee toto purchase sharesshares atat anan exerciseexercise price determineddetermined inin accordanceaccordance with thethe mechanism defineddefined inin thethe schemescheme atat thethe datedate ofof grant.grant. TheThe aggregateaggregate number ofof sharesshares forfor allall optionsoptions toto bebe grantedgranted underunder thethe schemescheme toto anyany singlesingle eligible employeeemployee shallshall not,not, atat anyany time,time, exceedexceed 3%370 ofofthe the paid upup capitalcapital (ordinary(ordinary andand voting]voting) of thethe Company (as(as increasedincreased fromfrom timetime toto time),time]. Further thethe grant of optionsoptions inin anyany oneone calendarcalendar yearyear exceedingexceeding 3%370 ofof thethe paid upup capitalcapital (ordinary andand voting)voting) shallshall requirerequire approvalapproval ofof thethe shareholders.shareholders. However, once thethe numbernunber ofof sharesshares issuedissued under thisthis schemescheme equalequal fifteenfifteen percentpercent (15%)(15%J ofof thethe paid up capitalcapital (ordinary(ordinary andand voting)votingJ of thethe Company,Company, thethe entitlemententitlement pool shallshall be exhausted andand this SchemeScheme shallshall ceasecease toto operate,operate, notwithstanding anyany subsequentsubsequent increaseincrease inin thethe paid up capital.capital.

The optionsoptions will have aa vesting period ofof one year andand anan exerciseexercise periodperiod ofof one yearyear fromfrom thethe datedate options arcare vested asas laidlaid downdown inin thethe scheme.scheme. Option price shallshall bebe payable by thethe employee onon thethe exerciseexercise ofof options inin fullfull oror part. TheThe optionsoptions will lapselapse afterafter completioncompletion ofof one yearyear fromfrom thethe datedate optionsoptions are vestedvested ifif not exercised.exercised.

Shares issuedissued inin responseresponse toto exerciseexercise of optionsoptions shallshall be Non-Voting Ordinary Shares, hereinafter calledcalled "Class"Class B Shares" and shallshall not;not;

(i)(i) havehave votingvoting lrights ights oror rightright to receivereceive notice, attendattend andand vote atat thethe generalgeneral meeting ofof thethe Company,Company, exceptexcept andand otherwiseotherwise provided by thethe Companies Act, 2017;2017; andand

(ii)(ii) be entitledentitled forfor right sharesshares (Ordinary[Ordinary andand Voting).

Shares issuesissues underunder thisthis schemescheme willwill convertconvert intointo ordinaryordinary sharesshares afterafter 33 years fromfrom thethe datedate ofof fistinglisting ofof thethe Company or afterafter completioncompletion ofof 33 yearsyears from thethe datedate of issue,issue, whichever isis later.later. TheThe CompanyCompany will nornot be obligedobliged toto buy backback thethe shares.shares. However, ifif thethe employeesemployees wishes toto sellsell thethe shares,shares, thethe Company may buy back thethe sharesshares atat thethe lesserlesser ofof thethe prevailingprevailing price onon thethe securitiessecurities exchangeexchange or atat thethe break upup value ofof thethe sharesshares determineddetermined asas per thethe latestlatest audited financialfinancial statementsstatements ofofthe tire Company.Company.

Before listinglisting ofof thethe Company fairfair value ofof thethe optionsoptions was determined based onon thethe break up value ofof sharesshares andand exerciseexercise price atat thethe datedate ofof eacheach grantgrant of options.options. Exercise priceprice was determineddetermined basedbased onon latestlatest availableavailable auditedaudited financialfinancial statementsstatements ofof thethe Company.Company. After listinglisting ofof thethe CompanyCompany thethe exercise priceprice shallshall be the weighted average ofof thethe closingclosing market priceprice ofof sharesshares ofof thethe Company forfor thethe lastlast 3030 daysdays prior toto thethe datedate ofof gramgrant ofof options.

Due toto issuanceissuance ofof bonus sharesshares of 300% ofof thethe existingexisting paidpaid upup capitalcapital ofof thethe CompanyCompany inin currentcurrent yearyear and demergerdemerger ofof thethe investmentinvestment segmentsegment ofof thethe Company intointo InterloopInterloop Holdings (Pvt)(Pvtl LimitedLimited inin lastlast year,year, thethe break up value ofof thethe sharesshares had been reduced toto Rs.Rs. 11.91 per share.share. ThisThis necessitated the repricing ofof thethe existing options outstanding duringduring thethe year,year. Moreover, thethe existingexisting exerciseexercise price of Rs,Rs. 76.0476.04per per shareshare was alsoalso not attractiveattractive atat the moment duedue toto thethe floorfloor price ofof Rs.Rs. 45 per shareshare setset inin thethe draft prospectus forfor thethe proposed IPOIPO dulyduly approvedapproved by thethe SecuritiesSecurities andand Exchange Commission ofof Pakistan (SECP)(SECP) andand thethe Pakistan Stock Exchange (PSX)(PSX) tilltill date.date. Accordingly itit waswas proposed toto offer exerciseexercise priceprice forfor outstandingoutstanding options atat Rs.Rs. 3535 perper shareshare toto make itit more lucrativelucrative forthefor the proposed eligible employees.employees.

The shareholdersshareholders ofofthe the CompanyCompany inin theirtheir meeting heldheld onon March 5.5, 2019 resolvedresolved toto repricereprice thethe optionsoptions alreadyalready grantedgranted andand pending for exerciseexercise under the Company's Employees StockStock Option Scheme,Scheme, fromfrom initialinitial exerciseexercise priceprice ofof Rs. 76.0476.04 perper shareshare toto thethe revisedrevised price ofof Rs. 3535 perper share,share, without any change oror modification inin anyany otherother specificspecific termsterms and conditionsconditions underunder which suchsuch options have been grantedgranted inin accordanceaccordance with rulerule 7(li)of7(ii)of thethe Public Companies (Employees(Employees StockStock Option Scheme) Rules.Rules, 200!2001 read with subsub clauseclause 33 ofof clauseclause 66 ofof ChapterChapter IIIIII ofof thethe GuidelinesGuidelines forfor Structuring andand Offering of thethe Employees StockStock Option SchemesSchemes approvedapproved by SecuritiesSecurities andand Exchange Commission ofof Pakistan.

Information aboutabout outstandingoutstanding numbernunber ofof optionsoptions atat thethe endend ofof thethe year isis asas follows:follows: 2019z0l9 201820La ----Numbers Numbers in'000in'000 —---

Options0ptions outstandingoutstanding atat thethe beginning of thethe yearyear L,3_991,399 1.341r,341, Opcions0ptions grantedgranted duringduring thethe year 933 Options0ptions declined/lapseddeclined/lapsed butbut subsequentlysubsequently offeredoffered 426 (7eo) (772) Options0ptions exercisedexercised duringduring thethe yearyear (790) (1723 (703) Options expired/lapsedexpired/lapsed duringduring thethe yearyear (465)(46s) (703) Options outstandingoutstanding atat thethe endend of thethe yearyear 570 1,3991-,399

The Company's management isis ofof thethe view thatthat nono furtherfurther optionsoptions would bebe exercisedexercised fromfrom thethe outstanding balance asas thethe samesame hashas alreadyalready been declined by thethe eligibleeligible employeesemployees andand management doesdoes notnot intendintend toto reofferreoffer thethe same.same. Therefore,Therefore, nono furtherfurther expenseexpense oror employeeemployee shareshare optionoption compensationcompensation reservereserve isis createdcreated inin thesethese financialfinancial statements.statements.

Further, itit isis pertinent toto mention here thatthat thethe schemescheme Isnotis.not inin operationoperation sincesince listinglisting ofofthe Che CompanyCompany onon PSXPSX primarilyprimarily duedue toto thethe factfact thatthat thethe termsterms ofof Chethe schemescheme requirerequire toto be consistentconsistent with thethe increasedincreased legallegal compliancecompliance for aa listedlisted entity.entity. TheThe proposalproposal for subjectsubject updationupdation inin the ExistingExisting schemeschenle isis under reviewreview andand pendingpending approvalapproval fromfrom shareholdersshareholders ofofthe the Company andand SECP respectively.respectively. 201920L9 201820ra NoloNote —--- Rupees Inin'000 "000 —--- 23. LONG TERMTERM FINANCING

From fmancialfinancial institutionsinstitutions -- securedsecured Diminishing musharika 23,1?3.r a-----rl4ilfli2,140,117 --- 2,263,222rr6nn1 542,857s4z,Bs7 814,286 Syndicated financefinance facilityfacility 23.2 I ll 814.286 | Syndicated financefinance facilityfacility (BMR)(BMRJ 23,323.3 95,208so,zoo 138,96813B,e6B I ll I Islamic longlong termterm financefinance facilityfacility -- ILTFFILTFF 23.4 | 696,7546e6,754 | - 3,475,936 3,216,4763,276,476 From relatedrelated partyparty - unsecured

Interlooplnterloop Holdings (Pvt)(PltJ LimitedLimited -- associatedassociated companycompany 23.5 1,400,000 - 4,875,936 3,216,4763,2L6,476 Less;Less: Current portion of longlong termterm financing (1,247,191)(L,247,reL) (968,540)(968,5401 j23l!L ______:3.628,745 2,247,936

23.123,1 TheseThese loansloans havehave been obtained under diminishingdiminishing musharika arrangementsarrangements and areare repayable inin quarterlyquarterly installments.installments. TheseThese areare securedsecured againstagainst 1st joint panpari passupassu chargecharge -- [PP ofof Rs.Rs. 6,4586,468 million (2018:(2018:7,474 1,474 million) overover fixedfixed assets,assets, specific/exclusivespecific/exclusive chargecharge ofof Rs. 1,9921,992 million {2013:(2018: 3.0153,015 fPP -lJlljlh-- million) onon fixedfixed assetsassets (plant(plant and machinery) andand rankingranking chargecharge ofof Rs. 718718 million (2018;(2018: 1,978 million)millionJ onon fixedfixed assetsassets ofof thethe Company.Company Mark up isis chargedcharged atat thethe raterate ofof 33 months K1BORKIBOR plus 0.10% toto 0.50%0.500/o per annumannum (2018:3(2018: 3 months KIBOR plusplus 0.10%0.10% toto 0-75%0.75% perper annum).annum).

23.2 TheThe companycompany hashas entered intointo aa syndicatedsyndicated longlong termterm financefinance facilityfacility arrangementarrangement forfor Rs. 1,900 million with aa consortiumconsoftium ofof locallocal banks forfor acquisitionacquisition of certaincertain assetsassets fromfrom Kohinoor Mills Limited,Limited. TheThe repaymentrepayment ofof thisthis loanloan isis toto be made inin quarterlyquarterly installmentsinstallments andand thethe loanloan isis securedsecured againstagainst thethe 1st1st specific chargecharge ofof Rs. 2,933.34 million (2018;(2018: 2.933,342,933.34 million) over thethe fixedfixed assetsassets ofof Interlooplnterloop LimitedLimited (Hosiery(Hosiery Division III).lll). The markDrark up isis chargedcharged at thethe fixedfixed raterate ofof 5%5%o per annumannum (2018:(2018: 5%50/o per annum).annumJ.

23.3Z?.3 TheThe CompanyCompany hashas alsoalso entered intointo syndicatedsyndicated longlong termterm financefinance facilityfacility arrangementarrangement forfor Rs. 300 million withwith aa consortiumconsoftium ofof locallocal banks for Balancing.Balancing, Modernization andand Replacement (BMR)(BMR) ofofassets assets purchased fromfrom Kohinoor Mills Limited.Limited. TheThe repaymentrepayment ofloanistoboofloan is to be made inin quarterly installmentsinstallments and securitiessecurities areare samesame asas mentioned inin notenote 23.2 above.above. Markup Isis chargedcharged atat thethe raterate ofof 0303 months KIBORKIB0R plus 1.3%1.3% perper annum (2018;(2018: 0303 monthsnronths KIBORKIB0R plusplus 1.3%1.3%o perper annum).annum).

23.423,4 The Company hashas obtainedobtained IslamicIslamic Long TermTerm FinanceFinance Facility •- 1LTFFILTFF ofof Rs,Rs. 1,5001,500 million for purchase ofof plant andand machinery forfor aa period ofof 10 yearsyears includingincluding 22 year grace period.period. Repayment ofofloan loan isis toto be made inin quarterlyquarterly installmentsinstallments andand isis securedsecured againstagainst IstJPPlstJPP chargecharge ofofRs.3,734 Rs. 3,734 million (2018:(2018: nil)nilJ overover land,land, buildingbuilding andand plantplant and machinerymachinery ofof thethe Company.Company. ThisThis 1st JPPJPP chargecharge ofof Rs.Rs. 3,7343,734 million isis samesame onon both ILTFFILTFF andand diminishing musharika facilitiesfacilities fromfrom HBlHBL and isis includedincluded inin aggregateaggregate chargecharge mentioned inin notenote 23.123.1 above.above. Markup isis chargedcharged at SBPSBP ILTFFILTFF rate pius.0.75%plus 0.75o/o perper annum (2018;(2018: nil).nilJ.

23.5 TheThe CompanyCompany "Interloop"lnterloop Limited" hashas enteredentered intointo loanloan agreementagreement with Interloop Holdings (Pvt)(Pvt) LimitedLimited upto anan amountamount ofof Rs. 3,000 millionmillion forfor periodperiod of threethree yearsyears includingincluding one yearyear gracegrace period.period. Mark upup isis chargedcharged atat thethe raterate ofof 5%5% per annumannum andand will be paidpaid tilltill 115th Sth of everyevery month, followingfollowing thethe end ofof every quarter.quarter. Upon lapseoflapse of paymentpayment date, thethe CompanyCompany sliallshall paypay lacelate payment chargescharges equivalentequivalent toto 2%20l0 ofof the monthly markupmark up installmentinstallment duedue for eacheach dayday ofof latelate payment,payment, which may bobe consideredconsidered toto waive offoff atat thethe discretion ofof management of InterloopInterloop Holdings (Pvt)(PvtJ Limited. TheThe loanloan isis unsecured butbut isis made with fullfull recourserecourse againstagainst thethe Company andand itsits successors,successors.

201920L9 201820 1B —--- Rupees inin'000 '000 —---

24. LIABILITIESLIABILITIESAGAINSTASSETS AGAINST ASSETS SUBJECT TO FINANCE LEASE Future minimum leaselease payments 1.1461,746 (61) Less:Lessi Un-amortized financefinance chargescharges - (") Present value ofof futurefuture minimum leaselease payments - 1,085 Less: Current portion shownshown under currentcurrent liabilitiesliabilities . (470){470) 615

24.1Z4.l During thethe year thethe Company has paidpaid offoff allall itsits leaselease liability.liability. 24.224,2 TheThe amount ofoffuture future payments ofofthe the leaselease andand thethe periodperiod inin which thesethese payments will become duedue areare asas follows;follows: ---i-,------q]5-201820ta Later thanthan oneone yearYear Not laterlater thanthalr one and not laterlater thanthan yearvear fiveive yearsyears —--- Rupees inin'000 '000 —--.

Future minimum leaselease payments 519 527627 Less;Less: Un-amortized financefinance chargescharges 49 12T2 Present value ofoffuture future minimum leaselease payments 470470 61S615

2019z0L9 201820LA Note —--- Rupees inin'000 '000 —--' 25, DEFERREDDEFERREDLIABILITIES LIABILITIES 25.2 2,482.623 1,925,612 Staff retirementretirement gratuity 25.2 ------?492'623.------122j83- 25.1ZSJ GeneralGeneraldescription description This representsrepresents anan unfunded gratuitygratuity schemeschene which provides terminationtermination benefitsbenefits forfor allall employeesemployees of thethe Company who attainattain thethe minimum qualifyingqualifying period. The latestlatest actuarialactuarial valuation ofofthe the defineddefined benefit planplan was carriedcarried outout asas atat juneJune 30,201930, 2019 usingusing thethe ProjectedProjected Unit Credit (PUC)(PUC) Actuarial Cost Method. Details ofof thethe defineddefined benefit planplan areare asas follows;follows: 2019z0t9 2018 Note —--- Rupees in '000'000 —"-- 25.22S.Z MovementMovernent inin thethe presentpresent value of defined benefit obligationobligation Opening balancebalance 1,925,612L,925,6t2 L,572,461-1,572,461 Expenses recognizedrecognized inin thethe statementstatement ofof profit oror lossIoss 25,325.3 522,833 414,5434L4,543 Remeasurement ofof plan obligationobligation chargeabfechargeable 25.5 t92,425192,825 91,3059 1,3 05 to otherolher comprehensivecomprehensive Incomeincome Balance transferredtransferred toto IntorloopInterloop Holdings (Pvt)(Pvt) Limited (17,120)(r7,rzo) (503)(s03) Balance transferredtransferred lollto IL Apparel fPvt)(Pvtl Limited (10,506)(10,s06J - Paid duringduring thethe yearyear (131,021)(L3L,oZLJ (152,194)(L52,le4) Closing balancebalance ______-JAB2,6Z32,482,623 __-___Jf25,6J3_1.925.612

25.3ZS.3 Expenses recognizedrecognized inin thetJre statementstatement ofofprofit profit oror lossloss Current serviceservice costcost 336,823336,A23 298,57529A,575 Interest costcost 186,010 115,968115,960 25.4 522.833522,A33 414,543+1+,543 25.4 Amounts chargedcharged inin thethe statementstatement ofof profit oror lossloss areare asas follows;follows: Cost ofof sales 440,739440,739 352,125352,125 Distribution expensesexpenses L436414,368 11,49817,498 Administrative expensesexpenses 67,726 50.92050,920 _____--___s22$3-522,833 ______3138!3_414.543 25.5 Total remeasurement chargeablechargeable toto oilierother comprehensivecomprehensive incomeincome Remeasurement of plan obligation: Actuarial gaingain fromfrom changeschanges inin demographicdemographic assumptionsassumptions - (75,521)(7s,s2t) Actuarial losseslosses fromfrom changeschanges inin financialfinancial assumptionsassumptions 97,569 67,778 Experience adjustmentsadjustments 95,256. 99,048 192.825792,A25 91.30591,305

25.6 PrincipalPrincipal actuarialactuarial assumptionsassumptions used 2019zotg 201820la

Discount raterate usedused forfor profit andand lossloss chargecharge 10.00% 7,75%7.750/n Discount ralerate forfor yearyear endend obligationobligation t4.\Oo/o14.50% 10.00%10,00% Salary increaseincrease usedused forfor yearyear endend obligationobligation Salary Increaseincrease forfor FYFY 20192019 N/A 9.25%9.250/o Salary increaseincrease forfor FYFY 20202020 t4.O0o/o14.00% 9.25%9.25o/o Salary increaseincrease for FY 20212021 L4.Ogo/o14.00% 9,25%9.ZS% Salary increaseincrease forfor FY 20222022 L4.ggo/o14,00% 9.25%9.Z5o/o Salary increaseincrease forfor FYFY 20232023 14.00%L4,OOo/o 9.25%9.ZSo/o Salary increaseincrease forfor FYFY 20242024 l4,O0o/o14.00% 9.25%9.25Vo Salary increaseincrease forfor FY 202S2025 onwardonward 14.00%t4,ggo/o 9.25%9.25o/o Demographic assumptionassumption Mortality ratesrates (for(for deathsdeaths inin service)servicel SL1CSLIC SLIC 2001-2005 20O1-2OO52001-2005 Setback X1 year Setback 11 year

Retirement assumptionassumption 60 yearsyears 60 yearsvears

25.725,7 TheTheexpectedcontributiontodefinedbenefitobligationfortheyearendinglune30,2020will expected contribution to defined benefit obligation for the year ending June 30,2020 will bebeRs Rs. 733.96733.96million',' niillion. 25.825,B SensitivitySensitivityanalysis analysis The calculationcalculation of thethe defineddefined benefit obligationobligation Isis sensitivesensitive toto assumptionsassumptions setset outout above.above. The following tabletable summarizessummarizes how the impactimpact onon thethe defined benefitbenefit obligationobligation atatthe the endend ofofthe the reportingreporting period would have increasedincreased / (decreased)(decreased) asas aa result ofofa a changechange inin respectiverespective assumptions by 100 bps,bps 201920L9 201820la —--- Rupees in'000in '000 —---

Discount raterate ++ 100100 bps (2,232,532) (1,728,390)(L,728,3e0) Discount raterate ■- 100 bps 2,781,8332,7AL,A33 2,165,469 Salary changechange ++ 100 bps 2,785,4052,7a5,405 2,169,1282,769,128 SalarySalaiy changechange -100- 100 bpsbps (2,225,007)(z,zzs,oo7-) (1,721,659)(1,721,6s9) The sensitivitysensitivity analysisanalysis of thethe defineddefined benefit obligationobligation toto thethe significantsignificant actuarialactuarial assumptionsassumptions hashas beenbeen performed using thethe samesane calculationcalculation techniques asas applied forfor calculationcalculation ofofdefined defined benefitbenefit obligationobligation reportedreported inin thethe balance sheet,sheet.

yearsJ 25.9ZS,g TheThe averageaverage durationduration ofof defineddefined benefitbenefit obligationobligation forfor thethe yearyear endedended 20192 0 1 9 isis 111 1 yearsyears (2010;[2 0 18: 111 1 years).'

26. TRADETRADEANDOTHERPAYABLES AND OTHER PAYABIES Creditors 833,328 889,974 Accrued liabilitiesliabilities 26.126.r 2,213,6452,2L3,645 1,464,098 Advances fromfrom customerscustomers 7,398739A 13,510 Other payablespayables 26.2 L53,L25153,125 127,402 4,315 Employees provident fundfund trusttrust 5,020 4,315 Withholding taxtax payablepayable 73,84578,A45 20,286 Workers' profit participation fund 26.3 285,500 210,329270,829 2.730.414 ------3ilSp9J-3,576.861 ------Jl-394!- 26.126,L itIt includesincludes anan amount ofofRs.209.85 Rs. 209.85 million (2018;(2018: Rs. 188.22 million}millionJ relatingrelating toto infrastructureinfrastructure cesscess payable.

Honourable Sindh High Court inin itsits decisiondecision dated 3717 September,September, 2008 declareddeclared thethe impositionimposition ofof infrastructureinfrastructure cesscess before December 28,200628, 2006 asas void and invalid.invalid. However, thethe Excise andand TaxationTaxation Department filedfiled an appealappeal before thethe Honourable Supreme CourtCourt ofof Pakistan. TheI'he Honourable SupremeSuprenre courtcourt ofof PakistanPakistan hadhad disposeddisposed offoff thethe appeal with aa jointjoint statementstatement ofof thethe parties thatthat duringduring thethe pendency ofof thethe appeal,appeal, another lawlaw i.e.i.e. fifthfifth version came intointo existenceexistence which was not thethe subjectsublect matter ofof thethe appealappeal hence thethe casecase was referredrefeued backback toto High Court ofof SindhSindh with rightright toto appealappeal toto Supreme Court,Court. On May 31,31,,2011, 2011, thethe High Court ofofSindh Sindh had gruntedgranted anan interiminterim reliefreliefon on anan applicationapplication ofofpetitioners petitioners onon certaincertain termsterms includingiDcluding discharge and returnreturn ofof bankbank guaranteesguarantees / securitysecurity furnished onon consignmentconsignment releasedreleased upup toto December 27, 2006 andand anyany bank guaranteeguarantee /,/ securitysecurity furnished onon consignmentconsignment releasedreleased after December 27,200627 , 2006 shallshall be encashedencashed toto extentextent ofof 50%50yo ofof thethe guaranteedguaranteed oror securedsecured amountamount onlyonly with balance kept Intactintact tilltill thethe disposal ofof petition.petition. InIn casecase thethe High Court upholdsupholds thethe applicabilityapplicability fifthfifth version of lawlaw andand its retrospectiveretrospective application,application, thethe authorities areare entitledentitled toto claimclaim thethe amountsamounts duedue under thethe said lawlaw with thethe right toto appealappeal availableavailable toto petitioner.petitioner. Inln thethe lightlight ofof interiminterim reliefrelief thethe Company hashas paid 50% of thethe amount ofof InfrastructureInfrastructure cess.cess. Importslmports of thethe Company are being releasedreleased against 50%500/0 payment ofof InfrastructureInfrastructure cessccss toto Excise andand TaxationTaxation Department andand furnishingfumishing ofof bank guarantee ofof balance amount.amount.

The Government of PunjabPunjab imposedimposed PunjabPunjab InfrastructureInfrastructure Development Levy inin termsterms ofof thethe Punjab Infrastructure Development CessCess Act, 20152015 (the(the Act) readread with PRA Notification No.PRA/IDC/201SNo.PM/IDC/ZO15 dated 16.05.201616.05.2016 andand PRA orderorder No.PRA/Orders.08/Z01SNo.PM/Orders.08/2015 dateddated 23.05.2016.23.05.2016. TheThe CompanyCompany being aggrievedaggrievedfiledwritpetitionvideWPNo.24536of filed writ petition vide WP No.24536 of 20162016beforeHonorableLahoreHighCourtchallengingtheconstitutionalityof before Honorable Lahore High Court challenging the constitutionality of thetheAct. Act. TheTheLahore Lahore High Court onon 28,07.201629.07.20L6 grantedgranted interiminterim reliefrelief forfor clearanceclearance ofof goodsgoods subjectsubject toto payment ofof 50%500/o ofofthe the disputeddisputed amountamount andand uponupon furnishingfurnishing ofof a bank guarantee forfor thethe balance ofof 50%5070 ofofthe the amount.amount.

Both thethe aboveabove referredreferred casescases areare pendingpending litigationlitigation beforebefore respectiverespective Honorable High Courts. TheThe casecase ofof SindhSindh HigliHigh Court isis pending adjudication,adjudication, whereas casecase preferredpreferred before Honorable Lahore High Court hashas beenbeen fixedfixed forfor 24.09.2019.24.09.2019.

However thethe fullfull amount ofof InfrastructureInfrastructure CessCess formsforms componentcomponent ofof cost ofof importedimported itemsitems andand provision recordedrecorded inin books. Bank guaranteesguarantees furnished ragarding impositionimposition ofofinfrastructure infrastructure ccsscess havehave been discloseddisclosed inin note -- 30.130.1 toto thesethese financialfinancial statements.statements.

26.2 This includesincludes amount ofof Rs. 333338 thousandthousand payable toto ESOS Management TrustTrust for payments receivedreceived agaiiistagainst issuanceissuance ofof sharesshares toto employeesemployees underunder ESOS. 2019to11- 2018 — Rupees*'0"u, ini''ooo '000 —"1'ot8 26.326,3 Workers'Workers'profitparticipationfund profit participation fund Opening balance 210,829zto,829 150,200150,2 0 0 Interestlnterest on fundsfunds utilisedutilized Inin thethe Company's business 21,4252L,425 6,172 232,254 156,3721-56,372 Less: paid duringduring thethe year (232,069)(232,0691 (156,373)(756,373) 185 [15t1l Add: allocation forfor thethe yearyear 285,315 210.830210,830 Closing balance ______z!58!q-285,500 __-----_---?1982e210.829

27. ACCRUED MARK UP MarkupMark up on;on: Long termterm financingfinancing 46,259 36,228 Short termterm borrowings 64,224 101,628t07,628 ______-_11!193_110,483 -_------J3lj56137,856 28.za. SHORT TERMTERM BORROWINGS From banking companiescompanies -- SecuredSecured Under mark upup arrangementsarrangements ERF -- IIII 11,726,000LL,7Z6,AO0 11,021,000 FAPC -- ownown sourcesource 28.129.1 -: - 2,750.0002,750,000 Running financefinance - 1,263,364 From relatedrelated parties -- Unsecured Chief executive andand directorsdirectors 146,573146.573 _-_-__J!fzS11,726,000 p99______J5,r99231-15,180,937

28.128,L TheseThese areare securedsecured againstagainst firstfirst jointJoint PartPari Passu (jPP)(lPP) chargecharge ofof Rs. 26,817.8326,817.83 million (2018:(2018; 26,083.3326,083.33 million) andand rankingranking chargecharge ofof Rs.Rs 2,6322,632 million (2018:(2018: Nil)NilJ byby allall thethe lendinglending banks overover allall present and futurefuture currentcurrent assetsassets ofof thethe Company. TheThe totaltotal limitslimits availableavailable toto thethe Company forfor shortshort termterm borrowings from allall thethe banksbanks areare amounting toto Rs. 24,9S024,950 million (2018;(2018: 19,562,519,562.5 million).millionJ.

Mark up isis chargedcharged as;as; ERF-IIERF. II SEPSBP raterate ♦+ 0.250.25 toto 0.30%0.3 0% p.a (2018;(2018: SBPSBP raterate *+ 0,25%0.25o/o toto 0.40%0.400/o p.a).p.a). FAPC -- ownown sourcesource 33 months Kibor ++ 0.250.25 toto 0.50%0.50% p.ap.a (2013:3(2018: 3 toto 66 months Kibor *+ 0.250.25 toto 1,00%1.00% p.a)p.aJ Running financefinance 1 toto 33 months Kibor <-0.20r 0.20 toto 1.00% p.a (2018;(2018: I1 toto 33 months Kibor + 0.200.20 toto 1,00%1.00% p.a)p.aJ

29. CURRENTCURRENT PORTION OFOF NON CURRENTCURRENT LIABILITIES

Long termterm financingfinancing 23 1,247,191r,247,t9t 968,540 Liabilities againstagainst assetsassets subjectsubject to finance leaseIease 24 470470 1,247,191L,247,l9l 969,0969,010 iU 2019zot9 2018 Note —--- Rupees Inin '000'000 ■■■--- 30. CONTINGENCIESCONTINGENCIES ANDAND COMMITMENTSCOMMITMENTS 30.130,1 ContingenciesContingencies 30.1.130,1,1 Bank guarantees issuedissued byby variousvarious banksbanks onon bebalfbehalf ofof thethe companycompany titin favourfavour of:of:

Sui NorthernNofthern Gas Pipelines limitedlimited againstagainst supplysupply ofof gas.gas. 547,069 386,8043 86,804

The Director, ExciseExcise andand Taxation.Taxation, KarachilGrachi againstagainst impositionimposition ofof infrastructureinfrastructure ccsscess 1.97,853197,853 172,853

Faisalabad ElectricElectric SupplySupply CompanyCornpany (FESCO](FESCOI againstagainst supplysupply ofof electricity.electricity. 70,41470,4L4 70.470,474 H

Punjab Revenue AuthorityAuthority 8,033 4,335

State BankBank ofof PakistanPakistan 127,551L27,55r 25,0002 5,000

_____-_--9Eqrzg._950,920 __*-_---"--F!%!-q-659,406 PostPost dateddated chequescheoues issuedissued inin favourfavour ofof customcustom authoritiesauthorities 30.1.2 forfor releaserelease ofof importedimported goods *_*_L.e97,613_3.291,613 ______3ElW9:2,643,166

30.1.3 Corporate guaranteesguarantees givengiven toto banks onon behalfbehalf ofof 11IL Apparel [Pvt)(Pvt) LtdLtd -- aa subsidiarysubsidiary companycompany :::__-laqq{!q-1,130.000

30.2 ComniltmentsCommitments Under lettersletters of creditcredit for:for;

Capital expenditure 1,275,725I,275,725 747.706747,706 Raw material 109,974L09,974 209,206 Stores andand sparesspares 136,399t36,399 37,1533 7,15 3 1,522,098p23_ 994,065 _____1EU -_-_-___22![55_ 31. SALES-NETSALES. NET 't7,5r8,696 Export solessales 3l.l3L.L 33,941,21333,94L,2L3 27,518,696 Local salessales 3,775,022 ' 3,816,8653,84.6,865 37,716.23537 ,716,235 31,365,56131,3 65,561 Less;Less: Sales discount l-- {206,7921eo6?riitl-- (206.052)(rGpstl Sales taxtax I {31,1221tzt,rzzlll (20,773)eo,nrl (237,9141(237,9L41 (226,025)(226,82s) _--____3!-AL9EZ1_37.478,321 _!1eEl3631,138.736 31.1 ItItincludesexchangegainamountingtoRs.2,258.645million includes exchange gain amounting to Rs. 2,258.645 million (2010;(2018: Rs.Rs.89062millionJ 890.62 million).

32. COSTCOST OFOF SALESSALES

Raw material consumedconsumed 32.132.r 15,654,92415,658,024 13,312,629 Stores andand sparesspares consumedconsumed 32.2 854,199 824,4738?4,473 Knitting chargescharges TL,A9711,897 192,13519 2,13 5 Salaries, wages andand benefits 32.3 5,529,513 5,037,474 Staff retirementretirement gratuity 25.4 440,739440,739 352,125 Fuel andand powerpower 2,261,2832,261,243 r,B71,874,447 4,447 Repairs andand maintenance 329,103LZg,L03 129,668 InsuranceInsurance 52,250 51,0645 1,064 DepredarionDepreciation 7.1.27.L.Z 1,490,464L,490,464 1,31,338,143 3 8,143 Rent, raterate andand taxestaxes 25,6762s,676 32,305 Other manufacturingnanufacturing costscosts 235,444 84.43584,435 26.088.59226,688,59? 23,228.898ac, L 40,o1o Work Inin process 471,276 450,6784so"a?E Opeiimg0pening balancebalance ---- 4?t,r?6lf Closing balance I {597,502)Fgz,soztll 1171.276)Wl,zTjl (126,286]uz6,za6l (20,598)(20,5981 Cost ofof goodsgoods manufactured 25,562,30626,562,306 23,208,300

Finished goodsgoods Opening balance l------t'484'uTlt-1,484,177 1,120,718lJ ro,? l8 l (1,484,177)(r,,re,r,rzz)l Closing balance I (1,954,089)(r,ss+,oegtll (469,912)(46e,9r2) (363,459)[363,4s9) 20,092,39426,092,394 22,844,841 Duty drawbackdrawback 1568,7871(s68,787) _ (850.604)f8so,6o4) 25,523.60725,523,607 21,994,23721,99+,237

32.132,L Raw material consumedconsumed Opening0pening balancebalance 3,166,2653,L66,265 1,994,4851,994,435 Purchases 16,222,599L6,??2,599 14,484,40914,+8+,+09 19,388,864 16,478,89416,478.891 (3,L66,26s) Closing balance (3,730,840) (3,166,265) 15,558.02475,65a,024 13,312,62913,317,6?9

32.23Z,Z Stores andand sparesspares consumedconsumed 43 Opening balance 779,198779,t94 696.743696,7 Purchases 962,660 906,928 1,741,858L,74\a5a 1,603,6711,603,67r Closing balancebalance (887,659)(887,6591 (779,198)1779,198) :--- 854,199E54j9, 824,473Br4,4n 32.332,3 Salaries, wages andand benefits includeinclude Rs. 6.3216.321 million {2018:(2018: Us,Rs.5.49 5.49 millinn)million) inin respectrespect ofofthe (lie providentprovident fundfund contribution.contribution. 2019z0L9 2018 Note —--- Rupees inin'000 000 ...--- 33. DISTRIBUTION COSTCOST

Sea andand airair freightfreight SO,14S50,145 47,672 Shipping expensesexpenses 623,795623,7A5 660,682 Selling commissioncommission 1,757,956L,757,956 1,,621,,21,21,521,212 bxportExport developmentdevelopment surchargesurcharge 83,24343,243 66,600 Marketing andand advertisementadvertisement 60,81760,aL7 77,900 Staff salaries andand benefitsbenefits 33.1 193,008 154,966754,966 Staff retirementretirement gratuitygratuity 25.4 14,368L436A 1.1.,49811,498 Others 397 483 ______Jf2,783,719 83J_U_ ___?f!J[13_2,641,013 33.1 StaffStaffsalaries salaries andand benefits includeinclude Rs, 0.9610.961 million (2018;(2018: Rs. 0.7150.715 million) Inin respectrespect ofofthe the provident fundfund contribution.contribution. 34. ADMINISTRATIVEEXPENSESADMINISTRATIVE EXPENSES Staff salaries andand benefits 34.134.t &&34.2 34.2 1,057,2t21,057,212 826,274 Directors' remuneration 96,362 111,470r1-1-,470 Staff retirement gratuitygratuity 25.4 57,72667,726 50,92050,9 2 0 Postage andand communicationcommunication 38,675 34,51334,5t3 Electricity, gas andand water 22,L3522,135 14,607 ReneRent, ratesrates andand taxestaxes 113,939 65,02265,022 Printing andand stationerystationery 62,475 53,346 Travelling andand conveyanceconveyance 114,448LL4,44a 100,324r00,324 Vehicles runningrunning andand maintenance 23,84623,446 20,0512 0,05 1 Legal andand professional chargescharges 73,98273,942 39,672 Repairs andand maintenance 45,07045,a70 49,71649,716 Auditors' remunerationremuneration 34.4 2,8752,A75 1,360 Insurance 17,951L7,951 17.21317 ,21-3 Entertainment 51,7915L,79L. 51,101 Advertisement 17,557'l7,s57 4,379 Newspapers andand periodicals 1,189 656 DepreciationDepredation 7,1.27.L.2 150,77(1L50,779 133,392733,392 Amortization 8 9,047I,O47 10,37110377 Others0thers 16,359 73,41713,417 ______83!&92*1,984,209 ___*_____JE2JB9!-1,597,804

34.134.f Staff salariessalaries andand benefits includeinclude Rs.Rs, 4.746 million (2018:(2018: Rs,Rs. 3,8043.804 million) inin respectrespect ofof thethe provident fundfund contribution,contribution.

34.2 StaffStaff salaries andand benefitsbenefits includeinclude Rs.Rs. 5.0315.03 1 million (2018:(2 018: Rs. 4.1884.188 million)millionJ inin respectrespect ofof employees' shareshare optionoption compensationcompensation expense.expense, 34.334,3 TheThe investmentsinv€stments out ofof providentprovident fundfund havehave been made inin accordanceaccordance with thethe provisions ofof sectionsection 218 ofof thethe CompaniesConrpanies Act,Act,20L7 2017 andand conditionsconditions specified thereunder.thereunder. 34.4 Auditors'Auditors'remuneration remuneration Annual auditaudit feefee 1,825L,AZ5 950 Other certificationcertification 400 260 Half yearly reviewreview 500 - Out0ut ofof pocket expensesexpenses ISO150 ISO150 ______---JE!-2,875 1.360 35. OTHER OPERATING EXPENSES

Exchange lossloss -- net ...,. 15,258 -__*--,1i6q-12,80112,80 1 Loss onon disposaldisposal ofof property, plant andand equipment 47,09147,Ogt 38,09434,694 Charity andand donations 35.1 350,1763SO,L76 1,04,847104,847 Workers' profit participation fundfund 26.3 285,315 210,8302 1 0,830 Loss onon mutual fundsfunds measured atat fairfair value throughthrough profit or lossloss 35.2 15,886 50,257511,257 Provision forfor impairmentimpairment lossloss on investmentinvestment inin ILIL Bangla Ltd. 9.1 70,81470,414 784,540 425,429

35.1 Donations includeinclude the followingfollowing Inin which aa directordirector or his spousespouse hashas an interest;interest;

Name ofof Donee Interest inin Donee Name of Director

99,223 21,.7 66 InterloopInterloop Welfare Trust Trustees Ir Mr. NavldNavid Fazal 99,223 21,766 Mr. Musadaq ZulqarnainZulqarnain -i Mrs. ShcrcnSheren Aftab Mr. JahansebJahanzeb Khan Banth l Mr. Muhammad Maqsood

35.2 Loss onon mutual fundsfunds measured at fairfair value throughthrough profit or loss;loss;

Remeasurement lossIoss on investmentinvestment inin mutualmutual fundsfunds -- fair value 18.1 20,78720,7A7 10,908 through profit oror lossloss

loss on investment in mutual funds - fair value through profit Realized loss on investment in mutual funds - fair value through profit 915 49,17749,1.77 or lossloss

- fair value through Dividend incomeincome onon investmentinvestment Inin mutual fundsfunds - fair value through (5,816) (1,828)(1,8281 profit oror lossloss 15,886 58,257 2019 2018zoLa Note —--- Rupees inin'000 '000 —--- 36. OTHER INCOMEINCOME Income fromfrom financialfinancial assetsassets

Interestlnterest onon longlong termterm loanloan toto SNGPLSNGPL 1,616 Interest onon loanloan toto Metis Internationallnternational (Pvt)(Pvt) LtdLtd 7,2117,Ztt 8,923 Profit on TDRsTDRs 1,437L,437 225 Interest onon receivablesreceivables fromfrom ILIL Bangla LimitedLimited 5,7985,796 t4,44414,444 9,164

37,37. FINANCE COSTCOST

Mark up on:on: Short termterm borrowings 552,483 269,986269,946 Long termterm financingfinancing 315,7303 15,73 0 13139,900 9,980 Interestlnterest on workers' profitprofit participationparticipation fund 26,3 21,4252L,425 6,1726,772 Lease financefinance chargescharges 14 82B2 Bank chargescharges andand commissioncommission 106,055 67,434 995,707 483,654483,6s4 38. TAXATIONTAXATION Current yearyear 38,138.1 226,216226,2L6 120,1971-20,1-97 Prior year - (2431(243) ______2252!9_226,216 _------J.j119.954 95!- 38.138,1 Provision forfor deferreddeferred taxtax isis notnot requiredrequired asas thethe Company Isis chargeablechargeable toto taxtax underunder sectionsection 154 andand 169 of thethe incomeIncome TaxTax Ordinance,0rdinance, 20012001 and nono temporary differences areare expected toto arise inin thethe foreseeableforeseeable future.future. Reconciliation ofof taxtax expenseexpense andand productproduct ofof accountingaccounting profitprofit multiplied by thethe appiicableapplicable taxtax raterate isis not requiredrequired inin view ofof presumptive taxation.taxation.

38.23A,Z SectionSection 5A5A ofof thethe Income TaxTax Ordinance, 2001 Imposesimposes taxtax atat thethe raterate ofof 5%50/o onon everyevery public companycompany otherother thanthan aa scheduledscheduled bank oror Modaraba, thatthat derives profits for aa taxtax yearyear but doesdoes not distributedistribute atat leastleast 20%20% ofof accountingaccounting profitprofit throughthrough cashcash dividend within sixsix months ofof thethe endend ofof saidsaid taxtax year.year,

The Company hashas distributeddistributed sufficientsufficient cashcash dividend, forfor thethe yearyear endedended JuneJune 30,30,2018, 2018, which compliescomplies with thethe above statedstated requirements.requirements. Accordingly, no provision forfor taxtax on undistributed profits has been recognizedrecognized inin thethe financialfinancial statementsstatements forfor thethe yearyear endedended JuneJune 30,2019.30, 2019.

39. EARNINGSEARNINGS PER SHARE -. BASIC AND DILUTED 2019zolg 2018

39.139,1 Earnings perper shareshare -- Basic 5,194,767 3,385,809 Profit forfor Chethe year (Rupees(Rupees inin 'ODOJ'000) ____-___58!l_91- ---_-_!,895.q-q9-

Weighted averageaverage number ofof ordinaryordinary sharesshares outstandingoutstanding duringduring thethe yearyear (Numbers(Numbers in'000)in'000) 778,75077A,7-5O 1189,993 89,993 Add;Add: Bonus sharesshares Issuedissued afterafter thethe reportingreporting period (Numbers(Numbers inin'000) '000J 571,83157 1,83 1 ___-_JJ3r5!-778,750 ______J-9182!_761,824 Earnings perper shareshare -- basicbasic (Rupees)(RupeesJ 6.67066,6706 ___=L!qq5.1007

39.2 Earnings perpershare share •- Diluted There isis aa dilutivedilutive effecteffect on thethe basic earningsearnings perper shareshare ofof thethe Company,Company, after takingtaking intointo thethe effecteffect ofof optionsoptions grantedgranted on Company's sharesshares toto employees ofofthe the CompanyCompany underunder thethe Employee shareshare optionoption schemescheme (ESOS).(ESOSJ. SuchSuch dilutiondilution isis based on thethe fairfair value ofofthe the Company'sCompany's shares,shares, which isis higher thanthan thethe respectiverespective exerciseexercise price ofof optionsoptions granted duringduring thethe year.year. Profit forfor thethe yearyear (Rupees( Rupees inin '000)'0001 ___-___j&3rg_5,194,767 _---3q$8!:-3,885,809

Weighted averageaverage number of ordinaryordinary sharesshares outstandingoutstanding during thethe year (Numbers(Numbers '000)'000) 778,750774,750 109,993189,993 Add; Weighted averageaverage adjustmentadjustment forfor assumedassumed conversionconversion of employees'employees' shareshare options (Numbers(Numbers '000)'000J --49 49 Add: Bonus sharesshares issuedissued afterafter thethe reportingrepofting period (Numbers(Numbers inin '000)'000) 571,831 Weighted averageaverage number ofof sharesshares forfor determinationdetermination of diluted earningsearnings per shareshare 778,75077a,750 761,873

Earnings per shareshare -- diluteddiluted (Rupees)(RupeesJ 6.6706 5.1003s.1003

201920L9 201820LA Note —--- Rupees Inin'000 '000 —---

40. CASH AND CASHCASH EQUIVALENTSEQUIVALENTS

Cash andand bank balancesbalances 19 1,538,564 1-93,687193.687 Short termterm investmentsinvestments -- TermTerm Deposit Receipts (TDRs](TDRsJ 18 941,255947,255 2,479,8192,479,At9 193,687193.687

41.4L, RECONCILIATION OF MOVEMENT OF LIABILITIES TOTO CASKCASH FLOWSFLOWS ARISINGARISING FROM FINANCING ACTIVITIES Balance Balance Non Cash ChangesChanges Cash Flows as on July 01,2018 ll mlas on June 30,2019 t'*",;',;t.'"-'; Rupees In 'OOO

Long termterm financingfinancing 3,216,476 - 1,659,460 4,875,936 Liabilities againstagainst assetsassets subjectsubject toto financefinance leaselease l.OSS1,085 (233)(2381 (847) - Short termterm borrowingsborrowings 15,180,937 (3,454,937)(3,4s4,e37) 11,726,000rr,726,000 Dividend toto ordinaryordinary shareholdersshareholders 475,276 1,090,247 (1,434,538)(1,434,5881 130,935 issued,Issued, subscribedsubscribed andand paidpaid up capitalcapital •. 1,901,104L,90L,t04 5,718,3135,718,3 13 1,102,558 8,721,9758,727,975 Share premiumpre'mium net ofof transactiontransaction costcost 30,255 (21,629)(21,62e) 3,782,976 3,791,602 _____z_a,8qil!!-20,805,133 6.786,6936.786.693 ____-__Je'!,622_1,654,622 29,246,44829,246,444 42. REMUNERATION TOTO CHIEFCHIEF EXECUTIVE,EXECUTIVE, DIRECTORS AND EXECUTIVES JuneIune 30,2019 Chief Executive Directors Executives RupeesRupees in in'000 '000

Managerial remuneration 24,00824,OOA 28,77924,779 232,094232,O94 Medical allowanceallowance 5,912s,9tz Bonus 3,750 3,750 29,61029,6_to Superannuation fund - 33,825 - Meetings fee • 2,2502,2_SO - Staff retirement gratuity • 14,967 Other allowancesallowances 57,01157,OtL 27,75827,754 68,60468,604 339,594 Number ofof persons 1 6 60

June 30,2018 Chief ExccullvcExecutive DirectorsI)irectors Executives • Rupees in '000 —

Managerial remunerationremuneration 23,4S021-,450 72,870 137,527137,527 Medical allowancealiowance - - 3,5893,589 Bonus 3,4003,400 13,7501-3,7 50 15,05515,0 65 Staff retirementretirement gratuity - - 7,732 Other allowances ; ; L6,20016,200 24,850 66,62086,620 180,1131 80,1 13 Number ofof personspersons l 9 42

The chiefchief executive officerofficer andand directorsdirectors areare provided with companycompany maintained cars.cars.

43. TRANSACTIONSTMNSACTIONS WITH RELATED PARTIESPARTIES Related parties includeinclude subsidiarysubsidiary company,company, associatedassociated companiescompanies andand undertakings, entities under commoncommon directorship, directors,directors, major shareholders,shareholders, keykey management personnel,personnel, employeesemployees benefit trusttrust andand postpost employmentemployment benefit plans.plans. The CompanyCompany inin thethe normal coursecourse of business carriescarries outout transactionstransactions with various relatedrelated parties. Amounts duedue fromfrom andand toto relatedrelated parties areare shownshown under thethe relevantrelevant notes toto thethe financialfinancial statements.statements. Remuneration toto directorsdirectors and key management personnel isis disclosed inin note 42. Detail of transactionstransactions with related parties, otherother thanthan thosethose which have beenbeen specificallyspecifically discloseddisclosed elsewhere inin thesethese financialfinancial statementsstatements are asas follows:follows: 2019zotg 2018 Name Nature ofoftransaction transaction —--- Rupees inin'000 '1)00 —--'

ILlL DanglaBangla Limited Sale ofof assetasset . 7,225 Expenses paid on behalf of associateassociate • 7,452 Interest Onon receivabiesreceivables fromfrom ILIL Bangla LimitedLimited 5,796 -

!LlL Apparel fPvt)(Pvt) Limited Expenses paid onon behalfbehalf of subsidiary 8,017 Yarn dyeing servicesservices provided 382342 Sale ofofyarn yarn andand sparespare parts 4,433 Sale ofof assets 4,L7t4,171 Investment inin shareshare capitalcapital 499,000 Share deposit money paidpaid 200,000

Interlooplnterloop Holdings (Pvt)(Prt) Limited Expenses paid onon behalf of associateassociate 200?oo 1,295 Finance management servicesservices receivedreceived fromfrom InterloopInterloop - Holdings (Pvt)(Pvt) Ltd 7,500 - Sale ofof assetsassets 22,323 - Loan obtainedobtained duringduring thethe year 3,000,000 - Loan repaidrepaid duringduring thethe yearyear 1,600,000 Mark up expenseexpense onon loanloan fromfrom Interlooplnterloop Holdings (Pvt)(Prt) Ltd 83,651 -

interloopInterloop Limited ESOS Management Funds transfertransfer for payment toto withdrawal casescases under Trust ESOS 500 Payment received onon behalfbehalf of ESOSES0S Management Trust -- net 838

Interloop Welfare Trust Sale ofof assetsassets 1,214L,Zl4 •

Texlan Center |Pvt)IPvt] Limited Sale of assets 58,100 20,766 Sale ofof yarn 644,549 60.68360,683

Global Veneer Trading Limited SeitingSelling commissioncommission 884,278aa4,27B 282,630

Eurosox PlusPlus BVBv Sale ofof sockssocks 693,658 15,86315,863 Reimbursement ofof expensesexoenses 5,1295,L29 3,234

Key mauagementpersonnclmanagement personnel andand otherother Sale ofof vehicle 5,551 related parties House buildingbuilding financefinance loanloan 25,75025,730 Mark up onon househouse building finance loanloan 923 Repayment of loanloan 146,573L46,573 IssuanceIssuance ofof bonus sharesshares s,sa75,587,323 323 Issuance ofof ordinary sharesshares 3,000 Dividend paid L,400,7331,400,733 transactions or have arrangements / agreements in place 43.143.1 Following areare thethe related partiesparties with whom thethe Companycompany hadhad enteredentered intointo transactions or have arrangements / agreements in place.

Common DirectorshipDirectorshiP // Address andand Country ofof Incorporation Company Name BasisBasisofRelationship of Relationship Percentagepercentageofshareholding of shareholding

31,61%3l.610/o House # 267,267, Road »# 19, New DOHS IL Bangla LimitedLimited Associate Mohakhali, Dhaka,Dhaka. 100.00% Al-SadlqAl-Sadiq Plaza, P-157, RailwayRailwaY Road, IL!L Apparel (Pvt)(Pvt) Limited Subsidiary Faisalabad.Faisalabad, Pakistan Common Directors Al-SadlqAl-Sadiq Plaza, P-157, RailwayRailwaY Road, Interloop Holdings (Pvt)(Pvtl Limited Associate Common Faisalabad, Pakistan Directors Al-Sadiq Plaza.Plaza, P-157, RailwayRailwaY Road, Interloop Dairies Limited Associate Common Directors Faisalabad, Pakistan Subsidiary ofof Associate Al-Sadiq Plaza, P-157, RailwayRailwaY Road,Road, Momentum Logistics (Pvt)(PvtJ Limited Associate Faisalabad, PakistanPakistan of Associate Al-Sadiq Plaza, P-157, RailwayRailwaY Road, Printkraft (Pvt)(Pvt) Limited Associate Subsidiary of Associate Faisalabad, Pakistan lanka' Common Directors Dagonna Road, Minowangoda,Minuwangoda, srisri lanka, Texlan Center (Pvt)[Pvt) LimitedLimited Associate

N/A Bahnhofa3i€asse22,6300Bahnhofasteasse22, 63 00 Zug,Zug, Switzerland.Switzerland' Global Veneer Trading Limited Associate

N/A Constructieweg 1,74511, 7451 PS Holten, Eurosox PlusPlus BV Associate Netherlands N/A Al-Sadiq Plaza, P-157, RailwayRailwaY Road, Interloop WelfareTrustWelfare Trust Trustee Faisalabad, Pakistan N/A Al-Sadiq Plaza, P-1S7,P-157, RailwayRailwaY Road, Interloop Limited ESOS Management TrustTrust Trustee Faisalabad.Faisalabad, PakistanPakistan N/A Al-Sadiq Plaza, P-357,P-157, RailwayRailwaY Road.Road, Interloop Provident Fund TrustTrust Trustee Faisalabad, Pakistan

20192Ot9 2018ZOLA 44. NUMBER OF EMPLOYEES 16,4021^6,402 75,37315,373 Average number ofof employeesemployees during thethe yearyear 17,395t7.395 15,40915'409 Number ofof employeesemployees atat endend ofofthe the yearyear

45. UTILIZATION OF PROCEEDS FROM INITIALINITIAL PUBLIC OFFERING

The Company planned forfor settingsetting upup twotwo new projects.projects' Division - V"' - A sockssocks knitting unit inin Khurrianwala, Faisalabad.Faisalabad, "Hosiery"Hosiery Division ■ V. - AA demmdenim stitchingstitching unitunit inin Lahore, "Denim"Denim Division".Division"' 201920L9 -- Rupees inin'000 '000- -- Estimated costcost of thesethese twotwo projectsproiects isis asas under;under; 4,454,0004,4S4,OOO Hosiery Division -- V 6,750,4236,750,423 Denim Division rt,zo4,4z311,204.423

banks. For this purpo'",0Se th co-puty tarried out a successful issuance of share capital to general public and financing from These projects areare financed throughthrough issuance of share capital to general public and financing from banks. For this P^P ,'i'"^ from banks is as from banks. Detail ofthe pioceeds from lPO and financing required IPOIpO during thethe year andand have securedsecired islamicislamic longlong termterm financefinance-facilities facilities from banks. Detail of the proceeds from IPO and fmancmg required under; 5,024,900s,oz4'900 Proceeds fromfrom IPGlP0 6,179,5236,L79,523 Financing fromfrom banksbanks 11204,423LL,204,423

is as under; Ass on JuneJune 30,2019 progress ofofboth both thethe projects is as under: DenimD""itn DivisionDiviti"n HoslervHosiery Division-VDivision'V

AmountAmountUtilized Utilized Amount Utilized Outstanding f.CsLCs PRs/POsPRs/POs IssuedIssued Rupees in'000 -

412,708412'708 578,637 1,413,7367,413,736 Land andand building 40,74440,744 339,803 912,123912,1_23 265,892 Plant andand machinery 10,168 83,288 426,445426,445 Power andand utilities 68,25168,251 103,440 - 13,159 Miscellaneous expensesexPenses 789,124789,724 - " Advances toto supplierssupPliers 531,871s3l'84- 1,894,292r,a94,292 912,123912'LZ3 2,119,232z.rts.ztz - T_-t l-.-__l -t N lm , I $l lN l lo o I +. .1 @. o: ldl m o l+ E l: I ls m I l-.- I .i *- ldi lJ .jt t lM I c d -l I .9 3 tr L_l I L_l 'tr f=--='1 1 G I ir lo o I Ea o$r9 lN I I ! NO li o N @ 5ll tr o9 r IN N I F h+rN 6 @o \i- r $$vtdxt L-, *0 F NN 16 6l I CO@ioN — N E .E 2o' | l$l lr o I r roN ii ra F ! N ON : bn '6 o

E d r--='lu NN ! :l a. a. t_] € I aa E oo | @-l @. @. g u G E 2^ Sr. L: L] F --='lI +t o NN aih ! l.s EF ut ut ! o n S 2 rr = N I sl ot et €r .= r 9A --' 'a LJ ttI E r 'o ;> t;;r m a lmla le-61 o sl-t lN - I .-1 HF 6 + o lN q l: Rl ld N I I =l I ,g I I @ L] [lr=--=t E t;-J ts ^to ls l6 0I *t ?a0 o I+ 6l N 6l 2 C o IN N I o o lo lr + I N €l w l@ N I lN o I ot 6l o lN o I € 6 to r Cot T5 3 'E.=m tZ s hml -l c € 6!U ? I ZLt B L__l I S:qo&OL H o T=--='l £ 'tr E-;t -l lo 6l lo o I -ldl c- ; lo 6l o. al @ E9 o lb o I s o lo c -1 b- tb :_= @ c Ni * gl ■e S a o E 4 I E I L] E u f=-=r E- 4 C-J N o^l lN lN Ol q so t6 bt rf @ 19 rl-l E IN NI U N IN lo N I b NI 16 0I ct di lri ld oil o' Nl 6E li bl N 6 IN E 16 6l N *l 6Nl @ N X; E -l F E I o I 9> 6 o 5 = o -q u I I E ilr--l o s tm Io bl I6! a ETI -t sl ,E lN 6l lN + I a- +-l v, ", -a l€ sl o :l 9; E 13. sl Ni a 6 l@ s E NFI =I fflGO s -l I •e ^ E c-9 o. E I [] Ea „C o L] f=-=r ! l;; 90 o l+ € I 6l 1trtr E o ld 6l lN 6l Nl !& I lN c I q.q l9 + I ml 16 N I ts(, a{' ! -t r€ o lo bl ml 16 6l tF 6 t 14l oa a E: dt i. *- !z AN{.- o 0 'l .9 €:-r 2I E 3 ^ -I z ["] [-] a • a c^ o: q E a.e 3 o .r do.U ocMa C f, 9 C C4, 96 T7.:qo C= M 6 Xq oo C E t :o Y6 3i. qo q i3 E !o E ;Eqo E= A o :9H 6 F.- 6 oi 9E = \6 ? Yo g o9.Y I EE E I .9 =9 !u t9 I Ai 2 z t,a c t oc 6b s & tr! o d uci, iF .E H f !y : c ^,t > : L 9= 0i =6! = qE 6.: E E uho;0;i 3 H c E e s q= : t a si e cE7 > -L > ;1 E@oq s :: !£ t| ';9r9 E y,F f a ;; q! 3i;5 u.- h gl «n « .- | o gh €=i c -E : : h SE= £? c O6 .C & -q E:,i i Ec Eii E :eEE E < 9": o S- H-= =;e.; 6 a: I g o < a.: GO OO u.L t-F A So '£0 o-F6tr = H ciq ,o^ .t:;' E = S E ^ I *t in o 't- l+r. mb rN j o eg6 *l -l 16f-;-:--=] d 6 < r^l .ll o: o o mloll sl 16 O ^+ cd@ vq@ ol sll -l *+bHNlmll ull -! ll lol e ol o- @-l $I sa+d+lNlli lo inm N i fi6 bl IN O 6 NI $6rNO16l l@ r-jN •}"+ mb g^6 I -€.li f CT r- r- o r-i +: T-Ii l* m@ soa enml SoNroNlmli rj r- o lo I gM P> "< Nii-6lall *ll I -l:ll l-l-;l "l la,i -t *ll lMll tt ttlt I Il I G;:;;Ir- OS * 6 1 oll co in O I -ll l;- ..; so*nol*ll lo i inb Ms vo6 ,l Nll l+ o V6 TO6l sll _o _o _o »6 MNlNll 6 0 lr o nN ^* inD oll lr , o i +l L @ll -***Noool6ll M 0< co ON *- lo o r-'N inb to6 I o Nll lsi .d N dl N O*o NOs CO6 .0 . ..616il F or lo N Oo MN M6 I 6ll o lN N + il oil Nf+N6SmlNll r-1 CO m co o, cnc! q. inu?. I r lo N N rl r oo+orl+ll il h lq on O m ' € ts I d Ms sS6 MN rtmlNll N l*Firl II illl tt rttl PI *t @-l RI o 6l -l Ol N; "l

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6lol ill 6l o .il ; N *l <.9 !s I *.t!; .e3 !€ o; ! oad! 6O od d!3 od o! u@i >ca ! -E9 co- { o- tE9at.a 6a _q EESO E3 a6 EgEg oc EuZ9,;5od 0:oo o {hO::j.g s ? !]9EU sEfiE; ti - 9l4c = Iegg3 *FgE€=tdl:oc,3 -3.9En.2 a o s t E -3 -d E e E 2., ldrnEES E A b flsr"! q F a .9.9 o L o s— be- 2 .6 3 sy i I= 0 s; iFsEE;fi I I £ -s ! r En sn5€5 1 ; E E i 't ,:Z oN iBE;g[r: * ; € PEP:9E 9X-,J!o ",55= o I6-i = t .9 = £iA.L <3= c= ? j ,3=i.e"S •£ 9 '> ^ 0J5 X» = I o .! L ! Jr g = i ! T3 XJ O. ES 2! EF:€E ? <22'it < i r E SgFF;E:b £g 21 H E F aEFg'"'; =s 2§ € ". -s"FE:;sOS=i=EEi M L. ■g "8"=;iiM = t =G E'ia 2 iO I i E =!-iN.?33"i"i: & F s si6fl5t t-F I€ 5 i:i5ii « S < Fsri+-ooso= a_{ € 9Aet +g 47.47, PLANTPLANTCAPACITYANDACTUALPRODUCTION CAPACITY AND ACTUAL PRODUCTION [luoMI UOM 1 2019 20113zota —--- Figures inin'000 '000 ------Hosiery

Installed capacitycapacity -- knitting [DZN]lDzNl 57,87157,A7t 51,28951.,289 Actual production - knittingknitting [DZN]IDZNI 43,242 45,935 Spinning installedInstalled capacitycapacity afterafter conversion intointo ZO/s20/s [LBS]lrBsl 29.94929,949 29,949 Actual productionproduction afterafter conversionconversion intointo 20/s20 /s [LBSJILBSI 26,63025,630 27,21927,21.9 Yarn Dyeing

installedlnstalled capacity [KGs]IKGs] 4,9284,92A 4,8104,8L8 Actual productionproduction [KGs]IKGs] 4,3244.324 4,440

Active Wear The plant capacitycapacity ofof this division isis indeterminableindeterminable duedue toto multi product plansplans involvinginvolving varying processes ofof manufacturing andand run length of orderorder iots.lots.

47.147,7 Reasons forfor shortfall The short fallfall inin actual production duringduring thethe yearyear when comparedcompared with capacitycapacity Isis mainly onon accountaccount of:of: - The actualactual production isis planned toto meet thethe internalinternal demanddemand andand ordersorders inin hand.

48. FAIRFAIRVALUE VALUE OF FINANCIAL INSTRUMENTS The carryingcarrying values ofof the financialfinancial assetsassets andand financial liabilitiesliabilities approximateapproximate their fairfair values. Fair value isis the amountamount forfor which an asset couldcould bebe exchanged,exchanged, oror aa liabilityliability settled,settled, betweenbetween knowledgeable, willing parties inin anan arm'sarm's lengthlength transaction."transaction.'

Fair value hierarchy

Fair value isis defineddefined as the price thatthat would be received toto sellsell anan assetasset oror paid toto transfer a liabilityliability inin anan orderlyorderly transactiontransaction betweenbetween market participants at thethe measurement date. Underlying thethe definitiondefinition ofof fairfair value isis thethe presumptionpresumption thatthat thethe companycompany isis aa goinggoing concernconcern andand therethere isis nono intentionintention or requirementrequirement to cucurtail rtail materially thethe scalescale ofof its operationsoperations oror toto undertake aa transaction on adverseadverse terms.

A financial instrument isis regardedregarded asas quoted inin anan active market ifif quotedquoted prices areare readily and regularlyregularly available fromfrom anan exchangeexchange dealer, broker, industryindustry group,group, pricing service,service, oror regulatoryregulatory agency, andand thosethose prices representrepresent actualactual andand regularly occurringoccurring market transactions onon anan arm'sarm's lengthlength basis.

IFRS 1313 'Fair'Fair Value Measurement"Measurement' requiresrequires thethe company toto classifyclassify fairfair valuevalue measurements andand fairfair value hierarchy thattllat reflectsreflects thethe significance of the inputsinputs used inin making the measurements ofof fairfair value hierarchy has thethe followingfollowing levels:levels:

Level 1:1 : Fair value measurements usingusing quotedquoted (unadjusted][unadjustedJ Inin activeactive markets forfor identicalidentical assetasset or liability.liability,

Level 22 :: Fair value measurements using inputs otherother thanthan quotedquoted prices includedincluded within Level 11 that are observableobservable forfor the assetasset oror liability, eithereither directlydirectly (i.e.[i.e. as prices)pricesJ oror indirectlyindirectly (i.e.(i.e. derivedderived fromfrom prices).pricesJ. Level 33 :: Fair value measurements using inputs forfor the assetasset or liabilityliability thatthat are notnot based onon observableobservable market datadata (i.e.(i.e. unobservable inputsl.inputs).

Transfer between levelslevels ofof thethe fairfair value hierarchy are recognized atat thethe end ofof the reportingreporting period duringduring which thethe changeschanges have occurred. The following tabletable showsshows thethe carryingcarrying amountsamounts and fairfair values ofoffinancial financial assets andand financialfinancial liabilities,liabilities, includingincluding their levelslevels inin thethe fairfair value hierarchy. ItIt doesdoes notnot includeinclude fairfair value informationinformation forfor financialfinancial assetsassets andand financialfinancial liabilitiesliabilities not measured atat fairfair value ifif the carrying amount isis aa reasonable approximationapproximation ofof fairfair value. \o o 6ll.ll coco ll oll

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The Company financesfinances itsits operationsoperations throughthrough equity, borrowings andand management ofofworking working capitalcapital with aa view toto maintain anan appropriateappropriate mix betweenbetween various sources ofof financefinance toto minimize risk.risk. TheThe CompanyCompany followsfollows anan effectiveeffective cashcash managementmanagement andand planning policy andand maintains flexibilityflexibility inin fundingfunding by keeping committedcommitted creditcredit lineslines available.available. Market risksrisks areare managed byby thethe Company throughthrough the adoptionadoption of appropriate policies toto cover currencycurrency risksrisks and interestinterest raterate risks.

The Company has exposuresexposures toto the followingfollowing risksrisks from itsits useuse ofof financialfinancial instruments;instruments:

- Market riskrisk - Credit riskrisk - Liquidity risk 49.149.t Market riskrisk Market risk isis the riskrisk that thethe fairfair value of futurefuture cashcash flowsflows ofof a financialfinancial instrumentinstrument will fluctuatefluctuate becausebecause ofof changeschanges Inin market prices. Market riskrisk comprisescomprises interestinterest raterate risk,risk, currency risk andand otherother priceprice risk suchsuch as equity risk.risk. The sensitivity analysisanalysis inin thethe following sections relaterelate to the position asas atat Junejune 30,201930, 2019 andand 2018.

49.J.149.1.1 InterestInterest raterate risk;risk:

lnterestInterest raterate riskrisk representsrepresents thethe risk thatthat thethe fair valuevalue or futurefuture cashcash flows ofof aa financialfinancial instrumentinstrument will fluctuatefluctuate becausebecause ofof changeschanges inin market Interestinterest rates. MajorityMaiority ofofthe the interest raterate exposureexposure arisesarises fromfrom investmentsinvestments inin termterm depositdeposit receipts, longlong term andand shortshort termterm loans,loans, short termterm borrowings, longlong term financingfinancing and liabilitiesliabilities againstagainst assetsassets subject toto finance lease.lease.

At thethe balance sheetsheet date, thethe interestinterest raterate profile ofof thethe Company's interest bearing financialfinancial instrumentsinstruments isis asas follows:follows:

20192079 201820\a Fixed raterate instrumentsinstruments

Short termterm investmentsinvestments (Rupees[Rupees inin '000}'000] 1,076,3551,076,355. Loan to Metis InternationalInternational (Pvt)[Pvt] Limited -- Secured (RupeesfRupees inin'000] '000} 9,560 33,41433,41.4 Long termterm financingfinancing -- Secured (Rupees(Rupees inin'000J '000} 2,639,611 814,286B14,2B6

Variable rate instrumentsinstruments

Loan toto directordirector -- SecuredSecured (Rupees[Rupees inin'000J "000) 25,750 Effective interestinterest raterate inin percentage 6.076.O7 Receivables fromfrom ILIL Bangla Limited (Rupees(Rupees inin'000J "000} 82,766B2,766 Effective Interestinterest raterate inin percentage 7.53

Long term financingfinancing fromfrom financialfinancial Institutionsinstitutions -- SecuredSecured (Rupees[Rupees inin '000}'000] 2,236,325 2,402,1902,402,1,90 Effective interestinterest rate inin percentage 13.3513,3 5 7.33

Liabilities againstagainst assets subjectsubject toto finance leaselease -- SecuredSecured (Rupees[Rupees inin '000}'000J 847 Effective interestinterest raterate inin percentage 7.94 Short term borrowings fromfrom financial institutionsinstitutions -- Secured (Rupees(Rupees inin '00f'000J \L,726,OOO11,726,000 15,034,315,034,364 64 Effective interestinterest raterate inin percentage 2.30 4.17

Fair value sensitivitysensitivity analysisanalysis forfor fixed rate instruments The Company doesdoes notnot accountaccount forfor any fixedfixed rate financialfinancial assets and liabilitiesliabilities atat fairfair valuevalue throughthrough profitprofii or loss.loss. Therefore, a changechange inin Interestinterest rate at thethe balance sheetsheet date would notnot affectaffect statementstatement ofof profit oror lossloss ofof thethe Company.Company.

Cash flowflow sensitivitysensitivity analysis forfor variable rate instruments iflf interestinterest ratesrates on loan,loan, receivables, longlong termterm financing,financing, liabilitiesliabilities against assets subjectsubject toto financefinance leaselease andand shortshort termterm borrowingsborrowit]gs fromfrom banks, atat thethe year end date, fluctuatefluctuate by 100 bpsbps higherhigher / lower with allall other variables, inin particularly foreignforeign exchangeexchange ratesrates held constant,constant, profit before taxationtaxation forfor the yearyear 20192019 andand 2018 would have been affected asas follows:follows: 20192079 201820la —--- Rupees in'000 —---

Effect onon profit andand lossloss ofof an increaseincrease Inin interestinterest raterate for loanloan to directordirector 144144 Effect onon profit andand lossloss ofof anan increaseincrease inin interestinterest raterate forfor receivablesreceivables fromfrom ILIL Bangla Limited 786 Effect onon profit and lossloss of an increaseincrease inin interestinterest rate forfor longlong term financingfinancing 14,696 15,188 Effect onon profit andand loss ofofan an increaseincrease inin interestinterest raterate forfor liabilitiesliabilities againstagainst assetsassets subjectsubiect to financefinance lease • 10 Effect on profit andand tossloss ofof anan increaseincrease inin interestinterest raterate forfor short term borrowings 81,834 51,54267,542

97,460 76,7407 6,7 40 been prepared on Decrease inin interest ratesrates atat juneJune 3030 would have hadhad the equalequal butbut oppositeopposite effecteffect of these amounts.amounts. SensitivitySensitivity analysisanalysis has been prepared on symmetric basis. 49.1.249,1,2 Currency riskrisk / Foreign Exchange risk:risk: CurrencyCurrenly riskrisk isis thethe riskrisk thatthat thethe fairfair valuevalue oror futurefuture cash flowsflows of a financialfinancial instrument;instrument, willwill fluctuatefluctuate because ofof changeschanges inin foreignforeign exchangeexchange rates.rates. Foreign currencycurrency riskrisk arisesarises mainly where receivablesreceivables andand payables existexist duedue toto foreignforeign currencycurrency transactions.transactions. Exposure toto Currency BiskRisk

The Company's exposureexposure toto currencycurrency riskrisk Isis restrictedrestricted to the amountsamounts receivablereceivable from/payablefrom/payable toto thethe foreignforeign entitiesentities andand bankbank balancesbalances which areare denominateddenominated inin currencycurrency otherother thanthan the functionalfunctional currencycurrency of thethe Company.Company. The Company's exposureexposure to currencycurrency riskrisk isis asas follows:follows; Z01920L9 201820 18 Particulars Currency F.Currcncy Rupees F.Currency Rupees

Foreign currencycurrency bank US$us$ 390.39 64,02464,0r+]|-- 261.55r6r-sslf----trnl 31,752 l---- 666 EUREUR€ € 38.84 I 7,239z,zzs ll 4.71+tt I 71,2637t,263 32,418 Trade debtsdebts USSUS$ 47,649.90 7,814,5837,A!4,5A3 57,364.98 6,964,1086,964,708

Loans and advancesadvances us$US$ 58.48 9,560 275.0027S.OO 33,41433,474

46? 56,74444-l Less: Payables -- Creditors us$ 332.28332.24 54,66154,66t f--- 457.42A4a---- Eii EUR € 152.36 28,4902A,490 89.78 12,688 CNY 0.93 23 ';::- '':;:-

CHF 0.45 75IJ 0.35 43 I 83,249 | ll 69,475 On0n Balance sheetsheet Exposure 7,812.1577,At2,r57 6,960,465

Under letterletter ofof creditcredit USUS$ $ 4,160.32 684,3736A4373 1,971.641.,971.64 239,357239,357 EUR € 4,271.954,271.95 798,81279A,812 5,297.17.5,297.77 748,6507 48,650 (PYIPY ¥Y 21,776.3121,776.37 33,28533,285 3,100.003,100,00 3,4023,402 GBP £€ 27.0027.OO 5,6285,624 CUPCHF - - 21.7521..7 5 2,6562.656 Off Balance SheetSheet Exposure 1,522,0981,522,O98 994,065994,065

The following significantsignificant exchangeexchange ratesrates were appliedapplied duringduring the year:year :

2019 20r82018 Foreign Currency Reporting Date Reporting Date Average Rate Average Rate RateRale Rate [R U P E E S]sl [Rlrr UPu P E E S)sl USSUS$ 142.70 164.00164,00 113.101 13.10 121,40127.40 EUR € 163.85 186.37ta6s7 130.621.30.62 141.33147.33 GBP £€ 183,80183.80 208.4520a.4s 147.78747.78 159.14759.1.4 CHF 145.07t4s.o7 168.03 115.83115.8 3 1.22.1.1122.11 CNY 21.29 23.85 - JPY,PY ¥Y 1.31 1.53 1.021..O2 1.10

Currency rate sensitivitysensitivity analysis ifIfthe the functionalfunctional currency, at reporting date, had weakened by 10%70o/o againstagainst thethe foreign currenciescurrencies with allall otherother variables heldheld constant,constant, thethe profit beforebefore taxationtaxation would have Increasedincreased forfor the year 20192019 andand 20132018 by the followingfollowing amounts: 2019 20182018 Foreign Currency —--- Rupees inin'000 '000 —-- USUS$ $ 744,183744,143 662,390 EUR € (2,019)(2,019) (1,142)(1,r42) CNY (2)(2) GIFCHF (7){7) (4)t4l 742,155 -----J!JAI-661,244 A 10% strengthening ofofthe the functionalfunctional currencycurrency against foreignforeign currencies at JuneJune 3030 would have had----J-42!5!- thethe equalequal but oppositeopposite effecteffect ofofthese these amounts,amounts. Currency riskrisk sensitivitysensitivity to foreignforeign exchangeexchange movements has been calculated on aa symmetricsymmetric basis. The analysisanalysis assumesassumes thatthat allall oilierother variables remainedremained constantconstant. 49.1.3 OtherOther price risk:risk: Priceprice riskrisk representsrepresents thethe riskrisk thatthat the fair valuevalue oror futurefuture cashcash flowsflows ofof aa financialfinancial instrumentinstrument will fluctuatefluctuate becausebecause ofof changeschanges inin market prices (other(other thanthan thosethose arisingarising fromfrom interestinterest raterate riskrisk or currencycurrency risk),risk], whether those changes areare caused byby factors specific toto thethe individualindividual financialfinancial instrumentinstrument or itsits issuer,issuer, oror factorsfactors affectingaffecting allall similarsimilar financialfinancial instrumentsinstruments traded inin thethe marketmarket. The CompanyCompany isis exposed toto price risk,risk, because ofofthe the investmentsinvestments held by the CompanyCompany inin money market mutual funds,funds, andand classified onon the balancebalance sheetsheet asas portfolio' fair value throughthrough profit andand loss.loss. ToTo manage itsits priceprice riskrisk arising fromfrom investmentsinvestments inin mutual funds,funds, the Company diversifiesdiversifies itsits portfolio.

Short termte-rm investmentsinvestments includeinclude fairfair value through profit andand lossloss investments ofof Rs. 130.90130.90 million (2018:(2018: Rs. 147.43147.43 million)millionJ which were subject toto price risk.risk. irrcdcmptionlfredemption priceprice on mutual tunds,furds, atat thethe yearyear cudend dale,date, fluctuatefluctuate by 5%5olo higherhigher / lowerlower with allall otherother variables heldheld constant,constant, profit afterafter laxtax forfor thethe yearyear wouldwoulcl have been Rs. 6.226.22 million (2018:(2018: 7 million) higher // lower,lower, mainly asas aa resultresult ofofhigher higher // lowerlower redemptionredemption price onon units ofofmutual mutual funds.

49.2 Credit rlslcrisk: Credit risk isis thethe riskrisk representing accounting lossloss thatthat would bobe recognizedrecognized atat thethe reportingreporting datedate ifif one party toto aa financialfinancial instrumentinstrument will failfail toto dischargedischarge anan obligation oror itsits failurefailure toto performperform dutiesduties under thethe contractcontracf asas contracted.contracted. Concentration ofof creditcredit risk arises when aa number ofof counterpartiescounterparties areare engagedengaged inin similarsimilar businessbusjness activitiesactivities oror havehave similarsimilar economiceconomic featuresfeatures thatthat would causecause theirtheir ahilityabiliq/ toto meet contractualcontractual obligationsobligations thatthat Isis susceptiblesusceptible toto changeschanges inin economic,economic, political oror other conditions.conditions. Concentration ofof creditcredit riskrisk Indicatesindicates thethe relative sensitivitysensitivity ofof thethe Company'sCompany's perlbrmanccperformance toto developments affectingaffecting aa particular industry.industry. TheThe maximum exposureexposure toto creditcredit riskrisk at thethe reportingreporting date isis asas follows:follows :

201920ts 20182018 —--- HnpeesRupees inin'000 "000 —---

Long termterm loansloans 55.76265,7 62 60,74760,7 47 Long termterm depositsdeposits 28,0192a,o19 24,817 Trade debtsdebts 8,247,740a,247,740 7,293,008 Loans andand advancesadvances 66,34366,343 01.163B 1,1 63 Other receivablesreceivables 94,42194,42r 154,697 Short termterm investmentsinvestments L,ZO7,ZsL1,207,251 L+7,425147,425 Bank balances 7,5r2,27L1,512,211 181.636r81,636 ------:lJll-lg11.221,747 ------131:j3:-7.943.493

Loans andand advancesadvances consistconsist ofof loansloans toto employees & directordirector andand Metis InternationalInternational (Pvt)(Pvt) Ltd.Ltd. Loans toto employeesemployees and directordirector areare securedsecured against theirtheir retirement benefitsbenefits andand loanloan toto Metis InternationalInternational isis alsoalso securedsecured throughthrough anan irrevocableirrevocable lien/chargelien/charge on totaltotal assetsassets of thethe MetisMetls InteniattonalInternational (Pvt)(Pvt) Limited. Therefore, CompanyCompany isis notnot exposedexposed toto anyany significantsignificant creditcredit riskrisk onon thosethese loans.loans. Long termterm depositsdeposits have been mainly placed with supplierssuppliers ofof electricity,electricity, gasgas and telecommunicationtelecommunication services.services. ConsideringConsidering thethe financialfinancial positionposition andand creditcredit qualityqualiry ofofthe the institutions,institutions, Company's exposureexposure toto creditcredit riskrisk isis not significantsignificant.

Trade debtsdebts amounting toto Rs.Rs. 4,2514,25 1 million out ofof totaltotal debtsdebts areare securedsecured againstagainst lettersletters ofof creditcredit andand insuredinsured contractcontract. Furthermore, creditcredit qualityquality of customers is assessedassessed takingtaking intointo considerationconsideration theirtheir financialfinancial positionposition andand previous dealingsdealings andand onon thatthat basis, individualindividual creditcredit limitslimits areare setset. Moreover, thethe management regularly monitors andand reviewsreviews customers'customers' creditcredit exposure.exposure. Accordingly, thethe companycompany isis not exposedexposed toto anyany significantsignificant creditcredit risk.risk.

Other receivablesreceivables constituteconstitute mainly receivablesreceivables fromfrom thethe relatedrelated parties and mark up subsidysubsidy fromfrom banks. ConsideringConsidering thethe financialfinancial positionposition ofof relatedrelated parties and creditcredit qualityquality ofofbanks banks andand insuranceinsurance companycompany exposureexposure toto creditcredit risk isis not significantsignificant.

Short termterm investmentsinvestments areare investmentsinvestments inin mutual funds,funds, TDRsTDRS andand salessales taxtax refundrefund bonds.bonds. TheThe creditcredit riskrisk on thesethese investmentsinvestments isis limitedlimited becausebecause countercounter parties arcare Rindfund management Companies, banksbanks andand GovernmentGovernment with reasonablyreasonably highhigh creditcredit ratings.ratings. TheThe creditcredit qualityquality ofof mutual fundsfunds cancan be assessedassessed byby reference toto externalexternal creditcredit ratings oror toto historical informationinformation aboutabout countercounter party default rate.rate. 2019 20182018 (I CreditCredit Ratings ]]

AtAl Meezan Investmentlnvestment Management Limited AMIAM1 AMIAM1 KBPNBP FundFund ManagementManagement LimitedLimited AMIAM1 AMIAM1 Alfalah CUPGHP Investmentlnvestment Management Limited AM2+AMZ+ AM2+ UBL fundFund Managers Limited AM1 AMIAM1

The creditcredit quailtyquality ofof Company's bank balances cancan bebe assessedassessed by referencereference loto externalexternal creditcredit racingsratings or toto historicalhistorical informationinformation aboutabout counterpartycounterparty defaultdefault

Name ofof BatikBank DaceDate Long termterm ShortShortterm term Outlook AgencyAgencY

Allied Bank Limited 27-Jun-1927 -lun-1-9 AAA Al*A1+ Stable PACRA Askari Bank LimitedLimited 28-|Un-1928-Jun-19 AAfAA+ AX*A1+ StableSrable CACRAPACRA Bank Alfalah LimitedLimited 28-)un-1928-lun- 1 9 AA+ AX*A1+ Stable,Stable PACRA BurjEurj Bank Limited 28-Jiin-1928-Jun-19 A A1Al Stablestable PACRA Dubai Islamiclslamic Bank Pakistan Limited 28-|un-1928-lun- 19 AA A-1+ StableStablc JCR-VIS Faysal Bank Limited 27-|un-1927 -lun-19 AA A1AL+ + Stable PACRA KabfbHabib BankBank LimitedLimited 28-lun-192B-Jun-19 AAA A-1+A-l< Stable JCR-VIS Habib Metropolitan BankBank LimitedLimited 27-Jun-I927-lun-19 AA+ A141+ + Stablestable PACRA MCB Bank LimitedLimited 27-lun-1927-lu\'19 AAA A1+-A1+ Stable PACRA MCB Islamicislamic Bank UmitedLimited 27-Iun-I927 -Itn-1-9 A A1Al Stablesrable PACRA Meezan Bank LimitedLimited 28-Iun-192B-Jun-19 AA*AA+ A-1A-1+ + Stablestable JCR-VIS National Bank of PakistanPakistan 28-Jun-1928-]un-19 AAA 41rAlt Stable PACRA Silk Bank Limited 27-|un-1927-lun-19 A- A-2 Stable ICR-VISJCR-VIS Standard Chartered Bank PakistanPakistan LimitedLimited 25-Jun-192 5 -Jun-1 9 AAA A1A1+ + Stablestable PACRA The Bank ofof PunjabPunjab 28-Jun-182 B-lun- 1 I AA A1A1+ + Stable PACRA United Bank Limited 2S-|un-1828-lun-18 AAA A-1A-1+ + Stable JCR-VIS

Due Coto Company'sCompany's longlong standingstanding relationshipsrelationships with thesethese counterpartiescounterparties andand afterafter givinggiving duedue considerationconsideration toto theirtheir strongstrong financialfinancial standing,standing, management doesdoes not expectexpect non-performancenon-performance by thesethese countercounter parties onon theirtheir obligationsobligations toto thethe Company,Company. Accordingly, thethe riskrisk isis minimal. 49.3 Liquidity riskrisk Liquidity riskrisk isis Chethe riskrisk thatthat anan entityentity will encounter difficultydifficulty inin meetingmeeting obligationsobligations associatedassociated with financialfinancial liabilities:liabilities.

The company'scompany's approach toto manage liquidityliquidity riskrisk isis toto maintain sufficientsufficient levellevel ofof liquidityliquidity by holdingholding highly liquidliquid assetsassets and thethe availabilityavailability otof funding throughthrough borrowing Iimits an adequateadequate amount ofof committedcommitted. creditcredit facilities.facilities. At JuneJune 30,201930,TOL, thethe CompanyCompany hashas Rs.Rs.13,224 13,224 million (2018:(2018: RsRs 4,381.564,381.56 million) unutilized borrowing limits available fromfrom financialfinancial institutionsinstitutions andand Rs,Rs. 1,538,561,538.56 millionmillion (2018:(2018: Rs. 193.69 million) cashcash andand hankbank balances. TheThe management believesbelieves thatthat thethe companycompany isis not exposedexposed toto anyany liquidityliquidity risk.dsk.

The followingfollowing areare thethe contractualcontractual maturity analysisanalysis ofoffinancial financial liabilitiesliabilities asas atat JuneJune 30.201930, 2019 andand 2018:2018: 2019 Carrying amount Contractual caslicash ll Within 56 m*,r',*;;*h;]ffi*il;;;lMore than 6 months More than 1 year Howsflows ll months and up to 1 year and upup toto 5s years I 11qfplgl{Ll | "nu v"".' I RupeesRupees In in'000 "000 — Financial Liabilities:Liabilities : Long termterm financingfinancing 4.875.9364,A75,936 5,764,4885,764,4AA 677,420677,4ZO 934,605 4,152,4634,L52,463 Trade andand otherother payablespayables 3,205,1183,20S,LLA 3,205,1183,2OSJLA 3,205,1183,205,118 Dividend payablepayable 130,935 130,935130,93 5 130,935130,93 5 Accrued mark up 110,483 110,483 110,483 Short termterm borrowings 11,726,000tt,726,ooo 11,811,478rt,atl,47a 11.811,478tr,aLr,47a 20,048,4722O,O4a,472 21,022,502Z[,O22,5OZ 15.935,43415,935,434 934,605 . _::Jlt2t93:4,152,463 - 2018201 A .n t t Carrying- .---__ amount l t"-----,,Contractual casli., *-l f Within 6 ffiMore than;;J 6 months GMore - than 1 yearr* I Larryrnsamount flowsn"*t"' -"--;;;lmonlhs andanauptorye"r up to 1 year and up to", S years I ll ll -ontr" ll llanouptosyearsl - Rupees inin'000 '000 -

Financial Liabilities:Liabilities : Long termterm financingfinancing 3,216,4763,216,+76 3,652,002 550,166 594,09959+,099 2,507,7372,507,737 Liabilities againstagainst assetsassets subjectsubject toto finance leaselease 847447 1,1681,1 6B 260 519 389 Trade andand otherother payablespayables 2,485,789 2,485,789 2,485,789 Dividend payable 475,270475,276 475.276+75,276 475,276 Accrued mark up 137,8561-37,856 137.856r37,856 137,A56137,855 Short termterm borrowings 15,180,937t 5,180,937 15,329,105t5,329,L05 15,329,105L5,329,r0s ______],!21,18]_21,497,181 _____4p9J,125-22,081,196 __--__1821_9,4!2_18,978,452 __-_____--__t2!e8_594,818 _-_____J,s93,1262.508,126

The contractualcontractual cashcash Howsflows relatingrelating toto thethe aboveabove financialfinancial iiabiiitiesliabilities havehave been determineddetermined onon thethe basisbasis ofof interestinterest ratesrates // mark-up rates effec'clveeffeitive asas atat 3030 june.June. The ratesrates of interestinterest // mark upup havehave been discloseddisclosed inin note 2323 andand note 282B toto thesethese unconsolidatcdunconsolidated financialfinancial statements,statements. 49.4 CapitalCapital riskrisk management

TileThe primary objectiveobjective ofof thethe Company's capitalcapital management isis toto safeguardsafeguard thethe company'scompany's abilityabilify toto continuecontinue asas aa goinggoing concern,concern, maintain healthyhealthy capitalcapital ratios,ratios, strongstrong creditcredit ratingrating andand optimaloptimal capitalcapital structuresstructures inin orderorder toto ensureensure ampleample availabilityavailability ofoffinance finance forfor itsits existingexisting and potential investmentinvestment projects, soso thattbat itit cancan continue toto provide returnsreturns forfor shareholdersshareholders therebythereby maximizing theirtheir wealth, benefitsbenefits forfor otherother stakeholdersstakeholders andand reducereduce thethe costcost ofof capital.capital

The CompanyCompany manages thethe capitalcapital structurestructure inin thethe contextcontext ofof economiceconomic conditionsconditions and thethe riskrisk characteristicscharacteristics ofof thethe underlyingunderlying assets.assets. InIn orderorder toto maintain oror adjust thethe capitalcapital structure,structure, thethe Company may, forfor example,example, adjustacljust thethe amountamount ofof dividends paidpaid toto shareholders,shareholders, issueissue new shares,shares, oror sellsell assetsassets toto reducereduce debt.

The CompanyCompany monitors capitalcapital onon thethe basisbasis ofofdebt debt toto equityequify ratio,ratio, calculatedcalculated onon thethe basis ofoftotal total debtdebt toto equity.equity. 2019 20182014 —--- Rupees inin'000 '000 ...---

Long termterm financingfinancing 4,875,9364,A75,9_36 3.216,4763,216,476 Liabilities againstagainst assetsassets subjectsubject toto financefinance leaselease - 847 Short termterm borrowingsborrowings 11,726,0007L,726,OOO 15,180,9371 5,1 B 0,937 Debts 16,601,93616,607,936 18,398,260 EquityEquily 17,879,784t7 ,a7 I ,7 A4 9,082,5379 ,082 ,537 Total capitalcapital {equity(equiry t+ debt)debt) ______J!e!129-34.481,720 _-_-21,439121-27,430.797 Gearing ratio (percentage)(percentagel '"48.15" 48.15 65.9566.95

SO,50, EVENTEVENTAFTERTHE AFTER THE DALANCEBALANCE SHEET DATE TheTheBoardofDirectorsintheirmeetingheldonSeptember23,2019haveproposedafinalcashdividendfortheyearendedJune30,2019ofRs Board of Directors in their meeting held on September 23,2019 have proposed a finai cash dividend for the year ended June 30,2019 of Rs. 1.751.75persllare, per share, amounting toto Rs. 1,526.34 million forfor approvalapproval ofofthe the members atat tliethe Annual GeneralGeneral Meeting ofolthe the Company,Company.

51. DATE OFOF AUTHORIZATION FOR ISSUEISSUE 2 3 SEPsEP 201S2019 The financialfinancial statementsstatements were authorized forfor issueissue onon - 2 ------■— byby thethe Board ofof Directors ofof thethe Company.Company.

52, GENERALGENERAL 52,152.1 Corresponding figuresfigures Corresponding figuresfigures havehave beenbeen rearranged and rociassifiedreclassified wherever necessary forlor thethe purpose ofof better presentation.presentation. However,Ilowever, duringduring thethe yearyear followingfollowing reclassificationsreclassifications areare made inin thethe correspondingcorresponding figures.figures.

Particulars From ToTo Rupees in'000in '000

Operating0perating fixedfixed assetsassets -- CostCost Freehold Building onon freeholdfreehold landland 143t+3 Operating fixedfixed assetsassets -- CostCost Building onon freeholdfreehold landIand Electric installationsinstallations 1,290 Operating0perating fixedfixed assetsassets -- CostCost Plant andand machinery Tools andand equipmentsequipments 1,680 Operating0perating fixedfixed assetsassets -- CostCost Plant anda[d machinery Electric installationsinstallations 22,157 Operating fixedfixed assetsassets -- CostCost Tools andand equipmentsequipments Building onon freeholdfreehold landland 4,249 Operating fixedfixed assetsassets -- CostCost Tools andand equipments Plant andand machinery 14,782 Operatingoperating fixedfixed assetsassets -- CostCost Tools andand equipments Furniture andand fixturesfixtures 2,729 Operating0perating fixedfixed assetsassets •- Cost Tools andand equipments Electric installationsinstallations 4,871+,877 Operating0perating fixedfixed assetsassets -- CostCost Office equipmentsequipments Furniture andand fixturesfixtures 6,225 Operating fixed assets - Cost Office equipmentsequipments Vehicles 11 Operating fixed assets - Cost ( qqq Operating fixedfixed assetsassets -- CostCost Electric installationsinstallations Building onon freeholdfreehold landland 5.999 Particulars From To Rupees inin 'ooo'000

Operating0perating fixedfixed assetsassets -- CostCost Electric installationsinstallations ToolsTools andand equipmentsequipments 2,894?.,894 Operating fixedfixed assetsassets -- CostCost ElectricElectric installationsinstallations Plant and machinery 2.529 Operating0perating fixedfixed assetsassets -- CostCost i'urniturcFurniture andand fixturesfixtures BuildingBuilding on Freeholdfreehold landland 105 Operating0perating fixedfixed assetsassets -- Cost Furniture andand fixturesfixtures ToolsTools andand equipmentsequipments 2.7312,731 Operating fixedfixed assetsassets -- CostCost Furniture andand fixturesfixtures ElectricElectric Installationsinstallations 134,836r34,836 Operating fixedfixed assetsassets -- Cost Furniture andand fixturesfixtures Plant andand machinery 10,339L0,339 Operating fixedfixed assetsassets ■- Cost Vehicles Tools andand equipmentsequipments 102,8131 02,8 13 Operating0perating fixedfixed assetsassets •- Accumulated depreciatinndepreciation Building onon freeholdfreehold landland Electric installationsinstallations 5,3165,376 Operating0perating fixedfixed assets-Accumulatedassets - Accumulated depreciationdepreciation PlantPlant andand machinery ToolsTools andand equipmentsequipments 474474 Operating fixedfixed assetsassets •- Accumulated depreciationdepreciation Tools andand equipments Building onon freeholdfreeliold landland l,+601,460 Operating0perating fixedfixed assetsassets - Accumulated depreciationdepreciation Tools andand equipments Plant andand machinery 10.9411,0,94t Operating fixedfixed assetsassets -- Accumulated depreciationdepreciation ToolsTools andand equipments FurnitureFurniture andand fixturesfixtures 161 Operating fixedfixed assetsassets -- Accumulated depreciationdepreciation ToolsTools andand equipments ElectricElectric installationsinstallations 312312 Operating fixedfixed assetsassets - Accumulated depreciationdepreciation OfficeOffice equipmentsequipments FurnitureFurniture andand fixturesfixtures 4,831 Operating0perating fixedfixed assetsassets -- Accumulated depreciationdepreciation OlficeOffice equipmentsequipments Vehicles 11 Operating0perating fixedfixed assetsassets •- Accumulated depreciationdepreciation Electric Installationsinstallations Tools andand equipmentsequipments 2,3202,326 Operating0perating fixedfixed assetsassets •- Accumulated depreciationdepreciation Electric Installationsinstallations PlantPlantand and machinery 2.6442,644 Operating fixedfixed assetsassets ■- Accumulated depreciationdepreciation Furniture andand fixturesfixtures ToolsTools andand equipmentsequipments 1,659 Operating fixedfixed assetsassets •- Accumulated depreciationdepreciation Furniture andand fixturesfixtures Electric installationsinstallations 54,92554,925 Operating fixedfixed assetsassets - Accumulated depreciationdepreciation Furniture andand fixturesfixtures PlantPIant andand machinery 1,562 Operaang0perating fixedfixed assets-Accumulatedassets - Accumulated depreciationdepreciation Vehicles ToolsTools and equipmentsequipments 74,003 DepredationDepreciation expenseexpense Administrative expensesexpenses CostCost ofofsales sales 17,470 Advertisement expenseexpense Distribution costcost Administrative expenseexpense 4,3794,379

SZ.Z52.2 HoundingRounding Figures have beenbeen roundedrounded offoffto to thethe nearest thousand.thousand

i'Ss

IK J DIRECTORil/ CHIEF FINAStBAI.FI 11 hi DIRECTOR